Americans are calling urgently for solutions to two major crises confronting the U.S.—gun violence and expiring DACA permits, which will leave thousands of young immigrants vulnerable to deportation. But instead of heeding these demands, Senate Republicans and a dozen Democrats are teaming up this week to push through legislation that would further enrich Wall Street and heighten the risk of another financial crash.
“This is not a community bank bill. They say it is. It’s like the tax cuts weren’t a middle-class tax bill; they want to say it is. This is a bill that helps some of the largest banks.”
—Sen. Sherrod Brown (D-Ohio)
“The national conversation at the moment is rightly focused on gun safety, but the Senate is taking up a totally unrelated bill to deregulate big banks,” Chad Bolt, senior policy manager at Indivisible, said in an interview with Buzzfeed on Sunday. “It’s totally out of touch.”
Introduced by Sen. Mike Crapo (R-Idaho) last November and co-sponsored by 13 members of the Senate Democratic caucus, the so-called “Economic Growth, Regulatory Relief, and Consumer Protection Act” has been portrayed by its backers as a bill that would provide much-needed relief to community banks overburdened by post-financial crisis regulations.
In addition to Sen. Angus King (I-Maine), the 12 Democratic senators currently co-sponsoring the deregulation measure are: Doug Jones (Ala.), Joe Donnelly (Ind.), Heidi Heitkamp (N.D.), Jon Tester (Mont.), Mark Warner (Va.), Claire McCaskill (Mo.), Joe Manchin (W.Va.), Tim Kaine (Va.), Gary Peters (Mich.), Michael Bennet (Colo.), Chris Coons (Del.), and Tom Carper (Del.).
A look beyond the measure’s “Orwellian” name and at its actual content reveals that supporters’ “community bank” talking points are little more than an attempt to mask the bill’s enormous gifts to large institutions.
As The Intercept‘s David Dayen reported last Friday, Crapo’s legislation—which is set to hit the Senate floor for a procedural vote on Tuesday—has been used by lobbyists as a vehicle to ram through changes to Wall Street regulations that will allow them to “ramp up risk” and further boost their bottom lines.
“A bill that began as a well-intentioned effort to satisfy some perhaps legitimate community bank grievances has instead mushroomed, sparking fears that Washington is paving the way for the next financial meltdown,” Dayen noted. “Aside from the gifts to Citigroup and other big banks, the bill undermines fair lending rules that work to counter racial discrimination and rolls back regulation and oversight on large regional banks.”
As the measure has soared through committee and as more Democrats—including Sens. Bill Nelson (D-Fla.) and Amy Klobuchar (D-Minn.)—are reportedly considering supporting it, grassroots groups have ramped up pressure on lawmakers by driving calls and delivering petitions demanding that lawmakers kill the deregulatory effort.
“The bank lobbyists have been hitting Capitol Hill hard, and they have a Dodd-Frank rollback bill lined up with the support of every Republican and twelve Democrats.”
—Sen. Elizabeth Warren (D-Mass)
Meanwhile, progressive Democrats in Congress have also fiercely denounced the bill as a giveaway to the very same banks whose fraudulent activity sparked the devastating 2008 financial crash.
“The public is not asking for bank deregulation,” Sen. Sherrod Brown (D-Ohio), the top Democrat on the Senate Banking Committee, said in an interview with the Washington Post on Sunday. “This is not a community bank bill. They say it is. It’s like the tax cuts weren’t a middle-class tax bill; they want to say it is. This is a bill that helps some of the largest banks.”
Sen. Elizabeth Warren (D-Mass.), who has been voicing her opposition to the deregulation bill since it was introduced last year, argued in a recent email to supporters that the deregulatory push is clear evidence that lobbyists dictate policy change in Washington.
“The bank lobbyists have been hitting Capitol Hill hard, and they have a Dodd-Frank rollback bill lined up with the support of every Republican and 12 Democrats,” Warren wrote. “We need to make some noise about this big wet kiss to the big banks by reminding senators as loudly as possible: they work for the American people, not for big bank lobbyists.”
Ahead of a vote on Crapo’s legislation—which appears likely to pass, thanks to Democratic support—commercial banks have been dumping contributions into the coffers of senators backing the measure.
According to the Center for Responsive Politics, Sens. Heidi Heitkamp (D-N.D.), Joe Donnelly (D-Ind.), and Jon Tester (D-Mont.)—all of whom are co-sponsoring Crapo’s bill—are the top three recipients of commerical bank cash this election cycle.