The House is currently debating the
Dodd-Frank
Wall Street Reform and Consumer Protect Act. These acts would put consumers first
and ending the era of taxpayer-funded bailouts and too-big-to-fail
institutions.
In an
interview
published yesterday, House Republican Leader John Boehner
criticized the reform bill calling it “an overreaction to the financial
crisis” and likened the worst fiscal crisis Americans have faced since
the Great Depression to “an ant”:
Boehner criticized the financial regulatory overhaul
compromise reached last week between House and Senate negotiators as an
overreaction
to the financial crisis that triggered the recession.
The bill
would tighten restrictions on lending, create a consumer protection
agency with broad oversight power and give the government an orderly way
to dissolve the largest financial institutions if they run out of
money.
“
This is killing an ant with a nuclear weapon,”
Boehner said. What’s most needed is more transparency and better
enforcement by regulators, he said.
The worst financial crisis since the Great Depression had its roots
in a decade of failure to properly regulate our financial system,
acknowledge and address obvious and growing problems and to invest in
growing our economy.
Irresponsible lending and complex derivatives
transactions led to a mortgage meltdown that sent the nation into
recession in December 2007. The financial collapse happened in the fall
of 2008 with the bankruptcy of Lehman Brothers, the implosion of AIG and
the subprime mortgage crisis. Here is an ant’s view of just some of the
financial crisis’ impact on Americans:
American workers have paid a huge price—we lost 8
million jobs.
American families have paid a huge price—$17.5
trillion in American household wealth was wiped out during the
last 18 months of the Bush Administration.
High-cost Payday Loans are preying on nearly 12
million Americans—they pay a chunk of interest each pay day,
costing them nearly $5 billion per year along with other predatory
lending.
These loans can ultimately carry annual interest rates of 400%
or more, with the typical borrower paying about $500 in interest for a
$300 loan, and still owing the principal.
2.8 million homes were in foreclosure in 2009
alone. Subprime and predatory home loans, in which mortgage
brokers lured families with low, teaser interest rates that later
skyrocketed to unaffordable levels, hidden fees and charges, and
incomprehensible terms and conditions that brought on the housing crisis
and undermined the financial system.
More than 60% of subprime loans
went to people who could have qualified for lower cost loans.
Total retirement assets, Americans’
second-largest household asset behind their homes, dropped by 22%,
from $10.3 trillion in 2006 to $8 trillion in mid-2008.
Financier Bernie Madoff was allowed to defraud investors out of as much as $65 billion in the largest Ponzi scheme in history.
The Securities and Exchange Commission (SEC) missed
red flags that could have put a stop to his asset management business.
As we rebuild our economy, we must put in place common-sense rules to
ensure big banks and Wall Street can’t jeopardize our recovery and hurt
hard-working families and small businesses once again.
Wall Street may
be bouncing back, but we know from experience that left to their own
devices they’re not going to police themselves.
