Elizabeth Warren Blasts Fellow Democrats for Supporting a Massive Bank Deregulation Bill

“The Senate just voted to increase the chances your money will be used to bail out big banks again.”

Bill Clark/CQ Roll Call via AP

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

The US Senate on Tuesday cleared a key procedural hurdle needed to move forward with a major bank deregulation bill that could pass the chamber in the coming days. If it becomes law, the bill would significantly loosen Wall Street regulations that were put in place by the landmark 2010 Dodd-Frank legislation following the financial crisis.

One of the major changes proposed in the bill is a provision that would shrink the number of big banks that, under Dodd-Frank, are subject to additional scrutiny designed to assess their ability to withstand financial shocks—in essence, extra checks to determine how likely the banks are to fail or to require a government rescue with public dollars. Currently, banks with at least $50 billion in assets are subject to the additional supervision. The Senate bill would quintuple that threshold, meaning that banks would not receive added scrutiny if they have less than $250 billion in assets. The Congressional Budget Office released an analysis on Tuesday warning that such a change could have serious consequences. The bill, notes the CBO, would “increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail.”

If this threshold change becomes law, several dozen major banks and financial institutions—including BB&T, American Express, Credit Suisse, Regions Financial, Citizens Financial, and SunTrust—would no longer be subject to the most rigorous checks, and the total number of financial institutions under the highest level of oversight would drop from 40 to about 12. Additionally, the CBO found that the bill would grow the deficit by at least $671 million between 2019 and 2027, and would slightly increase the possibility of another financial crisis.

Despite this CBO analysis, the bill appears to be on course to sail through the Senate, in part because it has garnered support from a sizable number of Democrats. On Tuesday, Sen. Elizabeth Warren (D-Mass.)—one of the original champions of Dodd-Frank—criticized Democrats who voted to advance the current bill. “This bill wouldn’t be on the path to becoming law without the support of these Democrats,” she wrote on Twitter. “The Senate just voted to increase the chances your money will be used to bail out big banks again.”

Democrats who support the bill—17 voted to advance the legislation on Tuesday—have argued that the dangers of its deregulatory measures are being blown out of proportion.

At a Tuesday morning press conference on Capitol Hill, however, Warren did not shy away from describing the bill as a precursor to another financial collapse. “People in this building may forget the devastating impact of the financial crisis 10 years ago—but the American people have not forgotten,” she said. “The millions of people who lost their homes; the millions of people who lost their jobs; the millions of people who lost their savings—they remember, and they do not want to turn loose the big banks again.”

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate