By Ed Mierzwinski, U.S. PIRG
Last week, the U.S. Treasury Department came out with a report mandated by a Presidential executive order. As feared, the report is a Wall Street wish list, with a few crumbs thrown to small banks (but make no mistake, the Wall Street bankers are hiding behind those small banks). The CFPB and investor protections are left in ruins.
Look no further than the blog of the respected Latino civil rights organization, the National Council of La Raza, for information that the report’s finding were preordained:
“These recommendations are not surprising given the Department’s lopsided engagement process. As of June, fewer than 15 consumer advocates, including NCLR [and U.S. PIRG], participated in the engagement process by meeting with the Department and commenting on financial regulation, compared to nearly 250 industry and trade groups who gave their input on the proposals. Clearly these recommendations favor Wall Street and do not reflect the perspectives of consumers. If adopted, these recommendations would prove harmful not only to Latinos, but to all American consumers.”
At the end of the report, you can see the lists of “fewer than 15” consumer and civil rights groups and 250 banking trade groups.
In his accompanying press release, Treasury Secretary Steven Mnuchin actually goes out of his way to praise the so-called Financial CHOICE Act, which passed the House earlier this month and has largely been panned as a compendium of bad ideas, including by over 150 professors of law. Better termed the Wrong Choice Act, it is considered dead on arrival in the U.S. Senate. Secretary Mnuchin also goes out of his way to claim that both the Treasury report and the Choice Act are primarily about community banks. The only reason for the small bank language is to provide cover for Wall Street.
We explained the importance of the CFPB two weeks ago when we released a report detailing how the CFPB helps protect servicemembers, veterans and their families. Harming the CFPB would put young servicemembers in “financial harm’s way,” we said. We pointed out weakening the CFPB would also hurt unit preparedness. Why? How? Bad credit is a leading cause of revocation of security clearances.
But this report and the Choice Act not only would dismantle the successful CFPB, they are intended to dismantle all of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act reforms enacted after the second largest financial collapse in U.S. history. Both collapses were fueled by Wall Street greed and a lack of meaningful enforcement abetted by regulatory capture.
Both the U.S. House passage of the Financial Choice Act — a true parade of horribles — and now the issuance of this “lopsided” U.S. Treasury Department report show that Wall Street maintains tremendous influence over Washington, less than ten years after Wall Street recklessness destroyed our economy. Money in politics is a big problem and Wall Street’s big money — over $2.7 million/day in lobbying and campaign donations — gives it undue influence.
The idea of the CFPB needs no defense, only more defenders.