Over consumer, worker, Democratic objections, key House panel OKs banking deregulation bill

WASHINGTON–Over consumer, worker and Democratic objections, the key GOP-run House committee that writes banking legislation approved a deregulation bill to virtually dismantle all the protections Congress erected seven years ago after financiers’ finagling and manipulation of shady investments produced the Great Recession.

The party-line 34-26 May 4 vote in the House Financial Services Committee sent the measure, HR10, to the full House, but debate on it hasn’t been scheduled yet.

That still gives workers and their allies – including workers who want to ensure pension financial “advisors” put workers’ interests first – time to lobby lawmakers to defeat the bill. .

Financial Services Committee Chairman Jeb Hensarling, R-Texas, says HR10, named “The Financial Choice Act,” abolishes what he claims are “too big to fail” sections of the current Dodd-Frank bank regulation law. But it also wipes away regulations, he said. Banks hate them.

And Hensarling claimed HR10 would help increase consumer access to credit and aid smaller community banks, not the behemoths of Wall Street, who — the lawmaker asserted — oppose the measure.

HR10’s passage by the House panel was generally ignored amidst the brouhahas over Russian interference in the U.S. 2016 presidential election and GOP President Donald Trump’s firing of FBI Director James Comey. Both uproars now engage attention of Congress and Washington.

Workers and their allies have a very different take on HR10. The AFL-CIO and the labor-backed National Consumers League focused on its plan to dismantle the enforcement powers of the Consumer Financial Protection Bureau (CFPB), a key pro-consumer and pro-worker section of Dodd-Frank.

The fed aimed for 102,000 signatures on a petition to Congress to protect the CFPB. “The Consumer Financial Protection Bureau has returned nearly $12 billion to families ripped off by big banks, student loan servicers, credit card companies and predatory lenders,” it said.

NCL says HR10 would undermine CFPB’s “proposed rules to limit high-cost payday loans and forced arbitration.”

“Consumers want their finances protected from predatory debt collectors or payday loan sharks,” said Executive Director Sally Greenberg. “Yet the majority in this Congress is hell bent on repealing those consumer protections and that spells danger for all of us.

“NCL is proud to join legions of consumers who have come to Washington to say ‘stop attacking hard-won consumer protections.’ We must stand up to” solons “who are siding with corporations over everyday consumers and oppose repeal of sensible consumer protections.”

Committee Democrats labeled HR10 “The Wrong Choice Act” and offered a series of amendments to highlight the harms it would cause workers and consumers. All lost on party-line votes. Their unsuccessful amendments included:

• Restoring the Labor Department’s fiduciary rule, to order brokers providing investment advice to retirees and pension funds to actually work in the best interest of their clients.

“The Wrong Choice Act would eliminate the fiduciary rule, exposing seniors and hardworking Americans to self-serving financial advisors,” said sponsoring Reps. Stephen Lynch, D-Mass. – a former union official — Keith Ellison, DFL-Minn., Al Green, D-Texas, and Gwen Moore, D-Wis.

• An amendment by Reps. Bill Foster, D-Ill., and Emanuel Cleaver, D-Mo., to “correct the Republicans’ revisionist history by inserting into the bill factual information about the Great Recession and its impact on hard-working Americans, as well as the way those economic metrics have turned around since Dodd-Frank became law.”

“The Wrong Choice Act would return us to a system that rewards short-term profits to the detriment of financial stability, leaving Americans to foot the bill,” the two stated.

• Rep. Brad Sherman, D-Calif., tried to protect consumers “by clarifying that forced arbitration clauses do not apply to checking and credit card accounts fraudulently opened without a customer’s consent.” That would close the “Wells Fargo loophole,” he said.

“The Wrong Choice Act would prevent Wells Fargo customers from having their day in court to lawfully contest Wells Fargo for setting up fake accounts in their names without their consent,” Sherman said. The fake accounts cost consumers billions of dollars.

• HR10 virtually dismantles the CFPB’S enforcement powers. Its pursuit of financial fraudsters has angered bankers and their GOP congressional allies. Rep. Charlie Crist, D-Fla., tried ban use of HR10’s “frivolous cost-benefit analysis” before letting CFPB enforce fair lending laws. He lost. “The Wrong Choice Act would strip the consumer bureau of its power to protect consumers and subject its work to a number of roadblocks,” Crist said.

• In a direct slam against shareholders, including union shareholders, that try to hold financial firms – and other corporations – accountable, HR10 bans shareholder proposals at any public company unless the shareholder has held at least 1 percent of the firm’s stock for at least three years. Reps. Ellison, Carolyn Maloney, D-N.Y., and Michael Capuano, D-Mass., tried to keep all shareholders at the table, unsuccessfully.

“The Wrong Choice Act is a vehicle for Donald Trump’s agenda to get rid of financial regulation and help out Wall Street,” said the committee’s top Democrat, California Rep. Maxine Waters. “Trump’s Treasury Secretary said he welcomes reintroduction of this bill. The bill destroys Wall Street reform, guts the Consumer Financial Protection Bureau, and returns us to the financial system that allowed risky and predatory Wall Street practices and products to crash our economy. It’s an invitation for another Great Recession, or worse.”

Source: PAI