Tag Archives: regulatory affairs

JPMorgan Chase Accused of Manipulating Electricity Prices, Pays Record-Breaking Penalties

by Susie Quan Posted on July 30, 2013

Mother Jones

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Just one day after US regulators formally accused it of manipulating energy prices, America’s largest bank, JPMorgan Chase, has agreed to pay a record $410 million in penalties.

Specifically, the Federal Energy Regulatory Commission (FERC) accused Chase traders in Houston of devising elaborate schemes that essentially forced electricity grid operators—organizations that manage the flow of electricity—in California and the Midwest to pay for plants to sit idle, causing them to pay more than 80 times the cost of prevailing electricity prices for ten months between 2010 and 2011. Chase’s alleged price-gouging echoes the infamous 2001 Enron scheme, in which the company constricted electricity supply in California in order to jack up prices.

The FERC action comes at a time of increasing scrutiny of banks’ ownership of commodities. Last week, for example, the New York Times questioned whether Goldman Sachs was manipulating the aluminum market through the metal warehouses it controls.

Even though the penalty for Chase’s bad behavior is the largest the FERC has ever slapped on a company, the fine still falls in line with trifling punishments leveled against the bank—and other financial behemoths—for similar egregious behavior. Chase’s $410 million settlement, which was reached on Tuesday and will be divided between ratepayers and the Treasury Department, represents less than two percent of Chase’s record $21.3 billion 2012 profits—or about what it earns in a single week. (FERC has also barred the bank from trading in US energy securities for the next six months.)

Investigators for the agency initially considered holding one Chase executive and a few specific traders individually liable for the allegedly abusive pricing schemes, but ultimately dropped that idea, according to the Times. The bank has denied wrongdoing, and, as Reuters has pointed out, the settlement will put an end to a troublesome “distraction” for Chase CEO Jamie Dimon.

The bank has had other distractions in recent years. In May 2012, Chase lost $6 billion on risky trades out of its London office. So far, the banks has escaped penalty for those actions—US banking regulators merely ordered it to fix the risk-management failures that led to the massive loss.

Sen. Elizabeth Warren (D-Mass.) has repeatedly highlighted the discrepancy between the punishments meted out to ordinary Americans for criminal behavior and those big banks receive for wrongdoing—whether it be tricking consumers into paying higher power prices, causing massive trading losses, or laundering drug money: “If you’re caught with an ounce of cocaine, you’re going to go to jail,” she said at a Senate Banking Committee hearing earlier this year, referring to the giant international bank HSBC. “But if you launder nearly a billion dollars for international cartels and violate sanctions you pay a fine and you go home and sleep in your own bed a night.”

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JPMorgan Chase Accused of Manipulating Electricity Prices, Pays Record-Breaking Penalties

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House Republicans Stand Up For the Ceiling Fan Lobby

by Gaberilla Eve Posted on July 26, 2013

Mother Jones

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House Republicans are incensed about new energy efficiency standards for ceiling fans. “We’ve already seen the federal government stretch their regulatory tentacles into our homes and determine what kind of light bulbs we have to use,” said Rep. Marsha Blackburn (R-Tenn.) in a speech earlier this month. “Now they’re coming after our ceiling fans.”

“It is a sad state of affairs when even our ceiling fans aren’t safe from this administration,” she continued. “Enough is enough.”

The Department of Energy’s Energy Efficiency and Renewable Energy Office (EERE) released a framework for updating rules on ceiling fans in March. The 101-page document is full of discussion points about how exactly to define “ceiling fan,” whether fans that are merely “decorative” should qualify for regulation, and how the DOE should go about testing the efficiency of fans. It’s hardly a Marxist takeover of your home air circulation system; it’s only the first step in a three-year process to write new rules that will include several drafts and public comment periods.

But Blackburn and colleague Todd Roika (R-Ind.) say they’re waging a “fight to save our ceiling fans” from the big, scary Obama administration. Their effort has been covered by a number of outlets, including NPR and The Hill, and it led to a House vote of approval for an appropriations measure that blocked funding for the DOE to enforce fan standards.

But what Blackburn doesn’t mention is that she voted for the 2005 Energy Bill that kicked off the rule-making process for ceiling fans. And that bill was signed into law by noted radical environmentalist George W. Bush.

“She was for standards before she was against them,” said Marianne DiMascio of the Appliance Standards Awareness Project. “This bill was bipartisan effort.”

