Senate Majority Leader Harry Reid said he plans to take procedural action today to advance a financial reform bill that will simplify regulation for community banks and draw a "bright line" between rules for commercial banks and investment banks.
In a news conference Wednesday, Reid reiterated his support for the financial reform bill sponsored by Sen. Christopher Dodd, D-Conn.
The bill will distinguish between Main Street banks and Wall Street banks, he said.
Community banks in Nevada, unlike investment banks on Wall Street, had little to do with the problems that triggered the country’s financial meltdown, Reid said.
"The community banks we have in Las Vegas and Reno and around the state, they have nothing to do, little to do, with this collapse," Reid said.
As a result, the legislation "draws a bright line" between what investment banks do and what community banks do, he said.
"The greed and excess on Wall Street, there is no question that has spiraled out of control," Reid said.
During the press conference, state Treasurer Kate Marshall said securities should be more transparent and Wall Street more accountable.
Dodd’s 1,500-page bill addresses derivatives, financial contract that are based on the future value of an asset, Reid said. Wall Street investment banks trade and create derivatives, including mortgage derivatives that analysts say contributed to the financial debacle.
Reid said he will file a motion today to bring Dodd’s financial reform bill to the Senate floor. If he gets 60 votes in favor of the procedural move on Monday, the bill will come before the Senate for debate.
The American Bankers Association remains opposed to the bill as written, said William Uffelman, chief executive officer of the Nevada Bankers Association.
"Bankers are working to ensure that, in fact, they don’t become overregulated or that there’s not another layer of regulatory load," Uffelman said.
In an April 20 letter to senators, the ABA said it objects to creation of the proposed Consumer Financial Protection Bureau, which would enforce "broad, untested and poorly defined standards" for banks of all sizes.
The association also contended that Dodd’s bill "does not adequately address "too-big-to-fail." That referred to arguments that the federal government was compelled to bail out giant institutions in 2008, because their failure would have undermined the American financial system.
However, the association said the bill "unfairly targets Main Street banks that did not contribute to the economic crisis."
Based on a campaign tour of Nevada, Reid said he thought the state’s economy was starting to recover.
Consumer Credit Counseling Service Chief Executive Officer Michele Johnson disagreed.
"We’re not seeing it, not in housing," she said. "We see absolutely no decrease in requests for assistance."
Johnson said her organization is encountering more and more families "with six-figure incomes that are being affected."
Contact reporter John G. Edwards at email@example.com or 702-383-0420.