May 10 2011

Shelby: In the End, the FCIC Did Not Matter

U.S. Senator Richard Shelby, ranking Republican on the Senate Committee on Banking, Housing and Urban Affairs, today made the following statement at a Committee hearing on the Financial Crisis Inquiry Commission’s final report.

Excerpts of Shelby’s statement are immediately below in bold, followed by the full text of his prepared remarks:

“I noted that this Committee responded to the Great Depression by launching the so-called Pecora Investigation.  That investigation went on for more than two years and laid the foundation for groundbreaking legislation including the Banking Act of 1933, which created the FDIC, the Securities Act of 1933, and the Securities Exchange Act of 1934, which created the SEC.

“Ultimately, the Democrat majority refused to undertake such a Committee-led investigation.   Instead, it created an independent commission to examine the origins of the crisis and make recommendations on how to reform our financial system. 

“Predictably, without a clear record to justify specific provisions, the Dodd-Frank legislation merely became a wish-list of reforms long sought by liberal activists, special interests, and Federal bureaucrats.  Today, the costs and unintended consequences of Dodd-Frank continue to mount, while the benefits of the legislation remain unclear.

“Mr. Chairman, I believe that this Committee squandered an historic opportunity when it chose not to conduct its own inquiry.  It only exacerbated that mistake when it decided to legislate before the Commission even had a chance to begin its work, let alone finish its report.

“While it is unfortunate that the Commission was unable to reach a bipartisan consensus on its final report, it is more unfortunate that -- in the end -- it did not matter.”

  

STATEMENT OF SENATOR RICHARD C. SHELBY

Committee on Banking, Housing and Urban Affairs

May 10, 2011

“Thank you, Mr. Chairman. 

“Today, we will hear from Phil Angelides, Chairman of the Financial Crisis Inquiry Commission.  The Commission’s statutory mission was ‘to examine the causes, domestic and global, of the current financial economic crisis in the United States.’

“The final report of the Commission was delivered to Congress in January.  For some, the Commission’s report represents a comprehensive record of the crisis.  For me, it represents a missed opportunity.

“Before the Commission was created, I called for this Committee to conduct a comprehensive investigation into the causes of the financial crisis.  I believed that the American people deserved a full accounting of what happened.  I also believed that such an accounting would lay a foundation for financial reform legislation.

“As I have said many times, before Congress considered how to reform our financial regulatory structure, we should have first determined the underlying causes of the crisis.  Without a comprehensive understanding of what went wrong, Congress would not be able to determine how our regulatory structure failed and what reforms were needed.

“I noted that this Committee responded to the Great Depression by launching the so-called Pecora Investigation.  That investigation went on for more than two years and laid the foundation for groundbreaking legislation including the Banking Act of 1933, which created the FDIC, the Securities Act of 1933, and the Securities Exchange Act of 1934, which created the SEC.

“Ultimately, the Democrat majority refused to undertake such a Committee-led investigation.   Instead, it created an independent commission to examine the origins of the crisis and make recommendations on how to reform our financial system. 

“In the absence of a Committee effort, I reluctantly supported the creation of the Commission.  If the Committee wasn’t going to do this work, I believed at least someone should.

“Unfortunately, while the Commission worked, the Administration and the majority moved forward with financial reform legislation.  Rather than help inform Congress, the Commission’s findings were largely ignored as the Democrat majority drafted and passed over 2,300 pages of new law without a firm grasp of the facts behind the financial crisis.  

“Predictably, without a clear record to justify specific provisions, the Dodd-Frank legislation merely became a wish-list of reforms long sought by liberal activists, special interests, and Federal bureaucrats.  Today, the costs and unintended consequences of Dodd-Frank continue to mount, while the benefits of the legislation remain unclear.

“Mr. Chairman, I believe that this Committee squandered an historic opportunity when it chose not to conduct its own inquiry.  It only exacerbated that mistake when it decided to legislate before the Commission even had a chance to begin its work, let alone finish its report.

“While it is unfortunate that the Commission was unable to reach a bipartisan consensus on its final report, it is more unfortunate that -- in the end -- it did not matter.

“Thank you, Mr. Chairman.”