AFR

Given the unfortunate demise of the Department of Labor (DOL) Fiduciary Rule and the glaring deficiencies in the Securities and Exchange Commission’s (SEC’s) Regulation Best Interest, we greatly appreciate states such as New Jersey that are willing to step in to fill the regulatory void by providing the protections investors need and expect.

Today, Americans for Financial Reform joined a coalition of national consumer and civil rights groups in writing to top banking regulators on the importance of preventing banks from once again issuing payday loans that trap people in a cycle of debt.

The cash infusions are a way of “reminding the president and the people close to him that they are among those who are generous to him with the profits that they earn from a business that’s in severe danger of regulation unless the Trump administration acts,” Americans for Financial Reform Executive Director Lisa Donner told ProPublica.

We commented to the banking regulators criticizing proposed rules on bank ownership of unsecured debt issued by systemically important (G-SIB) banks. This debt is intended to absorb losses in a potential future financial crisis, which may not be feasible if other banks are permitted to own significant amounts of it.

Even within our broad coalition, it is exceedingly rare for so many organizations to come together and to speak with one voice. The tremendous outpouring of opposition to high-cost, short-term loans that put people in a cycle of debt, whether issued by banks or nonbanks, illustrates the importance of this issue to people across the country.

Today, the SEC finalized a rule that will allow financial professionals to claim they are required to act in investors’ best interests. But “Regulation Best Interest” falls far short of what ordinary investors need to ensure they don’t fall prey to self-interested advice.

Following the SEC meeting, Americans for Financial Reform will host a conference call with guest SEC Commissioner Robert Jackson. AFR and other groups have criticized the commission’s plan on investment advice for leaving ordinary Americans vulnerable to harmful industry practices. The call will include the AFL-CIO, AARP, and the Consumer Federation of America.

Today’s hearing addresses the financial stability and economic risks of the growth of leveraged lending to non-financial businesses. The rapid growth and poor underwriting of high-risk corporate debt is clearly a significant current threat to financial and economic stability.