Easing up on fiscal bullies
The Trump administration admitted this week it is softening some consumer protection laws and easing regulations on financial institutions. Two sentences from a Washington Post article about this approach caught our attention:
1. “The Labor Department has delayed full implementation of a rule requiring financial advisers to act in their clients’ best interest.”
2. “And the Department of Education has withdrawn Obama-era regulations meant to strengthen protections for student borrowers.”
Now, the government instituted many regulations after the Great Recession of 2008 revealed lots of shady practices that were designed to deceive and dupe consumers.
Did the institutions learn their lessons from the debacle in 2008? Here are some pieces of an editorial we wrote in March 2012 — almost four years after the fiscal collapse:
“You read a lot about bullies in this and other publications.
“Generally, someone who has physically injured another person during the commission of a crime will receive a longer sentence and perhaps be obliged to attend anger management courses.
“But what about other kinds of bullies? Specifically, what about ‘fiscal’ bullies, as opposed to ‘physical’ bullies? What kind of corrective training are they subjected to?
“The resignation last week of Goldman Sachs banker Gordon Smith certainly begs the question. In his resignation letter (which ran as an op-ed piece in The New York Times), Smith said he was quitting because, ‘It makes me ill how callously people talk about ripping their clients off.’
“Smith said the bank sells clients financial products they are ‘trying to get rid of.’
“Mind you, this is the same company that paid a $550 million settlement in 2010. A Christian Science Monitor story said Goldman was accused of selling clients housing market investments — while the firm itself made hundreds of millions betting against those investments.
“In Smith’s farewell article, he said some Goldman employees still refer to their clients as ‘Muppets.’ That is not a reference to ‘Sesame Street.’ According to The Wall Street Journal, ‘Muppet’ is British slang for ‘idiot.’
“If Smith’s charges are correct, it would seem the $550 million settlement didn’t teach Goldman Sachs very much.”
But, apparently, the current administration thinks it is now time to ease up on the regulations for financial institutions. The president and his gang don’t have much interest in protecting us “Muppets.”
* Editorials reflect the opinion of the publisher.