It would be hard to name anything significant that Trey Hollingsworth has done for the people of Indiana’s 9th congressional district in the two years since he arrived and spent more than $3 million of his family’s real estate fortune winning a seat in the House of Representatives. It would also be hard to find a legislator who has used the powers of his office more often to advance Wall Street’s political agenda.
As a member of the influential and lucrative House Financial Services Committee, Rep. Hollingsworth has introduced, cosponsored and/or supported a stream of measures designed to help banks, payday lenders, and other financial companies – and their executives – enrich themselves at the expense of the rest of us. And financial companies and their executives have in turn been major funders of Trey Hollingsworth’s political career.
During the current election cycle, Rep. Hollingsworth has so far collected more than $498,000 in campaign contributions from financial and real estate interests, nearly half his total haul. His 2017-18 backers include New York Life Insurance ($15,000), the Investment Company Institute ($10,000), the Mortgage Bankers Association ($10,000), the Council of Insurance Agents and Brokers ($10,000), Capital One ($10,000), Massachusetts Mutual ($10,000), JPMorgan Chase ($8,500), Bank of America ($8,500), Citigroup ($8,500), Regions Financial ($8,000), the American Land Title Association ($7,500), the Independent Community Bankers Association ($7,000), the American Bankers Association ($7,000), Visa ($6,000), the Independent Insurance Agents and Brokers of America ($6,000), Goldman Sachs ($6,000), PricewaterhouseCoopers ($6,000), Morgan Stanley ($5,500), the Commercial Real Estate Finance Council ($5,000), the National Association of Real Estate Investment Trusts ($5,000), the American Financial Services Association ($5,000), Deloitte LLP ($5,000), Charles Schwab ($5,000), Ally Financial ($5,000), Bank of Montreal ($5,000), the Securities Industry and Financial Market Association ($5,000), the National Association of Mutual Insurance Companies ($5,000), LPL Investment Holdings ($5,000), State Farm Insurance ($4,750), Zurich Financial Services ($4,500), Prudential Financial ($4,500), Bank of New York Mellon ($3,500), Vanguard Group ($3,500), SunTrust Banks ($3,500), and the Consumer Bankers Association ($3,500).
Bills Introduced and Supported
In March 2018, Hollingsworth introduced a bill (HR 4861) giving banks the green light to market 200-300% interest balloon-payment loans that trap consumers and seniors on Social Security in a cycle of unmanageable debt. Hollingsworth has also co-sponsored legislation (HR 3299) to re-legalize the use of “rent-a-bank” schemes by payday, car-title, and installment lenders as a way to dodge state laws limiting the interest they’re allowed to charge.
The payday lending industry has other reasons to be grateful to Rep. Hollingsworth. On more than one occasion (HR 10, HR 1486, etc.), he has voted to curb the power, funding, and political independence of the Consumer Financial Protection Bureau. That’s the new federal agency – created after the 2008-09 financial crisis to bring basic rules of fair play to the world of banking and lending – which last year came out with nationwide rules to remove the worst debt-trap loans from the marketplace. During its first five years, the Consumer Bureau delivered nearly $12 billion in relief to more than 29 million Americans cheated by banks and other financial companies. It could never have done all that under the restrictions sought by Hollingsworth and his allies on the House Financial Services Committee.
