The one thing that can defeat Big Money’s influence on Congress is public opinion, Rep. Barney Frank said at the Consumer Federation of America awards ceremony last night.
Frank was talking about the media’s role in focusing attention on important issues of the day, and how often we (the public and the media) get distracted by the trivial (like, say, Balloon Boy) and even the not-so-trivial. If the BP oil spill had happened two months earlier, Frank wondered if the financial reform bill would have ever been passed. Enough attention at the right time can make a huge difference.
So can the little guy, as long as those big money forces aren’t arrayed against him—or her. A flight instructor, a part-time journalist and a deputy sheriff are among the IndyMac depositors who waged what looks to be a successful campaign to get retroactive coverage for their accounts.
IndyMac failed before FDIC insurance limits were raised to $250,000. The increase was supposed to be temporary and not retroactive, but the financial reform bill includes provisions to make it permanent and to cover depositors whose banks collapsed earlier.
From “Humble start for FDIC shift” from the Wall Street Journal:
Some Republicans say the rescue is little more than a bailout of careless depositors, especially given the brutal losses suffered by investors in collapsed financial firms. “It will cause people to think, I don’t have to worry about taking the right precautions,” said a spokeswoman for Rep. Scott Garrett (R., N.J.).
Rep. Jane Harman (D., Calif.), who co-sponsored the rescue with Rep. David Dreier (R., Calif.), says she was moved by nightmarish stories from depositors who say they were misled by IndyMac about their coverage. In some cases, account beneficiaries or joint owners say they were left off documents that would have qualified them for more than the standard $100,000 in protection. Some depositors say important records were lost after IndyMac’s seizure.
“It was a matter of fairness,” Ms. Harman says. “My view is that they were victims of the bank’s failure, not the cause.”
An FDIC spokesman said the retroactive rescue “would provide a more-even treatment of uninsured depositors since the onset of the crisis.”