U.S. Chamber: Senate Financial Regulatory Bill Will Create More Problems Than It Solves

Says Bill Is More About Politics Than Sound Economic Policy

WASHINGTON, D.C.—The U.S. Chamber of Commerce today expressed strong disappointment over the final passage of S. 3217, the “Restoring American Financial Stability Act of 2010.” This bill fails to achieve meaningful financial regulatory reform. As a result, businesses will have less access to capital, less ability to manage risk, and less capability to create jobs.

“Today we missed a golden opportunity to bring the right reforms to our financial system,” said Thomas J. Donohue, president and CEO of the U.S. Chamber. If you want to drive capital out of the United States, this is your bill. This process was about political sound bites rather than sound economic policy.”

The Chamber believes there is a right way and a wrong way to achieve financial regulatory reform. This bill is unequivocally the wrong way. In the name of consumer protection, the bill creates an unaccountable new regulator with unprecedented powers and authority over thousands of nonfinancial companies that aren’t in the business of consumer finance and who had nothing to do with the financial crisis. The bill will result in a significant drain on working capital from corporate end-users of derivatives—capital that would otherwise be used to expand, create jobs, and grow businesses. And, while significant bipartisan efforts were made to address resolution authority, these provisions fail to provide clarity for creditors of failing companies, which could lead to more rather than less risk to the system.

“In a global economy, capital goes where it is welcome,” said Donohue. “Today we have taken a significant step in the wrong direction, and it will put American companies and our financial system at a competitive disadvantage to the detriment of our long-term economic growth. We will work with members of Congress from both parties during the conference process to bring the right reforms to the system and restore certainty in our market. We cannot afford to do anything less.”

Since its inception three years ago, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

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