[Congressional Record Volume 156, Number 63 (Friday, April 30, 2010)]
[Senate]
[Pages S2988-S3004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           RESTORING AMERICAN FINANCIAL STABILITY ACT OF 2010

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of S. 3217, which the clerk will 
report.
  The legislative clerk read as follows:

       A bill (S. 3217) to promote the financial stability of the 
     United States by improving accountability and transparency in 
     the financial system, to end ``too big to fail,'' to protect 
     the American taxpayer by ending bailouts, to protect 
     consumers from abusive financial services practices, and for 
     other purposes.

  Pending:

       Reid (for Dodd-Lincoln) amendment No. 3739, in the nature 
     of a substitute.
       Reid (for Boxer) amendment No. 3737 (to amendment No. 
     3739), to prohibit taxpayers from ever having to bail out the 
     financial sector.

  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CORKER. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. CORKER. Mr. President, I know there will be a number of people 
talking about regulatory reform. The Senator from Virginia and I worked 
on a number of issues together in order to create a bill we think is 
solid and will stand the test of time. I hope that spirit continues.
  One of the things many Members have been talking about is the size of 
institutions. There has been some movement to arbitrarily decide what 
size an institution ought to be. Everybody is frustrated by what 
occurred a couple years ago. There are a lot of ideas coming forth to 
try to prevent the same types of things that occurred a couple years 
ago, or a year ago, from happening again. What I hope people will keep 
in mind is that the reason our large financial institutions are the 
size they are is because we have companies that need to be large in 
order to be competitive.
  Obviously, if it is a large company doing business throughout the 
country, what they want to ensure is that they have a financial 
institution that covers the entire geographic map of the country. They 
want to be able to do business in every State in a way that is easy and 
allows them to do what they do competitively.
  Then we have to remember, especially as we continue to talk about 
other countries and the tremendous growth taking place in countries 
such as China and others, that we live in a global environment. In that 
global environment, some of the great companies that have been founded 
in this country need the ability to operate and do so in a way that 
creates American jobs. We need to have a banking system where we have 
institutions with the ability to operate throughout the country. Then 
we need the ability for these institutions to compete on a global 
basis.
  What that means is, we have large, highly complex institutions that 
are able to do all the things necessary for companies to compete.
  I hope as people look at arbitrary downsizing, as people look at 
lines of business in which banks can or cannot be involved, that they 
take into account that of the 10 largest financial institutions in the 
world--let me start with the top five financial institutions in the 
world--a place where companies have to compete. We have not one bank in 
that category. We have the largest gross domestic product in the world, 
the most competitive business environment in the world. Yet we do not 
have one institution that ranks in the top five in the world.
  As a matter of fact, if we take it down to the top ten, we only have 
two financial institutions, two banks that are in the top ten, and they 
are toward the bottom of that ranking.
  I know it sounds great to say we are going to take on Wall Street, 
but I think we need to remember that we may be taking on the heartland. 
For instance, if you are in Indiana or Ohio or someplace like that, and 
you are making some product out of metals, you probably want to know, 
if you have long-term contracts, that you have the ability to hedge the 
risk of metals going up or, if you are dealing with another country 
where you have a lot of shipments going, you want the ability to know 
that if you are selling it for what you think is a U.S. dollar, that 
U.S. dollar stays constant by having currency swaps and those types of 
things.
  One of the great things about America--we talk about the American 
dream--is that people in this country have the ability--such as the 
Senator from Virginia. There is no better example. The Senator from 
Virginia had a dream he realized early on. I think he started with 
maybe $5,000 and might have lost that quickly. Then he had to reload 
again and figure out a way with small amounts of money to create a 
great company. He did that. He did it over and over again.
  The reason he was able to do that was in this country, we have the 
ability to bring capital together around entrepreneurs. You don't have 
to be born in this country with a silver spoon in your mouth. I know I 
started exactly the same way with $8,000 when I was 25 years old. We 
have the ability in this country to have a dream and to accumulate ways 
to build around that dream with capital formation that creates jobs.
  This debate is interesting. I know people can score political points; 
it is great to take on Wall Street. But what we have to be careful of 
is cutting our nose off to spite our face. The fact is, what makes this 
country great is all the companies across the country where people got 
up this morning and went to work. Some entrepreneur had an idea, built 
a company, and now it is employing people which I know all of us 
realize is probably the most important thing for all of us to care 
about. Heads of households then have the ability to raise their 
children, to pay for their education, to do the kinds of things that 
improve our standard of living.
  So I am a little concerned, as I hear night after night after night, 
people coming down to this floor and they are bashing Wall Street. By 
the way, there are some things that certainly need to be corrected, and 
I know the Senator from Connecticut is trying to do that with portions 
of his bill. I know the Senator from Virginia and I worked on portions 
of the bill we hope will do that, but just arbitrarily saying we are 
going to create a system in this country of small banks--banks that do 
not have the ability to aid companies that deal around this world so we 
as a country can be globally competitive--that concerns me.
  I hope that, again, in the name of political points, we will stop 
much of this

[[Page S2989]]

