House Republicans voted to gut Dodd-Frank Wall Street reform this past summer with legislation called the “Financial Choice Act.” Now, on the heels of their huge Tax giveaway to the rich the Senate is back with its own version of Wall Street de-regulation.
This bill puts us at risk of another financial crisis
The Dodd-Frank Act requires that the country’s largest banks be subject to responsible oversight, to safeguard against another crisis that the collapse of a large bank could cause. Current law requires any bank larger than $50 billion—the 38 biggest banks in the country—be subject to certain standards. But this bill would quintuple that threshold to $250 billion. That means two dozen of the country’s largest banks—that together received $47 billion in TARP “bailout” funds—would escape the oversight intended to prevent another financial crisis. It means that banks that are currently failing government “stress tests” would no longer have to undergo the current tests.
It allows racial discrimination in mortgage lending
Currently, most banks must collect demographic information when they originate mortgages. Collection of this data helps track patterns of application, denials, and volume along lines of race to ensure that discrimination in lending doesn’t continue to fuel broader, systemic racial inequality. This bill would exempt the vast majority of mortgage lenders from new data collection requirements passed after the subprime crash.
It erodes critical consumer protections
A number of key consumer protections put in place by Dodd-Frank to protect against the predatory behavior of banks are repealed or eroded by this bill. Guaranteed protection from surprise insurance fees and taxes that have been shown to reduce foreclosures are eliminated. Makers of manufactured homes are exempted from truth in lending requirements. Rural home buyers are particularly at risk from a new provision that could lead to homes being overvalued at the time of purchase, putting them at greater risk of owing more on their mortgage than the value of their home. And it allows lenders to surprise buyers with new predatory loan terms at the time of closing, without adequate time for review.
…All of this in the name of “helping community banks”
Proponents of this bill—Democrats included—say this bill is about helping the community banks and credit unions in their state. But this legislation goes far beyond that. In fact, it was flawed from the start: Senate Republicans began by copying and pasting more than a dozen sections from the House CHOICE Act. While the rest of it isn’t as radically extreme, still favors banks over people and allows the same risk in our financial system that the Wall Street reform law eliminated—risk that caused the financial crisis.
If Senators wanted to pass a community banking bill, they could pass a community banking bill. This is not it. In fact, prominent beneficiaries of this bill are international banks like Deutsche Bank, Barclays, and Santander.
FYI – Here are the Democratic Senators (we are sorry to say) who voted yes on the Motion to Proceed (Bennet, Carper, Coons, Donnelly, Hassan, Heitkamp, Jones, Kaine, King, Manchin, McCaskill, Nelson, Peters, Shaheen, Stabenow, Tester, Warner)
Our 2 California Democratic Senators voted against the Motion to Proceed, and Indivisible asks us to call them and say something like:
I’d like to thank the Senator for voting against the Motion to Proceed on S 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, and I hope she will vote against the bill.
Senator Feinstein: email,
DC (202) 224-3841,
LA (310) 914-7300,
SF (415) 393-0707,
SD (619) 231-9712,
Fresno (559) 485-7430
Senator Harris: email,
DC (202) 224-3553,
LA (213) 894-5000,
SAC (916) 448-2787,
Fresno (559) 497-5109,
SF (415) 355-9041,
SD (619) 239-3884