Begich Supports Successful Wall Street Reform Bill
Financial reform called most extensive since Great Depression
In an effort to protect Alaskans and all Americans from a repeat of the financial crisis of 2008, U.S. Sen. Mark Begich joined a majority of his colleagues in the Senate in approving passage Thursday of the Wall Street reform bill debated for the past few weeks.
The bill, which still must be reconciled with the House version, contains many major reforms designed to bring accountability to Wall Street by restricting the actions of banks and other financial firms, providing strong consumer protections, and bring an end to taxpayer bailouts.
"First and foremost we need to make sure Alaskans and all Americans never again have their personal investments and retirements decimated by the risky and unregulated practices of big banks and others who led our country into a financial crisis not seen in decades," Begich said. "This bill isn't perfect, but it's a good start and ensures new transparency and accountability that will allow fair competition and innovation without putting the taxpayer at risk."
Some of the key measures passed as part of the bill include:
· Audit of the Federal Reserve - A one-time audit by the Government Accountability Office of all emergency activities of the Fed since 2007. The Fed, which distributed more than $2 trillion in loans during the financial crisis, has not been subject to an audit in its 95-year-history.
· Rural/Community Bank Protection - Smaller, community banks will be protected from paying more than their fair share for federal bank insurance. It changes the way the Federal Deposit Insurance Corporation (FDIC) calculates premiums paid by banks into the fund. Under the new system, banks would pay based on total assets rather than deposits, protecting smaller community banks and credit unions like many in Alaska.
· Homeowner Protection -Prohibits mortgage lenders and loan originators from getting hidden payments when they steer homeowners into high-cost loans. Also creates strong underwriting standards to ensure borrowers have the ability to pay loans back.
· Pay it Back Act - requires all repaid TARP funds and all unobligated stimulus funds be used to pay down the deficit.
· Consumer Protection Division - Creates a new consumer protection division within the Federal Reserve charged with writing and enforcing new rules targeting abusive practices in businesses such as mortgage lending and credit-card issuance
· Protecting Taxpayers from Bailouts - In extreme cases the government will have the ability to seize and liquidate a failing financial institution without putting taxpayers on the hook.
"My goal all along has been to focus on the bad acts of the big East Coast banks and make sure they can't repeat their bad behavior. But at the same time protecting the small banks and credit unions -- like many in Alaska who have been following the rules -- from facing too much government regulation and intervention," Begich added.
The legislation must still be reconciled with a House version before it can be signed into law by the president.