We all remember the darkest days of the financial crisis five years ago.
Credit dried up. The stock market cratered. Millions of people lost their jobs. Billions of dollars in retirement savings disappeared.
There were legitimate fears that the dominos of our financial system would never stop falling, and we were heading into another Great Depression.
On many of these fronts, we've made real progress. The Dodd-Frank Act was the strongest financial reform law in three generations. If I had been in the Senate three years ago, I would have voted for it proudly.
Dodd-Frank put in place the new Consumer Financial Protection Bureau, which has made serious strides toward leveling the playing field for families and increasing transparency in the marketplace. Thanks to the CFPB, I don't think there will ever again be so many lousy mortgages to threaten our families and our economy.
But no law is perfect -- and our work isn't done.
Most importantly, where are we now on the "Too Big to Fail" problem?" Where are we on making sure the giant financial institutions on Wall Street can't bring down the whole economy with a wild gamble?
After the 2008 crisis, we widely recognized that Too Big to Fail had distorted the marketplace. The largest financial institutions have lower borrowing costs and competitive advantages because of their free, unwritten, government-guaranteed insurance policy.
There was a lot of talk, but look what happened: The four biggest banks are 30% larger today than they were five years ago. Too Big to Fail status is giving the 10 biggest US banks an annual taxpayer subsidy of $83 billion.
So what are we doing about it? More delays. Many say Congress should wait to act further because the agencies still have to issue many of the rules required by Dodd-Frank.
It's true many rules are not yet written, but that's because the agencies have missed more than 60% of Dodd-Frank's deadlines.
When Congress sets deadlines and regulators miss most of them, it's time for Congress to step in. Congress is responsible for oversight -- and that's what oversight means.
For that reason, I partnered with Senators John McCain, Maria Cantwell, and Angus King to offer up one potential way to address the Too Big to Fail problem: the 21st Century Glass-Steagall Act. It's time to separate boring commercial banking from risky investment banking once again.
There are many other approaches for ending Too Big to Fail, and there is no single answer for preventing future crisis.
But we should not accept a financial system that allows the biggest banks to emerge from a crisis in record-setting shape while ordinary Americans continue to struggle.
We should not accept a regulatory system that is so besieged by lobbyists for the big banks that it takes years to deliver rules that are too often watered-down and ineffective.
We should never forget the consequences of letting financial behemoths hold our economy hostage. We managed to avoid that grim fate, but our economy still suffered a staggering body-blow.
There were many powerful interests that that have fought against financial reform, and they will fight future reform efforts too.
But David beat Goliath with the passage of Dodd-Frank. David beat Goliath when we fought for and established a strong consumer agency.
I am confident David can also beat Goliath on Too Big to Fail. Five years after the financial crisis, we just have to pick up the slingshot again.
We all remember the darkest days of the financial crisis five years ago.
When I learned last winter that I would have a seat on the Senate Banking Committee, I was very happy because I knew it would give me the opportunity to ask tough questions and push for some accountability from Wall Street and its regulators. In the last six months, that’s exactly what I’ve tried to do.
Again and again, I’ve been making a simple point to anyone who will listen: we need to learn from the financial crisis of 2008 and, moving forward, to prevent the kinds of high-risk activities that made a few people rich but nearly destroyed our economy.
Now it’s time to launch the next push. I joined forces with Senators John McCain, Angus King, and Maria Cantwell to introduce the 21st Century Glass-Steagall Act of 2013 to reinstate and modernize core banking protections.
Banking should be boring. Savings accounts, checking accounts -- the things that you and I rely on every day -- should be safe from the sort of high-risk activities that broke our economy.
The way our system works, the FDIC insures our traditional banks to keep your money safe. That way when you want to withdraw money from your checking account, you know the money will be there. That’s what keeps our banking system safe and dependable.
But the government should NOT be insuring hedge funds, swaps dealing, and other risky investment banking services. When the same institutions that take huge risks are also the ones that control your savings account, the entire banking system is riskier.
