Dodd-Frank Bill
Floor Speech
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Mr. COONS. Mr. President, I would like to thank my colleagues from Ohio and Oregon, as we come to the floor today to talk about the 5 years since the passage of the Wall Street reform bill--better known as Dodd-Frank--and what it has meant for our States and for our country.
It is no secret that Delaware, my home State, is also home to a very large financial services industry. The whole range of financial institutions--from small community banks and credit unions, to larger regional banks, to literally some of the largest banks in the world--has a home in my State and employs tens of thousands of my constituents.
So I understand it might be surprising to some to see me come to the floor and join my colleagues in defense of the broad and sweeping Wall Street reform bill that was enacted 5 years ago, but as a Democrat representing these workers in a State that benefits from a robust financial services industry, I also know how important strong, stable, secure, predictable capital markets and well-functioning and well-regulated financial services are to a healthy economy from which we can all benefit. If we don't have a bank we can trust, we can't get a loan or buy a home or finance an education--investments that can serve as foundations to a brighter future for our families. If we don't have robust capital markets, companies cannot get money they need to invest in people and products and services, in growth and in jobs.
If you think of a world without functioning or reliable financial services, you can picture money sitting useless, unaccessible under a mattress. Without the roadways--the banks and financial services--to connect it, this money cannot move and an economy cannot grow. Quite literally, everything grinds to a halt.
We don't have to look far to see an example of this sort of seizing up of a modern economy. Greece has recently experienced a devastating financial crisis where money stopped flowing into and out of their economy, banks limited the amount of cash people could take out, and the government prohibited people from sending money abroad. The result was widespread panic, disruption of day-to-day lives, and a deep distrust of banks and banking that will take a long time to heal.
Capital markets and financial services that are well regulated and well run are important to us all. That is why we have to do everything we can to protect them. They make up a critical part of our Nation's economic infrastructure and lay the foundation for economic recovery. But just as streets need traffic lights and sharp turns need speed limits and bridges need guardrails, so, too, financial systems need fair and enforceable regulations. The alternative is what we saw just 5 years ago--the near collapse of our economy.
When the 2008 financial crisis unfolded, I was a local elected official in Delaware, not a Senator. As our mortgage system, our banking system, and our markets collapsed, I saw the real wreckage in my own home community. I saw thousands of folks who lost their jobs, who lost their life savings, who lost their homes, and the painful and lasting impact on them and on our whole community.
The 2008 crisis proved that a poorly regulated market left everyone exposed to risk, from consumers to financial services workers. Worst of all, it sparked a widespread distrust in our economy and our banks both here at home and abroad that we are still working to recover from today. The devastation caused by the great recession proved our financial system needed stronger regulations to protect consumers, families, businesses, and to make sure our capital markets are liquid, trustworthy, and reliable globally to instill faith back into our economy and system.
So I believe it was in our national best interest for there to be adopted fair, predicable rules to make sure we could all drive on the road safely, metaphorically, regardless of what size car we drove or what side of the road we were driving on. That is why, 5 years ago, in the wake of the worst financial crisis since the Great Depression, Congress's groundbreaking Wall Street reforms needed to become law. Those reforms took important steps to strengthen the rules of the road and prevent another significant crisis for our economy.
Congress created an agency, the CFPB, or Consumer Financial Protection Bureau, with a simple important mission: to protect consumers from abusive financial products. By helping to ensure that consumers have accurate financial information about the risks and benefits of financial products, CFPB works to prevent risky lending practices. An essential feature of CFPB is that it is an independent agency with only one responsibility; that is, protecting consumers.
Second, Wall Street reform limited risky and unsafe investment practices at the highest levels of finance. It set strong capital standards so banks have a sturdy backstop in times of need and ensured that regulators have the tools to scrutinize banking practices that are far more complicated than ever before--in fact, at the very limits of what is capable of regulatory oversight.
