Kaine's willingness to back any regulatory changes that benefit large banks stands in stark contrast to liberals' preferred VP pick — Sen. Elizabeth Warren. | AP Photo Liberals lash out at Tim Kaine over banking letter

A few days before Hillary Clinton is expected to unveil her running mate, a group of progressives are lashing out at Sen. Tim Kaine, widely seen as the frontrunner for the spot, over his support for loosening bank regulations.

The liberal groups are furious that Kaine, along with several other Democratic senators, signed a letter urging regulators to rethink how banking rules cover regional banks.


“Let's be really clear: It should be disqualifying for any potential Democratic vice presidential candidate to be part of a lobbyist-driven effort to help banks dodge consumer protection standards and regulations designed to prevent banks from destroying our economy,” Democracy for America executive director Charles Chamberlain said in a statement Thursday. "Our presidential ticket cannot beat the billionaire bigot by simply being not-Donald Trump. To win in November, our ticket needs to have an unquestionably strong record in the fight against income inequality, one of the defining issues of the 2016 election.”

And Kaine's willingness to back any regulatory changes that benefit large banks stands in stark contrast to liberals' preferred VP pick — Sen. Elizabeth Warren (D-Mass.). But Kaine's push to tailor financial regulations based on bank size falls in line with the views of many Senate Democrats, as regulators contemplate loosening some rules for smaller firms after years of cracking down on the industry in the wake of the 2008 financial crisis. Even Warren has supported targeted regulatory changes that would benefit a narrower group of smaller lenders.

In a statement, Kaine spokeswoman Amy Dudley argued the Virginian has a strong record on pushing stronger banking regulations.

"Sen. Kaine is a strong supporter of Dodd Frank’s financial protections because certain financial institutions wreaked havoc on the American economy, hurting millions of Americans in the process and believes we need strong rules‎ to stop that chaos from happening again," Dudley said. "The toughest regulation should be on the biggest and riskiest institutions. Credit unions, community banks and regional banks need to be carefully regulated, but the nature of the regulation can be different to ensure scarce resources are efficiently spent allowing regulators to focus on the bad actors."

Kaine was one of 70 senators who signed a one-page letter asking Consumer Financial Protection Bureau Director Richard Cordray to try to "prevent any unintended consequences that negatively impact community banks and credit unions or unnecessarily limit their ability to serve consumers," although the letter did not call for the rollback of any specific regulation.

Kaine also signed a second letter that called for changes to the rules governing how larger regional banks have to set up capital cushions to protect themselves against failure.

Written to the heads of the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency, the missive asked regulators to reconsider how they apply safeguards to the activities of regional banks — meaning those that are bigger than the smallest, community lenders but smaller than international mega-banks such as JPMorgan Chase and Citigroup.

Kaine was one of four Senate Democrats signatories on the letter, including Sen. Mark Warner, a fellow Virginia Democrat. Kaine and Warner have a strong constituent interest because Capital One, the tenth biggest bank in the country by assets, is based in McLean, Virginia.

The senators asked regulators to reconsider aspects of two sets of rules designed to ensure that large banks have enough financial resources to withstand another crisis. Kaine did not endorse dramatic de-regulatory measures, but asked for changes for "regional banks that do not share the same risk profile or complexity as their larger, systemically important brethren."

The general idea is one that is also being advanced by top Fed officials who have repeatedly told Congress and the public that they are considering steps to differentiate the way rules apply to major Wall Street banks and their smaller competitors.

A pro-Bernie Sanders group called the Bernie Delegates Network highlighted a Huffington Post story on Kaine’s signature on Thursday in a release titled “Delegates will likely protest Sen. Kaine or similar VP choice in Philly” during the Democratic National Convention next week.

Progressive Change Campaign Committee co-founder Stephanie Taylor warned against Clinton picking a vice presidential candidate with close ties to Wall Street. She then pivoted to arguing that Clinton’s pick needs to oppose the Trans-Pacific Partnership. Kaine voted for fast-track negotiating authority that helped the administration bring the TPP trade deal to a close. A Kaine spokeswoman said he has not taken a position on the agreement itself. But in October Kaine said he was "obviously favorably inclined."

"Hillary Clinton's vice presidential pick will be seen by many as a proxy for how she will govern — boldly or cautiously? The wrong pick could deflate energy among potential donors and volunteers, hurting Democratic efforts to win the White House,” Taylor said in a statement responding to questions about Kaine’s decision to write the letter. “After promising to oppose the TPP, it's important for Clinton to pick someone who shares that position — especially after her delegates rejected that position in the party platform. It's also important she pick someone committed to strong Wall Street reform. Otherwise, there will be a giant opening for Trump and other Republicans to outflank Democrats on economic populism issues and win important swing votes.”

Maine state Rep. Dianne Russell, a proponent of overhauling Democrats’ superdelegate system, pointed to the letters signed by Kaine in a new statement about changing the super delegate system. Russell’s statement referred to Kaine as “Tim ‘Big Banks’ Kaine.”

“Kaine, in what many consider a signal to Wall Street, signed two letters this week to banking regulators and the Consumer Financial Protection Bureau urging them to loosen regulations of the financial industry. That sentiment flies in the face of the majority of democratic voters who supported both Clinton and Senator Bernie Sanders,” the press release from Russell said.