Calls for Wall Street Reform to End Big Bank Bailouts, Create Stronger Consumer Protections and Increase Transparency on Wall Street
Renews Call for Wall Street Reform to Include Bipartisan Plan to ‘Pay It Back'
Washington, DC - As the Senate considers a bill to crack down on big bank abuses and create new rules of the road for Wall Street, Michael Bennet, U.S. Senator for Colorado, called for Washington to put aside partisan wrangling and work together to enact Wall Street Reform that protects consumers and safeguards America's financial future.
In remarks on the Senate floor, Bennet called for Wall Street Reform that ends big bank bailouts, creates stronger protections for consumers and improves transparency by bringing risky banking practices into the light of day.
"There's a shared understanding of what got us here," said Bennet. "Some on Wall Street took all the risk, yet it's the American people who paid the price. It's our responsibility to learn the lessons from the last collapse to help this economy recover and to head off the kinds of problems that could lead to another financial crisis."
In addition, Bennet highlighted the need for Wall Street reform to include an amendment he offered based on his Pay It Back plan, which would ensure repaid bailout funds are used to pay down the deficit, not fund further spending. For more information, please click here.
For video clips from Bennet's floor speech, please click here.
Below is the full text of Bennet's remarks, as delivered:
I see our chairman and ranking member on the committee on which I serve. We're finally doing some work around here and doing it in a bipartisan way. And I think this bill is going to improve over the course of this debate. It is an enormously important opportunity to safeguard our economy from the reckless danger that got us into this financial mess. I'm hopeful that we can wade through all this Washington wrangling and get something done to protect America's financial future.
Madam President, there's a shared understanding of what got us here. Some on Wall Street took all the risk, yet it's the American people who paid the price. Small businesses, homeowners and working families were forced to come in and clean up this mess. It's our responsibility to learn the lessons from the last collapse to help this economy recover and to head off the kinds of problems that could lead to another financial crisis. In short, Madam President, we have to fix this economy, ensuring that there will never have to be another taxpayer-sponsored bailout.
As someone who sits on both the Agriculture and Banking Committees, that shared jurisdiction over this bill, I can assure you, Madam President, that this package reflects months of hard work and incorporates ideas and concepts from both political parties. We've examined the problems that brought us to the financial brink nearly two years ago. And together, these two committee bills create a thoughtful and comprehensive plan to increase transparency, reduce systemic risk and strengthen our commitment to protecting consumers.
In reviewing the merits of the bill, I think it's important to analyze how it would have address so many of the problems that led to the financial collapse in 2008. Too often we don't ask the question what problem is it we're trying to solve and then we get busy solving problems that didn't exist or creating unintended consequences from our work. I think we've worked
hard on this legislation for this not to be so.
Had this legislation been the law of the land, we wouldn't be talking about that $700 billion taxpayer-funded rescue of our nation's largest bank holding companies. We would have been able to see many of the dangerous trends develop earlier, and we would have required these systemically risky companies to have more capital and less debt. Had any of these companies failed, we would have resolved them without transforming them into wards of the state, like AIG.
Second, had a strong consumer protection infrastructure existed, we could have stopped the subprime mess before it spiraled out of control. For example, the subprime giant Ameriquest would have been subject to meaningful rule making and enforcement authority. While I prefer a wholly independent agency, this bill represents substantial and meaningful progress on the consumer protection front.
Third, had the bill's derivatives reforms been in place, it is much less likely - much less likely - that the federal government would have been forced to spend tens of billions of taxpayer dollars to rescue AIG from its own sloppiness and greed.
In total, the plan before us represents a strong and thoughtful measure that rewrites the rules of the road for Wall Street. And through the amendment process here, we can make it even better. For example, I think we need to ensure that certain state-chartered community banks that did little to contribute to the current crisis don't have to change their prudential regulator. In so many of our towns, community banks play an important role in providing credit to our local economies. Many of these smaller institutions are struggling due to this difficult economy which means less available credit for families and small businesses. I have concerns that a change in prudential regulation may exert further pressure on these small banks, which continue to serve their local communities. It's my hope that we can balance the need to reduce regulatory arbitrage while preserving the existing prudential supervisory structure for some of these start-chartered banks.
And I also believe it is time for us to take advantage of this opportunity to begin to move away from the last bank bailout, the TARP. While there are a hundred opinions in this chamber about how effective TARP was, there really is a broad consensus - here and in the country - that it's time to wind down TARP, recapture what we can for taxpayers and prevent banks from tapping into the Treasury going forward. That's why in the coming days, I will be pushing bipartisan legislation that would do exactly that. It would use recaptured tarp funds, borrowed from our children, $180 billion so far and counting, for deficit reduction. And it would take important steps to end the TARP.
More broadly, I also think we need to be aggressive about strengthening this bill to further protect consumers, and I will be supporting amendments which do exactly that. When it comes to Wall Street reform, we simply can't afford to delay any longer. Recently the TARP Inspector General underscored this point better than I could have. He stated that even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car.
In short, bailing out companies has made the future risk of our financial system even worse by creating the moral hazard that a financial firm that participates in risky behavior is going to somehow be bailed out by the government, by the taxpayer. This Wall Street reform package takes a strong step toward restoring some degree of sanity to our financial system in making that moral hazard a thing of the past.
Finally, Madam President, Coloradans and the American people are expecting us to act. I'm confident we're going to succeed. Lobbyists may have been able to slow down Wall Street reform temporarily, but the American people want it, as well they should. We're getting closer and closer every day to sustaining a workable bill that can pass this chamber and that we can eventually send to the president for his signature. We can't allow the status quo to maintain its grip on our financial system. We have to work together and pass this groundbreaking reform package.
Madam President, I want to close again by thanking the Chairman of the Banking Committee who is here today for his leadership throughout the months not just on this issue, but on health care as well, but particularly sticking with this issue. I don't think we'd be having this debate right now were it not for the work that the Chairman did. And as a member of the Banking Committee, I appreciate it very much.
Madam President, I yield the floor.