Americans haven't forgotten the financial crisis — or who caused it

Americans haven't forgotten the financial crisis — or who caused it
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As the country marks the 10th anniversary of the Lehman Brothers failure and the beginning of the worst financial crisis since the Great Depression, new polling commissioned by Better Markets, conducted by The Harris Poll, shows the American people are strongly opposed to the recent rollback of bank regulations. 

In May, President TrumpDonald John TrumpTrump: I hope voters pay attention to Dem tactics amid Kavanaugh fight South Korea leader: North Korea agrees to take steps toward denuclearization Graham calls handling of Kavanaugh allegations 'a drive-by shooting' MORE signed legislation weakening key aspects of the financial rules that were passed in 2010 to prevent another crash. At the time, backers of the legislation cast it as a way to remove burdens from smaller banks.

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But in reality, the bill weakened consumer protection rules that were placed on some of the largest banks in America. Specifically, these changes included raising the threshold for critical financial protections (like annual stress tests) on banks with at least $50 billion in assets up to those with at least $250 billion in assets.

Unless you’re a Wall Street lobbyist, $50 billion almost certainly isn’t your definition of small. In total, the May legislation weakened the rules on 26 of the 40 largest banks in the country.

The new survey’s findings showed clearly that American voters reject this approach to financial regulation and oppose efforts to roll back the rules put in place after the crisis.

In fact, a majority of registered voters (58 percent) want either a return to the regulations the country put in place following the 2008 financial crisis (29 percent) or additional regulation of banks with at least $50 billion in assets (29 percent).

Those who will “definitely” vote in 2018 are far more likely to reject Washington’s recent financial deregulation efforts (66 percent). 

In a time unfortunately marked by bitter partisanship, this broad support for regulation of the biggest banks transcends party lines. Majorities of Democrats (70 percent) and independents (53 percent), as well as nearly half of Republicans (49 percent), would have preferred to leave Dodd-Frank untouched or see greater regulation of the biggest banks.

Among Republicans, a remarkably small number, only three out of 10, expressed support for weakening the rules on these financial giants capable of bringing the economy down. 

This major disparity between the views of American voters and their elected officials in Washington is especially jarring when politicians, regulators and policymakers are debating pursuing even more deregulation of the biggest banks.

In recent weeks, members of the Senate and House have written letters to federal regulators asking that they weaken the rules even further, and rules weakening capital requirements and the Volcker Rule ban on proprietary trading are under active consideration

With the midterm elections fast approaching, public opinion is crystal clear. Voters across party lines want candidates to explain their position on financial reform.

A full two-thirds of voters say they would be “more likely to vote for a candidate who supports regulating Wall Street and big banks, when he/she talks about the economy,” including strong majorities of Democratic, Republican and independent voters. 

Critically, 56 percent of all registered voters, including a majority of Democrats, Republicans and independents, believe that weakening regulations on the same banks that got bailouts “endangers my job, savings, and retirement.” 

That makes sense when you remember that in 2016, then-candidate Trump campaigned on getting tough on Wall street, spending a significant portion of his “closing ad” attacking Wall Street and Goldman Sachs in particular. 

Interestingly enough, this flip on a key policy directly relates to a third key finding in this survey: Voters see the rollback of financial crisis rules as part of the corruption in Washington.

Most voters agree these rollbacks are a “great example” of the corruption in Washington — especially among Democrats, independents and “definite” 2018 voters. Democrats are closely aligned with independents (75 percent and 72 percent agree, respectively), and a large majority of Republicans (60 percent) agree as well.

It’s clear the American people have not forgotten the economic pain and suffering inflicted on them just 10 years ago by Wall Street’s biggest banks.

They want to keep them on a tight leash and outright reject the deregulation effort that’s currently prevailing in Washington that will once again wreck the economy with risky and reckless behavior.

The American people are right that weakening the financial protection rules put in place just a few years ago on the country’s biggest banks is evidence of how powerful interests have corrupted Washington, putting the interests of Wall Street ahead of Main Street.

The 10th anniversary is a good time to reflect on how we got into a financial crisis and what can be done to prevent a future crisis.

Regulators, lawmakers, policymakers and candidates must speak clearly and loudly about financial regulation and take actions to ensure the financial system can withstand a downturn. It’s what the voters clearly want, and it’s what the country clearly needs.

Dennis Kelleher is the president and CEO of Better Markets, a Washington-based organization that promotes the public interest in financial reform, financial markets and the economy.