Several safeguards are critical to ensure that bank loan programs—particularly those designed for financially distressed consumers—promote financial inclusion rather than exacerbate financial exclusion and distress.
The need for strong public interest nominees is even greater today. This Administration has been
filling key regulatory positions with people pursuing Wall Street’s agenda at the public’s expense,
and the revolving door is spinning faster than ever. There is an enormous amount at stake at both
the SEC and FDIC as the financial industry and their friends in the Trump administration work to
undo the progress made in Dodd-Frank and to undermine key investor protection standards.
AFR sent an opposition letter to HR 2148, which would have put loopholes in new rules designed to ensure that banks did not make excessively risky commercial real estate loans. HR 2148 Oppo letter
AFR sent the letter below to the House Financial Services Committee urging them to reject nineteen deregulatory bills. AFR Letter Re HFSC 10-11 Markup
“ILC charters exploit a loophole in federal banking laws to gain access to the federal deposit-insurance safety net while avoiding critical federal supervision and regulation. ILCs therefore pose unique risks to the financial system… If these applications are granted, [it] will send a clear signal to the marketplace that the FDIC intends once again to approve ILC deposit insurance applications, potentially unleashing a dangerous avalanche of new applications.”
“…The essence of SoFi’s application is a request to seek the benefits of federal deposit insurance without subjecting SoFi itself or its private equity owners to the well-founded requirements for bank holding companies. The FDIC should not approve the application to facilitate this regulatory arbitrage. …If its application is granted, SoFi will be the first new ILC to secure deposit insurance in over a decade. That will send a clear signal to the marketplace that the FDIC intends once again to approve ILC deposit insurance applications. FDIC should not grant SoFi’s application and allow the ILC loophole to be revived.”
The OCC’s proposals would directly weaken financial regulatory protections and push aside other agencies so the OCC could take critical guardrails off of Wall Street on its own
“Tuesday’s letter to the Fed and FDIC from Americans for Financial Reform… is the latest evidence that the agencies could face some backlash if their verdict is favorable to the industry. The coalition includes large unions and public interest groups with powerful pull in Washington… The coalition asks that regulators, if they decline to find banks’ plans not credible, provide the public with a detailed explanation of improvements banks have made in the living wills since the firms failed to pass regulatory muster in 2014.”
“AFR sent a letter to banking regulators today concerning their review of bank resolution plans. The Dodd-Frank Act requires regulators to review these plans to ensure that major banks are no longer ‘too big to fail’ – that they can go through a conventional (Chapter 11) private bankruptcy in an orderly manner, without creating substantial economic disruption. “
“Mandatory margin requires participants in the swaps market to take full account of the risks of their derivatives transactions and provide some level of advance provisioning for such risks. The availability of properly segregated margin is clearly of enormous value in case of the default of a swaps counterparty.”