Menendez talks financial regulatory reform and implementing accountability on Wall Street

by: Jason Springer

Fri Nov 20, 2009 at 03:00:00 PM EST

The US Senate Banking, Housing and Urban Affairs committee has taken up legislation dealing with financial regulatory reform. Mondaq had more on the bill:

Senate Banking Committee Chairman Christopher Dodd has introduced a discussion draft of the Restoring American Financial Stability Act of 2009 (the "Dodd Bill"), which comprehensively addresses financial regulatory reform, encompassing the range of issues covered in the Obama Administration's proposed legislation and several bills pending in the House of Representatives. For further discussion of the Administration's proposed legislation, please see the July 28, 2009 Alert and the August 4, 2009 Alert and for the House legislation please see the October 20, 2009 Alert, the October 27, 2009 Alert and the November 3, 2009 Alert. Many provisions of the Dodd Bill are similar to other regulatory reform bills, such as the creation of a Consumer Financial Protection Agency ("CFPA"). However, the Dodd Bill also contains significant differences from other regulatory reform proposals, such as (a) combining all prudential bank supervision into a new agency, the Financial Institutions Regulatory Authority (the "FIRA"), (b) creating an entire new agency to regulate systemic risk, the Agency for Financial Stability (the "AFS"), and (c) reducing the powers of the FRB. Based on recent testimony, the Dodd Bill largely reflects the viewpoint of FDIC Chairman Sheila Bair, while the legislation introduced by House Financial Services Chairman Barney Frank largely reflects the viewpoint of FRB Chairman Ben Bernanke.

The Mondaq story has a pretty comprehensive breakdown of the components in the legislation. Here is the opening statement from Senator Menendez:

Menendez said it's time to corral the Wall Street bulls who saw red and ran wild. He said he will introduce amendments to strengthen the bill:

It's time for transparency, Mr. Chairman. It's time to increase the enforcement budget at the SEC. It's time to help innocent victims of fraud and Ponzi schemes recoup their losses through the Security Protection Investor Corporation (SIPC) or other means. It's time for accountability and regulations that protect American families while allowing our market based economy to run smoothly - but not run amok. These are necessary reforms and I believe they are long overdue.

This will no doubt be a big fight in Congress as the Financial Industry has the resources to push back and lobby against tighter regulations on their business practices.

Jason Springer :: Menendez talks financial regulatory reform and implementing accountability on Wall Street