March 7, 2016
Time to Reform Wall Street Pay Schemes That Put Our Economy at Risk
Public Citizen Applauds President Obama’s Call for Action on Wall Street Reform
WASHINGTON, D.C. – Public Citizen welcomes President Barack Obama’s efforts to prod the nation’s top financial watchdogs to more aggressive action. At a meeting with the major financial regulators today, the president reportedly urged them to take forceful action on the unfinished business of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
One long-delayed rule calls for regulators to forbid compensation structures that incentivize “inappropriate” risk taking. Congress emphasized the importance of this provision, contained in Section 956 of the law, by setting a deadline for the rule: May 2011.
“The pay reform rule should have been at the top of the agenda for the financial agencies,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “Instead, this rule remains mired in a tar pit of Wall Street lobbying and interagency feuding. The president speaking out loudly hopefully will help move the ball on this critical regulation to protect Main Street.”
“Reforming Wall Street pay structures that reward ‘inappropriate’ risk-taking is one of the core components of Dodd-Frank,” said Bartlett Naylor, financial policy advocate for Public Citizen’s Congress Watch division. “We need action on this rule, and we were thrilled to see the president again push regulators to move forward with unfinished business. Twenty months have passed since the president last pointed out that Wall Street pay reform was years overdue.”
“This rule is just one example of unfinished rulemaking, and our regulators have the responsibility to finish the remaining rules as well as begin to enforce those that are already on the books,” added Gilbert. “Today’s meeting also highlights the enormous importance of financial regulatory appointments. These regulators must avoid the rapidly spinning revolving door between Wall Street and agencies, and thus remain unaffiliated with the banks and financial entities they oversee.”