WASHINGTON — Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., said on Thursday that they plan to introduce legislation addressing concerns about "too big to fail" banks.
The two lawmakers announced their intentions during back-to-back speeches, in which they described their concerns and outlined the contours of their upcoming bill. The legislation will draw upon ideas put forward by the Thomas Hoenig, a director of the Federal Deposit Insurance Corporation and the agency's former Chairman Sheila Bair, along with Richard Fisher, president of the Federal Reserve Bank of Dallas.
"We shouldn't tolerate business as usual, monitoring risk until we are once again near the brink of disaster; we should learn from our recent history and correct our mistakes by dealing with the problem head-on," Brown said on the Senate floor. "That means preventing the anticompetitive concentration of banks that are too big to fail, and whose favored status encourages them to engage in high-risk behavior."
Vitter added that while the two are not quite ready to unveil their bill, the legislation would "fundamentally require significantly more capital for the megabanks" and reduce the regulatory burden on community banks.
The Senators, who otherwise occupy opposite ends of the political spectrum, have teamed up before on related issues. They previously worked together to push bank regulators to raise capital surcharges on the biggest banks, and led an effort during the lame duck session to direct the Government Accountability Office to conduct a study looking at the economic benefits of being "too big to fail."