Rep. Johnson amends financial reform legislation
WASHINGTON, D.C. – Seeking to restore accountability to our financial system and protect American consumers, Rep. Hank Johnson (GA-04) amended the Wall Street Reform and Consumer Protection Act of 2009 this week.
H.R. 4173, which passed the House on Friday, reforms regulation of the financial services industry to prevent future crises and protect investors and borrowers from abuse.
The bill would establish a Consumer Financial Protection Agency (CFPA), strengthen the Securities and Exchange Commission (SEC) and increase federal oversight of hedge funds and ratings agencies. It will also establish new regulation of so-called “derivatives” markets, where a lack of oversight was central to the financial crisis of 2008.
The Johnson Amendment, which Financial Services Committee Chairman Barney Frank included in the final version of the bill, ensures that financial institutions cannot avoid compliance with regulation by litigating abusively and stalling in court.
“Wall Street has operated without regard to the public interest, yet was bailed out by the American taxpayer when things went terribly wrong,” said Johnson. “It’s high time we rein in abusive Wall Street practices that have exposed the American taxpayer to undue risk.”
The Federal Deposit Insurance Corporation (FDIC) worked with Rep. Johnson to ensure that the Johnson Amendment would effectively prevent abusive litigation by major financial institutions.
“I appreciate the willingness of Rep. Johnson and Congress to work closely with the FDIC on this important legislation,” said FDIC Chairwoman Sheila Bair. “I thank Rep. Johnson for his hard work on the important Johnson Amendment, which will ensure that bank regulators have the tools necessary to effectively regulate the nation’s financial institutions.”