Years without accountability for Wall Street and big banks brought us the worst financial crisis since the Great Depression, the loss of 8 million jobs, failed businesses, a drop in housing prices, and significant losses in personal savings. Senate Democrats worked to restore responsibility and accountability in our financial system with the Wall Street Reform and Consumer Protection Act. The bill will put in place the reforms necessary to grow the economy and create jobs – giving Americans confidence that there is a system in place that works for and protects them.
Despite the overwhelming call for reform by the American people, Senate Republicans spent weeks obstructing progress on the bill in an effort to protect special interests and banks. They attempted to water down this vital legislation on behalf of CEOs and credit card companies. Democrats refused to take no for an answer, believing that hard-working American families deserve strong protections from the predatory practices of Wall Street. That is why Democrats persevered in the fight for the passage of Wall Street reform legislation.
Highlights of the Wall Street Reform and Consumer Protection Act
Consumer Protections with Authority and Independence: The bill creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protects them from hidden fees, abusive terms, and deceptive practices.
Ending Too Big to Fail Bailouts: The bill ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.
Advance Warning System: The bill creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.
Transparency & Accountability for Exotic Instruments: The bill eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated — including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.
Executive Compensation and Corporate Governance: The bill provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation and golden parachutes.
Protecting Investors: The bill provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.
Enforcing Regulations on the Books: The bill strengthens oversight and empower regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefits special interests at the expense of American families and businesses.