House Passes Tough Financial Reform Bill

by James Parks, Dec 11, 2009

The U.S. House of Representatives today took a big step toward reforming the risky and reckless practices on Wall Street that created the global financial crisis. By a 223-202 margin, lawmakers passed the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173), a package of reforms that would help protect Americans from a laundry list of practices from predatory lending to unregulated derivatives.

Introduced by Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, the bill is the most sweeping overhaul of the financial industry in more than 70 years. It would create a Consumer Financial Protection Agency (CFPA) to enforce consumer protection and civil rights laws that existing federal regulators have largely ignored. It also would provide increased transparency and regulation in financial derivatives such as those that brought down AIG and helped create the housing bubble.

The bill now goes to the Senate. The AFL-CIO is seeking to improve the bill further as it makes its way through Congress. AFL-CIO President Richard Trumka told the Financial Services Committee in October that Congress needed to reform the Federal Reserve System to get the big banks out of Reserve Bank boardrooms before it gave the Federal Reserve any more regulatory powers.

Trumka, who joined union members and allies at a rally outside the American Bankers Association meeting in Chicago in October, sent a clear message to bankers: “You work for us—not the other way around.”

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