Earlier this week, I joined with small business owners and consumer advocates in Red Bank’s vibrant downtown to rally support for passage of a comprehensive reform package that will put the interests of Main Street before those of Wall Street.
Last fall, I fought for the Wall Street Reform and Consumer Protection Act, a reform package that will protect consumers from the financial fallout of the selfish actions of bankers and prevent taxpayers from ever having to foot the bill for another bailout when risky investments go south. It will force the banks to pay back all bailout money they received and then go further, to tighten the reigns on Wall Street’s worst practices.
In my book, "too big to fail" means too big - period. No one bank - or small group of financial firms - should have the power to collapse our nation’s economy in the blind pursuit of profit. At the end of the day, all the reforms in the world cannot stop all irresponsible behavior and unreasonable risk-taking. But we can ensure that the impact of such bad decision-making is limited by ending the "too big to fail" financial firms. This will both protect the financial well-being of our families, students and retirees as well as businesses small and large. Perhaps more importantly, it will end the need for big bank bailouts that punish taxpayers for Wall Street’s risky decisions.
Moving forward, the proposed Consumer Financial Protection Agency (CFPA) will protect consumers from some of Wall Street’s worst abuses. For too long, banks have been allowed to engage in marketing gimmickry and predatory lending practices, aimed right at those who can afford it the least – families and small businesses. The CFPA will enforce transparency and fairness in lending, ensuring that credit cards, mortgages and personal loans are understandable, affordable and free of devious fine print.
Further oversight at the non-commercial level is needed as well. Just a few years ago, phrases like "credit default swap" were not something you ever heard in every day conversation, and with good reason. Overly complex financial products like CDS’s and derivatives – once referred to as "financial weapons of mass destruction" by Warren Buffet – devastated companies like Lehman Brothers and AIG, kicking off the financial crisis. Investors should never be in the dark when it comes to how their money is being spent. The current reform package will subject these volatile practices, once hardly regulated at all, to serious oversight. And entities like the SEC, which had been virtually powerless to deal with them, will be given a mandate for real enforcement and the funding with which to carry it out.
Sliding back into another economic crisis because we did not crack down on Wall Street abuses when we had the chance is not acceptable. That means standing up and fighting back right now against the defenders of the status quo who are already hard at work lobbying against this bill, trying to water it down to keep lining their pockets. We’ve all had to take our medicine. Now it’s time for Wall Street to take theirs.
