Mike’s plan introduces reforms that increase security, equity, and accessibility in the financial sector and enhances consumer protections
NEW YORK — Today, Democratic presidential candidate Mike Bloomberg released his plan to promote fairness and opportunity in the American economy by reforming Wall Street, restoring and strengthening key safeguards for consumers, and putting the financial system to work solving America’s most pressing challenges. Mike’s plan reduces the likelihood of taxpayer bailouts and systemic crises. Under Donald Trump, the federal government has gutted consumer protections, with dire consequences for communities of color, veterans and military servicemembers, and elderly Americans. Mike’s plan spreads prosperity to the financially underserved and allows American ingenuity to flourish.
“The financial system isn’t working the way it should for most Americans,” said Mike Bloomberg. “ The stock market is at an all-time high, but almost all of the gains are going to a small number of people, and our economy is still vulnerable to another shock like the 2008 financial crisis that devastated families and communities all over the country. President Obama made important progress strengthening our financial system and protecting consumers – but President Trump has spent the last three years gutting those safeguards, while giving a huge tax cut to the wealthiest people. As president, I will toughen the Volcker rule, protect Americans from predatory and discriminatory practices – and harness the power of the financial system to spread opportunity and drive economic growth in every community.”
Mike’s plan has three key pillars that undo the damage Donald Trump has done, strengthen the economy, and ensure the financial system works for all: 1) reinstate Obama Administration policies to rein in Wall Street and expand them, including toughening the Volcker Rule; 2) restoring consumer protections, including restoring and strengthening the Consumer Financial Protection Bureau (CFPB), established under Senator Elizabeth Warren’s leadership; and 3) driving innovation in the financial system to address the needs of all Americans.
Read more about Mike’s financial reform plan.
The 2008 financial crisis, precipitated by irresponsible banking practices and inadequate regulatory oversight, severely damaged the U.S. economy. Millions of people lost their jobs, homes, and livelihoods. To avoid economic collapse, American taxpayers put up hundreds of billions of dollars to bail out the country’s financial institutions. An estimated $1.4 trillion in annual output may never be recovered – a loss that cost the average American $70,000.
The Obama Administration took major steps to reform the financial sector and introduce key consumer protections, particularly through the passage of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and the 2011 establishment of the Consumer Financial Protection Bureau (CFPB).
But the Trump administration has eviscerated many of those protections, exposing Americans to predatory practices and an unacceptably fragile financial system. As a result of Trump administration rollbacks, payday lenders can trap millions of people in loans that can carry interest rates exceeding 400%. The 42 million Americans who owe $1.5 trillion in student loan debt have little relief, even in the case of bankruptcy. Lenders routinely discriminate against people of color, while 17% of Black Americans and 14% of Hispanic Americans lack a checking or savings account. Meanwhile, the Trump administration’s regulators are dropping their guard amid growing signs of financial excess, and ultra-fast trading is costing investors worldwide an estimated $5 billion a year while exposing them to the threat of “flash crashes.”
Mike’s Plan: Make the Financial System Secure, Equitable, and Accessible for All Americans
1. Strengthen the financial system to ensure that Wall Street’s mistakes never again threaten the livelihoods of millions of Americans.
- Restore and strengthen key measures taken in the wake of the 2008 financial collapse, including increasing the largest banks’ capacity to absorb losses, toughening the Volcker rule, reviving and intensifying stress tests of large financial institutions, reinstating the living wills requirement, and empowering the Financial Stability Oversight Council (FSOC) to address any emergent threats in the financial system – including in areas such as cybersecurity and climate change.
- Improve America’s ability to anticipate and prevent financial crises by restoring funding to the Office of Financial Research, requiring large financial institutions to monitor their risk exposure, and creating a centralized record of all transactions in the markets.
- Deter financial crimes by creating a dedicated corporate crime group at the Department of Justice, enhancing whistleblower protections, and encouraging prosecutors to pursue individuals, not only corporations, for infractions.
- Merge Fannie Mae and Freddie Mac into a single government-owned mortgage guarantor to ensure taxpayers are properly compensated for loan guarantees and low-income households are well-served.
2. Revive measures to protect consumers and ensure the financial system serves all Americans.
- Restore critical consumer protections overturned by the Trump administration – including rules that rein in payday lending, ensuring investment advice prioritizes people’s best interests, and preserving customers’ right to sue financial institutions – and strengthen the Consumer Financial Protection Bureau by ensuring funding and expanding its jurisdiction to include auto lending and credit reporting.
- Ensure that all Americans have equitable access to credit, banking services, and financial opportunity regardless of race, gender, or other characteristics. This would be done by strengthening and enforcing fair-lending laws, collecting relevant data on consumer and business lending, addressing bias in credit-scoring models, providing a selection of safe financial services through the post office, and requiring companies to report on the racial and gender composition of their hiring, pay, and procurement.
