New Dems on the Issues

Financial Services PDF Print
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MEMBERSHIP

Melissa Bean (IL-08), Co-Chair
Jim Himes (CT-04), Co-Chair
Dennis Moore
David Scott
Ron Klein
Bill Foster
Ed Perlmutter
Carolyn McCarthy
Dan Maffei
Jim Moran
Mike McMahon
John Adler
Gary Peters
Suzanne Kosmas
Andre Carson

NEW DEMOCRATS’ PLAN FOR CREATING A
21st CENTURY FINANCIAL REGULATORY STRUCTURE

With the near collapse of our financial system last fall, the American people are expecting Congress to modernize and reform our financial regulatory structure. The Democratic Caucus is looking to New Dems for leadership and counsel on these complicated issues. New Dems are well positioned with 16 Members on the Financial Services Committee and many Members with private sector financial experience.

As Congress considers comprehensive regulatory reform, New Dems will advocate efficient, effective regulation that strengthens consumer and investor protections and promotes market stability and transparency. In addition we support legislation which creates uniform financial regulatory standards across national and international markets.

Efficient and Effective Regulation

  1. Create a systemic risk regulator that can monitor systemically important institutions and their counterparties to mitigate the risk of systemic collapse.
  2. Reduce redundant regulatory structures in exchange for robust regulatory oversight.
  3. Ensure oversight over new financial instruments that currently do not have regulatory oversight.
  4. Require regulators to use prudential supervision to proactively work with those they regulate to prevent violations and keep communication lines open to better monitor efficacy and unintended consequences.
  5. Increase coordination and communication between federal regulators through expansion of the President’s Working Group on the Financial Markets to include all federal financial regulators.
  6. Modernize the regulation and oversight of the insurance industry to ensure adequate information and a consolidated U.S. position in international trade discussions.

Market Stability and Transparency

  1. Reform how regulators evaluate capital requirements when using fair value accounting values (mark to market) on hold to maturity assets in a temporarily impaired market.
  2. Prohibit excessive leverage on debt and derivative instruments by requiring necessary capital reserves to prevent against the potential risk of default.
  3. Create a countercyclical mechanism to temper extreme market fluctuations.
  4. Support measures to prohibit manipulation that can lead to extreme fluctuations in securities prices that could destabilize fair and orderly markets. 
  5. Support open exchanges and price disclosure to increase transparency in opaque markets like the credit default swaps market.
  6. Require lenders to hold a small percentage of loans in a first loss position to ensure originators retain some stake in the loans they underwrite.
  7. Conduct a thorough review of rating agencies' methodologies, models and compensation structures to ensure that ratings are accurate and not subject to conflict.
  8. Hold Treasury accountable to regularly collect data from all federal sources that receive financial data from recipients of TARP funds.

Robust Consumer and Investor Protection

  1. Aggressively pursue a multi-tiered strategy that prevents unnecessary foreclosures for credit worthy borrowers while protecting taxpayers and preserving the moral hazard principle.
  2. Work towards reintroduction of mortgage reform legislation and pass into law
  3. Ensure that credit is available and appropriate for consumers through strengthened oversight and regulation of predatory loans while protecting businesses' ability to price for risk.
  4. Hold federal financial regulators accountable for enforcement of consumer and investor protections.
  5. Protect and continue to encourage simpler disclosure of status and terms and conditions of Americans' retirement and investment accounts.
  6. Reduce incentives for excessive risk taking and improve corporate governance by empowering shareholders.
  7. Increase fraud prevention efforts.


About the Leaders of the New Dem Financial Services Task Force
Financial Services Task Force Co-Chair Congresswoman Melissa L. Bean (IL-08) is serving her third term in the House of Representatives, is a Member of the House Committee on Financial Services, and is Vice-Chair of the New Democrat Coalition. Congresswoman Bean brings her 20-year business and entrepreneurial background to her role in Congress, having built revenues in sales management positions at leading technology companies before founding her own consulting firm in 1995, which for nine years served high-tech Fortune 1000 clients worldwide.

Financial Services Task Force Co-Chair Congressman Jim Himes (CT-04) is serving his first term in the House of Representatives and is a member of the House Financial Services Committee.   Congressman Himes most recently led the New York office of Enterprise Foundation, a nonprofit institution that combines the resources of private, public, and community organizations to address complex issues of urban poverty, after leaving his 12-year career at Goldman Sachs, where he served as a Vice President.