Marking the first anniversary of the Dodd-Frank Act, Treasury Secretary Timothy Geithner is urging President Barack Obama to veto any bill put forward by its Republican foes that undermines the consumer protection measures and Wall Street reforms it has put in place.
“Many of those who fought reform during the legislative process are now trying to slow down and weaken rules, starve regulatory agencies of resources, and block nominations so that they can ultimately kill reform,” Geithner writes on the op-ed page of Wednesday’s Wall Street Journal.
But, he says, the Obama administration “will not let that happen” because “too many Americans are still suffering from the pain of the financial crisis [and] we owe them a financial system with better protections against abuse and catastrophic risk.”
“As secretary of the Treasury, I will recommend that the president veto any legislation passed by Congress that would undermine these vital financial protections,” Geithner warns.
Most of Geithner’s piece in the Journal focuses not on warnings but on touting the accomplishments of the Obama administration in bringing the country back from “the edge of a second Great Depression” while moving ahead on the reforms that were ultimately championed by now-former Sen. Chris Dodd (D-Conn.) in the Senate Banking Committee and Rep. Barney Frank (D-Mass.) in the House Financial Services Committee.
Since Obama signed their reform bill into law – on July 20, 2010 – “the U.S. financial system is in much stronger shape, not just relative to the depth of the crisis but also relative to conditions that prevailed before it hit,” Geithner writes.
“We have recovered most of the investments the government made to put out the fires and avert disaster,” he says.
“While many misperceive the investment made in banks under the Troubled Asset Relief Program as an unfair and unjust gift to the financial sector, we have already turned a profit on these investments, and we may do so on all the government intervention programs. Moreover, these actions have helped to restart economic growth, increase the value of American families’ savings by trillions of dollars, make it possible for businesses to borrow again, and prevent a second Great Depression.”
And some of the structural problems that created challenges a few years ago are, thanks to the provisions of Dodd-Frank, now being solved.
“The Securities and Exchange Commission, the Commodity Futures Trading Commission and the banking regulators have outlined the major elements of reforms to bring oversight, transparency and greater stability to the $600 trillion derivatives market,” Geithner writes.
The Federal Deposit Insurance Corporation, meanwhile, has plans in place meant to protect taxpayers from shouldering the burden of financial institutions that fail.
Another major step forward, he says, is the Consumer Financial Protection Bureau, which officially launches on Thursday.
In all, Geithner says, “We are implementing reform quickly but carefully, and we are taking public input at each step of the way. Because this is complicated work, and because it entails extensive coordination with multiple agencies around the world, some rules are being written more quickly than others. Where we need more time to get the substance right, we will take the time we need.”
But, he stresses, that can only happen without Republicans pushing to undermine the law.
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