WASHINGTON, D.C. – Oregon’s Senator Jeff Merkley—a co-author of the Volcker Rule, along with former Sen. Carl Levin (D-MI)—today released his comment letter in response to the Trump Administration’s recent proposal to rewrite and weaken the Volcker Rule.
The Volcker Rule, a modern-day Glass-Steagall enacted as one of the key provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, prevents banks from gambling with taxpayer-insured deposits.
On May 30th of this year, Trump-appointed financial regulators proposed significantly rewriting the Volcker Rule to weaken it.
“Congress intended for the Volcker Rule to function as a modern-day Glass-Steagall Act, acting as a firewall to safeguard traditional loan-making and deposit-taking at banks from high-risk bets that put customers and the financial system at risk,” Merkley wrote. “However, the proposed revisions do just the opposite of creating a modern-day Glass-Steagall.[…] These proposed changes are a creative maneuver to allow Wall Street banks to evade compliance while exposing taxpayers, investors, and our capital markets to enormous risks.”
Financial experts agree. As Merkley notes in his letter, Securities and Exchange Commission Kara Stein said that the proposed rewrite “cleverly and carefully euthanizes the Volcker Rule.” Today, Americans for Financial Reform and the Center for American Progress each released reports on the Volcker Rule and its significance. Those reports can be found here and here.
A pdf of Merkley’s full comment letter can be found here.