In 2017 and 2018, Americans for Financial Reform (a coalition of more than 200 consumer and other public-interest groups) tracked 38 House floor votes and 36 Financial Services Committee votes – 74 votes altogether – on measures that would benefit Wall Street banks and other financial companies at the expense of consumers, investors, workers, taxpayers, or the stability and safety of the financial system as a whole. Trey Hollingsworth voted for 71 of those 74 measures, including proposals to:
- Repeal the “Volcker Rule,” which bars the Wall Street megabanks from playing reckless games with insured deposits and other taxpayer-subsidized funds (HR 10, cosponsored);
- Roll back consumer credit safeguards for mobile (or manufactured) homes, making it easier to steer borrowers into high-cost loans with excessive fees and interest – in an industry that has long been riddled with such abuses (HR 1699, cosponsored);
- Let big banks boost profits by reducing the capital reserves they have to set aside as a safeguard against losses (HR 4296, voted for);
- Allow certain complex and risky mutual funds to take advantage of securities-regulation exemptions designed for more conventional businesses (HR 4279, introduced);
- Impede the ability of federal regulators to monitor large nonbank entities by adding a series of new procedural hurdles to a designation process that already includes ten distinct major steps and many opportunities for appeal and typically takes about two years to complete. (HR 4061, co-sponsored);
- Make it difficult for federal regulators to subject U.S. banks to safety and soundness standards that go beyond the relatively weak standards set by international bodies. (HR 3179, cosponsored)
- Place unprecedented new constraints on the ability of the Federal Reserve to address risks at 26 of the country’s largest banks, ranging from $50 billion to about $500 billion in size, even when regulators conclude that action is needed. (HR 3312, cosponsored);
- Dramatically undermine state protections against payday, car title, and other predatory lending—protections often put in place by the public directly through initiatives. The bill would override the Second Circuit’s Madden v. Midland decision and open the floodgates for a wide range of predatory actors to violate state laws and make loans at 300 percent annual interest or higher, simply by partnering with banks which could transfer loans to them. (HR 3299, cosponsored);
- Weaken oversight of the Big 3 credit ratings agencies, Moody’s, Standard & Poors, and Fitch, which made huge sums of money by slapping triple-A ratings on toxic mortgage-backed securities in the run-up to the financial crisis (HR 3911, voted for);
- End the Federal Reserve’s discretionary authority to perform annual stress tests on private equity firms, hedge funds, giant insurance companies, and multi-trillion dollar asset managers such as Blackrock and Fidelity, even though nonbanks like Bear Stearns, Lehman Brothers, and AIG were at the epicenter of the last global financial collapse (HR 4566, voted for);
- Give Wall Street banks and other large financial companies a new way to undo rules they dislike, by requiring the explicit approval of both houses of Congress before any major regulation takes effect. (HR 26, cosponsored); and
- Strip consumers of the right to band together and take banks and other financial companies to court over systematic wrongdoing, leaving them with no recourse except to submit an individual complaint to a corporate-friendly private arbitration firm. This is a system that effectively operates as a corporate Get out of Jail Free Card, since the arbitration firms are typically chosen by (and dependent on future business from) the company being complained against, and the damage suffered by any one victim is rarely large enough to justify the cost of legal action. (HJ Resolution 111, cosponsored).
Hollingsworth also voted for the Republican tax-cut plan, from which big banks and financial companies – and their executives – stand to gain hundreds of billions of dollars, with the scandal-ridden Wells Fargo poised to be the leading corporate beneficiary. And in May 2018, his support helped win passage of the biggest rollback of banking regulations since the financial crisis. Backers of this legislation (S 2155) described it as an effort to provide regulatory relief for small “community banks”; but that’s a well-honed Wall Street marketing pitch for bills whose chief beneficiaries, as a rule, are much larger and less sympathetic institutions. In fact, the core provision of S 2155 freed a group of 25 banks with $50-$250 billion in assets from the heightened oversight put in place after the 2008-09 financial crisis. Far from protecting community banks, S 2155 will spur increased bank consolidation by letting a $50 billion institution grow up to five times bigger without attracting any extra regulatory scrutiny – a point acknowledged by industry insiders as soon as the bill passed. Its other unadvertised features included a significant weakening of safeguards against predatory or racially discriminatory lending, especially in rural areas of the country. Senator Elizabeth Warren dubbed it The “Bank Lobbyist Act.”
All these votes occurred during the 115th Congress, which has done next to nothing about the serious problems facing ordinary Americans (health care, housing, etc.). If you’re wondering how the same elected body could somehow manage to act on item after item from Wall Street’s legislative wish list, the answer lies with Trey Hollingsworth – with Hollingsworth and others like him who have built their congressional careers around the pursuit of campaign donations from big banks, securities firms, payday lenders, and other giant financial companies.
When it comes to the issues that Wall Street banks, payday lenders, and securities firms care about, Hollingsworth has ignored not only the interests but the will of the people he is sworn to represent. Ten years after the financial crisis, the great majority of voters—across lines of geography and political party—voice their support for existing regulations and say they would like to see the rules governing Wall Street and the financial world made tougher. Yet in all the actions described here, Rep. Hollingsworth has not once called for stronger rather than weaker regulation of banks, lenders, and other financial entities.