As the U.S. economy continues to struggle, the public drumbeat for Wall Street reform remains steady. Congress, in the midst of an election year, is paying attention.

In late April, Arkansas Sen. Blanche Lincoln and Connecticut Sen. Chris Dodd — Senate Agriculture Committee Chairman and Senate Committee on Banking, Housing and Urban Affairs Chairman, respectively — announced an agreement had been reached to “bring transparency to the nation’s financial markets.”

On Wednesday, Lincoln spoke on the Senate floor focusing on the Dodd-Lincoln bill’s approach to derivatives. Among her prepared remarks:

“I would also like to speak about the derivatives title, which is the bipartisan product that was reported out of the Senate Agriculture Committee two weeks ago. Specifically, there have been statements in the press and here in the Senate Chamber that I believe need to be corrected regarding Section 716.

“As Chairman of the Senate Agriculture Committee, I am proud to have included this provision in Wall Street reform legislation approved on a bipartisan vote by our committee two weeks ago. I am also proud that it is included in the Dodd-Lincoln legislation that we are considering today.

“This provision seeks to ensure that banks get back to the business of banking. Under our current system, there are a handful of big banks that are simply no longer acting like banks. Surely every member of this body is aware that the operation of risky swaps activities was the spark that lit the flame that very nearly destroyed our economy.

“In my view, banks were never intended to perform these activities, which have been the single largest factor to these institutions growing so large that taxpayers had no choice but to bail them out in order to prevent total economic ruin.

“My provision seeks to accomplish two goals: first, getting banks back to performing the duties they were meant to perform — taking deposits and making loans for mortgages, small businesses and commercial enterprise; and second, separating out the activities that put these institutions in peril.

“This provision makes clear that engaging in risky derivative dealing is not central to the business of banking. Under Section 716, the Federal Reserve and FDIC will be prohibited from providing any federal assistance and funds to bail out swap dealers and major swap participants.

“Currently, five of the largest commercial banks account for 97 percent of the commercial bank notional swap activity. That is a huge concentration of economic power, which is why I am in no way surprised that several individuals are seeking to remove it from the bill.

“This provision will ensure that our community banks on Main Street won’t pay the price for reckless behavior on Wall Street. Community banks are the backbone of economic activity for cities and towns throughout the country. They don’t deal in risky swaps that put the whole financial system in jeopardy. Instead they perform the day-to-day business of banking-- making the smart, conservative decisions that banking institutions should be making.

“Unfortunately, we saw the five largest banks begin to fail in part because of risky swaps activity — activity that should never have been part of their operation in the first place. Sadly, it was our community bankers and their depositors who were left footing the bill.

“Community banks were forced to pay for a problem they did not create. Small banks are still paying the price. In 2009, we saw 140 bank failures and now the costs of FDIC insurance premiums are skyrocketing for community banks. Higher insurance rates mean less lending.

“Less lending means that now individuals and small businesses are also paying the price. The FDIC reported that in 2009 the bank industry reduced lending by 7.4 percent, the biggest decrease since 1942.

“I am a strong believer that you build an economic recovery from the ground up and if small and medium-sized businesses aren’t getting the capital they need to grow their businesses, something is wrong. The economy simply will not recover unless we free up lending.

“Unfortunately, Wall Street lobbyists are doing everything they can to distort this provision — spreading misinformation and untruths.

“The suggestion that this provision will force derivatives into the dark without oversight is absolutely false. The Dodd-Lincoln bill makes it abundantly clear that all swaps activity will be vigorously regulated by the Fed, the Commodity Futures Trading Commission and the Securities Exchange Commission.”

In recent days, New Hampshire Sen. Judd Gregg, Tennessee Sen. Bob Corker, “Wall Street lobbyists and others … have somehow argued that by pushing out risky swaps from the nation’s largest banks, like JP Morgan, Bank of American, Wells Fargo, Goldman Sachs or Citigroup, that somehow swaps will no longer be regulated.

“This is just plain wrong.

“Just because these swaps desks will no longer be overseen by the FDIC does not mean that they will not be subject to the bill’s strong regulation by the market regulators — the SEC and CFTC. In short, they simply ignore the strong provisions included in the rest of the underlying bill. (That may be) convenient for their argument, but not so convenient when seeking the truth.

“Let me reiterate: every swaps dealer and major swap participant will be subject to strong regulation.

“Wall Street lobbyists have also argued that this will prevent banks from using swaps to hedge their risks. Again, completely false.

“Banks who have been acting as banks will be able to continue doing business as they always have. Community banks using swaps to hedge their interest rate risk on their loan portfolio will continue to be able to do so and, most importantly, we want them to do so. Community banks offering a swap in connection with a loan to a commercial customer are also still in the business of banking and will not be impacted.

“Using these products to manage risk and designing exotic swaps — which have led to the financial demise of places like Jefferson County, Alabama; Orange County, California, and the country of Greece — are two very different things. Hopefully, this is something my colleagues will understand.

“Wall Street lobbyists have also said this provision will move $300 trillion worth of swap activities outside of the banks. My question is: why is this activity there in the first place?

“I agree that regulated, transparent swap activity is a necessary part of our economy — it just has no place inside of a bank where too many innocent bystanders are put at risk.

“Despite what those on Wall Street may be saying, this provision is an important part of real Wall Street reform. It has broad support from the Independent Community Bankers of America, The Consumer Federation of America, AARP, Labor Unions, and leading economists like Nobel-Prize-winning Joseph Stiglitz, among others.”

Lincoln then read lengthy excerpts from those backers. She concluded, “I look forward to working with my colleagues to ensure this legislation remains strong and new loopholes are not created on behalf of Wall Street.”