On June 8, House Republicans passed a bill called the “Financial CHOICE Act” that started the process of repealing the 2010 Dodd-Frank Act. They happened to do it right as all of America was watching the Senate grill former FBI Director James Comey.
The So-Called Facts
The Dodd-Frank Act was passed under President Barack Obama in order to prevent a repeat of the 2008 recession by “stress testing” banks.
President Donald Trump believes that the regulations are stalling the economy, and the CHOICE Act will help revitalize the United States, despite the fact that in 2016 banks saw record profits.
The CHOICE Act claims to have seven key principles:
- The ending of taxpayer bailouts of financial institutions;
- Holding Washington and Wall Street accountable;
- Simplifying the banking process;
- Revitalizing of economic growth;
- Economic independence for Americans;
- Consumer protections, and
- Risk to managed by the market.
The bill, since it passed the House, will head to the Senate where it is thought that the act will be broken up into smaller bills to be individually passed or rejected.
What The Bill Will Do
The bill will, at its core, free up Wall Street from the protections put in place by Obama, potentially driving America towards another recession.
One of the biggest differences is that big banks will be under less scrutiny, allowing them to start up the shady trading practices that almost destroyed America as we know it in 2007.
The choice that this bill allows for the banks is the freedom from Obama era rules if they have a larger financial surplus for emergencies.
In theory, the idea is that the surplus prevents the banks from going under when their shady practices cause their own ruin.
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What we also will see is the Consumer Financial Protection Bureau losing its independence and Senator Elizabeth Warren (D-Mass.) start reporting to the President.
This is the most chilling part of the bill, because, as we saw with James Comey, President Trump isn’t afraid to ax those he views as “unloyal.”
We don’t know what this bill will do in practice, but based around the Republican goal of freeing up the markets, expect to see another round of anti working class measures disguised as “protecting” the freedom of America.
Phrases like “economic independence” or “holding Washington accountable” should just read “ending safety net programs” and “cutting public services.”
I never thought I’d say it, but I hope the Republicans in the Senate have more sense than the House. If this bill is not stopped we could see a repeat of the 2008 economic collapse, and I don’t think the United States can make it through another.
Featured Image: Screenshot Via YouTube Video.