Menendez Hails Final Senate Passage of Landmark Wall Street Reform Legislation

Menendez Hails Final Senate Passage of Landmark Wall Street Reform Legislation

Bill contains a number of provisions championed by Menendez (LIST INCLUDED)

Washington - U.S. Senator Robert Menendez (D-NJ), a member of the Banking Committee who helped craft landmark Wall Street reform legislation, today hailed its final passage in the Senate by a 60-39 vote. The legislation will set in place common sense accountability rules for Wall Street that will rein in risky activities and end the need for big bank bailouts, while also establishing strong new consumer protections (complete summary of the legislation available here: http://banking.senate.gov/public/_files/070110_Dodd_Frank_Wall_Street_Reform_comprehensive_summary_Final.pdf). Menendez authored and successfully included a number of consumer protection and Wall Street accountability provisions in the bill.

"As a result of this landmark bill, accountability is coming to Wall Street, which means that greater economic security is coming to Main Street," said Menendez. "Had these common sense rules and consumer protections been in place before the recession, they would have saved millions of lost jobs, prevented millions of home foreclosures, and protected trillions of dollars in lost savings. At the heart of these vital reforms is the common sense idea that our economy should be rooted in a free market, not a free-for-all market. We are helping to ensure that simple truth is realized."

Provisions in the final bill that Menendez helped to include:

  • "Honest Broker" provision: guarantees that stockbrokers and other providers of investment advice act in the best interest of their clients and disclose all potential conflicts of interest. (Authored Senate amendment on this with Sen. Akaka)
  • Disclosure of CEO-to-worker pay ratio: requires publicly-listed companies to disclose in their annual SEC filing the amount of CEO pay, the amount of the median company worker pay, and the ratio of the two. (Drawn from Menendez's "Corporate Executive Accountability Act," included during Banking Committee work)
  • Avoiding systemic risk: requires financial regulatory agencies to produce regular reports on how they are using capital and liquidity standards to avoid systemic risk. (Included during Banking Committee work)
  • Permanent financial education program: Creates a permanent Financial Education and Counseling Program that makes grants available to community groups to provide education. (Included during Banking Committee work)
  • Expanded whistleblower protections: more protections for whistleblowers against employer retaliation at subsidiaries and affiliates of companies. (Included during Banking Committee work)
  • Greater derivatives trades oversight: Requires all trades (both cleared and uncleared) to be reported to repositories. (Authored Senate amendment on this that was added in conference committee)
  • Office of Minority and Women Advancement: Creates Offices of Minority and Women Advancement at all the major financial regulatory agencies, which will be responsible for all matters of diversity in agency employment and contracting. (Authored Senate amendment on this, modified version added in conference committee)
  • Prohibiting brokers from voting client shares on key compensatory issues: prohibits brokers from voting clients' shares without their consent in votes on "say on pay" and other significant decisions. (Drawn from Menendez's "Corporate Executive Accountability Act," included during Banking Committee work)
  • Municipal bond ratings: helps local governments finance job-creating projects by requiring credit rating agencies to use a universal standard for corporate and municipal bonds. (Included during Banking Committee work)
  • Greater disclosure of stock exchange rules (Included during Banking Committee work)
  • FDIC remains regulator for community banks (Included during Banking Committee work)
  • Off-sheet balance activity (relates to the type of accounting gimmicks Lehman Brothers used): requires regulators to take all off-balance sheet activities into account when calculating capital and other requirements. (Included during Banking Committee work)
  • Shareholders say on executive pay: gives shareholders the right to a nonbinding vote on companies' executive pay policies. (included in Menendez's "Corporate Executive Accountability Act," included during Banking Committee work)
  • Executive pay for performance: requires public companies to have a policy to recover incentive compensation that they erroneously paid to executives because they didn't follow accounting rules, and gives FDIC power to claw back compensation when winding down big companies. (advocated this in Banking Committee)
  • Banning steering payments to mortgage brokers: payments that steered borrowers into subprime mortgages (co-sponsored amendment with Senator Merkley)
  • Disclosure of remittance fees: upfront disclosure of fees charged when consumers send money. (co-sponsored amendment with Senator Akaka)

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