Ten years ago this month, the investment bank Lehman Brothers collapsed, paving the way for the worst economic crisis since the Great Depression. Too many Ohioans lost their savings and lost their homes.
In the first half of 2007, my zip code in Cleveland, 44105, had more foreclosures than anywhere in the country. And behind every one of those foreclosures, Ohio families were having painful conversations around kitchen tables about their limited options.
I talked with Bill Faith last week, who as Executive Director of the Coalition on Homelessness and Housing in Ohio saw firsthand the damage the housing crisis wreaked across Ohio, and who knows how so many families still haven’t recovered.
We have all heard the headline numbers of jobs lost and stock market drops. But there were also consequences many don’t often think about, that we’re still feeling today.
Right now, the retirement of more than 1.3 million truck drivers, miners, and others is at risk, because of the massive hit that pension funds took during the crisis. That includes more than 60,000 Ohioans. Before the crisis caused by Wall Street, the mineworkers’ pension plan was 90 percent funded. Now, it’s at risk of failing.
To make sure Main Street never again has to bail out Wall Street, we put in place safeguards to prevent banks from becoming too big to fail, like stress tests and capital requirements and limits on risky transactions. We created the Consumer Financial Protection Bureau as an independent watchdog, looking out for Americans scammed by big banks and shady lenders. Those reforms have largely worked. Banks were reined in from their riskiest behavior.
But this administration and the GOP leadership in Congress have been rolling back the rules and passing giveaways to Wall Street.
In July, the Federal Reserve let Morgan Stanley and Goldman Sachs haggle over their stress test results, and allowed the seven largest banks to plow $96 billion into dividends and buybacks to line CEOs’ pockets, rather than workers’ paychecks.
They’re also trying to roll back rules to prevent big banks from taking big risks with hardworking families’ savings accounts. And they’re weakening the Community Reinvestment Act—a law that ensures that low- and- moderate income communities have access to credit.
Meanwhile, Mick Mulvaney has been dismantling the Consumer Financial Protection Bureau from the inside. He cancelled enforcement actions against payday lenders, and abandoned examinations that protect servicemembers and their families from shady financial institutions.
Congress has spent its time handing out tax breaks to the biggest banks, denying Americans their day in court when they’re defrauded by companies like Wells Fargo and Equifax, and passing legislation to water down the Wall Street Reform rules, putting taxpayers at risk of another bailout.
Congress’s banking bill should have been focused on consumer protections, not Wall Street handouts. Many of us had ideas – I’ve put forward bills to rein in exorbitant scam overdraft fees, give Ohioans control over the personal information that credit bureaus like Equifax collect, and protect student loan borrowers.
It comes down to whose side you’re on.
Truly learning the lessons of the economic crisis means standing on the side of American workers – whether it’s on affordable housing or consumer protections, pensions, or protecting taxpayers from bailouts – not Wall Street.