Financial Regulatory Reform. This sweeping legislation (H.R. 4173) would tighten federal control of the financial sector on the false premise that the financial crisis was driven by free-market forces, as opposed to government and Fed policies (e.g., artificially low interest rates) that encouraged excessive borrowing and risk-taking. The legislation would create a new Financial Stability Oversight Council that would monitor the financial sector for system-wide risks, and could (by a two-thirds majority vote) subject non-bank entities to Fed regulatory powers and approve Fed decisions to break up large companies. It would also create a new Bureau of Consumer Financial Protection run by the Federal Reserve.
According to the American Bankers Association, the legislation would subject traditional banks to 5,000 pages of new regulations.
The Senate adopted the final version (conference report) of H.R. 4173 on July 15, 2010 by a vote of 60-39 (Roll Call 208). We have assigned pluses to the nays because ramping up regulatory control of the financial sector by the Fed and the federal government is not only unconstitutional but will make it exceedingly more difficult for the economy to recover.
