The movie based on the extremely popular book Too Big To Fail by Andrew Ross Sorkin is coming out soon, and there was recently a screening in New York that was attended by our current Treasury Secretary, Tim Geithner. After the screening Geithner told the crowd that attended something that no one wanted to hear, he predicted another big crisis will be coming.
“It will come again. There will be another storm, but it’s not going to come for a while. I’m certain we will” experience another catastrophe. He just couldn’t say when or what kind. “You will not know” when, which he is how he answered Sorkin when he tried to pin Geithner down. “It’s not going to be possible for people to capture risk with perfect foresight and knowledge.”
Keep in mind this is at a time when Republicans are trying to remove a lot of the oversight regulations that were instituted after the 2008 Wall Street crash. They are also opposing appointment of Elizabeth Warren to the Consumer Financial Protection Bureau, which was created to protect consumers, and are trying to weaken its regulatory power in order to protect corporations.
A GOP bill that was proposed aimed to make it easier for the Financial Stability Oversight Commission to overrule decisions that the CFPB might make in favor of consumers. It would require a simple majority vote by FSOC, instead of a two-thirds majority.
Republicans argued that the changes the bill would produce would make the consumers’ bureau more transparent and accountable, and protect more small banks. Democrats contended that the revisions would only weaken the CFPB, and give financial institutions a stronger say.
To prove Democrats’ point, Maloney offered another amendment that would have defined the “safety and soundness” mentioned in the proposal to exclude profits. Her point was that consumer-friendly decisions generally come at the expense of profits, and — if profitably is a standard — there would be a ready rationale to overturn almost any CFPB rule or finding.
“I am not saying that a financial institution should not be able to make a profit,” Maloney said in the hearing. “I am simply saying that, if you are going to put an extraordinary check on the CFPB’s ability to protect consumers, then a financial institution’s profitability should not come at the expense of consumers.”