Prudent regulation creates a safe, stable environment that people can rely on. Allowing Wall Street to own and operate depositor banks in a completely unregulated environment within our banking system was one of the most reckless things our elected leaders could have done. But they did it, and in doing so caused the majority of the financial problems we have faced in the past few years.
My top priority in Washington would be to write and introduce legislation to repeal Gramm Leach Bliley, and to reinstate the protections provided under Glass Steagall. The legislation would also repeal the Commodities Futures Modernization Act of 2000, and create sensible, sound regulation for all derivative products. Such legislation would also reduce the amounts of leverage that could be used in association with derivatives, as well as other financial instruments. Allowing the use of 40-1 leverage is imprudent and reckless and contributed greatly to the massive losses incurred by our financial institutions in 2008 and 2009.
The legislation would also create sensible, fair mortgage regulation. If we would have had such regulation in place, we could have avoided the housing bubble and its collapse. Anyone buying a home needs to put down at least 10%. The lender has to verify employment and run a credit report to make sure the person is credit worthy.
This legislation would include a "fair and reasonable" clause which would establish federal usury limits and prudent, fair guidelines for all banking services and products. This could do more to bring an end to predatory lending practices than anything else. No one should be allowed to charge anyone more than 10 points above the established prime rate.