Politically Connected Bank Gets a Dodd-Frank Waiver

Helen Whalen Cohen

6/3/2012 9:11:00 AM - Helen Whalen Cohen

Bloomberg News reports that Emigrant Bank in New York will be the sole recipient of a Dodd-Frank exemption. The bank asked legislators on the House Financial Services Committee to change the language of the financial regulations slightly, exempting Emigrant from having to comply and saving the bank $300 million.

 

A New York City bank with $10.5 billion in assets would be the sole beneficiary of a Dodd-Frank Act exemption approved today by the House Financial Services Committee.

Emigrant Bank asked lawmakers on the committee to approve a change to the 2010 financial-regulation overhaul law that will save the institution $300 million. The committee voted 35-15 today to approve the measure.

A group of New York lawmakers, led by Republican Representative Michael Grimm, have taken up the bank’s cause, arguing that it would be unfairly punished for protecting itself during financial stress. The measure would retroactively change the date used to determine which institutions are exempt from new rules on how institutions consider trust-preferred securities.

What the Bloomberg article does not mention, however, is that Howard Milstein, the owner of the bank, is an Obama bundler. He bundled between $100,000 and $200,000 for the president's campaign in 2008. He has also given $34,000 of his own money in political contributions to members of both parties, but mostly to Democrats.

I doubt that there are any banks that aren't politically connected, but I also thought that some people were saying that the era of corporate influence was over. Instead now we have burdensome financial regulations which lawmakers are apparently willing to apply selectively. I wonder if there will be anymore changes to Dodd-Frank to exempt more banks in the future. It's too bad that we can't just exempt all banks from the regulations by repealing this law altogether.