discussion and we will all come to our senses.
  Well, I should not have said that; everybody has strong opinions and 
that was a misstatement by me. I hope we will look at the end results 
of our actions and what that may mean to the good people of this 
country who get up every day and work hard and depend upon--depend 
upon--those people who are willing to take risks for their families to 
be able to put food on their table, to educate their kids, and to live 
a life in America we can all be proud of.
  I see the Senator from Connecticut. I know there is no one else on 
the floor. I will actually pause for a second. This may be the second 
longest speech I have ever given on the floor. So I will stop and take 
my breath.
  I yield the floor, if that is all right, to the Senator from 
Connecticut.
  The ACTING PRESIDENT pro tempore. The Senator from Connecticut.
  Mr. DODD. Mr. President, I am delighted to see that my good friend 
and colleague from Tennessee is here.
  Let me say, there is not a word the Senator from Tennessee has just 
said--I listened to his remarks--that I disagree with. In fact, I agree 
with everything he just said. I hope that mentality and attitude will 
prevail in the coming week or two we are going to be engaged in this 
discussion. I was thinking--when the Senator was talking--about an 
article I read the other day. It was making the same point the Senator 
from Tennessee is making; that is, that of the 50 largest banks in the 
world, 4 of them are located in the United States, 5 are located in our 
neighbor to the north, in Canada. Canada has a much smaller economy. 
Obviously, it is a smaller country than ours. They did not suffer any 
of the difficulties we have gone through during the last couple years 
during this economic crisis. They had a downturn. I do not mean to say 
it was all working beautifully for them, but, nonetheless, they did not 
have the problems within their financial structures we have had, 
despite the fact they have actually 1 more than we do of those 50 
largest banks.
  Paul Krugman, of the New York Times, whom I do not always agree with, 
has written about this point as well. I do not know if my colleague has 
seen his articles. Size, I understand, is important to people, and that 
may be one way of looking at all this. But it is excessive risk, it is 
a question of whether there is proper regulation of activities. It is 
leverage. It is capital requirements. It is liquidity. It is all these 
other factors--the ones we are trying to keep an eye on--because size 
then can become a problem.
  But size may not be the only issue. You could be a small institution 
engaging in the marketing of products that put the system at risk. So 
we need to get focused on exactly what are the issues we are trying to 
address in all this. That is what we have tried to do. Again, my 
compliments to both the Acting President pro tempore and the Senator 
from Tennessee for their tireless work. The Senator from Tennessee 
knows he and I worked and spent a lot of time talking about all this as 
well. A lot of what is in this bill is a reflection of the Senator's 
labors. I realize it is not exactly everything he wants, but I think it 
is 90, 95 percent of what we are talking about. My hope is in the 
coming days we can try to close whatever concerns and gaps people have 
that do not do any underlying damage to the overall thrust of what we 
are trying to improve.
  I wish to pick up on a second point as well because I think it is 
very important. I have said the three goals I have for this bill. I 
hope all of us have for this bill. One is to try to close the gaps 
where we have this unregulated part of our economy that went kind of 
wild out there and caused so much of the difficulties our country has 
been going through. So to the extent we can do that--recognizing it is 
not our job to regulate. I always say there are two things we do not do 
very well in this institution: One is to set accounting standards or 
necessarily write regulations. It is not within our pay grade to try to 
do all that. We try to focus on institutions that have that 
responsibility and then demand the accountability. But I, clearly, want 
to see us plug in those gaps so we do not have shadow economies 
operating that can put us at risk.
  Secondly, to try to see if we cannot create--there is always some 
danger in trying to do this and I commend both my colleagues because 
they have been the principal advocates of this--some sort of an early 
radar warning system. I do not know how perfectly it can work or how 
well it can work but at least having the idea that we have people with 
eyes who will bring a different perspective to all this, to kind of 
keep an eye out to the Greeces, the Shanghais, as well as to what 
happens here because we live in that global economy, as my colleague 
from Tennessee has just articulated.
  So if this next crisis comes--and it will come as certain as I am 
standing here, maybe long after we are gone from here--there will be 
another economic crisis, some bubble, I suppose, someplace--the 
question is, Can we identify it early enough before it metastasizes--I 
use that word--into the rest of the economy or globally, as is Greece, 
for instance, today. It is the downgrading of their debt that all of a 
sudden caused the Euro to decline, and Europe finds itself, once again, 
on the precipice of an economic disaster, spilling potentially over to 
the rest of the world. So that is the second point of the bill.
  But the third point is equally important; that is, to make sure, in 
our determination to satisfy point 1 and point 2, we do not end up 
strangling a financial system. We need to make sure the creativity, the 
innovation, the flow of credit and capital that are critical for job 
creation, wealth creation, and economic growth are going to be there.
  That is a very difficult sense of balance to maintain. No one has 
ever gotten it absolutely right. It is always one side or the other 
that seems to be dominating the other. But those are my three goals, in 
a sense: to make sure we satisfy those first two, while simultaneously 
making sure we do not end up making it more difficult for that kind of 
innovation and creativity to spring forward.
  So it is exactly as the Senator from Virginia and the Senator from 
Tennessee and many others have done--because they had an idea, they had 
imagination, they had determination to go out and to create an idea, to 
see an idea that would put people to work, to solve problems for 
people, whether it is a medical device or a prescription drug or 
creating a new widget that improves the efficiencies of how we function 
as a country. There are all sorts of ideas that have been the 
wellspring of what has made America such a unique place in the world, 
particularly in the 20th century.
  So before we begin this whole amendment process--I will repeat this 
as many times as I can--those are the goals. I think they are the 
shared goals. I believe they are the shared goals we all have. 
Obviously, there are debates about whether certain points advance those 
goals or cause some retreat in them, and I believe honest people can 
disagree about how to do that.
  In our job, which is the hardest thing in the world--I am speaking 
about a former Governor and a former mayor. They have come out of the 
executive side of the government, where it must be awfully frustrating 
to be sitting in a body with 98 other people who are also, in a sense, 
executives--we are all coequals--to bring forth our ideas to try to 
forge, out of a body such as this of 100 people, some clear, 
focused vision of how to achieve those goals.

  But that is the challenge we have in the coming weeks. Again, I am 
very grateful to both my colleagues for the contribution they have 
made. I say that with complete sincerity and appreciation for their 
efforts. This can be, I hope, a good, honest discussion and debate. 
Hopefully, we can agree on some things. Others may have to have that 
debate and those votes to see where it lies and not try to bind up the 
place in filibusters and other things. It is not an unlimited debate. 
We do not have unlimited time, obviously, to do it. But we can spend 
the next couple weeks to try to get this focused in a way where we can 
come out and, again, not solve every problem. This bill does not take 
on every imaginable financial institution and issue out in the country, 
but we think it focuses on some of these critical ones that are 
important.
  I appreciate my colleague from Tennessee coming over and sharing his 
thoughts. Again, I agree with him on our goals. That is my point.

[[Page S2990]]

  The ACTING PRESIDENT pro tempore. The Senator from Tennessee.
  Mr. CORKER. Mr. President, I appreciate so much the comments from the 
Senator from Connecticut. I would like to sort of summarize the way I 
see things today.
  I, first of all, would say, I think last week--or over the last short 
period of time anyway--probably has been the lowest point in my Senate 
career of 3 years and 4 months in just hearing all the rhetoric on both 
sides of the aisle, candidly, about this bill. I continue to hear it, 
unfortunately, in the evenings from this floor. The fact is, this is a 
serious issue, it is complex, and there are a lot of substantive issues 
that need to be addressed.
  I guess the thing that frustrates me most about this body--it has 
nothing to do with having been a mayor or a businessperson--is the 
outlandish things people can say on both sides of the aisle just to try 
to cut herds out of Americans. So Americans who are busy raising their 
families or doing what they do on a daily basis--and, candidly, what we 
are doing is just a long way away and they hear pieces of it--it is 
just to sort of divide up our country. I do hope on this bill we can 
focus more on the facts, and we will see if that occurs. It certainly 
would be the first time in a long time if that were to occur, but I 
hope that happens.
  As I look at this bill, first of all, on the too-big-to-fail piece, 
my sense is, the Senator from Connecticut is going to work with the 
Senator from Alabama and pretty well fix that over the course of this 
weekend. I have a feeling a manager's amendment is coming forth. There 
will be people on both sides of the aisle who think a resolution 
mechanism is not appropriate, I realize that, and there will be a push 
toward bankruptcy, which I know the Senator from Virginia and I wanted 
to strengthen in big ways. There are some committee issues that sort of 
keep that from happening as elegantly as it might happen. But I sure 
hope we will do everything we can to strengthen the bankruptcy laws so 
the default position for a major company is to go into bankruptcy. OK. 
That is the way our country works when a company fails.
  But in some cases, I do believe there is a need for a resolution 
mechanism. My sense is, the Senator from Connecticut and the Senator 
from Alabama will come to terms over the next several days with ways of 
ensuring there are not those gaps. The administration gets a little 
involved in a bill, and they want to create some flexibility. I 
understand that. If I were on their side, I would want to do the same: 
Hey, I will take the power and we will solve everything. We need to 
sort of close that up so the things we intend to happen actually happen 
in this bill, and my sense is, I say to the Senator, you all are going 
to fix that over the weekend.
  So then we have the issue of the derivatives, and I think all of us 
want to see derivatives cleared. There have been some issues, I know, 
that came forth out of the Ag Committee. This 106 issue is something 
that I think my friends on the other side of the aisle are going to 
figure out a way to solve and get back in the box, and I look forward 
to the debate you all will have amongst each other doing that. That 
will actually be humorous to watch. But I think the Senator from 
Virginia and the Senator from Connecticut and the Senator from Arkansas 
will figure out a way to get that one back in the tube, if you will.
  So the derivatives issue, my sense is, will get to a place where it 
probably works. I know Judd Gregg and Jack Reed--smart guys on both 
sides of the aisle--have worked on this. Their work at some point will 
bear some fruit. I know Saxby Chambliss and Blanche Lincoln have worked 
heavily on it. I think we are going to get that right.
  So at the end of the day, I think we know the issue that probably is 
going to divide this group, if we do not work it out--I am talking 
about this Senate body--is the consumer protection piece. Look, I want 
to see consumer protection take place. I do. I know the Senator from 
Connecticut knows I was serious about trying to resolve that issue in 
March. It is my hope we can come to terms on that.
  It is my hope we can create a balance, an appropriate balance, so the 
consumer protection piece is in balance with prudential regulation. For 
people who do not do this on a daily basis, I am talking about those 
people who make sure our banking system is safe and sound, that our 
financial institutions are not at risk because of the rules and those 
kinds of things. Hopefully, we can get that in balance.
  I do not know if the Senator from Connecticut wishes to speak to 
this, but that is the one issue I know has a lot of people concerned. I 
think many of us are concerned about an agency that, as it is written 
today, I do not think has appropriate checks and balances, and with the 
wrong kind of leadership, over time, could end up being something very 
different than even possibly what the Senator from Connecticut intends 
for it to be today.
  Again, over the course of the debate, I hope we have the ability to 
deal with consumer protection in a way that achieves that balance, 
where people across this country, who awaken on a daily basis and are 
not necessarily directly involved in the financial industry, have no 
fears of this sort of reaching out and becoming unnecessarily involved 
in what they are doing. So that is the one issue, and I know the 
Senator from Connecticut realizes that.