Coming out of the Great Depression, Congress passed the Glass Steagall Act to separate risky investment banking from ordinary commercial banking. And for half a century, the banking system was stable and our middle class grew stronger. As our economy grew, the memory of the regular financial crises we experienced before Glass-Steagall faded away.
But in the 1980s, the federal regulators started reinterpreting the laws to break down the divide between regular banking and Wall Street risk-taking, and in 1999, Congress repealed Glass Steagall altogether. Wall Street had spent 66 years and millions of dollars lobbying for repeal, and, eventually, the big banks won.
Our new 21st Century Glass Steagall Act once again separates traditional banks from riskier financial services. And since banking has become much more complicated since the first bill was written in 1933, we’ve updated the law to include new activities and leave no room for regulatory interpretations that water down the rules.
The bill will give a five year transition period for financial institutions to split their business practices into distinct entities -- shrinking their size, taking an important step toward ending “Too Big to Fail” once and for all, and minimizing the risk of future bailouts.
When people like you and me work together, we can stand up to even the most powerful interests. That’s how we got the Consumer Financial Protection Bureau in 2010. That’s how we won our election in 2012. And that’s how we’ll pass the 21st Century Glass Steagall Act.
AIG made reckless bets that nearly crashed our entire economy.
Beginning in 2008, the government poured billions of your taxpayer dollars into the insurance giant to save it from bankruptcy after it gambled on mortgage-backed securities. And the bailout worked -- earlier this year, AIG reported making billions in profit.
But AIG has a funny way of showing its gratitude. This morning, reports indicated that AIG is considering joining a lawsuit against the federal government because the terms of the bailout weren't generous enough. Can you believe it?
AIG should thank American taxpayers for their help -- not bite the hand that fed them.
The story gets even worse: The government is still bailing out AIG. Right now this profitable insurance giant is getting special tax breaks to give it an advantage and boost its bottom line.
Today, I'm renewing my call for an end to AIG's special tax status to avoid paying taxes -- and I want you to join me. Enough is enough.
Every time AIG files its taxes without paying a dime, it receives another payment in an ongoing, stealth bailout. Those special tax giveaways give AIG a competitive advantage over its competitors -- all while inflating AIG's profit numbers and compensation for its executives.
Washington shouldn't keep giving special breaks to giant corporations while hard-working middle class families get stuck paying the bill -- especially corporations that sucked up billions of dollars in bailouts after nearly crashing our economy.
Join the call for ending AIG's ongoing bailout and special tax status. They've received enough of our help.
Everyone should have to play by the same rules and pay their fair share -- even giant insurance companies. That's what I believed when I was chair of the Congressional Oversight Panel with oversight on the bank bailout, and that's what I still believe now.
Last week, Elizabeth Warren received the endorsement of the Massachusetts Credit Union League at an event held at Worcester Credit Union's Main Street branch. The League is one of the oldest U.S. trades groups still in operation, and this marks the first time they have officially endorsed a candidate for public office.
"Elizabeth Warren has been a strong and vocal proponent of the benefits that credit unions provide to working families across the Commonwealth and around the country," the League's President Dan Egan said at the endorsement event.
Elizabeth has devoted her career to building a credit market that works for American families, for lenders who want to serve those families, and for the economy as a whole. The League's endorsement shows that Elizabeth's vision for credit markets has gained traction from responsible lenders.
"I am honored to receive the endorsement of the Massachusetts Credit Union League," Elizabeth said to the League's Board of Directors. "It is critically important to support credit unions and the hard-working Americans who rely on their services."
At the event, Elizabeth met with Judy Fredenberg, a single mother of four from Fitchburg and a veteran of the Air Force. A few years ago, Judy found herself in a difficult financial situation that resulted in a foreclosure on her home. Fortunately, with the help of her credit union, Judy was able to accomplish her goal of reclaiming, in her words, "the only home my children have ever known."
The credit union endorsement coincided with the one-year anniversary of the Consumer Financial Protection Bureau opening its doors. In her remarks, Elizabeth emphasized that the mission of every credit union is to serve their members -- the same value that she aimed to incorporate into the new consumer agency's DNA.
