Presidential candidates Hillary Clinton and Bernie Sanders have repeatedly vowed to get tougher on Wall Street banks in order to avoid a financial crisis similar to the one the country experienced in 2008.
Now President Barack Obama is in on the action, making plans for further financial reforms during his remaining 10 months in office. Obama met with a group of financial regulators, including Federal Reserve Chair Janet Yellen and Securities and Exchange Commission Chair Mary Jo White, at the White House this week to discuss possibilities for more regulation for Wall Street in order to prevent another crisis from occurring.
Obama described the American Economy as “pretty darn great” last week during a meeting with his economic team at the White House, following the announcement from the Bureau of Labor Statistics that 242,000 jobs had been added in February. It was the 72nd consecutive month of private-sector job growth, the longest streak on record. The president last week also defended the controversial Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010, the the subsequent creation of the equally controversial Consumer Financial Protection Bureau (CFPB) from out of the Dodd-Frank law.
Even after the significant economic strides the country has made in the years since the crisis, the administration has indicated that it plans more regulation for the financial industry, namely a fiduciary rule that changes the way brokers who handle retirement accounts are paid. Under the new rule, brokers can earn sales commissions by signing a “best interest” contract with investors that puts the client’s best interests first. The brokerage industry is largely opposed to the fiduciary rule.
White House Secretary Josh Earnest said last week that the “important financial reforms of Wall Street” will be one of the key legacy achievements of the Obama Administration, saying that “Those reforms have led to a financial system that is more stable and ensures that taxpayers are not on the hook for bailing out financial institutions that make risky bets.”
“Instead of huddling at the White House, Washington regulators should be meeting with small business owners and consumers on Main Street to hear how the hyper-regulated Obama economy is hurting them.”
Rep. Jeb Hensarling, Chairman, House Financial Services Committee
While the president has staunchly defended his administration’s record for Wall Street reform, at least one lawmaker was skeptical.
“Instead of huddling at the White House, Washington regulators should be meeting with small business owners and consumers on Main Street to hear how the hyper-regulated Obama economy is hurting them,” said Rep. Jeb Hensarling (R-Texas), Chairman of the House Financial Services Committee. “Whether it's no more free checking, declined mortgage loans or mountains of red tape, Main Street is struggling because burdensome regulations are increasing consumers' costs and wiping out products and services they want and need.”
Hensarling continued, “While enshrining ‘too big to fail’ into law, Dodd-Frank’s regulatory onslaught has, according to a recent report by the Federal Reserve Bank of Dallas, made many community financial institutions ‘too small to succeed’ and the playing field against big banks ‘more uneven.’ That’s the exact opposite of what President Obama and Democrats promised would happen with all these new regulations.”
Hensarling noted that his committee passed seven bipartisan bills last year aimed at providing regulatory relief for Main Street, and that this year, “we’ll put forward bold ideas that promote more opportunities for low and moderate-income Americans, protect taxpayers from future Wall Street bailouts, and empower families and individuals to achieve financial independence.”