“You’re closing a profitable loophole, so there’s no surprise that we’re seeing the type of pushback that we see right now,” says Andrew Park, a senior policy analyst at investor advocacy group Americans for Financial Reform who was recently named to the SEC’s investor advisory committee
“This legislation would do quite a bit to undermine existing securities laws by creating an alternative route that could bypass the current, time-tested rules,” said Mark Hays, a senior policy analyst on fintech at Americans for Financial Reform, a progressive advocacy group. He added that the bill would create a new class of securities that lack the necessary investor protections.
In today’s polarized environment, it’s refreshing to see the banking industry and consumer advocacy organizations in agreement over the fact that industrial loan corporations or industrial banks only serve as a loophole for large companies to own a bank. These odd bedfellows range from the Center for Responsible Lending, Americans for Financial Reform and the Woodstock Institute on one end, to the Bank Policy Institute, PNC and the Independent Community Bankers of America on the other.
In the more than 150 years since the end of the Civil War, Black American wealth remains a fraction of that held by White Americans. Just after emancipation in 1865, African Americans owned 0.5% of national wealth. While closing this divide is essential to achieving racial equity in this country, it’s important that we apply the right tools for the job. We can’t properly solve problems without understanding their origins. The growing divide between White wealth and Black wealth is a product of economic systems designed to extract wealth from Black, Indigenous, and other people of color and redirect it to the wealthy, almost uniformly White elite.
“People get this really easily—we’re giving a whole lot of rich people more money for no reason other than them being rich,” says Mandla Deskins, advocacy manager at Take on Wall Street, an organization pressuring members of Congress to jettison this tax break. “It’s not necessarily dead,” Deskins says of the most recent effort to close the loophole, “but it is definitely on pause.”
“There’s nothing happening to reverse the Trump deregulatory agenda at the Fed or to think about what the Fed ought to be doing on financial regulation,” said Lisa Donner, executive director of Americans for Financial Reform, an advocacy group that represents unions and civil-rights and consumer groups.
“When we talk about the [North Carolina] bathroom bills of 2016 and 2017 compared to now, my first response is, well, they haven’t felt that the public pressure that they would be feeling to do something is worth more than the financial benefit they have from doing nothing,” said Mandla Deskins, an advocacy manager for Take on Wall Street, an activist coalition that pushes for financial reform. “That is the calculation that I would assume banks are always making,” Deskins added, “because it’s not like they have some long-standing position against hate.”
Popular education is essential to building an equitable future — especially for base-building organizations.
“Having a Fed vice chair for supervision is crucial to a progressive agenda,” said Renita Marcellin, a senior banking policy analyst at Americans for Financial Reform, which has called for a halt on all bank mergers, more rules for cryptocurrency firms and a crackdown on the private equity industry. “There’s a lot more to do than simply repairing the damage caused by Trump regulators.”
“The administration settled on a smart person with a background in the banking industry and in government as well as path-breaking scholarship on financial regulation,” said Carter Dougherty, a spokesperson for Americans for Financial Reform. “In less polarized times, somebody appointed by a Democratic president who worked for a previous Republican administration and for a Wall Street firm would be the kind of candidate everyone can agree on. But we’re at a moment where a candidate acceptable to Wall Street is a candidate that does the bidding of Wall Street. And that’s not acceptable to the public interest.”