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Jim Lardner is the communications director at Americans for Financial Reform, a coalition of more than 250 civil rights, consumer, labor, business, investor and other groups working for a strong, stable and ethical financial system.



Wall Street will be watching the House Financial Services Committee today – and counting on the rest of us to have our attention elsewhere.



The committee will consider a package of proposals to roll back important reforms adopted after the 2008 financial crisis. Most of these bills involve derivatives – the complex financial instruments that were the proximate cause of the meltdown. If approved, they would let the biggest banks go on enriching themselves, and endangering the country, with taxpayer–subsidized bets.



Take the Swap Jurisdiction Certainty Act. In the name of simplicity, the bill generally permits the foreign subsidiaries of American banks to follow the derivatives–trading rules of other nations. What the proposal's supporters don't say is that the rest of the world is way behind the U.S. in setting such rules and that a couple of clicks on a computer keyboard is pretty much all it takes for the typical megabank to route a transaction overseas, potentially escaping serious oversight.



This would be a huge loophole. "During a default, risk knows no geographic border," Gary Gensler, chairman of the Commodity Futures Trading Commission, said in a recent speech.



A second bill, the Swaps Regulatory Improvement Act, would undermine Section 716 of the Dodd–Frank financial reform law, which tells banks to segregate their most exotic derivatives transactions from taxpayer–guaranteed deposits. The bill would restore banks' right to conduct these complex and dangerous deals inside units that benefit from deposit insurance and access to Federal Reserve support.



The House bills threaten the authority of the Securities and Exchange Commission as well as the CFTC. Existing law requires the SEC to consider the economic impact of its rules; indeed, financial companies have won a number of lawsuits on cost–benefit grounds. But the SEC Regulatory Accountability Act would shift the odds even more in Wall Street's direction by saddling the commission with new cost–benefit–analysis procedures that it would have to follow not only for the rule it adopts but for all "available alternatives." The net effect would be to add a set of near–impossible obstacles to a process that is already tortuously slow.



These proposals – the ones enumerated here and others – present a textbook case of how a powerful industry pursues goals that run sharply against both the public interest and public opinion. Money and muscle loom large in the tale, needless to say. We got a glimpse of Wall Street's inside game with the recent disclosure of a February skiing bash in Utah, where the new Financial Services Committee chairman, Jeb Hensarling, R-Texas, was joined at a weekend fundraiser by representatives of a number of financial companies and Wall Street groups. (Around the time of his ski trip, the direct and indirect contributors to Hensarling's political action committee included Visa, MasterCard, JP Morgan, Capitol One, Credit Suisse, UBS, U.S. Bank, and the payday lenders Cash America and CheckSmart.)



Disguise is another key element of the strategy. Americans overwhelmingly support tough financial regulation, so the banks have broken their agenda into mini–bills with mind–numbing names like the Business Risk Mitigation and Price Stabilization Act and the Swap Data Repository and Clearinghouse Indemnification Correction Act.



Persistence is a piece of the puzzle, too. Three years after the legislative fact, the financial lobby is still battling to undo the progress of Dodd Frank. And making more headway than it should.

Many of the bills before the Financial Services Committee were approved by the House in 2012, and they could be headed for approval in 2013. But every vote cast will matter; the more nays there are in the committee and on the House floor, the easier it will be to prevent these bills from moving in the Senate, where reform forces will have to hold the line again this year as they did last year.



The challenge is to spread the word and hold legislators accountable, convincing Senators and House members alike that a favor for Wall Street will be noticed – and remembered – on Main Street.

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