The Republican establishment in Washington D.C. is working on a new plan that is likely to have devastating consequences for everyday working families.
The latest proposal being put forth by GOP lawmakers would destroy important financial regulations that are meant to protect our economy. Under the GOP plan, wealth corporations will be free to engage in risky investing behavior that ultimately puts everyone’s economic well-being in jeopardy.
Remember the 2008 financial crisis? This has a very real potential of being much, much worse.
House Republicans are preparing to vote on a new bill that would roll back many of the Wall Street regulations passed in the aftermath of the financial crisis.
The bill, which is called the Financial CHOICE Act and would gut the 2010 Dodd-Frank legislation, passed the House Finance Committee earlier this month without any Democratic votes. Republican leaders in the House are planning to whip votes this week; the bill’s chief proponent, Texas Rep. Jim Hensarling gave the Republican conference a pep-talk about the legislation in a Tuesday’s closed-door meeting, telling members it would be a boon for the economy and free financial institutions from burdensome regulations.
Progressives are lining up against the bill. The CHOICE act “is about rolling back the protections that decrease the likelihood that financial giants will blow up our economy again,” Sen. Elizabeth Warren told TIME in an interview, and “keeping the big guys from juicing their profits by putting the rest of America at risk.”
The bill would have an enormous impact on the finance industry if it passed, and would likely have broader effects on the economy, too.
One part of the GOP plan is to completely undermine the Consumer Financial Protection Bureau, which is a special agency that helps ensure Americans aren’t getting scammed through their loans or financial services. Thanks to the Republicans, those protections could soon be gone forever.
Read more, from Time:
The Consumer Financial Protection Bureau is a federal agency created as part of Dodd-Frank to improve transparency in auto loans, student loans, mortgages and other consumer-facing financial transactions. It has the power to fine bad actors: last year, for example it charged Wells Fargo $185 million for creating fake accounts and withdrawing fees from customers. The CFPB says that it has returned almost $12 billion to customers who’ve been cheated by financial institutions. The CFPB also has a public database of complaints about bank and credit issuers’ financial services, and helps resolve consumer-bank disputes.
Republicans believe the CFPB is unaccountable, as its director cannot be arbitrarily fired by the president, and the agency is not subject to congressional appropriations. To remedy their disagreements with the agency, they’ve written Financial CHOICE Act to weaken the CFPB, replacing its director with a bipartisan governing structure. The bill would also eliminate its current revenue stream, instead requiring Congress to chose whether or not to fund it every year.
The agency was conceived of by Warren when she was still a professor at Harvard Law School. The Massachusetts senator is incensed. “The consumer agency is the watchdog to make sure that families don’t get cheated on credit cards, mortgages, payday loans and other financial products,” Warren tells TIME. “The Republican bill is about leashing up the watchdog so it can’t do its job.”