Battle lines are forming on both sides of the compromise financial industry regulatory reform bill that is scheduled to be marked up by the Senate Financial Services Committee on December 5. However, while S. 2155 is supported by 10 committee Democrats, it is receiving significant, even harsh, criticism from other members of the party. The responses of industry and consumer advocacy groups are more predictable.
Democratic opposition. Probably the most significant opponent is the Banking Committee’s senior Democrat, Sherrod Brown (D-Ohio). In a floor speech, Brown drew a comparison between the recent tax bill and the regulatory reform bill, claiming that both benefit wealthy and powerful business while ignoring working people. He attacked nearly every aspect of the bill, including its effects on stress tests and living wills, capital requirements, and consumer mortgage protections.
In the House of Representatives, Financial Services Committee Ranking Member Maxine Waters (D-Calif) issued a statement that is nearly as strong. Characterizing the bill as "another brazen giveaway to Wall Street and big banks," Waters argued that banks do not need help. Banks earned record high profits last year and are lending to businesses at levels higher than before the financial crisis. Congress should work on strengthening consumer protection laws, not helping banks, she argued.
Industry backers. As outlined in a Banking Committee press release, financial services industry and business groups have lined up to support the bill. The release cites praise offered by groups such as the American Bankers Association, Independent Community Bankers of America, Consumer Bankers Association, Financial Services Roundtable, and Chamber of Commerce. The Insured Retirement Institute and National Association of Homebuilders also touted sections of the bill they say would help their members.
Consumer advocacy critics. The Center for Responsible Lending, National Community Reinvestment Coalition, and National Consumer Law Center joined in a letter opposing S. 2155. According to the letter, the bill fails to provide needed additional consumer protections and, in fact, eliminates some mortgage loan protections that were created by the Dodd-Frank Act.
A blog post by U.S. PIRG Consumer Program Director Ed Mierzwinski repeats the consumer protection criticisms. It also takes issue with the claim that the bill will give needed regulatory relief to community banks, arguing that the ongoing consolidation of smaller banks has its roots in factors other than Dodd-Frank Act regulatory burden.
Companies: American Bankers Association; Center for Responsible Lending; Chamber of Commerce; Consumer Bankers Association; Financial Services Roundtable; Independent Community Bankers of America; National Community Reinvestment Coalition; National Consumer Law Center; U.S. PIRG
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