FOR IMMEDIATE RELEASE

The so-called $50 billion “bailout slush fund” would force big banks to pay not taxpayers

Washington, DC – Americans for Financial Reform denounces the misstatements by opponents of reform – including Senators Shelby and DeMint – that have been spreading surrounding a measure in the Senate financial reform bill that would dissolve big banks and financial companies when they fail.

• Fact Check: Big Banks and risky financial institutions, not taxpayers, are on the hook for failures. The fund is paid for entirely by large, risky financial corporations, not taxpayers. It is meant to protect taxpayers and require risky financial companies to pay the costs of their own failure. That’s why the banking industry opposes what is essentially a tax on their reckless gambling.

• Fact Check: The fund will never be used to bail out a company. The only way the $50 billion Orderly Liquation Fund can be accessed is during the process of orderly liquidation. Thanks to the addition of Senator Shelby’s own provision in the bill (see p. 54 of Manager’s Amendment), any company entering liquidation must be liquidated and wiped out.

Heather Booth, Director, Americans for Financial Reform: “Calling a bill that will rein in the big banks and hold Wall Street accountable a ‘bailout’ bill is a page right from the dishonest and untrustworthy playbook of Wall Street and opponents of reform. If these Senators truly want to end ‘too big to fail’, why don’t they support breaking up the banks? If they truly oppose bailouts, why don’t they support tougher rules to rein in the risky shadow banks like AIG?  If they truly want to prevent another financial crisis, why do they oppose the Volcker Rule that would stop banks from playing ‘heads we win, tails you lose’ games with our money? April Fool’s Day might have passed, but these false statements are just a joke.”