Congresswoman Kaptur: “Wall Street Greed” Led to Economic Crisis crisis

Rep. Marcy Kaptur (D-OH), the prime sponsor of H.R. 129, “The Return to Prudent Banking Act,” has a new motivation for the bill on her Congressional website, under “Issues” — “Wall Street Reform.” She writes:

“The 2008 financial crisis and Great Recession destroyed 8.8 million jobs and $19.2 trillion of household wealth…

“Why did we let banks engage in subprime lending? Where were our regulators protecting consumers from predatory lending practices? Why did no one put a stop to big banks selling mortgage securities that were never examined and known to be defective? The answer is greed.

“The response by Congress to the 2008 financial crisis has been woefully inadequate. I voted consistently against the Wall Street bailout.

“What’s more, the subsequent Dodd-Frank legislation failed to address the root causes of the financial crisis.

“It did not: separate commercial banking from investment banking; end the too big to fail status of the largest institutions; rein in the credit rating agencies; require openness and transparency in the trading of derivatives; prevent Wall Street banks from replacing community banks; encourage prudent lending; strengthen support for those agencies finding and fighting fraud in our financial system; or, properly address the housing crisis.

“Congresswoman Kaptur’s legislation, the Return to Prudent Banking Act (H.R.129), would reinstate the provisions of the Glass-Steagall Act that keep investment banking separate from commercial banking. It would prevent the megabanks from engaging in speculative trading. It would also prohibit individuals from working for both an investment bank and a commercial depository bank.

“Also, we must bring to justice those who engaged in illegal activity that contributed to the financial crisis. The biggest obstacle is not enough cops on the beat. Congresswoman Kaptur’s bill, the Financial Crisis Investigation Act, (H.R. 131) would authorize hiring 1,000 agents and sufficient forensic experts to investigate financial crimes…”

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