Conference Committee Consideration of the Wall Street Reform and Consumer Protection Act (H.R. 4173)

House-Senate Conference Committee on Financial Regulatory Reform Legislation

Congresswoman Maxine Waters (CA-35) was selected by House leaders to serve on the "conference committee" -- a group of Representatives and Senators who will negotiate differences between House and Senate versions of legislation to reform regulation of the nation's major banks and financial institutions to prevent another financial crisis and to protect American consumers from predatory loans, abusive credit card fees and other practices. The conference committee held its first meeting today at which the conferees presented their opening statements. Congresswoman Waters' statement as prepared for delivery follows:

I am pleased and honored to serve on the conference committee for H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009. Given the comprehensive and sweeping nature of the legislation before us, I believe that this is the most important conference the Financial Services Committee has held in decades.

The financial crisis and the legislation we have drafted in response have made clear the important role of the financial services industry in the lives of everyday Americans: rich and poor, homeowners and renters, the banked and the unbanked. The bill before us today provides us with an opportunity to use public policy to level the playing field, be fair, and not to benefit solely the few, the powerful and the rich, but to help all Americans.

The Consumer Financial Protection Agency is one example of an improvement that this bill makes to the status quo. Congressional Oversight Panel Chairwoman Elizabeth Warren was one of the first people to realize that the current patchwork regulatory scheme of consumer protection failed consumers, benefited industry, and led to the resulting subprime mortgage meltdown. This provision to establish a Consumer Financial Protection Agency is essential to this legislation.

Derivatives, including credit default swaps (CDS), also contributed to the current crisis. These complicated instruments were designed to earn huge profits for parties on all sides of the transaction. Unfortunately, a lack of transparency and oversight led companies like AIG to issue swaps that they lacked the capital to cover. Strong action is needed in this area -- including improving transparency and regulating these products -- if we are to prevent another meltdown and another bailout.

As a member of the Judiciary Committee, I am very familiar with the issue of interchange fees, having heard testimony from merchants and banks on this topic. It's a very complicated issue but must be resolved in a manner that doesn't harm community banks or credit unions but provides some relief to small businesses and merchants, while protecting consumers.

I've also worked on the issue of private student loans for many years, both in this body and in the California State Assembly, ensuring the passage of a law in California called the Maxine Waters School Reform and Student Protection Act of 1989.

I remain concerned about proprietary for-profit schools failing to provide students with a meaningful education and succeeding in saddling them with tens of thousands of dollars in high interest private loans. While I am pleased that both bills address private student loans, I am concerned about making sure that students who attend these schools receive a quality education.

Lastly, I worked with the other 9 CBC Members on the Financial Services Committee to draft an amendment -- which passed the Committee on a voice vote -- to establish Offices of Minority and Women Inclusion at each of the federal banking agencies that are subject to this legislation. The case for these offices is clear. According to a recent study by the Heller School for Social Policy and Management at Brandeis University, the wealth gap between African Americans and whites has more than quadrupled in 23 years.

We absolutely must open up opportunities for minorities and women within the federal banking agencies. These offices will ensure that agencies have good processes for hiring, recruiting, retaining and working with minority and women employees and businesses.

I look forward to this conference and I'd like to thank Financial Services Committee Chairman Barney Frank for his leadership in passing the House bill and in pushing for such an open forum to resolve our differences with the Senate.

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