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Financial Planning > Behavioral Finance

Rep. Waters Vows Crackdown on ‘Bad Actors’ as Finserv Chair

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Rep. Maxine Waters, D-Calif., who’s prepped to be the next chairwoman of the House Financial Services Committee, laid out her priorities in a Friday letter to her House colleagues, seeking their support. She cited among matters of utmost importance under her watch: consumer and investor protection, cracking down on “bad actors” like Wells Fargo, supporting fintech and continuing to fight for the Consumer Financial Protection Bureau.

With the House flipping to the Democrats in the midterm elections and House Financial Services Committee Chairman Jeb Hensarling, R-Texas, out in January, all odds are on ranking minority member Waters taking the top seat.

Congress historically has caucus and steering committee meetings in December, where the House Financial Services Committee leadership “will largely be figured out,” Ed Mills, policy analyst for Raymond James, told ThinkAdvisor on Monday. For Waters, “this should be a formality, but it is still customary to ask for the support.”

The House Financial Services Committee oversees, among other agencies, the Federal Reserve Board, the Securities and Exchange Commission, the Treasury Department and the Federal Deposit Insurance Corp.

In her eight-page letter, Waters said she would “prioritize protecting consumers and investors from abusive financial practices, making sure that there are strong safeguards in place to prevent another financial crisis,” and would encourage “responsible innovation in financial technology” and promote diversity and inclusion in the financial services sector.

During the past six years, Waters said she’s “been on the front lines of pushing back against a rigid Republican ideology set on rolling back Wall Street reform and pursuing an anti-consumer, anti-investor, and anti-low and moderate- income family agenda.”

Despite the efforts of House Republicans and the Trump administration, Waters continued, “I have been able to lead Committee Democrats in fighting back and in achieving legislative success.”

While not citing the SEC’s advice standards package, including Regulation Best Interest, Waters called attention to the fact that she led Democrats in “pushing back” against Hensarling’s attempts to repeal the Labor Department’s “long overdue” fiduciary rule, which was eventually vacated by an appeals court.

Industry officials see Waters taking SEC Chairman Jay Clayton to task over the agency’s advice standards package — which could become finalized in the first quarter — as she was one of 35 House and Senate Democrats who signed a letter to Clayton complaining that the SEC did not follow the Dodd-Frank mandate to establish a uniform fiduciary standard for advisors and brokers.

Waters also mentioned that she “rejected” Hensarling’s Dodd-Frank Act rollback bill, the Financial Choice Act, which passed the House in June but has yet to get through the Senate.

She touted that she “led Committee Democrats in opposing this misguided and harmful legislation,” which she had dubbed the “Wrong Choice Act.”

Waters stated that “no one is above the law and financial institutions that engage in criminal behavior should be held accountable.”

“It became clear that Republicans would not hold Wells Fargo, or any big bank, accountable for its conduct” in opening millions of fraudulent bank accounts without their customers’ knowledge or permission, Waters stated, “and that Wells Fargo employees engaged in a routine practice of ripping off and preying on their customers.”

That’s why, she states, she introduced in 2018 H.R. 3937, the Megabank Accountability and Consequences Act, “which would punish recidivist financial institutions, like Wells Fargo, that repeatedly engage in a pattern or practice of violations of federal banking and consumer protection laws and regulations, including by empowering banking regulators to revoke the institution’s charter.”

As to the CFPB, Waters’ said that President Donald Trump “illegally installed” Mick Mulvaney as acting director of the bureau. Mulvaney’s “very presence at the CFPB and his role at [the Office of Management and Budget] compromises the critical independence of the agency.”

In summing up her call for support from her House colleagues, Waters stated: “As you can see, despite the obvious roadblocks, Committee Democrats have been very active and successful during these last six years. With Trump in the White House, I know that our fight for America’s consumers and investors will continue to be challenging. But I am more than up to that fight. I look forward to leading this fight for the Committee’s Democrats as chairwoman in the 116th Congress.”


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