Financial Services Issues
Wall Street helped dig the financial hole the economy is in, Wall Street should help pay to get us out. Excessive Wall Street speculation and trading contributed to the financial collapse, which has cost 8 million jobs and decimated home values by an average of 33 percent from their peak levels, for a total loss of over $6 trillion. It is only fair for Wall Street to help pay to clean up its mess. I am an original cosponsor of the Wall Street Trading and Speculators Tax Act to impose a fee of three basis points on the trading of certain securities. This modest fee raises $350 billion dollars, while reducing the speculation that fueled the financial crisis and will help underwrite our efforts to rebuild and renew America.
The measure does not harm long-term investing like retirement funds. Instead, it targets large-scale financial trading and complex transactions undertaken by financial and investment firms by placing a small tax on most non-consumer financial trades. This tax, set at 3 cents on every 100 dollars traded, will reduce certain speculative activities like high-speed computer arbitrage trading, and curb dangerous and unnecessary speculation while leaving the bottom line of average investors virtually untouched.
For too long Congress allowed corporations to put profits ahead of people. It is outrageous that financial institutions preyed on unsophisticated consumers for years to make enormous profits while putting the global financial system at risk. At the urging of Elizabeth Warren, Congress created the Consumer Financial Protection Bureau (CFPB) to put people ahead of profits and to ensure that financial institutions are following the law. Just as American consumers are protected from products that can cause serious physical harm, they should also be protected from products that can cause financial ruin. The CFPA will closely examine consumer lending practices to ensure that consumers are treated fairly. The agency will extend consumer protections to financial products, such as mortgages, credit cards, and "payday" lenders. It will also require that banks prominently display information regarding the fees and charges associated with the bank's overdraft protection program.
But Republicans are working to defang, derail, and delay the Bureau. They have voted to defund the Bureau and are refusing to even allow on a vote on the President’s nominee for CFPB Chairman, weakening the Bureau’s ability to protect consumers from corporate malfeasance. It is no wonder that less than ten percent of the public approves of Congress when so many of its members are standing up for the financial institutions that fund their campaigns instead of the people they are supposed to represent.
An important part of a robust and competitive financial sector is the ability of consumers to choose what institutions best meets their needs. While banks and other financial services have the ability to change their terms and conditions, like raising fees, they can make it very difficult for consumers to take their business elsewhere. This outrageous practice has encouraged people to exercise their rights in our free market system and to take their money elsewhere. But when they try to close out their account, their bank hits them with additional fees. People should be free to support financial institutions that put consumers ahead of profits. Congressman Blumenauer supports the Freedom and Mobility in Consumer Banking Act, which would grant a series of protections to consumers who wish to close accounts with financial institutions.
Oregon homeowners have been victimized by predatory lending and improper foreclosure practices but banks have not been held accountable. Oregonians deserve a full investigation into these activities that have cost thousands of Oregon families their homes and that led to the collapse of the housing market. Congressman Blumenauer has strongly urged Attorney General Eric Holder to ensure that banks are held accountable for their actions and that Oregon homeowners receive just compensation for any illegal activity. It is past time to show that these banks are not too big to prosecute.
Judges can reduce the terms of the mortgage on Donald Trump’s vacation homes, but they are prohibited from doing the same for average Oregonians. If someone with a vacation home or an investment property files for bankruptcy, a judge can “cram down” the value of those mortgages to its fair market value, reduce interest rates and reset the principal balance, providing substantial financial relief. But if you live in that home, you’re stuck. Average Oregonians suffer under the weight of their underwater home, but investors and speculators get another bail out? This is blatantly unfair and Congressman Blumenauer has voted to change this practice to provide homeowners equity in bankruptcy proceedings. Congress must allow judges to treat average Americans in the same manner in which the more affluent are treated.
Excessive risk-taking by banks coupled with lax regulations contributed to the financial crisis that devastated millions of families. A critical provision in Dodd-Frank known as the “Volcker Rule” will prohibit proprietary trading by U.S. banking entities in order to limit risk, protect shareholders, and protect the global financial system. But banks committed to engaging in the same risky behaviors that dug the hole the economy is in are lobbying hard for loopholes in the Volcker Rule. Congressman Blumenauer led efforts to push back against banks and Wall Street lobbyists and will continue fighting to ensure that the Volcker Rule remains strong and without loopholes.
Congressman Blumenauer has also called for Congress to reinstate Glass-Steagall, the Depression-era bank regulation that prevented Wall Street investment firms from gambling with money leveraged from savings and retirement accounts in affiliated commercial banks.