MANCHESTER- Today , the Shaheen Campaign released a TV ad that distorts John Sununu’s long record of leadership of calling for reform and oversight of our financial markets. For years, as pointed out by a wide variety of media outlets, John Sununu has helped lead the charge promoting regulatory reforms that could have prevented today’s crisis. Unfortunately, Jeanne Shaheen’s allies in Washington have fought every attempt to implement these strong and fair regulations.
Senator Sununu Has Proposed Legislation To Provide Oversight and Accountability To The Financial Markets:
· As early as July 25, 2000, John Sununu chaired a House Budget Committee hearing on the systemic risk posed by the massive mortgage portfolios held by Fannie Mae and Freddie Mac.
· On July 31, 2003, as a new member of the Senate Banking Committee, Sununu co-wrote and introduced legislation (S. 1508) to strengthen the regulation and oversight of Fannie Mae and Freddie Mac. Sununu foresaw the threat of systemic risk to the financial markets by the mortgage giants. Sununu called attention to the need to improve Fannie’s and Freddie’s safety and soundness in order to reduce the exposure to the American taxpayer and prevent a future bail out.
· Sununu continued to fight for reform by reintroducing even stronger legislation in 2005 (S. 190) and again in 2007 (S. 1100). As a member of the Banking Committee, he has participated in well-over a dozen hearings on Fannie Mae and Freddie Mac, and has authored and introduced numerous committee and floor amendments to legislation under consideration by the Senate, including an amendment to require Fannie and Freddie to register their securities with the Securities and Exchange Commission, and an amendment to the Lobbying Reform Bill that would have increased scrutiny of Fannie’s and Freddie’s lobbying activities on Capitol Hill.
· On July 28, 2005, the Senate Banking Committee, on a Party line vote of 11-9, approved S. 190, legislation Sununu co-wrote and introduced earlier that year to create an independent regulator and strengthen the oversight of Fannie and Freddie. Democrats, led by Chuck Schumer, opposed the bill because they wanted to relax provisions that would have allowed the new regulator to enforce stronger capital standards, review and approve new lines of business, and limit the size of Fannie’s and Freddie’s giant portfolios that exposed the entire financial system to greater risk. Conversely, Schumer and the Democrats insisted on expanding the size and mission of both Fannie and Freddie.
Schumer said at the time: “The portfolio limits are a very large sticking point for me.'' He added: “I have real doubts we can find bipartisan compromise.”
· On April 5, 2006, Sununu wrote and introduced the bipartisan National Insurance Act (S. 2509). This first of its kind legislation would create a federal role for the oversight and regulation of insurance markets and firms. The National Insurance Act would have given a specific role to the federal government to regulate national insurance companies, such as AIG, which operate across all 50 states and globally.
· Sununu first raised the issue of federal regulation for national insurers in 2003 during a Commerce Committee hearing on insurance. Since that time, he has been the leading advocate in Congress on the need to reform the regulatory structure for insurance. A federal regulator would have the ability to review and monitor the overall health of the insurance industry, which is national and global in its scope, and as we see today, has a significant impact on financial markets and the U.S. economy.
· Sununu reintroduced the National Insurance Act in 2007, but the Democrat led Banking Committee has yet to consider it.
· On September 22, 2006, the Credit Rating Agency Reform Act (S. 3850) passed the Senate. Sununu supported this legislation that earlier passed the Senate Banking Committee by a unanimous vote on September 6, 2006. This legislation was passed to improve ratings quality for the protection of investors and in the public interest by fostering accountability, transparency, and competition in the credit rating industry.
· On March 31, 2008, the Treasury Department released its Blueprint for a Modernized Regulatory Structure. Sununu supported this effort and issued the following quote:
“Effective and efficient regulation ensures safety, soundness, and confidence in financial service firms and our capital markets. Despite some modernization efforts during the past decade, America’s financial service regulations remain fragmented, and in many cases operate under structures designed in the 1930’s.”
“The Federal Reserve should be given greater powers to address systemic risk within our largest financial institutions. The sheer number of regulatory organizations should be reduced and areas of duplication and confusion need to be eliminated.”
“During the past five years, I have helped to write and introduce legislation modernizing and strengthening regulation of government sponsored housing enterprises, such as Fannie Mae and Freddie Mac, and legislation establishing a modern optional federal charter for insurance. I’m pleased to see both of these concepts are highlighted in Secretary Paulson’s working paper.”