In response to the 2008 financial crisis, President Obama achieved landmark reform of the Nation’s financial system in 2010 with enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Wall Street Reform). Wall Street Reform has made our financial system safer and more resilient by curbing excessive risk-taking, closing regulatory gaps, and putting in place the strongest consumer financial protections in history. And despite what critics said, Wall Street Reform has created a stronger and more stable foundation for economic growth. Over the past six years, banks have added nearly $700 billion of capital to cushion against unexpected losses and reduce overall leverage, while continuing to increase lending to small businesses and families, helping to fuel the creation of 14 million jobs. Wall Street Reform is making our financial system safer and more resilient, and has been good for the American economy.
But there is more work to do. Last year the Administration fought hard to keep Congressional Republicans from using must-pass budget legislation to roll back Wall Street Reform. We also fought to increase funding for financial regulators and to maintain their independence. But even these gains aren’t enough. That’s why in his Fiscal Year 2017 Budget, the President is calling for doubling the funding of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) from their FY 2015 levels by FY 2021.
The 2017 Budget’s down payment toward that target includes funding of $1.8 billion for the SEC and $330 million for the CFTC, up 11 percent and 32 percent respectively. The Budget also reflects continued support for legislation to enable funding the CFTC through user fees like other Federal financial and banking regulators. Fee funding would shift the costs of regulatory services provided by the CFTC from the taxpayer to the very firms that benefit from the CFTC’s oversight. This is a commonsense change that is long overdue. And while the Administration is pushing for more funding for these regulators, we’ll also continue to oppose efforts to restrict the funding independence of the other financial regulators, including the Consumer Financial Protection Bureau.
The President’s Budget also takes additional steps to reduce risk in the financial sector, including leveling a fee on the largest financial firms on the basis of their liabilities. We learned the hard way in 2008 just how damaging risk and leverage in the financial system can be, and we’ve done a lot to curb excessive risk on Wall Street since. This fee is another way to further those reforms, ensuring that taxpayers aren’t on the hook for risky Wall Street gambles.
The President will continue working to make sure that the financial system works for everyone. As the financial services industry continues to rapidly evolve, some in Congress have used budget limitations to hamper the agencies charged with establishing and enforcing the rules of the road. But the President has said time and time again that he won’t stand for attempts to rollback Wall Street Reform, whether through attacks on Dodd-Frank or through attempts to weaken regulators. Our Nation’s financial regulators must be able to supervise and regulate Wall Street, and doing so requires resources. For years, Congress has fallen short when it comes to providing the appropriate resources to the agencies tasked with keeping investors, markets, and consumers safe.
We’ve made a lot of progress together since 2008. But President Obama knows there’s more to do, and he won’t stop fighting to protect – and build on – that progress.