Two years ago, the unchecked greed and recklessness on Wall Street shattered the lives of millions of Americans, eliminating 8 million jobs and trillions of dollars in savings. After months of hard work, Senate Democrats have passed legislation that holds big banks and CEOs accountable for their own mistakes. The bill restores transparency to the systems and puts consumers back in control of their own financial future; establishes the Consumer Financial Protection Bureau to protect Main Street’s interests; ensures that no taxpayer funds will be used for bailouts; creates an advance warning system to look out for troubled institutions; and brings transparency to the derivatives market. 

Despite the overwhelming call for reform by the American people, Senate Republicans spent weeks trying to protect special interests and banks. They blocked progress and attempted to water down the legislation on behalf of CEOs and credit card companies. Democrats refused to take no for an answer, believing that hard-working American families deserve strong protections from the predatory practices of Wall Street. 

The Restoring American Financial Stability Act will protect consumers, investors, and small businesses in a number of ways:


A New “Cop On The Beat” To Protect Consumers. TheRestoring American Financial Stability Act will establish a new “cop on the beat” to protect consumers. The independent Consumer Financial Protection Bureau (Bureau) will provide American consumers with the information they need to empower them to make smart financial choices for themselves. The Bureau also will help guard against the hidden terms and fine print that trap American families in unfair, deceptive and abusive financial products. American consumers already have protections against faulty appliances, contaminated food, and dangerous toys. The Consumer Financial Protection Bureau will establish a watchdog to oversee consumer financial products, giving Americans confidence that there is a system in place that works for them – not just big banks on Wall Street. 

No Taxpayer Bailouts. After big banks and Wall Street CEOs dragged our economy to the brink of complete collapse, hard-working Americans were left to pay the price. The Restoring American Financial Stability Act will protect American taxpayers from having to bail out financial firms and will force Wall Street to pay for its own mistakes. The bill will strengthen big firms to better withstand stress, put a price on excessive growth or complexity that poses risks to the financial system, and create a way to shut down big financial firms that fail without threatening the economy. 

Advance Warning System. The bill will also establish a new framework to prevent a recurrence or mitigate the impact of future financial crises that could cripple financial markets and damage the economy. The Financial Stability Oversight Council established by the bill will focus on identifying, monitoring and addressing systemic risks posed by large, complex financial firms as well as products and activities that spread risk across firms. It will make recommendations to regulators for increasingly stringent rules on companies that grow large and complex enough to pose a threat to the financial stability of the United States. 

Strong Protections for Investors. For years, the big banks and Wall Street CEOs set the rules of the road and stacked the deck to guarantee themselves billions in bonuses, all at the expense of their investors. The Restoring American Financial Stability Act will give investors better protections, give shareholders more of a voice, and grant the SEC more authority. The bill will also provide tough new rules for transparency for credit rating agencies to protect investors and businesses. Transparency will help to prevent future meltdowns and give American investors and businesses access to the information they need to make financial decisions that work for them. 

Transparency and Accountability in the Derivatives Market. The bill will protect taxpayers and buffer the financial system from excessive risk-taking. Over-the-counter derivatives will be regulated by the CFTC and the SEC, more will be cleared through centralized clearing houses and traded on exchanges, swap dealers and major swap participants will be subject to capital and margin requirements, and trades will be reported so that regulators can monitor risks in this large, complex market. 

The Financial Stability Act Includes Many Key Amendments. Throughout the last few weeks, Senate Democrats have worked to make a good bill even better. Some of these important amendments include: 

·Ending taxpayer bailouts – The Boxer Amendment (3737) makes it clear that no failing firm may enter any FDIC resolution process without be liquidated. No taxpayer money may be used to keep a failing firm alive. 

·Fair interchange fees – The Durbin Amendment (3989) helps ensure that the fees charged to small businesses and other entities for accepting debit cards are reasonable and proportional to the costs incurred. 

·Providing consumers with credit scores – The Udall Amendment (4016) takes two existing consumer notices in federal law, and requires them to also include a consumer’s credit score. 

·Federal Energy Regulatory Commission – The Bingaman Amendment (3892) preserves existing FERC authority to ensure that rates to consumers are just and reasonable. Had this amendment not been passed, utilities could have used loopholes to harm consumers. 

·Consumer protections for service members and their families – The Reed Amendment (3943) strengthens consumer protections and helps prevent military families from being victimized by predatory lenders. It establishes the Office of Service Member Affairs within the Consumer Bureau to serve as a watchdog for military personnel. 

·Preventing hidden payments to lenders – The Merkley Amendment (3962) protects homeowners by prohibiting mortgage lenders and loan originators from receiving hidden payments when they steer homeowners into high-cost loans and will create strong underwriting standards to ensure borrowers have the ability to repay their loans. 

·Apply recaptured taxpayer bailouts to the national debt – The Bennet Amendment (3928) ensures that repaid banking, housing and auto bailout funds are used to pay down the deficit, not fund further spending. 

·Audit the Federal Reserve – The Sanders Amendment (3738), as modified, requires the GAO to conduct a one-time audit of all the emergency actions the Federal Reserve has taken within one year after the bill is passed and submit the report to Congress. 

·Ending the conservatorship of Fannie and Freddie – The Dodd Amendment (3938) instructs the Treasury Department to conduct a study on how to end the conservatorship for Fannie Mae and Freddie Mac while preserving a deep and liquid mortgage market. 

·Whistleblower protections for employees of ratings organizations – The Cardin Amendment (3840) extends whistleblower protections to employees of the 10 National Recognized Statistical Ratings Organizations.