Better Markets Month in Review Newsletter - May 2024

It’s David vs. Goliath, but remember who won that fight?

Hi friend,

The unfortunate reality is that money talks in Washington. Too often special interests hijack the conversation and policy through influence peddling via endless lobbying, campaign contributions, propaganda, and the revolving door (where former officials sell out their prior public service to serve the high-paying crypto industry).

That’s what we’ve seen happen with crypto in recent weeks and months. As a result, the House of Representatives recently passed crypto-friendly (and reportedly crypto-drafted) legislation that raises serious questions about investor protection and financial stability. This is despite the fact that crypto has no valid use, is the financial product of choice for criminals worldwide, and is not in the top 20 policy concerns of Americans this year.

So how has crypto catapulted to the top of the Congressional agenda? Simply put, money. The industry has flooded Capitol Hill with tens of millions of dollars in lobbying expenditures and is now poised to spend potentially hundreds of millions of dollars to attack public servants who don’t promote crypto’s interests. (This is similar to what FTX’s founder and CEO Sam Bankman-Fried and his cronies did in 2020-2022, before being handcuffed and convicted of crimes.) The industry has even paid for bogus polls that claim that 52 million Americans own crypto, despite ample evidence to the contrary.

Sadly, while the Securities and Exchange Commission (SEC) has aggressively pursued crypto lawbreakers, last week it doubled down on its historic mistake of approving spot bitcoin ETPs by approving a spot ether ETPs. These useless financial products don’t just endanger retail investors, but also threaten the broader banking and financial system as they become more prevalent and interconnected. Contagion, crisis, and bailouts will not be far behind.

While these are disappointing developments, it’s also a reminder that we need strong counterweights to the financial industry who are independent experts willing to speak truth to power. That’s why this month it was gratifying to see our CEO, Dennis Kelleher, named to Washingtonian magazine’s most influential list for the 4th year in a row. Dennis was one of the only public interest nonprofit leaders represented in the Banking & Finance category, and his recognition reflects Better Markets’ relentless commitment to fighting for the public interest, despite the hundreds of millions of dollars backing the financial lobby.

Yes, our fight against crypto and the wider financial industry often feels like David vs. Goliath. But we all remember who won that battle. The CFPB’s massive victory at the Supreme Court this month illustrates that the financial industry can be beaten. With your support and partnership, we’ll keep up the fight until Washington always puts the interests of Main Street Americans above the special interests.

Best,

Anton Becker
Communications Director, Better Markets

Kalshi, a financial services company, is trying to facilitate gambling on U.S. elections through CFTC – a dangerous attempt which will threaten our democracy. Dennis Kelleher and Lisa Gilbert, Executive Vice President of Public Citizen, wrote a joint op-ed for the Los Angeles Times explaining why this proposal must be stopped.

Wall Street’s biggest banks and their supporters have staged a widespread propaganda campaign in recent months to convince the American people, community organizations, and financial regulators that modestly higher capital requirements will have far-reaching dire consequences. In our fact sheet and comment letter, we rebut the most common false claims.

The SEC rightly approved a rule issued by Nasdaq that requires companies listed on the exchange to disclose key information about the diversity of their boards of directors. The SEC’s approval is under legal assault in the Fifth Circuit, and the stakes are high, which is why Better Markets filed an amicus brief in support of the SEC.

An independent judiciary is supposed to uphold the rule of law. However, too many federal judges, particularly in the Fifth Circuit Court of Appeals, are consistently disregarding the facts and law to strike down rules and regulations with which they disagree. Our new fact sheet and video highlight some of the most egregious examples of litigants using forum shopping to bring challenges to financial protection rules before the Fifth Circuit.

Better Markets in the News

Gambling on elections is unacceptable for many reasons, including that it will likely incentivize election interference, further erode Americans' trust in elections, and threatens investors with an inevitable onslaught of predatory platforms designed to lure them in to a manipulated market.

Activities at the Regulatory Agencies

Each month our legal team outlines some of the top cases we're keeping an eye on, the Amicus "Friend of the Court" Briefs we have filed, and why everyone with a bank account, credit card, mortgage loan, or retirement loan should be interested in those cases.

May was a busy month on Capitol Hill. Banking regulators testified during their semi-annual oversight hearings and crypto legislation was on the floor in the House and Senate, and the House Financial Services Committee held a hearing on SEC enforcement.