Yesterday marked the fifth anniversary of the collapse of Lehman Brothers which precipitated a near global financial meltdown. Millions of Americans experienced tremendous losses in their retirement savings, credit tightened making it more difficult for small businesses to get access to capital and the housing market crashed. Taxpayers were left to pay trillions of dollars to bailout the banks only to watch them use that money to hand out millions in bonuses to their executives.
Working America is still paying for the irresponsibility and greed of Wall Street. All while the largest financial institutions are back to posting huge profits and not a single executive has gone to jail.
To be sure, we've made some progress. While the reforms of Dodd-Frank don't go far enough, they are a big step forward. But the Republicans in Washington and the special interests are fighting as hard as they can to undo all of the headway we've made so far and return us to the days when Wall Street called all the shots.
I'm running for Congress because it isn't working for working families.
As state senator, I took on the banking industry right here in Massachusetts to help prevent unlawful foreclosures. I passed a bill that gives consumers greater protections by prohibiting lenders from passing on improper foreclosure costs and fees to borrowers, forcing creditors to prove they are the current, legal holder of a mortgage. My legislation also forces banks to undertake an honest effort to renegotiate with the family before they can foreclose on a home.
Unfortunately Washington is not doing the same heavy lift to hold banks accountable and not doing nearly enough to ensure that no financial institution can ever again be too big to fail.
I want to go to Washington and be Elizabeth Warren's partner in the House of Representatives in taking on the big banks and fighting for these four critical reforms:
First, we need Janet Yellen to chair the Federal Reserve. We cannot have a Federal Chair who epitomizes the revolving door that allows people to get rich on Wall Street, and then go into government to increase the riches of the good old boy network they just left - all at the expense of the middle class. Wall Street doesn't need any more well-connected friends in Washington. It is doing just fine already. Janet Yellen has a proven track record at the Fed and she has a strong focus on combatting unemployment.
Second, we need to pass the Brown-Vitters Too Big To Fail Act, which would mandate that big banks -- banks with over $500 billion in assets -- keep capital reserves of at least 15%. This key requirement forces large banks to keep enough capital to cover their own losses in order to compel them to never again rely on the taxpayers to rescue them. It also makes it tougher for regulators to bail out large banks by limiting federal assistance to traditional banking operations and not some of the riskier banking practices used today. Markets have previously relied on the assumption that the government will bail out the big banks if there is dire financial trouble. This only encourages the same risky activities that have threatened to destabilize the financial system; the Too Big to Fail Act works to discourage this behavior.
Third, I will fight back against all attempts to exempt the regulation of derivatives from Dodd-Frank. Wall Street has their army of lobbyists and cronies doing everything they can to roll back the system of reforms designed to reduce the risk of further financial crisis. Regulating derivatives is a vital component of this and we cannot allow the special interests to start unraveling the reforms of Dodd-Frank by picking it to pieces. Unregulated derivatives helped cause the market instability to begin with and we need government oversight to prevent Wall Street from running wild again.
And finally, we must reinstate Glass-Steagall. When senators with ideological positions as diverse as Elizabeth Warren and John McCain can agree that these mega banks are too big and too vulnerable to financial volatility, they are likely on to something. Reinstating Glass-Steagall would put the wall back up between where ordinary Americans store their money and where money for riskier activities like hedge funds, pooled investments, swaps, insurance and private equity sits. It would force Too Big To Fail banks to become smaller, helping to ensure that the taxpayers will never have to foot the bill for another massive bailout. I will fight to put back in place a clear line between personal and commercial banking to protect middle class families.
It's been five years since the collapse of Lehman Brothers sparked the worst financial crisis since the Great Depression and while Wall Street is roaring back, the recovery hasn't been as kind to middle class Americans. The median household income is still more than 6% below what it was in 2008. The job prospects for the long term unemployed are bleak. Women, minorities and young people are disproportionately struggling.
As I travel across the Fifth District, I hear an intense sense frustration from working families who feel like the system is rigged against them. These are teachers, nurses, small business owners, engineers, firefighters, construction workers, accountants, the list goes on, who have worked hard and played by the rules only to see it become harder and harder to save for retirement, send their kids to college, afford health insurance and maintain their place in the middle class.
I've spent my time in public office taking on the fights no one else would. I know what it is like to stand up to the insurance industry, the entrenched state bureaucracy and the big banks. I am running for Congress because the middle class needs a stronger voice in Washington and I don't back down.