Senate GOP leader: Starving regulators of money means a “better America”

Introduction

Belt-tightening – Senate Republican Leader Mitch McConnell says starving financial regulatory agencies of the money needed to carry out the Dodd-Frank law would be a good thing for America.

“The less we fund those agencies, the better America will be,” McConnell said at a breakfast hosted by the Christian Science Monitor. He said that Dodd-Frank followed health care reform as the “second worst” bill ever passed by Congress during his decades-long tenure.

“I think anything we can do to slow down, deter or impede their ability to engage in this oppressive overregulation, which is freezing up our economy, would be good for our country,” McConnell said, according to accounts published by The Hill and the Financial Times.

Bank lobbying – The American Bankers Association spent $2 million in the 2011 first quarter lobbying the federal government to reform or repeal key parts of the financial reform law, a sharp increase from $1.4 million spent in the 2010 fourth quarter, the Associated Press reports.

The banking group is fighting regulators as they attempt to finalize rules to limit debit card swipe fees, report over-the-counter derivatives trading and to boost capital requirements. In the first quarter, the influential banking group met with officials at the Fed, Securities and Exchange Commission and Treasury Department.

Stability council audit – Two senior House Republicans have asked the Government Accountability Office to audit virtually everything the new Financial Stability Oversight Council is doing.

Reps. Spencer Bachus of Alabama and Randy Neugebauer of Texas asked the GAO to review the council’s staffing, operations, budget, process for reviewing public comments, use of data to pinpoint which nonbank financial institutions will be subject to tighter regulation, and the operation and plans for the new Office of Financial Research. The FSOC, made up of the heads of financial regulatory agencies, monitors U.S. financial markets to try and prevent another 2008 meltdown.

Gingrich campaign – Republican presidential hopeful Newt Gingrich has released a campaign video, “Who Got the Money?,” that attacks the Federal Reserve and calls for a repeal of the Dodd-Frank law.

In the two-minute clip, Gingrich demands more audits of the secretive Fed, the Washington Post reports. The former House Speaker also said in a speech this week that Dodd-Frank is “the most destructive assault on businesses in a decade” and will stifle job growth.

Bank underwriting easing – An annual survey of 54 of the biggest U.S. banks shows some are easing their underwriting standards after three years of tightening them.

The Office of the Comptroller of the Currency said banks are responding to competition, more liquidity in credit markets, and a desire to boost market share. “We need to remember that overly liberal underwriting standards contributed to extremely high credit losses,” said David Wilson, senior deputy comptroller. “The pace of easing standards in products like leveraged lending is disconcerting and warrants close attention.”