Statement On Wall Street Reform Legislation

Mr. President, I strongly support the reform bill before us, S.3217, the Restoring American Financial Stability Act of 2010. 

I commend Banking Committee Chairman Christopher Dodd and Majority Leader Harry Reid for shepherding this significant piece of legislation through the Senate.  Getting to this point was no small feat given the near-unanimous opposition to Wall Street reform that this effort has encountered from the other side of the aisle.  But Senators Dodd and Reid persevered because they know that fixing our troubled financial system is absolutely, unequivocally in the best interests of our country and its citizens. 

The recent financial crisis revealed several flaws in our current regulatory system.  Many large Wall Street investment banks and insurance companies hid their shaky finances from stockholders and government regulators.  Corporate executives saw their salaries rise to extreme heights, even as their companies were failing and seeking government assistance.  Through it all, federal regulatory agencies failed to provide the necessary oversight to rein in reckless actions.  If this crisis has taught us anything, it is that the look-the-other way, hands-off deregulatory policies that were in vogue in recent times can jeopardize not only private investments, but our entire economy.  

The bill we are voting on today goes directly at the heart of the Wall Street excesses that brought our economy to the brink.  For far too long Wall Street firms made risky bets in the dark and reaped enormous profits.  Then, when their bets went sour, they turned to America’s taxpayers to bail them out.  This bill is about changing the culture of rampant Wall Street speculation and doing what needs to done to get our economy back on track.  We need more transparency and oversight of Wall Street, and this legislation finally will allow regulators to go after the fraud, manipulation, and excessive speculation on Wall Street. 

As chairman of the Senate Judiciary Committee, I am particularly pleased that the bill includes provisions I authored to ensure law enforcement and federal agencies have the necessary tools to investigate and uncover financial crimes; to protect whistleblowers who help uncover these crimes; and to introduce true transparency and sunshine into the complex operations of large financial institutions and the federal agencies that regulate them. 

Another major step forward is the derivatives section of the bill, which was authored by the Agriculture Committee on which I serve.  These reforms will finally bring the $600 trillion derivatives market out of the dark and into the light of day, ending the days of backroom deals that put our entire economy at risk.  The narrow end-user exemption in the bill will allow legitimate commercial interests, such as electric cooperatives and heating oil dealers, to continue hedging their business risks, but it will stop Wall Street traders from artificially driving up prices of heating oil, gasoline, diesel fuel and other commodities through unchecked speculation.

The bill also includes an amendment by Senator Dick Durbin that I supported to protect our small businesses from complicated predatory rules that big credit card companies impose on Vermont grocers and convenience stores.  The Durbin amendment will ensure that a small business will be able to advertise a discount for paying cash, or for using one card instead of another.  I do not want Vermonters to pay more for a gallon of milk just because the credit card companies are demanding a high fee on small transactions and are not allowing the grocer to ask for cash instead of credit. 

I am also pleased that the bill includes an amendment I cosponsored with Senator Bernie Sanders to shine more sunshine on the bailout transactions made by the Federal Reserve.  Under the Sanders amendment, the Government Accountability Office will conduct a one-time audit of all of the emergency actions the Federal Reserve has taken since the financial crisis began, to determine whether there were any conflicts of interest surrounding the Federal Reserve’s emergency activities.  It is time we know more about the closed-door decisions made by the Federal Reserve throughout this financial crisis. 

Mr. President, the Senate has before it today a bill that will reign in Wall Street abuses, end government bailouts, and give everyday Americans the consumer protection they deserve and expect.  I believe that cleaning up these Wall Street abuses will help build confidence in our economy and continue our progress toward economic recovery.        

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