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

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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.”

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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