Hoffa Lauds Lawmakers For Final Agreement on Financial Reform

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International Brotherhood of Teamsters

Jun 25, 2010, 04:03 ET

Teamsters Support Regulation of Private Equity, Consumer Protections

WASHINGTON, June 25 /PRNewswire-USNewswire/ -- Teamsters General President Jim Hoffa urged Congress to pass the conference report on financial reform that was concluded this morning.

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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.

"This is a landmark bill that will help redirect bank capital toward creating jobs instead of destroying them," Hoffa said. "It makes progress toward bringing back Glass-Steagall, which forbids traditional commercial banks from taking risks with other people's money.

"While not perfect, this conference report protects consumers, imposes some restrictions on executive compensation and regulates derivatives and private equity. I urge lawmakers to pass this important legislation."

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

"Regulating private equity and derivatives is essential to help curbing abuses by financial institutions," Hoffa said. "Private equity firms have wrecked too many companies and killed too many jobs to continue to operate without any transparency. Derivatives can create the wrong incentives, so that a handful of investors are motivated to destroy healthy enterprises."

Hoffa said he's pleased that the agreement includes an independent Consumer Financial Protection Board, which will have an independent budget and be headed by a presidential appointee. The CFPB will write and enforce rules for most banks, mortgage lenders, credit-card and private student loan companies.

"The CFPB has the authority and the independence to protect working families who have had too much of their hard-earned money plundered by greedy financial institutions," Hoffa said.

The legislation would give shareholders the right to cast advisory votes on executive pay, and the Federal Reserve will set standards on excessive compensation deemed a dangerous practice for a bank.

"We have said all along that allowing CEOs to loot their own banks creates systemic risk," Hoffa said. "I'm pleased the conferees recognize that outrageous pay for CEOs is not only wrong, but hazardous to our economic health."

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

"This is a big victory for pension funds," Hoffa said. "It will force corporate boardrooms to be more accountable to investors."

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