Occupy Wall Street -: Occupy Group Sues Government To Speed Up Rule Reining In Wall Street

from thinkprogress.org

By Pat Garofalo on Feb 28, 2013 at 4:55 pm

The Volcker Rule — a part of the Dodd-Frank financial reform law that is meant to rein in risky bank trading — is on the verge of being delayed, again, as regulators squabble over its exact parameters. Wall Street banks and congressional Republicans, after successfully watering down the Volcker Rule when Dodd-Frank was being debated, have been trying to get rid of what little bits are left ever since.

But Occupy the SEC, an offshoot of the Occupy Wall Street movement that focuses on matters before government regulatory agencies, is suing the federal government in an attempt to speed up the process and get the Volcker Rule in place. The two plaintiffs in the case claim that their deposits are at risk, so long as banks are allowed to engage in risky gambling with federally backed funds:

Plaintiffs suffer the risk of irreparable injury to their deposits by reason of [the government's] non-action. The Plaintiffs’ bank accounts are subject to potential dissipation or liquidation resulting from bank losses occasioned by excessively risky trading activities by those banks. The Volcker Rule would institute structural safeguards insulating depository accounts from banks’ proprietary trading activities, thereby protecting Plaintiffs’ bank accounts. Defendants’ unjustified delay in finalizing the Volcker Rule puts Plaintiffs’ bank accounts at continued risk of financial loss.

This is the first lawsuit challenging regulators to implement, rather than delay, the Volcker Rule. As Public Citizen’s Bart Naylor wrote, the suit is “making the straightforward case thatbanks shouldn’t gamble with savings because real people may be harmed.”

Currently, less than half of the rules in Dodd-Frank have been finalized. Wall Street, meanwhile, had its second most profitable year ever last year.