June 23, 2010
Members of the New York Delegation
United States House of Representatives
Washington, DC 20510
Members of the New York Delegation
United States Senate
Washington, DC 20510
Dear Senator/Representative:
We the undersigned members of New Yorkers for Responsible Lending write to urge you to support strong regulation of the $600 trillion derivatives market, and a meaningful ban on proprietary trading by banks and bank holding companies. Reckless swaps and derivatives trading played a major role in causing the financial crisis, turning the fallout from the crash of the domestic housing market into an economic catastrophe. Our groups have seen up close the devastating effect that unaccountable and unregulated Wall Street speculation has had on New York communities. Millions of New Yorkers have lost their jobs, homes, and overall economic security because of these irresponsible and harmful practices.
New Yorkers for Responsible Lending is a coalition of 153 organizations that represents millions of New Yorkers from all regions of the state. Since 2000 NYRL has promoted access to fair and affordable financial services and the preservation of assets for all New Yorkers and their communities. NYRL members represent community financial institutions, community-based organizations, affordable housing groups, advocates for seniors, legal services organizations, and community reinvestment, fair lending, and consumer advocacy groups.
We believe that it is critically important to preserve the Senate bill’s stronger provisions on derivatives. The Senate bill would regulate 90% of the derivatives market; would require federal regulators to set limits on speculators’ ability to gamble in the derivatives market; and would close loopholes that would allow entities such as hedge funds and insurance companies to evade regulation. We strongly support a vital provision of the Senate bill – Section 716 – that would require the big banks to spin off their swaps business, and thus protect taxpayers from having to bail out the big banks when risky bets go bad.
We also urge you to support stringent provisions to ban proprietary trading by banks and bank holding companies (the “Volcker Rule”). A strong Volcker Rule will be a critical firewall limiting bank depositors’ (and taxpayers’) exposure to risky proprietary trading by Wall Street. Current efforts to make application of the Volcker Rule discretionary after a “study” on its impact will seriously weaken a critical pillar of meaningful financial reform. We urge you to support the Merkley-Levin language to make a strong Volcker Rule statutory, and not subject to regulators’ whims.
Reckless practices by Wall Street have had a profoundly negative impact on millions of New Yorkers. We strongly oppose the efforts of several members of the New York delegation to weaken financial reform in the name of tax revenue for New York – in the long term, lack of accountability for Wall Street will only cause greater economic distress for New Yorkers, and will continue to put our state and national economy at risk.
If you have any questions, please feel free to contact Josh Zinner of NEDAP, at 212-680-5100.
Sincerely,
Brooklyn-Wide Inter-Agency Council for the Aging, Inc.
Central New York Citizens in Action, Inc.
Chautauqua Home Rehabilitation and Improvement Corporation (CHRIC)
Empire Justice Center
Fair Housing Council of Central New York
Genesee Cooperative Federal Credit Union
Greater Rochester Community Reinvestment Coalition
JASA Legal Services for the Elderly in Queens
Long Island Housing Services
Margert Community Corporation
NEDAP
Neighbors Helping Neighbors
New York Communities for Change
NYPIRG
Parodneck Foundation for Self-Help Housing and Community Development, Inc.
Pratt Area Community Council
Progressive Research and Action Center, Inc.
Syracuse University Securities Arbitration and Consumer Clinic
Urban Justice Center
Westchester Residential Opportunities, Inc.
Western New York Law Center