HR 992 - House passes repeal of restrictions on bailing out foreign banks by US taxpayers

[devil21]

While we're talking about LAX and NSA, here's what Congress is quietly working on. Repealing restrictions on bailing out foreign banks and restrictions on derivatives and swaps that was included in Dodd-Frank. It's already passed the House.

https://www.govtrack.us/congress/bills/113/hr992/text



To amend provisions in section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to Federal assistance for swaps entities.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Swaps Regulatory Improvement Act’.

SEC. 2. REFORM OF PROHIBITION ON SWAP ACTIVITY ASSISTANCE.

Section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 8305) is amended--

(1) in subsection (b)--

(A) in paragraph (2)(B), by striking ‘insured depository institution’ and inserting ‘covered depository institution’; and

(B) by adding at the end the following:

‘(3) COVERED DEPOSITORY INSTITUTION- The term ‘covered depository institution’ means--

‘(A) an insured depository institution, as that term is defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and

‘(B) a United States uninsured branch or agency of a foreign bank.’;

(2) in subsection (c)--

(A) in the heading for such subsection, by striking ‘Insured’ and inserting ‘Covered’;

(B) by striking ‘an insured’ and inserting ‘a covered’;

(C) by striking ‘such insured’ and inserting ‘such covered’; and

(D) by striking ‘or savings and loan holding company’ and inserting ‘savings and loan holding company, or foreign banking organization (as such term is defined under Regulation K of the Board of Governors of the Federal Reserve System (12 C.F.R. 211.21(o)))’;

(3) by amending subsection (d) to read as follows:

‘(d) Only Bona Fide Hedging and Traditional Bank Activities Permitted-

‘(1) IN GENERAL- The prohibition in subsection (a) shall not apply to any covered depository institution that limits its swap and security-based swap activities to the following:

‘(A) HEDGING AND OTHER SIMILAR RISK MITIGATION ACTIVITIES- Hedging and other similar risk mitigating activities directly related to the covered depository institution’s activities.

‘(B) NON-STRUCTURED FINANCE SWAP ACTIVITIES- Acting as a swaps entity for swaps or security-based swaps other than a structured finance swap.

‘(C) CERTAIN STRUCTURED FINANCE SWAP ACTIVITIES- Acting as a swaps entity for swaps or security-based swaps that are structured finance swaps, if--

‘(i) such structured finance swaps are undertaken for hedging or risk management purposes; or

‘(ii) each asset-backed security underlying such structured finance swaps is of a credit quality and of a type or category with respect to which the prudential regulators have jointly adopted rules authorizing swap or security-based swap activity by covered depository institutions.

‘(2) DEFINITIONS- For purposes of this subsection:

‘(A) STRUCTURED FINANCE SWAP- The term ‘structured finance swap’ means a swap or security-based swap based on an asset-backed security (or group or index primarily comprised of asset-backed securities).

‘(B) ASSET-BACKED SECURITY- The term ‘asset-backed security’ has the meaning given such term under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).’;

(4) in subsection (e), by striking ‘an insured’ and inserting ‘a covered’; and

(5) in subsection (f)--

(A) by striking ‘an insured depository’ and inserting ‘a covered depository’; and

(B) by striking ‘the insured depository’ each place such term appears and inserting ‘the covered depository’.

Passed the House of Representatives October 30, 2013.

Attest:

KAREN L. HAAS,

Clerk.

[FrankRep]

Justin Amash voted Yes on this.


Question:


Justin I usually like you because you are so transparent. But I can't seem to find why you votes yes on HR992. Deregulating the banks even more? Please explain.


Justin Amash: (https://www.facebook.com/repjustinamash?filter=2)


The bottom line is the bill does very little, but it marginally helps reduce the likelihood of future bailouts.

[devil21]

Well that's a bullshit answer.

[devil21]

This is serious wonk stuff, trying to decipher the legalese, but comparing current Dodd-Frank section 716 (here: http://www.dodd-frank-act.us/Dodd_Frank_Act_Text_Section_716.html) with the proposed changes in HR 992 (above), appears to completely reverse bailout restrictions on derivatives and specifically adds in foreign banks.

