From our friends at @StopTheDebtTrap:
With all the news to worry about these days, Virginia voters might not have noticed our two U.S. Senators getting behind a major new bank giveaway bill. Perhaps Senators Warner and Kaine themselves were hoping to hang low on this one.
Wall Street has, of course, never stopped believing it should be allowed to write its own rules, hide gotcha fees in take-it-or-leave-it consumer contracts, and gamble with federally guaranteed funds. Since the Wall Street Reform Act of 2010, the financial industry and its Congressional allies have come forth with an endless stream of measures to roll back consumer safeguards and relax limits on the kind of heads-they-win-tails-we-lose bets that crashed the economy less than a decade ago.
But in 2017 they gained a crucial new advantage with the inauguration of a President prepared to sign just about anything on the industry’s wishlist. And now, in a breakthrough that significantly improves their chances of legislative success, the Wall Street lobby has gained the support of a bloc of Democratic lawmakers including both men who represent us in the U.S. Senate.
What could Senators Warner and Kaine have been thinking?
Under the flimsy guise of providing relief for “community banks,” they have endorsed a far-reaching bill, S. 2155, that would loosen the rules for institutions with up to $250 billion in assets. That includes companies that took tens of billions of dollars in taxpayer-funded bailout money and count themselves among the biggest half of 1 percent of all U.S. banks.
Among other bad things, this legislation would:
- Let sellers of manufactured homes steer customers into needlessly expensive and tricky loans from affiliated companies;
- Make it harder for regulators and the public to gather evidence of racially discriminatory lending;
- Exempt a wide swath of mortgage lenders from appraisal and escrow provisions that help homeowners meet their obligations and avoid default; and
- Make the entire financial system more fragile by effectively lowering capital reserve requirements for the biggest banks and carving out a giant loophole in the Volcker Rule that bars banks from gambling with the advantages of deposit insurance and other public subsidies and guarantees.
2155 has been called a “terrific” bill by Treasury Secretary Steven Mnuchin. He’s the former Goldman Sachs exec and hedge fund magnate who bought a big mortgage lender on the cheap from Uncle Sam and made heaps of money foreclosing on seniors.
Mnuchin’s endorsement should have been warning enough to our Senators to follow the lead of their Ohio colleague, Senator Sherrod Brown, the ranking Democrat on the banking committee. Brown withdrew from negotiations that he rightly assessed as an effort to put a “bipartisan compromise” veneer on a one-sided bill. The last-minute inclusion of a few token consumer protections could not change the basic contours of a measure designed, as Brown said, to produce windfall gains for banks and corporate lenders while doing “nothing to help people with record high levels of student loan debt; nothing to help those with underwater mortgages; and nothing to help workers who are struggling to get by.”
This bill rests on a doubly false premise: first, that banks are hurting (in fact they’re making record profits), and second, that turning them loose could be a formula for a new burst of economic prosperity. That is, of course, the very same story Americans were sold in the years leading up to the financial crisis. Virginians know how it turned out. We need to remind our Senators. Please call 202-224-3121.