June 17, 2010

WASHINGTON - Financial Services Committee Ranking Member Spencer Bachus today expressed disappointment as House Democrats defeated a series of amendments offered by Republicans to put an end to, or even limit, taxpayer-funded bailouts, including those for government sponsored enterprises Fannie Mae and Freddie Mac. 

"Even though Democrats in both the Senate and the House have passed bills to permanently institutionalize bailouts for Wall Street. I know - and everyone at this Conference knows - that the American people are tired of bailouts," Bachus said.  "The only way to end the bailouts is to ensure failed institutions do what all other businesses and individuals are required to do - declare bankruptcy instead of relying on taxpayer handouts. Bankruptcy is the only way to protect taxpayers and end the bailouts. But the Democrats have fought us at every step, and the bankruptcy provisions - and any restrictions on future bailouts - are still not included in the bill." 

The following anti-bailout amendments were proposed and supported by House Republicans, but rejected by the Democrats in the majority. 

• Rep. Capito and Rep. Smith - Bankruptcy Not Bail-outs - Amendment would replace the entirety of resolution authority with language that would provide an enhanced bankruptcy regime.
   
• Rep. Bachus - Striking Provisions Authorizing FDIC to Treat Similarly Situated Creditors Differently -Amendment would strike provisions that permit the FDIC to treat similarly situated creditors of a failed firm differently.
   
•  Rep. Hensarling - Would require that the Secretary place any financial company which meets three specific "too big to fail" criteria into the orderly liquidation authority established by the bill with the FDIC as receiver.  Those criteria include: government ownership of at least 1 million shares of the company for at least one year, the company having received at least $50 billion in taxpayer funds since October 3, 2008, and the company having had at least $1 trillion of outstanding mortgage backed securities as of October 3, 2008.  Fannie Mae and Freddie Mac fit the criteria established in this amendment.

For more information on the House Republican plan to ensure failed firms qualify for bankruptcy, not bailouts, click here. 

###