Pelosi exposes GOP as they try to gut our consumer protections

[manicholic 3,694]

Here’s a glimpse of some of the main ways the Financial CHOICE Act could ease regulation of Wall Street and hurt consumers:

The bill guts the CFPB’s power to crack down on banks: The CFPB was created in the wake of the 2008 financial crisis by the Dodd-Frank act, which gave the agency authority to enforce consumer-protection regulations on banks and Wall Street. The current CHOICE act proposes a reduction in the agency’s authority to enforce these regulations on banks, instead dispersing that power among a mix of federal agencies. This splintered model for consumer protection is similar to what existed before the financial crisis, and proponents of the CFPB have argued that this decentralized approach helped contribute to the crisis.

Gives the White House control over consumer protection: The CHOICE act proposes ending the CFPB’s status as an independent agency whose director is appointed by the president and must be confirmed by the Senate. If the measure becomes law, the White House would have the power to fire the agency’s director without cause; today, the CFPB director can only be removed by the president over a small list of work-related offenses. Additionally, rules made by the agency would require White House review—a constraint that is not imposed on other banking agencies.

Decimates regulation of predatory lenders: The CHOICE Act would eliminate the CFPB’s power to regulate “small-dollar credit,” including “payday loans, vehicle title loans, or other similar loans” with extremely high interest rates that are used by more than 19 million mostly lower income US households to make ends meet when they’re lacking other options. Given the interest, these loans can lead to a cycle of ever-growing debt—the majority of borrowers end up having to take out a second loan to cover the first. The CFPB proposed rules in 2016 that would have curbed abuses by predatory lenders by requiring them to ensure a borrower will be able to make payments on time, and also make repeat lending to the same people more difficult.  The CHOICE Act’s proposal to strip the CFPB of its power to regulate small-dollar credit is “a free pass for payday and title lenders to not be subject to efforts to rein in their abusive practices,” Diane Standaert, executive vice president of the Center for Responsible Lending, told the Los Angeles Times.

Reverses efforts to curb the practice of forced arbitration: Forced arbitration clauses have proliferated in recent years, appearing in consumer contracts for virtually every financial product—bank accounts, credit cards, and more. These clauses prohibit consumers from bringing traditional lawsuits against financial institutions, requiring them to participate in private, often expensive, proceedings outside of the regular court system. The CHOICE Act would remove the CFPB’s authority to restrict forced arbitration, subsequently preventing the agency from finalizing a rule limiting forced arbitration clauses that was expected to go into effect in mid-2017.

Repeals the Volcker Rule: A key component of Dodd-Frank, the Volcker Rule prohibits big banks from participating in certain risky investment activities, in order to prevent them from jeopardizing their solvency by gambling with depositor funds. The bill would repeal that rule, which Wall Street has long complained reduces revenues. In a closed-door meeting last month, Treasury secretary Steve Mnuchin—an alum of Goldman Sachs, one of the banks subject to the Volcker rule—directed five federal agencies to review the Volcker rule with an eye towards easing some of its requirements. 

Repeals the fiduciary rule requiring retirement fund managers to work in their client’s best interests: The fiduciary rule enacted by Obama-era Department of Labor elevates asset managers handling retirement savings to “fiduciary” status. This means they are required to place their client’s interests above their own, disclose any potential conflicts of interests, and be transparent about all fees. After attempts to delay its implementation by the Trump administration, the fiduciary rule is set to go into effect on Friday. If it becomes law, this bill would repeal the rule, halting its implementation. 

Eases stress tests on big banks: The Federal Reserve requires the largest US banks that are “Too Big to Fail”—meaning their solvency is critical to the broader economy’s health—to undergo an annual stress test measuring the bank’s ability to withstand financial shock. “It’s been a cornerstone of our effort to improve supervision,” Fed Chair Janet Yellen told lawmakers in February. “It’s a key part of our regulatory process.” The Financial CHOICE Act proposes requiring banks to undergo these tests only every two years, and exempts them from the qualitative aspects of the tests, which check on internal bank processes—such as risk-monitoring, loss-modeling, and more—that help protect the bank in the case of an economic shock.

Repealing the government’s ability to restructure a failing financial institution: After the 2008 financial crisis, regulators explained they were unable to liquidate failing banks without throwing the economy into turmoil—hence the need for a taxpayer-funded bailout instead. In response to this, Dodd-Frank created the Orderly Liquidation Authority, which allows the FDIC to take over a failing financial institution and liquidate it using a mix of fees collected in advance from banks as a preemptive credit line for this sort of crisis. The CHOICE Act would repeal the OLA and replace it with a bankruptcy process that is “a reckless gamble with the stability of the US financial system,” according to a letter sent last month to Congress by more than 100 bankruptcy scholars and professors from law schools around the country.  

Raising debit and credit card fees: The Durbin Amendment enacted through Dodd-Frank allowed the Fed to set a limit on how much banks can charge consumers and retailers for using debit and credit cards. The amount ended up being about 12 centsper swipe. The Financial CHOICE Act proposes repealing the amendment and raising the cap on what banks can charge. Faced with pushback over this change from many retailers and some of his fellow Republicans, Rep. Hensarling said late last month that he will likely drop this portion of the bill in order to help ensure its passage

http://www.motherjones.com/politics/2017/06/house-republicans-are-trying-to-pass-the-most-dangerous-wall-street-deregulation-bill-ever/

[manicholic 3,694]

 

[ALGAYDO 35,052]

I read that as "Pepsi" and got really confused 

[manicholic 3,694]

2 minutes ago, HOMODRAKE said:

I read that as "Pepsi" and got really confused 

Would be so nice at some point in our lives to see a corporate behemoth like that expose GOP for what they really are/do 

[Petie Estie 5,704]

I love her

[ALGAYDO 35,052]

34 minutes ago, manicholic said:

Would be so nice at some point in our lives to see a corporate behemoth like that expose GOP for what they really are/do 

If it would financially benefit them, they would. But half of their consumer base are conservatives so they'd be ****ing themselves over, so I don't really blame them for staying silent. Which sucks, but capitalism will always triumph, sadly. 

 

OT: good on her. We need more outspoken individuals like her 

[manicholic 3,694]

 

[Whispering 18,865]

This is how we got into the housing and credit card crises. The Republicans will allow people to spend their way into a Depression and then the Dems will have to come clean it up again. 

It's almost like the GOP are wanting to screw over the working class and middle class and make more money for the top incomes. 

[ItsTommyBitch 12,640]

11 minutes ago, Whispering said:

This is how we got into the housing and credit card crises. The Republicans will allow people to spend their way into a Depression and then the Dems will have to come clean it up again. 

It's almost like the GOP are wanting to screw over the working class and middle class and make more money for the top incomes. 

GASP