Wall Street Reform And Consumer Protection Act Of 2009
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Ms. WATERS. Madam Chair, I rise in strong support of the manager's amendment to H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, and the underlying bill.
This bill will finally reform and rein in Wall Street and our financial system, triggered by greed and risk that caused this country to almost collapse. This bill addresses all of the elements of that collapse by allowing the government to wind down ``too big to fail'' institutions before their failure threatens the entire global economy, regulating risky over-the-counter derivatives, and requiring credit rating agencies to avoid the conflicts of interest that cause them to inflate the value of tax and assets.
Perhaps the most important part of this bill is the creation of a new Consumer Financial Protection Agency. This new agency's role will be to spot the next subprime crisis before it starts and prevent the next predatory product from stripping consumers of their homes and their wealth.
I would especially like to thank Financial Services Committee Chairman Barney Frank for including a provision at the request of the members of the Congressional Black Caucus to use $3 billion in Troubled Asset Relief, TARP, dollars to provide low-interest loans to unemployed homeowners that are having difficulty making their mortgage payments. We also thank Barney Frank for including another $1 billion to strengthen the Neighborhood Stabilization Program that will rehab foreclosed housing and also create jobs. This funding is needed because our current foreclosure prevention programs address the initial cause of our foreclosure crisis, subprime and predatory lending, and not the current cause, unemployment, which is at 10 percent nationally, and in minority communities 13 to 15 percent plus.
We know that these kinds of loans can work. Since 1983, Pennsylvania has run a very successful loan program--just ask Mr. Chaka Fattah--that has saved 42,700 unemployed homeowners from foreclosure.
Madam Chair, foreclosures and unemployment present a systemic risk to our economy. Therefore, I strongly urge my colleagues to vote ``yes'' on the manager's amendment and on H.R. 4173. This is a very important piece of legislation.
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Ms. WATERS. Madam Chair, I rise in strong support of the Manager's Amendment to H.R. 4173, the ``Wall Street Reform and Consumer Protection Act of 2009'' and the underlying bill.
This bill will reform Wall Street and our financial system by ensuring that another financial collapse never happens again. The bill addresses all of the elements of that collapse by allowing the government to wind down ``too big to fail'' institutions before their failure threatens the entire global economy, regulating risky over-the-counter derivatives, and requiring credit rating agencies to avoid the conflicts of interest that caused them to inflate the value of toxic assets.
Perhaps the most important part of this bill is the creation a new Consumer Financial Protection Agency. This new agency's role will be to spot the next subprime crisis before it starts, and prevent the next predatory product from stripping consumers of their homes and their wealth.
I would especially like to thank Financial Services Committee Chairman BARNEY FRANK for including a provision, at the request of the Congressional Black Caucus (CBC), to use $3 billion in Troubled Asset Relief Program (TARP) dollars to provide low-interest loans to unemployed homeowners that are having difficulty making their mortgage payments.
This funding is needed because our current foreclosure prevention programs address the initial cause of our foreclosure crisis--subprime and predatory lending--and not the current cause, unemployment, which is at 10 percent nationally.
We know that these kinds of loans can work. Since 1983, Pennsylvania has run a very successful loan program that has saved 42,700 unemployed homeowners from foreclosure.
Madam Chair, foreclosures and unemployment present a systemic risk to our economy. Therefore, I strongly urge my colleagues to vote ``yes'' on the Manager's Amendment and on H.R. 4173.
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The Acting CHAIR. The question is on the amendment offered by the gentleman from Massachusetts (Mr. Frank).
The question was taken; and the Acting Chair announced that the ayes appeared to have it.
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Ms. WATERS. Madam Chair, I rise in strong support of the amendment offered by the gentleman from Massachusetts. H.R. 4173 is designed to address the lack of regulation in the over-the-counter derivatives market that allowed AIG to write billions of dollars in risky credit default swaps. H.R. 4173 fixes this by subjecting over-the-counter derivatives to a comprehensive regulatory structure and requiring derivatives to be traded through clearinghouses.
However, the derivatives market is currently dominated by a handful of large institutions. And these institutions will simply buy the clearinghouses to make sure that they once again control this market. If this happens, these institutions will be in the conflicted position of ``clearing'' their own derivative deals. The result will be more AIGs. Mr. Lynch's amendment would prevent this by preventing any institution from controlling more than 20 percent of a clearinghouse.
If we don't close this loophole, the over-the-counter derivatives market will continue to be unregulated. Therefore, I strongly urge a ``yes'' vote on this amendment.
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