The Senate Is Not In Session - Next Session Tuesday, October 16 At 12:00 PM
Senate Session - May 6, 2010

The Senate continued work on a financial regulatory reform bill.

Speakers:
Time
Action
  • 09:30:29 AM

    THE PRESIDING OFFICER

    OFFICER: THE SENATE WILL COME TO ORDER. OUR VISITING CHAP LANE TODAY IS…

    OFFICER: THE SENATE WILL COME TO ORDER. OUR VISITING CHAP LANE TODAY IS FATHER CLAUDE PAMERLEAU, FROM THE UNIVERSITY OF POUREDLAND. HE WILL LEAD US IN PRAYER. THE GUEST CHAPLAIN. LET US PRAY. O LORD, MASTER OF THE UNIVERSE AND EVERYTHING IN IT, YOUR GENEROSITY GIVES US LIFE, GIVES US HOPE, GIVES US THE IMAGINATION TO ENVISION A WORLD WHERE NO CHILD WEEPS, WHERE VIOLENCE IS A DARK MEMORY, WHERE PEACE IS THE STORY OF EVERY DAY AND YEAR. AS THE GIFT OF THIS DAY UNFOLDS, AS THE CREATIVE MEN AND WOMEN IN THIS CHAMBER TURN THEIR GIFTS AND TALENTS TO MAKING LAWS THAT SEEK TO ELEVATE AND PROTECT THE LIVES OF MILLIONS OF THEIR FELLOW AMERICANS, DO NOT LET THEM LOSE THE SWEET PEACE AND LONG VISION OF THIS FIRST MOMENT. IN THE FACE OF SO MANY DISTRACTIONS AND CHALLENGES, MAY THEY BE FILLED WITH GRACE AND GENEROSITY, WISDOM AND WONDER, CALM AND COMPASSION. OPEN THEIR HEARTS, LORD, AND OPEN THEIR MINDS, AND FILL THEM WITH YOUR LOVE, AND MAKE OF THEM BEACONS OF YOUR LIGHT, SO THAT THEIR DELIBERATIONS THIS DAY TAKE THIS COUNTRY AND THIS SWEET PLANET EVER CLOSER TO YOUR PEACE AND YOUR JOY. AMEN.

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  • 09:32:20 AM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: PLEASE JOIN ME IN RECITING THE PLEDGE OF ALLEGIANCE TO…

    PRESIDING OFFICER: PLEASE JOIN ME IN RECITING THE PLEDGE OF ALLEGIANCE TO THE FLAG. I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL.

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  • 09:32:43 AM

    THE PRESIDING OFFICER

    OFFICER: THE CLERK WILL READ A COMMUNICATION TO THE SENATE.

  • 09:32:47 AM

    THE CLERK

    WASHINGTON, D.C, MAY 6, 2010. TO THE SENATE: UNDER THE PROVISIONS OF RULE…

    WASHINGTON, D.C, MAY 6, 2010. TO THE SENATE: UNDER THE PROVISIONS OF RULE 1, PARAGRAPH 3, OF THE STANDING RULES OF THE SENATE, I HEREBY APPOINT THE HONORABLE PATRICK J. LEAHY, A SENATOR FROM THE STATE OF VERMONT, TO PERFORM THE DUTIES OF THE CHAIR. SIGNED: ROBERT C. BYRD, PRESIDENT PRO TEMPORE.

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  • 09:33:07 AM

    MR. REID

    FOLLOWING LEADER REMARKS, THE SENATE WILL RESUME CONSIDERATION OF S. 3217,…

    FOLLOWING LEADER REMARKS, THE SENATE WILL RESUME CONSIDERATION OF S. 3217, WHICH IS THE WALL STREET REFORM LEGISLATION. THE TIME UNTIL 10:00 A.M. WILL BE FOR DEBATE WITH RESPECT TO THE TESTER HCH HUTCHISON-HUTCHISON AMENDMENT DEALING WITH FDIC. AT 10:00 A.M., THE SENATE WILL ROAD TO VOTE IN RELATION TO THAT AMENDMENT. ADDITIONAL VOTES ARE EXPECTED TO OCCUR WITH RESPECT TO THE WALL STREET REFORM BILL. CURRENTLY THE SHELBY AMENDMENT REGARDING CONSUMER PROTECTION IS PENDING. THE NEXT AMENDMENT UPON DISPOSITION OF THAT WILL BE THE SANDERS AMENDMENT REGARDING AUDIT OF THE FEDERAL RESERVE. THAT'S AMENDMENT NUMBER 3738. AS A REMINDER, THERE WILL AN ALL-SENATORS BRIEFING ON THE START TREATY RELATED TO NATIONAL SECURITY ISSUES FROM 4:30 TO 5:30 P.M. WE WILL REMAIN IN SESSION DURING THAT PERIOD OF TIME. WE EXPECT TO ARRIVE AT A TIME FOR VOTING ON THE SHELBY AMENDMENT. IF NOT, THERE WILL BE A MOTION TO TABLE THAT AMENDMENT. SO WE HAVE A LOT OF AMENDMENTS TO GET THROUGH. WE'RE GOING TO WORK INTO THE NIGHT. WE HAVE WORK THAT WE NEED TO DO TOMORROW. SO EVERYONE SHOULD BE AWARE THAT WE HAVE A LOT OF ISSUES THAT WE HAVE TO RESOLVE ON THIS MOST IMPORTANT LEGISLATION.

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  • 09:34:25 AM

    THE PRESIDING OFFICER

    THE SENATOR FROM VERMONT.

  • 09:34:27 AM

    MR. LEAHY

    MADAM PRESIDENT, I WOULD THANK THE DISTINGUISHED REPUBLICAN LEADER FOR…

    MADAM PRESIDENT, I WOULD THANK THE DISTINGUISHED REPUBLICAN LEADER FOR LETTING ME STEP FORWARD AHEAD OF HIM. I JUST WANTED TO NOTE WHAT A GREAT PRIDE IT IS IN OUR FAMILY TO HAVE WELCOMED THE VISITING PASTOR TODAY, FATHER CLAUDE PAMERLEAU, WHO'S ALSO MY WIFE MARCEL'S BROTHER. AND HE IS, WITH THE GRACIOUS CONCURRENCE OF OUR CHAPLAIN, DR. BLACK, HAS OPENED THE SENATE ON OTHER OCCASIONS, BUT IT IS A GREAT DEAL OF PRIDE FOR BOTH MARCEL AND MYSELF THAT HE IS HERE AND HAS A CHANCE TO VISIT WITH US. FATHER PAMERLEAU IS A DEAR FRIEND OF ALL OUR FAMILY AND HAS BEEN A GUIDE AND SPIRITUAL LEADER FOR OUR FAMILY FOR DECADES. AND, MADAM PRESIDENT, I WOULD ASK UNANIMOUS CONSENT THAT A SHORT BIOOF HIM BY THE -- BIO OF HIM BY THE UNIVERSITY OF PORTLAND -- WHICH EVEN SPEAKS ABOUT HIS CLARINET PLAYING -- BE MADE PART OF THE RECORD AT THIS POINT.

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  • 09:35:43 AM

    MR. LEAHY

    AND, AGAIN, I WOULD THANK OUR LEADERS AND WOULD YIELD THE FLOOR.

  • 09:35:47 AM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: THE REPUBLICAN LEADER.

  • 09:35:49 AM

    MR. McCONNELL

    MADAM PRESIDENT, LAST NIGHT THE SENATE FOBBING A STRONG STANCE ON…

    MADAM PRESIDENT, LAST NIGHT THE SENATE FOBBING A STRONG STANCE ON PROTECTING TAXPAYERS FROM THE UNINTENDED CONSEQUENCES OF A BILL THAT WAS ORIGINALLY MEANT TO HOLD WALL STREET ACCOUNTABLE FOR ITS MISTAKES. PUT ASIDE FOR A MOMENT THE LATEST TALKING POINTS THE OTHER SIDE IS USING ABOUT REPUBLICANS, OUR GOAL THROUGHOUT THIS DEBATE HAS BEEN TO PROTECT TAXPAYERS WHO GOT BURNED DURING THE LAST CRISIS AND LAST NIGHT'S VOTE SHOWED THAT THOSE EFFORTS ARE BEGINNING TO YIELD RESULTS. A $50 BILLION FUND FOR FAILING FINANCIAL FIRMS THAT WOULD HAVE DISTORTED THE MARKET BY ENCOURAGE THE SAME KINDS OF RISKY INVESTMENTS THAT LED TO THE LAST CRISIS IS NOW OUT OF THE BILL. A PROVISION THAT WOULD HAVE GIVEN INVESTORS IN FAILING FIRMS SPECIAL TREATMENT IS OUT. AND CONGRESS WILL NOW HAVE TO APPROVE ANY GOVERNMENT EFFORT TO INSURE BANK DEBT. SO IMPROVEMENTS ARE BEING MADE TO THIS FINANCIAL REGULATORY BILL IN THE RIGHT DIRECTION. NOW IT'S TIME TO FOCUS ON WHAT EMERGED AS ANOTHER CENTRAL POINT OF CONTENTION: THAT'S THE NEW GOVERNMENT BUREAUS THIS BILL WOULD CREATE OVER AT THE FED. THE FIRST THING TO KNOW ABOUT THIS NEW AGENCY IS THAT CONGRESS WOULDN'T HAVE ANY POWER OVER T THE SECOND THING TO KNOW IS WHAT IT WOULD DO. SOME OF THAT IS STILL VAGUE, BUT THE AMBIGUITIES ARE PART OF THE PROBLEM. WHAT WE DO KNOW IS THAT THIS NEW AGENCY WOULD BE AUTHORIZED TO GATHER INFORMATION ON BANKING AND PURCHASING PATTERNS AND ON ANYONE -- ANYONE -- OPERATING IN CONSUMER FINANCIAL MARKETS. ONE PROVISION, SECTION 1071, COULD LEAVE FINANCIAL INSTITUTIONS TO MAINTAIN A RECORD ON THE NUMBER AND DOLLAR AMOUNT THAT EACH CUSTOMER DEPOSITS AT BANK BRANCHES AND A.T.M.'S. NOW, UNDERSTAND ABLY, A LOT OF AMERICANS AND A LOT OF SMALL BUSINESS OWNERS HAVE SERIOUS CONCERNS ABOUT ALL OF THIS. THEY'RE ALSO CONCERNED ABOUT THE POTENTIAL OF THIS BILL TO FURTHER DRIVE CREDIT AT A TIME WHEN THEY'RE TRYING TO DIG THEMSELVES OUT OF A RECESSION. WE RECEIVED A LETTER JUST YESTERDAY FROM GROUPS REPRESENTING HUNDREDS OF THOUSANDS OF BUSINESSES -- FROM FLORISTS TO ORTHODONTISTS TO BUILDERS TO CAR DEALERS -- ALL CONCERNED ABOUT THE POTENTIAL IMPACT THIS NEW AGENCY WOULD HAVE. LET ME STATE THE OBVIOUS. NONE OF THESE BUSINESSES HAD ANYTHING WHATSOEVER TO DO WITH THE FINANCIAL CRISIS. NONE OF THESE BUSINESSES HAD ANYTHING TO DO WITH THE FINANCIAL CRISIS. WHY ON EARTH WOULD WE WANT TO PUNISH THEM FOR THE RECKLESS BEHAVIOR THAT WE SAW ON WALL STREET? WHY ON EARTH WOULD WE WANT TO PUNISH THESE SMALL BUSINESSES FOR THE RECKLESS BEHAVIOR THAT WE SAW ON WALL STREET? THE FACT IS, THIS AGENCY IS MORE ABOUT USING THIS CRISIS AS AN OPPORTUNITY TO SLIP A VAST NEW EUROPEAN-STYLE REGULATORY BUREAUCRACY PAST THE AMERICAN PEOPLE THAN IT IS ABOUT HOLDING WALL STREET ACCOUNTABLE. I SAY, LET'S FOCUS ON WALL STREET AND THE G.S.E.'S AND LEAVE ORDINARY AMERICANS OUT OF THIS. LET'S PUT THE MIDDLE-CLASS FAMILIES AND SMALL BUSINESS OWNERS WHO SHOULDERED THE BURDEN OF THIS CRISIS AHEAD OF THE BUREAUCRATIC WISH LIST HERE IN WASHINGTON. AT A MOMENT OF NEAR-DOUBLE-DIGIT UNEMPLOYMENT AND EXPLODING DEBTS AND DEFICITS, LET'S HAVE AT LEAST ONE DEMOCRATIC IDEA FOR EXPANDING THE REACH OF GOVERNMENT ON THE SHELVES. LATER TODAY THE SENATE WILL HAVE AN OPPORTUNITY TO BLUNT THE POTENTIAL IMPACT OF THIS EASMGHTS SENATOR SHELBY AND I HAVE JOINED SENATOR SEVERAL COSPONSORS ON AN AMENDMENT TO THAT DEFRECT THE FOCUS OF THIS BILL FROM MAIN STREET AND BACK TO WALL STREET WHERE IT BELONGS. LET'S TAKE THIS BILL OFF THE MAIN STREET AND SEND IT BACK TO WALL STREET, WHERE IT BELONGS. THE NATIONAL FEDERATION OF INDEPENDENT BUSINESS SUPPORTS OUR AMENDMENT BECAUSE IN PLACE OF THIS NEW BUREAUCRATIC AGENCY IT WOULD ESTABLISH A NEW DIVISION WITHIN THE FDIC THAT WOULD OVERSEE MORTGAGE ORIGINATORS AND OTHER BIG FINANCIAL SERVICE PROVIDERS. THAT'S WHERE TARGET SHOULD LIE, NOT ON THE BACKS OF AMERICA'S SMALL BUSINESSES AND MIDDLE-CLASS AMERICANS WHO EXPECTED TO BE PROTECTED BY THIS BILL, NOT PUNISHED BY IT. I WOULD URGE MY COLLEAGUES ON BOTH SIDES OF THE AISLE NOT TO LOSE FOCUS IN THIS DEBATE. I WOULD ALSO URGE EVERYONE TO SUPPORT THE SHELBY-McCONNELL AMENDMENT. MADAM PRESIDENT, I YIELD THE FLOOR. A SENATOR: MADAM PRESIDENT?

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  • 09:40:41 AM

    THE PRESIDING OFFICER

    OFFICER: UNDER THE PREVIOUS ORDER, THE LEADERSHIP TIME IS RESERVED. UNDER…

    OFFICER: UNDER THE PREVIOUS ORDER, THE LEADERSHIP TIME IS RESERVED. UNDER THE PREVIOUS ORDER, THE SENATE WILL RESUME CONSIDERATION OF S. 3217, WHICH THE CLERK WILL REPORT.

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  • 09:40:51 AM

    THE CLERK

    NUMBER 349, S. 3217, A BILL TO PROMOTE THE FINANCIAL STACKET OF THE UNITED…

    NUMBER 349, S. 3217, A BILL TO PROMOTE THE FINANCIAL STACKET OF THE UNITED STATES BY IMPROVING ACCOUNTABILITY AND TRANSPARENCY IN THE FINANCIAL SYSTEM AND SO FORTH AND FOR OTHER PURPOSES.

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  • 09:41:04 AM

    THE PRESIDING OFFICER

    UNDER THE PREVIOUS ORDER, THE TIME UNTIL 10:00 A.M. WILL BE FOR DEBATE ON…

    UNDER THE PREVIOUS ORDER, THE TIME UNTIL 10:00 A.M. WILL BE FOR DEBATE ON AMENDMENT NUMBER 3749, WITH THE TIME EQUALLY DIVIDED AND CONTROLLED IN THE USUAL FORM. THE SENATOR FROM NEBRASKA.

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  • 09:41:21 AM

    MR. JOHANNS

    THANK YOU VERY MUCH, MADAM PRESIDENT. I'M JUST GOING TO SPEAK TWO MINUTES…

    THANK YOU VERY MUCH, MADAM PRESIDENT. I'M JUST GOING TO SPEAK TWO MINUTES THIS MORNING. BUT I WOULD LIKE TO STAND TO TAKE A MOMENT TO VOICE MY SUPPORT FOR THE TESTER-HUTCHISON AMENDMENT. THIS AMENDMENT WILL ENSURE THAT BANKS OF ALL SIZES PAY THEIR FAIR SHARE BY BROADENING THE ASSETMENT BASE THAT IS USED BY THE FDIC. THE FDIC WOULD DETERMINE BANK PREMIUMS BY BASING IT ON TOTAL ASSETS, NOT JUST DOMESTIC DEPOSITS. FOR FAR TOO LONG, COMMUNITY BANKS HAVE PAID A DISPROPORTIONATE SHARE OF THE DEPOSIT INSURANCE PREMIUMS. THIS AMENDMENT REALLY LEVELS THE PLAYING FIELD. IT'S GOOD PIECE OF POLICY. IT WILL PUT COMMUNITY BANKS ON A MORE EQUAL FOOTING WITH THE LARGE BANK CONGLOMERATES, SO I URGE MY COLLEAGUES TO VOTE FOR THIS COMMONSENSE AMENDMENT. LET ME JUST WRAP UP BY SAYING THE INDEPENDENT COMMUNITY BANKERS HAVE LOOKED AT THIS AMENDMENT. THIS AMENDMENT WOULD REDUCE ASSESSMENTS FOR 98% OF THE BANKS WITH LESS THAN $10 BILLION IN ASSETS, KEEPING NEARLY $4.5 BILLION IN THE BANKS, MUCH-HEED MUCH-NEEDED CAPITAL TO MAKE OUR ECONOMY GROW. MADAM PRESIDENT, I THANK YOU. I YIELD THE FLOOR.

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  • 09:42:44 AM

    THE PRESIDING OFFICER

    WHO HE WOULD I DO NOT SEE TIME? -- WHO YIELDS TIME?

  • 09:42:52 AM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM TEXAS.

  • 09:42:54 AM

    MRS. HUTCHISON

    HOW MUCH TIME IS ON OUR SIDE?

  • 09:42:57 AM

    MRS. HUTCHISON

    WOULD YOU NOTIFY ME WHEN I HAVE CONSUMED FIVE MINUTES, BECAUSE THERE IS --

  • 09:43:04 AM

    MRS. HUTCHISON

    THANK YOU. MADAM PRESIDENT, I WANT TO JOIN MY COLLEAGUE, SENATOR TESTER,…

    THANK YOU. MADAM PRESIDENT, I WANT TO JOIN MY COLLEAGUE, SENATOR TESTER, AND AN INCREASING NUMBER OF COSPONSORS TO SUPPORT OUR AMENDMENT WHICH WILL ENSURE THAT BANKS OF ALL SIZES PAY THEIR FAIR SHARE IN DEPOSIT INSURANCE FOR THE RISK THEY POSE TO THE BANKING S OUR AMENDMENT IS INTENDED TO LEVEL THE PLAYING FIELD FOR OUR SAFE COMMUNITY BANKS WHO FOR IF A TOO LONG HAVE PAID -- FOR FAR TOO LONG HAVE PAID ASSESSMENTS INTO THE FDIC INSURANCE FUND ABOVE AND BEYOND THE RISK THEY POSE. THE FDIC LEVIES DEPOSIT INSURANCE PREMIUMS ON A BANK'S TOTAL DOMESTIC DEPOSITS. BUT DOMESTIC DEPOSITS ARE NOT THE BEST MEANS TO ANALYZE THE SAFETY OF BANKS. FINANCIAL ASSETS OTHER THAN DEPOSITS CREATE RISK IN THE SYSTEM, NONDEPOSIT ASSETS ARE HELD DISPROPORTIONATELY BY LARGERRER, NONCOMMUNITY BANKS AND CAN BE MORE COMPLEX AND MORE RISKY. COMMUNITY BANKS WITH LESS THAN $10 BILLION IN ASSETS RELY HEAVILY ON CUSTOMER DEPOSITS OR FUNDING. THIS PENAL ASS SAFE INSTITUTIONS BY -- THIS PENALIZES SAFE INSTITUTIONS BY FORCING THEM TO PAY PREMIUMS ABOVE AND BEYOND THE RISK THEY POSE TO THE BANKING SYSTEM. DESPITE MAKING UP JUST 20% OF THE NATION'S ASSETS, THESE COMMUNITY BANKS CONTRIBUTE 30% OF THE PREMIUMS TO THE DEPOSIT INSURANCE FUND. AT THE SAME TIME, LARGE BANKS HOLD 80% OF THE BANKING INDUSTRY'S ASSETS, YET JUST PAY 70% OF THE PREMIUMS. WE MUST FIX THIS INEQUALITY. THAT IS WHAT THE TESTER-HUTCHISON MEASURE DOES. IT WILL DO SO BY REQUIRING THE FDIC TO CHANGE THE ASSESSMENT BASE TO A MORE ACCURATE MEASURE, A BANK'S TOTAL ASSETS LESS TANGIBLE CAPITAL. THIS CHANGE WILL BROADEN THE ASSESSMENT BASE AND WILL BETTER MEASURE THE RISK A BANK POSES. A BANK'S ASSETS INCLUDE ITS LOANS OUTSTANDING AND SECURITIES HELD. ONE NEED ONLY LOOK BACK TO THE LAST TWO YEARS TO KNOW THAT THAT IS THE ASSETS -- THOSE ARE THE ASSETS THAT ARE MORE LIKELY TO SHOW A BANK'S SKPHOE SURE TO -- SKPHOE SURE TO RISKS -- EXPOSURE IS TO RISKS. THE MELTDOWN WAS CAUSED BY BAD MORTGAGES WHICH WERE PACKAGED INTO RISKY MORTGAGE-BACKED SECURITIES WHICH WERE USED TO CREATE DERIVATIVES. THESE RISKY FINANCIAL INSTRUMENTS AND THE LARGE INSTITUTIONS THAT CREATED AND HELD THEM ARE WHAT LED TO OUR FINANCIAL CRISIS. SO OUR AMENDMENT IS PARTICULARLY TIMELY BECAUSE THE FDIC HAS NOW SAID THAT BANKS ARE GOING TO HAVE TO PREPAY INTO THE INSURANCE FUND FOR THREE YEARS, AND ALL OF THAT WILL BE DUE THIS YEAR. SO, A THREE-YEAR ASSESSMENT DUE AT THE END OF THIS YEAR, IT IS SO IMPORTANT THAT WE HAVE A FAIR ASSESSMENT RATIO. AND THAT'S WHAT THE TESTER-HUTCHISON AMENDMENT WILL DO. IT WILL HAVE A RATIO FOR THE, WHAT A BANK OWES INTO THE DEPOSIT FUND THAT IS BASED ON ITS RISK, BASED ON ASSETS MINUS CAPITAL. SO I'M VERY PLEASED TO BE THE SPONSOR OF THIS AMENDMENT. I WORKED ON THIS AMENDMENT IN COMMITTEE. I DID THE RESEARCH ON IT TO TRY TO MAKE SURE THAT WE WERE DOING THE RIGHT THING. I'M PLEASED THAT SENATOR TESTER JOINED ME IN THIS EFFORT AND WE HAVE A VERY BIPARTISAN GROUP OF SUPPORTERS OF THIS AMENDMENT. AND IT IS MY HOPE THAT WE PASS AN OVERWHELMING -- BY AN OVERWHELMING VOTE THIS AMENDMENT WHICH WILL PUT INTO THE LAW THAT THE FDIC DEPOSIT INSURANCE WILL BE BASED ON A STANDARD THAT LEVELS THE PLAYING FIELD FOR COMMUNITY BANKS SO THAT BIG BANKS DON'T HAVE AN ADVANTAGE OVER OUR COMMUNITY BANKS. IT IS OUR COMMUNITY BANKS THAT ARE GIVING THE LOANS TO BUSINESSES THROUGHOUT OUR COUNTRY. THEY ARE THE ONES WHO WERE THERE IN THE CRISIS AS BEST THEY COULD TO TRY TO PUT LIQUIDITY INTO THE MARKET. THEY DIDN'T CAUSE THE CRISIS, AND THEY CERTAINLY SHOULDN'T PAY THE PRICE FOR IT. AND I URGE ALL OF MY COLLEAGUES TO SUPPORT THE TESTER-HUTCHISON AMENDMENT. THANK YOU, MADAM PRESIDENT, AND I YIELD THE FLOOR. MR.

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  • 09:47:52 AM

    THE PRESIDING OFFICER

    THE SENATOR FROM CONNECTICUT.

  • 09:47:53 AM

    MRS. HUTCHISON

    MADAM PRESIDENT, I WAS GOING TO SUGGEST THAT WE ALLOCATE THE TIME THAT IS…

    MADAM PRESIDENT, I WAS GOING TO SUGGEST THAT WE ALLOCATE THE TIME THAT IS BEING USED UP AGAINST BOTH SIDES. THAT WOULD BE BE MY MOTION, MADAM PRESIDENT.

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  • 09:48:03 AM

    MRS. HUTCHISON

    AND I SUGGEST THE ABSENCE OF A QUORUM.

  • 09:48:06 AM

    MR. DODD

    EXCUSE ME.

  • 09:48:10 AM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM CONNECTICUT.

  • 09:48:12 AM

    MR. DODD

    LET ME COMMEND OUR TWO COLLEAGUES, SENATOR TESTER AND SENATOR HUTCHISON,…

    LET ME COMMEND OUR TWO COLLEAGUES, SENATOR TESTER AND SENATOR HUTCHISON, FOR THIS PROPOSAL. AS I SAID SEVERAL TIMES YESTERDAY, I THINK THIS IS A VERY SOUND CONTRIBUTION TO THIS BILL, AND FOR THE VERY REASONS THAT HAVE BEEN OUTLINED THIS MORNING BY SENATOR HUTCHISON AND SENATOR TESTER EARLIER, REDUCING THE COST TO OUR COMMUNITY BANKS AT A TIME WHEN OBVIOUSLY THEY'RE ALL FEELING TREMENDOUS PRESSURES UNDER THIS ECONOMY. SO I'M A STRONG AND ARDENT SUPPORTER OF THEIR PROPOSAL AND HOPEFULLY CONFIDENT IT WILL BE OVERWHELMINGLY SUPPORTED BY OUR COLLEAGUES. LET ME QUICKLY ADD WE'RE GOING TO BE MOVING ON AFTER THAT VOTE TO THE SHELBY ET. A AMENDMENT REGARDING CONSUMERS PROTECTION. I KNOW MY COLLEAGUE HAS WRITTEN TO MY COLLEAGUE FROM -- MY COLLEAGUE FROM TEXAS HAS WRITTEN TO ME ALONG WITH JAY ROCKEFELLER REGARDING THE FEDERAL TRADE'S INTEREST. WE WORKED OUT, I BELIEVE TO THE SATISFACTION OF MY COLLEAGUES ON THE COMMERCE COMMITTEE. I DRAW TO THE ATTENTION OF MEMBERS THE AMENDMENT WE WILL BE VOTING ON DOES GREAT DAMAGE TO THE FDIC'S RULINGS. I ASK MY TKHRAOEGZ LOOK AT WHAT WE'RE GOING -- ASK MY COLLEAGUES TO LOOK AT WHAT WE'RE GOING TO SUPPORT BECAUSE IT DEPRIVES THE F.T.C. OF RULINGS WE WANT TO SUPPORT. I'LL ADDRESS THE SHELBY AMENDMENT AFTER THE HUTCHISON AND TESTER AMENDMENT IS DISPOSED OF. LET ME SAY IN RESPONSE TO THE MINORITY LEADER, ONE OF THE STRONGEST FEATURES, WHAT'S HAPPENED TO OUR COUNTRY IN THE LAST SEVERAL YEARS IS WE'VE HAD SEVEN DIFFERENT FEDERAL AGENCIES THAT HAVE DIVISIONS ON CONSUMER PROTECTION. THEY HAVE BEEN AROUND FOR A LONG TIME. AND THE REALITY IS MOST OF THEM ARE ASLEEP AT THE SWITCH. WE'RE TREATED AS SECOND-CLASS OPERATIONS WITHIN THEIR PRUDENTIAL REGULATOR TO SUCH A DEGREE THAT WE SAW EVEN THOUGH WE MANDATED LEGISLATIVELY TO PROTECT HOME MORTGAGES AND PEOPLE, NEVER EVEN PROMULGATED A SINGLE REGULATION IN THIS AREA. SMALL BUSINESSES WATCHED CREDIT CARD RATES GO THROUGH THE CEILING, AS I POINTED OUT. MANY PEOPLE RELY ON THAT, WATCHING RATES GO FROM 5% TO 22% WAS NOT UNCOMMON. THE IDEA THIS HAS BEEN A DIVISION BETWEEN BUREAUCRACY IN WASHINGTON AND WHAT HAPPENS IN MAIN STREET IS A COMPLETE ABERRATION HERE. WHEN YOU WATCH 7 MILLION PEOPLE LOST THEIR HOMES, MANY OF THEM BECAUSE THEY WERE LURED INTO DEALS THAT THEY NEVER COULD AFFORD AT THE FULLY INDEXED PRICE. WE SAW THE OUTRAGE EXPRESSED BY CONSUMERS. WE SAW CREDIT CARDS, WHEN THE RATES SKPWHROEDED, MAKING -- EXPLODED MAKING IT DIFFICULT. THERE'S ALL SORTS OF FEATURES HERE. THIS BILL ONLY COVERS FINANCIAL PRODUCTS AND FINANCIAL SERVICES. THIS MYTH THAT BUTCHERS AND DENTISTS ON THE STREET ARE GOING TO BE AFFECTED BY THIS IS A COMPLETE MYTH. THE PROVISIONS IN THE BILL COULDN'T BE MORE CLEAR ABOUT IT. THERE ARE NO NEW REGULATIONS. WE'RE TAKING EXISTING CONSUMER LAWS, SOME LEGISLATION GO BACK 50 YEARS TO PROTECT CONSUMERS FROM THE ACTIVITIES PEOPLE HAVE TO WORRY ABOUT EVERY DAY. THE QUESTION IS WHETHER OR NOT ANYBODY'S GOING TO ENFORCE ANY OF THIS AT ALL. SO BY SETTING UP THIS AGENCY UNDER THE -- IN THE FEDERAL RESERVE, GIVING THEM INDEPENDENT RULEMAKING AUTHORITY, APPOINTED BY THE PRESIDENT, CONFIRMED BY THE SENATE AS AN OPERATION AND THEN WORKING IN CONSULTATION WITH PRUDENTIAL REGULATORS SO YOU DON'T END UP WITH A CONFLICT BETWEEN THE SAFETY AND SOUNDNESS REQUIREMENTS OF OUR FINANCIAL INSTITUTIONS AND THE CONSUMER PROTECTION ISSUES. IN THE ABSENCE OF THIS, WHAT WE'RE CONFRONTED WITH EVERY YEAR IS HAVING TO DRAFT LEGISLATION TO DEAL WITH ONE CONSUMER PROBLEM AFTER ANOTHER. WE KNOW HOW LONG THAT CAN TAKE IF IT EVER GETS DONE AT ALL. IN THE MEANTIME WE SEE WHAT HAPPENS TO AVERAGE CITIZENS. THE WHOLE SHADOW ECONOMY -- COMMUNITY BANKS, HERE THEY ARE LOCATED ON ONE STREET CORNER AND THEY'VE GOT A PAYDAY LENDER, ON ANOTHER CORNER, COMPLETELY UNREGULATED. THE COMMUNITY BANK HAS TO GO THROUGH THE REGULATORY PROCESS AND THEN THE SHADOW COMPANY MAYBE 100 YARDS AWAY AND NO REGULATIONS. THIS BILL REQUIRES ASSESSMENTS OF COMMUNITY BANKS TO PAY FOR THE REGULATION OF THE NONBANK. OUR BILL DOES NONE OF THAT. THE COST OF THE CONSUMER PROTECTION AGENCY COMES OUT OF FED MONEY. NO APPROPRIATION TO SUPPORT IT. THIS ONE HERE REQUIRES AN ASSESSMENT. HERE WE ARE GOING TO ADOPT AN AMENDMENT, HERE THE HUTCHISON-TESTER AMENDMENT, WHICH REDUCES THE COST TO 98% OF CONSUMER BANKS AND THE NEXT ASSESSMENT ADDS -- AMENDMENT ADDS AN ASSESSMENT ON HERE. THAT'S WHAT THE SHELBY AMENDMENT DOES, AN ASSESSMENT IN HIS BILL ON THE COMMUNITY BANKS. NONBANKS WILL PAY SOME. THE OTHER ONES DO. WE DON'T DO THAT IN OUR BILL. I THINK THERE ARE SO MANY ASSESSMENTS OUT THERE ALREADY THAT SHOULDN'T BE THE CASE. WE CONSOLIDATE SO YOU GET CLARITY. NOT SEVEN AGENCIES TELLING YOU WHAT CONSUMER REGULATION YOU OUGHT TO FOLLOW OR NOT. THEY DESERVE CLARITY AND THOUGHT SO THERE IS A CONSISTENT LINE OF WHAT'S OCCURRING OUT THERE AND THAT INTERPRETATION OF COOPERATION WITH PRUDENTIAL REGULATION SO YOU DON'T HAVE THE CONFLICT. WE SPENT A LOT OF TIME GOING THROUGH THIS. THIS WAS WORKED ON, BY THE WAY, ON A BIPARTISAN BASIS AS WE WERE DRAFTING IT HERE SO WE CAN HAVE THIS FEATURE OF THE BILL. AGAIN, I'M WILLING TO LISTEN TO IDEAS ON HOW WE CAN STRENGTHEN THIS AND MAKE IT EVEN MORE CLEAR. AGAIN, SOME OF THE ACCUSATIONS WE'RE REACHING INTO MAIN STREET WITH THIS LEGISLATION, NOTHING COULD BE FURTHER FROM THE TRUTH. WE'RE NOT REACHING INTO IT AT ALL. BUT OBVIOUSLY ANY PROPOSAL HERE DESERVES TO BE LOOKED AT AGAIN AND OTHER IDEAS THAT CAN TWEAK IT AND MAKE IT WORK BETTER. BUT THE IDEA WE'RE GOING TO LEVEL ASSESSMENTS, THE F.T.C. GETS DAMAGED UNDER THIS AMENDMENT, IN MY VIEW, AS IT'S PRESENTLY WRITTEN, I THINK PEOPLE NEED TO READ CAREFULLY WHAT THEY'RE GOING TO BE ASKED TO VOTE ON IN THE SHELBY AMENDMENT AND TO WALK AWAY FROM. IT IS WORSE THAN THE STATUS QUO IN MANY WAYS. IT TAKES A HUGE STEP BACK. IF ANYTHING WE'VE LEARNED IN THE LAST TWO YEARS IS THOSE SMALL BUSINESSES, THOSE PEOPLE OUT THERE WHO RELY ON THE FLOW OF CREDIT, THE ACCESS TO CAPITAL TO SEE TO IT THERE IS GOING TO BE SOMEONE WATCHING OUT ON A CONSISTENT BASIS TO WHAT HAPPENS TO THEM, WE BELIEVE WE HAVE A VERY STRONG PROVISION IN OUR LEGISLATION. I WANT TO TURN -- SENATOR TESTER IS HERE TO CLOSE ON THE HUTCHISON AMENDMENT. I APOLOGIZE. I DRIFTED INTO SOME OTHER AREA. I SEE MY COLLEAGUE FROM MASSACHUSETTS. SENATOR TESTER, I KNOW YOU WANT TO BE HEARD. I APOLOGIZE TO MY COLLEAGUE. I YIELD THE FLOOR.

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  • 09:54:55 AM

    MRS. HUTCHISON

    MADAM PRESIDENT, THE SENATOR FROM MONTANA, I BELIEVE, IS GESTURING THAT…

    MADAM PRESIDENT, THE SENATOR FROM MONTANA, I BELIEVE, IS GESTURING THAT THE SENATOR FROM MASSACHUSETTS COULD HAVE UP TO THREE MINUTES. THANK YOU.

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  • 09:55:13 AM

    MR. BROWN

    MY COLLEAGUE FROM MONTANA AND SENATOR FROM TEXAS AS WELL. WE'VE BEEN…

    MY COLLEAGUE FROM MONTANA AND SENATOR FROM TEXAS AS WELL. WE'VE BEEN WORKING HARD ON THIS AMENDMENT. THE SENATOR JUST GOT THROUGH SPEAKING, I JUST WANT TO COMMEND HIM PRIVATELY AND PUBLICLY FOR REALLY TAKING THIS EFFORT AND TRYING TO WORK THROUGH IN A BIPARTISAN MANNER, BECAUSE AS I'VE SAID PUBLICLY MANY TIMES, THIS IS AN ISSUE THAT AFFECTS THE AMERICAN PEOPLE IN VERY SERIOUS WAYS. AND I DON'T WANT TO RUSH IT. I WANT TO DO IT RIGHT SO WE DON'T HAVE TO COME HERE NEXT YEAR OR NEXT MONTH AND TRY TO FIX THE PROBLEMS THAT WE MAY HAVE INADVERTENTLY CREATED HERE. SO I APPRECIATE YOU ALLOWING ME TO COME AND SPEAK TO YOU PRIVATELY IN YOUR OFFICE, AND YOUR STAFF, AND WORK THROUGH THIS. AND I'M HOPING WE CAN CONTINUE WITH THAT BIPARTISAN EFFORT. AS A REFLECTION OF THAT, I'VE SIGNED ON TO MANY AMENDMENTS, SOME BY MY DEMOCRATIC COLLEAGUES AND SOME BY MY REPUBLICAN COLLEAGUES. I'M THANKFUL THAT THE MAJORITY LEADER HAS SAID PUBLICLY THAT WE'RE GOING TO GET A FULL AND FAIR DISCOURSE ON THESE ISSUES. AND THE ONE THAT I'M REFERRING TO HERE TODAY IS THE TESTER-HUTCHISON AMENDMENT OF WHICH I'M ALSO A COSPONSOR, NUMBER 3749 BECAUSE THE PRESENCE OF FDIC DEPOSIT INSURANCE HAS MEANT AMERICANS WHO DEPOSIT SAVINGS IN AN INSURED BANK ACCOUNT CAN SLEEP SOUNDLY AT NIGHT. THAT'S KIND OF A BASIC PART OF HAVING A SMALLER COMMUNITY BANK THAT YOU KNOW WHEN YOU GIVE YOUR MONEY TO A BANK IT'S NOT GOING TO BE TREATED LIKE A CASINO. IT'S GOING TO BE PROTECTED. BUT AS OUR BANKING SECTOR HAS CONSOLIDATED AND LARGE NATIONAL BANKS EMERGED, OUR SMALLER COMMUNITY BANKS HAVE BEEN GETTING SQUEEZED. THESE SMALL BANKS PAY APPROXIMATELY 30% OF THE TOTAL OF THE FDIC ASSESSMENTS BUT HOLD ONLY 20% OF THE NATION'S BANKING ASSETS. IT'S TIME, I FEEL, FOR THE LARGER INSTITUTIONS TO PAY THEIR FAIR SHARE. AND THIS AMENDMENT, MR. CHAIRMAN, WILL IMPROVE COMPETITION IN THE MARKETPLACE AND HELP SMALL BUSINESSES. AND EVERYONE KNOWS THAT SMALL BUSINESSES ACROSS THE COUNTRY ARE HAVING A HARD TIME GETTING LOANS. AND LOWERING THE ASSESSMENTS ON THESE COMMUNITY BANKS, I BELIEVE AND OTHERS BELIEVE WHO ARE SPONSORING THIS AMENDMENT, WOULD HELP INCREASE LOANS TO SMALL BUSINESSES ON A RELATIVE BASIS OUR SMALL COMMUNITY BANKS ARE FAR MORE ACTIVE IN THE MARKET COMPARED TO LARGER BANKS. AS SOMEBODY WHO IN A PRIOR LIFE BEFORE I GOT HERE, WAS INVOLVED IN REPRESENTING SOME OF THOSE BANKS, I CAN TELL YOU THAT THEY ARE THE ONES CONTINUING TO KEEP THE ECONOMIC ENGINE GOING IN THESE SMALL TOWNS. AND I'M PLEASED THAT THE AMENDMENT WE WILL VOTE ON TODAY ALSO MAKES SURE THAT THE INSTITUTIONAL CUSTODIAL BANKS A AND BANKERS BANKS ARE PROTECTED FROM UNFAIR ASSESSMENT LEVELS THAT ARE NOT IN LINE WITH THE TRUE ROLE IN THE FINANCIAL SYSTEM. THIS MATTERS A GREAT ROLE TO MY STATE OF MASSACHUSETTS, THE GLOBAL HUB OF INSTITUTIONAL ASSET MANAGEMENT, AND WILL ALLOW US TO RESTORE FAIRNESS TO THE FDIC ASSESSMENT SYSTEM WITHOUT IMPOSING LARGE UNJUSTIFIED ASSESSMENT INCREASES --

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  • 09:58:15 AM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR'S TIME HAS EXPIRED.

  • 09:58:17 AM

    MR. BROWN

    -- I URGE MY COLLEAGUES TO SUPPORT THE AMENDMENT AND THANK YOU, MADAM…

    -- I URGE MY COLLEAGUES TO SUPPORT THE AMENDMENT AND THANK YOU, MADAM PRESIDENT, AND THE SENATOR FROM MONTANA, THANK YOU.

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  • 09:58:29 AM

    MR. TESTER

    THANK YOU, MADAM PRESIDENT. FIRST OF ALL, I WANT TO THANK THE SENATOR FROM…

    THANK YOU, MADAM PRESIDENT. FIRST OF ALL, I WANT TO THANK THE SENATOR FROM MASSACHUSETTS FOR HIS COMMENTS. I VERY MUCH APPRECIATE YOUR COSPONSORSHIP AND SUPPORT OF THIS AMENDMENT. I ALSO WANT TO THANK SENATOR HUTCHISON'S HARD WORK ON THIS AMENDMENT. I VERY MUCH APPRECIATE HER ABILITY TO GET THINGS DONE IN A FAIR WAY. AND I THANK YOU VERY MUCH FOR THAT, SENATOR HUTCHISON. SENATOR HUTCHISON AND I HAVE COME TO THE FLOOR SEVERAL TIMES TO TALK ABOUT THIS AMENDMENT, A BIPARTISAN AMENDMENT, A COMMONSENSE AMENDMENT TO HOLD BANKS ACCOUNTABLE FOR THEIR BEHAVIOR AND TO PRESERVE THE INTEGRITY OF THE FDIC DEPOSIT INSURANCE FUND. HAS BEEN SAID BEFORE TPH-LD DIRECT THE FUNDAMENTAL -- THIS WOULD DIRECT THE FDIC TO FORCE BANKS TO PAY THEIR FAIR SHARE UNDER THE FUND. FIXING THE LOPSIDED SYSTEM THAT WE HAVE NOW. IT WOULD ALSO PROTECT THE INTEGRITY OF THE DEPOSIT INSURANCE FUND WHICH IS CRITICALLY IMPORTANT, INSURING THAT IT HAS THE RESOURCES TO BE SELF-SUFFICIENT AND PREPARED TO ADDRESS ANY FUTURE CRISIS. LET ME SAY, MADAM PRESIDENT, THAT SENATOR HUTCHISON AND I THINK THIS AMENDMENT MAKES A GREAT DEAL OF COMMON SENSE, AS DO THE OTHER 13 COSPONSORS OF THIS LEGISLATION. I'M PLEASED THAT WE ARE JOINED BY SO MANY OF OUR COLLEAGUES ON THIS IMPORTANT AMENDMENT AND THAT IT IS ONE OF THE FIRST AMENDMENTS UP FOR CONSIDERATION. WITH THAT, I MEAN, IT IS REALLY A QUESTION OF EQUITY. IT IS REALLY A QUESTION OF MAKING SURE THAT THE FDIC INSURANCE FUND IS SOLVENT FOR YEARS AND DECADES TO COME. WITH THAT, I WANT TO THANK ALL THE PEOPLE WHO HAVE COSPONSORED. ONCE AGAIN THANK SENATOR HUTCHISON AND THANK THE CHAIRMAN OF THE BANKING KPH-D, SENATOR DODD, FOR WORKING WITH US ON THIS AMENDMENT. WITH THAT, I WOULD -- IS IT AFROAPTS ASK FOR THE YEAS AND NAYS?

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  • 10:00:22 AM

    THE PRESIDING OFFICER

    IS THERE A SUFFICIENT SECOND? THERE APPEARS TO BE. THE YEAS AND NAYS ARE…

    IS THERE A SUFFICIENT SECOND? THERE APPEARS TO BE. THE YEAS AND NAYS ARE ORDERED. IF ALL TIME IS YIELDED BACK, UNDER THE PREVIOUS ORDER, THE QUESTION IS ON AMENDMENT 3749. THE CLERK WILL CALL THE ROLL. VOTE: VOTE:VOTE: VOTE:

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  • 10:01:00 AM

    Senate Vote 132 - On the Amendment (Tester Amdt No 3749)

    To require the Corporation to amend the definition of the term "assessment base".

    Amendment Agreed to (98 - 0)
    Yea

    Vote Details: Yea - 97
    Republican - 40
    Democratic - 55
    Independent - 2

    Vote Details: Not Voting - 2
    Democratic - 1
    Republican - 1

  • 10:23:23 AM

    THE PRESIDING OFFICER

    ON THIS VOTE THE JAYCE ARE 98 -- THE NAYS ARE 98, THE NAYS ARE ZERO. THE…

    ON THIS VOTE THE JAYCE ARE 98 -- THE NAYS ARE 98, THE NAYS ARE ZERO. THE AMENDMENT IS AGREED TO. WITHOUT OBJECTION. MR.

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  • 10:24:52 AM

    MR. JOHANNS

    MADAM PRESIDENT, THANK YOU.

  • 10:24:54 AM

    THE PRESIDING OFFICER

    THE SENATE WILL BE IN ORDER.

  • 10:24:55 AM

    MR. JOHANNS

    MADAM PRESIDENT, THANK YOU. I RISE TODAY TO DISCUSS THE CONSUMER…

    MADAM PRESIDENT, THANK YOU. I RISE TODAY TO DISCUSS THE CONSUMER PROTECTION PIECE OF THE FINANCIAL REFORM BILL THAT WE HAVE BEEN DEBATING. LET ME START OUT AND EXPRESS MY APPRECIATION FOR THE GOOD WORK OF CHAIRMAN DODD AND THE GOOD WORK OF RANKING MEMBER SHELBY AND OTHERS WHO ARE MAKING THEIR WAY, I THINK, THROUGH A THOUGHTFUL PROCESS TO TRY TO GET A BILL, AN OVERALL BILL THAT WILL WORK. THIS PIECE OF THE BILL, THOUGH, IN MY JUDGMENT, NEEDS A TREMENDOUS AMOUNT OF EFFORT AND ATTENTION AND WORK YET. IT'S GENERATED A LOT OF DEBATE, THE CONSUMER PROTECTION PIECE. WE HAVE ALL ASKED THE QUESTION IN BANKING COMMITTEE HEARINGS AND ON THE FLOOR HERE: WHAT IS THE BEST WAY TO PROTECT CONSUMERS? LET ME UNDERSCORE THAT, MADAM PRESIDENT. THIS HAS NOT BEEN A DEBATE ABOUT WHETHER WE DO OR NOT. NO ONE IS TALKING ABOUT IGNORING THIS PIECE OF THE LEGISLATION. NO ONE IS ADVOCATING THAT WE DO NOTHING ON CONSUMER PROTECTIONS. WHAT WE ARE TRYING TO FOCUS ON IS THE BEST WAY OF DOING IT. WE NEED TO KEEP THAT PERSPECTIVE IN MIND AS THIS DEBATE UNFOLDS AND MOTIVES AND WORDS GET DISTORTED AND STRETCHED. THE BILL BEFORE US ESTABLISHES A CONSUMER PROTECTION REGIME THAT'S GOING TO BE HOUSED AT THE FEDERAL RESERVE. BUT LET ME EMPHASIZE, THAT DOES NOT MEAN IT'S UNDER ITS SUPERVISION. IT REALLY FUNCTIONS LIKE A STAND-ALONE AGENCY. THIS NEW -- QUOTE -- "BUREAU" WILL HAVE WHAEUB DESCRIBE AS UNPRESS -- WHAT I WOULD DESCRIBE AS UNPRECEDENTED POWERS, WITH POWER OVER NEARLY EVERYTHING, ANYTHING THAT RESEMBLES THE TERM "FINANCIAL" IN NATURE WILL COME WITHIN THE PURVIEW OF THIS BUREAU. I MUST ADMIT, AS THIS DEBATE WAS GOING ON, I FOUND IT SURPRISING, IF NOT SHOCKING, THAT FOLKS LIKE CAR DEALERSHIPS, ACCOUNTANTS, HROURS -- LAWYERS WERE SHOWING UP AT MY OFFICE TO TALK ABOUT THE IMPACT ON THEM. IT IS NO WONDER THAT SO MANY BUSINESS GROUPS HAVE COME OUT IN OPPOSITION TO THIS CURRENT PIECE OF THIS LEGISLATION. AND I'M NOT TALKING ABOUT BANKS. I'M TALKING ABOUT BUSINESS GROUPS. THE CHAMBER OF COMMERCE SENT A LETTER OUTLINING CONCERNS ON APRIL 28 ON BEHALF OF -- I'M USING THEIR LANGUAGE -- "HUNDREDS OF THOUSANDS OF NONFINANCIAL SERVICES BUSINESSES." UNQUOTE. THESE HUNDREDS OF THOUSANDS OF BUSINESSES, MANY OF THEM SMALL BUSINESSES, HAD ABSOLUTELY NOTHING TO DO WITH THE LAST CRISIS. YET, WITH THIS NEW BUREAU, I BELIEVE THEY'LL BE PUNISHED, OR AT A MINIMUM TIED UP IN RED TAPE. NOW THERE ARE MANY PIECES OF THIS THAT I COULD SPEND A LOT OF TIME ON THE FLOOR ABOUT, BUT WHAT I'VE TRIED TO DO TODAY IS TO JUST ENCAPSULATE MY THOUGHTS INTO FIVE AREAS, FIVE CONCERNS, IF YOU WILL. THE FIRST AREA IS THE UNLIMITED RULE MAKING AUTHORITY PROVIDED FOR IN THIS LEGISLATION. BECAUSE THE TERM -- QUOTE -- "ABUSIVE" WAS ADDED TO THE UNFAIR AND STKAOEP ALTERNATIVE ACTS -- AND DECEPTIVE ACTS OR STANDARDS, THERE IS NO LIMIT TO THE KIND OF RULES THIS NEW BUREAU CAN WRITE. WE ALSO KNOW THE TERM "ABUSIVE" IS ENTIRELY SUBJECTIVE. SO HOW DO YOU DETERMINE ABUSIVE? WELL, YOU MAKE EACH CUSTOMER TAKE A FINANCIAL LITERACY TEST? IS ABUSIVE DIFFERENT FOR MIKE JOHANNS THAN IT IS THE NEXT CUSTOMER? BECAUSE ABUSIVE CAN BE DEFINED SO DIFFERENTLY FROM ONE CUSTOMER TO THE NEXT, YOU CAN KIND OF SEE THE UNLIMITED PROBLEM THAT IS CREATED HERE. THE SECOND AREA: NO VETO POWER. I'VE CONSISTENTLY SAID THAT IT IS A MISTAKE TO SEPARATE CONSUMER PROTECTION FROM THE ISSUES OF SAFETY AND SOUNDNESS OF THE INSTITUTION. IF A PROPOSED RULE WILL HAVE A NEGATIVE EFFECT ON THE SAFETY AND SOUNDNESS OF FINANCIAL INSTITUTIONS, THEN WE NEED SOME KIND OF CHECKS AND BALANCES. CHECKS AND BALANCES ARE A GOOD THING. IN THIS BILL UNDER DEBATE, THIS NEW AGENCY ONLY HAS TO LIST THE REGULATOR'S CONCERNS, NOT TAKE THEM INTO ANY KIND OF MEANINGFUL CONSIDERATION. THE THIRD AREA: PRIVACY RIGHTS. WHILE THERE ARE A LOT OF PRIVACY CONCERNS HERE, TWO MAJOR ONES COME TO MIND. LET ME DP TO THE GO TO THE LANGUAGE OF THE BILL ITSELF. SECTION 1022 MANDATES THE BUREAU TO -- QUOTE -- "GATHER INFORMATION REGARDING THE ORGANIZATION, BUSINESS CONDUCT, MARKETS, AND ACTIVITIES OF PERSONS OPERATING IN CONSUMER FINANCIAL SERVICE MARKETS." A PERSON IS DEFINED IN THE BILL AS A -- QUOTE -- "INDIVIDUAL" -- UNQUOTE. SO DO YOU FOLLOW ME? WHAT THIS MEANS IS THAT THE BUREAU CAN LOOK INTO THE BUSINESS CONDUCT OF THE AVERAGE PERSON OUT THERE. SECTION 1071 REQUIRES ANY DEPOSIT-TAKING FINANCIAL INSTITUTION TOEE TO GEO CODE CUSTOMERS AND MAINTAINS RECORDS FOR AT LEAST THREE YEARS. AS THE CATO INSTITUTE DESCRIBED IT, "THINK OF HAVING YOUR OWN GOOGLE MAP OF WHERE YOU AND YOUR NEIGHBORS DO YOUR BANKING." IS THAT WHAT AMERICANS WANT OUT OF THIS BILL? THE FOURTH ITEM: IRK THE PREEMPTION STANDARD. THE CURRENT BILL REALLY CHANGES CURRENT FEDERAL LAW UNDER THE GUISE OF GIVING STATES MORE POWER OVER THEIR CONSUMER PROTECTION LAWS. THIS WORRIES ME. THIS WILL WREAK HAVOC FOR FINANCIAL COMPANIES OPERATING IN MORE THAN ONE STATE. WHAT YOU ARE SAYING IS THAT THEY WILL HAVE TO COMPLY WITH A PATCHWORK OF 51 STATE LAWS AND STATE AG'S WILL HAVE THE POWER TO ENFORCE LAWS AGAINST NATIONAL BANKS. NOW, IF THIS WERE THE WAY SINCE THE BEGINNING OF TIME, YOU WOULD SAY, WELL, THEY'VE ADAPTED TO IT. BUT TO PUT THEM IN THIS KIND OF REGIMEN IS LITERALLY TO SAY TO THEM, YOU ARE GOING TO HAVE TO CHOOSE UP MOUNTAINS OF CAPITAL TO -- CHEW UP MOUNTAINS OF CAPITAL TO TRY TO COMPLY WITH ALL OF THESE VARIOUS RULES AND REGULATIONS AND LAWS OF THE VARIOUS STATES AND THEN THE FIFTH ITEM I WANTED TO MENTION IS JUST THE EXPANSIVE REACH. THIS BILL INCLUDES WHAT I REGARD AS AN OVERLY BROAD DEFINITION OF -- QUOTE -- "CONSUMER FINANCIAL PRODUCT OR SERVICE" -- UNQUOTE -- AND -- QUOTE -- "SERVICE PROVIDER" -- UNQUOTE. SPECIFICALLY, SECTION 1027 WILL SUBJECT NUMEROUS MERCHANTS TO THE REGULATION OF THIS NEW BUREAU JUST BECAUSE THE BUSINESS PROVIDES THE ABILITY TO THEIR CUSTOMERS TO REPAY IN FOUR INSTALLMENTS. JUST IMAGINE: YOU OORD CAM CORED FOR CAMCORDER. THIS COMPANY PROVIDES YOU WITH THE FLEXIBILITY OF MAKING FOUR INSTALLMENT PAYMENTS. THIS NEW COMPANY COULD BE SWEPT UNDER THIS NEW BUREAU. HOW LONG DO YOU THINK COMPANIES WILL CONTINUE TO PROVIDE THAT KIND OF FLEXIBLE OPTION TO CONSUMERS IF THEY'RE GOING TO BE BURIED IN REGULATION? THAT'S WHY THE DENTISTS, THE LAWYERS, THE ADVERTISING AGENCIES, THE ACCOUNTANTS, AND EVEN THE FLORISTS ARE CONCERNED WITH THIS BILL AND ARE SHOWING UP IN OUR OFFICES SAYING, WHAT ARE YOU DOING? I DON'T KNOW ABOUT ANYONE ELSE, BUT I COULD MAKE THE CASE WITHOUT ANY HESITATION THAT MY LOCAL FLORIST DOESN'T COME TO MIND WHEN I THINK ABOUT THE PLAYERS WHO BROUGHT OUR ECONOMY TO THE EDGE. IN RESPONSE TO THIS EXPANSIVE AND UNFETTERED BUREAU, I'M PROUD TO ANNOUNCE MY SUPPORT FOR AN ALTERNATIVE. THIS ALTERNATIVE, LED BY SENATOR SHELBY, IS WELL-THOUGHT-OUT. IT'S A REASONABLE APPROACH, AND I BELIEVE A COMPROMISE TO A VERY DIFFICULT ISSUE IN THIS LEGISLATION. IT WOULD ESTABLISH A CONSUMER PROTECTION DIVISION WITHIN THE FDIC, WHICH CYBILL A NATURAL FIT -- WHICH I BELIEVE IS A NATURAL FIT, SINCE THIS AGENCY IS ALREADY TASKED WITH PROTECTING CONSUMER DEPOSIT ACCOUNTS. THIS NEW DIVISION WOULD HAVE AUTHORITY TO MAKE RULES RELATIVE TO CONSUMER PROTECTION. ALL RULES AND REGULATIONS AND ORDERS WOULD RECEIVE THE APPROVAL OF THE BOARD OF THE FDIC, AN IMPORTANT CHECK AND BALANCE. THIS VERY IMPORTANT -- THIS IS A VERY IMPORTANT DISTINCTION IN TERMS OF WHAT WE'RE PEA DEBATING TODAY. BOARD APPROVAL WILL ENSURE THAT ACTIONS TAKEN BY THE DIVISION APPROPRIATELY CONSIDER SAFETY AND SOUNDNESS OF THE FINANCIAL INSTITUTION WHILE ENSURING THAT CONSUMER SAFEGUARDS ARE IN PLACE. WHILE IT ALLOWS PRIMARY SUPERVISION AND ENFORCEMENT TO EXIST WITH THE EXISTING REGULATORS, IT DOES NOT BRING IN NONBANK MORTGAGE ORIGINATORS FOR SUPERVISION. I'LL END WITH A FINAL THOUGHT. MANY HAVE CLAIMED THAT THESE MORTGAGE INSURERS ACTED UNFAIRLY AND THAT THEY PREYED UPON UNSOPHISTICATED BORROWERS DURING THE LAST CRISIS. THIS ENSURES THE MORTGAGE BROKER OPERATING OUT OF HIS GARAGE OR WHATEVER IS GOING TO BE REGULATED. AND FINALLY, THIS NEW AGENCY WILL BE ABLE TO GO AFTER THE BAD ACTORS. AND THAT'S WHAT WE SHOULD BE DOING. ANYONE WHO SHOWS A PATTERN OF MATERIAL VIOLATIONS WILL BE BROUGHT UNDER THIS NEW FDIC DIVISION. LET ME WRAP UP WHERE I BEGAN, MADAM PRESIDENT. I APPLAUD ALL OF MY COLLEAGUES WHO HAVE SPENT SO MUCH TIME AND ENERGY FOCUSING ON THE CONSUMER PIECE OF THIS REGULATORY REFORM. CHAIRMAN DODD LED US THROUGH HEARING AFTER HEARING TRYING TO FIGURE OUT THE BEST WAY TO PROTECT CONSUMERS. SENATOR SHELBY, OUR RANKING MEMBER, WORKED ON THOSE ISSUES IN CONCERT. WE CAN GET THIS RIGHT. NOW, IN MY JUDGMENT, WHERE WE'RE AT TODAY WITH THE PROPOSED LEGISLATION ON THE FLOOR DOES NOT GET IT RIGHT. LET'S FOCUS ON GETTING IT RIGHT, GETTING THE BAD ACTORS. I BELIEVE THAT THE APPROACH THAT IS BEING CHAMPIONED BY OUR RANKING MEMBER SHELBY IS A REASONED ONE THAT ELEVATES CONSUMER PROTECTION WHILE KEEPING SAFETY AND SOUNDNESS AS A PARAMOUNT CONSIDERATION. I ASK MY COLLEAGUES TO SUPPORT THE ALTERNATIVE, AND I YIELD THE FLOOR.

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  • 10:37:37 AM

    MR. DODD

    LET ME FIRST OF ALL, IF I MAY, ACKNOWLEDGE THE CONTRIBUTION OF THE…

    LET ME FIRST OF ALL, IF I MAY, ACKNOWLEDGE THE CONTRIBUTION OF THE PRESIDING OFFICER, MY COLLEAGUE FROM NEW YORK, WHO IS A, WHILE, A NEW MEMBER OF THIS BODY, LIKE EVERYONE HERE, EVERYONE BRINGS VALUE TO THIS CHAMBER FROM TIME TO TIME BASED ON THEIR -- WHAT THEY'VE DONE IN THEIR EARLIER LIVES. AND I JUST WANT TO THANK HER IMMENSELY FOR BRINGING HER BACKGROUND AND EXPERIENCE TO THIS CRITICAL DEBATE WE'RE HAVING. SHE SPENT A LOT OF YEARS WORKING IN THIS AREA OF THE LAW AND KNOWS IT WELL. AND I'VE COME TO APPRECIATE HER COUNSEL AND ADVICE AND THOUGHTS ON ALL OF THIS. AND I JUST WANT TO ACKNOWLEDGE THAT, IF I MAY. MR. PRESIDENT, THIS IS -- WE'VE RESOLVED -- AS I SAID AT THE OUTSET, THERE ARE FOUR MAJOR PIECES OF THIS BILL OF OURS. AND I'LL ADD A FIFTH, OBVIOUSLY, DEALING WITH THE DERIVATIVES SECTION THAT WAS WORKED ON -- THE PRESIDING OFFICER IS A MEMBER OF THE AGRICULTURE COMMITTEE, BLANCHE LINCOLN, CHAIRMAN OF THE AGRICULTURE COMMITTEE. TITLE 7 DEALS WITH THAT SECTION OF THE THE BANKING SIDE DEALS WITH THE FOUR OTHER MAJOR PARTS OF THIS BILL. THEY ARE, ONE, END TOO BIG TO FAIL. RECIPIENT AN EARLY WARNING SYSTEM, NUMBER TWO. AND I'M BEING VERY SIMPLISTIC. RECIPIENT AN EARLY WARNING SYSTEM, DEAL WITH THE DERIVATIVES AND THE SO-CALLED EXOTIC INSTRUMENTS, AND HAVE A STRONG CONSUMER PROTECTION FEATURE TO THIS BILL. THOSE ARE THE FOUR POINTS. WE'VE RESOLVED, I BELIEVE, TO VIRTUALLY ALL OF OUR SATISFACTION THE TOO BIG TO FAIL ARGUMENT. WE DID THAT YESTERDAY AND I AGAIN THANK MY COLLEAGUE, PARTICULARLY SENATOR SHELBY, FOR HELPING US WORK THROUGH THAT AND COME TO A CONCLUSION THAT ENDS THE DEBATE AS TO WHETHER OR NOT THE BILL BEFORE US ENDS TOO BIG TO FAIL. THAT IN ITSELF WOULD BE JUSTIFICATION FOR SUPPORTING THE LEGISLATION. KNOWING THAT WE, IF WE DON'T ADOPT THIS LEGISLATION, AS I'M HOPEFUL WE WILL, AND, LORD FORBID, WE'RE CONFRONTED WITH ANOTHER MAJOR ECONOMIC CRISIS, THAT WE'LL NOT BE FACED WITH A CHOIRKS AS WE WERE IN THE FALL OF -- THAT WE'LL NOT BE FACED WITH A CHOICE, AS WE WERE IN THE FALL OF 2008. WE WROTE A CHECK FOR $700 BILLION TO BAIL OUT MAJOR FINANCIAL INSTITUTIONS THAT WERE ON THE VERGE OF COLLAPSE AND WE WERE TOLD IF THEY DID SO, THAT THE FINANCIAL SYSTEM OF OUR COUNTRY AND POSSIBLY GLOBALLY, WOULD MELT DOWN TO USE THEIR WORDS WHAT. WE WANTED TO AVOID IS EVER BEING PUT THIS THAT POSITION AGAIN WHERE YOU HAD THE IMPLICIT GUARANTEE THAT THE FEDERAL GOVERNMENT WOULD WRITE THAT KIND OF A CHECK. WE HAVE DONE THAT NOW IN THIS BILL. SO LET'S CHECK THAT BOX. TOO BIG TO FAIL IS OVER WITH. AND THIS BILL TAKES CARE OF THAT. WE NEED TO PASS THE BILL. WE NEED TO HAVE THE PRESIDENT SIGN IT SO THAT IT BECOMES LAW. AS OF RIGHT NOW, WE'RE FAR CLOSER TO RESOLVING THAT ISSUE THAN EVER BEFORE. THE DERIVATIVES SECTION OF THE BILL AND SO FORTH -- I KNOW PEOPLE ARE WORKING ON THIS, WORGING WITH SENATOR LINCOLN AND OTHERS ABOUT THAT SECTION OF THE BILL, AND I RESPECT IMMENSELY THEIR EFFORTS TO MAKE SURE WE CAN ARRIVE. WE THINK WE'VE GOT GOOD PROVISIONS IN THE BILL, BUT I THINK ALL OF US RECOGNIZE THAT OTHER IDEAS AND THOUGHTS ARE ALWAYS WELCOME. SO THAT'S BEING WORKED ON. THE SORT OF RADAR, LOOK-AHEAD APPROACH TO OUR LEGISLATION -- I DON'T THINK THERE'S ANY DEBATE ABOUT IT. SO THAT BOX HAS SORT OF BEEN CHECKED. MAYBE SOMEONE HAS SOME AMENDMENTS. THE IDEA THAT WE HAVE AN EARLY WARNING SYSTEM SO THAT WE PICK UP THESE PROBLEMS FAR EARLIER THAN WE DID OR WERE WILLING TO ACKNOWLEDGE, AS THEY WERE DEVELOPING WITHIN THE RESIDENTIAL MORTGAGE MARKET. AS EARLY AS 2005 AND 2006, BEGINNING TO EXPLODE IN 2007 AND THEN OF COURSE WATCHING THE EVENTS OF 2008 CULMINATING IN THE FALL WITH THE DECISIONS WE HAD TO MAKE IN ORDER TO STABLIZE OUR FINANCIAL SYSTEM IN THE COUNTRY. HAD WE HAD THAT EARLY WARNING SYSTEM, MORE THAN JUST ONE SET OF EYES, THE FEDERAL RESERVATION, WHICH DID-- --THE FEDERAL RESERVE, WHICH DID A FAIRLY INADEQUATE JOB OF PICKING UP WHAT WAS OCCURRING IN THE REAL ESTATE BUBBLE, WE WOULD HAVE NEVER HAD OURSELVES IN THE SITUATION WE FOUND OUR COUNTRY IN IN THE FALL OF 2008. THE EARLY WARNING SYSTEM, WE BELIEVE, WILL BE A MAJOR STEP IN LIMITING THE KINDS OF PROBLEMS THAT WE'VE SEEN IN THE LAST COUPLE OF YEARS. IT DOES NOT STOP THE NEXT ECONOMIC PROBLEM. THERE WILL BE ANOTHER ECONOMIC CRISIS. FUTURE GENERATIONS WILL DEAL WITH THEM IN OUR COUNTRY. THERE'S NOTHING IN THIS BILL THAT PROBABILITIES PROHIBITS US OR GUARANTEES US THAT WE HAVE ONCE AND FOR ALL AVOIDED ECONOMIC CRISIS. HOW MANY MORE HEADLINES DO WE HAVE TO READ ABOUT GREASE AND WHAT'S OCCURRING -- ABOUT GREECE AND WHAT'S OCCURRING THERE, THE RIOTS AND THE STABILIZING OF THEIR COUNTRY IS HAVING AN EFFECT GLOBALLY. SO WHILE WE CAN DO A LOT OF THINGS TO MINIMIZE WHAT HAPPENS HERE, WE RECOGNIZE WE LIVE IN A FAR MORE INTERCONNECTED WORLD THAT POSES ITS OWN SET OF RISKS. BUT NONETHELESS, I THINK THE FACT THAT WE'VE ESTABLISHED ON A BIPARTISAN BASIS -- AND AGAIN OUR COLLEAGUES, MARK WARNER AND BOB CORKER, ALONG WITH OTHER MEMBERS, DID A GREAT JOB, IN MY VIEW, IN CRAFTING THAT PART OF THE BILL. I THINK WE'VE DONE A GOOD JOB THERE AND I SEE VERY LITTLE DISSENT ABOUT IT. THE FOURTH PIECE -- THE CONSUMER PROTECTION -- IS THE ONE WE'RE ENGAGED IN. AND THIS ISN'T DEBATE THAT I BELIEVE IS WORTH HAVING OVER THE NEXT HOUR OR TWO AND THEN VOTE. LET ME SAY TO MY FRIEND FROM ALABAMA, THE AUTHOR OF THE AMENDMENT, AND THINKS COSPONSORS. WE'VE GOT TO COME AND DEBATE THIS STUFF. I'M HERE AND I WILL A.B.A. GLAD TO ENGAGE IN THE DEBATE. -- AND I'LL BE GLAD TO ENGAGE IN THE DEBATE. BUT I'VE GOT ONE OTHER COLLEAGUE HERE RIGHT NOW ENGAGED IN THIS QUESTION. THIS IS A MAJOR PART OF THE BILL. PEOPLE HAVE TOLD ME OVERED AND OVER AGAIN, THIS IS A BIG ISSUE FOR THEM. I'M WILLING TO ACCEPT THEIR DETERMINATION. I THINK IT IS A BIG ISSUE, TOO. BUT WE'VE GOT ABOUT 100 AMENDMENTS THAT PEOPLE WANTS TO OMPLET WE'VE GOT ABOUT -- THAT PEOPLE WANT TO OFFER. WE'VE GOT ABOUT 39 LEGISLATIVE DAYS UNTIL THE END OF THIS CONGRESS. WE'VE ALL BEEN DEBATING CONSUMER PROTECTION FOR YEARS NOW PARTICULARLY OVER THE LAST 18 MONTHS OF THIS BILL. THERE'S NO REASON TO HAVE A PROTRACTED DEBATE ON THIS QUESTION HERE. MY REPUBLICAN FRIENDS HAVE OFFERED A SUBSTITUTE TO MY BILL ON THIS ISSUE. AND I WELCOME THAT SUBSTITUTE. WE NEED TO NOW DEBATE IT AND THEN VOTE ON IT AND MOVE ON TO THE NEXT ISSUE, AND I'M DELIGHTED TO SEE MY GOOD FRIEND, WHO JUST ARRIVED HERE TO ENGAGE IN THIS DISCUSSION. SO, MR. PRESIDENT, LET ME ADDRESS THIS ISSUE OF CONSUMER PROTECTION. IN TERMS OF BOTH WHAT WE HAVE IN THE BILL, REETDING THE LANGUAGE -- READING READING THE LANGUAGE OF IT, AND WHAT THE ALTERNATIVE WOULD DO. I LISTENED TO MY FRIEND FROM NEBRASKA, SENATOR JOHANNS, AND A WONDERFUL MEMBER OF OUR COMMITTEE, A PERSON I'VE COME TO RESPECT VERY, VERY MUCH. HE'S BEEN VERY, PRODUCTIVE AND VERY HELPFUL IN THE BANKING COMMITTEE. BUT THE IDEA, TO USE HIS LANGUAGE THAT WE'RE COVERING FLORISTS AND ACCOUNTANTS AND LAWYERS AND DENTISTS -- NOTHING COULD BE FURTHER FROM THE TRUTH. YOU KNOW, I GUESS THE OLD ADAGE IS IF YOU SAY SOMETHING OFTEN ENOUGH AND REPEAT IT OFTEN ENOUGH, AND IF IT GOES UNCHALLENGED IT BECOMES A FACT. WELL, IT'S NOT A FAFNLGT FACT. IT'S ANYTHING BUT A FACT IN THIS BILL. SO I KNOW THAT THEY LIKE TO USE THAT ARGUMENT TO TRY AND PASS THEIR AMENDMENT OR TO DEFEAT THE SECTIONS OF OUR BILL THAT I'VE INCLUDED, BUT I CAN'T SAY IT ANYMORE CLEARLY TO MY COLLEAGUES. I BELIEVE IT'S SECTION -- I SHOULD KNOW THIS, BUT -- 1027 OF THE BILL. YOU'VE ALL GOT COPIES OF THE BILL ON THE DESK. READ SECTION 1027 WHEN YOU COME TO THE FLOOR. IT'S NOT COMPLICATED LEGISLATIVE LANGUAGE. IT SAYS SPECIFICALLY THE ONLY REASON YOU'D BE COVERED BY THE CONSUMER PROTECTION LANGUAGE OF THIS BILL IS IF YOU ARE SIGNIFICANTLY INVOLVED IN FINANCIAL SERVICES OR FINANCIAL PRODUCTS. I REALIZE THE WORD "SIGNIFICANTLY" PEOPLE WANT TO WORK ON AND I'M WILLING TO LISTEN TO IDEAS ON HOW WE CAN DEFINE THAT WORD SIGNIFICANT. THAT'S NOT A BAD POINT. I UNDERSTAND THAT. DON'T TELL ME IT COVERS A FLOOR RIFT. -- A FLORIST. UNDER ANY DEFINITION OF THE WORD SIGNIFICANTLY INVOLVED EXCLUDES RETAILERS AND MERCHANTS ACROSS THE COUNTRY. I'M WILLING TO DEBATE ALL SORTS OF LANGUAGE HERE BUT DON'T MAKE ME DEBATE JUST COMPLETE FALSE ALLEGATIONS ABOUT WHAT'S IN THE BILL. AT ANY RATE, MADAM PRESIDENT, WE'VE BEEN WORKING ON OUR BILL FOR A LONG TIME. AGAIN, MY COMPLIMENTS AND THANKS TO MY COLLEAGUE FROM ALABAMA FOR THE EFFORTS YESTERDAY AND SO FORTH. BUT THIS IS A VERY IMPORTANT PART OF THE BILL. WE WORKED TOO BIG TO FAIL. BUT THE CONSUMER PROTECTION IS CRITICAL BECAUSE IT GOES TO THE VERY HEART OF WHAT WE'RE TRYING TO DO. IN FACT, IT WAS CONSUMERS, BUSINESSES -- SMALL BUSINESSES, FAMILIES, INDIVIDUALS, FARMS THAT WERE ADVERSELY AFFECTED. WALL STREET DID FINE. SOME PEOPLE LOST SOME JOBS ALONG THE WAY. A COUPLE OF THESE LARGE INSTITUTIONS DID COLLAPSE. BUT WE'VE HEARD ABOUT THE BONUSES THAT WENT TO TOP EXECUTIVES, THE BUILDINGS ARE STILL THERE. THEY'RE MAKING RECORD PROFITS OVER THE LAST COUPLE OF YEARS. BUT WHAT HAPPENED TO THOSE 7 MILLION PEOPLE WHO HAD A HOME WHICH NOW IS GONE? WHAT HAPPENED TO THOSE 8.5 MILLION JOBS? GONE. WHAT HAPPENED TO THOSE RETIREES IN OUR COUNTRY THAT WATCHED 20% OF THEIR RETIREMENT EVAPORATE. Q. WHAT HAPPENED TO THE PEOPLE WHO HAD A HOUSE BUT THE VALUE OF THAT HOME DECLINED BY 30% IN THE LAST YEAR AND A HALF. I DON'T KNOW WHAT YOU CALL THEM BUT I CALL THEM CONSUMERS, THE AVERAGE PERSON IN OUR COUNTRY THAT DIDN'T DO ANYTHING EXCEPT TRY TO HOLD BODY AND SOUL TOGETHER. THEY GOT LURED INTO A BAD DEAL BY PEOPLE WHO ARE UNREGULATED AND ARE WILLING TO CONVINCE THEM THEY COULD BUY A HOME THEY NEVER COULD AFFORD KNOWING THE FULLY INDEXED ADJUSTABLE RATE MORTGAGE WAS GOING TO WIPE THEM OUT. I TALKED ABOUT DELORES KING, THE FIRST WITNESS I BROUGHT TO OUR COMMITTEE THREE YEARS AGO, JANUARY, FEBRUARY OF 2007. RETIREE IN CHICAGO. WORKED AS A LIBRARIAN FOR 30, 40 YEARS, HUSBAND DIED, HAD ABOUT A $4,000 OR $5,000, I THINK, CREDIT CARD DEBT. AND SOME UNSCRUPULOUS BROKER CAME IN AND CONVINCED HER SHE NEEDED TO REWRITE HER MORTGAGE AND CONVINCED HER AN ADJUSTABLE RATE MORTGAGE WOULD WORK FOR HER. DELORES KING LOST EVERYTHING. 70% OF HER RETIREMENT FIXED INCOME WENT TO PAY THAT MORTGAGE. WHEN PEOPLE TELL ME ABOUT YOU CAN'T HAVE CONSUMER PROTECTION, WHEN THAT AUTOMOBILE COMPANY A FEW WEEKS AGO HAD TO RECALL ITS CARS BECAUSE THE ACCELERATOR GOT STUCK, THEY GOT RECALLED. DID DELORES KING GET HER MORTGAGE RECALLED BECAUSE IT WAS FAULTY, WHEN SHE LOST HER HOME? THAT'S WHAT CONSUMER PROTECTION DOES. IF YOU'RE IN THE BUSINESS OF FINANCIAL SERVICES AND PRODUCTS THAT HAVING SOMEONE WALKING OUT TO THE AVERAGE CITIZEN OUGHT NOT TO BE A RADICAL IDEA WHEN WE TALK ABOUT FINANCIAL REFORM IN OUR COUNTRY. WE HAVE WRITTEN THIS IN A WAY ON A BIPARTISAN BASIS, I MIGHT ADD. IT SETS UP AN INDEPENDENT CONSUMER PROTECTION AGENCY HOUSED AT THE FEDERAL RESERVE. ITS DIRECTOR IS APPOINTED BY THE PRESIDENT, CONFIRMED BY THE UNITED STATES SENATE. IT HAS THE AUTHORITY TO WRITE RULES ON CONSUMER PROTECTION IN THE FINANCIAL SERVICES AREA WHERE PRODUCTS ARE INVOLVED. THEN OF COURSE IT H EXAMINATION AND ENFORCEMENT AUTHORITY ONLY FOR THOSE INSTITUTIONS THAT HAVE ASSETS MORE THAN $10 BILLION FOR ENFORCEMENT. OTHERWISE IT'S DONE AT THE LOCAL LEVEL. THE RULES ARE THE SAME. WE DON'T REALLY WRITE ANY MORE RULES. THE RULES ARE THERE. THEY HAVE BEEN AROUND IN SOME CASES FOR 50 YEARS. TRUTH IN LENDING, FAIR CREDIT, RSPA. ALL WE'RE SAYING IS COULD SOMEONE ENFORCE AN EXAMINING INSTITUTIONS TO SEE WHETHER OR NOT THEY'RE LIVING UP TO THEM. THERE ARE SEVEN AGENCIES THAT HAVE A CONSUMER PROTECTION DIVISION, AND FOR A HUGE PART OF OUR ECONOMY NO ONE IS WATCHING THEM. ONE OF THE VERY LEGITIMATE KPHAEUPBTS OUR -- COMPLAINTS OUR COMMUNITY BANKS MAKE, WE GET REGULATED BUT THAT GUY DOWN THE STREET, THAT PAY-DAY LENDER, NO ONE IS WATCHING WHAT HE'S DOING EVERYTHING. OUR BILL STOPS THAT. NOW IF YOU'RE A PAYDAY LENDER, YOU'RE GOING TO BE UNDER THE SAME KIND OF RULES THAT BANK WOULD BE, AT LEAST HAVE SOMEONE WATCHING WHAT YOU'RE DOING OUT THERE. THAT'S A MAJOR STEP FORWARD. WE RECOGNIZE THAT A MAJOR PART OF OUR ECONOMY COLLAPSE, OR NEAR COLLAPSE WAS IN THE SHADOW AREA OF OUR ECONOMY. OUR LEGISLATION FILLS THOSE GAPS. WE UNDERSTAND, MADAM PRESIDENT, AGAIN -- OR WE SHOULD UNDERSTAND HOW IMPORTANT HAVING AN INDEPENDENT AGENCY WITH RULE MAKING AUTHORITY. NOW, AGAIN, THE ISSUE IS WELL, WAIT A MINUTE, YOU'VE GOT TO BE CAREFUL, SENATOR, BECAUSE YOU'VE GOT SAFETY AND SOUNDNESS. PRUDENTIAL REGULATORS HAVE TO BE CONSIDERED IN ALL OF THIS. THAT'S A LEGITIMATE POINT. I DON'T DISAGREE WITH THAT. ALTHOUGH I THINK SOMETIMES THE ACCUSATION THERE IS THIS GREAT CONFLICT IS EXAGGERATED. OUR BILL SAYS THAT THE PRUDENTIAL REGULATORS HAVE TO EXAMINE AND LOOK AT THE RULES COMING OUT. AND IF THEY VOTE, TWO-THIRDS OF THEM, AND SAY THAT RULE CREATES A CONFLICT OR SOME PROBLEM, IT DOESN'T GO INTO EFFECT. THERE IS NOT ANOTHER AGENCY IN GOVERNMENT THAT CAN HAVE ITS OWN REGULATIONS OR RULES VETOED BY ANOTHER GROUP OF REGULATORS. THAT WAS A SUGGESTION, AGAIN, BY REPUBLICAN COLLEAGUES TO INCLUDE IN OUR BILL TO PROVIDE THE KIND OF SAFEGUARDS AGAINST A POTENTIAL CONFLICT OF INTEREST BETWEEN SAFETY AND SOUNDNESS AND CONSUMER PROTECTION. SO, MADAM PRESIDENT, AGAIN, TODAY WITH SEVEN AGENCIES TASKED WITH CONSUMER PROTECTION, NOT ONE OF WHICH DID THE JOB TO ANYONE'S SATISFACTION TO LEAD UP TO THIS CRISIS OUGHT TO BE JUSTIFICATION ALONE FOR WHAT WE'RE TRYING TO DO. OUR LEGISLATION WILL HAVE AN INDEPENDENT DIRECTOR, AS I SAID, APPOINTED BY THE PRESIDENT, CONFIRMED BY THIS BODY. THEY'LL HAVE A DEDICATED INDEPENDENT BUDGET PAID FOR BY THE FEDERAL RESERVE BOARD. THE PROPOSAL WE'RE BEING ASKED TO VOTE ON ADDS ADDITIONAL ASSESSMENTS TO BANKS AND TO NONBANKS. WE JUST GOT THROUGH ADOPTING THE TESTER-HUTCHISON AMENDMENT REGARDING ASSESSMENTS. TO REDUCE THE ASSESSMENTS ON COMMUNITY BANKS. IF YOU ADOPT THE SHELBY AMENDMENT, YOU'RE GOING TO ADD ASSESSMENTS ON AGAIN. IF WE VOTE ON ONE HAND TO TAKE THEM AWAY, AND NOW WITH AN AMENDMENT AT HAND TO PUT THEM BACK ON AND ASKING OUR COMMUNITY BANKS FOR ADDITIONAL ASSESSMENTS TO COVER THE ACTIVITIES OF NONBANKS. I THOUGHT I HEARD MY COLLEAGUES SAY AROUND HERE WE OUGHT TO BE MORE SENSITIVE TO WHAT'S HAPPENING TO THE COMMUNITY BANK LEVEL. YET, THIS AMENDMENT HERE DOES JUST THE OPPOSITE THAT MY COLLEAGUES ARE GOING TO BE ASKED TO VOTE FOR. SO BE VERY CAREFUL WHEN YOU GET UP AND VOTE FOR THIS AMENDMENT, EXPLAIN WHY LATER, IF IN FACT IT GETS ADOPTED, THIS BILL DOES, WHY WE'RE ADDING ASSESSMENTS TO THOSE BANKS. WE'LL HAVE A, OUR BILL WE HAVE AN OFFICE OF FINANCIAL LITERACY TO ENSURE THAT CONSUMERS ARE ABLE TO UNDERSTAND THE PRODUCTS AND SERVICES BEING OFFERED, WHICH IS A MAJOR PROBLEM IN THE LAST CRISIS, AND A NATIONAL TOLL-FREE CONSUMER COMPLAINT HOTLINE SO THAT MEMBERS HAVE SOME WHERE TO GO WHEN THEY NEED TO REPORT A PROBLEM. MR. PRESIDENT, IT WILL BE EMPOWERED, OUR BILL, TO WRITE CONSUMER PROTECTION RULES REGARDING ANY INSTITUTION, WHETHER A BANK OR PAYDAY LENDER THAT OFFERS CONSUMER FINANCIAL SERVICES OR PRODUCTS. AND ONLY THOSE BUSINESSES THAT DO THAT. IN SHORT, WE'RE ENDING THE ALPHABET SOUP OF DISTRACTED AND INEFFECTIVE REGULATORS AND REPLACING IT WITH ONE SINGLE EMPOWERED FOCUS COP ON THE CONSUMER PROTECTION BEAT. AGAIN, A COMPLAINT I THINK LEGITIMATELY WHEN YOU'VE GOT SEVEN AGENCIES WITH DIVISIONS OF CONSUMER PROTECTION, A LACK OF CLARITY, I THINK, IS IMPORTANT. AND I THINK MEMBERS UNDERSTAND THAT OR SHOULD UNDERSTAND THAT. MY COLLEAGUE FROM ALABAMA HAS COME OUT WITH A REPUBLICAN SUBSTITUTE FOR THE CONSUMER PROTECTION FINANCIAL BUREAU. I HAVE TO SAY I'M SOMEWHAT SURPRISED. I KNEW THAT MY REPUBLICAN FRIENDS WEREN'T GOING TO AGREE WITH THE CONSUMER PROTECTION DIVISIONS AS STRONG AS THE ONES IN OUR BILL. SOME OF MY MORE PESSIMISTIC MOMENTS, I THOUGHT THEY MIGHT EVEN WANT TO MAINTAIN THE STATUS QUO. BUT THIS SUBSTITUTE IS WORSE THAN THE STATUS QUO. THIS IS A MAJOR STEP BACK, MADAM PRESIDENT. THIS SUBSTITUTE ACTUALLY GOES BACKWARDS, MAKING IT EASIER FOR UNSCRUPULOUS LENDERS TO WR EUP OFF THE AMERICAN -- TO RIP OFF THE AMERICAN PUBLIC, BUSINESSES AND INDIVIDUAL FAMILIES. IT IS A STIMULUS PACKAGE FOR STAPL ARTISTS -- FOR SCAM ARTISTS. II CANNOT UNDERSTAND HOW AFTER MONTHS OF HEARINGS, MONTHS OF ANALYSIS REGARDING THIS FINANCIAL CRISIS STARTED WITH THE FAILURE OF CONSUMER PROTECTION, ANYONE WOULD THINK THE RIGHT SOLUTION IS LESS CONSUMER PROTECTION. YET THAT'S EXACTLY WHAT THIS AMENDMENT DOES. IT'S LIKE WE'RE IN A DEEP HOLE AND WE SPENT A FULL YEAR DEBATING HOW TO GET OUT, AND OUR REPUBLICAN FRIENDS, THEIR SOLUTION IS KEEP DIGGING. MADAM PRESIDENT, I'M GOING TO WALK THROUGH THE PROVISIONS OF THEIR SUBSTITUTE. BUT IN SHORT, HERE'S WHY IT'S SIMPLY UNACCEPTABLE. FIRST, IT COMES -- WHEN IT COMES TO WRITING NEW CONSUMER PROTECTION RULES, THE WALL STREET SUBSTITUTE -- AND THAT'S WHAT IT IS -- RELIES ON THE SAME REGULATORS WHO SCREWED UP THE COUNTRY IN THE FIRST PLACE. WHY WOULD YOU ASK THEM TO DO IT AGAIN? SECONDLY, WHEN IT COMES TO ENFORCING RULES, THE PLAN ACTUALLY MAKES THINGS WORSE, REDUCING REGULATOR'S ABILITY TO STOP RIP-OFFS AND LEAVING AMERICAN FAMILIES MORE VULNERABLE. THIRD, THE REPUBLICAN SUBSTITUTE WANTS TO RAISE TAXES ON COMMUNITY BANKS AND CREDIT UNIONS TO PAY FOR THE REGULATION THAT WON'T HAPPEN. FOURTH, THEY WANT TO MAKE IT EASY TO SELL AMERICAN MORTGAGES THEY CAN'T AFFORD. IF YOU HAVE BEEN PAYING ANY ATTENTION AT ALL TO WHAT'S GOING ON IN THE LAST 18 MONTHS IS THE VERY REASON AS TO HOW WE GOT IN THIS MESS IN THE FIRST PLACE. MAKE IT EASIER FOR AMERICAN MORTGAGES -- TO SELL, RATHER, AMERICANS MORTGAGES THEY CAN'T AFFORD. FIFTH, MADAM PRESIDENT, TO TOP IT ALL OFF, THIS SUBSTITUTE ELIMINATES THE PROVISION OF ANY CONSUMER PROTECTION PROPOSAL THAT TARGETS DISCRIMINATION IN LENDING. HOW ON EARTH COULD ANYONE BE AGAINST ENDING DISCRIMINATION IN LENDING? YET, THAT'S ALSO A PART OF THIS SUBSTITUTE. MADAM PRESIDENT, IF YOU LOOK AT HOW WE GOT INTO THE CRISIS AND YOU CONCLUDE THAT THE ANSWER IS TO WEAKEN CONSUMER PROTECTION, WHETHER YOU ARE DOING IT -- WELL, YOU ARE DOING IT ALL WRONG. LET ME GO INTO A BIT MORE DETAIL AND THEN I SEE MY COLLEAGUES THAT WANT TO BE HEARD ON THIS AS WELL. THE FIRST IMPORTANT CHANGE IN THE SUBSTITUTE IS THAT INSTEAD OF HAVING AN INDEPENDENT AGENCY WRITE CONSUMER PROTECTION RULES, IT PUTS THE TASK IN THE HANDS OF THE SAME DISTRACTED AND INEFFECTIVE REGULATORS WHO FAILED SO BADLY IN THE FIRST PLACE. WHAT WOULD THAT MEAN FOR CONSUMERS? HERE'S A PREVIEW. ONE OF THOSE REGULATORS HAS ALREADY DEMONSTRATED HIMSELF TO BE ANTICONSUMER, OPPOSING PROPOSED RULES TO KEEP CREDIT CARD COMPANIES FROM RETROACTIVELY RAISING INTEREST RATES ON OUTSTANDING BALANCES. AND I COULD SPEAK FIRSTHAND. I'M THE GUY WHO WROTE THE CREDIT CARD BILL. THE AGENCY THAT FOUGHT ME ON IT NOW IS GOING TO BE TASKED WITH THE JOB OF PROTECTING PEOPLE FROM IT. FOR THE LIFE OF ME, ALL THE AGENCIES YOU PICK TO RUN THIS THING IN YOUR BILL, YOU PICK THE ONE AGENCY THAT HAS FOUGHT US ON CREDIT CARD REFORM. STUNNING TO ME THAT SOMEONE WOULD ACTUALLY WRITE A SUBSTITUTE KNOWING THAT THIS AGENCY DID SO MUCH DAMAGE, OPPOSED TO THE IDEA THAT WE PUT LIMITS ON THE COUNT OF INTEREST RATES TO BE CHARGED ON OUTSTANDING BALANCES. THAT'S NOT PUTTING CONSUMER PROTECTION AT THE HEART OF OUR FINANCIAL SYSTEM. THAT'S PUTTING CONSUMER PROTECTION AT THE BACK SEAT WHERE IT'S BEEN FOR IF A TOO LONG. THAT'S NOT THE WORST OF T. THE REPUBLICAN SUBSTITUTE LIMITS ENFORCEMENT POWERS. AND I QUOTE -- "LIMITS ENFORCEMENT POWERS TO LARGE NONBANK MORTGAGE ORIGINATORS. LARGE NONBANK MORTGAGE ORIGINATORS." OTHER FINANCE COMPANIES WOMEN AVOID -- WILL AVOID ENFORCEMENT UNLESS THEY DEMONSTRATE A PRACTICE OF CONSUMER ABUSES. IN OTHER WORDS, THEIR VERSION WON'T BE ALLOWED TO PREVENT ABUSES COMMITTED BY COMMERCIAL OR BANKS OR PAYDAY LENDERS, CHECK CASHERS, CREDIT CARD COMPANIES, DEBT COLLECTORS, CAR DEALERS WHO ARE INVOLVED IN THE FINANCE BUSINESS, AND A WIDE RANGE OF THE WORST ACTORS IN THE SUBPRIME MORTGAGE INDUSTRY UNTIL IT'S ALREADY TOO LATE FOR POTENTIALLY THOUSANDS OF CONSUMERS TO BE PROTECTED. IT'S LIKE THEY WANT TO CREATE A POLICE DEPARTMENT THAT'S ONLY ALLOWED TO ENFORCE LAWS AGAINST LITTERING. MAYBE THEY'LL CUT DOWN ON LITTERING, BUT BY LEAVING THE SAME INEFFECTIVE REGULATORS TO DEAL WITH THE REST OF THE FINANCIAL SECTOR, THEY'RE TURNING A BLIND EYE TO EVERY OTHER CRIME OUT THERE. IN FACT, IT'S LIKE THEY'RE LEGALIZING THOSE CRIMES BECAUSE THE SUBSTITUTE ACTUALLY ELIMINATES THE EXISTING FEDERAL TRADE COMMISSION'S AUTHORITY TO POLICE UNFAIR AND DECEPTIVE FINANCIAL PRACTICES IN THESE OTHER SECTORS. THE SUBSTITUTE IS WORSE THAN THE STATUS QUO, MADAM PRESIDENT. THE STATUS QUO, MR. PRESIDENT, IS VERY BAD INDEED. MEANWHILE, THE SUBSTITUTE RAISES TAXES ON WHILE POTENTIALLY ANY NONBANK FINANCIAL SERVICE COMPANY THAT ALLOWS THE FEDERAL DEPOSIT INSURANCE CORPORATION TO RAISE ASSESSMENTS ON BANKS. THEIR PLAN WOULD ASK COMMUNITY BANKS AND CREDIT UNIONS TO PAY FOR THE REGULATION OF THEIR NONBANK COMPETITORS. THE SAME COMPETITORS WHO WILL BE GETTING A FREE RIDE EXEMPTED FROM ANY FEDERAL OVERSIGHT WHATSOEVER. OUR PLAN IS TO HAVE THE FED, FEDERAL RESERVE PAY FOR ENFORCEMENT. THEIR PLAN IS TO HAVE COMMUNITY BANKS PAY FOR ENFORCEMENT. AND THEN DO NOT HAVE ENFORCEMENT, OF COURSE. THAT'S A TAX INCREASE THEY DON'T NEED. AND ONE THAT OUR DEPOSIT TORRY INSTITUTIONS SO CRITICAL TO REBUILDING OUR ECONOMY CANNOT AFFORD. THE AMENDMENT ALSO PROHIBITS THE ESTABLISHMENT OF STRONG UNDERWRITING STANDARDS. WE ALL KNOW HOW IMPORTANT IT IS TO ESTABLISH BETTER UNDERWRITING STANDARDS. WE HAVE HAD RULES IN PLACE TWO YEARS AGO THAT REQUIRED BANKS AND MORTGAGE LENDERS TO MAKE LOANS ONLY TO PEOPLE WHO CAN SHOW THAT THEY HAVE THE AABILITY TO REPAY THEM. WE WOULDN'T BE IN THE MESS IF THAT HAD BEEN THE CASE. THE AMENDMENT BEFORE US WOULD PROBABILITY THE NEW DIVISION THAT IS BEING PROPOSED -- TO CREATE FROM ISSUING COMMONSENSE RULES LIKE THESE. IF YOU HAD TO PICK ONE THING IN THIS BILL TO UNDERMINE -- TO ENSURE THAT WE HAVE ANOTHER FINANCIAL CRISIS, IN MY VIEW, MADAM PRESIDENT, THIS WOULD BE IT. THE SUBSTITUTE ALSO ELIMINATES, AS AN OBJECTIVE OF THE NEW CONSUMER DEFICIENCY THE GOAL OF ELIMINATING DISCRIMINATION. THIS GOAL IS ESSENTIAL TO RESTORING AMERICA'S FAITH IN OUR MARKETS. IN SHORT, MR. PRESIDENT, I FIND IT IMPOSSIBLE TO WORK WITH THIS PROPOSAL. THERE ARE IDEAS I'M WILLING TO LISTEN TO HERE THAT WE CAN DEFINE SIGNIFICANTLY. I UNDERSTAND THAT. BUT THIS APPROACH JUST DOES MORE DAMAGE THAN YOU COULD IMAGINE. AGAIN, GO BACK TO WHAT I SAID AT THE OUTSET. A LOT OF TIME IS SPENT TALKING ABOUT WHAT HAPPENED TO THE BIG FIRMS AND WALL STREET AND WHAT HAPPENS TO LARGE INSTITUTIONS AND LARGE MANUFACTURERS. THE ROOT CAUSE OF THE PROBLEM WE'RE IN BEGAN BECAUSE THERE WAS A TOTAL DISREGARD FOR SMALL BUSINESS AND FAMILIES AND INDIVIDUALS OUT THERE, THAT THEY COULD TAKE ADVANTAGE OF THEM, AS THEY DID, BECAUSE THEY COULD SELL OFF, THEY GET PAID OFF, THEY SECURITIZE THESE CRUMMY MORTGAGES OUT THERE LEAVING THE HOMEOWNER IN A SITUATION THEY COULD NEVER AFFORD TO SUSTAIN. THE HOUSE OF CARDS CAME TOM TUMBLING DOWN. IT ALL BEGAN WITH THAT. I SAY RESPECTFULLY BUT THIS PROPOSAL GOES RIGHT AT THE HEART OF VERY ISSUE WE MUST ADDRESS IN THIS BILL, FLYINGS TO ALL THE OTHER ASPECTS WE'RE -- IN ADDITION TO ALL THE OTHER ASPECTS WE'RE TALKING B THERE'S NO MORE IMPORTANT VOTE THIS AWE'LL CAST THAN THIS ONE. IF WE WALK AWAY FROM PROVIDING THE SAFEGUARDS FOR THE AVERAGE AMERICAN, I DON'T CARE WHAT THEIR POLITICS ARE I DON'T CARE WHAT THEIR IDEOLOGY IS, ANYTHING ELSE. THEY DESERVE TO KNOW IN THIS DEBATE, AT LONG LAST, THEY'RE BEING CONSIDERED. WE'RE WATCHING OUT FOR THEM AS PART OF THIS. THE OUTRAGEOUS CASE THAT THIS SOMEHOW REACHES IN TO RETAILERS AND MERCHANTS IS HIGHLY OFFENSIVE. IT IS THE LAST THINGED A EVER SUGGEST, THAT WE SOMEHOW GET INTO THE BUSINESS AS FEDERAL REGULATORS POURING OVER FLORISTS AND DENY DENTISTS AND LAWYERS. NOTHING COULD BE FURTHER FROM THE TRUTH. THIS GOES OUT TO THOSE INVOLVED IN FINANCIAL SERVICES AND PRODUCTS AND IT DOES SO IN A WAY THAT PROVIDES CLARITY, PROVIDES AN OPPORTUNITY FOR THOSE INSTITUTIONS TO BE REGULATED, TO KNOW WHAT RULES THEY HAVE TO FOLLOW AND WHO'S IN CHARGE OF INSISTING THAT THEY MEET THOSE OBLIGATIONS. WITH THAT, MADAM PRESIDENT, I URGE MY COLLEAGUES TO VOTE AGAINST THIS AMENDMENT. AND MY HOPE IS WE'LL VOTE FAIRLY SOON ON IN. AGAIN, WE'VE GOT HUNDREDS OF AMENDMENTS ALMOST THAT PEOPLE WANT TO BE HEARD ON. WE DON'T HAVE ALL THE TIME IN THE WORLD TO DEAL WITH THEM. WE HAVE GOT TO MOVE ON ON THESE ISSUES. PEOPLE UNDERSTAND THE DEBATE. I URGE PEOPLE TO READ SECTION 1027, THE SECTION DEALING WITH CONSUMER PROTECTION, DEALING WITH WHOSE A COVERED, AND THEN WE WILL -- DEALING WITH WHO'S COVERED, AND THEN WE WILL HAVE A VOTE. MADAM PRESIDENT, I ASK UNANIMOUS CONSENT THAT THE SENATE PROCEED -- IS THIS TO BE -- ALL RIGHT, MADAM PRESIDENT, I ASK UNANIMOUS CONSENT THAT THE SENATE PROCEED TO EXECUTIVE SESSION TO CONSIDER CALENDAR NUMBER 78 THE, THE NOMINATION OF LARRY ROBINSON TO BE ASSISTANT SECRETARY OF COMMERCE FOR OCEANS AND ATMOSPHERE. THE MOTION TO RECONSIDER MOSHING -- THE THE MOTION TO RECONSIDER BE LAID ON THE TABLE THAT ANY STATEMENTS APPEAR IN THE RECORD AS IF READ, THE PRESIDENT BE IMMEDIATELY NOTE FISTED SENATE'S ACTION AND THE SENATE RESUM LEGISLATIVE SESSION.

