Restoring American Financial Stability Act of 2010

Floor Speech

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Ms. KLOBUCHAR. I say thank you so much to my friend from Texas. I wish to thank her for her leadership on this issue.

As she mentioned, our amendment seeks simply to preserve the Federal Reserve's authority to supervise community banks and bank holding companies as well as to preserve a system that ensures the institution charged with our Nation's monetary policy has a connection to not just Wall Street but to Main Street.

As the Presiding Officer knows, for the most part, our mid-sized banks, small banks in the States throughout this country--Texas and the Midwest--stayed out of these risky deals. They stayed away from these high-flying, way too risky deals of the past decade. They made meat-and-potatoes loans to consumers and businesses in their communities. They did well for their customers.

These Main Street banks did not dance down the yellow brick road to Wall Street dealmaking or Washington hobnobbing. When the pavement on Wall Street began to buckle and collapse, these community banks did not panic and run to Washington with tin cups in outstretched hands. They continued to conduct their business, behaving the way--well, the way banks are supposed to behave.

The Federal Reserve Bank of Minneapolis, along with 11 other regional banks, provides a presence across this country that gives the Fed grassroots connections, insights into the local economies, as well as legitimacy when they have to make tough decisions that affect not just Wall Street but the small local banks that serve so many of our communities. Through their working relationships with community banks, the regional Federal Reserve banks also collect and analyze important information about the movements and trends in local economies. This relationship is a two-way street as it also provides a voice for community banks that would be lost if the Federal Reserve were to only supervise the largest banks.

As the president of the Federal Reserve Bank of Minneapolis noted, it would be shortsighted to conclude that the Federal Reserve: ``can safely be stripped of its role as a supervisor of all banks.''

As he noted, disruptions in the financial system can come from all sectors, and the connection the regional Federal Reserve banks provide to local economies can be vital in ensuring the stability of the entire financial system.

I say to my friend from Texas, just this morning Noah Wilcox, president of the Grand Rapids State Bank in Grand Rapids, MN--a part of the country most hurt by this economic downturn caused by Wall Street--wrote to me and said this:

All Senators should be reminded that the Federal Reserve System was created to serve all of America, not just Wall Street.

I thank the Senator from Texas for her leadership, and I look forward to working with her on this amendment. I was glad that Senator Murray joined us on our amendment, and we have a number of other cosponsors. Again, I thank the Senator.

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