Senate Republicans are making a rapid push to weaken banking regulations that pulled the nation out the Great Recession and put tens of thousands of IBEW members back to work.
|Millions of jobs were lost when banking abuses collapsed the U.S. economy in 2007. The Dodd-Frank Act of 2010 set vital new rules for the financial industry, stabilizing the economy and creating millions of jobs. The Senate is voting this week on a bill that could undo that progress.
Senate Bill 2155 passed a procedural hurdle Tuesday, paving the way for a vote before the end of the week.
The bill exempts two-thirds of the country’s 38 largest financial institutions from rules established by the Wall Street Reform and Consumer Protection Act of 2010, better known as Dodd-Frank.
The law helped spur sustained economic growth that created 15 million American jobs between 2010 and 2016 and has safeguarded consumers against predatory lenders and other banking abuses.
While the national jobless rate peaked at 10 percent before Dodd-Frank, unemployment among IBEW inside wiremen hit 26 percent when the construction business bottomed out. That rate steadily dropped after the bill passed and construction today is at or near full employment.
Urging senators to join her in voting “no,” California Sen. Dianne Feinstein said supporters “have forgotten not only the lessons from 10 years ago, but also the devastating consequences for American families. In California, more than 2 million people were unemployed, 3.5 million mortgages were at risk and nearly 200,000 people filed for bankruptcy. We simply can’t return to that time.”
“Whose side are we on?” Ohio Sen. Sherrod Brown asked in a floor speech Tuesday. “Megabank lobbyists, or American taxpayers and homeowners and students and workers?”
Downplaying – or outright ignoring – the bill’s gifts to big banks, GOP backers claim it will revive community banks and credit unions, a sales pitch soundly rejected by opponents.
A March 6 opinion piece in The Hill newspaper suggests that Republicans are trying to conjure images of a small town Main Street bank with tellers who know customers by name and a bank president who sponsors the Little League team.
| Proponents of the Senate's bank-deregulation bill claim that Dodd-Frank put community banks out of business, and that the new bill will revive them. As this chart shows, the number of small banks has been in steady decline since the 1980s, long before the banking rules enacted in 2010.
“Those are the banks that supporters of deregulation want you to think are helped by this bill, but it’s not really true,” wrote Nick Jacobs of Better Markets, a public-interest group focused on a financial system that is both safe and strong. “The biggest beneficiaries are 26 of the largest banks in the country. They are bailout recipients. They are recidivist lawbreakers. And they are foreign-owned banks. They are not community banks.”
Dodd-Frank adversaries have long blamed the bill’s regulations for the dwindling numbers of community banks. Not so, says the Center for American Progress, which traced the decline of small banks and argues that it began in the 1980s for reasons that include economies of scale and new technology.
“The data clearly show that charges that Dodd-Frank has dampened lending or crushed community banks are untruths used to peddle a deregulatory agenda that will benefit Wall Street megabanks,” CAP said in a post featuring six charts illustrating the value of Dodd-Frank.
In other words, the GOP’s feel-good rhetoric about community banks is a smokescreen for lawmakers doing Wall Street’s bidding yet again.
In his remarks Tuesday, Brown recalled the audacious comment in March 2017 by James Ballentine, chief lobbyist for the American Bankers Association.
“I don’t want a seat at the table. I want the table,” James Ballentine told a conference of bankers.
“Piece by piece, Wall Street has gone to the agencies, gone to the courts, and gone to Congress to dismantle the protections we put in place,” Brown said. “The drumbeat is constant. They always want a new exemption, or a new, weaker standard, or a new tax break. And they are about to get it.”
International President Lonnie R. Stephenson urged IBEW members to call their senators at (202) 224-3121 and demand that elected officials put working families ahead of big bank special interests.
“We all remember how bad it got after 2008. The recession was devastating for this Brotherhood and for our families, our friends, our communities,” he said. “We can’t afford to let them put back in place the exact conditions that got us into that mess in the first place.”