- Defend consumers’ rights by eliminating exorbitant overdraft fees, curbing abusive debt-collection practices, and making credit reporting companies more responsible for the personal data they manage.
- Address the country’s overwhelming student debt burden by automatically enrolling borrowers in income-based repayment plans, capping payments at 5% of disposable income, making debts easier to discharge for the most impacted students, eliminating wage garnishment, and reducing fees.
3. Harness the power of the financial system to address America’s most pressing challenges.
- Introduce a tax of 0.1% on all financial transactions to raise revenue needed to address wealth inequality, and support other measures – such as a speed limit on trading – to curb predatory behavior and reduce the risk of destabilizing “flash crashes.”
- Promote healthy competition in financial services by creating a “regulatory sandbox” where startups can test concepts and by providing a clear regulatory framework for cryptocurrencies.
- Encourage better environmental stewardship by requiring companies to report on climate change risks in their regular financial statements.
Mike has long called for more efficient and transparent regulation that lets the financial sector thrive while being held accountable. He also has a strong record of enhancing consumer protections and advancing economic opportunity for every New Yorker.
As Mayor, Mike created the Center for New York City Neighborhoods, which provided $2.3 million in grants to families affected by the 2007-2008 crisis.
As Mayor, Mike took strong steps to protect New Yorkers from unscrupulous lenders. He launched Preserve Assets and Community Equity (PACE), a $1.35 million initiative to protect minority, elderly, and immigrant homeowners from predatory lenders. He also signed three bills into law taking aim at predatory lenders: one protecting homeowners from predatory contractors and two protecting low-income New Yorkers from payday lenders. Finally, he launched the “Know Before You Enroll” campaign to ensure students were fully informed about for-profit schools.
As Mayor, Mike partnered with the CFPB to help other American cities adopt New York’s model approach to consumer protection and financial empowerment.
Mike built a successful financial technology company that now employs some 20,000 people.
As a businessman and philanthropist, Mike has also led efforts to harness the financial system for public benefit: Mike chaired the Task Force on Climate-related Financial Disclosures, which sought to improve corporate reporting on climate-change risks.
While Donald Trump pretends to be a champion for all Americans, his Administration’s actions tell a much different story.
Trump’s key economic advisors include former Wall Street executives and lobbyists who have openly sought to deregulate their old industry and were key players pushing his 2017 tax bill. The corporate rate cut in Trump’s 2017 tax law helped drive bank profits to record levels, even as they cut thousands of jobs.
Trump has rolled back critical protections designed to prevent another 2008-level collapse – in particular, by taking aim at key reforms introduced through Dodd-Frank, encouraging banks to adopt more risky practices, and relaxing investor safeguards.
Trump has done everything he can to undermine and eliminate the Consumer Financial Protection Bureau (CFPB), thereby gutting consumer financial protections – with particularly dire consequences for communities of color, veterans and military servicemembers, and elderly Americans:
- He has rolled back measures like the forced arbitration and fiduciary rules, which preserved consumers’ right to sue financial institutions and required financial advisers to act in the best interests of their clients.
- He has stripped enforcement powers from the CFPB’s Office of Fair Lending and Equal Opportunity, undercutting a key tool to prevent lenders from discriminating against minority borrowers.
- He has reduced oversight of payday lenders and eliminated rules designed to make the industry less predatory.
- CFPB’s publicly-announced enforcement actions have dropped approximately 75 percent in recent years.
Reactions to Mike’s plan from Experts, Elected Officials, and Industry Leaders
U.S. Representative (FL-22) Ted Deutch
“You don’t have to look farther than the number of foreclosures in my district to see the damage done by ill-conceived Wall Street investment practices back in 2008. Something’s not right when regular people pay the price for corporate recklessness, and we need a president who will impose common sense regulation on banks, so that average Americans don’t cede valuable income to shore up businesses that are too big to fail. Mike Bloomberg knows a thing or two about this issue, and I trust him to work with all parties – banks, regulators, lenders and borrowers – to come up with parameters for investing that stand up to stress tests – but still allow room for the innovation and creativity that America is known for.”
U.S. Representative (CA-52) Scott Peters
“Too many servicemembers, veterans, and their families in my district and across the country are struggling to keep their homes and are getting taken advantage of by predatory lenders. Mike Bloomberg will protect all Americans from these harmful practices. He will strengthen the Consumer Financial Protection Bureau and empower it to start scrutinizing auto lending and credit reporting practices. He also will prohibit excessive overdraft fees and end abusive debt-collection practices. Mike isn’t afraid to take on the toughest fights, and I know he’ll get this done when he gets to Washington.”
