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Financial Services Reform

Resolution No. 62

WHEREAS:

Deregulated financial markets have taken a terrible toll on America’s working families and on the state and local governments that employ AFSCME members.  AFSCME members have paid the price for Wall Street’s greed through lost jobs and homes, slashed state and local budgets, lower household earnings, eroding retirement security and devastated communities; and

WHEREAS:
While money was being poured into exotic mortgage-backed securities, municipal interest rate swaps and hedge funds, our pressing need for investments in infrastructure, jobs, education and health care went unmet; and

WHEREAS:
Too many CEOs pursued excessively risky strategies that went unchallenged by boards of directors, and worse yet, too many boards approved executive compensation plans that rewarded such excessive risk taking; and

WHEREAS:
Shareholders in companies where AFSCME members’ pension funds are invested need better tools to hold boards of directors accountable. These shareholders should have the right to nominate candidates for corporate boards.  Shareholders should have an annual advisory vote on executive compensation and, in uncontested elections, directors should be elected by a majority of the votes cast by shareholders; and

WHEREAS:
The lack of transparency and accountability in the futures markets and derivatives products that are promoted by banks and other financial institutions have caused state and local governments to lose millions in investment dollars. The five biggest banks dominate the derivatives market and want to maintain the status quo, since opaque markets permit them to charge very high fees to derivatives clients and, in some cases, sell unsuitable products to municipalities; and

WHEREAS:
The need for reform of the nation’s financial system is critical in order to end the Wall Street abuses that helped cause the financial crisis; and

WHEREAS:
AFSCME and over 200 like-minded allies have converged under the banner of Americans for Financial Reform, to fight for a financial system based on accountability, fairness and transparency.  This coalition has supported the Congress in passing H.R. 4173 in 2009 and S. 3217 in 2010.

THEREFORE BE IT RESOLVED:
That AFSCME urge the Congress to approve final financial reform legislation that will hold big banks accountable, crack down on the greedy reckless behavior on Wall Street, rein in excessive bonuses and pay for CEOs and executives, protect consumers and investors from exorbitant fees and deceptive practices, and prevent predatory lenders from making loans they know cannot be paid back; and

BE IT FURTHER RESOLVED:
That the final financial reform legislation passed by the Congress must ensure the safety and soundness of insured, regulated institutions so that taxpayers are not forced to bail out the banks; promote transparency in financial markets so that the “casino economy” does not take on excessive risk without the knowledge of taxpayers, investors and regulators; and guarantee fair dealing in financial markets, so investors and consumers are not exploited and shareholders have the voice they deserve on how companies are governed; and

BE IT FURTHER RESOLVED:
That the final financial reform legislation must require that credit rating agencies use uniform criteria to rate municipalities, as opposed to the current regime where municipalities are penalized and therefore pay higher rates of interest; and 

BE IT FURTHER RESOLVED:
That any meaningful financial reform must make the marketplace safe for all Americans by creating an independent Consumer Financial Protection Agency to ensure fairness for American consumers; and

BE IT FURTHER RESOLVED:
That the final financial reform legislation in the Congress must give our pension funds greater say as shareholders to help prevent future financial meltdowns; protect public budgets from losses due to unforeseen housing crises; regulate derivatives to prevent large losses to municipalities and taxpayers; guard against future taxpayer bailouts; and supervise hedge funds and private equity funds that manage our retirement money and employ our members; and

BE IT FINALLY RESOLVED:
That AFSCME will continue to work with allies through Americans for Financial Reform to pursue these goals.
 
 
SUBMITTED BY: 
INTERNATIONAL EXECUTIVE BOARD