Blog - Need For Real Wall Street Reform

Statement

As U.S. Attorney, I took on the banking and financial industry for fraud and other illegal activities. My office went after big banks like Wachovia, brought charges against hedge funds and went after predatory lenders. We also charged corporate executives with securities fraud, many of whom provided false and misleading information to investors in an attempt to artificially inflate their stock values, undermining the integrity of our financial markets. I fought corruption and greed in the financial industry as U.S. Attorney and I will do so in Congress, voting for much needed financial reform.

The 2008 financial crisis illustrated in vivid detail the importance of effective regulation of our nation's financial institutions. The crisis brought down some of America's largest investment banks and its consequences are still being felt from Wall Street to Main Street even today.

An effective financial reform law will do two things: it will not only protect against systemic failures like the subprime mortgage crisis of 2008, but it will also increase the availability of credit for small businesses and families. I fear that the bill being crafted in Washington will do neither of those things.

One major concern is that the legislation completely ignores Fannie Mae and Freddie Mac, government-sponsored entities that were at the center of the subprime mortgage crisis. The lack of oversight and irresponsible manner in which they were managed cost the taxpayers billions of dollars. Any serious reform of the financial sector must include additional regulation of these taxpayer-funded corporations.

Also, while many of the proposed measures are well-intentioned, they may have the opposite effect of restricting the availability of credit and capital to those who need it most.

But the real issue with the legislation in its current form is that it doesn't just target big banks and Wall Street fat cats. The bill creates an entirely new federal bureaucracy with far-reaching regulatory authority into private business transactions.

Community banks and credit unions will also be hard hit by the legislations. Some credit unions have said the bill will essentially end the ability of smaller banks to provide free checking accounts and could impact their ability to issue credit and debit cards. Congress needs to be very careful that the legislation it is developing does not kill off the ability of smaller banks to compete with the large financial institutions. This is a delicate balance to be sure, but it is critically important. These banks provide vital services to small businesses and many local communities.

Financial reform is a critically important issue that deserves serious attention. The current bill, though, will not effectively prevent the next financial meltdown and it may well restrict the ability of small businesses and families to access credit. As a Congressman, I will make meaningful financial reform a top priority and work to ensure that a nightmare like the 2008 financial crisis never occurs again.

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