WASHINGTON, Jan 20, 2019 (BSS/AFP) – Wall Street is bunkering down for a
wave of intense scrutiny as a group of progressive Democrats, including
social media star Alexandria Ocasio-Cortez, have joined a powerful House of
Representatives committee overseeing banking activities.
“It’s a huge victory,” said Ocasio-Cortez, at 29 the youngest member of
Congress and a self-described socialist — a word that shocks conservatives,
who brandish it as a dire threat.
“I cannot stress how important this moment is. Dems are putting members
who rejected corporate campaign money on a committee overseeing Wall St.,”
she tweeted.
Ocasio-Cortez, often referred to by her initials AOC, will bring public
attention to the ordinarily drab committee via her strong social media
presence that includes 2.5 million followers on Twitter.
Wall Street is trying to figure out the goals of the Democrats, now in
charge of the House of Representatives after eight years of control by
President Donald Trump’s Republicans.
While the Senate remains in Republican hands and ready to block dramatic
changes, Democratic control of the House promises at least to make life
difficult for bankers, with tighter industry oversight and lengthy public
hearings.
The symbolism is already striking.
The panel is headed by Maxine Waters, 80, a regular target of Trump’s
barbs who is the first woman and the first African American to head the
committee.
Waters has warned the financial sector that the days of banking
deregulation and lax oversight are over.
– ‘Wall Street running amok’ –
In her first speech as committee chairwoman on January 16 she said the
2008 financial crisis “was a result of Wall Street running amok, with abusive
institutions peddling toxic products… with no agency responsible for
prioritizing consumer protection.
“Ultimately, the economy was sent tumbling into the abyss,” she said.
“Our fear,” a banking source told AFP, “is that she (Waters) will
reinforce oversight of big banks.”
The source expects to see “more CEO hearings in Congress” with the
Democrats in charge.
Half of the new committee members belong to the Progressive Caucus, the
left wing of the Democratic party.
Several made a splash when they ran for office in the November 2018
election.
They include Ayanna Pressley, the first African American congresswoman
from Massachusetts, and Rashida Tlaib, the first Palestinian American and one
of the two first female Muslim lawmakers in Washington.
– Tighter banking oversight –
The newcomers favor tighter banking oversight, but also promise to fight
for easier access to credit, more industry diversity, and against housing
discrimination.
“I’m looking forward to digging into the student loan crisis, examining
for-profit prisons/ICE detention, and exploring the development of public &
postal banking. To start,” Ocasio-Cortez tweeted.
“Public banking” are two words that send shivers down the spine of Wall
Street.
Nevertheless, “Cortez won’t set the agenda of the committee, Chairwoman
Walters will,” a second banking source said.
“We have a lot of differences with her (Waters) but she’s been in that
committee for 30 years. We know her, she knows us,” the source said. “There
are bipartisan issues we can work on.”
The alliance of progressive Democrats extends into the Senate, where they
can count on support from Elizabeth Warren, who has announced her interest in
running for president in 2020.
Even though she is confined to the opposition, the 69 year-old senator can
make bankers and government officials squirm with tough questions from her
perch on the Senate finance committee.
“With Republicans in control of the Senate, Waters’ best hope for the next
two years is to keep financial issues in the limelight in the hope they
influence the election next year,” wrote FTN analyst Chris Low.
Having Ocasio-Cortez on the committee “will bolster that goal,” he said.