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Friends, I am in the middle of a very important week here in Washington. As many of you know, I sit on the House Financial Services Committee. This week, my committee will bring critical financial services reform legislation to the House floor. These reforms are designed to ensure that the economic meltdown we are living through never happens again. Wall Street will live under careful new oversight and will abandon its riskier practices. Consumers will be newly protected from predatory and irresponsible lenders. Our government regulators, which were too often asleep at the switch, will be held accountable for protecting our people and our system. The days of privatized gains and socialized losses are over, and none too soon. Recently, Hearst wrote a story about my efforts that I would like to share with you: http://www.himesforcongress.com/page/m/6bc3b78f/309d0026/69b03787/166e83b8/3401994815/VEsE/ While I am fighting for reform in Washington, back home, another fight is raging. Right now, there are FIVE republican challengers lined up to unseat me and derail the good, smart reforms I am working towards as a Member of Congress. Their ideas are a remarkably true echo of the irresponsible and accountability-free doctrines of the Bush administration. We've seen that movie before. While 2009 has started the job of bringing our economy back from the brink, reforming our broken health care and financial systems, and restoring our standing and power abroad, we still have a long way to go. This is not the moment to go backwards. I need your help today in order to continue the fight. On December 31st I have a critical quarterly filing deadline with the FEC. $1000, $500, $100, or $50 today makes all the difference. The easiest way to give is securely online at http://www.himesforcongress.com/page/m/6bc3b78f/309d0026/69b03787/166e83bf/3401994815/VEsF/ These year end numbers will be the most important indication of the strength of our campaign yet. Finally, I would love to see everyone at my holiday celebration this Sunday, December 13th, 6pm, at Barcelona Restaurant in Norwalk, CT. If you have already sent your RSVP and a contribution, Thank you! If not, you can RSVP by clicking here. All the best, Jim |
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PLEASE SEE:
Himes helps guide Congress on regulatory reform
Jennifer A. Dlouhy
Hearst NewspapersWASHINGTON -- As the House begins debating a broad financial regulatory overhaul this week to prevent future meltdowns on Wall Street, Rep. Jim Himes, D-Conn., is uniquely positioned to vet the initiative.
As one of a handful of lawmakers with deep experience in the financial sector -- Himes was an executive at Goldman Sachs for more than a decade -- the first-term Greenwich Democrat already has played a role in crafting the measure.
Himes used his seat on the House Financial Services Committee to push for a change allowing farmers and other derivatives traders to satisfy margin requirements with non-cash collateral, such as soybeans or wheat, instead of dollars. Himes also helped secure a modification that aims to preserve the financing arms of General Electric, Pitney Bowes and other companies that offer credit to help large-scale customers buy their products.
Those changes came during weeks of committee work on nine separate financial regulatory bills that together are designed to stiffen oversight of the financial sector, preserve market stability and tighten regulation of the opaque over-the-counter derivatives market blamed for contributing to the worst credit crisis in decades.
House Democratic leaders are stitching the measures together and plan to launch debate this week on the combined financial regulation package.
On the other side of the Capitol building, Sen. Chris Dodd, D-Conn., is spearheading a separate regulatory reform push
Himes said congressional action is needed to update a financial regulatory system that has been "undermined, outclassed and outmoded."
Himes said: "The financial services industry morphed incredibly -- particularly in the last 20 years -- but we had, fundamentally, a 1930s-era regulatory apparatus." The nation's regulatory regime was "totally unprepared to deal with global behemoths" in the financial sector.
"Now we're literally doing everything from stuff that people really understand -- doing away with the no-income, no-job, no-problem mortgage at the consumer level -- to regulating derivatives so a future AIG never happens," Himes said.
A major target of the regulatory overhaul is any financial firm that is so big it poses a systemic risk. The bill would create a new council of federal regulators that would keep track of companies whose failure could jeopardize the entire economy and empower the federal government to sell off some pieces of those firms to minimize risk.
The measure also would create a new "resolution fund," financed by large financial institutions, that could be tapped to help dissolve failed firms.
Himes and other lawmakers on the 71-member Financial Services Committee have struggled to balance protections against systemic risk with interest in preserving the free market.
Himes' solution is a new safety valve -- a so-called "contingent capital" fund -- that is designed to help recapitalize struggling financial firms before they get to the brink of bankruptcy and need to be dissolved with money from the industry-financed resolution fund.
Himes worked with Reps. Bill Foster, D-Ill., and Walt Minnick, D-Idaho on the contingent capital plan, which would allow the Federal Reserve to require certain financial firms to issue debt securities that could be converted to common equity in the company if federal regulators say the company is failing. If a company is found to be failing, those bond-holders would effectively take ownership of the firm.
"There is a broad agreement that when a bank hits the skids, it should be recapitalized," Himes said. "The really ugly question is: Where does that money come from?" Under the contingent capital plan, Himes said, "the recapitalization is done by the market," and without taxpayer dollars.
The Financial Services Committee voted to add the contingent capital plan to the bill; it also adopted the change Himes sought to make it easier for big companies to keep their lending arms without subjecting their entire firms to tough banking rules.
Under Himes' plan, those companies could comply with banking regulations without having to restructure and spin off their lending operations.
The goal was to protect manufacturers, including some in Himes' district, that rely on their credit and financing divisions to help customers purchase planes, packaging equipment and other expensive products.
Himes said his background gives him insight into the real-world implications of the changes Congress is contemplating.
"Having worked in the industry, I'm one of maybe a half dozen members who can read and really" understand the possible consequences, Himes said.
That also means Himes is acutely aware of what he called the potential for "unintended consequences."
"I'm pretty humble about the need to really sweat the details" in this mammoth regulatory overhaul, Himes said. "A detail can turn out to be a big deal later on."
