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February 11, 2015

New Working Paper Shows How Wall Street Banks Hide Behind Community Banks to Push Own Agenda

Washington, D.C., February 11, 2015  – Dennis Kelleher, President and CEO of Better Markets, issued the following statement in response to a recent working paper authored by former JPMorgan Chase Senior Executive Marshall Lux and Robert Greene:

“This so-called ‘study’ is a perfect example of how Wall Street’s dangerous too-big-to-fail banks hide behind the rhetoric of ‘helping community banks’ to push their de-regulatory agenda.  The recommendations are little more than Wall Street’s wish list repackaged and re-labeled as a ‘study,’ including imposing onerous cost-benefit requirements on all banking regulators, heaping baseless burdens on the CFPB, and changing FSOC’s focus away from protecting taxpayers from risks posed by the largest banks.

“As Better Markets has demonstrated, ‘cost-benefit analysis’ sounds great, but is little more than industry-cost only analysis that provides Wall Street lobbyists and lawyers – not community banks – with another weapon to weaken, delay, and prevent our nation’s financial protection agencies from preventing economic crises and taxpayer bailouts.  Similarly, weakening the CFPB would do nothing to help community banks, which are already exempted from examination and enforcement by the Bureau and are reaping the benefits of finally competing against non-bank lenders on a level playing field.  The most that can be said about the idea that FSOC should cease its work to protect the economy from the next AIG by focusing on reducing regulations is that it directly states its intent to help Wall Street.  Nothing would be better for Wall Street’s dangerous too-big-to-fail banks- and worse for the American public – if this were to happen.

“Furthermore, this working paper is written without any appreciation for the economic context in which community banks exist in the US.  For instance, as is typical of Wall Street and its allies, the paper irresponsibly makes almost no reference to the dramatic impact of the 2008-2009 financial and economic collapse on banks and the customers they serve.  Instead, the authors arbitrarily decide to evaluate a time period beginning in mid-2010, which also makes little sense because that is at least a year before any of the financial reforms even went into effect.  It’s like claiming to study a car crash without looking at the crash and only looking at the new car purchased two years later.

“It is indefensible not to present, consider and analyze the many challenges facing community banks, and the US economy that they serve more broadly.  American workers (and consumers) and the businesses that rely on them to buy their goods and services remain deeply damaged from the 2008 financial crash and the devastating economic crisis it caused.  Indeed, it seems unlikely if not impossible that community bank lending to small businesses and homeowners would experience robust gains absent broader economic growth that was first killed by the crash and then grievously impaired by the ongoing economic crisis.  Unfortunately, the authors of the report never even considers such factors and, therefore, it is impossible to know the extent to which these factors have impacted community bank lending in recent years.”


Better Markets is an independent, nonprofit, nonpartisan organization that promotes the public interest in financial reform in the domestic and global capital and commodity markets. Better Markets advocates for transparency, oversight and accountability with the goal of a stronger, safer financial system that is less prone to crisis and failure thereby eliminating or minimizing the need for more taxpayer funded bailouts. To learn more, visit

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