The finalized GOP platform announced Monday at the Republican National Convention calls for the effective breakup of megabanks through the imposition of a new version of the Depression-era Glass-Steagall separation of investment and commercial banks.
Nevertheless, apart from that surprise plank, which is commonly associated with anti-Wall Street populism and was championed by Sen. Bernie Sanders in the Democratic primary, the platform includes more standard advocacy of less government regulation. The document calls the 2010 Dodd-Frank financial reform law signed by President Obama a “legislative Godzilla.”
The insertion of the Glass-Steagall measure was a surprise Monday, and bank groups rushed to criticize it after reports circulated that it might be included.
The policy prevented commercial banks with deposits insured by the federal government from underwriting stocks, advising on mergers, selling insurance or engaging in a variety of other financial activies. Court decisions, better technology and legislation chipped away at the rule until it was repealed in 1999.
One Republican candidate, former Texas Gov. Rick Perry, backed reinstating Glass-Steagall on the campaign trail. Other Republican leaders, such as Sen. John McCain of Arizona and House Speaker Paul Ryan, have expressed support for new versions of the law. Overall, however, there has been little movement within the party toward breaking apart large, complex banks that offer a variety of financial services.
Other parts of the platform take aim at new banking regulations, including one provision that criticizes the Consumer Financial Protection Bureau as “deliberately designed to be a rogue agency” and calls for it to be reined in.
Gone from this year’s version of the platform is a call for the bailed-out government-sponsored enterprises Fannie Mae and Freddie Mac to be wound down. But neither did the party express support for the companies to be recapitalized and released into the private sector, as some Republicans have advocated. Instead, the document says their roles should be reconsidered.