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  • 11:04:29 AM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: IS THERE ON OBJECTION? WITHOUT OBJECTION, SO ORDERED.

  • 11:04:35 AM

    THE PRESIDING OFFICER

    THE SENATOR FROM NORTH DAKOTA.

  • 11:04:37 AM

    MR. DORGAN

    MADAM PRESIDENT, I WILL JOIN MY COLLEAGUE FROM CONNECTICUT IN OPPOSING THE…

    MADAM PRESIDENT, I WILL JOIN MY COLLEAGUE FROM CONNECTICUT IN OPPOSING THE SUBSTITUTE, BUT I -- I DON'T COME TO SPEAK ABOUT THAT AT THE MOMENT. I WANTED TO SPEAK ABOUT AN AMENDMENT THAT I'VE DISCUSSED PREVIOUSLY ON THE ISSUE OF TOO BIG TO FAIL. LET ME SAY THAT THERE IS -- THERE IS MUCH YET TO DO ON THIS SUBJECT OF TOO BIG TO FAIL. I RECALL IN A ROOM JUST STEPS FROM HERE ON A FRIDAY, I BELIEVE IT WAS, THE FREASH SECRETARY LEANING OVER THE -- THE TREASURY SECRETARY LEANING OVER THE LECTURE IN A VERY STERN WAY SAYING TO THE CAUCUS THAT I WAS INVOLVED IN THAT IF WITHIN THREE DAYS A THREE-PAGE BILL GRANTING $700 BILLION TO THE SECRETARY OF THE TREASURY WITH WHICH TO PROVIDE FUNDS TO STABLIZE SOME OF THE BIGGEST FINANCIAL INSTITUTIONS IN THE COUNTRY, IF THAT DID NOT COME ABOUT, OUR ECONOMY COULD VERY WELL COLLAPSE COMPLETELY. I REMEMBER THAT MOMENT AND REMEMBER THINKING THAT IT'S PRETTY BIZARRE THAT OUR COUNTRY GOT TO THAT POINT, THAT ALL OF A SUDDEN ONE DAY AFTER BEING TOLD MONTH AFTER MONTH THAT THE ECONOMY IS STRONG, THE ECONOMY IS IN GOOD SHAPE, THERE ARE SOME RIPPLES AND HICKUPS HERE AND THERE BUT THINGS ARE ON COURSE AND WE HAVE CONFIDENCE IN THE STRENGTH OF THE ECONOMY, THAT NOW WE'RE NOW TOLD THE ECONOMY MAY WELL COLLAPSE IN DAYS UNLESS THE CODGES COMES UP WITH $700 BILLION. WHY WAS THAT THE CASE? BECAUSE INSTITUTIONS THAT WERE SO LARGE IN THIS COUNTRY AT THE TOP OF THE FINANCIAL INDUSTRY WERE SO IMPORTANT TO THE ECONOMY THAT THEIR FAILURE COULD VERY WELL RESULT IN THE FAILURE OF THE ENTIRE AMERICAN ECONOMY. THAT IS WHAT IS CALLED TOO BIG TO FAIL. NOW, LET ME SHOW A CHART THAT SHOWS THE SIX LARGEST FINANCIAL INSTITUTIONS IN THE COUNTRY AND WHAT HAS HAPPENED TO THEM SINCE 1995. THIS IS THEIR GROWTH AS A PERCENTAGE OF G.D.P. AND IT SHOWS THAT THEY ARE GETTING LARGER AND LARGER AND LARGER AND LARGER, AND MUCH, MUCH LARGER, EVEN DURING THIS PERIOD OF NEAR COLLAPSE. THE SAME INSTITUTIONS THAT WERE JUDGED TOO LARGE TO FAIL AND JUDGED TO REPRESENT A GRAVE RISK TO THE ENTIRE ECONOMY, HAVE GOTTEN LARGER. THAN JUST TOO BIG TO FAIL. NOW, WE HAD A VOTE YESTERDAY, BUT THAT CANNOT BEING BE THE END OF THIS DISCUSSION ABOUT HOW DO YOU ADDRESS TOO BIG TO FAIL. THE VOTE YESTERDAY WAS RATHER BYZANTINE AS FAR AS I WAS CONCERNED CHT I WAS NOT SOMEONE WHO WAS A BIG FAN OF THE $50 BILLION FUND FOR RESOLUTION OF TOO-BIG-TO-FAIL COMPANIES. BUT HAVING SAID THAT, TO DECIDE THAT $50 BILLION, WHICH WOULD COME FROM THE VERY INSTITUTIONS THAT ARE TOO BIG TO FAIL, SHOULD BE ABOLISHED AND THAT THE FUNDS INSTEAD WOULD COME FROM THE FDIC, WHICH IS THE AMERICAN TAXPAYER, AS YOU TRUE I TO RESOLVE -- US A TRY TO RESOLVE THE PROBLEMS OF A TOO-BIG-TO-FAIL INSTITUTION, MADE VERY LITTLE SENSE TO ME TO SUBSTITUTE FUNDS FROM THE BIGGEST BANKS TO FUNDS FROM THE FDIC, WHICH IS GOING TO COME FROM THE AMERICAN TAXPAYER AND THEN SUGGESTING THAT THAT'LL BE ALL RIGHT BECAUSE THE FDIC WILL BE REPAID WITH THE SAIL ASSETS. OH, REALLY? FIRMS THAT ARE TOO BIG TO FAIL THAT ARE GOING TO GET IN TROUBLE IF THE FUTURE AREN'T GOING TO HAVE TOO MANY SET AS. THEY'LL BE IN TROUBLE BECAUSE OF DRAMATIC OVERLEVERAGING, AND WHEN THE FIRM COMES TUMBLING DOWN, I FAIL TO SEE WHERE ASSETS ARE GOING TO EXIST IN SUBSTANTIAL QUANTITY TO REPAY THE TAXPAYER. BUT THAT WAS YESTERDAY. AND I -- YOU KNOW, I DIDN'T SUPPORT THAT. BUT THAT WAS YESTERDAY. THIS ISSUE OF CREATING A CIRCUMSTANCE OF EARLY WARNING ON TOO-BIG-TO-FAIL FIRMS IS NOT SATISFACTORY TO ME. THE ONLY WAY YOU RESOLVE TOO BIG TO FAIL IS TO ABOLISH TOO BIG TO FAIL. I MEAN, ABOLISH TOO BIG TO FAIL. THAT MEANS HAVING FIRMS THAT ARE NOT TOO BIG TO FAIL, THAT WILL NOT CAUSE A MORAL HAZARD OR A GRAVE RISK TO THE ENTIRE ECONOMY SHOULD THEY FAIL. DO YOU BELIEVE THAT'S THE CASE WITH THIS -- THIS GRAPH? AND IS THERE ANYTHING HERE THAT IF THIS GRAPH SHOWS WE HAVE FIRMS THAT ARE TOO BIG -- FAR TOO BIG TO FAIL, IS THERE ANYTHING HERE THAT'S GOING TO SOLVE THIS IN THIS BILL? THE ANSWER IS "NO." THE ONLY DIRECT AND EFFECTIVE WAY TO ADDRESS THIS IS TO DECIDE, IF YOU ARE IN FACT TOO BIG TO FAIL, THEN THERE HAS TO BE SOME SORT OF DIVESTITURE OR DISSOLUTION TO BRING THAT FIRM BACK DOWN TO A POINT WHERE IT IS NOT, IN SIZE AND SCORNINGS WHERE IT IS NOT TOO BIG TO FAIL AND IS NOT CAUSING THE KIND OF DRAMATIC SPECIAL RISK TO THE COUNTRY'S ECONOMY. THAT IT WOULD BRING THE ECONOMY DOWN WITH IT. THAT'S THE ONLY DIRECT AND EFFECTIVE SOLUTION. NOW, IS THAT RADICAL? WELL, I HAVE AN AMENDMENT THAT REQUIRES THAT. IF YOU ARE DETERMINED TO BE TOO BIG TO FAIL, THEN WE'D BEGIN A PROCESS OVER TWO YEARS OF BREAKING AWAY THOSE PARTS THAT MAKE YOU TOO BIG TO FAIL. IS IT A RADICAL IDEA? I DON'T THINK SO. ONE-FOURTH OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE BOARD SAYS WE OUGHTED OUGHT TO DO THAT. RICHARD FISHER, PRESIDENT. DALLAS FED SAYS "TOO BIG TO FAIL IS NOT A POLICY, IT IS A PROBLEM." HE SAYS WE OUGHT TO BREAK THEM UP. FEDERAL RESERVE BANK OF ST. LOUIS, JAMES BULLARD, PRESIDENT AND CLEAVE EXECUTIVE OFFICER. "I DO KIND OF AGREE THAT 'TOO BIG TO FAIL' IS TOO BIG IT EXIST EXIST." THE ECONOMIST JOE STIGLITZ, NOBEL-PRIZE WINNER, "TO ATOO-BIG-TO-FAIL BANKS HAVE PERVERSE INCENTIVES, IF THEY GAMBLE AND WIN, THEY WALK OFF WITH THE PROCEEDS. IF THEY GAICIALG TAXPAYERS PICK UP THE TAB." ALAN GREENSPAN, I SELDOM EVER AGREE WITH HIM. BUT I USE ADD QUOTE OF HIM HIS TO DESCRIBE WHERE WE'RE NOW. HE WAS AROUND SIGNATURE ON HIS HANDS FOR A GOOD MANY YEARS WHILE THESE PROBLEMS DEVELOPED DESPITE THE FACT THAT HE HAD THE TORT AUTHORITY TO AVOID THEM. NOW HE'S WRITTEN A BOOK WHILE ALL THIS WENT ON. NOW HE SAYS, "THE NOTION THAT RISKS CAN BE AIDENTIFIED IN A SUFFICIENTLY TIMELY MANNER TO ENABLE THE LIQUIDATION OF A LARGE FAILING BANK WITH MINIMUM LOSS HAS PROVED UNTENABLE DURING THIS CRISIS AND I SUSPECT IN FUTURE CRISES AS WELL." SIMON JOHNSON, PROFESSOR OF ENTREPRENEUR SHRNG THE SLOAN SCHOOL. "THERE IS SIMPLY NO EVIDENCE -- AND I MEAN ABSOLUTELY NONE -- THAT SOCIETY GAINS FROM HAVING A BALANCE SHEEFT LARGER THAN $100 BILLION." HIS POINT IS THAT TOO BIG TO FAIL MEANS TOO BISMGHT ARNOLD KING,CATO. I SELDOM QUOTE CATO ON THE FLOOR OF THE SENATE. QUIG BIG BANKS ARE BAD FOR FREE MARKETS. THERE IS A FREE MANUFACTURE MARKET CASE FOR BREAK UP LARGE FINANCIAL INSTITUTIONS: THAT OUR BIG BANKS ARE THE PRODUCT, NOT OF ECONOMICS, BUT OF THE POLITICS." AND FINALLY, -- LET ME USE ANOTHER ONE. THE PRESIDENT OF THE FEDERAL RESERVE BANK OF KANSAS STIRKS THE THIRD FED PRESS. "I THINK STHESHED BE BROKEN UP, AND IN DOING SO, I THINK YOU'LL MAKE THE FINANCIAL SYSTEM ITSELF MORE STABLE, MORE COMPETITIVE AND I THINK YOU'LL HAVE LONG-RUN BENEFITS OVER OUR CURRENT S" WE BROKE UP STANDARD OIL INTO 23 DIFFERENT PIECE AND IT TURNED OUT THAT 23 PIECES WERE MORE VALUABLE THAN STANDARD OIL WASSMENTS I'M NOT SAYING BREAK UP THINGS JUST FOR THE PURPOSE OF BREAKING THINGS UP. IF THERE IS A STANDARD BY WHICH YOU JUDGE AN INSTITUTION IS TOO BIG TO FAIL AND CAUSES A DRAMATIC RISK TO THE ECONOMY AS A WHOLE SHOULD IT FAIL ARC MORAL HAZARD ARKSD UNACCEPTABLE RISK TO THE ENTIRE ECONOMY, THEN IT SEEMS TO ME LIKE THIS ISSUE OF CREATING EARLY WARNINGS AND STOP SIGNS AND SIRENS AND SO ON IS LARGELY IRRELEVANT. WHAT WE NEED TO DO IS DO SOMETHING DIRECT AND EFFECTIVE AND SOMETHING WE ALL KNEW WE SHOULD DO, AND THAT IS TO SAY, IF YOU ARE TOO BIG TO FAIL AND JUDGED TO BE SO ANS JUDGED TO POSE -- AND JUDGED TO PIECE THOSE KINDS OF RISKS TO OUR ECONOMY, THEN YOU MUST BREAK OFF PIECES AND WE WOULD OVER A TWO-YEAR PERIOD REQUIRE THAT TO HAPPEN UNTIL YOU ARE NOT STWAIL. THE FIRST CHART I SHOWED -- LET KNEE SHOW A COUPLE OF QUICK CHARTS. THIS ONE SHOWS THE TOP FINANCIAL INSTITUTIONS, THE BIG GET BIGGER. THIS CHART SHOWS THE SAME THING, MEASURING ASSETS AND LIABILITIES, THE BIG GET BIGGER, MUCH, MUCH BIGGER. THE FIRST CHART THAT I SHOWED TODAY DEMONSTRATES WHY IF WE'RE DON'T PASS THE AMENDMENT, THE TYPE OF AMENDMENT WEE I SUGGEST, WE CAN THUMB OUR SUSPENDERS AND CROW ALL WE WANT IN EVERY HALLWAY. WE WILL HAVE NOT DONE WHAT WAS NECESSARY TO BE DONE TO ADDRESS TOO BIG TO FAIL. WE JUST WILL NOT DO IT. SO I HAVE AN AMENDMENT. I AM HERE BECAUSE I'M PESTERING THOSE WHO ARE LINING UP AMENDMENTS TO MAKE CERTAIN I HAVE A CHANCE TO DEBATE AND VOTE ON THAT AMENDMENT. AND THAT WILL BE THE TEST OF WHETHER THIS CONGRESS HAS LEARN ADD LESSON, WHETHER WHEN SOMEDAY A TREASURY SECRETARY LEANS HISTORY OF A LECTERN AND SAY, IF I DON'T GET $700 BILLION TO BAIL OUT THE BIG INTERESTS THAT RAN IN COUNTRY INTO DITCH, OUR WHOLE ECONOMY IS GOING TO THE DITCH. SO I HOPE VERY MUCH THAT WE'LL HAVE THE OPPORTUNITY TO BOTH SIMPLY AND EFFECTIVELY DO WHAT'S NECESSARY TO REALLY FINALLY AND THOUGHTFULLY ADDRESS THIS ISSUE OF TOO BIG TO FAIL. MADAM PRESIDENT, I YIELD THE FLOOR.

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  • 11:14:24 AM

    THE PRESIDING OFFICER

    THE SENATOR FROM COLORADO.

  • 11:14:30 AM

    MR. BENNET

    THANK YOU YOU MADAM PRESIDENT. I SEE OUR CHAIRMAN AND RANKING MEMBER ON…

    THANK YOU YOU MADAM PRESIDENT. I SEE OUR CHAIRMAN AND RANKING MEMBER ON THE COMMITTEE ON WHICH I SERVE. WE'RE FINALLY DOING SOME WORK AROUND HERE AND DOING IT IN A BIPARTISAN WAY. AND I THINK THIS BILL IS GOING TO IMPROVE OVER THE COURSE OF THIS DEBATE. IT IS AN ENORMOUSLY IMPORTANT TIEWRNTS TO SAFEGUARD -- OPPORTUNITY TO SAFEGUARD OUR ECONOMY FROM THE RECKLESS DANGER THAT GOT US INTO THIS MESS. I'M HOPEFUL THAT WE CAN WADE THROUGH ALL THIS WASHINGTON WRANGLING AND GET SOMETHING DONE TO PROTECT AMERICA'S FINANCIAL FUTURE. MADAM PRESIDENT, THERE'S A SHARED UNDERSTANDING OF WHAT GOT US HERE AND THAT'S THE GOOD NEWS. SOME ON WALL STREET TOOK ALL THE RISK, YET IT'S THE AMERICAN PEOPLE WHO PAID THE PRICE. SMALL BUSINESSES, HOMEOWNERS AND WORKING FAMILIES WERE FORCED TO CLEAN UP THIS MESS. IT'S OUR RESPONSIBILITY TO LEARN THE LESSONS FROM THE LAST COLLAPSE TO HELP THIS ECONOMY RECOVER AND HEAD OFF THE KINDS OF PROBLEMS THAT CAN LEAD TO ANOTHER FINANCIAL CRISIS. IN SHORT, MADAM PRESIDENT, WE HAVE TO FIX THIS ECONOMY, ENSURING THAT THERE WILL NEVER HAVE TO BE ANOTHER TAXPAYER-SPONSORED BAILOUT. AS SOMEONE WHO SITS ON BOTH THE AGRICULTURE AND BANKING COMMITTEES, THE CHAIR JURISDICTION OVER THIS BILL, I CAN ASSURE YOU, MADAM PRESIDENT, THAT THIS PACKAGE REFLECTS MONTHS OF HARD WORK AND INCORPORATES IDEAS AND CONCEPTS FROM BOTH POLITICAL PARTIES. WE'VE EXAMINED THE PROBLEMS THAT BROUGHT US TO THE FINANCIAL BRINK NEARLY TWO YEARS AGO. AND TOGETHER, THESE TWO COMMITTEE BILLS CREATE A THOUGHTFUL AND COMPREHENSIVE PLAN TO INCREASE TRANSPARENCY, REDUCE SYSTEMIC RISK AND STRENGTHEN OUR COMMITMENT TO PROTECTING CONSUMERS. IN RESRAOUGT MERITS OF THE BILL -- REVIEWING THE MERITS OF THE BILL I THINK IT'S IMPORTANT TO ANALYZE HOW IT WOULD ADDRESS SO MANY OF THE PROBLEMS THAT LED TO THE FINANCIAL COLLAPSE IN 2008. TOO OFTEN WE DON'T ASK THE QUESTION WHAT PROBLEM IS IT WE'RE TRYING TO SOLVE AND THEN WE GET BUSY SOLVING PROBLEMS THAT DIDN'T EXIST OR CREATING UNINTENDED CONSEQUENCES FROM OUR WORK. I THINK WE'VE WORKED HARD ON THIS LEGISLATION FOR IT NOT TO BE SO. HAD THIS LEGISLATION BEEN THE LAW OF THE LAND, WE WOULDN'T BE TALKING ABOUT THAT $700 BILLION TAXPAYER-FUNDED RESCUE OF OUR NATION'S LARGEST BANK HOLDING COMPANIES. WE WOULD HAVE BEEN ABLE TO SEE MANY OF THE DANGEROUS TRENDS DEVELOP EARLIER, AND WE WOULD HAVE REQUIRED THESE SYSTEMICALLY RISKY COMPANIES TO HAVE MORE CAPITAL AND LESS DEBT. HAD ANY OF THESE COMPANIES FAILED, WE WOULD HAVE RESOLVED THEM WITHOUT TRANSFORMING THEM INTO WARDS OF THE STATE LIKE A.I.G. SECOND, HAD A STRONG CONSUMER PROTECTION INFRASTRUCTURE EXISTED, WE COULD HAVE STOPPED THE SUBPRIME MESS BEFORE IT SPIRALED OUT OF CONTROL. FOR EXAMPLE, THE SUBPRIME GIANT AME R EUQUEST WOULD HAVE BEEN SUBJECT TO MEANINGFUL RULE MAKING AUTHORITY. THIS BILL REPRESENTS SUBSTANTIAL AND MEANINGFUL PROGRESS ON THE CONSUMER PROTECTION FRONT. THIRD, HAD THE BILL'S DERIVATIVES REFORMS BEEN IN PLACE, IT IS MUCH LESS LIKELY -- MUCH LESS LIKELY -- THAT THE FEDERAL GOVERNMENT WOULD HAVE BEEN FORCED TO SPEND TENS OF BILLIONS OF TAXPAYER DOLLARS TO RESCUE A.I.G. FROM ITS OWN SLOPPINESS AND GREED. IN TOTAL, THE PLAN BEFORE US REPRESENTS A STRONG AND THOUGHTFUL MEASURE THAT REWRITES THE RULES OF THE ROAD FOR WALL STREET. AND THROUGH THE AMENDMENT PROCESS HERE, WE CAN MAKE IT EVEN BETTER. FOR EXAMPLE, I THINK WE NEED TO ENSURE THAT CERTAIN STATE-CHARTERED COMMUNITY BANKS THAT DID LITTLE TO CONTRIBUTE TO THE CURRENT CRISIS DON'T HAVE TO CHANGE THEIR PRUDENTIAL REGULATOR. IN SO MANY OF OUR TOWNS, COMMUNITY BANKS PLAY AN IMPORTANT ROLE IN PROVIDING CREDIT TO OUR LOCAL ECONOMY. MANY OF THESE SMALL INSTITUTIONS ARE STRUGGLING DUE TO THIS DIFFICULT ECONOMY WHICH MEANS LESS AVAILABLE CREDIT FOR FAMILIES AND SMALL BUSINESSES. I HAVE CONCERNS THAT A CHANGE IN PRUDENTIAL REGULATION MAY EXERT FURTHER PRESSURE ON THESE SMALL BANKS WHICH CONTINUE TO SERVE THEIR LOCAL COMMUNITIES. IT'S MY HOPE THAT WE CAN BALANCE THE NEED TO REDUCE REGULATORY ARBITRAGE WHILE PRESERVING THE EXISTING PRUDENTIAL SUPERVISORY STRUCTURE FOR SOME OF THESE START-CHARTERED BANKS. AND I ALSO BELIEVE IT IS TIME FOR US TO TAKE ADVANTAGE OF THIS OPPORTUNITY TO BEGIN TO MOVE AWAY FROM THE LAST BANK BAILOUT, THE TARP. WHILE THERE ARE 100 OPINIONS IN THIS CHAMBER ABOUT HOW EFFECTIVE TARP WAS, THERE REALLY IS A BROAD CONSENSUS HERE AND IN THE COUNTRY THAT IT'S TIME TO WIND DOWN TARP, RECAPTURE WHAT WE CAN FOR TAXPAYERS AND PREVENT BANKS FROM TAPPING INTO THE TREASURY GOING FORWARD. THAT'S WHY IN THE COMING DAYS I WILL BE PUSHING BIPARTISAN LEGISLATION THAT WOULD DO EXACTLY THAT. IT WOULD USE RECAPTURED TARP FUNDS, BORROWED FROM OUR CHILDREN, $180 BILLION SO FAR AND COUNTING, FOR DEFICIT REDUCTION. AND IT WOULD TAKE IMPORTANT STEPS TO END THE TARP. MORE BROADLY, I ALSO THINK WE NEED TO BE AGGRESSIVE ABOUT STRENGTHENING THIS BILL TO FURTHER PROTECT CONSUMERS, AND I WILL BE SUPPORTING AMENDMENTS WHICH DO EXACTLY THAT. WHEN IT COMES TO WALL STREET REFORM, WE SIMPLY CAN'T AFFORD TO DELAY ANY LONGER. RECENTLY THE TARP INSPECTOR GENERAL UNDERSCORED THIS POINT BETTER THAN I COULD. HE STATED THAT -- QUOTE -- "EVEN IF TARP SAVED OUR FINANCIAL SYSTEM FROM DRIVING OFF A CLIFF BACK IN 2008, ABSENT MEANINGFUL REFORM, WE ARE STILL DRIVING ON THE SAME WINDING MOUNTAIN ROAD, BUT THIS TIME IN A FASTER CAR. IN SHORT, BAILING OUT COMPANIES HAS MADE THE FUTURE RISK OF OUR FINANCIAL SYSTEM EVEN WORSE BY CREATING THE MORAL HAZARD THAT A FINANCIAL FIRM THAT PARTICIPATES IN RISKY BEHAVIOR IS GOING TO SOMEHOW BE BAILED OUT BY THE GOVERNMENT, BY THE TAXPAYER. THIS WALL STREET REFORM PACKAGE TAKES A STRONG STEP TOWARD RESTORING SOME DEGREE OF SANITY TO OUR FINANCIAL SYSTEM IN MAKING THAT MORAL HAZARD A THING OF THE PAST. FINALLY, MADAM PRESIDENT, COLORADOANS AND THE AMERICAN PEOPLE ARE EXPECTING US TO ACT. I'M CONFIDENT WE'RE GOING TO SUCCEED. LOBBYISTS MAY HAVE BEEN ABLE TO SLOW DOWN WALL STREET REFORM TEMPORARILY, BUT THE AMERICAN PEOPLE WANT IT, AS WELL THEY SHOULD. WE'RE GETTING CLOSER AND CLOSER EVERY DAY TO SUSTAINING A WORKABLE BILL THAT CAN PASS THIS CHAMBER AND THAT WE CAN EVENTUALLY SEND TO THE PRESIDENT FOR HIS SIGNATURE. WE CAN'T ALLOW THE STATUS QUO TO MAINTAIN ITS GRIP ON OUR FINANCIAL SYSTEM. WE HAVE TO WORK TOGETHER AND PASS THIS GROUNDBREAKING REFORM PACKAGE. MADAM PRESIDENT, I WANT TO CLOSE AGAIN BY THANKING THE CHAIRMAN OF THE BANKING COMMITTEE WHO IS HERE TODAY FOR HIS LEADERSHIP THROUGHOUT THE MONTHS NOT JUST ON THIS ISSUE, BUT ON HEALTH CARE AS WELL. BUT PARTICULARLY STICKING WITH THIS ISSUE. I DON'T THINK WE'D BE HAVING THIS DEBATE RIGHT NOW WERE IT NOT FOR THE WORK THAT THE CHAIRMAN DID. AND AS A MEMBER OF THE BANKING COMMITTEE, I APPRECIATE IT VERY MUCH. MADAM PRESIDENT, I YIELD THE FLOOR.

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  • 11:21:38 AM

    THE PRESIDING OFFICER

    THE SENATOR FROM CONNECTICUT.

  • 11:21:41 AM

    MR. DODD

    MADAM PRESIDENT?

  • 11:22:56 AM

    THE PRESIDING OFFICER

    THE SENATOR FROM NEW YORK.

  • 11:22:58 AM

    MR. SCHUMER

    FIRST I WANT TO JOIN THE SENATOR FROM CONNECTICUT IN PRAISING SENATOR…

    FIRST I WANT TO JOIN THE SENATOR FROM CONNECTICUT IN PRAISING SENATOR BENNET WHO HAS HAD AN AMAZING EFFECT AND STEADY HAND IN BRINGING THIS BILL TO THE FLOOR. ALSO MY COLLEAGUE FROM VIRGINIA, SENATOR WARNER, THE NEW MEMBERS HAVE HAD A TREMENDOUS EFFECT ON THIS BILL. THIS REFLECTS THE WAY THE SENATE WORKS THESE DAYS, AND I THINK IT'S ALL TO THE BETTER. TO HAVE THEIR INPUT AND EXPERIENCE HAS BEEN VITAL. BUT, MR. CHAIRMAN, I WOULD ALSO SAY THAT YOU ARE FULL OF FRESH IDEAS AND VIM AND VIGOR. AND JUST BECAUSE YOU'VE BEEN AROUND HERE A LONG TIME DOESN'T MEAN THAT IN FACT YOU'VE HAD THE WISDOM TO ENCOURAGE SOME OF OUR NEW MEMBERS TO ACTIVELY PARTICIPATE, AND CONFIDENCE TO DO THAT AS WELL. I ALSO DON'T WANT TO FAIL TO NOTE MY COLLEAGUE FROM NEW YORK, SENATOR GILLIBRAND, WHO SITS IN THE CHAIR, HAS DONE A FABULOUS JOB TOO, PARTICULARLY ON THE AGRICULTURE PORTION OF THE BILL ON THE COMMITTEE ON WHICH SHE SITS. MR. PRESIDENT, I COME TO THE FLOOR TODAY AND RISE AGAINST THE CONSUMER AMENDMENT POSED BY SENATOR SHELBY THAT IS BEFORE US. I COME TO THE FLOOR TO SPEAK ABOUT THE NEED FOR A STRONG INDEPENDENT CONSUMER WATCHDOG. I AM HERE TO TALK ABOUT THE PROPOSAL PUT FORWARD BY SOME OF MY REPUBLICAN COLLEAGUES TO PLACE A NEW CONSUMER PROTECTION DIVISION WITHIN THE FDIC AND SIGNIFICANTLY REDUCE THE ABILITY OF THAT DIVISION TO CARRY OUT ITS MISSION. THE AMENDMENT BEFORE US GREATLY WEAKENS THE BILL IN TERMS OF CONSUMER PROTECTIONS. IN FACT, IT IS NOT JUST A STEP BACKWARD FROM THE BILL BEFORE US, IT IS A STEP BACKWARD FROM THE STATUS QUO. IF WE WERE TO PASS THE AMENDMENT ON THE FLOOR, CONSUMER PROTECTIONS, WEAK AS THEY ARE TODAY, WOULD BE EVEN WEAKER. THIS AMENDMENT WOULD LEAVE THE CONSUMER NAKED AND UNPROTECTED. THIS AMENDMENT STRIPS THE BILL OF SOME OF ITS STRONGEST PROTECTIONS. NOT EVERY FINANCIAL INSTITUTION PREYS ON CONSUMERS, BUT THOSE WHO DO WOULD BE GIVEN TOO FREE A HAND IF THIS AMENDMENT WERE TO PASS. AND I URGE STRONG TOPPINGS IT. -- STRONG OPPOSITION TO IT. ONE OF THE ROOTS -- LET ME EXPLAIN. ONE OF THE ROOTS OF THIS FINANCIAL CRISIS WAS UNDOUBTEDLY THAT TOTAL FAILURE OF OUR CONSUMER PROTECTION REGIME. AMERICANS WERE SOLD PRODUCTS THEY DIDN'T UNDERSTAND AND COULDN'T AFFORD BY MORTGAGE ORIGINATORS EAGER FOR A FEE AND HAPPY TO SELL THOSE LOANS OFF INTO THE GREAT SECURITIZATION MACHINE WHICH WAS GIVEN A VIRTUAL CARTE BLANCHE BY THE CREDIT RATING AGENCIES. AFTER THE EVENTS OF THE LAST SEVERAL YEARS, NO ONE CAN ARGUE THAT FUNDAMENTAL REFORM OF OUR CONSUMER PROTECTION REGIME IS NOT NECESSARY. NO ONE CAN ARGUE THAT THE STATUS QUO IS THE WAY TO GO. THE STATUS QUO SIMPLY WON'T DO. THERE'S NO ACCOUNTABILITY IN THE CURRENT SYSTEM. CONSUMER PROTECTION IS SPLIT AMONG SEVEN DIFFERENT REGULATORY AGENCIES. FOR THAT REASON, MADAM PRESIDENT, I WAS AN EARLY SUPPORTER OF EFFORTS TO CREATE A TRULY INDEPENDENT CONSUMER PROTECTION AGENCY, AND I'M STILL WORKING WITH MANY OF MY COLLEAGUES, INCLUDING SENATOR JACK REED AND SENATOR DURBIN, TO STRENGTHEN THE PROVISIONS OF THE BILL PROPOSED BY CHAIRMAN DODD. ONE OF THE KEY AUTHORITIES OF ANY NEW CONSUMER PROTECTION DIVISION OR AGENCY IS THAT IT MUST BE ABLE TO ADOPT RULES TO PROTECT CONSUMERS WITHOUT BEING OVERRULED BY BANKING REGULATORS WHO WOULD RATHER ALLOW TPWAOFRPBGZ PAD THEIR BOTTOM LINES BY -- ALLOW BANKS TO PAD THEIR BOTTOM LINES. SOME ARGUE YOU CAN'T SPLIT CONSUMER PROTECTION FROM SAFETY AND SOUNDNESS, BUT HISTORICALLY, IN THE PRESENT SETUP, EVERY TIME THERE'S A CONFLICT, THE CONSUMER LOSES. CONSUMERS DESERVE AN ACCOUNTABLE REGULATOR WITH OVERSIGHT OF CONSUMER FINANCIAL PRODUCTS AS ITS PRIMARY OBJECTIVE, NOT AS AN AFTERTHOUGHT. THE REPUBLICAN PROPOSAL BEING DISCUSSED IS TOTALLY INADEQUATE. IT WOULD ALLOW THE SAME BANK REGULATORS WHO STOOD IN THE WAY OF MEANINGFUL CONSUMER PROTECTION FOR YEARS TO VETO CONSUMER PROTECTION RULES PROPOSED BY THE HEAD OF THE DIVISION -- OF THE NEW DIVISION. FOR EXAMPLE, THE COMPTROLLER OF THE CURRENCY WHO PUBLICLY OPPOSED THE FED'S NEW CREDIT CARD RULES, WOULD UNDER THE SHELBY AMENDMENT GET TO VOTE ON FUTURE CREDIT CARD RULES. SO WE'RE SAYING THAT THE REGULATORS WHO DON'T REALLY CARE -- SOME OF THEM -- ABOUT CONSUMER PROTECTION, WOULD BE GIVEN A VETO POWER. THE KPWEUFGS WOULD HAVE NO -- THE DIVISION WOULD HAVE NO EXAMINATION OR ENFORCEMENT POWER OVER ANY BANKS OF ANY SIZE OR AFFILIATES. SOME OF THE WORST ACTORS IN THE SUBPRIME MESS WERE BANK SUBSIDIARIES. EVEN WORSE, IT COULD ONLY DO EXAMINATIONS OF NONBANK CONSUMER FINANCE COMPANIES IF THEY -- QUOTE -- "DEMONSTRATE A PATTERN OR PRACTICE OF VIOLATIONS" OF CONSUMER LAW. IN OTHER WORDS, ONLY AFTER CONSUMERS HAVE BEEN HARMED REPEATEDLY, THAT'S WHAT ONE COULD CALL TOO LITTLE TOO LATE. EVEN THE FED RECENTLY DELETED THIS REQUIREMENT FROM RULES GOVERNING SUBPRIME MORTGAGES BECAUSE IT HAMPERED ENFORCEABILITY OF THOSE RULES SO SEVERELY. NOW, EVEN THE BANKS WANT THE NEW CONSUMER DIVISION TO BE ABLE TO ENFORCE ITS RULES AT NONBANKS. THIS IS AMAZING. SOME OF THE MOST RAPACIOUS INSTITUTIONS THAT PREY ON CONSUMERS ARE NOT BANKS. THEY OPERATE OUTSIDE THE SCOPE OF THE FEDERAL REGULATORY AGENCIES. THEY'RE OFTEN RESPONSIBLE FOR MANY OF THE MOST EGREGIOUS ABUSES AND PREDATORY LENDING PRACTICES. MANY OF THE PRODUCTS PROVIDED TO CONSUMERS BY THESE NONBANKS PLAYED A DIRECT ROLE IN THE FINANCIAL CRISIS, AND MANY OF THESE BUSINESSES, PAYDAY LENDERS, RENT-TO-OWN COMPANIES, CURRENTLY OPERATE BELOW THE RADAR SCREEN TO PREY ON VULNERABLE COMMUNITIES. HOW CAN WE EXEMPT SOME OF THESE PAYDAY LENDERS AND RENT-TO-OWN COMPANIES? I'VE SEEN THEM PREY ON POOR PEOPLE IN MY STATE. HOW CAN WE EXEMPT THEM FROM REGULATION, WHEN THEY OFTEN ARE WORSE THAN MANY OF THE FINANCIAL INSTITUTIONS? THE REPUBLICAN AMENDMENT WOULD ALSO PROHIBIT THE CONSUMER DIVISION FROM ISSUING ANY RULES THAT AFFECT ANY UNDERWRITING STANDARDS OF DEPOSIT INSTITUTIONS AND THEIR AFFILIATES. AFTER THE CRISIS WE JUST WENT THROUGH, WHICH WAS IN PART CREATED -- IN LARGE PART CREATED BY BAD MORTGAGE UNDERWRITING STANDARDS, BE I CAN'T BELIEVE THAT ANYONE CAN PROPOSE THIS WITH A STRAIGHT FACE BECAUSE LET ME REPEAT WHAT IT DOES. THE CONSUMER DIVISION CAN'T ISSUE RULES THAT AFFECT ANY UNDERWRITING STANDARDS OF DEPOSIT INSTITUTIONS. IT'S SAYING LET'S REPEAT THE MORTGAGE CRISIS OVER AGAIN. IT MAKES NO SENSE. IF THE CONSUMER DIVISION WERE IN PLACE IN 2008, THE ONE PROPOSED BY MY COLLEAGUES HERE, IT WOULD NOT HAVE HAD THE POWER TO WRITE THE MORTGAGE RULES ESTABLISHING THE MINIMUM ABILITY TO PAY STANDARDS THAT THE FED ISSUED. AND AS WE KNOW, THE FED WAS NOT AN EXTREME WATCHDOG BY ANY SENSE. MR. PRESIDENT -- MADAM PRESIDENT, I HAVE WORKED LONG AND HARD IN THE AREA OF CONSUMER PROTECTION. I'VE WORKED WITH THESE REGULATORS. I SEE HOW SLOWLY THEY WORK. IT TOOK MORE THAN 10 YEARS TO GET THEM TO GO ALONG WITH THE SO-CALLED SCHUMER BOX, WHERE CREDIT CARD INTEREST RATES WERE MADE CLEAR AND VISIBLE TO PERSPECTIVE CREDIT CARD PURCHASERS. IT WORKED. BUT WHY DID IT TAKE SO LONG? AND THEN WHEN THE BANKS CAME WITH NEW WAYS OF GETTING AROUND THE RULES, AGAIN IT TOOK ME FOREVER TO GET THE FED TO MOVE. BECAUSE THE FED, FRANKLY, AND CHAIRMAN BERNANKE, TO HIS CREDIT, ADMITTED THIS, DID NOT MAKE CONSUMER PROTECTION A HIGH ENOUGH PRIORITY. SO WE NEED, IN MY JUDGMENT, AN INDEPENDENT AGENCY. THAT WOULD BE THE BEST SOLUTION. AND SECOND BEST WOULD BE AN AGENCY, EVEN IF IT'S WITHIN THE FED, THAT IS LARGELY INDEPENDENT IN BOTH THE RULES IT CAN PROMULGATE AND ITS ENFORCEMENT. WE NEED STRONG, FORWARD-LOOKING FINANCIAL REFORM, AND I HAVE ALWAYS SAID I WANT THE REFORM TO BE CONSTRUCTIVE, NOT PUNITIVE. BUT IF WE GO THROUGH ALL OF THIS AND FAIL TO LEAVE CONSUMERS BETTER PROTECTED THAN THEY WERE BEFORE THIS CRISIS, WE WILL HAVE TOTALLY FAILED IN OUR MISSION TO SERVE THE AMERICAN PEOPLE. I STRONGLY URGE THAT THIS AMENDMENT BE REJECTED BY A LARGE AND HOPEFULLY BIPARTISAN MAJORITY. MADAM PRESIDENT, I YIELD THE FLOOR.

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  • 11:32:13 AM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM WISCONSIN.

  • 11:32:15 AM

    MR. FEINGOLD

    THANK YOU, MADAM PRESIDENT. I'M GLAD THE SENATE IS FINALLY CONSIDERING THE…

    THANK YOU, MADAM PRESIDENT. I'M GLAD THE SENATE IS FINALLY CONSIDERING THE CRITICALLY IMPORTANT ISSUE OF FINANCIAL REGULATORY REFORM. FEW THINGS ARE AS IMPORTANT AS ENSURING WE NEVER AGAIN SUFFER THE KIND OF MELTDOWN IN THE FINANCIAL MARKETS THAT SHOVED OUR ECONOMY INTO THE WORST RECESSION SINCE THE GREAT DEPRESSION. AND I THINK IT STILL REMAINS TO BE SEEN IF THIS BILL WILL DO THAT. WHILE IT CERTAINLY INCLUDES SOME GOOD REFORMS, MORE NEEDS TO BE DONE, AND THE TRACK RECORD OF CONGRESS IN THIS AREA IS, AT BEST, CHECKERED. FOR THE LAST 30 YEARS, PRESIDENTS AND CONGRESSES HAVE CONSISTENTLY GIVEN IN TO WALL STREET LOBBYISTS AND WEAK WEAKENED ESSENTIAL SAFEGUARDS. AND AS HAS BEEN THE CASE IN SO MANY DIFFERENT AREAS, MEMBERS OF BOTH POLITICAL PARTIES ARE TO BLAME. LEGISLATION THAT PAVED THE WAY FOR THE CREATION OF MASSIVE WALL STREET ENTITIES AND REMOVED ESSENTIAL PROTECTIONS FOR OUR ECONOMY PASSED WITH OVERWHELMING BIPARTISAN SUPPORT. FROM THE SAVINGS-AND-LOAN CRISIS IN THE LATE 1980'S TO THE MORE RECENT FINANCIAL CRISIS THAT TRIGGERED THE HORRIBLE ECONOMIC DOWNTURN FROM WHICH WE ARE STILL RECOVERING, THOSE THREE DECADES OF BIPARTISAN BLUNDERS HAVE BEEN DEVASTATING TO OUR NATION. AND THE PRICE OF THOSE BLUNDERS HAS BEEN PAID BY HOMEOWNERS, MAIN STREET BUSINESSES, RETIREES, AND MILLIONS OF FAMILIES FACING AN UNCERTAIN ECONOMIC FUTURE. THE IMPACT OF THE RECENT FINANCIAL CRISIS ON THE NATION'S ECONOMY HAS BEEN ENORMOUS. MILLIONS HAVE LOST THEIR JOBS AND MILLIONS MORE ARE LUCKY ENOUGH TO HAVE A JOB ARE FORCED TO WORK FEWER HOURS THAN THEY WANT AND NEED TO WORK. ACCORDING TO A STUDY DONE BY THE PEW TRUST, THE FINANCIAL CRISIS COST AMERICAN HOUSEHOLDS AN AVERAGE OF NEARLY $5,800 IN LOST INCOME. AND, OF COURSE, FAMILIES LOST A SIGNIFICANT AMOUNT OF THEIR PERSONAL SAVINGS. AS A NATION, WE LOST $7.4 $7.4 TRILLION IN STOCK WEALTH BETWEEN JULY 2008 AND MARCH 2009 AND ANOTHER $3.4 TRILLION IN REAL ESTATE WEALTH DURING THAT SAME TIME. WE SIMPLY CANNOT AFFORD TO CONTINUE DOWN THE PATH THAT POLICY-MAKERS HAVE SAID OVER THE PAST 30 YEARS. THE TEST FOR THIS LEGISLATION, THEN, IS A SIMPLE ONE, WHETHER OR NOT IT WILL PREVENT ANOTHER FINANCIAL CRISIS. AND CENTRAL TO THAT TEST WILL BE HOW THIS BILL WILL ADDRESS TOO BIG TO FAIL. THIS IS A CRITICAL ISSUE THAT HAS BEEN GROWING FOR SOME TIME NOW AS AN INCREASED CONCENTRATION IN THE FINANCIAL SERVICES SECTOR HAS PUT MORE AND MORE FINANCIAL ASSETS UNDER THE CONTROL OF FEWER AND FEWER DECISION-MAKERS. MADAM PRESIDENT, YEARS AGO, A FORMER SENATOR FROM WISCONSIN, WILLIAM PROXMIRE, NOTED AS BANKING ASSETS BECOME MORE CONCENTRATED, THE BANKING SYSTEM ITSELF BECOMES LESS STABLE, AS THERE IS GREATER POTENTIAL FOR SYSTEMWIDE FAILURES. SADLY, SENATOR PROXMIRE WAS ABSOLUTELY RIGHT, AS RECENT EVENTS HAVE PROVEN. EVEN BEYOND THE ISSUE OF SYSTEMIC STABILITY, THE TREND TOWARD FURTHER CONCENTRATION OF ECONOMIC POWER AND ECONOMIC DECISION MAKING, ESPECIALLY IN THE FINANCIAL SECTOR, SIMPLY IS NOT HEALTHY FOR THE NATION'S ECONOMY. NOW, BANKS HAVE A VERY SPECIAL ROLE IN OUR FREE MARKET SYSTEM. THEY ARE RATIONERS OF CAPITAL. WHEN FEWER AND FEWER BANKS ARE MAKING MORE AND MORE OF THE CRITICAL DECISIONS ABOUT WHERE CAPITAL IS ALLOCATED, THEN THERE IS AN INCREASED RISK THAT MANY WORTHY ENTERPRISES WILL NOT RECEIVE THE CAPITAL NEEDED TO GROW AND FLOURISH. FOR YEARS, A STRENGTH OF THE AMERICAN BANKING SYSTEM WAS THE STRONG COMMUNITY AND LOCAL NATURE OF THAT SYSTEM. LOCALLY MADE DECISIONS MADE BY LOCALLY OWNED FINANCIAL INSTITUTIONS, INSTITUTIONS WHOSE ECONOMIC PROSPECTS ARE TIED TO THE FINANCIAL HEALTH OF THE COMMUNITY THAT THEY SERVE, HAVE LONG PLAYED A CRITICAL ROLE IN THE ECONOMIC DEVELOPMENT OF OUR NATION AND ESPECIALLY FOR OUR SMALLER COMMUNITIES IN RURAL AREAS. BUT, MADAM PRESIDENT, WE'VE MOVED AWAY FROM THAT SYSTEM. DIRECTLY AS A RESULT OF POLICY CHANGES MADE BY CONGRESS AND REGULATORS, BANKING ASSETS ARE CONTROLLED BY FEWER AND FEWER INSTITUTIONS. AND THE DIMINISHMENT OF THAT LOCALLY OWNED AND CONTROLLED CAPITAL HAS NOT BENEFITED EITHER BUSINESSES OR CONSUMERS. AND, OF COURSE, MOST DRAMATICALLY, TAXPAYERS ACROSS THE COUNTRY MUST NOW REALIZE THAT SENATOR PROXMIRE'S WARNING ABOUT THE CONCENTRATION OF BANKING ASSETS PROVED TO BE ALL TOO PRESCIENT WHEN PRESIDENT BUSH AND CONGRESS DECIDED TO BAIL OUT THOSE MAMMOTH FINANCIAL INSTITUTIONS RATHER THAN ALLOWING THEM TO FAIL. MADAM PRESIDENT, THAT WAS A BAILOUT THAT I STRONGLY OPPOSED. THE TREND TOWARD INCREASED CONCENTRATION OF CAPITAL WAS GREATLY ACCELERATED IN 1994 BY THE ENACTMENT OF THE RIEGLE-NEIL INTERSTATE BANK AND BRANCHING ACT, ESPECIALLY IN 1999 BY THE ENACTMENT OF THE GRAM LEACH BLILEY ACT WHICH TORE -- GRAMM LEACH BLILEY ACT WHICH TORE DOWN THE WALLS BETWEEN INVESTMENT BANKING AND FIRMS. THOSE FIRE WALLS HAS BEEN ESTABLISHED IN THE WAKE OF THE LAST COUNTRY'S GREAT FINANCIAL CRISIS 80 YEARS AGO BY THE BANKING ACT OF 1933, THE FAMOUS MEASURE -- REFORM MEASURE ALSO KNOWN AS THE GLASS-STEAGALL ACT. PRIOR TO GLASS-STEAGALL, DEVASTATING FINANCIAL PANICS HAVE BEEN A REGULAR FEATURE OF OUR ECONOMY, BUT THAT CHANGED WITH THE ENACTMENT OF THAT MOMENTOUS LEGISLATION, WHICH STABILIZED OUR BANKING SYSTEM BY IMPLEMENTING TWO KEY REFORMS. FIRST, THAT ESTABLISHED AN INSURANCE SYSTEM FOR DEPOSITS, REASSURING BANK CUSTOMERS THAT THEIR DEPOSITS WERE SAFE AND THUS FORESTALLING BANK RUNS. AND SECOND, IT ERECTED A FIREWALL BETWEEN SECURITIES UNDERWRITING AND COMMERCIAL BANKING. SO FINANCIAL FIRMS HAD TO CHOOSE WHICH BUSINESS TO BE IN. NOW, THAT FIREWALL, MADAM PRESIDENT, WAS A CRUCIAL PART OF ESTABLISHING ANOTHER PROTECTION: DEPOSIT INSURANCE. BECAUSE IT PREVENTED BANKS THAT ACCEPTED FDIC INSURED DEPOSITS FROM MAKING THESE SPECULATIVE INVESTMENTS, BETS WITH THAT MONEY. THE GRAMM-LEACH-BLILEY ACT TORE DOWN THAT FIRE WALL AS WELL AS THE FIREWALL THAT SEPARATED INSURANCE FROM WALL STREET BANKS, AND WE HAVE SEEN THE DISASTROUS RESULTS OF THAT POLICY. MADAM PRESIDENT, I VOTED AGAINST TEARING DOWN THE FIREWALL THAT SEPARATED MAIN STREET FROM THE WALL STREET BANKS. I DID IT FOR THE SAME REASON I VOTED AGAINST THE WALL STREET BAILOUT, BECAUSE I LISTENED TO THE PEOPLE OF WISCONSIN, WHO DID NOT WANT TO GIVE WALL STREET MORE AND MORE POWER. WALL STREET WAS GAMBLING WITH THE MONEY OF HARD-WORKING FAMILIES. TOO MANY MEMBERS OF CONGRESS VOTED TO LET THEM DO IT. I DIDN'T SUPPORT IT BEFORE AND I WON'T SUPPORT IT NOW. WE'VE GOT TO GET THIS LEGISLATION RIGHT, PROTECT THE PEOPLE OF WISCONSIN AND EVERY STATE, PROTECT THEM FROM SOMETHING LIKE THIS EVER HAPPENING AGAIN. SO I WAS PLEASED TO JOIN THE SENATOR FROM WASHINGTON, SENATOR CANTWELL, AND THE SENATOR FROM ARIZONA, MR. McCAIN, INTRODUCING LEGISLATION TO CORRECT THAT ENORMOUS MISTAKE THAT CONGRESS MADE IN PASSING GRAMM-LEACH-BLILEY. AND I LOOK FORWARD TO SUPPORTING AN AMENDMENT TO THIS MEASURE BASED ON THE CANTWELL-McCAIN-FEINGOLD BILL. THE MEASURE BEFORE US SEEKS TO MAKE UP FOR THE LACK OF PROTECTIVE FIREWALL BETWEEN THE SPECULATIVE INVESTMENTS, BETS MADE BY WALL STREET FIRMS AND THE SAFETY NET BACKED ACTIVITIES OF COMMERCIAL BANKING BY IMPOSING GREATER REGULATORY OVERSIGHT. WE HAVE SEEN JUST HOW CREATIVE FINANCIAL FIRMS CAN BE AT ELUDING REGULATION WHEN SO MUCH PROFIT IS AT STAKE. NO AMOUNT OF REGULATORY OVERSIGHT CAN TAKE THE PLACE, MADAM PRESIDENT, OF THE LEGAL FIREWALL ESTABLISHED BY GLASS-STEAGALL. SO WHEN IT IS OFFERED, I URGE MY COLLEAGUES TO SUPPORT SENATOR CANTWELL'S AMENDMENT TO RESTORE THAT SENSIBLE PROTECTION. REBUILDING THE GLASS-STEAGALL FIREWALL IS ESSENTIAL IN PREVENTING ANOTHER FINANCIAL CRISIS. BUT EVEN IF WE RESTORE GLASS-STEAGALL, THERE ARE ADDITIONAL STEPS WE SHOULD TAKE TO ADDRESS TOO-BIG-TO-FAIL IN THIS BILL. I'M PLEASED TO BE JOINING THE SENATOR FROM NORTH DAKOTA IN OFFERING HIS AMENDMENT TO ADDRESS THE PROBLEM DIRECTLY BY REQUIRING THAT NO FINANCIAL ENTITY BE PERMITTED TO BECOME SO LARGE THAT ITS FAILURE THREATENS THE FINANCIAL STABILITY OF THE UNITED STATES. AND I'M ALSO LOOKING FORWARD TO SUPPORTING AN AMENDMENT THAT WILL BE OFFERED BY THE SENATOR FROM OHIO, MR. BROWN, AND THE SENATOR FROM DELAWARE, MR. KAUFMAN, WHO'S IN THE CHAMBER, THAT PROPOSES BRIGHT-LINE LIMITS ON THE SIZE OF FINANCIAL INSTITUTIONS. THE DISPOSITION OF THESE -- OF THOSE THREE PROPOSALS THAT I HAVE JUST REVIEWED WILL GO A LONG WAY IN DETERMINING MY VOTE FOR THE FINAL VERSION OF THIS MEASURE. I VERY MUCH WANT TO CRAFT IN THIS BODY A BILL THAT CAN PREVENT THE KIND OF CRISIS WE EXPERIENCED IN THE FUTURE, BUT THE BILL BEFORE US NEEDS SOME WORK BEFORE WE CAN LEGITIMATELY MAKE THAT CLAIM. I THANK THE PRESIDENT, AND I YIELD THE FLOOR.

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  • 11:41:20 AM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM RHODE ISLAND.

  • 11:41:22 AM

    MR. REED

    THE REPUBLICAN SIDE HAS SUBMITTED A CONSUMER PROTECTION AMENDMENT THAT CAN…

    THE REPUBLICAN SIDE HAS SUBMITTED A CONSUMER PROTECTION AMENDMENT THAT CAN BE BRIEFLY SUMMARIZED: BUYER BEWARE. BECAUSE THEY WON'T HELP YOU. THIS FLOWS FROM A VERY SIMPLE PREMISE THAT THEY'VE ANNOUNCED FROM THE VERY BEGINNING OF THESE DISCUSSIONS AND DELIBERATIONS. THEY DO NOT WANT A INDEPENDENT CONSUMER PROTECTION AGENCY THAT HAS THE AUTHORITY TO MAKE RULES AND ENFORCE RULES THAT PROTECT CONSUMERS. SO WHAT THEY'VE SUGGESTED IS A CLASSIC BAIT-AND-SWITCH. WE'LL CREATE A AGENCY, QUOTE, UNQUOTE, WITHIN THE FDIC AND THEN WE WILL DENY THEM THE POWER TO REGULATE MOST OF THE FINANCIAL SECTORS AND INSTITUTIONS THAT AFFECTED THE DAILY LIVES OF AMERICANS: PAYDAY LENDERS, CAR LOANS, ALL THOSE THINGS. THEY'RE JUST OFF THE TABLE. SO IT AMOUNTS TO A GESTURE, NOT GOOD LEGISLATIVE POLICY. WE ARE WORKING -- WE HAVE BEEN WORKING, AND SENATOR DODD HAS TAKEN THE LEAD, TO ENSURE THAT THERE IS REAL CONSUMER PROTECTION BUILT INTO THIS WALL STREET REFORM LEGISLATION. WE BELIEVE THAT CONSUMERS NEED INFORMATION TO MAKE GOOD CHOICES, AND THE THRUST OF OUR EFFORTS IS TO ENSURE THAT THE AGENCY IS ABLE TO PROVIDE THAT INFORMATION THROUGH SIMPLIFIED FORMS, THROUGH SIMPLE PRODUCTS, THROUGH THOSE MECHANISMS THATTAL MEN AND WOMEN WHO ARE ENGAGED IN RAISING CHILDREN, KEEPING JOBS, COACHING LITTLE LEAGUE CAN UNDERSTAND WHAT THEY'RE PUTTING THEIR RESOURCES INTO. THAT IS NOT WHAT THE REPUBLICAN AMENDMENT IS PROPOSING TO DO. THEY ARE CREATING A SIX-PERSON COUNCIL WITHIN THE FDIC WITH NO REAL INDEPENDENCE AND EVEN LESS AUTHORITY, AND ONE COULD QUESTION WHY THE FDIC IS THE LOGICAL PLACE TO PUT IN A COUNCIL LIKE THIS. THEY WOULD CREATE AN OVERSIGHT AGENCY BUT EXEMPT, AS I SAID, VIRTUALLY THE ENTIRE FINANCIAL SECTOR OR SECTORS FROM OVERSIGHT OVERSIGHT. IT'S NOT LIKE A WATCHDOG, IT'S LIKE A LAP DOG. IT'S BUREAUCRACY AND NO BITE. THE DODD BILL, IN CONTRAST, CONTAINS A VERY ROBUST CONSUMER PROTECTION PROVISION. IT CREATES A CONSUMER FINANCIAL PROTECTION BUREAU WITH RESOURCES RESOURCES -- I WANT TO EMPHASIZE RESOURCES -- AND AUTHORITY TO PROHIBIT ABUSIVE PRACTICES AND DECEPTIVE FINANCIAL PRODUCTS RANGING FROM CREDIT CARD COMPANIES TO MORTGAGE BROKERS TO BANKS AND TO OTHERS. FOR EXAMPLE, IT WOULD HOLD THE CREDIT CARD COMPANIES ACCOUNTABLE AND ELIMINATE UNFAIR LENDING PRACTICES, LIKE PENALTY FEES FOR PAYING OFF YOUR DEBT ON TIME. ONE OF THE BIG EFFORTS THAT WE ARE UNDERTAKING IS INCREASED TRANSPARENCY FOR WALL STREET, AND THIS CONSUMER PROTECTION AGENCY WILL PROVIDE THAT TRANSPARENCY TO CONSUMERS. BASIC ECONOMICS, ECON 101, COMPETITIVE MARKETPLACE. ONE OF THE PRESUMPTIONS, PERFECT INFORMATION. WE'VE SEEN, FRANKLY, THAT INDIVIDUALS ON WALL STREET HAVE MADE BILLIONS OF DOLLARS OPERATING ON IMPERFECT INFORMATION. IN FACT, ONE COULD EVEN SUGGEST DELIBERATELY MANIPULATING PRODUCTS SO THAT THEY HAVE THE INFORMATION AND THE CONSUMER DOESN'T. WE WERE ALL, I THINK, TAKEN ABACK WHEN WE WERE LISTENING TO THE HEARING CONDUCTED BY SENATOR LEVIN WHICH TALKED ABOUT GOLDMAN SACHS AND THEIR TRADER DESCRIBED THE SYSTEM IN RATHER EVOCATIVE TERMS. IN HIS WORDS, MORE AND MORE LEVERAGE IN THE SYSTEM. THE ENTIRE SYSTEM IS ABOUT TO CRUMBLE ANY MOMENT. THE ONLY POTENTIAL SURVIVOR, THE FABULOUS FAV. STANDING IN THE MIDDLE OF ALL THESE COMPLEX, HIGHLY EXOTIC LEVERAGED TRADES WITHOUT ALL THE IMPLICATIONS OF THOSE MONSTROSITIES. WELL, THAT SEEMS TO ME VERY CHILLING, THE FACT THAT SOMEONE WOULD ADMIT THAT THEY DIDN'T EVEN KNOW THE PRODUCTS THEY WERE SELLING TO CONSUMERS WHO ASSUMED NOT ONLY THAT THEY KNEW BUT ALSO THAT THEY WOULD NOT BE DELIBERATELY MISLEADING. SO THAT'S AN EXAMPLE, BUT THE EXAMPLE DOESN'T STOP ON WALL STREET. IT EXTENDS OUT TO MAIN STREET, TO PEOPLE WITH CREDIT ARRANGEMENTS, PAYDAY LENDERS, ORGANIZATIONS CHARGING HUGE INTEREST CHARGES, AND IT'S DESIGNED, REALLY, TO EXPLOIT CONSUMERS. THE REPUBLICAN PROPOSAL DOES LITTLE, IF ANYTHING, TO PREVENT THAT. SO I WOULD HOPE THAT ON A BIPARTISAN BASIS, AS SENATOR SCHUMER SUGGESTED, THAT WE REJECT THIS AMENDMENT. IT IS A -- AS THEY SAY IN SOME PLACES, ALL HAT AND NO CATTLE. WE HAVE AN AGENCY, BUT WE HAVE NO ENFORCEMENT OF POWERS. WE HAVE AN AGENCY BUT THEY CAN'T ENFORCE THEIR -- THEIR RULES AND REGULATIONS ON CERTAIN SECTORS, I.E., MOST OF THE SECTORS. SO IF WE WANT TO PROTECT CONSUMERS, WE WANT ALSO TO HAVE EFFICIENT MARKETS, BECAUSE ONE OF THE, I THINK, INACCURATE PREMISES THAT SOME PEOPLE ARE SUGGESTING IS THAT CONSUMER PROTECTION SOMEHOW IS BAD FOR BUSINESS. WELL, I WOULD ARGUE VERY STRENUOUSLY THAT CONSUMER PROTECTION IS VERY GOOD FOR BUSINESS. THAT IF YOU TAKE CARE OF THE CONSUMER, IF THEY FEEL AND YOU PROVIDE VALUE AND GOOD SERVICE, THAT USED TO BE THE AMERICAN SORT OF MAXIM. THAT USED TO BE THE AMERICAN BYWORD FOR BUSINESS. THE CONSUMER IS ALWAYS RIGHT. THE CONSUMER COMES FIRST. WELL, IN THE REPUBLICAN LEGISLATION, THE CONSUMER COMES NOT FIRST BUT LAST. THE CONSUMER SHOULD COME FIRST, I WOULD HOPE THIS AMENDMENT WOULD REJECT IT AND WILL SUPPORT NOT ONLY THE UNDERLYING DODD BILL, BUT I THINK IT CAN BE IMPROVED. I WANT TO COMMEND THE SENATOR FROM CONNECTICUT. HE HAS DONE A REMARKABLE JOB CRAFTING THE CONSUMER PROTECTION AGENCY, BUT I THINK HE CAN MAKE IMPROVEMENTS AND I HOPE HE CAN, BUT TO ACCEPT THIS AMENDMENT FOR THE REPUBLICANS WOULD BE TO TURN OUR BACK ON CONSUMERS AND ESSENTIALLY REJECT THE OLD AMERICAN ACTION I AM -- AXIOM, THE CONSUMER IS ALWAYS RIGHT, THE CONSUMER COMES FIRST, AND ESSENTIALLY LEAVE EVERYONE WHERE WE ARE TODAY, BUYER BEWARE WITH THE MONSTROSITIES IN THE MARKETPLACE. THANK YOU.

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  • 11:48:24 AM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM DELAWARE.

  • 11:48:26 AM

    MR. KAUFMAN

    WILL THE SENATOR YIELD?

  • 11:53:40 AM

    MR. BROWN

    THE SENATOR FROM OHIO.

  • 11:53:42 AM

    MR. KAUFMAN

    THE SENATOR FROM OHIO.

