Financial Reform Reports

Dodd Frank Is Five: And Still Not Allowed Outside the House
July 21, 2015

Architects of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act promised that reckless banking would end and that we’d never bail out mega-banks again. Five years later, however, this law remains largely incomplete — either yet un-codified into specific rules, enforcement dates set into the future, or rules not fully advantaged. This report details the status of the bill’s key provisions. Read the report (PDF).

Financial Services Conflict of Interest Act: Outlining the Need for Increased Revolving-Door and Reverse Revolving-Door Legislation
July 15, 2015

Solving the problem of the revolving door is no easy task because of the overlap that exists between government and financial interests. The Financial Services Conflict of Interest Act contains five distinct legislative sections that cover entering government service, serving in the public interest, and leaving government to return to the private sector. This report documents the nature of the problems that have been reported under each section in order to shine light on the importance of a strong conflict of interest and revolving door code covering financial services regulatory agencies. Read the report (PDF).

Continued Concerns With HSBC: Giant Bank Has Been Involved in Several Legal Investigations Since Signing Deferred Prosecution Agreement
January 25, 2015

A new Public Citizen report lays out continued concerns involving HSBC Holdings plc. HSBC, one of the world's largest banks, signed a deferred prosecution agreement in 2012 in which it agreed to pay $1.9 billion in fines and restitution for violating anti-money-laundering laws, among other offenses, in order to avoid criminal prosecution. The firm also agreed to enact reforms to prevent future wrongdoing. This report outlines numerous legal inquiries involving the company since it entered into the agreement. Read the report.

Lowered Expectations: Even After Trimming Its Agenda, Securities and Exchange Commission Is Missing Its Marks on Public Safeguards
November 3, 2014

Public Citizen's analysis shows that more than six years after the financial crash of 2008 and four years after Congress responded with the Dodd-Frank Wall Street Reform Act, the Securities and Exchange Commission is well behind in its task to implement the law. The agency is both failing to meet own deadlines and also compares unfavorably to the Commodity Future Trading Commission (CFTC), a sibling of SEC with similar responsibilities. Read the report.

Justice Deferred:The Use of Deferred and Non-Prosecution Agreements With Large Financial Institutions In The Age of “Too Big To Jail”
July 8, 2014

Prior to 2001 the Department of Justice (DOJ) rarely entered into deferred prosecution and non-prosecution agreements (DPAs and NPAs) with financial institutions in lieu of criminal prosecution. Since then, DPAs and NPAs, which are agreements in which companies may or may not admit to wrongdoing and agree pay fines, have become the DOJ’s preferred tool for white collar criminal law enforcement.

The increasing use of DPAs and NPAs has raised the question of whether the DOJ maintains a “too big to jail” policy which favors banks that, because of their size and systemic importance, cannot be prosecuted for fear of seriously damaging the economy. This report details the DOJ’s increasing reliance on these types of agreements, and concludes that the transition has occurred without complete transparency as to why the agency enters in to agreements with companies rather than pursuing criminal prosecution. The DOJ should publicly disclose if and when it is providing favorable treatment under the law to financial institutions so that Congress can exercise its oversight authority. Read the report.

"Efficiency Nut?: Evaluating the Rulemaking Progress at the Securities and Exchange Commission
June 23, 2014

The 2013 nomination of Mary Jo White to chair the Securities and Exchange Commission evoked a mixed reaction. Some applauded her nomination because of her background as a former prosecutor who once led the U.S. Attorney’s Office for the Southern District of New York (SDNY). Others worried that her subsequent career as a white collar criminal defense attorney at Debevoise & Plimpton might negate that history of prosecution. Commenters, including former colleagues, agreed on one positive trait: she gets things done efficiently.

At her confirmation hearing, White pledged to “finish in as timely and smart a way as possible” the rule-making mandates. However, Public Citizen's analysis shows that White has now delayed the proposed completion date for SEC completion of final rules in 64 percent of the cases. Read the report.

Big Banks, Big Appetites:The Consequences When Banks Swallow Commodities
April 10, 2014

As the Federal Reserve Board revisits a critical policy concerning whether Wall Street mega-banks may own commodities, a new Public Citizen report concludes that for the sake of consumers and the financial system, regulators and lawmakers should establish a strong wallbetween banks and commerce.

