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Feingold Will Filibuster FinReg Without Serious Banking Reform

In a fiery speech on the Senate floor, Russ Feingold conditioned his support for the Wall Street reform measure on adding a multitude of amendments that would break up the mega-banks, cap size and leverage and restore the firewall between commercial and investment banks. He even went so far as to say that he would not vote to end debate on the bill unless these and other serious banking reforms were part of it.

Democrats, with 59 votes, already need the support of at least one Republican to move forward at the end of the process with the bill. It’s likely that Ben Nelson won’t support the final bill, and now Feingold is the first to make the threat from the left to vote against ending debate without real changes to how Wall Street does business.

After saying that regulators have failed taxpayers over the last 30 years, Feingold laid out three specific amendments that would be needed in a final bill:

• The McCain-Cantwell amendment to reinstate Glass-Steagall protections

• The Brown-Kaufman Safe Banking Act to put a strict cap on size and leverage

• The Dorgan amendment, which is a variant of the Brown-Kaufman Safe Banking Act. It would “require a break up of those activities in the largest financial institutions in the country that represent an unacceptable risk the American economy,” according to Dorgan.

Earlier, Feingold expressed his full support, as a co-sponsor, for an amendment to audit the Federal Reserve. In his statement on that, he also threatened to filibuster:

“Congress’ recent history on regulating the financial sector is not a proud one,” Feingold said. “For the last 30 years, both Democrats and Republicans have consistently given in to the wishes of Wall Street banks and voted to weaken essential safeguards. Congress needs to get it right this time, and enact tough reforms that will actually prevent another crisis from happening. I will not vote to end debate on this bill unless and until it meets that goal.”

If progressive Senators, like Feingold (who’s up for re-election), use their leverage and force at least some fundamental changes to how Wall Street does business, they can really make those changes. And unlike on health care, I do believe that Feingold, at least, will be all too happy to walk away from a bill which falls down from that.

A vote on auditing the Fed could come up today, along with a Republican amendment to weaken the consumer protection agency. The latter is not expected to pass, even by Republicans.

UPDATE: Video of the floor speech is now available.

UPDATE: Just exchanged emails with an aide from Sen. Feingold’s office, who reiterated that Feingold would join a filibuster, and not support ending debate “if the final bill does not prevent Wall Street from driving our economy into the ditch again.”

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David Dayen

David Dayen