Ocasio-Cortez Is on the Financial Services Committee, and Banks Are Afraid

Rep. Alexandria Ocasio-Cortez’s assignment to the powerful House Financial Services Committee has triggered a fresh round of handwringing, this time with some merit. Banks are afraid of her — and they should be. The addition of Ocasio-Cortez, an outspoken advocate for financial reform, to the committee represents one of the greatest challenges to big banks’ interests since the Wall Street Reform and Consumer Protection Act of 2010. Though she joins other strong voices like Senators Elizabeth Warren and Bernie Sanders, on the committee, Ocasio-Cortez will give a voice to her generation, which came of age in the financial crisis.

Now under the leadership of Rep. Maxine Waters (D-California), the Financial Services Committee is considered one of the House’s most active committees and wields great influence. The committee is described as a “magnet for campaign contributions,” and its members hold tight relationships with the industries they are tasked with overseeing. Public disclosures show that the financial, insurance and real estate sectors spend at least twice as much on campaign contributions to the committee’s members as any other sector. Both Rep. Sinema (D-Arizona) and Gottheimer (D-New Jersey) received over $1 million in contributions from Securities and Investment donors in the last congressional cycle.

By contrast, Ocasio-Cortez will join the committee as an independent, unbought politician. She boasted the largest number of small donors of any 2018 midterm candidate, with nearly 62 percent of her war chest coming from small donations. She’s built her brand and reputation on standing for working-class interests and, along with some other prominent Democratic candidates, has publicly eschewed big donors and corporate money.

Ocasio-Cortez’s fierce commitment to independence may also herald a step toward campaign finance reform. She tweeted earlier this week that she discovered that some members spend as little as five hours per week in their offices, forced instead to spend the majority of their time calling donors and fundraising for re-election. Ocasio-Cortez’s chief of staff said the new Congress member will be able to skip “call time altogether, thanks to her large and dedicated grassroots support. Mere days into her tenure in Congress, Ocasio-Cortez is already creating a new template that others may follow as they craft progressive positions to woo voters in 2020.

As Truthout previously reported, Ocasio-Cortez was speaking out against financial corruption and inequality well before she entered the halls of Congress. In early 2018, while campaigning for the primary, she called out Democrats who supported a massive deregulation bill, the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155). Dubbed the “Bank Lobbyist Act,” this legislation reduced oversight by raising the threshold from $50 billion to $250 billion in assets that triggered automatic monitoring by regulators of financial institutions. It also “functionally exempted 85 percent of US banks and credit unions from fair lending laws in the mortgage market.” It passed in May 2018 with bipartisan support — 16 Democratic senators voted in favor.

Ocasio-Cortez was one of the first to criticize the Democratic Caucus for their support of this bill from within the party. It’s this type of confrontation that has led many to frame her as a renegade freshman Congress member who challenges the views and practices of Democratic incumbents. But she is also posing a significant challenge to the Republican Party, beyond the president: While Trump sucks the air out of the room, the GOP has landed its deepest impacts through mass financial and environmental deregulation and stacking the courts.

Ocasio-Cortez is already channeling her energy into big ideas for the financial sector. Upon hearing the news that she made it onto the finance committee, she already announced she wants to focus on two major proposals — public banking and postal banking. Ocasio-Cortez has also said that she supports the restoration of the Glass-Steagall Act and wants to break up the banks — which are booming at near-record levels 10 years after the financial crisis.

Additionally, she has named student debt as a priority to address. Oversight of student loan servicers was virtually nonexistent under a Republican House majority. Along with Waters, who has long championed students and victims of for-profit colleges, the committee could become a leading force to fight predation in student lending. One place they could start would be to increase scrutiny on the student loan servicing giant Navient, which was sued by the Consumer Financial Protection Bureau in 2017 for illegally cheating borrowers out of their repayment rights.

But Ocasio-Cortez’s ideas aren’t just about ushering in a party of ideas for a progressive future. They’re also a rejection of Clinton/Obama-era politics and, more crucially, a rebuke of the Obama administration’s approach of “look forward and not backward” and “too big to fail”, which exculpated actors in the Bush administration and on Wall Street for the havoc they wreaked.

Many commentators reduce Ocasio-Cortez’s appeal to shallow media savvy. While she has undeniable social media prowess, she’s consistently used her platform to dig into the issues and, more importantly, explain them. Though she is an untested freshman, her new place on the Financial Services Committee offers the public a window into the complex policies that still hold so much sway over our future.