FOR IMMEDIATE RELEASE
April 18, 2024
CONTACT
Carter Dougherty, carter@ourfinancialsecurity.org
AFR Statements on House Majority’s Regulatory Rollback Plans
Americans for Financial Reform made the following comments on item marked up by the House Financial Services Committee yesterday:
On the bills related to climate and financial regulation:
“Climate change represents a clear and growing threat to households, financial institutions, and the economy, as evidenced by the ongoing climate-exacerbated property insurance crisis. We oppose these shortsighted efforts to overturn the SEC climate risk disclosure rule, the banking regulators’ climate risk management principles for large banks, and to hamper the Federal Insurance Office’s ability to monitor the ongoing insurance crisis” said Alex Martin, policy director for climate finance at AFR. “If successful, these attacks would leave our investors, markets, and regulators more in the dark on climate risks, and individuals and families more vulnerable.”
More details on the bills can be found here. All climate-related bills and resolutions passed out of committee on party line votes, with all Democrats rejecting them.
On the bills related to fintech regulation:
“Fintech firms often seek to have their cake and eat it too, by offering risky products that act like traditional finance, while seeking weaker regulatory regimes for those products,” said Mark Hays, senior policy analyst at Americans for Financial Reform and Demand Progress. “Giving fintech firms what amounts to get out of jail free cards will hamper regulators’ ability to provide meaningful oversight and expose consumers to the dangers of more unproven and risky products.”
HR 7428, “The Earned Waged Access Consumer Protection Act,” exempts high cost fintech payday loans from fair lending and truth in lending requirements, making it more difficult for consumers to understand and manage the high costs of these products. A coalition letter of opposition to this bill can be found here. HR 7440, “The Financial Services Innovation Act of 2023,” makes it easier for risky fintech companies to get exemptions from proven and effective consumer regulatory safeguards. A coalition letter of opposition to this bill can be found here.
Both bills passed on a party-line vote.
On the bills related to systemic risk:
AFR and other public interest groups oppose congressional actions that would nullify the Financial Stability Oversight Council’s nonbank designation guidance at a time when non bank financial sector risks have never been greater.
However, AFR and other public interest groups support congressional actions that would address issues contributing to Silicon Valley Bank (SVB) and other bank failures and the 2023 financial crisis. Two bills passed by the committee would take positive steps in this area. Rep. Brad Sherman’s H.R. 4206, the “Bank Safety Act of 2023,” would close a regulatory loophole to require large banks similar in size to SVB to reflect unrealized securities losses in their regulatory capital. Rep. Al Green’s H.R. 4116, the “Systemic Risk Authority Transparency Act,” would require the banking agencies to report to Congress on the use of the systemic risk authority under the Federal Deposit Insurance Act.
Members voted to rescind the nonbank designation guidance along party lines, with a vote of 29 to 23. The Systemic Risk Authority Transparency Act won unanimous support as amended, with a recorded vote of 50 to 0, supported by 28 republicans and 22 democrats. Members amended and agreed to the Safe Banking Act by a voice vote, for which specific details were not recorded.
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