Not only does bank control of metals, oil, food and other commodities enable Wall Street to monopolize markets and drive up prices, but it puts the financial system – and taxpayers – at risk. Banks buy commodities with borrowed, federally insured deposits so a natural disaster or catastrophic event can create billions in liabilities. When a bank lacks its own capital to cover these liabilities, taxpayers may be stuck with the bill. Read the report.

A Matter of Perspective: Added Costs From a Financial Transaction Tax Would Be Minuscule Compared to Fees Investors Already Pay
March 12, 2014

A financial transaction tax (FTT) would cost ordinary investors just a minuscule amount compared to costs and other hidden fees they already bear, while bringing in revenue and discouraging risky trading practices, a new Public Citizen report shows. The report, “A Matter of Perspective,” analyzes the costs that would be paid by a hypothetical investor who invests his or her money either in a mutual fund or a self-directed portfolio of individual stocks.

If the person invested $85,000 (representing roughly the average size of a 401(k) account) in a mutual fund with average fees and asset turnover rates, that investor now would spend $1,144 a year in fees and hidden costs, the report concludes. In comparison, the investor would pay only $24.48 in annual costs resulting from a 0.03 percent FTT. If one includes an FTT purchase tax on an $85,000 investment, the investor’s total, first-year FTT-related costs would be just $49.48.

Similarly, an investor who buys and purchases his or her own individual stocks currently pays about 13 times more in costs than the investor would pay for in annual costs resulting from a 0.03 percent FTT, the report shows. Read the report.

Thanks a Billion (or So): A Small Loophole Inserted 20 Years Ago Helps Companies Avoid Paying the U.S. Treasury Big Money
Nov. 11, 2013

In 2012, the ratio of CEO-to-median worker pay had soared to 354:1. Meanwhile, corporations have avoided paying taxes on their executives’ huge paychecks by paying them primarily on the basis of incentives, sometimes of questionable legitimacy. The top 20 highest-paid CEOs in the most recent version of the AFL-CIO’s annual list of highest-paid CEOs were paid base salaries totaling $28 million, but had performance-based, tax-deductible compensation totaling more than $738 million. Assuming that these CEOs’ companies paid a corporate tax rate of 35 percent, tax-deductible performance-based compensation for these CEOs cost American taxpayers as much as $235 million in lost tax revenue. To address the unintended loophole in section 162(m), Congress should pass the Stop Subsidizing Multi-Million Dollar Corporate Bonuses Act. Read the report.

Safety Glass: Why It's Time to Restore 1930's Separation of Banking and Gambling
June 19, 2013

Eighty years ago, President Franklin Roosevelt signed the National Banking Act, also known as “Glass-Steagall,” in reference to Sen. Carter Glass (D-Va.) and Rep. Henry Steagall (D-Ala.). The law socialized deposit insurance, with creation of the Federal Deposit Insurance Corp. In exchange for guaranteeing the deposits of bank customers, Glass-Steagall steered FDIC banks into engaging in socially useful activity, notably making loans to businesses and consumers. Whether Glass-Steagall would have prevented the financial crash of 2008 will be endlessly debated in policy circles, but the case for reinstatement draws widespread and sometimes unexpected support. Read the report.

Business as Usual: 99.9 Percent of Banks Would Not Be Affected by Volcker Rule
Dec. 13, 2012

The Volcker Rule, among the most controversial aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act, will prohibit federally insured banks from engaging in proprietary trading, which involves speculation through short-term trades in stocks, derivatives and other securities.The financial crash, borne of reckless banking practices, cost the economy about $12 trillion. But Wall Street lobbyists have sought to water down the rule based on relatively miniscule costs that it would impose on them. A new Public Citizen report shows that most bankers have little to fear. In reality, the Volcker Rule will mean no change, no closure of business divisions, no costs from foregone financial activity, for more than 99.9 percent of banks. Read the report.

Delayed and Diluted: At Anniversary, Dodd-Frank Reforms Remain Unfulfilled Due to Industry Obstruction
July 20, 2012

Two years after Congress approved the Dodd-Frank Wall Street Reform and Consumer Protection Act, many of the law’s primary provisions have yet to take effect. This delay largely results from a multi-pronged industry campaign to both weaken and delay regulations called for in the act.

Where Congress set deadlines to complete regulations to implement the law, agencies have missed their marks 79.4 percent of the time. Additionally, many rules that have been completed or are nearing completion fall short of providing the level of protection that Congress called for in the law. As a result, many of the very problems that prompted the passage of Dodd-Frank continue to endanger our economic stability. Read the report.

