Credit union association chief Dan Berger is warning that the U.S. could be in for another recession by the end of 2019 if the government doesn’t step in and break up big banks.
Berger, the chief executive officer of the National Association of Federally-insured Credit Unions (NAFCU), said some banks are so large that they could cause an economic collapse if one of them failed.
The CEO said that NAFCU is urging Congress and the Trump administration to take action and protect consumers before the U.S. hits another recession.
“One bank is bigger than an entire credit union industry out there — there are trillion dollar institutions, so you have large investment banks using consumer’s deposits to make risky investments,” Berger told Hill.TV co-host Krystal Ball and Buck Sexton on “Rising.”
“The recession could probably hit end of 2019 — maybe the first, second quarter of 2020, something for Congress to take a look at so American consumers are protected,” Berger said.
Berger argues this is why lawmakers should bring back the Glass-Steagall Act, which separated consumer banking from the more speculative side of investment banking.
The bill was originally passed in response to the failure of the banks following the Great Depression but was later repealed by repealed by the Gramm-Leach-Bliley Act under the Clinton administration.
But the 21st Century Glass-Steagall Act of 2017 would reinstate certain Glass-Steagall Act protections. This includes reducing risks to the financial system by limiting banks’ ability to engage in certain risky activities and limiting conflicts of interest.
Sen. Elizabeth Warren and three other senators, including the late Sen. John McCain (R-Arizona), introduced the bill to Congress last April.
The bill is currently waiting to be voted on by both the House and Senate.
— Tess Bonn
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