Menendez On Financial Reform Bill: 'Wall Street Accountability Must Not Wait Any Longer'

Menendez On Financial Reform Bill: 'Wall Street Accountability Must Not Wait Any Longer'

Key provisions Menendez has championed included in bill – list included

Washington - As Senate Banking Committee Chairman Christopher Dodd unveiled new Wall Street accountability legislation today, U.S. Senator Robert Menendez (D-NJ), a member of the Banking Committee, said that the Senate should work quickly on the bill. While Menendez said that he will work to improve the legislation in the committee, he said Chairman Dodd has provided a good starting point and applauded him for including a number of provisions that Menendez has championed to protect consumers, create jobs and ease the financial burden on local governments.

"Since the Fall of 2008, families across the country have been expecting Congress to act to rein in the reckless schemes some on Wall Street undertake with Main Street money," said Menendez. "Wall Street accountability must not wait any longer. This bill has a general framework for implementing accountability that represents a good starting point. We've talked about this long enough, now it's time to act. Chairman Dodd has held long and substantive bipartisan conversations in crafting this bill, and at the same time he has recognized the need for action. I am eager to get to the committee work on this bill, and I will judge it on its totality when we are ready for a final vote. One thing that is clear is that we need to start the process now. I hope that my Republican colleagues, who still resist committee action despite Chairman Dodd's outreach and inclusion, will come to realize that this is a major priority for families that got burned by irresponsibility on Wall Street and will help move the process."

Provisions in the Dodd bill that Menendez requested:

• Municipal bond ratings (helps local governments finance job-creating projects): requires credit rating agencies to use a universal standard for corporate and municipal bonds.

• 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.

• Avoiding systemic risk: requires financial regulatory agencies to produce regular reports on how they are using capital and liquidity standards to avoid systemic risk.

• FDIC remains regulator for community banks

Provisions in the Dodd bill that partially address Menendez requests:

• Pre-funded crisis fund (ends need for future taxpayer bailouts - Menendez is author of the Ending Taxpayer Bailouts by Making Wall Street Pay Act, Requires risky firms to pay into a fund that would be available to wind down any risky firm that fails. Assessments would be based on the risk posed to the system. In the case of failure, shareholders would pay first; the fund would be used only to prevent spillover effects of a failure and wind down the firm, not to bail out a firm or keep it going.

• Inspector General reform at federal financial regulatory agencies: Requires Presidential appointments and Senate confirmation of Inspectors General at financial regulatory agencies; requires financial regulators to respond when Inspectors General identify deficiencies - either by taking corrective action or explaining to Congress why they are not; requires Inspectors General to report to the board of the organization rather than the head of the organization; requires publication of any negative recommendations from the Inspectors General's peer review of other Inspectors General's work.

• Whistleblower protections: Amends the Sarbanes-Oxley Act to improve anti-retaliation protections for whistleblowers by expanding protection to cover whistleblowers at subsidiaries and affiliates of companies.