Republicans Are Planning to Unravel Wall Street Reform


House Republicans voted to gut the Dodd-Frank Wall Street reform law this past summer with legislation called the “Financial Choice Act.” Now, on the heels of a huge giveaway to the rich and corporations with the #GOPTaxScam, the Senate is back with its own version of Wall Street de-regulation. Tell your Senator to vote no the deceivingly-titled “Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155).”

This bill puts us at risk of another financial crisis

The Wall Street reform law requires that the country’s largest banks be subject to responsible oversight, to safeguard against another crisis that the collapse of a large bank could cause. Current law requires any bank larger than $50 billion—the 38 biggest banks in the country—be subject to certain standards. But this bill would quintuple that threshold to $250 billion. That means two dozen of the country’s largest banks—that together received $47 billion in TARP “bailout” funds—would escape the oversight intended to prevent another financial crisis. These are banks as big as the toxic subprime lender Countrywide. It also means that banks that are currently failing government “stress tests”—periodic checks to ensure that they won't blow up the economy—would no longer have to undergo the current tests.

It allows racial discrimination in mortgage lending to go unchecked

Currently, the Home Mortgage Disclosure Act requires most banks to collect demographic information when they originate mortgages. Collection of this data helps track patterns of application, denials, and volume along lines of race to ensure that discrimination in lending doesn’t continue to fuel broader, systemic racial inequality. This bill would exempt the vast majority of mortgage lenders from new data collection requirements passed after the subprime crash—leading to an information vacuum that will hurt communities of color.

It erodes critical consumer protections

A number of key consumer protections put in place by Dodd-Frank to protect everyday homebuyers against the predatory behavior of banks are repealed or eroded by this bill. Guaranteed protection from surprise insurance fees and taxes that have been shown to reduce foreclosures are eliminated. Makers of manufactured homes are exempted from truth in lending requirements, putting rural and low-income homebuyers at risk of predatory lending. Rural homebuyers are particularly at risk from a new provision that could lead to homes being overvalued at the time of purchase, putting them at greater risk of owing more on their mortgage than the value of their home. And it allows lenders to surprise buyers with new predatory loan terms at the time of closing, without adequate time for review. These changes and more tilt the playing field back in favor of the big banks and put consumers at risk.

...All of this in the name of “helping community banks”

Proponents of this bill—Democrats included—say this bill is about helping the community banks and credit unions in their state. But this legislation goes far beyond that. In fact, it was flawed from the start: Senate Republicans began by copying and pasting more than a dozen sections from the CHOICE Act. While the rest of it isn’t as radically extreme, it is still a terrible bill that favors banks over people and allows the same risk in our financial system that the Wall Street reform law eliminated—risk that caused the financial crisis.

If Senators wanted to pass a community banking bill, they could pass a community banking bill. This is not it. In fact, prominent beneficiaries of this bill are international banks like Deutsche Bank, Barclays, and Santander—hardly your community bank on the corner. Community banks have legitimate concerns that should be addressed but this legislation goes far beyond that—far enough that your Senator should oppose it.

Tell your Senator to oppose the “Economic Growth, Regulatory Relief, and Consumer Protection” Act

Caller: Hello! My name is [ ] and I’m calling from [part of state]. I’m calling because I would like Senator [ ] to oppose bill S. 2155, the Economic Growth, Regulatory Relief, and COnsumer Protection Act.

If the Senator is already a co-sponsor

Staffer: Thank you for calling. Unfortunately, the Senator disagrees with you on this issue. Community banks need relief from burdensome regulations that were unnecessarily imposed by the Dodd-Frank bill.

Caller: This bill goes way beyond just helping community banks. In fact, prominent banks that this bill helps include Deutsche Bank, Barclays, and Santander. And even worse, the bill puts us at risk of another financial crisis, it erodes consumer protections, and it allows racial discrimination in mortgage lending to go unchecked.

Staffer: The Senator believes this bill will get our economy going again. But I’ll be sure to pass along your thoughts to the Senator.

Caller: Please let the Senator know that I am very disappointed in this position, especially considering the huge handout Wall Street just got from the tax bill that Congress just passed. I hope he/she will change his/her mind about co-sponsoring.

If the Senator is undecided or staffer doesn’t know

Staffer: Thank you for calling. The Senator hasn’t taken a position on this bill yet.  

Caller: Ok. Please ask the Senator to oppose it. It goes way beyond helping community banks. In fact, prominent banks that this bill helps include Deutsche Bank, Barclays, and Santander. And even worse, the bill puts us at risk of another financial crisis, it erodes consumer protections, and it allows racial discrimination in mortgage lending to go unchecked.

Staffer: I’ll be sure to pass along your thoughts to the Senator.

Caller: Please let the Senator know that I'll be watching closely. Especially considering the huge handout Wall Street just got from the tax bill that Congress just passed, banks really don’t need the playing field tilted further in their favor.

If the Senator opposes

Staffer: Thank you for calling. The Senator agrees with you. This legislation will let Wall Street run amok.   

Caller: Please pass along my thanks to the Senator! This bill puts us at risk of another financial crisis, it erodes consumer protections, and it allows racial discrimination in mortgage lending to go unchecked. I am very glad the Senator will oppose it.

Staffer: I’ll be sure to pass along your thoughts to the Senator.