June 7, 2018 | Reading Time: 3 minutes
What Happened to Jim Himes’ Spine?
Himes looks like he caved to Wall Street. Did I mention he's a former banker?
I’ve been mulling it over lately, and I keep returning to the same question.
What happened to Jim Himes’ spine?
I mean, he has one, right? He’s represented Connecticut’s 4th Congressional district for nearly a decade. He was part of the effort to write the Dodd-Frank bill, a series of laws designed to prevent another financial panic like the one that gripped the United States between 2007-2008.
But given his vote to pass a new banking law that weakens Dodd-Frank, rather than strengthening it, I have to say that if Himes has a spine, it’s nearly impossible to see.
Himes tells us that in no way, shape, or form does the new law “gut” Dodd-Frank. On that score, he appears to be correct. The bulk of the law remains in place. But “gut” is what you say when you find yourself in the outside looking in. Name the most extreme thing you can think of. Then deny doing it. The trick often works. But not this time.
Every single Democrat from Connecticut, from both chambers of US Congress, voted against the new law—except Jim Himes. Every single Democrat said it was dressed up to look like it was helping Main Street when it was helping Wall Street—all except Jim Himes.
Fun fact: Jim Himes is a former Wall Street banker.
I’m no expert, but I can read. According to the papers, the new law makes it so that small banks don’t need to worry about Dodd-Frank provisions if they have less than a certain amount on hand. How much? Try $10 billion or less. Again, no expert here, but that sounds like the new law is helping big banks, not small community banks.
Now, you could say that lifting the lid is still a relief for small banks. Our dear congressman is saying that. But bear in mind that the biggest small banks in Connecticut don’t come close to that. Sikorsky Credit Union, one of the 25 credit unions in Himes’ district, has $800 million in assets.
Let’s see: 10 billion dollars minus 800 million dollars is—never was good at math. Safe to say, it’s a big enough difference to make you wonder, “Who does this law serve?”
You see, it was a twofer. If you voted for one part of the bill you had to vote for the other. On the one hand, Himes voted to weaken regulations for small banks that don’t come close to meeting the new threshold, making you wonder who the new law is going to serve. On the other, Himes voted to lift the cap on banks the size of American Express. Any bank with more than $250 billion is no longer considered too-big-to-fail, or a risk to the system.
Again, no expert, but $250 billion seems big, big enough to justify tightening the lid, not loosening it. Anyway, why would a Democrat think this trade-off is a good one?
For the sake of argument, let’s presume Himes is correct on the facts. He’s wrong, but let’s presume he’s correct in saying the point of the bill was to provide relief for small banks even though the biggest of the small banks in Connecticut don’t meet the new threshold. Even if he were correct, why risk appearing to be in hock to Wall Street?
Why not say something like: “Look, I support relief for small banks. If this were a clean bill, I’d vote for it. But my Republican colleagues have poisoned the bill with an amendment threatening banking safeguards. I’m a no.”?
I don’t know the answer. I don’t know if Himes knows the answer, because policy and politics might not have been top-of-mind. But I do know that Himes looks like he caved. Did I mention Himes is a former Wall Street banker?
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John Stoehr is the editor of the Editorial Board. He writes the daily edition. Find him @johnastoehr.