Sen. King poised to support Wall Street deregulation

Sen. King poised to support Wall Street deregulation

Last month the New York Times ran an editorial with the headline “Deregulating Corporate America” that sounded the alarm on a package of bills being introduced by a group of eight Senators that would delay and even undo important consumer protection rules.

“If you think Congress is hopelessly divided on party lines on every issue, think again. When it comes to regulating — more precisely, deregulating — corporate America, Republicans and Democrats are all too eager to find common ground,” read the piece.

These so-called “regulatory reform” bills are part of an elaborate strategy to weaken and delay federal regulations by adding more hurdles and requirements to an already laborious rulemaking process. One bill, for example, would require these independent agencies to send cost-benefit analysis to the Congressional Budget Office (CBO) for review even though the CBO has no experience or expertise in this area. Worse still it gives the CBO veto power of independent agency regulations. A negative review could force an agency to withdraw or weaken a rule and could allow corporations to suit the rulemaking process to a halt.

Overall, the effect of these bills would be to throw sand into the gears of federal regulators – potentially affecting everything from women’s health to food safety, financial reform, and the environment.

While it might not be surprising to see a package of bills like this moving through the Republican-controlled Senate, it is somewhat surprising to see a familiar name among those eight senators: Angus King.

Maine’s junior Senator has positioned himself in the past as a red-tape cutter, but this broad package of bills extends far past any red-tape cutting and into interfering with independent consumer protection agencies to the benefit of large corporations.

“The winners would be big banks and big businesses,” wrote the New York Times editorial board. “The losers would be ordinary Americans who would be deprived of timely and effective protection from the Consumer Financial Protection Bureau and other bank regulators, as well as from agencies that oversee consumer product safety, nuclear safety, investor safeguards, workplace rights and a host of other issues and activities.”

It’s no coincidence that these bills are being pushed forward as the Consumer Financial Protection Bureau is considering a landmark rule to reign in the worst practices of the payday loan industry.

Last year, predatory lenders across America raked in over $10 billion by trapping millions of people in short-term, high interest payday loans. These lenders market payday loans as a quick financial fix for people working minimum wage jobs who have nowhere else to turn for help. But with interest rates as high as 300%, many borrowers became trapped in a cycle of debt, owing more of each week’s paycheck to Wall Street lenders

Elements of this package could have serious impacts on this rulemaking process, by allowing the payday loan industry to suit in Federal court to grind the process to a halt and tip the balance away from consumers and back to Wall Street. It’s taken years for the CFPB to get to the point of even proposing a rule and being forced to turn back now because of legislation passed by Congress would be devestating to millions of Americans trapped in a predatory cycle of indebtedness to Wall Street.

According to Senator King’s office, he is still considering whether to sign on to most of the bills in the package. An online petition started last night encouraging the Senator to reconsider his support of these bills has already been signed by more than 600 Mainers. You can add your name here.

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