Don’t bank on congressman’s Trojan Horse bills


The Dodd-Frank banking law, the Consumer Finance Protection Bureau and regulations on financial institutions have been receiving a fair amount of attention this political season. Congressman Andy Barr said they have “failed to address the actual causes of the financial crisis” and “made future crises more likely.”


Unfortunately, many Kentuckians are not informed about banking and financial institutions and how they impact our local business and personal interests. Kentucky has 132 state-chartered banks, with assets ranging from $50 million up to $5 billion. Supporting and doing business with community banks benefits local businesses, as well as the banks.

Barr says he is a friend of small Kentucky banks and financial institutions. Actually, Barr has been supporting a kind of Trojan Horse on behalf of the megabanks that brought this country to its financial knees in 2008 and cost so many people so dearly.

As the Democratic candidate for Congress in Kentucky’s 6th District, I am committed to providing rural and community banks with needed relief from some of the provisions in Dodd-Frank, which aims to prevent the risky behavior that sparked that financial crisis.

However, reforming Dodd-Frank cannot happen at the expense of letting the “too-big-to-fail” banks off the hook.

It is easy for Barr and other congressional Republicans to hide their real intentions because of the complexity of these issues. In addition they are careful to wrap their “reforms” in nice-sounding names that would make George Orwell blush.

Barr mentioned one such obfuscating title of legislation designed to gut Dodd-Frank protections —the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act or the Financial CHOICE Act.

Consider also the Barr-sponsored Portfolio Lending and Mortgage Access Act (H.R. 1210), which sounds pretty harmless. However, it expands an exemption to all banks that was designed to help small and rural financial institutions make more loans.

The bill actually gives a green light for financial institutions to go back to the days of ignoring such basic lending standards as having to verify a borrower’s ability to repay a loan.

As Rep. Maxine Waters, D-Calif., the ranking member of the Committee on Financial Services, on which Barr serves, explains, the bill “would allow lenders to deal in the same kind of risky loans that sank Washington Mutual, Wachovia, Countrywide and eventually the entire economy in 2008.”

Another Trojan Horse co-sponsored by Barr has the nice-sounding name of Taking Account of Institutions with Low Operation Risk Act – TAILOR for short.

Its stated purpose is to force banking regulators to tailor rules to be less onerous for smaller banks. I wholeheartedly support that idea. However, that’s not what the bill actually does. In fact, the bill would hogtie the Consumer Financial Protection Bureau, which already has the power to tailor its regulations.

If you cut through all of the gobbledygook, you’ll see that the bill adds debilitating reporting and analysis requirements that would make it difficult, if not impossible, for the CFPB to act independently to protect the little guy from being ripped off.

Even some bankers realize that Barr’s tactics of using small banks as cover for efforts to help the big banks is not helping them — even when they support the intent of the legislation.

“We could probably pass our agenda tomorrow, if the megabanks didn’t constantly interfere,” Camden Fine, Independent Community Bankers of America president and CEO, told the Financial Times. The ICBA represents some 6,500 community banks.

Moreover, in his op-ed, Barr neglects to mention that the CFPB was created precisely to be independent from outside financial or political pressures like those that would arise if his CHOICE act were to become law. That freedom from congressional oversight was meant to protect consumers from the terrible damage caused by the banks’ reckless investment policies and sub-prime mortgages.

Therefore, it should come as no surprise that a great deal of Barr’s campaign financing comes from the financial industry and that most of his sponsored bills are aimed at doing their bidding.

Barr has been leading the charge in favor of his wealthiest contributors. It appears as if he has been bought by the same industry that collapsed our economy in 2008, and that values executive salaries more than the hopes and needs of everyday Americans.

Community and rural banks, and his Kentucky constituents deserve someone who will stand up for them and help bring about the meaningful regulatory relief they deserve. It is time to stop believing in Barr’s Trojan Horses.

History shows it always ends badly for believers of those kinds of myths.

Nancy Jo Kemper is the Democratic candidate for the 6th Congressional District.

At issue: Aug 1 commentary by Rep. Andy Barr, “Revise banking laws for opportunity for all, bailouts for none”