Washington, D.C. — As justification for rolling back financial regulations, President Donald Trump and congressional Republicans have tried to claim that banks and their lending business have suffered mightily under the financial stability and consumer protection requirements of financial reform. But lending has rebounded significantly since the Dodd-Frank Act’s passage, and consumer credit costs are down. Consumers are better protected in the financial marketplace from toxic products, and banks are better suited to handle periods of economic stress. A new report from the Center for American Progress examines Rep. Jeb Hensarling’s (R-TX) Financial CHOICE Act—proposed legislation that may be reintroduced in the weeks to come. This legislation would erase Wall Street accountability and leave the economy and working families dangerously vulnerable to abusive and risky practices or even another financial crisis.
“Less than a decade ago, the entire American economy was put in jeopardy by Wall Street’s risky practices—compounded by a lack of serious and effective oversight,” said Gregg Gelzinis, Special Assistant at CAP and co-author of the report. “Lending has recovered markedly since the financial crisis, and banks are doing just fine, but that’s apparently not good enough. The Financial CHOICE Act represents the choice of Donald Trump’s most important constituency—wealthy special interests—and its enactment would once again leave our economy and American taxpayers exposed to the devastating threat of a crash and to the ongoing abuses that drain working families’ wallets.”
“The Financial CHOICE Act is all about giving companies more choices on how to rip off American consumers, investors, homeowners, and taxpayers. It would take ‘protection’ out of the Consumer Financial Protection Bureau, block safeguards for retirement investors, and scuttle victims’ ability to take financial firms to court,” said Joe Valenti, Director of Consumer Finance at CAP and co-author of the report. “It’s another gift to the same actors whose predatory practices caused the crisis and cost nearly 10 million families their homes. Financial interests spent $2.7 million per day during the last Congress trying to gut financial reform. Firing the watchdogs is a sure path back to putting our economy at risk.”
CAP’s report delivers a thorough examination of the provisions of the Financial CHOICE Act, analyzing how the legislation would erode the financial stability safeguards that the real economy needs to thrive, from mitigation of systemic risk to financial sector accountability and consumer protection. It also explains how the bill further concentrates—and makes even more unaccountable—economic power in the hands of those that will serve their own interests at the expense of the real economy. Finally, CAP’s report details how the Financial CHOICE Act would eliminate the consumer and investor protections that guard against the predatory financial practices that wreaked havoc on consumers and investors prior to the financial crisis.
Read “President Trump’s Dangerous CHOICE” by Gregg Gelzinis, Ethan Gurwitz, Sarah Edelman, and Joe Valenti.
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For more information or to speak with an expert, contact Allison Preiss at [email protected] or 202.478.6331.