We are writing because we strongly oppose S. 1720. This bill is not jobs legislation, it is simply a laundry list of proposals pushed by opponents of any regulatory oversight of business whatsoever. Practically speaking, this legislation would give big business veto power over any effective regulation, including with regard to financial stability and consumer protection.
Americans for Financial Reform is an alliance of 250 organizations formed to advocate for effective financial reform in the public interest. Our membership includes consumers, labor, seniors, civil rights, business, and more. S. 1720 would cripple regulatory oversight in areas ranging from the practices of our largest Wall Street banks to everyday consumer financial products like credit cards.
S. 1720 would repeal the Dodd-Frank Wall Street Reform Act, the major legislative response to the problems revealed in the financial crisis and the resulting recession. Additional provisions incorporated into the legislation, such as those in Title XIII, would impose dozens of additional mandates on regulatory agencies that would make it effectively impossible for the financial regulatory agencies to pass any new regulations at all. These provisions would also ban any consideration any of the fairness or equity effects of regulation – in other words, the agency would be required to count a dollar gained by a large bank or credit card company as equal to a dollar lost by a working family or small business in an exploitative financial contract.
It is particularly ironic that these provisions are justified on the basis of “job creation”. The 2008 financial crisis was the most devastating economic event since the Great Depression. The Pew Economic Policy Group has estimated the losses to the U.S. economy created by the crisis at $10 trillion in wealth and 5.5 million jobs lost. With housing prices continuing to fall and unemployment remaining at 9 percent, millions of American families continue to suffer the economic fallout from the financial crisis every day. The Financial Crisis Inquiry Commission, as well as numerous bipartisan observers, have confirmed that this crisis was directly traceable to profoundly reckless and destructive conduct by major financial institutions enabled by holes and failures in regulatory oversight.
According to recent polling data, 77 percent of Americans favor tougher rules and enforcement for big Wall Street banks and the financial services industry. A large majority also favor the recently passed Dodd-Frank Wall Street Reform Act. A vote to repeal the Dodd-Frank Act and end the ability of regulators to oversee Wall Street would be a betrayal of the voters who entrusted Congress with the responsibility of addressing our nation’s economic problems.
Economic measures like low usage of existing productive capacity make clear that it is the lack of demand, not regulation or regulatory uncertainty, which explains the problems with our labor market. Small businesses and business economists say the same thing. Polls of these groups, by business associations, indicate that lack of demand is by far their largest concern, not regulation. We need real solutions to these problems. S. 1720 is simply an attempt by those who benefit from lack of regulatory oversight – including the big Wall Street banks who bear so much responsibility for our current jobs crisis – to end any accountability for their practices. It must be rejected.