On Dec. 11, the stop-gap spending measure currently funding the government will expire. But instead of looking for ways to help Main Street and pull America back from a self-imposed budget “cliff,” Republicans in Congress are already planning how to use this year-end deadline as a way to push through Wall Street’s Christmas wish-list.
In my role as the ranking Democratic member on the House Financial Services Committee, I think it’s important to remind and embolden Democrats to stand firm against the upcoming Republican strategy to repeal and roll-back Wall Street reform. After all, they’ve done it before.
Last December, we saw Republicans threaten a government shutdown over a Wall Street favor they wanted attached to a government funding bill. That provision, which was an integral part of Wall Street reform, helped to ensure that taxpayers weren’t on the hook for banks' riskiest bets. After a few calls from JPMorgan Chase CEO Jamie Dimon, Republicans granted Wall Street their wish: the “swaps push-out” provision of the Dodd-Frank Act was repealed, and Wall Street took a victory lap.
This year, Republicans are already hard at work preparing their next Christmas gift for special interests. But this time, they’re not after just one part of the Dodd-Frank reform bill. Now, their target is the entire financial sector.
Several months ago, Sen. Richard Shelby (R-Ala.), the chairman of the Senate Banking Committee, attached radical legislation to deregulate Wall Street, gut financial reform, and hobble the Federal Reserve to a pending version of government funding legislation in the Senate. Chairman Shelby’s legislation would touch nearly every corner of the financial services industry, undercutting sensible consumer protections and rules of the road for large financial institutions under the guise of helping small, community banks. It would weaken lending standards that protect consumers from the worst subprime loans that caused the foreclosure crisis; it would prevent regulators from identifying and stopping risks to the economy—the same kinds of risks that led to the blow-up of AIG; it would harm some of our country’s most vulnerable homebuyers by allowing manufactured housing lenders to charge borrowers higher rates without important protections; and it would inject political interference into the interest rate-setting process at the Federal Reserve. That’s just a small sampling of the extreme provisions included in this bill.
Not to be outdone, House Republicans have employed a similar strategy, using the government funding process to force through legislation that would weaken the Consumer Financial Protection Bureau (CFPB) – the new watchdog responsible for protecting consumers from risky, unsafe, or confusing financial products. Republicans are targeting the CFPB’s ability to regulate predatory payday loans, and they’re trying to stall the agency’s efforts to rein-in the forced arbitration clauses in financial contracts, which prevent consumers from having their day in court.
While Republicans were using the appropriations process to try to roll-back reform, Democrats were working together, in good faith, through the regular legislative process, to put forward common-sense regulatory relief for community banks and credit unions– relief that would ease their burdens without removing key protections for consumers. Yet, Republicans have insisted on hacking away at reform through this backdoor process. And rather than work with Democrats and the Obama administration to negotiate a sensible package, they’ve insisted instead on holding funding for the government hostage.
Keeping our government functioning shouldn’t be a bargaining tool. But Republicans seem all too willing to shut down the government – as they did for 13 days in 2013 – if they don’t get what they want. And this time, what they’re after is another giveaway for the big banks, a giveaway that would increase the odds of another financial crisis, the costs of which would be paid for by the American taxpayer.
It’s time for Democrats in Congress, as well as the Obama administration, to stand together against this latest attempt to expose consumers to the worst actors in our financial system—it is essential that Democrats are prepared to call Republicans’ bluff and reject Wall Street presents this coming holiday season.
Waters represents California’s 43rd Congressional District and has served in the House since 1991. She sits on the Financial Services Committee.
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