By Jon Bartholomew of Portland, Oregon. Jon is a policy advocate for OSPIRG.
It’s been about a year and a half since the crash of the global financial system that was brought on by deregulation and what have we done to prevent the next crash?
No significant financial system reforms have yet been enacted that will help consumers trust they aren’t being victimized by their banks and lenders. No significant reforms have been enacted that will stabilize the housing market. No significant reforms have been enacted that will ensure more stability of our entire economic system.
And for the last couple of weeks, Senator Dodd, Chair of the Senate Banking Committee has been trying to negotiate a bipartisan compromise that could water down proposed reforms until they are near meaningless. This is not what the American public needs or wants. In polling done just last month by Pew, Americans overwhelmingly support stricter regulations of financial institutions.
This is why I am pleased to see our Oregon Senator Merkley standing up for tough reforms and introducing a bill with Sen. Levin to curb risky trading by banks. This is exactly what we need – toughening up, not watering down of financial reforms. We should thank Sen. Merkley and then go further to call for Congress to beef up financial reform proposals.
The timing is critical. There are new reports that Sen. Dodd is going to back off his effort to get a bipartisan compromise, and propose something stronger. Now is the time to let all of our members of Congress know that we want consumers and taxpayers put before big banks. Check irresponsible financial practices with new rules and stronger, independent enforcement. We need a new strong, independent Consumer Financial Protection Agency.
We also need to cover all players and transactions. Rein in hedge funds and reckless investments that escaped regulations and traded without oversight on “shadow markets.” We must prevent financial institutions from becoming “too big to fail.” Banks shouldn’t be able to freely gamble with taxpayer money covering the bets. And we support greater oversight, accountability and democratization of the Federal Reserve.
These reforms are already way overdue, but there will be action in the next few days and weeks that give us the opportunity to make things the way they need to be for consumer protection and financial stability. Senator Merkley is showing he is willing to fight for good reforms, let’s show him he’s right to do so.