Treasury Secretary Timothy Geithner said lawmakers should reject amendments designed to weaken the financial regulatory reform bill.
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In a speech before the American Enterprise Institute, Geithner discussed the long-anticipated reform bill, which the Senate Banking Committee was scheduled to mark up on Monday evening. Committee Chairman Christopher Dodd, D-Conn., introduced his proposed version of the legislation last week after abandoning efforts to reach a compromise with Republicans on his committee (see Dodd Proposes Financial Regulatory Reform Bill). Republicans have since introduced over 400 amendments to the proposed legislation. The committee, which is dominated by Democrats, voted 13-10 on a party-line basis to pass the bill and send the bill directly to the Senate floor.
I urge everyone to watch this process closely, for it will be a test of our capacity as a nation to deal with complex and consequential problems, said Geithner. When you see amendments designed to weaken the basic protections of reform; when you see amendments to exempt certain types of financial firms or financial instruments from rules; ask why we should be protecting those private interests at the expense of the public interest.
Geithner noted that in 2008, the Bush administration had proposed assigning the regulation of consumer financial markets and bank safety and soundness to separate agencies, which is what Dodds proposed legislation and the version passed by the House last December would do. He also warned against relying too much on the advice of the financial industry in drafting the legislation.
These are difficult issues and our legislators and their staffs often look to the financial industry for advice as they try to sort out what makes sense, he said. This is important to get right, but be careful whose voice you listen to. Listen less to those whose judgments brought us this crisis. Listen less to those who told us all they were the masters of noble financial innovation and sophisticated risk management. Listen less to those who complain about the burdens of living with smarter regulation or who oppose having to pay a fee for the costs of this or future crises. Instead, listen to the families and businesses still suffering from this crisis. Listen to those who borrowed responsibly but today cant get a loan or cant refinance their mortgage. Listen to those who lost their jobs and their health care and their pension savings. Listen to them.