The Repo Ruse: Scheme in Which Loans Are Mislabeled As Sales Continues to Endanger the Financial System
May 17, 2012

In the run-up to the 2008 financial crisis, banks depended increasingly on an unreliable method of funding their activities, called “repurchase agreements,” or repos. Repos may look like relatively safe borrowing agreements, but they can quickly create widespread instability in the financial system. The dangers of repos stem from a legal fiction: despite being the functional equivalent of secured loans, repo agreements are legally defined as sales. Dressing up repo loans as sales can lead to sloppy lending practices, followed by sudden decisions by lenders to end their risky lending agreements and market panics. Repos also permit financial institutions to cover up shortcomings on their balance sheets. The problems in the repo market were exposed as the 2008 financial crisis unfolded, yet the risks posed by repos remain largely unaddressed. Without reform, the financial system will remain susceptible to the sudden and severe shocks that repos can cause. Read the report.

Forgotten Lessons of Deregulation: Rolling Back Dodd-Frank’s Derivatives Rules Would Repeat a Mistake that Led to the Financial Crisis
May 14, 2012

Although debate continues over some of the root causes of the 2008 financial crisis, there is little dispute that inadequate regulation of derivatives was a major contributor. This new Public Citizen report chronicles the flawed arguments that were used to deregulate derivatives during the Clinton administration and how the decision to do so led to the worst economic crisis since the Great Depression. But many have forgotten these recent lessons. At least nine bills have been introduced in Congress that would erode the derivatives reforms in the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 even as the nation is still recovering from the disaster that unregulated derivatives caused in first place. Read the report.

Industry's Messengers: Wall Street's "Two Cents" on the Volcker Rule
March 27, 2012

This is the third installment of our "Two Cents" series, in which documents Congress’s efforts on behalf of the financial industry regarding the Volcker Rule, which was one of the most important reforms in Dodd-Frank. Members of Congress who submitted comments asking federal agencies to weaken the Volcker Rule have received an average of more than four times as much in campaign contributions from the financial sector since 2010 as those who asked agencies to strengthen the rule. Read the report.

Banking on Failure: Speculators' Use of Credit Default Swaps Dangerous
Nov. 11, 2011

Betting on the misfortune of others has an unsettling quality to it. It just feels wrong. Under our current financial regulatory regime, speculators freely gamble on businesses failing and countries defaulting. In addition to its unseemliness, betting on others’ failure poses a grave risk to our financial system. Read the report

Just Not Us: Wall Street's "Two Cents" on Pay Rule: Self-Preservation, Not Principle
July 21, 2011

The second installment in our "Two Cents" series examines the financial services industry's efforts to undermine the proposed rule in Section 956 of Dodd-Frank, which covers incentive-based compensation that “encourages inappropriate risks.” We review 24 financial services industry companies, trade associations, and their allies that submitted comments seeking to weaken the proposed rule. The primary theme of industry’s comments: “Please exempt us from this rule.” Read the report.

Industry Repeats Itself: The Financial Reform Fight
July 12, 2011

With the one year anniversary of the Wall Street Reform and Consumer Protection Act approaching – and the inevitable industry hand-wringing that will accompany the July 21 occasion – Public Citizen and the Cry Wolf Project decided to take a look back at what industry said during the last major financial reform era: the Great Depression. Read the report.

Wall Street's "Two Cents": Industry’s Opposition to a Modest Pay Disclosure Rule
April 12, 2011

This is the first report in our Two Cents series, in which we will document the efforts of special interests to influence the rules that will determine the success or failure of Dodd-Frank. Each report will examine the lobbying expenditures, campaign contributions and “revolving door” connections of the most strident opponents of reform. Our inaugural installment looks at pre-rulemaking efforts to weaken the implementation of the financial reform bill’s requirement that companies registered with the Securities and Exchange Commission to reveal how much their CEO makes in comparison to their average employees. Read the report.

Hourly Rates: A Modest Essay About Extraordinary Paychecks
March 23, 2011

Every fourteen minutes in 2009, hedge fund manager David Tepper made President Obama's annual salary. With 2010 compensation figures forthcoming as companies prepare for annual meetings, here's a baseline report.

Wall Street Receipts: Pro-TARP, Anti-Reform Legislators Outpace Colleagues in Financial Services Contributions
September 23, 2010

Members of Congress who voted Wall Street’s way on the two most important financial services bills over the past two sessions of Congress the 2008 TARP bailout and the 2010 financial reform bill have received more in campaign contributions from the financial sector in the last two election cycles than those who opposed Wall Street on either or both measures, according to Public Citizen’s analysis of voting records and of contribution data provided by the Center for Responsive Politics ( Read the report.

