[Congressional Record Volume 155, Number 189 (Monday, December 14, 2009)]
[Extensions of Remarks]
[Page E2994]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         WALL STREET REFORM AND CONSUMER PROTECTION ACT OF 2009

                                 ______
                                 

                               speech of

                           HON. RUSH D. HOLT

                             of new jersey

                    in the house of representatives

                      Wednesday, December 9, 2009

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 4173) to 
     provide for financial regulatory reform, to protect consumers 
     and investors, to enhance Federal understanding of insurance 
     issues, to regulate the over-the-counter derivatives markets, 
     and for other purposes:

  Mr. HOLT. Madam Chair, I rise in support of H.R. 4173, the Wall 
Street Reform and Consumer Protection Act of 2009, and to commend 
Chairman Frank, Chairman Peterson, and the broad coalition of Members 
who have worked to craft this financial services reform legislation.
  The American Recovery and Reinvestment Act was an important first 
step, but we are still in the throes of recovery from the worst 
financial crisis since the Great Depression, which was caused m large 
part by more than a decade of regulatory failures. Reckless, abusive 
and irresponsible practices on the part of some in the mortgage 
issuance and financial services industries combined to create a perfect 
storm, resulting in a catastrophic economic collapse. The country had 
fallen into recession by the end of 2007, which exploded into an 
economic crisis as the subprime mortgage crisis unwound, Lehman 
Brothers filed for bankruptcy and AIG collapsed.
  The impact on the American people has been profound. Household net 
worth dropped by more than $14 trillion from 2007 to mid-2009, the 
value of retirement assets dropped by 22 percent between 2006 and in 
mid-2008, total home equity dropped from $13 trillion in 2006 to $8.8 
trillion by mid-2008, and as of today, almost one in four homeowners 
owes more on their mortgage than their home is worth. In addition, 
Americans in every income strata have simply not been protected from 
even the most egregious behavior. The Securities and Exchange 
Commission utterly failed to discover and prevent the collapse of a $65 
billion Ponzi scheme, as well as several others which also resulted in 
billions in losses to investors. Meanwhile, millions of Americans who 
live paycheck to paycheck and rely on payday loans are being charged 
annual interest rates of 400 percent or more, totaling nearly $5 
billion per year.
  The Wall Street Reform and Consumer Protection Act is an aggressive 
and comprehensive response to the broad spectrum of problems the recent 
economic crisis brought to light. It creates a new Consumer Financial 
Protection Agency to ensure that bank loans, mortgages, payday loans, 
overdraft fees and credit card policies are fair, affordable, 
understandable, and transparent. It establishes a new Financial 
Services Oversight Council to monitor and respond to systemic risk, to 
prevent the sort of tidal wave of catastrophic interconnected 
developments that brought down the economy in 2008. It puts measures in 
place to ensure that there will never again be a company deemed ``too 
big to fail,'' and it establishes an industry-funded dissolution fund 
to ensure that taxpayers will not be asked to bail out any such company 
if it goes into collapse. The bill also includes legislation passed in 
the House earlier in the year, to regulate the type of incentive-based 
executive compensation that provoked some of the riskiest and most 
reckless behavior in the financial services markets, and to prohibit 
the sorts of fraudulent and abusive mortgage issuance practices that 
caused the subprime mortgage crisis.
  I am also pleased that the bill includes several strengthening 
amendments I offered, and I thank Chairman Frank again for his support 
of those amendments and for including them in the Manager's Amendment. 
My amendments would clarify that the newly-created Financial Services 
Oversight Council, rather than one dominant member thereof (the Federal 
Reserve Board), is the systemic risk regulator empowered under the Act. 
The amendments would also ensure that the Council is a broad-minded 
think tank staffed equitably by all of its Voting Members, rather than 
predominantly by one (the Department of the Treasury). The staff would 
remain on the payrolls of the detailing agency, pre-empting a budgetary 
problem for the Council.
  In addition, the bill includes two good government amendments I 
offered, which clarify that financial companies cannot be compelled by 
the systemic risk regulator to waive any privilege (such as attorney-
client privilege) when providing data at the request of the systemic 
risk regulator, and that the same protection against compelled waiver 
of privilege applies to private funds, investment advisors and others. 
In times of crisis and crisis response, we must exercise heightened 
diligence in protecting and preserving our foundational rights and 
principles.
  The Committee has taken bold steps to confront the failures of our 
financial services regulatory system, and I urge my colleagues to 
support this bill.

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