[WASHINGTON, D.C.] – Assistant Senate Majority Leader Dick Durbin (D-IL) released the following statement today after the Obama Administration announced a plan for comprehensive financial regulatory reform:
“For the past two years, we have been dealing with the worst financial crisis since the Great Depression. The current crisis has many causes, but perhaps the most significant, was the breakdown of our financial regulatory system which left consumers and our markets unprotected.”
“It’s time we put the needs of American families above the interests of Wall Street. The newly proposed Consumer Financial Protection Agency – based partly on legislation I introduced earlier this year – will put consumers first, and protect members of the public from predatory practices. This new agency will also ensure that companies are held accountable when they abuse, deceive or take advantage of the very consumers they claim to be helping.
“I look forward to working with President Obama, Treasury Secretary Geithner and my colleagues in the Senate to quickly enact these long overdue reforms.”
In March, Durbin introduced the Financial Product Safety Commission Act – a bill to create a single government agency in charge of ensuring that the offering of financial products to consumers is responsible, accountable, and transparent.
According to Durbin, today’s proposal for a Consumer Financial Protection agency may be the most important step we can take to prevent another economic crisis from developing, because this agency would keep dangerous products such as predatory subprime mortgages off the market before they could create broad systemic risks.
Today’s announcement also:
- Promotes stronger supervision of all financial firms, through the creation of a Financial Services Oversight Council to review systemic risks, additional authority for the Federal Reserve to supervise all institutions that pose systemic risks, stronger capital standards, a new National Bank Supervisor, the elimination of the Office of Thrift Supervision, and the registration of all hedge funds with the SEC.
- Establishes comprehensive supervision of financial markets, through more transparency of securitization markets, stronger regulation of credit rating agencies, and a requirement that credit issuers retain a financial interest (“skin in the game”) in securitized loans.
- Improves tools for managing crises, through a new regime to unwind nonbank institutions and greater accountability of Fed emergency powers.
- Raises international regulatory standards through the coordination of stronger global oversight efforts.
In addition to being the Assistant Majority Leader, Durbin is the Chairman of the Financial Services and General Government Appropriations Subcommittee which has funding jurisdiction over financial regulatory agencies such as the one proposed today.