U.S. Representative (CA-48) Harley Rouda
“We all want to make sure the US continues to be the economic and financial leader of the world, but we shouldn’t ask Americans to bail out companies that gamble with our livelihoods. We did that in 2008, and as someone who took a personal hit in that crisis like so many other Americans, I know we shouldn’t be looking to taxpayers to be a substitute for fiscal responsibility. Mike Bloomberg understands this and his common sense proposals to do things like toughen the Volcker Rule, reinstate the living wills requirement, and give more latitude to Financial Stability Oversight Council sends a strong signal that the federal government is fully committed to economic stability and will no longer tolerate a Wall Street that succeeds at the expense of Main Street Americans.”
Dr. Yxstian Alberto Gutierrez, Mayor of Moreno Valley, CA
“The financial crisis of 2008 took a toll on my community. Housing prices dropped dramatically and many people are still feeling the after-effects of that time. Not to mention that we have many young people buried under a mountain of student loan debt – or victims of for-profit university closures. The bottom line is that we need more balanced federal economic policies that both hold large financial institutions to account – and work to improve the financial portrait of ordinary Americans at the same time. The good news is that it can be done and Mike Bloomberg knows how. I appreciate his call for better oversight of banks and more proactive proposals to use the financial system to help Americans, like the one that ties student loan repayment to income. If we can automatically enroll students in income based repayment plans and cap student debt repayment at 5% of disposable income, as Mike proposes, that would go a long way towards allowing people in my community – and across the U.S. – to breathe a sigh of relief. We need to work on both fronts at once and once Mike gets to Washington, I trust he’ll get it done.”
Janet Hanson, Founder & former CEO, 85 Broads; Founder & former CEO, Milestone Capital; Author, Investor, Trailblazer
“Mike Bloomberg has proposed common-sense reforms that will strengthen our financial system and make it work better for all Americans. I’ve worked in financial services for many years, and I’ve seen what works and what doesn’t. Mike also knows this industry well. He has a smart plan to reinstate and expand on consumer protection policies adopted by President Obama and abandoned by President Trump. We need Mike’s leadership in the White House to safeguard America from another financial collapse and expand economic opportunities throughout the country.”
Cathie Mahon, Chief Executive Officer, Inclusiv
“There’s so much to applaud in Mike Bloomberg’s plan to reform Wall Street and put our financial institutions to work solving problems for Americans. For starters, Mike understands that homeownership is the key to breaking the cycle of poverty and wealth inequality. In communities that have historically lacked access to credit, the ability to work with a local and responsible lender is the main ingredient for success. Mike’s plan to expand lending flexibility for community banks and credit unions will expand opportunity and build the marketplace for strong performing loans in markets that are often ignored or overlooked by large financial institutions. And enabling community financial institutions to increase their mortgage lending will drive out high-cost predatory financial service providers.
“Similarly, Mike’s strong support of the Community Reinvestment Act is also critical at this particular moment. By calling for an expansion of CRA to all lenders, Mike Bloomberg would be responsible for dramatically increasing the availability of capital in communities that need it most. And finally, I’m pleased to hear Mike vigorous defense of the Consumer Financial Protection Bureau, and glad that he will devote time energy to reinvigorating so many of the safeguards that President Trump has tried hard to undermine. We believe that the regulatory clarity provided by a central government bureau has been crucial in protecting consumers from bad actors and to even the playing field for good actors like community banks and credit unions. In short, with Mike in office we can look forward to a financial future that does more good for more people, with much less risk.”
Jonathan Mintz, Founding President and Chief Executive Officer of the national nonprofit Cities for Financial Empowerment Fund; former Commissioner of the New York City Department of Consumer Affairs
“Mike’s ideas for reforming Wall Street and restoring consumer protections are exactly what we need in this country. It’s no surprise. Mike’s been a champion of common sense reforms for more than a decade, and he comes to these issues with a reservoir of experience both as a businessman and as a mayor. And he’s not just looking at the corporate angle, but at how to protect regular families from harmful practices like predatory payday lending and abusive debt collection, that prey especially on Americans with low incomes.
“It’s why I’m pleased to see Mike calling for things like an alternative to high overdraft fees, smart banking access for the unbanked, and better enforcement of fair lending laws, in order to make financial services inclusive and equitable for everyone. Mike’s always been on the side of consumers, and time and again, over the 12 years when I worked in New York City government, and now through the CFE Fund, I’ve seen his innate appreciation for financial inclusion. Mike understands that economic stability is in everyone’s best interests and that we can still have thriving financial institutions even with robust safeguards. Mike’s smart and bold ideas are spot on, and I’m eager for him to carry them all the way to Washington next year.”