Congresswoman Chu Supports Restoring Common Sense Financial Reform on Wall Street
Washington, DC – Rep. Judy Chu (CA-32) voted to help restore common sense to Wall Street with the largest reform of our nation's financial regulations since the New Deal. The Wall Street Reform and Consumer Protection Act will end taxpayer-funded bailouts and ‘too big to fail' financial institutions, protects consumers from predatory lending, safeguards our retirement and college savings from unnecessary risks, and injects transparency and new accountability into a financial system run amok. The bill passed with a Democratic majority.
"Many working families were devastated from the collapse of our nation's financial markets and while they were struggling with the fallout, they saw Wall Street getting big bailouts," said Rep. Chu. "I'm proud to say that the House just passed historic reform to make sure our nation's banks and other financial services firms can't gamble away our money, homes, retirement, and college savings."
The bill provides the government with the tools it needs to manage financial crises, so we are not forced to choose between bailouts and financial collapse. This includes the ability to preemptively dismantle big banks whose risky and irresponsible behavior could bring down the entire economy, as well as an orderly process to wind down failing firms. It will help ensure American taxpayers are never again on the hook for bailing them out by requiring big banks and other financial institutions (with $50 billion in assets) to pay for any bailouts in the future. These institutions would pay assessments based on a company's potential risk to the whole financial system if they were to fail.
"Banks will no longer be able to grow ‘too big to fail' so that they have leverage over the taxpayer dollars. Banks will now have to pay into a fund so that if they are at risk of collapse, banks will bailout themselves. Also, the bill puts an end to outrageous executive pay that encourages CEOs and other corporate leaders to take excessive risk at the expense of their companies, shareholders, employees and ultimately, the American taxpayer," continued Rep. Chu.
Congresswoman Chu, a Member on the Government Reform and Oversight Committee, recently participated in a hearing investigating Bank of America's government bailout totaling $45 billion. The Committee held a series of hearings investigating executive compensation and how a private merger between Merrill Lynch and Bank of America turned into a federal bailout with taxpayer monies. Since then, Bank of America has paid back their bailout funds, including $2 billion in interest. The committee on Government Reform and Oversight is the main investigative arm and has jurisdiction to investigate any federal program and matters with federal policy implications, and has focused much of its energy on corporate accountability for the Trouble Asset Relief Program (TARP) recipient firms.
"This is great news to everyday Americans, whose hard-earned tax dollars have bailed out these large corporations, but we still need more stringent enforcement mechanisms to rein in executive compensation and put an end to the lavish perks and spending that essentially caused the financial meltdown. We have no guarantee that once these companies are nursed back to health, they won't return to the exorbitant and risky behavior of the past and start helping to rebuild our economy. The Wall Street Reform bill is a step in the right direction, and I hope that the Senate will do its part in passing this important legislation," added Rep. Chu.