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July 14th, 2010

Grassley Votes Agianst Financial Regulation Bill

I plan to vote against the conference report on the financial regulation bill when it comes up in the Senate tomorrow because of changes that were made to the original Senate bill, which I supported.

For starters, the conference report spends TARP dollars even though TARP dollars should be returned to the taxpayers and used for deficit reduction, as was promised from the start.  TARP funds should not be recycled to pay for more spending before the program is ended.  The conference report also uses FDIC fees twice in a budget gimmick that both credits those fees to the FDIC and uses them to pay for more spending.  What’s more, big banks should pay for failures rather than consumers, who will bear the brunt of these new fees.

Beyond that, important reforms are watered down in this final version of the bill.

The Federal Reserve should be open to scrutiny and accountability.  The Senate bill took a step in that direction, albeit way too small of a step.  A lot more should have been done in this area.  The House version included a full audit of the Fed, which I supported, and members of the conference could have taken that stronger language.

The $600 trillion derivatives market needs to be made transparent.  The conference report weakened Senate-passed requirements, which I voted for from the start, that banks receiving federal assistance remove all derivatives trading to separate operations.  Instead, banks will be allowed to continue certain derivatives trading.  This leaves banks in a more risky position.

The Senate bill also contained an amendment I cosponsored to stop letting security issuers pick their own credit rating agencies.  A lack of independent assessment by credit rating agencies was a major factor in the 2008 meltdown.  The conference report guts reform and replaces it with a mere study.

This bill is a bill that most of Wall Street wants passed.  And that’s the last thing Iowans expect in any real reform bill.


DES MOINES –Roxanne Conlin’s strong support of the financial reform legislation expected to pass the Senate Thursday is in sharp contrast to her own position criticizing the government’s Troubled Asset Relief Program.

Sen. Chuck Grassley said today that he will vote against the bill.

“Roxanne Conlin says she opposed TARP but now says she’s for it. The bill that is likely to pass tomorrow will take TARP money and spend it. Chuck Grassley will vote against it because he believes TARP money should be returned to taxpayers to pay down the deficit.  By supporting the additional spending, Roxanne Conlin is saying she would vote to use TARP for more big government spending,” said Grassley re-election campaign spokesman Eric Woolson. “Once again, Roxanne Conlin is showing her hypocrisy. She opposed TARP when it was intended to be paid back to taxpayers but she supports TARP when it’s used for more spending.”

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The Iowa Republican

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