Power Player Profile: Carolyn Maloney

By Darrell Delamaide, FinReg21 contributor 

Tenacious lawmaker champions credit card reform

Carolyn Maloney likes to list the things she has been first at – first New York City Council member to give birth while in office, first woman in Congress with a black belt in martial arts, first woman to chair the Joint Economic Committee. 

To her chagrin, Maloney, who represents New York’s “silk stocking” district in Congress, was not first on the list of candidates considered by New York Gov. David Paterson for filling the Senate seat vacated by Hillary Clinton. That appointment, briefly sought by Caroline Kennedy as well, went to Kirsten Gillibrand, another blonde Democratic congresswoman, who represented the 20th district in upstate New York. 

But Maloney is poised to achieve another kind of victory as the Credit Cardholders Bill of Rights that she authored and sponsored in the House of Representatives seems headed to the White House to become law. The bill has passed both houses, and will be ready for the president’s signature as soon as the House votes to approve changes in the Senate version. President Obama has said he would like to sign the bill before Memorial Day.

“It's a new era in Washington,” Maloney told a reporter as the bill wound its way through the legislative process. “It’s taken three years of hard work, but I’m delighted that we're on the brink of real protections for consumers.” 

The legislation would prevent credit card companies from imposing arbitrary rate increases and penalties and prevent certain billing practices. The credit card industry fiercely opposed the new restrictions, arguing that they interfered with their ability to manage risk and would result in less credit being available to consumers and small businesses. Their lobbying effort did successfully head off more drastic changes, however, such as interest rate caps or limits on the fees issuers charge to merchants. 

Maloney first launched her initiative last year, when the bill passed in the House but died in the Senate. This time around, she was able to tap into the public backlash against banks in the wake of the financial collapse and bailout to line up broad-based support in both houses.

Head of Joint Economic Committee

So if Maloney is crushed by not getting the Senate appointment, she’s not letting it show. An energetic 61-year-old who rises at 6 every morning and keeps going with high-energy “green” juice drinks blended from vegetables, Maloney continues to tackle the high-profile job that makes her one of the most influential members of Congress on economic issues. 

After serving in the last Congress as vice chairman of the JEC, one of the few bicameral standing committees in Congress and by far the most significant, Maloney took the helm as chairman in the new Congress this year in the midst of the country’s worst economic crisis since the Great Depression. 

And Maloney, who once wore a full burka on the House floor to demonstrate the plight of Afghan women under the Taliban, has jumped in with both feet. 

When the JEC was hearing testimony last month from Neil Barofsky, the special inspector general responsible for overseeing the government’s bailout program, she agreed with him that the Treasury Department needs to be more responsive in providing details about where the bailout money has gone. 

“On a basic level, it’s absolutely critical that we know where the money has gone and how it's been used,” she said, sweeping aside administration objections that the money was difficult to track. 

The role of financial reformer may not come completely naturally to Maloney. She is married to a former investment banker at Goldman Sachs, Clifton H.W. Maloney (as with the 41st president, George Herbert Walker Bush, his middle initials come from his grandfather, Harlan Wells). He now runs a private investment firm. 

Carolyn Maloney was one of the conferees in 1999 that smoothed out the final version of the Gramm-Leach-Bliley Act, which deregulated banking and is often blamed for leading to the current crisis. Her current House biography emphasizes that she labored to insert consumer protections into the bill. 

Throughout her 16-year career in the House, Maloney has represented her constituents in the Upper East Side of Manhattan and across the East River in Astoria, Queens, and supported the financial services firms that account for much of New York’s livelihood. It’s probably no coincidence that she and New York Sen. Chuck Schumer, another congressional standard bearer for New York financial institutions, have traded the two jobs at the top of the JEC – Schumer, chairman in the last Congress, is now vice chairman under Maloney. 

Maloney’s district has label “silk stocking” because of its extremely well-to-do and largely liberal constituency. The congresswoman, who lives on East 92nd Street, is right at home in this environment. 

From North Carolina to New York

Born Carolyne Jane Bosher (she dropped the “e” in Carolyne in 1982) in Greensboro, N.C., Maloney was the daughter of a real estate developer. Her grandmother was president of a coal company. 

Maloney attended Greensboro College, a small, church-affiliated school that was a women’s college until 1954, where she studied history and literature and graduated in 1968. She spent her junior year abroad in Dijon, France. She went on to spend a year at the University of North Carolina Law School. 

But the lure of the Big Apple was too great, and she went there in 1970 and stayed. After working as a public school teacher, she transitioned gradually to politics through jobs with the city board of education and then legislative assistant in housing at the state assembly and staffer for the minority leader. In 1982, she won her first election to the New York City Council and spent 10 years there before running for Congress in 1992. Maloney likes to say she has never lost an election. 

Along the way, in 1976, she married Clifton Maloney, originally of Philadelphia, who graduated from Princeton and Harvard Business School and served three years in the Pacific with the Navy. The couple has two daughters – Christina, a lawyer, and Virginia, a student at Princeton. 

One quality that will serve Carolyn Maloney well as she delves deeper into the financial crisis and regulatory reform is tenacity. Long a champion of women’s rights, Maloney has introduced the Equal Rights Amendment into every Congress since 1997 and remains the main House sponsor. 

In the aftermath of the Sept. 11, 2001 terrorist attacks, Maloney was fiercely tenacious in going after the Bush administration to keep its pledge for the some $20 billion in relief for New York City. While many elected officials in New York took the administration at its word and praised them for their help, Maloney repeatedly challenged the government to prove that the full amount was given, and argued that the city needed more relief. 

In Congress, meanwhile, she was in the forefront of those seeking to get the recommendations of the 9/11 Commission implemented. These efforts bore fruition with the passage of national security legislation in December 2004.

If her performance in that crisis is any indication, Maloney will be well-equipped temperamentally to follow up on the financial and economic crisis of the past year and a half. And as chairman of the JEC, she will have a prominent platform for her efforts.

Darrell Delamaide reports exclusively on financial regulation news and trends for FinReg21. Darrell is a veteran financial journalist who has worked for Dow Jones, Bloomberg, Institutional Investor, among others. He is based in Washington, D.C.