President Obama’s effort to reboot how the Federal Government regulates wall street could face major problems if Senator Tim Johnson, whose home state of South Dakota is a major hub for Credit Card companies, takes over the chairmanship of the Senate’s banking committee.
After the death of Senator Edward Kennedy, the major question will be whether Senator Chris Dodd will give up his position as the head of the Senate’s banking panel to become the chairmanship of one of the two committees overhauling the nation’s health care system. If Dodd chooses to succeed Kennedy as head of the Senate Health, Education, Labor and Pensions Committee, he would have to give up command of the Senate banking panel leaving it open for Johnson, the next democrat in line to take the position.
Democratic leaders confirmed that Johnson would b offered the chairmanship of the Banking, Housing and Urban Affairs Committee if Dodd steps down. Senator Chuck Schumer told reporters on Thursday that Johnson would be a capable an independent chairman.
Dodd has used his position as the banking committee chair to push through new restrictions that are tightening how credit card companies do business. Dodd has also been working on a separate piece of legislation that would create a new government agency designed to protect consumers from abusive business practices and fraud from investment companies.
Johnson voted against Dodd’s credit card bill, saying that it would “limit access to credit for consumers and potentially jeopardize thousands of jobs in South Dakota.” Citibank, Wells Fargo, Premier Bankcard and other national banks have large credit card operations because of their generous usury laws. Johnson also questioned President Obama’s goal of putting new restrictions on banks that offer exotic financing instruments.
