LEGISLATIVE OFFICE
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NASHVILLE, TENNESSEE 37243-0152
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/
House of Representatives
State of Tennessee
MIKE STEWART
STATE REPRESENTATIVE
52ND LEGISLATIVE DISTRICT
DAVIDSONCOUNTY / COMMITTEES
JUDICIARY
TRANSPORTATION
GENERAL SUBCOMMITTEE OF TRANSPORTATION
JOINT SELECT COMMITTEE
ON BUSINESS TAXES

FOR IMMEDIATE RELEASE

Stewart introduces Main Street Recovery and Wall Street Accountability Act of 2012

Legislation to hold “too big to fail” financial institutions accountable for bad investment decisions, 2008 financial collapse and subsequent Great Recession.

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NASHVILLE (December 21, 2011) –Today, State Representative Mike Stewart (D – Nashville) introduced far reaching legislation that would extend the time Tennessee citizens, businesses and local governments have to file suits against the financial institutions that caused the 2008 financial crisis and subsequent Great Recession that continues to plague so many Tennessee families.

“Thanks to citizen protests like the Occupy Wall Street movement, people are focused on the continuing threat to our economy posed by financial institutions that are so large that they can reap profits from risky investments when things go well, yet expect to be bailed out again and again by the taxpayers whenever things go poorly,” Stewart said.

This legislation holds such financial institutions accountable for the damage they caused when their bad investment decisions triggered the 2008 financial collapse and subsequent Great Recession. It also requires that Tennessee government officials evaluate the ongoing risk posed by “too big to fail”financial institutions so that steps can be takento insure thatTennessee taxpayers, retirees, and other investorsare not put at risk in the future.

“Tennessee citizens are, in many cases, only now learning the full extent of the incompetent and potentially fraudulent activities by ‘too big to fail’ financial institutions that led to the 2008 crash, through the hard work of the United StatesSenate Permanent Subcommittee on Investigations as well as a number of dogged financial reporters,” Stewart observed. “This legislation extends the statutesof limitations for lawsuits against ‘too big to fail’ financial institutions so that individuals, businesses, and local governments harmed by the actions of those institutions can hold them accountable and recover money lost because of the financial schemes that are only now being fully revealed to the public.”

The Main Street Recovery and Wall Street Accountability Act of 2012(the “Act”) does five things:

First, Section 5 of the Act prohibits those “too big to fail”financial institutions that received TARP bailout funds from contributing to candidates for the Tennessee House and Senate. “Large banks should not be able to take bailout funds from the American taxpayer and then turn around and use those funds to prevent those same taxpayers from fully regulating them,” Stewart remarked. Credit for this idea should be given to national columnist Matt Taibbi, who has promoted the notion that bailed out institutions should lose their right to use money to influence the political system.

Second, Sections 6 through 10 of the Act extendthe statutes of limitations for most private causes of action and criminal statutes that might apply to the negligent and potentially fraudulent actions of “too big to fail”financial institutions during the 2008 crash and subsequent Great Recession.

Third, Section 11 of the Act calls on the Comptroller of the Treasury to investigate the continuing risk to Tennessee retirement funds posed by the operation of financial institutions that are deemed “too big to fail”and, therefore, are likely to engage in further risky ventures of the sort that led to the 2008 crash and subsequent GreatRecession.

Fourth, Section 12 of the Act creates a Legislative Study Committee to evaluate Tennessee’s existing financial crimes statutes and those statutes allowing Tennessee citizens to sue financial institutions to ensure that those statutes provideour citizens witheffective protections against “too big to fail”financial institutions. The Study Committee would further study the creation of a public sector or not-for-profit ratings agency that states could use to obtain sound ratings of complex financial instruments of the sort that private sector ratings agencies were unable to provide in the years leading up to the 2008 Crash.

Fifth, Section 13 of the Act calls on the Comptroller of the Treasury to investigate the private sector credit ratings agencies that broadly failed to evaluate the economic risks posed by mortgage backed securities that played a major role in the 2008 crash.

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To speak to Rep. Stewart about this issue, please call him at 615-406-8719.