Rep. Jackie Speier, D-Calif., was a thorn in the banking industry’s side long before her current fight to force leverage limits on big institutions.
As a California state senator, Speier wrote a landmark privacy law that forced banks to get customers' permission before selling personal information to third parties. Banks fought the legislation for years. When it was enacted in 2003, industry representatives predicted the law would end the world as we know it. (It didn't.)
During this period, Speier saw financial services lobbying up close and didn’t exactly come away impressed.
"I've been in the legislative arena for 15 years," she said in a sit-down interview in 2003. "I can say this without fear of being contradicted: In that term I have never seen a bill so fervently fought by a phalanx of Brooks Brothers-suited opponents, with such intensity and with so much money being thrown around. It's been estimated by independent sources that over $20 million was spent killing that bill last session."
(It should be noted that at the time, the reporter conducting the interview – me – was wearing a Brooks Brothers suit. I really hope she didn’t notice).
Since coming to D.C., Speier has remained an outspoken bank critic. In 2009, she warned that the industry was fighting to gut a proposed consumer protection agency.
“They are going to try to make this a consumer protection agency in name only without the power that it needs to do its job,” she said.
But she has also been tough on the Obama administration for its foreclosure prevention plan.
“This program is death by a thousand cuts," she said last month. "It has failed. It has failed miserably. And we are incapable of saying this was an experiment and it didn't work. Let's try something else."
The conventional wisdom is that her leverage provision will have a tough time making it into the final regulatory reform bill. But banks have counted Speier out before – and lived to regret it.
In an online poll this week, 44% of respondents said Speier's proposal to cap leverage at systemically important institutions at 15:1 is exactly the kind of step any reform package should be taking, while 35% said it was arbitrary and restrictive and 21% said it was a political longshot either way.
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