Garrett Gazette
Washington,
Jun 15 -
Last week, my Republican colleagues on the Financial Services Committee and I introduced our proposal for financial services regulatory reform. At the core of our plan is a promise to the American taxpayer: no more bailouts. It’s time to reject the "too big to fail" logic that has resulted in unprecedented government intrusion into the marketplace and reinstate the free market principles that are the cornerstone of our nation and a healthy financial sector. The Republican leaders of the Financial Services Committee have developed a package aimed at preserving free market principles while providing significant reform to our antiquated banking regulations.
I look forward to working with my colleagues on both sides of the aisle to develop substantive reforms to the financial services industry. A competitive financial services industry, populated by well run, properly regulated companies, is the best means of helping Americans achieve their financial goals. Regulatory reform is needed to make sure that financial companies are never again allowed to wager their consumers’ money without consequence, nor to rely on the government for a handout when they make reckless decisions.
Sincerely,
Scott Garrett
Member of Congress
The components of the Republican financial services regulatory reform proposal are as follows:
Enhanced Bankruptcy. Republicans call for the resolution of insolvent non-bank institutions—no matter how large or systemically important—by creating a new chapter of the bankruptcy code to make it more efficient and better suited for resolving large non-bank financial institutions.
Market Stability and Capital Adequacy Board. Under the Republican plan, this Board will not have independent enforcement or supervisory authority over individual firms but would be tasked with monitoring the interactions of various sectors of the financial system, and identifying risks that could endanger the stability and soundness of the system.
Regulatory Restructuring. The plan combines the Office of the Comptroller of the Currency (OCC) and Office of Thrift Supervision (OTS) into one agency and shifts the supervisory functions of the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) to that agency, including the responsibility for overseeing bank and financial holding companies.
Fundamental Reform of the Federal Reserve. The plan refocuses the Fed on its core mission of conducting monetary policy by relieving it of current regulatory and supervisory responsibilities and reassigning them to other agencies, and requiring an explicit inflation target. The Republican Plan would impose limitations on the Fed’s use of its authority under section 13(3) of the Federal Reserve Act to respond to "unusual and exigent" circumstances by subjecting actions under 13(3) to Treasury approval and giving Congress the ability to disapprove, placing 13(3) transactions on Treasury's balance sheet, and eliminating the use of this authority on behalf of specific institutions.
Government Sponsored Enterprise (GSE) Reform. The Republican plan would phase out taxpayer subsidies of Fannie Mae and Freddie Mac over a number of years and end the current model of privatized profits and socialized losses. It sunsets the current GSE conservatorship by a date certain, placing Fannie and Freddie in receivership if they are not financially viable at that time.
Credit Rating Agency Reform. The Republican plan changes the definition of the Nationally Recognized Statistical Ratings Organization to "nationally registered statistical rating organizations" and removes all references to ratings throughout Federal law and regulation, so that the rating agencies will no longer operate as a government-sanctioned oligopoly.
Protecting Consumers Through Improved Disclosure and Complaint Resolution Procedures. The Republican plan expands the mission of the Financial Literacy and Education Commission to include consumer protection and disclosure issues by giving it the authority to direct regulated entities to disclose relevant policies, procedures, guidelines, standards and regulatory filings on their websites.
Strengthening Anti-Fraud Enforcement. The plan increases both civil and criminal money penalties in government enforcement actions, maximizes restitution for victims of fraud, improves surveillance of bad actors who prey on consumers, and allows regulators to share information with foreign regulators and law enforcement agencies engaged in the investigation and prosecution of violations of financial laws without waiving privileges.
My Office Coming to a Town Near You
My staff will be holding Mobile Constituent Service Hours in a number of Fifth District towns this week. My Constituent Service Officers are trained to act as your liaisons with Federal agencies. But, it’s not always easy to make it out to one of the my district offices – in Glen Rock and Newton – to meet with one of them, especially when you are dealing with government red tape. These Mobile Constituent Service Hours sessions bring the my office to you. So, if you are having trouble with a Federal program, such as Medicare, veterans benefits, Social Security, or more, please feel free to come by. And, please bring copies of any relevant paperwork with you to facilitate their work.
Tuesday, June 16
Hillsdale MCS – 10:00 a.m. to noon
Borough Hall, 380 Hillsdale Avenue
Tuesday, June 16
Westwood MCS – 1:00 to 3:00 p.m.
Borough Hall, 101 Washington Avenue
Wednesday, June 17
Allendale MCS - 1:00-3:00pm
Borough Hall, 500 W. Crescent Avenue
Wednesday, June 17
Ridgewood MCS - 10:00am-12:00pm
Borough Hall, 131 N. Maple Avenue