Asked for comment about the 2005 vote, Blackburn’s office sent a statement indicating that she would support efficiency standards—as long as they didn’t inconvenience the industry too much. “I support increased efficiency in American households but only as technology and innovation becomes readily available that can be supported and is needed by a consumer driven market. The ceiling fan industry already faces regulations that were codified in 2005,” said Blackburn in a statement. “Additional regulations, like those that were discussed in the Department of Energy’s rulemaking framework document, most likely will have an adverse impact by pricing consumers out of the ceiling fan market which in return would decrease household energy efficiency as consumers turn to less efficient methods to cool and light their homes.”

It probably doesn’t help that the largest fan company in the US, Hunter Fan Company, is based in Blackburn’s home state of Tennessee and is against improving efficiency standards, as Roll Call reported. Roika’s state is home to another large fan maker, Fanimation Inc.

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House Republicans Stand Up For the Ceiling Fan Lobby

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Supreme Court’s Gutting of Voting Rights Act Unleashes GOP Feeding Frenzy

by Magdalynamez Posted on July 26, 2013

Mother Jones

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When the Supreme Court recently gutted Section 5 of the Voting Rights Act, it did so under the theory that there was little evidence of continuing racial discrimination in the states that were required to get preclearance before changing their voting laws. Congress had rather pointedly disagreed when it renewed the VRA in 2006, but no matter. The Supreme Court knew better.

So how has that theory worked out? Normally we’d have to wait a while to find out. Even Citizens United, which gutted campaign financing law, took a few years before its full effect was obvious. But in this case, a few weeks has been enough. A couple of days ago, the North Carolina Senate voted to approve a draconian set of changes to its voting laws, and there’s not much question that final passage will come shortly. Check out this astonishing list of changes in the bill:

Require voter ID at polling places.
Reduce the early voting period from 17 days to 10 days.
Prohibit counties from extending poll hours by one hour on Election Day even in extraordinary circumstances, such as in response to long lines. (Those in line at closing time would still be allowed to vote.)
Eliminate pre-registration for 16- and 17-year-olds, who currently can register to vote before they turn 18.
Outlaw paid voter registration drives.
Eliminate straight-ticket voting.
Eliminate provisional voting if someone shows up at the wrong precinct.
Allow any registered voter of a county to challenge the eligibility of a voter rather than just a voter of the precinct in which the suspect voter is registered.

Why North Carolina’s Voter ID Bill Might be the Nation’s Worst

In the past, all of this would have required preclearance from the Justice Department, and it almost certainly would have been dead on arrival. But with the end of Section 5 there was nothing left to stop them, so the bill turned into a feeding frenzy of provisions designed to suppress voting among blacks, Hispanics, the poor, and the young. “What’s happening in North Carolina,” said Ed Kilgore, “is the product of a gang of ideologues led and funded by gazillionaire Art Pope who stormed the ramparts of a once-progressive state.”

There is, needless to say, virtually no justification for any of this. “Election integrity” is the stated reason, but examples of voter fraud are vanishingly rare and no one in North Carolina has even bothered to pretend otherwise. They just want to reduce voting among any group that happens to support Democrats. If that means reducing the black and Hispanic vote—something that North Carolina’s own Secretary of State has confirmed will happen—well, you can’t make an omelet without breaking a few eggs, can you?

So is there any hope of overturning this law? There’s not much in North Carolina itself. But on Thursday, Attorney General Eric Holder announced that the Justice Department would file a suit to halt a new voter ID law in Texas. “My colleagues and I are determined to use every tool at our disposal to stand against such discrimination wherever it is found,” he told an audience in Philadelphia, and a suit to stop North Carolina’s law is likely too. So this is where the fight is headed. Section 5 is dead, and despite some early noises from congressional Republicans about passing a new version, there was never any serious chance of that happening. What’s happening in North Carolina, after all, is part of broad push by the Republican Party itself throughout the country. So now it’s up to the Justice Department to go in after the fact and take these laws to court one by one. The Supreme Court seemed to think this was a perfectly adequate subsititute for preclearance. We’ll soon find out if they were serious when once of these challenges eventually wends its way onto their docket.

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Supreme Court’s Gutting of Voting Rights Act Unleashes GOP Feeding Frenzy

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Congress to Fed: End Too-Big-to-Fail Already!

by ElizaTSK Posted on July 25, 2013

Mother Jones

Between 2007 and 2009, the Federal Reserve doled out $16 trillion in massive, super-cheap loans to save flailing Wall Street banks. The 2010 Dodd-Frank financial reform act called for the Fed to limit its emergency lending powers so too-big-to-fail banks won’t count on the central bank saving them again. But three years after Dodd-Frank became law, the Fed still has not budged to curb its bailout powers—and Congress is losing its patience.

