The U.S. House of Representatives passed legislation Wednesday that will protect consumers from predatory lending, regulate "Too Big to Fail" financial companies, and prevent future taxpayer funded Wall Street bailouts. U.S. Congressman Bart Stupak (D-Menominee) voted in favor of H.R. 4173, the Wall Street Reform and Consumer Protection Act, which will put an end to the abuses that have allowed Wall Street to profit at the expense of American consumers and destroy our economy.
"Years of abuse on Wall Street, manipulation of our financial markets and the expansion of regulatory loopholes have harmed American consumers and businesses for far too long and ultimately led to a global financial disaster," Stupak said. "This legislation establishes critical consumer protections, strengthens accountability and reins in Wall Street without punishing local community banks and credit unions, like those found throughout northern Michigan."
Under the legislation, an independent Consumer Financial Protection Bureau will be established to protect consumers when they borrow money, make deposits or obtain other financial products and services. It will have the authority to put an end to unfair, deceptive and abusive consumer financial products and services. Non-bank institutions, like payday lenders, will also be federally regulated for the first time.
To put an end to future taxpayer funded bailouts, "Too Big to Fail" firms on the verge of collapse as a result of their own recklessness will now be dissolved in an orderly fashion rather than being propped up by taxpayers. Large financial firms will now pay into a new fund to ensure the financial industry, not taxpayers, bear any losses in this dissolution process.
A top priority for Stupak found in H.R. 4173 was ensuring that it bring oversight and transparency to the largest unregulated financial sector of the economy and effectively end "dark markets." While trades on regulated markets totaled $80 trillion in 2008, trades on the unregulated "dark markets" accounted for $600 trillion, or 41 times the size of the entire U.S. economy. The bill ensures federal regulators have the tools to impose limits on unregulated trading, that these trades are publicly reported in real-time and that taxpayer funds are not used to support institutions engaged in risky derivative trading.
As chairman of the Energy and Commerce Subcommittee on Oversight and Investigations, Stupak has led congressional investigations into the role speculators trading on the dark markets play in driving up costs for consumers, particularly the cost of gasoline and other energy products. His work helped highlight the need for the increased oversight, transparency and regulation of the energy markets provided by H.R. 4173.
"By shining a light on these dark markets and closing loopholes that allow speculators to avoid regulation, this legislation will help put an end to the risky behavior that threatens the stability of our economy," Stupak said.