The top Democrat on the House Financial Services Committee, Congresswoman Maxine Waters (D-CA), today took her opposition to a provision that could bring back an era of Wall Street bailouts to the House floor. In a fiery speech, Waters expressed her concerns with a Wall Street-authored provision that repeals important taxpayer protections against reckless bank activity enacted as part of the Dodd-Frank Wall Street Reform Act. The provision was jammed into the must-pass government funding package at the 11th hour.
Ranking Member Waters called the provision an effort to give “Wall Street banks a multibillion dollar gift this Christmas.”
Earlier today, she expressed optimism that Democrats will rally to defeat the provision. She made the following statement, as prepared for delivery is below.
“I have come to the floor today to stop Republican efforts to give Wall Street banks a multibillion dollar gift this Christmas.
Under the cover of ‘must pass’ legislation, big bank lobbyists are hoping that Congress will allow Wall Street to once again gamble with taxpayer money – by reversing a provision that prohibits banks from using taxpayer-insured funds, bank deposits, to engage in derivatives trading activity.
In fact, the New York Times reported that Citigroup, a bank that stands to directly benefit to the tune of billions of dollars, authored this provision.
Big banks want to use their cheap funds provided by the taxpayer backstop to undercut their competition, in a ‘heads I win, tails the taxpayer loses’ scenario. And we know why Republicans want it – the spending bill also quietly allows individuals such as the big banks, to contribute millions more to their reelections. This provision must be stopped.
Enough is enough. This puts taxpayers at risk. This puts consumers at risk. This provision directly weakens a provision intended to prevent future bailouts of Wall Street.
The Obama Administration said this provision could be ‘disruptive and harmful.’ Former FDIC Chairman Sheila Bair said the provision takes reform in the ‘wrong direction.’ It is also strongly opposed by consumer, labor and civil rights groups. And, Former Chairman Barney Frank, who puts the Frank in Dodd-Frank, called it a ‘frightening precedent.’