  I will digress slightly. I know the Senator from Connecticut referred 
to Canada and the large institutions Canada has and a much smaller GDP. 
One of the reasons they did not get into the same difficulties we had 
as a country is they have underwriting mechanisms there that determine 
what is appropriate for people to do as it relates to borrowing for 
their homes. Their underwriting standards are very different than exist 
in this country. I know the Senator from Connecticut has an approach to 
it--the 5-percent risk retention with securitizations. I have a little 
different approach to it and feel as though we shouldn't be 
securitizing loans in the first place that are written to people who 
can't pay them back.
  I wish to get at the very base of this issue, and I hope that over 
the course of this debate we will figure out a way to merge what the 
Senator from Connecticut has proposed and maybe some real underwriting 
so that when the loans are written in the first place and end up 
getting spread across our country, we have made sure these loans are 
written in such a way that we know the people who have taken out these 
mortgages can pay them back.
  Again, that is why Canada had no issues whatsoever as it related to 
this because in their country they have different underwriting 
standards. People there actually put down 50 percent, generally 
speaking, when they purchase their homes. I know we don't want to be 
overly proscriptive in this body. I hope the Senator from Virginia and 
the Senator from Connecticut and all of us can sit down and figure out 
a way to address that in a slightly different way. But candidly, as it 
relates to this issue, it is hard for me to believe that we have a 
financial regulation bill and are not addressing that, the underwriting 
piece.
  But, again, as the Senator from Connecticut mentioned, we are not 
going to deal with everything. We cannot deal with everything. We know 
we have to come back around very soon and deal with Fannie and Freddie. 
I hate it that we are not dealing with that now. I think all of us 
would like to be dealing with that now. The fact is that at some point 
we ought to come back around and deal with that, have another bite at 
the apple to deal with many of these issues, when that issue is taken 
up.
  Back to consumer protection. I think as a body we have a chance to 
pass a serious piece of legislation--a serious piece of legislation--
that a lot of thought has gone into. A lot of hearings have taken 
place. We have a chance to pass a serious piece of legislation in this 
body with potentially an overwhelming vote if we can figure out a way 
to come together on the consumer protection piece. I think the Senator 
from Connecticut knows where most Republicans wish to be on that issue. 
If you look at a 10 scale, if you will, I think where Republicans wish 
to be, or at least many on this side of the aisle, is an 8 on a 10 
scale for people who care about and who think consumer protection is 
the issue. It seems to me that as a body, instead of trying to score 
political points and say if you vote against this bill, you are voting 
for Wall Street, which is ludicrous, all of us care.

[[Page S2991]]

  I have something every Tuesday called Tennessee Tuesday. The Senator 
from Tennessee, Senator Alexander and I, greet people from Tennessee. I 
have to tell my colleagues, there are not any Wall Street bankers 
there. They are community bankers and credit unions who come to see us. 
Those are the folks who I think most of us care about as it relates to 
constituents in our State. I know these provisions that are in consumer 
protection are what scare them most about what that might become down 
the road.
  So, again, instead of making this an ``if you are with us, you are 
against Wall Street; if you are against us, you are for Wall Street,'' 
I hope what we will do is at some point--I know these bills all sort of 
have a life and they ebb and flow and there is a time maybe when these 
kinds of negotiations can take place in a serious way, but I hope what 
we will do, instead of dividing this body over an issue we all care 
about, is unite this body by maybe figuring out a way to merge that 
issue a little bit more fully.
  I realize there is a way that a bill can pass out of this body on a 
62-vote margin. I realize that is possible, that there will be a couple 
folks who might have different sensibilities about particular issues 
and things. I realize that.
  As a tribute, actually, to the Senator from Connecticut, who has been 
here many years, who is leaving this body at the end of this term, I 
hope what we do is figure out a way to have an 85-vote bill and come 
together on this one issue that I think ultimately has the potential to 
divide us--a piece of legislation that leaves this body on a party-line 
vote almost, or maybe it doesn't even leave because it is so divisive, 
but leaves on a party-line vote that I don't think this country 
respects much. I think they are over that, and I think they wish to see 
us work together in a way that solves things.
  I am getting ready to yield the floor because I am beginning to talk 
way too long. I thank the Senator from Virginia. I thank the Senator 
from Connecticut. I hope within this body we are able to do something 
that seeks the appropriate balance and seeks to do something that truly 
is a bipartisan compromise that will stand the test of time.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Connecticut.
  Mr. DODD. Mr. President, again I wish to thank my colleague from 
Tennessee for his comments and thoughts. I won't address each and every 
point, but I wish to make a couple of suggestions.
  Most people I have worked with over the years, many of whom have long 
since left this Chamber since the day I arrived here in January of 
1981, I think people believe this about me, which is that I never 
chaired a committee before 36 months ago, 37 months ago, despite being 
here for 30 years. I had the wonderful privilege of sitting next to 
some people who have had longevity, both politically and healthwise, so 
I ended up having the wonderful experience of being a junior Member for 
virtually my entire service. Only about 37 or 38 months ago did I 
become a chairman of a major committee the first time, the Banking 
Committee. It was through the departure of my great friend Paul 
Sarbanes who has now retired, the elevation of Joe Biden to the vice 
presidency, and the passing of my best friend in this Chamber, Ted 
Kennedy, that created an opportunity for me for the first time in a 
quarter of a century to actually chair a committee.
  But I have managed bills on the floor in the past, either as a 
subcommittee chairman or for other matters. In every single instance, 
with the exception of one or two, I have always had a Republican 
partner in what I have done. Kit Bond and I did family and medical 
leave together, along with Dan Coats of Indiana. Orrin Hatch and I 
wrote child care legislation 27 years ago. I worked on private 
securities litigation reform with Phil Gramm of Texas. Mitch McConnell 
and I did the Help America Vote Act together. Lamar Alexander and I did 
premature birth infant screening. There is a long list without 
exception. I don't have a public partner yet on this one here and, 
again, I think it is a reflection on the times we are in, in terms of 
people's willingness to come together and say this isn't exactly what I 
would write, anymore than this bill is today, but to sit down and help 
manage something through so we get to that point of getting the best 
result we can under the circumstances in which we live, the times in 
which we live.
  So over these coming weeks, while I don't have a partner yet in all 
of this, I will certainly be reaching out the best I can to people to 
say, Come along. Again, if you are looking for perfection, if one side 
wants to totally dominate the other, obviously, you don't get that. But 
my experience, with some success over the years, includes in our own 
committee where during the last 37 months we have had 42 measures come 
out of the Banking Committee. Now 37 of those 42 measures are the law 
of the land today because Richard Shelby and I have been able to work 
together with others on a wide range of issues, by the way. We worked 
on transit security, terrorist risk insurance, port security, a lot of 
major balls, Iran sanction legislation, and the like. So I am hopeful 
that will happen here in the next couple of weeks, and I am reaching 
out to people so that will be the process.
  Let me mention specifically a couple of things. I agree with my 
colleague, I hope we can resolve the derivatives issue. I commend 
Blanche Lincoln for her efforts, and Chuck Grassley. By the way, the 
only bipartisan proposal that is on the table right now is the one 
Senator Lincoln forged and managed to get some bipartisan support for. 
So I commend my colleague from Arkansas for her work on that committee.

