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Last weekend, the U.S. Senate gave final approval to a spending bill that included a controversial measure that rolls back a key provision of the Dodd-Frank banking reform law. At issue: a rule that prevented federally insured banks from dealing in exotic and risky securities — the kind that blew up and played such a big role in the financial crisis.
Massachusetts Sen. Elizabeth Warren fought hard against the change — which she says will allow a handful of big banks to gamble with taxpayer money. Here's what she told NPR this morning.
"This is a provision that Citigroup lobbyists literally wrote," Warren told NPR Monday morning. "I think that tells you what was really going on here. They want to be able to juice their profits — a half dozen of the largest financial institutions in this country want to be able to take riskier bets, and hey, if it doesn't work out, they want the U.S. taxpayer to bail them out."
As originally written, the Dodd–Frank Wall Street Reform and Consumer Protection Act required banks to create a separate subsidiary to do their trading — to protect customer deposits from this risky kind of trading.
The question now is, what will happen to the law going forward? Will it be further weakened with a new Republican majority set to take over the Senate in January?
- "Sen. Elizabeth Warren failed to stop a change in bank regulations last weekend, but she raised her profile yet again."
- "Retired House Democrat Barney Frank urged his former colleagues to vote against a nearly $1.1 trillion spending plan, saying it constitutes an attack on a Wall Street regulatory overhaul he co-authored in response to the financial crisis."
This segment aired on December 16, 2014.
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