There’s a new Wall Street Sheriff in town. Her name is Elizabeth Warren and she’s President Obama’s pick to help set up (control) a brand new Big Government agency called the Bureau of Consumer Financial Protection. (Just so you know, this new agency was the brainchild of the corrupt Fannie and Freddie twins, Barney Frank and Chris Dodd. The laughably named Dodd-Frank Wall Street Reform and Consumer Protection Act effectively gives the federal government control of our nation’s financial sector. (Think of it as Obamacare for Wall Street, the stock market, and credit cards.)

Obama and his allies have been big promoters of Warren, who is the left-wing patron saint of so-called consumer protection.

There’s only one problem. In the dubious tradition of Obama czars, Warren is a leftist radical with a “penchant for provocative statements” and has very little chance of being confirmed by even a Democratic Senate. How anti-business? Well, in a blog she crafted for TPMCafe.com in 2005, Warren said: “…big corporate interests, led by the consumer finance industry, are devouring families and spitting out the bones.”

And that’s just one example.

Even Democrat Senator Chris Dodd, Chairman of the Senate Banking Committee, sees the writing on the wall on a Warren appointment. Dodd has publicly stated that he doubts Warren could muster the votes for confirmation. Many others in Congress agree, even if they won’t say it publicly.

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Despite the populist rhetoric and anti-bank bank posture, a look behind the curtain of the Wall Street Reform bill reveals nothing more than self-interest, business as usual and more power and influence to Wall Street instead of the free market.  And as if the permanent bailouts and too big to fail advantages already in the Obama Dodd bill aren’t enough for the greedy banks, a proposed amendment offered by former Bank of America executive Sen. Kay Hagen is a perfect case and point.

Hagen’s amendment proposes to “protect consumers” from lenders whose market includes lower and middle class Americans — the type of folk that Bank of America wouldn’t lend a dollar to — despite trillions in federal support.

These loans, often called “payday loans,” provide short-term cash to Americans who need money to repair their car, fix their house, even pay a medical bill, while they wait for payday to payback the loan.  The Hagen amendment would limit competition for the big boys at Bank of America but allow consumers to take cash advances from their credit cards.

The Hagan amendment does not protect consumers from outrageous and exorbitant fees that Bank of America charges consumers.  In fact, its actually going to cost consumers more in fees. A Bank of America customer with a two-week overdraft of $66 results in a $30 fee — an APR of 1,165%!  In fact, last year Wall Street banks charged consumers $38 billion in overdraft and NFS fees. And by putting the traditional short term lenders out of business, the Hagan amendment will force more strapped consumers to resort to paying overdraft fees that will earn big banks an additional $14 billion a year.

Its not surprising to find out that Sen. Hagan has received over $315,000 in political contributions from commercial banks and financial institutions including $19,000 from Bank of America.

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Wall street wants it, unions want it, Obama wants it and now you can add at least one Communist filmmaker to the list of supporters of CFPA.

As thousands of union members converged on Wall Street last week,  they were joined in solidarity by Kevin Keating. Keating, a cinematographer on the 1976 movie “Harlan County, U.S.A” and an unabashed communist joined his union brethren in demanding the Obama-Dodd financial takeover bill that would give unions greater ability to takeover the governing boards of companies and drain resources into their own coffers.

Conservative talk radio in Memphis is calling for the firing of the staff member of Sen. Bob Corker who demeaned and belittled Tea Party activists in the Volunteer State calling them “sad” and “creepy” when they visited the office protesting Corker’s support for establishing a permanent bailout fund for companies “too big to fail.”

Corker is leading the charge for a “bipartisan” deal on so-called financial reform legislation that will create bailouts as far as the eyes can see, create a new regulators for small businesses (that had nothing to do with creating the crisis) and empowering big labor with shareholder proxy provisions aimed at undermining private company policy decisions. The House passed version of the bill authorizes the Federal Reserve to spend up to $4 trillion for bailouts. The Senate version is a blank check.

Attitudes are set at the top of the organization.

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Today I am releasing the following web video highlighting President Obama’s financial bailout bill that will impose burdensome regulations and new fees on local banks in my district back in Ohio and other local communities around the country. In addition, Obama’s plan rewards top Democratic contributors and promises permanent bailouts to Wall Street companies deemed ‘too big to fail.’ The video and full remarks are outlined below:

The American people have made it clear that they’ve had enough of the bailouts and all the open-ended expansion of government in Washington.

