At a hearing to commemorate the five year anniversary of the Dodd-Frank Wall Street Reform Act, Congresswoman Maxine Waters, Ranking Member of the Financial Services Committee, issued a strong rebuke to Republican attacks on the landmark law, recounting the devastation of the crisis, the success of the law thus far, and documenting Republicans’ efforts to return to the practices that brought the economy to its knees in the first place.
Her opening statement follows:
“Thank you, Mr. Chairman.
Today’s hearing is the first of several scheduled in recognition of the fifth anniversary of the Dodd-Frank Wall Street Reform Act.
It’s important to remember that the 2008 financial crisis was not a natural disaster. Instead, it was the result of deliberate choices – choices on the part of some on Wall Street, who put their own short-term interests ahead of the long-term economic health of our nation’s investors and consumers. It’s the result of choices on the part of some of our regulators, who failed to respond as both vulnerabilities and illegalities in our financial system emerged.
These choices had tremendously damaging consequences. Our nation became plagued by small business closures, large drops in the stock market, stunning job losses, rising foreclosures, and fears of a looming repeat of the Great Depression.
In the six months before President Obama took office, our economy hemorrhaged nearly 4 million private sector jobs – an average of 650,000 per month. Nearly $16 trillion in household wealth simply disappeared. The retirement accounts of many hard working Americans were swept away. Around 9 million individuals were displaced from their homes, many of whom may never again have the opportunity for homeownership.
Once the economy was stabilized, Democrats worked diligently on legislation to restore responsibility and accountability to our financial system, and instill confidence that we had the tools in place to protect Americans from another crisis.
Since Dodd-Frank was enacted five years ago, the American economy has added nearly 13 million private sector jobs and unemployment has fallen by 4.5 percentage points to its lowest level since September 2008. The housing market is recovering, with home prices rising, negative equity falling, and measures of mortgage distress improving.
Retirees’ investments are recovering as well. The S&P 500 has risen by more than 250 percent since February 2009, and the average 401(k) balances reached a record high in 2014.
But even as we celebrate our success at avoiding a second Great Depression, it’s important to recognize that the events of 2008 have cast a long shadow over our nation’s growth and prosperity, one which has not been shared equally by all.
Research from Cornell University found that the foreclosure crisis has resulted in an increasing level of re-segregation in many urban areas. Several institutions confirm the foreclosure crisis likely had substantial negative impacts on child well-being, with multiple moves and marital discord leading to anxiety, depression, and poor performance in school.
The crisis also exacerbated what was already an unacceptably large wealth gap between white and minority households. The Pew Research Center found that the current wealth gap between African-Americans and whites has reached its highest point since 1989. The current white-to-Hispanic wealth ratio has reached a level not seen since 2001.
We must go further to address these lingering challenges.
But make no mistake, we have made progress. Most notably, in Dodd-Frank we created a Consumer Financial Protection Bureau that, in just a few years, has already returned $5.3 billion to 15 million consumers who have been subjected to unfair and deceptive practices. We have worked with the Bureau to create rules-of-the-road to make sure predatory mortgages never again strip wealth from American families and endanger our economy. And we worked regulators to institute rules to protect retirees and other investors from the practices that wreaked havoc on savers in 2008.
But Mr. Chairman, too much time has been wasted in Congress by a Majority bent on austerity policies that leave workers, retirees, and minority communities behind, while ignoring the substantial progress we have made toward deficit reduction. Too much energy has been spent trying to re-litigate the causes of the 2008 crisis, which at this point everyone should recognize as settled. Finally, far too much effort has been spent by the Republicans to weaken our regulatory apparatus – whether through underfunding our regulators, relentlessly pressuring them to go soft on rules, or injecting unrelated Wall Street giveaways into must-pass government funding bills. I’m tired of the Republicans’ “death by 1,000 cuts” strategy to roll back the significant gains we’ve made since Dodd-Frank’s enactment.
Five years later, I urge my colleagues to take stock of where we were and how far we’ve come. And I suggest they recognize, that much like the recent Supreme Court decisions to uphold the Affordable Care act and the disparate impact standard to prevent discrimination in housing, Dodd-Frank is settled law.