The banking crisis of 2023, an event appearing on few bingo cards, has thrown a harsh light on the urgency of managing the multitude of crises that the world now faces – climate change being the most existential of them. Factor in the vexing problem that economists have repeatedly underestimated the economic impacts of climate change and we have a straightforward case for proactively hardening the financial system against its effects.
We now know that Fed Chair Jerome Powell sought to head off questions about responsibility and accountability around March 12, the day federal regulators resorted to a blanket deposit guarantee to stop the crisis from spreading. Perhaps that’s because Powell has an extensive record supporting deregulation and lighter supervision, even before he was confirmed to head the central bank.
This week, the Consumer Financial Protection Bureau filed a notice of appeal in its redlining lawsuit against Townstone Financial and its owner Barry Sturner as part of an ongoing case. In 2020, the CFPB accused Sturner and Townstone, a nonbank mortgage lender, of violating the Equal Credit Opportunity Act (ECOA) by discouraging prospective Black applicants from applying for their mortgages. Unfortunately, in February 2023, Judge Franklin Valerrama of the U.S.
Unbeknownst to most people with loved ones in nursing homes, it’s often nearly impossible to determine if the facility you’ve entrusted your family member to is owned by a private equity firm – an ownership structure that has been shown to result in worse health outcomes for patients, at greater cost. Within the past two decades, the once-obscure private equity industry has ballooned in size from $1 trillion in 2008 to nearly $4.5 trillion in 2021.
Congressional Republicans have moved on to their next target for financial deregulation: Republicans in Congress and the consumer finance industry want to eliminate or hobble the Consumer Financial Protection Bureau. The agency has provided $16 billion in restitution or cancelled debt to 192 million consumers since the agency began operation in 2010. It’s one of the few institutions, public or private, that has earned Americans’ confidence in a long time.
At the behest of a bank lobby that pumps billions into the political system, Congress in 2018 relaxed laws on mid-sized banks like Silicon Valley Bank, at a time when regulators appointed by former President Trump were already eager to go easier on banks. The signal could not have been clearer, and AFR warned so at the time.
