President of fastest-growing labor union condemns "closed-door" changes to longstanding rules designed to protect consumers

WASHINGTON, DC - Andy Stern, International President of the 2-million member Service Employees International Union (SEIU)--the fastest-growing labor union in the Americas--issued the following statement today regarding rule changes by the Federal Reserve that make it easier for private equity firms to invest in the nation's retail banks:

If nothing else, this week's financial crisis should have sent a strong message to Washington: The time for back-room deals and lax regulation is over.

Instead, federal regulators remain out of step with the rest of the country. At the very moment Americans both rich and poor are recognizing the critical need for improved oversight, total transparency, and stronger rules that protect taxpayers, consumers, and the economy, the Federal Reserve has chosen to move in the exact opposite direction.

By easing longstanding rules restricting the influence and level of investment private equity firms can make in the country's retail banks, the Fed has taken steps that expose taxpayers to the kind of risky practices and profiteering that led to the meltdown on Wall Street in the first place. Even worse, the changes were made behind closed doors, without a "notice and comment period" to permit the general public to weigh in on the deal.

That's the wrong move at the wrong time for our economy.

Private equity firms like TPG, Kohlberg Kravis Roberts (KKR), and the Carlyle Group have staked their reputation on making major profits in a short period of time by taking big risks and exploiting insufficient regulation. Allowing secretive, unregulated private equity firms to own a bigger stake and a greater say in the nation's banks now will only ensure less stability for our financial institutions--and permit conflicts of interest in the future.

Working families have paid far too much already for the economic crisis. Congress should call on the Fed to immediately stop making rule changes--and start putting the long-term safety and soundness of our financial system ahead of the self-interested demands of buyout firms.

For more information, visit www.bigbadbanks.org.