President Obama signed into law Wednesday a sweeping overhaul of the nation's financial services system in a widely attended ceremony at the Ronald Reagan Building in Washington.
The legislation represents a major victory for the administration and the president heralded the reforms as way to prevent the next financial crisis.
"Because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes," Obama said. "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. And there will be new rules to make clear that no firm is somehow protected because it is 'too big to fail,' so that we don't have another AIG."
The more than 2,300-page law would establish a system to monitor and prevent risk, give the government powers to unwind large, systemically important institutions, and create an independent consumer protection bureau within the Federal Reserve Board.
Obama cited the consumer protection bureau as a major achievement of reform.
"All told, these reforms represent the strongest consumer financial protections in history," he said. "And these protections will be enforced by a new consumer watchdog with just one job: looking out for people - not big banks, not lenders, not investment houses - in the financial system."
The president added that although the bill is signed, much work remains.
"For these new rules to be effective, regulators will have to be vigilant," he said. " We also may need to make adjustments along the way as our financial system adapts to these changes. And no law can force anybody to be responsible; it is still incumbent on those on Wall Street to heed the lessons of this crisis in how they conduct business."
The president was flanked by several lawmakers during the signing, including the bill's chief sponsors, Senate Banking Committee Chairman Chris Dodd and House Financial Services Committee Chairman Barney Frank.
Obama singled the two out during his comments, saying the chairmen "have worked day and night to bring about this reform, and I am profoundly grateful to you."
The bill is named after both lawmakers, and will be formally known as the Dodd-Frank Wall Street Reform and Consumer Protection Act. When the president noted their efforts, the room erupted in applause and attendees gave them an extended standing ovation.
Other lawmakers on stage with Obama and Vice President Joe Biden included: House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid, Senate Agriculture Committee Chairman Blanche Lincoln, House Agriculture Committee Chairman Collin Peterson, and House Majority Leader Steny Hoyer.
More than 400 others were in attendance, including a host of regulators: Treasury Secretary Tim Geithner, Federal Reserve Board Chairman Ben Bernanke, Federal Deposit Insurance Corp. Chairman Sheila Bair, Comptroller of the Currency John Dugan, Acting Office of Thrift Supervision Director John Bowman, Commodity Futures Trading Commission Chairman Gary Gensler and former Fed Chairman Paul Volcker.
Elizabeth Warren, the Harvard professor who first suggested the creation of a consumer protection agency and is a leading candidate to be its first director, also attended.
A few bankers were also on hand, including Vikram Pandit, the chief executive of Citigroup and Gerald Hassell, the president of Bank of New York Mellon Corp. Camden Fine, the president of the Independent Community Bankers of America, which supported the reform bill, also attended.
Attendees also included representatives from several consumer groups, including John Taylor, the president of the National Community Reinvestment Coalition, Ed Mierzwinski, the consumer program director for U.S. Public Interest Research Group, and Mike Calhoun, the president of the Center for Responsible Lending.
This story has been reprinted with permission from American Banker.
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