Politics of Wall Street: Race for 'Obama' Senate Seat

WASHINGTON (TheStreet) -- In the Illinois race for the U.S. Senate seat once occupied by President Barack Obama, Democrat Alexi Giannoulias is trying to make Wall Street an issue but his Republican opponent Mark Kirk is having none of it.

Giannoulias' official campaign Web site criticizes Kirk for "catering to big Wall Street Interests" while Kirk's campaign site is relatively devoid of references to investors, banks or Wall Street.

To understand Kirk's position on Wall Street regulation, it's necessary to visit his Congressional Web site, where he states that he supports "reforms to the criminal code and the regulatory structure that ensure the accuracy of financial statements, protect the interests of investors, preserve the benefits of stock option and 401 (k) plans, and prohibits executives from fraudulently profiting at the expense of rank and file workers." That said, he also makes clear that he "opposes excessive legislation that chokes the growth of growing smaller public companies."

Kirk voted against the financial reform bill that Obama signed into law in July and explained his decision this way: "I support bipartisan, common-sense financial regulations, but we should not do so at the expense of jobs or cutting loans for small businesses. Rep. Barney Frank's 2,319-page financial regulation bill failed to address any major reforms for two institutions responsible for a significant part of the Great Recession - Fannie Mae and Freddie Mac. After receiving a nearly $150 billion taxpayer bailout, Fannie and Freddie still lack an independent inspector general."

The most obvious impact of Kirk's position would be on Fannie Mae (FNMA) and Freddie Mac (FMCC), with potential consequences for major mortgage lenders and servicers. Wells Fargo, (WFC), Bank of America (BAC) and JPMorgan Chase (JPM) were the three biggest originators of mortgages in the second quarter, according to Mortgage Daily.

By contrast, Giannoulias is campaigning on some very specific proposals that could have consequences for banks in particular and Wall Street in general. He supports "greater capital requirements at financial firms" and calls for "immediate contributions by large financial institutions to an 'emergency fund' that could be tapped for any future bailout."

These are references to the so-called "too-big-to-fail" banks that received taxpayer bailouts, including Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS) as well as Wells Fargo, JPMorgan Chase and Bank of America.