Tim Kaine on Wall Street Reform

If you missed the first campaign event of the Clinton/Kaine ticket on Saturday, you might want to check it out. There is a reason why the headlines about Sen. Tim Kaine immediately went from “boring whitebread” to “happy warrior.” As someone who didn’t think the VP pick would have a lot of effect on this campaign prior to watching it, I now think that Kaine’s biography and upbeat optimism might inject something that has been sorely lacking from either ticket – most notably from Trump’s dark dystopian description of America that was on display at his speech in Cleveland.

From what I saw, Kaine addressed almost all of the concerns that had been leveled about him in the lead-up to this announcement. But there was one that remained for some Democrats. It comes down to a question of whether or not he wholly supports Wall Street reform. That’s why I found it interesting that, on the morning before the Clinton/Kaine rally in Florida, there was a guest who appeared with President Obama for his weekly address.

In many ways, that was a powerful statement of unity on the Democratic side.

But in the lead-up to the VP announcement, there were headlines about how Tim Kaine was proposing a roll-back of some of the reforms in Dodd-Frank. So it’s worth taking a look at what that was all about. Last week Kaine signed two letters – one to the Consumer Financial Protection Bureau (CFPB) and one to Federal Reserve Board – asking them to ease up on applying some of the Dodd-Frank regulations to community banks, credit unions and regional banks.

Those measures are supported by the Independent Community Bankers of America (ICBA), one of the most powerful lobbies in Washington. In response to the letters Kaine signed, David Dayen wrote: “Tim Kaine, Possible Hillary Clinton Pick for Vice President, Goes to Bat for Banks,” and says this about the group that is behind these requests:

In the letters, Kaine is offering to support community banks, credit unions, and even large regional banks. While separate from the Wall Street mega-banks like JPMorgan Chase and Bank of America, these financial institutions often partner with the larger industry to fight regulations and can be hostile to government efforts to safeguard the public, especially if it crimps their profits.

They also represent a key source of donor funds, one that has trended away from Democrats. The Independent Community Bankers of America have given 74 percent of their $873,949 in donations this cycle to Republicans, according to the Center for Responsive Politics.

Sen. Tim Kaine certainly wouldn’t be the first Democrat to support the interests of ICBA. We could probably find countless times that has happened. But there is one in particular that is worth noting. A little over a year ago, I wrote about Sen. Elizabeth Warren, the pragmatist. It was all about how she had worked with ICBA during the lead-up to passage of Dodd-Frank to exempt them from oversight by the CFPB. In it, I quoted some of Ryan Lizza’s account of how Warren worked with Camden Fine, head of ICBA.

As the Dodd-Frank bill made its way through Congress, in 2010, Fine’s willingness to tolerate it was crucial. With Warren’s blessing, Barney Frank, who sponsored the bill in the House, negotiated a deal with Fine that allowed community banks to be examined by their current regulators rather than by Warren’s new agency. “They were the ones with the clout, and that’s why I had to make a deal with Cam,” Frank told me. Warren signed off on it. “She was willing to do what she had to do as long as it didn’t give away substance,” Frank said.

Whether or not community banks, credit unions and regional banks should be subjected to the same scrutiny as the financial institutions who were responsible for the Great Recession is a question that can be discussed. But if agreeing to exempt them from Dodd-Frank regulations indicates that someone is “going to bat for the banks,” then that description would apply to Sen. Warren as well. I don’t think that accusation sticks. Tim Kaine proposed nothing beyond what Elizabeth Warren advocated for during the passage of Wall Street reform.

Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly.