Archive for November, 2016

Middle America: We really can have it both ways

November 14, 2016 Leave a comment

The best testimonies are personal ones. By day I am the Compliance Manager of a major financial institution. My staff and I keep track and implement hundreds of government rules covering every single aspect of our operations. Financial Services is one of the most highly regulated industries, and for good reason. Financial institutions hold all the money, everybody’s money, your money. The vast majority of financial regulations are there to protect the customer, from both thieves and from the banks themselves.

Part of the outcry from Middle America is government regulation is stifling business’s ability to thrive. Product quality controls, OSHA standards, overtime rules, and environmental impact are expensive, but it’s not hard to understand why these are important. On the other hand, there appears to be a huge disconnect when it comes to the regulation of financial services.

One of the most damning claims against Hillary Clinton during the campaign was how she befriended the big banks that were responsible for the 2009 economic collapse. But you need to look a little deeper. Clinton has always been an ally of Elizabeth Warren who is a chief champion of more government banking regulation to prevent crises like 2009. Warren was the original choice to head the Consumer Financial Protection Bureau. The CFPB has forced banks to use proper underwriting on loans so folks don’t get ripped off, and prices reflect real values instead of bubbles. This is an expensive proposition for banks, but it means a fair deal for you. Why would Clinton endorse this kind of limitation if she was in fact in the pocket of the big banks?

Part of diplomacy is to sit down with your enemies and get to know them. Sometimes you even need to tell them what they want to hear to get them to the bargaining table. During the campaign I saw posts from the Right accusing her of agreeing with the humanitarian abuses of the Saudi government based on pictures of her being polite with diplomats. Never mind that she spent her entire career fighting for human rights. So I was not surprised or upset to read the leaked transcripts of her speeches with bankers behind closed doors. Yes, the biggest banks, the ones who run Wall Street, are still getting away with too much. But the CFPB was the agency that busted Wells Fargo for ripping off millions of customers in a credit card scam last month.

The Trump Administration will act in concert with the Republican controlled Congress to disband the CFPB. This has been a very high priority of Republican Congressional leaders (right behind Obamacare) for many years. Expect the ax to fall by March 2017. Congressional leaders are already scheduling legislation to disband Medicare. OSHA will be next, along with the EPA. This is what Middle America voted for.

It may be too little too late, but Middle America needs to understand that well-heeled, well-entrenched industries are not our friends. They do not create jobs for Middle America, and they cannot be trusted not to rip us off. The housing bubble burst of 2009 and more recently the millions of folks ripped off by Wells Fargo, are things that happened while the government thought it had a handle on things. That handle is about to be let go.

A politician doesn’t have to cozy up with bankers to let them get away with robbing America. In fact, appearing to cozy up to them is probably maneuvering for tactical advantage. No, you let the big banks rob America by gutting the regulations that keep them in check. Yes, the very thing Clinton was berated for is exactly what Trump is about to do.

So what can we do now? Move your money out of the big banks into community banks and credit unions that have a charter to service communities, not shareholders and not Wall Street. Watch for shenanigans and write to your Congresspeople whenever you see the big banks ripping off their customers. Demand fair treatment and clear disclosures any time you deal with a bank. They have your money, they need to work for you. Talk to your neighbors and make sure they understand that voting for politicians who give away our protections are selling out to big money and not acting in our best interest.

Regulatory overreach is a thing. Compliance with government rules can be expensive. So vote for politicians who understand how to craft fair and reasonable rules that don’t shut down business but still protect people from unregulated greed.

My expertise is in financial services, but this same pattern is true of product safety, work safety, environmental safety, healthcare, and all the areas where government puts rules on business.

The Devil is in the details. Headlines and internet memes do not tell enough details to inform people to make good choices. Keeping business thriving and people safe at the same time is called governance. People, all of our people, have to understand how critically important it is for government to find that balance. Middle America has come to believe we have let the pendulum swing too far to safety to the detriment of business. They see jobs disappearing with no apparent advantage to the safety regulations bring. So now the pendulum is swinging way too far the other way, and people are going to get hurt.

“Moderates” sounds boring, but extremists do not strike the essential balance that leads to everyone thriving. The next time you hear a politician say we need to eliminate something or tighten down on something, ask yourself if that will achieve the balance of safety and business. If their aim is to drive too far one way or the other, call them out on it. We do not need to choose between safe unemployed people and employed but injured and ripped off people. We can have it both ways. But only if our electorate keeps its politicians on target.

Categories: Politics, Uncategorized
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