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(Washington, D.C.) – Today, U.S. Senator Patty Murray (D-WA) voted to ensure that as part of Wall Street Reform legislation Washington state taxpayers are never again responsible for bailing out failing Wall Street firms. The amendment (3737), to the Restoring American Financial Stability Act, which the Senate is currently debating, passed by a vote of 96-1.

“While there may be some aspects of Wall Street Reform that are complex, this isn’t,” said Senator Murray. “This vote makes it absolutely clear that Wall Street Reform will spell an end to taxpayer funded bailouts for Wall Street. It’s time for Wall Street to be on the hook to clean up their own mess.”

The amendment Senator Murray voted to support will allow the Federal Deposit Insurance Corporation (FDIC) to liquidate a failing Wall Street firm and to put the costs of that failure on the firm, its creditors, or the financial sector.

Specifically, the amendment which applies to Title II of the Wall Street Reform bill, makes it clear that:

  • No failing firm may enter any FDIC resolution process under Title II without being liquidated. No taxpayer money may be used to keep a failing firm alive; instead, any resolution will guarantee the termination of the firm.
  • Any funds used to liquidate a failing firm must come from either selling off the assets of the failing firm, or else from a “user fee” type assessment on the financial sector. (This is the way the current FDIC deposit insurance fund is handled).
  • Taxpayers shall bear no losses from the exercise of any government liquidation authority under Title II.

The amendment that passed today was introduced by Senator Barbara Boxer (D-CA) and co-sponsored by Senator Murray.

Senator Murray has said that the end to taxpayer funded bailouts is one of the core principles in strong Wall Street Reform legislation that she is working to pass to hold Wall Street accountable and protect Washington families. Watch Senator Murray discuss her goals for Wall Street Reform in a speech on the U.S. Senate floor

See more information about the end to bailouts in the Wall Street reform bill.