The Democratic platform position on financial regulation begins with an endorsement of Dodd-Frank. The Democrats state that they will “vigorously implement, enforce and build on the landmark Dodd-Frank financial reform law” while “stop[ping] dead in its tracks every Republican effort to weaken it.” When addressing the financial industry, a term used interchangeably with “Wall Street,” the Democrats aver that it is marked by “greed and recklessness” and that it is “gambling trillions” for the benefit of a “handful of billionaires.” To combat this, the Democrats would “support stronger criminal laws and civil penalties for Wall Street criminals who prey on the public trust” and would support “extending the statute of limitations” to prosecute such people.
The Democrats propose to:
- support the Department of Labor’s new fiduciary rules;
- “oppose any efforts to change the CFPB’s structure from a single director to a partisan, gridlocked Commission” and “oppose any efforts to remove the [CFPB’s] independent funding and subject it to the appropriations process”;
- “nominate and appoint regulators and officials who are not beholden to the industries they regulate”;
- “crack down on the revolving door [sic] between the private sector . . . and the federal government,” and “ban golden parachutes” [payable to those leaving private industry to work in government];
- “limit conflicts of interests by requiring bank and corporate regulators to recuse themselves from official work on particular matters that would directly benefit their former employers”;
- “bar financial service regulators from lobbying their former colleagues for at least two years”;
- adopt an “updated and modernized version of Glass-Steagall”
- impose a “financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading,” although the platform does “acknowledge that there is room within our party for a diversity of views on a broader financial transactions tax”; and
- “defend the Federal Reserve’s independence,” but also “reform the Federal Reserve so that it is more representative of America as a whole, and . . . fight to make sure that executives at financial institutions are not allowed to serve on the boards of regional Federal Reserve banks or select its members.”
The Democratic Party emphasized its determination:
Democrats will not hesitate to use and expand existing authorities as well as empower regulators to downsize or break apart financial institutions when necessary to protect the public and safeguard financial stability, including new authorities to go after risky shadow-banking activities.
The Democratic platform envisions not only a continuing expansion of financial regulation, but also seems to promote the idea that government should play a very major role as a direct provider of financial services.
As a provider of financial services, the federal government would:
- expand the powers of the Postal Service so that it may offer “basic financial services such as paycheck cashing”; and later, the platform again emphasizes that the Democrats “believe that we need to [provide additional banking services] by empowering the United States Postal Service to facilitate the delivery of basic banking services”;
- create an “independent, national infrastructure bank that will support critical infrastructure improvements” and “provide loans and other financial assistance for . . . multi-modal infrastructure projects”;
- continue to support the interest tax exemption on municipal bonds . . . to encourage infrastructure investment by state and local governments;
- defend the “Export-Import Bank”;
- “provide direct federal funding for a range of local programs that will put young people to work”;
- “provide targeted funding and support for entrepreneurship and small business growth in underserved communities”;
- “double loan guarantees that support the bio-based economy’s dynamic growth”; and
- expand “federal funding for New Markets Tax Credit, community development financial institutions, and the State Small Business Credit Initiative.”