Today, in response to a report from the U.S. Department of the Treasury which resulted from President Trump’s February Executive Order, Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, released the following statement:
“Our nation’s economic security is in grave danger. The report released by Treasury is an attack on protections for consumers, investors and retirees. Make no mistake, the Treasury Department is proposing to take apart Wall Street Reform just like the Wrong Choice Act - they are just trying to make it sound nicer. But there is nothing nice, reasonable, or thoughtful about this proposal. The Trump Administration is saying loud and clear that they would rather gamble with our financial security than prevent Wall Street from taking advantage of hardworking families.
“In some respects this plan is even more expansive in scope than the Wrong Choice Act, and hides harmful intentions behind generalities and platitudes. For example, the report proposes to rewrite the Community Reinvestment Act in an ambiguous, undefined way that could lead to less investment in our communities, and also instructs Congress to “take action to reduce regulatory fragmentation, overlap and duplication” without any concrete recommendations on how to do so.
“In many areas, this plan is as brazen and openly regressive as the Wrong Choice Act. It too would destroy the Consumer Bureau, and roll back critical rules in place to ensure the stability of our financial system. The recommendations in this report must not be allowed to come to fruition.”
The Treasury plan mirrors the Wrong Choice Act in seeking to functionally terminate the highly successful Consumer Financial Protection Bureau, which has returned nearly $12 billion to 29 million Americans. Specifically the plan proposes to:
- Empower President Trump to fire the Consumer Bureau’s Director at will, chilling any tough enforcement actions against the President’s friends on Wall Street;
- Eliminate the Consumer Bureau’s independent funding and subjecting it to a partisan congressional appropriations exercise that could drastically slash its budget;
- Hide the Consumer Bureau’s transparent nationwide consumer complaint database, even though 97 percent of complaints submitted to companies have received timely responses;
- Constrain the Consumer Bureau’s enforcement tools, making it much harder to go after unfair, deceptive or abusive acts or practices committed by Wall Street banks like Wells Fargo;
- Roll back numerous protections put in place by the Consumer Bureau in the mortgage market;
- Slap a moratorium on mortgage servicing rules that could better protect consumers from the kind of foreclosure abuses performed by banks like OneWest; and
- Impose delays and repeals of various data collection that would help shed a light on discriminatory lending practices.
Narrow items to help community banks and credit unions are dwarfed by other major rollbacks for the biggest financial institutions on Wall Street. Specifically, the plan proposes to:
- Encourage a new race to the bottom on Wall Street by weakening safeguards – like stress tests and living wills – that help mega banks plan for financial and economic stress, providing an “off ramp” for mega-banks to avoid appropriate Federal oversight and creating loopholes in the Volcker Rule for Wall Street to gamble with taxpayer money;
- Weaken prudential rules for massive foreign banks that operate in the United States;
- Eliminate the Office of Financial Research’s (OFR) independence by subjecting it to Treasury control and congressional appropriations, making it less effective in helping the Financial Stability Oversight Council (FSOC) to monitor and address emerging risks that can crash the economy; and
- Slap onerous cost-benefit requirements on regulators in a manner that helps the industry block rules they simply don’t like.