  • 11:53:44 AM

    MR. BROWN

    I THANK YOU FOR BRINGING OUT -- THERE IS SUCH BROAD AS WE'RE SEEING…

    I THANK YOU FOR BRINGING OUT -- THERE IS SUCH BROAD AS WE'RE SEEING SUPPORT BY ECONOMISTS AS CONSERVATIVE AS ALAN GREENSPAN, AS PROGRESSIVE AS BOB REICH AND OTHERS THAT SAY THAT TOO BIG TO FAIL MEANS SIMPLY TOO BIG. YOU SAID SOMETHING -- SO OUR AMENDMENT WHICH WILL ONLY AFFECT THE SIX LARGEST BANKS, ONLY AFFECT THEIR SIZE. IT WILL AFFECT SMALLER BANKS AND HELPING THEM BE MORE COMPETITIVE AS YOU SUGGESTED, BUT YOU HAD SAID SOMETHING ON THE FLOOR YESTERDAY, SENATOR KAUFMAN, THAT IN EFFECT THE SIZE OF THESE BANKS GIVES THEM A SUBSIDY, GIVES THEM 75 -- ROUGHLY THREE QUARTERS OF A PERCENT, 75 BASIS POINTS ADVANTAGE IN THE CAPITAL MARKETS. SO THIS -- THIS AMENDMENT WE HAVE WHICH IS GAINING INCREASING SUPPORT -- WE HAVE GOTTEN NOW, I BELIEVE, TEN OR 11 COSPONSORS TO IT. WE'RE WORKING WITH PEOPLE ON BOTH SIDES OF THE AISLE ON THIS AMENDMENT. SAYING TOO BIG TO FAIL IS TOO BIG. TALK TO US FOR A MOMENT OF HOW THESE BANKS GET THEIR SUBSIDIES. IN A SENSE, WE'RE GIVING WELFARE TO THE WALL STREET BANKS. BECAUSE OF THEIR SIZE, THEY ARE ACTUALLY GETTING ADVANTAGE ON THE CAPITAL MARKETS BECAUSE INVESTORS WITH THEIR DOLLARS UNDERSTAND THAT THESE BANKS ARE NEVER GOING TO BE ABLE TO FAIL UNLESS WE REALLY KEEP THEM FROM GETTING TOO BIG. SO EXPLAIN THAT SORT OF WALL STREET WELFARE, THAT WE SEE THESE FIVE LITERALLY TRILLION-PLUS DOLLAR BANKS THAT THEY EXTRACT FROM THE SYSTEM.

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  • 11:55:14 AM

    MR. KAUFMAN

    SURE. I DON'T COME AT THIS, YOU KNOW, FROM ANY OTHER AREA EXCEPT HOW…

    SURE. I DON'T COME AT THIS, YOU KNOW, FROM ANY OTHER AREA EXCEPT HOW IMPORTANT OUR CAPITAL MARKETS ARE. I'M A MARKET GUY. I THINK THAT THE TWO GREATEST THINGS WE HAVE IN THIS COUNTRY ARE DEMOCRACY AND OUR CAPITAL MARKETS AND OUR -- THE CREDIBILITY OF OUR CAPITAL MARKETS. SO WHEN I WANT TO FIND OUT WHAT'S GOING ON IN A FINANCIAL AREA, I DON'T GO OUT AND DO A SURVEY OF 27 PEOPLE. I GO AND SAY WHAT IS THE MARKET TELLING US? WHAT IS THE MARKET TELLING US ABOUT WHAT'S GOING ON? AND WHAT THE MARKET SAYS, IS THAT IF YOU'RE A BIG BANK LIKE ONE OF THESE TOP BANKS, THIS STUDY THAT I TALKED ABOUT YESTERDAY, IF YOU'RE ONE OF THESE BIG BANKS, YOU GET A 70-80 BASIS POINT ADVANTAGE WHEN YOU COME OUT TO BORROW MONEY. YOU PAY LESS THAN OTHER PEOPLE PAY.

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  • 11:56:04 AM

    MR. BROWN

    GENTLEMAN YIELD? THAT MEANS IF ONE OF THE REALLY HUGE WALL STREET BANKS,…

    GENTLEMAN YIELD? THAT MEANS IF ONE OF THE REALLY HUGE WALL STREET BANKS, ONE OF THESE SIX BANKS IS GETTING A .75%, ROUGHLY, INTEREST RATE DIFFERENTIAL, BONUS, PERHAPS, THAT MEANS BANKS IN DELAWARE AND OHIO THAT AREN'T SO BIG ARE AT A COMPETITIVE DISADVANTAGE, WHICH I ASSUME ALSO MEANS THAT THOSE BIG BANKS HAVE OPPORTUNITIES TO GET LARGER. IF THEY ARE -- IF THE FIELD IS NOT LEVEL, IF THE PLAYING FIELD IS NOT LEVEL, THOSE TO WHOM IT TILTS, TOWARDS WHOM IT TILTS, GETS OTHER ADVANTAGES AND GROW LARGER AND LARGER AND LARGER, MAKING THE POINT FOR OUR AMENDMENT THAT MUCH STRONGER.

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  • 11:56:43 AM

    MR. KAUFMAN

    ABSOLUTELY. AND OBVIOUSLY, THAT'S THE KEY POINT. AND I'M REALLY SURPRISED…

    ABSOLUTELY. AND OBVIOUSLY, THAT'S THE KEY POINT. AND I'M REALLY SURPRISED THAT MORE OF OUR SMALLER BANKS AREN'T COMING FORWARD AND SAYING THIS ISN'T FAIR. THEY -- YOU KNOW, THE MARKET SAYS IT'S NOT FAIR. AND THE SECOND POINT IS THE TOO BIG TO FAIL. NOW, YOU CAN ARGUE WE'RE NOT TOO BIG TO FAIL, BUT THE MARKET THINKS YOU'RE TOO BIG TO FAIL AND I LISTEN TO THE MARKET. THAT'S ONE OF THE REALLY IMPORTANT CONSIDERATIONS. UNLESS PEOPLE MISUNDERSTAND -- I HEAR PEOPLE SAY OH, YOU WANT TO DESTROY THE BANKS AND THE REST OF IT. UNDER OUR AMENDMENT, CITIGROUP WOULD BE REDUCED TO THE SIZE IT WAS IN 2002. NOW, 2002. WERE THEY ABLE TO COMPETE OVERSEAS? WERE THEY ABLE TO DO ALL THE THINGS THEY HAD TO DO IN 2002? GOLDMAN SACHS WHICH IS NOW ABOUT $850 BILLION UNDER THE BROWN-KAUFMAN AMENDMENT, WOULD BE DOWN TO $350 BILLION. YOU MIGHT SAY WHOA, THAT'S A 50% INCREASE. THAT'S GOING TO REALLY HURT THEIR OPPORTUNITY. IN 2002, THEY HAD $100 BILLION IN ASSETS. SO ALL WE'RE SHRINKING GOLDMAN SACHS DOWN TO IS THREE AND A HALF TO FOUR TIMES WHAT THEY WERE IN 2002. SO THIS IS NOT SOME DRACONIAN EFFORT IN ORDER TO DO IT. AND THE SECOND POINT, THE POINT THAT WE REALLY -- WE HAVE BEEN FOCUSING ON IS THE FACT THAT WE ALSO WENT AT RISK. THIS IS NOT ABOUT SIZE. I COMMEND EVERYONE TO PAGE "THE WASHINGTON POST" TODAY -- I'M SURE IT'S PRINTED OTHER PLACES, BUT THAT'S WHERE I READ IT -- WHERE JIMMY KANE TESTIFIED TO THE FINANCIAL CRISIS INQUIRY COMMISSION, THAT IN HIS OPINION AS C.E.O. OF BEAR STEARNS, THEY FAILED BECAUSE IT WAS LEVERAGED 40 TIMES OVER ITS CAPITAL BASE. 4-0, 40 TIMES OVER ITS CAPITAL BASE. BROWN-KAUFMAN WOULD CAP LEVERAGE AT 16 TIMES. SO WHAT HE IS BASICALLY SAYING IS IF BROWN-KAUFMAN HAD BEEN IN EFFECT WHEN THIS WENT ON, BEAR STEARNS WOULD NOT HAVE FELL. NOW, I'M SURE THERE ARE A LOT OF PEOPLE THAT HAVE A LOT OF DIFFERENT OPINIONS, BUT THAT'S WHAT HE SAYS. SO THIS IS NOT JUST ABOUT SIZE. THIS IS ABOUT RISK. WHAT WE'RE TRYING TO DO IS TARGET RISK. AND, YOU KNOW, THESE BANKS DON'T FAIL -- YOU KNOW, BANKS ARE DOING GREAT NOW, PROFITS ARE OUT THE ROOF, BUT YOU DON'T FAIL ON A NICE, SUNNY DAY. YOU CAN'T SIT HERE TODAY AND SAY NO PROBLEM. THAT'S WHY THE REGULATORS NEVER DO ANYTHING BECAUSE BASICALLY THE BANKS ARE DOING WELL. TIME AND AGAIN WE HAD THE HEARINGS BEFORE THE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, WE HEARD FROM WASHINGTON MUTUAL, WE HEARD FROM GOLDMAN SACHS. LOOK, THEY WERE DOING SO WELL, HOW CAN YOU GO IN AND REGULATE THEM AND MAKE THEM CHANGE WHEN THEY WERE DOING SO WELL? THE FACT THEY ARE DOING SO WELL BY CHURNING OUT ABSOLUTELY MORTGAGES THAT WERE DOOMED TO FAIL IS AN INDICATION THEY SHOULD HAVE MOVED IN, BUT THE REGULATORS DIDN'T. SO I JUST WANT TO TELL YOU -- AND I'M NOT HOLDING THIS OUT, BUT IF YOU WANT TO SEE WHAT CAN HAPPEN UNDER THE WORST CASE, TAKE A LOOK AT EUROPE TODAY. LOOK AT THE MESS UNFOLDING IN EUROPE. GREECE FALTERS AND IT AFFECTS OTHER COUNTRIES LIKE PORTUGAL, SPAIN AND IRELAND. EUROPE AND OTHER BANKS HAVE MASSIVE EXPOSURE IN THESE COUNTRIES. GERMAN AND FRENCH BANKS CARRY A COMBINED $119 BILLION IN EXPOSURE TO GREEK BORROWERS AND MORE THAN $900 BILLION TO GREECE AND OTHER VULNERABLE COUNTRIES INCLUDING IRELAND, PORTUGAL AND SPAIN. WELL, PEOPLE SAY TO ME HOW CAN WE COMPETE IF THESE BIG BANKS -- REMEMBER, WE'RE ONLY REDUCING CITIBANK DOWN TO THE SIZE OF 2002, BUT HOW DO WE COMPETE WITH EUROPE? WHY DO WE WANT TO COMPETE WITH EUROPE? WHY DO WE WANT TO GO IN WITH THEIR MEGABANKS? WHY DO WE WANT TO DEAL WITH THE PROBLEMS THAT THEY HAVE? THE ROYAL BANK OF SCOTLAND HAD A BALANCE SHEET BASICALLY 1 1/2 TIMES OF THE SIZE OF THE U.K. ECONOMY. SEE THESE NUMBERS UP HERE. 63% RIGHT NOW ARE -- OUR SIX LARGEST BANKS MAKE UP 60% OF OUR ASSETS OF GROSS DOMESTIC PRODUCT. THE ROYAL BANK OF SCOTLAND WAS 1 1/2 TIMES THE GROSS DOMESTIC PRODUCT OF EUROPE WHEN IT FAILED. PEOPLE SAY TO ME, OH, LOOK, THE BIG BANKS DIDN'T FAIL -- IT WASN'T THE BIG BANKS THAT FAILED. IT WAS THE SMALL BANKS THAT FAILED. I KEEP HEARING THAT J.P. MORGAN AND BANK AMERICA DIDN'T FAIL, IT WAS WASHINGTON MUTUAL. THEY SAY THERE'S NO CORRELATION. WELL, JUST LOOK AT SPAIN, WHERE YOU HAVE A BANK THAT WAS 150 TIMES THE ASSETS OF THE -- OF THE COUNTRY AND THEY FAILED. AND MEGABANKS, LIKE CITIGROUP, ONLY SURVIVED THROUGH MASSIVE CAPITAL INFUSIONS, REGULATORY FORBEARANCE AND FEDERAL MONETARY EASING. EVEN J.P. MORGAN HAS BENEFITED FROM NOT HAVING TO WRITE DOWN ITS SECOND LEIN MORTGAGES AND COMMERCIAL REAL ESTATE. THE NEXT THING THEY SAY IS, WHEN WASHINGTON MUTUAL FAILED, THERE WAS A BIGGER, HOW ABOUT THAT, THAT WAS A SMALLER BANK? THAT WASN'T A BIG BANK? THE REASON WHY THAT WENT DOWN IS BECAUSE WE KNEW AT THE TIME WHEN IT FAILED THAT J.P. MORGAN CHASE WOULD COME IN AND GRAB IT. I JUST ASK THE QUESTION: WHO'S GOING TO BAIL OUT, IF SOMETHING GOES WRONG WITH J.P. MORGAN CHASE OR BANK OF AMERICA OR ANY OF THESE SIX LARGE BANKS? REMEMBER, GOING BACK TO CITIGROUP, CITIGROUP ESSENTIALLY FAILED AND HAD TO BE BAILED OUT THREE TIMES IN THE LAST 30 YEARS YEARS: 1982 BECAUSE OF THE EMERGING MARKET DECK,1989-1991, BECAUSE OF COMMERCIAL REAL ESTATE, AND 2008-2009 BECAUSE RESIDENTIAL REAL ESTATE.

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  • 12:02:31 PM

    MR. BROWN

    THE GENTLEMAN YIELD AGAIN? I APPRECIATE THAT ANALYSIS IN EUROPE. I HEAR,…

    THE GENTLEMAN YIELD AGAIN? I APPRECIATE THAT ANALYSIS IN EUROPE. I HEAR, AS WE'VE TALKED ABOUT THE BROWN-KAUFMAN AMENDMENT, AND IT'S GOTTEN INCREASING ATTENTION BECAUSE INCREASING NUMBER OF PEOPLE HAVE SAID TOO BIG TO FAIL IS TOO BIG AND THAT IF WE ALLOW THESE SIX BANKS, THAT CHART YOU SHOWED ORIGINALLY, THAT -- THAT SIX BANKS, THE LARGEST SIX BANKS IN THE UNITED STATES AND 15 YEARS AGO WERE 17% OF OUR G.D.P. AND TODAY THEY'RE 63% AND -- AND GROWING, AS YOU MENTIONED. AND IF YOU LOOK AT THE RATE OF GROWTH AS THEY'VE -- THE -- I MEAN, IT'S -- THEY DIDN'T GROW A WHOLE LOT UNTIL THE LAST 10 YEARS AND THEN YOU LOOK WHAT HAPPENS, AND THEY'RE GOING TO CONTINUE TO GROW SINCE GLASS-STEAGALL REPEALED. BUT I HEAR OPPONENTS TO OUR AMENDMENT, THE ARGUMENT THEY USE MOST FREQUENTLY IS, WELL, WE DON'T HAVE THE LARGEST BANKS IN THE WORLD ANYMORE, THERE ARE LARGER BANKS OTHER PLACES. AND HOW ARE OUR BANKS GOING TO COMPETE WITH THESE HUGE BANKS? AND I -- I'M INTRIGUED BY THAT BECAUSE OUR BANKS ARE TRILLION-DOLLAR BANKS. IF -- AND I KNOW THERE ARE STUDIES THAT BANKS WITH ASSETS OF $300 BILLION AND $400 BILLION AND $500 BILLION HAVE ALL THE ECONOMIES OF SCALE. MINE, YOU CAN'T -- ECONOMIES OF SCALE DON'T WORK FOREVER, INTO INFINITE, AND SO A BANK THAT'S $200 BILLION OR $300 BILLION OR $400 BILLION HAS ALL THE ECONOMIES OF SCALES, A TRILLION-DOLLAR BANK, SO THIS POINT THEY MAKE ABOUT EUROPEAN, WE CAN'T COMPETE INTERNATIONAL, BUT, I MEAN, IT WAS CLEAR FROM WHAT YOU SAID. ALL OF OUR BANKS WHEN THEY WERE SMALLER, AND SMALLER THAN THE LARGEST BANKS IN THE WORLD, COULD COMPETE INTERNATIONALLY 10 YEARS AGO, THERE'S SIMPLY NO REASON THEY CAN'T COMPETE LIKE THAT TODAY. AND I'VE FOUND THAT IT'S THE, YOU KNOW, THE HUGE, LUMBERING BUREAUCRACIES, WHETHER THEY'RE A BANK OR WHETHER THEY'RE THE CENTER FOR MEDICARE AND MEDICAID SERVICES, THEY AREN'T AND FLEXIBLE AND NYMPH EXPWEL CAN'T KEEP UP WITH THE -- NIMBLE AND CAN'T KEEP UP WITH THE MARKET NEARLY IF THEY'RE THAT BAD. SO THE BROWN-KAUFMAN AMENDMENT, AGAIN, DOESN'T APPLY TO MANY INSTITUTIONS. NO MORE THAN FIVE OR SIX WILL BE EVEN UNWOUND A LITTLE BIT. THEY'RE NOT GOING TO -- WE'RE NOT GOING TO SPLIT THEM ALL UP SO THAT THEY'RE SMALL, LITTLE COMMUNITY BANKS. BUT THEY'RE STILL CLEARLY GOING TO BE ABLE TO COMPETE. THERE'S JUST NO QUESTION ABOUT THAT, UNDER THE BROWN-KAUFMAN AMENDMENT. WE GIVE -- WE GIVE THREE YEARS TO THESE BANKS TO SELL OFF SOME OF THEY'RE ASSETS OR TO SPIN OFF A LINE OF BUSINESS OR TO -- TO SELL THEIR REGIONAL OPERATIONS THEY MAY HAVE IN ONE AREA OF THE COUNTRY TO COMPLY WITH THIS AMENDMENT, BUT IT -- IT'S CLEAR THAT AS INCREASING NUMBERS OF PEOPLE SAY, TOO BIG TO FAIL IS TOO BIG, THAT IF WE ALLOW THESE BANKS TO KEEP GETTING BIGGER AND BIGGER AND BIGGER, AND WE SEE THIS CHART WHERE THE SIX LARGEST BANKS IN TOTAL ASSETS END UP ABOUT 70%, 80%, 90% OF G.D.P., IT'S HARD FORIT'S HARD FOR ME TO THINK THAT IF ONE OF THEM STUMBLES, THAT WE'RE GOING TO LED THEM FAIL, THAT THE GOVERNMENT IS GOING TO LET THEM FAIL, BECAUSE OF THE HUGE ECONOMIC REPERCUSSIONS THAT THESE LARGE INSTITUTIONS HAVE.

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  • 12:05:36 PM

    MR. CAWFER MAN

    AGREE THAT THE PRESENT BILL IS A GOOD BILL AND IT HAS A GOOD RESOLUTION…

    AGREE THAT THE PRESENT BILL IS A GOOD BILL AND IT HAS A GOOD RESOLUTION AUTHORITY. IT'S BEEN WORKED ON FOR YEARS. MY BASIC CONCERN IS WE NEED A LITTLE PREVENTION IN THE MIX ON THIS.

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  • 12:05:46 PM

    MR. KAUFMAN

    THE SENATOR FROM TENNESSEE.

  • 12:08:51 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM TENNESSEE.

  • 12:08:53 PM

    MR. CORKER

    MAY WE HAVE ORDER IN THE CHAMBERS, PLEASE. THE SENATOR FROM TENNESSEE.

  • 12:14:00 PM

    MR. CORKER

    THE CHAIRMAN OF THE BANKING COMMITTEE IS CREATING DISRUPTIONS. THANK YOU.…

    THE CHAIRMAN OF THE BANKING COMMITTEE IS CREATING DISRUPTIONS. THANK YOU. THANK YOU, MADAM PRESIDENT, I APPRECIATE THAT. [LAUGHTER] I ACTUALLY WISH I COULD HEAR WHAT THEY WERE SAYING. [LAUGHTER] CAN SOMEBODY IN THIS BODY REMIND ME AS TO WHERE I WAS? OKAY. I THINK THAT STATE BANKS ACROSS THE COUNTRY HAVE ENJOYED -- AGAIN, THESE ARE THE SMALLER INSTITUTIONS -- THEY HAVE ENJOYED THE FACT THAT THERE IS SOMETHING CALLED FEDERAL PREEMPTION. BECAUSE WHAT THAT DOES -- WHAT THAT HAS DONE IS DISCOURAGED HYPERACTIVITY ON BEHALF OF STATE LEGISLATORS TO CREATE LAWS THAT MIGHT BE POPULIST IN NATURE, THAT MIGHT BE DONE TO, IN ESSENCE, UTE OURS FINANCIAL USE OR FINANCIAL SYSTEM FOR OTHER ENDS. ONE OF THE THINGS THAT I THINK IS MOST DISRUPTIVE ABOUT THIS LEGISLATION IS THAT IF YOU CAN IMAGINE THIS -- I THINK ALL OF US REALIZE THAT WHAT LED TO THIS LAST CRISIS WAS THE FACT THAT WE HAD VERY POOR UNDERWRITING ON LOANS. I MEAN, THAT WAS THE ESSENCE OF THIS LAST CRISIS. IT GOT SPREAD AROUND THE WORLD, THE FACT THAT WE HAD INCREDIBLY POOR UNDERWRITING. I HOPE TO FIX THAT, BY THE WAY, WITH AN AMENDMENT IN A FEW DAYS. I HOPE IT COMES UP AND HOPE IT PASSES. BUT WHAT THE DODD BILL DOES IS GIVE TO A CONSUMER PROTECTION AGENCY LOAN UNDERWRITING, LOAN UNDERWRITING STANDARDS. NOW, IF YOU CAN IMAGINE THAT, I'D LIKE FOR PEOPLE IN THIS BODY TO THINK ABOUT THAT, BUT A CONSUMER PROTECTION AGENCY BEING INVOLVED IN SETTING UNDERWRITING STANDARDS FOR LOANS HAS TO UNDERMINE THE SAFETY AND SOUNDNESS OF OUR FINANCIAL INSTITUTIONS. TO ME -- TO ME, THAT IS A HUGE PROBLEM. SO MADAM PRESIDENT, WHAT I'D LIKE TO SAY IS LOOK, ALL OF US WOULD LIKE TO SEE CONSUMER PROTECTION TAKE PLACE. ALL OF US WOULD LIKE TO SEE IT, I HOPE, TAKE PLACE, THOUGH, IN A WAY THAT IS BALANCED SO THAT THE CONSUMER PROTECTION LAWS THAT ARE PUT IN PLACE ARE PUT IN PLACE IN A WAY THAT IS BALANCED AGAINST ENSURING THAT OUR FINANCIAL INSTITUTIONS ACROSS THIS COUNTRY ARE SAFE AND SOUND, THAT PEOPLE KNOW THEY CAN GO TO THOSE INSTITUTIONS AND ARE GOING TO OPERATE. I BELIEVE THAT THE DODD BILL AS IT RELATES TO CONSUMER PROTECTION IS A VAST OVERREACH. I KNOW THAT PEOPLE ON THE OTHER SIDE OF THE AISLE HAVE COME UP TO ME AND SAID LOOK, THIS IS PROBLEMATIC, AND IF YOU GUYS CAN HELP US FIGURE OUT A WAY TO PEEL THIS BACK, WE WOULD LIKE TO BE ABLE TO DO THAT. WE'RE GOING TO HAVE A CHAN LATER TODAY TO VOTE ON A CONSUMER PROTECTION BILL -- OR AMENDMENT THAT HAS CERTAINLY BROUGHT THIS MORE IN BALANCE. THERE MAY BE OTHER WAYS OF GETTING AT IT. I WOULD URGE THE CHAIRMAN TO CONSIDER LOOKING AT WAYS TO PEEL THIS BACK BECAUSE I DO BELIEVE THAT -- THAT AGAIN WE'RE GOING TO WAKE UP IN THIS COUNTRY -- IF THE DODD BILL PASSES IN ITS PRESENT FORM, WE'RE GOING TO WAKE UP IN 10 OR 15 YEARS AND REALIZE THAT CONSUMER PROTECTION HAS GOTTEN OUT OF HAND, THAT CONSUMER PROTECTION HAS BEEN USED IN MANY WAYS, USED TO CREATE SOCIAL JUSTICE, IF YOU WILL, ON OUR FINANCIAL SYSTEM. AND TO ME, MADAM PRESIDENT, THAT'S SOMETHING THAT'S VERY, VERY DANGEROUS. SO I THANK YOU FOR THE TIME. I HOPE WE HAVE THE -- LET ME JUST ADD ONE OTHER THING. THERE IS A NEW WORD IN THIS TITLE THAT'S UNDEFINED. IT'S A WORD THAT SAYS THEY WILL ALSO BE LOOKING TO SEE IF PRACTICES WERE ABUSIVE, BUT NOBODY KNOWS WHAT THAT MEANS. NOBODY KNOWS WHAT THAT MEANS. AND UNDER THIS BILL, BY THE WAY, IF SOME WERE TO COME IN AFTER THE FACT AND FIND THAT SOMETHING -- QUOTE -- WAS ABUSIVE, IT WOULD NEGATE THE FINANCIAL TRANSACK THAT WAS ENTERED INTO. SO YOU COULD HAVE A ZEALOUS CONSUMER ADVOCATE COME IN AND SAY I'M SORRY, THIS LOAN THAT WAS MADE BETWEEN TWO PARTIES WAS ABUSIVE AND IT WOULD NEGATE THAT TRANSACTION. SO MADAM PRESIDENT, THIS BILL IS A HUGE OVERREACH. IT OBVIOUSLY GOES RIGHT ALONG THE LINES OF THE WHITE HOUSE SAYING THAT YOU SHOULD -- YOU SHOULD NEVER LET A GOOD CRISIS GO TO WASTE. THIS BILL IS GOING TO BE AROUND FOR A LONG TIME IF IT PASSES, AND I HOPE THAT WHAT WE CAN DO OVER THE COURSE OF THE NEXT SEVERAL DAYS, DURING THIS TIME WHERE WE ARE HAVING ONE OF THE MOST CIVIL DEBATES I THINK WE HAVE HAD IN THE SENATE SINCE I HAVE BEEN HERE, A HIGH-LEVEL CIVIL DEBATE. I HOPE WE'LL BE ABLE TO PUT THIS BACK IN BALANCE. I KNOW THE MADAM PRESIDENT IS FROM A STATE WHERE PEOPLE CARE A GREAT DEAL ABOUT THEIR FINANCIAL INSTITUTIONS. I HOPE TO WORK WITH HER AND MY FRIEND FROM MINNESOTA AND OTHERS TO TRY TO ACHIEVE THAT BALANCE. MADAM PRESIDENT, I YIELD THE FLOOR.

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  • 12:18:41 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM CONNECTICUT.

  • 12:18:43 PM

    MR. DODD

    PRESIDENT, I HAVE EIGHT UNANIMOUS CONSENT REQUESTS FOR COMMITTEES TO MEET…

    PRESIDENT, I HAVE EIGHT UNANIMOUS CONSENT REQUESTS FOR COMMITTEES TO MEET DURING TODAY'S SESSION OF THE SENATE. THEY HAVE THE APPROVAL OF THE MAJORITY AND MINORITY LEADERS. I WOULD ASK UNANIMOUS CONSENT THAT THESE REQUESTS BE AGREED TO, THESE REQUESTS BE PRINTED IN THE RECORD.

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  • 12:19:00 PM

    MR. DODD

    PRESIDENT, LET ME SAY I WILL RESPOND A LITTLE LATER BECAUSE MY COLLEAGUE…

    PRESIDENT, LET ME SAY I WILL RESPOND A LITTLE LATER BECAUSE MY COLLEAGUE AND FRIEND FROM MINNESOTA IS ON THE FLOOR TO BE HEARD. JUST TO SAY ON THIS BILL, A LOT OF WORK WENT INTO THIS. I MUST SAY OVER THE LAST NUMBER OF YEARS, YOU DON'T HAVE TO WAIT TEN OR 15 YEARS TO FIND OUT WHAT CAN HAPPEN. WE WATCHED PAINFULLY WHAT CAN HAPPEN OVER THE LAST SEVEN YEARS WHEN THE VERY PEOPLE, THE PRUDENTIAL REGULATORS SHOULD HAVE BEEN STANDING UP AND SAYING NO-DOC LOANS ARE WRONG AND DANGEROUS. IN FACT, IT WAS CONSUMER GROUPS THAT WARNED ABOUT THE REAL ESTATE BUBBLE. WE WERE TOLD EVERYTHING WAS SAFE AND SOUND BECAUSE PEOPLE WERE MAKING MONEY, AND IT LOOKED LIKE IT MIGHT GO ON FOREVER. OF COURSE WE PAINFULLY LEARN NOW EVERYONE HAS 20-20 HINDSIGHT LOOKING BACK AS TO WHAT OCCURRED. HAD WE HAD IN PLACE SOMEONE SAYING NO-DOC LOANS, NO DOWN PAYMENTS, ADJUSTABLE RATE MORTGAGES AT FULLY INDEXED PRICES, WE'RE GOING TO FULLY CRIPPLE PEOPLE'S ABILITY TO MEET THOSE OBLIGATIONS, WE WOULDN'T BE IN THE SITUATION WE'RE IN TODAY. BUT SEVEN AGENCIES THAT HAVE JURISDICTION OVER CONSUMER PROTECTION, NONE OF WHICH ARE DOING THEIR JOB VERY WELL. I WILL ADDRESS MORE SPECIFICALLY THE ALTERNATIVE IDEA BEING SUGGESTED. LET ME ALSO SAY I HAVE NEVER CLAIMED OUR PROPOSAL IS PERFECT ON CONSUMER PROTECTION. I ACKNOWLEDGE THAT THE WORD ABUSIVE DOES NEED TO BE DEFINED. WE'RE TALKING EITHER ABOUT STRIKING THAT WORD OR DEFINING IT BETTER. DECEPTIVE AND FRAUDULENT I THINK COVERS THE GROUND PRETTY WELL BUT I THOUGHT ABUSIVE WAS A GOOD EXCLAMATION POINT BECAUSE THAT'S WHAT HAPPENED, IT WAS ABUSIVE, COMMON LANGUAGE. I WILL COME BACK LATER, BUT I WANTED JUST TO ACKNOWLEDGE THAT WE HAVE A NUMBER OF ORGANIZATIONS THAT HAVE -- HAVE ENDORSED THIS BILL OF OURS, STRONGLY SUPPORT OUR COMMITTEE BILL, FROM THE AMERICANS FOR FINANCE REFORM, CONSUMERS UNION, CENTER FOR RESPONSIBLE LENDING, CONSUMER FEDERATION OF AMERICA, THE PUBLIC CITIZEN, THE NATIONAL CONSUMER LAW CENTER, CONSUMER WATCHDOG, AND AARP. OF COURSE, WE'RE ALL FAMILIAR WITH THE GROUP REPRESENTING OLDER AMERICANS. IN FACT, I WOULD ASK UNANIMOUS CONSENT, MADAM PRESIDENT, THAT A LETTER FROM THE AARP OPPOSING THE SHELBY SUBSTITUTE ON CONSUMER PROTECTION BE INCLUDED IN THE RECORD AT THIS POINT. SO MAJOR GROUPS, ONES THAT ARE CONSUMER ORIENTED AS WELL AS THOSE THAT WATCH OUT FOR OLDER AMERICANS, MANY OF WHOM HAVE TO PAY MORTGAGES ON FIXED INCOMES I THINK ARE WORTHY OF NOTE. BUT AGAIN, I WANT TO THANK MY COLLEAGUES FOR THEIR COMMENTS AND THOUGHTS ON THIS AMENDMENT. I WILL ADDRESS MORE OF IT A LITTLE LATER, BUT LET ME YIELD THE FLOOR.

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  • 12:21:42 PM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM MINNESOTA.

  • 12:21:44 PM

    MR. FRANKEN

    MADAM PRESIDENT, I RISE TODAY TO SPEAK ABOUT THE NEED TO FURTHER ADDRESS…

    MADAM PRESIDENT, I RISE TODAY TO SPEAK ABOUT THE NEED TO FURTHER ADDRESS THE PROBLEMS IN THE CREDIT RATING AGENCY INDUSTRY. SENATOR DODD HAS PRESENTED US WITH A VERY GOOD BILL. IT TAKES MAJOR STRIDES IN ADDRESSING MANY OF THE PROBLEMS THAT BROUGHT OUR ECONOMY TO THE BRINK OF COLLAPSE. IT REANS IN TOO BIG TO FAIL. -- IT REINS IN TOO BIG TO FAIL. IT BRINGS DERIVATIVES OUST OF THE SHADOW. IT CREATES A NEW CONSUMER WATCHDOG THAT WILL PRIORITIZE CONSUMER PRESIDENT CLINTON OVER WALL STREET PROFITS. SENATOR DODD'S BILL INCLUDES SEVERAL PROVISIONS ON CREDIT RATING AGENCIES. IT HOLDS RATING AGENCIES ACCOUNTABLE IN COURT FOR BEING RECOGNIZE UNLESS THEIR DUTIES. IT REQUIRES INCREASED DISCLOSURE, CREATES NEW COMPLAINT SYSTEMS AND REQUIRES RATERS TO USE INFORMATION BEYOND WHAT IS PROVIDED BY ISSUERS. THESE ARE A FEW OF THE MANY PROVISIONS THAT THE DODD BILL INCLUDES TO BEGIN TO ADDRESS ISSUES WITH CREDIT RATING AGENCIES, AND THEY ARE ALL GOOD. BUT ONE THING IT DOESN'T DO IS GET AT THE UNDERLYING PROBLEM, THE CONFLICT OF INTEREST INHERENT IN ISSUER -- THE ISSUER PAYS MODEL WHERE THE ISSUER PAYS THE RATING AGENCY. TO ROOT OUT CONFLICTS OF INTEREST COMPLETELY, WE MUST CHANGE THE VESTED INTEREST OF EACH OF THE PLAYERS. THE CENTRAL CONFLICT OF INTEREST CAN BE BOILED DOWN TO THIS. THE ISSUER HAS AN INTEREST IN ATTAINING A HIGH RATING SO IT CAN SELL ITS PRODUCT. THE CREDIT RATING AGENCY HAS AN INTEREST IN GIVING OUT A HIGH RATING SO IT CAN SELL ITS SERVICE. TOM TOLLS OF "THE WASHINGTON POST" DEPICTS THE PROBLEM QUITE WELL IN THIS SATIRICAL CARTOON. HERE YOU SEE THE RATING AGENCIES. HE LABELS THEM THAT. THAT'S HOW YOU KNOW THEY ARE THEM. GIVING THREE TENS TO A FIGURE SKATER LABELED WALL STREET, AND HE IS KIND OF FAT THERE. YOU SEE HE SAYS I PAY THEIR SALARIES. THAT'S WHY HE IS GETTING THE THREE TENS, OR AAA. AND YET HE IS A FIGURE SKATER AND HE IS DUMPING TRASH, REALLY. THERE YOU SEE AN APPLE CORE, THERE IS A FISH HEAD, SKELETON, A BANANA. YOU DON'T WANT THOSE ON THE ICE. YOU JUST DON'T WANT THAT. THAT'S BAD. AND THEN A LITTLE FIGURE HERE, A LITTLE GARBAGE MAN HERE AT THE BOTTOM, IT SAYS SOMEBODY ELSE PAYS TO CLEAN THE ICE. THAT, OF COURSE, IS US, THE TAXPAYERS. I THINK AFTER SEEING THIS CARTOON, IF ANYONE DOESN'T SUPPORT MY AMENDMENT, THEY ARE -- I DON'T KNOW WHAT COULD DO THAT. ANYWAY, THIS ACTUALLY SHOWS -- MAKES THE POINT VERY WELL. THE ISSUER IS PAYING THE RATING AGENCY AND WEDNESDAY THE AAA. HOWEVER, THE CREDIT RATING AGENCY SHOULD HAVE AN INTEREST IN PROVIDING ACCURATE RATINGS, UNLIKE THE TRIPLE TEN HERE, SO THAT INVESTORS ARE PROVIDED WITH ACCURATE INFORMATION THAT THEY NEED TO MAKE INVESTMENT DECISIONS, BUT FOR THE REASONS I JUST DESCRIBED, THERE ARE VERY FEW INCENTIVES TO PROVIDE ACCURATE RATINGS. THE MARKET SIMPLY DOESN'T REWARD ACCURATE RATINGS. THE BEST WAY TO FIX THIS PROBLEM IS TO CHANGE THE WAY THE MARKET WORKS SO IT REWARDS ACCURATE RATINGS, AND ONCE WE START GETTING ACCURATE RATINGS, INVESTORS CAN MAKE BETTER DECISIONS ABOUT THE PRODUCTS THEY ARE SELECTING FOR INCLUSION INTO PENSION FUNDS. HAVING SAFE PRODUCTS IN PENSION FUNDS PROTECTS THE RETIREMENT SECURITY OF HARD-WORKING AMERICANS. NOW, LET ME GIVE YOU AN EXAMPLE OF THE PERVERSE INCENTIVES THAT HAVE BEEN DRIVING THE CREDIT RATING AGENCY THUS FAR. MY FRIEND AND COLLEAGUE, SENATOR LEVIN, RECENTLY HELD A HEARING IN THE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS. HIS INVESTIGATORS RELEASED MANY EMAILS FROM THE INDUSTRY THAT REFLECT THE CONFLICTS OF INTEREST THAT DROVE THE SYSTEM. HERE'S A GOOD EXAMPLE. NOW, HERE'S -- THIS IS A RATING AGENCY EMPLOYEE WRITING TO A -- HIS OWN RATING AGENCY PEOPLE ABOUT THE GROUP THAT'S -- A GROUP OF THEIRS. "WE ARE MEETING WITH YOUR GROUP THIS WEEK" -- THE GROUP THAT'S WITHIN THE AGENCY, WITHIN THE RATING AGENCY." WE'RE MEETING WITH YOUR GROUP THIS WEEK TO DISCUSS ADJUSTING CRITERIA FOR RATING C.D.O.'S OF REAL ESTATE ASSETS THIS WEEK BECAUSE OF THE ONGOING THREAT OF LOSING DEALS. LOSE THE C.D.O. AND LOSE THE BASE BUSINESS. SO HERE THE CREDIT RATING AGENCY IS PROPOSING TO CHANGE ITS RATING CRITERIA TO AVOID LOSING BUSINESS. THIS IS EXACTLY WHAT WAS AT THE ROOT OF ALL THESE AAA RATED SUBPRIME MORTGAGE-BACKED SECURITIES THAT WERE LEVERAGED AND HAD THE C.D.O.'S ON THEM, THE EXOTIC INSTRUMENTS THAT WERE RATED AAA AND THAT CREATED THIS ENTIRE MESS. NOW, IT'S CLEAR HERE THAT THE INCENTIVES HERE ARE TO KEEP CUSTOMERS COMING BACK TO MAKE SURE THAT ACCURATE RATINGS AREN'T DRIVING CUSTOMERS INTO THE ARMS OF OTHER RATING AGENCIES. DON'T WANT TO LET ACCURACY GET IN THE WAY OF MORE BUSINESS. WE NEED TO CHANGE THE INCENTIVES, AND I BELIEVE THAT MY AMENDMENT, NUMBERED 3808, WILL DO THAT. THE AMENDMENT TASKS A BOARD, A SELF-REGULATORY ORGANIZATION WITH SELECTING A POOL OF QUALIFIED CREDIT RATING AGENCIES. THE BOARD WOULD THEN CHOOSE A SYSTEM TO ASSIGN ONE AT A TIME ONE OF THESE QUALIFIED CREDIT RATING AGENCIES TO EACH REQUEST FOR AN INITIAL, AN INITIAL CREDIT RATING. ISSUERS COULD NO LONGER SHOP AROUND FOR THE BEST RATING. THEY COULD, HOWEVER, GET A SECOND, THIRD OR FOURTH RATING FROM ANY AGENCY THEY CHOOSE, BUT THE FIRST ASSIGNED RATING COULD PROVIDE A CHECK AGAINST THE NEXT AGENCY INFLATING ITS RATING. THE AMENDMENT WOULD REQUIRE THE BOARD TO CONSIDER A RATING AGENCY'S PAST PERFORMANCE AND COULD ADJUST THE NUMBER OF RATING ASSIGNMENTS BASED UPON DEMONSTRATED ACCURACY. IF A SMALL RATING AGENCY BEGAN PERFORMING EXTREMELY WELL, THE BOARD COULD START GIVING IT MORE ASSIGNMENTS, BREAKING THE OLIGARCHY OF THE BIG THREE RATERS WHICH SERVED US VERY POORLY. OR MAYBE THE BIG THREE WOULD GET THEIR ACT TOGETHER HONORING THIS NEW SYSTEM. THE POINT IS WHEN THE AGENCIES ARE FINALLY OPERATING IN A MARKET IN WHICH ACCURACY IS VALUED, THEY WILL COMPETE ON THE BASIS OF ACCURACY, AND WHEN ACCURACY IS DRIVING GROWTH, NOT PRE-EXISTING RELATIONSHIPS OR SWEETHEART DEALS, AND SMALLER AGENCIES WILL HAVE AN OPPORTUNITY TO COMPETE AND GROW, MAKING THE INDUSTRY MORE ROBUST. SO PROPERLY ADDRESSING CONFLICTS OF INTEREST IN THE CREDIT RATING AGENCY INDUSTRY NECESSITATES REALIGNING THE INTERESTS OF RATING AGENCIES WITH THE INTERESTS OF INVESTORS, OF INVESTORS. THE WAY TO DO THAT IS BY PROMOTING AND REWARDING ACCURACY. MY AMENDMENT WILL CREATE THESE INCENTIVES, INCREASE ACCURACY, PROMOTE COMPETITION AND STABILITY AND RESTORE INTEGRITY TO THE CREDIT RATING INDUSTRY SYSTEM. I THANK MY COLLEAGUE, SENATOR SCHUMER, SENATOR NELSON FOR HELPING LEAD THIS EFFORT, AND SENATORS WHITEHOUSE, BROWN, MURRAY, BINGAMAN AND MURRAY FOR JOINING US. THANK YOU, MADAM PRESIDENT, AND I YIELD THE FLOOR. A SENATOR: MADAM PRESIDENT?

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  • 12:30:30 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM ALABAMA.

  • 12:30:35 PM

    MR. SHELBY

    I RISE TODAY TO DISCUSS THE AMENDMENT THAT I HAVE OFFERED ON BEHALF OF THE…

    I RISE TODAY TO DISCUSS THE AMENDMENT THAT I HAVE OFFERED ON BEHALF OF THE REPUBLICANS TO GREATLY IMPROVE CONSUMER FINANCIAL PROTECTION. THE AMENDMENT RECOGNIZES THAT OUR EXISTING FINANCIAL REGULATORY SYSTEM FAILS TO ADEQUATELY PROVIDE CONSUMER PROTECTION. OUR SYSTEM IS BROKE AND IT NEEDS FIXING. WE REALIZE THAT. MADAM PRESIDENT, THE RECENT FINANCIAL CRISIS HAS REVEALED THAT OUR FINANCIAL REGULATORS WERE ASLEEP AT THE SWITCH AND HAD NEGLECTED TO UPHOLD THEIR BASIC RESPONSIBILITIES FOR CONSUMER PROTECTION. FAR TOO OFTEN, OUR REGULATORS WERE MORE CONCERNED ABOUT PLEASING THE ENTITIES THAT THEY REGULATED THAN LOOKING OUT FOR CONSUMERS. IT'S CLEAR THAT WE NEED TO REFOCUS THE PRIORITIES OF OUR FINANCIAL REGULATORS AND TO ENSURE THAT CONSUMER PROTECTION GETS THE ATTENTION THAT IT RIGHTLY DESERVES. MAKE NO MISTAKE, REPUBLICANS HERE WANT TO STRENGTHEN CONSUMER PROTECTION. WE ARE ALL CONSUMERS IN AMERICA. WE NEED TO MAKE SURE THAT CONSUMERS GET CLEAR AND UNDERSTANDABLE DISCLOSURE SO THAT THEY CAN MAKE GOOD DECISIONS. WE NEED TO MAKE SURE THAT REGULATORS HAVE SUFFICIENT AUTHORITY TO COMBAT FRAUDULENT PRACTICES. WE ALSO NEED TO MAKE SURE THAT OUR CONSUMER PROTECTION LAWS AND REGULATIONS KEEP UP WITH CHANGES IN OUR DYNAMIC AND OUR INNOVATIVE MARKETPLACE. MADAM PRESIDENT, ANY CHANGES TO CONSUMER PROTECTION, HOWEVER, NEED TO REFLECT THE CONSUMER -- THAT CONSUMER PROTECTION DOES NOT STAND IN ISOLATION. IT'S INHERENTLY LINKED WITH SAFETY AND SOUNDNESS REGULATION IN OUR FINANCIAL INSTITUTIONS. THIS IS MOST DRAMATICALLY ILLUSTRATED BY THE FACT THAT AN ILL-CONCEIVED CONSUMER PROTECTION LAW, SUCH AS THE LINE FOR NO DOWN PAYMENTS, COULD CAUSE BANKS TO FAIL, AS WE KNOW. GIVEN THAT TAXPAYERS RESULTLY ON THE HOOK FOR BANK FAILURES, IT WOULD BE IRRESPONSIBLE FOR ALL OF US NOT TO REQUIRE REGULATORS TO CONSIDER THE IMPACT PROPOSED CONSUMER PROTECTIONS COULD HAVE ON THE DEPOSIT INSURANCE FUND THAT'S SO IMPORTANT TO ALL OF US. AFTER ALL, MADAM PRESIDENT, ONE OF THE MOST IMPORTANT CONSUMER PROTECTIONS IS A HEALTHY FINANCIAL SYSTEM. WHERE FINANCIAL INSTITUTIONS ARE ABLE TO KEEP LONG-TERM COMMITMENTS TO CONSUMERS, LIKE ANNUITIES, INSURANCE, AND RETIREMENT FUNDS. THE AMENDMENTS WE'RE PROPOSING -- THE AMENDMENT THAT WE'RE PROPOSING TODAY EMBODIES THIS APPROACH. IT WOULD PUT THE FEDERAL DEPOSIT INSURANCE CORPORATION IN CHARGE OF WRITING CONSUMER PROTECTION REGULATION. THAT RESPONSIBILITY CURRENTLY RESTS WITH THE FEDERAL RESERVE. AS A PRUDENTIAL REGULATOR, THE FDIC HAS THE EXPERIENCE NECESSARY TO ENSURE THAT THE RIGHT BALANCE IS STRUCK BETWEEN CONSUMER PROTECTION AND SAFETY AND SOUNDNESS OF THE INSTITUTIONS. TO RAISE THE STATUS OF CONSUMER PROTECTION, A NEW DIVISION WOULD BE ESTABLISHED AT THE FDIC. THE DIVISION WILL BE LED BY A PRESIDENTIALLY APPOINTED AND SENATE CONFIRMED DIRECTOR. THE DIRECTOR, UNDER OUR PROPOSAL, WOULD SERVE A TERM OF FOUR YEARS AND WOULD BE REQUIRED TO TESTIFY BEFORE CONGRESS AT LEAST TWICE A YEAR. THIS WOULD HELP ENSURE THAT REGULATORS ARE HELD ACCOUNTABLE FOR THEIR ACTIONS ON CONSUMER PROTECTION. NAD,IN ADDITION, MADAM PRESIDENT, THIS AMENDMENT THAT WE'RE OFFERING DOES NOT PREEMPT THE CENTURY AND A HALF PREEMPTION WITH RESPECT TO NATIONAL BANKS. I THINK WE SHOULD BE VERY CAUTIOUS BY ALLOWING NATIONAL BANKS TO BE REGULATED BY 50 DIFFERENT STATES AND OPENING UP THE DOOR TO NEEDLESS REGULATION THAT ONLY ENRICHES LAWYERS AND RAISES COSTS TO CONSUMERS. THE REPUBLICAN AMENDMENT THAT I'M DISCUSSING ALSO GRANTS THE FDIC PRIMARY SUPERVISION AND ENFORCEMENT AUTHORITY OVER LARGE NON-BANK MORTGAGE ORIGINATORS AND OTHER FINANCIAL SERVICE PROVIDERS THAT HAVE VIOLATED -- YES, VIOLATED -- CONSUMER PROTECTION STATUTES. THIS WOULD GIVE THE FDIC BROAD AUTHORITY TO CLAMP DOWN ON THE WORST OFFENDERS OF OUR CONSUMER PROTECTION LAWS WITHOUT NEEDLESSLY SUBJECTING LAW-ABIDING BUSINESSES TO EXPENSIVE REGULATION. THE REPUBLICAN APPROACH HERE TO CONSUMER PROTECTION SHARPLY CONTRASTS WITH THE APPROACH OF THE DODD BILL. UNDER THE DODD BILL, THE CONSUMER FINANCIAL PROTECTION BUREAU, MADAM PRESIDENT, WOULD ISSUE RULES WITHOUT CONSIDERING THE IMPACT ON THE SAFETY AND SOUNDNESS OF FINANCIAL INSTITUTIONS. NEED I REMIND MY COLLEAGUES THAT THIS IS THE SAME REGULATORY MODEL THAT PRODUCED THE FIASCOES AT FANNIE MAE AND FREDDIE MAC? IN THAT CASE -- LISTEN, H.U.D. WROTE RULES ON HOUSING RULES AND UNDERWRITING STANDARDS WHILE THE OTHER REGULATOR, OFEO, REGULATED THEM FOR SAFETY AND SOUNDNESS, A BIFURCATED DEAL, AS THEY'RE PROPOSING NOW IN THE DODD BILL. DO WE NEED A BETTER EXAMPLE OF THE FOOLISHNESS OF DIVORCING CONSUMER PROTECTION FROM SAFETY AND SOUNDNESS? HOW DID THAT REGULATORY MODEL HELP CONSUMERS? IT CERTAINLY LEFT THEM WITH A HUGE TAX BILL TO COVER THE GOVERNMENT BAILOUT THAT IS CONTINUING TO THIS VERY DAY. AN EXAMINATION OF THE POWERS AND SIZE OF THE BUREAU ESTABLISHED BY THE DODD BILL SHOWS FURTHER HOW THE REPUBLICAN APPROACH DIFFERS FROM THE APPROACH ADVOCATED BY THE OBAMA ADMINISTRATION AND MY DEMOCRATIC FRIENDS. THEY START -- THEY, THE DEMOCRATS -- START WITH THE ASSUMPTION THAT ASSUMPTION THAT SMALL BUSINESSES ARE, IN PRESIDENT OBAMA'S WORDS -- QUOTE -- "BILKING PEOPLE." AND THAT HEAVY-HANDED REGULATIONS AND AN EXTENSIVE BUREAUCRACY ARE THE ONLY WAYS TO ENSURE THAT SMALL BUSINESSES DO NOT TAKE ADVANTAGE OF THEIR CONSUMERS. MADAM PRESIDENT, I DO NOT BELIEVE THAT THE TENS OF THOUSANDS OF SMALL BUSINESSES IN MY STATE OR IN THE PRESIDING OFFICER'S STATE, BUSINESSES LIKE FLORISTS, RETAILERS, DENTISTS, AUTO DEALERS, AND SO FORTH, WHO FALL WITHIN THE REGULATORY REACH OF THE DODD PROPOSAL ARE BILKING PEOPLE. I ALSO KNOW THAT THESE ENTITIES HAD NOTHING TO DO WITH THE FINANCIAL CRISIS THAT WE'RE GRAPPLING WITH. UNFORTUNATELY, THE DODD BILL WOULD CREATE A MASSIVE NEW BUREAUCRACY WITH UNPRECEDENTED POWERS TO REGULATE SMALL BUSINESSES AND CONSUMERS. THE CONSUMER FINANCIAL PROTECTION BUREAU THERE COULD DICTATE EXACTLY WHAT FORMS BUSINESSES MUST USE, WHO THEY PROVIDE SERVICES TO, AND HOW THEY SELL THEIR PRODUCTS. CONTROL OVER AMERICAN BUSINESSES WOULD SHIFT FURTHER FROM ENTREPRENEURS TO BUREAUCRATS IN WASHINGTON, D.C. MADAM PRESIDENT, PERHAPS THE MOST TROUBLING ASPECT OF THE DODD APPROACH IS THAT IT ASSUMES THAT CONSUMERS NEED BENEVOLENT BUREAUCRATS TO MAKE DECISIONS FOR THEM. IN ORDER TO MAKE THAT HAPPEN, THE DODD BILL AUTHORIZES THE NEW CONSUMER AGENCY TO COLLECT ANY INFORMATION BASICALLY THAT IT DESIRES. SHAWL BUSINESSES ACROSSSMALL BUSINESSES ACROSS THE COUNTRY FEAR THE MASSIVE AND POTENTIALLY NEW BUREAUCRACY CREATED UNDER THE RUBRIC OF CONSUMER PROTECTION. THEY HAVE EVERY RIGHT TO BE AFRAID. THIS MASSIVE NEW GOVERNMENT BUREAUCRACY HAS THE POWER TO PLACE INDIVIDUALS UNDER OATH AND DEMAND INFORMATION ABOUT THEIR PERSONAL FINANCIAL AFFAIRS. THE NEW BUREAUCRACY, AS PROPOSED BY THE DEMOCRAT -- THE DEMOCRATS IS ALSO REQUIRED TO REPORT TO THE INTERNAL REVENUE SERVICE ANY INFORMATION IT GETS THAT IT BELIEVES MAY BE EVIDENCE OF TAX EVASION. WHY DOES THEIR NEW BUREAUCRACY NEED THESE INCREDIBLE POWERS, UNPRECEDENTED IN AMERICA? BECAUSE THEIR BILL ENVISIONS THAT THE BUREAU ANALYZING AND MONITORING AMERICA'S BEHAVIOR -- AMERICANS' BEHAVIOR AND THEN ISSUING REGULATIONS TO STOP THEM FROM DOING THINGS THE BUREAUCRATS DEEM -- QUOTE -- "IRRATIONAL" OR -- QUOTE -- "INAPPROPRIATE." JUST READ THE WRITINGS OF THE ASSISTANT SECRETARY OF TREASURY FOR FINANCIAL INSTITUTIONS, ONE OF THE CHIEF ARCHITECTS OF THIS EXPANSIVE NEW BUREAUCRACY. HE HAS WRITTEN HOW -- QUOTE -- "REGULATING APPROPRIATELY IS DIFFICULT AND REQUIRES SUBSTANTIAL SOPHISTICATION BY REGULATORS, INCLUDING PSYCHOLOGICAL INSIGHT. LET ME TRANSLATE THIS ACADEMIC JARGON HERE. HE'S SAYING THAT ALL-KNOWING REGULATORS -- THE DODD PROPOSAL -- SHOULD BE EMPOWERED TO MAKE DECISIONS FOR CONSUMERS BECAUSE BENEVOLENT REGULATORS ARE THE ONLY ONES WHO POSSESS THE RIGHT -- QUOTE -- "PSYCHOLOGICAL MIND-SET" TO DO THINGS -- QUOTE -- "APPROPRIATELY." THINK ABOUT IT A MINUTE. REGULATORS ARE WISE AND SHOULD BE HEEDED. CONSUMERS ARE FOOLISH AND SHOULD DO AS THEY'RE TOLD. THAT'S WHAT WE'RE TALKING ABOUT HERE. MADAM PRESIDENT, THE ARCHITECTS OF THIS MASSIVE NEW BUREAUCRACY HAVE LONG ARGUED FOR A CONSUMER BUREAUCRACY WITH THE RIGHT CULTURE. WHETHER THAT CULTURE FOCUSES ON CONSUMER PROTECTION AND A SAFE AND SOUND BANKING SYSTEM OR IT BECOMES A WAY FOR COMMUNITY ORGANIZERS AND GROUPS LIKE ACORN TO GRAB FEDERAL RESOURCES IS STILL LEFT WIDE OPEN. ONE OF THE STRONGEST PROPONENTS FOR THE NEW CONSUMER BUREAUCRACY HAS BEEN THE TREASURY ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS, AS I SAID. MADAM PRESIDENT, ALLOW ME TO READ INTO THE RECORD A COUPLE OF QUOTES FROM A PAPER ENTITLED -- "BEHAVIORALLY INFORMED FINANCIAL SERVICES REGULATION," COAUTHORED BY THE ASSISTANT SECRETARY BARR IN OCTOBER OF 2008. THE SECRETARY WRITES -- AND I'LL QUOTE -- "BECAUSE PEOPLE ARE FALLIBLE AND EASILY MISLED, TRANSPARENCY DOES NOT ALWAYS PAY OFF." HE WRITES -- AND I QUOTE AGAIN -- "REGULATORY CHOICE OUGHT TO BE ANALYZED ACCORDING TO THE MARKET STANCE TOWARD HUMAN FALLIBILITY." ON REGULAR LABOR, HE FURTHER WRITES -- AND I QUOTE -- "PRODUCT REGULATION WOULD ALSO REDUCE COGNITIVE AND EMOTIONAL PRESSURES RELATED TO POTENTIALLY BAD DECISION MAKING BY REDUCING THE NUMBER OF CHOICES." HE'S TALKING ABOUT CHOICES IN THE MARKETPLACE. YES, MADAM PRESIDENT, THE ADMINISTRATION'S CHIEF ADVOCATE BELIEVES THAT BENEVOLENT REGULATORS NEED TO REDUCE CHOICES FOR THE CONSUMER SO THAT THEY, THE CONSUMER, CAN BE PROTECTED FROM BAD DECISION MAKING AND THEIR OWN INHERENT FALLIBILITY. HE ALSO, MADAM PRESIDENT, OPINES ON THE TOPIC OF DISCLOSURES, WHERE HE STATES -- AND I QUOTE -- "DISCLOSURES ARE GEARED TOWARDS INFLUENCING THE INTENTION OF THE BORROWER TO CHANGE HIS BEHAVIOR. HOWEVER, EVEN IF THE DISCLOSURE SUCCEEDS IN CHANGING THE BORROWER'S INTENTIONS, WE KNOW THAT THERE IS OFTEN A LARGE GAP BETWEEN INTENTION AND ACTION." MADAM PRESIDENT, I BELIEVE THAT REGULATORS NEED TO ENSURE THAT CONSUMERS HAVE THE INFORMATION THEY NEED TO MAKE THEIR OWN DECISIONS BASED ON THEIR NEEDS AND THEIR CIRCUMSTANCES. THE PROPONENTS OF BEHAVIORAL ECONOMICS BELIEVE, HOWEVER, THAT REGULATORS NEED TO INFLUENCE PEOPLE'S INTENTIONS AND CHANGE THEIR BEHAVIOR SO THAT THEY MAKE DECISIONS THAT THE REGULATOR DEEMS APPROPRIATE FOR THEM. AS I HAVE SAID BEFORE, THIS IS THE NANNY STATE AT ITS WORST. FINALLY, MADAM PRESIDENT, HE WRITES OF A PROPOSAL OF LATE FEES CHARGED BY FINANCIAL SERVICES PROVIDERS, HE WRITES -- AND I QUOTE -- "UNDER HIS PROPOSAL, FIRMS COULD DETER CONSUMERS FROM PAYING LATE OR GOING OVER THE CREDIT CARD LIMITS WITH WHATEVER FEES THEY DEEM APPROPRIATE, BUT THE BULK OF SUCH FEES WOULD BE PLACED IN A PUBLIC TRUST TO BE USED FOR FINANCIAL EDUCATION AND ASSISTANCE TO TROUBLED BORROWERS BORROWERS." THE TRANSLATION HERE, MADAM PRESIDENT, IS THAT BEHAVIORAL ECONOMISTS NOT ONLY BELIEVE THAT THEY'RE IN THE BEST POSITION TO MAKE CHOICES AND DECISIONS FOR US, BUT THEY'RE ALSO BEST POSITIONED TO DECIDE HOW PRIVATE COMPANIES SPEND THEIR MONEY. NEEDLESS TO SAY, THIS IS A DISTURBING PERSPECTIVE. IT DOES NOT REVEAL JUST HOW MUCH THE OBAMA ADMINISTRATION WANTS TO EMPOWER BUREAUCRATS. WE SHOULD REMEMBER THAT THE FAILURE OF OUR EXISTING REGULATORS -- PRIMARILY THE FEDERAL RESERVE -- TO PROPERLY ENFORCE CONSUMER PROTECTIONS HAVE CAUSED THIS CRISIS. YET THE DODD BILL'S HERE RESPONSE IS TO CREATE A BIGGER BUREAUCRACY, TO HIRE MORE BUREAUCRATS AT THE FED. IN CONTRAST, THE REPUBLICAN ALTERNATIVE, THE AMENDMENT BEFORE US, WOULD MAKE THE CHANGES AND IMPROVEMENTS THAT WE ALL CAN AGREE NEED TO BE DONE BUT WOULD DO SO IN A MORE FOCUSED AND I BELIEVE A MORE PRUDENT MANNER. THE EXPANSIVE REACH OF THE DODD BILL MEANS THAT THE NEW BUREAU IS GOING TO BE EXPENSIVE. THE BUDGET FOR THE BIEWR BUREAU IS APPROXIMATELY $650 MILLION IN NEW TAXPAYER COSTS, FUNDED ARGENTINA STYLE, BY TAPPING THE CENTRAL BANK'S MONEY PRINTING POWERS. IN COMPARISON, THE BUDGET OF THE OFFICE OF THE COMP TREASURE COMPTROLLER OF THE CURRENT CIRCUMSTANCES OUR NATIONAL BANK REGULATOR, IS CURRENTLY SPENDING $750 MILLION A YEAR AND THAT AGENCY DOES BOTH CONSUMER PROTECTION AND PRUDENTIAL SUPERVISION. UNDER THE REPUBLICAN PLAN, INDUSTRY, NOT TAXPAYERS, WOULD PAY THE COST OF CONSUMER PROTECTION. YET DESPITE GIVING THE BUREAU A HUGE BUDGET AND VAST POWER, THE DODD BILL FAILS TO TAKE ANY REASONABLE STEPS TO HOLD THE BUREAU ACCOUNTABLE. THE BUREAU RECEIVES ALL OF ITS FUNDING FROM THE FEDERAL RESERVE, BEYOND BOTH CONGRESSIONAL AND EXECUTIVE OVERSIGHT. THE BUREAU HAS COMPLETE DISCRETION ON HOW IT SPENDS THE BUDGET -- ITS BUDGET UNDER THE DODD PROPOSAL, ALLOWING IT TO DEVICE PROGRAMS FOR BACK DOOR FUNDING OF SPECIAL INTEREST GROUPS LIKE ACORN AND OTHER LIBERAL ACTIVIST GROUPS. THE MORE WE LEARN ABOUT THE DODD BILL'S APPROACH TO CONSUMER PROTECTION, THE MORE I BELIEVE THE REPUBLICAN APPROACH MAKES MORE SENSE AND STRIKES THE RIGHT BALANCE. THE REPUBLICAN AMENDMENT WISELY, I BELIEVE, PLACES CONSUMER PROTECTION IN A FINANCIAL REGULATOR, THE FDIC, BUT ENHANCES THE STATUS OF CONSUMER PROTECTION BY CREATING A NEW DIVISION OF CONSUMER PROTECTION. IT HOLDS REGULATORS, MADAM PRESIDENT, ACCOUNTABLE AND ENSURES THAT REPEAT VIOLATORS OF CONSUMER PROTECTION LAWS FACE STIFFER PENALTIES AND REGULATION. THE REPUBLICAN AMENDMENT AVOIDS CREATING COSTLY NEW BUREAUCRACY AND IMPOSING UNNECESSARY COSTS ON SMALL BUSINESSES THAT HAD NOTHING TO DO WITH THE FINANCIAL CRISIS. MADAM PRESIDENT, WE ALL AGREE THAT CONSUMER PROTECTION NEEDS TO BE MODERNIZED AND GIVEN MORE ATTENTION BY OUR REGULATORS. I BELIEVE THE REPUBLICAN APPROACH DOES THIS AND IT DOES SO WITHOUT BUILDING THE EXPENSIVE AND EXPANSIVE BUREAUCRACY CONTAINED IN THE DODD BILL. MOST IMPORTANTLY, THE REPUBLICAN APPROACH ENSURES THAT CONSUMERS ARE PROTECTED BUT THEY, NOT BUREAUCRATS, ARE ULTIMATELY THE ONES MAKING THE DECISIONS FOR THEMSELVES. MADAM PRESIDENT, I HAVE HEARD FROM PRODUCTIVE AMERICAN COMPANIES, FROM TRACTOR-TRAILER MANUFACTURERS TO BEER BREWERS, FROM MOTORCYCLE MANUFACTURERS TO PUBLIC UTILITIES THAT PROVIDE HEATING FUEL TO OUR HOMES, AND THEY STRONGLY OPPOSE THIS SECTION OF THIS BILL BECAUSE IT WILL INCREASE THEIR OPERATIONAL AND RISK MANAGEMENT. I HAVE HEARD SMALL, RESPONSIBLE BUSINESS OWNERS WHO OFFER THEIR CUSTOMERS THE CONVENIENCE OF INSTALLMENT PAYMENTS, EXPRESS SERIOUS CONCERNS ABOUT THE POTENTIAL FOR AN OUT-OF-CONTROL CONSUMER BUREAUCRACY THAT'S ENVISIONED IN THE DODD BILL. ALTHOUGH THE BILL'S SUPPORTERS HAVE AND WILL ARGUE THAT THE FEARS ARE UNFOUNDED BECAUSE THE BILL SAYS THAT MERCHANTS NOT ENGAGED SIGNIFICANTLY IN OFFERING CONSUMER FINANCIAL SERVICES ARE EXCLUDED FROM THE NEW CONSUMER REGULATORY BUREAUCRACY. THE BILL, THOUGH, MADAM PRESIDENT, DOES NOT DEFINE WHAT THE WORD "SIGNIFICANTLY" MEANS, LEAVING THAT TO THE DISCRETION, AGAIN, OF THE BENEVOLENT BUREAUCRATS. THE SUPPORTERS OF THIS NEW MASSIVE GOVERNMENT AGENCY TRUST THE BUREAUCRATS. MADAM PRESIDENT, I TRUST THE AMERICAN SMALL BUSINESS OWNERS AND CONSUMERS TO MAKE THEIR DECISION. I YIELD THE FLOOR AND SUGGEST THE ABSENCE OF A QUORUM -- OH, EXCUSE ME. A SENATOR: MADAM PRESIDENT?

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  • 12:48:29 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: THE SENATOR FROM TENNESSEE.

  • 12:48:33 PM

    MR. ALEXANDER

    THANK YOU, MADAM PRESIDENT. MADAM PRESIDENT, I CONGRATULATE THE SENATOR…

    THANK YOU, MADAM PRESIDENT. MADAM PRESIDENT, I CONGRATULATE THE SENATOR FROM ALABAMA FOR HIS COMMENTS AND FOR HIS PROPOSAL WHICH HE DESCRIBES AS A REPUBLICAN PROPOSAL. OF COURSE, WHAT ALL OF US HOPE IS THAT IT BECOMES A BIPARTISAN PROPOSAL AS OUR FRIENDS ON THE OTHER SIDE LOOK CAREFULLY AT IT. THAT'S WHAT HAPPENED WITH THE BIG BANK BAILOUT PROVISION THAT WE WORKED ON YESTERDAY. SENATOR DODD AND SENATOR SHELBY WORKED FOR A WHILE. SENATORS CORKER AND WARNER HAD WORKED BEFORE THAT, AND WE CAME UP WITH A CONCLUSION THAT ALL BUT FIVE SENATORS AGREED TO. NOW WE HAVE MOVED TO TWO OF THE OTHER MAJOR DEFICIENCIES IN THE DODD BILL THAT ARE ALL WRAPPED UP IN ONE PROPOSAL HERE, AND IT'S REALLY WRAPPED UP WITH THE CENTRAL ISSUE THAT'S BEFORE THE AMERICAN PEOPLE. PRESIDENT OBAMA SAID IN SEPTEMBER OF LAST YEAR THAT THE HEALTH CARE BILL WAS A PROXY FOR A LARGER ISSUE ABOUT THE ROLE OF GOVERNMENT IN AMERICANS' LIVES. THE PRESIDENT WAS EXACTLY RIGHT ABOUT THAT, AND WE HAVE SEEN THAT ISSUE OVER AND OVER AND OVER AGAIN. I DON'T THINK IT WILL CHANGE BETWEEN NOW AND THE NOVEMBER ELECTION. IN FACT, THE PRESIDENT SAID AT OUR HEALTH CARE SUMMIT THAT'S WHY WE HAVE ELECTIONS, AND I THINK HE'S CORRECT ABOUT THAT. WE HAVE SEEN A WASHINGTON TAKEOVER OF BANKS. WE HAVE SEEN A WASHINGTON TAKEOVER OF CAR COMPANIES. WE HAVE SEEN A WASHINGTON TAKEOVER OF MANY ASPECTS OF HEALTH CARE. WE HAVE SEEN A GRATUITOUS WASHINGTON TAKEOVER OF STUDENT LOANS. AND NOW IN THIS FINANCIAL REGULATION BILL, INSTEAD OF DEALING WITH THE HIGH JINKS OF BIG BANKS, WE'RE GOING TO TAKE OVER MAIN STREET LENDING AND ON TOP OF IT CREATE A NEW CZAR OR CZARINA TO MAKE DECISIONS ABOUT MILLIONS OF TRANSACKS ACROSS AMERICA THAT ARE ON MAIN STREET. SO WHAT SENATOR SHELBY'S PROPOSAL OFFERS -- AND WE HOPE IT RECEIVES THE SAME KIND OF BIPARTISAN CONSIDERATION THAT THE RESOLUTION AUTHORITY OR THE BIG BANK BAILOUT DISCUSSION DID YESTERDAY THAT WE HAD FINALLY AGREED ON, IS THAT WE WOULD LIKE TO CHANGE THIS BILL IN TWO WAYS. WE'D LIKE TO SAY LET'S TAKE MAIN STREET LENDING OUT OF IT. THE SENATOR FROM CONNECTICUT, SENATOR DODD, SAID IT'S NOT IN THERE, BUT THE LANGUAGE MAKES IT LOOK LIKE IT'S IN THERE. IT MAKES IT LOOK LIKE THAT THIS IS THE END OF THE 18-MONTH PAYMENT FOR YOUR DAUGHTER'S -- FOR YOUR DAUGHTER'S DENTIST BILL. IT MAKES IT LOOK LIKE THAT THE PLUMBER, THE DENTIST, THE STORE OWNER UP AND DOWN MAIN STREET WHO GIVES YOU FLEXIBLE CREDIT -- IN OTHER WORDS, WHO SAYS YOU CAN PAY ME OVERTIME, IT LOOKS LIKE WE'RE GOING TO START REGULATING THAT TRANSACTION. AND WHAT'S GOING TO HAPPEN IS THAT'S GOING TO MAKE CREDIT HARDER TO GET BECAUSE THE DENTIST IS GOING TO SAY, THE PLUMBER IS GOING TO SAY OR THE STORE OWNER IS GOING TO SAY I'M NOT GOING TO FOOL WITH IT. I DON'T WANT TO BE REGULATED BY SOME WASHINGTON BUREAU, SO IF YOU WANT TO BUY MY GOODS, GO TO THE BANK AND GET SOME MONEY OR GET ANOTHER CREDIT CARD. AND YOU KNOW WHAT THAT'S GOING TO DO? THAT'S GOING TO SLOW DOWN THE ECONOMY. THAT'S GOING TO MAKE JOBS HARDER TO CREATE BECAUSE IT'S GOING TO MAKE CREDIT HARDER TO OBTAIN AND CREDIT HARDER TO OFFER. THAT'S WHAT IT DOES. AND THAT'S NOT WHAT WE NEED AT THIS TIME, MADAM PRESIDENT. I MEAN, WE JUST HAD THE REPORTS OF THE GROWTH, THE ECONOMIC GROWTH OF OUR COUNTRY DURING THE FIRST QUARTER. IT WAS 3.2%. THAT'S NOT VERY GOOD. I CAN VIVIDLY REMEMBER FLYING ON A HELICOPTER WITH PRESIDENT BUSH WHEN I WAS EDUCATION SECRETARY IN 1992, AND THE ECONOMIC GROWTH OF THE -- OF THE THIRD QUARTER OF THE YEAR WAS BETTER THAN THAT. IT WAS 3.6%, AND BILL CLINTON BEAT GEORGE BUSH SR. ON THE "IT'S THE ECONOMY, STUPID" CAMPAIGN. SO 3.2% ISN'T GOING TO CUT IT FOR OUR COUNTRY. MOST ECONOMISTS SAY THAT IF OUR ECONOMY CONTINUES TO GROW OVER THE NEXT YEAR ALL THE WAY THROUGH 2010 AT THE SAME RATE THAT IT GREW IN THE FIRST QUARTER, THAT THE UNEMPLOYMENT RATE WON'T CHANGE. THE UNEMPLOYMENT RATE WILL STILL BE ABOUT 9% OR 10% AT THE END OF THIS YEAR AS IT IS TODAY. NOW, WHAT CAN WE DO TO CHANGE THAT? WELL, WE HAVE TO CREATE AN ENVIRONMENT FOR JOB GROWTH. WE HAVE DONE PRETTY GOOD IN CREATING JOB GROWTH IN WASHINGTON. THE ONE PLACE THE STIMULUS HAS REALLY WORKED IS IN WASHINGTON, D.C. SALARIES ARE UP, JOBS ARE UP. THERE ARE PLENTY OF NEW JOBS AROUND HERE. BUT OUT ACROSS AMERICA, WE'RE NOT CREATING ENOUGH NEW JOBS, AND TOO MANY OF THE THINGS THAT WE'RE DOING HERE MAKE IT HARDER TO CREATE NEW JOBS. THE HEALTH CARE BILL MAKES IT HARDER TO CREATE NEW JOBS BECAUSE IT IMPOSES TAXES ON JOB CREATORS. IT IMPOSES TAXES ON INVESTORS. TAX INCREASES MAKE IT HARDER TO CREATE NEW JOBS. RUNNING UP THE DEBT. IF THE PROPOSAL IS TO DOUBLE THE DEBT IN FIVE YEARS AND TRIPLE IT IN TEN YEARS. THAT MAKES THE ECONOMY LESS CERTAIN AND MAKE IT HARDER TO CREATE NEW JOBS. AND THE THREAT OF CREATING A CZAR OR CZARINA IN WASHINGTON, D.C., AND A NEW BUREAU TO SUPERVISE AND MAKE MORE DIFFICULT AND EXPENSIVE MAIN STREET LENDING MAKES IT HARDER TO CREATE NEW JOBS, AND WE SHOULD TAKE IT OUT OF THE BILL. IF THE SENATOR FROM CONNECTICUT, WHO IS ONE OF OUR FINEST SENATORS, WELL INTENTIONED, IF HE REALLY WANTS IT OUT OF THE BILL, LET'S JUST TAKE IT OUT OF THE BILL. LET'S DON'T LEAVE IN THERE THE POSSIBILITY THAT SOMEONE MIGHT COME ALONG AND INTERPRET SIGNIFICANT FINANCIAL ACTIVITIES TO INCLUDE THE PLUMBER AND THE DENTIST. THIS HAS ATTRACTED THE ATTENTION OF A LOT OF PEOPLE FROM TENNESSEE. COMMUNITY BANKERS, CREDIT UNIONS, THE NATIONAL FEDERATION OF INDEPENDENT BUSINESSES. THEY ARE TALKING ABOUT OFFICE SUPPLIERS, JEWELERS, HEALTH PROFESSIONALS, FURNITURE STORES. THEY ESTIMATE THAT ABOUT 50% OF SMALL BUSINESSES LET YOU PAY OVERTIME. IN OTHER WORDS, THEY OFFER YOU CREDIT. THEY MAKE SPECIAL ARRANGEMENTS. THEY SAY OKAY, WE KNOW YOU DON'T HAVE ALL THE CASH RIGHT NOW AND YOU MIGHT NOT WANT TO RUN UP YOUR CREDIT CARD OR MAYBE YOUR CREDIT CARD IS NEAR THE TOP, SO WE'LL SELL YOU WHATEVER WE HAVE TO SELL YOU OR WE'LL PROVIDE YOU THE SERVICE. YOU CAN PAY US IN SIX MONTHS. YOU CAN PAY US IN FIVE MONTHS. WELL, IF YOU DO THAT UNDER THIS BILL AND YOU'RE IN A SIGNIFICANT FINANCIAL ACTIVITY, THEN THIS CZAR OR CZARISM NA IN -- OR CZARINA IN WASHINGTON, D.C., IS GOING TO BE REGULATING YOU, AND YOU MIGHT BE A VERY SMALL BUSINESS, YOU MIGHT NOT HAVE A LOT OF EXTRA MONEY TO FILL OUT FORMS, BUT YOU'RE GOING TO BE FILLING OUT FORMS, SUFFERING MORE REGULATIONS, YOU'RE GOING TO BE OFFERING LESS CREDIT, AND UP AND DOWN MAIN STREET IT WILL BE HARDER TO DO. SO IF OUR REAL INTENTION IN THIS BODY ON BOTH SIDES OF THE AISLE IS TO NOT INTERFERE WITH MAIN STREET LENDING, THEN LET'S JUST SAY THAT. THAT'S WHAT THE REPUBLICAN AMENDMENT WHICH WE HOPE BECOMES A BIPARTISAN AMENDMENT DOES. AND THEN THERE IS THE SECOND BIG IDEA THAT'S IN THIS REPUBLICAN AMENDMENT SO FAR AS I'M CONCERNED. WE DON'T NEED ANOTHER CZAR. THIS BILL IS SUPPOSED TO BE ABOUT BIG BANKS, ABOUT FINANCIAL HIGH JINKS, ABOUT THIS RECESSION THAT WE'RE IN AND ABOUT -- ABOUT ISSUES THAT WILL CHANGE THE REGULATIONS IN A SENSIBLE WAY THAT WILL AVOID AS MANY FUTURE RECESSIONS AS POSSIBLE, AT THE SAME TIME CREATING AN ENVIRONMENT IN WHICH WE CAN GROW THE LARGEST NUMBER OF GOOD NEW JOBS. BUT SUDDENLY, WE HAVE THIS NEW WASHINGTON AGENCY -- AND REMEMBER, THE ISSUE IN AMERICA IS THE ROLE OF THE FEDERAL GOVERNMENT IN THE LIVES OF AMERICANS, SO WE HAVE A NEW WASHINGTON AGENCY NOT ONLY POSSIBLY REGULATING MAIN STREET LENDING BUT CREATING AN UNACCOUNTABLE PERSON AT THE TOP TO WRITE THE RULES AND REGULATIONS. WHEN I SAY UNACCOUNTABLE, THAT MEANS THAT SHE OR HE IS JUST OVER HERE AT THE FED. ONCE CONFIRMED BY THE SENATE, THIS PERSON HAS NO BOSS. DOESN'T REPORT TO THE PRESIDENT. DOESN'T HAVE TO COME BEFORE CONGRESS FOR APPROPRIATIONS. JUST HAS A STEADY STREAM OF MONEY AND REALLY UNLIMITED AUTHORITY. AND THERE IS NOTHING TO KEEP THIS NEW CZARINA OR CZAR FROM WRITING THE KIND OF AUTHORITIES AND RULES THAT GOT US INTO TROUBLE IN THE FIRST PLACE WITH HOUSING, THAT MIGHT ENCOURAGE IRRESPONSIBLE HOMEOWNERSHIP. THAT'S WHAT WE HAD BEFORE, SO THIS MIGHT ENCOURAGE IRRESPONSIBLE BORROWING. SO THE SECOND MAJOR IDEA OF THE REPUBLICAN AMENDMENT IS LET'S MAKE THIS PERSON ACCOUNTABLE. OF COURSE, THE PRESIDENT CAN APPOINT, CONFIRM BY THE SENATE, BUT THIS PERSON WOULD BE IN THE FEDERAL DEPOSIT INSURANCE CORPORATION AND WOULD BE THERE FOR -- WOULD BE THEREFORE ACCOUNTABLE TO OTHER PEOPLE APPOINTED BY THE PRESIDENT AND WOULD HAVE TO COME BEFORE THE CONGRESS FOR -- FOR -- FOR APPROPRIATIONS TO GIVE US A CHANCE TO INQUIRE ABOUT THINGS. SO, MR. PRESIDENT, I HAVE COME TO THE FLOOR TODAY TO SAY WE HAVE MADE AN IMPORTANT STEP IN THE RIGHT DIRECTION WHEN WE WORKED ON THE FIRST PART OF THIS BILL YESTERDAY ACROSS PARTY LINES. THAT WAS ONE OF THE FIVE ISSUES THAT WE NEED TO DEAL WITH, THE ISSUE OF WHAT DO WE DO ABOUT ENCOURAGING BANKS TO GET TOO BIG AND FAIL AND GET THE REST OF US IN TROUBLE AT THE SAME TIME. SO THAT ISSUE, WE THINK, IS OUT OF THE WAY. BUT WE HAVE GOT FOUR MORE BIG ISSUES TO DEAL WITH HERE, AND TWO OF THEM ARE IN THIS REPUBLICAN AMENDMENT. ONE IS LET'S NOT TAKE OVER MAIN STREET LENDING AND MAKE IT HARDER TO LOAN MONEY, HARDER TO GET MONEY AND HARDER TO CREATE JOBS. THE NUMBER TWO IS LET'S NOT CREATE ANOTHER CZAR IN WASHINGTON. THE LAST THING WE NEED IS ANOTHER WASHINGTON TAKEOVER AND ANOTHER WASHINGTON CZAR. WE HOPE OUR AMENDMENT WILL ATTRACT SIGNIFICANT BIPARTISAN SUPPORT AND THEN WE CAN MOVE ON TO THE OTHER IMPORTANT QUESTIONS IN THIS LEGISLATION. I THANK THE PRESIDENT AND I YIELD THE FLOOR.

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  • 12:58:56 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM MARYLAND.

  • 12:59:01 PM

    MR. CARDIN

    WITHOUT OBJECTION, SO ORDERED.

