White House hopeful Sen. Bernie Sanders (I-Vt.) on Tuesday vowed to fundamentally remake the nation’s financial system, drawing sharp distinctions between himself and party front-runner Hillary Clinton.
Speaking before a raucous crowd of backers in New York City, Sanders laid out his vision for how Wall Street would operate if he were president. And for Wall Street, it wasn’t pretty.
{mosads}The Democratic presidential candidate vowed to identify and break up all “too big to fail” banks within his first year in office and said he would bar anyone with Wall Street experience from serving within his administration.
Sanders’s ambitious plan would also include a return of the Glass-Steagall Act, a law repealed under former President Bill Clinton in 1999 that separated traditional and investment banking, among a host of other major policy changes.
Beyond policy prescriptions, the senator’s speech was an outright condemnation of the banking industry, which he described as rife with fraud and other illegal behavior.
“If elected president, I will rein in Wall Street so they can’t crash our economy again,” he said. “Will they like me? No. Will they begin to play by the rules if I’m president? You better believe it.”
In his remarks, Sanders made it clear he fundamentally disagrees with Clinton when it comes to Wall Street. Clinton has already unveiled a financial regulatory plan, aimed primarily at protecting existing rules, increasing accountability for individual bankers and heightening rules on less-regulated sectors of the market.
But Sanders said the former secretary of State’s plan misses the mark.
“Secretary Clinton says we just need to impose a few more fees and regulations on the financial industry. I disagree,” he said.
Sanders also invoked Sen. Elizabeth Warren (D-Mass.), a liberal favorite and prominent bank basher, to bolster his plan. While Warren has not endorsed any Democratic candidate, Sanders noted that she is pushing similar ideas to his own, including a return of Glass-Steagall.
Clinton’s campaign preemptively challenged Sanders on Monday, issuing a statement criticizing him for not cracking down hard enough on the “shadow banking” industry — the less-regulated facets of Wall Street that are a focal point of Clinton’s plan.
Sanders responded Tuesday, saying his plan would strike at “the heart of the shadow banking system.”
With his lengthy reputation as a Wall Street critic, the Vermont Independent minced no words when it came to his plans for the financial sector. Calling the industry’s entire business model fraud, Sanders vowed to fundamentally remake the financial system and severely punish bank executives that engage in wrongdoing.
“The reality is that fraud is the business model on Wall Street,” he said. “It is not the exception to the rule. It is the rule.”
Many of the ideas put forward by Sanders were ones he had repeatedly pushed in the Senate and as a candidate. But beyond breaking up the banks, taking bank executives to court and reestablishing Glass-Steagall, Sanders’s plan would overhaul the financial system in ways less flashy but still significant.
For example, he said he would cap ATM fees at $2 and interest rates on credit cards at 15 percent if elected president. The senator described current high interest rates as the height of immorality.
“The Bible has a term for this practice. It’s called usury. And in ‘The Divine Comedy,’ Dante reserved a special place in the Seventh Circle of Hell for those who charged people usurious interest rates,” he said.
Credit rating agencies, whose overinflated ratings many believe contributed to the financial crisis, would be turned into nonprofit enterprises under a President Sanders, as opposed to the current model where banks pay raters to rate their offerings.
Sanders’s plan would also push for the U.S. Postal Service to offer some basic banking services, an idea favored by liberals eager to see additional banking resources in more rural areas serviced by the Postal Service.
As he has in the past, Sanders called for reforms at the Federal Reserve, arguing the regulator sees far too much influence from Wall Street.
Sanders also vowed to limit the financial sector’s presence within his own administration.
“As president, I will nominate and appoint people with a track record of standing up to power, rather than those who have made millions defending Wall Street CEOs,” he said. “Goldman Sachs and other Wall Street banks will not be represented in my administration.”
The raucous New York City crowd included some Sanders diehards so familiar with his stump speech, they were able to finish some of his sentences.
“The reality is that Congress doesn’t regulate Wall Street,” Sanders began. The crowd finished the line: “Wall Street regulates Congress.”
“That’s it, you got it,” said a smiling Sanders.
This story was updated at 7:04 p.m.