For Immediate Release
Hensarling’s Plan to Deregulate Wall Street Would Bring Disaster
Statements from Public Citizen Experts
WASHINGTON - This morning, U.S. House Financial Services Committee Chair Jeb Hensarling (R-Texas) delivered the outline of a major financial deregulation plan, which he has misleadingly named the CHOICE Act.
“Hensarling’s plan would be abysmal for the Main Street economy. Eviscerating the most important legacy of the Obama administration, namely U.S. Sen. Elizabeth Warren’s Consumer Financial Protection Bureau, is but one of the elements that renders this proposal nothing more than a fundraising tool for lawmakers soliciting contributions from Wall Street.”
- Lisa Gilbert, director of Public Citizen’s Congress Watch division
“Apparently, Hensarling believes Wall Street needs more ways to block new reforms in the courts and in Congress. The truth is that regulators have been under siege by Wall Street at every turn, and the proof is in the glacially slow pace of rulemaking authorized, and in some cases ordered, by Dodd-Frank. But that appears to be too fast for Hensarling, whose bill would make the financial rulemaking process even longer and more prone to being gamed by Wall Street.”
- Amit Narang, regulatory policy advocate for Public Citizen’s Congress Watch division
“Hensarling’s proposal requires banks to maintain a leverage requirement of more than 10 percent. That means the difference between assets and liabilities must be greater than 10 percent of assets. However, the problem revealed by the financial crash is that assets at the big banks were found to be almost 20 percent less than reported on their books. That cuts through a 10 percent leverage ratio with mathematical, painful precision. Asking Wall Street banks to raise more capital would help, but wouldn’t eliminate the extraordinary danger these institutions pose to our economy. That’s why Hensarling’s plan isn’t a real choice. It’s a retreat from regulating the very firms that brought on the biggest economic crisis in generations.”
- Bartlett Naylor, financial policy advocate for Public Citizen’s Congress Watch division
Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.