Credo Action

Tell federal regulators: Protect the Volcker Rule

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Tell the Securities Exchange Commission, the Federal Reserve, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency:

"Banks should stick to serving customers, not risky trading to pad their profits. Protect a strong Volcker Rule and reject any proposals to weaken the regulations or create new loopholes."

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    Tell federal regulators: Protect the Volcker Rule

    Donald Trump loves Wall Street. Many of his cabinet officials and economic advisers have backgrounds in the finance industry, and he has carefully picked Wall Street lawyers and big-bank allies to serve in important regulatory positions.1

    Now, his strategy is paying off. Trump’s pick to oversee bank regulation at the Federal Reserve recently proposed weakening the Volcker Rule, which stops banks from gambling with taxpayer-insured deposits. Reports indicate that Trump-friendly regulators are taking a look at Wall Street’s “wish list” for undermining the rule.2,3

    The Volcker Rule was already a watered-down version of Glass-Steagall, the true separation between financial speculation and traditional banking that America needs, but it’s an important guard against Wall Street gambling. We can’t let Donald Trump and Wall Street regulators make it even weaker.

    Tell federal regulators: Protect the Volcker Rule.

    Tens of thousands of CREDO members demanded that Congress include the Volcker Rule in Wall Street reform and then pressured regulators for years as they slowly put the regulations involved into place. At the same time, we kept fighting for tough legislation like Sen. Warren’s 21st Century Glass-Steagall Act.

    Last year, CREDO members warned members of Congress about the nomination of Randal Quarles, a longtime Wall Street lawyer whom Trump picked to oversee regulation at the Federal Reserve. Now, Quarles is teaming up with other regulators to expand loopholes in the Volcker Rule and grant more exemptions to big banks. One Chamber of Commerce lobbyist said that as Trump appointees take up roles as important Wall Street regulators, “You’re going to see momentum start building and start building quickly.”4,5

    Unlike members of Congress, regulators aren’t used to receiving massive public pressure. Our campaigns in the past helped push bank overseers to finally implement the Volcker Rule after years of delay. Now we need that kind of outcry once again.

    Tell federal regulators: Protect the Volcker Rule.

    The original Glass-Steagall Act separated general banking – like savings deposits and small business loans – from the kind of high-risk speculative trading done by investment banks that crashed the economy. Ever since banks got it repealed in the 1990s, we’ve seen a resurgence of risky gambles and financial crashes from banks that hold Americans’ savings.6

    The Volcker Rule is “Glass-Steagall lite” because instead of separating banks, it says banks cannot use taxpayer-insured deposits in their risky schemes. But even though it’s not as strong as it could be, it is one of the most powerful rules currently in place to protect Main Street businesses and families from risking gambling of Wall Street, and we can’t let regulators tear it down.

    Tell federal regulators: Protect the Volcker Rule.

    Thank you for speaking out.

    References:

    1. Daniel Marans, “How Trump’s Pick To Police Wall Street Endangers The Economy,” HuffPo, July 12, 2017.
    2. Lalita Clozel, “Fed Considering ‘Broad Revisions’ to Volcker Rule Compliance,” The Wall Street Journal, March 5, 2018.
    3. Pete Schroeder, “Exclusive: U.S. regulators examine Wall Street's Volcker rule wish list - sources,” Reuters, Feb. 28, 2018.
    4. Clozel, “Fed Considering ‘Broad Revisions’ to Volcker Rule Compliance.”
    5. Schroeder, “Exclusive: U.S. regulators examine Wall Street's Volcker rule wish list - sources.”
    6. Kevin Cirilli, “Warren, McCain introduce bill to bring back Glass-Steagall,” The Hill, July 7, 2015.