Financial regulation bill will hurt Main Street
The U.S. Congress should be forced to take the same oath that doctors take to "first do no harm." Because more often than not, under the guise of "fixing" a problem, Washington makes things much, much worse for hard-working middle-class families and small businesses.
That's precisely the problem with the financial regulation bill that's before the Senate right now. Instead of strengthening our financial system, this legislation will stifle economic growth and job creation, strangle critical credit, send U.S. jobs overseas and add more burdensome, costly and misguided regulation onto the backs of struggling businesses.
Thus, instead of the Obama administration's promise to "fix" Wall Street, we've got a bill that squarely takes aim at Main Street instead. The careless overreach will have a lasting and negative impact on small businesses across Utah and America.
Let's be honest, Wall Street is going to have armies of accountants, lawyers and experts figure out a way to get around any of the new rules in this bill. No wonder Lloyd Blankfein, the CEO of the New York investment giant Goldman Sachs, said "that the biggest beneficiaries of reform will be Wall Street itself." That's a luxury our small businesses in Utah can't afford when they're saddled with this legislative monstrosity.
Furthermore, at a time when public trust in Washington is at a record low, the White House and its Capitol Hill allies grab more power for federal bureaucrats at the expense of states and our judicial system.
When companies get in trouble, bankruptcy courts should be in charge to ensure transparency and accountability. Instead, the bill creates "expedited liquidation authority" that permits the Federal Deposit Insurance Corporation's politically appointed bureaucrats to take over large, complex, intertwined financial institutions. In addition, the bill contains a provision that would allow the FDIC to play favorites -- and give more money -- to certain creditors if the FDIC determines a particular creditor poses a systemic risk. Doesn't this put the large banks at an unfair advantage over smaller institutions?
The White House is pushing for a new consumer protection agency. Why a big new bureaucracy? The real solution lies in taking a closer look at why these agencies failed to protect consumers and fix the problem existing within the system. We do not need to add more layers of regulators that will make it more expensive and complicated to get a car loan or credit card.
But the worst part of this legislation is what it's missing -- reform of Fannie Mae and Freddie Mac. These two mortgage agencies caused the financial crisis by backing loans to people who couldn't afford it. But that certainly didn't stop Uncle Sam from bailing them out and continuing to bail them out at a cost of $145 billion to the taxpayer.
Why is it that people don't know how much debt these two agencies are piling onto the backs of our children and grandchildren? Well, that's because the Obama White House decided not to put their debt on the books where it can be seen. Now if that isn't outrageous, I don't know what is.
We can't hide from this problem. This administration has to stop propping up Fannie and Freddie with taxpayer dollars while refusing to push significant reform. Utah families have had to make tough choices; it's time these Washington bureaucrats did, too.
Does our financial regulatory system need reform? Absolutely, but this legislation is a prescription to make things worse for Main Street all in the name of fixing Wall Street.
, a Republican, is the senior U.S. senator from Utah.