Current law:

(d) ONLY BONA FIDE HEDGING AND TRADITIONAL BANK ACTIVITIES PERMITTED.—The prohibition in subsection (a) shall apply to any insured depository institution unless the insured depository institution limits its swap or security-based swap activities to:

This is the current prohibition in subsection (a):
"(a) PROHIBITION ON FEDERAL ASSISTANCE.—Notwithstanding any other provision of law (including regulations), no Federal assistance may be provided to any swaps entity with respect to any swap, security-based swap, or other activity of the swaps entity."


Proposed law:

‘(1) IN GENERAL- The prohibition in subsection (a) shall not apply to any covered depository institution that limits its swap and security-based swap activities to the following:
Completely rewrites definitions of swaps and removes entire section about CDS/derivatives

Remember, "covered" is the term and the definition includes foreign banks. HR 992 removes an entire section related to limitations on Credit Default Swaps/derivatives. My reading of HR 992 basically is that it adds in foreign banks as a covered institution that can be bailed out by the Fed and/or Treasury.

Justin, I do not think this bill means what you think it does! I do not use FB so if someone could let Justin know that the bill is NOT what he thinks it is, much appreciated. This also needs to be actively opposed when it comes before the Senate!!

[tsai3904]

He responded again:


I heard this was a bailout bill for derivatives trading that was passed. Am I missing something?

Justin Amash - Yes, it's not a bailout bill. If anything, it reduces the likelihood of future bailouts. I will explain soon. My vote explanations are posted chronologically.

Justin Amash - I have rarely seen so much misinformation spread around about one bill.

Here's a good Q&A on HR 992:
http://ourfinancialsecurity.org/blogs/wp-content/ourfinancialsecurity.org/uploads/2013/04/Q-A-HR-992-FINAL-4-10-13.pdf

[devil21]

He responded again:



Here's a good Q&A on HR 992:
http://ourfinancialsecurity.org/blogs/wp-content/ourfinancialsecurity.org/uploads/2013/04/Q-A-HR-992-FINAL-4-10-13.pdf

I have a hard time taking any group seriously that has Elizabeth "I don't know where all the TARP money went even though that was my job" Warren as it's poster child.

Here's their Board of Directors and affiliated organizations: (holy left-wing Batman!)

Lisa Donner – Executive Director

Marcus Stanley – Policy Director

Marvin Silver – Outreach Director

Jim Lardner – Communications Director

Erin Kilroy – Administrative Manager
AFR Executive Committee

Name Organization

Stephen Abrecht SEIU
Mitria Wilson National Community Reinvestment Coalition
Lisa Donner Americans for Financial Reform
Heather Slavkin AFL-CIO
Nancy Zirkin The Leadership Conference on Civil and Human Rights
Lisa Gilbert Public Citizen

AFR Steering Committee

Name Organization

Stephen Abrecht SEIU
Lisa Gilbert Public Citizen
Mary Bottari The Center for Media and Democracy
Janis Bowdler NCLR
Mike Calhoun Center for Responsible Lending
Mitria Wilson National Community Reinvestment Coalition
Alan Charney US Action
Lisa Donner Americans for Financial Reform
Ira Rheingold NACA
Ed Mierzwinski US PIRG
Lisa Lindsley AFSCME
Heather McGhee Demos
Lenore Palladino MoveOn.Org
Liz Ryan Murray National People’s Action
Heather Slavkin AFL-CIO
Tom Feltner Consumer Federation of America
Lisa Rice National Fair Housing Alliance
Maureen Thompson The Hastings Group
Rob Randhava The Leadership Conference on Civil and Human Rights
Mary Wallace AARP

Im very curious to read Amash's explanation so someone please post it when it's available. If there's one thing I've learned it's that when practically all of Congress supports a bill nothing good will come from it, particularly when it's a bill to change a law that originally was to prevent bailouts.

[TaftFan]

Full explanation from Amash will come later.

Three Republicans voted no-Jimmy Duncan, Thomas Massie, and Walter Jones.

[tsai3904]

Im very curious to read Amash's explanation so someone please post it when it's available. If there's one thing I've learned it's that when practically all of Congress supports a bill nothing good will come from it, particularly when it's a bill to change a law that originally was to prevent bailouts.

