Illinois legislators at heart of financial reform

Sauk Valley News
July 16, 2010
By: Chris Freeman

WASHINGTON The most comprehensive reform to the financial industry since the Great Depression is headed to the President’s desk for his signature, and its completion shows significant impact from area legislators.

The Senate passed the financial overhaul bill Thursday by a 60-39 vote, 22 months after the collapse of Lehman Brothers triggered a worldwide panic in credit and other markets.

The bill that will become law contains a consumer protection bureau, extended powers for regulators to watch over the financial industry, and brings transparency to derivative markets that had operated without any.

It also included new rules and regulations regarding interchange fees the amount businesses pay cardholders each time a credit or debit card is used that came directly from Illinois Sen. Dick Durbin.

It contains mortgage reforms and regulatory framework that were initiated by U.S. Rep. Melissa Bean, D-Barrington, and other members of the New Democrat Coalition.

It contains measures for contingent capital, making banks carry a fraction of their debt into something that automatically can be converted into equity if the company has financial trouble. That was the top priority put forward by Rep. Bill Foster, D-Batavia.

And on the day the Senate passed the bill, it was Illinois Sen. Roland Burris operating as the president, gavel in hand, reading the final tally.

Little wonder, then, that area legislators were happy to see the process end Thursday with a bill set to become law.

After a lengthy and vigorous debate, we have passed a comprehensive financial reform package that will protect Illinois families and American consumers while taking tangible steps to prevent another economic crisis, Burris said in a news release.

Checking in at more than 2,000 pages, Republicans and critics called the reform package a vast government overreach, and lamented the lack of reform for mortgage giants Fannie Mae and Freddie Mac in the bill.

Still, from storefront payday lenders to the biggest banking and investment houses on Wall Street, few players in the financial world are immune to the bills reach. Consumer and investor transactions, whether simple debit card swipes or the most complex securities trades, face new safeguards or restrictions.

This landmark, bipartisan reform package will end taxpayer bailouts for Wall Street and the high-flying bank schemes that can kill our economy, Durbin said in a statement.

Large, failing financial institutions would be liquidated and the costs assessed on their surviving peers. The Federal Reserve is getting new powers while falling under greater congressional scrutiny.

Most importantly, this Wall Street Reform Bill will put the American people back in the drivers seat of our economy and make sure this kind of economic crisis can never happen again, Burris said.

Named after Senate Banking Committee Chairman Chris Dodd and House Financial Services Committee Chairman Barney Frank, the legislation ends a trend to ease regulations and clamps down on the financial industry in ways unseen since the Great Depression.

It contains the strongest financial consumer protections in our nations history and empowers consumers to make the right choices on mortgages, student loans, and credit cards, Durbin said.

Although neither Burris or Durbin were members of the Senate Banking Committee that wrote its version of the bill, Bean and Foster were on the House Financial Services Committee that wrote its version of the reform package. Other Illinois representatives on the committee are Rep. Don Manzullo, R-Egan, Luis Gutierrez, D-Chicago, and Judy Biggert, R-Willowbrook.

Bean said she was pleased to see the journey at its end.

Enactment of these reforms will finally close the book on the anti-regulatory culture that has reigned in Washington and on Wall Street for too long, Bean said in a statement. This legislation will protect the savings and investments of American families and businesses and restore worldwide investor confidence in Americas financial system.