In a new report, Americans for Financial Reform looks at what the 113th Congress did in 2013-2014 to advance or impede the cause of stronger regulation of the financial industry. AFR’s report, Where They Stand on Financial Reform (view or download PDF here), tracks a
“Americans for Financial Reform stated that the bill is ‘fundamentally misconceived: while its proponents claim to be focused on the needs of small community banks, the substance of the bill reads more like a deregulatory wish list for big banks and other large financial players.’ AFR stated that a ‘disturbing number of lawmakers are once again willing to act as shills for Wall Street and its discredited deregulatory agenda,’ adding that it’s ‘unlikely that this dangerous bill or anything like it will become law.’”
“As today’s [Senate banking committee] vote shows, a disturbing number of lawmakers are once again willing to act as shills for Wall Street and its discredited deregulatory agenda. But the sharply divided nature of the vote is heartening. Ten of the committee’s 22 members voted against the bill. Their continued support for Wall Street reform, along with the public’s support, makes it unlikely that this dangerous bill or anything like it will become law.”
“On behalf of Americans for Financial Reform and the undersigned organizations, we are writing to express our opposition to Chairman Shelby’s draft legislation, “The Financial Regulatory Improvement Act of 2015.”… While there are a number of reasonable proposals within this lengthy bill, the legislation as a whole contains numerous provisions that would unacceptably weaken consumer and financial protections.”
“‘The administration can say whatever it wants about its interpretation of these trade agreements,’ said Marcus Stanley, policy director at Americans for Financial Reform, a Wall Street watchdog group. ‘The problem is, under the terms of these agreements, they are not going to be interpreting them. Private tribunals of trade lawyers are going to be interpreting them, and there are going to be plenty of openings, as this shows, to make claims that critical prudential regulations conflict with trade agreements. And eventually one of those is going to win out.'”
“The legislation would make it easier for Wall Street to escape tough rules designed to make trading more competitive and transparent, Marcus Stanley, policy director for Americans for Financial Reform, said in an interview. ‘It could undo various parts of the Dodd-Frank Act by permitting American banks to transact in locations where swaps are not as well-regulated,’ Stanley said.”
“Senator Shelby’s 216-page draft legislation makes sweeping changes that would significantly weaken key financial reforms passed in direct response to the events of the 2007-2009 financial crisis. It puts the wish list of the financial sector above protecting the stability of the US economy, and the safety of mortgage markets and of homebuyers. “
“The {American Action Forum] paper doesn’t argue that [the] costs outweigh the benefits. But it doesn’t attempt to quantify any of those benefits, either. That’s a significant flaw, according to Americans for Financial Reform… ‘Extensive economic research shows that the benefits of greater financial sector stability alone will exceed the costs claimed by the AAF,’ the group argued.”
The American Action Forum has released a study claiming that the Dodd-Frank Act will reduce total U.S. economic output by $895 billion between 2016 and 2025. But the study has multiple significant flaws. In sum, the AAF study both exaggerates the growth costs of regulation and fails to include benefits from regulation that would substantially exceed even these exaggerated costs.
“On behalf of Americans for Financial Reform (AFR), we are writing to express our opposition to several of the bills under consideration in today’s subcommittee hearing, as well as our support for HR 1847, the “Swaps Data Repository and Clearinghouse Indemnification Act”.