Wall Street CEOs are lobbying against the Biden administration’s proposed banking regulations, asserting that rules meant to protect consumers will be detrimental to small businesses and low-income Americans.
Treasury Secretary Janet Yellen proposed the rules, which are intended to curb risky financial practices which led to 2008’s financial crisis, last month. However, CEOs of large banks and Wall Street firms argue the rules are overly restrictive and could limit access to financial products for small businesses.
“We’re not opposed to smart and effective regulation, only government overreach and wrongful grouping of Main Street institutions in with those from Wall Street,” the Bank Policy Institute stated in a statement.
The bank’s chief executive officer,Greg Baer, also argued the regulation fails to account for how small businesses and the banking industry has changed since the financial crisis.
“This is a proposal for rules intended for large, complex banks,” Baer said. “But applying these rules to banks that are of a much different size and complexity doesn’t make sense…Small business lending will suffer and the legacy of the 2008 crisis will be furthered, not ended, if an exclusive one-size-fits-all approach is taken.”
The banking industry also argues the proposed rules could lead to an increase in fees that would be passed onto customers. Some of the potential regulations include implementing higher capital requirements, limiting riskier business activities, and placing restrictions on executive compensation.
In response to the criticism, Yellen has stated that the proposed regulations are meant to protect consumers and increase banking security.
“By now, we all know the tragedies that took place 10 years go and the unfortunate costs that were paid,” she told reporters. “Now is the time to take steps to prevent things from happening again. We can do this by making sure banks have enough capital and liquidity to weather the next crisis. It is not meant to put an undue burden on smaller banks or reduce options for low-income Americans.”
Many consumer groups agree with Yellen, saying the proposed regulations are necessary to ensure another financial crisis does not occur.
“It is absolutely critical that any bank regulation crafted in response to the 2008 financial crisis focus primarily on safety and soundness,” the National Consumer Law Center said in a statement. “It’s time to move forward now and make sure that Main Street Americans are protected from Wall Street’s risky behavior.”
Wall Street CEOs are lobbying against the Biden administration’s proposed banking regulations, asserting that rules meant to protect consumers will be detrimental to small businesses and low-income Americans.
Treasury Secretary Janet Yellen proposed the rules, which are intended to curb risky financial practices which led to 2008’s financial crisis, last month. However, CEOs of large banks and Wall Street firms argue the rules are overly restrictive and could limit access to financial products for small businesses.
“We’re not opposed to smart and effective regulation, only government overreach and wrongful grouping of Main Street institutions in with those from Wall Street,” the Bank Policy Institute stated in a statement.
The bank’s chief executive officer,Greg Baer, also argued the regulation fails to account for how small businesses and the banking industry has changed since the financial crisis.
“This is a proposal for rules intended for large, complex banks,” Baer said. “But applying these rules to banks that are of a much different size and complexity doesn’t make sense…Small business lending will suffer and the legacy of the 2008 crisis will be furthered, not ended, if an exclusive one-size-fits-all approach is taken.”
The banking industry also argues the proposed rules could lead to an increase in fees that would be passed onto customers. Some of the potential regulations include implementing higher capital requirements, limiting riskier business activities, and placing restrictions on executive compensation.
In response to the criticism, Yellen has stated that the proposed regulations are meant to protect consumers and increase banking security.
“By now, we all know the tragedies that took place 10 years go and the unfortunate costs that were paid,” she told reporters. “Now is the time to take steps to prevent things from happening again. We can do this by making sure banks have enough capital and liquidity to weather the next crisis. It is not meant to put an undue burden on smaller banks or reduce options for low-income Americans.”
Many consumer groups agree with Yellen, saying the proposed regulations are necessary to ensure another financial crisis does not occur.
“It is absolutely critical that any bank regulation crafted in response to the 2008 financial crisis focus primarily on safety and soundness,” the National Consumer Law Center said in a statement. “It’s time to move forward now and make sure that Main Street Americans are protected from Wall Street’s risky behavior.”
