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Rep. Katie Porter (D-Calif.), a member of the House Financial Services Committee and a bank regulation scholar, condemned the plan to gut post-crisis safeguards as "another example of Trump regulators listening to Wall Street's wish list." (Photo: Getty Images/iStock)

With Help of Democrats, Regulators Move to Gut 'Last Line of Defense' Against Wall Street Gambling

"We can expect Too Big to Fail banks to get riskier and have less of a cushion to guard taxpayers from bailouts," said Rep. Katie Porter

Jake Johnson

In a move policy analysts and progressives warned could drastically increase the risk of another financial collapse, two Democratic regulators appointed by Senate Minority Leader Chuck Schumer (D-N.Y.) joined their GOP colleagues in pushing the Federal Reserve to weaken safeguards that limit Wall Street's dangerous gambling.

"We are barely a decade from the greatest fiasco of financial over-leveraging in history, and we are already unlearning its most obvious lessons."
—David Adler, DiEM25

"At issue is the supplementary leverage rule, which was adopted in the aftermath of the 2008 collapse as a last line of defense against financial excess," HuffPost's Zach Carter reported Tuesday. "Four out of five top officials at the Commodity Futures Trading Commission want the Fed to lower leverage requirements by changing the way the officials treat derivatives."

Rep. Katie Porter (D-Calif.), a member of the House Financial Services Committee and a banking regulation expert, condemned the plan to gut post-crisis protections as "another example of Trump regulators listening to Wall Street's wish list."

"Between this, the banking deregulation bill passed last year, and other changes proposed by the Fed and [Office of the Comptroller of the Currency]," Porter added, "we can expect Too Big to Fail banks to get riskier and have less of a cushion to guard taxpayers from bailouts."

The plan to weaken post-crisis leverage requirements on the nation's six largest banks—backed by Schumer appointees Rostin Behnam and Dan Berkovitz—was presented to the Fed last month, according to HuffPost.

Gregg Gelzinis, a policy analyst at the Center for American Progress told HuffPost that the proposal would "only increase the likelihood of another crash."

The latest bipartisan deregulatory push comes just months after Democrats in Congress helped Republicans ram through legislation that significantly weakened the Dodd-Frank Act on the anniversary of the 2008 Wall Street collapse.

"We are barely a decade from the greatest fiasco of financial over-leveraging in history, and we are already unlearning its most obvious lessons," tweeted David Adler, policy analyst at DiEM25.


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'Morally Bankrupt' G7 Slammed for 'Caving' to Fossil Fuel Lobby on Climate

"People in poverty around the world will pay the highest price for this backtrack by some of the wealthiest countries," one activist warned of the group's new statement on gas investments.

Jessica Corbett ·


'Yeah, And?': Ocasio-Cortez Embraces GOP Freakout Over Helping Women Skirt Abortion Bans

"Republicans are mad because I am sharing this information," said Rep. Ocasio-Cortez. "Too bad!"

Julia Conley ·


WATCH LIVE: Top Meadows Aide Cassidy Hutchinson Testifies at Surprise Jan. 6 Hearing

Hutchinson, who has spent more than 20 hours in deposition with the House panel, is expected to provide more damning evidence of the role that Meadows played in Trump's coup attempt.

Kenny Stancil ·


Oxfam Condemns G7 for Leaving 'Millions to Starve' as Global Hunger Surges

"Faced with the worst hunger crisis in a generation, the G7 have simply failed to take the action that is needed," said Max Lawson of Oxfam International.

Jake Johnson ·


'Horrific': 50 Migrants Found Dead in Abandoned Trailer Truck in Texas

"We need to end Title 42 and fix our broken immigration system so these unimaginable tragedies stop happening," said Rep. Chuy García. "People fleeing violence and poverty deserve a chance at a better life."

Jake Johnson ·

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