But instead of listening, President Obama and the majority party in Congress continues to scheme up new costly policies that will make bailouts permanent, kill jobs and impose new burdens on taxpayers.

This week, they’ll continue with their push to pass a job-killing permanent bailout bill for Wall Street.

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It’s not often the two Republican Senators from Maine safeguard the country from excessive government with more vigilance than a Republican Senator from Tennessee.  But on the issue of Financial Reform, Sen. Collins and Snowe have become champions for the taxpayers — holding the line against more bailouts and bureaucracy — while Sen. Bob Corker continues to push the country toward permanent bailouts and a Washington regulatory scheme “one like we have not seen before.”

Big Government readers are well aware of Corker’s repeated attempts to cut a deal with “Countrywide” Chris Dodd.  Despite signing a letter pledging to oppose the legislation, Corker is now taking to the airwaves denying the legislation contains a permanent bank bailout provision.

Neat trick Senator. Swear to your constituents that you oppose further bailouts and then push a bailout bill by simply saying it contains no bailouts.

Corker has become to Financial Reform what Sen. Lindsey Graham is to climate change legislation — a sucker.  And his words are being used by left-wing activists to deny there is a bailout in the legislation.

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Last week, the Securities and Exchange Commission brought civil fraud charges against Wall Street investment bank Goldman Sachs. The charges arise from the bank marketing collateralized debt obligations (CDOs) to customers without disclosing that a major hedge fund investor, and Goldman client, John Paulson had made a series of bets against the securities. (The SEC did not announce any charges against Mr. Paulson.)

The announcement of the charges comes at a volatile time for the financial industry. With the Senate set to take up its version of a sweeping revamp of the financial services industry, the allegations against Goldman are certain to have a prominent place in the debate.

Appearing this afternoon on Chicago’s WLS radio station, Illinois Senator Dick Durbin seemed downright excited about the allegations:

The timing was perfect. We’re about to take up the financial regulatory reform bill. The banks are saying Oh, this is totally unnecessary. We have everything worked out. Now we find out the Securities and Exchange Commission has stepped up and charged Goldman Sachs, one of the biggest, with involvement in some trading that really turns out to be very suspicious.

Ah yes, the “timing was perfect.”

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The Obama Administration is concerned their takeover of the financial industry is at risk and are offering Republicans a fig leaf to buckle.

First they deny there was a bailout in the legislation. Now they are proposing the removal of a $50 billion fund that oversees future bailouts.

Don’t be fooled — the $50 billion is just a downpayment to administer future bailouts. The funding for the permanent bailouts will come from the Federal Reserve under the Blank Check Bailout bill.

The House bill authorizes the Fed to spent $4 trillion to bailout and “wind down” companies. The Senate bill doesn’t have a cap.

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Democrats’ collective fixation on Frank Luntz’s memo on Financial Reform misses the point entirely but it is very telling.

The now famous Luntz memo makes strategic recommendations based on an aggregation of voters’ responses to being informed about various portions of the Dodd Blank Check Bailout bill in factual, common sense, simple language.  The public spoke and Luntz recorded it. He didn’t make up the fact that there is a $4 trillion dollar bailout in the bill. Its right there in black and white.

But what has Democrats completely possessed is that what the public said is inconvenient to their Orwellian plan to dupe America into believing that up is down, black is white and that the Dodd bill will end “too big to fail”, contains no new bailouts and will possibly save endangered animals.

Their plan is a two step process: First, use oblique language about “protecting consumers” and “ending too big to fail” to convince the public that the Dodd bill is somehow “financial reform”. Then, bully Senate Republicans into voting for Dodd’s government takeover bill by portraying them as against said “financial reform.”

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As long as the Democrats continue to control Congress, we’ll have to endure an endless procession of initiatives for the federal government to take over industry after industry. Health insurance and college loans went under federal hegemony with passage of a single bill, known as “ObamaCare.”

Now, a new bill, referred to by the name of its chief sponsor, the ethically challenged Sen. Chris Dodd of Connecticut, aims to consolidate a federal takeover of the nation’s entire network of financial institutions.

As Peter Wallison of the American Enterprise Institute notes:

Does the bill, as [Republican Senate leader Mitch] McConnell said, “institutionalize too big to fail?” Of course. There can’t be any reasonable doubt about this. The bill authorizes the Fed to regulate all non-bank financial institutions that are “systemically important” or might cause instability in the U.S. financial system if they failed. . . .

