Shock and Awe: From Massachusetts to the Obama “Volcker Rule” (Part 8 of 10)

Meeting with Michelle Maiwurm, Staff for Virginia Senator Mark Warner (D):

Less Engagement: Unlike the first two meetings where the staff proactively began the discussion with pointed questions and were very prepared to engage in this issues, Michele made clear that she was either not authorized to say much or that she was not knowledgeable of the details. The person who was supposed to meet with us, as noted above, decided to instead meet with the president of the American Bankers Association, the lobbying group for big banks.

Draft Language Expected by end of February: When asked how far along they were and whether Warner was open for input she quoted Warner’s Republican counterpart, Corker as saying in the Congressional Quarterly: "We don’t have a deal until we have a deal." That said, she indicated that Corker-Warner were pretty far along in the process and would have a draft by the end of February and a mark-up in March. She also made clear that the go-it-alone approach Dodd initially attempted was a non-starter.

Bankruptcy vs. Receivership: We discussed the bankruptcy default/resolution plan. She said that any financing of the failing firm would be capped and then Congress would have to authorize the additional funding. She said Warner does not want another bailout, but Jerry pointed out this looks like a "backdoor bailout" if it is funded ex post. We also made the points identified above from the Merkley meeting.

Community Banks: Rene (from the community bankers association) made clear that ICBA wants an FDIC type resolution process that is clear and wants authority consolidated at the FDIC.

Prevention: Jerry also discussed the need for preventative measures -- i..e there is concern that all they've focused on is the resolution/TBTF issues and not the leverage restrictions etc. that are part of the Volcker Rule.

Don’t Re-Invent the Wheel – Use the House Bill Model for Too Big to Fail Banks: AFR (Dana) mentioned the Kanjorski amendment and the wisdom in benefiting from the other chamber. See previous part of the series for more details.