May 21 2010
“The Senate today approved a major financial reform bill. This is an historic step. It is a comprehensive effort to restore trust in our financial markets and protect consumers.
The bill approved by the Senate will restore transparency to dark, unregulated derivatives markets. It will provide strong oversight authority to federal agencies that regulate financial and energy commodities markets. And it sends a clear message to Wall Street traders and large financial institutions that they will be held accountable for their actions.
Our nation’s economy has begun the slow process of rebuilding from the massive meltdown that ricocheted from Wall Street to Main Street. And this bill lays the critical foundation necessary to keep our economy headed in the right direction.”
Key Provisions of the Bill:
- Creates a Bureau of Consumer Financial Protection with the authority to limit abusive financial products, housed at the Federal Reserve;
- Requires banks to take on less debt and meet more stringent capital requirements;
- Establishes a council of regulators to monitor large financial firms and take swift action if an individual firm placed the broader economy at risk;
- Implements an orderly liquidation process to allow regulators to quickly unwind large distressed firms at shareholder—not taxpayer—expense;
- Streamlines oversight and supervision of banks;
- Limits risky proprietary trading at banks that hold federally-insured deposits;
- Ensures that firms issuing products like mortgage-backed securities retain a stake in the products they package and securitize;
- Requires most hedge funds to register with the Securities and Exchange Commission (SEC); and
- Restores oversight of the financial and commodity derivatives responsible for bringing down Enron, AIG, and Lehman Brothers.