Newly-minted House Financial Services Committee Chairwoman Maxine Waters (D-CA) came out swinging at Wall Street and even regulators in her first policy since picking up the gavel as the first woman and first African American to lead the powerful congressional committee.

The banking “crisis was the result of Wall Street running amok. Large Wall Street banks are not subject to anybody and do great damage to our economy,” said Waters, who made the fiery speech at an American Progress Action Fund event in the nation’s capital.

Waters, who has oversight over all federal financial regulators including the SEC, said she plans to hold many hearings in the 116th Congress. “I will be keeping a watchful eye on all of the financial regulators to make sure that they are carrying out their statutory duties, including holding bad actors accountable, and promoting financial stability,” Waters said.

“As we saw during the 2008 financial crisis, large Wall Street banks that aren’t subject to strong oversight and safeguards to protect our economy can do a lot of damage, and so in Dodd-Frank we put in place robust reforms for our largest and most complex financial institutions, including increased capital, reduced leverage, improved liquidity, vigorous stress testing, and thorough living wills, all designed to improve financial stability,” said Waters, who has been a member of the Financial Services Committee since 1991, and served as Ranking Member or Chairwoman of every Subcommittee under the Committee’s jurisdiction since 1995.

“The Committee will be paying close attention to whether financial regulators try to weaken these important reforms, and keeping an eye on the big banks and their activities, including by holding many hearings,” said Waters, who wants the SEC to create a broker fiduciary standard to better protect consumers.

Undoubtedly, SEC Chairman Jay Clayton will spend time in the hotseat in Chairwoman Water’s hearing room, explaining why the SEC’s “Reg Best Interest” proposal does not create a fiduciary standard for brokers and hybrid investment advisors. Although it is unlikely Waters will be able to force such a rule-making through legislation due to the Republican majority in the Senate, it is highly likely she will hammer the point home and may be able to increase investor safeguards in the proposal.

Waters said she will also be looking into Fintech and credit agencies. “As Americans are banking and accessing credit in new ways, it is important that we encourage responsible innovation with the appropriate safeguards in place to protect consumers and without displacing community banks and credit unions. I have great hopes that fintech firms can open up opportunities for those who have been excluded from access to responsible credit, but I strongly believe that there must be strong protections for consumers of these financial products, and that abusive payday lending practices must not be allowed,” Waters said.

“Credit reporting is another issue I will be scrutinizing. In the wake of the Equifax data breach, it’s absolutely critical for Congress to reform the nation’s credit reporting system. We need to shift the burden of removing mistakes from credit reports onto the credit bureaus and furnishers, and away from consumers. We also need to place limits on credit checks for employment purposes, reduce the time period that negative items stay on credit reports, and make other reforms to fix the serious problems with the credit reporting sector,” Waters said.

Waters said will also focus on housing affordability and plans to introduce $13.2 billion funding bill to prevent homelessness. She also plans to train her attention on the mortgage industry, especially Fannie Mae and Freddie Mac, which are still in guardianship. She now oversees the entities.

“Contrary to Republican claims, Fannie Mae and Freddie Mac did not cause the financial crisis. The Financial Crisis Inquiry Commission and others have made that clear. The financial crisis was driven by predatory lending, the private market packaging those toxic, risky loans into securities and then selling those securities to unsuspecting investors,” added Waters, who said she will be advocating for legislation that:

  • provides stability and liquidity so that we can withstand any future financial crisis;
  • maintains access to the 30-year fixed rate mortgage;
  • ensures sufficient private capital is in place to protect ensuring sufficient private capital is in place to protect taxpayers;
  • ensures a smooth transition to a new finance system;
  • requires transparency and standardization in a way that ensures a level playing field for all financial institutions, especially credit unions and community banks;
  • maintains access for all qualified borrowers that can sustain homeownership and serving homeowners of the future; and
  • ensures access to affordable rental housing.

The long-time critic of President Trump has also promised to keep the heat on the White House, as well his former Consumer Financial Protection Bureau Director and now White House Chief of Staff Mick Mulvaney.

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