Reforming Wall Street, finally
By U.S. Rep. Mike Michaud
Wall Street’s recklessness and bad bets led to Americans losing their jobs and homes, seeing their retirement savings severely depleted, and their states and local communities pushed to the brink of collapse. Our national economy and millions of families continue to struggle.
At long last, over a year and a half after the financial crash, we are in the final stretch of passing commonsense rules that will hold Wall Street accountable, protect consumers and make sure we don’t face a similar crisis in the future. On July 1st, I joined a majority of my colleagues in the House in voting to pass the Wall Street Reform and Consumer Protection Act. This bill, although it comes a bit late, is a substantial step in the right direction and long overdue.
Part of the reason I voted against the Wall Street bailout was because it contained no reforms to our financial system. The irresponsibility of the big banks nearly crippled our economy and we are now finally ready to send the President a bill that will prevent it from happening again. The bill the House passed, and hopefully the Senate will pass soon, lays out commonsense rules of the road for our financial industry. At the same time, it will end taxpayer bailouts and protect consumers and small businesses from predatory lending abuses, fine print, and industry gimmicks.
While the reforms in the bill are praiseworthy and something I strongly support, many Mainers rightly want to know how the bill will benefit their daily lives. Fortunately, it takes a number of important steps to protect consumers.
The bill creates a new, independent federal agency called the Consumer Financial Protection Bureau (CFPB), which is solely dedicated to protecting consumers from unfair financial products. This new independent watchdog will ensure consumers get the clear, accurate information they need to shop for things like credit cards, student loans and mortgages. It will also work to protect them from hidden fees, unfair terms and conditions, and misleading practices.
And for the first time, the bill creates a national consumer complaint hotline that will allow all Americans to report problems with financial products and services. The bill would also outlaw many of the industry practices that marked the subprime lending boom, and it would ensure that mortgage lenders make loans that benefit consumers.
This new law promotes accountability and responsibility. It empowers consumers to take control of their financial futures. And it will restore confidence in our nation’s financial markets and products.
For example, it ensures that the credits cards we use and the mortgages we sign are fair, transparent, and understandable. The bill helps protect 401(k)s and pensions by stopping institutions from taking risks that threaten the financial system. And the bill ends predatory lending practices so that lenders can’t put consumers into an unaffordable or difficult to understand loan.
All of these commonsense changes are long overdue. The failure to regulate the financial markets let Wall Street and the big banks gamble with the hard earned savings of millions of Americas. And it caused a ripple effect throughout our economy that we have still not recovered from.
We know from experience that Wall Street is not going to police themselves. The Wall Street Reform and Consumer Protection Act will finally begin to rein in the abuses that brought our economy to the brink of collapse. I am hopeful that the Senate acts soon so that we can begin to focus on policies that will create jobs and return our country to a path of fiscal health.
