Does Wall Street have no shame?
Americans for Financial Reform, the Leadership Conference on Civil and Human Rights, The Other 98%, and other bank watchdogs are blasting Congress for potentially destroying a key protection that was included in the Dodd-Frank financial reform legislation. Dodd Frank financial reform was passed in response to the Wall-Street induced financial meltdown, and aimed to curb the riskiest behavior that ultimately resulted in hundreds of thousands of jobs lost, retirement savings lost, and millions of people losing their homes to foreclosure.
If this “gift” is allowed to go through, banks will be allowed to use insured deposits and other taxpayer subsidies and guarantees to gamble in the derivatives market. This practice helped create the 2008 financial crisis.
Under Dodd-Frank, bank holding companies are required to segregate, and independently fund their riskiest and most exotic derivatives trading. This requirement means taxpayers won’t be on the hook if the banks engage in risky behavior again.
Apparently a measure, written by Citigroup lobbyists, has worked its way into the stop-gap government funding measure.
What can you do about it?
Call your senators and let them know. We don’t want the banks to be allowed to gamble with American citizens picking up the tab at the end. The “Citigroup measure” included in the omnibus spending bill must be removed!
PS: As a reminder, Wall Street is counting on you to have a short memory. Consider CIT Group, which received $2.3 billion under the TARP program. At the time, taxpayers were told this “investment” was important because of CIT’s role as a small business lender. A year later, CIT had made only 142 small business loans (that’s 1,053 fewer than the year before), and CIT also declared bankruptcy, wiping out its obligation to repay taxpayers. Fast forward to 2014, and CIT Group is now trying to buy OneWest bank and create another Too Big To Fail Bank. In addition to the $2.3 billion “gift” to CIT Group, there’s ongoing corporate subsidy tucked into this deal as well- take a look at the lucrative shared-loss deal that OneWest’s billionaire owners were able to secure from the FDIC: Is the FDIC Subsidizing a ‘Too Big to Fail’ Merger?