Republican Lawmakers Fight for Last-Minute Gift to Big Banks

If Republican lawmakers have their way, one of the final acts of the 113th Congress will be to make it easier for big banks to gamble with taxpayers’ money.

As Congress negotiates a last-minute deal to fund the federal government and avoid a shutdown on Dec. 11, it appears likely that a last-minute trade-off will roll back a provision of the Dodd–Frank Wall Street Reform and Consumer Protection Act aimed at limiting bank bail-outs.

The provision, “Section 716,” requires banks that trade some of the riskiest types of financial products to conduct the activity in subsidiaries separate from the portion of the bank that is insured by the Federal Deposit Insurance Corporation.

A group of pro-reform senators sent a letter to Senate budget negotiators late last week urging them to leave the controversial provision intact. The letter, signed by Sens. Sherrod Brown (D-Ohio), Tom Harkin (D-Iowa), Carl Levin (D-Mich.) and Jeff Merkley (D-Ore.) states, “Section 716 of the Act was a key component of the financial reforms. We urge you to oppose inclusion of provisions modifying or repealing this reform in any funding legislation.”

Sen. Elizabeth Warren (D-Mass.) blasted the efforts to roll back derivatives regulation, calling it “reckless.” She said:

Middle-class families are still paying a heavy price for the decisions to weaken the financial cops, leaving Wall Street free to load up on risk. Congress should not chip away at important reforms that protect taxpayers and make our economy safer.

Reposted from AFL-CIO NOW

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