After leading the dramatic three day Showdown in Chicago at the American Bankers Association (ABA) Convention in Chicago, AFL-CIO President Richard Trumka will head to the House Financial Service Committee today to testify against proposed reform legislation that actually gives the banks more power. In a twist of irony, he literally sit down the table from American Bankers Association Ed Yingling as he testifies against the banksters.

After weakening current law on derivatives., the committee has once again weakened law in the banker's favor. The drafted legislation concerning banks "too big to fail" which would actually lead to more bailouts over the long run.

In an advance copy of AFL-CIO President Richard Trumka's prepared testimony that I obtained, Trumka will tesify that:

The discussion draft appears to take the most problematic and unpopular aspects of the TARP and makes them the model for permanent legislation.

Essentially the legislation would weaken regulation and lead to the conditions in which the American people would be forced to bail out the banks again. As Trumka testifies:

The discussion draft would appear to give power to the Federal Reserve to preempt a wide range of rules regulating the capital markets - power which could be used to gut investor and consumer protections.

Trumka goes onto explain in vivid details how the Federal Reserve with its lack of accountability has traditionally acted in the interests of the banks:

The Federal Reserve currently is the regulator for bank holding companies. In that capacity, it was responsible throughout the period of the bubble for regulating the parent companies of the nation's largest banks. While regulatory authority rests in the Board of Governors of the Federal Reserve in Washington, routine responsibility for regulatory oversight has been delegated by the Board of Governors to the regional Federal Reserve Banks. The Federal Reserve System's regulatory expertise resides in these regional banks.

The problem is that these regional Federal Reserve Banks are actually controlled by their member banks - the very banks whose holding companies the Fed regulates. The member banks control the selection of the majority of the regional bank boards, and the boards pick the regional bank president, who are effectively the CEO's of the regulatory staff...

Giving the Federal Reserve with its current governance control over which financial institutions are bailed out in a crisis is effectively giving the banks the ability to raid the Treasury for their own benefit.

Trumka explains how the proposed legislation would incredibly give the big banks more of an incentive to take risky bets in order to drive out their competition:

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