VOINOVICH SAYS OUR FINANCIAL SYSTEM NEEDS SURGERY, NOT A BAND-AID

Release:

WASHINGTON, D.C. — U.S. Senator George V. Voinovich (R-OH) []issued the following statement on his vote against cloture on the financial reform bill:

“Although I am pleased with the fair and open process my colleagues used to advance this bill – senators were allotted enough time to offer amendments, there was substantial bipartisan debate, and all amendments were germane – this financial reform legislation still does not include all the things needed to strengthen and restructure our financial system.

“I voted no on cloture for several reasons, but first and foremost it is because this bill fails to address the catalyst of the 2008 financial meltdown – the bursting of the mortgage and housing bubble. It does not get to the root of the problem, and also over-reaches its regulatory scope. The issues with the now-government owned and operated Fannie Mae and Freddie Mac are numerous, yet none are addressed in this bill. Additionally, an increase in regulations will cost Ohioans jobs, hurt businesses that are not connected with the meltdown, and harm credit at a time when job recovery is still just inching forward. The Consumer Bureau is like an octopus, reaching its tentacles into various sectors and pulling others, who are not a part of the problem, into government regulation.

“I am disappointed that many of the amendments offered by my colleagues that would have addressed these issues, as well as my other concerns with the bill, were not adopted. It is as if my colleagues want to put a band-aid on a wound that obviously needs emergency surgery.”

The following reasons are why Sen. Voinovich voted no:

The now-government owned Fannie Mae and Freddie Mac failed in the midst of the financial crisis and continue to drain taxpayers for billions of dollars. Just this month, Fannie and Freddie requested an additional $19 billion of taxpayer monies to fund operations, bringing the total government assistance to roughly $145 billion, yet these two entities are not addressed in the bill.

The lack of sound underwriting standards produced a flood of mortgages that ended with homeowners in foreclosure, yet this is not adequately addressed in the bill.

The new Consumer Bureau is far too wide in its regulatory scope and will result in overburdened businesses that had nothing to do with the financial crisis facing heavy and unnecessary new regulations.

State attorneys general are permitted wide authority, likely to be abused for political purposes, in enforcing new federal consumer rules.

Many businesses with no connection to the financial crisis will be punished and forced to adhere to new regulations that increase their costs and reduce available credit to consumers.