The White House’s Top Ten FinReg Loophole Watchlist

White House Communications Director Dan Pfeiffer has a very interesting post today on the official White House blog  listing what, in the administration’s eyes, are the 10 most wanted lobbyist loopholes in respect to financial reform. As has been noted, with the breaking last week of the Republican filibuster of the Motion to Proceed, the financial reform bill (or the Wall Street Reform bill, as the White House prefers to call it) is now to the point of having amendments offered on it. This is where the real construction of the bill is done, and where a lot of danger potentially lies.

And whereas in normal times there would usually be a lot of horsetrading going on now, recently the amendment process has just been another juncture where Republicans have refused to negotiate in good faith. They offer amendments not to make the bill more to their liking so they can vote for it, but to make the bill so bad as to be ineffective, or even unpassable. Very often, the impetus for these poison-pill amendments comes from industry lobbyists. This is what Pfeiffer is trying to warn about.

I think the thinking here is that financial reform, even more so than health care reform, is A) popular in theory, and B) so complex as to be incomprehensible to most of the general public, as well as to many legislators. This combination makes for a perfect opportunity for lobbyists to have amendments introduced that allow their legislators to ultimately vote for the bill, but make it effectively toothless. All the while, very few people realize this is taking place until it’s too late.

As Ezra Klein points out, “The White House doesn’t usually make such concrete demands, in part because when you give the media metrics to use to judge whether you won or lost, it’s harder to spin a loss.” For that reason, I think it’s noteworthy that the administration apparently feels strongly enough about these points to make them so specifically. I suggest reading the whole post, but very briefly, here are the White House’s top ten loopholes to watch out for:

1. Ok, Consumer Protection Rules are Fine… Just Don’t Enforce Them
2. Letting Non-Banks Play by a Weaker Set of Rules
3. If You Can’t Kill Consumer Protection Now, Starve it to Death Later
4. Preventing States from Protecting Their Own Citizens
5. Removing the Derivatives Trading Requirement to Protect Wall Street Profits
6. Stretching the Derivatives “End-User” Exemption into a Hedge Fund Loophole
7. Creating an “AIG Loophole” 
8. Who Needs to Know What’s Happening at Insurance Companies?
9. Letting Firms Make Loans Without Skin in the Game
10. Preserving “Too Big to Fail” While Pretending to Kill It