Last night, the House of Representatives passed the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The Bill is the culmination of almost two years of work by the Democratic Congress to examine the causes of this financial crisis and respond with common sense rules of the road to balance economic growth with tough regulation. The bill will create a number of safeguards to increase transparency in financial markets and accountability for financial firms. The bill will create an independent consumer financial protection bureau, regulate the over the counter derivatives markets and give the government the tools it needs to wind down large complex financial institutions. The Dodd-Frank Act will also:

Create Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.

End Too Big to Fail Bailouts: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.

Create an Advance Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.

Provide for Transparency & Accountability for Exotic Instruments: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated — including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.

Address Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation and golden parachutes.

Protect Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.

The Dodd-Frank Act now awaits Senate action before heading to the President’s desk for his signature.

 “The Dodd-Frank Act is a historic piece of legislation. Once Dodd-Frank becomes law, it will create the most robust set of financial regulations since the laws that resulted from the Great Depression,” stated Rep. Clarke. “I am confident that this law will create an environment where businesses can access the capital they need and investors can support future growth. Further, the Dodd-Frank Act will bring forth regulations that will restore transparency and confidence to the financial system and to the economy. I am proud to have voted for this bill so that consumers and investors in the 11th district will be protected going forward,” concluded Rep. Clarke.