↩ the History · a speech, filed

Signing Wall Street Reform

Barack Obama · the Ronald Reagan Building, Washington · July 21, 2010
text: The American Presidency Project, UC Santa Barbara · a work of the United States government, in the public domain
colour carries the act's function; a dashed underline marks a predicted misfire; hover or focus any span for its filing

The President. Thank you. Everybody, please have a seat. Have a seat. Well, good morning, everyone.

Audience members. Good morning.

The President. We are gathered in the heart of our Nation's Capital, surrounded by memorials to leaders and citizens who served our Nation in its earliest days and in its days of greatest trial. Now, today is such a time for America.

Over the past 2 years, we have faced the worst recession since the Great Depression. Eight million people lost their jobs. Tens of millions saw the value of their homes and retirement savings plummet. Countless businesses have been unable to get the loans they need, and many have been forced to shut their doors. And although the economy is growing again, too many people are still feeling the pain of the downturn.

Now, while a number of factors led to such a severe recession, the primary cause was a breakdown in our financial system. It was a crisis born of a failure of responsibility, from certain corners of Wall Street to the halls of power in Washington. For years, our financial sector was governed by antiquated and poorly enforced rules that allowed some to game the system and take risks that endangered the entire economy.

Unscrupulous lenders locked consumers into complex loans with hidden costs. Firms like AIG placed massive, risky bets with borrowed money. And while the rules left abuse and excess unchecked, they also left taxpayers on the hook if a big bank or financial institution ever failed.

Now, even before the crisis hit, I went to Wall Street and I called for commonsense reforms to protect consumers and our economy as a whole. And soon after taking office, I proposed a set of reforms to empower consumers and investors, to bring the shadowy deals that caused this crisis into the light of day, and to put a stop to taxpayer bailouts once and for all.

Today, thanks to a lot of people in this room, those reforms will become the law of the land. For the last year, Chairmen Barney Frank and Chris Dodd have worked day and night--[applause]--Barney and Chris have worked day and night to bring about this reform. And I am profoundly grateful to them. I would be remiss if I didn't also express my appreciation to Senator Harry Reid and Speaker Nancy Pelosi for their leadership. It wouldn't have happened without them.

Passing this bill was no easy task. To get there, we had to overcome the furious lobbying of an array of powerful interest groups and a partisan minority determined to block change. So the Members who are here today, both on the stage and in the audience, they have done a great service in devoting so much time and expertise to this effort, to looking out for the public interests and not the special interests. And I also want to thank the three Republican Senators who put partisanship aside, judged this bill on the merits, and voted for reform. We're grateful to them and the Republican House Members. Good to see you, Joe.

Now, let's put this in perspective. The fact is, the financial industry is central to our Nation's ability to grow, to prosper, to compete, and to innovate. There are a lot of banks that understand and fulfill this vital role, and there are a whole lot of bankers out there who want to do right--and do right--by their customers. This reform will help foster innovation, not hamper it. It is designed to make sure that everybody follows the same set of rules so that firms compete on price and quality, not on tricks and not on traps. It demands accountability and responsibility from everyone. It provides certainty to everybody, from bankers to farmers to business owners to consumers. And unless your business model depends on cutting corners or bilking your customers, you've got nothing to fear from reform.

Now, for all those Americans who are wondering what Wall Street reform means for you, here's what you can expect. If you've ever applied for a credit card, a student loan, or a mortgage, you know the feeling of signing your name to pages of barely understandable fine print. What often happens as a result is that many Americans are caught by hidden fees and penalties or saddled with loans they can't afford. That's what happened to Robin Fox, hit with a massive rate increase on her credit card balance, even though she paid her bills on time. That's what happened to Andrew Giordano, who discovered hundreds of dollars in overdraft fees on his bank statement, fees he had no idea he might face. And both are here today. Well, with this law, unfair rate hikes, like the one that hit Robin, will end for good, and we'll ensure that people like Andrew aren't unwittingly caught by overdraft fees when they sign up for a checking account.

