Duffy Loosens Reins on Wall Street While Inflating Financial Reform's Effect on Small Local Bankers, Credit Unions

Oct 30, 2011

Wausau – As the House Financial Services Committee arrives in Wausau, Rep. Sean Duffy continues to inaccurately inflate the effect of the Dodd-Frank financial reforms on small banks and credit unions. At the same time, his trademark bill in Congress would loosen the reins on Wall Street once again.

Duffy’s inaccurate claims appeared most recently in an October 25 interview with WQOW Channel 18 (Eau Claire) and his own October 27 press release. The WQOW interview included Duffy saying, “We’ve worked on bank regulation to make sure that our smaller community banks and credit unions in Wisconsin aren’t being treated like the Wall Street banks who caused this economic crisis. But right now they are, and they had nothing to do with it…”

Duffy is right that small banks and credit unions had nothing to do with our financial troubles, but wrong about them being treated like Wall Street under financial reform. According to a “Myths vs. Facts” document released by the House Financial Services Committee when the bill was passed under a Democratic majority, banks and credit unions with less than $10 billion in assets will continue to be regulated by the same agencies as always.

Politifact has also rated as “mostly false” a similar Duffy statement from July claiming that small banks and credit unions would have to spend 2.2 million hours complying with Dodd-Frank. Politifact’s analysis is long, but their ultimate conclusion is: “But some of the rules appear to have little to do with Main Street lenders.” Politifact further points out that the hours required to comply with Dodd-Frank would mostly be spent on so-called “swaps,” which small banks are mostly not involved in.

Ironically, while claiming to worry about smaller banks and credit unions, earlier this year Duffy authored a high-profile bill to severely weaken the popular new Consumer Financial Protection Bureau (CFPB) that is meant to protect consumers from Wall Street abuses. Two weeks after he introduced this major legislation, however, Duffy admitted in an Appleton Post-Crescent article that he still needed to get “up to speed” on banking issues.

“Sean Duffy has been focused squarely on loosening the reins on Wall Street — it’s written in black and white, and yet when he comes home he tells us that he’s only trying to protect our small local community banks and credit unions,” said Jeff Johnson, Chair of the Marathon County Democrats. “What that tells me is that he either doesn’t understand what he’s voting on, or he’s deliberately voting to protect Wall Street while trying to dupe us here at home. What Duffy ought to be doing is cracking down on Wall Street and its CEOs that keep giving themselves bonuses for failing.”

The House Financial Services Committee is holding a field hearing in Wausau this morning.