Progressives Aim to Push Hillary on Wall Street Reform

Progressives Aim to Push Hillary on Wall Street Reform

Progressives Aim to Push Hillary on Wall Street Reform

Clinton pleased activists with her speech earlier this week, but won’t be backing one key reform.

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Only days before the five-year anniversary of the Dodd-Frank legislation, the country happens to be in the middle of an extremely consequential week for the future of Wall Street reform.

On Monday, Hillary Clinton outlined for the first time her ideas about reforming the financial sector. We know that until further notice the Republican plan is to dismantle Dodd-Frank, neuter the Consumer Financial Protection Bureau, and generally pursue an agenda of extreme deregulation, so Clinton’s idea’s for financial reform are where the real intrigue lies.

Observers were keenly interested to know to what extent Clinton’s campaign has been swayed by not only the policy merits of further reining in the industry that brought down the global economy in 2008, but also the extent to which she had taken the political rise of Elizabeth Warren and Bernie Sanders seriously.

The results heartened many reformers, but also appears to have motivated them to keep pushing Clinton on the issue.

Clinton explicitly said she wanted to go “beyond Dodd-Frank” instead of simply defending what has already been enacted. Moreover, she cited the shadow-banking sector as an area in need of reform: This is the aspect of Wall Street that isn’t exactly banking—hedge funds, high-frequency traders, finance companies—and so isn’t subject to the same tough regulation. This sector is booming at pre–crisis levels, and reformers were pleased that Clinton singled it out.

More surprisingly, Clinton also lamented that not enough individual executives were facing criminal charges for misdeeds in the financial sector, and said, “This is wrong, and on my watch it will change.” This has been a huge complaint among progressives during the Obama era, and here Clinton implicitly endorsed that criticism and promised to do something about it. As Matt Yglesias notes, this is one area where Clinton will be able to act all by herself as president. It’s therefore a serious pledge to make, and one that her advisers were reportedly debating right up until she gave the speech.

All that earned applause from progressive thinkers who have taken Wall Street reform seriously. Joseph Stiglitz said after the speech that it “showed a clear understanding that our economy is no longer working for most Americans, that the rules of the economy matter, and that we need to fundamentally rewrite the rules to ensure our nation and its people can live up to their full potential.”

But that’s not to say Clinton fully appeased the financial-reform community, and already this week, progressives are organizing campaigns to keep pushing her.

At one point during the speech, Clinton said she “will appoint and empower regulators who understand that ‘too big to fail’ is still too big a problem.” On Wednesday, three leading progressive groups—the Progressive Change Campaign Committee, Democracy for America, and Americans for Financial Reform—announced a petition that they hope will keep momentum behind that promise.

The groups listed several key regulatory positions, ranging from the Treasury secretary to the Federal Trade Commission chair, that should be staffed by people who have demonstrated “a strong commitment toward holding Wall Street accountable.” They extended this demand to the staffing of presidential campaigns as well.

This comes on the heels of a push by liberal groups earlier to get Clinton to sign on to a reinstatement of Glass-Steagall, the Depression-era law that separated commercial and investment banking, which was repealed by Clinton’s husband.

A Clinton adviser told reporters Monday that Clinton would not back that idea, which was incidentally just introduced as legislation by Warren and Senator John McCain last week.

Warren, without mentioning Clinton, is already pushing her supporters this week to speak up for Glass-Steagall. And groups like DFA are communicating to reporters that “it’s essential that Sec. Clinton make clear whether she stands with Elizabeth Warren and millions of Americans in the fight for new Glass-Steagall banking reforms or the army of Wall Street lawyers and lobbyists who will stop at nothing to defeat them.”

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