Republican Senator Bob Corker worked closely with Chris Dodd on his financial reform bill and one clause in particular: the “Hotel California” provision.He told Reuters that the provision is “sort of” tailor-made for Goldman Sachs.
“Hotel California” means that firms that took TARP funds won’t be able to hand in their bank charters, which would let them escape Fed supervision.
“You might as well call this the Goldman Sachs clause,” said Matt McCormick, a portfolio manager at Bahl & Gaynor Investment Counsel told Reuters.
Corker explains it this way:
“We had some companies that ran into the shade of the federal government.
“What you don’t want to have happen is when times get good, people start running out from under that.”
Goldman told Reuters it doesn’t care; the bank has “no interest” in changing its status as a bank holding company.