A Republican plan to dismantle key banking reforms passed in the wake of the 2008 financial crisis has been dubbed by Sen. Elizabeth Warren (D-Mass.) the “Wet Kiss for Wall Street Act.”
Rep. Jeb Hensarling, a Republican from Texas, outlined his proposal—the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act—in a speech at the Economic Club of New York on Tuesday. The legislation contains “sweeping provisions that effectively constitute a wish list for Republicans,” according to American Banker.
“If unity means a marriage between Donald Trump’s toxic racism and Jeb Hensarling’s Wall Street giveaways, then I think they’d be better off with division.”
—Senator Elizabeth Warren
The plan would roll back a slew of Dodd-Frank regulations; reduce the power of the Consumer Financial Protection Bureau created by Warren; repeal the Volcker Rule that aims to stop banks from making risky bets with taxpayer-backed deposits; and prevent the Financial Stability Oversight Council from labeling insurers and other non-banks as “systemically important financial institutions”—or too big to fail—making them subject to federal constraints.
Furthermore, the proposal would give megabanks the ability to “opt-out” of Dodd-Frank by holding a higher amount of capital. Bloomberg described this aspect as a sort of “deal” between House Republcians and U.S. banks: “Raise several hundred billions of dollars in additional capital and Washington will let you break free from a litany of burdensome rules.”
Or, Hensarling told the Economic Club, “Think of it as a market-based, equity-financed Dodd-Frank off-ramp.”
But Warren offered a different take at a Banking Committee hearing on Tuesday, saying the legislation would allow financial institutions to “return to the good old days before the 2008 crisis when these banks could run wild.”
She noted that Hensarling “is in New York today meeting with Donald Trump to discuss what we could call his Wet Kiss for Wall Street Act.”
“Now while most Republicans are debating not whether to run away from Trump, but how far and how fast, Congressman Hensarling is sprinting toward Trump Tower,” she said. “You know, I get that the Republicans want unity right now…but if unity means a marriage between Donald Trump’s toxic racism and Jeb Hensarling’s Wall Street giveaways, then I think they’d be better off with division. That is not what the American people are looking for and it is a path to ruin both for our economic system and for our country.”
Watch Warren’s full take-down below:
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