  • 01:05:36 PM

    MR. CARDIN

    THE INCLUSION OF AMENDMENT 3732 TO S. 3217. THIS AMENDMENT IS CRITICAL…

    THE INCLUSION OF AMENDMENT 3732 TO S. 3217. THIS AMENDMENT IS CRITICAL PART OF THE INCREASED TRANSPARENCY AND GOOD GOVERNANCE THAT WE ARE STRIVING TO ACHIEVE IN THE FINANCIAL INDUSTRY. THIS IS A BIPARTISAN AMENDMENT THAT WOULD REQUIRE ALL FOREIGN AND DOMESTIC COMPANIES REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION, THE S.E.C., TO REPORT IN OUR ANNUAL REPORT TO THE S.E.C. HOW MUCH THEY PAY EACH GOVERNMENT FOR ACCESS TO OUR OIL, GAS AND MINERALS. MOST OF THE WORLD'S EXTRACTED MINERAL COMPANIES WOULD BE COVERED BY THIS LAW, SETTING A NEW INTERNATIONAL STANDARD FOR TRANSPARENCY, FOR OPENNESS. WE'VE SEEN THE DEVASTATING EFFECTS OF THE LACK OF TRANSPARENCY IN THIS COUNTRY, WHPPED WHAT HAPPENED WHEN WALL STREET IS LEFT UNCHECKED ASK BARRENS CLOAKED IN SECRECY MADE OFF WITH MILLIONS WHEN OTHERS LOST THEIR HOMES. THIS IS WHY WE ARE ADDRESSING OPENNESS AND TRANSPARENCY IN THE UNDERLYING LEGISLATION TODAY AND WE WOULD BE REMISS TO CREATE THE SWEEPING REFORM OF OUR FINANCIAL SECTOR WITHOUT ADDRESSING THE NEEDS FOR ADDING A NEW LAYER OF TRANSPARENCY TO A SET OF COMPANIES ALREADY UNDER S.E.C.'S JURISDICTION, THE OIL, GAS AND MINING COMPANIES THAT MAKE UP THE EXTRACTIVE INDUSTRIES. THIS AMENDMENT WOULD CREATE AN ENVIRONMENT OF TRANSPARENCY TO REASSURE INVESTORS, HELP STABILIZE GLOBAL ENERGY MARKETS AND, THUS, SUPPORT GOALS OF ENERGY SECURITY. CURRENT FEDERAL ACCOUNTING STANDARD BOARDS -- STANDARDS REQUIRE REPORTS OF TAX, ROYALTY, AND BONUS PAYMENTS TO HOST GOVERNMENTS, BUT THE NUMBERS NEED ONLY BE REPORTED IN THE AGGREGATE CATEGORY, SUCH AS PRODUCTION COSTS, EXCLUDING TAXES, AND TAXES OTHER THAN INCOME. THESE PAYMENTS ARE REPORTED ON A COUNTRY LEVEL, WHERE A COMPANY'S OPERATIONS ARE VERY SUBSTANTIAL. BUT OTHERWISE, THEY ARE REPORTED ON SUCH A BROAD BASIS THAT A COMPANY CAN SIMPLY REPORT ON WHICH CONTINENT IT WAS OPERATING OPERATING,. SIS DISCLOSURE IS NOT USEFUL IN DETERMINING THE EXTENT OF A COMPANY'S OPERATION IN OR ONGOING FINANCIAL ARRANGEMENTS WITHIN A COUNTRY. IN TEMPLES ENERGY SECURITY, THE OIL, GAS AND MINING REVENUES ARE CRITICALLY IMPORTANT ECONOMIC SECTOR IN ABOUT 60 DEVELOPING AND TRANSITION COUNTRIES WHICH ARE TEAR DOCKS CLI PARADOX CLI HOME TO MORE THAN TWO-THIRDS OF THE WORLD'S POOREST PEOPLE.DESPITE RECEIVING BILLIONS OF DOLLARS PER YEAR FROM EXTRACTIVE REVENUES, THESE COUNTRIES RANK AMONG THE LOWEST IN THE WORLD ON POVERTY, ECONOMIC GROWTH, AUTHORITARIAN GOVERNANCE, CONFLICT, AND POLITICAL INSTABILITY. UNACCOUNTABLE MANAGEMENT OF NATURAL RESOURCE REVENUES BY FOREIGN GOVERNMENT LEADS TO CORRUPTION AND MISMANAGEMENT, WHICH, IN TURN, CREATES UNSTABLE AND HIGH-COST OPERATING ENVIRONMENTS FOR MULTINATIONAL COMPANIES AND THREATENS THE SECURITY OF ENERGY SUPPLIES OF THE UNITED STATES AND OTHER INDUSTRIAL NATIONS. SO, MR. PRESIDENT, WE ARE TALKING ABOUT IN THESE COUNTRIES WHERE MINERAL WEALTH BECOMES A MINERAL CURSE. IT BECOMES A SOURCE OF REVENUE FOR CORRUPTION RATHER THAN A SOURCE OF REVENUE FOR ECONOMIC GROWTH. SO A COUNTRY CAN GROW. IT RUNS COUNTER TO OUR FOREIGN POLICY OBJECTIVES OF GOOD GOVERNANCE AND ECONOMIC GROWTH FOR THE DEVELOPING WORLD. TRANSPARENCY WILL HELP MAKE SURE THAT THE MINERAL WEALTH GOES TO THE PEOPLE OF THAT NATION. THE PROVISION OF THIS AMENDMENT WOULD APPLY TO ALL OIL GAS AND MINING COMPANIES REQUIRED TO FILE PERIODIC REPORTS WITH THE S.E.C., NAMELY 90% OF THE MAJOR INTERNATIONALLY OPERATING OIL COMPANIES AND 8 OUT OF 10 LARGEST MINING COMPANIES IN THE WORLD, ONLY TWO OF WHICH ARE U.S.. SO WE'RE TALKING ABOUT FOREIGN-OWNED COMPANIES, NOT U.S. COMPANIES, BY AND LARGE. OF THE TOP 50 LARGEST OIL AND GAS COMPANIES BY PROVEN OIL RESERVES, 20 ARE NATIONAL OIL COMPANIES THAT DO NOT OPERATE INTERNATIONALLY. THESE COMPANIES ARE NOT REGISTERED WITH THE S.E.C. OR ANY OTHER EXCHANGE AND ONLY OPERATE WITHIN THEIR OWN COUNTRY, WHICH MEANS THAT THESE NATIONAL OIL COMPANIES DO NOT COMPETE WITH INTERNATIONAL OPERATING COMPANIES. OF THE REMAINING 30 COMPANIES THAT DO OPERATE INTERNATIONALLY, 27 WOULD BE COVERED BY THIS LEGISLATION. 27 OF THE 30. THESE INCLUDE CANADIAN, EUROPEAN, RUSSIAN, CHINESE, BRAZILIAN AND OTHER INTERNATIONAL COMPANIES. WE CURRENT HAVE A VOLUNTARY INTERNATIONAL STANDARD TO PROMOTE TRANSPARENCY. A NUMBER OF COUNTRIES AND COMPANIES HAVE JOINED THE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE, EITI, AN EXCELLENT INITIATIVE THAT HAS MADE TREMENDOUS STRIDES IN CHANGING THE CULL TOUR OF SEEK -- CULTURE OF SECRECY THAT SURROUNDS THE EXTRACTIVE INDUSTRY. BUT TOO MUCH COUNTRIES AND COMPANIES REMAIN OUTSIDE THIS VOLUNTARY SYSTEM. THE NOTION OF TRANSPARENCY HAS BEEN ENDORSED BY THE G-8, BY THE I.M.F. AND THE WORLD BANK AND A NUMBER OF REGIONAL DEVELOPMENT BANKS. IT IS CLEAR TO THE FINANCIAL LEADERS OF THE WORLD THAT TRANSPARENCY IN NATURAL RESOURCES IS -- RESOURCES DEVELOPMENT IS KEY TO HOLDING GOVERNMENT LEADERS ACCOUNTABLE FOR THE NEEDS OF THEIR CITIZENS AND NOT JUST BUILDING UP THEIR PERSONAL OFFSHORE BANK ACCOUNTS. IT IS NOW TIME TO CREATE AN INTERNATIONAL STANDARD FOR TRANSPARENCY. AND IT WILL ONLY HAPPEN IF THE UNITED STATES IS IS IN THE LEADERSHIP. THE INTERNATIONAL COMMUNITY LOOKS TO US TO BE A LEADER ON THIS ISSUE. INVESTORS NEED TO BE ABLE TO ASSESS RISKS IN THEIR INVESTMENTS. INVESTORS NEED TO KNOW WHERE, IN WHAT AMOUNT, IN WHAT TERMS THEIR MONEY IS BEING SPENT AND -- AND WHAT TYPE OF HIGH-RISK OPERATING REQUIREMENTS. THESE ENVIRONMENTS ARE OFTEN POOR DEVELOPING COUNTRIES THAT MAY BE POLITICALLY UNSTABLE, HAVE LOTS OF CORRUPTION HAVE, A HISTORY OF CIVIL UNREST. INVESTOR HAS A RIGHT TO KNOW ABOUT THE PAYMENTS. SECRECY OF PAYMENTS CARRIES REAL BOTTOM-LINE RISKS FOR INVESTORS. CREATING A REPORTING REQUIREMENT WITH THE S.E.C. WILL CAPTURE A LARGER PORTION OF THE INTERNATIONAL EXTRACTIVE INDUSTRIES, CORPORATIONS THAN ANY OTHER SINGLE MECHANISM, THEREBY SETTING A GLOBAL STANDARD FOR TRANSPARENCY AND PROMOTING A LEVEL PLAYING FIELD. INVESTORS SHOULD BE ABLE TO KNOW HOW MUCH MONEY IS BEING INVESTED UPFRONT IN OIL, GAS AND MINING PROJECTS. FOR EXAMPLE, OIL COMPANIES OFTEN PAY VERY LARGE SIGNATURE PAYMENTS TO SECURE THE RIGHT FOR AN OIL FIELD LONG BEFORE THE FIRST DROP OF OIL IS PRODUCED. SUCH PAYMENTS ARE IN ADDITION TO THE CAPITAL INVESTMENT REQUIRED. IN ANGOLA, FOR EXAMPLE, $500 BILLION IS NOT AN UNUSUAL SIGNATURE BONUS THAT HAS TO BE PAID FOR A SINGLE FIELD. AND SINGLE FIELD CAN COST MORE THAN $2 BILLION TO DEVELOP. SUCH COST TAKES YEARS FOR THE COMPANIES TO RECOUP THROUGH THEIR PRODUCTION SHARING ARRANGEMENT WITH HOST COMPANIES. FOR THIS REASON, IT IS IN THE INTEREST OF THE INVESTORS TO KNOW THE AMOUNT AND TIMING OF PAYMENTS IN HIGH-RISK OPERATING ENVIRONMENTS. WHEN A COMPANY INVESTS BECOMES TARGETED BY A CAMPAIGN OF MISINFORMATION, ONLY TRANSPARENCY OF THEIR FINANCIAL INFORMATION WILL HELP THE INVESTOR. DISCLOSURE OF PAYMENT IS ONE WAY TO ADDRESS THE RISK, HELPING COMPANIES PROTECT THEMSELVES FROM FALSE OR UNFAIR ACCUSATIONS AND BLAME SHIFTING BY HOST GOVERNMENTS THAT CAN TURN THEIR IMAGE IN THE INVESTOR COMMUNITY AND THE GENERAL PUBLIC. MR. PRESIDENT, I URGE MY COLLEAGUES TO JOIN ME IN SUPPORTING THE CREATION OF AN HISTORIC TRANSPARENCY STANDARD THAT WILL PIERCE THE VEIL OF SECRECY THAT FOSTERS SO MUCH CORRUPTION AND INSTABILITY IN RESOURCE-RICH COUNTRIES AROUND THE WORLD. I THANK THE PRESIDING OFFICER, AND I WOULD YIELD THE FLOOR.

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  • 01:13:10 PM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM MISSOURI IS RECOGNIZED.

  • 01:13:14 PM

    MR. BOND

    PRESIDENT, AMERICANS HAVE SENT CONGRESS A MESSAGE -- REFORM WALL STREET,…

    PRESIDENT, AMERICANS HAVE SENT CONGRESS A MESSAGE -- REFORM WALL STREET, HOLD BAD ACTORS ACCOUNTABLE BUT DON'T HURT THE FOLKS ON MAIN STREET WHO HAD NOTHING TO DO WITH THE FINANCIAL CRISIS. THAT'S WHAT WE'RE DEBATING ABOUT HERE IN THE SENATE THIS WEEK. SENATORS ON BOTH SIDES OF THE AISLE AGREE ON ONE THING -- ALL OF US WANT TO HOLD WALL STREET ACCOUNTABLE FOR THE HAVOC WREAKED ON MAIN STREET. WE ALL AGREE WE NEED TO ENACT REFORM TO PREVENT ANOTHER FINANCIAL CRISIS, BUT WE HAVE SOME DISAGREEMENTS ON WHAT RESPONSIBLE REFORM LOOKS LIKE. WHILE WE ALL AGREE ON THE NEED TO REFORM WALL STREET TO PROTECT MAIN STREET, THE CURRENT BILL, EVEN WITH AMENDMENTS SO FAR, DOESN'T, IN MY VIEW, DO THE TRICK. WE'RE MAKING PROGRESS BUT THERE'S STILL A LOT OF WORK TO DO, BECAUSE IN ITS CURRENT FORM, THE BILL IS STILL A MASSIVE GOVERNMENT OVERREACH, PUNISHING MAIN STREET, HURTING FAMILIES, COSTING JOBS BY STIFLING SMALL BUSINESS AND ENTREPRENEURSMENT TODAY I'LL HIGHLIGHT SOME OF THE CONCERNS I'VE HEARD FROM MAIN STREET IN MISSOURI AND ELSEWHERE AND SOME OF THE AMENDMENTS THAT HAVE BEEN FILED TO IMPROVE THE BILL. FIRST, ON THE G.S.E.'S. NONE OF US CAN DENY THAT FANNIE MAE AND FREDDIE MAC WERE SIGNIFICANT CONTRIBUTORS TO THE FINANCIAL CRISIS. JUST LIKE ANY REAL REFORM TO PREVENT A FUTURE FINANCIAL CRISIS, WE HAVE TO DEAL WITH WALL STREET AND WE MUST ALSO DEAL WITH FANNIE MAE AND FREDDIE MAC. UNFORTUNATELY, THIS BILL TOTALLY IGNORES, IT TURNS A BLIND EYE TO THESE GOVERNMENT-SPONSORED ENTERPRISE, G.S.E.'S, WHICH CONTRIBUTED TO THE FINANCIAL MELTDOWN BY BUYING HIGH-RISK LOANS BANKS WERE DIRECTED TO MAKE TO PEOPLE WHO COULD NOT AFFORD THEM. THE IRRESPONSIBLE ACTIONS IN THE MARKETPLACE BY FANNIE AND FREDDIE TURNED THE AMERICAN DREAM INTO THE AMERICAN NIGHTMARE FOR FAR TOO MANY FAMILIES WHO FACE FORECLOSURE, THEN A DEVASTATING ENTIRE NEIGHBORHOODS WITH THE FORECLOSED HOMES AND COMMUNITIES WHERE PROPERTY VALUES DIMINISHED. ULTIMATELY, IT LED TO THE NATIONAL AND INTERNATIONAL FINANCIAL CRISIS. NO ONE, ESPECIALLY THOSE OF US WHO ARE TAXPAYERS, CAN FORGET WHAT HAPPENED AFTER FREDDIE AND FANNIE GOT DONE WREAKING HAVOC ON NEIGHBORHOODS. THEY WENT BELLY UP. A YEAR AND A HALF AGO, THE GOVERNMENT HAD TO TAKE OVER THE G.S.E.'S, LEAVING US AS TAXPAYERS TO TAKE OVER THE BILL. TO MAKE MATTERS WORSE, I'M SURE EVERYBODY READ WITH SHOCK JUST YESTERDAY THE PRESS REPORTED THAT FREDDIE LOST $8 BILLION IN THE FIRST QUARTER. THAT'S A LOT OF WORK. THEN THEY HAD THE NERVE TO REQUEST ANOTHER $10.6 BILLION FROM AMERICAN TAXPAYERS AND WARNED, AND WARNED THAT THIS $10.6 BILLION IS JUST A DOWN PAYMENT ON THE MONEY THEY WILL NEED IN THE FUTURE. IS IT TIME TO CALL A HALT? IS IT TIME TO GET A HANDLE ON IT? WELL PAST. IN CASE YOU NEED A REMINDER, THIS LATEST $8 BILLION FREDDIE LOST IS ON TOP OF THE THE $126.9 BILLION THAT FREDDIE AND FANNIE HAD ALREADY LOST THROUGH THE END OF 2009. "THE WALL STREET JOURNAL" TODAY HIT THE NAIL ON THE HEAD WHEN THEY REFERRED TO FANNIE AND FREDDIE TODAY AS THE TOXIC TWINS. THESE TOXIC TWINS ARE FAR AND AWAY THE BIGGEST LOSERS IN THE ENTIRE FINANCIAL CRISIS. BIGGER THAN A.I.G., CITIGROUP AND ALL THE REST. SO WHEN WE FOCUS OUR ANGER, LET'S NOT FORGET OUR FRIENDS AT FANNIE AND FREDDIE. YOU TALK ABOUT DOING SOME DAMAGE, HERE'S WHERE THE DAMAGE IS. HERE'S WHERE THE BURDEN COMES. NOT JUST ON US, BUT ON THE CREDIT CARDS OF OUR CHILDREN AND GRANDCHILDREN, THE YOUNG PEOPLE HERE AS PAGES. THEY HAVE GOT TO -- THEY ARE CARRYING AROUND WHAT THEY THINK IN THEIR WALLET, THEY DON'T REALIZE HOW HEAVY A DEBT BURDEN WE HAVE ALREADY PUT IN THEIR WALLET. SORRY ABOUT THAT, FOLKS. BUT YOU AND YOUR GENERATION AND GENERATIONS TO COME ARE GOING TO BE PAYING FOR IT. TAXPAYERS AND TAXPAYERS IN THE FUTURE WILL BE THE BIGGEST LOSERS. IT SAYS ACCORDING TO CONGRESSIONAL BUDGET OFFICE OPTIMISTIC ESTIMATES, THESE TOXIC TWINS WILL COST THE TAXPAYERS CLOSE TO $380 BILLION. EVEN FOR THOSE OF US IN WASHINGTON, $380 BILLION IS A BIG NUMBER. AFTER ALL THIS BANE TO FAMILIES, NEIGHBORHOODS AND TAXPAYERS, YOU WOULD THINK THAT OVERSIGHT OF FANNIE AND FREDDIE WOULD BE A TOP PRIORITY. WHICH IS WHY IT'S STUNNING TO ME THAT THE OBAMA ADMINISTRATION HAS ONLY RECENTLY NOMINATED SOMEONE TO FILL THE CRITICALLY IMPORTANT POSITION OF INSPECTOR GENERAL OF THE FEDERAL HOUSING FINANCE AGENCY TO OVERSEE THE G.S.E.'S. HOW CAN WE HAVE PROPER AND EFFECTIVE OVERSIGHT OF FANNIE AND FREDDIE WHEN THE OFFICE HAS BEEN VACANT AT THE HIGHEST LEVEL FOR SO LONG? THE BOTTOM LINE IS THAT RESPONSIBLE REFORM MUST ADDRESS FANNIE MAE AND FREDDIE MAC. RESPONSIBLE FORM WOULD PUT AN END TO TAXPAYER-FUNDED BAILOUT OF FANNIE AND FREDDIE AND REFOCUS THEM ON AFFORDABLE HOUSING. SENATORS McCAIN, SHELBY AND GREGG HAVE FAILED AN AMENDMENT TO PROTECT TAXPAYERS AND PUT AN END TO THE GOVERNMENT BAILOUT OF FANNIE AND FREDDIE. IN SHORT, THIS AMENDMENT CUTS UP THE FEDERAL CREDIT CARD BY PUTTING AN END TO THE LIMITLESS LINE OF CREDIT FANNIE AND FREDDIE CURRENTLY ENJOY, COMPLIMENTS OF US AS TAXPAYERS. THIS AMENDMENT PUTS AN END TO THE CONSERVATORSHIP AND REQUIRES EACH TO OPERATE EVENTUALLY WITHOUT GOVERNMENT SUBSIDIES AND ON A LEVEL PLAYING FIELD WITH THE PRIVATE SECTOR. NEXT OF GREAT IMPORTANCE IS SEED CAPITAL. IT'S CRITICAL IN REFORMING WALL STREET WE NOT PUNISH MAIN STREET AND THE VERY SPECIFIC SMALL BUSINESS START-UPS THAT ARE SO CRITICAL TO JOB CREATION. IF THERE IS ONE THING WE'RE WORRYING ABOUT, IT'S WHERE ARE THE JOBS. I'LL TELL YOU WHERE THE JOBS ARE. THEY ARE THE JOBS THAT THE ENTREPRENEURS AND THE INNOVATORS AND THE INVENTORS CAN START UP. UNFORTUNATELY, IN THE CURRENT FORM OF THIS BILL, THERE ARE PROVISIONS THAT WILL KILL THE BUSINESS START-UPS. WHILE TITLE 9 OF THE DODD BILL HAS BEEN LITTLE TALKED ABOUT -- FAR TOO LITTLE, IF MY OPINION -- -- IN MY OPINION, IT COULD HAVE DEVASTATING CONSEQUENCES. THIS BILL COULD DELAY SMALL BUSINESS START-UPS BY ELIMINATING THE AVAILABILITY OF PRIVATE INVESTOR SEED CAPITAL. AND THAT'S ESSENTIAL WHERE THESE START-UPS ARE VIABLE IN GROWTH. THROUGH NEW BURDENSOME REGULATION BY THE S.E.C., INNOVATORS AND ENTREPRENEURS WOULD BE SUBJECT TO REGISTERING WITH THE S.E.C. FOR A FOUR-MONTH REVIEW, THUS TYING UP VITAL VENTURE CAPITAL NEEDED FOR IMMEDIATE USE BY NEW BUSINESS. THIS COULD CRIPPLE NEW BUSINESSES. NEXT, IT WOULD ADD A FURTHER REQUIREMENT TO RAISE THE NET WORTH TO THOSE WHO CAN INVEST INVEST $2.3 MILLION, RAISING THE ANNUAL HOUSEHOLD INCOME TO TO $450,000. AS THE BILL PROPOSES. THIS WOULD DISQUALIFY TWO-THIRDS OF CURRENT ACCREDITED INVESTORS ACCORDING TO THE AGE OLD CAPITAL ASSOCIATION. SMALL BUSINESS AND START-UP COMPANIES ARE THE BACKBONE OF OUR COUNTRY. THEY ARE WHERE WE ARE LOOKING TO GET THE NEW JOBS OF THE FUTURE, AND THE CRITICAL ROLE IS PLAYED BY ANGEL INVESTORS IN CREATING AND DEVELOPING NEW COMPANIES SMALL OR LARGE. I'LL TELL YOU, I WILL CONFESS, THIS IS OF PARTICULAR CONCERN TO MY STATE OF MISSOURI WHERE I HAVE BEEN WORKING FOR A LONG TIME TO BUILD AN AGRICULTURAL BIOTECH CORRIDOR ACROSS THE STATE. IN MISSOURI, WE HAVE THE RESEARCH INSTITUTIONS, THE SCIENTIFIC LEADERS AND ADVANCED AG RESEARCH AND BIOTECHNOLOGY. THE RESEARCH AND BIOTECH INDUSTRY IS OUR BEST HOPE FOR A STIMULUS TO CREATE HIGH-PAYING, SKILLED JOBS IN RURAL AS WELL AS URBAN MISSOURI AND I WOULD SAY ACROSS AMERICA. THE STIMULUS THESE BIOTECH AND RESEARCH COMPANIES ARE SPURRING IN MISSOURI IS ALSO HAPPENING TODAY ACROSS THE NATION. ACCORDING TO THE KAUFMAN FOUNDATION, BETWEEN 1980-2005, COMPANIES LESS THAN FIVE YEARS OLD ACCOUNTED FOR ALL, ALL THE NET JOB GROWTH IN THE U.S. AS A MATTER OF FACT, THAT SAME STUDY SHOWED THAT IN 2008, ANGEL INVESTORS PROVIDED ROUGHLY $19 BILLION TO HELP START UP MORE THAN 55,000 COMPANIES. WHY WOULD YOU WANT TO LIMIT THAT? THE BILL, IF ENACTED, WOULD DENY IMMEDIATE ACCESS TO THE CAPITAL AND WOULD SAY TO THESE INNOVATORS AND ENTREPRENEURS YOU ARE TOO SMALL TO SUCCEED, TOO SMALL TO SURVIVE. NOT TOO BIG TO FAIL. BUT THERE'S GOOD NEWS HERE, AND THERE IS A BIPARTISAN SOLUTION IN THE WORKS. I'M VERY THANKFUL AND GRATEFUL TO SENATOR DODD WHO HAS AGREED TO WORK WITH ME TO FIX THE PROBLEM. WE BOTH WANT TO PROTECT THESE SMALL BUSINESS START-UPS VITAL TO JOB CREATION ACROSS THE COUNTRY. I THINK WE'RE CLOSE TO AN AGREEMENT TO FIX THIS AND HOPE TO HAVE A BIPARTISAN AMENDMENT SOON, AND I WOULD URGE ALL MY COLLEAGUES TO TAKE A LOOK AT IT AND TO JOIN US IN SUPPORTING IT. NEXT AND FINALLY FOR TODAY, TO GO TO ONE OF THE BIGGEST PROBLEMS IN THE BILL, I BELIEVE WILL UNDOUBTEDLY HURT ORDINARY AMERICANS WHO HAD NO ROLE IN CAUSING THE FINANCIAL CRISIS. THAT'S THE CREATION OF THE SO-CALLED CONSUMER FINANCIAL PROTECTION BUREAU, CFPB. THOSE INITIALS COULD IN THE FUTURE SCARE PEOPLE MORE THAN ALL THE COMBINED DEADLY TEN ACRONYMS OF I.R.S., E.P.A. AND S.E.C. THIS NEW MASSIVE SUPERGOVERNMENT BUREAUCRACY WOULD HAVE UNPRECEDENTED AUTHORITY TO IMPOSE EXPENSIVE MANDATES ON ANY ENTITIES THAT EXTEND CREDIT. WE'RE NOT TALKING ABOUT GOLDMAN SACHS OR BIG WALL STREET BANKS. INSTEAD, THIS NEW SUPERBUREAUCRACY COULD HIT HARD YOUR COMMUNITY BANKER, FARM LENDER, LOCAL DENTIST OR AUTO DEALER. THE PAIN ON MAIN STREET WON'T JUST BE BORNE BY SMALL BUSINESS, BUT THE COST WILL BE PASSED ON TO CONSUMERS. ORDINARY AMERICANS THE BILL SEEKS TO PROTECT, IT MIGHT EVEN COST THEM THEIR JOBS. THE NATIONAL FEDERATION OF INDEPENDENT BUSINESS, A STRONG VOICE, STATED THEIR CONCERN CLEARLY WHEN THEY SAID -- "THESE SMALL BUSINESSES HAD NOTHING TO DO WITH THE WALL STREET MELTDOWN AND SHOULD NOT BE FACED WITH OWNER US NEW AND -- WITH ONEROUS NEW AND DUPLICATIVE REGULATIONS BECAUSE OF PROBLEMS THEY DID NOT CAUSE. FURTHER AS THE MOST RECENT SMALL BUSINESS TREND SURVEYS SHOWS, SMALL BUSINESSES CONTINUE TO STRUGGLE WITH LOST SALES AND SUCH REGULATIONS COULD MAKE THESE PROBLEMS WORSE, STIFLING ANY POTENTIAL SMALL BUSINESS RECOVERY." CLOSE QUOTE. AND THAT, MR. PRESIDENT, IS WHY I JOIN WITH SENATORS McCONNELL, GREGG, SHELBY AND OTHERS ON AN AMENDMENT TO FIX THE PROBLEM. INSTEAD OF CREATING A BRAND-NEW SUPERBUREAUCRACY WITH UNLIMITED AUTHORITY AND REACH, OUR AMENDMENT WOULD EMPOWER THE FDIC TO LOOK OUT FOR CONSUMERS. IT MAKES SENSE. THE FDIC IS THE ONE THAT HAS A STRONG RECORD OF PROVIDING CONSUMER PROTECTIONS. IT HAS A RECORD OF BEING ABLE TO DEAL WITH FINANCIAL INSTITUTIONS. IT IS DEALING WITH THE FINANCIAL INSTITUTIONS THAT GET INTO PROBLEMS. WITH THE BANKS, ANYBODY THAT IS REGULATED BY THE FDIC, THEY ARE IN THERE LOOKING OVER THEIR SHOULDER. OUR AMENDMENT WOULD CREATE A DIVISION OF CONSUMER FINANCIAL PROTECTION IN THE FDIC SO THEY COULD PROTECT CONSUMERS WITHOUT ADDING BURDENSOME AND DUPLICATIVE REGULATIONS. THEY WOULD AVOID COSTS BEING PASSED ON TO THE CONSUMERS, THE VERY FOLKS WHO ARE TRYING TO PROTECT, NOT SADDLE THEM WITH NEW COSTS. THE AMENDMENT WOULD ENSURE THAT CONSUMER PROTECTION FOCUSES ON THE REAL CULPRITS CURRENTLY OPERATING UNDER THE RADAR. THIS SHADOW BANKING, AS I CALL IT, OR AS I WOULD LIKE TO SAY THE CLICKS, NOT THE BRICKS. THESE ARE PEOPLE WHO HAVE PREYED ON VULNERABLE AMERICANS. BEFORE THE FINANCIAL CRISIS WAS BROUGHT ON BY BAD LOANS, ESPECIALLY TOO GOOD TO BE TRUE HOME LOANS PUSHED ON FAMILIES WHO COULD NOT AFFORD THE LOANS, MY FACTION AND -- MY FAX AND INBOX WERE CLUTTERED, DESPITE MY BEST SPAM FILTERS, WITH 1% OR NO DOWN PAYMENT OFFERS. THESE OFFERS WERE NOT REGULATED EFFECTIVELY BY STATE REGULATORS, THE S.E.C., THE FEDERAL RESERVE OR THE O.C.C. THEY SUCCEEDED IN ESCAPING EFFECTIVE REGULATION ENTIRELY, ALTHOUGH SOME HAVE LATER FALLEN TO REGULATION BY U.S. ATTORNEYS WHO FILED CRIMINAL FRAUD SUITS A LITTLE BIT TOO LATE IN THE GAME. ALSO IMPORTANT TO THIS NEW DIVISION BE TASKED WITH FINANCIAL LITERACY AS I WILL CONTINUE TO STRESS. WE HAVE TO IMPROVE CONSUMER EDUCATION IN ANY AND ALL AREAS WHERE LOANS ARE MADE. WHILE FORECLOSURE COUNSELING IS IMPORTANT, IT'S ANOTHER BIPARTISAN PROGRAM WITH WHICH I WORK -- WHICH I WORKED WITH SENATOR DODD IN DECEMBER, 2007, BUT $180 MILLION IN IT. WE WENT OUT AND REACHED OUT TO FINANCIAL COUNSELING GROUPS. THEY ARE DOING A GOOD JOB TRYING TO HELP COUNSEL FAMILIES IN DANGER OF LOSING THEIR HOMES ON WAYS TO SOLVE THE PROBLEM, BUT THEY CAME BACK WITH THIS UNANIMOUSLY, PLEADED WITH US TO SAY MAKE AVAILABLE PRELOAN COUNSELING BEFORE SOMEBODY BUYS A HOME. MAKE SURE THEY UNDERSTAND THE TERMS. MAKE SURE THEY TAKE A LOOK TO SEE WHETHER THEY CAN AFFORD TO SERVICE THE LOAN. WELL, THESE ARE JUST SOME OF THE THINGS WE NEED TO DO. MISSOURIANS IN MY STATE AND PEOPLE ACROSS AMERICA ARE ANGRY. THEY ARE ANGRY THAT BAD ACTORS CAUSED THE FINANCIAL CRISIS AND LEFT MANY OF THEM WITH A PINK SLIP INSTEAD OF A PAYCHECK. THEY ARE ANGRY AT WALL STREET BAD ACTORS THAT LEFT THEM WITH A NIGHTMARE OF FORECLOSURE INSTEAD OF THE AMERICAN DREAM OF HOMEOWNERSHIP. THEY ARE ANGRY THE GOVERNMENT HAS COMMITTED TRILLIONS OF TAXPAYER DOLLARS FOR RESCUING THE FINANCIAL INDUSTRY. BUT SO MANY OF THEM ARE STILL STRUGGLING TO PAY THE BILLS. IS IT ANY SURPRISE THAT MISSOURIANS AND AMERICANS ACROSS THE COUNTRY ARE SKEPTICAL ABOUT FINANCIAL REFORM? THESE FOLKS WERE MADE MORE SKEPTICAL WHEN THEY HEARD AND SAW ON TV AND READ IN THE PAPER THAT IT'S THE ACTORS ON WALL STREET WITH WHOM THE BILL WAS SUPPOSED TO DEAL AND WHO CAUSED THE FINANCIAL CRISIS THAT ARE NOW CHEERLEADING THIS BILL. MISSOURIANS ASK ME HOW THIS BILL CAN BE REAL REFORM WHEN THE HEAD OF INVESTMENT BANK GOLDMAN SACHS, WHO IS SUPPORTING THE BILL, SAID, QUOTE -- LET ME MAKE SURE YOU UNDERSTAND. THIS IS FROM THE HEAD OF THE LARGEST INVESTMENT BANK ON WALL STREET. "THE BIGGEST BENEFICIARY OF THIS REFORM IS WALL STREET ITSELF." CLOSE QUOTES. THAT'S A QUOTE ABOUT THE ORIGINAL BILL. MISSOURIANS HAVE ASKED ME NOT TO PASS A BILL THAT WILL BAIL OUT OUT -- THAT WILL BAIL OUT WALL STREET. WE NEED TO TAKE CARE OF MAIN STREET. THERE IS NO BAILOUT FOR STRUGGLING FAMILIES. WE DON'T WANT ANY MORE WALL STREET BAILOUTS. PASS A BILL THAT REFORMS WALL STREET THAT PROTECTS THE MAIN STREET. WE HAVE AN OPPORTUNITY, I BELIEVE, TO PASS REAL RESPONSIBLE AND BIPARTISAN REFORM. IF SENATORS FROM BOTH PARTIES WILL LISTEN TO THE CONCERNS RAISED BY ORDINARY AMERICANS WHO DIDN'T CAUSE BUT ARE PAYING FOR THE FINANCIAL CRISIS. AND I HAVE HEARD SIMILAR CONCERNS DISCUSSED BY SPEAKERS ON THE OTHER SIDE OF THE AISLE THAT SAY -- THAT SEEM TO INDICATE THAT WE ARE -- WE SHARE THE SAME CONCERNS, AND I HOPE WE CAN WORK TOGETHER, MR. PRESIDENT, TO GET A GOOD, STRONG REFORM BILL THAT WILL DEAL WITH THE PROBLEMS THAT CAUSED THE LAST FINANCIAL TRANSACTION, PROTECT THE CONSUMERS, ASSURE THE SAFETY AND SOUNDNESS OF ALL FINANCIAL INSTITUTIONS AND NOT SUBJECT THEM TO SPECIAL INTERESTS WHO MAY HAVE PUSHED FOR THE BAD LOANS THAT CAUSED THE LAST CRISIS. MR. PRESIDENT, I THANK THE CHAIR AND YIELD THE FLOOR, AND I SUGGEST THE ABSENCE OF A QUORUM.

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  • 01:30:00 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: THE CLERK WILL CALL THE ROLL. QUORUM CALL: QUORUM CALL:…

    PRESIDING OFFICER: THE CLERK WILL CALL THE ROLL. QUORUM CALL: QUORUM CALL: MRS.

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  • 01:30:26 PM

    Quorum Call

  • 01:38:54 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: THE SENATOR FROM CALIFORNIA IS RECOGNIZED.

  • 01:38:56 PM

    MRS. BOXER

    I ASK THAT THE QUORUM CALLING DISPTIONED W.

  • 01:38:59 PM

    MRS. BOXER

    WHAT IS THE PENDING BUSINESS, THE ORDER?

  • 01:39:04 PM

    THE PRESIDING OFFICER

    THE AMENDMENT 3826. OFFERED BY SENATOR SHELBY IS THE PENDING BUSINESS.

  • 01:39:14 PM

    MRS. BOXER

    THE SENATOR IS IN ORDER.

  • 01:39:24 PM

    THE PRESIDING OFFICER

    THE SENATOR IS IN ORDER.

  • 01:39:29 PM

    MRS. BOXER

    WITHOUT OBJECTION, SO ORDERED.

  • 01:49:58 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: WITHOUT OBJECTION, SO ORDERED.

  • 01:50:01 PM

    MRS. BOXER

    I WOULD GIVE ONE MORE EXAMPLE THAT I THINK IS VERY IMPORTANT. I TOLD YOU…

    I WOULD GIVE ONE MORE EXAMPLE THAT I THINK IS VERY IMPORTANT. I TOLD YOU THAT THE TEMPLATE FOR SENATOR SHELBY'S NEW CONSUMER PROTECTION AGENCY IS THE F.T.C., AND I TOLD YOU THAT UNDER THOSE RULES, THE F.T.C. HASN'T DONE ANYTHING FOR CONSUMERS SINCE 19 # 4 -- SINCE 1984. BUT LET'S SAY THEY WERE ABLE TO GET NEW RULES WRITTEN. LET'S SAY THEY WERE ABLE TO DO THAT. SENATOR SHELBY INSURES THAT THE RULES THEY WRITE COULD NEVER BE ENFORCED. HOW DOES HE DO THAT? BECAUSE HE SAYS THAT THE ONLY TIME THE WEAKENED CONSUMER DIVISION COULD DO ANY EXAMINATIONS OF SOME FINANCIAL COMPANIES WOULD BE AFTER CONSUMERS HAVE BEEN HARMED REPEATEDLY. THIS IS AFTER THE FACT AUTHORITY. I'VE SEEN TOO MANY PEOPLE CRYING BECAUSE OF WHAT HAPPENED ON WALL STREET. I'VE SEEN TOO MANY PEOPLE CRYING BECAUSE THEY LOST THEIR JOB BECAUSE OF WHAT HAPPENED ON WALL STREET. I'VE SEEN PICTURES IN THE PAPER OF AMERICANS CRYING BECAUSE OF WHAT BERNIE MADOFF DID TO THEM AND THEIR CHILDREN. I WANT THIS STOPPED. I DON'T WANT IT STOPPED AFTER THE FACT. YES, THANK GOODNESS BERNIE MADOFF'S IN PRISON WHERE HE BELONGS. BUT IT'S VERY DIFFICULT TO MAKE THE PEOPLE WHOLE WHO WERE HARMED BY THAT PONZI SCHEME. WE DON'T WANT AFTER THE FACT AUTHORITY, MR. PRESIDENT. WE WANT BEFORE THE FACT AUTHORITY. WE WANT THIS CONSUMER PROTECTION AGENCY TO BE ON ITS TOES, TO INTERVENE, TO SEE IF THERE'S A SCAM GOING ON, TO SEE IF THERE'S A CREDIT CARD SCAM THAT LEADS TO 30%, 40%, 50% INTEREST RATES, TO SEE IF THERE'S A SCAM ON MORTGAGES WHERE PEOPLE UNKNOWINGLY WALK INTO A MORTGAGE WHERE THE RATE GOES UP TO 12%. SO, AT THE END OF THE DAY, WE KNOW CONSUMERS WERE HURT, HURT HARD BY PONZI SCHEMES, BY MARKETS IN THE DARK, CONFUSING MORTGAGE OPTIONS, SOME BORDERING ON FRAUD BY CREDIT CARD SCAMS AND WORSE. SO LET'S TAKE A STAND IN A BIPARTISAN WAY AND VOTE "NO" ON THIS AMENDMENT AND SUPPORT THE CONSUMER PROTECTION AGENCY, THE STRONG ONE THAT IS IN THIS BILL. BECAUSE I CAN TELL YOU WHEN YOU HAVE THAT DONE, THE AMERICAN PEOPLE CAN TAKE A DEEP BREATH AND KNOW THAT THEY WILL BE PROTECTED. I THANK YOU VERY MUCH. I YIELD THE FLOOR. A SENATOR: MR. PRESIDENT?

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  • 01:52:44 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM OREGON IS RECOGNIZED.

  • 01:52:49 PM

    MR. MERKLEY

    I APPLAUD MY COLLEAGUE FROM CALIFORNIA WHO HAS BEEN AN EXTRAORDINARY…

    I APPLAUD MY COLLEAGUE FROM CALIFORNIA WHO HAS BEEN AN EXTRAORDINARY CHAMPION OF CONSUMERS THROUGHOUT HER CAREER. SHE UNDERSTANDS THAT THE BASIS OF A SUCCESSFUL NATION IS SUCCESSFUL FAMILIES. THAT DEPENDS UPON THEM HAVING A STRONG FINANCIAL FOUNDATION. WE SHOULD NOT MEASURE THE SUCCESS OF OUR COUNTRY BY THE MILLION-DOLLAR BONUSES OR THE BILLION-DOLLAR QUARTERLY PROFITS ON WALL STREET. WE SHOULD MEASURE IT BY THE SUCCESS OF OUR FAMILIES, AND THIS BILL -- THE FINANCIAL REFORM BILL -- IS ESSENTIAL TO RESTORING THOSE FINANCIAL FOUNDATIONS. WHEREAS THIS AMENDMENT BEFORE US DOES THE OPPOSE. THE SHELBY AMENDMENT CARVES THE HEART OUT OF THIS BILL. THIS DOG DON'T HUNT. IN FACT, THIS DOG DOESN'T BITE. I DON'T EVEN THINK THIS DOG BARKS, AND FOR THAT MATTER, I'M NOT SURE IT'S A DOG. THAT'S HOW BAD THE SHELBY AMENDMENT IS. NOW, THE BACKGROUND IS THIS: PREDATORY MORTGAGES AND THE SECURITIZATION OF THOSE MORTGAGES ON WALL STREET BUILT A HOUSE OF CARDS ECONOMY THAT CAME FALLING DOWN LAST YEAR. THE PREDATORY MORTGAGES WERE DONE AT THE RETAIL LEVEL. THE SECURITIZATION AND SELLING OF THOSE PACKAGES OCCURRED ON WALL STREET. AND THEY BUILT INVESTMENTS THAT WERE TAKEN IN BY EVERY MAJOR FINANCIAL HOUSE PRACTICALLY IN THE WORLD, AND THOSE INVESTMENTS, THOSE SECURITIES HAD A TWO-YEAR FUSE ON THEM, ESSENTIALLY A TWO-YEAR TEASER RATE ON EVERY UNDERLYING MORTGAGE. AT THE END OF THE TWO YEARS THE MORTGAGE RATES DOUBLED, THE FAMILIES CAN'T MAKE THE PAYMENTS AND THE SECURITIES GO BAD AND WE HAVE ONE FINANCIAL FIRM AFTER ANOTHER COLLAPSING. WE HAVE LEHMAN COLLAPSING, WE HAVE BEAR STEARNS COLLAPSING. WE HAVE MAJOR PROBLEMS AT BANK OF AMERICA NEEDING A BAILOUT. WE HAVE CITIBANK COLLAPSING. ALL BUILT ON PREDATORY PRACTICES, EVERY SINGLE PIECE. THAT'S WHY CONSUMER PROTECTION IS SO IMPORTANT. THAT'S WHY IT'S AT THE VERY HEART OF THIS BILL. THAT'S WHY WE NEED A CONSUMER FINANCIAL REGULATION AGENCY. NOW, I HAVE FRIENDS BACK IN OREGON WHO WRITE TO ME, CITIZENS BACK IN OREGON, CONSTITUENTS WHO WILL SAY HERE'S WHAT WENT ON, AND HOW CAN THAT BE FAIR? LET ME GIVE YOU AN EXAMPLE. A WOMAN FROM SALEM WROTE TO ME AND SHE SAID, "I ALWAYS PAY MY CREDIT CARD ON TIME. ALWAYS HAVE FOR YEARS AND YEARS. BUT I GOT MY CREDIT CARD STATEMENT AND IT HAD A LATE FEE, AND SO I CALLED UP THE CREDIT CARD COMPANY AND SAID HOW IS IT POSSIBLE? I ALWAYS MAIL MY PAYMENT ON THIS DAY. IT SHOULD HAVE HAD PLENTY OF TIME TO GET THERE. THE CREDIT CARD COMPANY SAID, YES, AS A MATTER OF FACT, YOUR PAYMENT DID COME ON TIME. BUT, YOU KNOW, MADAM, WE ARE NOT REQUIRED TO POST YOUR PAYMENT ON THE DAY WE RECEIVE IT. IN FACT, UNDER THE CONTRACT THAT WE HAVE, WE CAN SIT ON YOUR PAYMENT FOR TEN DAYS AND THEN POST IT, AND THEN YOUR PAYMENT'S LATE, WE GET TO CHARGE YOU THIS FEE. AND WE'RE JUST FOLLOWING THE RULES. AND SHE SAID, HOW CAN THAT BE FAIR?" WELL, IT'S NOT FAIR. EVERYONE KNOWS IT'S NOT FAIR. LET ME GIVE YOU ANOTHER EXAMPLE. CITIZENS WHO WROTE SAYING, HEY, I HAD A WHOLE SERIES OF TRANSACTIONS WITH MY BANK, AND THEN THE BANK CHANGED THE ORDER OF THOSE TRANSACTIONS TO PUT THE BIGGEST TRANSACTION FIRST. IT SO HAPPENED THAT BIGGEST TRANSACTION MADE ME $10 OVER THE FUNDS I HAD IN THE BANK. I HAD AN OVERDRAFT. BUT BY PUTTING THAT TRANSACTION FIRST, IT MEANT THAT INSTEAD OF ONE OVERDRAFT FEE, I HAVE TEN OVERDRAFT FEES. INSTEAD OF OWING $10 FOR ONE OVERDRAFT, I OWE $350 FOR AN OVERDRAFT SERIES. HOW CAN IT BE FAIR THE ORDER WAS CHANGED IN ORDER TO MULTIPLY THE FEES I OWE TENFOLD? NOW, EVERYONE KNOWS THAT THAT'S NOT FAIR. EVERYONE KNOWS IT. AND WE SIMPLY NEED TO HAVE AN AGENCY THAT IS ABLE TO SAY THAT'S NOT OKAY. WE DON'T WANT TO HAVE A PROCESS WHERE SOMETHING THAT IS UNFAIR GOES ON FOR TEN YEARS OR 15 YEARS OR 20 YEARS BEFORE THERE'S LEGISLATION TO ADDRESS IT. YOU CAN'T ADDRESS A CONSUMER PRODUCTS CHOKING HAZARD BY DOING IT IN LEGISLATION. YOU HAVE TO EMPOWER AN AGENCY TO SAY NO, THAT PART'S TOO SMALL. YOU CAN'T ADDRESS LEAD PAINT BY DOING LEGISLATION EVERY TIME SOMETHING'S PAINTED. YOU HAVE TO HAVE AN AGENCY TO SAY WE'LL TEST THAT PAINT AND WE'LL SAY LEAD PAINT IS NOT OKAY. IT'S THE SAME IN CONSUMER FINANCIAL PRODUCTS. WE NEED THE SAME POWER TO FIX TRAPS AND TRICKS IN REAL TIME FOR FAIRNESS TO AMERICA'S FAMILIES, SO THEY CAN REBUILD THEIR FINANCIAL FOUNDATIONS. BECAUSE THAT'S WHAT A STRONG COUNTRY IS: FAMILIES WITH STRONG FINANCIAL FOUNDATIONS. NOT MILLION-DOLLAR BONUSES, NOT BILLION-DOLLAR QUARTERLY PROFITS BASED ON STRIPPING FUNDS FROM WORKING AMERICANS. AND IT ALL COMES DOWN TO THE HEART OF IT: FAIRNESS IN CONSUMER FINANCIAL DOCUMENTS. LET'S TAKE A LOOK AT THE AMENDMENT, NUMBER 3826, AND WHY IT CARVES THE HEART OUT OF THIS IMPORTANT BILL FOR AMERICA'S FAMILIES, AMERICA'S MAIN STREET FAMILIES AND BUSINESSES. BECAUSE HERE IS WHAT IT DOES. FIRST, IT SAID VIRTUALLY NO ONE IS COVERED. NOW LET'S LOOK AT THE LIST HERE. WATER COVERED -- WHAT ARE COVERED ARE LARGE NONBANK MORTGAGE ORIGINATORS. LARGE NONBANK MORTGAGE ORIGINATORS DON'T REALLY EXIST ANYMORE. SO IT'S COVERING FIRMS THAT DON'T REALLY EXIST ANYMORE. IT'S KIND OF LIKE SAYING WE'RE GOING TO HAVE THE REGULATION OF SAFETY ON CARS, BUT IT'S ONLY BEING FOR CARS THAT ARE POWERED BY GASOLINE AND WERE BUILT BEFORE 1850. NO SUCH CARS REALLY EXIST. ALL THE OTHER CARS, THE ONES ACTUAL LIP ON THE ROAD, WE'RE NOT -- THE ONES ACTUALLY ON THE ROAD, WE'RE NOT GOING TO COVER THEM. LET'S SEE IF WE HAVE A LIST HERE. WE HAVE. COMMERCIAL BANKS, NOT COVERED. INVESTMENT BANKS, NOT COVERED. CREDIT CARD COMPANIES, NOT COVERED. CAR LENDERS, NOT COVERED. PAYDAY LENDERS, NOT COVERED. NONBANKS THAT SELL FINANCIAL PRODUCTS OF A WHOLE SORT, NOT COVERED. WELL, I THINK YOU GET THE PICTURE THAT THIS AMENDMENT IS MEANT TO MAKE SURE NOTHING IS COVERED. AND THEN JUST IN CASE THERE'S SOME LITTLE PIECE THAT DOES GET COVERED, IT SAYS, YOU KNOW WHAT? THIS AGENCY IS NOT INDEPENDENT. IT CANNOT WRITE RULES. IT HAS TO HAVE EVERYTHING IT DOES APPROVED BY FINANCIAL WORLD, THE FINANCIAL WORLD THAT BROUGHT US ALL THESE PROBLEMS, THAT BROUGHT US THE TRICKS AND TRAPS, THAT STRIPPED WEALTH FROM WORKING AMERICANS. THEY'RE GOING TO DECIDE WHAT'S COVERED. I WOULD ECHO MY CONSTITUENT FROM SALEM AND SAY WHERE IS THE FAIRNESS IN THAT?

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  • 02:00:25 PM

    MR. DURBIN

    CERTAINLY.

  • 02:00:29 PM

    MR. DURBIN

    AS I UNDERSTAND THE REPUBLICAN AMENDMENT AMENDMENT, IT GOES BACK TO THE…

    AS I UNDERSTAND THE REPUBLICAN AMENDMENT AMENDMENT, IT GOES BACK TO THE OLD DAYS WHERE THERE WAS VIRTUALLY NO CONSUMER FINANCIAL PROTECTION. THE BILL THAT WE HAVE BEFORE US HERE THAT SENATOR DODD AND THE BANKING COMMITTEE BROUGHT HAS THE STRONGEST CONSUMER FINANCIAL PROTECTION LAW IN THE HISTORY OF THE UNITED STATES. IT HAS AN AGENCY WITH INDEPENDENT AUTHORITY TO PROTECT AMERICANS, BUT MORE IMPORTANTLY, TO EMPOWER AMERICANS TO MAKE THE RIGHT DECISIONS WHEN THEY'RE TAKING OUT A MORTGAGE, A LOAN FOR THE CAR, A HOME LOAN, A STUDENT LOAN, AND WHAT THE REPUBLICANS ARE SUGGESTING IN THE SHELBY AMENDMENT IS TO GO BACK TO THE OLD DAYS WHERE THERE WAS NO PROTECTION, THERE WAS NO AUTHORITY, AND I ASK THE SENATOR, THE ARGUMENT THAT'S MADE ABOUT THE FACT THAT, WELL, WHEN IT COMES TO MORTGAGES, THEY WEREN'T THE PROBLEMS. THE PROBLEMS WERE WALL STREET. BUT AT THE HEART OF THE ISSUE ON WALL STREET WAS THE MORTGAGE BEING SIGNED BY THE FAMILY IN SPRINGFIELD, ILLINOIS RS AND PORTLAND, OREGON. I ASK THE SENATOR, IN YOUR STATE, IN YOUR EXPERIENCE, AS YOU LOOK AT THIS, IF THE REPUBLICANS HAD THEIR WAY OF MOVING US BACK TO THE OLD DAYS WHEN IT COMES TO THIS CONSUMER EMPOWERMENT, CONSUMER PROTECTION DON'T, WE RUN THE RISK OF FALLING INTO OTHER ECONOMIC CRISIS, LOSING MILLIONS MORE OF JOBS ACROSS AMERICA? ISN'T THAT THE RISK WE RUN IF WE GO THE ROUTE SUGGESTED BY THE REPUBLICAN AMENDMENT?

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  • 02:01:51 PM

    MR. MERKLEY

    MY COLLEAGUE IS ABSOLUTELY RIGHT, THAT BECAUSE MORTGAGE -- PREDATORY…

    MY COLLEAGUE IS ABSOLUTELY RIGHT, THAT BECAUSE MORTGAGE -- PREDATORY MORTGAGE PRACTICES WERE AT THE HEART OF THIS CRISIS THAT LED TO SECURITIES THAT BLEW UP THE ECONOMY, WHICH LED TO THE LOSS OF MILLIONS OF JOBS AROUND OUR NARKSNATION, AN UNEMPLOYMENT IN MY STATE THAT HAS BEEN OVER 12%, WE NOT ONLY HAVE THE RISK OF GOING BACK THERE, WE'RE PERHAPS MORE AT RISK, BECAUSE WE HAVE FEWER LARGER BANKS AND MANY INVESTMENT HOUSES THAT WERE INDEPENDENT ARE NOW INSIDE THOSE BANKS IN A POSITION WHERE IF THEY BLOW UP, THEY WILL BLOW UP THE BANKS AS WELL. SO UNLESS WE HAVE THIS STRONG CONSUMER FINANCIAL PROTECTION AGENCY, IT'S LIKE TAKING THIS BILL BEFORE US AND STICKING IT IN THE SHREDDER AND WITH IT SHREDDING THE HOPES AND ASPIRATIONS OF AMERICA'S WORKING FAMILIES TO BUILD STRONG FINANCES IN THE FUTURE.

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  • 02:02:42 PM

    MR. DURBIN

    IF THE SENATOR WOULD YIELD FOR A ANOTHER QUESTION --

  • 02:02:47 PM

    MR. DURBIN

    TRUE THAT LAST WEEK ON THREE DIFFERENT OWE EDUCATIONS THE REPUBLICANS…

    TRUE THAT LAST WEEK ON THREE DIFFERENT OWE EDUCATIONS THE REPUBLICANS FILIBUSTERED THIS BILL TO STOP US FROM EVEN STARTING THE DEBATE ON THIS BILL? THAT UNLESS AND UNTIL THEY REACH THE POINT AFTER THE GOLDMAN SACHS HEARING WHEN THERE WAS THIS EMBARRASSING TESTIMONY FROM EXECUTIVES TELLING AMERICA WHAT THEY WERE UP TO, IT WAS ONLY AFTER THAT HEARING WHEN IT ALL BECAME VERY PUBLIC THAT THE REPUBLICANS FINALLY BACKED OFF THEIR FILIBUSTER, BACKED OFF THEIR DELAY OF THIS LEGISLATION, AND NOW LET US COME FORWARD AND DEBATE AND NOW ONE OF THE FIRST AMENDMENTS THEY OFFER IS TO WEAKEN THIS BILL SO THAT THE FINANCIAL INSTITUTIONS AND THE BANKS ARE GOING TO HAVE MORE POWER OVER THE ECONOMY, MORE POWER OVER CONSUMERS, THAN THIS BILL PROVIDES? ISN'T THAT THE HISTORY, THE REAL HISTORY OF HOW WE GOT TO THIS MOMENT IN THIS DEBATE?

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  • 02:03:34 PM

    MR. MERKLEY

    -- THE SENATOR IS ABSOLUTELY CORRECT, THAT INDEED MY COLLEAGUES ACROSS THE…

    -- THE SENATOR IS ABSOLUTELY CORRECT, THAT INDEED MY COLLEAGUES ACROSS THE AISLE, THE REPUBLICANS, VOTED THREE TIMES TO SAY WE DO NOT WANT TO PROCEED TO THE BILL WHERE OUR IDEAS WOULD BEAR PUBLIC EXPRIEWT KNEE. INSTEAD, WE WANT TO TALK BEHIND CLOSED DOORS. YOU KNOW WHAT THEY WERE LOOKING TO DO IS NOT TO STRENGTHEN THIS BILL. AND NOW WE DO SEE THAT NOW THE AMENDMENT HAS COME OUT AND BEEN PLACED BEFORE US PUBLICLY, IT DOES AS WE FEAR. IT'S DESIGNED TO TAKE A KNIFE AND CARVE THE HEART OUT OF THIS FINANCIAL REFORM.

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  • 02:04:08 PM

    MR. DURBIN

    I WOULD ASK THE SENATOR FROM OREGON, IF HE'D YIELD FOR ONE LAST QUESTION,…

    I WOULD ASK THE SENATOR FROM OREGON, IF HE'D YIELD FOR ONE LAST QUESTION, NOW THAT WE'VE BEEN THROUGH THIS EXPERIENCE WHERE WE LOST $17 TRILLION IN VALUE IN THIS AMERICAN ECONOMY, $17 TRILLI ACCOUNTED FOR IN THE SAVINGS OF ACCOUNTS OF ORDINARY AMERICANS IN ILLINOIS AND OREGON, $17 TRILLION IN BUSINESSES THAT FAILED ANDS, IN JOBS THAT WERE LOST, ISN'T IT CRITICALLY IMPORTANT THAT THIS BILL FROM THE SENATE BANKING COMMITTEE MOVE FORWARD AND THAT EACH AMENDMENT TAKE THIS STRONG BILL AND MAKE IT STRONGER INSTEAD OF THE REPUBLICAN AMENDMENTS, WHICH COMPLEERL ARE DESIGNED TO WEAKEN THIS -- WHICH CLEARLY ARE DESIGNED TO WEAKEN THIS AMENDMENT AND OPEN US UP TO THE VULNERABLE OF MORE JOB LOSS AND MORE ECONOMIC CRISIS?

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  • 02:04:52 PM

    MR. MERKLEY

    MY COLLEAGUE IS ABSOLUTELY CORRECT. THE FAILURE OF FINANCIAL RULES THAT…

    MY COLLEAGUE IS ABSOLUTELY CORRECT. THE FAILURE OF FINANCIAL RULES THAT DID SUCH A DEVASTATING IMPACT TO OUR FAMILIES -- AS YOU PUT IT, D $17 TRILLION WORTH OF DAMAGE T MEANS FAMILIES WHOSE HOUSES ARE UNDER WATER IF THEY'RE LUCKY, FOR MANY FAMILIES IT MEANS LOSS OF A JOB, LOSS OF HEALTH CARE, LOSS TO MAKE THOSE MORTGAGE PAYMENTS AT ALL. AND THEY HAVE LOST THEIR DREAM AT EVERY SINGLE LEVEL. THAT'S THE DAMAGE THAT THAT $17 TRILLION DID TO OUR FAMILIES AND THAT'S WHY THE BILL THAT WE HAVE BEFORE US RIGHT NOW, EVERY AMENDMENT SHOULD SEEK TO SAY, HERE'S THE BILL AND HERE'S HOW WE WILL MAKE IT STRONGER. AND WITH THAT, MR. PRESIDENT, I YIELD THE FLOOR.

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  • 02:05:42 PM

    MR. DODD

    WANT TO QUAKILY -- I APPRECIATE EVERYONE WANTING TO MAKE MY BILL STRONGER.…

    WANT TO QUAKILY -- I APPRECIATE EVERYONE WANTING TO MAKE MY BILL STRONGER. EVERY BILL CAN USE A LITTLE IMPROVEMENT. I WANT TO COMPLIMENT MY COLLEAGUE AND A MEMBER OF THE BANKING COMMITTEE, SENATOR MERKLEY. HE'S BEEN A VERY VALUED MEMBER OF THIS COMMITTEE. I MENTIONED EARLIER THAT WE'VE HAD -- IN THE COMMITTEE MEETING, IT IS BY SENIORITY. AND I'VE GOT THIS CLUSTER OF NEW MEMBERS DOWN AT THE END OF THIS COMMITTEE TABLE, AND THE SENATOR FROM ILLINOIS AND I HAVE BEEN AT THAT POSITION ON THOSE TABLES BACK OVER THE YEARS, BUT BETWEEN SENATOR TESTER AND SENATOR MERKLEY AND SENATOR BENNET, THEY KIND OF OCCUPY THAT LAST THREE SEATS ON THE BANKING COMMITTEE. AND I SAW THAT WITH GREAT RESPECT TO ALL THE REST WHO ARE ON THE COMMITTEE. BUT THOSE THREE NEW MEMBERS ON THE COMMITTEE HAVE ADDED TREMENDOUS VALUE TO OUR DEBATES AND PARTICULARLY THE SENATOR FROM OREGON HAS BEEN WONDERFUL IN HIS CONCERN ABOUT MORTGAGES, PREPAYMENT PENALTIES, WHAT'S HAPPENED TO THE 7 MILLION FORECLOSURES IN OUR COUNTRY, THE 8.5 MILLION JOBS THAT GOT LOST IN OUR NATION, AND WHY WE NEED TO ADDRESS THIS ISSUE, WHY IT IS SO CRITICALLY UPON. I WANT TO MAKE ONE MORE POINT ABOUT THIS RAIMENT, THE SHELBY AMENDMENT THAT MAY BE LOST ON OUR COLLEAGUES HERE. IN OUR BILL THERE'S NO ASSESSMENT ON A NONBANK OR A BANK. BUT THERE ARE ASSESSMENTS IN THIS AMENDMENT. WE JUST WENT THROUGH THE TESTER-HUTCHISON AMENDMENT TO ACTUALLY LOWER THE ASSESSMENTS ON COMMUNITY BANKS. WHAT A GREAT IRONY THAT THE NEXT AMENDMENT, THOSE HAVING SUPPORTED THE EARLIER AMENDMENT TO REDUCE COSTS, THIS AMENDMENT SETS ASSESSMENTS. COMMUNITY BANKS HAVE ASSESSMENTS ON THE NONBANKS OUT THERE IN ORDER TO PAY FOR THEIR CONSUMER BUREAU WITHIN THE FDIC. SO I -- THOSE WHO ARE CONCERNED ABOUT THE BURDENS ON COMMUNITY BANKS -- AND I THINK A LEGITIMATE CONCERN, ONE THAT I THINK THE HUTCHISON-TESTER AMENDMENT DID A GREAT DEAL TO ALLEVIATE -- THEY'RE GOING TO TURN RIGHT AROUND ON THESE INSTITUTIONS THAT ARE STRUGGLING TO STAY ALIVE TO SERVE THEIR COMMUNITIES AND ADD A FINANCIAL BURDEN TO THEM. FOR ALL OF THOSE REASONS THE SENATOR FROM OREGON MENTIONED PLUS THAT ONE, THE SHELBY AMENDMENT DESERVES TO BE DEFEATED. I YIELD THE FLOOR.

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  • 02:07:59 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM WYOMING IS RECOGNIZED.

  • 02:08:02 PM

    MR. ENZI

    THE SENATOR FROM FLORIDA IS RECOGNIZED.

  • 02:23:41 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM FLORIDA IS RECOGNIZED.

  • 02:23:44 PM

    MR. LeMIEUX

    YOU, MR. PRESIDENT. WHILE I COULDN'T HAVE SAID BETTER WHAT MY FRIEND AND…

    YOU, MR. PRESIDENT. WHILE I COULDN'T HAVE SAID BETTER WHAT MY FRIEND AND COLLEAGUE SAID FROM WYOMING, JUST TALKED ABOUT IN TERMS OF THIS CONSUMER PROTECTION BILL. EVERY MEMBER OF THIS BODY IS IN FAVOR OF CONSUMER PROTECTION. THE GOAL IS TO GET IT RIGHT, NOT TO DO TOO MUCH AND NOT TO DO TOO LITTLE. I THINK IT'S IMPORTANT FOR US TO REMEMBER WHAT WE'RE TRYING TO ADDRESS. WE'RE TRYING TO ADDRESS THE FINANCIAL MARKET MELTDOWN THAT HAPPENED IN 2008 AND THE RAMIFICATIONS THAT HAVE BEEN SO DEVASTATING TO THIS ECONOMY, VERY DEVASTATING IN MY HOME STATE OF FLORIDA. BUT WHAT WE SHOULD DO IS ADDRESS THE PROBLEM. WHAT WE SHOULD DO IS TRY TO MAKE SURE THE PROBLEM DOESN'T HAPPEN AGAIN AND NOT USE THIS CRISIS AS AN OPPORTUNITY TO CREATE A HUGE NEW ALL-POWERFUL BUREAU OF GOVERNMENT THAT IS GOING TO REGULATE ORTHODONTISTS AND FOLKS THAT HAVE NOTHING TO DO WITH THIS FINANCIAL CRISIS. LET'S THINK BACK ABOUT WHAT HAPPENED. TO ME THERE,'S REALLY THREE OR FOUR PARTS OF THIS STORY WHERE YOU CAN FIND THE CULPABILITY, PLACES WHERE WE SHOULD BE REGULATING, SOME OF WHICH IS NOT DONE IN THIS BILL. ONE IS WE KNOW MORTGAGES WERE GIVEN TO PEOPLE WHO SHOULDN'T HAVE HAD MORTGAGES. PEOPLE WHO HAD NO INCOME AND NO JOBS. THEY CALLED THEM NINJA ONES. WHY WERE THEY WRITTEN? MANY WERE WRITTEN BY MORTGAGE LENDERS AND BANKS. THERE WERE NO UNDERWRITING STANDARDS AND THEY COULD SHIP THEM OFF. THEY HAD NO SKIN UNTIL IN THE GAME AND NO RESPONSIBILITY. AND THEN ON WALL STREET, THIS HUGE MARKET WAS CREATED TO SUCK IN ALL OF THESE MORTGAGES TO CREATE THESE NEW INVESTMENT VEHICLES THAT PUT ALL OF THESE MORTGAGES TOGETHER, MORTGAGES THAT DIDN'T HAVE THE UNDERWRITING STANDARDS THAT YOU COULD MAKE SURE THAT THEY WERE SOUND. AND IN THE NEED TO CREATE MORE AND MORE INVESTMENT INSTRUMENTS, THEY CREATED WHAT ARE CALLED SYNTHETIC INVESTMENT ENTITIES. AND THOSE AREN'T EVEN ONES THAT HELD THESE ACTUAL MORTGAGES. THEY WERE JUST MERELY A SHADOW THAT TRACKED THEM. SO WE COMPOUNDED THE PROBLEM INTO HUNDREDS OF TRILLIONS OF DOLLARS BETTING ON MORTGAGES THAT SHOULD NEVER IN MANY WAYS BEEN WRITTEN IN THE FIRST PLACE. AND THEN WHAT WAS THE THIRD PART OF THE PROBLEM? WELL, THESE MORTGAGES GOT BUNDLED UP INTO THESE MORTGAGE-BACKED SECURITIES SOLD ON WALL STREET, AND THE WORLD LOOKED TO THE RATING AGENCIES TO STAMP THEIR APPROVAL ON THEM. AND THE MORNING STARS AND THE MOODY'S -- THE MOODY'S, THE FITCH'S AND THE S-P -- S&P STAMP THEIR RATING WITHOUT EVALUATING THEM. THAT'S ONE OF THE CULPRITS THAT CAUSED THIS FINANCIAL CRISIS WE HAD. BUT FOR THOSE RATING AGENCIES PUTTING THE AAA GRADE ON THESE MORTGAGE-BACKED SECURITY SREFRPLTS, I DON'T BELIEVE WE -- INVESTMENTS, I DON'T BELIEVE WE WOULD HAVE HAD THE CRASH THAT OCCURRED. PEOPLE WOULD NOT HAVE PLACED THEIR CONFIDENCE IN THEM. WHY DID H THAT HAPPEN? WHY DID THESE RATING AGENCIES STAMP THEM? WHY DID SO MANY PEOPLE RELY ON THEM? WHAT WE'VE COME TO FIND OUT IS THAT THESE RATING AGENCIES ARE WRITTEN INTO LAW. THEY ARE WRITTEN INTO THE FEDERAL LAW AS A WAY TO DETERMINE THE CREDIT WORTHINESS OF INVESTMENTS. THE FDIC ABDICATES ITS AUTHORITY AND ALLOWS RATING AGENCIES TO BE THE ONES THAT SAY SOMETHING IS A GOOD INVESTMENT OR NOT. THAT'S IN THE LAW. NOW HOW DO THESE RATING AGENCIES, HOW DO THEY GET PAID? THEY GET PAID BY THE VERY BANKS THAT PUT PRODUCTS IN FRONT OF THEM FOR THEM TO RATE. SO HERE'S THIS A REAL EASY WAY TO UNDERSTAND THIS. WE ALL BUY "CONSUMER REPORTS" MAGAZINE. "CONSUMER REPORTS" MAGAZINE EVALUATES EVERYTHING FROM TOASTERS TO TOYOTAS, BUT THEY DON'T TAKE OWN MONEY FROM THE PEOPLE THAT THEY RATE. THEY DON'T HAVE ADVERTISERS. BUT FOR THESE RATING AGENCIES, THEY'RE PAID BY THE PEOPLE THEY RATE, BY THE PRODUCTS THAT THESE BANKS BRING IN FRONT OF THEM. AND OUR LAW SAYS THAT THEY ARE THE ONES WHO ARE GOING TO DETERMINE WHETHER OR NOT SOMETHING IS CREDIT WORTHY. SO, MR. PRESIDENT, I WANT TO MAKE SURE THAT WE HAVE, AS SENATOR SHELBY PUT FORWARD, A GOOD CONSUMER PROTECTION LAW IN THIS COUNTRY. BUT I ALSO WANT TO MAKE SURE THAT WE ARE ADDRESSING THE PROBLEMS THAT CAUSED THIS FAILURE IN THE FIRST PLACE. AND ONE OF THE WAYS TO DO THAT IS TO MAKE SURE THAT WE HAVE UNDERWRITING ON THESE MORTGAGES SO THAT PEOPLE HAVE SOME SKIN IN THE GAME. THAT YOU'RE PUTTING A DOWN PAYMENT ON YOUR HOUSE. THAT YOU'RE SHOWING THAT YOU CAN BE CREDIT WORTHY. THAT'S THE WAY IT ALWAYS WAS. IT'S ONLY RECENTLY THAT THAT WENT AWAY. WE NEED TO GO BACK TO THAT, AND THAT'S WHY I JOIN MY COLLEAGUES: SENATOR CORKER, SENATOR ISAKSON, SENATOR GREGG ON THEIR AMENDMENT TO PUT THE UNDERWRITING BACK IN THE MORTGAGE BUSINESS. BUT ANOTHER THING WE NEED TO DO IS WE NEED TO TAKE THESE CREDIT AGENCIES AND WE NEED TO WRITE THEM OUT OF THE LAW. THEY SHOULD NO LONGER GET THEIR PREFERENTIAL KHAOEPLT. AND THEY SHOULD NO LONGER SHOULD THE FDIC ABDICATE RESPONSIBILITY TO GET CREDIT WORTHINESS. THE MARKET SHOULD TAKE CARE OF THIS. IF PEOPLE KNOW THEY CAN'T RELY UPON THREE OR FOUR OR FIVE RATING AGENCIES AND THEY HAVE TO DO THEIR EVALUATION THEMSELVES, WE MAY PREVENT THIS PROBLEM FROM HAPPENING IN THE FUTURE. AND THE NEXT WAY THIS PROBLEM MAY MANIFEST ITSELF. MR. PRESIDENT, I'VE INTRODUCED AN AMENDMENT, FILED AN AMENDMENT, AMENDMENT NUMBER 3774 WHICH WILL DO JUST THIS. IT WILL TAKE THESE CREDIT RATING AGENCIES OUT OF LAW. AND IN THAT WAY I BELIEVE THAT WE CAN STOP ONE OF THE REASONS WHY WE HAD THIS FINANCIAL COLLAPSE. IT'S NOT JUST ME WHO BELIEVES IN THIS. ON THE OTHER SIDE OF THIS BUILDING, IN THE HOUSE OF REPRESENTATIVES, THIS SAME LANGUAGE WAS PUT FORWARD IN THE PACKAGE THAT WAS PASSED. SO THIS SHOULD NOT BE A REPUBLICAN ISSUE. IT SHOULD NOT BE A DEMOCRATIC ISSUE. BECAUSE THE DEMOCRATS IN THE HOUSE SUPPORTED SOMETHING VERY SIMILAR TO WHAT I'M PROPOSING. THIS JUST MAKES COMMON SENSE. LET'S GO AFTER ONE OF THE PROBLEMS THAT CAUSED THIS FINANCIAL MESS. MR. PRESIDENT, I'D LIKE TO POINT TO THE AUGUST 21 EDITION OF THE "WALL STREET JOURNAL." IN THEIR EDITORIAL, THEY SAY WHEN THE GOVERNMENT ORDAINS MOODY'S AND STANDARD & POOR'S AS OFFICIAL ARBITERS OF RISK, THE DAMAGE CAN BE CATASTROPHIC BECAUSE SO MANY PEOPLE RELY UPON THEM. LET'S NO LONGER ABDICATE THE GOVERNMENT'S RESPONSIBILITY. LET'S NO LONGER ENSHRINE THESE RATING AGENCIES IN FEDERAL LAW. LET'S GET RID OF ONE OF THE REASONS WHY WE HAD THIS FINANCIAL MELTDOWN TO START WITH. LET'S NOT CREATE A WHOLE NEW HUGE CONSUMER AGENCY THAT DOES WAY TOO MUCH, GETS INVOLVED IN TOO MANY THINGS THAT HAVE NOTHING TO DO WITH THIS FINANCIAL MELTDOWN. LET'S GO AFTER THE PROBLEM, SOLVE THAT PROBLEM. MR. PRESIDENT, I BELIEVE WE CAN DO SO BY PASSING THE AMENDMENT THAT I'VE INTRODUCED TODAY. WITH THAT, MR. PRESIDENT, I YIELD THE FLOOR. A SENATOR:

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  • 02:31:12 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM SOUTH DAKOTA --

