UPDATE: The House votes on Citigroup’s bill TODAY! Call (202) 224-3121 now, ask for your Rep by name, and tell them to vote NO on HR 992! Then tweet this out and share it on Facebook.“Citigroup got half a trillion bucks in government help – now Congress lets them write our laws?”
HUH? Wall Street megabank Citigroup received $467.2 Billion dollars worth of bailout money during the financial crash – and now Congress is literally letting them write our financial laws. 1
HOW? Citigroup lobbyists wrote 70 out of the 85 lines of The Swaps Regulatory Improvement Act (HR 992), which would gut a crucial part of the Dodd-Frank law meant to protect taxpayers from future bailouts – and now they’re urging both parties to sign their bill as one of their first post-shutdown actions.2
WHY? HR 992 would let Big Banks hold almost all their risky derivatives inside of the part of the bank with FDIC insurance – which makes business cheaper for the banks, but keeps us on the hook for bailing them out if things go south.3
This bill passed two Committees with bipartisan support, and is due to be voted on in the House of Representatives on October 30th. When this bill bill passed the House Agriculture Committee, Democratic Representative Collin Peterson warned his colleagues: “You’re putting taxpayers on the hook…You can vote any way you want, but this could come back and haunt you.”4
We’re tired and outraged that after all their crimes, Citigroup STILL holds sway in Congress. We are calling on BOTH the Democratic Whip Steny Hoyer AND the Republican Whip Kevin McCarthy to whip AGAINST HR 992. We want to let them know that we are watching, and we know that a vote for HR 992 is a vote to help Citigroup at the expense of We, The People.
Are you the kind of total nerd who, like us, who wants more details and sources? Read on!
It’s cheaper for banks to borrow money out of the “insured depository” — the part of the bank with FDIC insurance — because it has a higher credit rating.5 It has a higher credit rating, because Credit Ratings Agencies assume the government would bail that part of the bank out were something to go wrong. But why should we allow the banks to hold risky products in this safe, insured part of the bank, just because it’s cheaper for them? Haven’t we done ENOUGH for the Big Banks?
While Citigroup has lobbied for this bill because they claim it’s too cumbersome and expensive to move their risky derivatives out of the “insured depository,” you should know that Morgan Stanley and Goldman Sachs already hold their derivatives outside the “insured depository,” and are not complaining. It is only Citigroup, the bank that needed the most help, that is complaining. Why should Congress listen to the worst bank on Wall Street, and let the bank that needed to most government money write our laws?
In Congress, the people responsible for rallying votes are called “whips.” We are calling on BOTH the Democratic Whip Steny Hoyer AND the Republican Whip Kevin McCarthy to whip AGAINST HR 992. We want to let them know that we are watching, and we know that a vote for HR 992 is a vote to help Citigroup at the expense of We, The People.
1. New York Magazine, “Citigroup Received More Bailout Money Than Any Other Bank.”
2. The New York Times, “Bank Lobbyists Help in Drafting Financial Bills.”
3. The Other 98%, “Alexis Breaks Down the Citigroup Bill-Writing Scandal.”
4. The Huffington Post, “Wall Street Deregulation Advances As Top Democrat Warns That Vote Could ‘Haunt’ Congress.”