[Congressional Record Volume 158, Number 111 (Tuesday, July 24, 2012)]
[Extensions of Remarks]
[Page E1311]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         CHRIS DODD REAFFIRMS THE NEED FOR FINANCIAL REGULATION

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                           HON. BARNEY FRANK

                            of massachusetts

                    in the house of representatives

                         Tuesday, July 24, 2012

  Mr. FRANK of Massachusetts. Mr. Speaker, working with then Senator 
Chris Dodd on financial reform and other matters from 2007 through 
2010, was very rewarding. Senator Dodd's leadership in the Senate in 
getting a tough, complex regulatory bill past the Senate filibuster, 
was an extraordinarily impressive achievement. While he has moved on 
from Congress, Chris Dodd continues to defend the important reforms 
Congress adopted 2 years ago, and in yesterday's Politico, he wrote an 
important article that refutes the criticism of the bill that comes 
from a number of sources, primarily those financial industry leaders 
who behaved irresponsibly and resent the fact that they have diminished 
opportunities to do so. Because this debate now goes on with people 
trying to roll back their efforts to provide some stability in our 
financial system, I ask that Chris Dodd's article be printed here.

                     [From POLITICO, July 22, 2012]

                      Why Dodd-Frank is Necessary

                      (By Former Sen. Chris Dodd)

       Wall Street received a long overdue regulatory overhaul two 
     years ago that fundamentally changed the way the financial 
     sector operates and can finally provide the American people 
     with a more secure financial sector.
       At the time, I knew that these reforms we devised in 
     Congress would not be popular with those who either had a 
     vested interest in seeing them overturned or believed that a 
     repeal of Dodd-Frank is good politics.
       The Wall Street Reform and Consumer Protection Act passed 
     two years ago last Saturday, overcoming many efforts to kill 
     it. Opponents have since spent millions to stall 
     implementation of new financial rules--while attempting to 
     build support for repeal.
       Yet 73 percent of Americans support strong oversight of 
     Wall Street and this law's provisions, according to recent 
     polling by Lake Research Partners. And for good reason. 
     Consider the recent revelations that one bank has admitted 
     and others are being investigated for manipulating Libor, the 
     interbank loan rate. Another bank suffered a $6 billion 
     trading loss because of bad actors. These misdeeds and more 
     are making the strongest case for implementing Dodd-Frank.
       Opponents of this law will likely continue their efforts to 
     weaken our work. But supporters of these financial reforms 
     must continue to explain why these changes are a vital part 
     of long-term U.S. economic security.
       Critics largely forget that U.S. tax dollars rescued the 
     economy from the brink of collapse in 2008. Putting basic 
     rules in place to prevent a crisis of this magnitude from 
     being repeated was not only responsible--it was essential.
       Rep. Barney Frank (D-Mass.) and I worked with both 
     Democrats and Republicans for two years to craft a bill to do 
     just that--using a transparent process to update our 
     financial system for the first time since the 1930s.
       This was a fundamental transformation of our regulatory 
     structure, allowing regulators to keep pace with the 21st 
     century's global financial marketplace. The pace of 
     implementation has been slow because the complexities of 
     these problems required careful consideration.
       I've always believed that a thoughtful approach is needed 
     to ensure these issues are adequately studied and new rules 
     are implemented correctly. Though it's important that these 
     new regulations be implemented soon, it's far more important 
     that these regulations get it right.
       The law that Frank and I--and many other members of 
     Congress--completed two years ago is having a significant 
     effect, providing critical benefits to U.S. consumers.
       For decades, regulators focused exclusively on protecting 
     the safety and soundness of the financial system--not 
     consumers. We created a new watchdog--the Consumer Financial 
     Protection Bureau--whose sole focus is to protect consumers 
     from abusive and deceptive financial practices.
       Its work is under way with the creation of consumer-
     friendly mortgage forms and credit card agreements that force 
     lenders to give borrowers a clear and accurate description of 
     their loan terms. The bureau also has the power to crack down 
     on deceptive practices--as revealed last week in the 
     settlement with Capital One, which must send refunds to 
     nearly two million customers. Solutions like this, 
     unimaginable two years ago, are forcing financial 
     institutions to rethink some products they offer and adopt 
     new consumer-friendly practices.
       We also established requirements for banks to maintain 
     higher capital levels to better absorb unexpected losses. 
     Those running financial institutions are required to be far 
     more knowledgeable about their firm's everyday dealings. 
     Regulatory agencies must now communicate in real time with 
     one another and watch for problems ahead. Dodd-Frank also 
     prohibits the Federal Reserve from bailing out failing firms 
     and brings more accountability to the $600 trillion 
     derivatives market.
       The bill we passed is by no means perfect. But reversing 
     course now can only weaken the economy and bring back the 
     reckless days of lax regulations--or no regulations--and 
     abusive practices that nearly destroyed the economy.
       Our time and energy would be better spent working together 
     to strengthen this law and improve the work we started--
     responsibly implementing an effective regulatory structure 
     that puts the best interests of the American people above all 
     else.
       Chris Dodd, a Democrat who represented Connecticut in the 
     Senate for 30 years, is a co-author of the Dodd-Frank Wall 
     Street Reform and Consumer Protection Act. He retired in 2011 
     and is now chairman and CEO of the Motion Picture Association 
     of America.

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