January 23, 2019
On January 16th, Rep. Maxine Waters (D–CA), the new chair of the House Financial Services Committee, laid out an extensive agenda in a speech at the Center for American Progress. Greeted by a crowded room of supporters, press, and curious activists, Waters was received warmly as she took her place behind the podium. Before delving into her agenda, Waters offered consolation to the several hundred thousand federal workers currently working without pay or placed on unpaid leave due to the longest government shutdown in US history. Her comforting words fell short of veiling her skepticism toward Trump and his administration, which seemed to echo the emotions and fuel the eagerness for accountability of everyone under her voice.
Her top priorities include an increase in oversight and accountability, strengthening consumer protection, and eliminating discrimination within the financial sector. Urging vigorous oversight of Trump administration overreach, Waters stressed that this would be a new day in Congress for the Financial Services Committee and a day of reckoning for bad actors both within the administration and the private sector.
Her message of accountability highlighted these key issues:
Consumer Financial Protection and Mulvaney’s Legacy
Congress placed the Consumer Financial Protection Bureau (CFPB) at the helm of protecting consumers from predation by bankers. The CFPB’s job is to create and enforce appropriate regulations against financial firm misbehavior. Unfortunately, the Trump administration has been intent on undermining the legal role of the CFPB. Trump appointed Mick Mulvaney, already director of the Office of Management and Budget (OMB), as the long-term Acting Director of the CFPB. Despite holding two jobs, Mulvaney managed to undermine the CFPB quite a lot during his stint. Mulvaney eliminated the Bureau’s Office of Students and Young Consumers, leaving millions of student borrowers defenseless against predatory lending practices. Additionally, Mulvaney fired the CFPB advisory council which works with consumer groups to pinpoint discriminatory and unfair practices that consumers face.
Both actions come at the expense of millions of consumers. Waters expressed regret over the irrefutable damage to CFPB under Mulvaney and vowed that the committee will investigate his actions even as he has been replaced by Kathy Kraninger. Waters’ committee will also be holding additional future oversight hearings on proper regulation. Additionally, the committee will be considering her Consumers First Act bill originally introduced in 2018 to reverse several Mulvaney actions.
Financial Regulation Oversight
Waters continually emphasized the importance of congressional oversight and the merit in holding bad actors accountable, two themes the Revolving Door Project has been highlighting. Notably, she referenced the events leading to the 2008 financial crisis and the lack of strong oversight of Wall Street banks that made the economic collapse possible. In spite of post-crisis regulation through the passage of Dodd–Frank, financial regulators under Trump are seeking to weaken reforms. Additionally, Trump’s regulators appear to be paving the way for emerging markets like financial technology firms (or “fintech”) to pursue unfair financial practices such as payday lending.
The committee will be keeping a close eye on financial regulators and fintech firms to avoid discrimination, abusive payday lending, and the displacement of credit unions and community banks. Waters was adamant that the way to protect consumers, investors, and the economy from big banks was by implementing vital financial regulation.
Housing
The House Financial Services Committee also plans to address and work toward eliminating the housing affordability and homelessness crisis. With over 500,000 people homeless in the United States, ensuring safe, decent, and affordable housing while tackling the homelessness crisis is a top priority. Such large tasks will require Congress as a whole to assist the committee by dedicating much-needed resources to both issues. Regarding housing, Waters advocated that future housing finance reform needs to encompass broader access to affordable mortgage credit and affordable rental housing. Other core principles in housing finance reform that the committee will pursue include ensuring sufficient private capital to protect taxpayers, requiring transparency and standardization, and maintaining access to 30-year fixed mortgages.
To undertake both housing affordability and homelessness, Waters plans to reintroduce two bills, the Restoring Fair Housing Protections Act and the Ending Homelessness Act to strengthen fair housing laws and ensure that they are strictly enforced.
Diversity and Inclusion
As the first black person and the first woman to lead the House Financial Services Committee, Waters understands the importance of representation and diversity. Citing the Government Accountability Office, from 2007–15 ”representation of African Americans at various management levels decreased” in the financial services industry while “representation of women was generally unchanged during this period.”
Those troubling trends are why Waters announced a subcommittee on diversity and inclusion to address this problem — the first of its kind. The subcommittee will examine issues that fall under the committee’s jurisdiction and strive to promote “better workforce and supplier diversity.”
The agenda of the House Financial Services Committee is a bold and necessary first step in holding the Trump administration accountable, protecting consumers from abuse by Wall Street and other financial entities, and safeguarding economic fairness.
