20 State Attorneys General Oppose Proposed Repeal Of Dodd-Frank, Including PA's
Pennsylvania's Josh Shapiro has joined with fellow attorneys general from 19 other states to send a letter to Congress urging them not to pass the Financial Choice Act of 2017.
The bill is expected to pass in the House on Thursday, largely along partisan lines.
NPR reported last week that the bill would unravel the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed in 2010 to prevent another financial crisis.
Perhaps the biggest partisan flashpoint - the bill scales back the authority of the Consumer Financial Protection Bureau to regulate large banks and payday lenders. The CFPB was created under Dodd-Frank and designed to operate as an independent watchdog with a single director.
In the letter, the 20 top attorneys said the CFPB “emerged as the independent federal consumer watchdog the national has long needed, and as a key partner in critical important consumer protection work” undertaken by individual states.
Shapiro also pointed to the dissolution of the fiduciary rule, which requires that financial institutions work in the best interests of their clients.
“Imagine if you’re a senior citizen in Pennsylvania, and you go to your financial advisor for help on investing your life savings, and their job is not to give you the best information, but rather to give you information that suits their purposes,” Shapiro said.
Rep. Keith Rothfus (R-PA 12), a co-sponsor of the bill, said Dodd-Frank was meant to lift the economy and prevent the “too big to fail” phenomenon from taking hold in the future.
“But what has happened is we’ve seen a tremendous concentration among the big banks,” Rothfus said. “There’s an implicit, if not express, taxpayer bailout fund available for the big banks if they get into trouble.”
Rothfus is referencing the elimination of the orderly liquidation authority, which was set up to guide failing financial institutions to dissolution.
President Trump has said that scheme would "encourage excessive risk taking” among banks.