Top House lawmakers question proposed waiver for Credit Suisse

Three House Democrats are urging the Labor Department to reconsider its proposed waiver of sanctions on Credit Suisse following its guilty plea over tax evasion charges.

Reps. Maxine WatersMaxine Moore WatersMaxine Waters cuts off Jim Jordan, Fauci sparring at hearing: 'Shut your mouth' Big bank CEOS to testify before Congress in May Maxine Waters: 'Hard to believe' officer meant to use Taser on Daunte Wright MORE (Calif.), ranking member of the Financial Services Committee, George MillerGeorge MillerChicago hospital exec resigns after improper Trump Tower vaccine distribution Three ways James Kvaal can lead postsecondary education forward Keep the Capitol secure but open MORE (Calif.), ranking member of the Education and the Workforce Committee and Stephen LynchStephen Francis LynchUS wasted billions of dollars in Afghanistan: watchdog House Oversight requests Secret Service briefing on threats of extremist violence in wake of Capitol riot The Hill's Morning Report - Presented by Facebook - Republicans squeeze Biden with 0 billion COVID-19 relief alternative MORE (Mass.) called for a “thorough and thoughtful review” and a public hearing on Credit Suisse’s waiver application.


“The American public has grown increasingly frustrated about the lack of accountability in our financial system, both with regard to conduct contributing to the financial crisis and to scandals that have occurred since then," they wrote Friday in a letter to Labor Secretary Thomas PerezThomas PerezClinton’s top five vice presidential picks Government social programs: Triumph of hope over evidence Labor’s 'wasteful spending and mismanagement” at Workers’ Comp MORE.

They argued that sanctions were imposed because of Credit Suisse's "imminent criminal conviction for its decades-long role in assisting thousands of U.S. taxpayers in filing false income tax returns."

Under existing law, a criminal misconduct provision automatically disqualifies institutions from claiming the status of qualified professional asset manager, which would prohibit Credit Suisse from providing certain asset management services to pension funds.

“As you know, this bad actor provision in the law is designed to promote integrity at our nation’s financial institutions engaging in the serious business of advising millions of Americans investing for retirement," the lawmakers wrote.

"The beneficial status of qualified professional asset manager should be reserved for institutions that have shown a commitment to maintaining a high standard of integrity via compliance with the law."  

The lawmakers said they are concerned that Labor is “reflexively granting waivers,” and saying it is something that “may enshrine a policy of too big to bar.”

They expressed concern that the process to grant waivers is “not sufficiently robust" and that since 1997 the DOL has reportedly granted waivers for all 23 firms seeking them.

"When the department simply waives the disqualification provisions on a seemingly automatic basis, it undermines firms’ incentives to obey the law," they wrote.

Since the financial crisis in 2008, the lawmakers say they have seen Libor manipulation, robo-signing of foreclosure documents, tax evasion, and failures in money laundering controls.

"While law enforcement has tallied up record monetary settlements in response to this conduct, we remain concerned that our regulators are not using the full arsenal of tools available to them to protect the public and retirees from bad actors and to ensure that criminal behavior is appropriately deterred," they wrote.

Amid those concerns they argued that the Labor Department must "seriously consider whether granting a waiver in this case is truly warranted."

"The Department must give due regard to the views of pension funds, retirees, taxpayers and the American public and their interest in seeing greater accountability and integrity among our nation’s financial institutions."