"It is our hope and expectation that Elizabeth will ensure that credit unions and their members have an advocate in the Senate," said Egan.
Elizabeth reiterated that she will continue to fight for a level playing field and serve as a voice for Massachusetts credit unions. There are more than 200 credit unions in the Commonwealth with more than 2.5 million members.
Last August, I stood in a living room in Andover and talked about why our country faced a massive deficit and what it would take to move us forward as a nation.
I'm proud of what I said. I meant every single word of it.
I said, "There is nobody in this country who got rich on his own." I praised the people who did get rich. I said, "You built a factory and it turned into something terrific or a great idea, God Bless!" But I asked those who make it big to invest in the next generation of kids so they will have a chance too.
Nearly one million people have watched the video from that house party. If you haven't seen the full clip, you can watch it here. And If you've seen it, you can watch it again -- and share it with your friends. Let's show Scott Brown and Mitt Romney that we won't back down:
We don't know who is going to have the next big idea in America.
But we're pretty sure they're going to need employees who can read and write. They're going to need power to keep the lights on and clean water and functioning sewers to keep going. They're going to need roads and bridges to move their goods to market or bring customers to their store. And they're going to need police officers and firefighters to keep their businesses safe.
That's what makes America great. We make the investments together -- to put the conditions in place so that businesses can flourish and create more opportunities for all of us. And it keeps going forward. When we make it, all of us have an obligation to invest in creating the conditions so the next kid can get ahead, and the kid after that, and the kid after that.
I believe in small businesses. My brother started a small business. My daughter started a small business. My aunt started a small business--and that's where I worked when I was a teenager. I've seen up close and personal how hard small business owners work and how much they risk to make their businesses succeed.
Right now, Washington's rigged for the big corporations who can afford armies of lobbyists and lawyers -- not America's small businesses. If Republicans like Scott Brown and Mitt Romney have their way, the system is going to stay rigged for the big guys.
The Republicans have their vision for the future. It says, "I've got mine, the rest of you are on your own."
That's not the American Dream. That's not how we build a future for ourselves and our children. We build a future together.
Saturday was the one year anniversary of the Consumer Financial Protection Bureau opening its doors. Elizabeth is proud to have worked with President Obama to help level the playing field for working families.
The first time I talked to Senator Ted Kennedy about a new consumer protection agency, he had just one question.
"What will it do for families?"
I said to him, "Senator, it won't fix everything. But it will repair a big hole in the bottom of the economic boat. It will make a big difference."
Senator Kennedy just looked back at me and said, "I'll do it." No political calculation and no questions about where the big banks would line up on this. If it was the right thing to do for working families, he was in.
The big banks fought tooth and nail to stop the Consumer Financial Protection Bureau. But we got organized, and when the time came for Congress to give us a public vote, we won. On Saturday, the new consumer agency celebrated the one-year anniversary of opening its doors.
Today, the Consumer Financial Protection Bureau is working on easier-to-understand mortgages, credit cards and student loans. It's protecting groups targeted for some of the worst financial products, including seniors, active-duty military, vets, and students. It's giving families a consumer complaint center to help when they get ripped off. And it's monitoring the big banks and holding those that break the law accountable.
I tell the story of the Consumer Financial Protection Bureau on the campaign trail all across Massachusetts for two reasons. The first is that in a time of great cynicism -- when people so often say you can't get anything done in Washington -- we have a consumer agency. Big change IS possible.
The second reason I tell this story is that it shows that change is possible only when we all work together. Money is powerful, but people joining forces and organizing can be even more powerful.
When I signed up for this campaign, I knew I wouldn't be alone. This isn't my campaign -- it's our campaign. Thank you for standing up to say, "I'll do it."
When it became my responsibility as Chairman of the Financial Services Committee in 2009 to begin work on a financial reform bill, Elizabeth Warren was one of the first people I made sure to consult.
