WASHINGTON D.C. – U.S. Sen. Sherrod Brown (D-OH) outlined today how Wall Street reform is needed to hold big banks accountable, prevent future bailouts, and protect Ohio homes, jobs, pensions, and businesses. Brown released an analysis of economic indicators in Ohio to demonstrate how risky practices on Wall Street have hurt Ohio homeowners, retirees, businesses, and workers. He also announced introduction of the SAFE Banking Act of 2010, legislation which would place reasonable caps on the size of our nation’s megabanks and ensure that financial institutions have the resources to cover their losses.
“This is about holding Wall Street accountable to ensure that American taxpayers never have to bail out the big banks again,” Brown said. “While taxpayers helped Wall Street banks get back on their feet, Main Street Americans were not so lucky. Their homes, their jobs, and their retirement accounts were lost or put at risk due to big banks that gambled with their money. That’s why we need to pass tough Wall Street reform that holds banks accountable and ensures transparency in financial information.”
Eight million people lost their jobs and seven million homes have been foreclosed upon because of a financial system that lacked the necessary safeguards to protect Main Street. Brown released an analysis today of how greed, excess, and risky practices on Wall Street has hurt homeowners, small businesses, and workers in Ohio.
Brown, a member of the Senate Banking Committee and chairman of its Economic Policy Subcommittee, is a leading voice for tough Wall Street reform – legislation which is expected to be debated in the Senate as soon as this week. Wall Street reform would enact new consumer protections, hold big banks accountable, and provide protections to Ohioans from the tricks and traps in the mortgage market and elsewhere that led to the near collapse of our economy. It would end taxpayer bailouts and ensure that banks take responsibilities for their actions, while also ensuring that Wall Street firms disclose what they are betting consumers’ money on – out in the open, in fully transparent markets. The bill would also create an independent agency to protect consumers, stop banks from taking excessive risk with Ohioans’ money, support community banks, and force big banks and credit card companies to offer clear terms to consumers.
As much as $33,000 for every single taxpayer since 2007 and federal agencies have disbursed $4.6 trillion dollars to support the financial sector since the meltdown in 2007-2008; that’s at least four times what has been spent in the wars in Iraq and Afghanistan since 2001.
The Safe Banking Act of 2010 will limit the size of these megabanks by:
- Imposing a strict 10 percent cap on any bank-holding-company’s share of the United States’ total insured deposits.
- Limits the size of non-deposit liabilities at financial institutions (to 2 percent of United States GDP for banks, and 3 percent of GDP for non-bank institutions).
- Sets into law a 6 percent leverage limit for bank holding companies and selected nonbank financial institutions.
The Safe Banking Act of 2009 was cosponsored by Ted Kaufman (D-DE), Robert P. Casey (D-PA), and Sheldon Whitehouse (D-RI). Brown and Kaufman held a news conference call today with The Main Street Alliance, a consortium of small businesses commitment to Wall Street Reform. The Main Street Alliance released a letter signed by more than 100 small businesses urging tough rules to hold Wall Street accountable.
Sen. Brown is Chairman of the Senate Banking Subcommittee on Economic Policy and a constant advocate for banking regulation that benefits Main Street. He has held a series of hearings examining ways to restore credit to small businesses and manufacturers. Brown was an early champion of the CARD Act, which changes the consumer protections to prevent abusive practices by lenders. In February of this year, Brown introduced legislation to tax bonuses of firms receiving TARP support to fund loans to small businesses.