[Congressional Record Volume 155, Number 69 (Wednesday, May 6, 2009)]
[House]
[Pages H5174-H5179]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  PROVIDING FOR CONSIDERATION OF H.R. 1728, MORTGAGE REFORM AND ANTI-
                         PREDATORY LENDING ACT

  Ms. PINGREE of Maine. Madam Speaker, by direction of the Committee on 
Rules, I call up House Resolution 400 and ask for its immediate 
consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 400

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 1728) to amend the Truth in Lending Act to 
     reform consumer mortgage practices and provide accountability 
     for such practices, to provide certain minimum standards for 
     consumer mortgage loans, and for other purposes. The first 
     reading of the bill shall be dispensed with. All points of 
     order against consideration of the bill are waived except 
     those arising under clause 9 or 10 of rule XXI. General 
     debate shall be confined to the bill and shall not exceed one 
     hour equally divided and controlled by the chair and ranking 
     minority member of the Committee on Financial Services. After 
     general debate, the Committee of the Whole shall rise without 
     motion. No further consideration of the bill shall be in 
     order except pursuant to a subsequent order of the House.

  The SPEAKER pro tempore. The gentlewoman from Maine is recognized for 
1 hour.
  Ms. PINGREE of Maine. Madam Speaker, for the purpose of debate only, 
I yield the customary 30 minutes to the gentleman from Texas (Mr. 
Sessions). All time yielded during consideration of the rule is for 
debate only.
  I yield myself such time as I may consume.


                             General Leave

  Ms. PINGREE of Maine. Madam Speaker, I ask unanimous consent that all 
Members be given 5 legislative days in which to revise and extend their 
remarks on House Resolution 400.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Maine?
  There was no objection.
  Ms. PINGREE of Maine. Madam Speaker, House Resolution 400 provides 
for initial consideration of H.R. 1728, the Mortgage Reform and Anti-
Predatory Lending Act. The rule provides for 1 hour of general debate 
to be controlled by the Chair and ranking member of the Committee on 
Financial Services. After the general debate, there will be no further 
consideration of the bill except pursuant to the subsequent rule.
  Homeownership has always been a key part of the American Dream. 
Unfortunately, for hundreds of thousands of Americans, that dream has 
been shattered by predatory lenders that entice them to accept loans 
they could not afford.
  Now, across this country, hardworking families are unable to pay 
loans they can't afford, and they are losing their homes to foreclosure 
in unprecedented numbers. On top of this, many would argue that the 
extreme problems in the mortgage industry have been one of the most 
serious causes of our current, economic problems.
  This week we have the opportunity to rein in these lending practices. 
H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act of 2009 
is a major step forward in curbing abusive and predatory lending. This 
Congress has already passed legislation aimed at invigorating the 
housing market, by helping new homebuyers purchase homes and dispensing 
of many of the toxic assets that have had our economy in a 
stranglehold.
  The bill we take up today is the second and equally important step of 
building a stronger foundation. The regulations that are proposed will 
put a new face on the mortgage system that has become rife with fraud.
  H.R. 1728 would outlaw many of the worst industry practices, while 
also preventing borrowers from deliberately misrepresenting their 
income to qualify for a loan. The message is simple: Lenders can't give 
loans to people who can't afford them and borrowers have to tell the 
truth about their finances when applying for a loan. If you can't play 
by the rules, you will be held accountable.
  This bill draws upon everything that was once fundamentally sound 
about our banking system. It takes us back to a time when community 
bankers knew their consumers, to when they understood clearly what they 
could afford and to when they worked with them to offer loans that 
worked best for their families.
  This is a far cry from some of the practices developed during the 
real estate boom, when mortgages became far more risky and terms like 
``no-doc

[[Page H5175]]

