This week marked the start of the financial reform conference, at which Senators and Representatives met in a series of day-long negotiations to harmonize the two bills to overhaul Wall Street. Rep. Mary Jo Kilroy (D-OH) is a member of the conference committee and a freshman facing a tough re-election battle against a former bank lobbyist. We spoke outside the Rayburn Congressional Office Building on Wednesday during a break in the negotiations.
How transparent is this conference, and why is that important?
This is an issue that is critically important to the American people, our financial well-being, and they need to be able to see what is going on. It's important for it to be transparent. We want to change the way we're doing business here ... not the same business as usual, not the same behind closed doors, lobbyists sneaking in amendments at the last minute kind of business.
Besides the optics, will this conference produce a bill that provides stronger reform than either of the base bills?
So far, it is. And I hope that's going to continue. We saw stronger investor protection provisions get accepted by both the House and the Senate today. We made progress on the house offer on giving investors some say in executive compensation, and an ability to rein in compensation that brings unnecessary risk and that encourages the go-for-broke mentality that had really distorted the market -- and led to this bubble which has burst with drastic consequences.
In the upcoming days, are there other provisions you want to see get put into this bill?
Absolutely. Unregulated derivatives were a big factor in these big financial scandals, whether the Enron scandal of the 90s or the AIG scandal of now. And we need to make sure that we are first making derivatives trading transparent and open and I think all of the effort to put in some of the missing Glass-Steagall pieces, to the extent that we can do that, are commendable.
When you go back to your district and you're talking to your constituents, how do you explain that?
I think our constituents have learned some very painful lessons about the financial system over the last year and a half, where maybe in October 2008, people weren't so educated about derivatives and credit default swaps and too-big-to-fail. But many of them are, and they understand a lot more than I think you might give people credit for. I hold the meetings with my constituents and listen to them about their financial concerns and talk to them about the protections that they would like to see, and talk to them about how the financial crisis has really affected their families. Some of the testimony is incredibly personal and painful.
Who is trying to water down this bill?
I think you've seen some efforts by the Republicans to remove whole sections of the bill. You certainly saw that with executive pay. It's definitely being beaten back by people who want to put the interests of the people of this country ahead of the special interests.
There have been some concerns from progressives that the bill doesn't go far enough to change the way Wall Street does business. Do you think you're going to be able to go back home and say "We saw this crisis, and we reacted in a strong enough manner"?
We're taking a look at things from A to Z, taking a look at the SEC and how they work and how they're funded, making sure they have the tools they need to keep up with Wall Street. We're taking a look at consumer protection, and want to see a strong consumer protection agency -- one that will be a real consumer watchdog with the teeth to get the job done.
How do you present that in an election where Democrats may have a harder time than recently?
I'm here, working every day to try to reform Wall Street, to put in strong regulations, to protect people's pensions and life savings, to protect their homes from being foreclosed upon, to protect them from predatory lending practices. I'm here every day working to reign in the abuses of credit card companies and banks, and to give people the kind of clear language and disclosures about their financial instruments. I'm here fighting so that they're not being overcharged, or that their small businesses aren't being overcharged by Wall Street and big banks. I'm here to restore confidence in markets and make them work for investors.
Now, the contest with my opponent, who has a history of lobbying for the same kind of exemptions, the same kind of deregulations, and the mentality of "anything goes" that led us to this mess. [Do] you want to go back to the days when Wall Street and lobbyists got legislators to do their bidding, and for regulators to go to sleep on the job?
Or, you could have somebody who is going to work for them so that regulations rein in the excesses of major corporation, whether that's Wall Street, whether that's BP and other big oil companies, whether that's health insurance companies. I'm here, standing up for them.
Is there anything else people should be thinking about financial reform in the next couple months?
The next couple months? [Laughter]. Try the next couple weeks.