May 8, 2009
In a recent radio address on Radio Chicagoland Senator Richard (Dick) Durbin remarked on power the financial services industry still wields at a time when that industry is theoretically under great scrutiny:
"The banks hard to believe in a time when we're facing a banking crisis that many of the banks created are still the most powerful lobby on Capitol Hill. And they frankly own the place."
The banking lobby won a significant victory in Congress on May 1, 2009 when 12 Democrats joined a united Republican Caucus to vote down an amendment to President Obama's housing bill. At issue was a measure that would have allowed bankruptcy judges to modify mortgages to help homeowners avoid foreclosure.
The House version of the bill, which provides wide housing assistance and consumer protection measures, passed with the amendment, but Speaker Nancy Pelosi recently said she does not expect the measure to be included in the final bill since the Senate voted it down.
Democrats had hoped allowing bankruptcy judges to adjust mortgages on primary residences would encourage banks to renegotiate mortgages with homeowners facing foreclosure -- a key part of President Obama's plan to address the financial crisis. Judges are already permitted to adjust mortgages for second homes, farms and ranches. Banks claim that allowing judges to adjust primary mortgages would increase their risk and raise the price of mortgages across the board.
Senator Richard Durbin, who sponsored the amendment, explained to Bill Moyers on THE JOURNAL why he thinks it's an important measure, and what eventually led to its defeat.
Senator Durbin mentions Simon Johnson's recent article in the ATLANTIC, in which Johnson notes that even in the midst of great public unpopularity, the finance industry retains enormous power in the halls of Congress. Senator Durbin believes it was the banking sector's opposition that defeated the bill, "The banking industry fought me tooth and nail, with one exception, Citigroup, that came out for this early on and stuck with me to the bitter end. But the banking industry, the associations and groups, fought me all the way."
Two watchdog groups connect the banking industry's continued political clout, despite its public unpopularity, to the amount of money they give to Congress in the form of campaign contributions. Following the defeat of Senator Durbin's measure, The Center for Responsive Politics pointed out that the finance, insurance and real estate industry was the number one donor to 6 of the 12 Democrats who voted against the measure and was among the top donors to the rest.
And a recent report from the Center for Public Integrity shows that the 25 largest originators of subprime mortgages, the risky loans some say are at the heart of the recent financial crisis, spent over $370 million in Washington fighting against regulation. The report also found that at least 21 of the 25 ventures were either backed or owned by banks now receiving bailout money.
Senator Durbin recently introduced a bill with Senator Arlen Specter to create a voluntary public financing system for members of Congress. As he tells Bill Moyers on the JOURNAL: "I think that is a good move for our democracy, and it's one which we ought to acknowledge is at the heart of many of the issues we face."
>Tracking Campaign Dollars Online
Senator Dick Durbin was elected in December 2006 to the post of Assistant Majority Leader, also known as Majority Whip. It is the Senate's second highest ranking position.
Durbin, a Democrat from Springfield, is the 47th U.S. Senator from the State of Illinois. He is the state's senior senator and convenor of the bipartisan Illinois delegation.
Senator Durbin was elected to the U.S. Senate on November 5, 1996 and re-elected in 2002 and 2008.
In 2001, Senate Democratic Leader Tom Daschle (D-SD) appointed Durbin to the Senate's leadership team, Assistant Democratic Floor Leader. In 2000, Durbin served as Co-Chairman of the Democratic Platform Committee and also was Co-Chairman of the Atlantic Conference sponsored by the Chicago Council on Foreign Relations. He is a founding member of the Senate Global AIDS Caucus.
Published May 8, 2009.
Guest photos by Robin Holland