lending'' and ``liars loans'' became part of our language.
  Madam Speaker, this bill sets minimum standards for mortgages 
requiring that consumers must have a reasonable ability to pay the loan 
back, and that mortgage refinancing must provide a net tangible benefit 
to the consumer.
  All mortgage originators will be licensed and registered. 
Securitizers and other participants in the secondary mortgage market, 
for the first time, under Federal law, will be liable for supporting 
irresponsible lending.
  The bill also prohibits financial incentives that encourage mortgage 
originators to steer consumers to higher cost and more abusive 
mortgages. In other words, lenders can't sell consumers loans that 
aren't good for them.
  Over the last decade, many subprime loans were made to borrowers who, 
due to their weak credit histories, were high credit risks. This bill 
will make sure that, instead of rewarding originators for pumping out 
high volumes of costly mortgage loans, there will be incentives for 
lenders to give borrowers the best possible price and stick with the 
borrower over the course of the loan.
  And any creditor that violates the standard set forth in this bill 
will be liable to the consumer. They will be required to either rescind 
the loan and pay for all the legal fees or work with them in a timely 
fashion to modify or refinance the loan at no additional cost to the 
borrower.
  Somewhere along the line, our mortgage system has lost its way at a 
great cost to our economy. The affordable, 30-year fixed rate mortgage 
that allowed generations to experience the American Dream of 
homeownership has been tragically replaced with a subprime loan, teaser 
rates, and unaffordable payments.
  Commonsense principles, like having the ability to pay, were 
abandoned in favor of schemes that involved collateralized debt 
obligation and credit default swaps. And as this financial house of 
cards collapsed, it is now the American taxpayers that are left holding 
the bag.
  Madam Speaker, I hope we have learned our lesson. It is time to bring 
responsibility and accountability back to mortgage lending and to make 
sure we don't face another crisis like this. This bill is essential if 
we are to stabilize the housing market, to end these abusive practices, 
and to get our economy back on track.
  I commend my colleagues, Mr. Miller, Mr. Watt, and Chairman Frank for 
their determination to this critical issue and their hard work in 
bringing it to the floor today.
  I reserve the balance of my time.
  Mr. SESSIONS. I thank the gentlewoman.
  As I rise today, before I begin my formal statements, I would like to 
acknowledge that the gentleman, Mr. Frank, the chairman of the 
committee, has come to the floor, and I want to personally thank the 
gentleman for engaging with me and perhaps other members of the 
Republican Party on working on this bill. I want to personally thank 
the chairman for that engagement and believe that it will result in the 
opportunity for Republicans to have a better say on the bill that will 
be before the House today, and I want to personally thank the 
gentleman.
  Madam Speaker, I do rise today, however, in opposition to H.R. 1728, 
which is the majority's misled attempt to bring stability back into the 
mortgage market. As the American people will soon see, many provisions 
of the bill are a destructive force to both the lending industry and, 
in turn, the American homebuyer.
  First, the new Federal Reserve regulations already exist and are 
about to be implemented in October of this year, which means that this 
work on predatory lending has already taken place.
  Second, this bill establishes a new group of qualified mortgages, 
which limits consumer choice of mortgages and unduly burdens the 
mortgage industry.
  Third, it establishes new credit risk retention rules, which 
dramatically limit the successful functioning of the secondary market, 
especially small, nonbank lenders.
  And, fourth, it authorizes a $140 million slush fund for legal 
defense funds.
  Last July, the Federal Reserve issued new regulations under the Home 
Ownership and Equity Protection Act which implemented many provisions 
of the predatory lending legislation of Congress last year. As part of 
this implementation, new Federal rules have been developed which 
address predatory practices and products, bringing an end to a variety 
of issues which have haunted the subprime market, such as poor 
underwriting standards. These rules already are set to take effect in 
October of this year.
  My colleagues from both sides of the aisle understand that these new 
regulations will soon be in effect, and certainly cleaning up the 
lending industry is important. Even Chairman Frank has previous 
knowledge, and I quote, that ``the Federal Reserve has adopted 
regulations so that the predatory and deceptive lending practices that 
led to the subprime crisis will be prohibited,'' already done.
  But rather than allowing the Fed's carefully constructed regulations 
to take effect, this new majority has decided to draft their own 
mortgage reform bill with their own unique twist. Unfortunately, this 
twist includes new and untested mandates and duties, that even if they 
can be implemented, they may end up punishing the very consumers that 
this majority party is trying to protect.
  My question is simple: Why is Congress meddling with regulations that 
will soon yield significant and expected benefits in combating mortgage 
fraud, eliminating the bad actors of the industry, and providing 
greater protection to the consumer?
  While this legislation attempts to correct past excesses in the 
mortgage market by establishing new standards for mortgage origination, 
and imposing greater legal liability on the secondary market, this 
bill, in fact, injects legal uncertainty into the lending process, 
thereby raising the cost and reducing the availability of mortgage 
credit to consumers. Allowing a slush fund for people to sue is a prime 
example of what we are talking about. I would like to say this is an 
unintended consequence. I think it's an intended consequence.
  One of the primary provisions which contribute to the higher cost and 
reduced availability of loans is the misconstrued establishment of a 
new class of loans called qualified mortgages. Any loans deemed as 
qualified mortgages are, in theory, protected under the bill's limited 
safe harbor and are exempt from the new lending risk retention 
requirements.
  All other nonqualified mortgages are excluded from this safe harbor 
and siphoned into the category of subprime mortgages. In turn, any 
lender can be sued for selling nonqualified mortgages.
  The kicker, however, is that H.R. 1728 makes all real safe harbor 
mortgages rebuttable, meaning that borrowers can sue any creditor for 
any mortgage.
  Under the terms of this bill, no mortgages are protected by safe 
harbor laws and all lenders can be sued. That is going to have a direct 
and devastating consequence on the marketplace.
  When the bill was introduced in Congress, the last Congress, the bill 
appropriately filtered most mortgages into three types of loans. For 
the sake of explanation, let's call them green, yellow and red 
mortgages.
  Green light mortgages are good, traditional, protected mortgages. 
Yellow light mortgages are potentially hazardous mortgages. In this 
case, the consumer has the right to sue for loss in the case of 
predatory lending, while the lender maintains the right to a fair 
defense.