  It is going to involve all of us here to come up with some answers on 
derivatives. Despite the fact that my friend from Tennessee would love 
to sit in that chair of his over there and have a good laugh, as we end 
up having a battle here--no, sir, the Senator from Tennessee is going 
to be involved in that whether he likes it or not if we are going to 
end up resolving it.
  On the issue again of too big to fail, the Presiding Officer and the 
Senator from Tennessee have done about 98 percent of the work. There 
are a couple of issues we are going to try to work ourselves through 
over the next couple of days and present to our colleagues what we 
believe is a fair resolution of that matter that will deal with those 
issues and that will guarantee I hope once and for all the end of the 
debate about whether anything in this bill is designed to perpetuate 
the too-big-to-fail concept.
  Let me mention the issue of underwriting, because we have written--
and of course the Federal Reserve has now written underwriting 
standards, at long last, by the way. I was around in 1994 when we 
passed the legislation mandating the Federal Reserve to promulgate 
regulations against deceptive and fraudulent practices in the 
residential mortgage market. They never promulgated one in all of those 
years, so we ended up in this unregulated part of the economy, again, 
where a lot of these brokers and others were out there luring people 
into complicated matters. I get a kick out of this: Having owned 
several homes in Connecticut--two, actually--over the last 30 years, 
and one home here, we have all been to those closings, when we sit down 
across that table and there is usually a stack of papers with tabs on 
them and someone who is representing the buyer and seller is asking us 
to sign. I have yet to meet anybody, whether it is a banker, a lawyer, 
a Senator, or a Congressman, who reads all of the details in those 
things. We sort of assume whoever is representing our interests has 
protected us. Well, we can imagine an awful lot of people in the 
country who lack the understanding or even the financial literacy who 
appreciate what they are reading.
  Clearly underwriting standards are important. How do we achieve that? 
For the first time, what these community banks like about our bill is 
we are not going to have that unregulated part of the economy, so they 
are going to play by the same rules. That has been unfair to those who 
have been regulated. I can't speak for community bankers in Tennessee 
or Virginia, but I can tell my colleagues in my State of Connecticut, I 
forget the numbers, but it is so infinitesimal, the number of 
foreclosures that occurred or subprime lending that went on within my 
community banks, and I presume that is pretty true nationwide based on 
the evidence I have heard over the last

[[Page S2992]]

number of months. So we need to get that unregulated shadow economy 
regulated.
  We also know what has happened. In securitization, the difference 
between Canada and the United States and Europe and ourselves is we 
have had a deep appreciation for the ability of the average American to 
buy a home because we have understood how much that meant to people. 
The idea that they can have their own home has been the greatest source 
of wealth creation for most Americans, an acquisition of equity in a 
piece of property that would ultimately provide a source of revenue to 
help educate your children, provide a cushion in your retirement. It 
stabilizes families, stabilizes neighborhoods and communities. Look at 
neighborhoods where you have renting and where you have people who have 
a financial interest in that property in which they live, and the 
differences are huge. So we are different. I know in Europe and 
elsewhere you get 5-year loans and so forth. We are the only country in 
the world, the only one, that provides a 30-year, fixed-rate mortgage 
for people. It has been a remarkable tool to provide stability and 
wealth creation for people. Other countries don't do that.
  I certainly believe you have to have underwriting standards. You have 
to have them. The question is how do you get them and what is the 
standard, because as my friend points out--and he is absolutely right 
about this--having that 15 percent or 20 percent may be absolutely 
critical under one set of circumstances, but for someone else it may 
not be necessary. You may actually have a zero down, again, based on 
the FICO scores and other factors that are there to apply one standard 
over another. What we want is underwriting standards that will take 
into consideration the ability of that borrower to meet those 
obligations so they understand what they are getting into.
  The securitization of the real estate market has provided a source of 
capital and liquidity that has allowed for a further expansion of home 
ownership. So I am not opposed to securitization at all; it is a 
question of whether it can be done responsibly, the rating agencies 
that brand these bundled products as being AAA or AA and whether the 
institutions are actually marketing products that they are going to be 
concerned about what happens to them. We all know what has occurred for 
a lot of the unregulated brokers. We recall we had those hearings in 
which they showed their Web site where the first rule of the broker 
was: Convince the borrower you are their financial adviser. Of course, 
we have learned they were anything but in many cases their financial 
adviser. They are being paid rather quickly. The banks that are writing 
the mortgages hold on to them on average 8 to 10 weeks. That is the 
average time. So basically in that 8 or 10 weeks they bundle these 
together and sell them off, so they are out of the game; they have been 
paid. The broker is paid, the bank is paid, and some unsuspecting 
investor has just acquired something that has a brand on it of AAA or 
AA and they feel pretty good. Home mortgages have been a pretty 
reliable investment over the years. People pay their mortgages. And of 
course no one was sitting there insisting that we look at exactly 
whether that borrower could afford to do this under these circumstances 
or looking at whether it was a fully indexed price or looking at all of 
these other teaser rates and things that went on in there.
  We will have someone there who will now be accountable, because we 
are going to keep an eye on you. There is a cop on the beat who says to 
the broker that you have to do this right. We are saying to 
institutions out there you are going to, one, either put up skin in the 
game, because I know if you have skin in the game you will pay more 
attention to what you are doing; you will not expose yourself to losses 
if you have skin in the game or--and this is where we need to come 
together--meet some underwriting standard. Make the choice. If you 
don't want to do that, put some money on the table, because I want you 
to bear some loss if that thing goes out the door and you have allowed 
it to happen because you decided you didn't care. I prefer to have the 
underwriting standards. That is one option I looked at, and I invite my 
colleague to look at this, to get good underwriting standards, in the 
absence of which we might have an inability to move forward. I raise 
that as one thought.
  On the consumer side of the equation, a lot more gets made of these 
issues for the very reason my friend from Tennessee worries about. I 
find people sort of pumping up politically trying to fire up people 
because they have other motives in all of this. I am aware that people 
can demagog on the issue of what we are trying to do. For the first 
time in our country, seven agencies have had a consumer protection 
responsibility, and virtually all of them have failed. It is not a 
priority. There is always something else that comes in that takes a 
priority position, including those who have the prudential 
responsibilities of safety and soundness. I acknowledge that safety and 
soundness is critical. I am also painfully aware that for quite a bit 
of time, between 2005 and 2007, people were saying: Our institutions 
are safe and sound. What are you talking about? How do you know that? 
Look at how much money they are making--when, in fact, it was rotting 
from within, because of the very things my colleague talked about: lack 
of underwriting standards, people were pushing this stuff out the door, 
and there were unregulated sections of our economy running wild. It was 
hardly safe and sound; nobody was watching what was happening at the 
most fundamental level--that person who picks out a home for their 
family and decides this is what we would love to have; they pick out 
colors for the rooms and get excited, and then they are across the 
table and they close on the deal. It is hardly a level playing field.
  For the overwhelming majority of Americans, it is hardly a level 
playing field. When you are excited about it and you are convinced this 
is the right thing for your family, you can get lured into those deals. 
I am not excusing the consumer. We all have to be more responsible. 
Senator Daniel Akaka has spent time talking about financial literacy. 
We tried to include provisions to raise the level of financial 
literacy. My colleagues know I have two young children--an 8-year-old 
and a 5-year-old. My 8-year-old is in second grade here in a public 
school in the District. They are trying to get them to talk more in 
math classes early on about how to balance a checkbook, so that we 
start raising a generation that will understand financial 
responsibilities at an early age.
  I don't discount the moral responsibility and the financial 
responsibility people have. That is where a lot of this began. All we 
are trying to do here is say that average citizen has an advocate in 
this process.
  We saw what happened to the credit card industry, which was gouging 
people right and left. That bill passed 90 to 5 here, trying to do 
something about that issue. I worry that sometimes people glom onto 
these ideas and say the sky is falling, and what a dreadful thing we 
may do, when that is hardly the intention at all.
  I am prepared to listen to ideas on how we can make this work better. 
I don't want someone to exaggerate what this means and then suggest 
somehow that the bill should fall because maybe we are trying to do a 
little more in this area of protecting people, who have very little 
protections out there in the world today.
  I am not talking about what happens at some community bank level. In 
fact, the community bankers--again, providing regulatory coverage to 
those nonregulated areas is important, as we are talking about here; it 
is not the Federal regulators. If your financial institution's business 
assets are less than $10 billion--and I only have one in Connecticut 
that has assets in excess of $10 billion--then your cop is that local 
involvement, not the Federal Government or some national consumer 
protection agency jumping all over you. It is going to be done at a 
local level. Again, we will have to watch it and see how it works. I 
think we would be remiss in the bill if we didn't end up with something 
that says to the American consumer: What do I get out of this?
  Lastly, I don't like the bashing that goes on. I realize that 
happens. To make a point, sometimes people engage in that. My colleague 
said this at the outset of his remarks, and I commend him. The idea 
that we want to provide that capital, that credit for that person, with 
an idea that if someone

