By Miriam Raftery
July 22, 2010 – President Barack Obama has signed into law H.R. 4175, a landmark reform measure that “cracks down on corporate fraud and holds big banks accountable for reckless, risky behavior,” said Senator Patrick Leavy (D-Vermont.)
Leaders of the retail industry and consumer groups have praised the bill. Among local Congressional representatives, Republicans opposed, while Democrats supported the reform measure.
View a video and read details provided by the White House detailing specifically what the bill does: http://www.whitehouse.gov/wallstreetreform.
Three Senate Republicans voted with Democrats in the Senate to end a Republican-led filibuster of the bill, which was opposed by the banking industry. California Senators Barbara Boxer and Dianne Feinstein voted for the bill. In the House, Democrats Bob Filner and Susan Davis voted for the bill, while Republican Congressmen Duncan Hunter, Brian Bilbray and Darrell Issa.
At yesterday's signing ceremony at the White House, the President said the measure “demands accountability and responsibility from everyone” and provides”certainty to everybody, from bankers to farmers to business owners to consumers. And unless your business model depends on cutting corners or bilking your customers, you’ve got nothing to fear from reform.”
National Retail Federation senior vice president Mallory Duncan praised passage of the bill, titled the Wall Street Reform and Consumer Protection Act. “This is a landmark step forward in protecting Main Street against the excesses of the banking industry,” he said, according to Business Wire.
He hailed the bill as a “major victory” for retailers and consumers in their fight against credit card fees, requiring reasonable debit card swipe fees and making it easier for merchants to give discounts for customers who don’t use credit cards.
According to the nonpartisan site www.opencongress.org, the measure aims to “develop a better system for identifying emerging risks in the financial markets, end too-big-to-fail and taxpayers bailouts, regulate the derivatives market, protect consumers from predatory lenders, make the Federal Reserve more transparent, and more.”
Reuters international news service called the bill “the broadest overhaul of U.S. financial rules since the Great Depression.”
What does Wall Street reform mean for Americans? “If you’ve ever applied for a credit card, a student loan, or a mortgage, you know the feeling of signing your name to pages of barely understandable fine print,” the President noted. “What often happens as a result is that many Americans are caught by hidden fees and penalties, or saddled with loans they can’t afford.” The bill will crack down on hidden rate hikes and abusive practices in the mortgage industry, he pledged, adding that the bill will also require that contracts be easier for consumers to understand.
The bill will create a consumer financial protection bureau to regulate the trading of derivatives, one of the root causes of the financial meltdown, while allowing small businesses to continue using derivatives to mitigate risk. It will also end taxpayer bailouts of Wall Street institutions by establishing a new authority to wind-down falling mega-firms outside of bankruptcy, so that costs will be paid by shareholders and creditors—not taxpayers. The bill will also protect small businesses by establishing reasonable and fair “swipe fees” for debit and credit cards.
Leahy said the measure brings transparency and regulation to Wall Street, “ending the days of back-room deals that put our entire economy at risk” and that it includes enforcement measures that include jail time for corporate wrongdoers as means to curb fraud, manipulation, and reckless speculation.
In negotiations, legislators devised a plan to fund the $20 billion cost by ending the government’s Troubled Asset Relief Program (TARP), the big bailout bill for banks, ahead of schedule as well increasing premiums that big banks pay for deposit insurance.