As he completes his sixth week in office, U.S. Rep. Conor Lamb (D – Mt. Lebanon) is straddling the partisan divide with two votes on bank rules.
In his first vote as a member of Congress, Lamb joined the GOP and 77 other Democrats in supporting a limit on a rule that prohibits banks from making the kind of risky investments that led to the financial crisis of 2008. The bill would exempt banks with assets of $10 billion or less from the so-called Volcker rule, which was enacted under the Dodd-Frank Act of 2010.
It would also give the Federal Reserve exclusive rulemaking authority under the Volcker Rule. Currently, the Fed shares that authority with the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.
While 103 Democrats — including Pittsburgh’s Mike Doyle — opposed the bill, Lamb said the Volcker rule is too burdensome for small banks, which generally don’t engage in speculative trading. He said he was less enthusiastic about centralizing regulatory authority in a single agency but that he trusted the Fed to bear the responsibility.
“I think that part of the bill was what you get when you want to engage in compromise, which is what I’m trying to do,” Lamb said.
Tuesday, however, the representative stuck with his party in voting against a more sweeping bill that would scale back a number of rules under the Dodd-Frank Act. One provision reduces the amount of cash that banks with up to $250 billion in assets must keep on hand in the event of another financial crisis.
Lamb worries the legislation could hurt taxpayers, who ultimately bailed out banks deemed too large to fail during the crash of 2008.
“Once you’re talking about a bank with $250 billion, you’re talking about a real risk to our whole financial system if that bank goes down, and a real risk of another taxpayer-financed bailout,” Lamb said.
Lamb’s opponent in the November election, U.S. Rep. Keith Rothfus (R – Sewickley), hailed the recently passed bill in a statement Tuesday. He said it will reduce compliance costs that he said have forced banks to cut financial services to consumers.