Areas of Concern on Financial Reform

The proposed financial reform bills have four main areas that need to be addressed before there is a final vote on the bill.

A vital part of needed reform is missing from the proposed financial reform bills. Reforms for Fannie Mae and Freddie Mac are not addressed. These two institutions played a major role in our current recession. It would be foolish in the extreme not to include them in a financial reform bill. It would be like going on a diet without addressing your caloric intake.

Wall Street is going to love the proposed liquidity fund. It provides for a permanent revolving bailout. It will encourage risky financial behavior. Risk will not frighten them, because they will not have to face the consequences of their risky behavior. This provision does not prevent bailouts – It creates them!

Some members of Congress are proposing to again separate commercial banks from investment banks. This is actually a good idea. The Glass-Steagall Act (1933) established this separation. The Gramm-Leach-Bliley Act (1999) removed this separation and allowed banks to combine commercial, investment, and insurance services. This created banks that were recently deemed “to big to fail”.

The most alarming part of the proposed legislating is the amount of power that Congress cedes to the Executive branch. Without the approval of Congress, the administration can take over any company that IT deems to be at risk. This is not limited to banks. The Administration would control the operations of these companies. It would set policies, salaries, and the very existence of these companies. I would like to ask Congressional Democrats a question. Would you have granted these vast new powers to the Executive branch if George Bush were still President?

I ask Congress to further consider what needs to be included in a financial reform bill. Do not rush this. Our economy is at stake.

Signed,
The Electorate