Do you think Congress should be able to dictate to banks what activities they can do?

Dodd-Frank forced banks to trade certain swaps in a separate entity. This bill allows banks to trade some of those prohibited swaps within their existing institution.

[HOLLYWOOD]

I like this one that was quietly passed in April


Obama Signs Bill Gutting Transparency Provisions in Insider Trading Law

President Obama has signed into law a measure critics say guts key transparency provisions from a law designed to combat insider trading by members of Congress. The new bill repeals a requirement in the Stop Trading on Congressional Knowledge Act that high-level federal officials disclose financial information online. But, according to the Center for Responsive Politics, it also removes requirements for the searchable and electronic filing of information related to potential conflicts of interest by the president, vice president, Congress and other officials. On its website OpenSecrets.org, the Center wrote: "Without the provisions, the STOCK act is made toothless. Insider trading by members of Congress and federal employees is still prohibited, but the ability of watchdog groups to verify that Congress is following its own rules is severely limited because these records could still be filed on paper — an unacceptably outdated practice that limits the public’s access."

ACTION ALERT: STOCK Act Reversal Signed by President

by Dan Auble on April 15, 2013 1:27 PM
http://www.opensecrets.org/news/2013/04/action-alert-stock-act-reversal-signed.html


Sponsor

http://www.opencongress.org/images/photos/thumbs_42/300082.png (http://www.opencongress.org/people/show/300082_Harry_Reid) Senator

Harry Reid (http://www.opencongress.org/people/show/300082_Harry_Reid) D-NV
No Co-Sponsors

Committees
No Committees found for this Bill
OpenCongress Summary

Effectively excludes staffers--both legislative and executive--from the scope of the STOCK Act. OpenCongress bill summaries are written by OpenCongress editors and are entirely independent of Congress and the federal government. For the summary provided by Congress itself, via the Congressional Research Service, see the "Official Summary" below.

Official Summary
Nullifies the effectiveness of the Stop Trading on Congressional Knowledge Act of 2012 (STOCK Act) with respect to mandatory public, on-line financial disclosure reporting by congressional staff (except Members of Congress and congressional candidates) and executive branch officers and empl...Read the Rest (http://www.opencongress.org/bill/113-s716/show#)
President Obama has just signed a rollback of key transparency provisions of the STOCK Act (http://www.opensecrets.org/pfds/stockactprimer.php).

Late Thursday night, as we reported (http://www.opensecrets.org/news/2013/04/senate-guts-stock-act.html) last week, the Senate gutted the disclosure requirements by approving S.716 (http://www.opencongress.org/bill/113-s716/show), an act amending the requirements of the 2011 law. The House followed suit the next day, and the president signed the bill minutes ago.

The bill doesn't just eliminate a controversial requirement that personal financial disclosures of tens of thousands of high level federal employees be made publicly accessible online. It also reverses two critical components of the original STOCK act: mandatory electronic filing of PFDs by the president, his cabinet and members of Congress, and the creation of a publicly accessible database.

The elements of the STOCK Act that were removed include:


Creation of searchable, sortable disclosure of the information contained in reports even for Congress, the president, vice president, the president’s cabinet and congressional candidates.



Required electronic filing for Congress, the president, vice president, the president’s cabinet and congressional candidates, as well as high-level executive and congressional branch employees. Even images of the staffers' filings will not be available for viewing on the web.

Without the provisions, the STOCK act is made toothless. Insider trading by members of Congress and federal employees is still prohibited, but the ability of watchdog groups to verify that Congress is following its own rules is severely limited because these records could still be filed on paper -- an unacceptably outdated practice that limits the public's access.
This is not true disclosure.

Contact President Obama’s office today (http://www.whitehouse.gov/webform/comment-legislation?billname=S.%20716%20%E2%80%93%20STOCK% 20Act%20Modifications) to signal your disappointment, and urge YOUR members of Congress to file their personal financial disclosure documents electronically and to propose legislation reinstating the database provision.