  • 02:31:16 PM

    MR. THUNE

    I WANT TO COMPLIMENT MY COLLEAGUE FROM FLORIDA, HE'S ADDRESSED AN ISSUE…

    I WANT TO COMPLIMENT MY COLLEAGUE FROM FLORIDA, HE'S ADDRESSED AN ISSUE WHICH IS AN IMPORTANT PART OF THIS DEBATE, AND THAT IS MAKING SURE THAT LOANS THAT GET MADE IN THIS COUNTRY AND BOTH ON THE BORROWER'S SIDE AND THE LENDER'S SIDE ARE RESPONSIBLE LOANS. I THINK THE AMENDMENT THAT HE WILL OFFER IS ONE THAT WE OUGHT TO HAVE A DEBATE ON AND WE OUGHT TO HAVE A VOTE ON. AND I HOPE THAT THIS BODY WILL ACT IN A WAY THAT LEADS TO MORE RESPONSIBLE PRACTICES AND A HIGHER LEVEL OF RESPONSIBILITY, BOTH WITH BORROWERS AND LENDERS IN THIS COUNTRY, WHICH REALLY WAS AT THE HEART OF WHY WE ENDED UP WHERE WE DID. NOW, IT'S INTERESTING TO ME, MR. PRESIDENT, THAT WE CONTINUE TO WATCH THE PROBLEMS THAT WE'RE EXPERIENCING IN OUR ECONOMY PROBABLY BY FAR THE MOST IMPORTANT ONE IS THE HIGH LEVEL OF UNEMPLOYMENT THAT HAS BECOME SORT OF A CHRONIC PROBLEM. AND EVEN THOUGH THE ECONOMY APPEARS TO BE RECOVERING AND GROWING AGAIN, WE CONTINUE TO SEE THESE VERY HIGH RATES OF UNEMPLOYMENT, CERTAINLY WORTH IN SOME PARTS OF THE COUNTRY THAN IN OTHERS, BUT NONETHELESS SOMETHING WE CANNOT TOLERATE AND WE OUGHT TO BE ATTACKING EVERY SINGLE DAY. EVERYTHING WE DO HERE OUGHT TO BE FOCUSED ON WHAT CAN WE DO TO ELIMINATE THIS HIGH LEVEL OF UNEMPLOYMENT, TO PROVIDE INCENTIVES FOR SMALL BUSINESSES TO CREATE JOBS, TO GROW THEIR BUSINESSES AND EXPAND, GET THE ECONOMY GOING AGAIN. AND OBVIOUSLY IN MY VIEW, AT LEAST, THE SMALL BUSINESSES IN THIS COUNTRY REALLY ARE THE ECONOMIC ENGINE OF OUR ECONOMY, THEY ARE OUR JOB CREATORS AND WE OUGHT TO BE FOCUSED ON MAKING IT EASIER FOR THEM TO CREATE JOBS RATHER THAN HARDER. AND THAT'S WHY I THINK IT'S IRONIC THAT ALMOST EVERYTHING THAT THE CONGRESS HAS BEEN DOING OF LATE MAKES IT EVEN MORE DIFFICULT FOR SMALL BUSINESSES TO DO THAT. WE PASSED A BIG, MASSIVE EXPANSION OF THE HEALTH CARE ENTITLEMENT HERE IN THE CONGRESS AWHILE BACK AND THAT'S GOING TO IMPOSE LOTS OF NEW TAXES, LOTS OF NEW MANDATES ON SMALL BUSINESSES, GOING TO RAISE THEIR INSURANCE PREMIUMS, WHICH WE'RE SEEING NOW MORE AND MORE, THE C.M.S. ACTUARY WITH THEIR RECENT REPORT SUGGESTS WHAT WE SUGGESTED ALL ALONG AND THAT IS THAT FS GOING TO DRIVE -- THAT THIS IS GOING TO DRIVE THE COST OF HEALTH CARE UP IN THIS COUNTRY. IT'S NOT GOING TO DRIVE IT DOWN, IT'S GOING TO DRIVE IT UP. SO WHAT I THINK YOU'RE GOING TO SEE WITH SMALL BUSINESSES ACROSS COUNTRY IS NOT ONLY A HIGHER TAX BURDEN ASSOCIATED WITH FAIG FOR PAYING FOR THAT BUT ALSO THE NEW MANDATES ASSOCIATED WITH IT BUT YOU'RE ALSO GOING TO SEE THEM HAVING TO DEAL NOW WITH THE HIGHER INSURANCE COSTS THAT WILL BE ASSOCIATED AND COME WITH THIS MASSIVE HEALTH CARE EXPANSE THAT WAS PASSED. NOT TO MENTION THE FACT THAT IN MY VIEW, THIS IS GOING TO END UP IN TREMENDOUS AMOUNT OF GROWTH IN THE DEBT IN THE OUT-YEARS WHEN WE REALIZE THAT THIS THING IS GOING TO COST WAY MORE THAN WAS EXPEAPPED THAT MANUFACTURE THE OFFSETS -- ANTICIPATED AND THAT MANY OF THE OFFSETS OR PAY-FORS PROBABLY ARE NOT GOING TO COME TO FRUITION. BUT THAT BEING SAID, IT SEEMS TO ME AT LEAST THAT HAVING ALL THIS UNCERTAINTY COMING OUT OF WASHINGTON, WHETHER IT'S THE IMPLEMENTATION OF THE NEW HEALTH CARE BILL, WHETHER IT'S QUESTIONS ABOUT A CLIMATE CHANGE BILL THAT COULD IMPOSE A CRUSHING NEW ENERGY TAX ON OUR ECONOMY IN THIS COUNTRY, QUESTIONS ABOUT WHAT'S GOING TO HAPPEN WITH TAX RATES WITH REGARD TO DIVIDENDS AND CAPITAL GAINS AND MARGINAL INCOME TAX RATES NEXT YEAR, WHAT'S GOING TO HAPPEN WITH THE DEATH TAX, ALL THIS UNCERTAINTY THAT IS JUST HANGING A CLOUD OVER THIS ECONOMY AND MAKING IT VERY, VERY DIFFICULT FOR OUR SMALL BUSINESSES TO DO WHAT THEY DO BEST AND THAT IS TO -- TO EXERCISE THAT ENTREPRENEURIAL SPIRIT, TO GROW THE ECONOMY, TO CREATE JOBS. VERY DIFFICULT TO DO THAT WHEN YOU PILE MORE AND MORE BURDENS AND MORE AND MORE COSTS ON TOP OF THE VERY SMALL BUSINESSES THAT WE'RE HOPING WILL LEAD US OUT OF THIS RECESSION. AND THAT'S WHY I THINK THAT ALL OF OUR EFFORTS OUGHT TO HAVE A -- A VERY CLOSE EYE ON WHAT IMPACT THEY'RE GOING TO HAVE ON THE SMALL BUSINESS SECTOR OF OUR ECONOMY. AND THIS IS NO EXCEPTION. THE DEBATE ON FINANCIAL SERVICES REFORM, MR. PRESIDENT, REALLY IS ABOUT SOME VERY CRITICAL ISSUES, ISSUES THAT NEED TO BE ADDRESSED, ISSUES THAT WE SHOULD BE FOCUSED ON, HOW TO DEAL WITH THE ISSUE OF SYSTEMIC RISK AND MAKE SURE THAT SYSTEMICALLY RISKY ENTERPRISES IN THIS COUNTRY, THAT THAT RISK IS CONSTRAINED, THAT THERE IS APPROPRIATE OVERSIGHT, THERE'S APPROPRIATE TRANSPARENCY. I THINK THAT THERE'S A -- THERE'S AN IMPORTANT ISSUE TO BE DE MAIZIERE BAITED HERE IN TERMS DE -- DEBATED HERE IN THIS COUNTRY WHICH IS DERIVATIVES, WHICH IS A TRILLION-DOLLAR ECONOMY THAT'S BEEN OPERATING IN THE SHADOWS, IN THE LEGISLATION BEFORE US. IF IT'S AMENDED IN THE RIGHT WAY, AND I THINK IT WILL BE HERE ON THE FLOOR, WILL BRING THAT INTO THE LIGHT THERE, WILL BE TRANSPARENCY, SOMETHING THAT I THINK IS DESPERATELY NEEDED IN THAT AREA, HOPEFULLY DONE IN A WAY THAT DOESN'T IMPOSE NEW BURDENS ON END USERS, THOSE WHO ARE TRYING TO LEGITIMATELY HEDGE AGAINST HIGHER COMMODITY PRICES AND CURRENCY RATES AND INTEREST RATES AND THOSE SORTS OF THINGS. BUT THERE ARE THINGS THAT NEED TO BE DONE IN THIS LEGISLATION TO DEAL WITH THE ISSUE OF SYSTEMIC RISK, TO ENSURE THAT WE TAKE ALL THE STEPS THAT WE POSSIBLY CAN TO AVOID AND PREVENT THE TYPE OF ECONOMIC COLLAPSE AND MELTDOWN THAT WE WITNESSED A COUPLE OF YEARS AGO. NOW, I THINK IT'S IRONIC THAT THIS LEGISLATION DOES NOT ENCOMPASS SOMETHING THAT WAS AT THE VERY HEART OF THAT ECONOMIC MELTDOWN AND THAT IS THE ISSUE OF FREDDIE MAC AND FANNIE MAE. IRONIC TO ME AT LEAST THAT THE FOCUS OF THIS LEGISLATION IS TO DEAL WITH THE ISSUES THAT LED TO THE ECONOMIC MALAISE THAT WE FOUND OURSELVES IN AND THE COLLAPSE THAT WE EXPERIENCED HERE A COUPLE OF YEARS AGO THAT WOULD ATTEMPT TO ACCOMPLISH THE OBJECTIVE OF PREVENTING THAT IN THE FUTURE ABSENT DEALING WITH FREDDIE MAC AND FANNIE MAE, WHICH WERE A HUGE CONTRIBUTING FACTOR TO WHAT WE -- WHAT WE WITNESSED HERE A COUPLE OF YEARS AGO. SO IT DOES NOT INCLUDE THAT. IT DOES GET AT DERIVATIVES. IT DOES ADDRESS IN SOME FASHION THE ISSUE OF TOO-BIG-TO-FAIL AND THEN IT ALL ADDRESSES THIS ISSUE THAT WE ARE DEBATING RIGHT NOW WHICH IS THE ISSUE OF CONSUMER PROTECTION. AND I WOULD ARGUE THAT THIS IS AN IMPORTANT PART OF THE DEBATE. WHEN IT COMES TO THE RELG LAITION OFREGULATIONOF FINANCIAL MARKETS, PERHAPS EVEN THE MOST IMPORTANT PART AND THAT'S PROTECTING CONSUMERS. NOW, HAVING SAID THAT, I THINK THAT THE -- WHAT THE RECENT FINANCIAL CRISIS HIGHLIGHTED WAS THE FACT THAT THERE WERE A NUMBER OF BAD ACTORS OUT THERE IN THE MARKETPLACE WHO WERE OUT FOR A QUICK PROFIT WITHOUT CONCERN FOR THE CONSUMER, AND THIS CONSUMER PROTECTION EFFORT HERE IS PART OF THIS LEGISLATION IS DESIGNED I THINK TO CORRECT THAT OR AT LEAST ADDRESS AND GET AT THAT PROBLEM. NOW, I STRONGLY SUPPORT SOME OF THE CONSUMER PROTECTION IDEAS THAT HAVE BEEN PUT FORWARD. THERE'S A REPUBLICAN ALTERNATIVE AMENDMENT THAT'S BEEN OFFERED TO THE BASE BILL. BUT AS IS TYPICALLY THE CASE HERE IN THE CONGRESS, INSTEAD OF JUST DEALING WITH THE ISSUE THAT NEEDS TO BE FIXED, TRYING TO FIX THE ISSUE THAT NEEDS TO BE FIXED FIXED, IT SEEMS LIKE THE PATTERN HERE IS THAT WE TRY TO GO BEYOND THAT AND FIX ISSUES THAT DON'T NEED TO BE FIXED. AND, IN FACT, IN -- IN THIS PARTICULAR CASE, WITH A WHOLE NEW BUREAUCRACY, CREATING A WHOLE NEW CONSUMER FINANCIAL PROTECTION BUREAU, A MAN WITH LOTS OF NEW FEDERAL GOVERNMENT EMPLOYEES, WITH LOTS OF NEW POWERS AND -- AND IN MY VIEW, MR. PRESIDENT, EXTENDING A REACH WAY BEYOND WHAT SHOULD EVER HAVE BEEN COMPLICATED -- OR CONTEMPLATED TO DEAL WITH THE IMPORTANT ISSUE OF PROTECTING CONSUMERS IN THIS COUNTRY. NOW, ARE DO I SAY THAT? I -- I HAD N IN MY OFFICE LAST WEEK A BUNCH -- IN MY OFFICE LAST WEEK A BUNCH OF COMMUNITY BANKERS, I'VE MET WITH CREDIT IEWRNTIONZ I'VE UNIONS, I'VE MET WITH AUTO DEALERS, I'VE METES MET WITH LOTS OF SMALL BUSINESSES, AND I WOULD SAY THESE RESIDENT THE TYPES OF ENTITIES THAT LED TO ALL THE PROBLEMS WE EXPERIENCED. THESE RESIDENT SYSTEMICALLY RISKY ENTITIES OR COMPANIES. THREES HARD-WORKING IN MOST CASES SMALL BUSINESSES. WHEN I SAT DOWN WITH MY COMMUNITY BANKERS, I'M NOT TALKING ABOUT BIG WALL STREET BANKS. I'M TALKING ABOUT MAIN STREET BANKS, LOCAL BANKS, BANKS THAT ARE ABOUT THEIR CUSTOMER BECAUSE THEY CARE ABOUT THEIR CUSTOMER AND THEY'RE -- THEY'RE THEIR NEIGHBORS, THEY'RE THE FOLKS THAT THEY -- THAT THEY HANG OUT WITH, THEIR FRIENDS AND THEIR KIDS GO TO SCHOOL TOGETHER. THESE ARE PEOPLE WHO ARE FAR REMOVED FROM WALL STREET. AND THEY TOLD ME ABOUT HOW THIS BILL DOES NOT LEVEL THE PLAYING FIELD AND HOW THEY'RE GOING TO BE SUBJECT TO A WHOLE NEW LAYER OF REGULATION THAT THEY CANNOT AFFORD. THEY TOLD ME STORIES ABOUT, YOU KNOW, HOW THEY WOULD MAKE SURE THAT THEIR CUSTOMER'S ALWAYS SATISFIED AND HOW THEY CANNOT AFFORD TO MAKE BAD LOANS N. THESE SMALLER BANKS AND -- BAD LOANS. IN THESE SMALLER BANKS AND SMALL COMMUNITIES WHERE THERE'S A TREMENDOUS AMOUNT OF ACCOUNTABILITY, OBVIOUSLY THESE RESIDENT THE TYPES OF BANKS THAT I THINK THIS LEGISLATION SHOULD BE TARGETED OR DIRECTED AT. THESE ARE BANKS THAT PROVIDE CAPITAL TO OUR FARMERS, OUR SMALL BUSINESS OWNERS IN MY STATE OF SOUTH DAKOTA. YOU KNOW, THESE ARE THE PEOPLE THAT MOST OF MY CONSTITUENTS WOULD RATHER BANK WITH THAN THESE BIG, YOU KNOW, LARGE CHAIN BANKS THAT WE TALK ABOUT WHEN IT COMES TO THE ISSUE OF SYSTEMIC RISK. THE DEMOCRATS' BILL IN ITS CURRENT FORM PLACES NEW BURDENS ON THESE BANKS, MR. PRESIDENT, COSTLY REGULATIONS ON BANKS THAT ARE ALREADY HEAVILY REGULATED AND WHO HAVE ALREADY PROVED TO BE SOUND FINANCIAL ENTITIES. I ALSO RECENTLY SAT DOWN WITH SOME CAR DEALERS FROM MY STATE, AND, AGAIN, SMALL, MAIN STREET BUSINESSES IN SOUTH DAKOTA WHO HAVE PERSONAL RELATIONSHIPS WITH THEIR CUSTOMERS. THEY TOLD ME HOW THEY MAY HAVE TO CUT SOME OF THE SERVICES THAT THEY PROVIDE TO THEIR CUSTOMERS BECAUSE OF THE BROAD AUTHORITY THAT IS GRANTED TO THIS BRAND-NEW AGENCY, THIS CONSUMER FINANCIAL PROTECTION BUREAU. THESE BUSINESSES TAKE GREAT PRIDE -- WHEN I SAY "THESE" THE AUTO DEALERS -- IN THE SERVICES THAT THEY PROVIDE TO THEIR FRIENDS AND NEIGHBORS WHO COME INTO THEIR BUSINESSES TO BUY A CAR AND TO HAVE BUREAUCRATS IN WASHINGTON, D.C., LOOKING OVER THEIR SHOULDER DOES NOT SEEM LIKE THE RIGHT APPROACH TO ME. NOW, I'VE HEARD THE ARGUMENTS THAT THE SMALL BANKS ARE SOMEHOW NOT GOING TO BE AFFECTED BECAUSE OF THE $10 BILLION EXEMPTION, BUT I THINK IT'S IMPORTANT THAT WE POINT OUT HERE AND THAT WE CLEAR UP SOME OF THE FACTS ON THIS ISSUE. THAT $10 BILLION EXEMPTION, MR. PRESIDENT, IS FROM ENFORCEMENT AND EXAMINATION AUTHORITY BY THE NEW CONSUMER FINANCIAL PROTECTION BUREAU. THE NEW BUREAUCRACY STILL HAS THE ABILITY TO OVERSEE EVERY PRODUCT AND LOAN AND TRANSACTION THAT THESE SMALL BANKS ENTER INTO WITH THEIR CUSTOMERS. I'VE ALSO HEARD THE ARGUMENT THAT SECTION 1027 EXCLUDES MANY OF THE SMALL BUSINESSES WHO ARE CALLING ME AND E-MAILING ME AND COMING TO MY OFFICE BECAUSE THEY'RE CONCERNED. HOWEVER, IT SEEMS TO ME THAT ONCE A SMALL BUSINESS DECIDES TO GIVE THEIR CUSTOMERS AN OPTION TO PAY FOR THEIR GOODS AND SERVICES OVER TIME THAT THIS NEW CONSUMER FINANCIAL PROTECTION BUREAU CAN COME KNOCKING ON THEIR DOOR. NOW, WHAT WASHINGTON BUREAUCRATS ARE GOING TO TELL THEM IS WHAT'S IN THE BEST INTERESTS OF THEIR CUSTOMERS IN SOUTH DAKOTA AND SO YOU CAN IMAGINE, MR. PRESIDENT, THE IMPLICATIONS OF THIS TYPE OF AUTHORITY. AND CURRENTLY, THE LEGISLATION PROVIDES VERY FEW CHECKS ON THIS NEW BUREAU'S BROAD, NEW AUTHORITIES. I WANT REFORMS TO OUR CURRENT REGULATORY OVERSIGHT STRUCTURE AND WE NEED BETTER PROTECTIONS FOR OUR CONSUMERS, BUT THE BILL THAT IS BEFORE US, MR. PRESIDENT, CREATES A NEW BUREAUCRACY THAT HAS A FUNDING STREAM OUTSIDE OF CONGRESSIONAL OVERSIGHT WITH VERY FEW CHECKS AND BALANCES AND THAT IS NOT REFORM. WHAT I WANT TO SEE IS THIS -- WOULD LIKE TO SEE IS THIS BUREAU REMOVED FROM THE BILL. THERE ARE OTHER WAYS TO PROVIDE BETTER PROTECTION FOR CONSUMERS WITHOUT BURDENING SMALL BUSINESSES, WHICH, AS I SAID EARLIER, ARE THE ENGINE OF OUR ECONOMY. NOW, JUST TO -- TO ILLUSTRATE OR TO PUT A FINE POINT ON THAT, I HAVE A LETTER HERE FROM THE NATIONAL FEDERATION OF INDEPENDENT BUSINESS WHICH REPRESENTS BUSINESSES ALL ACROSS THIS COUNTRY, HAS A VERY LARGE MEMBERSHIP, INCLUDING MANY BUSINESSES IN MY STATE, AND THEY WRITE TO EXPRESS THEIR CONCERNS WITH CERTAIN PARTS OF THE BILL THAT ARE TOO FAR-EXPREECHG WOULD IMPOSE MAJOR -- FAR-REACHING AND WOULD IMPOSE MAJOR NEW COSTS ON SMALL BUSINESSES. AND THEY GO ON TO SAY THAT THE ESTABLISHMENT OF THE NEW CONSUMER PROTECTION BUREAU WILL COVER MANY SMALL BUSINESSES STRICTLY BECAUSE THEY SET UP FLEXIBLE PAYMENT ARRANGEMENTS WITH THEIR CUSTOMERS. ACCORDING TO A STUDY THAT THEY DID A FEW YEARS BACK ON GETTING PAID, APPROXIMATELY 50% OF SMALL BUSINESSES OFFER SPECIAL TERMS OR CREDIT-TYPE ARRANGEMENTS TO ALLOW CUSTOMERS TO PAY FOR GOODS OR SERVICES. AND THEN THEY GO ON TO DESCRIBE THE NATURE OF SOME OF THOSE ARRANGEMENTS. BUT I THINK IT'S FAIR TO SAY, MR. PRESIDENT, THAT A LOT OF SMALL BUSINESSES -- AND CAR DEALERS ARE PROBABLY THE MOST NOTABLE EXAMPLE OF THIS, BUT AS WAS SAID EARLIER, THAT COULD EXTEND TO TURNT STORES, FURNITURE STORES, JEWELRY STORES, THAT COULD EXTEND TO ORTHODONTISTS AND DENTISTS, PEOPLE WHO ALLOW THEIR CUSTOMERS TO SPREAD OUT THE PAYMENTS OVER TIME, TO PAY ON TERMS AND HAVE THESE FLEXIBLE TYPES OF PAYMENT ARRANGEMENTS WOULD BE COVERED BY THIS. THAT MAKES NO SENSE. AT A TIME WHEN WE'RE TRYING TO GET OUR SMALL INTOISES THAT THEY CAN -- SMALL BUSINESSES SO THAT THEY CAN HELP LEAD US OUT OF THIS RECESSION, START CREATING JOBS, INSTEAD OF DEALING WITH THE SYSTEMICALLY RISKY ENTITIES THAT GOT US INTO THIS -- THIS MESS IN THE FIRST PLACE, WE'RE TALKING ABOUT PILING A WHOLE NEW BURDEN AND LOTS OF NEW COSTS ON TOP OF OUR SMALL BUSINESSES AT A TIME WHEN THEY CAN LEAST AFFORD IT. AND SO I WOULD HOPE, MR. PRESIDENT, THAT THE AMENDMENT THAT'S BEING OFFERED, THE ALTERNATIVE TO THE CONSUMER PROTECTION FINANCIAL BUREAU IN THIS BILL WILL BE ADOPTED, THAT MY COLLEAGUES HERE IN THE SENATE WILL TAKE STEPS TO IMPROVE THE WAY THAT THIS BILL TREATS CONSUMER PROTECTION AND THE WAY THAT IT TREATIES SMALL BUSINESSES UNDER THIS BILL. I, FRANKLY, AS I SAID EARLIER, WOULD LIKE TO SEE THIS TITLE REMOVED ENTIRELY AND US DEAL WITH THIS IN A WAY THAT MAKES MORE SENSE, THAT DOESN'T CREATE A WHOLE NEW BUREAUCRACY WITH ALL KINDS OF NEW GOVERNMENT EMPLOYEES, WITH ALL KINDS OF NEW POWERS. THERE ARE CERTAINLY WAYS IN WHICH WE CAN ADDRESS THE ISSUE OF CONSUMER PROTECTION ABSENT HAVING TO GO TO THESE GREAT LENGTHS AND TO THIS GREAT COST EXPENSE TO THE TAXPAYER AND GREAT NEW BURDENS IMPOSED UPON SMALL BUSINESSES IN THIS COUNTRY. AND SO, MR. PRESIDENT, I AM ONE WHO WILL BE SUPPORTING NOT ONLY THE AMENDMENT THAT IS BEFORE US BUT OTHER AMENDMENTS THAT ADDRESS THIS TITLE IN THE BILL. I HAVE ONE THAT I'M WORKING ON THAT WOULD EXEMPT MANY OF THE SMALL BUSINESSES THAT WOULD BE COVERED BY THIS BILL. SO FAR WHICH I MENTIONED IN MY REMARKS -- SOME OF WHICH I MENTIONED IN MY REMARKS EARLIER, BUT I THINK THIS IS AN ISSUE WHICH IS INCREDIBLY CONSEQUENTIAL IN THIS LEGISLATION AND SO FAR REMOVED, SO FAR REMOVED FROM THE PURPOSE OF THIS BILL IN THE FIRST PLACE. AND AS I SAID EARLIER, WE OUGHT TO FIX THE THINGS THAT NEED TO BE FIXED BUT WE SHOULDN'T TRY AND FIX THINGS THAT DON'T NEED TO BE FIXED, PARTICULARLY WHEN IT CALLS FOR CREATING A WHOLE NEW GOVERNMENT BUREAUCRACY AND -- AND NEW GOVERNMENT IN WASHINGTON, D.C., NEW GOVERNMENT EMPLOYEES AT GREATER ADDITIONAL COST, AND, OF COURSE, AS I SAID EARLIER, AT GREAT ADDITIONAL EXPENSE TO AMERICA'S SMALL BUSINESSES, WHICH ARE THE ECONOMIC ENGINE AND THE JOB CREATORS IN OUR ECONOMY. MR. PRESIDENT, I YIELD THE FLOOR. A SENATOR: MR. PRESIDENT?

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  • 02:46:10 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM NEW JERSEY IS RECOGNIZED.

  • 02:46:13 PM

    MR. MENENDEZ

    THANK YOU, MR. PRESIDENT. MR. PRESIDENT, I -- I WANTED TO COME TO THE…

    THANK YOU, MR. PRESIDENT. MR. PRESIDENT, I -- I WANTED TO COME TO THE FLOOR TO TALK ABOUT THE SHELBY AMENDMENT. I THINK WE WOULD HAVE TO BE 100% CLEAR ABOUT ONE THING, AND THAT IS IS THAT WE NEED TO PASS A CONSUMER PROTECTION BILL. NOT A WALL STREET PROTECTION BILL. A STRONG INDEPENDENT AGENCY THAT CAN AGGRESSIVELY DEFEND FAMILIES IN ALL SECTORS OF THE FINANCIAL INDUSTRY. THAT'S -- THAT'S CONSUMER PROTECTION. A WEAK AGENCY THAT CAN'T DEFEND FAMILIES AGAINST COMMERCIAL BANKS, INVESTMENT BANKS, CREDIT CARD COMPANIES, CAR DEALERS, PAYDAY LENDERS AND ENTITIES LIKE A.I.G., THAT'S WALL STREET PROTECTION AND THAT'S WHAT, IN ESSENCE, THIS AMENDMENT DOES. THE FACT IS IS THAT THE REPUBLICANS' PROPOSAL ON THIS AMENDMENT SEEMS TO SYMBOLIZE AMERICA'S WORST FEARS ABOUT HOW THE POWERFUL OPERATE. THE POWERFUL PROTECTING THE POWERFUL. THE PROBLEM IS ISN'T THAT FAMILIES HAVE TOO MUCH PROTECTIONS ON WALL STREET. THE PROBLEM IS THAT THEY HAVEN'T BEEN PROTECTED ENOUGH. THE SHELBY SUBSTITUTE IS JUST THE STATUS QUO. IT'S A CYNICAL ATTEMPT TO PRETEND THAT THEY ARE DOING CONSUMER PROTECTION. IN REALITY, IT'S MEANT TO ASSUME THAT THERE IS NO MEANINGFUL CONSUMER PROTECTION AT THE END OF THE DAY. IT WILLFULLY IGNORES THE LESSONS THAT WE SHOULD HAVE LEARNED, THAT LEFT TO THEIR OWN DEVICES, THERE ARE LENDERS WHO CAN AND WILL TAKE ADVANTAGE OF CONSUMERS. THAT'S WHAT THE MARKETPLACE AS IT IS RIGHT NOW HAS TAUGHT US. WE ABSOLUTELY NEED A MUSCULAR, INDEPENDENT AGENCY, HOWEVER IT'S CONFIGURED, WHEREVER IT'S HOUSED, ONE THAT WILL HAVE FULL AND COMPREHENSIVE AUTHORITY TO DEVELOP AND IMPLEMENT REAL HONEST PRO CONSUMER RULES SO THEY WILL NO LONGER BE FOOLED BY 30 PAGES OF FINE PRINT NO ONE EXCEPT THE BANK LAWYERS COULD POSSIBLY UNDERSTAND. ONE THAT HAS INDEPENDENT RULE WRITING AUTHORITY AND AUTHORITY OVER BANKS AND NONBANKS WHILE MAINTAINING STRONG STATE CONSUMER PROTECTION LAWS. ONE THAT WILL STOP THE ONGOING ATTEMPTS BY CREDIT CARD COMPANIES TO CERTIFICATE COUPLE VENT THE RULES THAT THIS SENATE AND THIS CONGRESS HAVE ALREADY ENACTED. THEY'RE ALREADY WORKING AT IT. AS HAZARD LAW -- AS HARVARD LAW PROFESSOR ELIZABETH WARREN HAS NOTED, THANKS TO PRODUCT SAFETY RULES, YOU CAN BUY A TOASTER THAT WON'T BURN DOWN YOUR HOUSE, BUT YOU CAN BUY A FAULTY MORTGAGE THAT CAN TAKE YOUR HOUSE AWAY. AND THE BANK REGULATORS HAVE BEEN OF NO GREAT HELP BECAUSE THEY'RE LOOKING OUT FOR THE BANKS, NOT FOR US, NOT FOR YOU, NOT FOR UNSUSPECTING FAMILIES WHO NEED THE FULL FORCE OF REGULATIONS IMPLEMENTED BY A MUSCULAR AGENCY THAT'S ON YOUR SIDE. SO IN MY VIEW, A NEW INDEPENDENT AGENCY WOULD PROVIDE NOT ONLY THE COMFORT THEY NEED BUT THE PROTECTION THAT THEY DESERVE. WE CAN ARGUE ABOUT DETAILS, BUT I DOUBT THERE IS MUCH DISAGREEMENT AFTER WHAT WE HAVE BEEN THROUGH THAT WALL STREET NEEDS A WATCHDOG, ONE THAT HAS JURISDICTION OVER ALL FINANCIAL PRODUCTS, NO MATTER WHO OFFERS THEM, NOT JUST THE PRODUCTS OFFERED BY BIG BANKS. CHAIRMAN DODD HAS WORKED VERY HARD OVER MANY MONTHS TO CRAFT THE DETAILS OF AN AGENCY THAT STRIKES THE BALANCE, AND I WAS REALLY HAPPY TO SEE THAT FINALLY OUR REPUBLICAN COLLEAGUES ARE SAYING WE'RE ON THE WALL STREET REFORM TRAIN, BUT NOW I BEGIN TO WONDER WHEN I SEE AMENDMENTS LIKE THIS THAT THEY JUMPED ON THE TRAIN TO STRIKE THE EMERGENCY BRAKE ON CONSUMER PROTECTION ENFORCEMENT. THE SHELBY AMENDMENT OFFERS NOTHING IN THE WAY OF CONSUMER PROTECTION. THERE'S NO INDEPENDENCE. THE CFPD WOULD SIMPLY BE A DIVISION WITHIN THE FDIC WITH NO AUTONOMY OF ITS OWN. IT WOULDN'T EVEN FINALIZE A RULE WITHOUT FDIC APPROVAL. IT WILL NOT HAVE ANY RESOURCES. THAT'S HOW REPUBLICANS WANT IT. NO RESOURCES, NO SUPERVISORY AUTHORITY, NO ENFORCEMENT POWER. GUESS WHO WINS IN THAT SCENARIO? NONMORTGAGE COMPANIES WILL EVER BE SUBJECT TO THE SUPERVISION UNLESS THEY HAVE A PATTERN OR PRACTICE OF BREAKING THE LAW WITHIN THE PAST THREE YEARS. SO WHAT DOES THAT MEAN? LET'S HAVE A LOT OF PEOPLE GET HURT BEFORE WE ACTUALLY WOULD SAY THAT WE SHOULD NOW GIVE THEM PROTECTION. IT'S NOT MY SENSE OF HOW THE LAW SHOULD OPERATE. THE SHELBY AMENDMENT WOULD ESTABLISH THE DIVISION OF CONSUMER PROTECTION OF THE FDIC. IT MAINTAINS, IN ESSENCE, THE STATUS QUO. CONSUMER PROTECTION RULE WRITING WILL STILL BE UNDER THE SAME AUTHORITY, THE SAME REGULATORS WHO ROUTINELY IGNORE OR OPPOSE THE NEEDS OF CONSUMERS. NO SAFEGUARDS TO PREVENT THE FDIC CHAIR OR BOARD FROM OVERWRITING DECISIONS BY THE DIVISION DIRECTOR. THE AMENDMENT WOULD ACTUALLY PROHIBIT, PROHIBIT THE PROPOSED CONSUMER DIVISION FROM DOING ANY RULE WRITING UNDER THE FEDERAL TRADE COMMISSION ACT FOR PAYDAY LENDERS, DEBT COLLECTORS, FORECLOSURE SCAM OPERATORS, MORTGAGE BROKERS, OTHER NONBANK CONSUMER FINANCE COMPANIES. THEY COULD ONLY DO EXAMINATIONS OF NONBANK CONSUMER COMPANIES WHEN THEY DEMONSTRATE A PATTERN OR PRACTICE OF VIOLATIONS OF CONSUMER LAW SO ONLY AFTER THE CONSUMER HAS BEEN HARMED COULD THEY REPEATEDLY, REPEATEDLY AFTER THEY HAVE BEEN HARMED, REPEATEDLY COULD THE CONSUMER DIVISION DO ANY EXAMINATION OF BUSINESS. THIS IS JUST SIMPLY SAYING, YOU KNOW, I'M GOING TO TELL YOU THAT I'M GOING TO PUT A COP ON THE BEAT. HE HAS GOT NO UNIFORM, HE HAS GOT NO EQUIPMENT, AND HE CAN'T STOP THE BAD GUYS. WHAT A FALSEHOOD. WE NEED TO DEFEAT THIS AMENDMENT, AND WE NEED TO HAVE A BILL THAT ULTIMATELY GIVES STRONG CONSUMER PROTECTIONS FOR MILLIONS OF FAMILIES IN THIS COUNTRY WHO HAVE ALREADY FACED THE CONSEQUENCES OF THE SYSTEM THAT IS GOING ON UNREGULATED IN A WAY THAT IT ALLOWS GREED AND EXCESSES TO TAKE PLACE AND THAT PUTS PROTECTIONS, YES, FOR WALL STREET BUT NOT FOR MAIN STREET. SENATOR DODD HAS STRUCK THE RIGHT BALANCE. WE NEED TO PRESERVE IT. AND I LOOK FORWARD TO SUPPORTING HIM AND OPPOSING THIS AMENDMENT. WITH THAT, MR. PRESIDENT, I YIELD THE FLOOR.

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  • 02:53:02 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: THE SENATOR FROM CONNECTICUT IS RECOGNIZED.

  • 02:53:07 PM

    MR. DODD

    ME BRIEFLY EXPRESS MY GRATITUDE TO MY GREAT PAL AND FRIEND FROM NEW…

    ME BRIEFLY EXPRESS MY GRATITUDE TO MY GREAT PAL AND FRIEND FROM NEW JERSEY, BOB MENENDEZ. ONCE AGAIN, WE LOOK AROUND, THERE ARE A HUNDRED OF US HERE. I DON'T OFTEN ACKNOWLEDGE THESE THINGS, BUT IF I HAD TO PICK ONE OF MY COLLEAGUES TO BE IN MY CORNER AS AN ADVOCATE, I WOULD PICK BOB MENENDEZ EVERY TIME. WHEN HE IS AS FOCUSED ON MATTERS SUCH AS THIS ONE, THERE IS NO BETTER ADVOCATE THAN HIM. HE HAS BEEN A GREAT HELP THE LAST NUMBER OF YEARS AS WE HAVE WORKED ON BILLS COMING OUT OF THE COMMITTEE. HIS UNDERSTANDING OF THIS ISSUE IS EXACTLY RIGHT. I SAY THERE ARE IDEAS PEOPLE CAN OFFER FOR WHICH THEY CAN MAKE A CASE THAT THEY STRENGTHEN OUR PARTICULAR PROVISIONS HERE, BUT I SAY RESPECTFULLY THIS IS SUCH A STEP BACKWARDS. IT'S EVEN HARD TO IMAGINE SOMEONE COULD CONJURE UP AN AMENDMENT THAT WOULD STEP THIS FURTHER AWAY FROM EVEN THE STATUS QUO. I THOUGHT I MIGHT GET ANOTHER STRIKE AND JUST LEAVE THE WORLD AS IT IS. SENATOR THUNE MADE THAT SOMEHOW THIS ISN'T BROKE, LEAVE IT ALONE. YET THERE ISN'T A PERSON I KNOW IN THIS COUNTRY THAT DOESN'T RECOGNIZE THIS PROBLEM ALL BEGAN BECAUSE THERE WERE UNSCRUPULOUS BROKERS. THERE WERE PEOPLE WILLING TO PUT RATINGS ON BUNDLED SECURITIES THAT WERE WORTHLESS. THERE WERE BANKERS WILLING TO TURN A BLIND EYE AND A DEAF EAR, PUSHING OUT MORTGAGES THEY KNEW PEOPLE COULDN'T POSSIBLY AFFORD, LURING THEM INTO IT BY PROMISING THEY COULD BEAT ALL THEIR OBLIGATIONS. AND TO SUGGEST THE SYSTEM ISN'T BROKEN, YOU WOULD ALMOST HAVE TO HAVE BEEN LIVING ON A DIFFERENT PLANET OVER THE LAST FEW YEARS NOT TO RECOGNIZE WHAT HAPPENED BECAUSE CONSUMERS WERE FORGOTTEN. SAFETY AND SOUND WE WERE TOLD WAS IN GREAT SHAPE, INSTITUTIONS WERE MAKING MONEY. THIS WAS A VERY STABLE SITUATION. WOE HAD A -- WE HAD A HEARING ALMOST THREE YEARS AGO WITH OUR COMMITTEE, JUNE OF 2007. DAVID BYRNEBACH. LET ME QUOTE, IF I CAN, HIS THREE YEARS AGO TESTIMONY." FOR THE PAST FIVE YEARS, COMMUNITY GROUPS, CONSUMER PROTECTION GROUPS, FAIR LENDING GROUPS AND ALL OUR MEMBERS OF THE NATIONAL COMMUNITY REINVESTMENT COALITION HAVE BEEN SOUNDING AN ALARM ABOUT POOR UNDERWRITING, UNDERWRITING THAT NOT ONLY ENDANGERED COMMUNITIES, THE TAX BASES, THEIR MUNICIPAL GOVERNMENTS, THEIR ABILITY TO HAVE SOUND SERVICES AND CELEBRATE HOMEOWNERSHIP, BUT UNDERWRITING THAT WAS GOING TO IMPACT ON THE SAFETY AND SOUNDNESS OF OUR BANKING INSTITUTIONS THEMSELVES. THOSE CRIES, HE CONCLUDED OR ACTIONS FELL ON DEAF EARS AND HERE WE ARE TODAY. I REMEMBER MY COLLEAGUE FROM NEW JERSEY ALMOST THREE YEARS AGO, I REMEMBER YOUR WORDS. I DON'T HAVE THEM WRITTEN DOWN IN FRONT OF ME, BUT I REMEMBER THEM VERY CLEARLY. THIS IS GOING TO BE A TSUNAMI WERE YOUR WORDS THAT DAY. THE FIRST TIME I HEARD THOSE WORDS USED TO DESCRIBE THE LOOMING FORECLOSURE CRISIS. WE WERE TOLD THEN MAYBE A MILLION, MAYBE TWO MILLION FORECLOSURES. NOW WE KNOW THE NUMBER IS IN EXCESS OF SEVEN MILLION THAT HAVE OCCURRED, NOT TO MENTION JOB LOSS AND THE LIKE. SO WHEN I HEAR PEOPLE SAY THAT -- THAT THE UNDERWRITING STANDARDS, THE CONSUMER PEOPLE WERE ARGUING FOR UNDERWRITING STANDARDS. IT WAS THE SAFETY AND SOUNDNESS REGULATORS THAT WERE REFUSING TO ACKNOWLEDGE THAT WE DIDN'T HAVE UNDERWRITING STANDARDS OR REFUSING TO ACKNOWLEDGE THAT WE HAD TO DO SOMETHING ABOUT IT. SO I JUST WANTED TO COMMEND MY COLLEAGUE.

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  • 02:56:30 PM

    MR. MENENDEZ

    I ASK MY DISTINGUISHED CHAIRMAN TO YIELD A MOMENT, YOU'RE ABSOLUTELY…

    I ASK MY DISTINGUISHED CHAIRMAN TO YIELD A MOMENT, YOU'RE ABSOLUTELY RIGHT. AS A MATTER OF FACT, WHEN I MADE THAT COMMENT WE WERE GOING TO HAVE A TSUNAMI OF FORECLOSURES, THE ADMINISTRATION WITNESSES AT THE TIME, PREVIOUS ADMINISTRATION, OF COURSE, SAID THAT WITH ALL DUE RESPECT THAT'S AN EXAGGERATION. I WISH THEY HAD BEEN RIGHT AND WE HAD BEEN WRONG. BUT I THINK THAT THE CHAIRMAN HITS IT RIGHT ON THE POINT. IN THE CONTEXT OF THE RATING AGENCIES, THEY WERE PLAYING COACH AND REFER. WELL, WHEN YOU'RE PLAYING COACH AND REFER, -- AND REFEREE, SOMEHOW THE GAME DOESN'T WORK OUT QUITE THAT WELL. I APPRECIATE WHAT YOU HAVE DONE IN THAT RESPECT HERE AS WELL. I THINK THE CHAIRMAN MAKES THE CASE VERY CLOARL THAT THE DEFINITION OF INSANITY IS DOING THE SAME THING TIME AND TIME AGAIN AND EXPECTING A DIFFERENT RESULT. IF WE WANT TO SEE EXACTLY WHAT'S HAPPENED TO THE AMERICAN CONSUMER IN THIS COUNTRY CONTINUE TO FACE THE SAME CONSEQUENCES THEY HAVE PASSED OVER THE LAST COUPLE OF YEARS, THEN WE ADOPT THIS AMENDMENT, BUT IF WE WANT TO CHANGE THAT, THEN WE WOULD SUPPORT YOUR UNDERLYING PROVISIONS IN YOUR BILL. THANK YOU FOR YOUR LEADERSHIP.

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  • 02:57:34 PM

    MR. DODD

    POINT I WANT TO MAKE ON THE AMENDMENT. UNDER THIS PROPOSAL, ANY PERSON…

    POINT I WANT TO MAKE ON THE AMENDMENT. UNDER THIS PROPOSAL, ANY PERSON THAT IS SUBJECT TO ONE OF THE ENUMERATED STATUTES COULD BE ASSESSED UNDER THIS BILL. SECTION 1015-A. NOW, AS I READ THAT SECTION, 1015-A -- AND THIS AMENDMENT, BY THE WAY, TALK ABOUT A BUREAUCRACY, A LONG AMENDMENT HERE. BUT IN 1015-A, IT SAYS -- "THE CHAIRPERSON SHALL ESTABLISH BY RULE AN ASSESSMENT SCHEDULE." WE'LL ASSESS NOW THESE VARIOUS INSTITUTIONS THAT ARE ALREADY BURDENED WITH ASSESSMENTS. "INCLUDING THE ASSESSMENT BASE AND RATES APPLICABLE TO COVERED PERSONS SUBJECT TO SECTION 1023." THIS I KNOW SOUNDS LIKE A LOT OF JIBBERISH, MR. CHAIRMAN, BUT WHAT IS 1023? WHAT DO THEY SAY? SECTION 1023 TALKS ABOUT NONDEPOSITORY INSTITUTIONS SUBJECT TO CONSUMER LAWS. JUST CONSUMER LAWS. NOW, ONE OF THE COMPLAINTS ABOUT OUR UNDERLYING BILL IS -- WHICH IS TOTALLY FALSE, IS THAT FLORISTS AND BUTCHERS AND DENTISTS AND ACCOUNTANTS AND LAWYERS WOULD BE SUBJECT TO THE PROVISIONS OF THIS ACT. NOTHING COULD BE FURTHER FROM THE TRUTH, AND THE LANGUAGE IN OUR BILL MAKES IT EXPLICITLY CLEAR THAT YOU MUST BE SIGNIFICANTLY INVOLVED IN FINANCIAL SERVICES OR PRODUCTS. THAT'S THE LANGUAGE OF OUR BILL. 1023, NONDEPOSITORY INSTITUTIONS SUBJECT TO CONSUMER LAWS, COULD BE LEVIED WITH ASSESSMENTS. THAT IS YOUR FLORIST, YOUR BUTCHER, YOUR DENTIST, YOUR ACCOUNTANT, YOUR LAWYER. SO THOSE WHO ARGUE AGAINST MY BILL AND ARGUE FOR THIS ALTERNATIVE, IN FACT EXPLICITLY IN HERE, AT LEAST AS I READ THIS, COULD VERY WELL IMPOSE ASSESSMENTS ON THE VERY, VERY PEOPLE THEY CLAIM ARE AFFECTED BY OUR LEGISLATION. AND AGAIN, I INVITE MY COLLEAGUES TO READ IT. IT'S NOT A SPEECH I'M READING. I'M READING FROM THE PROPOSED AMENDMENT. IN THAT SECTION 1023, ASSUMING YOU CAN LOOK IT UP HERE, IT'S A SECTION OF THE BILL, IT SPEAKS ABOUT NONDEPOSITORY INSTITUTIONS SUBJECT TO CONSUMER LAWS, AND THE DEFINITION ACCORDINGLY THE VERY PEOPLE WHO ARE NOT FINANCIAL INSTITUTIONS WHO COULD BE LEVIED WITH THOSE ASSESSMENTS. SO FOR ALL OF THOSE REASONS, I SAY RESPECTFULLY I WOULD URGE MY COLLEAGUES TO REJECT THIS AMENDMENT. I DON'T CLAIM PERFECTION IN OUR UNDERLYING CONSUMER PROTECTION LANGUAGE. WE THINK WE HAVE GOT A VERY STRONG BILL, MR. PRESIDENT. I'M ALWAYS ANXIOUS TO HEAR IF PEOPLE THINK THEY CAN MAKE IT STRONGER OR BETTER IN SOME WAY, FINE. BUT TO PROPOSE A WHOLE NEW REGULATORY STRUCTURE HERE WITH NEW PEOPLE COMING ON AT GREAT COST WITH NO POWER WHATSOEVER TO DO ANYTHING ABOUT THE VERY PROBLEM WE'RE CONFRONTED WITH SEEM TO BE THE HEIGHT OF WHAT WE'RE TRYING TO AVOID, CREATING A BUREAUCRACY THAT DOESN'T DO MUCH. THAT SEEMS TO BE WHAT THE AMERICAN TAXPAYERS WANT US TO AVOID. WITH THAT, MR. PRESIDENT, WE'RE COMPLETE ON OUR SIDE WITH THE DEBATE AGAINST THIS AMENDMENT. UNLESS THERE ARE SOME FURTHER COMMENTS, THEN I WOULD ASK FOR THE YEAS AND NAYS ON THE AMENDMENT AND CALL FOR A VOTE.

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  • 03:00:43 PM

    THE PRESIDING OFFICER

    OFFICER: IS THERE A SUFFICIENT SECOND? NOW THERE IS. THERE SEEMS TO BE.…

    OFFICER: IS THERE A SUFFICIENT SECOND? NOW THERE IS. THERE SEEMS TO BE. THERE IS A SUFFICIENT SECOND.

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  • 03:01:02 PM

    THE PRESIDING OFFICER

    SURE. A SENATOR: MR. PRESIDENT?

  • 03:01:48 PM

    MR. DODD

    GOING TO THE VOTE, I ASK UNANIMOUS CONSENT THAT THE SENATE NOW PROCEED TO…

    GOING TO THE VOTE, I ASK UNANIMOUS CONSENT THAT THE SENATE NOW PROCEED TO A VOTE WITH RESPECT TO THE SHELBY AMENDMENT, NUMBERED 3826, WITH NO AMENDMENT IN ORDER TO THE AMENDMENT PRIOR TO THE VOTE. FURTHER, THAT THE PREVIOUS ORDER WITH RESPECT TO THE SANDERS AMENDMENT REMAINING IN EFFECT, PROVIDED THAT AFTER THE SANDERS AMENDMENT HAS BEEN CALLED UP AND REPORTED BY NUMBER, SENATOR McCAIN BE RECOGNIZED TO CALL UP AN AMENDMENT RELATING TO G.S.E.'S, AND THAT AFTER THE McCAIN AMENDMENT HAS BEEN REPORTED BY NUMBER, THE SENATE THEN RESUME CONSIDERATION OF THE SANDERS AMENDMENT.

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  • 03:02:20 PM

    THE PRESIDING OFFICER

    THERE OBJECTION? WITHOUT OBJECTION, SO ORDERED.

  • 03:02:24 PM

    MR. DODD

    JUST BEFORE WE GET TO THIS VOTE AGAIN, I MAKE THIS APPEAL THAT WE'RE GOING…

    JUST BEFORE WE GET TO THIS VOTE AGAIN, I MAKE THIS APPEAL THAT WE'RE GOING TO HAVE THIS VOTE, WE'LL GO TO THE SANDERS AMENDMENT, THEN TO THE McCAIN AMENDMENT. AND AGAIN, WE'RE GOING TO TRY TO GO BACK AND FORTH AND MOVE ALONG. THE NUMBER OF AMENDMENTS NOW HAS INCREASED TO OVER 150 AMENDMENTS. WHEN I SAY TO MY COLLEAGUES -- THERE ARE ACTUALLY MORE AMENDMENTS ON THE DEMOCRATIC SIDE THAN THE REPUBLICAN SIDE. NOT MANY MORE, BUT MORE. I URGE MY COLLEAGUES TO EITHER EITHER -- WE'LL SHARE THIS WITH YOU. IF YOU HAVE VERY LIKE-MINDED AMENDMENTS, IT MIGHT BE IN YOUR INTERESTS TO COMBINE SOME OF THESE IDEAS TOGETHER IN A SINGLE AMENDMENT THAT INCORPORATES THE SAME CONCEPTS, OR IF THERE IS REPETITION OF THE SAME IDEA SEVERAL TIMES OVER, MAYBE RALLY AROUND ONE AMENDMENT THAT ACTUALLY MAKE THE POINT. I WOULD LIKE TO EITHER EXTRACT FROM THE BILL OR ADD TO THE BILL. AGAIN, WE ALL REALIZE, LOOK, WE'RE NOT GOING TO BE ON THIS BILL FOREVER. I WANT TO ACCOMMODATE AS MANY PEOPLE AS I CAN AND HAVE THE KIND OF DISCUSSION WE JUST HAD ON THIS AMENDMENT, BUT TO DO THAT IN THE TIME FRAME WE HAVE IS GOING TO REQUIRE COOPERATION AND SOME INDULGENCE ON THE PART OF PEOPLE TO -- TO NOT BE DEMANDING. IF YOU HAVE AN AMENDMENT UP, LET'S TRY TO GET TO IT, HAVE A GOOD DISCUSSION, BUT NOT TOO LONG SO WE GIVE OTHER PEOPLE A CHANCE TO BE HEARD AS WELL. I MAKE THAT PLEA TO EVERYONE INVOLVED. WITH THAT, MR. PRESIDENT, I YIELD THE FLOOR AND I STILL ASK WE MOVE TO THE --

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  • 03:03:50 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: THE YEAS AND NAYS HAVE BEEN ORDERED. THE QUESTION IS ON…

    PRESIDING OFFICER: THE YEAS AND NAYS HAVE BEEN ORDERED. THE QUESTION IS ON THE SHELBY AMENDMENT. THE CLERK WILL CALL THE ROLL. VOTE: IEKSZ VOTE: VOTE:

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  • 03:04:11 PM

    Senate Vote 133 - On the Amendment (Shelby Amdt No 3826)

    To establish a Division of Consumer Financial Protection within the Federal Deposit Insurance Corporation, and for other purposes.

    Amendment Rejected (38 - 61)
    Yea
    Nay

    Vote Details: Yea - 38
    Republican - 38

    Vote Details: Nay - 60
    Democratic - 56
    Independent - 2
    Republican - 2

  • 03:30:27 PM

    THE PRESIDING OFFICER

    ARE THERE ANY MEMBERS WISHING TO CHANGE -- TO VOTE OR TO CHANGE THEIR…

    ARE THERE ANY MEMBERS WISHING TO CHANGE -- TO VOTE OR TO CHANGE THEIR VOTE? IF NOT, WE HAVE 38 YEAS AND 61 NAYS. THE AMENDMENT IS NOT AGREED TO. WITHOUT OBJECTION. A SENATOR: MR. PRESIDENT?

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  • 03:30:53 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: THE SENATOR FROM VERMONT.

  • 03:30:59 PM

    MR. DODD

    LET ME GIVE OUR COLLEAGUES SOME IDEA OF HOW WE'RE GOING TO TRY TO PROCEED.…

    LET ME GIVE OUR COLLEAGUES SOME IDEA OF HOW WE'RE GOING TO TRY TO PROCEED. MR. PRESIDENT, SENATOR SANDERS HAS THE NEXT AMENDMENT. WE ENTERED INTO AN UNANIMOUS CONSENT AGREEMENT A MINUTE AGO. SENATOR SANDERS' AMENDMENT. HE HAS ASKED FOR 80 MINUTES TO BE EQUALLY DIVIDED ON HIS AMENDMENT. WE'LL THEN TURN TO THE McCAIN AMENDMENT -- OR GO TO THE McCAIN AMENDMENT U I'M HOPING WE GET A TIME AGREEMENT ON THAT AMENDMENT AS WELL. ABOUT 140 MINUTES EQUALLY DIVIDED BETWEEN US HERE. I WANT TO ACCOMMODATE EVERYBODY AS MUCH AS I CAN. IF SOME PEOPLE TAKE TOO MUCH TIME, IT WILL MEAN OTHERS NEVER GET A CHANCE TO OFFER THEIR AMENDMENTS. SO I MAKE A REQUEST OF MY GOOD FRIEND, SENATOR SHELBY, TO INQUIRE BEFORE WE GET TO THE McCAIN AMENDMENT WHAT SORT OF A TIME AGREEMENT WE COULD HAVE ON JOHN'S AMENDMENT. THEN MY INTENTION WOULD BE TO GO TO A DEMOCRATIC AMENDMENT AND POSSIBLY A REPUBLICAN AMENDMENT TONIGHT. AND THERE'LL BE VOTES TOMORROW. I WILL LET ME COLLEAGUES KNOW THAT WE'RE GOING TO HAVE VOTES TOMORROW. WE'VE GOT, I GATHER, MONDAY AND FRIDAY NEXT WEEK THAT ARE NONVOTE DAYS. SO WE'LL HAVE A LIMITED WEEK NEXT WEEK. AND WE'VE GOT 140 AMENDMENTS WITH MEMBERS WHO WANT TO BE HEARD. OBVIOUSLY WE CAN'T GO ON FOREVER, TOO. REID WILL MY FRIEND YIELD?

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  • 03:32:27 PM

    MR. REID

  • 03:33:29 PM

    MR. REID

    SENATOR McCAIN, HAS HE AGREED TO A TIME?

  • 03:33:33 PM

    MR. DODD

    MY COLLEAGUE, IF EVERYONE DEMANDS MORE TIME, EVERYONE HERE SUFFERS.…

    MY COLLEAGUE, IF EVERYONE DEMANDS MORE TIME, EVERYONE HERE SUFFERS. THERE'S NOT AN UNLIMITED DEBATE ON THIS BILL. WITH 141 AMENDMENTS, ABOUT EQUALLY DIVIDED WITH MY COLLEAGUES, WE HAVE GOT TO PROVIDE TIME FOR PEOPLE. I WANT TO DO THAT. BUT I CAN'T DO IT IF SOMEONE US INSISTS UPON UNLIMIT THELIMITED TIME OR MORE TIME. WE YOU A KNOW THESE ISSUES PRETTY WELL. THIS IS NOT AS IF THIS IS A NEW BILL. I'M NOT ASKING FOR IT RIGHT NOW. THINK ABOUT IT.

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  • 03:34:02 PM

    MR. McCONNELL

    IF THE SENATOR FROM CONNECTICUT WILL YIELD FOR JUST A MINUTE, JUST FOR AN…

    IF THE SENATOR FROM CONNECTICUT WILL YIELD FOR JUST A MINUTE, JUST FOR AN OBSERVATION. MR. PRESIDENT, WE MAY HAVE 141 AMENDMENTS, BUT THEY'RE NOT ALL EEQUAL. WE'RE GOING TO TRY TO WORK OUR WAY THROUGH THE MAJOR AMENDMENTS HERE IN A SERIOUS WAY. THIS IS A VERY IMPORTANT PIECE OF LEGISLATION. AND I THINK THE MAJORITY LEADER AND I HAD A GOOD CONVERSATION EARLIER TODAY ABOUT HOW TO GO FORWARD AND WE'LL JUST KEEP WORKING ON IT AND TRY TO WORK OUR WAY THROUGH IT IN A SYSTEMATIC WAY THAT MAXIMIZES OPPORTUNITY FOR PEOPLE TO HAVE VOTES ON IMPORTANT P AMENDMENTS.

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  • 03:34:38 PM

    MR. DODD

    MY GOOD FRIEND FROM KENTUCKY, THIS HAS BEEN 24 HOURS ON ONE AMENDMENT. 24…

    MY GOOD FRIEND FROM KENTUCKY, THIS HAS BEEN 24 HOURS ON ONE AMENDMENT. 24 HOURS. WE'VE GOT TO DO BETTER THAN THAT. I CAN'T ACCOMMODATE PEOPLE IF WE'RE GOING 0 SPEND A DAY ON ONE AMENDMENT T JUST DOESN'T WORK. AND SO ALL AMENDMENTS MAY NOT BE EQUAL, BUT ALL MEMBERS R ALL MEMBERS DESERVE TO HAVE AN OPPORTUNITY TO BE HEARD. AND I -- AND SO I APPRECIATE THE MAJORITY LEADER'S POINT OF TRYING TO CONSOLIDATE, IF SEVERAL MEMBERS HAVE THE SAME IDEA ABOUT SOMETHING. MAYBE IT CAN BE BROUGHT TOGETHER AS ONE AMENDMENT, RATHER THAN FIVE IN SOME CASES. I SAY THAT TO BOTH DEMOCRATS AND REPUBLICANS, SO WE HAVE A GOOD DISCUSSION. THAT'S MY ONLY REQUEST IS THAT WHEN YOU'RE BRINGING -- I CAN'T SPEND 24 HOURS ON ONE AMENDMENT AND ACCOMMODATE PEOPLE. JUST ISN'T GOING TO HAPPEN. THAT'S MY PLEA.

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  • 03:35:26 PM

    MR. SHELBY

    I THINK WE'RE MAKING PROGRESS. WE MIGHT NOT BE MAKING PROGRESS AS QUICKLY…

    I THINK WE'RE MAKING PROGRESS. WE MIGHT NOT BE MAKING PROGRESS AS QUICKLY AS SOME PEOPLE WOULD LIKE. BUT THIS IS A VERY IMPORTANT BILL, AND MAYBE WE DID SPEND A LOT OF TIME ON THIS AMENDMENT. BUT IT'S VERY IMPORTANT. AND WE'VE DEBATED IT AND I GUESS IT'S BEEN DISPOSED OF, AT LEAST THAT PART OF IT NOW. BUT THERE ARE A THE ALTHOUGH OF OTHER IMPORTANT AMENDMENTS COMING UP. WE CAN WORK TOGETHER AND WE CAN WORK THROUGH SOME OF THEM BECAUSE A LOT OF THEM ARE DUPLICATION, TO SOME DEGREE. SOME OF THEM WE CAN TAKE. AND SENATOR DODD AND I CAN HELP WITH OUR STAFFS ON THAT. BUT THIS -- REMEMBER, THIS AFFECTS ALL OF OUR ECONOMY, EVERYTHING. MR.

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  • 03:36:05 PM

    MR. DODD

    ADVANTAGE OF THE MOTIVE MOMENT, MR. PRESIDENT. I'LL BE HERE ALL WEEKEND.…

    ADVANTAGE OF THE MOTIVE MOMENT, MR. PRESIDENT. I'LL BE HERE ALL WEEKEND. NOT GOING TO HAVE VOTES ON THE WEEKEND. BUT I'LL BE HERE ALL WEEKEND. FOR MEMBERS WHO HAVE AMENDMENTS AND WOULD LIKE US TO CONSIDER THEM, SENATOR SHELBY'S STAFF WILL BE AROUND, WE'LL TRY TO WORK ON YOUR AMENDMENTS TO TRY TO MODIFIED THEM. SO I'LL SPEND SATURDAY AND SUNDAY HERE ALL DAY WITH PEOPLE TO GO OVER THEIR PRODUCT SO WE CAN MAYBE EXPEDITE THINGS NEXT WEEK AS WELL. WITH THAT -- A SENATOR:

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  • 03:36:34 PM

    MR. REID

    IF I COULD JUST TALK TO THE TWO MANAGERS THROUGH THE CHAIR, I KNOW HOW…

    IF I COULD JUST TALK TO THE TWO MANAGERS THROUGH THE CHAIR, I KNOW HOW IMPORTANT EVERYONE THINKS THEIR AMENDMENT S BUT YOU COULD HAVE A HALF-HOUR ON EACH SIDE, AN HOUR PER AMENDMENT. SOMEBODY CAN SAY QUITE A BIT IN FIVE MINUTES. I JUST THINK WE'RE GOING TO HAVE TO HAVE SOME GUIDELINES AS TO WHAT WE'RE GOING TO DO. EVERYBODY THINKS THEIR AMENDMENT IS THE MOST IMPORTANT, AND I'M SURE IN THEIR OWN MIND IT PROBABLY S BUT WE'RE GOING TO HAVE TO SET SOME STANDARD HERE. I HAVE BEEN VERY ACCOMMODATING IN THE LAST 24 HOURS, BECAUSE I THINK SO MUCH OF MY COMANAGER OF THE BILL, SENATOR SHELBY. WE COULD HAVE MOVED TO TABLE HIS AMENDMENT A LONG TIME AGO. LET'S NOT -- LET'S UNDERSTAND, THERE ARE OTHER WAYS WE CAN MOVE FORWARD. WE JUST CAN'T -- SOMEBODY COMES AND SAY, I NEED THREE HOURS HON AN AMENDMENT. THERE'S NOT AN AMENDMENT ON THIS BILL THAT'S WORTH THREE HOURS, OKAY? SO WE'VE HAD A GOOD CONVERSATION. I HOPE THAT WE CAN -- THE TWO MANAGERS CAN GIVE US A GUIDELINE AS TO WHAT THEY EXPECT TO DO TONIGHT AND TOMORROW. BECAUSE MEMBERS HAVE OTHER THINGS TO DO THAN LISTEN TO THE THREE OF US.

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  • 03:37:57 PM

    MR. DODD

    MR. PRESIDENT, AND SENATOR SANDERS?

  • 03:38:02 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM VERMONT.

  • 03:38:05 PM

    MR. SANDERS

    UP AMENDMENT NUMBER 3738.

  • 03:38:08 PM

    THE PRESIDING OFFICER

    THE CLERK WILL REPORT.

  • 03:38:10 PM

    THE CLERK

    THE SENATOR FROM VERMONT, MR. SANDERS, FOR HIMSELF AND OH, PROPOSALS AN…

    THE SENATOR FROM VERMONT, MR. SANDERS, FOR HIMSELF AND OH, PROPOSALS AN AMENDMENT NUMBERED 3738 TO AMENDMENT NUMBER 3739.

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  • 03:38:19 PM

    MR. SANDERS

    I ASK THAT THE AMENDMENT BE CONSIDERED AS READ.

  • 03:38:22 PM

    THE PRESIDING OFFICER

    WITHOUT OBJECTION.

  • 03:38:28 PM

    MR. SANDERS

    MR. PRESIDENT, THIS AMENDMENT -- MR. PRESIDENT, THIS AMENDMENT, WHICH…

    MR. PRESIDENT, THIS AMENDMENT -- MR. PRESIDENT, THIS AMENDMENT, WHICH CALLS FOR TRANSPARENCY AT THE FED, IS FRANKLY ONE OF THE MORE UNUSUAL AMENDMENTS THAT I HAVE EVER PARTICIPATED IN, NOT SO MUCH FOR ITS CONTENT BUT FOR THE KIND OF COALITION THAT HAS COME TOGETHER AROUND IT. HOW OFTEN DO YOU HAVE THE AFL-CIO AND FREEDOMWORKS SUPPORTING THE SAME EFFORT? HOW OFTEN ARE THE SEIU -- WHICH IS THE LARGEST TRADE UNION IN THIS COUNTRY -- MoveOn.ORG, PUBLIC CITIZEN STRIVING FOR THE SAME GOAL AS THE NATIONAL TAXPAYERS UNION OR THE EAGLE FORUM OR THE CONSERVATIVE AMERICANS FOR TAX REFORMER? SO I THINK THERE IS A COALITION REPRESENTING TENS OF MILLIONS PROLIFERATE GRASS-ROOTS ACTIVISTS, SOME OF THEM ARE PROGRESS, COME FROM WHERE I COME FROM; SOME OF THEM ARE CONSERVE TIVMENT BUT THEY ARE ALL UNITED AROUND THE VERY BASIC PRINCIPLE. WE NEED TRANSPARENCY AT THE FED, AND WE NEED IT NOW. AND I WANT TO USE THIS OPPORTUNITY AND THANK CHAIRMAN DODD FOR ALLOWING ME TO DO THIS TO TALK ABOUT THE AMENDMENT, WHAT IT DOES, AND WHY SO MANY DIVERSE GROUPS ARE COMING TOGETHER IN SUPPORT OF IT. BECAUSE YOU DO HAVE TO ASK YOURSELF, WHAT BRINGS TOGETHER SOME OF THE MOST PROGRESSIVE GROUPS IN THE COUNTRY WITH SOME OF THE MOST CONSERVATIVE GROUPS, SOME OF THE MOST PROGRESSIVE MEMBERS OF THE SENATE WITH SOME OF THE MOST CONSERVATIVE? I ALSO WANT TO TELL YOU, NOT ONLY WHAT THIS AMENDMENT DOES BUT TO CLARIFY, AS BEST I CAN, WHAT IT DOES NOT BECAUSE THERE HAS BEEN SOME DISTORTION IN TERMS OF -- ABOUT THIS AMENDMENT AND THOSE DISTORTIONS ARE BLATANTLY UNTRUE. AND I WANT TO TOUCH ON THAT ALSO. I HAVE TO TELL YOU, MR. PRESIDENT, THAT THE ORIGIN FOR THIS AMENDMENT CAME ON MARCH 3, 2009. AND THAT WAS THE DATE THAT, AS A MEMBER OF THE BUDGET COMMITTEE, I HAD THE OPPORTUNITY OF ASKING CHAIRMAN BERNANKE WHAT I THOUGHT WAS A PRETTY SIMPLE QUESTION. CHAIRMAN BERNANKE OIVELG OBVIOUSLY IS CHAIRMAN OF THE FEDERAL. AND WHAT I ASKED HIM IS, MR. CHAIRMAN, MY UNDERSTANDING IS THAT THE FED HAS LENT OUT SOME $2 TRILLION TO SOME OF THE LARGEST FINANCIAL INSTITUTIONS IN THIS COUNTRY. WOULD YOU PLEASE TELL ME AND THE AMERICAN PEOPLE WHO RECEIVED THAT MONEY. AND I THOUGHT THAT WAS A PRETTY SIMPLE AND STRAIGHTFORWARD QUESTION. MR. BERNANKE SAID, NO, DESPITE THE FACT THAT THIS WAS $2 TRILLION IN ZERO INTEREST OR NEAR-ZERO INTEREST LOANS. HE APPARENTLY BELIEVES THAT THE AMERICAN PEOPLE DO NOT HAVE A RIGHT TO KNOW WHO RECEIVED THAT MONEY. ON THAT VERY SAME DAY, I INTRODUCED LEGISLATION REQUIRING THE FED TO PUT THIS INFORMATION ON ITS WEB SITE, JUST AS CONGRESS REQUIRED THE TREASURY DEPARTMENT TO DO WITH RESPECT TO THE $700 BILLION TARP PROGRAM. AND HERE WE'RE TATTED. -- AND HERE WE'RE TODAY. WHATEVER ONE MAY THINK OF THE TARP PROGRAM, YOU CAN GET INFORMATION AS TO WHO RECEIVED THAT MONEY, WHEN IT WAS PAID BACK, THE DETAILS. IT'S RIGHT THERE ON THE INTERNET, AND I BELIEVE THAT THAT SAME INFORMATION SHOULD BE MADE AVAILABLE IN TERMS OF THE FED ZERO AND NEAR-ZERO INTEREST LOANS. MR. PRESIDENT, WHAT THE FED APPARENTLY DOES NOT UNDERSTAND -- AND THIS IS THE IMPORTANT POINT -- IS THAT THIS MONEY, THESE TRILLIONS OF DOLLARS, DO NOT BELONG TO THE FED. THEY BELONG TO THE AMERICAN PEOPLE. AND IT IS INCOMPREHENSIBLE TO ME -- AND I THINK TO THE OVERWHELMING MAJORITY OF THE PEOPLE IN OUR COUNTRY -- THAT THE FED BELIEVES THAT THEY CAN KEEP THIS INFORMATION SECRET. THIS AMENDMENT NOT ONLY REQUIRES THAT THE FED TELL US WHO HAS RECEIVED THE $2 TRILLION IT LENT OUT, BUT SIMILAR TO THE LANGUAGE INCORPORATED IN THE HOUSE BILL, IT CALLS FOR AN AUDIT OF THE FED BY THE G.A.O. AND THAT'S IT, MR. PRESIDENT. THAT'S WHAT WE'RE ATTEMPTING TO DO WITH THIS AMENDMENT. TRANSPARENCY AND A STRAIGHTFORWARD AUDIT. WHO GOT WHAT WHEN, ON WHAT BASIS, ON WHAT TERMS, WHO WAS AT THE MEETINGS, WHO MADE THE DECISIONS, AND TAKING A LOOK AT POSSIBLE CONFLICTS OF INTEREST. SIMPLE, FACTUAL QUESTIONS THAT PEOPLE FROM THE STATE OF VERMONT ASK ME. I SUSPECT PEOPLE FROM MINNESOTA ASK YOU, AND PEOPLE ALL OVER THIS COUNTRY, REGARDLESS OF THEIR POLITICAL PERSUASION, ARE ASKING. MR. PRESIDENT, I UNDERSTAND THAT THIS AMENDMENT MAY NOT BE SUPPORTED BY EVERYONE. SOME MAY SUGGEST INACCURATELY THAT THIS AMENDMENT -- AND I QUOTE FROM A STATEMENT -- "TAKES AWAY THE INDEPENDENCE OF THE FEDERAL RESERVE AND PUTS MONETARY POLICY INTO THE HANDS OF CONGRESS" -- END OF QUOTE. THAT'S ONE OF THE CHARGES THAT'S ONE OF THE CHARGES BEING MADE AGAINST THIS AMENDMENT. LET ME ADDRESS THOSE CONCERNS BY SIMPLY READING TO THE MEMBERS OF THE SENATE EXACTLY WHAT IS IN THE AMENDMENT SO THAT WE KNOW WHAT WE'RE TALKING ABOUT, AND I QUOTE FROM PAGE 4 OF A 6-PAGE AMENDMENT. NOT A LONG AMENDMENT. AND THIS IS WHAT IT SAYS. CAN'T BE CLEARER THAN THIS: "NOTHING IN THIS AMENDMENT SHALL BE CONSTRUED AS INTERFERENCE IN OR DICTATION OF MONETARY POLICY TO THE FEDERAL RESERVE SYSTEM BY THE CONGRESS OR THE GOVERNMENT ACCOUNTABILITY OFFICE." END OF QUOTE. SO IF THERE ARE PEOPLE WHO ARE SAYING, OH, WE'RE GOING TO GET INVOLVED IN MONETARY POLICY, OH, WE'RE GOING TO BE POLITICIZING THE FED, OH, WE'RE GOING TO HAVE BEFORE THE ELECTION CONGRESS TELLING THE FED TO RAISE INTEREST RATES, TO LOWER INTEREST RATES, THAT IS ABSOLUTELY INACCURATE. THAT IS NOT WHAT WE'RE DOING. THAT IS NOT IN MY VIEW WHAT WE SHOULD BE DOING. WE WANT AN INDEPENDENT FED. WE WANT THEM TO DEVELOP MONETARY POLICY. THAT IS NOT UNDERLINE, WHAT THIS AMENDMENT DOES. THIS AMENDMENT DOES NOT TELL THE FED WHEN TO CUT SHORT-TERM INTEREST RATES AND WHEN TO RAISE THEM. IT DOES NOT TELL THE FED WHAT BANKS TO LEND MONEY TO AND WHAT BANKS NOT TO LEND MONEY TO. IT DOES NOT TELL THE FED WHAT FOREIGN CENTRAL BANKS THEY CAN DO BUSINESS WITH AND WHICH ONES THEY CANNOT DO BUSINESS WITH. IT DOES NOT IMPOSE ANY NEW REGULATIONS ON THE FED, NOR DOES IT TAKE ANY REGULATORY AUTHORITY AWAY FROM THE FED. LET US BE CLEAR ABOUT THAT. MR. PRESIDENT, WHAT THE OPPONENTS OF THIS AMENDMENT ARE DOING, I THINK, IS EQUATING INDEPENDENCE WITH SECRECY, AND THERE IS A DIFFERENCE. AT A TIME WHEN OUR ENTIRE FINANCIAL SYSTEM ALMOST COLLAPSED, WE CANNOT LET THE FED OPERATE IN SECRECY ANY LONGER. THE AMERICAN PEOPLE HAVE A RIGHT TO KNOW. I FIND IT AMUSING FOR SOME PEOPLE WHO OPPOSE THIS AMENDMENT, AS CHAIRMAN DODD OR THE PRESIDING OFFICER KNOWS, WE HAVE HAD HEATED DEBATES ON THE FLOOR OF THE SENATE OVER A $5 MILLION AMENDMENT, OVER AN $8 MILLION PROVISION. IT GOES ON FOR HOURS. AND YET, YOU'VE GOT TRILLIONS OF DOLLARS BEING LENT OUT, AND THERE ARE SOME PEOPLE WHO THINK AMERICAN PEOPLE DON'T HAVE A RIGHT TO KNOW WHO GOT THEIR MONEY. I THINK, FRANKLY, THAT IS ABSURD. WE HEAR OVER AND OVER AGAIN ON THE FLOOR OF THE SENATE THE AMERICAN PEOPLE PLAY BY THE RULES. THAT IS WHAT THE AVERAGE AMERICAN FAMILY DOES, THEY PLAY BY THE RULES. WHAT ARE THE RULES GOVERNING THE FED? WHO MAKES THOSE RULES, OR ARE THEY JUST MADE UP AS THEY GO ALONG AND THEY DON'T HAVE TO TELL ANYBODY ABOUT IT? SO I'VE GOT A PROBLEM WITH THAT, AND THAT'S WHAT THIS AMENDMENT IS ABOUT. NOW, MR. PRESIDENT, TO MY MIND -- AND THESE ARE JUST MY ISSUES. OTHERS MAY HAVE DIFFERENT ISSUES, AND I'M SURE THEY DO. HERE ARE JUST A FEW OF THE QUESTIONS THAT THE AMERICAN PEOPLE ARE ASKING AND WHY WE NEED A G.A.O. AUDIT OF THE FED. THESE ARE JUST A FEW. LET ME THROW THEM OUT. MR. PRESIDENT, WHY WAS LLOYD BLANKFEIN, THE C.E.O. OF GOLDMAN SACHS, INVITED TO THE NEW YORK FEDERAL RESERVE TO MEET WITH FEDERAL OFFICIALS IN SEPTEMBER OF 2008 TO DETERMINE WHETHER A.I.G. WOULD BE BAILED OUT OR ALLOWED TO GO BANKRUPT? WHEN THE FED AND TREASURY DECIDEED TO BAIL OUT A.I.G. TO THE TUNE OF $182 BILLION, WHY DID THE FED REFUSE TO TELL THE AMERICAN PEOPLE WHERE THAT MONEY WAS GOING? WHY DID THE FED ARGUE THAT THIS INFORMATION NEEDED TO BE KEPT SECRET -- QUOTE -- "AS A MATTER OF NATIONAL SECURITY"? END QUOTE. NOW HERE'S THE POINT, WHEN A.I.G. FINALLY RELEASED THE NAMES OF THE COUNTERPARTIES RECEIVING THIS ASSISTANCE, HOW DID IT HAPPEN THAT GOLDMAN SACHS RECEIVED $13 BILLION OF THIS MONEY? A.I.G., $182, $13 BILLION GOING TO GOLDMAN SACHS. 100 CENTS ON THE DOLLAR OF A COMPANY THAT WAS GOING BANKRUPT AND THAT WAS BAILED OUT. HOW'S THAT, 100 CENTS ON THE DOLLAR. NOT BAD. GOLDMAN SACHS. ANOTHER QUESTION THE PEOPLE MIGHT ASK: DID GOLDMAN SACHS USE THIS MONEY TO PROVIDE $16 BILLION IN BONUSES THE NEXT YEAR? SO HERE YOU HAVE GOLDMAN SACHS GETTING $13 BILLION OUT OF THE $182 BILLION THAT A.I.G. GOT. THE NEXT YEAR THEY'RE ANNOUNCING $16 BILLION IN BONUSES. DID THEY USE SOME OF THIS MONEY TO PROVIDE THOSE BONUSES? A G.A.O. AUDIT OF THE FED MIGHT HELP EXPLAIN TO THE AMERICAN PEOPLE IF THERE WERE ANY CONFLICTS OF INTEREST SURROUNDING THIS DEAL. I THINK THE AVERAGE AMERICAN WOULD SAY, YEAH, THERE'S A CONFLICT OF INTEREST. YOU'VE GOT A GUY FROM GOLDMAN SACHS SITTING IN THE ROOM ARGUING FOR $182 BILLION. HE GETS $13 BILLION. THE NEXT YEAR THE COMPANY GIVES $16 BILLION IN BONUSES. IS THERE A CONFLICT OF INTEREST? I THINK SO. BUT THAT'S WHAT -- YOU KNOW, MY OPINION ISN'T THE IMPORTANT ONE HERE. THAT'S WHAT THE G.A.O. WILL BE DOING IF THIS AMENDMENT IS PASSED. MR. PRESIDENT, JUST ANOTHER QUESTION OUT THERE: IN 2008, IT SEEMS TO ME -- I MAY BE WRONG BUT IT SEEMS TO ME THERE WAS A CONFLICT OF INTEREST AT THE FED, BE FEDERAL RESERVE OF NEW YORK WHEN STEVEN FRIEDMAN, THE HEAD OF THE NEW YORK FED WHO ALSO SERVED ON THE BOARD OF DIRECTORS OF GOLDMAN SACHS -- LET'S BACK IT UP. HEAD OF THE FED, SERVES ON THE BOARD OF GOLDMAN SACHS, APPROVED GOLDMAN'S APPLICATION TO BECOME A BANK HOLDING COMPANY, GIVING IT ACCESS TO CHEAP LOANS FROM THE FEDERAL RESERVE. OKAY? HEAD OF THE FEDERAL RESERVE, NEW YORK FEDERAL RESERVE, ON THE BOARD OF GOLDMAN SACHS, APPLYING FOR GOLDMAN SACHS TO BECOME A BANK HOLDING COMPANY TO GAIN CHEAP LOANS FROM THE FED. LOOKS TO ME LIKE THERE MAY BE A CONFLICT OF INTEREST, BUT WHAT DO I KNOW? THAT'S WHAT WE NEED A G.A.O. REPORT TO TELL US. HERE IS INTERESTINGLY ENOUGH AN ARTICLE ON MAY 9, 2009, IN THE "WALL STREET JOURNAL." LET ME QUOTE BRIEFLY FROM THAT ARTICLE. QUOTE -- "GOLDMAN SACHS RECEIVED SPEEDY APPROVAL TO BECOME A BANK HOLDING COMPANY IN SEPTEMBER OF 2008. DURING THAT TIME THE NEW YORK FED'S CHAIRMAN, STEVEN FRIEDMAN, SAT ON GOLDMAN'S BOARD AND HAD A LARGE HOLDING IN GOLDMAN'S STOCK, WHICH BECAUSE OF GOLDMAN'S NEW STATUS AS A BANK HOLDING COMPANY, WAS A VIOLATION OF FEDERAL RESERVE POLICY. THE NEW YORK FED ASKED FOR A WAIVER, WHICH AFTER ABOUT TWO AND A HALF MONTHS THE FED GRANTED. WHILE IT WAS WEIGHING THE REQUEST, MR. F R EU EDMAN -- MR. FRIEDMAN BOUGHT MORE SHARES IN DECEMBER. THEY HAVE SINCE RISEN 1.7 MORE IN VALUE. MR. FREEDMAN SAYS NONE OF THESE EVENTS INVOLVES ANY CONFLICTS. END OF QUOTE. THAT'S THE "WALL STREET JOURNAL," MAY 9, 2009. THAT'S WHAT MR. FRIEDMAN SAYS. I KIND OF DISAGREE WITH HIM, BUT I WOULD LIKE THE G.A.O. TO TAKE A LOOK AT THAT. MR. PRESIDENT, WITHOUT A COMPREHENSIVE G.A.O. REPORT, WE HAVE TO TAKE MR. FRIEDMAN AT HIS WORD, AND I DON'T THINK WE SHOULD. WHO GOT WHAT? WHEN DID THEY GET IT? ON WHAT BASIS? ON WHAT TERMS? WHO WAS AT THOSE MEETINGS? WERE THERE CONFLICTS OF INTEREST? THESE ARE THE KINDS OF QUESTIONS THAT A G.A.O. AUDIT OF THE FED WILL ANSWER. MR. PRESIDENT, AS A RESULT OF THE BAILOUT OF BEAR STEARNS AND A.I.G., THE FED -- AND THIS IS A BEAUTY. THIS IS REALLY QUITE SOMETHING. THE FED NOW OWNS CREDIT DEFAULT SWAPS -- LISTEN UP ON THIS ONE -- NOW OWNS CREDIT DEFAULT SWAPS BETTING THAT CALIFORNIA, NEVADA, AND FLORIDA WILL DEFAULT ON THEIR DEBT. SO THE FEDERAL RESERVE STANDS TO MAKE MONEY IF CALIFORNIA, NEVA AND FLORIDA GO BANKRUPT. AND I SUSPECT THAT THE SENATORS FROM THE GREAT STATES OF CALIFORNIA, NEVADA AND FLORIDA WOULD BE RATHER INTERESTED TO KNOW THAT IF THEIR STATES GO BANKRUPT, THE FED MAKES MONEY. ON THE SURFACE, THIS LOOKS A LITTLE BIT ABSURD TO ME. BUT AGAIN, I THINK THIS IS AN ISSUE THAT THE FED -- THAT THE G.A.O. MIGHT BE TAKING A LOOK AT. MR. PRESIDENT, IT HAS BEEN REPORTED THAT THE FEDERAL RESERVE PRESSURED BANK OF AMERICA INTO ACQUIRING MERRILL LYNCH, MAKING THIS FINANCIAL INSTITUTION EVEN BIGGER AND RISKIER, ALLEGEDLY THREATENING TO FIRE ITS C.E.O. IF THE BANK OF AMERICA BACKED OUT OF ITS MERGER. WHEN THE MERGER WENT THROUGH, MERRILL LYNCH'S EMPLOYEES RECEIVED $3.7 BILLION IN BONUSES. WAS IN A GOOD DEAL FOR THE AMERICAN TAXPAYER? A G.A.O. AUDIT CAN HELP US FIND OUT. MR. PRESIDENT, WHEN THE FEDERAL RESERVE PROVIDED $29 BILLION -- A $29 BILLION LOAN TO J.P. MORGAN CHASE TO ACQUIRE BEAR STEARNS, THE C.E.O. OF J.P. MORGAN CHASE -- HIS NAME IS JAMIE DIAMOND -- SERVED ON THE BOARD OF DIRECTORS AT THE NEW YORK FEDERAL RESERVE. LET'S REPEAT THAT. WHEN THE FEDERAL RESERVE PROVIDED $29 BILLION TO J.P. MORGAN CHASE, THE C.E.O. OF J.P. MORGAN CHASE SERVED ON THE BOARD OF DIRECTORS OF THE NEW YORK FED. DID THIS REPRESENT A CONFLICT OF INTEREST? I THINK THE AVERAGE AMERICAN WOULD SAY YES. MAYBE SOMEBODY HAS A DIFFERENT POINT OF VIEW. BUT I THINK A G.A.O. AUDIT COULD HELP EXPLAIN ALL OF THIS TO THE AMERICAN PEOPLE. MR. PRESIDENT, CURRENTLY -- AND I THINK WE HAVE TO APPRECIATE THIS AS WELL, TO SHED SOME LIGHT ON THESE ISSUES. CURRENTLY SOME 35 MEMBERS OF THE FEDERAL RESERVE BOARDS OF GOVERNORS ARE EXECUTIVES AT PRIVATE FINANCIAL INSTITUTIONS WHICH HAVE RECEIVED NEARLY $120 BILLION IN TARP FUNDS. BUT, MR. PRESIDENT, WE DON'T KNOW HOW MUCH THESE BIG BANKS RECEIVED FROM THE FED. WE KNOW WHAT THEY GOT FROM THE TARP, NOT FROM THE FED. A G.A.O. AUDIT COULD ANSWER THIS QUESTION. MR. PRESIDENT, ALL OF US -- I BELIEVE ALL OF US ARE DEEPLY CONCERNED THAT SMALL AND MEDIUM-SIZE BUSINESSES AROUND THIS COUNTRY -- I KNOW IT'S CERTAINLY THE CASE IN VERMONT. SMALL AND MEDIUM-SIZE BUSINESSES ARE BEGGING FOR AFFORDABLE CREDIT. THEY HAVE THE OPPORTUNITY TO EXPAND. WE'RE BEGINNING TO SEE SOME ECONOMIC RECOVERY. THEY WANT TO EXPAND. THEY WANT TO CREATE NEW JOBS. THEY ARE FINDING IT EXTREMELY DIFFICULT TO ACQUIRE THOSE DESPERATELY NEEDED AFFORDABLE LOANS. NOW, I FIND IT AS IMPORTANT ISSUE TO ASK HOW MUCH OF THE TRILLIONS OF DOLLARS IN ZERO OR NEAR ZERO INTEREST LOANS THAT FINANCIAL INSTITUTIONS RECEIVE FROM THE FED WENT OUT TO THOSE SMALL BUSINESSES? OR PERHAPS, AS I PERSONALLY BELIEVE IS THE CASE, WERE SIMPLY INVESTED IN FEDERAL GOVERNMENT BONDS EARNING AN INTEREST RATE OF 3% OR 4%. WHAT A NUMBER OF OBSERVERS BELIEVE, AND THE G.A.O. CAN HELP US DISCOVER, DID WE PROVIDE -- DID THE FED PROVIDE ZERO INTEREST LOANS TO A LARGE BANK WHICH THEN TOOK THAT MONEY, BOUGHT GOVERNMENT BONDS OR 3%? AND IF THAT WAS THE CASE, AND I SUSPECT IT WAS, YOU'RE LOOKING AT A HUGE SCAM. HUGE SCAM AS SMALL AND MEDIUM SIZE BUSINESSES THAT NEED THE MONEY. THAT WAS THE INTENTION OF THESE LOANS. BUT I DON'T KNOW HOW MUCH OF THIS WAS INVESTED IN GOVERNMENT BONDS. YOU DON'T KNOW, THE AMERICAN PEOPLE DON'T KNOW, AND IT IS TIME THAT WE FOUND OUT. MR. PRESIDENT, THIS AMENDMENT THAT I AM OFFERING IS VIRTUALLY IDENTICAL TO LEGISLATION THAT I'VE OFFERED ON THIS SUBJECT THAT HAS 33 SKPOERS. THE -- COSPONSORS. THE AMENDMENT, I THINK, HAS 20, 22 DEMOCRATS AND REPUBLICANS. THE ORIGINAL LEGISLATION HAD 33 COSPONSORS. JUST SO THAT YOU CAN GET A SENSE OF THE DIVERSITY OF IDEOLOGICAL OPINION BEHIND THIS AMENDMENT, LET ME TELL YOU THE NAMES OF THE PEOPLE ON BOARD THE LEGISLATION. NOT THE AMENDMENT. THE LEGISLATION. THAT IS SENATORS BARRASSO, BENNETT OF UTAH, BURR, COBURN, COCHRAN, CRAPO, DeMINT, FEINGOLD, GRAHAM, GRASSLEY, HARKIN, HATCH, HUTCHISON, INHOFE, ISAKSON, LEAHY, LINCOLN, McCAIN, MURKOWSKI, RISCH, SANDERS, THUNE, VITTER, WICKER AND WYDEN. THOSE ARE PEOPLE WHO ARE ON THE ORIGINAL LEGISLATION. 33 COSPONSORS. AND AS YOU CAN SEE, THEY RANGE FROM SOME OF THE MOST PROGRESSIVE MEMBERS TO SOME OF THE MOST CONSERVATIVE MEMBERS. THE AMENDMENT THAT IS NOW ON THE FLOOR HAS, I BELIEVE, 22 COSPONSORS, REPUBLICANS AND DEMOCRATS ALIKE. AND I WANT TO THANK ALL OF THEM FOR THEIR SUPPORT. YOU KNOW, THE AMERICAN PEOPLE ARE ASKING: CAN PEOPLE WORK TOGETHER? CAN THEY COME TOGETHER ON IMPORTANT ISSUES? IF THERE IS AN IMPORTANT ISSUE THAT PEOPLE WITH DIFFERENT IDEOLOGICAL BACKGROUND HAVE COME TOGETHER ON, THIS IS THAT ONE. AND I WANT TO THANK MY REPUBLICAN FRIENDS AND MY DEMOCRATIC FRIENDS WHO EVERY OTHER DAY ARE FIGHTING LIKE CATS AND MICE, BUT ON THIS ISSUE HAVE COME TOGETHER, AND I APPRECIATE THAT. BUT IT'S NOT ONLY THE MEMBERS OF THE SENATE. MR. PRESIDENT, IN TERMS OF PROGRESSIVE GRASS ROOTS ORGANIZATIONS, THIS AMENDMENT ENJOYS THE STRONG SUPPORT OF THE AFL-CIO, THE SERVICE EMPLOYEES INTERNATIONAL UNION -- THE SINGLE LARGEST UNION IN THE COUNTRY -- UNITED STEELWORKERS OF AMERICA, PUBLIC CITIZEN, THE NEW AMERICAN FOUNDATION, CENTER FOR ECONOMIC POLICY, THE U.S. PUBLIC INTEREST RESEARCH GROUP, AND AMERICANS FOR FINANCIAL REFORM, WHICH IS A COALITION OF OVER 250 CONSUMER EMPLOYEE, INVESTORS AND CIVIL RIGHTS. HUGE AMOUNT OF SUPPORT FROM THE PROGRESSIVE COMMUNITY. IT ALSO HAS A HUGE AMOUNT OF SUPPORT FROM THE CONSERVATIVE COMMUNITY. LET ME READ BRIEFLY A LETTER THAT I RECEIVED FROM THE LEGISLATIVE DIRECTOR OF THE AFL-CIO. THIS IS WHAT HE SAYS: "ON BEHALF OF THE AFL-CIO, I AM WRITING TO URGE YOU TO SUPPORT THE SANDERS-FEINGOLD-DeMINT-LEAHY- GRASSLEY-VITTER AMENDMENT. WORKING PEOPLE WANT TO KNOW WHO BENEFITED FROM THE LIQUIDITY PROVIDED BY TAXPAYERS DURING THE CRISIS, AND THIS AMENDMENT WILL ENSURE THAT WE RECEIVE THIS INFORMATION." END OF QUOTE. I RECEIVED ANOTHER LETTER WHICH CAME FROM THE PRESIDENT OF SEIU, PRESIDENT OF STEELWORKERS, MANY OTHER PROGRESSIVE GROUPS AND THIS IS WHAT THEY SAY: "SINCE THE START OF THE FINANCIAL CRISIS, THE FEDERAL RESERVE HAS DRAMATICALLY CHANGED ITS OPERATING PROCEDURES. INSTEAD OF SIMPLY SETTING INTEREST RATES TO INFLUENCE MACROECONOMIC CONDITIONS, IT RAPIDLY ACQUIRED A WIDE VARIETY OF PRIVATE ASSETS AND EXTENDED MASSIVE SECRET BAILOUTS TO MAJOR FINANCIAL INSTITUTIONS. THERE ARE STILL MANY QUESTIONS ABOUT THE FED'S BEHAVIOR IN THESE NEW ACTIVITIES. THE FEDERAL RESERVE'S BALANCE SHEET EXPANDED TO MORE THAN $2 TRILLION ALONG WITH IMPLIED AND EXPLICIT BACK STOPS TO WALL STREET FIRMS THAT COULD COST EVEN MORE. WHO RECEIVED THE MONEY? AGAINST WHAT COLLATERAL? ON WHAT TERMS AND CONDITIONS? THE ONLY WAY TO FIND OUT IS THROUGH A COMPLETE AUDIT OF THE FEDERAL RESERVE. THAT'S WHY WE SUPPORT THE STANDARDS-FEINGOLD-DeMINT-LEAH Y-VITTER-GRASSLEY-BROWNBACK AMENDMENT" TO INCREASE TRANSPARENCY." THAT'S FROM THE SCIU AND THEIR UNIONS. NOW, THAT IS WHAT SOME OF THE PROGRESSIVE GROUPS, GROUPS THAT I, FRANKLY, WORK WITH QUITE ON WHICH, HAVE TO SAY ABOUT THIS AMENDMENT. BUT LET ME QUOTE FROM SOME OF THE CONSERVATIVE ORGANIZATIONS WHO, FRANKLY, I USUALLY DO NOT HAVE VERY GOOD VOTING RECORDS WITH. VERY OFTEN THEY OPPOSE WHAT I BRING FORTH. HERE'S THE NATIONAL TAXPAYERS' UNION. I DON'T KNOW HOW MANY FOLKS THEY HAVE BUT THEY ARE A BIG ORGANIZATION. THIS IS WHAT THE NATIONAL TAXPAYERS' UNION SAYS -- AND I QUOTE -- "THE NATIONAL TAXPAYERS' UNION URGES ALL SENATORS TO VOTE YES ON S.; 3738 TOS.; 3738TO THE FINANCIAL REGULATORY REFORM BILL. THIS AMENDMENT WOULD REQUIRE THE ACCOUNTABILITY OFFICE TO CONDUCT AN AUDIT OF THE FEDERAL RESERVE." AND I LIKE THEIR NEXT SENTENCE. THIS IS WHAT THE NEXT SENTENCE IS. "TRANSPARENCY IS NOT A DEMOCRAT OR A REPUBLICAN ISSUE BUT, RATHER, AN ISSUE OF RIGHT OR WRONG. IF THE SENATE INSISTS ON FURTHER EXPANDING THE FED'S REACH, AMERICANS DESERVE TO KNOW MORE ABOUT THE WORKINGS OF A GOVERNMENT SANCTIONED ENTITY WHOSE DECISIONS DIRECTLY AFFECT THEIR ECONOMIC LIVELIHOOD. A YES VOTE ON S. AMENDMENT 3738, THIS AMENDMENT, WILL BE SIGNIFICANTLY WEIGHTED AS A PRO-TAXPAYER VOTE IN OUR ANNUAL RATING OF CONGRESS." THAT MEANS I MAY HAVE AT LEAST A 1% APPROVAL VOTE FROM THE NATIONAL TAXPAYERS' -- FROM THE NATIONAL TAXPAYERS' UNION. AND I APPRECIATE THEIR SUPPORT. THAT'S FROM THE NATIONAL TAXPAYERS' UNION. LET ME QUOTE FROM ANOTHER LETTER OF SUPPORT I RECEIVED FROM A GROUP OF CONSERVATIVE ORGANIZATIONS THAT INCLUDES THE AMERICANS FOR TAX REFORM, THE CAMPAIGN FOR LIBERTY, THE RUTHERFORD INSTITUTE, THE FREEDOM WORKS, AND THE CENTER FOR FISCAL ACCOUNTABILITY. AGAIN, SOME OF THE MORE CONSERVATIVE GROUPS IN THIS COUNTRY, GROUPS THAT USUALLY DO NOT SUPPORT MY INITIATIVES. THIS IS WHAT THEY SAY -- QUOTE -- "WE URGE YOU TO VOTE FOR SENATORS FEINGOLD, DeMINT, SANDERS, TRANSPARENCY AMENDMENT. THIS AMENDMENT DOES NOT TAKE AWAY THE "INDEPENDENCE" OF THE FED, IT SIMPLY CONDUCTS THE G.A.O. TO CONDUCT AN INDEPENDENT AUDIT OF THE FED AND RELEASE THE NAMES OF THE RECIPIENTS OF MORE THAN $2 TRILLION OF TAXPAYER-BACKED ASSISTANCE DURING THIS LATEST ECONOMIC CRISIS. ANY TRUE FINANCIAL REFORM EFFORT WILL START WITH REQUIRING ACCOUNTABILITY FROM OUR NATION'S CENTRAL BANK." AND LET ME THANK ALL OF THE CONSERVATIVE GROUPS. IN THIS CASE, THE AMERICANS FOR TAX REFORM, THE CAMPAIGN FOR LIBERTY AND THE OTHERS, FOR THEIR VERY STRONG GRASS-ROOTS EFFORT IN SUPPORTING THIS AMENDMENT. IT IS AN INDICATION, AGAIN, THAT ON CERTAIN ISSUES, PROGRESSIVES AND CONSERVATIVES CAN COME TOGETHER. MR. PRESIDENT, LET ME MENTION THIS BECAUSE I THINK IT'S POSSIBLE THAT SOME OF THE MEMBERS DON'T KNOW THIS. MADAM PRESIDENT -- I AM SORRY. THE PRESIDENCY CHANGED WHILE I WAS SPEAKING, I GUESS. THIS AMENDMENT IS NOT A RADICAL IDEA. AS PART OF THE BUDGET RESOLUTION DEBATE, IN APRIL OF 2009, THE SENATE VOTED OVER WEPG WHELMINGLY IN SUPPORT OF THIS -- OVERWHELMINGLY IN SUPPORT OF THIS CONCEPT BY A VOTE OF 59-39. I BROUGHT THAT UP. IT WAS A NONBINDING VOTE, PART OF THE BUDGET RESOLUTION, 59-39. SO MANY SENATORS HAVE ALREADY GONE ON RECORD IN SUPPORTING THAT. AND HERE IS ALSO AN IMPORTANT PIECE OF INFORMATION. IN THE HOUSE OF REPRESENTATIVES, THIS CONCEPT PASSED THAT -- THIS CONCEPT PASSED THE HOUSE FINANCIAL SERVICES COMMITTEE BY A VOTE OF 43-26 AND WAS INCORPORATED INTO THE HOUSE VERSION OF THE WALL STREET REFORM BILL THAT WAS APPROVED BY THE HOUSE LAST DECEMBER. SO AGAIN, WHAT WE ARE TALKING ABOUT IS SOMETHING THAT WAS PASSED IN THE HOUSE AND IT IS IN THE HOUSE BILL. THERE'S A VARIATION. WE ARE NOT THE SAME, TO BE HONEST. BUT THE SAME CONCEPT FOR A FEDERAL AUDIT ALREADY EXISTS IN THE WALL STREET REFORM BILL PASSED IN THE HOUSE. THIS CONCEPT HAS THE SUPPORT OF THE SPEAKER OF THE HOUSE, NANCY PELOSI, WHO HAS SAID THE CONGRESS SHOULD ASK THE FED TO PUT THIS INFORMATION -- QUOTE -- "ON THE INTERNET, LIKE THEY'VE DONE WITH THE RECOVERY PACKAGE AND THE BUDGET." THAT'S EXACTLY WHAT THIS AMENDMENT WOULD DO. THIS CONCEPT HAS ALREADY -- NOW, HERE'S ANOTHER POINT. MANY PEOPLE DON'T KNOW THIS. A LOT OF THIS LANGUAGE IS IN THE HOUSE BILL. A LOT OF THIS LANGUAGE HAS ALREADY BEEN SUPPORTED IN THE SENATE LAST YEAR AS PART OF THE BUDGET RESOLUTION. BUT HERE'S AN IMPORTANT POINT THAT MANY PEOPLE DON'T KNOW. BLOOMBERG NEWS SERVICE DID A VERY GOOD JOB AND THEY HAVE AGGRESSIVELY DEMANDED AS A NEWS ORGANIZATION THAT THIS INFORMATION APPROXIMATE ABOUT WHO THE FED LENT MONEY TO -- INFORMATION ABOUT WHO THE FED LENT MONEY TO BE MADE PUBLIC. AND AS A RESULT OF THEIR EFFORTS, TWO FEDERAL COURTS -- NOT ONE, TWO FEDERAL COURTS -- HAVE ORDERED THE TODAY RELEASE ALL THE NAMES AND DETAILS OF THE RECIPIENTS OF MORE THAN $2 TRILLION IN FEDERAL RESERVE LOANS SINCE THE FINANCIAL CRISIS STARREDSTARTED AS A RESULT OF A FREEDOM OF INFORMATION ACT LAWSUIT. SO BLOOMBERG NEWS FILED SUIT TO FEDERAL COURT SUPPORTED BLOOMBERG. MR. PRESIDENT, THE FED HAS ARGUED -- HAD ARGUED IN COURT, IN OPPOSITION TO BLOOMBERG, THAT IT SHOULD NOT HAVE TO RELEASE THIS INFORMATION, CITING, ACCORDING TO REUTERS -- QUOTE THIS IS WHAT THE FED SAID -- QUOTE -- "AN EXEMPTION THAT IT SAID LETS FEDERAL AGENCIES KEEP SECRET VARIOUS TRADE SECRETS AND COMMERCIAL OR FINANCIAL INFORMATION." END OF QUOTE FROM THE FED. HOWEVER, THE U.S. COURT OF APPEALS IN NEW YORK DISAGREED. HERE IS WHAT A UNANIMOUS THREE-JUDGE APPEALS COURT PANEL WROTE IN THEIR OPINION. UNANIMOUS THREE-COURT -- THREE-JUDGE APPEALS COURT. QUOTE -- "GIVE THE FED POWER TO DENY DISCLOSURE BECAUSE IT THINKS IT BEST TO DO SO WOULD UNDERMINE THE BASIC POLICY THAT DISCLOSURE, NOT SECRECY, IS THE DOMINANT OBJECTIVE. IF THE BOARD BELIEVES SUCH AN EXEMPTION WOULD BETTER SERVE THE NATIONAL INTEREST, IT SHOULD ASK CONGRESS TO AMEND THE STATUTE." MR. PRESIDENT, THIS APPEALS COURT DECISION UPHELD AN EARLIER RULING BY THE SOUTHERN FEDERAL DISTRICT COURT OF NEW YORK THAT ALSO ORDERED THE FED TO RELEASE THIS INFORMATION. IN OTHER WORDS, MR. PRESIDENT, WE NOW HAVE 59 SENATORS WHO, AS PART OF THE BUDGET RESOLUTION, VOTED ON THIS ISSUE, 320 MEMBERS OF CONGRESS, THE HOUSE, TWO U.S. COURTS THAT HAVE ALL TOLD THE FED IN NO UNCERTAIN TERMS, GIVE US TRANSPARENCY. THAT'S WHAT WE'VE GOT. MR. PRESIDENT, AS I WIND DOWN AND CONCLUDE MY REMARKS, LET ME JUST SIMPLY SAY THAT I THANK VERY MUCH ALL OF THE SUPPORT, ALL THE GRASS-ROOTS SUPPORT FROM PROGRESSIVE AND CONSERVATIVE GROUPS AND FROM MY FELLOW SENATORS. THE AMERICAN PEOPLE HAVE A RIGHT TO KNOW WHEN TRILLIONS OF THEIR DOLLARS ARE BEING SPENT AND WHO GOT IT. THE AMERICAN PEOPLE HAVE A RIGHT TO KNOW WHETHER THERE ARE CONFLICTS OF INTEREST. MR. PRESIDENT, I WOULD ASK MY COLLEAGUES -- THERE'S SO MANY COSPONSORS, I WON'T EVEN MENTION THEM ALL. BUT I JUST WANT TO THANK ALL OF THEM. LET ME JUST CONCLUDE BY SAYING THAT I AM VERY PROUD TO SAY THAT WE HAVE BEEN WORKING WITH SENATOR DODD'S OFFICE AND SOME OTHER OFFICES AND I'M GOING TO ASK THAT MY AMENDMENT WITH MODIFIED WITH THE CHANGES ARE AT THE DESK, AND I'M PROUD TO SAY THAT THESE MODIFICATIONS HAVE BEEN WORKED OUT BY SENATOR -- WITH SENATOR DODD AND WOULD ALLOW THE G.A.O. TO CONDUCT A TOP-TO-BOTTOM AUDIT OF ALL OF THE FEDERAL RESERVE'S EMERGENCY LENDING ACTIVITIES SINCE DECEMBER 1, 2007. IN ADDITION, THE MODIFICATIONS REQUIRE THE FED TO PUT ON ITS WEB SITE ALL OF THE RECIPIENTS OF OVER $2 TRILLION IN EMERGENCY ASSISTANCE SINCE DECEMBER 1, 2007. MR. PRESIDENT?

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  • 03:50:15 PM

    QUESTION OUT THERE

    IT SEEMS TO ME -- I MAY BE WRONG BUT IT SEEMS TO ME THERE WAS A CONFLICT…

    IT SEEMS TO ME -- I MAY BE WRONG BUT IT SEEMS TO ME THERE WAS A CONFLICT OF INTEREST AT THE FED, BE FEDERAL RESERVE OF NEW YORK WHEN STEVEN FRIEDMAN, THE HEAD OF THE NEW YORK FED WHO ALSO SERVED ON THE BOARD OF DIRECTORS OF GOLDMAN SACHS -- LET'S BACK IT UP. HEAD OF THE FED, SERVES ON THE BOARD OF GOLDMAN SACHS, APPROVED GOLDMAN'S APPLICATION TO BECOME A BANK HOLDING COMPANY, GIVING IT ACCESS TO CHEAP LOANS FROM THE FEDERAL RESERVE. OKAY? HEAD OF THE FEDERAL RESERVE, NEW YORK FEDERAL RESERVE, ON THE BOARD OF GOLDMAN SACHS, APPLYING FOR GOLDMAN SACHS TO BECOME A BANK HOLDING COMPANY TO GAIN CHEAP LOANS FROM THE FED. LOOKS TO ME LIKE THERE MAY BE A CONFLICT OF INTEREST, BUT WHAT DO I KNOW? THAT'S WHAT WE NEED A G.A.O. REPORT TO TELL US. HERE IS INTERESTINGLY ENOUGH AN ARTICLE ON MAY 9, 2009, IN THE "WALL STREET JOURNAL." LET ME QUOTE BRIEFLY FROM THAT ARTICLE. QUOTE -- "GOLDMAN SACHS RECEIVED SPEEDY APPROVAL TO BECOME A BANK HOLDING COMPANY IN SEPTEMBER OF 2008. DURING THAT TIME THE NEW YORK FED'S CHAIRMAN, STEVEN FRIEDMAN, SAT ON GOLDMAN'S BOARD AND HAD A LARGE HOLDING IN GOLDMAN'S STOCK, WHICH BECAUSE OF GOLDMAN'S NEW STATUS AS A BANK HOLDING COMPANY, WAS A VIOLATION OF FEDERAL RESERVE POLICY. THE NEW YORK FED ASKED FOR A WAIVER, WHICH AFTER ABOUT TWO AND A HALF MONTHS THE FED GRANTED. WHILE IT WAS WEIGHING THE REQUEST, MR. F R EU EDMAN -- MR. FRIEDMAN BOUGHT MORE SHARES IN DECEMBER. THEY HAVE SINCE RISEN 1.7 MORE IN VALUE. MR. FREEDMAN SAYS NONE OF THESE EVENTS INVOLVES ANY CONFLICTS. END OF QUOTE. THAT'S THE "WALL STREET JOURNAL," MAY 9, 2009. THAT'S WHAT MR. FRIEDMAN SAYS. I KIND OF DISAGREE WITH HIM, BUT I WOULD LIKE THE G.A.O. TO TAKE A LOOK AT THAT. MR. PRESIDENT, WITHOUT A COMPREHENSIVE G.A.O. REPORT, WE HAVE TO TAKE MR. FRIEDMAN AT HIS WORD, AND I DON'T THINK WE SHOULD. WHO GOT WHAT? WHEN DID THEY GET IT? ON WHAT BASIS? ON WHAT TERMS? WHO WAS AT THOSE MEETINGS? WERE THERE CONFLICTS OF INTEREST? THESE ARE THE KINDS OF QUESTIONS THAT A G.A.O. AUDIT OF THE FED WILL ANSWER. MR. PRESIDENT, AS A RESULT OF THE BAILOUT OF BEAR STEARNS AND A.I.G., THE FED -- AND THIS IS A BEAUTY. THIS IS REALLY QUITE SOMETHING. THE FED NOW OWNS CREDIT DEFAULT SWAPS -- LISTEN UP ON THIS ONE -- NOW OWNS CREDIT DEFAULT SWAPS BETTING THAT CALIFORNIA, NEVADA, AND FLORIDA WILL DEFAULT ON THEIR DEBT. SO THE FEDERAL RESERVE STANDS TO MAKE MONEY IF CALIFORNIA, NEVA AND FLORIDA GO BANKRUPT. AND I SUSPECT THAT THE SENATORS FROM THE GREAT STATES OF CALIFORNIA, NEVADA AND FLORIDA WOULD BE RATHER INTERESTED TO KNOW THAT IF THEIR STATES GO BANKRUPT, THE FED MAKES MONEY. ON THE SURFACE, THIS LOOKS A LITTLE BIT ABSURD TO ME. BUT AGAIN, I THINK THIS IS AN ISSUE THAT THE FED -- THAT THE G.A.O. MIGHT BE TAKING A LOOK AT. MR. PRESIDENT, IT HAS BEEN REPORTED THAT THE FEDERAL RESERVE PRESSURED BANK OF AMERICA INTO ACQUIRING MERRILL LYNCH, MAKING THIS FINANCIAL INSTITUTION EVEN BIGGER AND RISKIER, ALLEGEDLY THREATENING TO FIRE ITS C.E.O. IF THE BANK OF AMERICA BACKED OUT OF ITS MERGER. WHEN THE MERGER WENT THROUGH, MERRILL LYNCH'S EMPLOYEES RECEIVED $3.7 BILLION IN BONUSES. WAS IN A GOOD DEAL FOR THE AMERICAN TAXPAYER? A G.A.O. AUDIT CAN HELP US FIND OUT. MR. PRESIDENT, WHEN THE FEDERAL RESERVE PROVIDED $29 BILLION -- A $29 BILLION LOAN TO J.P. MORGAN CHASE TO ACQUIRE BEAR STEARNS, THE C.E.O. OF J.P. MORGAN CHASE -- HIS NAME IS JAMIE DIAMOND -- SERVED ON THE BOARD OF DIRECTORS AT THE NEW YORK FEDERAL RESERVE. LET'S REPEAT THAT. WHEN THE FEDERAL RESERVE PROVIDED $29 BILLION TO J.P. MORGAN CHASE, THE C.E.O. OF J.P. MORGAN CHASE SERVED ON THE BOARD OF DIRECTORS OF THE NEW YORK FED. DID THIS REPRESENT A CONFLICT OF INTEREST? I THINK THE AVERAGE AMERICAN WOULD SAY YES. MAYBE SOMEBODY HAS A DIFFERENT POINT OF VIEW. BUT I THINK A G.A.O. AUDIT COULD HELP EXPLAIN ALL OF THIS TO THE AMERICAN PEOPLE. MR. PRESIDENT, CURRENTLY -- AND I THINK WE HAVE TO APPRECIATE THIS AS WELL, TO SHED SOME LIGHT ON THESE ISSUES. CURRENTLY SOME 35 MEMBERS OF THE FEDERAL RESERVE BOARDS OF GOVERNORS ARE EXECUTIVES AT PRIVATE FINANCIAL INSTITUTIONS WHICH HAVE RECEIVED NEARLY $120 BILLION IN TARP FUNDS. BUT, MR. PRESIDENT, WE DON'T KNOW HOW MUCH THESE BIG BANKS RECEIVED FROM THE FED. WE KNOW WHAT THEY GOT FROM THE TARP, NOT FROM THE FED. A G.A.O. AUDIT COULD ANSWER THIS QUESTION. MR. PRESIDENT, ALL OF US -- I BELIEVE ALL OF US ARE DEEPLY CONCERNED THAT SMALL AND MEDIUM-SIZE BUSINESSES AROUND THIS COUNTRY -- I KNOW IT'S CERTAINLY THE CASE IN VERMONT. SMALL AND MEDIUM-SIZE BUSINESSES ARE BEGGING FOR AFFORDABLE CREDIT. THEY HAVE THE OPPORTUNITY TO EXPAND. WE'RE BEGINNING TO SEE SOME ECONOMIC RECOVERY. THEY WANT TO EXPAND. THEY WANT TO CREATE NEW JOBS. THEY ARE FINDING IT EXTREMELY DIFFICULT TO ACQUIRE THOSE DESPERATELY NEEDED AFFORDABLE LOANS. NOW, I FIND IT AS IMPORTANT ISSUE TO ASK HOW MUCH OF THE TRILLIONS OF DOLLARS IN ZERO OR NEAR ZERO INTEREST LOANS THAT FINANCIAL INSTITUTIONS RECEIVE FROM THE FED WENT OUT TO THOSE SMALL BUSINESSES? OR PERHAPS, AS I PERSONALLY BELIEVE IS THE CASE, WERE SIMPLY INVESTED IN FEDERAL GOVERNMENT BONDS EARNING AN INTEREST RATE OF 3% OR 4%. WHAT A NUMBER OF OBSERVERS BELIEVE, AND THE G.A.O. CAN HELP US DISCOVER, DID WE PROVIDE -- DID THE FED PROVIDE ZERO INTEREST LOANS TO A LARGE BANK WHICH THEN TOOK THAT MONEY, BOUGHT GOVERNMENT BONDS OR 3%? AND IF THAT WAS THE CASE, AND I SUSPECT IT WAS, YOU'RE LOOKING AT A HUGE SCAM. HUGE SCAM AS SMALL AND MEDIUM SIZE BUSINESSES THAT NEED THE MONEY. THAT WAS THE INTENTION OF THESE LOANS. BUT I DON'T KNOW HOW MUCH OF THIS WAS INVESTED IN GOVERNMENT BONDS. YOU DON'T KNOW, THE AMERICAN PEOPLE DON'T KNOW, AND IT IS TIME THAT WE FOUND OUT. MR. PRESIDENT, THIS AMENDMENT THAT I AM OFFERING IS VIRTUALLY IDENTICAL TO LEGISLATION THAT I'VE OFFERED ON THIS SUBJECT THAT HAS 33 SKPOERS. THE -- COSPONSORS. THE AMENDMENT, I THINK, HAS 20, 22 DEMOCRATS AND REPUBLICANS. THE ORIGINAL LEGISLATION HAD 33 COSPONSORS. JUST SO THAT YOU CAN GET A SENSE OF THE DIVERSITY OF IDEOLOGICAL OPINION BEHIND THIS AMENDMENT, LET ME TELL YOU THE NAMES OF THE PEOPLE ON BOARD THE LEGISLATION. NOT THE AMENDMENT. THE LEGISLATION. THAT IS SENATORS BARRASSO, BENNETT OF UTAH, BURR, COBURN, COCHRAN, CRAPO, DeMINT, FEINGOLD, GRAHAM, GRASSLEY, HARKIN, HATCH, HUTCHISON, INHOFE, ISAKSON, LEAHY, LINCOLN, McCAIN, MURKOWSKI, RISCH, SANDERS, THUNE, VITTER, WICKER AND WYDEN. THOSE ARE PEOPLE WHO ARE ON THE ORIGINAL LEGISLATION. 33 COSPONSORS. AND AS YOU CAN SEE, THEY RANGE FROM SOME OF THE MOST PROGRESSIVE MEMBERS TO SOME OF THE MOST CONSERVATIVE MEMBERS. THE AMENDMENT THAT IS NOW ON THE FLOOR HAS, I BELIEVE, 22 COSPONSORS, REPUBLICANS AND DEMOCRATS ALIKE. AND I WANT TO THANK ALL OF THEM FOR THEIR SUPPORT. YOU KNOW, THE AMERICAN PEOPLE ARE ASKING: CAN PEOPLE WORK TOGETHER? CAN THEY COME TOGETHER ON IMPORTANT ISSUES? IF THERE IS AN IMPORTANT ISSUE THAT PEOPLE WITH DIFFERENT IDEOLOGICAL BACKGROUND HAVE COME TOGETHER ON, THIS IS THAT ONE. AND I WANT TO THANK MY REPUBLICAN FRIENDS AND MY DEMOCRATIC FRIENDS WHO EVERY OTHER DAY ARE FIGHTING LIKE CATS AND MICE, BUT ON THIS ISSUE HAVE COME TOGETHER, AND I APPRECIATE THAT. BUT IT'S NOT ONLY THE MEMBERS OF THE SENATE. MR. PRESIDENT, IN TERMS OF PROGRESSIVE GRASS ROOTS ORGANIZATIONS, THIS AMENDMENT ENJOYS THE STRONG SUPPORT OF THE AFL-CIO, THE SERVICE EMPLOYEES INTERNATIONAL UNION -- THE SINGLE LARGEST UNION IN THE COUNTRY -- UNITED STEELWORKERS OF AMERICA, PUBLIC CITIZEN, THE NEW AMERICAN FOUNDATION, CENTER FOR ECONOMIC POLICY, THE U.S. PUBLIC INTEREST RESEARCH GROUP, AND AMERICANS FOR FINANCIAL REFORM, WHICH IS A COALITION OF OVER 250 CONSUMER EMPLOYEE, INVESTORS AND CIVIL RIGHTS. HUGE AMOUNT OF SUPPORT FROM THE PROGRESSIVE COMMUNITY. IT ALSO HAS A HUGE AMOUNT OF SUPPORT FROM THE CONSERVATIVE COMMUNITY. LET ME READ BRIEFLY A LETTER THAT I RECEIVED FROM THE LEGISLATIVE DIRECTOR OF THE AFL-CIO. THIS IS WHAT HE SAYS: "ON BEHALF OF THE AFL-CIO, I AM WRITING TO URGE YOU TO SUPPORT THE SANDERS-FEINGOLD-DeMINT-LEAHY- GRASSLEY-VITTER AMENDMENT. WORKING PEOPLE WANT TO KNOW WHO BENEFITED FROM THE LIQUIDITY PROVIDED BY TAXPAYERS DURING THE CRISIS, AND THIS AMENDMENT WILL ENSURE THAT WE RECEIVE THIS INFORMATION." END OF QUOTE. I RECEIVED ANOTHER LETTER WHICH CAME FROM THE PRESIDENT OF SEIU, PRESIDENT OF STEELWORKERS, MANY OTHER PROGRESSIVE GROUPS AND THIS IS WHAT THEY SAY: "SINCE THE START OF THE FINANCIAL CRISIS, THE FEDERAL RESERVE HAS DRAMATICALLY CHANGED ITS OPERATING PROCEDURES. INSTEAD OF SIMPLY SETTING INTEREST RATES TO INFLUENCE MACROECONOMIC CONDITIONS, IT RAPIDLY ACQUIRED A WIDE VARIETY OF PRIVATE ASSETS AND EXTENDED MASSIVE SECRET BAILOUTS TO MAJOR FINANCIAL INSTITUTIONS. THERE ARE STILL MANY QUESTIONS ABOUT THE FED'S BEHAVIOR IN THESE NEW ACTIVITIES. THE FEDERAL RESERVE'S BALANCE SHEET EXPANDED TO MORE THAN $2 TRILLION ALONG WITH IMPLIED AND EXPLICIT BACK STOPS TO WALL STREET FIRMS THAT COULD COST EVEN MORE. WHO RECEIVED THE MONEY? AGAINST WHAT COLLATERAL? ON WHAT TERMS AND CONDITIONS? THE ONLY WAY TO FIND OUT IS THROUGH A COMPLETE AUDIT OF THE FEDERAL RESERVE. THAT'S WHY WE SUPPORT THE STANDARDS-FEINGOLD-DeMINT-LEAH Y-VITTER-GRASSLEY-BROWNBACK AMENDMENT" TO INCREASE TRANSPARENCY." THAT'S FROM THE SCIU AND THEIR UNIONS. NOW, THAT IS WHAT SOME OF THE PROGRESSIVE GROUPS, GROUPS THAT I, FRANKLY, WORK WITH QUITE ON WHICH, HAVE TO SAY ABOUT THIS AMENDMENT. BUT LET ME QUOTE FROM SOME OF THE CONSERVATIVE ORGANIZATIONS WHO, FRANKLY, I USUALLY DO NOT HAVE VERY GOOD VOTING RECORDS WITH. VERY OFTEN THEY OPPOSE WHAT I BRING FORTH. HERE'S THE NATIONAL TAXPAYERS' UNION. I DON'T KNOW HOW MANY FOLKS THEY HAVE BUT THEY ARE A BIG ORGANIZATION. THIS IS WHAT THE NATIONAL TAXPAYERS' UNION SAYS -- AND I QUOTE -- "THE NATIONAL TAXPAYERS' UNION URGES ALL SENATORS TO VOTE YES ON S.; 3738 TOS.; 3738TO THE FINANCIAL REGULATORY REFORM BILL. THIS AMENDMENT WOULD REQUIRE THE ACCOUNTABILITY OFFICE TO CONDUCT AN AUDIT OF THE FEDERAL RESERVE." AND I LIKE THEIR NEXT SENTENCE. THIS IS WHAT THE NEXT SENTENCE IS. "TRANSPARENCY IS NOT A DEMOCRAT OR A REPUBLICAN ISSUE BUT, RATHER, AN ISSUE OF RIGHT OR WRONG. IF THE SENATE INSISTS ON FURTHER EXPANDING THE FED'S REACH, AMERICANS DESERVE TO KNOW MORE ABOUT THE WORKINGS OF A GOVERNMENT SANCTIONED ENTITY WHOSE DECISIONS DIRECTLY AFFECT THEIR ECONOMIC LIVELIHOOD. A YES VOTE ON S. AMENDMENT 3738, THIS AMENDMENT, WILL BE SIGNIFICANTLY WEIGHTED AS A PRO-TAXPAYER VOTE IN OUR ANNUAL RATING OF CONGRESS." THAT MEANS I MAY HAVE AT LEAST A 1% APPROVAL VOTE FROM THE NATIONAL TAXPAYERS' -- FROM THE NATIONAL TAXPAYERS' UNION. AND I APPRECIATE THEIR SUPPORT. THAT'S FROM THE NATIONAL TAXPAYERS' UNION. LET ME QUOTE FROM ANOTHER LETTER OF SUPPORT I RECEIVED FROM A GROUP OF CONSERVATIVE ORGANIZATIONS THAT INCLUDES THE AMERICANS FOR TAX REFORM, THE CAMPAIGN FOR LIBERTY, THE RUTHERFORD INSTITUTE, THE FREEDOM WORKS, AND THE CENTER FOR FISCAL ACCOUNTABILITY. AGAIN, SOME OF THE MORE CONSERVATIVE GROUPS IN THIS COUNTRY, GROUPS THAT USUALLY DO NOT SUPPORT MY INITIATIVES. THIS IS WHAT THEY SAY -- QUOTE -- "WE URGE YOU TO VOTE FOR SENATORS FEINGOLD, DeMINT, SANDERS, TRANSPARENCY AMENDMENT. THIS AMENDMENT DOES NOT TAKE AWAY THE "INDEPENDENCE" OF THE FED, IT SIMPLY CONDUCTS THE G.A.O. TO CONDUCT AN INDEPENDENT AUDIT OF THE FED AND RELEASE THE NAMES OF THE RECIPIENTS OF MORE THAN $2 TRILLION OF TAXPAYER-BACKED ASSISTANCE DURING THIS LATEST ECONOMIC CRISIS. ANY TRUE FINANCIAL REFORM EFFORT WILL START WITH REQUIRING ACCOUNTABILITY FROM OUR NATION'S CENTRAL BANK." AND LET ME THANK ALL OF THE CONSERVATIVE GROUPS. IN THIS CASE, THE AMERICANS FOR TAX REFORM, THE CAMPAIGN FOR LIBERTY AND THE OTHERS, FOR THEIR VERY STRONG GRASS-ROOTS EFFORT IN SUPPORTING THIS AMENDMENT. IT IS AN INDICATION, AGAIN, THAT ON CERTAIN ISSUES, PROGRESSIVES AND CONSERVATIVES CAN COME TOGETHER. MR. PRESIDENT, LET ME MENTION THIS BECAUSE I THINK IT'S POSSIBLE THAT SOME OF THE MEMBERS DON'T KNOW THIS. MADAM PRESIDENT -- I AM SORRY. THE PRESIDENCY CHANGED WHILE I WAS SPEAKING, I GUESS. THIS AMENDMENT IS NOT A RADICAL IDEA. AS PART OF THE BUDGET RESOLUTION DEBATE, IN APRIL OF 2009, THE SENATE VOTED OVER WEPG WHELMINGLY IN SUPPORT OF THIS -- OVERWHELMINGLY IN SUPPORT OF THIS CONCEPT BY A VOTE OF 59-39. I BROUGHT THAT UP. IT WAS A NONBINDING VOTE, PART OF THE BUDGET RESOLUTION, 59-39. SO MANY SENATORS HAVE ALREADY GONE ON RECORD IN SUPPORTING THAT. AND HERE IS ALSO AN IMPORTANT PIECE OF INFORMATION. IN THE HOUSE OF REPRESENTATIVES, THIS CONCEPT PASSED THAT -- THIS CONCEPT PASSED THE HOUSE FINANCIAL SERVICES COMMITTEE BY A VOTE OF 43-26 AND WAS INCORPORATED INTO THE HOUSE VERSION OF THE WALL STREET REFORM BILL THAT WAS APPROVED BY THE HOUSE LAST DECEMBER. SO AGAIN, WHAT WE ARE TALKING ABOUT IS SOMETHING THAT WAS PASSED IN THE HOUSE AND IT IS IN THE HOUSE BILL. THERE'S A VARIATION. WE ARE NOT THE SAME, TO BE HONEST. BUT THE SAME CONCEPT FOR A FEDERAL AUDIT ALREADY EXISTS IN THE WALL STREET REFORM BILL PASSED IN THE HOUSE. THIS CONCEPT HAS THE SUPPORT OF THE SPEAKER OF THE HOUSE, NANCY PELOSI, WHO HAS SAID THE CONGRESS SHOULD ASK THE FED TO PUT THIS INFORMATION -- QUOTE -- "ON THE INTERNET, LIKE THEY'VE DONE WITH THE RECOVERY PACKAGE AND THE BUDGET." THAT'S EXACTLY WHAT THIS AMENDMENT WOULD DO. THIS CONCEPT HAS ALREADY -- NOW, HERE'S ANOTHER POINT. MANY PEOPLE DON'T KNOW THIS. A LOT OF THIS LANGUAGE IS IN THE HOUSE BILL. A LOT OF THIS LANGUAGE HAS ALREADY BEEN SUPPORTED IN THE SENATE LAST YEAR AS PART OF THE BUDGET RESOLUTION. BUT HERE'S AN IMPORTANT POINT THAT MANY PEOPLE DON'T KNOW. BLOOMBERG NEWS SERVICE DID A VERY GOOD JOB AND THEY HAVE AGGRESSIVELY DEMANDED AS A NEWS ORGANIZATION THAT THIS INFORMATION APPROXIMATE ABOUT WHO THE FED LENT MONEY TO -- INFORMATION ABOUT WHO THE FED LENT MONEY TO BE MADE PUBLIC. AND AS A RESULT OF THEIR EFFORTS, TWO FEDERAL COURTS -- NOT ONE, TWO FEDERAL COURTS -- HAVE ORDERED THE TODAY RELEASE ALL THE NAMES AND DETAILS OF THE RECIPIENTS OF MORE THAN $2 TRILLION IN FEDERAL RESERVE LOANS SINCE THE FINANCIAL CRISIS STARREDSTARTED AS A RESULT OF A FREEDOM OF INFORMATION ACT LAWSUIT. SO BLOOMBERG NEWS FILED SUIT TO FEDERAL COURT SUPPORTED BLOOMBERG. MR. PRESIDENT, THE FED HAS ARGUED -- HAD ARGUED IN COURT, IN OPPOSITION TO BLOOMBERG, THAT IT SHOULD NOT HAVE TO RELEASE THIS INFORMATION, CITING, ACCORDING TO REUTERS -- QUOTE THIS IS WHAT THE FED SAID -- QUOTE -- "AN EXEMPTION THAT IT SAID LETS FEDERAL AGENCIES KEEP SECRET VARIOUS TRADE SECRETS AND COMMERCIAL OR FINANCIAL INFORMATION." END OF QUOTE FROM THE FED. HOWEVER, THE U.S. COURT OF APPEALS IN NEW YORK DISAGREED. HERE IS WHAT A UNANIMOUS THREE-JUDGE APPEALS COURT PANEL WROTE IN THEIR OPINION. UNANIMOUS THREE-COURT -- THREE-JUDGE APPEALS COURT. QUOTE -- "GIVE THE FED POWER TO DENY DISCLOSURE BECAUSE IT THINKS IT BEST TO DO SO WOULD UNDERMINE THE BASIC POLICY THAT DISCLOSURE, NOT SECRECY, IS THE DOMINANT OBJECTIVE. IF THE BOARD BELIEVES SUCH AN EXEMPTION WOULD BETTER SERVE THE NATIONAL INTEREST, IT SHOULD ASK CONGRESS TO AMEND THE STATUTE." MR. PRESIDENT, THIS APPEALS COURT DECISION UPHELD AN EARLIER RULING BY THE SOUTHERN FEDERAL DISTRICT COURT OF NEW YORK THAT ALSO ORDERED THE FED TO RELEASE THIS INFORMATION. IN OTHER WORDS, MR. PRESIDENT, WE NOW HAVE 59 SENATORS WHO, AS PART OF THE BUDGET RESOLUTION, VOTED ON THIS ISSUE, 320 MEMBERS OF CONGRESS, THE HOUSE, TWO U.S. COURTS THAT HAVE ALL TOLD THE FED IN NO UNCERTAIN TERMS, GIVE US TRANSPARENCY. THAT'S WHAT WE'VE GOT. MR. PRESIDENT, AS I WIND DOWN AND CONCLUDE MY REMARKS, LET ME JUST SIMPLY SAY THAT I THANK VERY MUCH ALL OF THE SUPPORT, ALL THE GRASS-ROOTS SUPPORT FROM PROGRESSIVE AND CONSERVATIVE GROUPS AND FROM MY FELLOW SENATORS. THE AMERICAN PEOPLE HAVE A RIGHT TO KNOW WHEN TRILLIONS OF THEIR DOLLARS ARE BEING SPENT AND WHO GOT IT. THE AMERICAN PEOPLE HAVE A RIGHT TO KNOW WHETHER THERE ARE CONFLICTS OF INTEREST. MR. PRESIDENT, I WOULD ASK MY COLLEAGUES -- THERE'S SO MANY COSPONSORS, I WON'T EVEN MENTION THEM ALL. BUT I JUST WANT TO THANK ALL OF THEM. LET ME JUST CONCLUDE BY SAYING THAT I AM VERY PROUD TO SAY THAT WE HAVE BEEN WORKING WITH SENATOR DODD'S OFFICE AND SOME OTHER OFFICES AND I'M GOING TO ASK THAT MY AMENDMENT WITH MODIFIED WITH THE CHANGES ARE AT THE DESK, AND I'M PROUD TO SAY THAT THESE MODIFICATIONS HAVE BEEN WORKED OUT BY SENATOR -- WITH SENATOR DODD AND WOULD ALLOW THE G.A.O. TO CONDUCT A TOP-TO-BOTTOM AUDIT OF ALL OF THE FEDERAL RESERVE'S EMERGENCY LENDING ACTIVITIES SINCE DECEMBER 1, 2007. IN ADDITION, THE MODIFICATIONS REQUIRE THE FED TO PUT ON ITS WEB SITE ALL OF THE RECIPIENTS OF OVER $2 TRILLION IN EMERGENCY ASSISTANCE SINCE DECEMBER 1, 2007. MR. PRESIDENT?

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  • 04:10:10 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM CONNECTICUT.

  • 04:10:12 PM

    MR. DODD

    I'M GOING TO SPEAK LONG OTHER THIS LATER BUT LET ME JUST THANK OUR --…

    I'M GOING TO SPEAK LONG OTHER THIS LATER BUT LET ME JUST THANK OUR -- LONGER ON THIS LATER BUT WILL LET ME JUST THANK OUR COLLEAGUE FROM VERMONT. HE BRINGS GREAT FOOTION THIS -- PASSION TO THIS ISSUE. BUT WHEN SENATOR SANDERS GETS INVOLVED IN SOMETHING, YOU BETTER BELIEVE HE DOES IT WITH A GREAT DEAL OF CONVICTION AND PASSION AND PURPOSE. AND I'M A COSPONSOR OF THIS AMENDMENT HE'S JUST MODIFIED. I THINK IT'S RIGHT. HE'S ABSOLUTELY CORRECT ON THE TRANSPARENCY ISSUES, THERE'S NO EXCUSE, WHEN AS MUCH OF AMERICAN TAXPAYER MONEY HAS BEEN EXPOSED AS IT HAS BEEN, THE RIGHT TO UNDERSTAND WHERE THAT'S GOING, WHO'S INVOLVED IN IT. IT'S DONE IN A WAY, BY THE WAY, THAT DOES NOT -- BECAUSE THERE WAS A CONCERN ABOUT WHETHER OR NOT THE INDEPENDENCE OF THE FED IN ANY WAY WOULD BE COMPROMISED AND HE HAS GUARANTEED WITH HIS LANGUAGE HERE THAT THAT IS NO LONGER AN ISSUE WHATSOEVER. AND I WANT TO THANK HIM FOR IT. IT'S A GREAT AMENDMENT. AND I KNOW SENATOR GRASSLEY WANTS TO BE HEARD AND SO I'M GOING TO YIELD THE FLOOR AND LATER ON I'LL TALK IN GREATER DETAIL.

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  • 04:11:12 PM

    MR. SANDERS

    THANK YOU VERY MUCH.

  • 04:11:16 PM

    MR. GRASSLEY

    YOU'VE HEARD ME SAY MANY TIMES ON THE -- TO MY COLLEAGUES THAT THE…

    YOU'VE HEARD ME SAY MANY TIMES ON THE -- TO MY COLLEAGUES THAT THE PUBLIC'S BUSINESS OUGHT TO BE PUBLIC. AND I DON'T KNOW WHY THAT DOESN'T APPLY TO THE FEDERAL RESERVE, AT LEAST ON ITS REGULATORY AND ACTIVITIES WHEN IT GIVES MONEY OUT. THERE'S ALL KINDS OF REASONS WHY IT SHOULDN'T APPLY TO MONETARY POLICY, BUT FOR EVERYTHING ELSE, THE FEDERAL RESERVE IS ACTING AT THE BEHEST OF CONGRESS, LAW GOING WAY BACK TO 1913 GIVING THEM CERTAIN POWERS. IF CONGRESS EXERCISED THESE SAME POWERS AND UNDER THE CONSTITUTION WE HAVE THE AUTHORITY TO DO THAT, IT WOULD BE THE PUBLIC'S BUSINESS. IN FACT, EVEN MORE THAN WHAT THIS AMENDMENT DOES. SO THE PUBLIC'S BUSINESS OUGHT TO BE PUBLIC. AND WITH TRANSPARENCY -- AND THAT'S WHAT THIS AMENDMENT IS ALL ABOUT -- YOU GET ACCOUNTABILITY. AND IT SEEMS TO ME WITH WHAT'S HAPPENED OVER THE LAST TEN YEARS, MORE TRANSPARENCY LEADING TO ACCOUNTABILITY, IF WE'D HAD THAT TRANSPARENCY, WE PROBABLY WOULDN'T HAVE HAD THE BUBBLE IN THE FIRST PLACE THAT BROKE IN 2008 THAT BROUGHT US TO THIS RECESSION THAT WE'RE IN. SO I RISE NOT HESITANTLY BUT FORTHRIGHTLY TO SUPPORT THE PENDING AMENDMENT BY THE SENATOR FROM VERMONT. I APPRECIATE ALL OF HIS HARD WORK ON MAKING THE FEDERAL RESERVE MORE ACCOUNTABLE TO THE PEOPLE OF THIS COUNTRY. I'M A COSPONSOR OF HIS STAND-ALONE BILL, SO I'M GLAD TO BE A SPONSOR -- COSPONSOR OF THIS AMENDMENT TO BRING SUNSHINE TO THE FED. DURING THE LAST 2 1/2 YEARS, THE FED HAS GONE WELL BEYOND WHAT WAS VIEWED AS ITS HISTORICAL AUTHORITY. IT HAS TAKEN ON MORE AND MORE RISK IN COMPLICATED AND UNPRECEDENTED WAYS. IT INTERVENED IN THE MARKET TO PROP UP CERTAIN FIRMS. IT INTERVENED IN THE MARKET TO PROTECT THESE FIRMS FROM FAILING FAILING. AND USING AN UNLIMITED SOURCE OF TAXPAYERS' DOLLARS TO, IN EFFECT, PICK WINNERS AND LOSERS. THE RISKS THAT THEY'VE TAKEN WILL ULTIMATELY BE BORNE BY THE AMERICAN TAXPAYERS. SO IN THE INTEREST OF ACCOUNTABILITY, THE TAXPAYERS DESERVE TO HAVE ANSWERS ON WHO GOT MONEY AND HOW IT WAS SPENT. UNDER LAW, THE FEDERAL RESERVE HAS LENDING AUTHORITY FOR UNUSUAL AND EXIGENT CIRCUMSTANCES. UNDER SECTION 13-C OF THE FEDERAL RESERVE ACT, THE RESERVE CAN -- QUOTE -- "DISCOUNT FOR ANY INDIVIDUAL, PARTNERSHIP OR CORPORATION NOTES, DRAFTS, AND BILLS OF EXCHANGE WHEN SUCH NOTES, DRAFTS, AND BILLS OF EXCHANGE ARE ENDORSED OR OTHERWISE SECURED TO THE SATISFACTION OF THE FEDERAL RESERVE BANK." ESSENTIALLY, THIS MEANS THAT THE FED CAN LAND LEND TO ANY ENTITY OR PERSON WHEN IT BELIEVES THAT THERE IS AN EMERGENCY. THIS IS AN EXTRAORDINARY AMOUNT OF POWER AND DISCRETION AND IT SHOULD BE EXERCISED IN THE LIGHT OF DAY. TRANSPARENCY, ACCOUNTABILITY, THE PUBLIC'S BUSINESS OUGHT TO BE PUBLIC. TRILLIONS OF DOLLARS WERE PROVIDED TO FINANCIAL INSTITUTIONS AND CORPORATIONS SINCE THE FINANCIAL CRISIS BEGAN BEGAN. THE FED HELPED RESCUE FANNIE MAE AND FREDDIE MAC. THE FED PROPPED UP BEAR STEARNS AND A.I.G. WHEN THEY WERE ON THE BRINK OF FAILURE. THEY INTERVENED IN BUSINESS ACTIVITIES OF LEHMAN BROTHERS, MERRILL LYNCH, AND CITIGROUP. BUT HOW MUCH HAS BEEN DOLED OUT AND TO WHOM IS STILL A MYSTERY. THIS AMENDMENT WOULD ALLOW THE INDEPENDENT ARM OF CONGRESS, THE GOVERNMENT ACCOUNTABILITY OFFICE, TO REVIEW THE DECISIONS MADE BY THE FEDERAL RESERVE. AND THE GENERAL ACCOUNTING OFFICE IS -- AND THE GOVERNMENT ACCOUNTABILITY OFFICE IS NOTHING BUT A GROUP OF PROFESSIONAL PEOPLE WITHOUT A POLITICAL MOTIVE AND THE RIGHT GROUP TO GET THE JOB DONE AND DOING IT ON AN ONGOING BASIS. AN OBJECTIVE REVIEW OF THE FED'S ACTIONS WILL SERVE OUR COUNTRY WELL IN THE FUTURE. WE CAN LEARN FROM THE MISTAKES THAT MAY HAVE BEEN MADE. WE CAN DETERMINE IF THE LOSSES OR PROFITS FROM THE FED'S INVESTMENTS HELP SERVE THE ECONOMY WELL. DID THE FEDERAL RESERVE ACT IN AN APPROPRIATE AND ETHICAL MANNER? WAS THE RELATIONSHIP BETWEEN REGULATORS AND THE FINANCIAL INDUSTRY TOO COZY, HAMPERING THE ABILITY TO MAKE OBJECTIVE DECISIONS? PROPONENTS OF THE FEDERAL RESERVE SHOULDN'T CONSIDER THIS AS A THREAT TO THE INDEPENDENCE OF THE FED, AN INDEPENDENCE THAT I SUPPORT. THEY SHOULD EMBRACE AN INDEPENDENT EVALUATION AS AN OPPORTUNITY TO IMPROVE ITS OPERATIONS, AND MOST IMPORTANTLY STRENGTHEN PUBLIC TRUST FOR FUTURE GENERATIONS WHO MAY BE FACED WITH SIMILAR FINANCIAL CRISIS. AS THE SENATOR FROM VERMONT HAS MADE VERY CLEAR, THE INTENT OF HIS AMENDMENT IS NOT TO INTERFERE IN MONETARY POLICY. I SHARE THAT SAME FEELING THAT HE HAS AND I WOULD NOT SUPPORT AN AMENDMENT THAT WENT INTO MONETARY POLICY. BUT THE FED'S EXTRAORDINARY POWER OUTSIDE OF MONETARY POLICY SHOULD BE SUBJECT TO THE LIGHT OF DAY. TRANSPARENCY AND ACCOUNTABILITY. THE PUBLIC'S BUSINESS OUGHT TO BE PUBLIC. WE SHOULD ALLOW THE GOVERNMENT ACCOUNTABILITY OFFICE TO AUDIT THE FED SINCE THEY MOVED FAR BEYOND THEIR TRADITIONAL AND PRIMARY MISSION OF CONDUCTING MONETARY POLICY. I YIELD THE FLOOR.

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  • 04:17:58 PM

    MR. SANDERS

    JUST THANK THE SENATOR FROM IOWA, NOT ONLY FOR HIS SUPPORT BUT HIS LONG…

    JUST THANK THE SENATOR FROM IOWA, NOT ONLY FOR HIS SUPPORT BUT HIS LONG FIGHT FOR TRANSPARENCY. IT'S BEEN A PLEASURE WORKING WITH YOU, AND I THANK YOU VERY, VERY MUCH. A SENATOR: MADAM PRESIDENT? MADAM PRESIDENT, I WANT TO THANK MY COLLEAGUES, SENATOR SANDERS AND SENATOR DeMINT FOR PUTTING FORWARD, BRINGING THIS AMENDMENT TO THE FLOOR. I'M A COSPONSOR OF THIS AMENDMENT ALONG WITH SEVERAL OF MY OTHER COLLEAGUES.

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  • 04:18:26 PM

    MR. BROWNBACK

    AS WELL TO MY COLLEAGUE FROM VERMONT, MY COLLEAGUE FROM SOUTH CAROLINA AND…

    AS WELL TO MY COLLEAGUE FROM VERMONT, MY COLLEAGUE FROM SOUTH CAROLINA AND OTHERS THAT ARE SPONSORS OF THIS, THIS IS AN ISSUE I HEAR A LOT ABOUT. WHEN I'M AROUND -- TRAVELING AROUND MY STATE, WHICH IS OFTEN THAT I'M TRAVELING AROUND AND LISTENING TO PEOPLE, THIS IS SOMETHING PEOPLE ARE CONCERNED ABOUT. THEY ARE CONCERNED ABOUT THE MONETARY POLICY, THEY ARE CONCERNED ABOUT THE MONEY SYSTEM. THEY ARE -- THEY ARE CONCERNED. AND I WOULD NOTE TO PEOPLE AND MY COLLEAGUES IN PARTICULAR, THE CONGRESS CREATED THE FED, THE FED DIDN'T CREATE THE CONGRESS. SO THE CONGRESS DOES HAVE CONTROL OVER THIS ISSUE, AND I THINK WE NEED TO LOOK AT IT AND SAY LET'S LOOK AT WHAT IS APPROPRIATE AND WHAT'S PROPER HERE, AND THIS IS CLEARLY ONE PIECE OF IT. I THINK THE FED HAS DONE A NUMBER OF THINGS QUITE WELL AND QUITE RIGHT, YET I DON'T SEE ANY PROBLEM WHATSOEVER WITH HAVING A SIMPLE AUDIT, THAT THAT'S GOING TO SOMEHOW REVEAL THE GENIE IN THE BOTTLE AND LET OUT ALL THESE SECRETS THAT ARE GOING TO BE HARMFUL TO THE DEVELOPMENT OF MONETARY POLICY. THIS SEEMS TO ME TO BE A LOT OF -- A FAIR AMOUNT OF OVERSTATEMENT ON THE OTHER SIDE OF THE TERRIBLE DAMAGE THAT THIS AUDIT WOULD DO. THAT DOESN'T SEEM RIGHT TO ME. IT DOESN'T SEEM RIGHT TO MY CONSTITUENTS. MY CONSTITUENTS LOOK AT THIS AND SAY I DON'T WANT TO HARM THE DEVELOPMENT OF MONETARY POLICY. I WANT IT TO BE WISE AND GOOD AND SOUND, BUT I DON'T SEE HOW IT'S HARMED BOY AN -- BY AN AUDIT OF AN ENTITY THAT'S CREATED BY THE GOVERNMENT, THAT'S CREATED BY THE CONGRESS, SO WHY SHOULDN'T WE DO SOMETHING LIKE THIS? THAT'S WHY I THINK THIS IS A PRUDENT AMENDMENT. I THINK IT'S A GOOD COMMONSENSE AMENDMENT, AND I THINK IT WILL BE WELL RECEIVED BY THE CONSTITUENTS OF THIS GREAT COUNTRY THAT I THINK ARE PRETTY WISE ON THESE -- THESE OTHER DECISIONS THAT WE GO AROUND. THAT IF WE'LL LISTEN TO WHAT PEOPLE ARE SAYING, I THINK THERE IS A LOT OF WISDOM IN THAT. THEY ARE SAYING WE OUGHT TO KNOW MORE ABOUT WHAT'S TAKING PLACE IN THE FED. I KNOW WE WOULD ALL LIKE TO MOVE FORWARD ON FINANCIAL REGULATORY REFORM LEGISLATION. I HAVE SOME SERIOUS PROBLEMS IN THIS BILL. I THINK THE CONSUMER FINANCIAL PRODUCT PIECE SHOULDN'T PENALIZE AUTO DEALERS AND ORTHODONTISTS AND OTHERS THAT DIDN'T CAUSE ANY OF THIS PROBLEM. SO I HAVE AN AMENDMENT, I HAVE GOT OTHER AMENDMENTS THAT I'M A PART OF AS WELL ALONG WITH THIS ONE THAT I THINK WE NEED TO CONSIDER BEFORE WE MOVE ON FORWARD. EVEN THOUGH I HAVE SOME PROBLEM WITH THE BASIS OF THE BILL, I THINK IT HITS MORE MAIN STREET THAN IT DOES WALL STREET. THE DIFFICULTY IS THAT WE JUST HAVE DIFFERENT IDEAS AND BELIEFS ABOUT THE BEST WAY TO MOVE FORWARD, AND THAT'S -- THAT'S NORMAL. THIS AMENDMENT ISN'T JUST ABOUT THE CHOICES, THOUGH, WE HAVE ON REFORMING THE FINANCIAL SECTOR. I THINK IT GETS TO THE HEART OF A MORE FUNDAMENTAL ISSUE. WHAT THE AMERICAN PEOPLE HAVE A RIGHT TO EXPECT AND KNOW FROM THEIR GOVERNMENTAL INSTITUTIONS. THE FACT THAT THIS AMENDMENT IS BROUGHT FORWARD BY GENTLEWOMAN VERMONT, MR. SANDERS, AND THE SENATOR FROM THE GENTLEMAN FROM SOUTH CAROLINA, MR. DeMINT, SHOULD BE A SUFFICIENT WARNING AND MEASURE TO MAKE EVERYONE SIT UP AND TAKE NOTICE OF WHAT IS IT THAT'S HERE THAT'S SO TROUBLING? THIS AMENDMENT ISN'T ABOUT WHETHER THE LEGISLATION WILL PUT AN END TO TAXPAYER-BACKED BAILOUTS. IT ISN'T ABOUT WHETHER OR NOT THE LEGISLATION WENT INTO TOO BIG TO FAIL. IT ISN'T EVEN ABOUT HOW TO BEST PROTECT THE AMERICAN PEOPLE AND TAXPAYER DOLLARS. IT'S ABOUT SOMETHING I BELIEVE EVEN MORE FUNDAMENTAL, THE ACCOUNTABILITY OF GOVERNMENTAL INSTITUTIONS TO THE PEOPLE OF THE UNITED STATES AND TO THE CONGRESS. I THINK IT IS IMPORTANT, AS I STATED, TO REMEMBER -- I WANT TO STATE THIS AGAIN -- ONE SINGLE FUNDAMENTAL REALITY IN THIS DEBATE, THAT CONGRESS CREATED THE FEDERAL RESERVE, NOT THE OTHER WAY AROUND. WE CREATED THE FEDERAL RESERVE SYSTEM TO SERVE THE INTERESTS OF THE CITIZENS OF THIS NATION, NOT TO SERVE THE INTEREST OF LARGE FINANCIAL INSTITUTIONS. IN ESTABLISHING THE FEDERAL RESERVE, CONGRESS RECOGNIZED THE IMPORTANCE OF A CENTRAL BANK THAT COULD OPERATE WITH INDEPENDENCE TO ASSURE THE ORDERLY FUNCTIONING OF THE BANKING SYSTEM AND TO MAINTAIN PRICE STABILITY. THAT'S THE CORE FUNCTION OF THE FED. MORE RECENTLY, THE FEDERAL RESERVE MANDATE WAS EXPANDED TO CHARGE THEM WITH MAINTAINING PRICE STABILITY AND MAXIMUM EMPLOYMENT. THAT WAS AN EXPANSION PIECE THAT WAS ADDED. THE GOVERNMENT ACCOUNTABILITY OFFICE IS ALSO A CREATION OF CONGRESS. G.A.O. IS AN INDEPENDENT AND NONPARTISAN AGENCY THAT WORKS FOR CONGRESS. WHAT IS G.A.O.'S MISSION? G.A.O.'S MISSION IS TO SUPPORT THE CONGRESS IN MEETING ITS CONSTITUTIONAL RESPONSIBILITIES AND TO HELP IMPROVE THE PERFORMANCE AND ENSURE THE ACCOUNTABILITY OF THE FEDERAL GOVERNMENT FOR THE BENEFIT OF THE AMERICAN PEOPLE. NOW, IN MY VIEW, THE REAL ISSUE HERE IS WHETHER OR NOT YOU BELIEVE THAT THE CONGRESS HAS THE RIGHT TO ASK G.A.O., IN MANY RESPECTS OUR AUDITOR TO REVIEW ACTIONS AND ACTIVITIES OF AN INSTITUTION THAT WE, THE CONGRESS, CREATED. I CERTAINLY UNDERSTAND THE IMPORTANCE OF THE FEDERAL RESERVE'S INDEPENDENCE IN THE EXECUTION OF MONETARY POLICY. I UNDERSTAND AND I SUPPORT THAT. I UNDERSTAND THE IMPORTANCE OF NOT INTERFERING WITH THE OPERATION OF THE FOMC. THAT IS NOT WHAT THIS AMENDMENT IS ATTEMPTING TO DO. THAT IS NOT MY INTENTION. I'M CONFIDENT AS WELL IT'S NOT THE INTENTION OF THE MAIN SPONSORS OF THIS AMENDMENT. BUT I DO THINK IT IS RELEVANT TO KNOW WHETHER THE FEDERAL RESERVE IS OPERATING IN A MANNER THAT IS CONSISTENT WITH ITS STATUTORY AUTHORITY. I DO THINK IT IS RELEVANT TO KNOW WHETHER THE FEDERAL RESERVE IS FOLLOWING ITS OWN ESTABLISHED RULES AND PROCEDURES OR IF IT IS JUST MAKING IT UP AS IT GOES ALONG. I DO THINK IT IS RELEVANT FOR CONGRESS TO KNOW WHO WAS INVOLVED IN DECISIONS TO TAKE EXTRAORDINARY MEASURES BY EXERCISING EMERGENCY POWERS, AS WELL AS WHO WAS AND WAS NOT CONSULTED BEFORE THOSE ACTIONS WERE TAKEN. THOSE ARE PRUDENT AND PROPER THINGS FOR US TO KNOW. I THINK IT IS EQUALLY IMPORTANT TO KNOW WHETHER OR NOT THE POLICY STATEMENTS AND SUBSEQUENT MINUTES OF FOMC MEETINGS ACCURATELY REFLECT WHAT WENT ON IN THOSE MEETINGS. RECENT NEWS REPORTS SURROUNDING THE RELEASE OF TRANSCRIPTS FROM 2004 MEETINGS OF THE FED CONTAIN SOME SERIOUS DISTRESSING INFORMATION. THOSE REPORTS REVEAL THAT AS FAR BACK AS 2004, THERE WERE SIGNIFICANT CONCERNS RAISED BY REGIONAL RESERVE BANK PRESIDENTS ABOUT AN EMERGING HOUSING BUBBLE THAT INDEED DID EMERGE AND BURST. DID WE SEE ANY INDICATION OF THAT IN THE MEETING MINUTES OR THE POLICY STATEMENTS? WE DID NOT. AND WHAT THAT TELLS ME IS THAT THE MINUTES DID NOT ACCURATELY ACCURATELY -- I WILL EVEN SAY THEY DIDN'T DIRECTLY PORTRAY WHAT WENT ON IN THE MEETINGS. I DON'T BELIEVE THAT'S RIGHT. DISTURBINGLY, THE TRANSCRIPTS REVEAL THAT THE FEDERAL RESERVE BANK PRESIDENT FROM ATLANTA WARNED THAT, QUOTE -- "A NUMBER OF FOLKS ARE EXPRESSING GROWING CONCERN ABOUT POTENTIAL OVERBUILDING AND WORRISOME SPECULATION IN THE REAL ESTATE MARKETS, ESPECIALLY IN FLORIDA. ENTIRE CONDO PROJECTS AND UPSCALE RESIDENTIAL LOTS ARE BEING PRESOLD BEFORE ANY CONSTRUCTION WITH BUYERS FREELY ADMITTING THAT THEY HAVE NO INTENTION OF OCCUPYING THE UNITS OR BUILDING ON THE LAND BUT RATHER ARE COUNTING ON FLIPPING THE PROPERTIES, SELLING THEM QUICKLY AT HIGHER PRICES." END OF QUOTE. THAT'S A DIRECT QUOTE. DISCONCERTINGLY, AT THE SAME MEETING, THE FORMER CHAIRMAN OF THE BOARD OF GOVERNORS, GROPES GREENSPAN, MADE THE FOLLOWING STATEMENT -- "WE RUN THE RISK BY LAYING OUT THE PROS AND CONS OF A PARTICULAR ARGUMENT, OF INDUCING PEOPLE TO JOIN IN ON THE DEBATE. IN THIS REGARD, IT IS POSSIBLE TO LOSE CONTROL OF A PROCESS THAT ONLY WE FULLY UNDERSTAND." LET ME REPEAT THAT QUOTE. THIS IS FROM CHAIRMAN, FORMER CHAIRMAN GREENSPAN -- "WE RUN THE RISKS BY LAYING OUT THE PROS AND CONS OF A PARTICULAR ARGUMENT OF INDUCING PEOPLE TO JOIN IN ON DEBATE THAT IN THIS REGARD IT IS POSSIBLE TO LOSE CONTROL OF THE PROCESS THAT ONLY WE, THE FEDERAL RESERVE BOARD, FRIEWL UNDERSTAND. "-- FULLY UNDERSTAND." I SERVE AS THE RANKING MEMBER OF THE JOINT ECONOMIC COMMITTEE. SENATOR DeMINT IS ALSO A MEMBER OF OUR COMMITTEE. WE BELIEVE IN THE FREE ENTERPRISE SYSTEM. WE RECOGNIZE THE SUPPORT OF THE STRONG FINANCIAL SYSTEM. YET A FUNDAMENTAL REQUIREMENT FOR THE ORDERLY OPERATION OF FREE MARKETS IS TRANSPARENCY AND ACCURATE REPORTING INFORMATION. I THINK THE SUGGESTION THAT ONLY THE FEDERAL RESERVE WAS CAPABLE OF, QUOTE, FULLY UNDERSTANDING IS EVIDENCE ENOUGH THAT THIS AMENDMENT IS NECESSARY. CONGRESS NEEDS TO DEMAND CHANGE AND GREATER ACCOUNTABILITY SO PEOPLE CAN HAVE MORE INFORMATION. WHAT IF THE PEOPLE HAD KNOWN ABOUT THIS DEBATE GOING ON AT THE FEDERAL RESERVE AS THE HOUSING BUBBLE WAS DEVELOPING? HOW WOULD PEOPLE HAVE ACTED? MY GUESS IS THEY WOULD HAVE ACTED QUITE FLUENTLY IN SAYING THE FEDERAL RESERVE IS CONCERNED ABOUT THIS, THIS IS LEGITIMATE INFORMATION. MAYBE WE SHOULD PULL BACK ON HOUSING INVESTMENTS, MAYBE WE SHOULD BE WATCHING THIS AS WELL. I THINK PEOPLE CAN GET IT. THEY NEED THE INFORMATION, THOUGH. THIS AMENDMENT DOESN'T ADDRESS THE ISSUE OF TIME DELAY IN RELEASING TRANSCRIPTS. I DO BELIEVE THAT THE CURRENT FIVE YEARS WHICH AMOUNTS TO ALMOST SIX IN MANY CASES IS INDEFENSIBLE BETWEEN THE ACTUAL MINUTES AND THEM BEING RELEASED. FIVE YEARS. IN BETWEEN THE ACTUAL MINUTES AND THEIR BEING RELEASED TO THE PUBLIC. IN MY JUDGMENT, THAT TIME LIMIT SHOULD BE REDUCED TO NO MORE THAN TWO YEARS. MEMBERS OF THIS BODY SHOULD HAVE ACCESS TO THESE AND OTHER TRANSCRIPTS BEFORE WE WERE ASKED TO RECONFIRM THE CURRENT CHAIRMAN OF THE FEDERAL RESERVE BOARD OF GOVERNORS, AND I WOULD SUGGEST IT WOULD HAVE BEEN HELPFUL TO HAVE HAD ACCESS TO THIS INFORMATION BEFORE THE HOUSING MARKET COLLAPSE AND BEFORE IT TURNED INTO A FINANCIAL CRISIS. MADAM PRESIDENT, THE AMERICAN PEOPLE ARE MAD AT WASHINGTON, THEY ARE MAD AT THE GOVERNMENTAL INSTITUTIONS THAT THEY VIEW AS INCREASINGLY UNRESPONSIVE AND UNACCOUNTABLE. LET'S TAKE THIS STEP IN THE DIRECTION OF TRANSPARENCY, ACCOUNTABILITY AND DISCLOSURE OF INFORMATION. THE AMERICAN PEOPLE HAVE A RIGHT TO KNOW WHETHER THEIR INTEREST WERE PROTECTED OR SIMPLY PLACED ON THE BACK SHELF, THEY HAVE A RIGHT TO KNOW THE INFORMATION. I URGE MY COLLEAGUES TO SUPPORT THIS AMENDMENT AND I URGE THE FEDERAL RESERVE TO WORK WITH US TO ADDRESS REAL CONCERNS ABOUT THIS AMENDMENT RATHER THAN TRYING TO DEFEAT IT OR AMEND IT WITH THE PURPOSE OF MAKING IT A SYMBOLIC AND MEANINGLESS GESTURE. LET'S REMIND THE FEDERAL RESERVE BOARD OF GOVERNORS THAT THEY ARE NOT THE ONLY PEOPLE CAPABLE OF FULLY UNDERSTANDING ISSUES ON WHICH I OR ALL OF OUR ECONOMIC FUTURE DEPENDS. MR. PRESIDENT, I YIELD THE FLOOR.

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  • 04:29:22 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM VERMONT.

  • 04:29:25 PM

    MR. SANDERS

    TO THANK THE SENATOR FROM KANSAS FOR HIS REMARKS AND FOR HIS STRONG…

    TO THANK THE SENATOR FROM KANSAS FOR HIS REMARKS AND FOR HIS STRONG SUPPORT FROM DAY ONE FOR THIS CONCEPT OF TRANSPARENCY OF THE FED. THANK YOU VERY MUCH.

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  • 04:29:46 PM

    THE PRESIDING OFFICER

    OFFICER: THE CLERK WILL CALL THE ROLL. QUORUM CALL:

  • 04:30:07 PM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM OKLAHOMA.

  • 04:30:09 PM

    MR. COBURN

    THANK YOU. YEAH, THAT'S FINE. THANK YOU. THANK YOU, MADAM PRESIDENT. I…

    THANK YOU. YEAH, THAT'S FINE. THANK YOU. THANK YOU, MADAM PRESIDENT. I WANTED TO SPEND A FEW MINUTES ON A COUPLE OF TOPICS.

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  • 04:30:18 PM

    THE PRESIDING OFFICER

    THE SENATOR WILL NOTE THAT THE SENATE IS IN A QUORUM CALL.a

  • 04:30:26 PM

    MR. COBURN

    THAT THE QUORUM CALL BE DISPENSED WITH.

