For almost thirty years, Washington politicians slowly stripped away common-sense regulations that had been put in place after the Great Depression to protect consumers from the excesses of Wall Street. The result was the stock market crash of 2008. Since then, the average American household has lost 25% of its wealth. And Washington has failed to act appropriately.
The biggest banks in America, through selfish, risky behavior, caused the crisis. It's time for Congress to stand up for people and consumers rather than the special interests that brought us to the brink of economic collapse. After the taxpayers bailed out Wall Street Banks, most of those banks paid debts and bonuses rather than loosening the credit crunch that has small businesses struggling to keep up. It's time for Washington to work for consumers, too.
As Secretary of State I protect North Carolinians from investment and securities fraud. In recent years, I have witnessed an increase in financial frauds and scams against North Carolina citizens. In the past year I have reached settlements with some of the mega-banks preying on North Carolina consumers. My experience shows that such scams are easier to carry out without consumer protections from Washington. Wall Street will resist these and other reforms with the same scare tactics that convinced us to foot the bill for its follies. We must enact common sense financial services reform to give American consumers a chance to prosper, not just big banks.
Create an Independent Consumer Finance Protection Agency
Wall-Street special interests and lobbyists spend tremendous energy in Washington protecting mega-banks. The Consumer Finance Protection Agency will give consumers a voice in credit transactions, adding simplicity and transparency to the credit and borrowing process --no more loopholes or incomprehensible fine print.
Hold All Parties Accountable
A lot of accountants and lawyers were complicit in the economic collapse. They looked the other way while their clients cooked the books. These people should be held accountable for aiding and abetting securities fraud. Investors need the right to sue law firms and accountants that perpetrate fraud.
Increase Transparency in the Derivatives Market
Rampant speculation of over-the-counter derivatives was a major contributor to the financial crisis. Many of these derivatives were sold behind closed doors in perfectly legal transactions. Congress needs to require that these deals be made on an open exchange so everyone knows the price of the derivatives.
Recoup bailout funds from big banks
Big bonuses and business-as-usual on Wall Street means it's time taxpayers got their money back. A fee on mega-banks would discourage reckless behavior and focus on mega-banks whose sheer size makes Wall Street's every move send shock waves through the economy.
End "too big to fail"
If a bank is "too big to fail," it operates with an invisible government safety net. This belief that Washington will save Wall Street has seen mega-banks taking unreasonable risks with investors' money. We must re-enact consumer protections that were eliminated with the repeal of the Glass-Steagall Act in 1999. Enacted in response to reckless behavior by banks during the Depression, Glass-Steagall separated commercial banking, investment banking and insurance companies. Repeal of Glass-Steagall is one of the things that got us into this financial crisis, and we need its protections back.