The House is currently debating the Dodd-Frank Wall Street Reform and Consumer Protect Act–putting consumers first and ending the era of taxpayer-funded bailouts and too-big-to-fail institutions. In an interview published yesterday, House Republican Leader John Boehner criticized the reform bill calling it “an overreaction to the financial crisis” and likened the worst fiscal crisis Americans have faced since the Great Depression to “an ant”:
Boehner criticized the financial regulatory overhaul compromise reached last week between House and Senate negotiators as an overreaction to the financial crisis that triggered the recession. The bill would tighten restrictions on lending, create a consumer protection agency with broad oversight power and give the government an orderly way to dissolve the largest financial institutions if they run out of money.
“This is killing an ant with a nuclear weapon,” Boehner said. What's most needed is more transparency and better enforcement by regulators, he said.
The worst financial crisis since the Great Depression had its roots in a decade of failure to properly regulate our financial system, acknowledge and address obvious and growing problems and to invest in growing our economy. Irresponsible lending and complex derivatives transactions led to a mortgage meltdown that sent the nation into recession in December 2007. The financial collapse happened in the fall of 2008 with the bankruptcy of Lehman Brothers, the implosion of AIG and the subprime mortgage crisis. Here is an ant’s view of just some of the financial crisis’ impact on Americans:
American workers have paid a huge price–we lost 8 million jobs.
American families have paid a huge price–$17.5 trillion in American household wealth was wiped out during the last 18 months of the Bush Administration.
High-cost Payday Loans are preying on nearly 12 million Americans–they pay a chunk of interest each pay day, costing them nearly $5 billion per year along with other predatory lending. These loans can ultimately carry annual interest rates of 400% or more, with the typical borrower paying about $500 in interest for a $300 loan, and still owing the principal.
2.8 million homes were in foreclosure in 2009 alone. Subprime and predatory home loans, in which mortgage brokers lured families with low, teaser interest rates that later skyrocketed to unaffordable levels, hidden fees and charges, and incomprehensible terms and conditions that brought on the housing crisis and undermined the financial system. More than 60% of subprime loans went to people who could have qualified for lower cost loans.
Total retirement assets, Americans’ second-largest household asset behind their homes, dropped by 22%, from $10.3 trillion in 2006 to $8 trillion in mid-2008.
Financier Bernie Madoff was allowed to defraud investors out of as much as $65 billion in the largest Ponzi scheme in history. The Securities and Exchange Commission (SEC) missed red flags that could have put a stop to his asset management business.
As we rebuild our economy, we must put in place common-sense rules to ensure big banks and Wall Street can’t jeopardize our recovery and hurt hard-working families and small businesses once again. Wall Street may be bouncing back, but we know from experience that left to their own devices they're not going to police themselves.