                              {time}  1045

  Lastly, red mortgages are simply mortgages presumed bad and the law 
allows the consumer to sue for any loss.
  Unfortunately, according to this year's version of the bill, the law 
will only allow for green and red light mortgages, and, most 
importantly, neither of them will have a real safe harbor because 
borrowers can sue any creditor for any mortgage. Regardless of how safe 
and affordable and how well an alternative mortgage may have served the 
borrower, lenders will begin making fewer and more expensive loans out 
of fear of being sued.
  At the end of the day, what is the purpose of this mortgage reform? A

[[Page H5176]]

government-mandated mortgage structure enforced by the very taxes paid 
by the American homeowner, or providing for consumer choice of loans 
which best suits the needs of responsible homebuyers with the assurance 
of meaningful customer protection? I think we can see what we are going 
to get.
  Madam Speaker, I have a concern also with the new ``credit risk 
retention'' requirements. This provision will force any loan originator 
to hold 5 percent of any mortgage that does not fit the bill's narrow 
safe harbor, what is known as the ``qualified mortgage.'' The ``credit 
risk retention,'' as it is referred to, requirement is a far-reaching 
requirement that leaves my colleagues and me confused as to how certain 
groups, such as smaller lenders, will even survive.
  The fact stands that many smaller nonbank lenders do not have the 
same reliable sources of funding as depository institutions. These 
lenders would be unable to compete, let alone to operate, at a 
competitive level. They simply cannot compete. Additionally, this 
provision will necessitate that larger lenders increase their capital. 
This is the wrong approach during a time when the government is 
concerned that lenders are insufficiently capitalized; moreover, during 
a time in which the government is making the taxpayer pay for these 
insufficiencies. David Kittle, chairman of the Mortgage Bankers 
Association, testified in front of the Financial Services Committee on 
April 23 of this year. And here is what he said, ``at a time when 
policymakers are focusing so much of their efforts on injecting capital 
into the financial services sector, this provision would force an 
inefficient use of capital across all types of institutions and 
threaten to further impair their ability to lend at all.'' This will 
simply narrow choices, lessen credit and increase costs for borrowers 
and taxpayers, as well as increasing lawsuits.
  While a critical element of mortgage reform should be giving 
incentives for greater accountability to lenders without damaging the 
mortgage market, H.R. 1728 imposes huge liability on all groups 
involved in issuing a loan while circumventing any investor liability. 
Unfortunately, the bill magnifies the already substantial legal risks 
faced by participants in the mortgage market, dramatically reducing any 
incentives for lenders to partake in the mortgage market.
  And as if new litigation were not enough, this bill authorizes $140 
million for legal assistance grant funds to legal organizations to 
provide taxpayer-funded legal defenses for homeowners in default or 
facing eviction. Simply put, this bill sets up lenders for failure by 
burdening them with undue liabilities and funding trial lawyers. This 
bill lacks the key taxpayer and lender protections, opening the door to 
taxpayer-financed frivolous civil lawsuits which will ultimately ruin 
the mortgage industry. I'm sure it will empower a bigger Federal 
Government, however.
  Additionally, this bill subjects the taxpayer to involuntarily 
funding groups like ACORN, who will be eligible for receiving grants 
from this legislation. My colleague from Minnesota was able to add a 
provision which sufficiently blocks any organization that has been 
indicted from receiving any funds--for example, ACORN. Unfortunately, 
the majority is actively making efforts to reopen groups like ACORN to 
taxpayer funds with no regard for past indiscretions.
  Restructuring the mortgage industry is essential in returning safety 
and security to the housing industry. We don't debate that. 
Unfortunately, the majority party is choosing to streamline an 
overzealous mortgage bill without allowing the Federal Reserve 
regulations to first go into effect, not to mention the destructive 
nature of this bill on the lending industry and what the impact of this 
bill will have on every single American who is striving for the dream 
