Letter to Senate Banking Committee Chairman Chris Dodd and Ranking Member Richard Shelby

Letter

Senators Call for Taxpayer Protection, Stronger Oversight, in Financial Crisis Response

Today, United States Senator Ken Salazar joined several of his colleagues in outlining a plan to strengthen the Administration's proposed response to the financial crisis that is gripping Wall Street and affecting millions of middle-class families.

"American families are rightly concerned about the impact a worsening financial crisis would have on their savings, their home values, and on their economic security," said Sen. Salazar. "They are also rightly concerned about the risks that the Administration's proposal carries for taxpayers. Taxpayers want - and deserve - the strongest protections and oversight possible."

In a letter to Senate Banking Committee Chairman Chris Dodd and Ranking Member Richard Shelby, Sen. Salazar and his colleagues call for drafting a bill that: 1) minimizes taxpayer liability; 2) helps middle class families weather the storm; and 3) contains regulatory reforms and improved oversight.

The text of the letter is below.

Dear Chairman Dodd and Ranking Member Shelby:

As the Senate crafts a legislative proposal to respond to the recent instability in the financial sector, we believe that we must focus our efforts on drafting a bill that minimizes taxpayer liability; directs as much assistance as possible toward Americans on Main Street, to improve the economy and create jobs, rather than just the corporate titans on Wall Street; and contains regulatory reforms that reduce the chance of a future financial crisis of this magnitude. While there are additional ideas that some of us feel strongly about, we agree on the following and we urge that they be addressed in the legislation:

Financial protection for taxpayers

1) The taxpayers should not be expected to bear all of the risk with little or no prospect for real gain from each of these transactions. That is a path that limits the recovery of the taxpayers money. As was the case in the assistance provided to AIG and the government -sponsored enterprises, taxpayers should share in the likely equity improvements of companies relieved of impaired assets. This is especially true if those assets underperform. The taxpayers are being placed at considerable risk and they deserve to see the recovery of their tax dollars.

2) For companies that receive assistance; there should be limits placed on dividends, key executives should have a look back provision placed on their compensation and there should be a prohibition of golden parachutes.

Helping Main Street and Consumers

1) There should be an economic stimulus package to help create jobs and spur local economies.

2) There should be reforms of credit card practices to better protect the consumer, reducing the chance of a future financial crisis.

3) The bill should provide increased aid to financially stressed homeowners borne by the industry to help homeowners and reduce foreclosures.

Regulatory reform

1) There should be a regulator of the financial markets focused on protecting the consumer.

2) There should be changes in corporate governance to improve the independence of corporate boards to reduce reckless behavior.

3) There should be limits placed on speculative behavior in the markets.

We appreciate your consideration of these crucial issues.

Sincerely

Senator Tom Harkin
Senator Ken Salazar
Senator Jim Webb
Senator Bill Nelson
Senator Amy Klobuchar

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