Banking Committee Adopts Bennet Amendments Strengthening Investor Protections

Bennet Continues to Push for Strong Reform

Denver, CO - After months of working in the Senate Banking and Urban Affairs Committee to improve the Wall Street reform bill to better protect consumers and provide better accountability over abusive banks, Michael Bennet, U.S. Senator for Colorado, was successful in passing three additional amendments to the Restoring American Financial Stability Act of 2010 that would make similar improvements. The committee passed the broader bill with Bennet's changes on a 13-10 vote.

The Wall Street reform bill includes a provision that would authorize the Securities and Exchange Commission (SEC) to require brokers to disclose details on investment products to consumers before the sale of mutual funds and bonds. One of Bennet's three amendments would take this one step further by requiring these disclosures to contain clear and understandable information on investment objectives, fees and risks to individuals either purchasing these investment products or rolling over their 401(k)s.

Bennet said, "Often, critical details about mutual funds, such as their fees and other financial incentives, are buried in lengthy and complicated documents. This amendment will make it easier for families to understand what they're purchasing and whether their broker is receiving any incentives for selling them a specific product."

Bennet's remaining amendments put the burden of responsibility on the federal government to strengthen the oversight over credit rating agencies that have struggled with conflicts of interest and lackluster performance throughout the recent financial crisis. One provision would ensure that these agencies have independent directors tasked with minimizing conflicts of interest and strengthening oversight. The other measure clarifies the SEC's ability to prosecute credit rating agencies for fraud.

Bennet stated, "Some credit rating agencies have troubling conflicts of interest that have undermined confidence of our financial system. It is my hope that these changes will minimize these conflicts to the greatest extent possible."

Director of Investor Protections for the Consumer Federation of America, Barbara Roper, said, "CFA greatly appreciates the leadership role Sen. Bennet played in strengthening the bill's investor protections. Amendments sponsored by Sen. Bennet that were included in the manager's amendment will arm investors with clear and concise information on the investment products and services they purchase and strengthen oversight of credit rating agencies that played such a key role as enablers of the financial crisis. We look forward to working with Sen. Bennet to preserve these important investor protections as the bill moves forward."

While the consumer protections in the current bill strengthen current regulations, Bennet believes that the agency tasked with overseeing those protections should be through an independent agency, rather than an existing department.