One section of Dodd-Frank requires that any future emergency lending by the Fed has to be backed by good collateral, can’t be used to bail out insolvent firms, and can’t go to a single institution. The law also places time limits on the Fed’s emergency loans to banks. But the Fed still hasn’t crafted these general provisions into specific regulations. Until it does, financial reform advocates say, the central bank can interpret that part of the Dodd-Frank law however it wants—which means banks have little reason to doubt the Fed will again dole out easy money in the event of a financial meltdown.

This “is an important part of Dodd-Frank, designed to explicitly prohibit bailouts,” Sen. Mark Warner (D-Va.), who sits on the Senate banking committee, told Mother Jones when asked about the Fed’s delay in writing up the regulations. “The Federal Reserve should move expeditiously to issue the required regulations.” Banking committee chair Sen. Tim Johnson (D-Ill.), Sen. Kirsten Gillibrand (D-NY), Sen. Sherrod Brown (D-Ohio), Reps. David Scott (D-Ga.), and Keith Ellison (D-Minn.) all echoed Warner’s comments. Some members of Congress are so fed up that they’re trying to force the Fed’s hand; in April, Brown and Sen. David Vitter (R-La.) introduced a bill that would place far stronger limitations on emergency assistance from the central bank.

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Congress to Fed: End Too-Big-to-Fail Already!

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The GOP’s Plan B to Kill Elizabeth Warren’s Consumer Watch Dog

by Polly Browder Posted on July 24, 2013

Mother Jones

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Last week, Sen. Elizabeth Warren (D-Mass.) declared victory when the Senate confirmed Richard Cordray to head the Consumer Financial Protection Bureau (CFPB), the consumer watchdog agency that she conceived and helped launch. For years, Republicans had been fighting tooth and nail to kill the infant agency, which is charged with protecting Americans from abusive practices by banks, payday lenders, mortgage-servicing companies, and debt collectors. Originally, the GOP planned to cripple the agency by blocking it from ever getting a director. That didn’t work, so now Republicans have to turn to Plan B.

The GOP has several weapons in its arsenal, including a case against the agency that the Supreme Court will hear in the fall, a separate suit recently lodged against the bureau, several pieces of legislation that would weaken the CFPB, and a slew of bills that would clamp down on government regulators more generally. There’s just one problem: the plans are probably not going to work.

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The GOP’s Plan B to Kill Elizabeth Warren’s Consumer Watch Dog

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The Alberta Oil Sands Have Been Leaking for 9 Weeks

by h0rt67bx11 Posted on July 23, 2013

Mother Jones

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Nine weeks ago, an oil leak started at a tar sands extraction operation in Cold Lake, Alberta, and it’s showing no signs of stopping.

On Friday, the Toronto Star reported that an anonymous government scientist who had been to the spill site—which is operated by Canadian Natural Resources Ltd.—warned that the leak wasn’t going away. “Everybody at the company and in government is freaking out about this,” the scientist told the Star. “We don’t understand what happened. Nobody really understands how to stop it from leaking, or if they do they haven’t put the measures into place.” The Star reported that 26,000 barrels of watery tar have been removed from the site.

The impacted area spans some 30 acres of swampy forest, said Bob Curran, a spokesperson for the Alberta Energy Regulator (AER), which oversees these sites. According to the Star, pictures and the documents provided by the scientist show that dozens of animals, including loons and beavers, have been killed, and some 60,000 pounds of contaminated vegetation have been removed. (You can see the pictures at the Star‘s website.)

Curran confirmed to Mother Jones that the leak was ongoing as of Tuesday afternoon and said AER was working with the company on a plan to contain the damage. He added that he couldn’t make a firm assessment of what caused the leak until after AER had completed its investigation. “We don’t get into probable causes,” he explained. But he did say that AER was concerned, adding that the leak was “very uncommon—which is why we’ve responded the way we have.”

In response to specific questions about the spill, the company sent Mother Jones a previously prepared statement: “The areas have been secured and the emulsion is being managed with clean up, recovery and reclamation activities well underway. The presence of emulsion on the surface does not pose a health or human safety risk. The sites are located in a remote area which has restricted access to the public. The emulsion is being effectively cleaned up with manageable environmental impact. Canadian Natural has existing groundwater monitoring in place and we are undertaking aquatic and sediment sampling to monitor and mitigate any potential impacts. As part of our wildlife mitigation program, wildlife deterrents have been deployed in the area to protect wildlife…We are investigating the likely cause of the occurrence, which we believe to be mechanical.”

