During every election cycle it seems that all anyone can talk about is the necessity for a dramatic change in the political system. Yet, each time a new Congress is sworn in, it seems to be more of the same. Finally, after the 2016 elections, the leaders in Congress heard the message from their constituents loud and clear and have decided to take action. The three biggest takeaways they got from this voter-led change?
The government needs to be more responsive to professional lobbyists.
Consumer protection is not a proper role for government.
The government must stop interfering with the profit seeking activities of the big banks.
These are, unquestionably, the most important lessons learned by GOP policy makers. In response to the first issue Representative Doug Collins (Republican of Georgia) and 160 co-sponsors (all Republicans) have introduced the REINS Act. This act says that ANY regulatory action by ANY government agency (with a few minor exceptions) cannot take effect until it is approved by a majority vote of both houses of congress within 70 days. The 70 day deadline will enables well funded companies to quickly mobilize their lobbying staff to prevent enactment of anything remotely threatening to their interests. Without the tedious, drawn-out process of members of the general public expressing their non-expert opinions big business will be better equipped to influence policy. This is truly a congressional act by, and for, the people.
To further ensure responsiveness to professional lobbyists Representative Jeb Hensarling (Republican of Texas) and 40 co-sponsors (again, all Republicans) have introduced the Financial Choice Act. This act does many things to restore power to our nation’s major banks that were undemocratically stripped off during the Obama administration. Of particular note, the act moves financial regulators from being independently funded authorities and makes them dependent on the appropriators in congress. This will allow members of Congress to have much tighter control over the exercise of regulatory authority, especially when applied to their constituents, the executives of America’s largest banks. For key members of Congress, this act takes great strides to restore the power to mitigate regulatory action against their constituents. That’s honest change we can believe in.
The Financial Choice Act also responds to the second critical change demanded by voters. It removes the authority of the Consumer Financial Protection Bureau to outlaw activities which contribute to the profits of important banks. The CFPB is uncontrollable simply because unelected bureaucrats, who do not have a connection with the people that members of Congress have, believe that consumer protection is more important than bank profits. Congress finally got the message, and is doing away with it.
In an effort to address the third major issue, Representative Hensarling said money managers take on “Systemic risk” which “must be managed in a market with profit and loss.” Those financial institutions which take high risks, are doing just that, managing risk. They will, undoubtedly lose their client’s money in the next recession, and by doing so, go out of business. We saw this with the 2008 financial crisis where all of the banks that lost their clients money were as a result were driven out of business. It is ridiculous for the government to be preventing this process by using regulations to control risk. Clearly the market will take care of this on its own.
Congress finally got the message -- their voters insist that nothing must stand in the way of higher profits for America’s banking industry and lobbyists: not regulators, not consumers, and certainly not protecting Americans.