Conservatives want you to believe that regulations on powerful banks are destroying the economy. It’s not the banks themselves— you know, the ones that destroyed the economy in the 2000s by fueling a housing bubble, making money hand over fist, getting bailed out with taxpayer money, and then fraudulently booting millions of homeowners out on the street.
On Thursday, House Republicans were passed the Financial CHOICE Act, a radical Wall Street deregulation bill that would undo many of the provisions passed in the wake of the Great Recession that increased scrutiny and placed modest limits on big banks to keep them from taking down the economy again.
Unable to call the legislation what it is—an unhinged reversion to the Wall Street Wild West—House Speaker Paul Ryan has the audacity to call it a jobs bill for Main Street.
— Paul Ryan (@SpeakerRyan) June 8, 2017
Here’s a question: Where was he when an unregulated finance industry single-handedly brought down the American economy, taking nearly nine million private-sector jobs with it?
Ryan and the Republicans have consistently harped about Dodd-Frank supposedly making it harder for small-business owners to get loans. That’s simply not true. In fact, commercial and industrial loans were at an all-time high as of November.
But the only way that House Republicans’ deregulatory agenda can be sold is by insisting that Obama’s financial regulations have killed job growth. The only way to fix the economy passed on by Obama, Republicans say, is with a heaping dose of good ole’ Wall Street deregulation.
This is classic trickle-down ideology: deregulation for the powerful and a more volatile and predatory marketplace for everyone else.
Here’s a quick rundown of what the bill would do:
First, it would remove the Dodd-Frank’s orderly liquidation authority, which allows regulators to more effectively ratchet down banks that are the verge of collapse. It would also take away bank regulators’ ability to deem certain financial institutions “systemically important,” a label that comes with more scrutiny and stricter regulations. In short, it will increase the risk of taxpayer-funded bailouts of Too-Big-to-Fail banks.
The CHOICE Act ends the Volcker rule, which prohibits banks from engaging in certain types of speculative investments with their depositors’ money. It would also jettison the Fiduciary Rule, which the Obama Department of Labor implemented to require that retirement advisers provide services in the best financial interest of their clients. Conflicted retirement advice costs retirement savers billions of dollars each year.
One of the central purposes of the bill is to gut the Consumer Financial Protection Bureau (CFPB), the independent agency launched by now-Senator Elizabeth Warren to crack down on rampant predatory actions on Wall Street. Since its creation in 2011, the agency has recovered a reported $11.7 billion for more than 27 million consumers, going after predatory practices in the auto, student, home loan, banking, and credit card industries. The CHOICE bill would remove the bureau’s single director and create a partisan board of commissioners, take away its independent authority, and severely curtail the scope of its purview.
Congressman Jeb Hensarling, the chair of the Financial Services Committee and one of Wall Street’s favorite lawmakers, is the architect of the deregulatory bill. He’s long had it out for the CFPB, calling it a “rogue, unconstitutional” agency. “I want to protect consumers from the Orwellian-named Consumer Finance Protection Bureau—that’s the most important thing we want to do,” he told Bloomberg. (Over his career, Hensarling has received millions of dollars from the finance sector (more than $7.4 million) and companies that stand to lose from stronger consumer protections.)
This isn’t the Republican Party caring about small businesses and job creation. This is the Republican Party doing what it does best: pushing toxic agendas that appease its donors and inflict risk and injury on everybody else.