GOP senator joins foes of Wall Street provision in spending bill

A Republican has joined Democrats in criticizing the inclusion of a partial repeal of the Dodd-Frank financial reform law in legislation funding the government.

Sen. David Vitter (R-La.) signed on to a letter with Sen. Sherrod Brown (D-Ohio) that calls on congressional leaders to scrap portions of the $1.1 trillion “cromnibus” that relax restrictions on banks trading financial derivatives.

{mosads}The pair argued in the letter that there is “broad bipartisan support” for removing that particular language.

Vitter’s public plea potentially makes him the first GOP lawmaker to call for the Dodd-Frank provision to be removed.

Brown and Vitter, who have worked together in the past on bills to limit big banks, argued that the language was unfairly jammed into the 1,603 page bill without proper debate.

“Congress should not gamble on a possible government shutdown by attempting to tuck this controversial provision into a spending bill without having been considered by the committees of jurisdiction, where it can be subjected to a transparent and vigorous debate,” they wrote.

The language at stake would repeal a portion of the 2010 financial reform law that bars banks from trading risky financial derivatives within the portion of their institution that is guaranteed by the Federal Deposit Insurance Corporation.

Critics of the provision argue removing that prohibition could expose taxpayers to risks if banks trade in derivatives and end up collapsing, requiring an FDIC rescue.

“If Wall Street wants to gamble, Congress should force them to pay for their losses,” they wrote.

While the two senators are critical of the provision, both stopped short of saying they would vote against the overall bill if that provision is not removed.

Sen. Elizabeth Warren (D-Mass.) has called on House Democrats to oppose the bill unless that provision is removed. A vote in the House on the bill is scheduled for Thursday afternoon.