Rep. Paul E. Kanjorski (D-PA), chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, voted for HR 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which passed in the House by a vote of 237-192. Rep. Kanjorski participated as one of the few negotiators to resolve the differences between the House and Senate versions of the Wall Street reform bills and reach a final agreement on the historic legislation that the House voted on. The Senate will have to pass HR 4173 before it goes to the President for his signature.
Chairman Kanjorski provided the following statement on the House passage of HR 4173:
"Today marks an historic achievement for the American people and our economy," said Rep. Kanjorski. "We have been through a great deal of turmoil during the past two years, and we are still working to recover from the dark days in the fall of 2008 that resulted from excessive greed and deceitful actions by Wall Street operators. The legislation that the House passed today with my strong support will work to better protect the American public which has unfortunately felt the severe consequences of Wall Street's dire mistakes. As we have learned from the past two years, we are all interconnected, and this legislation takes significant steps to protect average Americans from future financial crises. It will also considerably strengthen our economy's infrastructure, which serves as a cornerstone of our global markets. It is singlehandedly the most significant overhaul of our financial services regulatory system since the Great Depression.
"Let's set the record straight—this bill aims to prevent future bailouts and end the era of ‘too big to fail.' Those terrifying months in late 2008 convinced me that the federal government needed to play a far more vigorous role in policing the activities of the Wall Street firms. During the last two years, my top priority has therefore been to avoid having any future Congress face the same dilemma that we faced in 2008: ‘bail out' Wall Street to save Main Street or risk the collapse of the entire American economy. I decided that the most important element of any Wall Street reform effort needed to ensure that no financial firm could be allowed to become so big, interconnected, or risky that its failure would endanger the whole economy, as we experienced in the fall of 2008. This legislation includes many provisions that I wrote, including the Kanjorski amendment, which is complemented by the Volcker rule advanced by the Obama Administration, to empower federal regulators to rein in, and even dismantle if necessary, those firms whose very existence threaten the entire system. This key amendment provides sweeping authority to help avoid taxpayer funded bailouts, prevent financial companies from threatening the stability of our economy, and protect the American public from experiencing the financial turmoil that we have felt for the past two years. Too many people have been struggling financially, and we must do everything possible to prevent such circumstances from happening again. This legislation, particularly with the Kanjorski amendment as a part of it, works to do just that.
"I have worked diligently to ensure that this legislation was created in an open and transparent manner. Over the past two years, Congress has held numerous hearings, mark ups, and floor debates. We held a full conference committee to negotiate a final bill, the entirety of which was televised on C-SPAN for all Americans to watch. This legislation has been carefully crafted, and while it is not perfect, I am very pleased with the final outcome. I believe that this bill has the capability to effectively protect our economy and the American people. Now, I strongly encourage the Senate to pass this important set of legislative reforms in order to fundamentally change the way that Wall Street operates."
Chairman Kanjorski wrote many provisions in the legislation, including the following:
Prevent future bailouts and end the era of "too big to fail"
The Kanjorski "too big to fail" amendment empowers federal regulators to rein in and dismantle financial firms that are so large, inter-connected, or risky that their collapse would put at risk the entire American economic system. Therefore, American taxpayers should no longer be on the hook for bailouts, as financial companies would not be able to become "too big to fail."
It was originally included in the Wall Street reform bill that the House passed on December 11. The Senate included similar language in its Wall Street reform bill which passed in May. President Obama also announced his proposals to limit the size and scope of financial companies, and both Administration officials and House leaders have regularly stated that the President's proposed Volcker rule builds upon the Kanjorski amendment to address companies that are deemed too big to fail.
Improve mortgage servicing standards
For nine years, Rep. Kanjorski has been working on these issues, which first came to his attention because of predatory mortgage lending problems in the Poconos. His 2004 hearing in the Poconos on this issue led to the introduction of his comprehensive bipartisan bill in 2005 to protect consumers. The bipartisan reforms have now passed the House in 2007, 2009, and 2010.
Help families to stay in their homes
Rep. Kanjorski advocated on behalf of a national program to offer emergency bridge loans to help unemployed workers with reasonable prospects for reemployment to keep their homes. This new national initiative is based on the Homowners' Emergency Mortgage Assistance program in Pennsylvania, which since 1983 has saved 43,000 homes from foreclosure by helping to cover mortgage payments until homeowners find new jobs.
Better protect investors
Rep. Kanjorski's provisions will help to better protect investors and safeguard our economy in the future. Among these reforms is a requirement for banks and brokers to tell the truth to investors, seniors, and retirees about how the money for their retirement accounts and pension funds are invested. It will also help to bolster the U.S. Securities and Exchange Commission so that it can more effectively regulate the financial markets and work to prevent potential problems that could impact the whole economy.
Regulate credit rating agencies
Credit rating agencies like Moody's, Fitch, and Standard & Poor's greatly contributed to our current economic problems by providing many faulty financial firms with grades stating the opposite. Such gross inaccuracies dramatically propelled the financial problems as they only helped to hide companies' sticky financial situations and promote instability in the marketplace. Chairman Kanjorski's provisions will change the way that credit rating agencies operate and make sure they are held accountable to investors.
Require the registration of hedge funds
While hedge funds did not directly cause the latest financial crisis, we know that they helped to promote instability within our financial system. This provision will ensure that hedge funds are fully regulated like other financial institutions and no longer skirt needed oversight, which will help to better protect the economy.
Monitor insurance markets
Chairman Kanjorski's provision creating a federal insurance office will, for the first time, allow the federal government to speak with a uniform voice on insurance matters on the international stage and better monitor the insurance industry to protect the economy. Insurance is regulated at a state level, leaving a void when the U.S. needs to discuss insurance issues at a national level with other countries. This provision would create such a national voice.
For more information, visit http://kanjorski.house.gov.