of homeownership, namely, making it more expensive and less available 
to those people who need it the most.
  H.R. 1728 is a jackpot for trial lawyers, kryptonite for the mortgage 
industry, and ultimately crushes dreams of homeownership for many 
Americans. Therefore, Madam Speaker, I oppose the rule and the 
underlying legislation, and I hope my colleagues do the same.
  I reserve the balance of my time.
  Ms. PINGREE of Maine. Madam Speaker, I yield 3 minutes to the 
gentleman from Massachusetts, the Chair of the Committee on Financial 
Services, Mr. Frank.
  Mr. FRANK of Massachusetts. Madam Speaker, I am grateful for this 
very clear delineation of the Republican philosophy, ``do nothing about 
subprime mortgages.'' Now, the gentleman from Texas did say, well, the 
Federal Reserve is doing it. Understand that in 1994, a Democratic 
Congress gave the power to the Federal Reserve to promulgate those 
regulations. Alan Greenspan refused to use them. From 1995 on, he 
refused to use them.
  At some point in the late 1990s and the early part of this century, 
it became clear to many of us, led by my colleagues from North 
Carolina, Mr. Miller and Mr. Watt, that we had problems in the subprime 
area. And people tried to get Mr. Greenspan to do it, and he wouldn't 
do it. So we then said, ``okay, we had better act legislatively in the 
absence of the Federal Reserve doing it.'' We were blocked from doing 
it by the Republican leadership of the House.
  The gentleman from North Carolina (Mr. Watt), the gentleman from 
North Carolina (Mr. Miller) and I tried to get some legislation. Some 
Republican Members were ready to cooperate with us. But the decision 
came from the Republican leadership ``no.'' So from 1994, when Congress 
voted authority to the Federal Reserve, until 2007, after the Democrats 
had come back into the majority, nothing was done to block subprime 
mortgage abuses. Nothing. And not a single piece of legislation came 
forward when the Republicans were in control.
  Now, I would add, by the way, that in 2007 we did a bill, we had some 
bipartisan cooperation, not a majority of Republicans, the bill passed 
the House but failed in the Senate. It didn't come up. Now we are doing 
it again. At no point have we seen a Republican alternative. The 
gentleman from Texas had some criticisms. We have never seen a 
Republican proposal to deal with subprime mortgages. Now they might 
say, ``well, we are in the minority, what is the point?'' But they were 
in the majority, Madam Speaker, from 1995 to 2006.
  The gentleman from Texas (Mr. Hensarling) submitted an amendment to 
the bill which talks about how subprime mortgages skyrocketed in 
percentage from 2002 to 2006 under the Bush administration and under 
Republican control of Congress. Members on the Democratic side said, 
``let's do something it about it.'' The Republican answer was ``no.'' 
So we have here the clearest demonstration of the Republican approach 
of ``do nothing.'' But then the gentleman said, ``oh, no, the Federal 
Reserve has done it.'' Well, first of all, understand the inconsistency 
between conservative attacks on the undemocratic nature of the Federal 
Reserve in some context and the decision to allow Congress to let them 
legislate instead of the Congress.
  The notion, we heard it on credit cards and we heard it today, the 
notion that the elected officials of this country should not intrude 
when the Federal Reserve has proposed legislation turns democracy on 
its head and is wholly inconsistent with other arguments we get. Beyond 
that, while I appreciate what Mr. Bernanke has done----
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Ms. PINGREE of Maine. I yield the gentleman 2 additional minutes.
  Mr. FRANK of Massachusetts. Mr. Bernanke, to his credit, repudiated 
the no-regulation, extreme conservative philosophy of Mr. Greenspan and 
promulgated rules, but only after a Democratic Congress began to act on 
this. And I think he did a good job and deserves credit.
  The problem is that there are things he cannot do. The Federal 
Reserve cannot change statute. So, yes, this bill goes beyond what the 
Federal Reserve did. I'm glad the Federal Reserve is doing it. I'm glad 
that Mr. Bernanke reversed the Greenspan position which had been 
supported by the Republicans to do nothing. We will debate individual 
cases of this. As to legal services, yes, we have had examples of 
individuals being evicted, being foreclosed inappropriately. What this 
does is to say that they can get some legal help.

[[Page H5177]]

This is a defensive measure for people who are going to be losing their 
homes. And we found that there were some problems there.
  As to securitization, we will get into this. But, yes, I do agree we 
have people who have come to us and said, ``you know what? We don't 
have any money. Why don't you let us make loans?'' Well, we don't think 
people should be lending money they don't have and immediately selling 
the loans. Here is the point, Madam Speaker, we will get into it later. 
The extension of loans to people who shouldn't have gotten them, partly 
the fault of the borrowers, partly the fault of the lenders, whatever 
the reason, that was the single biggest cause of the subprime crisis.
  And the record of the Republican Party, from taking office in 1995 
until today, is to oppose overwhelmingly any effort to do anything 
about it, from Mr. Greenspan's refusal to use the authority he was 
given to the failure of the Republicans to this day to come forward 
with any constructive legislative alternative. So, yes, there might be 
room for debate, but as between doing something to prevent this and 
doing nothing, I believe ``something'' wins.
  Mr. SESSIONS. Madam Speaker, I find myself in a position of making 
sure that this body does understand that lots of debates have taken 
place. I know the gentleman, Mr. Frank, has been on the committee for a 
long time and has argued very vehemently for years that the crisis was 
not about to happen, that the crisis and the changes that were made to 
Fannie and Freddie and subprime mortgages and all these things, that 
there was no crisis that was getting ready to happen. And I would 
respectfully say to the gentleman, it seems like Mr. Greenspan agreed 
with that. Something did happen. And it is up to us as thoughtful 
Members to make sure that we appropriately then take action where 
necessary. This was done last year. The Federal Reserve understood it, 
went through a deliberative process, took feedback from the industry 
and took feedback from consumers. The damage had been done.
  We are now talking about predatory lending. We are not talking about 
what got us in the problem in the first place. We are talking about now 
that people are in trouble, how do we help save them? How do we help 
work with them? How do we make sure that the system properly works not 
just for people who might be in trouble, but people who might be in the 
future? The Federal Reserve has already done this. We already know that 
those rules will take place in October.
  What I would argue with the gentleman about is going then too far, 
not doing something. I wouldn't argue with the gentleman. The gentleman 
is really very thoughtful in much of what he does. But the legislation 
will narrow choices, lessen credit and increase costs for borrowers and 
taxpayers. And at some point there has to be some balance. We are in 
agreement that we ought to move forward, that we ought to do things, 
that the laws that will take place through the regulation of the Fed 
are proper, necessary and needed. But we are not for making lawsuits a 
better part of what we are doing, providing money for people to sue, 
narrowing choices, lessening credit and increasing costs. And that is 
our decisionmaking point where we disagree with not only this 
legislation but perhaps moving this bill in the first place.
  I reserve the balance of my time.

                              {time}  1100

  Ms. PINGREE of Maine. Madam Speaker, I yield 1 minute to the 
gentleman from Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Madam Speaker, the gentleman from Texas 
is wrong to say we didn't want action. Yes, in the early part of the 
century we thought there wasn't a crisis. We tried to get Alan 
Greenspan to use the authority we gave him.
  In 2003 I said that Fannie Mae and Freddie Mac were in crisis, as I 
didn't think they were, as Wachovia wasn't and Merrill Lynch.
  In 2004, the Bush administration ordered Fannie Mae and Freddie Mac 
significantly to increase the subprime mortgages and low-interest 
mortgage rates. At about that time, and as Mr. Hensarling's amendment 
shows, it was around that time that the Bush administration presided 
over a great increase in subprime mortgages.
  Beginning in 2003, we tried to get legislation adopted, and the 
Republicans said no. The Republicans wouldn't do it. It wasn't until 
2007 that there was any action at all. And it is not a coincidence that 
the Fed was given authority under a Democratic Congress in 1994 and 
didn't exercise it until a Democratic Congress came back in 2007. Yes, 
I was in the Congress. I was in the minority, and I was frustrated by 
the failure of the Republicans to do anything.
  The SPEAKER pro tempore. The gentleman's time has expired.
  Ms. PINGREE of Maine. I yield an additional minute to the gentleman 
from Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Now under Mr. Oxley, he did try to amend 
the rules to regulate Fannie Mae and Freddie Mac, and a bill passed the 
House in 2005. I voted for it in committee, but opposed it on the floor 
because it restricted organizations like the Catholic Church from 
participating in affordable housing. But the bill failed after 2005. 
The bill to regulate Fannie Mae and Freddie Mac, which passed the 
House, where I served, it died later on in part because, as Mr. Oxley 
has made clear, the Bush administration and he got into a disagreement.
  So the Republicans had authority to pass bills on Fannie Mae and 
Freddie Mac and subprime lending for 12 years and did nothing. We, in 
2007 when we came into the majority, very promptly passed a bill to 
regulate Fannie Mae and Freddie Mac and to regulate subprime lending 
over consistent Republican opposition.
  Mr. SESSIONS. Madam Speaker, you know, two points: first of all, we 
are sitting here blaming each other. I hope I am not doing that about 
the past. We were talking about today's bill, the right way to balance 
what needs to be done now with the understanding that the Fed has 
already acted, notwithstanding whether the gentleman, Mr. Frank, thinks 
that they should have acted or whether the chairman of the Fed should 
have done something. The bottom line is that the gentleman was right 
there with him the whole time. ``There is no problem. There is no 
systemic risk.'' And that was the constant message that we heard from 
the gentleman, Mr. Frank, about the same big issue.
  But I would like to take issue with one point, and that is 
Republicans have done nothing. Well, I would like to say that there was 
Republican-authored legislation called the SAFE Act. And the SAFE Act 
which created licensing and registration for the mortgage industry was 
enacted last year.
  The Conference of State Bank Supervisors had called ranking member, 
oh, yes, he is a Republican, Spencer Bachus' bill ``the most 
significant mortgage reform in years.''
  So let's be a little bit clear: Republicans were not here doing 
nothing. Our friends, the majority party, were offering public comment 
about what was not going to happen, and the subprime mortgage effort 
did happen. And now what we are trying to do is work with a set of 
rules and regulations that have been agreed to by the Fed, well 
understood, and the industry as well down the line to make sure this 
October we know what those rules are. And now we are going to have our 
friends in the majority party to overlay new rules that empower trial 
lawyers that will narrow choices, lessen credit, and increase costs. 
There has got to be some balance.
  Mr. Speaker, I would argue today that notwithstanding the gentleman 
from Massachusetts (Mr. Frank) and the gentleman from Alabama (Mr. 
Bachus) and the gentleman from Texas (Mr. Hensarling), who has been 
mentioned a couple of times, have been very active for 6 or 8 years on 
this issue. Doing nothing would not be an accurate description. Saying 
that Republicans blocked attempts would not be a correct assertion. But 
saying that there has been work in the aftermath to try and do the 
right thing that is right on target already exists and we don't need to 
add to that would be equally true also.
  I reserve the balance of my time.
  Ms. PINGREE of Maine. Mr. Speaker, I yield 1 minute to the gentleman 
from Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Mr. Speaker, first I reiterate, yes, I 
did say