With this law, we'll crack down on abusive practices in the mortgage industry. We'll make sure that contracts are simpler, putting an end to many hidden penalties and fees in complex mortgages, so folks know what they're signing. With this law, students who take out college loans will be provided clear and concise information about their obligations. And with this law, ordinary investors, like seniors and folks saving for retirement, will be able to receive more information about the costs and risks of mutual funds and other investment products so that they can make better financial decisions as to what will work for them.

So all told, these reforms represent the strongest consumer financial protections in history--in history. And these protections will be enforced by a new consumer watchdog with just one job: looking out for people--not big banks, not lenders, not investment houses--looking out for people as they interact with the financial system.

And that's not just good for consumers; that's good for the economy. Because reform will put a stop to a lot of the bad loans that fueled a debt-based bubble. And it will mean all companies will have to seek customers by offering better products instead of more deceptive ones.

Now, beyond the consumer protections I've outlined, reform will also rein in the abuse and excess that nearly brought down our financial system. It will finally bring transparency to the kinds of complex and risky transactions that helped trigger the financial crisis. Shareholders will also have a greater say on the pay of CEOs and other executives, so they can reward success instead of failure.

And finally, because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes. There will be no more tax-funded bailouts, period. If a large financial institution should ever fail, this reform gives us the ability to wind it down without endangering the broader economy. And there will be new rules to make clear that no firm is somehow protected because it is too big to fail, so we don't have another AIG.

That's what this reform will mean. Now, it doesn't mean our work is over. For these new rules to be effective, regulators will have to be vigilant. We may need to make adjustments along the way as our financial system adapts to these new changes and changes around the globe. No law can force anybody to be responsible; it's still incumbent on those on Wall Street to heed the lessons of this crisis in terms of how they conduct their businesses.

The fact is, every American, from Main Street to Wall Street, has a stake in our financial system. Wall Street banks and firms invest the capital that makes it possible for startups to sell new products. They provide loans to businesses to expand and to hire. They back mortgages for families purchasing a new home. That's why we'll all stand to gain from these reforms. We all win when investors around the world have confidence in our markets. We all win when shareholders have more power and more information. We all win when consumers are protected against abuse. And we all win when folks are rewarded based on how well they perform, not how well they evade accountability.

In the end, our financial system only works, our market is only free when there are clear rules and basic safeguards that prevent abuse, that check excess, that ensure that it is more profitable to play by the rules than to game the system. And that's what these reforms are designed to achieve, no more, no less. Because that's how we will ensure that our economy works for consumers, that it works for investors, that it works for financial institutions, that it works for all of us. This is the central lesson not only of this crisis but of our history.

Ultimately, there's no dividing line between Main Street and Wall Street. We rise or fall together as one Nation. So these reforms will help lift our economy and lead all of us to a stronger, more prosperous future.

And that's why I'm so honored to sign these reforms into law, and I'm so grateful to everybody who worked so hard to make this day possible. Thank you very much, everybody.

It's done. Thank you.

The divergences

"And finally, because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes" — the room files a Promise and hears the crisis closed; a lawyer reading the statute files an Assertion about a resolution mechanism whose costs fall on creditors and on industry assessments. They part on function, and the split is what makes the sentence unfalsifiable in either direction. A commitment whose content is a non-event has no performance that discharges it and no date on which it comes due; the only party with standing to call it in is a taxpayer inside a bailout that has not happened, and the officials who would have to keep it are Treasury Secretaries not yet appointed. The archive holds the emergency this ceremony settles. Twenty-two months earlier, asking the country for the money, the address that announced the crisis hedged the same commitment twice before it reached its verb — "we expect that much, if not all, of the tax dollars we invest will be paid back" — and a forecast survives an outcome a promise does not. Here every hedge is gone and the tense is flat: "There will be no more tax-funded bailouts, period." When the Federal Deposit Insurance Corporation covered uninsured depositors at Silicon Valley Bank in March 2023 under a systemic risk exception, funded by a levy on other banks, both filings survived intact: one side called it the promise kept, the other called it the promise broken, and the word doing the work was "tax-funded."

