DIGNITY OF WORK POLICY
TAKING POWER BACK FROM WALL STREET
Our financial system is controlled by a small number of very large banks that don’t serve the real economy – instead, they redirect the wealth created by workers to CEO bonuses. There is no dignity in work when many Americans can’t afford a $400 emergency expense, but Wall Street pay is rising. We should break up the power large banks have over our financial system and reward investments in communities and jobs, rather than risky Wall Street speculation.
We should take power back from Wall Street by:
- Breaking up the biggest banks;
- Rewriting the rules on how banks fund their activities;
- Banning forced arbitration clauses that prevent consumers from having their day in court when financial companies defraud them;
- Giving workers an alternative to predatory payday lending by allowing them to tap into their Earned
- Income Tax Credit early; and
- Blocking Republican efforts to roll back safeguards we put in place after the 2008 financial crisis.
In 2008, after decades of financial deregulation, this country experienced the worst financial crisis since the Great Depression. Millions lost their jobs and their homes and their retirement savings. More than a third of workers across the country were unemployed for 27 weeks or more. According to the Federal Reserve Bank of San Francisco, the financial crisis cost the average American $70,000 in lifetime income.
And the crisis further exacerbated wealth and income inequality by destroying almost half the wealth in Black and Latino communities. Banks which had previously denied services to communities of color began to flood them with toxic loans that ultimately stole the wealth many workers had built through their homes.
Following the crisis, we passed the Dodd-Frank financial reform bill, created the Consumer Financial Protection Bureau (CFPB), put limits on derivatives, and forced the Fed to pay attention to risks at the biggest banks.
But only 10 years later, Washington has collective amnesia. Republicans in Congress continue rolling back the reforms we put in place to protect consumers, taxpayers, and our economy from experiencing another crisis. And the Trump Administration has systematically attacked the Consumer Financial Protection Bureau.
Our first job is to stop the roll-back of Dodd-Frank and boost the Consumer Bureau so it can continue the job of protecting consumers.
But that’s not enough. We must also break up the biggest banks by limiting their size and their activities, so no bank has unfair leverage over the marketplace, its regulators, or even over Congress. No bank should be so large or complex that its bad decisions could put the entire economy at risk.
We also need to rewrite the rules for how banks fund their activities and stop them from relying on dangerous levels of debt. This would not only protect our economy, but also ensure that banks invest in long-term success and real economic growth, rather than short term profits followed by catastrophe. Currently, the banking sector takes about 25 percent of all corporate profits, but creates only 4 percent of the jobs. The banking system should be a vehicle for growing jobs and communities, not enriching CEOs and big investment firms at everyone else’s expense.
Consumers must also be allowed to band together and take on financial companies that defraud and abuse them. Banning so-called “forced arbitration clauses” will ensure that consumers have the right to their day in court and give workers the power to protect their paychecks from financial scammers and fraudsters.
And we must do more to protect consumers from predatory payday lenders that trap them in a cycle of debt. In addition to putting tougher rules on payday lenders themselves, we can give workers an alternative to payday lending by allowing them to claim a one-time, $500 advance on their Earned Income Tax Credit for the following taxable year. This would allow workers to deal with financial emergencies like a car repair without paying abusive fees or triple-digit interest rates.
For work to have dignity, we must ensure that the hard work of millions of families cannot be destroyed by abuses in the financial sector and the recklessness of a few powerful banks.