  • 04:30:30 PM

    MR. COBURN

    AS WE WATCHED THE DEBATE THE LAST SIX DAYS ON THE FINANCIAL REGULATION…

    AS WE WATCHED THE DEBATE THE LAST SIX DAYS ON THE FINANCIAL REGULATION REFORM BILL, I THOUGHT IT WOULD BE INTERESTING JUST TO RAISE A FEW QUESTIONS. THE CONGRESS, BOTH THE HOUSE AND THE SENATE, CREATED WHAT WAS CALLED THE FINANCIAL INQUIRY COMMISSION. AS A MATTER OF FACT, THEY HAD A MEETING TODAY. AND THE PURPOSE OF THAT COMMISSION, WHO WILL TURN IN THEIR REPORT IN DECEMBER OF THIS YEAR, WAS TO TAKE A THOROUGH AND COMPLETE LOOK AT WHAT WHAT HAPPENED TO US IN 2008, THE CAUSES, THE REGULATORY FAILURES, THE POOR INCENTIVES, AND THEN MAKE RECOMMENDATIONS TO THE CONGRESS ON WHAT WE SHOULD DO. NOW, THE QUESTION I HAVE FOR MY COLLEAGUES IS, WE HAVE A BILL ON THE FLOOR THAT IS GIVEN NO CREED TONS THE COMMISSION WE -- THAT IS GIVEN NO CREDENCE TO THE COMMISSION THAT WE CREATED. WE'RE ACTUALLY GOING TO FINISH THE BILL NEXT WEEK WITHOUT THE BENEFIT THAT HAVE COMMISSION'S INQUIRY. SO A COUPLE QUESTIONS I'D ASK IS NUMBER ONE, WHY? WHY ARE WE DOING THAT? AND, NUMBER TWO -- AND, BY THE WAY, THE PEOPLE ON THAT COMMISSION IS LEARNED PEOPLE WITH GREAT EXPOSURE AND GREAT EXPERIENCE IN THE AREAS OF WHICH WE'RE DISCUSSING. AND THEN THE SECOND QUESTION I'D ASK IS, WHY ARE WE ALLOWING THE COMMISSION TO CONTINUE SPENDING MONEY IF WE'RE NOT GOING TO PAY ANY ATTENTION TO THEM? WHY DON'T WE JUST END THE COMMISSION? SINCE WE'RE OBVIOUSLY DECIDED WHAT THEY'RE GOING TO HAVE TO GIVE TO US ISN'T OF VALUE, AS WE MAKE THE DECISION ABOUT WHAT WE NEED TO CHANGE. BUT THAT'S WHAT WE HAD THE COMMISSION FOR. SO I FIND IT PECULIAR THAT IN OUR RUSH TO BLAME SOMEBODY, OUR RUSH TO TAKE THE FOCUS OFF OF WHERE IT REALLY BELONGS -- AND, BY THE WAY, THAT'S RIGHT HERE IN THE U.S. CONGRESS, BECAUSE 90% OF WHAT WENT WRONG WAS OUR FAULT, OUR FAULT, THAT'S WHERE IT LIES -- IN OUR RUSH TO SHIELD AND REFLECT THAT AWAY FROM US, WE'RE GOING TO PASS A BILL WITH ALL SORTS OF UNINTENDED CONSEQUENCES OF WHICH WE FULLY DON'T UNDERSTAND RIGHT NOW, A BILL THAT'S GOING TO TREAT THE SYMPTOMS, NOT THE UNDERLYING DISEASE, OF THE FINANCIAL PROBLEMS THAT WE HAD, AND IT RINGS WELL FROM A POPULIST STANDPOINT, BUT IN THE LONG RUN IT DOES A DISSERVICE TO OUR COUNTRY, UNDERSTAND THAT DOESN'T MEAN THAT THIS BILL -- THIS BILL MAY NOT HIT IT 100% ON WHAT THE COMMISSION RECOMMENDS. BUT WE HAVE NO IDEA WHAT THEY'RE GOING TO RECOMMEND. SO I THINK ITS IT'S A GREAT QUESTION FOR THE PUBLIC TO BE ASKING US, WHY ARE WE DOING THAT? AND WHY ARE WE CONTINUING A COMMISSION THAT WE'RE OBVIOUSLY NOT PAYING ANY ATTENTION TO? ONE WAS TO CREATE IT SO WE WE'D OFFLOAD THE COMMISSION. WE OBVIOUSLY DIDN'T CARE WHAT THEY THOUGHT BECAUSE WE'RE NOT GOING TO PAY ANY ATTENTION TO IT. AND, NUMBER TWO, WE'RE GOING TO CONTINUE TO SPEND MONEY ON THE COMMISSION THAT WE'RE NOT IS GOING TO VALUE. AND IF WE WERE GOING TO VALUE IT, WE WOULD AT LEAST HAVE GIVEN A MANDATE TO HURRY UP SO WE CAN MAKE APPROPRIATE DECISIONS AND USE THEIR EXPERTISE, OR WE'D ELIMINATE IT. NOW TO THE BILL THAT'S IN FRONT OF US. WHAT REALLY HAPPENS HERE -- THIS IS MY OPINION OF WHAT HAPPENED. THE U.S. CONGRESS CREATED INCENTIVES TO INCREASE WITH EASE THE ABILITY TO OWN A HOME IN THIS COUNTRY. AND THEN WE CREATED INCENTIVES THROUGH FANNIE MAE AND FREDDIE MAC TO DO THAT EVEN GREATER, AND THEN WE CREATED THE ABILITY TO PACKAGE AND OFFLOAD WHAT FANNIE MAE AND FREDDIE MAC HAD TAKEN AND SECURITIZE IT, AND WE WONDER WHY PEOPLE WOULD TAKE ADVANTAGE OF THAT. THERE WASN'T ONE OVERSIGHT HEARING ON THE OFFICE OF THRIFT SUPERVISION, WHICH ABSOLUTELY FAILED IN TERMS OF LOAN ORIGINATORS. THERE WAS ONE HEARING IN FOUR YEARS ON THE S.E.C. THAT HAD NOTHING TO DO WITH THEIR OVERSIGHT OF THE PACKAGING OF THESE BILLS, BEFORE THEY BECAME A PROBLEM. THERE WAS NO OVERSIGHT, SIGNIFICANT OVERSIGHT, ON THE EXPLOSIVE NATURE OF DERIVATIVES TRADING IN THIS COUNTRY AND AROUND THE WORLD. AND WE'RE SO QUICK TO POINT THE FINGERS AT THE PEOPLE WHO TOOK ADVANTAGE OF THE INCENTIVES THAT WE SET IN MOTION. AND SO NOW WHAT DO WE HAVE? WE HAVE $6 TRILLION OR $8 TRILLION WORTH OF EXPOSURE FOR THE U.S. TAXPAYER IN TERMS OF GUARANTEED MORTGAGES BY THE FEDERAL GOVERNMENT THROUGH FANNIE MAE, FREDDIE MAC, AND F.H.A., AND WE'RE HULLING ALONG SO THAT NONE OF -- AND WE'RE HUSTLING ALONG SO THAT NONE OF THAT ENDS UP GETTING FOCUSED OUNCE. AND WE'VE GOT A BILL ON THE FLOOR THAT DOESN'T ADDRESS THE CORE PROBLEM OF WHAT WENT WRONG. AND HERE'S THE CORE PROBLEM OF WHAT WENT WRONG: THERE WERE NO MORTGAGE ORIGINATION STANDARDS THAT WERE ENFORCED BY THE FEDERAL GOVERNMENT AS THEY TOOK AMERICAN TAXPAYERS TO GUARANTEE WHAT WAS GOING TO BE AN ASSET. AND WHAT WE FIND AT THE PERMANENT SUBCOMMITTEE OF INVESTIGATIONS? THAT IN THE LAST YEAR BEFORE THIS, ONE COMPANY ALONE THAT ORIGINATED A VAST MAJORITY OF THE LOANS IN CALIFORNIA -- LONG BEACH MORTGAGE -- 90% OF THE MORTGAGES WERE BASED ON FRAUDULENT DATA. O.P.S. KNEW T DIDN'T DO ANYTHING ABOUT IT. WHY DID THEY NOT DO IT? BECAUSE THEY GOT 16% OF THEIR REVENUE FROM WASHINGTON MUTUAL SAVINGS AND LOAN, WHO OWNED LONG BEACH MORTGAGE. SO WE SET UP ALL THESE SYSTEMS, WE INCENTIVIZE THE SYSTEM, AND NOW THAT IT BLEW UP IN OUR FACE BECAUSE WE DIDN'T LOOK AT IT, WE DIDN'T OVERSIGHT IT, WE DIDN'T DO OUR FIDUCIARY RESPONSIBILITY, WE WANT TO BE QUICK AND GET RID OF THAT BLAME FROM US BY POINTING THE FINGER SOMEWHERE ELSE. WE HAVE MINIMAL LEVERAGE RIRLTS REQUIREMENTS IN THIS BILL. IF YOU'RE GOING TO CREATE AN INCENTIVE FOR PEOPLE TO ACT BAD, AT LEAST YOU OUGHT TO PUT A BLOCK SOMEWHERE ELSE THAT WILL LIMIT THE EXPOSURE OF FINANCIAL INSTITUTIONS BASED ON CAPITAL RATIO. WE HAVEN'T DONE THAT. WE HAVEN'T ACCOMPLISHED THAT IN THIS BILL. THAT'S SOMETHING THAT HAS TO BE THERE. TO KEEP US -- WE HAD COMPANIES GOING 40 AND 50 TIMES THEIR NET WORTH LEVERAGE OUT AND YET WE'RE NOT AADDRESSING THAT ISSUE TO A SIGNIFICANT EXTENT. ONE SMALL PORTION OF THE BILL. AND THEN WE'RE GOING TO TAKE A CONSUMER PROTECTION, WHICH WE CREATED THE PROBLEMS FOR, AND CREATED A MASSIVE GOVERNMENT BUREAUCRACY THAT'S GOING TO FILTER ALL THE WAY DOWN TO EVERY SMALL BUSINESS IN THIS COUNTRY AND ALL THAT POWER IN ONE INDIVIDUAL THAT'S NOT ACCOUNTABLE TO THE PRESIDENT AND SAY, YOU FIX T AND WE'RE -- ON LIMITED FUNDING STREAM THAT'S GOING TO BE TOTALLY OUT OF CONTROL, THAT'S GOING TO IMPEDE ANDIMPACT THE FREEDOM OF AMERICANS TO MAKE A LIVING. IN THE NAME OF CONSUMER PRESENTATION PROTECTION. IF YOU THIM A GIVING A SPEECH TO PROTECT BANKS, YOU'RE WRONG. I LIKE THEM ABOUT AS MUCH AS I LIKE INSURANCE COMPANIES. BUT WE HAVE TO THINK ABOUT WHAT WE'RE DOING. AND WE OUGHT TO BE ABOUT FIXING THE REAL DISEASE, AND THAT REAL DISEASE IS US. US NOT DOING OVERSIGHT, US NOT BEING RESPONSIBLE FOR THE LEGISLATION THAT WE CREATE, INCENTIVES, AND THEN YAWN AS IT GOES BY AND GOES AWRY AND THEN POINT OUR FINGER SOMEWHERE ELSE. THERE'S NO QUESTION WE NEED TO CHANGE THE REGULATORY STRUCTURE IN THIS COUNTRY. BUT THERE'S SOMETHING WE NEED TO CHANGE MORE THAN THE REGULATORY STRUCTURE, AND THAT'S THE DEMAND ON THE CONGRESS TO START DOING ITS JOB IN TERMS OF OVERSIGHT. WE'RE QUICK TO WHIP A BILL OUT WHEN IT'S POLITICALLY EX EXPEDIENT TO DO IT AND TO CREATE A WHIPPING BOY -- OR, SEVERAL WHIPPING BOYCE, AND SAY WE'RE DREFG THINGS BUT IT'S KIND OF LIKE THE PEA UNDER THE THREE WALNUT SHELLS. YOU NEVER KNOW WHERE THE PEA IS. AND THE REASON YOU NEVER KNOW IS BECAUSE THERE'S NOT REALLY EVEN A PEA THERE. THERE WAS WHEN IT STARTED. BUT IT WENT WAY. AND THEN IT GETS PUT BACK. AND SO WE'RE PLAYING THE GAME. WE'RE PLAYING THE AMERICAN PEOPLE THAT WHAT WE'RE DOING IS SUBSTANTIVE AND IN FACT IT'S GOING TO ENHANCE CAPITAL FORMATION WHEN WHAT WE'RE DOING IS IT'S GOING TO DECREASE CAPITAL FORM MAISMGHTS WE HAVE ONE SECTION IN THIS BILL THAT SAYS, EVERY SMALL BANK IN OKLAHOMA, IF THEY WRITE A MORTGAGE FOREVER AND SELL IT, THEY HAVE TO KEEP 5% OF IT. IF THEY'RE A SMALL CAPITALIZED BANK, THEY'RE NEVER GOING TO CREATE ANOTHER MORTGAGE IN OKLAHOMA. SO WE'RE GOING TO CONCENTRATE ALL THE MORTGAGES TO THE BIG BANKS IN THIS COUNTRY. THAT'S WHY GOLDMAN SACHS LOVES THIS BILL. THAT'S WHY CITIBANK LOVES THIS BILL. BECAUSE WE'RE NOT MAKING THE BIG BANKS SMALLER. WE'RE MAKING THE BIG BANKS BIGGER. AND WE'RE GOING TO UNDERCUT THE SMALL- AND MEDIUM-SIZED BANKS IN THIS COUNTRY BECAUSE WE'RE GOING TO PUT A 5% RETENTION ON EVERY MORTGAGE THAT THEY WRITE. WHEN IN FACT ALL WE WOULD HAVE TO SAY IS IF YOU WRITE A MORTGAGE AND YOU PACKAGE IT AND SELL IT, THERE'S RECOURSE BACK TO YOU, THE ORIGINATOR OF THE LOAN, THAT THAT MORTGAGE WHEN IT BECOMES NONPMPLING COMES BACK TO YOU. -- NONPERFORMING COMES BACK TO YOU. THAT'S ALL WE HAVE TO DO. THAT DOESN'T TIE UP THEIR CAPITAL. THAT DOESN'T LIMIT THERE THEIR INCENTIVE TO CREATE HOUSING IN OUR OWN REGIONAL MARKETS, WHICH IS MADE AVAILABLE WITH CAPITAL IN THOSE REGIONAL MARKETS. WE'RE GOING TO MAKE THE BIG BOYCE BIGGER. YOU KNOW, ALL THE REGULATION THAT'S IN THIS BILL, NONE OF THE BIG BANKS WILL EVER HAVE A PROBLEM WITH IT. THEY ALREADY HAVE THOUSANDS AND THOUSANDS OF STAFF TO HANDLE GOVERNMENT REGULATION. THEY WON'T ADD A PERSON. BUT EVERY SMALL COMMUNITY BANK IN THIS COUNTRY, EVERY SMALL FINANCIAL INSTITUTION IN THIS COUNTRY IS GOING TO DROWN IN THE REQUIREMENTS OF THIS BILL. I KNOW THAT THE CHAIRMAN OF THE BANKING COMMITTEE HAS WORKED HARD TO TRY TO BRING A BILL. I KNOW THERE'S BEEN GREAT DELIBERATION WITH MANY FROM OUR SIDE OF THE AISLE ON THIS BILL. BUT I THINK WE'VE THROWN COMMON SENSE OUT THE WINDOW. THE MOTIVES ARE GOOD. THE GOAL -- FIX THE PROBLEM -- IS GOOD. BUT IF WE TREAT THE SYMPTOMS OF THIS AND CONVINCE THE AMERICAN PEOPLE WE'VE FIXED IT WHEN IN FACT WE HAVEN'T, WHEN WE REALLY HAVEN'T ELIMINATED TOO BIG TO FAIL BECAUSE WE'RE GOING TO MAKE THE BIG BANKS BIGGER, WHAT WE'RE GOING TO SEE IS A FURTHER DECLINE. IN THE NAME OF FIXING THINGS, WE'RE GOING TO BE TAKING MASSIVE AMOUNTS OF FREEDOM AWAY FROM SMALL BUSINESSES IN THIS COUNTRY. WE'RE GOING TO TAKE DISCRETION AND CAPITAL RISK, WE'RE GOING TO TAKE DISCRETION AWAY FROM CAPITAL RISK THAT HAS MINIMAL RISK TO THE COUNTRY BUT HAS EVERY BY THE OF RISK TO THE PERSON LENDING THE CAPITAL. WE'RE EVEN GOING TO TAKE AWAY SUGAR DAD DID I INVESTORS WHO ARE THE ONLY HOPE FOR SOME IDEAS -- NOT VENTURE CAPITALISTS -- WE'RE GOING TO TAKE AWAY THE ABILITY FOR SOMEONE TO COME IF IN AND INVEST 40% IN YOUR COMPANY. WE'VE ACTUALLY CREATED REQUIREMENTS FOR THAT. AS WE LOOK AT WHAT WE'RE ABOUT TO DO, THE AMERICAN PEOPLE OUGHT TO ASK THREE QUESTIONS. THREE VERY IMPORTANT QUESTIONS. DOES IT REALLY FIX THE PROBLEM? THAT'S ONE. NUMBER TWO, DOES IT GROW THE GOVERNMENT AND REQUIRE INCREASED SPENDING. TWO. AND, NUMBER THREE, IS THERE ANYTHING TO MAKE YOU THINK, SINCE WE WERE REGULATING ALL THESE INDUSTRIES ALREADY, THAT THE CONGRESS MIGHT OVERSIGHT THE NEXT SET OF REGULATIONS THAT WE PUT OUT THERE TO FIX THIS PROBLEM? AND I THINK THE ANSWER TO THAT -- ALL THREE OF THOSE QUESTIONS -- IS "NO." AND I'M IN THE MINORITY. I UNDERSTAND THAT. AND I SAID PREVIOUSLY, I THINK THAT WE OUGHT TO CHANGE THE REGULATIONS IN THIS COUNTRY. BUT I THINK WE ALSO OUGHT TO ELIMINATE TOO BIG TO FAIL BY MAKING THOSE THAT ARE TOO BIG BECOME SO SMALL THAT THEY WON'T MAKE A DIFFERENCE IF THEY DO FIT. YOU -- IF THEY DO FAIL. WE OUGHT TO CREATE THE MARKET CIRCUMSTANCES THAT WOULD FORCE THAT TO HAPPEN. BUT THIS BILL DOESN'T DO THAT. THIS BILL WON'T DO THAT. SO AS WE GO THROUGH THIS RATHER LARGE BILL THAT I THINK HAS HAD THREE OR FOUR ACCEPTED AMENDMENTS SO FAR, THAT IS 1,409 PAGES LONG, ONE OF THE OTHER QUESTIONS WE OUGHT TO BE ASKING IS HOW MANY MEMBERS HAVE READ THE ENTIRE BILL. HOW MANY MEMBERS REALLY UNDERSTAND WHAT IS IN THE BILL? HOW MANY MEMBERS CAN HAVE THE CAPABILITY TO ANTICIPATE THE UNINTENDED CONSEQUENCES OF WHAT'S IN THE BILL? AND I THINK WE'LL FIND THAT THAT'S ZERO. YET, WE'RE IN A HURRY TO DO THIS FOR A POLITICAL REASON. SO I'LL GO BACK TO WHAT I STARTED ON. WE CREATED THE FINANCIAL INQUIRY COMMISSION. WHAT ARE WE GOING TO DO WITH IT? WHAT ARE WE GOING TO DO? WHAT HAPPENS IF THEY COME OUT IN DECEMBER AND SAYS EVERYTHING WE DID WAS WRONG? WHY DID WE CREATE IT? I'D LOVE TO READ BACK SOME OF THE SPEECHES THAT WERE GIVEN ON THIS FLOOR ABOUT WHY WE WERE CREATING IT. BECAUSE WE HAD TO KNOW WHAT WENT WRONG. AND NOW WE HAVE A COMMISSION THAT'S BEEN CHARGED TO TELL US WHAT'S WRONG, BUT WE'RE GOING TO IGNORE THEM. WE'RE GOING TO PASS A BILL BEFORE THEY EVEN COMPLETED THEIR HEARINGS. I THINK THERE'S NO WONDER WHY THE COUNTRY HAS A LOW LEVEL OF CONFIDENCE IN OUR DELIBERATIONS, BECAUSE THEY DON'T MAKE SENSE TO THE AVERAGE AMERICAN. THEY UNDERSTAND THE POLITICAL SPIN. THEY UNDERSTAND PINNING THE TAIL ON THE DONKEY. THEY UNDERSTAND PLACING BLAME SO YOU CAN DEFLECT IT FROM YOURSELF. THEY GET ALL THAT. THEY SEE IT. THEY SEE RIGHT THROUGH IT. BUT WE'RE CREATURES OF HABIT. THERE ARE GOOD THINGS IN THIS BILL. LET ME END ON THAT. THE ELIMINATION OF THE OFFICE OF THRIFT SUPERVISION HAD TO BE. THE REASON THEY WERE INEFFECTIVE IS BECAUSE THEY GOT THEIR MONEY FROM THE VERY PEOPLE THEY WERE SUPERVISING, AND WHEN THEIR BIGGEST CUSTOMER WAS DOING SOMETHING WRONG, RATHER THAN LOSE REVENUE, THEY TURNED THE EYE THE OTHER WAIT A MINUTE CONSEQUENTLY, BILLIONS -- THEY TURNED THE EYE THE OTHER WAY. CONSEQUENTLY BILLIONS AND BILLIONS OF DOLLARS BECAME JUNK. OTHER GOOD THING: CHANGING THE RATING AGENCIES. WHAT THEY'RE ACCOUNTABLE FOR. THIS BILL GOES IN A DIRECTION DIFFERENT THAN WHAT I WOULD HAVE GONE. BUT THE POINT IS THERE NEEDS TO BE A CHANGE. THEY NEED TO NOT GET PAID BY THE VERY PEOPLE THAT ARE ASKING THEM TO RATE SOMETHING THEY'RE GETTING READY TO SELL, AND THEY REALLY OUGHT TO BE PAID BY THE PERSON THAT'S GETTING READY TO BUY WHAT THEY'RE GETTING READY TO SELL. SO THE ACCOUNTABILITY WILL BE THERE. BUT WE HAVEN'T DONE THAT. WE RECOVERED AND ARE RECOVERING FROM THIS FINANCIAL FIASCO BECAUSE OF THE RESILIENCE OF AMERICAN PEOPLE. THE PRICE IS ENORMOUS WITH HAVING 14 MILLION PEOPLE UNEMPLOYED. THAT'S A TREMENDOUS PRICE TO PAY. THE LOSS IN TERMS OF DIGNITY, THE LOSS IN TERMS OF ABILITY TO PROVIDE FOR YOUR FAMILY, THE LOSS OF LOSING A SKILL SET THAT YOU HAD AND NO LONGER CAN FIND A JOB TO DO IT, TREMENDOUS PRICE THAT HAS BEEN PAID. BUT THE AMERICAN PEOPLE ARE RESILIENT. WHAT THEY DON'T WANT TO TOLERATE, HOWEVER, IS A CONGRESS THAT FAILS TO RECOGNIZE AND CONTINUES TO REPEAT THE MISTAKES OF THE PAST. AND SO WE CAN SAY WE'VE BEEN WORKING ON THIS FOR SIX MONTHS. WE HAVE. THERE'S BEEN NEGOTIATIONS GOING ON FOR A LONG TIME ON THIS. MY QUESTION IS: DO WE REALLY HAVE THE ANSWERS? DO WE KNOW WHAT THE ANSWERS ARE? AND IF THE ANSWER TO THAT QUESTION IS YES, THEN LET'S DISBAND THE FINANCIAL INQUIRY COMMISSION RIGHT NOW. LET'S NOT WASTE THOSE FOLKS' TIME. LET'S DON'T SPEND ANOTHER PENNY OF FEDERAL TAXPAYERS' MONEY IF WE THINK WE ALREADY HAVE THE ANSWERS. WE'RE GOING TO DO JUST LIKE WE DO ON EVERY OTHER PROGRAM. WE'RE GOING TO CREATE ANOTHER ONE, AND WE'RE GOING TO KEEP SPENDING ON THE FIRST ONE. NEEDLESS TO SAY, I THINK THIS BILL IS FIXABLE. I THINK WE OUGHT TO ADDRESS THE REAL KEY ISSUE: FANNIE MAE AND FREDDIE MAC. WHY ARE WE NOT ADDRESSING THEM? BECAUSE WE DON'T WANT TO PUT ON THE BUCKS, THE COST TO DO IT. THAT'S WHY. THAT'S WHY WE'RE NOT ADDRESSING IT. WE KNOW THE ISSUES. WE'VE TAKEN AN UNLIMITED NOW AMOUNT OF OUR KIDS' MONEY AND PUT AT EXPOSURE, AND WE'VE GIVEN AN ABSOLUTE IMPLICIT, IMPLIED GUARANTEE TO BOTH THOSE ORGANIZATIONS NOW. THE PRESIDENT IN LATE DECEMBER TOOK OFF THE -- THEY'RE NOW BUYING BACK CLOSE TO $400 BILLION WORTH OF MORTGAGES FROM THE TREASURY, NONPERFORMING MORTGAGES, OF WHICH OUR KIDS ARE ALL GOING TO PAY THAT BACK. AND IT'S 20 OR 30 YEARS BEFORE ANY OF THAT PROPERTY ACTUALLY ATTAINS THE LEVEL OF WHICH IT WAS SOLD. SO WHAT'S COMING NEXT? WHAT'S COMING NEXT IS WE'RE GOING TO MANDATE PRINCIPAL REDUCTION ON MORTGAGES ACROSS THIS COUNTRY. NOW WHO'S THAT IMPACT? WHAT THAT SAYS IS EVERYBODY WHO PAID THEIR MORTGAGE ON TIME AND KEPT UP WITH THEIR PAYMENTS ARE MAKING TREMENDOUS SACRIFICES OTHER PLACES, GUESS WHAT? YOU'RE GOING TO GET TO PAY FOR THE MORTGAGE OF EVERYBODY THAT DIDN'T. FOR YOUR TAXES AND YOUR KIDS, THROUGH THEIR TAXES. YOU ACTED RESPONSIBLY, BUT WHAT'S COMING DOWN THE PIKE IS WE'RE GOING TO LIFT THE LOAD FOR THOSE THAT DIDN'T. YOU MET YOUR OBLIGATIONS. YOU SIGNED A CONTRACT ON THE BOTTOM LINE, AND THOSE WHO ARE LESS FORTUNATE THAN YOU, YOU NOW ARE GOING TO GET TO PAY FOR THEM TOO. THAT'S WHAT'S COMING. MARK MY WORD, AND YOU'LL HEAR IT BEFORE NOVEMBER. THAT IS WHAT IS COMING, THROUGH THE 40% REDUCTION IN THE PRINCIPAL AMOUNT ON MANY OF THESE MORTGAGES. SO WHAT'S GOING ON? WE'RE RUSHING A FINANCIAL REFORM BILL THAT DOESN'T ATTACK THE THREE MAJOR, MAJOR UNDERLYING DISEASES OF THE FINANCIAL SYSTEM, AND THEN RIGHT AFTER WE PASS THAT, WE'RE GOING TO FORCE PRINCIPAL REDUCTIONS ON HUNDREDS OF THOUSANDS, IF NOT MILLIONS, OF MORTGAGES OF WHICH YOU, THE TAXPAYER, ARE GOING TO PICK UP THE BILL. THAT'S WHAT'S COMING. WE'RE GOING TO HEAR THAT IT'S NOT. THAT'S WHAT'S COMING. SO WHA WATCH WHAT WE DO -- SO WATCH WHAT WE DO CAREFULLY. WATCH HOW WE SPEND THINGS. WATCH HOW WE CREATE DEMONS WHEN IN FACT WE'RE THE SOURCE OF THE PROBLEM. WATCH HOW WE POINT OUR FINGERS AT OTHERS WHO WE INCENTIVIZE TO TAKE ADVANTAGE OF SYSTEMS WE CREATED AND SAY, OH, NO, WE'RE NOT CULPABLE AT ALL. IT WASN'T US. WE DID ALL THE OVERSIGHT HEARINGS. WE HELD THE -- WE CHANGED IT. WHEN WE SAW THE WRITING ON THE WALL. WE DIDN'T DO ANY OF THAT. THE CONGRESS CREATED THIS MESS, AND WE'RE GOING TO CONTINUE TO ACT IN THE SAME WAY THAT'S GOING TO CREATE MORE. BECAUSE WE'RE GOING TO CREATE A WHOLE NEW SET OF REGULATIONS, AND THEN WE'RE NOT GOING TO HAVE THE OVERSIGHT HEARINGS. ARE YOU DOING THEM? WHERE'S THE METRICS? HOW DO WE MEASURE WHETHER YOU'RE DOING THEM? ARE YOU MR. BUREAUCRAT DOING WHAT THE CONGRESS DIRECTED? AS A MATTER OF FACT, WE DON'T EVEN PUT THE REGULATIONS IN THERE. WE LET SOMEBODY ELSE WRITE THE REGULATIONS. WE'RE SO KNOWLEDGEABLE THAT WE'RE GETTING READY TO FIX THIS PROBLEM, BESIDES THE FACT THAT THE FINANCIAL INQUIRY COMMISSION HASN'T SAID ANYTHING TO US YET ABOUT WHAT THE CAUSES ARE AND POTENTIAL SOLUTIONS. BUT WE'RE NOT EVEN GOING TO WRITE THE REGULATIONS, JUST LIKE WE DID ON THE HEALTH CARE BILL. 1,690 TIMES THE DEPARTMENT OF H.H.S. IS GOING TO WRITE REGULATIONS ON THE HEALTH CARE IN THIS COUNTRY. THE SAME THING IS GOING TO HAPPEN IN THIS BILL. LIKE I SAY, I HOPE WE CAN FIX THE BILL, BECAUSE I THINK WE NEED TO MAKE MAJOR CHANGE. AND THERE ARE SOME GOOD THINGS IN THIS BILL. WE ARE IN DANGER OF LOSING WHAT CONFIDENCE IS LEFT OF THE AMERICAN PEOPLE IN OUR ACTIONS. AND WE OUGHT TO BE ASKING THE RIGHT QUESTIONS FOR THE RIGHT REASONS, THAT SHOULDN'T HAVE ANYTHING TO DO WITH POLITICS, SHOULDN'T HAVE ANYTHING TO DO WITH PARTISANSHIP, AND OUGHT TO HAVE EVERYTHING TO DO WITH WHAT IS THE BEST RIGHT SOLUTION FOR OUR COUNTRY IN THE LONG RUN, NOT THE SHORT RUN. MR. PRESIDENT, I YIELD THE FLOOR.

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  • 04:55:45 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM NORTH DAKOTA.

  • 04:55:47 PM

    MR. DORGAN

    MR. PRESIDENT, I'VE COME TO SPEAK ON BEHALF OF THE SANDERS AMENDMENT, IN…

    MR. PRESIDENT, I'VE COME TO SPEAK ON BEHALF OF THE SANDERS AMENDMENT, IN SUPPORT OF IT. I AM INTRIGUED BY MY COLLEAGUE'S PRESENTATION, SO I WILL RESPOND TO JUST A BIT OF IT. THERE ARE A COUPLE OF AREAS WHERE WE AGREE AND SOME WHERE I PROFOUNDLY DISAGREE. BUT LET ME START WITH THE AGREEMENT. WHEN MY COLLEAGUES SAYS IF YOU ARE TOO BIG TO FAIL, YOU'RE TOO BIG AND YOU OUGHT TO GET SMALLER, I FULLY AGREE WITH THAT, AND I HAVE AN AMENDMENT THAT WOULD SAY IF YOU'RE TOO BIG TO FAIL, JUDGE BY THE COUNSEL IN THIS BILL THAT YOU'RE TOO BIG TO FAIL, AT THAT POINT YOU BEGIN TO PARE THAT -- YOU REQUIRE THE BREAKING UP OR THE PARING BACK OF WHATEVER'S NECESSARY OF THAT INSTITUTION TO BRING IT BELOW THE LEVEL AT WHICH ITS FAILURE WOULD CAUSE A MORAL JEOPARDY OR AN UNACCEPTABLE RISK TO THIS COUNTRY'S ENTIRE ECONOMY. IF WE END THIS PROCESS AND TOO BIG TO FAIL STILL EXISTS -- THAT IS WE HAVE COMPANIES THAT ARE IN FACT TOO BIG TO FAIL, THEN WE WILL HAVE FAILED, IN MY JUDGMENT. TOO BIG TO FAIL MEANS YOU ARE TOO BIG. WE'VE BROKEN UP STANDARD OIL INTO 23 PIECES. IT TURNS OUT THAT 23 PIECES ARE MORE VALUABLE THAN THE WHOLE. AT&T WAS BROKEN UP. I'M NOT INTERESTED GOING TO BREAK UP COMPANIES FOR THE SAKE OF IT, BUT I AM SAYING THIS: WE KNOW WHAT'S HAPPENED. THIS CHART SHOWS WHAT HAS HAPPENED TO THE LARGEST FINANCIAL INSTITUTIONS IN THIS COUNTRY. IT SHOWS THAT WITH RESPECT TO ASSETS AND LIABILITIES, THE TOP SIX COMMERCIAL FINANCIAL INSTITUTIONS OF THIS COUNTRY HAVE GOTTEN BIGGER, BIGGER, BIGGER AND MUCH, MUCH, MUCH BIGGER. DOES THAT CAUSE JEOPARDY TO THIS COUNTRY? WELL, IF YOU'VE BEEN AWAKE THE LAST FEW YEARS TO WATCH $700 BILLION BE PLEDGED TO AVOID A CALAMITY, CALAMITOUS EVENT TO THIS ECONOMY, THEN YOU UNDERSTAND THAT THIS IS TOO BIG. AND SOMETHING HAS TO BE DONE ABOUT IT. CREATE EARLY WARNINGS? NO, I DON'T THINK SO. STOP SIGNS? HOW ABOUT DECIDING THAT IF YOU ARE TOO BIG, YOU'RE JUST TOO BIG, AND YOU HAVE TO PARE BACK THOSE PORTIONS OF YOUR INSTITUTION THAT MAKE YOU TOO BIG TO FAIL AND PROVIDE A MORAL HAZARD TO THIS COUNTRY AND AN UNACCEPTABLE RISK TO THE FUTURE OF THIS ECONOMY. HERE'S ANOTHER CHART THAT SHOWS ABOUT THE SAME THING. IT SHOWS THE GROWTH OF THESE INSTITUTIONS GOING BACK TO 1995. IT IS RELENTLESS, AGGRESSIVE GROWTH. AND IF WE END THIS WITHOUT HAVING ADDRESSED IT, WE WILL NOT HAVE BEEN -- WE WON'T BE ABLE TO TELL THE AMERICAN PEOPLE WE TOOK CARE OF TOO BIG TO FAIL. NOW, THE AREA -- AND SO I AGREE WITH THE SENATOR FROM OKLAHOMA ON THAT POINT. WHERE WE DISAGREE IS THE NOTION THAT THE PROBLEM HERE IS US. WELL, I TELL YOU WHAT. THE "US," QUOTE UNQUOTE, BEARS PLENTY OF RESPONSIBILITY. LET ME JUST TALK ABOUT THE "US." IT WASN'T THE US WHO DECIDED IN COUNTRYWIDE, WHICH WAS THE LARGEST SINGLE MORTGAGE COMPANY IN THIS COUNTRY, TO DECIDE TO WRITE LIAR'S LOANS, TO DECIDE TO SAY TO PEOPLE, HEY, YOU WANT TO GET SOME MONEY FROM US? WE'RE A BIG OLD COMPANY. WE'RE MAKING A LOT OF FEES. WE'RE PAYING A LOT OF MONEY TO OUR EXECUTIVES. AND WE WANT YOU TO COME TO US. IN FACT, I'VE GOT AN AD THAT THEY RAN, COUNTRYWIDE, THE BIGGEST MORTGAGE COMPANY IN THE COUNTRY. HERE'S THE AD THEY SAID TO AMERICA: DO YOU HAVE LESS THAN PERFECT CREDIT? DO YOU HAVE LATE MORTGAGE PAYMENTS? HAVE YOU BEEN DENIED BY OTHER LENDERS? HEY, COME TO US. WE'VE GOT MONEY FOR YOU. ARE YOU A BAD RISK? ARE YOU A BAD PERSON? YOU CAN'T PAY YOUR BILLS? COME TO US. NOW, IT WASN'T -- IT WASN'T THE CONGRESS THAT DID THAT, I WOULD SAY TO MY FRIEND. THIS IS COUNTRYWIDE MORTGAGE. AND, BY THE WAY, THE GUY THAT RAN THIS ORGANIZATION GOT OFF WITH $200 MILLION. AND SO, HE'S NOW UNDER CRIMINAL INVESTIGATION. BUT DON'T SUGGEST TO ME THAT SOMEHOW THAT WAS A RESPONSIBILITY OF SOMEBODY OTHER THAN THE GUY RUNNING THE COMPANY THAT PUTS UP ADS LIKE THIS. ZOOM CREDIT. IT SAYS "YOU'VE BEEN BANKRUPT, SLOW CREDIT? NO CREDIT? CAN'T PAY? WHO CARES." I MEAN, THAT'S WHAT WAS ADVERTISED TO THE AMERICAN PEOPLE. THAT WASN'T SOMEBODY IN THIS CHAMBER GOING OUT TO SAY, HOW ABOUT LETTING US GIVE YOU A LOAN IF YOU HAVE BAD CREDIT? WAS IT SOMEBODY IN THIS CHAMBER THAT DECIDED WE'RE GOING TO CREATE CREDIT DEFAULT SWAPS? THAT'S LIKE SAYING THE DEVIL MADE ME DO IT, ON THE OLD TV SHOEFPLT NO, IT WAS A -- OLD TV SHOW. IT WAS A GROUP OF PEOPLE WEARING SILK SHIRTS, MONOGRAMMED SLEEVES AND THEY CREATE ALL THESE INSTRUMENTS. CREDIT DEFAULT SWAPS. CREDIT DEFAULT SWAPS WASN'T ENOUGH. THEY HAD TO DO SYNTHETIC NAKED CREDIT DEFAULT SWAPS. IT WAS WAGERING, HAD NOTHING TO DO WITH INVESTING. IT WASN'T SOMEBODY IN THIS CHAMBER THAT SAID TO THEM PLEASE DO THIS. THE MOST UNBELIEVABLE GREED AND AVARICE I HAVE EVER SEEN IN THE HISTORY OF THIS COUNTRY. BY A L -- BY A LOT OF FOLKS. I'M NOT SAYING EVERYBODY DID IT. I'M SAYING ENOUGH DID IT TO IMPERIL THIS COUNTRY'S ECONOMY, TO REQUIRE EMERGENCY ACTION IN THIS COUNTRY TO, AS THE SECRETARY THEN SAID, SAVE THE AMERICAN ECONOMY. NOW, ALL THIS WAS GOING ON, EVERYBODY WAS HAVING A CARNIVAL, MAKING LOTS OF MONEY. WALL STREET IN 2008 HAD A NET LOSS OF $35 BILLION AND PAID BONUSES OF $17 BILLION. NOW, I WENT -- I GOT A MASTER'S DEGREE IN BUSINESS, I WENT TO BUSINESS SCHOOL. THERE'S NO PLACE THAT TEACHES THAT. GO LOSE A BUNCH OF MONEY AND THEN PAY HUGE BONUSES. THIS WAS A CARNIVAL OF GREED THAT WENT ON IN THIS COUNTRY AND STEERED THIS COUNTRY RIGHT INTO A DITCH. NOW, WHEN MY COLLEAGUE SAYS, WELL, THAT'S GOVERNMENT THAT DID THAT. I'M SORRY, THAT'S JUST FLAT-OUT WRONG. WHAT GOVERNMENT DID -- AND THEY DID IT FOR A NUMBER OF YEARS IN THE LAST DECADE -- GOVERNMENT HIRED A BUNCH, AND THE PREVIOUS ADMINISTRATION ESPECIALLY IS RESPONSIBLE FOR THIS, THEY HIRED A BUNCH OF REGULATORS WHO DIDN'T LIKE GOVERNMENT AND DIDN'T WANT TO REGULATE, AND ONE OF THEM, ONE OF THE KEY PEOPLE THAT CAME TO THIS TOWN IN A KEY POSITION OF REGULATORY RESPONSIBILITY SAID, HEY, THIS IS A NEW DAY, THIS IS A BUSINESS-FRIENDLY PLACE. UNDERSTAND THAT. WE'RE GOING TO BE WILLFULLY BLIND HERE FOR A NUMBER OF YEARS, SO DO WHAT YOU WANT. WE WON'T WATCH AND WE DON'T CARE. AND SO THE RESPONSIBILITY FOR REGULATORY AUTHORITY IS NOT IN THIS CHAMBER. AND I'M NOT -- I'M NOT SOMEBODY WHO COMES THEY'RE BLAME PREVIOUS ADMINISTRATIONS VERY OFTEN. BUT WHEN THE BUSH ADMINISTRATION CAME TO OFFICE, ABOUT THE SAME TIME THAT GRAMM-LEACH-BLILEY, BY THE WAY, WITH THE SUPPORT OF THE CLINTON ADMINISTRATION, REPEALED GLASS-STEAGALL AND SAID, YOU CAN CREATE BIG FINANCIAL HOLDING COMPANIES AS BIG AS YOU WANT AND YOU CAN -- YOU CAN MERGE INVESTMENT BANKS WITH COMMERCIAL BANKS AND SECURITIES SALES AND YOU CAN DO IT ALL. ONE-STOP FINANCIAL SHOPPING. IT WILL BE GREAT AND WE'LL CALL IT MODERN. AND ABOUT THE TIME THAT GOT PASSED, OVER MY OBJECTIONS -- I WAS ONE OF EIGHT SENATORS WHO VOTED "NO" AND I WAS OUT HERE ABOUT SIX, EIGHT TIMES OPPOSING IT -- ABOUT THE TIME THAT GOT PASSED, WE HAD A NEW ADMINISTRATION COME TO TOWN TO SAY, OH, BY THE WAY, WE'RE GOING TO PUT REGULATORS IN PLACE WHO HAVE NO INTEREST IN WHACHG WHAT DO YOU SO -- IN WATCHING WHAT TO DO SO DO WHAT YOU WANT TO DO. PUT OUT NAKED DEFAULT SWAPS. WHO CARES? PUT OUT TRILLIONS AND TROIL YONS AND TROIL YONS OF TRILLIONS OUT NORM AND WHO CARES? WE'LL HAVE A MEETING IN THE BASEMENT OF THE S.E.C. AND WE WILL, JUST LIKE THAT, WE'LL APPROVE YOU TO BE ABLE TO INCREASE YOUR LEVERAGE TO 30 TIMES YOUR CAPITAL. AND IT WILL HARDLY BE REPORTED BY ANYBODY BECAUSE WE'RE NOT WATCHING ANYTHING. BLIND REGULATORS. DEAD BLIND REGULATORS. UNBELIEVABLE. AND SO I -- YOU KNOW, DON'T BLAME THIS ON SOMEONE ELSE. WE CAN BLAME IT ON BAD LEGISLATION A DECADE AGO. THAT'S FAIR. THAT CAUSED SOME OF THIS. BUT THOSE OUT THERE THAT WERE MAKING BAD LOANS AND TAKING THEIR PAYCHECK TO THE BANK AND FILLING IT WITH MILLIONS OF DOLLARS, THEY WERE DOING THAT BECAUSE THEY WERE GREEDY AND NO ONE WAS WATCHING AND NO ONE WAS WILLING TO STOP THEM. AND THAT AVALANCHE OF GREED BUILT INTO A BUBBLE OF SPECULATION THAT REALLY INJURED THIS COUNTRY AND NEARLY RAN IT OFF A CLIFF. AND, BY THE WAY, AT THE SAME TIME ALL OF THIS WAS HAPPENING IN THE LAST 15 YEARS OR SO, THE FINANCIAL INSTITUTIONS DECIDED THEY'RE GOING TO SECURITIZE EVERYTHING. IT DOESN'T MATTER. YOU FIND SOME DEBT, WE GOT SOME PEOPLE THAT CAN ROLL IT INTO A SECURITY. AND ONCE THEY ROLL IT INTO A SECURITY, THEY CAN SELL IT THREE, FOUR TIMES, UP TO AN INVESTMENT BANK, TO A HEDGE FUND, YOU NAME IT, AND THEY CAN GET A RATINGS AGENCY, BY THE WAY, BECAUSE THE INVESTMENT BANKS PAY THE COSTS OF THE RATING AGENCIES THAT RATE THEIR SECURITIES. INTERESTING. PRETTY BIG CONFLICT OF INTEREST. THE FACT IS, THEY CAN ROLL THESE FORWARD AND NOBODY HAS ANY SKIN IN THE GAME. MY COLLEAGUE TALKS ABOUT HOW UNFAIR IT WOULD BE TO ASK SOMEBODY TO -- TO SAVE AT LEAST A PORTION OF A LOAN THEY'RE PROVIDING. WELL, YOU KNOW WHAT? THE ONLY WAY YOU HAVE PROPER UNDERWRITING OF LOANS ANYWHERE IN THE COUNTRY SITTING ACROSS THE TABLE FROM SOMEONE WHO WANTS TO GET A LOAN AND LOOKING IN THEIR EYES AND LOOKING AT THEIR CREDIT REPORTS AND DETERMINING ARE THEY ELIGIBLE FOR A LOAN, SHOULD WE DO THIS? THE ONLY WAY THAT YOU EVER ASSURE THAT THAT HAPPENS THE RIGHT WAY IS TO HAVE THAT KIND OF UNDERWRITING AND CALLED TO THAT IF YOU'RE GOING TO HAVE SOME CONTINUING RISK. BUT IF YOU'RE GOING TO GIVE A $750,000 THROWN SOMEBODY THAT MAKES $-- LOAN TO SOMEBODY THAT MAKES $17,000 A YEAR -- AND IT HAPPENED, BY THE WAY, A LIAR'S LOAN, NO-DOCUMENTATION LOAN WITH NO INTEREST PAID AND NO PRINCIPAL PAID BECAUSE YOU PUT IT ALL ON THE BACKSIDE. THE ONLY WAY YOU'RE GOING TO DO THAT IS IF YOU CAN SELL THAT IN A SECURITY TO SOMEBODY ELSE AND YOU HAVE NO FURTHER RISK. YOU GET YOUR MONEY FREE AND CLEAR, AND THAT'S WHAT WAS GOING ON AT EVERY SINGLE LEVEL. THE UN -- JUST THE MOST UNBELIEVABLE IRRESPONSIBLE LACK OF REGULATION PERHAPS IN THE HISTORY OF THIS COUNTRY. AND I JUST -- I WANT TO SAY GOVERNMENT HAS MADE PLENTY OF MISTAKES, BUT DON'T BLAME THIS CHAMBER OR DON'T BLAME PEOPLE WHO WERE ELECTED TO THE SENATE FOR THE BAD BEHAVIOR OF SOMEBODY THAT TAKES $200 MILLION AWAY FROM THE BIGGEST MORTGAGE FINANCE COMPANY IN THIS COUNTRY AND WHO IS SELLING LIAR'S LOANS AND ADVERTISING THAT IF YOU HAVE BAD CREDIT, NO CREDIT, SLOW CREDIT AND BANKRUPTCY, COME TO US AND WE'RE GOING TO GIVE YOU SOME MONEY. DON'T BLAME THAT ON SOMEBODY ELSE. PUT THAT BLAME WHERE IT RESTS. UNBELIEVABLE GREED AMONG PEOPLE WHO SHOULD HAVE KNOWN BETTER. AND AMONG PEOPLE WHO SHOULDN'T HAVE BEEN ABLE TO DO IT IN THE FIRST PLACE BECAUSE REGULATORS SHOULD HAVE BEEN ALL OVER THEIR NECK IN A MOMENT SAYING, YOU CAN'T DO IT. BUT THAT DIDN'T HAPPEN AND IT -- WHAT THIS DEMONSTRATES TO ME IS THE NEED FOR EFFECTIVE REGULATION. THE NEED FOR REGULATORS. THE FREE MARKET SYSTEM WORKS, BUT WHEN THERE ARE PEOPLE THAT TRY TO -- TRY TO SUBVERT IT, WHEN THERE ARE PEOPLE THAT COMMIT FOULS IN THE FREE MARKET SYSTEM, IT NEEDS A REFEREE WITH A WHISTLE AND A STRIPED SHIRT AND THAT'S WHAT WAS MISSING IN THE LAST DECADE. NOW, MR. PRESIDENT, ONE FINAL POINT. IT'S SORT OF -- PART OF THIS ARGUMENT IS SORT OF LIKE EXCUSING THE CRIMINAL BEHAVIOR BECAUSE THERE WAS NOT A COP ON THE BEAT. DON'T EXCUSE THE CRIMINAL BEHAVIOR. DON'T EXCUSE IT. WE NEED COPS ON THE BEAT. WE NEED LEGISLATION THAT WILL MAKE SURE WE CLOSE THE LOOPHOLES THAT EXISTED. WE NEED TO LEGISLATE SOBERLY AND THOUGHTFULLY HERE THAT GIVE THE AMERICAN PEOPLE SOME NOTION THAT THIS CANNOT HAPPEN AGAIN. AND AGAIN, BY THE WAY, I THINK THE WAY WE DO THAT IS TO MAKE CERTAIN THAT YOU CANNOT BE TOO BIG TO FAIL. BY ONE JUSTIFICATION SHOULD THE MAJOR FINANCIAL COMPANIES OF THIS COUNTRY CONTINUE THIS KIND OF CONCENTRATION AND ESCALATION OF SIZE IN A MANNER THAT JEOPARDIZES THIS COUNTRY SHOULD THEY FAIL? BY WHAT JUSTIFICATION SHOULD WE ALLOW THAT TO CONTINUE? THE ANSWER IS, IT SHOULD NOT, AND THERE ARE TWO AMENDMENTS TO ADDRESS IT THAT I'M AWARE OF. ONE IS BY SENATOR BROWN AND COUGH PLAN, WHICH A -- KAUFMAN, WHICH CREATES A NUMERICAL LIMIT WITH RESPECT TO SIZE AND SO ON. I SUPPORT THAT. I BELIEVE I'VE ADDED MY NAME AS A COSPONSOR. THE OTHER, WHICH I ACTUALLY PREFER BECAUSE IT HAS MY NAME, AND THAT IS JUST FLAT-OUTBREAK UP FIRMS THAT ARE TOO BIG TO FAIL TO A POINT WHERE THEY ARE NOT TOO BIG TO FAIL. A MUCH MORE DIRECT AND, IN MY JUDGMENT, THE MOST EFFECTIVE WAY TO DO THIS. NOW, I CAME TO THE FLOOR TO SPEAK AND I WILL SPEAK JUST SO EVER BRIEFLY ABOUT THE SANDERS AMENDMENT. I JUST GOT SIDETRACKED BY MY COLLEAGUE FROM OKLAHOMA, AS IS SO OFTEN THE CASE. MY COLLEAGUE FROM VERMONT HAS OFFERED A PIECE OF LEGISLATION THAT I THINK HAS GREAT MERIT, AND IT IS -- LET ME TELL YOU WHAT IT DOESN'T DO. IT DOES NOT, AS THOSE WHO FEAR THE AMENDMENT, INVOKE THE TENTACLES OF THE UNITED STATES CONGRESS IN THE CONSTRUCTION OF MONETARY POLICY. THAT AREA BELONGS TO THE FEDERAL RESERVE BOARD. NOW, THE FEDERAL RESERVE BOARD IS A CREATURE OF LEGISLATION. THE CONGRESS CREATED THE FEDERAL RESERVE BOARD. YOU GO BACK AND READ THE DEBATE, THE COUNTRY WAS ASSURED THAT THIS WAS NOT CREATING A STRONG CENTRAL BANK. THERE WERE JUST LEAD PIPE ASSURANCES SO THAT BUT, OF COURSE, THAT TURNED OUT NOT TO BE THE CASE. NONETHELESS, THE FEDERAL RESERVE BOARD CREATES MONETARY POLICY, AND THERE IS A THOUGHT -- AND I AGREE WITH THAT THOUGHT -- WE DON'T WANT MONETARY POLICY CREATED ON THE FLOOR OF THE UNITED STATES SENATE. WE DON'T WANT TO INTRUDE ON THE CREATION OR THE DEVELOPMENT OF MONETARY POLICY. WE DO FISCAL POLICY, THE TAXING AND SPENDING SIDE, WHICH IS CALLED FISCAL POLICY. THE MONETARY SIDE, THAT'S THE FEDERAL RESERVE BOARD'S TERRAIN. BUT THE FEDERAL RESERVE BOARD OUGHT NOT BE UNACCOUNTABLE TO ANYTHING OR TO ANYBODY, RATHER, FOR ANYTHING. THE FEDERAL RESERVE BOARD, IT SEEMS TO ME, DESERVES, NUMBER ONE, TO BE AUDITED PROPERLY, A GOVERNMENT ACCOUNTABILITY OFFICE AUDIT, WHICH THE SANDERS AMENDMENT WOULD REQUIRE. AND I KNOW THE FED IS HAVING AN APOPLECTIC SEIZURE ABOUT NOW THINKING MAYBE THIS AMENDMENT WILL PASS. BUT YOU KNOW WHAT? IT IS -- IT IS THE RIGHT THING TO DO TO SAY AT LEAST, AT LONG, LONG LAST, THERE SHOULD BE -- AT LAST, AT LONG ARE LONG LAST, THERE SHOULD BE AN AUDIT OF THE FEDERAL RESERVE BOARD. I'M NOT TALKING ABOUT AUDITING MONETARY POLICY. I'M TALKING ABOUT AUDITING WHAT IT DOES GENERALLY. AND IT'S NECESSARY, I SUPPORT THIS, I THINK IT'S THE RIGHT POLICY. NUMBER TWO, THIS LEGISLATION DOES WHAT I AND MANY OTHERS HAVE BEEN PUSHING THE FED FOR, FOR SOME WHILE. LAST JULY OF 2009, I HAD A LETTER THAT WAS SIGNED BY A GOOD MANY OF MY COLLEAGUES -- I THINK THERE WERE 10 OR 11 COLLEAGUES THAT SIGNED THE LETTER TO CHAIRMAN BERNANKE OF THE FEDERAL RESERVE BOARD SAYING YOU HAVE NOW USED YOUR EMERGENCY POWERS FOR THE FIRST TIME IN THE U.S. HISTORY TO OPEN YOUR LOAN WINDOW TO INVESTMENT BANKS. NEVER BEFORE IN THE HISTORY OF OUR COUNTRY. SERIOUS FINANCIAL PROBLEMS, YOU SAY. OPEN THE LOAN WINDOW AND COME AND GET SOME MONEY. SO WE WRITE AND WE SAY, OKAY, YOU DID THAT ON AN EMERGENCY BASIS, FIRST TIME IN THE HISTORY OF OUR COUNTRY. TELL US, WHAT WAS THE RESULT? WHO GOT THE MONEY? WHAT WERE THE TERMS? WHAT WERE THE CONDITIONS? THE AMERICAN PEOPLE DESERVE TO HAVE THAT INFORMATION. WE WROTE AGAIN ON MARCH 19 OF THIS YEAR. ON BOTH OCCASIONS, WE RECEIVED LETTERS FROM CHAIRMAN BERNANKE, POLITE, CERTAINLY, THOUGHTFUL BUT LETTERS THAT SAID, DO YOU KNOW WHAT? WE DON'T INTEND TO PROVIDE YOU INFORMATION OR THE AMERICAN PEOPLE INFORMATION ABOUT WHAT HAPPENED AT OUR LOAN WINDOW. WE DON'T INTEND TO TALK ABOUT LOANS THAT WE GAVE TO INVESTMENT BANKS FOR THE FIRST TIME IN HISTORY. WHAT I'M WONDERING IS -- AND THIS IS JUST IDLE CURIOSITY -- DID WE HAVE INVESTMENT BANKS SHOW UP AT THIS WINDOW AT THE FEDERAL RESERVE BOARD AND GET NEAR ZERO INTEREST RATE LOANS AND THEN INVEST THEM BACK INTO TREASURY BONDS? HOW MUCH MONEY DID THEY MAKE JOUST THAT TRANSACTION? I KNOW THAT MANY OF THESE ORGANIZATIONS, THE LARGEST INVESTMENT BANKS ARE NOW MAKING RECORD PROFITS, BUT IT'S NOT AS A RESULT OF LOANING MONEY TO BUSINESSES IN THIS COUNTRY THAT NEED THE LENDING. IT'S BY TRADING SECURITIES. ONCE AGAIN, RIGHT BACK IN THE SAME TRENCH. BUT THIS LEGISLATION THAT MY COLLEAGUE, SENATOR SANDERS, HAS OFFERED IS LEGISLATION THAT WILL PUT IN LAW A REQUIREMENT THAT THE FEDERAL RESERVE BOARD DISCLOSE THE ACTIVITIES IN A CERTAIN PERIOD OF TIME OF WHO RECEIVED THE LENDING FROM THE FEDERAL RESERVE BOARD, WHAT THE CONDITIONS AND THE AMOUNTS OF FUNDING WAS. I KNOW THE CHAIRMAN OF THE FED SAID WELL, THIS MIGHT -- THIS MIGHT MAKE IT VERY DIFFICULT, IT WILL UNDERMINE THIS AND THAT, UNDERMINE THESE PROGRAMS, PUBLICLY RELEASING THE NAMES. LOOK, TWO FEDERAL COURTS HAVE REQUIRED THE FEDERAL RESERVE BOARD TO DO THIS. TWO FEDERAL COURTS, THE DISTRICT COURT AND THE CIRCUIT COURT, HAVE SAID THE FEDERAL RESERVE BOARD DOES NOT HAVE THE AUTHORITY TO WITHHOLD THIS INFORMATION. AND THE FEDERAL RESERVE BOARD HAS NOW ONCE AGAIN SAID, DOESN'T MATTER, WE INTEND TO APPEAL AGAIN. THEY INTEND, APPARENTLY, JUST TO KEEP THIS TIED UP IN THE COURT SYSTEM AS LONG AS THEY CAN. THIS AMENDMENT IN THIS PIECE OF LEGISLATION WILL SAY TO THE FEDERAL RESERVE BOARD, YOU CAN'T DO THAT. THE LAW REQUIRES YOU TO DISCLOSE TO THE AMERICAN PEOPLE WHAT YOU HAVE DONE. SO I -- I'VE COME HERE TO SAY I THINK THIS IS A -- A GOOD BILL. I HAD INTRODUCED A SEPARATE AMENDMENT ON THE DISCLOSURE BY THE FED. SO IF WE CAN PASS THE -- THE SANDERS AMENDMENT, THAT WILL TAKE CARE OF MY AMENDMENT. IT'S -- SOME PEOPLE TALKED EARLIER ABOUT THERE'S SOME DUPLICATES HERE. MINE WILL BE TAKEN CARE OF IF WE PASS THE LARGER AMENDMENT OFFERED BY SENATOR SANDERS. I SUPPORT THE AMENDMENT. I KNOW THAT A GOOD MANY OF MY COLLEAGUES WILL AS WELL, AND I THINK AT LONG LAST -- IT'S BEEN A LONG, LONG TIME TO TRY TO GET AN AUDIT OF THE FEDERAL RESERVE BOARD OF THE NOT AN AUDIT OF MONETARY POLICY BUT AN AUDIT OF THE FEDERAL RESERVE BOARD F. WE DO THAT, THIS WILL HAVE BEEN -- IF WE DO THAT, THIS WILL HAVE BEEN A VERY SIGNIFICANT STEP FORWARD FOR THOSE OF US WHO BELIEVE THAT IS NECESSARY AND IMPORTANT FOR THE COUNTRY. MR. PRESIDENT, I YIELD THE FLOOR.

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  • 05:14:34 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM SOUTH CAROLINA.

  • 05:14:36 PM

    MR. DeMINT

    THANK YOU, MR. PRESIDENT. I WANT TO JOIN SENATOR DORGAN IN SUPPORTING THE…

    THANK YOU, MR. PRESIDENT. I WANT TO JOIN SENATOR DORGAN IN SUPPORTING THE AMENDMENT OF SENATOR SANDERS TO AUDIT THE FEDERAL RESERVE. LET ME BEGIN WITH A PERSPECTIVE OF WHAT HAPPENED WITH THE STOCK MARKET TODAY. CLEARLY SOMEONE GOT IT WRONG, CREATED A DOMINO EFFECT OF ONE THING FALLING AFTER ANOTHER, AND BEFORE WE KNOW IT, THE STOCK MARKET WAS DOWN A THOUSAND DOLLARS -- OR A THOUSAND POINTS. FORTUNATELY IT CLIMBED BACK UP BEFORE IT CLOSED TODAY. BUT IT JUST REMINDS US OF HOW VOLATILE, HOW VULNERABLE WE ARE IN A WORLD WHERE SO MANY SYSTEMS ARE INVOLVED WITH OUR FINANCIAL SYSTEM. IT'S GOOD THAT CONGRESS IS LOOKING AT FINANCIAL REFORM. I ONLY REGRET THAT WE'RE NOT DEALING WITH THE REAL CAUSES OF OUR FINANCIAL CRISIS. WALL STREET IS CLEARLY JITTERY. YOU COULD SEE THAT FROM THE STOCK MARKET TODAY. EVERYONE, I THINK, IS WAITING FOR THE DOMINOES TO FALL. WE SEE WHAT'S HAPPENING IN GREECE. ONE COUNTRY THAT CONTINUED TO SPEND MORE THAN IT WAS BRINGING IN UNTIL IT WENT BANKRUPT. AND NOW, UNFORTUNATELY, THE AMERICAN PEOPLE ARE ON THE HOOK FOR YET ANOTHER BAILOUT. NOT EVEN A BAILOUT IN THIS COUNTRY. BUT BILLIONS OF AMERICAN TACK DOLLARS ARE HEADED FOR DEGREES RIGHT NOW. AS OTHER EUROPEAN COUNTRIES HEAD TOWARDS BANKRUPTCY, LAST YEAR IN THIS CONGRESS, WE CREATED ANOTHER CREDIT LINE FOR THE INTERNATIONAL MONETARY FUND TO BE DRAWN DOWN. THE REAL IRONY HERE IS WE'RE BORROWING THE MONEY FROM COUNTRIES LIKE CHINA IN ORDER TO BAIL OUT OTHER COUNTRIES IN THE WORLD AT A TIME WHEN THE UNITED STATES IS CARRYING $13 TRILLION OF DEBT TODAY IN -- AND PROJECTIONS OF TENS OF TRILLIONS MORE DOLLARS IN THE FUTURE. IT'S CLEARLY UNSUSTAINABLE. THE STOCK MARKET AND INVESTORS HAVE A REASON TO BE JITTERY, AND AMERICANS HAVE A REASON TO BE ANGRY. WE SAW WHAT THE FAILURE OF LARGE GOVERNMENT ORGANIZATIONS LIKE FANNIE MAE DID AND HOW IT COST AMERICANS TRILLIONS OF DOLLARS. PEOPLE WHO HAD BEEN SAVING AND INVESTING ALL THEIR LIVES FOUND OUT ALMOST OVERNIGHT THAT THE SYSTEM THEY COUNTED ON AND THAT WE WERE SUPPOSED TO OVERSEE WAS NOT WHAT THEY THOUGHT IT WAS. AND SUDDENLY, WEALTH WAS GONE. BUT IF FANNIE MAE COULD DO THAT MUCH DAMAGE TO OUR COUNTRY, THAT'S SMALL IN COMPARISON WITH WHAT COULD HAPPEN IF THE FEDERAL RESERVE DOES IT WRONG. THE CONSTITUTION GIVES CONGRESS THE RESPONSIBILITY FOR OUR MONETARY POLICY. CONGRESS YEARS AGO DELEGATED THAT TO AN INDEPENDENT AGENCY WE CALL THE FEDERAL RESERVE, BUT WE'RE STILL RESPONSIBLE FOR MONETARY POLICY, AND IF SOMETHING IS DONE WRONG WITH THAT POLICY, ALL THAT WE HAVE WORKED FOR IN THIS COUNTRY, EVERYONE'S SAVINGS AND INVESTMENTS AND EVERYONE'S WEALTH, NOT ONLY IN THIS COUNTRY BUT BECAUSE WE'RE THE RESERVE CURRENCY FOR THE WORLD, THE WHOLE ECONOMIC SYSTEM OF THE WORLD IS RESTING ON TOP OF WHAT THE FEDERAL RESERVE DOES. AND THE FACT IS WHILE IT'S OUR RESPONSIBILITY TO OVERSEE MONETARY POLICY, WE DON'T KNOW WHAT THE FEDERAL RESERVE IS DOING. KEEP IN MIND WE WERE SURE ONLY MONTHS BEFORE FANNIE MAE AND FREDDIE MAC COLLAPSED -- AND BY THE WAY, WE BAILED THEM OUT, FREDDIE MAC, FOR ANOTHER $10 BILLION THIS WEEK. ONLY MONTHS BEFORE THEY COLLAPSED, WE WERE TOLD BY CHAIRMAN BERNANKE AT THE FEDERAL RESERVE AND MANY OTHER ECONOMIC EXPERTS THAT THERE WAS NO PROBLEM, BUT THERE WAS A PROBLEM. THE REAL PROBLEM WAS WE DIDN'T KNOW IT. THAT WAS A COMPANY CREATED BY THIS CONGRESS, AND IT WAS OUR RESPONSIBILITY TO OVERSEE IT. WE DID NOT CARRY OUT OUR RESPONSIBILITY. WE NEED AN INDEPENDENT FEDERAL RESERVE. WE DO NOT NEED POLITICAL MANIPULATION AND SECOND-GUESSING OF OUR MONETARY POLICY, BUT WE DON'T NEED A SECRET FEDERAL RESERVE. WE HAVE TO KNOW WHAT THEY ARE DOING IF WE'RE GOING TO BE RESPONSIBLE FOR WHAT THEY ARE DOING, AND IT'S NOT GOING TO BE ENOUGH IF THEY DO SOMETHING WRONG THAT WE POINT OUR FINGER AT THEM AND SAY IT WAS THEIR FAULT, BECAUSE IT IS OUR RESPONSIBILITY. FOR YEARS, THE FEDERAL RESERVE HAS BEEN AVOIDING ANY KIND OF AUDIT, ANY KIND OF ACCOUNTABILITY, ANY KIND OF TRANSPARENCY. EVERY TIME WE ASK FOR SOME KIND OF DISCLOSURE, THEY ARE SAYING WE'RE VIOLATING THEIR INDEPENDENCE. WE'RE NOT VIOLATING THEIR INDEPENDENCE WITH THIS BILL PROPOSED BY SENATOR SANDERS. ALL WE'RE DOING IS UNCLOAKING THE SECRECY THAT EXECUTIVES -- THAT EXISTS WITHIN THE FEDERAL RESERVE. IT'S IMPORTANT TO KNOW WHAT WE DO KNOW. WE KNOW THE FEDERAL RESERVE HAS BAILED OUT BEAR STEARNS, A.I.G., TAXPAYERS ARE STUCK HOLDING FAILED BETS ON EVERYTHING FROM TOXIC SUBPRIME MORTGAGES TO STRIP MALLS AND HOTELS. YOU KNOW, THANKS TO THE BAILOUTS, TAXPAYERS NOW OWN STAKES IN BANKRUPT HILTON HOTELS IN MALAYSIA, RUSSIA AND SINGAPORE. I'M NOT SURE THAT'S WHAT THE CONGRESS HAD IN MIND WHEN THEY STARTED THE FEDERAL RESERVE. THE FEDERAL RESERVE OWNED PARTS OF CIVIC OPERA BUILDINGS IN CHICAGO AT CROSSROADS MALL IN OKLAHOMA CITY. I THOUGHT IT WAS BAD WHEN THE FED WAS PRINTING MONEY TO KEEP UP THE GOVERNMENT SHOPPING SPREE, BUT I NEVER EXPECTED THEY WOULD BUY THE MALL TO GO SHOPPING IN. THEY SAY IT'S OVER WHEN THE FAT LADY SINGS. WELL, NOW THE FED HAS AN OPERA HOUSE READY FOR HER TO SING IN. AMERICANS DESERVE TO KNOW IF THE FEDERAL RESERVE IS BEING HONEST WITH THE CONGRESS AND WITH THE AMERICAN PEOPLE. WE KNOW WHAT THEY SAY BEHIND CLOSED DOORS DOESN'T SQUARE WITH WHAT THEY SAY PUBLICLY. RECENTLY, RELEASED TRANSCRIPTS SHOW THAT IN 2004, MEMBERS OF THE FEDERAL RESERVE PUBLICLY DOWN PLAYED SPECIFIC CONCERNS THEY DISCUSSED INTERNALLY ABOUT THE COMING HOUSING CRISIS. THEY KNEW WE HAD A PROBLEM. AT THAT TIME, CHAIRMAN ALAN GREENSPAN SAID IF THEY WERE TO ENCOURAGE THE PUBLIC TO TALK ABOUT IT, AND I QUOTE -- "IT'S POSSIBLE TO LOSE CONTROL OF A PROCESS THAT ONLY WE FULLY UNDERSTAND. "END QUOTE. MEANWHILE, THEY WERE TELLING THE CONGRESS AND THE PUBLIC EVERYTHING WAS FINE. AND BY DOING THAT, THEY COST MILLIONS OF AMERICANS A LIFETIME OF SAVINGS THAT THEY ARE STILL STRUGGLING. MILLIONS OF PEOPLE OUT OF WORK BECAUSE OF MISMANAGEMENT BY THE FEDERAL RESERVE, YET THEY SEEM TO THINK THAT THEY REQUIRE NO SUPERVISION, NO ACCOUNTABILITY, NO TRANSPARENCY. WE NEED TO END THAT WITH THIS AMENDMENT TODAY. WITHIN 30 DAYS OF THE PRESIDENT SIGNING THIS LEGISLATION, THIS AMENDMENT THAT HAS BEEN PROPOSED, THE FEDERAL RESERVE WILL HAVE TO TELL US WHO GOT ALL THIS BAILOUT MONEY, HOW MUCH THEY GOT AND THE REASONING FOR GETTING IT AND WHAT TERMS OF REPAYMENT THERE ARE. IT'S A PRETTY SIMPLE REQUEST. TRUE FINANCE REFORM MUST INCLUDE A FULL AUDIT OF THE FEDERAL RESERVE, AND A BREAKUP AND A WINDDOWN OF FREDDIE MAC AND FANNIE MAE. BUT THE PEOPLE WHO RUN THE GOVERNMENT AREN'T WILLING TO HOLD THE GOVERNMENT INSTITUTIONS RESPONSIBLE, AND THOSE WHO REALLY UNDERSTAND WHAT HAPPENED IN THIS FINANCIAL CRISIS KNOW THAT THE EASY MONEY POLICY OF THE FEDERAL RESERVE, FANNIE MAE AND FREDDIE MAC, BUYING SUBPRIME MORTGAGES AND SECURITIZING THEM, SELLING THEM ALL OVER THE WORLD WERE A LARGE PART OF THE MELTDOWN OF OUR FINANCIAL SYSTEM. YET THIS FINANCIAL REFORM BILL THAT WE'RE TALKING ABOUT DOES NOT EVEN ADDRESS THE REAL CAUSES OF OUR FINANCIAL MELTDOWN. BUT ONE THING WE CAN DO IF WE PASS THIS AMENDMENT IS MAKE SURE THERE IS MORE TRANSPARENCY, MORE ACCOUNT ABLGHT AT THE FEDERAL RESERVE. AS I HAVE ALREADY MENTIONED JUST YESTERDAY, FREDDIE MAC POSTED AN $8 BILLION LOSS. IT'S NOW FULLY OWNED BY THE FEDERAL GOVERNMENT. SO THE FEDERAL GOVERNMENT IS CLEARLY MISMANAGING FREDDIE MAC. AND THEY ASKED FOR ANOTHER ANOTHER $10 BILLION BAILOUT FROM THE TAXPAYERS. BUT THIS TIME THAT DOESN'T HAVE TO GO THROUGH CONGRESS. PRESIDENT OBAMA HAS TAKEN THE CAPS OFF ANYTHING THAT CAN GO TO THESE BANKRUPT COMPANIES, SO JUST BILLIONS OF DOLLARS ARE GOING TO FLOW FROM TAXPAYERS DIRECTLY TO THESE GOVERNMENT-OWNED ENTITIES. FREDDIE MAC AND FANNIE MAE HAVE TOGETHER LOST AT LEAST LEAST $126.9 BILLION SO FAR. IT'S PRETTY AMAZING IN A TIME WHEN THIS COUNTRY IS JUST OVERCOME WITH DEBT. THERE IS NO END IN SIGHT AND THERE IS NO CAP ON HOW MUCH TAXPAYERS COULD BAIL THEM OUT, YET THEY ARE NOT EVEN MENTIONED IN THIS FINANCIAL REFORM BILL. WE HAVE HEARD ABOUT GREED ON WALL STREET, BUT WE HAVEN'T EVEN ADDRESSED THE GREED WITHIN THE GOVERNMENT AND WITHIN THE GOVERNMENT AGENCIES. THE DEMOCRAT HOUSE FINANCIAL SERVICES CHAIRMAN BARNEY FRANK DOESN'T THINK THAT THESE GOVERNMENT-RUN INSTITUTIONS ARE GOOD CANDIDATES FOR REFORM. HE WROTE A MEMO TO THE WHITE HOUSE YESTERDAY SAYING THEY WERE BEING MANAGED RESPONSIBLY AND AREN'T DOING ANY FURTHER ECONOMIC DAMAGE. FORTUNATELY, SENATOR McCAIN HAS AN AMENDMENT TO ADDRESS THIS, AND I HOPE IT PASSES, BUT IF THERE IS ONE PLACE THAT THE BLAME CAN BE PLACED FOR THIS FINANCIAL MELTDOWN, IT COMES BACK TO FANNIE MAE AND FREDDIE MAC. WALL STREET CERTAINLY DESERVES A LOT OF THE BLAME FOR THE FINANCIAL CRISIS BECAUSE THEY TOOK ADVANTAGE OF A LOT OF THE MISMANAGEMENT IN GOVERNMENT TO THEIR OWN BENEFIT. BUT THE FEDERAL RESERVE, FREDDIE MAC AND FANNIE MAE ALSO DESERVE A LOT OF THE BLAME, AND THEY SHOULD BE ADDRESSED AS WELL. THE SANDERS AMENDMENT AT LEAST BEGINS THE PROCESS IN LETTING US KNOW WHAT THE FEDERAL RESERVE IS DOING. THE FED AMENDMENT HAS MORE THAN 300 COSPONSORS IN THE HOUSE AND 32 IN THE SENATE. IT'S SUPPORTED BY A BROAD SPECTRUM OF POLITICAL GROUPS FROM FREEDOM WORKS ALL THE WAY TO VERY LIBERAL GROUPS. WITHIN HERE, IF AMERICA WANTS BIPARTISAN ACTIVITY, IT COULD NOT BE MORE BIPARTISAN THAN BERNIE SANDERS AND JIM DeMINT. SO I ENCOURAGE MY COLLEAGUES TO SUPPORT THIS BILL. LET'S REFORM NOT ONLY THE FINANCIAL SYSTEM BUT OUR OWN HOUSE, AND THAT INCLUDES THE FEDERAL RESERVE. THANK YOU, MR. PRESIDENT. I YIELD BACK.

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  • 05:26:12 PM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM VIRGINIA.

  • 05:26:15 PM

    MR. WARNER

    PRESIDENT, I RISE TODAY AND JUST SPEAK VERY BRIEFLY FOLLOWING ON MY…

    PRESIDENT, I RISE TODAY AND JUST SPEAK VERY BRIEFLY FOLLOWING ON MY COLLEAGUE'S COMMENTS FROM SOUTH CAROLINA. SO MUCH ABOUT THE AMENDMENT PENDING THAT I KNOW HAS REACHED BROAD BIPARTISAN SUPPORT, BUT I ALSO WANT TO COMMENT ON WHAT HAPPENED IN THE MARKET TODAY. THE STOCK MARKET WAS DOWN ABOUT 347 POINTS, BUT WHAT WAS MORE TELLING WAS THE STOCK MARKET AT ONE POINT TODAY APPROACHED A LOSS OF A THOUSAND POINTS, WHICH WOULD HAVE, IF IT HAD HELD, WOULD HAVE BEEN THE LARGEST SINGLE DAY LOSS IN MODERN HISTORY. NOW, THERE WERE A NUMBER OF CAUSES. MY COLLEAGUE MESSENGERED SOME. CLEAR CONCERNS ABOUT THE CRISIS IN GREECE, BUT WHAT IT APPEARS TO BE IN TERMS OF REAL-TIME REPORTING GOING ON RIGHT NOW IS THAT PART OF THIS PRECIPITOUS DROP TOOK PLACE BECAUSE IT APPEARS THAT THERE WAS A TECHNOLOGY GLITCH ON AN ORDER PUT IN THAT HAD NO BACK GUARD OR SAFEGUARDS TO STOP IT. NOW, I KNOW THIS IS -- I'M GOING TO QUICKLY GO INTO AN AREA THAT IS ACTUALLY THE EXPERTISE OF THE PRESIDING OFFICER. HE MAY WANT TO TAKE A MOMENT HERE. I KNOW SENATOR McCAIN'S TIME IS UP OR WILL BE UP IN A MOMENT, BUT I HAVE HEARD SITTING IN THAT CHAIR MY FRIEND, THE SENATOR FROM DELAWARE, COME TO THIS FLOOR TIME AND AGAIN TO TALK ABOUT THE CHALLENGES THAT HAVE BEEN CREATED IN THE MARKETPLACE WITH INCREASED USE OF HIGH-SPEED TRADING, FLASH TRADING, CO-LOCATION, SPONSORED ACCESS. A WHOLE SERIES OF TECHNICAL TERMS, TERMS THAT WE MAY HAVE SEEN THE FIRST INKLING TODAY OF WHAT HAPPENS WHEN THESE TOOLS OF TECHNOLOGY DON'T WORK THE WAY THEY ARE SUPPOSED TO. AND I WOULD LIKE TO ASK MY FRIEND, THE SENATOR FROM DELAWARE, WHO HAS SPENT TIME ON THIS ISSUE MUCH MORE THAN I, BUT I THINK TODAY WE SAW AND I HAVE BECOME A BELIEVER AND I KNOW THE S.E.C. HAS STARTED TO MOVE FORWARD ON THE FLASH TRADING ISSUE, BUT THERE ARE A SERIES OF OTHER ACTIVITIES THAT AS WE GO THROUGH THIS FINANCIAL REFORM BILL, WE AT LEAST NEED TO HAVE MORE FACTS. I, FOR ONE, BELIEVE THE S.E.C. NEEDS TO HAVE THE RESOURCES TO KEEP UP WITH THE MARKETPLACE, AND I THINK WE SAW IN LIVING, BREATHING, REAL-TIME EXAMPLE TODAY THE POTENTIAL CATASTROPHE THAT TAKES PLACE IF WE DON'T HAVE AN ABILITY TO MAKE SURE WE ADEQUATELY USE THIS TECHNOLOGY BUT WE HAVE SAFEGUARDS AND REALLY REALIZE HOW SOME OF THESE FIRMS ARE USING THIS TECHNOLOGY TO GET AN ADVANTAGE OVER THE EVERYDAY MAIN STREET INVESTOR.

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  • 05:29:00 PM

    MR. KAUFMAN

    YOU. THE SENATOR FROM VIRGINIA, RIGHT FROM THE BEGINNING YOU HAVE SAID --…

    YOU. THE SENATOR FROM VIRGINIA, RIGHT FROM THE BEGINNING YOU HAVE SAID -- AND BECAUSE OF YOUR GREAT KNOWLEDGE ON WALL STREET AND FINANCE, IT CAME AS A GREAT SOURCE OF ENCOURAGEMENT TO ME. I HAVE BEEN ON THIS FLOOR AND SPOKEN REPEATEDLY, AND THIS IS NOT A SURPRISE. NOW, WHETHER THIS ACTUALLY TURNED OUT TO BE THE WORST CASE OF WHAT WE'RE TALKING ABOUT, WE DON'T KNOW. BUT WHAT HAPPENED OVER THE YEARS, WE WENT FROM A MARKET THAT WAS BASICALLY A FLOOR-BASED MARKET TO A MARKET THAT WAS DIGITALIZATION AND DECIMALIZATION, WHERE WE BEGAN TO HAVE TENTHS USING DECIMALS AS OPPOSED TO EIGHTHS. AND WHAT HAPPENED IS THAT MARKETS, PEOPLE -- COMPUTER FIRMS. IF YOU WANT TO READ A GREAT STORY, A BOOK BY STEVEN JACKSON RELAYS OUT. WHAT HAPPENED IS PEOPLE CAME INTO THE MARKET AND THEY BEGAN TO DEVELOP THESE HIGH-SPEED COMPUTERS. SO HUMAN BEINGS WERE NO LONGER DOING THE TRADING, THE COMPUTERS WERE. THEY DEVELOPED THESE ALGORITHMS. THE WHOLE THING IS RUN AUTOMATICALLY. IT GREW AND GREW. NOW SOMETHING LIKE -- THEY WENT FROM 30% TO 70% OF ALL THE TRADES IN OUR MARKETS ARE IN THESE HIGH-FREQUENCY TRADING THAT USES THESE HIGH-SPEED COMPUTERS. THERE IS NO WAY TO KNOW WHAT'S GOING ON. THEY TRADE 2,000 TO 3,000 SHARES IN A SECOND. NO ONE KNOWS WHAT'S HAPPENING IN THE EXCHANGES WHEN THE TRADE SOMETHING GOING ON. NO ONE KNOWS. THE SECURITIES AND EXCHANGE COMMISSION HAS SAID, AFTER REPEATED REQUESTS, THAT WE'RE GOING TO LOOK AT MARKET STRUCTURE. THIS IS MONTHS AGO. THEY SAY, WE'RE GOING TO LOOK AT THIS. NOW THEY'RE HAVING A GROUP LOOK AT IT. RIGHT NOW THERE'S NO WAY KNOW WHAT IS HAPPENING IN THE MARKETPLACE. ALL WE HAVE BEEN REQUESTING FROM THE SECURITIES AND EXCHANGE COMMISSION IS THEY TAKE A LOOK AT WHAT'S HAPPENING. BECAUSE REMEMBER, YOU HAVE 2,000 TO 3,000 TRADES IN A SECOND. THE ONLY RECORDS ARE KEPT IN THE ACTUAL TRADES. BUT 90%, JUST TO LET YOU KNOW HOW COMPLICATED IT IS 90% OF THE TRADES ARE CANCELED. WHY ARE THEY DOING THAT? THERE ARE A LOST ALLEGATIONS. BUT RIGHT NOW WE HAVE IN GIGANTIC BUSINESS. 70% OF THE TRADING AND WE KNOW WHAT'S NOT GOING ON. WHAT CAN HAPPEN IF WE ALLOW OUR BANKS TO MINUTE WELL, OUR INVESTMENT BANKS AND DON'T PUT SOME CAP ON IT? INVESTMENT BANKS ARE INTO RISKY THINGS AND WHERE MOST OF THESE THINGS ARE TAKING PLACE. IF YOU GO BACK AND LOOK AT DERIVATIVES, YOU HAD UNDER DERIVATIVES IS YOU HAD A WHOLE LOT OF MONEY. DERIVATIVES IS GIGANTIC. THIS IS NOW GIGANTIC. YOU HAD A LOT OF CHANGE. WE WENT FROM VERY FEW DERIVATIVES TO MASSIVE NUMBERS OF THEM. THIS WE WE NEED WENT FROM 30% TO 70% BE HIGH-FREQUENCY TRADING. WE HAVE NO TRANSPARENCY LIKE WE HAVEHAVE WITH DERIVATIVES. WE HAVE NO REGULATION BECAUSE YOU DON'T KNOW WHAT THE TRADES ARE. AND WHAT HAPPENED? WE HAD THIS GIGANTIC MELTDOWN. SO I'M JUST SAYING, I TOTALLY AGREE WITH THE SENATOR FROM VIRGINIA. WE HAVE A VERY DANGEROUS SITUATION.

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  • 05:32:07 PM

    MR. WARNER

    AND I WILL WRAP UP VERY QUICKLY HERE. WE SAW TODAY, FOR EXAMPLE, IN MAST A…

    AND I WILL WRAP UP VERY QUICKLY HERE. WE SAW TODAY, FOR EXAMPLE, IN MAST A MOMENT OR TWO PROCTER AND GAMBLE, ONE OF AMERICA'S PREMIER COMPANIES, FALL FROM $60 TO $39. SO ANOTHER COMPANY FALL FROM AROUND $0 TO A PENNY STOCK -- FROM AROUND $30 TO A PENNY STOFNLGT THIS WAS A RESULTSTOCK. THIS WAS A RESULT OF SOME OF THE LACK OF OVERSIGHT. THERE WOULD BE NOBODY IN THIS CHAMBER THAT IS MORPH AN VOASKT TECHNOLOGY AND THE POWERFUL TOOL THAT TECHNOLOGY CAN BE. BUT WE'RE SEEING, AND I THINK THE SENATOR FROM DELAWARE HAS BEEN AN EARLY LEADER ON THIS. AND I'VE LISTENED TO HIS SPEECHES FOR MONTHS. AND EVERYTHING IN MY GUT SAY, HE IS ONTO SOMETHING HERE. AND I'VE ASKED THE CHAIRMAN OF THE BANKING COMPLETE TO MAKE SURE THAT AS WE -- AS THIS PIECE OF LEGISLATION PROCEEDS, THAT WE MAKE SURE THAT, WHETHER IT IS A STUDY, WHETHER IT IS AN APPROPRIATE REQUEST OF THE S.E.C. THAT THIS HIGH-SPEED -- HIGH-FREQUENCY TRADING, COLOCATIONS, SPONSORED ACCESS, ALL OF THESE THEORIES AND TOOLS THAT SEEM TO GIVE THE BIG GUYS A SLIGHTLY BIGGER ADVANTAGE OVER THE EVERYDAY INVESTOR, BE APPROPRIATE SUBJECT OF SOME ADDITIONAL STUDY. WE MAY DISAGREE ABOUT HOW WE GOT INTO THE LAST CRISIS, BUT I BELIEVE THE SENATOR FROM DELAWARE IS POTENTIALLY ON TO WHAT COULD BE THE NEXT CRISIS. AND I THINK WE PERHAPS SAW A LITTLE WINDOW INTO THAT POSSIBILITY TODAY WHEN THE STOCK MARKET GOT CLOSE FOR MOMENTS IN TIME, WHAT APPEARED TO BE BASED ON TECHNOLOGY ERRORS, HIGH-SPEED TRADING, GOT VERY CLOSE TO BEING PERHAPS THE SINGLE-BIGGEST LOSS IN MODERN AMERICAN HISTORY, 1,000-POINT LOSS. A MOMENT IN TIME THIS AFTERNOON. SO I WILL A YIELD BACK TO MY FRIEND, THE SENATOR FROM DELAWARE, UNLESS THE SENATOR FROM ARIZONA WANTS TO TALK ON HIS ISSUE AS WELL. I THINK THERE WAS A WARNING SIGN SHOT ACROSS THE BOW TODAY. AS WE DEAL WITH FINANCIAL REREGULATION, IF WE DON'T MAKE SURE THIS IS PART OF THE MIX, I THINK WE'RE NOT ACTING APPROPRIATELY.

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  • 05:34:09 PM

    MR. KAUFMAN

    YIELD -- I THINK THIS IS A CASE THAT WE HAVE TO LOOK INTO THIS, SEE WHAT'S…

    YIELD -- I THINK THIS IS A CASE THAT WE HAVE TO LOOK INTO THIS, SEE WHAT'S GOING ON AND FIND OUT WHAT'S GOING ON I YIELD TO THE SENATOR FROM ARIZONA.

