During the last financial crisis, banks paid out dividends to shareholders even as losses mounted and the financial sector headed toward collapse. Now, even as they face big losses on commercial real estate loans, the nation’s largest banks are once again being permitted to continue paying out billions of dollars of dividends to shareholders — and a top Trump appointee at the Federal Reserve has pushed to weaken rules requiring banks to keep large cash reserves on hand to cover losses.

In essence, regulators are allowing banks to spend capital on making payments to shareholders — which could amount to over $50 billion this year — rather than requiring them to save more resources to either lend during the pandemic or protect against a financial collapse that could require another government bailout.

Officials from the Federal Reserve Bank of New York have found that restricting dividends at the outset of the COVID-19 pandemic would have significantly increased the amount of capital that banks had on hand to lend to consumers and businesses dealing with the economic fallout.