WASHINGTON, D.C. Aug. 20, 2019 – Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, issued the following statement on the decision by the Federal Deposit Insurance Corporation (FDIC) and approval of the Office of the Comptroller of the Currency (OCC) to weaken the Volcker Rule, which stops banks from gambling with taxpayer money.
“The Volcker Rule is a cornerstone of Wall Street reform that Congress passed in the wake of the 2008 financial crisis to prevent federally-insured, deposit-taking banks from engaging in risky, speculative activities, like owning hedge funds and private equity funds, on the backs of the American taxpayers. I am deeply concerned by today’s FDIC and OCC actions, and potential additional votes by other regulators, to weaken this critically important rule.
“Doing so will not only put the U.S. economy at risk of another devastating financial crisis, but it could potentially leave taxpayers at risk of having to once again foot the bill for unnecessary and burdensome bank bailouts. The final rule published today would curtail prohibitions in a manner that Congress never intended and allow Wall Street megabanks to gamble with the same types of risky loan securitizations that turned toxic in 2008, at a time when these risky products are once again on the rise. These actions are clearly intended to carry out the reckless deregulatory agenda of President Trump and his Administration.
“I call on the FDIC, OCC, and other regulators to reconsider this senseless decision, especially given the significant changes made from the initial proposal, and take the time to give the public a full and fair chance to comment.”
Chairwoman Waters continues her efforts to fight against the deregulatory agenda of the Trump Administration and Congressional Republicans, and today’s actions by the FDIC and OCC are part of a long series of deregulatory actions that benefit Wall Street at the expense of Main Street.
Since 2017, the Trump Administration has made financial deregulation a top priority, with the President vowing in his first few days to do a “big number” on the Dodd-Frank Wall Street Reform and Consumer Protection Act’s safeguards that Congress put in place following the global financial crisis a decade ago. Trump’s Treasury Department subsequently laid out the Administration’s deregulatory blueprint through a series of reports containing numerous recommendations for regulators to deregulate Wall Street megabanks, payday lenders and other bad actors.
Trump’s appointees have been busy implementing his plan to undermine the work of the Consumer Financial Protection Bureau in a myriad of ways, rolling back key financial stability oversight, and despite Wall Street megabanks making record profits, regulators have been methodically weakening their capital, liquidity, stress testing, and living will requirements that have helped keep the financial system safe since the last financial crisis.
The Treasury reports also call for a significant weakening of the Volcker Rule, which today’s actions by the FDIC and OCC, and potentially the Federal Reserve, Securities and Exchange Commission and Commodity Futures Trading Commission, if they follow suit, would help fulfill.