The Primrose bitumen emulsion site, where the leak occurred, sits about halfway up Alberta’s eastern border and pulls about 100,000 barrels of bitumen—a thick, heavy tar that can be refined into petroleum—out of the ground every day. But unlike the tar sand mines that have scarred the landscape of northern Alberta and added fuel to the Keystone XL controversy, the Primrose site injects millions of gallons of pressurized steam hundreds of feet into the ground to heat and loosen the heavy, viscous tar, and then pumps it out, using a process called cyclic steam stimulation (CSS). Eighty percent of the bitumen that can currently be extracted is only accessible through steam extraction. (CSS is one of a few methods of steam extraction.) Although steam extraction has been touted as more environmentally friendly, it has also been shown to release more CO2 than its savage-looking cousin.

There have been accidents before with steam injection mining. At another kind of steam injection site, the high pressure at which the steam is injected exceeded what the terrain could bear and blasted wild-looking craters, hundreds of feet wide, into the landscape.

Curran said that although the current leak is extremely unusual, a similar—but smaller—incident occurred at Primrose back in 2009. In that case, tar started bubbling out of “thin fissures” in the ground near the wellhead. According to a report from the Energy Resources Conservation Board—an oversight agency that was folded into AER last year—new limits on steam pressure were imposed, and extraction was allowed to resume.

But on May 21, something new went wrong at the Primrose site. According to Curran, springs of watery bitumen started popping up, seeping out of the earth. When the first three appeared, AER shut down nearby steam injection. When a fourth appeared in a body of water close by, AER shut down all injection within a kilometer of the leaks, and curtailed adjacent steaming operations. “The first three are just leaking right there at the surface,” Curran says. “Small cracks in the ground, just kind of bubbling out.”

It’s unclear what long-term consequences might result from the spill. “They don’t know where this emulsion has gone, whether it has impacted groundwater,” says Chris Severson-Baker, managing director of the Pembina Institute, a nonprofit group that studies the impacts of tar sand mining. According to Severson-Baker, the question is what will happen if the geology at Primrose is to blame. “If the problem is inherent to the project itself, are they going to remove the permits for the project?” Even so, he claims the damage might already be done. “At this point, what can actually be done to prevent the impact from continuing to occur? I don’t think there is anything that can be done.”

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The Alberta Oil Sands Have Been Leaking for 9 Weeks

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Ex-Indiana Gov. Mitch Daniels Supports Free Speech—Except When He Disagrees With It

by um2rnxc Posted on July 17, 2013

Mother Jones

When Mitch Daniels took the helm of Purdue University in January, after eight years as the Republican governor of Indiana, he published an “open letter to the people of Purdue” outlining his vision for the state’s second-largest public college. In his letter, Daniels offered critiques and observations about the state of higher education; on the subject of “Open Inquiry,” he wrote: “A university violates its special mission if it fails to protect free and open debate,” adding that “the ensuring of free expression is paramount.”

Now, some great muckraking by the Associated Press casts serious doubt on Daniels’ commitment to protecting free speech. According to emails obtained by the AP, Daniels as governor tried to ban the works of historian Howard Zinn from the classrooms of Indiana’s public colleges. When Zinn died in February 2010, Daniels wrote in an email: “The terrible anti-American academic has finally passed away.” Daniel described Zinn’s celebrated and widely read book A People’s History of the United States as “a truly execrable, anti-factual piece of disinformation that misstates American history on every page.”

Daniels goes on to write: “Can someone assure me that it is not in use anywhere in Indiana? If it is, how do we get rid of it before more young people are force-fed a totally false version of our history?”

When told the book was being taught at Indiana University in a course on American social movements, Daniel fired back: “This crap should not be accepted for any credit by the state. No student will be better taught because someone sat through this session.”

More from the AP:

David Shane, a top fundraiser and state school board member, replied seven minutes later with a strategy directing Bennett and Indiana Commissioner for Higher Education Teresa Lubbers to review university courses across the state.

“Sounds like we need a cleanup of what is credit-worthy in ‘professional development’ and what is not. Who will take charge,” Daniels replied seven minutes later.

Shane replied that a statewide review “would force to daylight a lot of excrement.”

