WISCONSINREPORT.COM (12/12/2009) - U.S. House Representative Ron Kind (D-WI), Vice-Chair of the New Democrat Coalition, voted Friday to protect consumers and hold Wall Street and big banks accountable through the Wall Street Reform and Consumer Protection Act (H.R. 4173). Kind says he voted that way so that the United States never again comes close to the near economic collapse faced last year.
"Just over a year ago, we were held hostage by large institutions that were viewed as too big to fail, that made bad decisions that almost brought down our entire economic system," said U.S. House Representative Kind.
"This bill will change that. No longer will there be institutions deemed too big to fail," Kind said.
"This bill will allow them to fail, but at their own expense, and in a way that doesnít jeopardize the whole U.S. financial system," Representative Kind explained.Ē
The legislation holds Wall Street accountable through increased transparency and regulation of risky practices.
A new systemic risk regulator will monitor financial activity across the whole sector to identify risks and irresponsible behavior and prevent them from becoming a problem for individual investors and the entire economy.
The bill also establishes an orderly process for dismantling large, failing companies - at their own expense, and requires that stockholders and executives take a financial hit if risky deals fall through, ensuring an end to taxpayer funded bailouts.
The bill also enacts several measures to protect consumers including:
(1) Ensuring that credit cards and mortgages are fair, transparent, and understandable by creating the Consumer Financial Protection Agency (CFPA), a new, independent federal agency solely devoted to protecting Americans from unfair and abusive financial products and services and providing quality information about potential risks.
(2) Helping protect 401k and pension plans by stopping institutions from taking risks that threaten the financial system and can cause a crash.
(3) Ending predatory lending practices so that lenders canít put consumers into an unaffordable or difficult to understand loan.
"Over the past year, we have become aware of many financial practices which were abusive and reckless and unfortunately, did not do enough to protect the consumer," Kind said.
"Weíre putting an end to that with this bill," Congressional Representative Kind stated.
"At the same time, itís important that we modernize our regulatory system, so we can preserve the ability of businesses to continue to innovate and take appropriate risk to support economic growth and job creation," Kind continued.