Elizabeth was focused to a very great extent on her concept of an independent agency to protect consumers from being abused or taken advantage of in their financial dealings. She and I began working together to get the necessary Congressional support to make this part of the law.
I knew before I met Elizabeth that she was the intellectual leader in this field. What I learned to my benefit was that she was -- and is -- a natural legislator and leader.
On the first anniversary of the Consumer Financial Protection Bureau that she did so much to create, I've signed a card thanking Elizabeth for her hard work and determination to make it possible and I ask that you sign the card with me.
While Elizabeth was not then a Member of Congress -- a condition I hope that will soon be changed -- she had a great understanding of the way in which our process worked, from both the procedural and political standpoint.
She was also a rare example of someone who was extremely talented at both the inside and outside parts of the work.
That is, she was a perfect ally in my dealings with other Members of Congress, and a great asset in her ability to communicate with the broader public and to mobilize the support that was needed to overcome the entrenched opposition of virtually every financial institution.
I am proud, as I said, of the work I was able to do as Chairman to create the Independent Consumer Bureau. We are fortunate that we had a President who was committed to doing everything he could to help this get adopted.
And we were particularly lucky to have, as the spearhead for this particular effort, an advocate who combines a zeal for the substance with a pragmatic understanding of how to achieve it.
I'm very pleased to ask you to join me in thanking Elizabeth for this great effort, and letting her know of your appreciation.
There is one last thing I want to say. We now face a situation where there is a serious effort to undermine financial reform and weaken the new consumer agency.
Mitt Romney has even called for full-on repeal. And in Congress, Republicans have been using a variety of tactics to chip at it in ways that are more obscure and complicated but still devastating.
We need to elect Elizabeth Warren and to protect the Democratic majority in the Senate in order to protect American consumers. It's critical for the future of our economy and our country.
When Elizabeth first came up with the idea for the Consumer Financial Protection Bureau, a lot of people in Washington said it would never happen.
The big banks were making enormous profits off the status quo -- little oversight, sparse accountability, and cozy regulators in Washington. They would assemble an army of lobbyists to stop real reform, and everyone knew it.
But every time it looked like the future of the agency was in doubt, Elizabeth fought harder. Every time the lobbyists made inroads pushing loopholes, she spoke louder. And every time it looked like the agency would be scrapped without an open vote, she said, "Not on my watch."
She stood up to the bankers on Wall Street and the lobbyists in Washington -- and she won a strong new watchdog to protect consumers and stand up to the big banks for all of us.
This week is the one-year anniversary of the Consumer Financial Protection Bureau opening its doors -- and we've started an online card thanking her for making it possible. Will you sign the card with me?
From the beginning, the purpose of the new agency has been to hold big banks accountable and to rein in the tricks and traps too often buried in the fine print of mortgages, credit cards, student loans and other financial products.
Just yesterday, the CFPB delivered its first enforcement action against the financial industry -- forcing Capital One to refund $140 million to its customers for deceptive credit card practices.
Here are some of the other ways the CFPB has already helped people:
- Launching the Know Before You Owe Project to make prices and risks clear up front. The project includes a new student financial aid shopping sheet, a shorter two-page credit card agreement, and a single, simpler mortgage disclosure form.
- Collecting consumer complaints on credit cards, mortgages, bank accounts, and private student loans. The Consumer Response Center has helped thousands of people to resolve their complaints about financial products and services.
- Protecting older Americans, servicemembers, students and their families by helping them to navigate unique financial challenges with education and engagement about their financial choices.
Join us in thanking Elizabeth for standing up for America's families:
Elizabeth's original thinking was critical, but it was her fierce determination and fearlessness that made it possible.
She wore out the soles of her shoes meeting with Members of Congress and Obama Administration officials. She met again and again with labor unions, consumer groups, civil rights organizations, small business organizations, and anyone who would listen to rally support. There was never a task she wouldn't take on to make this consumer agency real.
Elizabeth has a clear record of doing what it takes to fight for America's families. Help her celebrate this huge milestone today: