Banks Are Making Record Profits, But Sure, Let’s “Help” Them By Eliminating Regulation

According to the GOP, regulations are hurting the economy and they must be vanquished for the prosperity of the American people. Supposedly, that’s precisely why Congress tossed out some significant Dodd-Frank rules, freeing up the banks to conduct business with less oversight.

President Donald Trump wasted little time signing the biggest deregulation since the financial crisis took hold of the country a decade ago. “This legislation I’m signing today rolls back the crippling Dodd-Frank regulations,” Trump said, adding that Dodd-Frank is a “disaster.”

Here’s the thing, though: Wall Street has been doing great. In the first months of 2018, the big banks netted $56 billion, making it the most profitable quarter for the industry ever. While some of that profit is attributable to the massive corporate tax cuts the Republicans passed last year (thanks again, GOP!) even if you took out those new savings, the banks would still have earned $49 billion and would still be a record.

This idea that regulations have held the banks back is completely a myth. The banking industry is thriving, and the regulations are in place to make sure they don’t take irresponsible risks that tank the economy again. The banks get to keep making big bucks, and the working class gets to avoid becoming the unwitting victims of a recession.

Though a lot of the deregulation applies to small or midsized banks – which are also doing remarkably well, mind you – the new rules now categorize many of the big but not biggest banks at the mid-sized level to avoid certain oversights and requirements.

Bloomberg details some of the concessions to the largest banks, including lowering compliance costs, expanding trading opportunities, substituting pricy debts with deposits and kicking back more money to shareholders. Meanwhile, regulations designed specifically to protect consumers have been eliminated.

Let’s not blame the situation entirely on Republicans. These rolled back rules passed with help from dozens of Democrats. Although the Democratic Party was instrumental in passing the Dodd-Frank rules in the first place, lobbyist money works on some in the left, too, and they voted to cut the banks some unwarranted slack rather than maintaining the assurance that banks are acting more ethically.

Hopefully these Democrats won’t also be on board for the next phases of deregulation. Most conservatives in Congress want to see Dodd-Frank gutted altogether, which would really benefit the big banks. As we’ve already established, the big banks do not need deregulation to be successful – they’d just prefer to not be held accountable for any reckless actions.

74 comments

Marie W
Marie W6 months ago

Thanks for sharing.

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Susanne R
Susanne Rabout a year ago

Paul: I found the comment and am happy to copy and paste it for your benefit:

Russia Meddled to Help Trump, Concludes Senate Intelligence Committee
Susanne R 15 days ago

Brian: Did you even bother to read my post regarding Dodd-Frank? I admitted that 17 Democrats voted to ease its regulations, a few because they represented red states and were reluctant to vote against it because they're facing re-election. Others represented smaller states where small banks and credit unions are more prevalent, and the Dodd-Frank legislation was unfair to them. That's not unreasonable. They were elected to promote the interests of their constituents. What part of this do you not understand? I supported Elizabeth Warren when she proposed the creation of the Consumer Financial Protection Bureau and resented the GOP for blocking her appointment to head the agency she created. I've signed thousands of petitions over the past eight years, and many were to protect the CFPB.

https://www.care2.com/causes/russia-meddled-to-help-trump-concludes-senate-intelligence-committee.html

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Susanne R
Susanne Rabout a year ago

Paul: I think you're a bit confused. In another thread, in a comment to Brian, I specifically mentioned that some Democrats voted against Dodd-Frank because they represented smaller states that had small banks and credit unions, which were being disproportionately affected by the regulations meant for the Wall Street banks. I'll look for the thread and provide the link.

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Brian F
Brian Fabout a year ago

Paul B You're disengenously deliberately defending the Republicans and Democrats who voted against Dodd-Frank. The Democrats created Dodd-Frank to keep the big multibillion dollar banks like Wells Fargo from continuing their corruption and ripping off customers. It's the big banks that are the problem, and Dodd-Frank is needed to keep them from continuing their corruption. So it was wrong for the Republicans and many Democrats to vote to repeal Dodd-Frank. You're simply demonizing Dodd-Frank, and defending the corrupt Republicans and Democrats who voted against it.

