The era of banks that are "too big to fail" ended today when President Barack Obama signed the Wall Street Reform and Consumer Protection Act into law. Congressman Jim Oberstar released the following statement on the new law:
"The Wall Street Reform and Consumer Protection Act enacts tough, common sense reforms that protect consumers and end the era of "too big to fail." The new law creates a new Consumer Financial Protection Agency to protect families and small businesses by ensuring that bank loans, mortgages and credit cards are fair, affordable, understandable and transparent.
Unscrupulous practices by credit card companies, like arbitrarily adding fees and raising interest rates, are now banned. They will no longer be allowed to send you a bill a day before it is due, and then charge a late fee because your payment arrived late.
Federal regulators now have the authority to seize and dismantle large banks and brokerage firms before they threaten to the financial health of the nation. Taxpayers will never again be asked to pay for the reckless behavior of big bankers and Wall Street CEOs.
Other reforms will ensure that Wall Street does not gamble with your money. Complex financial products like credit default swaps and derivatives trades that contributed to the financial meltdown will now be subject to common sense rules and regulations, just like the stock market is. The Securities and Exchange Commission has been given more authority to oversee hedge funds and private equity funds.
It was important to me to ensure that banks on the Main Street of Northeast Minnesota did not pay the price for the misdeeds of Wall Street. I fought hard to ensure that this law targets those who were at the heart of the problem. Federal Deposit Insurance Corporation rates have been readjusted so premiums are lower for banks on Main Street and higher for banks on Wall Street. Just as a driver with a bad driving record pays higher car insurance premiums, big financial institutions will see their rates go up."