[[Page H5178]]

in 2003 I didn't think we had a crisis. As the Bush administration 
increased the number of subprime loans that it required Fannie Mae and 
Freddie Mac to take, and as we saw the subprime crisis, I said we did 
have one and pushed for legislation. But most importantly, the 
gentleman referred to what is called the SAFE Act. It did not pass as a 
standing bill. First of all, during the period when the Republicans 
controlled the House for 12 years, they passed no such legislation. It 
never even came up in committee. When the Democrats took power, we 
passed a subprime bill. The provision he is talking about was the 
section of the subprime bill that was passed over the objection of a 
majority of the Republicans.
  My guess is that the gentleman from Texas probably voted against the 
bill he has just hailed. We can check the Record.
  But, yes, there was an amendment offered by the gentleman from 
Alabama that we worked on. It became a part of the Democratic bill that 
was passed over the objections of a majority of Republicans, and the 
gentleman from Alabama was severely criticized by most Republicans for 
voting for the bill.
  The SPEAKER pro tempore (Mr. Ross). The gentleman's time has expired.
  Ms. PINGREE of Maine. I yield the gentleman an additional 30 seconds.
  Mr. FRANK of Massachusetts. During the period of Republican rule, 
nothing happened. When the Democrats took over, we did pass a subprime 
bill of which the SAFE Act was a part. It was opposed in final passage 
by a majority of the Republicans. The author, Mr. Bachus, was 
criticized by many Republicans for supporting the bill. And I would be 
interested in knowing whether the gentleman from Texas voted for the 
bill which he has just hailed.
  Mr. SESSIONS. Mr. Speaker, I am very pleased to engage the gentleman, 
and I appreciate him doing this. But, Mr. Speaker, my point would be 
the gentleman is trying to get into a political argument especially 
about how I may or may not have voted. He supposes I would have voted 
against the bill because it was a reasonable bill. I think that is what 
he is trying to say. I don't know how I voted on the bill, this section 
of the bill, at all.
  What I would say to you is that you can't have it both ways. You 
can't say Republicans did nothing and then say, oh, Republicans, a 
handful of Republicans did something, but the vast majority of 
Republicans voted against it. That is, Mr. Speaker, trying to take what 
we are attempting to do here today, making public policy wise choices 
in the open, and by the way, Republicans are for doing this on the 
floor to talk about every amendment, to talk about the processes, to 
talk about the expectations of performance, to talk about what we 
expect the laws to do; and now he is trying to have it both ways to 
say, I guess it was a Republican idea, but most Republicans opposed it. 
It was a Republican idea by the ranking member of Financial Services, 
Spencer Bachus, who is a Republican, and who moved forth in those 
responsibilities an opportunity for something to become law. And it is 
obvious the gentleman, Mr. Frank, at the time was willing to engage in 
that, and that should make all of us feel good.
  But I don't think we should turn around later and diminish that 
effort just because we want to make political points here today. And I 
don't mind making political points because here are the political 
points I would make: today we are going to narrow choices, lessen 
credit, and increase costs for borrowers and taxpayers. We are going to 
provide at a time when our country should be trying to lessen spending 
of money, we are going to provide an extra $140 million for people to 
go sue in court to overload our courts when resolution should be done 
by the legislation, but in fact also by the rules that are already 
provided by the Federal Reserve.
  Republicans aren't here just to say no and to come to fight. We are 
after good public policy. We are after public policy that will work for 
people and a marketplace so there are lenders in every single 
community.
  This bill that we are here today on will lessen, take away the number 
of qualified lenders who are available because now the costs are going 
to go up, fewer consumers will be able to get the loans and will pay 
more money because now we are going to give from the Federal Government 
$140 million to go sue somebody.
  Legislation should be about finding a balance. I'm not opposed to 
remedies. I'm not opposed to courts and people litigating for the right 
reasons. I am simply not interested in now that it is over, trying to 
find a way to beat up people when resolution, keeping people in their 
homes, finding a way for that balance to work.
  And today we will give full credit to Mr. Frank. He wants political 
credit; let's give him full political credit. All the Democrats will 
get full political credit today for doing essentially two things: 
number one, reworking what is already laws that are going to begin in 
October by the Federal Reserve; and, secondly, we will give you credit 
for these principles, narrowing choices, lessening credit, and 
increasing costs for borrowers and taxpayers. Making it more difficult 
at a time when America and Americans need the chance to go get a home 
loan, we are now going to add more rules and regulations to the 
mortgage industry.
  This is exactly where Republicans do draw the line. We are for well-
balanced, well-meaning, thoughtful articulation on this floor to make 
sure we understand what we are doing. We are not for suing people and 
not for adding costly rules and regulations. The industry has already 
told us that is exactly what the intended outcome of this bill will be.
  I reserve the balance of my time.
  Ms. PINGREE of Maine. Mr. Speaker, I yield 1 minute to the gentleman 
from Massachusetts (Mr. Frank), the chairman of the Committee on 
Financial Services.
  Mr. FRANK of Massachusetts. Mr. Speaker, the record is relevant 
because when you----


