WASHINGTON, April 19 - With the Senate slated soon to begin debate on a financial overhaul bill, Sen. Bernie Sanders (I-Vt.) said today that reform legislation must fundamentally change the way that Wall Street works.
"Disgust at Wall Street is profound. The American people want us to change in a very profound way how Wall Street functions, and Congress must deliver," said Sanders.
He said real reform should include a credit card interest cap, similar to legislation sponsored by Sanders and endorsed last week by hundreds of religious leaders and community organizations from across the country. The Senate bill also must lift the secrecy at the Federal Reserve, which has refused to divulge which financial institutions received more than $2 trillion in loans. There are now 32 cosponsors of a Sanders bill demanding greater openness at the Fed.
Real financial reform also must break up big banks to eliminate monopoly-like ownership concentrations and to keep any single failing financial institution from dragging the economy down with it. The concept behind legislation Sanders first introduced last Nov. 5 has drawn support from progressives and conservatives alike, including three Federal Reserve bank presidents. The financial reform bill also must steer Wall Street toward investments in job-creating businesses and away from esoteric financial instruments, he said.
Sanders said he would offer or back amendments to the financial reform bill that would:
Break Up Huge Banks. The four biggest U.S. banks - Bank of America, Citigroup, JPMorgan Chase and Well-Fargo - issue two-thirds of all credit cards, write half the mortgages and control nearly 40 percent of bank deposits in the United Sates. "We must break up these behemoths because of the incredible economic power they exert through their concentration of ownership," Sanders said. "It is simply not acceptable that a small handful of giant financial entities can exert such enormous influence over the economic well being of hundreds of millions of Americans."
Make Wall Street Part of the Real American Economy. "With rampant unemployment and when small- and medium-size businesses are unable to obtain affordable credit, it is insane that our largest financial institutions continue to trade trillions in esoteric financial instruments which makes Wall Street the largest gambling casino in the world," he said. Instead, Sanders said, we need to create millions of new jobs by rebuilding our manufacturing base, transforming our energy system and addressing our transportation and infrastructure crisis. We need to make sure that businesses get the credit they need to expand and create employment.
Cap Credit Card Interest Rates. Millions of middle-class Americans who pay their bills on time are being charged interest rates of 30 percent or more. "That is not only obscene but, according to every major religion, immoral. Banks cannot be allowed to engage in usury and charge outrageous interest rates," Sanders said. He will offer an amendment that would cap interest rates for private banks at the same level federal law allows for credit unions; 15 percent except under exceptional circumstances.
End Fed Secrecy. During the bailout, large financial institutions received trillions of dollars in near-zero interest loans. "Who received those loans and under what terms? The Fed won't say. Did some of them turn around and, in a mammoth welfare scam, invest that Fed money in government treasury bonds at 3 percent or 4 percent interest rates? The Fed isn't telling. It's time we had transparency at the Fed so that the American people know what our central bank is doing with taxpayer dollars," Sanders said.
Sanders said it is clear that it will not be easy for Congress to pass real and meaningful financial reform. When Wall Street and the financial sector successfully fought for deregulation, they poured some $5 billion dollars into lobbying and campaign contributions over a 10-year period. Now, as Congress begins to address financial reform, they are at it again. In 2009, the major financial interests spent $300 million in lobbying and campaign contributions.