Obama: Main Street’s Future at Stake in Wall Street Reform

President Obama Using a Buffalo, N.Y. small business he visited this week as his focal point, President Obama said consumers, business owners and community banks have much at stake in sweeping Wall Street oversight reform that could come to a final vote in a few days.
Already amendments have been approved to the Senate reform bill that would allow for the orderly liquidation of big failing firms, ban “no documentation” mortgage loans and place the first-ever regulatory controls over the “swipe fees” that Visa and MasterCard charge merchants.
All of the measures – including an overhaul of how credit rating firms grade investment products – are a result of the practices by the largest financial institutions that fueled the housing market collapse and subsequent financial crisis of 2008.
But an independent consumer financial protection bureau, championed by the President for several months, has proven to be the broad reform bill’s most contentious provision. It would create a new rule-making authority over credit cards, mortgages and other loan products.
“What’s true for our community banks is also true for small businessmen and women like the ones I met in Buffalo,” Obama said in his radio/website address. “These small businesses were some of the worst victims of the excessive risk-taking on Wall Street that led to this crisis.
“Their credit dried up. They had to let people go. Some even shut their doors altogether. And unless we put in place real safeguards, we could see it happen all over again.”
Obama said that while community banks “played by the rules” leading up to the crisis, their big competitors did not. But the credit crunch that resulted has affected small and mid-sized banks the hardest, as they struggle with faltering commercial development and residential real estate loans.
“So, what reform will do is help level the playing field by making sure all our lenders – not just community banks – are subject to tough oversight. That’s good news for our community banks, which is why we’ve received letters from some of these banks in support of reform,” Obama said.
But all consumers have the largest stake in reform, the President emphasized, as he continued to push hard for an independent consumer agency, opposing Republican efforts to have existing bank regulators oversee the proposed new entity.
“First and foremost, you have a stake in (reform) if you’ve ever been treated unfairly by a credit card company, misled by pages and pages of fine print, or ended up paying fees and penalties you’d never heard of before,” Obama said.

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