News Archives
July 15, 2010
Landmark Financial Reform Bill Clears Congress
The greed, irresponsibility, and poor oversight which led to the financial meltdown in 2008, have been put in check thanks to the efforts of President Obama, Congressional Democrats, and three Republicans who today displayed the courage to say “no” to Wall Street abuses. For far too long, Big Banks and Wall Street executives have taken advantage of a system full of loopholes, seizing profits and leaving Main Street to cover their losses. Thankfully, after the passage of the Wall Street Overhaul Bill, in both the Senate and House, America has taken its first step towards a more transparent system where the average middle class family can once again benefit from our financial system
This bill among other things will:
· Create a 10 member council of regulators led by the Treasury secretary to monitor threats to the financial system and place regulations on companies that approach the point of being “too big to fail”.
· Require mortgage lenders to make sure mortgage borrowers could afford to repay. Lenders would also have to disclose the highest payment borrowers could face on their adjustable rate mortgages.
· Be funded in part by using $11 billion from the Troubled Asset Relief Program (TARP). Additional costs would be covered by increasing premium rates paid by commercial banks to the Federal Deposit Insurance Corp. to insure bank deposits. Banks with assets under $10 billion would be exempt from the increase.
· Establish a new independent office to oversee financial products and services such as mortgages, credit cards, and short-term loans.
· Task the Federal Reserve with oversight of big companies whose failures could cause another economic collapse.
· Limit the banks in their ability to engage in riskier derivative trades,
· Limit a bank’s investment in hedge funds to three percent of their capital.
· Allow the Federal Reserve to oversee executive compensation and to intervene if the pay practices promoted risky behavior.
· Resolve the conflict of interest between credit rating agencies and banks by holding credit rating agencies that give reckless advice legally liable for investor losses.
Thank you to all affiliates who committed themselves collectively to the fight for financial reform. The passage of this bill marks a major milestone for organized labor and demonstrates a first shift in power back to the hard working families of our country.