Courting the New Dems (PDF)
June 21, 2010

The 43 members of the New Democrat Coalition who last week sent a letter urging House-Senate negotiators to weaken the financial reform bill’s regulation of derivatives have received an average of 44.1 percent more campaign contributions from the financial services sector in the current election cycle than have the 25 coalition members who did not sign the letter, according to Public Citizen’s analysis of data from the nonpartisan Center for Responsive Politics ( Accounting for all campaigns since the 1998 election cycle, signers have received 44.6 percent more than non-signers, on average. Read the report (PDF).

Conference Klatch: The 43 House and Senate Members Negotiating Final Wall Street Reform Legislation Will Be Lobbied by 56 of Their Former Staffers (PDF)
June 11, 2010

Lobbyists for the financial services industry enjoy longstanding ties to the members of Congress who were named this week to the conference committee on financial reform legislation, according to a joint analysis of available data released today by Public Citizen and the Center for Responsive Politics. Read the report (PDF).

Banking on Connections
June 3, 2010

Organizations in the financial services sector have deployed at least 1,447 former federal employees to lobby Congress and federal agencies since the beginning of 2009, according to a joint analysis of federal disclosure records and other data released today by Public Citizen and the Center for Responsive Politics. Read the report.

Looking for a Free Ride (PDF)
May 24, 2010

So far in the 2010 election cycle, 44 senators have received $380,693 from the auto dealer industry’s employees and political action committees (PACs), according to Public Citizen’s analysis of data provided by the Center for Responsive Politics. The ten largest recipients – seven Republicans and three Democrats – have received more than half of the industry’s contributions to the Senate this cycle. Read the report (PDF).

Eleven to One (PDF)
May 18, 2010

Since the beginning of 2009, nearly 1,000 lobbyists have worked on at least one of nine key bills designed to rewrite the rules governing derivatives, a new Public Citizen report shows.These lobbyists have overwhelmingly represented organizations opposing or attempting to water down proposed regulation, according to Public Citizen’s analysis of lobbying disclosure data filed with the U.S. House of Representatives. Lobbyists representing opponents of strong derivatives reform have outnumbered pro-reform lobbyists by more than 11-to-1 (903 to 79 lobbyists). Among the clients represented by the anti-reform lobbyists were the nation’s five largest banks, several major financial trade associations and the U.S. Chamber of Commerce. Read the report (PDF).

Rewarding Failure
December 15, 2009

The CEOs of 10 Wall Street firms that either failed or received taxpayer bailouts were paid an average of $28.9 million per year in the years leading up to the Wall Street meltdown, according to a Public Citizen report. Their average pay this decade, calculated through 2007, equaled 575 times the median American family’s 2007 income.“Fat cat compensation has nothing to do with good corporate performance,” Public Citizen President Robert Weissman said. “These CEOs were exorbitantly compensated for driving their companies off the cliff. At a minimum, Congress must ensure that corporate leaders are paid for long-term performance, not short-term illusions. Read the report.

Investments in the Opponents of Reform
December 8, 2009

Representatives sponsoring two amendments that would weaken critical consumer protections in financial reform legislation have received at least $2.3 million from the financial services sector since the beginning of 2009, according to Public Citizen’s analysis of data provided by the Center for Responsive Politics. Read the report.

CA$HING IN: More Than 900 Ex-Government Officials, Including 70 Former Members of Congress, Have Lobbied for the Financial Services Sector in 2009
November 19, 2009

Since the beginning of 2009, organizations in the financial services sector – including banks, investment firms, insurance companies and real estate companies – have commissioned 940 former federal employees as federal lobbyists, Public Citizen’s analysis of data provided by the Center for Responsive Politics ( shows. Read the report.

Financial Industry Invests Heavily in Key Lawmakers
November 16, 2009

As Congress considers legislation to reregulate the financial services industry in response to the greatest economic downturn since the Great Depression, the industry is focusing campaign contributions on the congressional leadership and members of the committees crafting reform legislation. Read the report.

Bank-rolling Congress
August 26, 2009

Lobbyists, political action committees (PACs) and trade associations tied to the banks receiving the most federal bailout money have scheduled 70 fundraisers for members of Congress since Election Day and have made $6 million in federal campaign contributions, according to a Public Citizen report. Read the report.