FOR IMMEDIATE RELEASE
Jan. 30, 2018
Trump Year One: Year of Gifts to Wall Street
“President Donald Trump’s first year in office will go down as a one where Wall Street banks, predatory lenders, and private fund magnates made out like bandits,” said Lisa Donner, executive director of Americans for Financial Reform. “Their political and lobbying contributions, and their access to and control of the decision-making process, helped them shift the rules even further in their own favor, at the expense of consumers, investors, families and communities.”
A short list of Wall Street’s 2017 wins.
- Tax cuts: the financial industry stands to be the biggest long-term winner from the corporate rate cuts, with nearly $250 billion in estimated gains over the next decade.
- ‘Government R Us’: Seldom have so many bankers, fund managers, and other Wall Street operatives been tapped for so many influential positions, beginning with Treasury Secretary Steven Mnuchin, a former bank CEO who oversaw the execution of tens of thousands of foreclosures after receiving taxpayer bailout funding and government support conditioned on the bank’s promise to make its “best efforts” to keep families in their homes. Then there’s National Economic Council Director Gary Cohn, who as President of Goldman Sachs aggressively pushed the sale of toxic mortgage-backed securities to unaware investors, even as Goldman itself bet billions that the market would collapse. Jay Clayton, Goldman’s longtime lawyer, now chairs the Securities and Exchange Commission.
- Wall Street’s agenda is the Trump agenda. In June 2017, the Treasury Department released a set of regulatory policy recommendations. In 17 out of 20 areas, Treasury’s proposals mirrored those of The Clearing House, the major trade association for the country’s biggest banks.
- Rejection of the forced arbitration rule. On October 24, 2017, Vice President Mike Pence cast the tiebreaking vote as the Senate agreed to nullify this key Consumer Financial Protection Bureau rule, thus restoring the ability of financial companies to to strip defrauded consumers of the right to join together to seek justice in the courts.
- Other rules to stop abuse and hold Wall Street accountable on the chopping block. Here are just three of the financial regulations that Trump appointees have already taken steps to delay or overturn:
- CFPB’s payday lending rule, to rein in the abuses of payday and car title lenders whose business model is built on sucking people into unmanageable long-term debt at annual interest rates of 300% and up.
- Volcker rule, to stop the big Wall Street banks from playing reckless games with the help of insured deposits and other taxpayer subsidies and guarantees.
- Department of Labor fiduciary rule, to require retirement investment advisers to put their clients’ best financial interests first. (Wall Street hopes to hold onto an an estimated $17 billion a year in profits stemming from conflicted retirement investment advice – sales pitches disguised as advice, that is.)
- Inside job on the mission of the Consumer Financial Protection Bureau. This Dodd-Frank-created agency has been under relentless industry attack since it got started, but now the attack is led from within — by “acting director” Mick Mulvaney, who, as a congressman from South Carolina, called the Bureau a “sick, sad” joke and introduced legislation to do away with it. Under Mulvaney’s thumb, the bureau has:
- Stalled important work on the basis of cooked-up objections;
- Requested zero dollars in funding for the current quarter;
- Appointed political hacks to oversee its professional staffers;
- Prioritized asking the companies it regulates for reorganization advice; and
- Called off investigations or lawsuits involving, among other suspect entities, four payday lenders charging up to 950 percent APR; World Acceptance Corporation, over deceptive marketing practices that trap consumers into renewing online loans with interest rates of up to 300 percent APR; and, evidently, Santander bank for overcharging borrowers on auto loans. (When Mulvaney arrived, the bureau was reportedly just days away from a decision to bring a legal action in this case. Two months later, no suit has been filed. Mulvaney’s former chief of staff is a lobbyist for Santander.)