Hoffa Commends Congress for Enacting Financial Reform

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International Brotherhood of Teamsters

Jul 15, 2010, 04:44 ET

Teamsters Leader Says Re-regulation Could Help Create Jobs

WASHINGTON, July 15 /PRNewswire-USNewswire/ -- Teamsters General President Jim Hoffa praised Congress today for passing a landmark bill to re-regulate the U.S. financial service industry.

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The Teamsters have supported regulation of private equity firms and derivatives, as well as stronger protection for investors and consumers and limits on executive compensation.

"Without tough regulation, our financial system was directing too much capital toward destroying jobs instead of creating them," Hoffa said. "This bill takes important steps toward bringing back the wall between traditional banking and risky speculation."

"Consumers will benefit from important protections in this bill. CEOs won't be able to take unrestricted amounts of money from their corporations. Derivatives and private equity will be subject to much-needed regulation," Hoffa said.

The bill lets the Securities and Exchange Commission require private-equity and hedge fund advisers to open their books to inspection. It also requires derivatives to be traded on exchanges or cleared in clearinghouses.

"Private equity firms destroyed too many companies and too many jobs to continue to operate without any oversight," Hoffa said. "Derivatives have allowed a small group of investors to profit from wrecking healthy businesses. It's time to end these practices and put our financial system to work creating jobs instead of killing them."

Hoffa said he's pleased that the bill includes an independent Consumer Financial Protection Bureau. The CFPB will write and enforce rules for most banks, mortgage lenders, credit-card and private student loan companies.

"Working families have had too much of their hard-earned money siphoned by unscrupulous financial institutions," Hoffa said. "The CFBP has the authority and the independence to protect them."

Under the legislation, the Federal Reserve will set standards on executive compensation that it deems to be a dangerous practice. The bill will also give shareholders the right to cast advisory votes on executive pay.

"When CEOs can loot their own banks without penalty, it endangers our entire financial system," Hoffa said. "I'm pleased Congress understands that outrageous pay for CEOs is not only wrong, but dangerous."

Finally, the bill includes a provision for proxy access. The SEC will have the authority to decide adequate holding periods and ownership levels.

"Corporate boardrooms have not been accountable to investors," Hoffa said. "Union pension funds are large investors in public companies and we are pleased that this legislation will increase board accountability to shareholders."

Founded in 1903, the International Brotherhood of Teamsters represents more than 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.

SOURCE International Brotherhood of Teamsters