Sherrod Brown And Liz Warren Are Not Having Your Banking Bill Crap!

US Senator Sherrod Brown of Ohio gave a hell of a speech yesterday against the Senate's brand new banking bill (S. 2155). The bill is being sold as regulatory relief for Main Street community banks, but it's morphed into a beast that will roll back much of the Dodd-Frank protections put in place after the 2008 financial meltdown. In just 16 minutes, Brown outlines some of the worst provisions of the bill, the giveaways to big banks that have magically sneaked into the bill.

Brown does a pretty good Jimmy Stewart in Mr Smith Goes to Washington here, looking appropriately rumpled, and he's plenty ticked off at some of his Democratic colleagues who support the bill, saying they've acquired "some kind of illness ... called collective amnesia; they forget what happened 10 years ago."

Brown notes that the bill had started out as something he could get behind; a set of tweaks to help relieve small banks with limited assets of the kinds of regulations that Dodd-Frank demanded of the very largest banks, to prevent the failure of a single big bank from bringing down the economy.

But in this place, when we work something to help the small guy, the big guy thinks, "Well don't leave me out! I wanna be part of this! I wanna get my things, too!" And so we start helping community banks, we start helping the little guy, and all of a sudden Wall Street gets its hand out, just like on the tax bill [.]

Instead, as banking lobbyists got their hands on the bill, it became a free-for all of special favors, including a provision to provide relief to, of all corporations, Equifax, those nice folks who let 148 million Americans' personal information get hacked, oopsies. Brown was simply incredulous that, in exchange for an agreement to provide some credit monitoring for members of the armed services, Equifax wrung out a provision making it impossible for consumers to sue them for letting their data leak:

Equifax got exactly what it asked for. Equifax let your data loose and ruined your credit score? Too bad, you won’t be able to sue them.

Gosh, thanks, Equifax!

Brown moved on to another provision that would substantially weaken reporting requirements on who gets credit, since there's a documented nationwide problem with people of color being denied loans, yes, still. One part of Dodd-Frank required institutions to collect and report lending data, such as applicants' credit scores or debt-to-income ratios -- so Congress and regulators can make informed policy to address such discrimination, Brown said:

The good news is that the Dodd-Frank Act required this very kind of data to be collected, and beginning in January, banks and credit unions began reporting it.

Problem solved, right?

Once the more detailed data set is available and large enough, watchdogs can undertake better analysis, target the bad actors and allow the good lenders to continue with their business without a regulator knocking on their door.

Who am I kidding? Of course this bill wants to do away with that too.

The substitute would repeal the reporting required by Dodd-Frank for about 85 percent of all banks. Backers of the substitute will claim it has addressed complaints that this effort will undermine enforcement of our civil rights laws. But it does not.

Instead, the bill includes a provision that requires only monitoring of banks that have been formally found noncompliant with the Community Reinvestment Act, which sounds on the surface like it might keep a sharp eye on bad actors, but in reality, only two banks in 2017 flunked the CRA exam. So the data from the supposedly-compliant banks (in an environment where discrimination is endemic) won't ever be collected, and the problem will simply be ignored. Hooray! With no data, there's clearly no more discrimination! Added Brown,

Let’s say a bank is engaged in discriminatory lending. An examiner gives it a “needs to improve” rating. This amendment says – “No harm, no foul, the first one’s free.”

A few years later, when the next exam rolls around, if the bank is still discriminating, only then will it have to submit the amount of data required today.

That's a very nice loophole! And then there's one more itty-bitty change to help America's small-town community banks: The bill includes a big fat loophole for foreign banks, which will be freed -- like many of America's richest banks under S. 2155 -- from the rigorous stress tests previously required under Dodd-Frank.

In essence, the decision as to whether to monitor the financial health of foreign banks operating in the US will be left up to Trump's financial regulators. Gosh, wonder if they'll demand tight oversight of, say, Deutsche Bank?

Hey, we get the banking regulation the banks pay for. And as Brown points out, "When Wall Street says jump, most of this Senate jumps [...] And frankly, straight down the hall in the House of Representatives, they jump faster and higher."

Nonetheless, as Elizabeth Warren points out, 17 Democrats are supporting this mess, and need to hear from their constituents.

Senate Republicans voted unanimously for the #BankLobbyistAct . But this bill wouldn’t be on the path to becoming law without the support of these Democrats. The Senate just voted to increase the chances your money will be used to bail out big banks again. https: //t.co/bfkEgNdl9C 

— Elizabeth Warren (@SenWarren) March 6, 2018 

The last thing we need is Susan Sarandon showing up on TV in a couple years telling us how the new financial meltdown is finally the chance to bring the revolution.

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[ Sherrod Brown / CSPAN (about 2 hours 17 minutes in)]