Posey: Financial Stability Act Puts Taxpayers on Hook for More Bailouts

The U.S. House narrowly passed HR 4173, the Restoring American Financial Stability Act of 2010 today, and U.S. Rep. Bill Posey, R-Rockledge, is unimpressed.

The member of the House Financial Services Committee said in a statement that the measure "codifies into law the principle of ''too big to fail' when it comes to troubled Wall Street financial firms and puts the American taxpayer on the hook for future bailouts.

"The legislation dips into the TARP fund for nearly $20 billion, using it as a slush fund and guaranteeing that it will not be repaid. The bill also creates a new bureaucracy with unprecedented power to govern nearly every aspect of consumer financial products."

So what's the bottom line, congressman?

"HR 4173 gives greater powers to the very regulators who were in many cases complacent as the 2007-2008 economic crisis brewed," Posey said. Among other things, this bill fails to hold the Securities and Exchange Commission accountable for blatantly ignoring, until it was too late, the $65 billion Ponzi scheme run by Bernard Madoff.

"It does nothing to address the problems at government-sponsored enterprises Fannie Mae and Freddie Mac, despite their role in acquiring $2.2 trillion worth of sub-prime loans and securitized sub-prime loans.

"This bill does nothing to reform the government-mandated Community Reinvestment Act, which forced financial institutions to make trillions of dollars in additional risky loans. This legislation leaves intact government policies that played a major role in creating the financial crisis and we are doomed to see it repeated.