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  • 05:34:22 PM

    MR. McCAIN

    I WANT TO DISCUSS AMENDMENT 3839. THIS AMENDMENT IS DESIGNED TO END THE…

    I WANT TO DISCUSS AMENDMENT 3839. THIS AMENDMENT IS DESIGNED TO END THE TAXPAYER-BACKED CONSERVATORSHIP OF FANNIE MAE AND FREDDIE MAC BY PUTTING IN PLACE AN ORDERLY TRANSITION PERIOD AND EVENTUALLY REQUIRING THEM TO OPERATE WITHOUT GOVERNMENT SUBSIDIES ON A LEVEL PLAYING FIELD WITH THEIR PRIVATE-SECTOR COMPETITORS. THE EVENTS OF THE LAST TWO YEARS HAVE MADE IT CLEAR THAT NEVER AGAIN CAN WE ALLOW THE TAXPAYER TO BE RESPONSIBLE FOR POORLY MANAGED FINANCIAL ENTITIES WHO GAMBLED AWAY BILLIONS OF DOLLARS. FANNIE MAE AND FREDDIE MAC ARE SYNONYMOUS WITH MISMANAGEMENT AND WASTE AND HAVE BECOME THE FACE OF TOO BIG TO FAIL. THE TIME HAS COME TO END FANNIE MAE AND FREDDIE MAC'S TAXPAYER-BACKED FREE RIDE AND REQUIRE THEM TO OPERATE ON A LEVEL PLAYING FIELD. I'D LIKE TO MENTION, AN A.P. STORY ENTITLED "FREDDIE MAC ASKED FOR $10.6 BILLION MORE IN FEDERAL AID AFTER POSTING $8 BILLION LOSS IN FIRST QUARTER. FREDDIE MAC IS ASKING FOR $10.6 BILLION IN ADDITION FEDERAL AID AFTER POSTING A BIG LOSS IN THE FIRST THREE MONTHS OF THE YEAR. IT'S ANOTHER SIGN THAT THE TAXPAYER BILL FOR STABILIZING THE HOUSING MARKET WILL KEEP MOUNTING. McLEAN-BASED VIRGINIA MORTGAGE COMPANY HAS BEEN FCTIVELY OWNED BY THE GOVERNMENT AFTER NEARLY COLLAPSING IN SEPTEMBER OF 2008. THE NEW REQUEST WILL BRING THE TOTAL TAB FOR RESCUING FREDDIE MAC TO $61.3 BILLION. FREDDIE MAC SAYS IT LOST $8 BILLION OR $2.45 A SHARE IN THE JANUARY-MARCH PERIOD. THAT TAKES INTO ACCOUNT $1.3 BILLION IN DIVIDENDS PAID TO THE TREASURY DEPARTMENT AND IT COMPARES WITH A LOSS OF $10.4 BILLION IN THE YEAR-AGO PERIOD." SO THE BEAT GOES ON. AND THE DRAINAGE GOES ON. AND HERE WE HAVE MONEY YET -- IN THIS CHART, THE MONEY YET TO BE PAID BY INSTITUTIONS -- TO BE REPAID BY INSTITUTIONS THAT RECEIVED $10 BILLION OR MORE IN TAXPAYER BAILOUTS. OBVIOUSLY, THESE ORGANIZATIONS HAVE PAID BACK. GMAC STILL HAS $16 BILLION. THEY OWE THE TAXPAYERS. CITIGROUP, $25 BILLION. G.M., DESPITE THEIR P.R. STUNT THE OTHER DAY WHERE THEY PAID BACK WITH TARP MONEY -- THEY PAID THE TAXPAYERS WITH TAXPAYERS' MONEY, $43.7 BILLION. A.I.G., $69.8 BILLION. AND OF COURSE FANNIE AND FREDDIE, $125-PLUS BILLION. I'D LIKE TO BEGIN TODAY BY CALLING MY COLLEAGUES' ATTENTION TO AN EDITORIAL IN THIS THIS MORNING'S "WALL STREET JOURNAL" WHICH STATES, "FAN AND FRED OWNED OR GUARANTEED $5 TRILLION IN MORTGAGES -- IN MORTGAGE-BACKED SECURITIES WHEN THEY COLLAPSED IN SEPTEMBER OF 2008. REFORMING THE FINANCIAL SYSTEM WITHOUT FIXINGEN IF KNEE AND FREDDIE IS LIKE DECLARING A WAR ON TERROR AN IGNORING AL QAEDA." I WANT TO REPEAT THAT SENTENCE FOR THE BENEFIT OF MY COLLEAGUES FROM "THE WALL STREET JOURNAL" THIS MORNING. "REFORMING THE FINANCIAL SYSTEM WITHOUT FIXING FANNIE AND FREDDIE IS LIKE DECLARING WAR ON TERROR AND IGNORING AL QAEDA. UNREFORMED, THEY'RE SURE TO KILL TAXPAYERS AGAIN. ONLY YESTERDAY, FREDDIE SAID IT LOST $8 BILLION IN THE FIRST QUARTER, REQUESTED ANOTHER $10.6 BILLION FROM UNCLE SAM, AND WARNED THAT IT WOULD NEED MORE IN THE FUTURE. THIS COMES ON TOP OF THE $126.9 BILLION THAT FAN AND FRED HAD ALREADY LOST THROUGH THE END OF 2509. THE YOU DON'T YOW ARE BY FAR THE BIGGEST LOSERS OF THE ENTIRE FINANCIAL PANIC. BIGGER THAN A.I. G.I., CITIGROUP AND THE REST. WHEN THE 2008 MELTDOWN THROUGH 2020, THE TOXIC TWINS WILL COST TAXPAYERS CLOSE TO $380 BILLION. THE NUMBERS --" THE NUMBERS, I STEY SAY, ARE STAGGERING. STAGGERING. ACCORDING TO THE CONGRESSIONAL BUDGET OFFICE, THIS IS A CAUTIOUS ESTIMATE. "THE OBAMA ADMINISTRATION WON'T EVEN PUT THE COMPANIES ON BUDGET FOR FEAR OF THE DEFICIT IMPACT, BUT IT REALIZES THE PROBLEM BECAUSE LAST CHRISTMAS EVE, STRANGELY ENOUGH ON CHRISTMAS EVE, IT RAISED THE $400 BILLION CAP ON THEIR POTENTIAL TAXPAYER LOSSES TO INFINITY. MOREOVER, THESE TAXPAYER LOSSES UNDERSTATE THE FINANCIAL DESTRUCTION WROUGHT BY FAN AND FRED. BY CONCEALING HOW MUCH THEY WERE GAMBLING ON RISKY SUBPRIME AND ALTER NATIONAL-A MORTGAGES, THE COMPANY SAID BOGUS SIGNALS ON THE SIZE OF THESE MARKETS AND DISTORTED DECISION MAKING THROUGHOUT THE SYSTEM. THEIR IMPLICIT GUARANTEE ALSO LET THEM SELL MORTGAGE-BACKED SECURITIES AROUND THE WORLD ATTRACTING CAPITAL TO U.S. HOUSING AND, THUS, TURBO CHARGING THE MANIA." SPECIFICALLY, THIS AMENDMENT DOES SEVERAL THINGS. IT PROVIDES FOR A FINITE END TO THE CURRENT CONSERVATIVE SCSH CONSERVATORSHIP PERIOD FOR BOTH GOVERNMENT-SPONSORED ENTERPRISES, G. SE'S, AT TWO YEARS FROM THE DATE OF ENACTMENT. THE FEDERAL HOUSING FINANCE AGENCY HAS AN OPTION TO EXTEND CONSERVATORSHIP FOR SIX MONTHS IF THE FHFA DIRECTOR DETERMINES AND NOTIFIES CONGRESS THAT ADVERSE MARKET CONDITIONS EXIST. IF AT THE END OF CONSERVATORSHIP A G.S.E. IS NOT FINANCIALLY VIABLE, THE FHFA MUST PLACE THAT G.S.E. IN RECEIVERSHIP. IF THE G.S.E. IS FINANCIALLY VIABLE, THEN IT WOULD BE ALLOWED TO REENTER THE MARKET UNDER NEW OPERATING RESTRICTIONS. PROVIDES FOR CHANGES TO EXISTING OPERATING STRUCTURE: IT CALLS FOR THE REPEAL OF THE AFFORDABLE HOUSING GOAL MANDATE FOR THE G.S.E.'S. IT CALLS FOR NEW LIMITS FOR MORTGAGE ASSETS HELD ON ITS BOOKS OF NO MORE THAN 5E9D% OF MORTGAGE ASSETS OWNED ON DECEMBER 31 OF THE PRIOR YEAR. REDUCED AN ADDITIONAL 25% BY THE END OF YEAR ONE. REDUCED AN ADDITIONAL 25% BY THE UNDERSTAND OF YEAR TWO, AND REDUCED TO $250 BY THE END OF YEAR THREE. IT STRENGTHENS CAPITAL STANDARDS AND ALLOWS THEM TO BE INCREASED BY THE FHFA AS NECESSARY. CALLS FOR THE REPEAL OF THE TEMPORARY INCREASES IN CONFORMING LOAN LIMIT AND HIGH-COST AREA INCREASES AND RETURN TO THE 417,000 CONFIRMING LOAN LIMIT FOR THE FIRST YEAR, SUBJECT TO ANNUAL ADJUSTMENTS BY FHFA. PROVIDES FOR A PROHIBITION ON THE PURCHASE OF MORTGAGES EXCEEDING THE MEDIAN HOME PRICE FOR THAT EAMPLET IT CALLS FOR A MINIMUM DOWN PAYMENT REQUIREMENTS OF AT LEAST 5% FOR ALL NEW LOANS PURCHASED BY THE G.S.E., INCREASING TO 7.5% IN THE SECOND YEAR AND 10% IN THE THIRD YEAR. IT REPEALS THE G.S.E.'S EXEMPTION FROM HAVING TO PAY STATE AND LOCAL TAXES. I WONDER HOW MANY OF MY COLLEAGUES AND FELLOW CITIZENS KNEW THATTEN IF KNEE AND FREDDIE -- THAT FANNIE AND FREDDIE DID NOT HAVE TO PAY STATE AND LOCAL TAXES? A REPEAL OF THE EXEMPTION ALLOWING G.S.E. SECURITIES TO AVOID FULL S.E.C. REGISTRATION. IN OTHER WORDS, GIVEN THEIR ENORMOUS CLOUT HERE IN THE CONGRESS, FANNIE AND FREDDIE WERE ABLE TO HAVE AN EXEMPTION FROM THEIR SECURITIES FALL UNDER FULL S.E.C. REGISTRATION. IT CALLS FOR AN ASSESSMENT OF FEE ON G.S.E. T.S.O. RECOUP FULL BENEFIT OF THE BENEFIT PROVIDED BY THE FEDERAL GOVERNMENT. THE G.A.O. WILL CONDUCT A STUDY TO DETERMINE CURRENT VALUE OF GOVERNMENT GUARANTEE. IT ESTABLISHES A THREE-YEAR PERIOD AFTER THE END OF CONSERVATORSHIP FOR G.S.E.'S TO OPERATE UNDER NEW OPERATING RESTRICTIONS UNTIL THEIR GOVERNMENT CHARTER EXPIRES. UPON CHARTER EXPIRATION, IT PROVIDES FOR A TEN-YEAR PERIOD THROUGH WHICH THE CREATION OF A SEPARATE HOLDING CORPORATION AND AA DISSOLUTION IS HELD. IT ESTABLISHES A SENATE-CONFIRMED SPECIAL INSPECTOR GENERAL WITHIN THE GOVERNMENT ACCOUNTABILITY OFFICE WITH RESPONSIBILITY FOR INVESTIGATING AND REPORTING TO CONGRESS ON DECISIONS MADE WITH RESPECT TO THE CONSERVATORSHIPS OF FANNIE MAE AND FREDDIE MAFNLGT THE S.I.G. WOULD PROVIDE QUARTERLY REPORTS TO CONGRESS. WHILE G.S.E.'S REMAIN IN CONSERVATORSHIP, IT REESTABLISHES THE FEDERAL FUNDING LIMIT OF $200 BILLION PER INSTITUTION FOR THE G.S.E.'S AND REQUIRES THE G.S.E.'S TO REDUCE THEIR PORTFOLIO HOLDINGS BY 10% OF THE PRIOR YEAR'S HOLDINGS. IT ALSO ESTABLISHES AN APPROVAL PROCESS FOR ANY FURTHER AGREEMENTS THAT PUTS TAXPAYERS AT RISK. IT PLACES PLACES FANNIE MAE AND FREDDIE MAC AS PART OF THE FEDERAL BUDGET. AS LONG AS EITHER INSTITUTION IS UNDER CONSERVATORSHIP OR RECEIVERSHIP. NOW, AGAIN, MY COLLEAGUES MIGHT BE INTERESTED THAT FANNIE MAE AND FREDDIE MAC AND WHAT WE'RE DOING WITH THEM NOW IS NOT PART OF THE FEDERAL BUDGET. REMARKABLE. REQUIRES THE F.H.A. TO ESTABLISH MINIMUM PRUDENT UNDERWRITING STANDARDS FOR MORTGAGE LOANS ELIGIBLE FOR G.S.E. PURCHASE. MINIMUM REQUIREMENTS WILL INCLUDE VERIFICATION AND DOCUMENTATION OF INCOME AND ASSETS RELIED UPON TO QUALIFY THE BORROWER FOR THE MORTGAGE LOAN AND DETERMINATION OF BORROWER'S ABILITY TO REPAY THE MORTGAGE LOAN. AND I MIGHT ADD THAT THE CONGRESSIONAL BUDGET OFFICE HAS INDICATED THAT THIS AMENDMENT WOULD SAVE THE TAXPAYERS SEVERAL BILLIONS OF DOLLARS ANNUALLY. I REPEAT: THE CONGRESSIONAL BUDGET OFFICE STATES -- AND, BY THE WAY, IT HASN'T BEEN GIVEN ANY PHONY SUPLGS SUCH AS A -- PHONY ASSUMPTION SUCH AS A DOC FIX THAT THIS WOULD SAVE THE TAXPAYERS SEVERAL BILLIONS ANNUALLY. DURING THE DEBATE ON THE FINANCIAL REFORM BILL, WE'LL CONTINUE TO HEAR A LOT ABOUT HOW THE UNITED STATES GOVERNMENT WILL NEVER AGAIN ALLOW A FINANCIAL INSTITUTION TO BECOME TOO BIG TO FAIL. WE'LL HEAR COUNTLESS CALLS FOR MORE REGULATION TO ENSURE THAT TAXPAYERS ARE NEVER AGAIN PLACED AT SUCH TREMENDOUS RISK. SADLY -- AND I SAY VERY SADLY -- THE UNDERLYING BILL COMPLETELY IGNORES THE ELEPHANT IN THE ROOM, BECAUSE NO OTHER ENTITY'S FAILURE WOULD BE AS DISASTROUS TO OUR ECONOMY AS FANNIE MAE'S AND FREDDIE MAC'S. YET, THIS BILL DOESN'T ADDRESS THEM AT ALL. IN A RECENT OPINION PIECE IN THE "WALL STREET JOURNAL," ROBERT WILMIRSH WROTE -- AND I QUOTE -- "CONGRESS MAY BE MAKING PROGRESS CRAFTING NEW REGULATIONS FOR THE FINANCIAL SERVICES INDUSTRY, BUT IT HAS YET TO BEGIN REFORMING TWO INSTITUTIONS THAT PLAYED A KEY ROLE IN THE 2008 CREDIT CRISIS: FANNIE MAE AND FREDDIE MAC. WE CANNOT REFORM THESE GOVERNMENT-SPONSORED ENTERPRISES UNLESS WE FULLY CONFRONT THE EXTENT TO WHICH THEIR OUTRAGEOUS BEHAVIOR AND RECKLESS BUSINESS PRACTICES HAVE AFFECTED THE ENTIRE COMMERCIAL BANKING SECTOR AND THE U.S. ECONOMY AS A WHOLE. AT THE END OF 2009, THEIR DEBT OUTSTANDING EITHER HELD DIRECTLY ON THEIR BALANCE SHEETS OR AS GUARANTEES ON MORTGAGE SECURITIES THEY'D SOLD TO INVESTORS WAS $8.1 TRILLION." $8.1 TRILLION. "THAT COMPARES TO THE $7.8 TRILLION IN TOTAL MARKETABLE DEBT OUTSTANDING FOR THE ENTIRE U.S. GOVERNMENT. THE DEBT HAS THE IMPLICIT GUARANTEE OF THE FEDERAL GOVERNMENT BUT IS NOT REFLECTED ON THE NATIONAL BALANCE SHEET. THE PUBLIC IS FOCUSED MORE ON TAXPAYER BAILOUTS OF BANKS, AUTOMAKERS AND INSURANCE COMPANIES. BUT THE SCALE OF THE RESCUE REQUIRED IN SEPTEMBER 2008, WHEN FANNIE AND FREDDIE WERE FORCED INTO CONSERVATORSHIP, THEIR VERSION OF BANKRUPTCY WAS STAGGERING. TO DATE, THE FEDERAL GOVERNMENT HAS BEEN FORCED TO PUMP $126 BILLION INTO FANNIE AND FREDDIE. THAT'S FAR MORE THAN A.I.G., WHICH ABSORBED $70 BILLION OF GOVERNMENT LARGESS. AND GENERAL MOTORS AND CHRYSLER WHICH SHARED $77 BILLION. BANKS RECEIVED $205 BILLION, OF WHICH $136 BILLION HAS BEEN REPAID. FANNIE AND FREDDIE CONTINUE TO OPERATE DEEPLY IN THE RED WITH NO END IN SIGHT. THE CONGRESSIONAL BUDGET OFFICE ESTIMATED THAT IF THEIR OPERATING COSTS AND SUBSIDIES WERE INCLUDED IN OUR ACCOUNTING OF THE OVERALL FEDERAL DEFICIT, AS PROPERLY THEY SHOULD BE, THE 2009 DEFICIT WOULD BE GREATER BY $291 BILLION. THE OP-ED CONTINUES, "ALL OF THIS HAPPENED IN THE NAME OF THE AMERICAN DREAM OF HOMEOWNERSHIP, BUT THERE IS NO EVIDENCE THAT FANNIE AND FREDDIE HELPED MUCH TO MAKE THIS DREAM COME TRUE. DESPITE INITIATIVES IN THE EARLY 1970'S SHORTLY AS THEY WERE INCORPORATED AS PRIVATE KORPGS PROTECTED BY GOVERNMENT CHARTERS, THE PERCENTAGE OF AMERICAN HOUSEHOLDS OWNING HOMES HAS INCREASED BY MERELY FOUR PERCENTAGE POINTS TO 67%. ACCORDING TO A 2004 CONGRESSIONAL BUDGET OFFICE STUDY, THE TWO G.S.E.'S ENJOYED $30 BILLION IN SUBSIDIES IN 2003 PRIMARILY IN THE FORM OF LOWER BORROWING COSTS AND EXEMPTION FROM STATE TAXATION, BUT THEY PASSED ON ONLY $13 BILLION TO HOME BUYERS. SO THEY GOT $23 BILLION IN SUBSIDIES AND PASSED ON ONLY $13 BILLION TO HOME BUYERS. NEVERTHELESS, ONE FORMER FANNIE MAE C.E.O. FRANKLIN RAINES, RECEIVED $91 MILLION IN COMPENSATION FROM 1998 THROUGH 2003. AMAZING. IN 2006, THE TOP FIVE FANNIE MAE EXECUTIVES SHARED $34 MILLION IN COMPENSATION WHILE THEIR COUNTERPARTS AT FREDDIE MAC SHARED $35 MILLION. IN 2009, EVEN AFTER THE FINANCIAL CRASH, AND AS THESE TWO G.S.E.'S FELL DEEPER INTO THE RED, THE TOP FIVE EXECUTIVES AT FANNIE MAE RECEIVED $19 MILLION IN COMPENSATION AND THE C.E.O. EARNED $6 MILLION. THIS ISN'T PRIVATE ENTERPRISE. IT'S CRONY CAPITALISM IN WHICH PUBLIC SUBSIDIES ARE TURNED INTO PRIVATE RICHES. FROM 2001 THROUGH 2006, FANNIE AND FREDDIE SPENT $123 MILLION TO LOBBY CONGRESS, THE SECOND-HIGHEST LOBBYING TOTAL IN THE COUNTRY. THAT LOBBYING WAS COMPLEMENTED BY SIZABLE DIRECT POLITICAL CONTRIBUTIONS TO MEMBERS OF CONGRESS. CHANGING THIS TERRIBLE SITUATION WILL NOT BE EASY. THE MORTGAGE MARKET HAS COME TO BE STRUCTURED AROUND FANNIE AND FREDDIE AND POWERFUL INTERESTS ARE ALLIED WITH THE STATUS QUO. NONETHELESS, CONGRESS MUST GET TO WORK ON THE REFORM OF FANNIE MAE AND FREDDIE MAC. A HEALTHY HOUSING MARKET, A HEALTHY FINANCIAL SYSTEM AND EVEN THE BOND RATING OF THE FEDERAL GOVERNMENT DEPEND ON IT. THERE HAVE BEEN COUNTLESS WARNINGS ABOUT THE MISMANAGEMENT OF FANNIE AND FREDDIE OVER THE YEARS. IN MAY OF 2006, AFTER A 27-MONTH INVESTIGATION INTO THE CORRUPT CORPORATE CULTURE AND ACCOUNTING PRACTICES AT FANNIE MAE, THE OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT, OFHEO, THE FEDERAL REGULATOR CHARGED WITH OVERSEEING FANNIE MAE, ISSUED A BLISTERING 348-PAGE REPORT WHICH STATED -- AND I QUOTE -- "FANNIE MAE'S SENIOR MANAGEMENT PROMOTED AN IMAGE OF THE ENTERPRISE AS ONE OF THE LOWEST-RISK FINANCIAL INSTITUTIONS IN THE WORLD AND AS BEST IN CLASS IN TERMS OF RISK MANAGEMENT, FINANCIAL REPORTING, INTERNAL CONTROL AND CORPORATE GOVERNANCE. THE FINDINGS IN THIS REPORT SHOW THAT RISKS AT FANNIE MAE WERE GREATLY UNDERSTATED AND THAT THE IMAGE WAS FALSE. DURING THE PERIOD COVERED BY THIS REPORT, 1998 TO MID2004, FANNIE MAE REPORTED EXTREMELY SMOOTH PROFIT GROWTH AND ANNOUNCED TARGETS FOR EARNINGS PER SHARE PRECISELY EACH QUARTER. THOSE ACHIEVEMENTS WERE DILUTIONS DELIBERATELY AND SYSTEMATICALLY CREATED BY ENTERPRISES OF SENIOR MANAGEMENT WITH THE AID OF INAPPROPRIATE ACCOUNTING AND IMPROPER EARNINGS MANAGEMENT. A LARGE NUMBER OF FANNIE MAE'S ACCOUNTING POLICIES AND PRACTICES DID NOT COMPLY WITH THE GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE ENTERPRISE ALSO HAD SERIOUS PROBLEMS OF INTERNAL CONTROL, FINANCIAL REPORTING AND CORPORATE GOVERNANCE. THOSE ERRORS RESULTED IN FANNIE MAE OVERSTATING REPORTED INCOME AND CAPITAL BY A CURRENTLY ESTIMATED $10.6 BILLION. BY DELIBERATELY AND INTENTIONALLY MANIPULATING ACCOUNTING TO HIT EARNINGS TARGETS, SENIOR MANAGEMENT MAXIMIZED THE BONUSES AND OTHER EXECUTIVE COMPENSATION THEY RECEIVED AT THE EXPENSE OF SHAREHOLDERS. EARNINGS MANAGEMENT MADE A SIGNIFICANT CONTRIBUTION TO THE COMPENSATION OF FANNIE MAE CHAIRMAN AND C.E.O. FRANKLIN RAINES, WHICH TOTALED OVER $90 MILLION FROM 1989 THROUGH 2003. I REPEAT FROM THE REPORT, "EARNINGS MANAGEMENT MADE A SIGNIFICANT CONTRIBUTION TO THE COMPENSATION OF FANNIE MAE CHAIRMAN AND C.E.O. FRANKLIN RAINES, WHICH TOTAL OVER $980 FROM 19 -- OVER $90 MILLION FROM 1998 TO 2003. OVER $50 MILLION WAS DIRECTLY TIED TO ACHIEVING EARNINGS PER SHARE TARGETS. FANNIE MAE CONSISTENTLY TOOK A SIGNIFICANT AMOUNT OF INTEREST RATE RISK, AND WHEN INTEREST RATES FELL IN 2002 INCURRED BILLIONS OF DOLLARS IN ECONOMIC LOSSES. THE ENTERPRISE ALSO HAD LARGE OPERATIONAL AND REPUTATIONAL RISK EXPOSURES. FANNIE MAE'S BOARD OF DIRECTORS CONTRIBUTED TO THOSE PROBLEMS BY FAILING TO BE SUFFICIENTLY INFORMED AND TO ACT INDEPENDENTLY OF ITS CHAIRMAN FRANKLIN RAINES AND OTHER SENIOR EXECUTIVES BY FAILING TO EXERCISE THE REQUISITE OVERSIGHT OVER THE ENTERPRISE'S OPERATIONS AND BY FAILING TO DISCOVER AND ENSURE THE CORRECTION OF A WIDE VARIETY OF UNSAFE AND UNSOUND PRACTICES. THE BOARD'S FAILURE CONTINUED IN THE WAKE OF REVELATIONS OF ACCOUNTING PROBLEMS AND IMPROPER EARNINGS MANAGEMENT AT FREDDIE MAC AND OTHER HIGH-PROFILE FIRMS. THE INITIATION OF OFHEO'S SPECIAL EXAMINATION AND CREDIBLE ALLEGATIONS OF IMPROPER EARNINGS MANAGEMENT MADE BY AN EMPLOYEE OF ENTERPRISE'S OFFICE OF THE COMPTROLLER. SENIOR MANAGEMENT DID NOT MAKE INVESTMENTS IN ACCOUNTING SYSTEMS, COMPUTER SYSTEMS AND OTHER INFRASTRUCTURE, AND STAFFING NEEDED TO SUPPORT A SOUND INTERNAL CONTROL SYSTEM, PROPER ACCOUNTING AND GAAP, G-A-A-P, CONSISTENT FINANCIAL REPORTING. THOSE CHALLENGES CAME AT A TIME WHEN FANNIE MAE FACED MANY CHALLENGES RELATED TO ACCOUNTING AND LEGAL REQUIREMENTS. FANNIE MAE'S SENIOR MANAGEMENT SOUGHT TO INTERFERE WITH OFHEO'S SPECIAL EXAMINATION BY DIRECTING THE ENTERPRISE'S LOBBYISTS TO USE THEIR TIES TO CONGRESSIONAL STAFF TO, ONE, GENERATE A CONGRESSIONAL REQUEST FOR THE INSPECTOR GENERAL OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT -- H.U.D. -- TO INVESTIGATE OFHEO'S CONDUCT OF THAT INVESTIGATION. AND, TWO, INSERT INTO AN APPROPRIATIONS BILL LANGUAGE THAT WOULD REDUCE THE AGENCY'S APPROPRIATIONS UNTIL THE DIRECTOR OF OFHEO WAS REPLACED. OFHEO WAS DIRECTED AND WILL CONTINUE TO DIRECT FANNIE MAE TO TAKE REMEDIAL ACTIONS TO ENHANCE THE SAFE AND SOUND OPERATIONS OF THE ENTERPRISE GOING FORWARD. OFHEO STAFF RECOMMENDS ACTIONS TO ENHANCE THE GOAL OF MAINTAINING THE SAFETY AND SOUNDNESS OF FANNIE MAE. A REMARKABLE, REMARKABLE REPORT. SO WHAT STEPS WERE TAKEN BY THE CONGRESS TO PUNISH FANNIE MAE FOR SUCH DELIBERATE MANIPULATION AND OUTRIGHT CORRUPTION? BASICALLY NONE. ACCORDING TO PUBLISHED REPORTS, INCLUDING FANNIE MAE'S OWN NEWS RELEASE, DANIEL MUDD, THE PRESIDENT AND C.E.O. OF FANNIE MAE AT THE TIME, WAS AWARDED OVER $14.4 MILLION IN 2006, THE YEAR THAT THIS REPORT WAS ISSUED. AND OVER $12.2 MILLION IN 2007 IN SALARY, BONUSES AND STOCK. AND FANNIE MAE CONTINUED THEIR RISKY BEHAVIOR, SUCCESSFULLY POSTING PROFITS OF $4.1 BILLION IN 2006. THE BLATANT CORRUPTION REPORTED BY THE OFHEO LED ME TO COME TO THE SENATE FLOOR BACK IN 2006 AND CALL FOR THE IMMEDIATE CONSIDERATION OF G.S.E. REGULATORY REFORM LEGISLATION. AT THAT TIME I SAID "FOR YEARS I'VE BEEN CONCERNED ABOUT THE REGULATORY STRUCTURE THAT GOVERNS FANNIE MAE AND FREDDIE MAC AND THE SHEER MAGNITUDE OF THESE COMPANIES AND THE ROLE THEY PLAY IN THE HOUSING MARKET. OFHEO'S REPORT THIS WEEK DOES NOTHING TO EASE THESE CONCERNS. IN FACT, THE REPORT DOES QUITE THE CONTRARY. OFHEO'S REPORT SOLIDIFIES MY VIEW THAT THE G.S.E.'S NEED TO BE REFORMED WITHOUT DELAY. IF CONGRESS DOES NOT ACT, AMERICAN TAXPAYERS WILL CONTINUE TO BE EXPOSED TO THE ENORMOUS RISK THAT FANNIE MAE AND FREDDIE MAC POSE TO THE HOUSING MARKET, THE OVERALL FINANCIAL SYSTEM, AND THE ECONOMY AS A WHOLE. ADDITIONALLY, ALSO IN MAY 2006, I JOINED 19 OF MY COLLEAGUES WRITING TO THE MAJORITY LEADER, URGING HIM TO BRING THE FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT TO THE FLOOR FOR DEBATE. THIS LETTER -- I ASK UNANIMOUS CONSENT THIS LETTER BE INCLUDED IN THE RECORD.

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  • 06:00:10 PM

    MR. McCAIN

    MR. PRESIDENT?

  • 06:24:46 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM RHODE ISLAND IS RECOGNIZED.

  • 06:24:48 PM

    MR. WHITEHOUSE

    THANK YOU, MR. PRESIDENT. I WISH TO SPEAK FOR A MOMENT AGAIN ABOUT MY…

    THANK YOU, MR. PRESIDENT. I WISH TO SPEAK FOR A MOMENT AGAIN ABOUT MY AMENDMENT NUMBERED 3746, WHICH I'M DELIGHTED THAT THE DISTINGUISHED PRESIDING OFFICER IS A COSPONSOR OF, AND I WOULD LIKE TO ASK UNANIMOUS CONSENT THAT CHAIRMAN PATRICK LEAHY, SENATOR JIM WEBB AND SENATOR BOB CASEY ALL BE ADDED AS COSPONSORS TO THE AMENDMENT.

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  • 06:25:19 PM

    THE PRESIDING OFFICER

    WITHOUT OBJECTION. SO ORDERED.

  • 06:25:22 PM

    MR. WHITEHOUSE

    IT BRIEFLY, IF YOU GO AROUND THE COUNTRY -- I WOULD BE GLAD TO YIELD TO…

    IT BRIEFLY, IF YOU GO AROUND THE COUNTRY -- I WOULD BE GLAD TO YIELD TO THE CHAIRMAN.

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  • 06:25:31 PM

    MR. DODD

    FROM ARIZONA. COULD I ASK MY -- DID YOU LAY DOWN YOUR AMENDMENT, SENATOR?…

    FROM ARIZONA. COULD I ASK MY -- DID YOU LAY DOWN YOUR AMENDMENT, SENATOR? I'M UNCLEAR.

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  • 06:25:39 PM

    MR. McCAIN

    I HAVE NOT LAID DOWN THE AMENDMENT BECAUSE I UNDERSTAND THAT THE SENATOR…

    I HAVE NOT LAID DOWN THE AMENDMENT BECAUSE I UNDERSTAND THAT THE SENATOR FROM CONNECTICUT WOULD MOVE TO TABLE, AND THERE ARE NUMEROUS MEMBERS THAT WANT TO TALK ON THIS ISSUE, THIS MULTITRILLION DOLLAR ISSUE. SO NO, I HAVE NOT -- BUT I CAN ALSO ASSURE THE SENATOR FROM CONNECTICUT IF I PROPOSE THE AMENDMENT AND IT IS TABLED WITHOUT PROPER DEBATE, THERE WILL BE ANOTHER AMENDMENT JUST LIKE IT.

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  • 06:26:04 PM

    MR. DODD

    MY FRIEND, HE IS MY FRIEND FROM ARIZONA, I HAVE NO INTENTION OF…

    MY FRIEND, HE IS MY FRIEND FROM ARIZONA, I HAVE NO INTENTION OF IMMEDIATELY TABLING ANYONE'S AMENDMENT. I HAVE NOT DONE THAT AT ALL IN THE PROCESS. I THINK MOST MEMBERS APPRECIATE, I HAVE BEEN TRYING TO MAKE SURE EVERYBODY HAS A CHANCE TO BE HEARD AND TO WORK OUT AMENDMENTS WHERE WE CAN SO WE CAN MOVE ALONG. YOU CAN ALSO UNDERSTAND MY DILEMMA IN A SENSE THAT WE HAVE 100 MEMBERS HERE THAT BASICALLY ALL HAVE AMENDMENTS THEY WANT TO GET HEARD ON. EVERYONE THINKS THEIR AMENDMENT IS PRETTY IMPORTANT, I RESPECT THAT. ALL I WANT TO LOOK FOR IS A TIME AGREEMENT SO WE CAN SAY HOW MUCH TIME DO WE NEED SO WE CAN SET UP SOME SCHEDULE WHERE SOME PREDICTABILITY. MEMBERS WANT TO GO HOME TOMORROW. DO WE HAVE VOTES TOMORROW, VOTES ON MONDAY? I'M TRYING TO SCHEDULE HERE SO I CAN ACCOMMODATE AS MANY PEOPLE AS I CAN SO THEY CAN BE HEARD ON THE MATTERS. THAT'S ALL I'M SEEKING. I'M NOT TRYING TO SHORT CUT ANYBODY, ALTHOUGH I WOULD ASK REASONABLENESS ON TIME SO WE HAVE A CHANCE SO THAT EVERYBODY GETS A CRACK AT WHAT THEY WOULD LIKE TO DO. THAT'S ALL I'M INQUIRING.

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  • 06:27:01 PM

    MR. McCAIN

    WORDS OF HUMPHREY BOGART IN "CASABLANCA," I WAS MISINFORMED BECAUSE I WAS…

    WORDS OF HUMPHREY BOGART IN "CASABLANCA," I WAS MISINFORMED BECAUSE I WAS TOLD BY SEVERAL DIFFERENT INDIVIDUALS THAT YOU WOULD BE MOVING TO TABLE THE AMENDMENT IF IT WAS PROPOSED. I'M GLAD TO HEAR THAT THAT WAS NOT THE CASE. I KNOW OF AT LEAST 20 MEMBERS ON THIS SIDE WHO WANT TO SPEAK ON THIS ISSUE. I WILL TRY TO COMPILE THOSE AND TRY TO COME TO YOU WITH A LIST AND THE TIME THAT THEY WANT TO DISCUSS. IN ALL DUE RESPECT TO ALL THE OTHER AMENDMENTS -- AND I DON'T SAY THIS VERY OFTEN -- WHEN WE'RE TALKING ABOUT TRILLIONS OF DOLLARS, TRILLIONS OF DOLLARS, THIS IS A VERY IMPORTANT AMENDMENT, AND SO I WILL TRY TO GET TO THE DISTINGUISHED CHAIRMAN, I THINK WITH SYMPATHY AND RESPECT, A LIST OF SPEAKERS AND THE AMOUNT OF TIME THEY MAY CONSUME AS SOON AS POSSIBLE.

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  • 06:27:51 PM

    MR. DURBIN

    THE SENATOR FROM ARIZONA WHILE HE IS WORKING OUT HIS LIST, COULD WE WORK…

    THE SENATOR FROM ARIZONA WHILE HE IS WORKING OUT HIS LIST, COULD WE WORK ON OTHER AMENDMENTS HERE, BRING THEM TO A VOTE THIS EVENING?

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  • 06:28:01 PM

    MR. McCAIN

    I HAVE NO OBJECTION TO MOVING OTHER AMENDMENTS WHILE I'M DOING THAT, NONE…

    I HAVE NO OBJECTION TO MOVING OTHER AMENDMENTS WHILE I'M DOING THAT, NONE WHATSOEVER.

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  • 06:28:07 PM

    MR. DURBIN

    OF THE AISLE, I HOPE WE CAN WORK TO ACCOMPLISH THAT.

  • 06:28:11 PM

    MR. McCAIN

    OUR LEADER, BUT YES, THAT'S FINE. OUR TWO LEADERS SAY IT'S FINE. THANK YOU.

  • 06:28:16 PM

    MR. DODD

    IS THERE SUFFICIENT SECOND? THERE APPEARS TO BE.

  • 06:28:47 PM

    THE PRESIDING OFFICER

    IS THERE A SUFFICIENT SECOND?

  • 06:28:58 PM

    MR. DODD

    SUFFICIENT SECOND?

  • 06:29:24 PM

    THE PRESIDING OFFICER

    THERE IS NOT A SUFFICIENT SECOND.

  • 06:29:28 PM

    MR. SANDERS

    POINT OF ORDER? HOW MANY HANDS DO YOU NEED UP?

  • 06:29:33 PM

    THE PRESIDING OFFICER

    NEED 20.

  • 06:29:45 PM

    THE PRESIDING OFFICER

    OFFICER: THE ORDER OF THE YEAS AND NAYS DOES NOT FORCE A VOTE ON THE…

    OFFICER: THE ORDER OF THE YEAS AND NAYS DOES NOT FORCE A VOTE ON THE AMENDMENT. ORDERING THE YEAS AND NAYS DOES NOT FORCE A VOTE ON THE AMENDMENT. THE CLERK WILL CALL THE ROLL. QUORUM CALL: VOTE:

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  • 06:33:44 PM

    THE PRESIDING OFFICER

    OFFICER: IS QUORUM IS NOT PRESENT. THE MAJORITY LEADER IS RECOGNIZED. MR.

  • 06:33:59 PM

    MR. REID

    OF ABSENT SENATORS.

  • 06:34:00 PM

    Senate Vote 134 - On the Motion (Motion to Instruct the Sgt At Arms)

    Restoring American Financial Stability Act of 2010

    Motion Agreed to (61 - 33)
    Yea
    Nay

    Vote Details: Yea - 60
    Republican - 3
    Democratic - 55
    Independent - 2

    Vote Details: Nay - 33
    Republican - 33

    Vote Details: Not Voting - 6
    Republican - 5
    Democratic - 1

  • 06:34:01 PM

    THE PRESIDING OFFICER

    QUESTION IS ON THE MOTION.

  • 06:34:33 PM

    THE PRESIDING OFFICER

    THE CLERK WILL CALL THE ROLL. VOTE: VOTE: VOTE: VOTE: VOTE: VOTE:

  • 07:42:25 PM

    THE PRESIDING OFFICER

    ARE THERE ANY SENATORS WISHING TO VOTE OR TO CHANGE THEIR VOTE? IF NOT,…

    ARE THERE ANY SENATORS WISHING TO VOTE OR TO CHANGE THEIR VOTE? IF NOT, THE YEAS ARE 61. THE NAYS ARE 33. THE MOTION IS AGREED TO, AND THE QUORUM IS PRESENT.

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  • 07:42:43 PM

    THE PRESIDING OFFICER

    OFFICER: THE MAJORITY LEADER IS RECOGNIZED. QUORUM CALL:

  • 07:43:02 PM

    Quorum Call

  • 07:50:46 PM

    THE PRESIDING OFFICER

    THE MAJORITY LEADER IS RECOGNIZED. THE SENATE WILL COME TO ORDER.

  • 07:51:01 PM

    MR. REID

    CONSENT IT BE TERMINATED.

  • 07:51:06 PM

    MR. REID

    THE BROWN AMENDMENT NUMBER 3733, WITH A SECOND-DEGREE AMENDMENT BY SENATOR…

    THE BROWN AMENDMENT NUMBER 3733, WITH A SECOND-DEGREE AMENDMENT BY SENATOR ENSIGN. AMENDMENT NUMBER 3869. THAT'S SENATOR BROWN -- THAT SENATOR BROWN WILL HAVE FIVE MINUTES, SENATOR ENSIGN WILL HAVE FIVE MINUTES, AND SENATOR DODD WILL HAVE FIVE MINUTES AND THEN WE WILL PROCEED TO A VOTE ON THAT MATTER. I ALSO ASK CONSENT THAT IT BE IN ORDER FOR A DEMOCRATIC SIDE-BY-SIDE TO THE McCAIN G.S.E. AMENDMENT AND THAT CARDIN AMENDMENT NUMBER 3840 WOULD BE CONSIDERED TONIGHT. AND IT'S MY UNDERSTANDING THAT AMENDMENT WILL ALSO BE DECIDED BY A VOICE VOTE. THAT AFTER THE CANTWELL AMENDMENT IS CALLED AND MODIFIED THERE, WILL BE TEN MINUTES OF DEBATE WITH RESPECT TO THAT AMENDMENT WITH THE TIME EQUALLY DIVIDED AND CONTROLLED IN THE USUAL FORM. UPON THE USE OR YIELDING BACK OF THE TIME, THE AMENDMENT BE AGREED TO, THERE BE NO AMENDMENTS IN ORDER TO THE AMENDMENTS IN THIS AGREEMENT PRIOR TO A VOTE EXCEPT AS WE'VE STATED.

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  • 07:54:47 PM

    MR. REID

    AMENDMENT NUMBER 3733, WITH A SECOND-DEGREE AMENDMENT BY SENATOR ENSIGN.…

    AMENDMENT NUMBER 3733, WITH A SECOND-DEGREE AMENDMENT BY SENATOR ENSIGN. AMENDMENT NUMBER 3869. THAT'S SENATOR BROWN -- THAT SENATOR BROWN WILL HAVE FIVE MINUTES, SENATOR ENSIGN WILL HAVE FIVE MINUTES, AND SENATOR DODD WILL HAVE FIVE MINUTES AND THEN WE WILL PROCEED TO A VOTE ON THAT MATTER. I ALSO ASK CONSENT THAT IT BE IN ORDER FOR A DEMOCRATIC SIDE-BY-SIDE TO THE McCAIN G.S.E. AMENDMENT AND THAT CARDIN AMENDMENT NUMBER 3840 WOULD BE CONSIDERED TONIGHT. AND IT'S MY UNDERSTANDING THAT AMENDMENT WILL ALSO BE DECIDED BY A VOICE VOTE. THAT AFTER THE CANTWELL AMENDMENT IS CALLED AND MODIFIED THERE, WILL BE TEN MINUTES OF DEBATE WITH RESPECT TO THAT AMENDMENT WITH THE TIME EQUALLY DIVIDED AND CONTROLLED IN THE USUAL FORM. UPON THE USE OR YIELDING BACK OF THE TIME, THE AMENDMENT BE AGREED TO, THERE BE NO AMENDMENTS IN ORDER TO THE AMENDMENTS IN THIS AGREEMENT PRIOR TO A VOTE EXCEPT AS WE'VE STATED.

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  • 07:55:42 PM

    THE PRESIDING OFFICER

    OFFICER: IS THERE OBJECTION?

  • 07:55:44 PM

    MR. McCONNELL

    MR. PRESIDENT, RESERVING THE RIGHT TO OBJECT.

  • 07:55:46 PM

    THE PRESIDING OFFICER

    THE REPUBLICAN LEADER.

  • 07:55:48 PM

    MR. McCONNELL

    I'M CERTAINLY NOT GOING TO OBJECT. I JUST WANT TO MAKE SURE EVERYBODY…

    I'M CERTAINLY NOT GOING TO OBJECT. I JUST WANT TO MAKE SURE EVERYBODY UNDERSTANDS. SO THEN TOMORROW WE WOULD BE DEBATE ONLY?

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  • 07:55:57 PM

    MR. REID

    ONLY, AND THE SAME ON MONDAY.

  • 07:56:00 PM

    MR. McCONNELL

    TO ECHO THE COMMENTS OF THE MAJORITY LEADER WITH REGARD TO GETTING…

    TO ECHO THE COMMENTS OF THE MAJORITY LEADER WITH REGARD TO GETTING AMENDMENTS PREPARED. IT IS TO OUR ADVANTAGE TO HAVE AMENDMENT VOTES AND WE'RE GOING TO WORK HARD TO GET THEM IN THE QUEUE AND TO GET THEM VOTED ON.

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  • 07:56:15 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: IS THERE OBJECTION? WITHOUT OBJECTION, SO ORDERED.

  • 07:56:35 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM WASHINGTON IS RECOGNIZED.

  • 07:56:39 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: THE SENATE IS NOT IN ORDER. IF THE SENATOR WILL SUSPEND.

  • 07:56:59 PM

    MS. CANTWELL

    THE CLERK WILL REPORT.

  • 07:57:06 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: THE CLERK WILL REPORT.

  • 07:57:09 PM

    THE CLERK

    FROM WASHINGTON, MS. CANTWELL, PROPOSES AN AMENDMENT NUMBERED 3786, AS…

    FROM WASHINGTON, MS. CANTWELL, PROPOSES AN AMENDMENT NUMBERED 3786, AS MODIFIED.

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  • 07:57:14 PM

    MS. CANTWELL

    I ASK THAT FURTHER READING BE WAIVED.

  • 07:57:16 PM

    THE PRESIDING OFFICER

    OFFICER: WITHOUT OBJECTION.

  • 07:57:18 PM

    MS. CANTWELL

    MR. PRESIDENT, I FURTHER ASK THAT SENATORS MERKLEY, BROWN OF OHIO --

  • 07:57:22 PM

    THE PRESIDING OFFICER

    THE SENATOR WILL SUSPEND. THE SENATE'S NOT IN ORDER.

  • 07:57:27 PM

    MS. CANTWELL

    FURTHER ASK THAT SENATORS MERKLEY, SENATORS BROWN OF OHIO AND SHAHEEN BE…

    FURTHER ASK THAT SENATORS MERKLEY, SENATORS BROWN OF OHIO AND SHAHEEN BE ADDED AS COSPONSORS.

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  • 07:57:37 PM

    MR. DODD

    I WOULD LIKE TO BE ADDED AS A COSPONSOR.

  • 07:57:43 PM

    MS. CANTWELL

    THANK YOU, MR. PRESIDENT. MY AMENDMENT STRENGTHENS THE COMMODITIES FUTURE…

    THANK YOU, MR. PRESIDENT. MY AMENDMENT STRENGTHENS THE COMMODITIES FUTURE TRADING COMMISSION'S AUTHORITY TO GO AFTER MANIPULATION AND ATTEMPTED MANIPULATION IN THE SWAPS AND COMMODITIES MARKETS. IT MAKES IT UNLAWFUL TO MANIPULATE OR ATTEMPT TO MANIPULATE THE PRICE OF A SWAP OR COMMODITY USING ANY MANIPULATIVE DEVICE OR CONTRIVANCE. NOW, SOME PEOPLE MIGHT BE THINKING, WHY DO WE NEED LEGISLATION LIKE THAT, DON'T WE ALREADY HAVE SOMETHING IN PLACE? UNFORTUNATELY, CURRENT LAW DOES NOT HAVE ENOUGH PROTECTIONS FOR OUR CONSUMERS AND WE HAVE FOUND IN OTHER AREAS THAT IT IS VERY IMPORTANT TO HAVE A STRONG, BRIGHT-LINE LAW ON THE BOOKS AGAINST MANIPULATION. WE WANT THE F.D.C. TO HAVE STRONG TOOLS TO GO AFTER THIS KIND OF BEHAVIOR, AND THIS AMENDMENT IS ABOUT PROTECTING THE INTEGRITY OF MARKETS FOR PEOPLE WHO RELY ON THEM FOR BUSINESS. CURRENT LAW MAKES IT VERY DIFFICULT FOR THE COMMODITIES FUTURE TRADING COMMISSION TO PROSECUTE MARKET MANIPULATION. THE CFTC HAS TO PROVE THAT SOMEONE HAD SPECIFIC INTENT TO MANIPULATE, AND, MR. PRESIDENT, THAT IS A VERY DIFFICULT STANDARD TO PROVE. MOST INDIVIDUALS DON'T WRITE AN E-MAIL, FOR EXAMPLE, SAYING THAT THEY HAVE MANIPULATED PRICES BUT THAT IS CURRENTLY WHAT THE LAW REQUIRES THE COMMODITIES FUTURE TRADING COMMISSION TO PROVE. AS A RESULT OF THIS, THE FEDERAL COURTS RECOGNIZE THAT THE CFTC WEAKER ANTIMANIPULATION STANDARD HAS GENERALLY PROVEN THAT THE CFTC IN COURT ON THESE ISSUES HAS NOT FARED WELL. IN FACT, THE LAW IS SO WEAK THAT IN THE CFTC'S 35-YEAR HISTORY, IT HAS ONLY HAD ONE SUCCESSFULLY PROSECUTED CASE OF MARKET MANIPULATION. AND THAT CASE IS CURRENTLY ON APPEAL IN FEDERAL COURT. I'M GOING TO SAY THAT AGAIN. IN 35 YEARS OF ITS HISTORY, THE CFTC HAS ONLY SUCCESSFULLY PROSECUTED ONE SINGLE CASE OF MANIPULATION. MR. PRESIDENT, THIS LANGUAGE AND THIS AMENDMENT IS PATENTED AFTER LAW THAT THE S.E.C. USES TO GO AFTER FRAUD AND MANIPULATION, THAT THERE CAN BE NO MANIPULATIVE DEVICES OR CONTRIVANCES. IT IS A STRONG AND CLEAR LEGAL STANDARD THAT ALLOWS REGULATORS TO SUCCESSFULLY GO AFTER RECKLESS AND MANIPULATIVE BEHAVIOR. AND THIS LEGISLATION TRACKS IN SECURITIES ACT THE PART OF FEDERAL CASES SO THAT IT IS CLEAR LANGUAGE IDENTICAL TO WHAT IS USED IN OTHER STATUTES. AND CONGRESS HAS MADE SURE THAT ITS INTENTION IS CLEAR. IN THE 75 YEARS SINCE THE ENACTMENT OF THE SECURITIES AND EXCHANGE ACT OF 1934, A SUBSTANTIAL BODY OF CASE LAW HAS DEVELOPED OVER THE LAST CENTU AROUND THESE WORDS, AROUND THE WORDS MANIPULATIVE AND DECEPTIVE DEVICES AND CONTRIVANCES. THE SUPREME COURT HAS COMPARED THIS BODY OF LAW TO A JUDICIAL OAK WHICH HAS GROWN FROM LITTLE MORE THAN A LEGISLATIVE ACORN. SO IT'S WORTH NOTING THAT THE COURTS HAVE HELD THIS MANIPULATION AUTHORITY IS NOT INTENDED TO CATCH SELLERS WHO TAKE ADVANTAGE OF THE NATURAL MARKET OF SUPPLY AND DEMAND, ONLY THOSE WHO ATTEMPT TO AFFECT THE MARKET PRICES BY ARTIFICIAL MEANS UNRELATED TO THE NATURAL FORCES OF SUPPLY AND DEMAND. MR. PRESIDENT, CONGRESS GRANTED THE SAME ANTIMANIPULATION AUTHORITY TO THE FEDERAL ENERGY REGULATORY COMMISSION IN 2005 AS PART OF LEGISLATION IN THE ENERGY POLICY ACT. WE DID THIS AS A RESULT OF ENRON MARKET MANIPULATION, AND I'M VERY PROUD OF THIS LEGISLATION AND ITS BAN ON MANIPULATION IN ELECTRICITY AND NATURAL GAS MARKETS. I SAY THAT BECAUSE IT WAS A SIMILAR ISSUE OF DEREGULATION THAT LED TO THE FEDERAL REGULATORS NOT DOING THEIR JOB. SINCE WE HAVE IMPLEMENTED THIS LANGUAGE IN THE ELECTRICITY MARKETS, THE FEDERAL ENERGY REGULATORY COMMISSION SINCE 2005 HAS USED ITS AUTHORITY TO CONDUCT 135 INVESTIGATIONS. OF THOSE 135 INVESTIGATIONS, 41 HAVE RESULTED IN SETTLEMENTS INVOLVING CIVIL PENALTIES OR MONETARY REMEDIES OF OVER OVER $49 MILLION. TWO INVESTIGATIONS BROUGHT ABOUT ENFORCEMENT ACTIONS AGAINST MANIPULATION, ONE AGAINST AMRANTH --

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  • 08:11:56 PM

    THE PRESIDING OFFICER

    THERE FURTHER DEBATE? IF NOT, ALL IN FAVOR SAY AYE. ALL THOSE OPPOSED SAY…

    THERE FURTHER DEBATE? IF NOT, ALL IN FAVOR SAY AYE. ALL THOSE OPPOSED SAY NO. THE AYES APPEAR TO HAVE IT. THE AYES DO HAVE IT. THE AMENDMENT IS AGREED TO.

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  • 08:12:12 PM

    THE PRESIDING OFFICER

    WITHOUT OBJECTION.

  • 08:12:16 PM

    THE PRESIDING OFFICER

    MR. PRESIDENT, I CALL UP AMENDMENT 3733.

  • 08:12:20 PM

    MR. BROWN

    PRESIDENT, I CALL UP AMENDMENT 3733.

  • 08:12:23 PM

    THE PRESIDING OFFICER

    THE CLERK WILL REPORT.

  • 08:12:25 PM

    THE CLERK

    FROM OHIO, MR. BROWN, FOR HIMSELF AND OTHERS, PROPOSES AN AMENDMENT…

    FROM OHIO, MR. BROWN, FOR HIMSELF AND OTHERS, PROPOSES AN AMENDMENT NUMBERED 3733 TO AMENDMENT NUMBERED 3739. ON PAGE 92 --

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  • 08:12:36 PM

    MR. BROWN

    I ASK UNANIMOUS CONSENT TO --

  • 08:12:38 PM

    THE PRESIDING OFFICER

    WITHOUT OBJECTION.

  • 08:12:40 PM

    MR. BROWN

    THANK YOU, MR. PRESIDENT.

  • 08:12:42 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM OHIO IS RECOGNIZED.

  • 08:12:45 PM

    MR. BROWN

    THE KAUFMAN-BROWN AMENDMENT WITH 14 COSPONSORS WOULD SCALE BACK THE SIX…

    THE KAUFMAN-BROWN AMENDMENT WITH 14 COSPONSORS WOULD SCALE BACK THE SIX LARGEST BANKS IN THE NATION, REQUIRING THEM TO SPIN-OFF INTO SMALLER, MORE MANAGEABLE BANKS AND MAINTAIN SUFFICIENT CAPITAL TO COVER THEIR DEBTS. THESE SIX BANKS' ASSETS TOTAL $9 TRILLION. OUR AMENDMENT ENDS BAILOUTS BY ENSURING THAT NO WALL STREET FIRM IS SO BIG OR SO RECKLESS THAT IT FAILS, AS DOES SO DOES OUR ECONOMY. THE BILL WE'RE CONSIDERING TODAY IS STRONG BUT IT NEEDS TO BE STRONGER. IT FOCUSES ON MONITORING RISK. RISK IS THE BIGGEST PROBLEM. IT TAKE ACTION ONCE THERE ARE SIGNS OF TROUBLE, BUT SIZE IS ALSO A HUGE PROBLEM. EVERYONE FROM CONSUMER GROUPS TO SMALL BUSINESS OWNERS TO FORMER DIRECTORS TO GOVERNORS OF THE FED TO CHAIRMAN OF THE FEDERAL RESERVE, TWO OF THEM, UNDERSTAND WHAT'S AT STAKE IF WE DON'T PASS THIS AMENDMENT. THEY HAVE UNDERSTOOD BECAUSE WE SEE IT FOR OURSELVES THAT WHEN A FEW MEGABANKS DOMINATE OUR FINANCIAL SYSTEM, THE DOWNFALL OF ANY OF THEM CAN MARK THE DOWNFALL OF OUR ENTIRE ECONOMY. WE HAVE SEEN MILLIONS OF JOBS LOST. WE HAVE SEEN MILLIONS OF HOMES LOST. WE HAVE SEEN TRILLIONS OF DOLLARS IN SAVINGS AND WEALTH DRAINED. JUST 15 YEARS AGO, MR. PRESIDENT, 15 YEARS AGO, THE SIX LARGEST U.S. BANKS HAD ASSETS EQUAL TO 17% OF OUR G.D.P. TODAY, THE SIX LARGEST BANKS HAVE TOTAL ASSETS ESTIMATED TO BE IN EXCESS OF 63%. FROM 17% OF G.D.P. TO 63% OF G.D.P., THESE SIX LARGEST BANKS. ALAN GREENSPAN SAID TOO BIG TO FAIL IS TOO BIG. TOO BIG TO FAIL IS TOO BIG. THESE SIX BANKS, IN ADDITION TO THE FACT THAT THEY ALREADY HAVE SUCH DOMINANCE IN OUR ECONOMY, THESE SIX BANKS WHEN BORROWING MONEY, WHEN GOING INTO THE CAPITAL MARKETS, ENJOY AN 80 BASIS POINT ADVANTAGE OVER BANKS IN DENVER AND CLEVELAND, OF REGIONAL BANKS IN OUR STATES AND COMMUNITY BANKS THAT ARE EVEN SMALLER. THEY HAVE AN 80 BASIS POINTS ADVANTAGE, ENSURING, MR. PRESIDENT, IF WE DON'T PASS THE BROWN-KAUFMAN AMENDMENT THAT THEIR ADVANTAGE WILL ONLY GROW BECAUSE THESE BANKS WILL GROW LARGER BECAUSE THE PLAYING FIELD IS TILTED TOWARDS THEM BECAUSE THEY HAD THIS INTEREST RATE ADVANTAGE WHEN THEY BORROW MONEY. ANOTHER REASON TO UNDERSTAND THAT TOO BIG TO FAIL IS TOO BIG. I YIELD THE LAST TWO OR THREE MINUTES TO SENATOR KAUFMAN.

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  • 08:15:16 PM

    MR. KAUFMAN

    I WANT TO SAY TO THOSE WHO SAY THIS IS DRACONIAN, JUST THINK OF ONE THING…

    I WANT TO SAY TO THOSE WHO SAY THIS IS DRACONIAN, JUST THINK OF ONE THING -- CITIGROUP UNDER THIS WOULD BE THE SIZE THEY WERE IN 2002, THEY COMPETED INTERNATIONALLY, EVERYTHING WAS THE SAME. IN TERMS OF RISK, JAMES KANE SAID TODAY AFTER HE SPOKE AFTER THE FINANCIAL CRISIS INQUIRY, THAT BEAR STEARNS FAILED BECAUSE THEIR RATIO OF ASSETS TO CAPITAL WAS 40-1. THIS BILL WOULD CAP IT AT 16. BEAR STEARNS WOULD NOT HAVE FAILED. WE SHOULD NOT LEAVE THIS FOR THE REGULATORS N.1933, OR FOREBEARERS WENT BEFORE US AND THEY MADE TOUGH DECISIONS AFTER THE GREAT DEPRESSION AND PUT IN GLASS-STEAGALL. WE SHOULD DO NO LESS. WE SHOULD BE LEGISLATING FOR GENERATIONS HERE TONIGHT AND SUPPORT THIS AMENDMENT. THANK YOU.

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  • 08:16:00 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM NEVADA.

  • 08:16:03 PM

    MR. ENSIGN

    HAVE A SECOND-DEGREE AMENDMENT TO THE BROWN AMENDMENT AT THE DESK.

  • 08:16:06 PM

    THE PRESIDING OFFICER

    OFFICER: THE CLERK WILL REPORT.

  • 08:16:08 PM

    THE CLERK

    FROM NEVADA, MR. ENSIGN, PROPOSES AN AMENDMENT NUMBERED 3898 TO AMENDMENT…

    FROM NEVADA, MR. ENSIGN, PROPOSES AN AMENDMENT NUMBERED 3898 TO AMENDMENT NUMBER 3767.

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  • 08:16:16 PM

    MR. ENSIGN

    WITHOUT OBJECTION.

  • 08:16:18 PM

    THE PRESIDING OFFICER

    WITHOUT OBJECTION.

  • 08:16:20 PM

    MR. ENSIGN

    A VERY SIMPLE SECOND-DEGREE AMENDMENT TO ACTUALLY SUPPORT THE UNDERLYING…

    A VERY SIMPLE SECOND-DEGREE AMENDMENT TO ACTUALLY SUPPORT THE UNDERLYING AMENDMENT. BUT WHAT MY SECOND-DEGREE SAYS IS SIMPLY THAT SAYS FANNIE MAE AND FREDDIE MAC WILL BE SUBJECT TO THE SAME LIMITS. TOO BIG TO FAIL, EVERYBODY'S BEEN TALKING ABOUT THAT. THAT IS ONE OF THE PROBLEMS. ALL THIS INTERCONNECTEDDIVENESS OF OUR FINANCIAL MARKETS, WHEN ONE IS TOO BIG TO FAIL, IT DRAWS THE ENTIRE MARKET DOWN. THAT'S WHY TARP WAS NEEDED. THAT'S WHY, YOU KNOW, PEOPLE HAVE JUSTIFIED A LOT OF THE BAILOUTS. FANNIE AND FREDDIE, I DON'T THINK THERE'S ANYBODY WHO CAN LEGITIMATELY ARGUE THAT THEY AREN'T TOO BIG TO FAIL. AND SO WHAT THIS SECOND-DEGREE AMENDMENT SAYS VERY SIMPLE IS THE 3% OF G.D.P. THAT YOU'RE LIMITING THE BANKS TO GET THAT BIG, YOU LIMIT FANNIE MAE AND FREDDIE MAC TO THOSE SAME LIMITS. WE SAW YESTERDAY AFTERNOON THAT FREDDIE MAC JUST CAME UP AND SAID THEY NEEDED ANOTHER $10 BILLION IN TAXPAYER BAILOUTS BAILOUTS. THERE'S NO QUESTION THAT IT'S TOO BIG. THERE'S NO QUESTION THAT IT'S -- IF WE ACTUALLY PUT THEIR DEBT ON OUR BALANCE SHEETS, WE LOOK MUCH WORSE. THE DEFICITS ON OUR BALANCE SHEET, WE LOOK MUCH WORSE. WHAT WE'RE SEEING OVER IN GREECE WITH THE RIOTING, WITH THE -- HOW THAT'S AFFECTING OUR FINANCIAL MARKETS, WE NEED TO BE HONEST IN OUR ACCOUNTING BUT WE ALSO NEED TO MAKE SURE THAT THESE THINGS DON'T CONTINUE TO GET LARGER AND LARGER. BACK IN DECEMBER, THE PRESIDENT TOOK THE LIMITS OFF OF FANNIE AND FREDDIE, TOOK THE LIMITS OFF OFF. THAT'S JUST SAYING THEY CAN GROW AND KEEP BORROWING AND KEEP DOING THE IRRESPONSIBLE THINGS THAT THEY DID IN THE PAST. WHEN WE LOOK AT THE ROOT CAUSES OF THE FINANCIAL CRISIS, THERE WERE -- PEOPLE TOOK RISKS THEY NEVER SHOULD HAVE TAKEN BECAUSE THERE WERE IMPLICIT GUARANTEES, NOT ONLY IN THE BANKS BEING TOO BIG TO FAIL BUT ESPECIALLY IN FANNIE AND FREDDIE BEING TOO BIG TO FAIL. SO IT SKEWED THE MARKETS. PEOPLE TOOK RISKS THEY NEVER SHOULD HAVE TAKEN. IF WE KNOW THAT THESE THINGS CAN'T GET TOO BIG, THERE ARE OTHER THINGS I BELIEVE NEED TO BE DONE WITH FANNIE AND FREDDIE, BUT CERTAINLY WE CAN'T ALLOW THEM TO GET AS LARGE AS THEY ARE NOW. AND SO THE REASONABLE LIMITS THAT -- THAT HAVE BEEN PUT ON THE LARGE BANKS I THINK NEED TO BE PUT ON THESE -- THESE G.S.E.'S, THE GOVERNMENT-SPONSORED ENTITIES. AND IF WE DO THAT, I THINK THAT WE'LL BE IN BETTER SHAPE IN FUTURE FOR NOT HAVING A -- ANOTHER FINANCIAL COLLAPSE. SO IT'S A VERY SIMPLE AMENDMENT. I WOULD ASK FOR THE YEAS AND NAYS.

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  • 08:18:44 PM

    THE PRESIDING OFFICER

    IS THERE A SUFFICIENT SECOND? THERE APPEARS TO BE. THE YEAS AND NAYS ARE…

    IS THERE A SUFFICIENT SECOND? THERE APPEARS TO BE. THE YEAS AND NAYS ARE ORDERED. WHO YIELDS TIME?

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  • 08:18:59 PM

    MR. DODD

    MR. PRESIDENT, HOW MUCH TIME REMAINS?

  • 08:19:01 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM CONNECTICUT HAS FIVE MINUTES.

  • 08:19:04 PM

    MR. DODD

    MR. PRESIDENT, LET ME YIELD TWO MINUTES TO MY COLLEAGUE FROM VIRGINIA,…

    MR. PRESIDENT, LET ME YIELD TWO MINUTES TO MY COLLEAGUE FROM VIRGINIA, SENATOR WARNER, A MEMBER OF THE BANKING COMMITTEE.

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  • 08:19:10 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM VIRGINIA.

  • 08:19:12 PM

    MR. WARNER

  • 08:20:33 PM

    MR. DODD

    SENATOR WARNER IN OPPOSITION TO THE BROWN AMENDMENT BUT I WANT TO SPEAK…

    SENATOR WARNER IN OPPOSITION TO THE BROWN AMENDMENT BUT I WANT TO SPEAK ABOUT SENATOR ENSIGN'S AMENDMENT. WE TALK ABOUT RUSHING THROUGH THINGS HERE, AND I'VE HEARD THAT MENTIONED A LOT OVER THE LAST COUPLE OF DAYS. THIS IS GOING BEYOND RUSHING THROUGH HERE. THE ENTIRE OR 97% OF ALL MORTGAGES -- 97% OF ALL MORTGAGES IN THE COUNTRY TODAY ARE GOING THROUGH THE G.S.E.'S, FANNIE AND FREDDIE. WITHOUT THEM, THERE IS NO HOUSING MARKET IN THE COUNTRY. AND SO BEFORE WE DECIDE TO DO THIS WITHOUT ANY ALTERNATIVE IN PLACE -- AND CLEARLY ONE IS NEEDED. I TAKE BACK SEAT TO NO ONE IN THE IDEA THAT WE NEED TO REFORM HOW THE G.S.E.'S ARE FUNCTIONING. BUT AS I THINK MY FRIEND JUDD GREGG MENTIONED THE OTHER DAY, AND I'LL ALMOST COMPLEX HIM, THIS IS FAR TOO COMPLEX AN ISSUE TO INCLUDE IN THIS BILL. WE ALREADY HAVE 1,500 PAGES. WE NEVER INTENDED TO DEAL WITH EVERY FINANCIAL ISSUE IN THE UNITED STATES, AND PARTICULARLY ONE WHERE THE HOUSING MARKET TODAY IS ABSOLUTELY DEPENDENT ON THIS. YOU ADOPT THIS AMENDMENT, BELIEVE ME, BY TOMORROW, YOU'LL HAVE AN ECONOMIC REACTION IN THE COUNTRY YOU WON'T WANT TO BELIEVE. SO WITH ALL DUE RESPECT TO THIS, WE'RE GOING TO DEAL WITH THIS. I'LL HAVE LANGUAGE IN THIS BILL THAT WILL ABSOLUTELY GUARANTEE WE'RE GOING TO TAKE UP THIS ISSUE IN THE COMING CONGRESS. IT HAS TO BE DONE. BUT TO GRAPPLE WITH THAT AND ALL THESE OTHER MATTERS IN THE SAME BILL IS REALLY ASKING TOO MUCH. IT DOESN'T MINIMIZE THE IMPORTANCE OF THE ISSUE BUT IT WOULD THIS EVENING, WITHOUT ANY ALTERNATIVE IN PLACE, TO ADOPT THIS KIND OF AMENDMENT AND THEN HAVE THE IMPLICATIONS. 97% OF ALL MORTGAGES IN THE UNITED STATES GO THROUGH THE G.S.E.'S. AND WITHOUT THEM, THERE IS NO HOUSING MARKET. MR. PRESIDENT, I URGE MY COLLEAGUES TO REJECT THE ENSIGN AMENDMENT.

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  • 08:22:13 PM

    THE PRESIDING OFFICER

    OFFICER: THE SENATOR FROM NEVADA.

  • 08:22:15 PM

    MR. ENSIGN

    MR. PRESIDENT, I THINK THE CASE HAS BEEN MADE THAT FANNIE AND FREDDIE ARE…

    MR. PRESIDENT, I THINK THE CASE HAS BEEN MADE THAT FANNIE AND FREDDIE ARE TOO BIG. THERE'S NO QUESTION THAT THEY'RE TOO BIG. WE'VE ALSO HAD ALMOST TWO YEARS TO DEAL WITH IT BUT WE HAVEN'T DONE ANYTHING. AND THERE'S NO -- NO QUESTION --

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  • 08:22:27 PM

    MR. DODD

    THAT'S UNTRUE. WE PASSED LEGISLATION ONLY LAST YEAR ON THE G.S.E.'S. MY…

    THAT'S UNTRUE. WE PASSED LEGISLATION ONLY LAST YEAR ON THE G.S.E.'S. MY COLLEAGUE FROM CALIFORNIA --

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  • 08:22:33 PM

    MR. ENSIGN

    NOT REFORMED THE G.S.E.'S WHAT NEEDS TO BE DONE.

  • 08:22:39 PM

    MR. DODD

    TELL ME WE HAVEN'T DONE ANYTHING.

  • 08:22:41 PM

    MR. ENSIGN

    THIS IS ONE LARGE STEP TO DOING THAT AND I BELIEVE WE SHOULD BECAUSE THEY…

    THIS IS ONE LARGE STEP TO DOING THAT AND I BELIEVE WE SHOULD BECAUSE THEY ARE TOO BIG AND THEY CAN TAKE THIS ENTIRE ECONOMY DOWN. AND THAT'S WHY WE HAVE TO LIMIT THE SIZE OF THEM. SO I WOULD ENCOURAGE OUR COLLEAGUES TO SUPPORT THIS AMENDMENT.

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  • 08:22:54 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM NEW HAMPSHIRE.

  • 08:22:56 PM

    MR. DPEG

    HAS ALL THE TIME BEEN USED UP IN OPPOSITION TO THE BROWN AMENDMENT?

  • 08:23:01 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM CONNECTICUT HAS TWO MINUTES REMAINING. THE SENATOR FROM…

    THE SENATOR FROM CONNECTICUT HAS TWO MINUTES REMAINING. THE SENATOR FROM OHIO HAS 1 MINUTE AND 45 MINUTES REMAINING. AS DOES THE SENATOR FROM NEVADA.

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  • 08:23:14 PM

    MR. GREGG

    I WOULD JUST ASK THE SENATOR FOR A MINUTE ON THIS. I DON'T UNDERSTAND THIS…

    I WOULD JUST ASK THE SENATOR FOR A MINUTE ON THIS. I DON'T UNDERSTAND THIS BROWN AMENDMENT. BASICALLY WHAT IT SAYS IS IF YOU'RE SUCCESSFUL -- WE'RE NOT TALKING ABOUT TOO BIG TO FAIL HERE. WE'RE TALKING ENTITIES, BUSINESSES THAT ARE BIG, YES. THEY'RE ACTUALLY NOT AS BIG AS A LOT OF THE INTERNATIONAL BANKS THAT THEY COMPETE WITH AND THAT WE AS A NATION COMPETE WITH, BUT THEY'RE LARGE, BUT THEY'RE SUCCESSFUL. AND YOU'RE GOING TO BREAK THEM UP? I MEAN, WHERE DOES THIS STOP? DO WE TAKE McDONALD'S ON? DO WE TAKE ON WAL-MART? DO WE TAKE ON MICROSOFT? DO WE TAKE ON GOOGLE? I MEAN, WHENEVER -- IF YOU SET A STANDARD THAT WE AS A BODY CAN JUST STEP IN AND UNILATERALLY DECIDE THAT SOME COMPANY THAT'S GOTTEN TOO LARGE DESERVES TO BE BROKEN UP, EVEN IF IT'S HEALTHY. NOW, IF IT'S A SYSTEMIC RISK BECAUSE IT'S OVEREXTENDED ITSELF, PUT ITSELF INTO A SITUATION WHERE YOU'VE GOT A QUESTION OF WHETHER OR NOT IT CAN SURVIVE AND MIGHT TAKE THE SYSTEM DOWN, THEN WE HAVE THE RESOLUTION AUTHORITY TO TAKE CARE OF THAT. BUT WHY -- WHY WOULD WE, WE, 100 PEOPLE, THINK THAT WE KNOW ENOUGH TO START BREAKING UP BUSINESSES IN THIS NATION WHICH ARE PROFITABLE AND WHICH MAKE US COMPETITIVE AS A NATION? IT REALLY DOESN'T MAKE ANY SENSE TO ME.

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  • 08:24:33 PM

    THE PRESIDING OFFICER

    DODD: I YIELD BACK.

  • 08:24:45 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM CONNECTICUT YIELDS BACK.

  • 08:24:48 PM

    MR. BROWN

    MR. PRESIDENT, I ONLY SAY THAT ALAN GREENSPAN, NOT SOMEONE WHO'S BEEN ON A…

    MR. PRESIDENT, I ONLY SAY THAT ALAN GREENSPAN, NOT SOMEONE WHO'S BEEN ON A CRUSADE TO BREAK UP AMERICA'S LARGEST BUSINESSES, SAYS TOO BIG -- TALKING ABOUT THESE BANKS, TOO BIG IS -- TOO BIG TO FAIL IS TOO BIG AND I THINK THAT SUMS IT UP PRETTY WELL. I YIELD BACK MY TIME, ASK FOR A RECORDED VOTE ON THE BROWN AMENDMENT.

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  • 08:25:16 PM

    THE PRESIDING OFFICER

  • 08:25:32 PM

    MR. DODD

    MR. PRESIDENT, FIRST ON THE ENSIGN AMENDMENT; IS THAT CORRECT?

  • 08:25:35 PM

    THE PRESIDING OFFICER

    OFFICER: THAT IS CORRECT. THE QUESTION'S ON THE ENSIGN AMENDMENT. THE YEAS…

    OFFICER: THAT IS CORRECT. THE QUESTION'S ON THE ENSIGN AMENDMENT. THE YEAS AND NAYS ARE ORDERED. -- WERE ORDERED. THE CLERK WILL CALL THE ROLL. VOTE: VOTE:

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  • 08:26:05 PM

    Senate Vote 135 - On the Amendment (Ensign Amdt No 3898)

    To amend the definition of the term "financial company" for purposes of limits on nondesposit liabilities.

    Amendment Rejected (35 - 59)
    Yea
    Nay

    Vote Details: Yea - 35
    Republican - 28
    Democratic - 7

    Vote Details: Nay - 58
    Republican - 8
    Democratic - 48
    Independent - 2

    Vote Details: Not Voting - 6
    Republican - 5
    Democratic - 1

  • 08:46:28 PM

    THE PRESIDING OFFICER

    THERE ANY SENATORS WISHING TO VOTE OR CHANGE THEIR VOTE?

  • 08:46:50 PM

    THE PRESIDING OFFICER

    ARE THERE ANY SENATORS WISHING TO VOTE OR TO CHANGE THEIR VOTE? IF NOT, ON…

    ARE THERE ANY SENATORS WISHING TO VOTE OR TO CHANGE THEIR VOTE? IF NOT, ON THIS, THE YEAS ARE 35, THE NAYS ARE 59. THE AMENDMENT AMENDMENT IS NOT AGREED TO. WITHOUT OBJECTION. THE QUESTION IS ON THE BROWN AMENDMENT. THE YEAS AND NAYS HAVE BEEN ORDERED. THE CLERK WILL CALL THE ROLL. VOTE:

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  • 08:47:29 PM

    Senate Vote 136 - On the Amendment (Brown (OH) Amdt No 3733)

    To impose leverage and liability limits on bank holding companies and financial companies.

    Amendment Rejected (33 - 61)
    Yea
    Nay

    Vote Details: Yea - 33
    Democratic - 29
    Independent - 1
    Republican - 3

    Vote Details: Nay - 60
    Republican - 33
    Democratic - 26
    Independent - 1

    Vote Details: Not Voting - 6
    Republican - 5
    Democratic - 1

  • 08:57:21 PM

    THE PRESIDING OFFICER

    PRESIDING OFFICER: ORDER IN THE SENATE. VOTE: VOTE:

  • 09:04:51 PM

    THE PRESIDING OFFICER

    MR. PRESIDENT?

  • 09:05:20 PM

    THE PRESIDING OFFICER

    THE SENATOR FROM CONNECTICUT.

  • 09:05:23 PM

    MR. DODD

    ARE NO FURTHER VOTES TODAY, AND AS I UNDERSTAND IT, THERE ARE NO FURTHER…

    ARE NO FURTHER VOTES TODAY, AND AS I UNDERSTAND IT, THERE ARE NO FURTHER -- THERE WILL BE NO VOTES TOMORROW. BUT WE WILL BE IN SESSION TOMORROW FOR MEMBERS TO COME OVER AND TO BE HEARD ON THE REMAINING PARTS OF THE BILL OR AMENDMENTS THAT WE STILL HAVE TO CONSIDER. I THINK WE ALL HEARD THE MAJORITY LEADER, SENATOR REID, MAKE THE POINT THAT I MADE EARLIER, AND THAT IS THAT I INTEND TO BE HERE ALL WEEKEND. MY STAFF AND SENATOR SHELBY'S STAFF WILL BE AS WELL. SO FOR THOSE MEMBERS WHO STILL HAVE AMENDMENTS, WE'RE MORE THAN HAPPY TO SIT DOWN AND TRY TO RESOLVE AND WORK TOGETHER ON THOSE AMENDMENTS TO TRY AND SEE IF WE CAN'T REACH AGREEMENT ON SOME AND -- OR AT LEAST TO WORK WITH THE OFFICE OF THE AMENDMENTS AND THEIR STAFFS. SO WE'LL BE HERE TO DO THAT. LET ME JUST THANK ALL MEMBERS, AGAIN. EARLIER TODAY, MR. PRESIDENT -- IT IS RICHARD SHELBY'S BIRTHDAY TODAY, MY SEATMATE ON THE BANKING COMMITTEE, THE FORMER CHAIRMAN OF THE BANKING COMMITTEE. I WOULD JUST NOTE THAT EVEN THOUGH HE WAS LATE FOR HIS DINNER WITH ANNETTE TONIGHT, HIS LOVELY WIFE, WE STEPPED ASIDE AROUND 4:00 P.M. THIS AFTERNOON AND THE MEMBERS OF THE BANKING COMMITTEE AND HIS STAFF AND OURS, WE BROUGHT OUT A NICE CAKE FOR SENATOR SHELBY, SO WE CELEBRATED IN THE MIDST OF THE DEBATE. IT'S IMPORTANT THAT THE PEOPLE IN THE COUNTRY KNOW WE CAN HAVE VERY STRONG DIFFERENCES. I HAD STRONG OBJECTIONS TO THE SHELBY AMENDMENT TODAY AND WE DEBATED. YET, DESPITE THOSE VERY STRONG DIFFERENCES, IT'S IMPORTANT FOR PEOPLE TO KNOW THAT WE ALSO CAN WORK TOGETHER. WHILE WE DISAGREE WITH EACH OTHER ON SUBSTANTIVE ISSUES, WE CAN ENJOY EACH OTHER'S COMPANY ON A PERSONAL LEVEL, ON A CIVIL LEVEL. SO LET ME, ON BEHALF OF ALL OF US HERE TODAY, WISH RICHARD SHELBY A VERY HAPPY BIRTHDAY ON THIS DAY. AGAIN, I THANK HIM FOR HIS COOPERATION AND THAT OF HIS STAFF. I THANK OUR FLOOR STAFF AS WELL FOR HERE TODAY WHO WORK VERY HARD EVERY DAY. HERE IN THE MORNING AND GO UNTIL LATE IN THE EVENING HERE WITH US. I WANT TO THANK THEM ALL FOR THEIR TREMENDOUS JOBS AS WELL. WITH THAT, MR. PRESIDENT, YOU'RE GOING TO CLOSE AND WE'RE ALL DONE. MR. PRESIDENT, I YIELD THE FLOOR.

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  • 09:07:34 PM

    THE PRESIDING OFFICER

    THE CLERK WILL CALL THE ROLL. QUORUM CALL: MR.

  • 09:07:54 PM

    Quorum Call

  • 09:15:39 PM

    MR. SCHUMER

    I ASK UNANIMOUS CONSENT THE QUORUM BE DISPENSED WITH.

  • 09:15:43 PM

    MR. SCHUMER

    I ASK UNANIMOUS CONSENT THE SENATE PROCEED TO A PERIOD OF MORNING BUSINESS…

    I ASK UNANIMOUS CONSENT THE SENATE PROCEED TO A PERIOD OF MORNING BUSINESS WITH SENATORS PERMITTED TO SPEAK FOR UP TO 10 MINUTES EACH.

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  • 09:15:50 PM

    THE PRESIDING OFFICER

    WITHOUT OBJECTION.

  • 09:15:52 PM

    MR. SCHUMER

    I ASK UNANIMOUS CONSENT THE SENATE PROCEED TO THE IMMEDIATE CONSIDERATION…

    I ASK UNANIMOUS CONSENT THE SENATE PROCEED TO THE IMMEDIATE CONSIDERATION OF H.R. 5160, WHICH WAS RECEIVED FROM THE HOUSE AND IS AT THE DESK.

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  • 09:16:01 PM

    THE PRESIDING OFFICER

    THE CLERK WILL REPORT.

  • 09:16:05 PM

    THE CLERK

    ACT TO EXTEND THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT TO PROVIDE CUSTOMS…

    ACT TO EXTEND THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT TO PROVIDE CUSTOMS SUPPORT SERVICES TO HAITI AND FOR OTHER PURPOSES.

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  • 09:16:14 PM

    THE PRESIDING OFFICER

    WITHOUT OBJECTION, THE SENATE WILL PROCEED TO THE MEASURE.

  • 09:16:17 PM

    MR. SCHUMER

    UNANIMOUS CONSENT THAT THE BILL BE READ A THIRD TIME.

  • 09:16:22 PM

    THE PRESIDING OFFICER

    THE CLERK WILL READ THE BILL FOR THE THIRD TIME.

  • 09:16:26 PM

    THE CLERK

    TO EXTEND THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT TO PROVIDE CUSTOMS…

    TO EXTEND THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT TO PROVIDE CUSTOMS SUPPORT SERVICES TO HAITI AND FOR OTHER PURPOSES.

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  • 09:16:34 PM

    THE PRESIDING OFFICER

    OFFICER: IS THERE FURTHER DEBATE? IF NOT, THE QUESTION IS ON THE PASSAGE…

    OFFICER: IS THERE FURTHER DEBATE? IF NOT, THE QUESTION IS ON THE PASSAGE OF THE BILL. THOSE IN FAVOR SAY AYE. THOSE OPPOSED, NO. THE AYES APPEAR TO HAVE IT. THE AYES DO HAVE IT. THE BILL IS PASSED.

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  • 09:16:52 PM

    MR. SCHUMER

    I ASK UNANIMOUS CONSENT THE MOTION TO RECONSIDER BE LAID UPON THE TABLE…

    I ASK UNANIMOUS CONSENT THE MOTION TO RECONSIDER BE LAID UPON THE TABLE WITH NO INTERVENING ACTION OR DEBATE AND ANY STATEMENTS RELATED TO THE BILL BE PLACED IN THE RECORD AT THE APPROPRIATE PLACE AS IF READ.

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  • 09:17:02 PM

    THE PRESIDING OFFICER

    OFFICER: WITHOUT OBJECTION.

  • 09:17:11 PM

    MR. SCHUMER

    I ASK UNANIMOUS CONSENT THAT WHEN THE SENATE COMPLETES ITS BUSINESS TODAY,…

    I ASK UNANIMOUS CONSENT THAT WHEN THE SENATE COMPLETES ITS BUSINESS TODAY, IT ADJOURN UNTIL 9:30 A.M. FRIDAY, MAY 7. THAT FOLLOWING THE PRAYER AND PLEDGE, THE JOURNAL OF PROCEEDINGS BE APPROVED TO DATE, THE MORNING HOUR BE DEEMED EXPIRED, THE TIME FOR THE TWO LEADERS RESERVED FOR THEIR USE LATER IN THE DAY AND THE SENATE RESUME CONSIDERATION OF S. 3217, WALL STREET REFORM.

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  • 09:17:33 PM

    THE PRESIDING OFFICER

    OFFICER: THE CLERK WILL REPORT. WITHOUT OBJECTION.

  • 09:17:37 PM

    MR. SCHUMER

    MR. PRESIDENT, THERE WILL BE NO ROLL CALL VOTES DURING FRIDAY'S SESSION OF…

    MR. PRESIDENT, THERE WILL BE NO ROLL CALL VOTES DURING FRIDAY'S SESSION OF THE SENATE. IF THERE IS NO FURTHER BUSINESS TO COME BEFORE THE SENATE, I ASK THAT IT ADJOURN UNDER THE PREVIOUS ORDER.

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  • 09:17:46 PM

    THE PRESIDING OFFICER

Briefings for May 6, 2010

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Hearings for May 6, 2010

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Statistics

115th Congress - Senate
Total Hours: 2039 (After 650 days)
  • Debate1175 Hours
  • Quorum Calls474 Hours
  • Votes333 Hours

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Source: Resume of Congressional Activity (senate.gov)