The ad wars begin, with one from the Democratic side of the aisle noting the record of one Joe Heck, currently the Republican representative from Nevada District 3:
“The ad highlights legislation Heck sponsored as a state senator to repeal excise taxes on Nevada banks, criticizes him for accepting more than $300,000 in campaign contributions from the securities and investment industry, and portrays him as in “lockstep with Washington Republicans.”
It also notes that Heck, who now represents Nevada’s 3rd Congressional District, once called the mortgage crisis in the state “a blip on the radar” on a 2008 questionnaire.” [LVSun]
The amount of money candidates receive from the financial industry doesn’t bother me as much as the voting records of the candidates who receive them. And, Representative Heck has been a very good little soldier for the financial sector interests.
Marching back to July 26, 2012 we find Representative Heck voting in favor of the interestingly titled HR 4078 “Red Tape Reduction and Small Business Job Creation Act.” The title was commonplace, everything in those days had “small business” and “job creation” attached to the title, perhaps to obscure the fact that the Congress had done exactly diddly to create jobs or help really small businesses. The effect would not have been small, or particularly creative.
HR 4078 would have prohibited any federal government agency from promulgating or taking “significant regulatory action,” unless the employment rate dropped below 6%, defining “significant regulatory action” as any action that is likely to result in a rule or guidance with a fiscal effect of $50 million or more as determined by the Office of Management and Budget, or to adversely affect one of the following, including, but not limited to (Sec. 105) [PVS] Now why would this bill illustrate Representative Heck’s allegiance to the banking sector?
Answer: Because the Dodd-Frank Act regulating the financial sector was enacted on July 21, 2010 – that would be the Wall Street Reform and Consumer Protection Act – and the agencies were in the rule making process when HR 4078 was considered in the House. Now, what sector of the economy was going to see a $50 million dollar effect? Here’s a clue: It’s not family owned bodegas and gas stations. The banking industry did NOT want to see any regulation, any restraint, any inconvenience to their consumer gouging practices and HR 4078 was the result. (And, the law if enacted would have prevented any more attempts to contain climate change – a bonus in GOP eyes.)
Move forward to October 23, 2013, and HR 2374 the “Retail Investor Protection Act.” There’s nothing in this bit of legislation that protects “retail investors.” In fact, section 2 “Prohibits the Secretary of the Department of Labor from establishing a regulation that defines the circumstances under which an individual is considered a fiduciary until 60 days after the Securities and Exchange Commission establishes standards of conduct for brokers and dealers.” Does this sound familiar? It should. It’s part and parcel of the fight to allow financial advisors to push products which improve their bottom line even if the advice isn’t in the best interests of their clients – like retirement funds. The bankers have been fighting this right down to at least May 6, 2016. However, the rule – now in place — has some benefits for “retail investors” as Morningstar summarizes:
“This change clearly is a victory for investors. Roughly half of retail U.S. mutual fund assets will be protected by the new, higher standards. They will not prevent bad advice, of course, nor trades from lower- to higher-cost funds. But they do command that all advice, whether successful or not, be offered in good faith, and that the rationale for all trades, whether into cheaper or pricier funds, be recorded. Such precautions will inevitably lead to better overall outcomes.”
Yes, those better overall outcomes and higher standards of responsibility for mutual funds were precisely what the bankers wanted to avoid, and exactly what Representative Joe Heck voted against on behalf of the bankers in HR 2374.
It doesn’t take too much financial expertise to see which Nevada senatorial seat candidate is taking marching orders from the financial sector. On one hand we have Joe Heck (R-NV3) who can be counted upon to find fault with the CFPB, the Dodd Frank Act, and efforts to make financial advisors account for their advice; and, on the other we have a former state Attorney General who actually Did something about that not-so-little blip that was the housing market crash/debacle in Nevada:
“2009: Cortez Masto Investigated And Found Broad Problems With The Bank Of America’s Interactions With Imperiled Borrowers. “In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009. […] The breadth of the new Nevada complaint indicates that Bank of America’s problems extend throughout its mortgage operations, including origination, loan servicing and securitization. Nevada officials also found broad problems in the bank’s interactions with imperiled borrowers.” [New York Times, 8/30/11]” [CCM]
And, there’s more. [here] What Representative Joe Heck was calling a “blip” was in reality the state of a state which led the national foreclosure rate stats for 62 straight months, and a scene in which some 58% of Nevada homeowners in 2011 were “underwater.” Some blip. Gee, even Representative Heck was pleased as of February 2012 with the settlement achieved in part by Cortez Masto,“Rep. Joe Heck, R-Nev., said he is ‘happy to see that an agreement was reached. At a time when Nevada families are struggling the most to make ends meet, I have high hopes that this settlement will provide them much needed relief.’ [Las Vegas Review-Journal, 2/9/12]”
There really doesn’t appear to be much question at this point which senatorial candidate is most disposed to protecting the interests of retail investors (or any other kind for that matter), and consumers of financial products (most all of us), and homeowners… we have a choice between the man who wanted to scale back the efforts of the Dodd Frank Act and CFPB and the woman who took on the Big Banks and fraudulent lenders.