The market will see immediately that the government has created Fannie Maes and Freddie Macs in every sector of the financial system where these large companies are designated for Fed regulation, including insurance companies, hedge funds, finance companies, bank holding companies, securities firms, and any other kind of financial institution the government wants to regulate. Since these firms will be too big to fail, they will be seen in the market—as Fannie and Freddie were seen—as ultimately backed by the government and thus safer firms to lend to than small firms that are not government backed. This will permanently distort the financial market, favoring large companies over small ones, and eventually force a consolidation of each market where these firms exist into a few large competitors operating under the benign supervision of the government.

In other words, this is another huge step toward fascistic corporatism, completing a de facto government takeover of today’s nominally “private” financial firms. These corporations would be reduced to the status of politically managed public utilities.

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Despite efforts by some weak sisters like Sen. “Bailout” Bob Corker (R-TN) to cut a deal with “Countrywide” Chris Dodd (D-CT) on legislation to create a Blank Check Bailout Bill and lots of loud speculation from Senate Democrats about peeling off a Republican, Senate Republicans are currently holding firm against intimidation tactics to ram the bill through the Senate a la Health Care Reform.

Sources on Capitol Hill report that Sen. Shelby recently briefed Senate Republicans about the bill and got unanimous support for his efforts to block the Democrats latest government takeover scheme.  Unanimous support means that even the Senators from Maine — Susan Collins and Olympia Snowe are holding the line against future bailouts despite ongoing White House efforts to jam the bill. According to our sources, Collins even went so far as to make an explicit commitment to Shelby to oppose the bill saying she has many problems with it.

And with good reason too. As readers recall, the so-called “Financial Reform” legislation contains a number of key provisions – none of them good–that creates more bureaucracies, more fees and taxes, more Washington red tape and makes bailouts the permanent policy of the US Government.  But while offering permanent bailouts and a government takeover of the rest of our economy the legislation of course does nothing to address the root causes of the crisis including Fannie Mae, Freddie Mac and the consumer lending laws that pushed mortgages to people who could never afford to pay them back.

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A few weeks ago, Democratic strategist Robert Creamer was repeating the widely-circulated slanders about the Tea Party: “Is there any wonder that they spit at members of Congress as they went to vote, or that they hurl racial insults that are dredged up from the worst parts of America’s past,” he wrote in his column at the Huffington Post.

Today, Creamer is full of praise for the Tea Party movement–with nary an accusation of racism or violence in sight. “Tea Party activists don’t much trust big institutions of any sort–big government or big banks. They think of themselves as victims of the bureaucrats in Washington as well as the big banks in New York,” he writes.

What seems to have changed Creamer’s mind is the realization that more and more Americans sympathize with the Tea Party’s simple goals–which, in my understanding at least, are to protect and to expand freedom and opportunity for all Americans by restoring our constitutional values and limiting the size and reach of government.

Creamer seems to believe that the Tea Party can be turned against “traditional Republican defenders of Wall Street.” Some of Wall Street’s most devoted patrons are Democrats, but never mind. Creamer seems to envision a sort of proletarian unity, in which ordinary people can be whipped up in anger against their perceived oppressors.

I think Creamer has the Tea Party wrong, in that its members are not hostile to the free market ideals that built America.

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It’s not often that we can give credit to Barney Frank but when it comes to the issue of Financial Reform at least we can say is he was honest enough to put a price tag on the proposed permanent bailout fund.  Can’t say the same for Sen. Chris Dodd.

The Frank bill’s price tag for future bailouts was clear — $4 trillion.

Sen. Dodd’s bill proposes the same bailout authority but makes matters even worse — he leaves the check blank.  Taxpayers will be on the hook for any amount.

Dodd’s bill gives the Fed “emergency lending authority” to “any “ entity or market utility, program or facility that the Financial Stability Oversight Council determines is or is likely to become “systemically important.”

But don’t worry. They have to report back to Congress why they used this authority within seven days after they use it. But– they only have to disclose who they helped “within one year” and only if they deem that it won’t hurt the “effectiveness of the program”

Still thinking maybe this isn’t a bailout?  Well, on page 1306, one of the requirements is that the Fed has to report to Congress  “ the expected or final cost to the taxpayers of such assistance.”

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Surprise, surprise. Sen. Chris Dodd’s financial-regulation proposal raises the possibility of substantial progress on the road to ending “too big to fail” (TBTF) and bailout nation for banks and other financial institutions.

