Senate Democrats Join Hands With Republicans to Sell You Out to Banks
The New York Times reports that a group of Senate Democrats is helping the Republican effort to roll back the Dodd-Frank bank regulations signed by President Obama in the wake of the 2008 financial crisis. The new proposal would raise the threshold for extra regulatory scrutiny from $50 billion in assets to $250 billion, “leaving fewer than 10 big banks in the United States subject to the stricter oversight,” according to the paper.
According to the Times, the bill’s supporters argue it would “offer much-needed relief to small banks and credit unions in parts of America that have been struggling under regulations that had primarily been aimed at the biggest banks.” That’s right: Every bank smaller than the 10th biggest bank in America is now a struggling small bank, just trying to make ends meet. Banks worth between $50 billion and $250 billion would no longer have to worry about proving to regulators that they could survive another crash, which is definitely absolutely never going to happen again. The bill would also allow banks with less than $10 billion to make “risky bets with federally-guaranteed deposits,” which sounds great and definitely like a thing that needs to happen.
A similar bill passed in the House in December, with 59 Democratic votes. At the time, the Center for American Progress’ Gregg Gelzinis wrote that the bill would “effectively deregulate 30 of the 38 largest banks in the country”:
The 30 banks deregulated by this bill hold a combined $5.3 trillion in assets, or roughly 25% of the total assets in the banking sector. Collectively they received $65 billion in TARP bailout funds and hundreds of billions more in additional forms of government support. This universe of banks deregulated by the bill also includes the U.S. holding companies of systemically important foreign banks like Credit Suisse, Deutsche Bank and HSBC. These scandal-plagued foreign banks should be some of the last banks policymakers consider deregulating.
Meanwhile, Sen. Heitkamp (D-N.D.) told the Times yesterday that “A lot of what was Too Big To Fail under Dodd-Frank became ‘too small to succeed’ because of the onerous regulatory burdens.” See? They’re doing it for all the little guys out there, like HSBC’s U.S. holding corporation.