By Craig Sandler, Public Citizen
Right now, there’s a snake slithering through the grass outside of the House of Representatives: It’s a bill that passed the U.S. Senate last month. And the House has the power to either kill the snake or make its venom even more dangerous.
The bill, S. 2155, is officially titled the “Economic Growth, Regulatory Relief, and Consumer Protection Act,” which is so incorrect it’s laughable. So, we prefer to use Senator Elizabeth Warren’s term: the Bank Lobbyist Act. Simply put, the Bank Lobbyist Act would roll back many of the Dodd-Frank consumer protections and safeguards put in place after the 2008 financial collapse and is a clear giveaway to corporate donors at the expense of the public.
Though it is billed as a benefit for small banks, S. 2155 would actually reduce oversight of some of the nation’s largest banks, banks that taxpayers spent nearly $50 billion to bail out in the 2008 crisis as per Public Citizen’s analysis. Specifically, the bank removes “enhanced supervision” for banks with less than $250 billion. The current law requires such supervision for all banks with more than $50 billion in assets.
This bill simply provides more ways for Wall Street financiers to line their own pockets while saying it’s for the benefit of average Americans. But the greatest lesson we’ve learned in the ten years since the crash is that Wall Street bankers never seem to give even a moment’s thought to the harm their risky behaviors cause to consumers or the danger they’re putting our economy in.
Furthermore, in addition to reducing oversight of some banks, S. 2155 would take away important consumer financial protections. For example, Dodd-Frank regulations against racial discrimination in the home mortgage industry would be weakened. The bill would also devastate consumer protections for purchasers of mobile homes, which many low-income Americans rely on for affordable housing. And it would allow some banks to avoid escrow or appraisals, which help safeguard against predatory lending practices in the housing market.
Currently, the Bank Lobbyist Act awaits action in the House. And as venomous as the bill that passed through the Senate already is, some House Republicans would like to make it even worse by tacking on disastrous amendments. These potential amendments include provisions to:
- Set up a bank-friendly appeals office that could veto the Consumer Financial Protection Bureau (CFPB)’s decisions;
- Reduce oversight of even more of the financial institutions responsible for the 2008 financial crisis;
- Limit the CFPB’s scope of jurisdiction over predatory insurers; and
- Prevent the Federal Reserve from stress testing big banks to determine their soundness.
When Washington rolls back Wall Street rules, Americans suffer. We saw that clearly when the deregulatory measures passed in the 1990s and 2000s led to the 2008 financial crisis. That crisis and the Great Recession that followed cost our economy up to $14 trillion, destroyed 8.7 million jobs and caused pension funds for workers to lose nearly a third of their value. Millions of Americans lost their homes, their retirement savings and saw steep declines in their paychecks. Banks recovered quickly, but many Americans did not. A version of this disaster could happen again if the Bank Lobbyist Act were to be signed into law.
Now the House faces a choice to either worsen the bill, take it up as is, or to reject it outright. And they must hear from us if they are to kill this snake of a bill. Without voices of the people chiming in, unfortunately our Representatives will only be hearing from bank lobbyists.
We cannot let bank lobbyists determine the banking laws in this country, freeing them to resume gambling with taxpayer-backed deposits. We cannot give a green light for Wall Street to resume the reckless activities that could lead to another financial crash and taxpayer bailout.
Tell your representative that Wall Street needs more regulation, not less. Use this toll-free number to call the Capitol switchboard at (877) 762-8762 to be connected with your representative today and urge her or him to oppose the Bank Lobbyist Act, S. 2155.