Senator Scott Brown has trumpeted his role in casting the deciding vote in favor of the 2010 Wall Street overhaul, but records show that after he voted for the law, he worked to shield banks and other financial institutions from some of its tough provisions.
E-mails between Brown’s legislative director and US Treasury Department officials show that Brown advocated for a loose interpretation of the law so that banks could more easily engage in high-risk investments.
While the law, known as Dodd-Frank, sets broad parameters for how the financial industry must behave, the interpretation of the law, and the rules that follow, will govern Wall Street’s daily business.
At issue in Brown’s e-mails is the Volcker rule, a particularly contentious provision of Dodd-Frank. The rule, championed by Paul Volcker, a former chairman of the Federal Reserve, prevents commercial banks from speculating heavily in higher risk investments. Banks are federally insured, which means that if they fail, taxpayers must reimburse many depositors.
Brown’s role in helping to loosen the Volcker rule in advance of casting his vote on Dodd-Frank has been well-documented. Notably, he helped create a provision that allows banks to invest up to 3 percent of their money in riskier investments such as hedge funds and private equity funds, and to own up to 3 percent of an individual fund - additions that won him Wall Street support.
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