Congress required banks to perform risk testing, to improve oversight and make sure they can withstand turbulence in the same way first responders are required to perform regular safety drills to make sure everything works properly in the case of a crisis or a fire. Banks are now required to make sure they have the protocols and the policies and the resources in place to respond effectively to a renewed financial crisis.
Last, the financial crisis made it clear that although there is much we can do to limit risk and protect consumers, banks--particularly big banks--can still fail. When they do, it is critical they are wound down, they are resolved, they are closed in a way that is responsible, does not spread contagion and harm the larger economy, and does not require an expensive taxpayer bailout. That is why Wall Street reform gave the government new abilities to responsibly wind down banks so they do not cause a financial earthquake, much in the way the government has done with smaller banks through the FDIC for more than 80 years.
While I believe these reforms took much needed steps toward making sure our financial system is strong and healthy, I also believe we can build upon these reforms.
One of its key authors, Senator Dodd, said just yesterday--former Senator and Chairman Dodd said just yesterday at a public event: It wasn't the Ten Commandments that was crafted; it was a law, and a law that needs to be improved.
I know it might be difficult to believe Democrats and Republicans can find common ground on Wall Street reform, but there are, in fact, changes we can agree on that will make sure these reforms protect consumers and financial services. For example, we ought to lighten the regulatory burden on community banks so smaller banks can provide lending that their neighborhoods really need to grow and thrive. That is why Senator Merkley and I have cosponsored Senator Brown's important bill, the Community Lender Regulatory Relief and Protection Act, which would help smaller banks by streamlining exams, by helping credit unions develop more diverse sources of capital, and by reducing onerous privacy notification rules.
Many of the proposals in this bill have bipartisan support. I am eager to work with my colleagues to implement those and other improvements. But unfortunately, rather than looking for ways to strengthen and sustain the broad architecture of Wall Street reform, too many of our Republican colleagues have continued to try to roll back the clock. We have seen how Republicans in the House have continued efforts to dismantle these bills, in particular in recent appropriations legislation. They have supported significant, harmful cuts to the regulatory agencies that are charged with rulemaking and with oversight--the most important entities in the financial services realm. They have also tried to undermine and undercut the CFPB's independence.
Just today, Senate Republicans have proposed similarly misguided legislation. I plan to do everything I can to protect those agencies and stop efforts to fundamentally undo important Wall Street reform.
It is time for my colleagues to stop proposing spending bills on a wide range of the subcommittees of the Appropriations Committee that have no chance of passing and that continue to push us closer to an inevitable government shutdown that would devastate our economy and I think cause real harm to our working families. I have heard those very same colleagues argue that by doing so, they are on the side of banks and they are on the side of increasing the forward growth of our economy and that is why they want to dismantle regulations. But what I hear from business leaders and bank leaders in my home State is that the biggest threat they face are more manufactured crises here in Congress that chip away at the confidence in the American economy that serves as a bedrock of our prosperity.
As the leading Democrat on the committee charged with overseeing the financial services funding bills here in the Senate, I think it is critical that we work together to improve Wall Street reforms where we can rather than reverse what progress we have made. Whether you are a Republican or a Democrat, a consumer or a banker, a CEO or a small business owner, a family member or a financial services worker, we can all agree that we do not want another financial crisis. Nobody wants another bailout to banks.
I strongly believe you can be pro-business, pro-financial services, and still believe in smart, strong, sensible regulation to keep everyone in our financial services system healthy and our overall system and economy safe. I believe a well-regulated financial system is critical to sustaining this sector into the future and ensuring that it is a trusted place for businesses and consumers to invest in from at home or abroad. A strong, secure, stable economy has long been the hallmark of America's global leadership, so I think we must work together to make sure it remains that way for decades to come.
Wall Street reform was the result of a lot of hard work and compromise just 5 years ago. I look forward to working with my colleagues to continue strengthening the financial rules of the road as we go further into the future together.
I yield the floor.
I suggest the absence of a quorum.
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