"It was a crisis born of a failure of responsibility, from certain corners of Wall Street to the halls of power in Washington" — the White House files a Frame-set that distributes the fault across the whole distance between two places; a listener who asks which halls and whose responsibility files an omission. They part on target. The frame indicts an address rather than an office: no regulator, no committee, no charter, no charge. The address that asked for the seven hundred billion had already done this from the other side of the argument, dividing the fault evenly between "Many mortgage lenders" and "Many borrowers" and starting the chain of causes offshore. Two administrations, two parties, one crisis, and neither account produces a defendant. The paragraph's one concrete actor here is a set of rules, which "allowed" and were "poorly enforced" by nobody.

"And unless your business model depends on cutting corners or bilking your customers, you've got nothing to fear from reform" — the room files an Assertion of reassurance addressed to honest banks; a compliance officer files a Threat, since the sentence states the harm by naming its exemption. They part on function. No firm is named, which keeps both filings alive, and the second person appears here for the only time in the address as an industry rather than a borrower. The Marshall address built the same instrument out of the same materials — "any government which maneuvers to block the recovery of other countries cannot expect help from us" — a criterion published in advance, so that the party it applies to has to identify itself.

"Looking out for people--not big banks, not lenders, not investment houses--looking out for people as they interact with the financial system" — consumers file a Promise made to them; the three named trades file a designation. They part on target: whether the sentence describes an agency's mandate or assigns the parties an argument will have. The asymmetry is structural. The beneficiary is "people," a class with no address, no counsel and no meeting to attend; the adversary is three industries, each with all three. The private individuals named in the address, Robin Fox and Andrew Giordano, are on the beneficiary side and are in the room; no bank is named as a defendant anywhere in the text. Twelve years after this sentence the Bureau it describes was still being litigated over its funding, and the people it was built for had no party to the case.

"For these new rules to be effective, regulators will have to be vigilant" — the audience files an Assertion of prudence, a modest caveat at the end of a list of guarantees; a supervisor at a Federal Reserve Bank files an Order that transfers every pledge on the page onto their desk. They part on orientation. The address never addresses them: its second person has been an industry and then a borrower, and regulators appear only in the third. The sentence is also the hinge on which the guarantees turn conditional — nine paragraphs of what the law will do, followed by the admission that its doing depends on people who are not present and whose conduct the address does not undertake to secure.

"In the end, our financial system only works, our market is only free when there are clear rules and basic safeguards" — the administration files an Assertion about how markets function; the opposition files a Frame-set, after which an argument against the statute is an argument against free markets. They part on function, and the sentence that follows shows the frame being defended before it is attacked: "no more, no less" fixes the reading against a seizure of finance on one side and a demand for further legislation on the other. The construal is the day's most durable product. The bill's provisions could be amended, delayed, or left unwritten by the agencies; the definition of a free market as one with rules survives all of that, because nothing was required of anyone to install it.

"It's done. Thank you." — the ceremony files a Declaration, the words that close the making of a law; a reader files an Assertion, since the law was made by a signature the transcript records as a paragraph break. They part on function, and the archive's signing pages divide the labour differently every time. In the Rotunda the words named what the pen would set in motion by Tuesday morning and handed the act to the Congress — "the act that you have passed that I will sign today." In the Rose Garden the words did repair work the pen could not, and the signature was the only move left to a signer who had opposed the bill. At the Clean Air signing the words narrated the statute as the administration's own proposal and declined three times to read the congressional list. At the Till monument the sentence describing what the paper does was spoken twice, on both sides of the moment the paper did it. Here the pen is mentioned once, inside a feeling about using it, and the ceremony's last performative arrives two words at a time after the instrument has already worked.