Financial Regulatory Reform
This is a new day. In June of 2009, President Obama called for major reforms as we were desperately trying to climb from the depths of the financial crisis. And we've achieved the vast majority of his goals. I was proud to be a conferee to the Dodd-Frank Wall Street Reform and Consumer Protection Act. With this package the conference approved on June 28, Congress is close to the finish line to enacting the most comprehensive financial reform since the Depression.
We have established a Consumer Financial Protection Bureau; we've established a Systemic Risk Council for regulators to oversee all aspects of the financial system; we've required that banks can no longer trade for their own accounts; we’ve strengthened investor protections; we’ve brought transparency to the derivatives market; and we've created a mechanism to wind down troubled financial institutions so that taxpayers never have to be on the hook again. It's not just consumers who will benefit. We've required that the Federal Reserve establish fairer interchange rates charged for debit cards-- that are more in line with the actual cost of processing a transaction. That will help small businesses all across America-- the engine of job growth.
I'm glad to have worked with Sen. Durbin on interchange fees to work out compromise language representing a balanced approach that addresses concerns by merchants about high interchange fees, and the financial industry’s concerns that fees will be set too low to allow institutions to cover the cost of providing critical banking services. The compromise language continues to enable those who don’t have access to traditional banking services to use pre-paid debit cards and ensures that state governments will continue to be able to distribute public benefits on debit cards.
As President Obama has said, everyone has a stake in financial reform: whether you’re a family trying to buy your first house, a parent trying to fund your child’s education, an employee trying to save for retirement, or an entrepreneur trying to expand your business. I agree with Sheila Bair at the FDIC when she says these new rules end "too big to fail." We've made sure that it's the risk-takers, not the taxpayers, who take the hit when something goes wrong.
Brief Summary of the Dodd-Frank Wall Street Reform and Consumer Protection Act
Create a Sound Economic Foundation to Grow Jobs, Protect Consumers, Rein in Wall Street and Big Bonuses, End Taxpayer-financed Bailouts and Too Big to Fail, Prevent Another Financial Crisis
Years without accountability for Wall Street and big banks under Republican rule brought us the worst financial crisis since the Great Depression, cost us 8 million jobs, and wiped out the retirement security for tens of millions of Americans.
The most comprehensive and common sense reforms in generations restore responsibility and accountability, and will empower consumers with information to make the best choices on their homes, credit cards, and college and retirement savings. Wall Street Reform is key to creating a strong new foundation to grow the economy and create jobs.
HIGHLIGHTS OF THE LEGISLATION
Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.
Ends Too Big to Fail Bailouts: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.
Advance Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.
Transparency & Accountability for Exotic Instruments: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated -- including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.
Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation and golden parachutes.
Protects Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.
Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefits special interests at the expense of American families and businesses.
06/29/2010 - Financial Regulatory Reform Conference Report