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04.08.19

IFPTE Endorses the Return to Prudent Banking Act of 2019

IFPTE applauds the legislation, which is authored by Ohio Representative, Marcy Kaptur and would reinstate Glass-Steagall Act protections, as, “a huge step in the right direction in protecting working families from an unregulated Wall Street.”

Read the full letter below.

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April 9, 2019

Hon. Marcy Kaptur
U.S. House of Representatives
2186 Rayburn House Office Building
Washington, DC 20515

Dear Representative Kaptur:

On behalf of the tens of thousands of members represented by the International Federation of Professional and Technical Engineers (IFPTE), we are writing to endorse The Return to Prudent Banking Act of 2019. This much-needed legislation will provide concrete protections to American families by reinstating the Glass-Steagall Act.

Amazingly, the very banking industry that nearly took our economy into a full-blown depression during the 2008 financial crisis is back to doing business again with very little oversight. As a reward for causing our national economy to spiral from within a step of an actual depression, which lead to millions of Americans losing their jobs and homes, Congress handed Wall Street a taxpayer-funded bailout in the amount of $700 billion. Fast forward to today – over ten years later - it is back to business as usual for the Wall Street bankers. In fact, the banks continue to work toward a complete dismantling of the oversight reforms called for by the 2010 Dodd/Frank banking reform law.

IFPTE continues to hold out hope that lawmakers of all political stripes will eventually see the light and do what Congress did in 1933 by passing the Glass-Steagall Act. Known at the time as The Federal Banking Act of 1933, this law regulated private sector mortgage lending by separating commercial banking from investment and speculative banking. Glass-Steagall was the law of the land until 1998 when Congress essentially eliminated these prudent mortgage lending practices by passing the Leach-Bliley bill. That legislation lifted the Glass-Steagall requirement that commercial banks and investment banks remain separate, allowing banks to expand into other ventures, including speculation and insurance. It created a ripe environment for what led to the housing bubble, its eventual collapse, the so-called ‘Great Recession’, and the suffering of tens of millions of workers who lost their jobs and their homes. Banks that were “too big to fail” not only failed, but took down middle-class working families in the process. To add the ultimate insult to injury, the very taxpayers that lost their jobs, homes and in some cases their lives, were made to bail out the same banking industry that brought our economy to its knees.

Unfortunately, our recent past Congress, and the current Administration, have made it clear that they want to fully repeal Dodd/Frank and just ‘hope’ that Wall Street will not once again seek our economy. While the 2010 Dodd/Frank law was not perfect, it has at least limited laissez faire mortgage practices by banks. Practices such as allowing financial institutions to take bank assets – i.e. the monies of their depositors – to use toward risky investments such as purchases of commercial real estate and owning companies, were curtailed (although some have found ways around that). These shady dealings were the cause of Wall Street titans like Goldman Sachs and Morgan Stanley, for example, to write off billions in commercial real estate losses during the Great Recession. It is practices like these, as well as the bundling of high-risk mortgages that caused millions of subprime mortgages to go belly up, that the 2010 law was intended to rein in. Unfortunately, from the day it was passed it has been under attack.

It is clear to IFPTE that much bolder action is required, which is why we applaud you for sponsoring this legislation. We believe that your bill is a huge step in the right direction in protecting working families from an unregulated Wall Street.

Should you have any questions please feel free to contact either of us, or IFPTE legislative representative, Faraz Khan, at (202) 239-4880.

Sincerely,

Paul Shearon,
President

Matthew Biggs,
Secretary-Treasurer/Legislative Director

Cc: U.S. House of Representatives

Download the letter

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