Us versus the Banks

Dear Donald – 

Despite all of the press you’ve been getting recently, you don’t seem to have been getting much on your moves in the financial sector, which is too bad. I think your base, who was convinced Hillary was bought and paid for by Wall Street, would be really interested. 

Some of it may be a little in the weeds, which is why the media haven’t covered it much, but it’s really important stuff for Americans who participate in the financial sector, which is basically everyone with a bank account. 

The first is a memorandum on the fiduciary duty rule. I know, you’re probably already asleep, but stick with me on this. At its core, the fiduciary duty rule says that your financial advisor (the guy helping you invest your money in mutual funds or retirement accounts) had to put your interests ahead of his own. That makes sense. My investments and my retirement accounts should be chosen because they’re the best ones for me, not just because my advisor gets a kickback for selling it to me. Think of it this way, if I went into a store to buy a TV and asked the salesman which one I should get, it’s probably important for me to know that he’ll get $100 if I buy the Samsung and nothing if I get the Vizio. Chances are, that’ll skew his recommendation, and I’ll get bad information. The same is true of financial advisors – we should know how they’re making their money, and whether they’re potentially being influenced to make certain recommendations because of that fact. Your memo basically asked the Department of Labor to review the rule again, specifically with an eye to gutting it. In fact, the memo literally says:

[The rule] may not be consistent with the policies of my Administration. 

The only reason you would want to undermine the fiduciary duty rule is if you want financial advisors to be able to take advantage of people and let banks bribe advisors into selling particular funds or investment options. It’s not good for consumers, but it’s great for banks and the financial industry. 
In that same vein, you also recently signed an executive order for the Treasury Department to review all regulations on the financial industry, again, seemingly with a view to gutting them. Folks may have a short memory, but just eight years ago, our financial system was falling apart because banks made risky bets trying to pad their pockets and put all of us on the hook to pay the tab. These regulations were meant to curtail the excesses of banks and protect taxpayers. Sure, it limits the profits bankers can make off of wild speculation in financial markets, but that’s the price of protecting us from them. Removing these protections enriches them and puts us all at risk. 

Just look at the press photos of your signing these two actions. You’re surrounded by bankers. No consumer advocates in sight. No one who cares about the well-being of poor people or retirees. And just look at the grind on the faces of those bankers. Anything that makes a bank CEO that happy has got to be terrifying for the rest of us. 

And then there’s the Consumer Financial Protection Bureau (CFPB), which is tasked with protecting consumers from unscrupulous business practices. You, and your cronies on the Hill, are actively trying to remove Richard Cordray from the head of CFPB and gut the agency. Since it’s inception, CFPB has recovered more than $5 billion for consumers because of violations of consumer protection laws. That’s $5 billion bilked from consumers by unscrupulous corporations that’s been returned to them. Getting rid of CFPB only removes the watchdog, it doesn’t do anything to “improve efficiency” or “promote markets.” It is a direct harm to consumers. 

But then again, protecting the people from shady banks and financial firms may just not be consistent with the policies of your Administration. 

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