Last night, U.S. PIRG and the AFL-CIO joined Americans for Financial Reform in a detailed comment letter urging issuance of a strong Volcker rule by the financial regulators. It’s a 72-page pdf comment letter that basically comes down to one simple thing. We tell the financial regulators: don’t let big banks make taxpayer-backed bets. The rule implements Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as proposed by former Federal Reserve Chairman Paul Volcker and implemented into law by the consumer and investor champions, Senators Jeff Merkley (OR) and Carl Levin (MI).
Excerpt from our joint letter:
There are significant positive elements in this proposed rule. But it still falls well short of fully implementing the statute. It is clear from both the legislative history and the text of the statute that in passing the Volcker Rule Congress sought fundamental change in the American financial system by restoring basic firewalls between the banking system and the capital markets. In the proposed rule, the regulators have not placed the statutorily required limitations on permitted capital market activities. Instead, they have gone to some effort to preserve business as usual in important areas. This includes practices at the center of the financial crisis, such as dealing in illiquid and customized products for which no market exists and bank participation in securitizations. The metrics-based oversight regime favored by the regulators here, while positive in many respects, simply will not work unless it is accompanied by clear restrictions on the scope of permitted activities.
Senior Director, Federal Consumer Program, U.S. PIRG Education Fund
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.