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Paul B
Paul Babout a year ago

Susanne, your comments regarding Dodd-Frank demostrate you really don't know what it did to small banks, inhibiting competition for the big banks who lobbied and got what they wanted. Sure it inhibited their abilities, but only slightly. It killed the little guys. They loved it. The amendments recently passed helped to reverse some of the restrictions that really hurt the little guys. The big guys, well, they have doe and gotten away with anything they have wanted... for far too long. This IS good legislation. If the big guys are complaining, then we know it is the right thing.

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Brian F
Brian Fabout a year ago

Obama also refused to support marijuana legalization, and his corrupt AG Eric Holder didn't prosecute one banker, and got a million dollar a year job working for a law firm that defends bankers, as a reward. So Obama cashed in on his presidency, and was extremely corrupt. This is why after 8 years of Obama's failed neo liberal policies, voters chose this crook Trump. They had no choice after the Democrats cheated Bernie Sanders out of his primary. They weren't going to vote for Hillary who supported the TPP, natural gas fracking, the Libya invasion, and refused to support marijuana legalization and Medicare for all, because she is a crook like Obama. Hillary was seen as a continuation of the horrible failed neo liberal policies of the sellout liar Obama. So the Democrats caused this crook Trump to win, by becoming corrupt and corporate owned like the Republicans, having an unfair super delegate rule, and rigging the primary for Bernie Sanders to lose.

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Brian F
Brian Fabout a year ago

Obama criminalized whistleblowers, imprisoned Manning for 7 years for telling the truth about the Iraq war, made the GW Bush tax cuts permanent, allowed Artic oil drilling, allowed natural gas fracking, supported Israel's illegal occupation of Palestinian lands, supported the TPP, sold weapons to Saudi Arabia, expanded 2 wars to 7, killed a 16 year old and others in drone strikes, gave us a horrible Republican healthcare plan, instead of Medicare for all, took $400,000 as a reward from Wall Street for not prosecuting one banker, did nothing as thug police beat innocent protesters at Standing Rock, and the Occupy protest. Sure Obama had a horrible do nothing Republican congress filibustering and blocking most of what he tried to accomplish, but he had a filibuster proof Democratic majority his first year and a half in office, and could have passed Medicare for all. Now Obama will get a 65 million dollar book deal, after selling the country out to Wall Street and corporations. So the horrible failed neo liberal policies of the sellout liar Obama, led us to this crook Trump. Obama promised hope and change, but the only thing that changed, was his bank account. Many of the horrible things this crook Trump is doing, Obama and the Democrats have done, and nothing was said about it. The Democrats voted to give this crook Trump his 700 billion dollar military budget, and 17 Democrats voted with the Republicans to repeal Dodd-Frank ban

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Susanne R
Susanne Rabout a year ago

Paul: In all honesty, did a Republican ever vote for anything President Obama proposed for our country? And HE was an intelligent, well-informed man and an outstanding public speaker who spent his non-working hours learning more about the national and global issues he had to deal with and spending time with his wife and daughters. Trump spends his time tweeting, being briefed by the likes of Sean Hannity and Rudy Giuliani, insulting those who disagree with him, and finding new money-making opportunities. You could easily tell during the Republican primaries that he didn't know what he was talking about. He was completely out of his league. He was worse than Ross Perot's running mate, James Stockdale (the Admiral) who shocked viewers during a debate when he asked, "Who am I? Where am I." At one point, he stopped responding to questions and someone had to check on him as he stared into the distance. He said he had turned off his hearing aids and didn't know he was being called upon to speak. But he was honest and admitted that he wasn't able to answer the questions and treated everyone with respect --which is more than I can say for trump. Trump uses the same tactics as president that he used as a primary candidate: create a diversion; change the subject; blame someone else: and lie, lie, and then lie some more..

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Brian F
Brian Fabout a year ago

Paul B Dodd-Frank kept the banks from continuing their corruption. Wells Fargo ripped off customers, and the CEO walked away with millions of dollars. The Democrats were wrong to side with the Republicans.

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Paul B
Paul Babout a year ago

The fact that it passed with Dems on board is because it is good legislation. I am surprised more didn't vote for it as well. Dems don't vote for anything Trump wants, so that fact alone should have been your first clue it was needed.

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