However the impending overhaul of financial rules ends up affecting Wall Street, it gives Democrats in Congress an answer when they're attacked for supporting bank bailouts.
“I didn’t like having to vote for it, but I knew the consequences (of bank failure) to everybody I represented would be horrific,” Sen. Patty Murray said Saturday of the bipartisan but unpopular 2008 bailout. “But I vowed to myself as we passed that, that I was going to do everything I could to change the rules on Wall Street so that this would never happen again.”
At the Democrats’ state convention, Murray and the party’s other major candidates said the deal hammered out last week in Congress on financial regulations is a step forward, though they would have liked a bigger one.
“I think it’s a start. I think we could do better,” said Suzan DelBene, who is challenging Republican Rep. Dave Reichert of Auburn.
The legislation wouldn’t necessarily break up the big banks that Congress rescued out of a concern they were “too big to fail.”
Democratic candidates including DelBene and Denny Heck of Olympia want a division between investment banks and more traditional consumer lending.
It’s something Sen. Maria Cantwell pushed for unsuccessfully in the financial-reform legislation. It’s part of the platform Democrats adopted Saturday at their convention. And for decades after the Great Depression, it was the law. Called the Glass-Steagall Act, it was repealed in 1999.
Heck has been vocal in calling for rebuilding that banking wall, but the 3rd Congressional District candidate still praised the legislation Saturday while also saying he needed to review details of the final deal.
He pointed to regulations that would limit the investments banks could make and the trading they could do in derivatives, the financial instruments that helped lead to the crisis.
“There’s absolutely no question that it’s a giant step forward for the American consumer,” Heck said.
The bill sets up a consumer agency with some authority over credit cards, mortgages and other lending. DelBene, though, said the agency may not have enough teeth.
Congress hasn’t moved fast enough on several fronts this year, said DelBene, who favors a cap on polluters’ carbon dioxide emissions and stronger measures to lower health care costs than those in this year’s health care overhaul.
“I think we’ve been incredibly slow. I think we’ve tended to pass weak legislation,” she said.
Democratic delegates approved resolutions Saturday calling for tougher financial regulations.
One delegate who favors a crackdown on Wall Street said that people, not government, must take the lead. Customers of large banks should withdraw their money, said Mark Boswell, an engineer who lives near Auburn.
“If we want to restore our economy,” Boswell said, “the only thing we can do is move our money out of the institutions that will not loan it.”
Murray said she backed amendments to toughen the financial rules, but she said the bill in the end will require banks, not taxpayers, to pay for their own rescue in a future financial collapse.
“Moving forward 85 percent is much better than staying where we were today,” Murray said.