Restoring Banking Integrity

RETURN BANKS TO THEIR PUBLIC PURPOSE

I will make sure banks serve their true public purpose: helping Americans save money, and making loans that get paid back. Congress seems to think that banks–especially those with political connections–are entitled to taxpayer bailouts. I will put an end to the idea of “Too Big To Fail” by proposing that troubled banks be wound down by the FDIC or bankruptcy courts, with interim lending to protect consumers and creditors. America’s economic future rests on the three Rs: Risk, Reward, and Responsibility. We succeed when investors who take risks are able to reap the rewards, but know they must also bear the responsibility.

NO MORE HARMFUL OVER-REGULATION

I will oppose misguided or excessive over-regulation that leads to more costs, less choice, and scarcer credit for American consumers, or that shuts down competition and innovation. The recent Wall Street reform bill was packed with billions of dollars in new taxes and fees on banking services. It also created a bulky new bureaucracy, and over-reaching regulations that affect a wide range of non-banking companies. Yet it did nothing to address problems at Fannie Mae and Freddie Mac–two of the largest recipients of federal bailout money. Instead, I will propose legislation that targets the source of the problem, without destroying competition and innovation in banking and the financial sector.

NO MORE GOVERNMENT GUARANTEES OF BAD DEBT

Over the past decade, Congress has failed to regulate mortgages adequately, allowing subprime mortgages, “liar loans,” and other bad practices to proliferate. I will propose tougher standards and an end to the federal guarantees that encouraged the spread of toxic assets. I will also propose legislation that prevents conflicts of interest at ratings firms and gives investors greater protection from brokerage fraud. Our free economy is based on “three R’s”–risk, reward, and responsibility. For too long, we allowed the reward without the responsibility, and handed the risk to the taxpayer. That has to end–for Washington and for Wall Street.