House Republicans Put Wall Street Before Puerto Rico, On Financial Services Committee Agenda


An already dire economic situation in Puerto Rico is deteriorating after Hurricane Maria, but the territory isn’t getting any consideration from the House Financial Services Committee.

Twenty-three bills were before the panel on Wednesday, amid a deregulatory frenzy overseen by Chair Jeb Hensarling (R-Texas). Legislation included proposals that would weaken consumer protections and federal oversight of unscrupulous lenders.

Rep. Maxine Waters (D-Calif.), the top Democrat on the committee, criticized the decision to not hold hearings to examine recovery efforts in both Puerto Rico and the US Virgin Islands.

“This committee and every committee in Congress should be gathering ideas about how to address both tragedies,” Waters said.

“I hope we can turn our attention to these matters as well as to return to regular order to better understand the measures that are coming before this committee,” she added.

Congress is already planning to pass $36.5 billion in aid for storm-ravaged parts of the US, including Puerto Rico. But the territory’s financial structure was in tatters before Hurricane Maria.

Facing the possibility of default on some of its $72 billion in public debt, Congress passed a law last year imposing an unelected-technocracy and austerity regime on Puerto Rico. The legislation was part of deal that gave the territory more leeway to restructure existing debt.

Unlike their counterparts in states, government entities in Puerto Rico can’t declare bankruptcy. President Reagan signed a law in 1984 specifically exempting the territory from the bankruptcy code.

The legislation passed last year—and signed into law by President Obama–also forbids the Puerto Rican government from borrowing more money in private markets.

The limits led the White House to call on Congress to loan Puerto Rico $4.9 billion to ensure the territory’s government is solvent in the coming months. Tax revenue has dried up in the three weeks since Hurricane Maria, leaving the territory with an unexpected cash crunch.

Republican leaders agreed to include the request in the $36.5 billion aid package to be considered this week.

While the House Financial Services Committee didn’t schedule any discussion of Puerto Rican debt on Wednesday, it did find time to consider what a public interest advocate decried as “darts ripping holes in important consumer protections.”

“One piece of legislation reduces interest rate protections for purchasers of mobile homes,” said Public Citizen financial industry expert Barlett Naylor. “Another eliminates the recent US Department of Labor rule that requires Wall Street advisers to put their customers’ interests first, instead of steering the investor to products that pay higher fees.”

Another bill that is being considered Wednesday would prevent federal regulators from stopping a bank from doing business with certain customers, codifying into law the reversal of “Operation Choke Point”–an Obama-era crackdown on fraud and predatory lending.

Another piece of legislation before the committee: a proposal to increase the threshold for supervision by the Consumer Financial Protection Bureau—to $50 billion from $10 billion in assets. If signed into law, the legislation would see 77 banks exempt from the scrutiny of CFPB examiners.

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Since 2010, Sam Knight's work has appeared in Truthout, Washington Monthly, Salon, Mondoweiss, Alternet, In These Times, The Reykjavik Grapevine and The Nation. In 2012, he worked as a producer for The Alyona Show on RT. He has written extensively about political movements that emerged in Iceland after the 2008 financial collapse, and is currently working on a book about the subject.


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