Congress deregulated Wall Street in 1999, and then less than a decade later, the crash of 2008 that lead to the Great Recession happened. There’s a similar story from the deregulation of the 1920s that lead to the 1929 crash and the Great Depression. And big banks already make record profits, and lessening oversight and regulation of them will allow them to push those profits higher at the expense of consumers.
In a strong indication that they are well aware of how politically toxic a vote to reward big banks is in the eyes of the American public, not a single one of the 33 Democrats who voted for the bill—many of whom have received substantial sums of campaign cash from big banks—had the courage to speak in favor of it on the House floor.
By approving the deregulatory measure, which weakens oversight of 25 of the nation’s 38 largest banks, the House cleared the final obstacle on the bill’s path to Trump’s desk. In a tweet early Wednesday, the president applauded the measure’s passage and vowed to sign it into law “shortly.”
“It is reprehensible that our Congress has abdicated this responsibility in a clear move to cater to Wall Street,” Morris Pearl, chair of Patriotic Millionaires, said in a statement on Tuesday. “This is bipartisanship at its worst—members of both parties coming together to bow down to their wealthy donors on Wall Street instead of protecting their constituents. 2008 was just a decade ago, have we already forgotten the lessons we learned?”
On Capitol Hill, Congress passed sweeping legislation to exempt thousands of banks from key regulations in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, meaning the vast majority of banks will no longer have to follow the regulations aimed at preventing another financial meltdown. The Dodd-Frank Act was passed after the 2008 economic crisis, which was provoked by years of risky lending by Wall Street banks.
Yet, in a rare bipartisan effort Tuesday, House lawmakers voted 258 to 159 to exempt banks with less than $250 billion in assets from many of these regulations, even though banks’ profits are soaring. A report issued Tuesday from the Federal Deposit Insurance Corporation said the net income of banks and saving institutions hit $56 billion in the first quarter of this year—a 27 percent increase from a year ago. Thirty-three Democrats joined their Republican counterparts in voting for the financial regulation rollback, which, if signed into law, would leave fewer than 10 banks in the U.S. subject to stricter federal oversight.