WALL STREET REFORM & CONSUMER PROTECTION ACT PASSES SENATE, HEADS TO PRESIDENT FOR SIGNATURE

Consumer and retail industry leaders praise bill’s passage; San Diego’s Congressional delegation’s votes split down party lines

By Miriam Raftery
 

July 15, 2010 (Washington D.C.) – Moments ago, the U.S. Senate passed HR 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), author of the bill which is expected to be signed into law by President Barack Obama later today.
 

Business Wire reports that 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.

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.”
 

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.
 

Three 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.