[[Page S2993]]

wants to expand a plant, we need to have a Wall Street that helps that 
happen. This is too circular. It was all happening within the sort of 
closed circulatory system, where little of that capital was moving out. 
Basically, people were thinking how to scam it. By making bets for and 
against certain things, their wealth increased, but very little of it 
got out through that mechanism to that person you are talking about 
there--maybe that person you went to as a young man of 25, who took a 
chance on you and said that guy has a good idea and I am going to get 
behind him. That is the idea we ought to have more of, where a person 
with a good idea can come through the door, and someone may be 
interested in your idea.
  That happens in venture capital and equity markets. My colleague from 
Virginia can bear witness to what angel investors can do. I spoke last 
evening with our colleague from Missouri, Kit Bond, who cares about it, 
as Senator Warner does. We will have amendments on that. We possibly 
went too far in the bill in that area. We need to fix that so that the 
venture capitalist who thinks you have a good idea can get behind it. 
Too much of Wall Street gave up on that. No customers were coming in 
the door as we know them here, and it got so self-absorbed in its own 
capacity to generate wealth for itself that it lost sight of what this 
is supposed to all be about. That is what makes people so furious.
  I thank my colleague from Tennessee--this is probably not something 
he wants to be thanked for, but having been charged, he has been very 
involved in this. I will never forget as long as I live that morning 
meeting about six of us had. He was included. It was on the first 
floor. We met to figure out how to do this thing in the fall of 2008, 
to put us into a position where we don't find a financial meltdown and 
collapse. We will never know the answer as to whether that would have 
happened. But when you have pretty important people telling you we are 
on the brink of that, we had to respond. We stepped up and managed to 
write something that I think made a difference. But the ability to come 
together and get that job done, to move us away from that, and then to 
watch, after we stabilized these institutions and kept them on their 
feet, provided the kind of security and predictability, turn around and 
sort of almost disregard all of that and get into these silly arguments 
about how much of a bonus I can take, in the midst of everybody else 
suffering, is where this arrogance comes in, which people in the 
country got so irate about.
  There was a notion that having written that check for $700 billion to 
stabilize and provide certainty that we weren't going to collapse--you 
would have thought at that moment, for a couple of years, leaders of 
these institutions would say: Thank you, America, thank you, average 
Joe taxpayer, you kept this country alive. You stood up and made that 
choice. We thank you for doing that. By the way, for the next few 
years, we are going to take some hits for ourselves, self-imposed. We 
will not take huge bonuses of millions of dollars. We are going to roll 
up our sleeves and figure out how we can do a better job of doing like 
Bob Corker and Mark Warner did. Someone stood behind them and with 
them, and they grew a business, employed people, and created jobs in 
our country. I don't recall hearing one voice say that during all of 
this--not one stood up and said: Thank you, America; thank you for 
writing that check to help us stabilize our economy. It was the 
arrogance of it that drove people to distraction. I don't disagree. We 
need to move on in the debate. But it is also important to understand 
what happened here and why people are so angry and upset. Jobs have 
been lost, lives have been ruined--absolutely ruined--because of what 
happened over the last 18 months, and a little before that. They are 
never going to get it back again. That retirement income is gone, the 
home has been lost, and that job has disappeared. So they are never 
going to get back on their feet again.

  When they hear somebody saying that is the way life is, and I hope 
one day life gets better for you--why not have a consumer protection 
agency to keep an eye on these things. Obviously, some people aren't 
going to watch out that closely for you. Maybe that is part of our job 
to do that. I don't want to create a situation to take small businesses 
and others--I know there has been a lot of talk about that, but that is 
not the intention. We can make it clear that that is not what we are 
trying to do at all. Too often sometimes we get insulated from what is 
happening out there. I understand that level. The tea party people--
many were at every event with ``dump Dodd'' signs and flags and bumper 
stickers. Certainly, it hurt personally that people would say that 
about me after 30 years of service. But I kind of understand it, too. I 
understand the average person. It wasn't about me personally, 
necessarily. They were deeply upset and frustrated. They are not bad 
people. Maybe there is some leadership out there and others who are 
frankly dangerous elements. I worry about that. I have a feeling that 
an awful lot of people who are not at a rally but are watching it on TV 
and reading about it feel that way too. They may say: I am not going to 
join in a crazy demonstration saying outrageous things, but I feel that 
way too. I think we need to acknowledge that in all of this. They are 
out there, and they are not Democrats, Republicans, Independents; they 
don't think about political affiliation every day. They wonder if 
anybody is watching out for them. Who cares about me? When these 
debates happen and people talk about systemic risk, derivatives, credit 
default swaps, and currency swaps, they say, what are you talking 
about? I don't understand what you are talking about. I presume it is 
important, but how does that affect me? I want to know is anybody in 
that place going to write anything here so when the credit card company 
or that bank, that is not necessarily the best guy in town--is someone 
standing up for me and giving me a shot that I don't end up in the 
ruinous position so many people did when we were going through a safe 
and sound period, when we were anything but safe and sound?
  That is at the heart of all this. I will listen to ideas on how we 
can do a better job. If anybody claims they have all the wisdom, I get 
nervous about those people. We are not going to write something that 
will necessarily satisfy everybody. Hopefully, we can do something that 
makes sense.
  I didn't intend to talk this long, but that point of not losing sight 
of our job here--it is about big companies that sell all over the 
world. I know that. Being able to have big financial institutions that 
they can stay with and compete in the global economy. But in our 
interest in satisfying that, let's not forget that person who is not a 
big company, a big corporation, who is going to work every day trying 
to raise their families and make sure if somebody gets sick, they will 
be OK, and they can retire with dignity and security, and maybe buy 
that home or take that vacation. They are not looking for much out 
there. They want to know in this debate, in this bill here, which has 
my name on it--the only name on it is mine at this point. There is only 
one name up here, and I will be the last to say there is anything 
Biblical about this. It is our best efforts to try to address some 
issues here. There are flaws in here, I will guarantee you. Sometimes 
things don't work as well as the author intended. But is there 
something in here that speaks to that individual out there, who is not 
a banker, not a Wall Street guy, not a big corporation, just a consumer 
in the country, and they would like to know we have them in mind.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Tennessee.
  Mr. CORKER. I enjoyed listening to the comments of the Senator from 
Connecticut. I can certainly share with him some of the ideas he 
suggested. My other colleagues and I, to be candid, could change this 
bill and it would have numerous names on it. I hope we have the ability 
to talk about some of those over the course of the next several days. 
Apparently, it is not quite time for that.
  I want to mention the issue of Wall Street and talk about public 
relations. There is no question that after what occurred, many of the 
folks on Wall Street could have used a public relations firm to help 
them. No question, the bonuses and things we saw, after getting 
taxpayer money to make sure they survived, no doubt that created a 
backlash.

