Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

The big bank-friendly bill rejected today was deceptively titled, 'Promoting Job Creation and Reducing Small Business Burdens Act.' (Photo: Adam Fagan/flickr/cc)

'Chalk One Up for Main Street': House Rejects Wall Street Giveaway

Bill would have watered down the 'Volcker Rule,' a key reform adopted after the 2008 financial crisis that bans banks from gambling in securities markets with taxpayer money

Deirdre Fulton

Progressives celebrated on Wednesday as the U.S. House of Representatives failed to pass yet another Wall Street giveaway, rejecting by a slim margin legislation that would have gutted an important financial regulation embedded in the 2010 Dodd-Frank reform act.

While a majority voted for the bill, rules were suspended, which required the bill to have a two-thirds' majority. The vote was 276 to 146.

On Twitter, Angela Bradbery of the watchdog group Public Citizen said the outcome was good news for the 99 percent:

Before the vote, Public Citizen called on representatives to reject H.R. 37, which would have given banks an additional two-year reprieve from unloading some of their riskiest holdings—known as collateralized loan obligations—as part of a larger deregulation package aimed at undermining Dodd-Frank.

"[W]e urge you to Vote NO on the bill deceptively titled the 'Promoting Job Creation and Reducing Small Business Burdens Act'," Public Citizen said in a letter (pdf) sent Wednesday. "Not a month since Congress unwisely pierced a key Wall Street safeguard that would have prevented certain bank speculation with taxpayer-insured funds, the House now considers a package with several measures that threaten the fabric of other protections."

Chief among those measures was one that diluted the so-called 'Volcker rule,' a key reform adopted after the 2008 financial crisis that bans banks from gambling in securities markets with taxpayer money. H.R. 37, sponsored by Rep. Michael Fitzpatrick (R-PA), would have given banks an extra two years to comply with a section of the rule related to collateralized loan obligations.

According to the Huffington Post:

Collateralized loan obligations, or CLOs, are complex contracts similar to the mortgage securities that crashed the economy in 2008. To create a CLO, banks package dozens of risky corporate loans together and sell slices to investors. The Office of the Comptroller of the Currency, a major bank regulatory agency, warned in December that the corporate debt market is overheating and becoming increasingly dangerous.

The nation's largest banks dominate the CLO market. According to an April letter from five federal regulators, banks with at least $50 billion in assets hold between 94 percent and 96 percent of the domestic market, valued at $84 billion to $105 billion.

Already in December, the Federal Reserve handed banks a win with a one-year extension on implementing the Volcker rule.

As Public Citizen put it, the extension under debate on Wednesday "simply lets the mega-banks gamble through 2019 with taxpayer-insured deposits."

Democrats came out swinging against the rule change. On the House floor, Rep. Michael Capuano, a Democrat from Massachusetts, said the bill effectively "guts" the Volcker rule.

Progressive Rep. Keith Ellison, of Minnesota, shared the words of one of his colleagues:

Democratic leader Nancy Pelosi said in a statement: "Later today, Republicans will attempt to pass an 11-bill Wall Street wish list introduced in the dead of night and rushed before the House without transparency, scrutiny or debate. The Republican package to be offered under suspension of the rules represents a brazen attempt to dismantle essential Wall Street reforms and sneak through a New Year’s present to big banks. The last thing large banks need is more help."

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

This is the world we live in. This is the world we cover.

Because of people like you, another world is possible. There are many battles to be won, but we will battle them together—all of us. Common Dreams is not your normal news site. We don't survive on clicks. We don't want advertising dollars. We want the world to be a better place. But we can't do it alone. It doesn't work that way. We need you. If you can help today—because every gift of every size matters—please do. Without Your Support We Simply Don't Exist.

Trump's CIA Considered Kidnapping or Assassinating Assange: Report

"The Biden administration must drop its charges against Assange immediately."

Jake Johnson ·

'Carrying Water for Big Corporations': Sinema Faces Backlash for Opposing Tax Hikes

"Make no mistake, if she sides with her wealthy donors and kills popular investments to jump-start the economy, everyday families—including across Arizona—will pay the price."

Jake Johnson ·

UN Chief Warns Humanity Is 'Unacceptably Close to Nuclear Annihilation'

"Now is the time to lift the cloud of nuclear conflict for good," United Nations Secretary-General António Guterres said ahead of the International Day for the Total Elimination of Nuclear Weapons.

Jake Johnson ·

Coalition Slams UN Food Summit for Peddling 'Corporate-Led False Solutions' to Hunger

"The U.N. has finally made it clear what 'multilateralism' is all about—paying lip service to the people while skewing priorities for the interests of imperialists and monopoly capitalists."

Jake Johnson ·

'Political Malpractice': House Democrats' Bill Wouldn't Add Dental to Medicare Until 2028

"I don't want to see it drawn out to as far as the House has proposed," Sen. Bernie Sanders said during a recent press call.

Jake Johnson ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.

Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo