Two weeks ago, lawmakers voted 67-32 to proceed with a debate on S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, a bill that would decrease the regulations currently governing capital and planning requirements, specifically Dodd-Frank, the legislation that created the Consumer Financial Protection Bureau (CFPB) to stop Wall Street’s ability to again wreak havoc on our economy through the following steps:
- Supervising and enforcing action against big banks;
- Preventing unfair, deceptive, and abusive practices;
- Protecting against payday and car title lenders that charge sky-high interest rates; and
- Maintaining a public database of consumer complaints about financial firms.
On Wednesday, the Senate passed the measure, advancing it to the House of Representatives. If signed into law, it will relax regulations for mortgage lenders, expand free credit freezes, and alter requirements for student loan defaults. It will raise banks’ asset threshold from $50 billion to $250 billion, and require only a dozen banks to uphold the most stringent regulations. More than two dozen banks would be protected from some federal oversight under Dodd-Frank. If those banks ultimately fail, they would be excused from required procedures for safe dismantling, and would complete the bank “health test” only periodically instead of once a year.
Sen. Sherrod Brown (D-Ohio), the top Democrat on the banking panel, said on the Senate floor:
“This legislation threatens to undo important rules protecting us from risk. This legislation again puts taxpayers on the hook for bailouts.”
“Buried down in the details of the bill are more landmines for American families. Washington has become completely disconnected from the real problem in people’s lives.”
Moderate Democrats accused progressives like Warren of engaging in hyperbole. They argue they have to respond to their states’ political and banking needs, citing the harm consolidation in the banking industry caused since Dodd-Frank was passed.
Sen. Heidi Heitkamp (D-ND), a moderate Democrat up for re-election, stated on the Senate floor:
“They don’t understand where we live. They don’t understand who we are. They don’t understand we live in communities and that we support and protect each other. Instead, they write one regulation that’s supposed to be one-size-fits-all.”
Sen. Mark Warner (D-Va.), argued:
“Let me be clear that I will do nothing and support no legislation that seriously undermines or cuts back on the provisions and the systemic protections that were put in place. But eight years later…there is widespread agreement that some of the standards we set in Dodd-Frank needed time for review.”
George W. Bush was on his way out, Barack Obama was on his way in, Democrats were about to regain the majority in Congress, albeit briefly.
And then the economy crashed.
As Obama stepped into the White House, what has been dubbed the worst financial crisis since the Great Depression was beginning to grip the nation.
It looks as though 2008 is here again–minus Barack Obama and a democratic majority.
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