[[Page S2994]]

  As a matter of fact, the Senator from Virginia and I are working on 
an amendment that would say, if this ever happens again and we have to 
take one of these firms through resolution, which is part of the Dodd 
bill right now, the bonuses and other types of things in recent years 
would all be clawed back. You cannot make huge sums of money, take your 
company down the tubes, and do things to America in that way without 
paying a price. We are working on something I think is balanced and 
appropriate, hopefully not populace but something that is thoughtful. 
If somebody takes their company down and wreaks havoc on our country, 
that will make us use this resolution mechanism. I think that is 
appropriate to look at.
  Also, back in the fall of 2008, had the resolution mechanism we have 
talked about that still has some imperfections been in place--and I 
realize Senator Dodd and Senator Shelby are going to fix it this 
weekend--had that been in place, that meeting might not have occurred--
right?--because we would have had a way to deal with some of the 
contagion that exists when a company goes down.
  I want to go back. The Senator from Connecticut talked about the 
groups, when he was in Connecticut, who were upset with him. I say to 
the Senator, it is not those issues that he alluded to that made them 
so angry and made me angry. It is the huge expansion of government they 
are seeing take place. It is this huge role that Washington is 
beginning to play in their lives.
  As we look at this consumer protection title Senator Dodd addressed a 
minute ago, the big guys on Wall Street do not care about that. This is 
not something that is going to affect the big guys on Wall Street. They 
have staffs and they have reams of people who have the ability to deal 
with these consumer laws. Those are not the people who are coming into 
our office. It is the small, the medium-sized folks who do not have the 
ability to deal with these in the same way.
  If the Senator from Connecticut would be willing to sit down and talk 
about ways of ensuring that Americans should not fear this organization 
because this organization over time will become way involved in their 
lives--which I think is stoking most of the anger we are seeing across 
the country today, and I think rightfully so--if there is a way of 
achieving a balance where, in essence, consumers are protected--I know 
the Senator from Connecticut knows well I am all for working on 
streamlining, pulling these agencies together, making sure we have a 
voice that is out there dealing with that issue--if there is a way of 
doing that, I think the Senator from Connecticut would find that this 
body would come together, and very quickly.
  There are a few issues--106. Maybe the Volcker language ought to be 
modified a little bit. Sometimes we do best around here when we study 
things before we take action. I know Americans might be shocked if we 
actually did that.
  If we can moderate just a couple of things--I am talking about just a 
few sentences--and then look at consumer protection in a way that is 
balanced and does not stoke that anger, that rightful anger that exists 
across our country with the government taking a bigger and bigger role 
in people's lives unnecessarily, if we could fix that--and I think we 
can. That is what frustrates me. I think we can do that--then we will 
have appropriately dealt with the resolution. We will have 
appropriately dealt with derivatives. There are a few changes that need 
to take place, and both sides know what they are. If we can do that, 
then we will have a bill that I think will stand the test of time, and 
we will have a bill I think Americans will embrace and will do the 
things we set out to do.
  I know we have had a long colloquy. I thank the Senator from 
Connecticut for indulging me and the Senator from Virginia, with whom I 
talked prior to coming to the floor. I hope in some form or fashion, we 
are able to deal with some of these concerns to ensure consumers are 
protected, to ensure that derivatives are clear and we do not end up 
with an AIG situation with huge amounts of money and having to settle 
up on a daily basis and we deal with the issue that when a company in 
this country fails, they fail.
  I have to tell my colleagues, that is what Tennesseans care about. 
They do not understand because when a business in Bradley County or a 
business in Shelby County--maybe a mom or pop--fails, they are out of 
business. In this country, they see these large institutions on Wall 
Street fail and they do not go out of business. They consider that to 
be morally wrong.
  I know we will get that right in this bill before it passes. I hope 
we can deal with these other issues appropriately.
  The ACTING PRESIDENT pro tempore. The Senator from Connecticut.
  Mr. DODD. Mr. President, while we are on the subject matter, I 
appreciate the thoughts of my friend and colleague from Tennessee. Let 
me note one quick observation the Senator said. It goes back to the 
issue that Wall Street could have used a public relations firm. In a 
sense, that is the problem. When you have to hire a public relations 
firm, if you do not understand this yourself, then there is something 
fundamentally wrong. You do not need to hire a public relations firm if 
you are taking multimillion-dollar bonuses and 8.5 million people have 
lost their jobs and 7 million homes are in foreclosure, in no small 
measure, because of the problems you created. I don't think you need a 
public relations firm. Where is the sense of decency and ethics and 
morality that says: The average citizen made it possible for this 
institution I am running to stay alive? If I have to insist we hire a 
public relations firm, we are in deeper trouble than I could imagine.
  That is usually the answer when things go wrong: hire a public 
relations firm. Just stand up and tell the truth. That might not be a 
bad idea. They always say it is the best defense on these matters.
  I presume my colleague shares my view on this subject, that they 
should not have needed a public relations operation to do it. I could 
not resist responding. One would have thought a good look in the mirror 
would have done it, and saying to themselves: Why are people angry? 
What can we do to help get back on our feet?
  That is what is going on out there. I thank my colleague. I did not 
mean to dwell on that point.
  Mr. CORKER. Obviously, Mr. President, I was being humorous in talking 
about that. The Senator is right. The Senator from Virginia and I both 
know that in our businesses, we were the last ones to be paid. Everyone 
else was dealt with and our obligations were dealt with first.
  I agree with the Senator from Connecticut. Something certainly went 
awry after the country had basically made these companies whole. It 
appeared to me the conduct was very unseemly. I agree with the Senator 
from Connecticut.
  I yield the floor.
  Mr. DODD. Mr. President, I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. WEBB. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. WEBB. Mr. President, I understand there is an amendment pending 
that is not appropriate to set aside to call up another amendment; is 
that correct?
  The ACTING PRESIDENT pro tempore. An amendment is pending and will 
require unanimous consent to set aside.
  Mr. WEBB. Having discussed this with the chairman, it is his 
preference not to set the pending amendment aside; is that correct?
  Mr. DODD. That is correct, yes.
  Mr. WEBB. All right. Well, I assume there will be no objection if I 
speak about the amendment I have introduced, amendment No. 3736?
  Mr. DODD. None whatsoever.


                           Amendment No. 3736

  Mr. WEBB. I thank the chairman for that.
  Mr. President, I introduced this amendment earlier, on another piece 
of legislation, and it was not considered germane. I understand there 
may be some procedural issues with raising it on this particular piece 
of legislation, but I believe it is an amendment that Congress needs to 
pass and that the American people need to have. It is a one-shot 
windfall profit tax on a very

[[Page S2995]]

appropriately designed group of executives who benefitted enormously 
from the contributions the American taxpayers made in order to bail out 
the economy as opposed to bailing out banks specifically. I will 
address this amendment in detail in a moment.


