Moderate Democrats helped Wall Street avoid regulation in the ’90s. They’re doing it again.

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Moderate Democrats helped Wall Street avoid regulation in the ’90s. They’re doing it again.

February 19th, 2016

Awake Goy

Republicans on the campaign trail aren’t exactly shy about their desire to roll back President Obama’s bank regulations. Donald Trump has called Dodd-Frank a “terrible” “disaster,” Ted Cruz has introduced legislation to abolish the Consumer Financial Protection Bureau (CFPB), and Marco Rubio has claimed, incorrectly, that more than 40 percent of small and midsize banks were wiped out by the financial reform law.

But the real threat to tough Wall Street regulation isn’t just on the campaign trail. It’s also in Congress, where a coalition of Republicans and a few moderate Democrats — like Sen. Mark Warner (D-VA), Sen. Heidi Heitkamp (D-ND), and Sen. Joe Manchin (D-WV) — are working on legislation that would severely curtail regulators’ power and make it easier for banks and other financial organizations to escape scrutiny, a move Elizabeth Warren and other liberal reformers are fighting.

The lawmakers want to subject financial regulation to what’s known as “cost-benefit analysis,” a practice currently used to weigh health, safety, and environmental regulations. Applying it to financial rules too may sound reasonable, but it’s not — and, in fact, could severely undermine Dodd-Frank and the entire post-crisis effort to rein in Wall Street.