AFR Supports H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009

by admin in Financial Reform News

Americans for Financial Reform is supporting H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009.

The need for this legislation could not be more obvious. Years of deregulation have produced a financial system that is a threat to our economy. Rampant abuses in consumer lending practices, combined with a casino mentality on Wall Street and the willful blindness of federal regulators, have plunged our economy into its worst economic crisis since the Great Depression – and it is clear that Wall Street has not learned its lessons. While H.R. 4173 needs to be strengthened, it contains vital reforms for our country and must be passed.

AFR sent the following letter to members of the House of Representatives on December 10. Download the letter as a PDF to view our positions on more amendments (pages 3 – 7).

Support H. R. 4173 “Wall Street Reform and Consumer Protection Act of 2009” and Statements on Amendments

Dear Representative:

The undersigned organizations strongly urge you to support H.R. 4173, the “Wall Street Reform and Consumer Protection Act of 2009,” when it comes to the House floor this week. We write individually and also on behalf of Americans for Financial Reform, a coalition of more than 200 national, state and local consumer, labor, retiree, investor, community, business and civil rights organizations who are campaigning for real reform in our nation’s financial system.

The need for this legislation could not be more obvious. Years of deregulation have produced a financial system that is a threat to our economy. Rampant abuses in consumer lending practices, combined with a casino mentality on Wall Street and the willful blindness of federal regulators, have plunged our economy into its worst economic crisis since the Great Depression – and it is clear that Wall Street has not learned its lessons. While H.R. 4173 needs to be strengthened, it contains vital reforms for our country and must be passed.

A number of amendments will be offered which will fundamentally affect the shape of this legislation. In order to ensure meaningful financial reform we strongly urge you to:

  • OPPOSE the Minnick amendment to eliminate a new Consumer Financial Protection Agency (CFPA) from the bill. It would leave enforcement of consumer protection and civil rights laws in the hands of the same existing regulatory bodies that resoundingly failed to use them.  [Read our letter of opposition regarding this amendment here.]
  • SUPPORT the Stupak/DeLauro/Larson/Van Hollen amendment on derivatives.  Regulators must have the authority to ban abusive derivatives instruments rather than simply reporting them to Congress, transactions which violate the law should be considered invalid, and loopholes which leave too many trades to continue in the shadows must be closed.

At the same time, we believe that as the legislative process moves forward H.R. 4173 must be improved in important respects including:

  • The bill provides systemic regulatory authority to the Board of Governors of the Federal Reserve without reforming the Federal Reserve System to remove the banks themselves from a role in overseeing the Federal Reserve’s regulatory staff. We need a fully public systemic risk regulator, either in the form of a separate agency as detailed in Chairman Dodd’s proposal, or a reformed Federal Reserve.
  • The proposed CFPA needs to have jurisdiction over the Community Reinvestment Act (CRA), as it does in Chairman Dodd’s proposal. The CRA is vital to fighting discriminatory, deceptive, and unsustainable lending practices in minority communities. But as is the case with other consumer protection and civil rights laws, CRA enforcement in recent years has been extremely weak, allowing a wide range of under-regulated, non-bank – and often predatory – lenders to fill the void.
  • The legislation should also be changed to give the SEC authority to make the exemption from registration under the 1940 Act for private investment funds contingent upon such funds fulfilling requirements established by the SEC.

Despite the need for these improvements, passage of H.R. 4173 would represent dramatic progress towards a financial system that works for all Americans. By voting for it, you will send an important message to the American public that you intend to change the way that Wall Street works for the better.

Thank you for your consideration of our views. If you have any questions, please contact Rob Randhava, Leadership Conference on Civil Rights, (202) 466-6058 and Lisa Donner, Americans for Financial Reform, (202) 263-4544.

Sincerely,
Americans for Financial Reform

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