               Anniversary of Official End of Vietnam War

  Before I address the subject of my amendment, I would like to point 
out, as I have every April 30 since I have been in the Senate, that 
today is the day--now 35 years ago--South Vietnam fell to a Communist 
offensive and the Vietnam war officially ended.
  April 30, 1975, has a very unique meaning among Vietnamese and the 2 
million Americans of Vietnamese descent in this country. It is almost 
as strong as the way many people feel in this country about B.C. and 
A.D. It is a very clear demarcation line in terms of an effort that was 
made for many years to assist an incipient democracy in South Vietnam 
from coming under a different form of government, just as clearly as we 
attempted to assist South Korea from coming under the form of 
government that today we see in North Korea and just as clearly as we 
spent many years and much national treasure preserving the democratic 
principles in West Germany after the Cold War began, with the hope and 
the eventual result of the unification of that country.
  This is not a time, all these years later, to debate the merits of 
the American involvement in Vietnam. I am one who is very proud to have 
served in that war as a U.S. marine. I still believe strongly in what 
we attempted to do. And we have heard from some of the really great 
thinkers of our generation--the Asian thinkers, such as Minister Lee 
Kuan Yew of Singapore--that the attempt of the United States to staunch 
the flow of communism in Vietnam allowed the other countries in 
Southeast Asia--Singapore strongly among them but a number of the other 
countries in Southeast Asia--to build governmental systems and free 
market economies that eventually have had a dramatic impact in that 
part of the world.
  Today we see organizations such as ASEAN, the 10 nations of Southeast 
Asia, having begun to come together and think with commonality about 
free market principles and different sorts of governments. A great deal 
of that did come out of the position the United States took during the 
Vietnam war.
  This war is not taught in American schools. It goes by so fast in 
school systems that sometimes it is dealt with in a matter of an hour 
or two. The contributions of our men and women in Vietnam in the 
military are generally dismissed or downplayed. We put 2.7 million 
American military people into that country against a very capable 
enemy. We fought for years. We lost 58,000 Americans on the 
battlefield. We lost another 300,000 wounded.
  The U.S. Marine Corps lost more total casualties in Vietnam than even 
in World War II. They lost three times as many as in Korea. They lost 
five times as many combat dead as in World War I. The experience, 
because of the division in this country, went right past the American 
populace. It is still not plugged into the comprehension, the quality 
of the service and the quality--against a very highly capable enemy--
the results we brought onto the battlefield as measured by the 
standards that our leaders placed upon us. Mr. President, 1.4 million 
Communist soldiers died in this war--by the admission of the Hanoi 
government in 1995, not these arguments about whether body counts 
coming from the battlefield were inflated or not, 1.4 million soldiers. 
This was a brutal war.
  The aftermath of the war is almost never discussed in this country. 
It is as if everything ended in 1975. One million South Vietnamese, the 
cream of South Vietnam's young leadership, were put into reeducation 
camps; 240,000 of them remained in those camps for longer than 4 years; 
an estimated 56,000 died. Another 1 million Vietnamese jumped into the 
sea, followed by others, including my wife's family. This day, 35 years 
ago, her family was on a boat having escaped from North Vietnam in 1954 
and South Vietnam in 1975, facing unknown futures. The Soviet Union 
gained a strong foothold which did not expire until the Soviet Union 
expired, putting into place a command economy and basically a Stalinist 
system. When I first started going back to Vietnam in 1991, the system 
was extremely rigid and could only be called a Stalinist system.
  But the other piece of this, which a number of people in this 
country--and I count myself among them--have worked assiduously for 
decades to bring about is the healing of that war here, in Vietnam, 
between the 2 million people of Vietnamese descent in this country and 
the existing forces in Vietnam. This has been a very arduous and 
successful, for the most part, process.
  When I look at the Vietnam of today--and I have spent a great deal of 
time there not only during the war but after the war--I am very 
optimistic. I have always believed, even in my younger days as a 
marine, that Vietnam was one of the four or five most important 
countries to the United States when we look at our relations in Asia. 
This is evolving. The countries, as our trade relations have evolved, 
as our contacts have evolved, and as the trust level has evolved, our 
countries are working very well together to assure the stability of 
this region.
  I feel compelled to make these points on a day that has such an 
impact on Vietnamese around the world, and to say I am hopeful that 
with the progress we have made over the past several years that we can 
achieve the objectives that we once were trying to achieve at the time 
on the battlefield--a strong relationship with a country whose 
government will become more open and more mature, with a people who 
have a tremendous level of entrepreneurship and energy, and in the end, 
a relationship that can assure greater stability in east Asia and 
Southeast Asia.


                           Amendment No. 3736

  I would now like to turn to my amendment. I would like to emphasize, 
this is a very carefully drafted amendment. It is one shot, not a 
continuing windfall profits tax--which I don't generally agree with. It 
is a one-shot amendment designed to give the American taxpayers a place 
on the upside of the recovery of the financial system that they, 
frankly, enabled. You can understand the anger in this country when we 
look at the results of this hearing the other day that Senator Levin 
chaired. We hear in many cases the irresponsible behavior of some 
executives in the financial sector who brought about the difficulty 
that threatened our entire economic system.
  This amendment is very simple. It would provide a one-time, 50-
percent tax on bonuses that are above $400,000 of any initial bonus 
paid to executives at Fannie Mae, Freddie Mac, or financial 
institutions that received a minimum of $5 billion in the TARP. It is 
only for income that was generated for work in 2009 and compensated in 
2010.
  Again, this is a one-shot matter of fairness to balance out the 
rewards that these financial institutions received which were enabled 
by the contributions of the American taxpayers, particularly in the 
TARP. We have had estimates this amendment would recover for our 
economic system somewhere in the neighborhood of a minimum of $3.5 
billion and potentially as high as $10 billion--13 companies, on 
bonuses in excess of $400,000 after all the other compensation has been 
paid. That is the amount of money paid to these executives.
  Again, I need to emphasize the American taxpayer did not create the 
economic crisis. They were required to bail out the people who did 
create it, and they deserve a share in the upside because these are the 
rewards that they themselves enabled.
  Paul Krugman, who is a Nobel Prize-winning economist, wrote in July 
of 2008 about his concern at the very inception of this economic crisis 
that we were moving toward a tendency in this country to socialize risk 
and individualize reward. In other words, whenever we create a 
situation where there is an economic challenge, the American taxpayer 
at large is expected to absorb the risk. But when the reward comes in, 
only the executives, the people who were managing the financial system, 
are able to actually get the reward.
  This particular reward in this one-shot tax proposal has come about 
largely as a result of government intervention, as a result of working 
people having to put their money forward, having to bail out a 
financial system that went wrong. As a result, as a matter of equity, 
the reward should be

[[Page S2996]]

shared with the taxpayers who made it possible.
  When I first started thinking about doing this, I actually was drawn 
to an article that was written in the Financial Times. This actually 
was last November in the Financial Times. It was written by Martin 
Wolf, who is a conservative economist. Here you see the logic and the 
equity of moving forward with this type of windfall profits tax. When 
we have Paul Krugman, who is known as a liberal economist, a Nobel 
Prize winner, and Martin Wolf, who is a conservative economist who 
writes for the Financial Times, agree on principle, we have to stop and 
think about it.
  Martin Wolf, in this article, said--and I am going to just read a few 
excerpts from the article:

       Windfall taxes are a ghastly idea. . . . So why do I now 
     find the idea of a windfall tax so appealing? Well, this time 
     it looks different.
       First, all the institutions making exceptional profits do 
     so because they are beneficiaries of unlimited State 
     insurance for themselves and their counterparts. . . .
       Second, the profits being made today are in large part the 
     fruit of the free money provided by the central bank, an arm 
     of the state. . . .
       Third, the case for generous subventions is to restore the 
     financial system--and so the economy to--health. It is not to 
     enrich bankers. . . .
       Fourth, ordinary people--

  And we need to think about this when we look at the impact, the 
incredible anger that is in this country after incidents such as the 
hearings this week--

     ordinary people can accept that risk takers receive huge 
     rewards. But such rewards for those who have been rescued by 
     the state and bear substantial responsibility for the crisis 
     are surely intolerable. . . .

