The Big Wall Street Giveaway the 115th Congress Hopes the 116th Won’t Notice

Candidates in the Democratic presidential primary are tripping over each other to declare themselves enemies of the billionaire class. Bank CEOs are fretting about both the makeup of the House Financial Services Committee and the landscape of the presidential election. But no matter how they may whine publicly, Wall Street still has plenty to celebrate. And with predictions of a downturn coming, their gifts from the 115th Congress should make the rest of us plenty nervous.

In February alone, the financial services industry delivered a one-two punch to consumers. First of all, its friend at the Consumer Financial Protection Bureau, Kathy Kraninger, decided to radically scale back regulations on payday lenders, betraying the mission that is literally the first three words of the bureau’s name. Then, SunTrust and BB&T announced plans to merge, adding another bank to the ranks of the “too big to fail” for the first time since the financial crisis.

How is this happening? Shouldn’t our democracy prevent payday lenders and bailed out banks — two of the most despised actors in society — from getting the best of the public?

Not when the federal government has been controlled by Wall Street-funded Republicans for two years. The financial services industry got a staggering number of gifts from the 115th Congress, in most cases thanks to Republicans, which are detailed in this report from my employer, Americans for Financial Reform.

For each piece of news that consumers are reeling from right now, you can draw a straight line back to a vote knowingly taken by Republicans in the Senate and House..

Let’s start with the CFPB’s rollback of consumer protections on payday loans. It is the first big policy initiative for the bureau’s new director, Kathy Kraninger. Republicans confirmed her in a partisan, party-line Senate vote last December. The Democrats main objection to Kraninger wasn’t the president who nominated her – it was that Kraninger has absolutely no professional experience relevant to her job. She’s never worked in consumer law, or the finance industry, or anything related to what the CFPB does all day.

She has, however, worked for Mick Mulvaney, the then-acting CFPB director and former congressman whose electoral campaigns were heavily funded by payday lenders. Mulvaney picked his old protege for the job, and she predictably continued his legacy of helping payday loan predators.

If just one Senate Republican had cared more about basic qualifications for office than party alignment, they could have halted Kraninger’s confirmation and protected low-income borrowers. But when it comes to financial regulation, all that counts to Republicans in Congress is whether you’ll toe the party line.

Then there’s the SunTrust/BB&T merger. Last May, several Democrats joined almost every Republican in passing S.2155, better known as the Crapo Bill. Proponents pitched the Crapo Bill as a bipartisan effort to help struggling community banks – which is odd, since its marquee provision let more big banks avoid careful supervision. These weakened oversight standards gave the banks more latitude to make questionable investments, boosting profits at SunTrust and BB&T, which they just funneled into mergers and acquisitions.

If Congress really cared about the plight of small banks, it had plenty of alternative approaches to calling off the regulators on nearly all the banks. In fact, far from deregulation propping up lenders in underserved rural areas, the new law has pushed those smaller banks to merge and become larger conglomerates. S.2155 has only reduced the number of actors in the field, boosting monopolies and nudging the creation of the sixth-largest bank in the country.

But the Crapo Bill isn’t solely responsible for this merger. Thanks to the 2017 Tax Cuts and Jobs Act, the 23 largest American banks, including SunTrust and BB&T, paid $21 billion less in taxes in 2018, funds that made the massive merger possible. The banks that didn’t spend their gifts on mergers blew them on stock buybacks, while at the same time firing thousands of employees and doing less actual lending than before the tax cut passed.

By any measure, Wall Street has contributed less to the well-being of average Americans since the Tax Cuts and Jobs Act passed. Just like with the Crapo bill and the Kraninger nomination, Republicans put their big money ties ahead of the very real needs of their constituents.

The news of the last few weeks should remind us that votes have consequences, and that Wall Street keeps its congressional allies on a tight leash. When the next financial crisis hits, Wall Street will inevitably stick its hand out and demand that taxpayers cover their disaster. When it does, we should all take a good hard look at the record, and tell Wall Street: you’ve had too many gifts already.