“This terrible bill ignores the lessons of the financial crisis and includes a huge list of giveaways to Wall Street,” said Lisa Donner, executive director of Americans for Financial Reform. “Though it may work for Wall Street and assorted predatory lenders, it is dangerous policy that is bad for financial stability, bad for consumers, bad for investors, and bad for the real economy.”
Call it what it is: Wall Street’s CHOICE Act. A detailed analysis of the bill can be found here. In broad terms it would:
- Create unprecedented barriers to regulatory action that would effectively give large financial institutions veto power to overturn or avoid government oversight.
- Eviscerate the Consumer Financial Protection Bureau and make it impossible for it to act forcefully against unfair or abusive practices in consumer lending markets.
- Eliminate critical elements of regulatory reforms passed since the financial crisis, including restrictions on subprime mortgage lending, the Volcker Rule ban on banks engaging in hedge-fund like speculation, and restrictions on excessive Wall Street bonuses.
- Increase the ability of “too big to fail” financial institutions to hold up taxpayers for a bailout by threatening economic disaster if they failed.
- Weaken investor protections and accountability in the capital markets, including the elimination of crucial new fiduciary protections for retirement savers.
“The level of venom directed at the Consumer Financial Protection Bureau, an agency that is successfully carrying out its mission of preventing tricks and traps that harm American families, is astounding,” Donner said. “The changes proposed by the legislation only make sense if you want to weaken consumer protections and make it easier for Wall Street, and predatory lenders, to profit by cheating people.”
Wall Street’s CHOICE Act would:
- End the Consumer Bureau’s authority to supervise large banks, returning to the failed consumer regulatory model that brought us the financial crisis.
- Take away the Consumer Bureau’s core authority to take on unfair, deceptive and abusive practices, a power that has enabled the Bureau to stop Wells Fargo from opening fake accounts in their customers’ names; prohibit lenders from making false threats in debt collection; and refund consumers tricked into paying for worthless credit card add-ons.
- Limit supervision of non-bank financial companies.
- Undermine the Consumer Bureau’s independence, making it subject to the whims of the White House and Wall Street lobbyists.
- Eliminate all CFPB jurisdiction over payday and title loans, preventing it it from taking on the unaffordable lending at the heart of the payday debt trap, and also from acting against payday lenders that break the law.
- Stop the Consumer Bureau’s rulemaking on forced arbitration, which is otherwise on track to restore consumers rights to hold financial institutions accountable in court if they break the law..
- Create massive loopholes in the rules put in place to discourage the kind of unaffordable mortgages that were at the heart of the foreclosure crisis.
- Hide the public consumer complaint system that has been so useful in making financial companies more responsive to their customers.