In a win for amnesia, Congress advanced a bipartisan bill on Tuesday deregulating the banking industry, just a decade after Wall Street triggered a financial crisis that caused millions to lose their jobs and their homes. S.2155, known as the Crapo bill both for its co-author, Senate Banking Committee chair Mike Crapo (R-Idaho), and its general quality, was pitched as a narrow measure to provide relief for salt-of-the-earth community banks and credit unions. But anyone making that claim is either misinformed or trying to spin the truth.
In reality, the Crapo bill will deregulate 25 of the 38 largest banks in America, weaken capital requirements that force banks to pay for their own mistakes, free some lenders from disclosing data used to detect lending discrimination and largely handcuff the Federal Reserve’s ability to apply special regulations to the biggest banks, to name just a few provisions. Plus, the changes have already begun to consolidate the banking sector, with the very community banks the bill was intended to help being scooped up by larger rivals. Combined with efforts inside the agencies that regulate banks to weaken rules, it represents a pendulum shift away from safety and toward another financial crisis.
Who would agree to such bleak legislation, and why? Well, it fits with the Republican project of impeding government’s ability to protect the public; out of 276 GOP members of Congress voting on the Crapo bill, 275 voted in favor (Walter Jones, an apostate House member from North Carolina, was the only one to oppose it). A bigger surprise came in how many Democrats were willing to sign on: 16 Senators and 33 House members.
Senate Democrats like Jon Tester (Mont.), Heidi Heitkamp (N.D.) and Joe Donnelly (Ind.) co-authored, co-sponsored and stepped forward as the public faces of the Crapo bill. Because of Senate filibuster rules, the Crapo bill would have died without Senate Democratic support. Why they considered this vital to the nation’s functioning…