Obama: Financial Bill Means 'No More... Bailouts, Period'

Shortly after the Senate passed landmark financial overhaul bill Thursday, clearing the way for it to be sent to his desk, President Barack Obama visited the news cameras outside the White House to praise the lawmakers who made it happen and to vow that the legislation would eventually place the financial markets and economy on sounder footing.

In one of his boldest claims, Obama said the new legislation would mean "no more taxpayer-funded bailouts, period." Expect to hear more from Obama and congressional Democrats on this point as they try to make the case to voters that they and not Republicans are truly the friends of those who spend their time on Main Street, not Wall Street.

Republicans, for their part, had argued in the spring that the legislation would all but ensure future bailouts. More recently, however, they had shifted their critique to say the legislation would create a larger, unaccountable bureaucracy that would create more uncertainty, leading to constrictions on credit that would harm the economy.

 

In any event, here's Obama's reaction:

PRESIDENT OBAMA:  Good afternoon, everybody.

With today's vote in the Senate, the United States Congress has
now passed a Wall Street reform bill that will bring greater economic
security to families and businesses across the country.

It was clear from the moment it began that this recession was not
the result of your typical economic downturn.  It was the result of
recklessness and irresponsibility in certain corners of Wall Street
that infected the entire economy — irresponsibility that cost
millions of Americans their jobs, and millions more their hard-earned
savings.  It's why businesses can't get credit, and why families
haven't been able to see appreciation in their home values; in fact,
the values of their homes have plummeted.

Even before the financial crisis that led to this recession, Ispoke on Wall Street about the need for common-sense reforms to protect consumers and our economy as a whole.  But the crisis came, and only underscored the need for the kind of reform the Senate passed today: reform that will protect consumers when they take out a mortgage or sign up for a credit card, reform that will prevent the kind of shadowy deals that led to this crisis, reform that would never again put taxpayers on the hook for Wall Street's mistakes.

The reform that Congress passed today will accomplish these goals.  It is a bill that was made possible, first and foremost, by the tireless efforts of Chairman Chris Dodd and Congressman and Chairman Barney Frank, as well as the leadership of Harry Reid and Nancy Pelosi.

 

I am extraordinarily grateful for their determination in the face of amassive lobbying effort from the financial industry.  And I'm alsograteful for all the members of Congress who stood on the side ofreform, including three Republican senators who put politics andpartisanship aside today to vote for this bill.

The financial industry is central to our nation's ability to grow, to prosper, to compete and to innovate.  This reform will foster that innovation, not hamper it.  It's designed to make sure that everyone follows the same set of rules so that firms compete on price and quality, not on tricks and traps. It demands accountability and responsibility from everybody.  It provides certainty to everyone from bankers to farmers to business owners to consumers.  And unless your business model depends on cutting corners or bilking your customers, you have nothing to fear from this reform.

For all those Americans who are wondering what Wall Street reform
means for you, here's what you should expect.  If you've ever applied for a credit card, a student loan, a mortgage, you know the feeling of signing your name to pages of barely understandable fine print.  It's a big step for most families, and one that's often filled with unnecessary confusion and apprehension.  As a result, many Americans are simply duped into hidden fees and loans they just can't afford by companies who know exactly what they're doing.

Those days will soon end.  From now on, every American will be
empowered with the clear and concise information you need to make
financial decisions that are best for you.  This bill will crack down
on abusive practices and unscrupulous mortgage lenders.  It'll
reinforce the new credit-card law we passed banning unfair rate hikes
and ensure that folks aren't unwittingly caught by overdraft fees when they sign up for a checking account.

It will give students who take out college loans clear information and
make sure lenders don't cheat the system.  And it will ensure that
every American receives a free credit score if they are denied a loan
or insurance because of that score.  

All told, this reform puts in place the strongest consumer
financial protections in history.  And it creates a new consumer
watchdog to enforce those protections.  

Because of this reform, the American people will never again be
asked to foot the bill for Wall Street's mistakes.  There will be no
more taxpayer-funded bailouts, period.  

If a large financial institution should ever fail, this reform
gives us the ability to wind it down without endangering the broader
economy.  There will be new rules to end the perception that any firm is too big to fail, so that we don't have another Lehman Brothers or AIG.  

Because of reform, the kind of complex backroom deals that helped
trigger this financial crisis will finally be brought into the light
of day.  And from now on, shareholders and other executives can know that shareholders will have greater say on the pay of CEOs, so that they can reward success instead of failure and help change the
perverse incentives that encourage so much reckless risk-taking in the past.  

In short, Wall Street reform will bring greater security to folks
on Main Street, to families who are looking to buy their first home or
send their kids to college, to taxpayers who shouldn't have to pay for somebody else's mistakes or irresponsibility, to small businesses,
community banks and credit unions who play by the rules, to
shareholders and investors who want to see their companies grow and thrive.  

Now, already the Republican leader in the House has called for
repeal of this reform.  I would suggest that American can't afford to
go backwards.  And I think that's how most Americans feel as well.

We can't afford another financial crisis just as we're digging out from
the last one.  

Now I said when I took office we can't simply rebuild this
economy on the same pile of sand, on maxed-out credit cards, houses used like ATM machines, or overleveraged firms on Wall Street.  

We need to rebuild on a firmer, stronger foundation for economic
growth. That's why we invested in renewable energy that's currently
creating new jobs all across America.  It's why we're reforming our
education system, so that our workers can compete in the global
economy. That's why we passed health reform that will lower costs for families and businesses.  And that's why I'm about to sign Wall Street reform into law, to protect consumers and lay the foundation for a stronger and safer financial system, one that is innovative, creative, competitive and far less prone to panic and collapse.

Along with the steps we're taking to spur innovation, encourage
hiring and rein in our deficits, this is how we're ultimately going to
build an economy that is stronger and more prosperous than it was
before and one that provides opportunity for all Americans.

Thanks very much.

REPORTER: Sir, are you encouraged that the oil has stopped flowing in the Gulf?

PRESIDENT OBAMA:  I think it is a positive sign.  We're still in
the testing phase.  I'll have more to say about it tomorrow.