Waters Statement on FDIC Proposal to Eliminate Inter-Affiliate Swaps Initial Margin
Washington, DC, September 17, 2019
Today, following the release of a Federal Deposit Insurance Corporation (FDIC) proposal to eliminate the requirement that banks collect initial margin when transacting with their affiliates, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, issued the following statement:
“The rollback of this important safeguard has been on Wall Street’s wishlist since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which Democrats put in place to a prevent another devastating financial crisis. Now, the megabanks have found a friendly audience among Trump-appointed regulators, and unfortunately, some Members who were not in Congress during the crisis have endorsed this rollback. The fact of the matter is that the FDIC’s proposal would ultimately be a $40 billion giveaway to Wall Street megabanks at the expense of our economic stability and U.S. taxpayers. The FDIC should not adopt this proposal, and I will continue to work to prevent its implementation.”
In August, Chairwoman Waters and Senator Sherrod Brown (D-OH), Ranking Member of the Senate Committee on Banking, Housing and Urban Affairs, sent a letter to Jerome Powell, Chairman of the Board of Governors of the Federal Reserve System; Jelena McWilliams, Chairman of the Federal Deposit Insurance Corporation (FDIC); and Joseph Otting, Comptroller of the Office of the Comptroller of the Currency (OCC), urging them to maintain the current requirements to post initial margin for any swaps transaction between insured depository institutions (IDIs) and their affiliates.