UPDATED 12 January 2015: Here is our U.S. PIRG letter opposing the Regulatory Accountability Act to be considered on the House floor tomorrow Tuesday. (We discuss the bill further in the original post below).
ORIGINAL POST: In the first of what is expected to be a never-ending effort by powerful special interests to weaken Wall Street and other regulatory reforms in the new Congress, supporters of public protections achieved a surprising victory. House leaders miscalculated today when they attempted to pass a sweeping rollback of Wall Street reforms under a suspension of the rules procedure usually limited to bills naming Post Offices or praising Cub Scouts and Little League teams.
Faced with strong opposition led by Rep. Keith Ellison (MN),the proposal failed to get the necessary 2/3rds vote in favor to pass (Public Interest Vote is NAY). Unfortunately the proposal will be back. Leadership is expected to bring it back under normal procedures, when the bill will be subject to at least nominal amendments, but only a simple majority will be required for passage.
Nevertheless, the public anger over the inclusion of a Wall Street reform rollback written by Citibank in the final appropriations package funding the government, passed in late December, is at last resonating somewhat on Capitol Hill. Indeed, when Kevin Yoder (KS), a principal author of that controversial December provision repealing the “swaps pushout” provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 defended himself with an op-ed in his local Kansas paper this week, all the comments (so far), have attacked him. This paper is in Kansas, not Cambridge, Massachusetts or Portland, Oregon.
That swaps pushout rule had simply required that banks place their casino bets with their own money, which would be kept in a separate arm of the bank “pushed out” from the bank’s FDIC-insured consumer accounts. Today’s bill, HR 37, contained 11 separate controversial provisions, including yet another (two year) delay in the so-called Volcker rule also intended to insulate money in the bank under the government safety net from money used for risky betting. As former Federal Reserve Chairman Paul Volcker himself said after today’s vote:
“As I indicated a few weeks ago, it is striking that the world’s leading investment bankers, noted for their cleverness and agility in advising clients on how to restructure companies and even industries however complicated, apparently can’t manage the orderly reorganization of their own activities in more than five years,” Volcker said in a statement.
Next week, the House will consider the latest version of the Regulatory Accountability Act, which, in previous iterations, placed at least 65 new roadblocks in front of new health, safety or financial protection regulations. Down the line, of course, other major battles will be fought over all aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including its centerpiece, the Consumer Financial Protection Bureau. The CFPB is the first federal financial regulator established with just one job: protecting American consumers, including students, retirees, servicemembers and veterans and the rest of us from predatory lending and other unfair financial practices.
Not surprisingly, it turns out that payday and other predatory lenders, the big Wall Street banks, other banks, the debt collectors, the credit bureaus and the U.S. Chamber of Commerce don’t like the idea of an agency tasked with making financial markets work fairly. And their massive campaign contributions have helped members of Congress forget that just a few short years ago, in 2008, our economy collapsed due to a lack of regulation.
We expect that 2015 will include numerous other fights over weakening public protections. Stay tuned.
Senior Director, Federal Consumer Program, PIRG
Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.