Tester: Time to get America’s financial industry ‘on our side’
Senator also cosponsors TARP Transparency Act
(WASHINGTON, D.C.) – Senator Jon Tester is marking the one-year anniversary of the Wall Street crisis by calling on Congress to ramp up its efforts to “keep America’s financial industry on our side.”
Tester is also cosponsoring the TARP (Troubled Asset Relief Program) Transparency Act to provide better transparency of TARP—the $700 billion Wall Street bailout he voted against.
One year after the investment bank Lehman Brothers collapsed and sparked a global financial meltdown, Tester took to the Senate floor, urging his colleagues to “reform the rules” of Wall Street.
“How? It’s going to take a lot of hard work, a lot of honesty and a lot of common sense,” said Tester, Montana’s only member of the Senate Banking Committee. “We need to use this one-year anniversary as a reminder of the need to act now to protect consumers and investors, to close loopholes in our regulatory framework and to ensure that no company is ‘too big to fail.’”
Tester and his colleagues on the Banking Committee have held dozens of hearings over the past year on ways to bring the financial industry into the 21st century.
Tester is advocating a series of comprehensive reforms to protect consumers and investors by putting “refs back on the playing field” and increasing supervision and transparency of the financial markets. He promised to work towards enacting common sense reform that will bring back investor confidence.
Tester put the focus on the Wall Street bankers that created the financial crisis and vowed to protect Montana’s banks and credit unions against excessive fees or burdens.
“They are the good actors,” Tester said. “They don’t live on the edge. They didn’t get into the Wall Street shenanigans that caused this mess. Montana’s community banks and credit unions serve their towns and communities reliably and safely.”
Tester also reminded his colleagues of the price that Americans paid when companies were allowed to become “too big to fail.”
“That price was seven hundred billion dollars of taxpayer money,” Tester said. “I opposed that bailout. It rewarded the wrong people and I was concerned it wouldn’t create a single job for our small businesses, or help one family farmer. It was a very bad deal for Main Street.”
Tester is the only Senate Democrat to vote against both bailouts of Wall Street and the auto industry last year.
Tester’s floor speech appears below.
U.S. Senator Jon Tester
Wall Street Reform
Mr. (Madame) President, I rise to say a few words about an issue that’s been front-and-center in my office over the past 12 months – reforming regulation of our financial markets.
I’m a family farmer. And in my neck of the woods, farmers don’t usually sit around shooting the breeze about economic policy and Wall Street financial institutions.
But I guarantee you where I come from, everyone talks about common sense. And why so much common sense seemed to be missing when America’s financial industry almost collapsed one year ago.
Everyone in my state felt the impact of what happened when Lehman Brothers caved in. When Fannie and Freddie hit a dead end. When AIG went belly up. When we saw daily headlines about bank mergers and bailouts.
We all paid a price because of a few greedy bad actors on Wall Street. And no refs on the playing field.
That price was seven hundred billion dollars of taxpayer money. I opposed that bailout. It rewarded the wrong people and I was concerned it wouldn’t create a single job for our small businesses, or help one family farmer. It was a very bad deal for Main Street.
Last year, I asked Treasury Secretary Paulson – the former chairman of Goldman Sachs – about why this happened. His answer? Quote, “I don’t know.”
Where I come from, answers like that aren’t good enough. And the term “Too Big To Fail” just doesn’t make common sense.
It’s time to make some changes.
Mr. (Madame) President, after what we’ve been through over the past year, it’s clear that we need to reform the rules that keep America’s financial industry on our side.
How? It’s going to take a lot of hard work. A lot of honesty. And a lot of common sense.
We’ve already started. I teamed up with some of my friends in the Senate – from both parties – to cosponsor the TARP Transparency Act. Our bill will better track the money being used to get the financial industry back on its feet. Because it’s taxpayer money. And taxpayers deserve no less.
Over the course of the past year the Senate Banking Committee has held countless hearings on regulatory modernization.
The Administration has put forth a good faith effort in working with Congress in the massive legislative overhaul.
And government has worked with the financial industry and consumers to outline the goals of sweeping new financial regulatory reform.
Now I don’t believe comprehensive financial reform will guarantee that we are safe from financial crises. But it if done right, it can provide folks with adequate protection. It can bring back confidence in the marketplace. And it can minimize the risk of a financial meltdown similar to the one we barely weathered last Fall.
Unfortunately there are those who do not believe comprehensive reform should be on the front burner. They are now lobbying to protect their own self interests, their own profits and the status quo over consumer protection.
That is why we need to use this one-year anniversary as a reminder of the need to act now to protect consumers and investors. To close loopholes in our regulatory framework. And to ensure that no company is “too big to fail.”
Mr. President, we must:
- Regulate derivatives;
- Supervise financial companies that have been outside the scope of regulation creating a level playing field;
- Ensure there is strong supervision of all financial firms – not just depository institutions;
- Build on the bipartisan success of the credit card legislation and pass mortgage reform to protect consumers;
- Combine the numerous banking regulators into a more simple, streamlined, common-sense structure that is capable of supervising 21st century financial institutions;
- Create an entity that will protect taxpayers from future financial corporate failures and minimize the need for further government action;
- Increase capital standards to prohibit institutions from growing too big to fail; and
- Ensure those that companies selling mortgages and securities keep some skin in the game by holding onto a portion of the underlying asset to keep them honest
As we move forward with regulatory reform, I will be working hard to eliminate any unintended consequences – specifically as it relates to community banks and credit unions.
In Montana, when we talk about the banking industry, we are talking about community banks and credit unions. They are the good actors. They don’t live on the edge. They didn’t get into the Wall Street shenanigans that caused this mess.
Montana’s community banks and credit unions serve their towns and communities reliably and safely.
We are fortunate in Montana to not have had a bank fail in over ten years. We also have one of the lowest rates of mortgage defaults and foreclosures in the nation. And we have had very few problems predatory subprime loans.
The community banks and credit unions are not the problem. So I want to make sure that we do not place excessive fees or regulatory burdens on these small – but very important – institutions like community banks.
Over the course of the coming weeks and months I plan to work with Senator Dodd – Chairman of the Banking Committee – and all of my colleagues towards common sense reforms that will increase supervision and transparency of the financial markets. That will bring back investor confidence. And that will protect consumers and safeguard us from another situation where the greed of Wall Street penalized hard-working families.
Earlier this week, the President spoke on Wall Street. He said, "We are beginning to return to normalcy," But he warned that "normalcy cannot lead to complacency.”
I couldn’t agree more. And that’s what we in Montana call common sense.