Liberal activists who backed Sen. Bernie Sanders’s campaign cried foul Thursday over what they describe as pro-banking lobbying by Sen. Timothy M. Kaine, a finalist to become Hillary Clinton’s running mate.
Kaine (D-Va.) signed a bipartisan letter Monday urging the Consumer Financial Protection Bureau to “carefully tailor its rulemaking” regarding community banks and credit unions so as not to “unduly burden” these institutions with regulations aimed at commercial banks. At issue are compliance rules under the post-recession banking law known as Dodd-Frank.
Kaine was also one of four senators to sign a second letter Monday on behalf of regional banks seeking relief from a daily reporting requirement of liquidity. Activists said the request to Federal Reserve Chair Janet L. Yellen and other officials to lengthen the time between reporting would allow some very large banks too much leeway. Liquidity can be a measure of a bank’s health and risk-taking.
The requests would help banks of many sizes avoid oversight, said Charles Chamberlain, executive director of the activist network Democracy for America.
“Let’s be really clear: It should be disqualifying for any potential Democratic vice-presidential candidate to be part of a lobbyist-driven effort to help banks dodge consumer-protection standards and regulations designed to prevent banks from destroying our economy,” Chamberlain said.
Kaine, campaigning in Northern Virginia, dismissed criticism over the letters.
“People are going to say whatever they want, but I’m strongly for the regulation of the financial industry,” Kaine said.
“It’s important you don’t treat every financial institution the same,” he said. “It wasn’t credit unions that tanked the economy, it wasn’t local community banks that tanked the economy, generally wasn’t regional banks that did things that tanked the economy.”
Kaine spokeswoman Amy Dudley said Kaine is “a strong supporter of Dodd-Frank.” He backed the proposed changes, she said, as a way to draw distinctions between types of banks and to train federal oversight where it is most needed.
Kaine “believes it’s important that the rules are tailored to the character of individual institutions so that we don’t accidentally choke off capital access to the families and small businesses in our communities,” Dudley said. “The toughest regulation should be on the biggest and riskiest institutions. Credit unions, community banks and regional banks need to be carefully regulated, but the nature of the regulation can be different to ensure scarce resources are efficiently spent allowing regulators to focus on the bad actors.”
Dodd-Frank allows the CFPB to grant some reporting and compliance exemptions.
Opponents say loosening Dodd-Frank to exempt large classes of financial institutions could open consumers to bad practices such as risky mortgages.
“Our presidential ticket cannot beat the billionaire bigot by simply being not Donald Trump,” Chamberlain said. “Making Senator Tim Kaine our vice-presidential candidate could be potentially disastrous for our efforts to defeat Donald Trump this fall.”
The activist network had endorsed Sanders, and many of its members worked as Sanders volunteers. The group endorsed Clinton last week while praising Sanders for airing important issues including banking reform.
Fifteen Senate Democrats and one independent signed the letter. Sens. Elizabeth Warren of Massachusetts and Cory Booker of New Jersey did not sign it, making Kaine the only Clinton vice-presidential prospect who did so.
Banking laws — specifically the question of whether to expand on Dodd-Frank rather than contract it — were a major issue in the Democratic primary. Sanders advocated breaking up large financial institutions to give consumers greater leverage. He did not sign either letter.
Hours before Clinton was expected to announce her decision, Kaine noted his warmness toward the Trans-Pacific Partnership, a trade bill that is opposed by Clinton, Trump and the progressive wing of the Democratic Party.
Also Thursday, an ad hoc group claiming to represent more than 1,200 of the 1,900 Sanders delegates who will attend the Democratic convention next week said a peaceful convention protest against Kaine would be likely.
The group cited a survey of Sanders delegates Sunday that showed less than 3 percent of delegates considered Kaine an “acceptable” Democratic vice-presidential nominee.