U.S. Senator Mark Pryor today said new controls have been established to prevent Wall Street from playing risky games with consumers' savings, retirements and economic security.
Pryor said the Restoring American Financial Stability Act of 2010 promotes the financial stability of our nation and prevents the risky financial schemes cooked up by Wall Street that led to the worst financial and economic crises since the Great Depression. The Wall Street reform bill establishes an early warning system to detect and address emerging threats to the economy, enhances consumer and investor protections, strengthens the supervision of large, complex financial organizations, provides a mechanism to liquidate failing financial companies without any cost to the taxpayer, and regulates the $600 trillion over-the-counter derivatives market.
"The near economic collapse of our country taught us many lessons. One, we can't afford a hands-off approach in overseeing Wall Street's practices and products. Two, we need the proper liquidation process in place so that if financial companies built on greed crash, it will not cost taxpayers billions to bail them out. Three, Wall Street firms would do it all again if we let them," Pryor said. "I believe this bill incorporates these lessons, and establishes the proper checks and balances to prevent a financial meltdown in the future."
Small Business Regulation
Pryor joined with Senator Olympia Snowe (R-ME) to ensure when the newly created Consumer Financial Protection Bureau (CFPB) establishes regulations, it considers the economic impact these rules will have on small businesses.
"Small businesses must be able to compete and thrive in today's global economy, which means they must have access to credit," Pryor said. "Because this new agency will likely issue rules affecting credit, Senator Snowe and I want to make sure small businesses have a seat at the decision-making table. The result -- valuable input and job impact analysis -- will prevent new rules from having unintended consequences that could jeopardize good-paying jobs."
Specifically, the Snowe-Pryor amendment, as passed, would designate the CFPB as a "covered agency" under the Regulatory Flexibility Act. This designation would require the agency to convene a small business review panel before issuing a rulemaking that has a significant impact on small businesses.
These small business panels have been successful in shaping proposed rules by the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) to make them workable for small businesses -- and they would do the same for CFPB. Since 1996, EPA has convened 35 panels and OSHA has convened 9 panels. The findings of the panel reports helped EPA and OSHA improve the draft proposals by tailoring regulatory approaches to address small business concerns.
Regulation of Manufacturers and Retailers
Pryor worked with Senator David Vitter (R-La) to limit the reach of a new federal financial regulatory council to only those companies truly engaged in financial services.
"Under this bill, we need to fix what's broken, and leave manufacturing companies, retailers and other non-financial companies alone. They were not part of the problem and should not be subject to enhanced supervision by the Federal Reserve. Our amendment simply clarifies that banks and financial companies deserve a higher threshold of review, while companies like Home Depot, Sears, Wal-Mart or Dillards don't," Pryor said.
The senators' amendment, as passed, restricts regulation to companies "predominantly engaged" in financial services, defined as those that receive at least 85 percent of their revenue or assets from financial activities. Prior to the change, companies engaged in "financial activities" could have been designated by the systemic risk council for additional supervision by the Federal Reserve.