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. The Chair notes a disturbance in the gallery 
in contravention of the law and rules of the House.
  The Sergeant at Arms will remove those persons responsible for the 
disturbance and restore order to the gallery.
  Mr. FRANK of Massachusetts. Mr. Speaker, as I was saying, the notion 
that the differences between the parties is irrelevant, I understand 
why, given the Republican's record, they want to argue this.
  The fact is, yes, the gentleman from Alabama had a good idea. He was 
chairman of the subcommittee during the 12-year period and could have 
brought it to the floor. But because of the Republican position that no 
regulation was appropriate, he couldn't do that. The gentleman from 
Texas said this was a very good idea. I agreed; that's why I supported 
it.
  By the way, the gentleman from Texas voted against the bill, along 
with two-thirds of the Republicans that embodied it. So we wouldn't 
have had it if he had carried his way.
  But the fact is that for 12 years after the subprime crisis broke, 
the Republican Party wouldn't allow the gentleman from Alabama, who was 
then chairman of the subcommittee, to bring his bill up. We did bring 
the bill up, yes, in a bipartisan way. Unfortunately, the gentleman 
from Alabama was then criticized by Members of his party on the 
conservative side and has been forced to withdraw it a little bit.
  The SPEAKER pro tempore. The gentleman's time has expired.
  Ms. PINGREE of Maine. I yield 15 seconds to the gentleman.
  Mr. FRANK of Massachusetts. Differences between the parties are 
relevant. For 12 years, the Republicans wouldn't allow the gentleman 
from Alabama to bring his bill to the floor. In our first year, we did 
and I was glad to work with him, but it was a minority position opposed 
by the great majority of the Republicans, including the gentleman from 
Texas.
  Mr. SESSIONS. Mr. Speaker, I appreciate this one-sided debate about 
how bad Republicans are, how we did nothing; but I believe the 
gentleman has already well answered that question and heard it that 
Republicans in fact have been proactive during this entire time.
  Mr. Speaker, I include for the Record a letter dated May 5, 2009, 
from the Mortgage Bankers Association whose title is ``Investing in 
Communities.''

[[Page H5179]]

