The Citibank Defense provision inserted by Rep Kevin Yoder, Republican from Kansas
Dec 19, 2014
The recent spending bill passed by the House and Senate included a provision to put the US taxpayers on the hook in case of a derivatives meltdown, so as to save the big gambling banks.
Citibank especially. With this provision in place, they just passed JP Morgan by adding another $9 billion to their derivatives gambling portfolio. Who is the culprit who added this provision to the spending bill? None other than Rep. Kevin Yoder, R-Kansas.
Boo. Thumbs down. I wish I were a Kansas voter. Kansas citizens, Arise!
Washington (CNN) -- The mystery congressman responsible for the inclusion of language in the $1.1 trillion dollar spending bill that caused a progressive outcry is coming forward to defend the provision. The measure weakens banking regulations designed to prevent another financial crisis.
Critics of the language, such as Democratic Sen. Elizabeth Warren, claim the provision could invite another fiscal meltdown and was essentially written by the U.S. banking giant, Citigroup.
In a statement to CNN, Rep. Kevin Yoder, R-Kansas, insisted the provision included in the spending bill would not lead to a collapse on Wall Street, followed by a bailout from taxpayers….
"We got the language from HR 992," a Yoder aide told CNN.
That legislation, HR 992, was partially written by lobbyists for Citigroup, according to emails obtained by The New York Times. The bill, which was never voted on in the Senate, sought to loosen Dodd-Frank Act regulations aimed at limiting banking and investment industry practices that led to the 2008 financial crisis.
No wonder big banker Jamie Dimon lobbied so hard to get the bill passed without dropping this provision.
The acrimony that erupted Thursday between President Obama and members of his own party largely pivoted on a single item in a 1,600-page piece of legislation to keep the government funded: Should banks be allowed to make risky investments using taxpayer-backed money?
The very idea was abhorrent to many Democrats on Capitol Hill. And some were stunned that the White House would support the bill with that provision intact, given that it would erase a key provision of the 2010 Dodd-Frank financial reform legislation, one of Obama’s signature achievements.
But perhaps even more outrageous to Democrats was that the language in the bill appeared to come directly from the pens of lobbyists at the nation’s biggest banks, aides said. The provision was so important to the profits at those companies that J.P.Morgan's chief executive Jamie Dimon himself telephoned individual lawmakers to urge them to vote for it, according to a person familiar with the effort.
In the end, this provision ensured that when the derivatives market collapses, the US government itself will go bankrupt, along with the big banks.