Washington, DC--Congressman Eliot Engel (D-NY-17) voted on Wednesday to pass sweeping reforms of our nation’s financial regulations, the largest since the New Deal.  The Wall Street Reform and Consumer Protection Act (H.R. 4173) will end taxpayer-funded bailouts and ‘too big to fail’ financial institutions.  It will also provide key protections for consumers and small businesses, and the final product provides enough safeguards to ensure that New York will not be unduly punished for being the home of the financial industry.   The measure passed the full House by a vote of 237 to 192. 

“For eight years, President Bush and his Republican allies looked the other way as corporations and big banks exploited loopholes and gambled with our money – compromising our savings, our future, and the American Dream.  Now, they stand against this reform and stand instead with corporations rather than with working families and small business owners.  It is almost as if they have forgotten the eight million jobs lost, and $17 trillion in retirement savings and American net worth lost during that same time.  If we are to prevent any future taxpayer bailout of the financial industry, this legislation is not only necessary, it is an imperative,” said Rep. Engel.

The legislation would do the following:

• End bailouts by ensuring taxpayers are not on the hook for any risky decisions.
• Protect families’ retirement funds, college savings, homes and businesses’ financial futures from risky decisions from CEOs, lenders and speculators.
• Protect consumers from predatory lending abuses, fine print and industry gimmicks.
• Inject transparency and accountability into the financial system too long left alone.

“Similar to their apocalyptic rhetoric seen during the health care debate, Republicans are trying to scare Americans on behalf of their corporate allies.  Sarah Palin accused Democrats of putting ‘death panels’ in the health care bill.  Actually, she was close; the death panels are in this bill – as ‘too-big-to-fail’ corporations are going to be allowed to die.  I have long been a strong supporter of preventing companies from becoming too big to fail, and the authority given to the FDIC will prevent this from happening again.  The unwinding of failed corporations will be paid for by those firms, and not by taxpayers.  The days of taxpayer-funded bailouts are officially over,” added Rep. Engel.

Some more details regarding the legislation:

• Protections for small businesses – Grocers, retailers and other small business owners who face out-of-control swipe fees that banks and other credit and debit card issuers charge are protected and will stand to save billions.
• Consumer Financial Protection Agency – Protects families and small businesses by ensuring that bank loans, mortgages and credit cards are fair, affordable, understandable and transparent.
• Ending Predatory Lending – The subprime lending frenzy helped send the economy on its downward spiral in 2008.
• Shut down “Too Big To Fail” – No longer will risky and irresponsible behavior threaten to take down the whole economy.
• Ending bailouts – Will unwind failing companies that pose the greatest risk, paid for by the companies. 
• Tough rules on risky practices – Companies who gambled and caused the financial crash, such as the credit default swaps that devastated AIG, will face strong regulations.  The “Volcker Rule” restricts large financial firms with commercial banking operations from trading in speculative investments.
• Tough oversight – Enforcement power and funding for the Securities and Exchange Commission, including requiring registration of hedge funds and private equity funds.  Plus enhanced oversight and transparency for credit rating agencies.
• Rein in excessive executive compensation – It allows for a “say on pay” for shareholders and requires independent directors on compensation committees.

“Due to some of the poor decisions made by the financial industry, we have been forced into making hard decisions.  Especially those of us who represent New York, as Wall Street is a huge part of our city and state’s economy, and we had to ensure our state's protection.  The compromise struck during the House-Senate Conference Committee enables New York Members to support the legislation on behalf of New Yorkers because it does not adversely affect New York jobs and the state of its economy.  Jobs will not be sent overseas by banks and credit default swaps and other risky derivatives will be separated from banking institutions, while traditional non-risky activities will still be allowed,” added Rep. Engel.

The legislation is supported by a vast array of organizations such as the Consumer Federation of America, Americans for Financial Reform, AARP, Consumers Union, National Restaurant Association, Council of Institutional Investors, National Retail Federation, National Credit Union Association, Service Employees International Union, and many others.

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