WASHINGTON — Several progressive lawmakers criticized efforts to include controversial banking policy riders in a yearend deal Wednesday evening.
Sens. Jeff Merkley of Oregon, Elizabeth Warren of Massachusetts and Jack Reed of Rhode Island defended the Dodd-Frank Act and the Consumer Financial Protection Bureau on the Senate floor, arguing that any changes to financial services regulation should come via regular order, rather than being negotiated behind closed doors as part of must-pass spending legislation. The fight over the yearend budget deal is heating up ahead of a key Dec. 11 deadline to avoid a government shutdown.
Republicans and Democrats are now sparring over the inclusion of certain policy riders across a number of issue areas from immigration to women's health to banking.
"We are here to say 'no.' 'No' to the industry lobbyists, 'no' to their friends in Congress who are [threatening a] government shutdown if we won't roll back rules that protect consumers and protect the safety of our financial system," Warren said on the floor.
She added that "it's a pretty neat trick" to include substantive provisions in omnibus packages, referencing last year's rollback of a Dodd-Frank swaps rule as part of a yearend spending deal ultimately supported by the White House. This time around, the Obama administration has said repeatedly that it would veto any provisions that undermine financial reform, setting the stage for what could be a dramatic fight in coming weeks.
"The lobbyists know they probably can't get a rollback of financial regulation passed out in the open where the American people can actually see what's happening," Warren added. "So instead they tack rollbacks onto must-pass legislation, like the upcoming government funding bill, to give their friends in Congress a lot of cover for voting 'yes.' "
Merkley, who convened the colloquy of senators, raised concerns about several potential riders that he said could hurt the financial system, including efforts to change the leadership structure of the CFPB into a board, create a carve-out for small banks under the Volcker Rule, undermine the CFPB's mortgage rules and undercut the Financial Stability Oversight Council. Many of those provisions were attached to the Senate's financial services appropriations legislation over the summer.
"Let's make sure that we work together to build wealth and success through fair financial practices, not special favors done for very powerful institutions that are designed to exploit and operate as predatory measures to strip the wealth of American families," Merkley said.
Reed, meanwhile, spoke about the ravages of the financial crisis, warning that efforts to undermine Dodd-Frank could have lasting economic impacts.
"We seem to have forgotten that Wall Street, without sound financial regulation — strong regulation — will find its way off the path and into this type of difficulty," he said.
Sen. Bill Nelson, D-Fla., also spoke out on the chamber floor against the use of policy riders earlier on Wednesday.