Search Form
First, enter a politician or zip code
Now, choose a category

Public Statements

Sen. Vitter, Rep. Garrett Introduce Bill to Stop Spread of "Too-Big-To-Fail"

Press Release

Location: Washington DC

U.S. Sen. David Vitter (R-La.) and Rep. Scott Garrett (R-N.J.) introduced a bill today in both the Senate and the House that would stop "Too-Big-To-Fail" from spreading beyond banks to other types of financial firms. The Dodd-Frank financial reform bill created a council that is tasked with giving some non-banks a "Too-Big-To-Fail" designation, thus increasing regulations.

"Our bill takes the federal government out of the business of picking winners and losers in the economy because they're too-big-to-fail. While I'll continue fighting to eliminate this mentality with the megabanks, we need to stop the spread of the too-big-to-fail virus into other sectors of the economy," Vitter said. "Dodd-Frank took the problem that led to the Wall Street bailouts, and made it the standard. Now we're seeing the problem expanding. This bill is a modest first step in rolling back the expansion of the bailout state that Dodd-Frank enshrined."

The Terminating the Expansion of Too-Big-To-Fail Act would remove the authority for the government to designate non-bank financial institutions as "systemically important financial institutions" as contained in Title 1 of the Dodd-Frank Act.

The Dodd-Frank Act created the Financial Stability Oversight Council (FSOC) which is a group of financial regulators, chaired by the Secretary of the Treasury. As required by Dodd-Frank, the FSOC published a rule that would designate non-bank companies as TBTF. The rule is unclear and provides no understanding about what standards will be used to make these designations. Companies chosen by the FSOC will be subjected to enhanced regulation by the Federal Reserve System.

While the Federal Reserve proposed a rule that would apply the same regulations for the largest banks to the designated non-banks, in testimony before the Financial Services Committee last week, Treasury Secretary Geithner also indicated that the designations of non-bank financial institutions would happen this year.

Skip to top

Help us stay free for all your Fellow Americans

Just $5 from everyone reading this would do it.

Back to top