Maffei/Sherman Amendment to the Financial Stability Improvement Act of 2009

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November 23, 2009 -- Congressman Dan Maffei offered an amendment, with Congressman Brad Sherman, to the Financial Services Committee to Financial Stability Improvement Act of 2009 last week. The amendment passed Committee by a vote of 52-17.

This Financial Stability Improvement Act sets up a regulatory structure to ensure that no company becomes “too big to fail” and ensures that our financial system will remain on sound footing. It prevents the sort of financial crisis that occurred last year.

Under the new system, financial institutions are required to pay assessments to the Systemic Resolution Fund based on their size and the potential risk they pose to the financial system. Rep. Maffei’s Amendment ensures that medium-sized businesses with below $50 billion in assets do not have to pay into the fund. Instead, only bigger financial institutions that are more systemically important to the financial system, and hedge funds which are potentially riskier, will contribute to the fund.

Rep. Maffei said: “As we saw last year, improved federal oversight of the financial system is crucial, and we must improve the ability of the government to deal with the failure of large, systemically connected companies. This amendment goes a long way to improving both the stability and fairness of managing financial systems. Essentially we’re saying that the largest and riskiest businesses need to contribute to this fund, and not community banks that were absolutely not the cause of the economic meltdown we saw last year.”

MONEY FCU, CEO Bruce LaGrow said: “We appreciate Congressman Maffei's leadership on this issue. Local financial institutions like MONEY FCU did not engage in activities that brought about the financial meltdown. We are local lenders that invest in our communities and Congressman Maffei's efforts on this important legislation will allow us to continue to focus on our mission.”

Family First FCU, CEO Christine Peters said: “Credit unions pose no systemic risk to the financial system and should be allowed by Congress to continue their mission of serving their members and local communities. We applaud Congressman Maffei for his efforts to ensure that credit unions can continue to provide consumer friendly financial products and services to our members in Central New York.”

Read more about the amendment here: http://thehill.com/homenews/house/68785-panel-approves-credit-unions-car...

Source: Congressman Dan Maffei