A provision of the Dodd-Frank financial reform law that is often overlooked is one requiring lenders to hold onto a portion of risky loans that they make. This addresses a key problem that contributed to the country’s economic meltdown, which was the ability for subprime lenders to securitize and sell off an entire loan, divorcing themselves from the risk of mortgage default.

As the Center for Public Integrity has pointed out, during the subprime bubble, “lenders were selling their loans to Wall Street, so they wouldn’t be left holding the deed in the event of a foreclosure.” Wall Street then sold the loans off to investors, moving the default risk even further down the road. This process fueled a dramatic decline in lending standards.

Dodd-Frank requires that lenders retain five percent of every loan on their books, so that they are not completely separated from default risk. McClatchy reports that the banks are trying to quietly nix that part of the law:

Financial lobbyists also are working to soften requirements that Wall Street firms put more “skin in the game” by retaining more mortgage bonds on their books to guard against shoddy lending…They’re trying to expand the definition of “plain vanilla” mortgages that would be exempted from the risk-retention requirements. [...]

The [American Securitization Forum] and its members want to exempt interest-only mortgages, which caused many unsophisticated borrowers to lose their homes. “Certain types of loans aren’t standard, but are appropriate for high creditworthy borrowers,” Deutsch said in an interview, pointing to wealthy borrowers who seek to maximize their mortgage-interest deductions at tax time.

During the debate over Dodd-Frank, the banks pushed Sen. Bob Corker (R-TN) to propose an amendment (which was ultimately defeated) striking the risk-retention provision from the bill. It’s no surprise that during the law’s rule-making phase, they are trying to weaken it as much as possible.

Exempting interest-only loans from the risk-retention requirement would be particularly detrimental, considering that they are risky loans that typically involve large resets, and the dramatic increase in monthly mortgage payments that such resets entail. “In a lot of ways, [an interest-only loan is] an illusion of homeownership with the reality of rental,” said Michael Calhoun, president of the Center for Responsible Lending.

With House Republicans hell-bent on rolling back provisions in Dodd-Frank, this is one more area that merits watching. After all, the banking industry is already counting on “better outcomes” with Republicans running the lower chamber.

In October, the House and Senate quietly passed a bill — the Interstate Recognition of Notarizations Act of 2010 — that would have forced states to accept notarized documents from any state. This came at the same time that the robo-signing scandal was finally coming into focus, and one of the problems that the banks were having with their documentation was a slew of false and possibly fraudulent notarizations.

At the time, Ohio Secretary of State Jennifer Brunner said that the bill “would weaken protection of homeowners by requiring many states to accept lower standards for notarizations.” President Obama, warning of the “unintended consequences of this bill on consumer protections, especially in light of the recent developments with mortgage processors,” vetoed the legislation.

Congress is not a body that actually stands up to the banking industry with any consistency, so the House today will be voting to override Obama’s veto. But nothing has changed the fact that the bill would make it more difficult for homeowners to challenge foreclosures (as any notarization, done under any standard, would have to be accepted). Zach Carter explains:

In foreclosure fraud, this is important because banks are robo-signing documents in order to cover-up problems with their loan documentation. In the GMAC scandal that ignited the recent controversy, a robo-signer named Jeffrey Stephan had hundreds of thousands of these documents notarized in Pennsylvania, even though they concerned foreclosure cases all over the country. If courts have to accept out-of-state notarizations, it becomes much more difficult to demonstrate that GMAC is committing rampant fraud.

In addition, forcing any state to immediately accept notarized documents from out of state could also lead to a race to the bottom, as banks will originate all their documents in states that have the loosest standards. It would only take one state significantly lowering its standards (in the face of bank lobbying or the promise of banks moving jobs into the state) and suddenly homeowners would have to accept bank documents with no idea whether the information on them was verified properly by an impartial observer.

As the Wall Street Journal reported, “it isn’t clear how much the foreclosure mess, which erupted in mid-September, could affect support for the measure among House lawmakers who voted for the bill last spring.” The House needs to abandon this terrible idea once and for all.

This morning, Bloomberg reporter Drew Armstrong broke an incredible story revealing that health insurance companies, like UnitedHealth and CIGNA, funneled $86.2 million into the U.S. Chamber of Commerce in 2009 to pay for the Chamber’s multifaceted campaign to kill President Obama’s health reform legislation. In January of this year, the National Journal’s Peter Stone reported that insurers had pumped $20 million into the Chamber for its anti-health reform campaign. Armstrong’s report exposes the true extent to which insurers worked to fool the public and defeat health reform. However, the report also poses new questions about the role of insurance companies in the health reform debate.

Why did insurance companies try to hide their donations to the Chamber’s anti-health reform campaign? Given their own unpopularity and Obama’s pledge to be the first leader to successfully reform America’s broken health system, the health insurance industry hatched a plan to fundamentally deceive the public, the press, and politicians. Instead of fighting reform tooth and nail, the insurance industry worked to manipulate the process and ultimately kill reforms by adopting what ThinkProgress termed “The Duplicitous Campaign.” In public, health insurance lobbyists and executives promised to support reform and work closely with reform advocates. The top health insurance lobbyist, Karen Ignagni, went to the White House early in the reform debate and promised Obama, “You have our commitment to play, to contribute and to help pass health-care reform this year.”

In private, the health insurance industry worked with conservative think tanks and media, right-wing front groups, and highly ideological trade associations like the National Association of Manufacturers and the Chamber to kill the bill. By using third party groups and ideological cover, the health insurance industry sought to trick Americans into hating reform. In September of 2009, while many in the media still believed insurance executives were honestly supporting reform, ThinkProgress released a report detailing the ways in which the health insurance industry secretly worked to undermine the process and poison public opinion (read it here). We also produced a video with health insurance whistle-blower Wendell Potter, who explained how insurers control the debate to defeat reform:

ThinkProgress busted several anti-reform groups, like Conservatives for Patients’ Rights, Coalition to Protect Patients’ Rights and Center for Medicine in the Public Interest as industry-created fronts used to deceive the public. As ThinkProgress also first reported, health insurance companies like WellPoint and Blue Cross Blue Shield paid hundreds of thousands of dollars to anti-reform talking heads like former House Speaker Newt Gingrich. In December of 2009, ThinkProgress produced an exclusive investigation showing how health insurance executives are also secretly working to undermine and undo reform on the state level by orchestrating state-based constitutional challenges to the law. The question for the press and for politicians becomes: we now know that health insurance companies absolutely lied to the public about its role in the reform process in 2009. How much are health insurers funding efforts to repeal the law and weaken health reform regulations?

According to a new report by HCAN, a pro-reform group, health insurers posted a 22 percent increase in profits for 2010, largely by shedding customers. How much of that money — money from health insurance premiums — is being used on right-wing lobbying campaigns instead of actual treatments and health care for the sick?