Sept. 12, 2016
An Avalanche of Deregulatory Rubbish Threatens to Bury Dodd-Frank
Hensarling’s Legislation Would Harm Consumers, Threaten Financial Safety, Hamstring Bank Regulators
WASHINGTON, D.C. – The U.S. House of Representatives Financial Services Committee should reject U.S. Rep. Jeb Hensarling’s (R-Texas) recently introduced Financial CHOICE Act of 2016 (H.R. 5983), which is an avalanche of deregulatory rubbish that would imperil consumers and the entire financial system, Public Citizen said today.
The legislation, scheduled for markup on Tuesday, would drastically hinder the ability of financial regulators to put in place new consumer and Main Street protections by undoing key components of the Dodd-Frank Wall Street Reform and Consumer Protection Act. H.R. 5983 spans 513 pages and would repeal government response tools for teetering megabanks, repeal banker pay safeguards, repeal limits on debit card fees, institute new rules to hobble regulators, politicize the U.S. Consumer Financial Protection Bureau (CFPB), rescind the recent rule requiring investment advisers to put their clients’ interests ahead of their own, and more.
“Mere weeks after introducing this sweeping bill to gut major swaths of Wall Street reform, Chair Hensarling proposes to force a vote on it,” said Bart Naylor, financial policy advocate for Public Citizen’s Congress Watch division. “Not only does Public Citizen oppose this deregulatory malfeasance, we ask the committee to take up the important, proactive and bipartisan legislation to restore Glass-Steagall.”
Another harmful provision in the legislation would undermine the ability of consumer-focused agencies to stop practices that clearly injure customers of financial products and services. For example, the legislation would block the CFPB from implementing its proposed rule to limit the use of arbitration rip-off clauses that force harmed consumers into private arbitration proceedings, denying them their constitutional right to a day in court. The rule’s public comment period ended last month, with more than 100,000 consumers writing to support this reform.
“Constraining consumer protections is unconscionable. We urge members to see this legislation for what it is: a gift to the Big Banks, that would extend their ‘license to steal’ and tear down hard-fought banking regulations, some of which have not yet been implemented,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “Americans still suffering from the economic collapse deserve better; we deserve government watchdogs with teeth.”