Anti-Bank Dem Maxine Waters Rises On Key Financial Panel

[Geee]

Investors Business Daily:

Rules: If you thought Rep. Barney Frank was bad, his likely replacement is worse. Rep. Maxine Waters is Congress' most anti-bank member — unless she owns stock in one, that is.

Waters is in line to take over from Frank on the powerful Financial Services Committee when he retires next year. On financial issues, the California liberal is even left of Frank, who was the chief architect of the disastrous banking overhaul bill bearing his name.

"As the next most senior member of the committee, I hope to use my experience to continue and expand his work in the committee," Waters said. "I will continue to champion practical regulations."

Really? As a key member of the Dodd-Frank conference committee, Waters authored the "practical" rule of requiring every bank regulatory agency to create an Office of Minority and Women Inclusion.

The little-known provision unleashes an army of diversity cops on the Federal Reserve and all its regional banks, along with the FDIC, Treasury and 17 other government agencies. It will regulate both their workforces and those of their contractors.

So what? The Waters amendment creates an unprecedented — and redundant — layer of Equal Employment Opportunity bureaucracy that will have the end result of injecting affirmative-action decision-making in financial transactions, slowing the flow of capital and economic growth.

Such decisions can also corrupt the flow of money by channeling it into unprofitable and highly risky investments. This is precisely what happened in the run-up to the mortgage crisis — something Waters knows a thing or two about.

She championed political lending quotas under the Community Reinvestment Act. In fact, she had direct input into CRA changes in the 1990s.

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Among other things, they mandated banks practice "flexible" underwriting, which permanently eroded credit standards throughout the mortgage industry.

She also supported 1990s legislation requiring Fannie Mae and Freddie Mac to meet new "affordable-housing" quotas.

When in 2003, the publicly created mortgage giants became dangerously overleveraged with weak mortgages, Waters pushed them to underwrite even "more products where you have no down payments."

She accused critics of the quotas of discriminating against minorities and the poor.

[NCTexan]

Putting Maxine as head of the Financial Services Committee is like making Sheila Jackson Lee head of NASA.