Just seven minutes later, Daniels signed off on it.

“Go for it. Disqualify propaganda and highlight (if there is any) the more useful offerings. Don’t the ed schools have at least some substantive PD (professional development) courseware to upgrade knowledge of math, science, etc,” Daniels wrote.

Daniels also appeared to have used his position as governor to target an academic who was critical of the state’s education policies. Emails show that Daniels asked for an audit focusing on the work of Charles Little, who is on the faculty of Indiana University Purdue University–Indianapolis’ School of Education and who leads the Indiana Urban Schools Association, an advocate for inner-city students, teachers, and administrators. In an April 11, 2009, email, Daniels asked for greater scrutiny of Little’s program and how it spent it funds.

Reached at his office, Little said he wasn’t surprised that Daniels and his colleagues targeted him. “It is worrisome that some of the people mentioned in the article are still around” in state government, Little told me.

Daniels, for his part, told the AP he had no regrets about his decision to target Howard Zinn. “We must not falsely teach American history in our schools,” he responded. “We have a law requiring state textbook oversight to guard against frauds like Zinn, and it was encouraging to find that no Hoosier school district had inflicted his book on its students.”

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Ex-Indiana Gov. Mitch Daniels Supports Free Speech—Except When He Disagrees With It

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Elizabeth Warren Declares Victory over GOP on Senate Confirmation of Wall Street Watchdog

by Sue Allen Posted on July 17, 2013

Mother Jones

“It is truly a historic day,” Sen. Elizabeth Warren said Tuesday after the Senate agreed to allow a vote on Richard Cordray to head the Consumer Financial Protection Bureau (CFPB), the consumer watchdog agency that Warren devised and helped get on its feet. “It took nearly two years, but…now the American people will have a strong watchdog in Washington,” Warren continued in a conference call with reporters. “David beat Goliath.”

On Tuesday evening, the Senate confirmed Cordray by a vote of 66 to 34 after Republicans agreed not to filibuster his confirmation. The vote came after Republicans spent years trying to block Cordray’s appointment and attacking the CFPB in court.

The CFPB has already accomplished much to benefit consumers—forcing credit card companies to refund nearly half a billion dollars they juked consumers out of, implementing new rules to make mortgages safer, and creating a center that fields consumer complaints about shady dealings by financial institutions. But without a director confirmed by the Senate, the agency’s powers were limited. Now that Cordray has been confirmed, the CFPB is fully legitimate, Warren says. “There are no more clouds. Period. This locks all the pieces in place,” she told reporters Tuesday.

It was a long struggle. Senate Republicans filibustered Cordray when Obama first nominated him to head the agency in July 2011. In response, Obama used a recess appointment—a presidential appointment that happens while the Senate is on vacation and does not require Senate approval—to install Cordray in January 2012. Republicans then sued to challenge the constitutionality of Cordray’s appointment. Senate Republicans intended to filibuster Cordray again this time around, demanding fundamental changes that would weaken the CFPB before they’d allow a vote. Harry Reid, the Democratic Senate majority leader, threatened to change the rules of the Senate to block the GOP filibuster. But late Tuesday, the Senate devised a truce to avert the Republicans’ filibuster—and Reid’s rule change.

The agency was devised by Warren after the financial crisis, who pointed out at the time that it was “impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street.” The agency came to life as part of the 2010 Dodd-Frank financial reform act, and Warren has aggressively campaigned for Cordray’s confirmation ever since.

Republicans will continue to push for changes to the agency, such as forcing the agency to be subject to the congressional appropriations process so Congress can revoke its funding and allowing other regulatory agencies to veto CFPB actions. And the Supreme Court will review the constitutionality of Cordray’s previous recess appointment in the fall.

But Warren is not worried. “They can introduce whatever legislation they want. The political stalemate is over,” she told reporters, adding that any Supreme Court ruling would have few implications since Cordray now has the Senate’s official approval. As she said in a statement after the Tuesday vote, “The consumer agency is the law of the land and is here to stay.”

