Rep. Ellison Statement on House Bills to End Protections for Consumers, Economy

Statement

Rep. Keith Ellison (D-MN) released the following statement today after the House of Representatives passed The Swaps Regulatory Improvement Act (H.R. 992) and the Retail Investor Protection Act (H.R. 2374), which put America's consumers at risk:

"The House of Representatives passed two bills this week, H.R. 992 and HR. 2374, which end common-sense protections for consumers. I voted against both bills.

"We know what caused the financial crisis: some on Wall Street decided that increasing profits was more important than protecting consumers and investors. If we want to prevent the next Great Recession, we need reforms and rules that put working people ahead of balance sheets. The Dodd-Frank Wall Street Reform and Consumer Protection Actprotects consumers and the economy from financial firms gambling with the complicated and opaque financial products that caused the financial crisis. The Department of Labor is currently writing a rule to ensure that financial experts who offer high-cost and poorly understood products don't hurt consumers.

"H.R. 992 repeals the part of Dodd-Frank that requires financial institutions to use their own funds when investing in swaps and derivatives, rather than using bank deposits insured by the Federal Deposit Insurance Corporation (FDIC). Taxpayers should not provide a safety net for banks that want to invest in the same kind of risky products that gave us the Great Recession. Most Democrats opposed this bill for that reason.

"H.R. 2374 delays the Department of Labor's rule that would ensure that financial advisors put the client's interest first when providing financial advice to Individual Retirement Account (IRA) investors. Current practice allows salespeople to recommend investing in retirement products that bring the salesperson a commission. But the salesperson doesn't have to tell the customer that they get the commission, and there is no incentive for the advisor to show the customer other products. Many customers do not realize that high fees in retirement products can strip one-third to one-half of their potential wealth. By stopping the Department of Labor rulemaking process prematurely, investors are left at the mercy of complex and impenatrable financial products sold to them by people who may be more focused on their own income than consumers' long-term interest.

"We can't predict every crisis, but there are some we can prevent. The bills passed this week by the House of Representatives put consumers and our economy at risk once again. Let's not relive the nightmare of 2008. Let's enforce common-sense protections for consumers."

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