Tags:



dan auble (http://www.opensecrets.org/MT/mt-search.cgi?blog_id=8&tag=dan%20auble&limit=20&IncludeBlogs=8),
pfd (http://www.opensecrets.org/MT/mt-search.cgi?blog_id=8&tag=pfd&limit=20&IncludeBlogs=8),
pfds (http://www.opensecrets.org/MT/mt-search.cgi?blog_id=8&tag=pfds&limit=20&IncludeBlogs=8),
stock act (http://www.opensecrets.org/MT/mt-search.cgi?blog_id=8&tag=stock%20act&limit=20&IncludeBlogs=8)

[devil21]

Do you think Congress should be able to dictate to banks what activities they can do?

Dodd-Frank forced banks to trade certain swaps in a separate entity. This bill allows banks to trade some of those prohibited swaps within their existing institution.

No, I don't think that. I do think the banks are fully responsible for those actions. I don't support bailouts in any form though so it's a moot point as long as there are still conditions in which a bank can be bailed out by taxpayers for bad bets on derivatives. Dodd Frank 716 is about bailouts, not regulating exactly what activity a bank can undertake.

I wondered why the AFR that's helping push this is so chock full of lefty groups....then it occurred to me why. Many big union pension plans are tied into bank derivatives and of course the unions want their pensions bailed out by taxpayers in case (when) the banks resume making bad bets.

[tsai3904]

I wondered why the AFR that's helping push this is so chock full of lefty groups....then it occurred to me why. Many big union pension plans are tied into bank derivatives and of course the unions want their pensions bailed out by taxpayers in case (when) the banks resume making bad bets.

They're opposed to the bill.

http://ourfinancialsecurity.org/blogs/wp-content/ourfinancialsecurity.org/uploads/2013/10/AFR-Letter-Oppose-HR-992-10-23-13.pdf

[devil21]

They're opposed to the bill.

http://ourfinancialsecurity.org/blogs/wp-content/ourfinancialsecurity.org/uploads/2013/10/AFR-Letter-Oppose-HR-992-10-23-13.pdf

Im thoroughly confused by their publications, Amash's statements, and my own understanding of the bill.

So Amash is misunderstanding the bill then and/or he voted incorrectly? My original understanding of the bill is correct?

[jdcole]

There's a shit ton of people on his FB page taking him to the woodchipper on this one, myself included. I also took time to thank Thomas for voting "No" on it.

[devil21]

There's a shit ton of people on his FB page taking him to the woodchipper on this one, myself included. I also took time to thank Thomas for voting "No" on it.

Being a politician is a damn tough job at times.

I've never been an active supporter of Amash but I've never had anything bad to say about him. If his vote was in error, just come out and admit it. Don't spin it.

[malkusm]

There's a shit ton of people on his FB page taking him to the woodchipper on this one, myself included. I also took time to thank Thomas for voting "No" on it.

Maybe everyone could wait to see his full explanation? I think he's earned the benefit of the doubt until then, no?

[Natural Citizen]

So, I wonder exactly how many hundreds of trillions of dollars these banks will be guaranteed to be paid by us? Any guesses? And these are all credit derivitives? Heh. Bend over. Here it comes again...:eek:

[LibertyEagle]

Maybe everyone could wait to see his full explanation? I think he's earned the benefit of the doubt until then, no?

^^ This.

[jdcole]

Maybe everyone could wait to see his full explanation? I think he's earned the benefit of the doubt until then, no?

Perhaps. Doesn't it say something about us, though, if we aren't willing to hold our champions accountable in the same manner we do our opponents?

I'll wait for the explanation - I know he has a backlog of vote explanations to give, but considering the nature of this vote (and the amount of people hammering him on why he voted the way he did), you'd think he would pony one up right quick. If it's valid, I'll thank him and apologize. If it's the same BS as above, however....well, the chipper's always gassed up and ready to go.

[malkusm]

Perhaps. Doesn't it say something about us, though, if we aren't willing to hold our champions accountable in the same manner we do our opponents?

Doesn't it equally say something about us if we're going to throw our own under the bus (or as you would say, "into the woodchipper") at the faintest notion of a mistake? I mean really, who in their right mind would sign up to run for elected office as a libertarian-type if we're pretty much going to seek out their one questionable vote and deride them for it despite their larger body of work?

[devil21]

Did Justin post an explanation on his FB for this vote yet?