Maloney Offers Amendment to Maintain Dodd-Frank Protections Against Taxpayer Bailouts of Banks
WASHINGTON, DC – Congresswoman Carolyn B. Maloney (NY-12), Ranking Member on the House Financial Services Committee’s Subcommittee on Capital Markets, Securities, and Investment, introduced an amendment to protect the Orderly Liquidation Authority of Dodd-Frank, which ensures that taxpayers don’t have to bailout failing financial institutions. The amendment was offered during the House Financial Service Committee’s consideration of its budget views and estimates. The Congresswoman released the following statement after offering the amendment.
“The Republican peddled idea that the Orderly Liquidation Authority (OLA) will lead to bailouts is not only wrong, it’s dangerous. My amendment strikes the majority’s section on the OLA, which is highly misleading and fundamentally flawed, and replaces it with views that more accurately reflect reality.
“The OLA is critically important, because it allows the FDIC to safely wind down a large non-bank financial company like Lehman or AIG, without causing a financial crisis or resorting to a taxpayer bailout. We’ve already lived through a crisis in which the bankruptcy code was the only way to wind down a large non-bank financial company and the result was the disastrous, disorderly failure of Lehman Brothers, which sparked a massive, world-wide panic that almost brought down the entire global financial system.
“Any firm that is wound down under the OLA must — by law — be liquidated, its shareholders and creditors must bear any losses, the management that was responsible for the failure must be fired, and taxpayers must not bear any losses whatsoever. This is not simply what we hope will happen under the OLA — it is the law and clearly not a taxpayer-bailout.
“If the majority truly wishes to avoid more taxpayer bailouts, they will support my amendment.”