This is a letter I received from Dick Durbin’s camp. I’m all for common sense, as long as mis-perception does not get in the way. I guess we’ll see what happens.
Full letter:
Thank you for sharing your concerns regarding the Restoring American Financial Stability Act, S. 3217. This legislation will reform Wall Street and big bank practices to help prevent future financial meltdowns such as the one we have experienced over the past several years.
This commonsense measure will:
Establish a Consumer Financial Protection Bureau (CFPB). The Wall Street reform bill will create a Consumer Financial Protection Bureau, housed in the Federal Reserve, to protect consumers from the tricks, traps, and fine print that some banks use to take unfair advantage of consumers. The CFPB will focus solely on protecting consumers. The Bureau will have oversight of depository institutions holding more than $10 billion in assets.
Prevent Banks from Becoming Too Big to Fail. The bill will establish an orderly process for the liquidation of financial institutions that mismanage their affairs. The bill will impose significant new requirements on firms that pose a systematic risk to the financial system. Large financial institutions will be required to submit “funeral plans” periodically to describe their planned course of action in the event of a melt-down. If a company is unable to develop a credible way to unwind itself in a crisis, federal regulators may order the company to be broken up into smaller entities that pose less risk to the public.
Senator Boxer offered an amendment I supported that explicitly prohibits taxpayer bailouts. It clarifies that any failed financial company taken into receivership by the government must be put out of business, and the liquidation must not be done at taxpayers’ expense.
Regulate Derivatives. Derivatives, in their most basic form, allow users to manage certain business risks that arise from volatile commodity prices, interest rates, currency exchange rates, and a wide range of other variables. The Senate adopted Senator Lincoln’s amendment to the Wall Street reform bill, which will strengthen transparency in the largely unregulated derivatives market and close loopholes that are often exploited.
Improve the Mortgage Process. The amount of paperwork required to establish a mortgage can be overwhelming, and many lenders and brokers have taken advantage of that confusion to sell borrowers loans they can’t afford. The consumer financial protection agency will be required to consolidate and simplify two overlapping and sometimes inconsistent federal mortgage forms.
Prevent Credit Card Company Abuse. Banks and credit card companies will be forced to offer clear terms in plain English. Consumers will have the information they need to compare rates so they can make the financial choices that are right for them.
The Senate adopted Senator Reed’s amendment, which will create a “Consumer Protection Liaison” for military members and their families. Military families sometimes use credit cards to get by when times are tight. Now they will benefit from stronger protections.
I offered an amendment, which was adopted, to ensure that debit interchange (swipe) fees are reasonable and proportional to the processing costs. The amendment will help small businesses that are being squeezed as a result of rising interchange fees assessed by credit card companies. It exempts institutions with assets under $10 billion to protect community-based banking institutions.
Apply the Same Rules to Payday Loans, Credit Bureaus, Debt Collectors, and Other Nonbank Entities. For the first time the CFPB will establish fair rules of the road for non-bank financial providers such as check cashers, payday lenders, credit bureaus, debt collectors, and mortgage brokers.
Audit the Federal Reserve. Senator Sanders offered an amendment that will increase transparency regarding the Federal Reserve. This amendment will require the Government Accountability Office (GAO) to conduct an independent and comprehensive audit of the Federal Reserve System, which must be completed one year after the bill is passed. The amendment will also require the Federal Reserve to disclose the names of financial institutions and foreign central banks that received financial assistance from the Fed since the start of the recession, the amount they received, and the terms of that assistance.
The financial collapse caused 8.4 million Americans to lose their jobs, millions of small businesses to close, and nearly 7 million people in the United States to lose their homes to foreclosures. It depleted the savings and retirement accounts of millions of Americans. This historic legislation offers a strong foundation to help ensure that this kind of collapse never happens again.
I appreciate hearing from you. Thank you again for writing.
Sincerely,
Richard J. Durbin
United States Senator