How the Dodd bill will play out in the final details remains to be seen. But when you read the Dodd fact sheet, there are a few key items to like.

First, under the Dodd scheme, large complex companies will have to submit plans for rapid and orderly shutdowns should they go under. These are called “funeral plans.” Then, in terms of these orderly shutdowns, the bill would create an “orderly liquidation mechanism for the FDIC to unwind failing systemically significant financial companies. Shareholders and unsecured creditors will bear losses and management will be removed.” Good.

Then comes the “liquidation procedure.” This spells out that the Treasury, FDIC, and Federal Reserve must all agree to put companies into the orderly liquidation process. “A panel of three bankruptcy judges must convene and agree — within 24 hours — that a company is insolvent,” the bill goes on to say. It also states that the largest financial firms will be assessed $50 billion for an upfront fund that will be used if needed for any liquidation. This is a kind of debtor-in-possession safety net for the bankruptcy-liquidation process. Also good.

Finally, under the heading of bankruptcy, the bill stipulates that most large financial companies are expected to be resolved through the normal bankruptcy process. This is the key. However, it is not an airtight case for bankruptcy. It is possible that a government-resolution process could keep big banks alive or in conservatorship, such as with Fannie and Freddie. That would be wrong. Very wrong. In fact, one of the flaws in the Dodd bill is that there is no mention of Fannie and Freddie.

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With the focus this week on health care’s “home stretch” and concerns about government limiting the ability of ordinary Americans to make choices about medical treatment, another threat to freedom is accelerating that could harm Americans’ abilities to start a business, invest for retirement, and get affordable home and auto insurance policies. On Monday, after abruptly shutting down earnest negotiations between Senate Republicans, Senate Banking Committee Chairman Chris Dodd wannounced a partisan so-called financial regulatory reform bill that he will try to ram through his committee within a week.

And this 1336-page bill will do nothing to put restrictions on two entities that were proximate causes of the housing bubble, the government-sponsored Fannie Mae and Freddie Mac, and instead hit Main Street businesses and entrepreneurial firms that had nothing to do with the crisis. The bill’s specific provisions would  penalize the corporate structure of public companies from Google to Warren Buffett’s Berkshire Hathaway, tax prudent banks stable home and auto insurers and their policy holders to pay for the bailout of the next Lehman or AIG, depress revenues from incorporation fees  in Sen. Harry Reid’s Nevada and Vice President Biden’s Delaware by federalizing corporate governance laws, and put thousands of retailers who issue gift cards or even offer layaway plans under a new Federal Reserve bureaucracy to regulate credit.

Here are the highlights of some of most destructive provisions for the freedom of entrepreneurs, investors and consumers.

1. The shareholder rights jujitsu with “proxy access” and other corporate governance mandates.

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Grassroots conservatives were rightly up in arms over Senator Corker’s game of footsie with far left Democrat Chris Dodd. The two worked together on President Obama’s effort to impose a massive new regulatory scheme on the American economy. Dodd, of course, is one of the architects of the current financial crisis. His decades long support of ACORN, Fannie Mae, Freddie Mac and the Community Reinvestment Act should have disqualified him from these negotiations in the first place.

The word from the halls of the Capital last week was that Corker was still trying to cut a deal with democrats… a bad deal.

But, it looks like Corker bailed after the constant pressure from conservatives this past week…
Senator Bob Corker (R-TN) just backed out of a deal with Dodd and democrats to establish a new federal bureaucracy to regulate the financial industry.
Congress Daily reported:

Senate Banking Chairman Christopher Dodd said today he will unveil legislation to revamp the nation’s financial regulatory system without the support of Sen. Bob Corker, R-Tenn., with whom he had been working to strike a bipartisan deal.

“Over the last few months, Banking Committee members have worked together to try and produce a consensus package. Together we have made significant progress and resolved a many of the items, but a few outstanding issues remain,” Dodd said in a statement.

Dodd said he intends to unveil the bill Monday and hold a markup during the week of March 22 to move the bill out of committee.

“I have been fortunate to have a strong partner in Senator Corker, and my new proposal will reflect his input and the good work done by many of our colleagues as well,” Dodd added. “Our talks will continue, and it is still our hope to come to agreement on a strong bill all of the Senate can be proud to support very soon.”

Corker is scheduled to hold a news conference at 11 a.m. to give his version of the breakdown of the talks.

