Spencer Bachus, incoming House financial chairman, gets heat for saying regulators should ‘serve’ banks

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The incoming Republican chairman of the House Financial Services Committee is facing fire for recently saying that Washington and banking regulators should ‘serve’ the banks.

Rep. Spencer Bachus (R-Ala.), who recently beat back a challenge from Ed Royce of Fullerton to win the chairmanship of the powerful committee, made the comments in an interview with the Birmingham News last week.

‘In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks,’ Bachus said. The paper added that ‘he later clarified his comment to say that regulators should set the parameters in which banks operate but not micromanage them.’

But Democrats quickly jumped on the comments, saying they show that Bachus intends to favor banks over average Americans. The controversy highlighted concerns among some Republicans that Bachus might not be the best choice to chair the key committee, which oversees financial regulators and the industry.

The bank flap was Bachus’ second controversy in recent weeks. Shortly after the midterm elections, Bachus said that Sarah Palin cost Republicans control of the Senate. That led Palin to blast him for his past support of big government programs, such as the $700-billion bank bailout.

This time, the Democrats are after Bachus. The Democratic Congressional Campaign Committee quickly dubbed him ‘Big Bank Bachus’ and highlighted the more than $1 million in campaign contributions he has received from Wall Street over the years. MSNBC’s Keith Olbermann recently dubbed him his nightly ‘worst person in the world’ for the comment.

And on Wednesday, outgoing Financial Services Committee Chairman Barney Frank (D-Mass.) jumped into the fray.

He slammed Bachus’ intentions to scale back the recently enacted financial reform law, including trying to limit the powers of the new Consumer Financial Protection Bureau, saying the comments showed ‘a seriously flawed view of the relationship that should exist between financial institutions and those who set the rules governing safety and soundness.’

“His view of the role of regulation, expressed before he ‘clarified’ his genuine belief, explains why he is so opposed to an independent consumer financial protection bureau, and why he wants to weaken restraints on speculation by banks with depositors’ money,” Frank said.

-- Jim Puzzanghera