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Elizabeth Warren Declares Victory over GOP on Senate Confirmation of Wall Street Watchdog

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Obama Admin: Here’s How the Obamacare Rollout Will Work

by Leoni Posted on July 12, 2013

Mother Jones

There are a mere 80 days left until one of the main components of Obamacare goes into effect. The health insurance exchanges—where uninsured Americans will be able to buy health coverage with federal subsidies—open up for business on October 1. Naysayers are predicting delays and confusion. And not without reason. According to a June survey, 79 percent of Americans haven’t heard of the exchanges. (Forty-two percent are still unsure if Obamacare is even law.) GOPers spreading misinformation about the law have outspent proponents by a factor of five. The administration is altering provisions of the law as it unfolds, even as Congress blocks efforts to improve it. Needless to say, the Obama administration has some work to do in the next couple of months to convince the American public that it is up to the task of signing up millions of people for coverage over the next year. As part of that effort, the White House held a press briefing with liberal reporters on Friday to advertise the fact that, despite all the gloom and doom, those insurance exchanges are ready to go, and darnit, people are going to like them. Here’s how that will work, according to several senior administration officials:

First of all, it’s no big thing: The insurance exchange roll-out has been portrayed as a gargantuan task, requiring the Department of Health and Human Services to coordinate 50 separate exchanges, and craft an entirely new online marketplace. But the administration insists the infrastructure for signing all these people up already exists: more people signed up for Medicare part D under President Bush II than will ever enroll in the exchanges. And out of the 30 million uninsured Americans, only 15.4 million will be purchasing coverage on the individual market through the exchanges. Out of these people, the officials say, the administration really only needs to worry about signing up a good proportion of young and healthy folks—or 2.7 million 18 to 35 year-olds—so premiums won’t be too expensive.

Micro-targeting will win again: This target group is mostly male, mostly minority, and mostly concentrated in urban areas, according to Census data. In order to sign up these Americans, the administration is deploying the same kinds of micro-targeting techniques it relied on during the re-election campaign—advertising through radio, social media, churches, community health centers, and retailers. Every Walgreens will distribute info on the healthcare law. The administration has also been working with women’s networks and magazines, like Cosmo, to promote Obamacare.

The application process won’t be terrible: The administration has already set up healthcare.gov, where uninsured people will be able to apply for and buy insurance. The application was recently cut down from 23 pages to 3, and, officials say, you won’t have to fill out any annoying questions about your migraines or your paternal grandmother’s history of heart disease that private companies use to jack up rates. Once you fill out the online app, you’ll find out if you’re eligible for Medicaid, or whether you should buy through the marketplace, and, if so, whether you’re eligible for a subsidy.

Those states that are not expanding Medicaid might come around: Obamacare broadened Medicaid eligibility to all people within 138 percent of the poverty line, but last year, the Supreme Court made that part of the law optional, and so far 17 states have refused to expand the program. Poor people filling out apps in states that are not expanding Medicaid will still be directed to the state Medicaid office, who will then have to inform the uninsured person that the state will not provide her insurance because the governor (or state legislature) decided he didn’t want to. Administration officials are hopeful that public dismay at this kind of in-your-face rejection—along with pressure from mayors nationwide who are fans of the expansion—could lead recalcitrant states to change their minds.

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Obama Admin: Here’s How the Obamacare Rollout Will Work

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Wall Street Dodges Financial Reform Again

by DorothyUn Posted on July 5, 2013

Mother Jones

The Dodd-Frank financial reform act, the law designed to clean up the abuses that led to the financial crisis, celebrates its third birthday this month. But only about a third of the rules required by the legislation have been finalized so far, and even those are not going into effect as scheduled. This week provided a perfect example of why that is: The Federal Reserve granted Goldman Sachs a two-year extension to implement a key Dodd-Frank rule that would require banks to move risky trading into separate affiliates that are not backed by the Federal Deposit Insurance Corporation (FDIC). Several other of the nation’s biggest banks won the same exemption last month.

Financial reformers are not shocked. “Quelle surprise!” quips Bart Naylor, a policy advocate at the consumer advocacy group Public Citizen. “The Federal Reserve decides to heed the crush of Wall Street lobbyists.”

The Dodd-Frank rule, which Goldman Sachs was supposed to implement by July 16, requires FDIC-insured banks to move most of their derivatives trades into separate firms so that when a trade goes bad the bank will have to handle the fallout, not taxpayers. (Derivatives are financial products with values derived from underlying variables, like crop prices or interest rates; they were a major catalyst in the economic meltdown of 2008.) In its request for an extension, Goldman told the Federal Reserve—the main overseer of derivatives dealers—that complying with the deadline would mean the firm would need to either divest or stop a big portion of its swaps trading; a transition period, Goldman said, would be needed to ensure that the rest of the economy is not damaged by the shift. On Tuesday, the Fed agreed.

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Wall Street Dodges Financial Reform Again

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