From the President: Urgent Need to Complete Financial Reforms

Written by Dory Rand on January 14, 2010 - 2:00am

With Senator Dodd’s announcement on January 6 that he will retire after this year and the likelihood that his successor as Senate Banking Committee chair will be less pro-consumer, there is an even greater urgency to complete work on financial reform proposals pending in Congress.  We cannot afford to lose momentum towards creating a more just financial system that protects consumers, communities, and the financial system from another near collapse, bailout, and recession.

With the stock market up and bonuses flowing again, things are looking better for some Wall Street firms and employees. Wall Street interests are continuing to pour millions of dollars into blocking financial reform efforts. Some may be lulled into thinking that reforms are unnecessary. Meanwhile, the devastating effects of the financial crisis and recession on Main Street small businesses and neighborhoods, especially lower-wealth communities of color, are likely to continue for some time and cannot be prevented from recurring without enactment and effective enforcement of significant financial reforms.

A key piece of Senator Dodd’s financial reform package that would protect consumers and communities is creation of a Consumer Financial Protection Agency with authority to regulate all financial products and to implement Community Reinvestment Act requirements that financial institutions provide lending, investments, and services to lower-wealth persons and communities, consistent with safe and sound lending practices. Senator Dodd’s bill would also create a new council to provide oversight of financial institutions that present systemic risk to the economy, sometimes called “too big to fail.” Once the Senate acts, its package must be reconciled with conflicting provisions of the previously passed House bill, so it’s important to act quickly and allow time for those negotiations.

We urge Sen. Dodd to continue standing strong for financial reform and end his Senate career with a groundbreaking piece of legislation that will protect families’ and communities’ finances for decades to come. Woodstock encourages individuals and organizations to keep the pressure on Congress to act now to protect consumers and prevent future crises.