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January 7, 2015

Happy New Year, Wall Street: Congress Has Another Gift For You

“WASHINGTON — After stuffing Wall Street’s stockings in December with subsidies for risky trading, the House of Representatives plans to wish big banks a happy New Year on Wednesday by hacking up and delaying the Volcker Rule.

“The Volcker Rule is a key reform adopted after the 2008 financial meltdown that bans banks from gambling in securities markets with taxpayer money — a tactic known as proprietary trading. But under legislation slated for a Wednesday vote, banks would be given a two-year reprieve from unloading some of their riskiest holdings — known as collateralized loan obligations.

“The deregulation measure is one of 11 changes to the 2010 Dodd-Frank financial reform law that Republicans will bring to the floor under a single bill Wednesday. The legislation can only pass the House if dozens of Democrats support it, since the bill will be brought up under special rules that require a two-thirds majority for approval. Rep. Keith Ellison (D-Minn.) will lead the opposition to the bill for Democrats on the House floor. Ellison will likely be opposed by House Minority Whip Steny Hoyer (D-Md.), who voted for a similar bill in April, and supported the bank subsidy in December.

“Sen. Elizabeth Warren (D-Mass.) railed against the bill in a statement provided to HuffPost.

“One day into the new Congress, House Republicans are picking up right where they left off: trying to gut Wall Street reforms so that big banks can make more risky bets using taxpayer-backed money,” Warren said. “This is yet another big bank giveaway that makes our economy and middle class families less safe.”

“Other bank watchdogs are apoplectic about the bill.

“It’s all about the bonus pool,” said Dennis Kelleher, president and CEO of Better Markets, a financial reform nonprofit. “The attack on the Volcker Rule has been nonstop, because proprietary trading is about big-time bets that result in big-time bonuses. Wall Street has been fighting it from day one, and they’re not going to stop.”

***

Read the full Huffington Post article by Zach Carter and Sam Levine here.

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