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Capitol Confidential and Jim Hoft have done an excellent job laying out concerns with the potential “compromise” bill that comes out of Sen. Bob Corker’s negotiations with Chris Dodd.  But when it comes to the destructive provisions that could come out of a Dodd-Corker deal, they may have just scratched the surface.

In addition to the troubling new powers for a new nanny-state consumer agency and possibly the Federal Reserve added to the prospect of billions more in bailouts for reckless financial firm, the bill may also contain the sneaky  “proxy access” power grab for unions, radical environmentalists, and other groups on the Left. This rule, inspired by Saul Alinsky’s Rules for Radicals, is contained in Dodd’s “discussion draft” bill from late last year.

As I detailed in BigGovernment last week, “proxy access would federalize and override decades of state law governing the structure of corporations and force publicly-traded companies to put shareholders’ nominees for a board of directors on a company’s proxy ballot along with the firm’s own nominees for those positions.” Many shareholder groups that are pushing this are union pension funds, the radical Tides Foundation, and other progressive groups — from animal rights to anti-Israel — who place their own political agenda items at the expense of ordinary shareholders.

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It appears that the Bailout Bob Corker continues to ignore the pleas of his conservative allies and constituents and is close to reaching a deal on establishing a new consumer regulatory bureaucracy that in the words of Sen. Dodd, will be like one we have not seen before. Corker has told CNBC that the last stick point is not the principle of new regulation — he has capitulated on that point — but “administrative issues.”

The legislation includes Corker’s pet project, a “strong resolution mechanism for unwinding troubled companies.” News to Corker: For over 200 years, America had such a mechanism — it was called bankruptcy. But “unwinding” troubled companies is a code word for BAILOUT. The Federal Government, via the Federal Reserve, would be empowered to break-up, subsidized and bailout companies. As House conservatives warned during the House debate, enactment of the bill would establish bailouts as the official policy of the United States for decades to come. That’s why the House bill authorizes $4 trillion for the Federal Reserve.

Adding insult to injury, Reuters also reports that the Corker “reform” bill does not address the main culprit in the financial crisis — Fannie Mae and Freddie Mac. It does not address the issues associated with Community Lending that encouraged banks to lend to people who could never pay back their loans. It does not address ACORNS. All it does it layer more Washington bureaucracy on top of existing Washington Bureaucracy. Nice work, Bob.

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Friday night on National Public Radio, a fitting place to announce an unprecedented growth in federal power, Sen. Chris Dodd praised his partner in crime Sen. Bob Corker for working together to create an “independent, autonomous, rule- writing entity, unlike anything we’ve ever had before.”  That is exactly why Tea Party activists from across the Volunteer State gathered in front of Corker’s office this past week to protest his back room dealmaking.

Why would  Corker ignore his constituents and abandon all conservative principles to work for legislation that earns him praise from Chris Dodd of all people?  Here’s why.

The big banks and Wall Street firms support the President’s Financial Reform package.  The House passed bill contains the mother of all bailouts — a $4 trillion authorization for the Federal Reserve to continue to bailout firms for decades to come.  In fact, as conservatives in the House reminded us when the Obama/Frank bill was on the floor, this bill makes bailouts the permanent policy of the US government.  And who gets those bailouts?  The same banks and firms that support the bill.  And who does Wall Street rain campaign contributions on?  None other than Bailout Bob Corker.

Corker has raised over $3 million from Wall Street and related firms since being elected to the Senate.  That’s a lot for a freshman Senator.  It seems like Wall Street is finally getting a good return on their investment.

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Let’s be clear, the creation of a federal Consumer Financial Protection Agency (CFPA) is a liberal’s dream.  The agency would have the power to regulate businesses of any size. The House passed legislation, authored by Barney Frank, would as Rep Jeb Hensarling (R-Texas) put it in remarks before the House Financial Services Committee “create a brand new, large draconian federal agency with new sweeping powers.”

The bill came to the Senate where Senator Shelby stood strong on principle and won. Negotiations broke down and the Democrats’ big government dream was all but dead. No new agency and (on this issue at least) no new vast government powers.

Then Sen. Corker entered the fray and took it upon himself to negotiate a deal to revive the CFPA with the master of the financial crisis Sen. Dodd.

Before Corker got started, Shelby spokesperson Jonathan Graffeo warned that “Republicans on the committee have several principles upon which they’ve tried to negotiate with Dodd, to no avail” and that “If (Corker) adheres to those principles, he will likely find himself at an impasse as well.”

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