|9:00 PM EST||
Sean P. Duffy, R-WI 7th
Mr. DUFFY. Mr. Speaker, I listened to the ranking member talk about this bill tonight and you would think the sky is falling if this CLO portion of our package is passed. The problem with that argument is that 53 of the Democrats on the Financial Services Committee, with Republicans, voted to pass this package last year. Only three Democrats dissented--only three. Then it passed this House floor by a voice vote.
If this bill was so disastrous for the American economy, I would ask my good friend across the aisle: At 9 o'clock on a Tuesday night where Members of Congress have nothing going on, where are the Democrats? Where is the outrage with this package?
There is only one. There is only one, because many Democrats in the last Congress voted for this bill because they agreed with it. It didn't get anywhere because it fell into Harry Reid's trash bin.
The Volcker rule directed under Dodd-Frank was supposed to stop big banks from using insured customer funds to engage in risky investments. CLOs had a default rate of less than one-half of 1 percent. These are safe. This wasn't the cause of the financial crisis. The cause was Fannie and Freddie securitizing loans that had no documentation, no verification of income, and subprime mortgages. In Dodd-Frank, the root cause of the financial crisis wasn't addressed because Fannie and Freddie weren't
even brought up.
When we talk about Dodd-Frank, the ranking member is so concerned about Dodd-Frank being chipped away, but the CLO issue wasn't even in Dodd-Frank. Section 619 of Dodd-Frank states:
Nothing in this section shall be construed to limit or restrict the ability of a banking entity or nonbank financial company supervised by the Federal Reserve Board to sell or securitize loans in a manner otherwise permitted by law.
CLOs were excluded in Dodd-Frank, which the ranking member voted for. But not only that, in the first proposal of the Volcker rule, CLOs weren't even included.