Wall Street’s allies in Washington, D.C. are looking to once again hand out a massive bailout to some of the biggest banks in the country. They want to loosen regulations, which by definition, will impact our current financial stability. While it won’t be trillions of dollars of taxpayer money (though it will wind up costing taxpayers trillions when we have to bail out the banks when another crisis occurs), it will be through a coordinated effort to deregulate some of the largest financial institutions in the country. Loosening these rules only helps Wall Street executives get bigger bonuses while at the same time puts Main Street consumers in harm’s way.
In the 10 years since the worst financial crisis since the Great Depression, two big things have occurred:
Even after the financial sector got bailed out by Main Street, these financial institutions nevertheless continued to break the law. And they did so in some of the most egregious ways, like market manipulation, mortgage abuses and selling toxic securities abuses. In fact, in just 10 years these 26 banks racked up 193 violations. This doesn’t even account for the hundreds, if not thousands, of violations for the very largest banks on Wall Street.
And while some believe big banks receive their “just” punishment with “huge fines” … not a single individual has been held accountable – meaning they are in a position to repeat their illegal behavior – and the fines these institutions pay are just fractions of what the bank makes that year in net income. In fact, for those 26 banks the fines totaled just 20% of their net income over the past year. This means it makes business sense to break the law, thus the continued harming of Main Street consumers and that is just wrong.
Big banks love to claim that Dodd-Frank has been hurting their bottom line, but after its implementation their incomes continue to reach record high after record high. Profits and revenue have soared and that has been fueled by an increase in lending (shifting away from their risky trading behavior tendency).
Now, Wall Street’s allies in DC want to get rid of even more rules, which serve a vital role in protecting Main Street consumers and investors. Ask yourself, if banks are making record profits and aren’t being deterred from breaking the law, does it really make sense to loosen regulations further? It doesn’t. It’s actually a good reason to keep things where they are.
If Wall Street’s allies in DC are successful in deregulating these huge banks, Main Street consumers will once again be put in harm’s way so Wall Street executives can get their bonuses. This is not what Main Street deserves, it’s not what the economy needs and it’s not what any elected official who claims to champion the middle class should support.