Banking Law

The "Durbin Amendment" to the Dodd-Frank Act has been causing heartburn to big bankers since the law was enacted. Frankly, even though community banks are exempted from the limit on interchange fees, most community bankers I talk to don't kid themselves that the limits that apply to big banks won't will "trickle down" to their level. I've heard scuttlebutt that Senator Durbin would love to give the law a super charger by extending it to credit cards, as well. I think he has as much chance of getting that done with the House controlled by the Republicans as I do of scoring a night of passion with Jennifer Lopez. Still, it's nice for every man to have a dream.

On the other hand, in the other chamber of horrors, known as the "House of Representatives," our old buddy Barney Frank is sounding positively pacific when it comes to interchange fees.

In an interview with Bloomberg, the ranking member of the House Financial Services Committee said he would work with the GOP on the issue, putting him at odds with the new lead voice on Wall Street reform in the Senate, Sen. Dick Durbin (D-Ill.).

"If they want to do something on it, I'll work with them," he said Wednesday.

I'm merely guessing, but perhaps Barney believes that it doesn't hurt him to appear to be cooperative with House Republicans on an interchange fee rollback because (A) the Republicans in the House can ram through just about anything they please, and (B) Durbin will never let it pass in the Senate, where Democrats still constitute a bare majority.

When it comes to Fannie Mae and Freddie Mac, however, Barney chides the Republicans for not moving more quickly to overhaul those rotting corpses.

Rep. Barney Frank, (D., Mass.), the top Democrat on the House Financial Services Committee, told reporters that he was ?puzzled? by what he characterized as a lack of action by Republicans, who criticized the Dodd-Frank financial-overhaul law enacted last summer as incomplete without dealing with the mortgage giants.

?Last year the Republicans were very insistent that this was an emergency,? Frank told reporters. ?I?m waiting for their plan. I am surprised that they?re not moving as quickly?They knew exactly what they wanted to do when they were in the minority, so I don?t know why they aren?t moving forward.?

[...]

?I think many of their financial supporters don?t like what they are talking about doing,? said Frank. ?This issue is a little harder when you have the responsibility for dealing with it.?

While the hatred displayed toward Frank in the comments section of the Wall Street Journal's blog post is unfocused, over two years ago, the Boston Globe's Jeff Jacoby summed up the reasons why Frank comes off today as an especially hypocritical clown in a town chock full of them.

[Frank's] fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.

I was worried that with the changing of the guard in the House, the low-hanging fruit of mockery might become a bit more scarce than they've been in the last few years. Fortunately, Barney just can't keep his mouth closed.