A Failed Vote on Breaking up BanksMay 7, 2010 - by Donny Shaw
The Senate last night voted on a financial reform amendment that, although probably never having a real shot at passing, gives us a unique chance to see in the stark relief the divisions in both parties on truly reining in the “too big to fail” banks.
The amendment, a version of the SAFE Banking Act sponsored by Sens. Sherrod Brown [D, OH] and Ted Kaufman [D, DE], would have placed strict size caps on banks and non-bank financial companies. In practical terms, it would have forced the breaking up of some of the Wall Street corporations. Instead of consolidating like they have been doing for the past 20 years, banks like Bank of America and Chase would have been forced to sell some of their branches off to smaller regional banks over a period of three years.
Obviously, the big banks were dead set against this amendment. With no economic literature showing any economies of scale for banks with assets above $100 billion or so, and plenty of studies showing banks getting more predatory and abusive as they get bigger, there was not a very substantial policy argument to be made against it. There wasn’t even too much of a debate in the Senate. Banking Committee Chairman and financial reform floor manager Chris Dodd [D, CT] called up the amendment last night suddenly for a snap vote, in an apparent attempt to catch the Senate off guard and cut-off progress in organizing that was being made by reform advocates.
When the roll was called, the amendment failed overwhelmingly, 33-61. The Democrats were sharply divided, and the lists of the Democrats voting “no” and the Democrats voting “yes” are really interesting. You can view them here:
Also worth paying attention to is the list of senators who dodged going down on the record on the amendment at all by voting “abstain”:
- Sen. Robert Bennett [R, UT]
- Sen. Jim Bunning [R, KY]
- Sen. Robert Byrd [D, WV]
- Sen. Jim DeMint [R, SC]
- Sen. Richard Lugar [R, IN]
- Sen. David Vitter [R, LA]