Democratic Platform Grew More Liberal on Financial Regulation

The Democratic Party’s 2016 platform offers a robust defense of the Consumer Financial Protection Bureau, calls for allowing the U.S. Postal Service to offer basic banking services, and says a financial-transactions tax on Wall Street would help “curb excessive speculation.” The final 55-page draft of the party blueprint also calls for strengthening of regulatory agencies’ enforcement powers to hold Wall Street executives accountable when crimes are committed.

The document, which delegates will vote on at the Democratic National Convention in Philadelphia beginning Monday, showcases a more liberal agenda on financial regulation than did previous versions. In part, the language counters a Republican push to dismantle the CFPB, created under the 2010 Dodd-Frank Act, and to scale back enforcement of financial crimes committed by bankers.

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The platform backs the idea of a financial-transactions tax aimed at curbing “excessive speculation and high-frequency trading, which has threatened financial markets.” It says banks “should not be able to gamble with taxpayers’ deposits or pose an undue risk to Main Street,” and calls for an updated version of the now-defunct Glass-Steagall Act, which separated commercial and investment banking. That notion was also embraced by the GOP platform.

To address the problems that some middle- and lower-income Americans have in obtaining affordable financial services, the Democratic platform calls for “empowering” the Postal Service to offer basic banking, such as cashing paychecks, an idea championed by Sen. Warren and labor unions.

Proponents of getting the Postal Service more involved with financial services say it could help solve two persistent problems by expanding scarce banking services to the “underbanked” while helping to bolster the Postal Service’s finances. Still, such a step would require congressional approval, and that’s considered unlikely with GOP control of Congress.

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http://www.wsj.com/articles/democratic-platform-grew-more-liberal-on-financial-regulation-1469209399