Remarks by Sen. Richard Shelby, provided by the National Republican Senatorial Committee
I’m Alabama Senator Richard Shelby, the ranking Republican on the Senate Banking Committee. The Senate is currently debating legislation to reform our nation’s financial system. The outcome will have serious consequences for our financial system and our economy for years to come. That’s why we need to get this right.
Republicans believe that meaningful financial reform is necessary. And such reform should address the causes of the financial crisis, promote economic growth, and end bailouts for good. The legislation that the Democrats proposed failed each of these tests.
 | At its core, the recent financial crisis stemmed from a meltdown in the mortgage market. At the heart of this market lie the government-sponsored housing agencies Fannie Mae and Freddie Mac. For decades, these multi-trillion dollar institutions leveraged the implicit backing of the American taxpayer to encourage mortgage lending to people who could not afford to repay the loans. |
For years, Democrats blocked meaningful reform of Fannie and Freddie, and not much has changed. Their legislation to reform the financial system touches nearly every corner of the economy, but these major contributors to the crisis are left unscathed.
A recent Wall Street Journal editorial observed, ‘Reforming the financial system without fixing Fannie and Freddie is like declaring a war on terror and ignoring al Qaeda.’ Well said. In the days to come, Republicans will be demanding that financial reform include Fannie and Freddie.
And, while the Democrat bill fails to address, in any way, this central cause of the crisis, it does, however, dramatically expand the reach of the federal government into parts of our economy that had nothing to do with the financial crisis.
If the Democrats have their way, the so-called Consumer Financial Protection Bureau could reach into every small business who provides credit and place unreasonable burdens on them, which only means higher costs and fewer choices for consumers.
Moreover, the Democrats’ new bureaucracy is completely divorced from regulators who are responsible for monitoring the safety and the soundness of our banks. Separating consumer protection from safety and soundness is the same ill-conceived approach that led to the demise of Fannie and Freddie Mac.
This week, Republicans stood with America’s small business owners and offered a rational alternative that strengthens consumer protections without burdening Main Street with unnecessary regulations. The Democrats chose, once again, to ignore the American people and unanimously rejected our amendment. The vast array of Main Street business groups who wrote in support of the Republican alternative deserved better.
And although this legislation still has many flaws, there has been some improvement on one important front. After insisting that changes be made, Republicans were able to close significant loopholes in the Democrats’ bill that would have perpetuated taxpayer funded bailouts. These changes demonstrate our determination to protect the American taxpayer and the future of our economy.
Ultimately, this debate is about the appropriate role of the federal government in the economy. Republicans believe that the federal government should protect taxpayers and promote economic growth. We will continue to support changes to this legislation in an attempt to achieve these goals. Thank you. ####
TEXT CREDIT: National Republican Senatorial Committee
VIDEO CREDIT: TheNRSC