                                 Mortgage Bankers Association,

                                      Washington, DC, May 5, 2009.
     Hon. Nancy Pelosi,
     Speaker of the House, U.S. House of Representatives, 
         Washington, DC.
     Hon. John Boehner,
     Republican Leader, U.S. House of Representatives, Washington, 
         DC.
       Dear Speaker Pelosi and Leader Boehner: On behalf of the 
     2,400 members of the Mortgage Bankers Association (MBA), we 
     are writing with regard to H.R. 1728, the Mortgage Reform and 
     Anti-Predatory Lending Act, a bill the House is scheduled to 
     consider later this week.
       Congress is facing a once-in-a-generation opportunity to 
     improve the mortgage lending process. If carefully crafted, 
     improved regulation is the best path to restoring investor 
     and consumer confidence in the nation's lending and financial 
     markets and assuring the availability and affordability of 
     sustainable mortgage credit for years to come. At the same 
     time, if regulatory solutions are not well conceived, they 
     risk exacerbating the current credit crisis.
       While we applaud the comprehensive nature of H.R. 1728, we 
     believe this legislation misses the opportunity to replace 
     the uneven patchwork of state mortgage lending laws with a 
     truly national standard that protects all consumers, 
     regardless of where they live.
       MBA is also concerned with the bill's requirement that 
     lenders retain at least five percent of the credit risk 
     presented, by non-qualified mortgages. While this provision 
     was improved by the Financial Services Committee, it will 
     still make it highly problematic for many lenders to operate, 
     particularly smaller non-depositories that lend on lines of 
     credit. It will also necessitate that larger lenders markedly 
     increase their capital requirements. Both results will narrow 
     choices, lessen credit, and force an inefficient use of 
     capital at the worst possible time for our economy.
       Finally, MBA believes the bill's definition of ``qualified 
     mortgage'' is far too limited and will result in the 
     unavailability of sound credit options to many borrowers and 
     the denial of credit to far too many others. We urge the 
     House to expand the definition and to provide a bright line 
     safe harbor so that if creditors act properly, they will not 
     be dogged by lawsuits that increase borrower costs.
       MBA would like to commend the House for the priority it has 
     given to reforming our mortgage lending process. It is 
     imperative that we continue to work together to stabilize the 
     markets, help keep families in their homes and strengthen 
     regulation of our industry to prevent future relapses.
           Sincerely,
     John A. Courson,
       President and Chief Executive Officer.
     David G. Kittle, CMB
       Chairman.

  I would like to read from that letter signed by John Courson, 
president and chief executive officer, and David G. Kittle, chairman, 
and these are people who are in the business, and they say this bill 
will ``narrow choices, lessen credit, and force an inefficient use of 
capital at the worst possible time for our economy.''

                              {time}  1115

  So the argument that I'd make is that evidently the Fed--their rules 
were not accused of this. They were seen by the industry and by 
consumer groups as the right thing to do. We're worried about it.
  So we'll give the gentleman full credit. The Democrats get full 
credit for bringing the bill to the floor today. I don't know who's 
going to vote for it and I don't know who's going to vote against it, 
but what I will say is let the facts of the case be very evident--
narrow choices, lessening credit, and a force of an inefficient use of 
capital at the worst possible time for our economy.
  Republicans are for balance. We are not for and would not support 
something that would be described by the industry as bad for consumers.
  I reserve the balance of my time.
  Ms. PINGREE of Maine. I reserve the balance of my time.
  Mr. SESSIONS. I want to thank not only the gentlewoman for extending 
the time, but also the gentleman, Mr. Frank, for engaging in this 
issue.
  Mr. Speaker, testifying to the Financial Services Subcommittee on 
behalf of a coalition of consumers, advocacy groups, and labor 
organizations from across the country, Margaret Saunders of the 
National Consumer Law Center, called this bill ``convoluted and 
virtually impossible as a mechanism to solve the current problem.'' 
Convoluted and virtually impossible as a mechanism to solve the current 
problem.
  We need to go back to the drawing table and remove many of the 
political provisions which will only cause further damage in the 
marketplace. It will further damage a fragile mortgage market that is 
in need of greater certainty, not more uncertainty.
  This afternoon in the Rules Committee, my friends on the other side 
of the aisle will have an opportunity to allow for quality changes to 
the underlying legislation, opportunities for Members of this body to 
hear debate and vote on amendments. I encourage an open rule, which 
will be an open and honest discussion just like we've had here on the 
floor today, on the discussions that the House will handle tomorrow.
  With respect to the 50-plus amendments to the legislation that were 
submitted to the Rules Committee yesterday morning, we'd like to see 
them all be made in order. Congress has an opportunity to provide for 
quality, meaningful returns, and to help the current mortgage lending 
process, and it is my hope that my Democrat colleague friends will 
allow for that process.
  With that, I oppose this rule and look forward to a better rule 
tomorrow. As always, I think that a better rule tomorrow, an open rule, 
will yield not only the intended results, but will help the American 
people to know what we intend to do with this legislation.
  I yield back the balance of my time.
  Ms. PINGREE of Maine. First, I once again want to thank Mr. Miller 
and Mr. Wamp, my colleagues, for their excellent work on this bill, and 
to Chairman Frank for his work as well and for being here on the floor 
with us today for some very lively and important debate that clearly 
emphasized the importance of this bill, how long we have waited for 
this reform, and the damage that has been done by not having this 
reform for this considerable length of time.
  By ensuring borrowers only secure loans that they can afford, this 
legislation will give Americans the best opportunity to purchase and 
maintain a home.
  This legislation is about accountability. It will reward people who 
play by the rules and guarantee hard consequences for those individuals 
and institutions that do not. It's good for borrowers, it's good for 
lenders, and it is very good for our economy as a whole.
  I urge a ``yes'' vote on the previous question, and on the rule.
  I yield back the balance of my time, and move the previous question 
on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.

                          ____________________