Grimm Indictment May Hurt Financial Industry Priorities

The damning indictment against Rep. Michael G. Grimm might do more than sink his political career — it may also undermine bipartisan efforts to advance some of the financial industry’s top legislative priorities.

The New York Republican is one of the few relative moderates in his party that sits on the House Financial Services Committee.

Notably, Grimm has shown a willingness to work with Democrats in several instances to maintain government support for certain parts of the economy if it would help his constituents. That’s won him favor among housing and banking industry groups but has displeased conservatives.

Update: Grimm has announced his intent to step down from the Financial Services panel “in light of recent events,” and Speaker John A. Boehner has accepted Grimm’s request.

Grimm was a co-author of legislation (PL 113-89) passed last month that halted higher flood insurance premiums from taking effect.

He has been a vocal advocate of reauthorizing the Terrorism Risk Insurance Act and sponsored a bill (HR 508) to renew the government’s loss-sharing program, which expires at year’s end absent congressional action.

And he has supported a reauthorization of the U.S. Export-Import Bank, which helps finance the export of U.S. goods and services abroad.

Hard-line conservative groups and lawmakers oppose all of those efforts.

In particular, the fight to extend the Ex-Im bank’s charter before it lapses at the end of September is sure to provoke high drama on Capitol Hill. Financial Services Chairman Jeb Hensarling, R-Texas, called the bank the “face of cronyism” last week.

A defiant Grimm said Monday he has no plans to resign or drop his bid for reelection.

But the jaw-dropping accusations — which include impeding the IRS, conspiracy to defraud the United States, filing false tax returns, mail fraud, wire fraud, health care fraud and the hiring of undocumented immigrants — are sure to take a toll on his ability to legislate.

Even if Grimm remains committed to his policy priorities, other lawmakers and industry groups may not want him to be the face of their issues.

Here’s the text of the indictment.

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To stay up to speed on news developments such as these in real time, visit CQ on Banking & Finance.