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2 hostile to oversight fight each other

November 14, 2010 - Mike Maneval
Citizens await to see the full impact of the electoral shift of the U.S. House of Representatives to Republican control - and the full impact will be the sum of many parts, including which Republican heads which committee. An article by Andy Kroll for Mother Jones magazine looks at the two Republicans locked in a fight to chair the financial services committee in the House.

Spencer Bachus, from central Alabama, has collected about $3,688,000 from banks, insurance companies, and real estate and other financial interests during his congressional career. Ed Royce, who represents the Los Angeles suburbs in Orange County, only pulled about $1,657,000 in donations from the financial sector.

Bachus, Kroll reports, is an opponent of the "Volcker rule," a law passed in 2010 to require trading firms to keep enough capital on hand to mitigate losses in high-risk transactions. He also opposed provisions in the financial regulatory reform bill to liquidate the sort of "too big to fail" enterprises who've sought bailouts before. Royce also has objections to the financial regulatory reform bill, particularly its rules regarding derivatives. Under the reform act, derivatives-trading will proceed through a comprehensive clearinghouse and traders will be required, much like the Volcker rule, to be prepared, with adequate capital as collateral. Royce wishes to amend the derivatives rules in such a way that the Congressional Research Service says "would all but nullify the rule."

Do Kroll's insights provide readers with a sense of which congressman is more hostile to oversight and transparency in the financial sector? Kroll himself says "on the issues, Ed Royce ... isn't all that different from Bachus." And either way, Kroll notes, the leadership of the Republican Caucus in the House has pledged to refuse to fund enforcement of the financial regulatory reform act ... so rather than the hostility of either to oversight distinguishing one from the other, it may well prove to define both and all their partisan colleagues.


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