Washington, D.C.—Today, Congressman Joe Donnelly voted for the Wall Street Reform and Consumer Protection Act of 2009, which passed the House by a vote of 223 to 202. The legislation would ensure that Wall Street and big banks are held accountable while protecting consumers and investors. Also included in the bill are three amendments that Donnelly authored.
“For too long, Wall Street and big banks exploited loopholes and ignored growing problems at the expense of hard-working Hoosiers and Americans. Compounding the problem was an insufficient patchwork of government regulators who missed the warning signs leading up to the economic crisis. Those days are over,” Donnelly said. “This legislation puts in place rational rules so that the hard work of our families and small businesses is never again put in jeopardy by those who put greed ahead of integrity.”
Included in the financial regulatory reform package is:
- Protection for north central Indiana families and small businesses by ensuring that bank loans, mortgages, and credit cards are fair, affordable, understandable, and transparent through the creation of a new Consumer Financial Protection Agency.
- A stop to predatory lending practices that occurred during the subprime lending frenzy.
- An end to “too big to fail” financial firms before risky and irresponsible behavior threatens to bring down the entire economy and hurt hard-working Hoosiers.
- Ruling out future taxpayer bailouts with new procedures to unwind failing companies that pose the greatest risk – paid for by the financial industry and not our hard-earned tax dollars.
- Tough new rules on the riskiest financial practices like credit default swaps and derivatives that were previously unregulated and abused by companies like AIG in risky and complex bets.
- Tougher enforcement and oversight, which includes:
More enforcement power and funding for the Securities and Exchange Commission, including requiring registration of hedge funds and private equity funds;
Enhanced oversight and transparency for credit rating agencies, whose undeserved seals of approval gave way to excessively risky practices that led to a financial collapse;
Addressing egregious executive compensation, allowing a ‘say on pay’ for shareholders, requiring independent directors on compensation committees, and limiting bank executive risky pay practices that jeopardize banks’ safety and soundness.
In addition to these reforms, three amendments offered by Donnelly while the bill was still in the House Financial Services Committee were included in the final bill. The first amendment ensures that an office created within the Securities Exchange Commission to regulate credit rating agencies is given the necessary staff and broad rulemaking authority needed to perform its duties properly.
In addition, Donnelly offered an amendment that will prevent the FDIC from being used in the future to purchase equity shares of troubled banks during a rescue attempt and, instead, ensure that the FDIC is used only to protect customers’ savings and smoothly resolve failing banks.
Finally, Donnelly offered an amendment to clarify that manufactured housing retailers are not subject to the proposed Consumer Financial Protection Agency’s authority. Manufactured housing sellers did not participate in the kind of predatory lending that other mortgage originators did. The amendment will ensure that MH retailers who act in their traditional capacity of selling homes will not face an undue burden that could increase costs for consumers.
The legislation is now pending before the Senate.
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