  Our taxpayers, our working people, rescued a financial system that 
was on the verge of collapse because of massive acts of bad judgment 
and greed by the very companies that are now reaping huge bonuses from 
the government's intervention. It is not too much to ask those who have 
been so fully compensated and who have received in excess of a $400,000 
bonus on top of their compensation, that they pay a one-time tax and 
share that excess, on top of their $400,000 bonus, with the people who 
rescued them.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Hawaii is 
recognized.
  Mr. AKAKA. Mr. President, it is timely that we have started to 
consider the financial services modernization legislation during April, 
a month that we have designated as Financial Literacy Month. There are 
three vital components to financial literacy: education, consumer 
protection, and economic empowerment. H.R. 3217, the Wall Street Reform 
bill, includes essential provisions in all three of these areas for 
consumers and investors. I have worked extensively with the chairman of 
the Banking Committee and other members of the Committee to ensure that 
bill includes essential education, consumer protection, and economic 
empowerment provisions. I appreciate all of the leadership and work 
done by Chairman Dodd and his efficient, effective, and hardworking 
staff to develop this legislation so important to working families.
  With regard to education, the legislation creates an Office of 
Financial Literacy within the Consumer Financial Protection Bureau. The 
Financial Literacy Office is tasked with developing and implementing 
initiatives to educate and empower consumers. A strategy to improve the 
financial literacy among consumers, that includes measurable goals and 
benchmarks, must be developed. The Administrator of the Bureau will 
also become Vice-Chairman of the Financial Literacy and Education 
Commission. This will ensure meaningful participation in the 
Commission.
  The legislation also requires a Securities and Exchange Commission, 
SEC, financial literacy study to be conducted. The SEC will be required 
to develop an investor financial literacy strategy intended to bring 
about positive behavioral change among investors.
  The second key component of financial literacy is consumer 
protection. This legislation creates a regulatory structure to ensure 
greater emphasis by regulators on investor and consumer protection. The 
failure of regulators to protect consumers contributed significantly to 
the financial crisis. Prospective homebuyers were directed into 
mortgage products that had risks and costs that they could not 
understand or afford.
  The Consumer Financial Protection Bureau will have the ability to 
restrict predatory financial products and unfair business practices in 
order to prevent unscrupulous financial services providers from taking 
advantage of consumers.
  We also strengthen the ability of the SEC to better represent the 
interests of retail investors. My proposal to create an Investor 
Advocate within the SEC is in the bill. The Investor Advocate is tasked 
with assisting retail investors to resolve significant problems with 
the SEC or the self-regulatory organizations, SROs. The Investor 
Advocate's mission includes identifying areas where investors would 
benefit from changes in Commission or SRO policies and problems that 
investors have with financial service providers and investment 
products. The Investor Advocate will recommend policy changes to the 
Commission and Congress in the interests of investors. The creation of 
the Office of the Investor Advocate has widespread support from 
consumer, labor, and industry organizations.
  We worked to include in the legislation clarified authority for the 
SEC to effectively require disclosures prior to the sale of financial 
products and services. Working families depend on their mutual fund 
investments and other financial products to pay for their children's 
education, prepare for retirement, and attain other financial goals. 
This provision will ensure that working families have the relevant and 
useful information they need when they are making decisions that 
determine their future financial condition.
  This legislation also addresses remittance consumer protections. 
Working families often send substantial portions of their earnings to 
family members living abroad.
  In my home State of Hawaii, many of my constituents remit money to 
their family members living in the Philippines. Consumers can have 
serious problems with their remittance transactions, such as being 
overcharged or not having their money reach the intended recipient. 
Remittances are not currently regulated under Federal law and State 
laws provide inadequate consumer protections.
  The bill will modify the Electronic Fund Transfer Act to establish 
remittance consumer protections. It will require simple disclosures 
about the costs of sending remittances to be provided to the consumer 
prior to and after the transaction. A complaint and error resolution 
process for remittance transactions would be established.
  The third component of financial literacy is economic empowerment. 
Senator Kohl and I developed title XII of the legislation which is 
intended to increase access to mainstream financial institutions for 
the unbanked and the underbanked. Mainstream financial institutions are 
a vital component to economic empowerment.
  Banks and credit unions provide alternatives to high-cost and often 
predatory fringe financial service providers such as check cashers and 
payday lenders. Unfortunately, approximately one in four families are 
unbanked or underbanked.
  Many of these families are low- and moderate-income families that 
cannot afford to have their earnings diminished by reliance on these 
high-cost and often predatory financial services. Unbanked families are 
unable to save securely for education expenses, a down payment on a 
first home, or other future financial needs. Underbanked consumers rely 
on nontraditional forms of credit that often have extraordinarily high 
interest rates. Regular checking accounts may be too expensive for some 
consumers unable to maintain minimum balances or afford monthly fees. 
Poor credit histories may also limit their ability to open accounts. 
More must be done to promote product development, outreach, and 
financial education opportunities intended to empower consumers.
  Title XII authorizes programs intended to assist low- and moderate-
income individuals establish bank or credit union accounts and 
encourage greater use of mainstream financial

[[Page S2997]]

services. Title XII will also encourage the development of small, 
affordable loans as an alternative to more costly payday loans.
  Payday loans often have outrageously high interest rates. Payday loan 
flipping often leads to instances where the fees paid for a payday loan 
well exceed the principal borrowed. This creates a cycle of debt that 
is hard to break.
  There is a great need for working families to have access to 
affordable small loans. This legislation would encourage banks and 
credit unions to develop consumer-friendly payday loan alternatives. 
Consumers who apply for these loans would be provided with financial 
literacy and educational opportunities. I am proud of the credit unions 
in Hawaii that have worked to develop payday loan alternatives to meet 
the needs of their members, particularly for our military families that 
have traditionally been exploited by payday lending.
  The National Credit Union Administration has provided assistance to 
develop these small consumer-friendly loans. More working families need 
access to affordable small loans. This program will encourage 
mainstream financial service providers to develop affordable small loan 
products.
  I also appreciate the work done by Senator Menendez and his staff to 
authorize financial education economic empowerment grants intended to 
provide opportunities for economically vulnerable families.
  This bill is not about the last financial crisis. This legislation is 
about creating a more fair financial system that better educates, 
protects, and empowers consumers and investors.
  The emergency actions that had to be done in the fall of 2008 brought 
with it an obligation to create a financial regulatory system that is 
more helpful to working families. This legislation fulfills that 
obligation and will help improve the lives of so many people in our 
country by educating, protecting, and empowering consumers and 
investors.
  The ACTING PRESIDENT pro tempore. The Senator from Connecticut.
  Mr. DODD. Mr. President, before he leaves the floor, I wish to 
commend our friend and colleague from Hawaii. I have had the privilege 
and pleasure of knowing Senator Akaka for a long time. He is consistent 
in his issue cluster, if you will. He obviously has issues to deal with 
in his State, but I have never known another individual who has been as 
dogged as the Senator from Hawaii has been about seeing to it that 
people get that clear, understandable information, the ability to learn 
more about their own financial activities, that literacy he has 
consistently talked about for such a long time.
  There are other accomplishments he has achieved. He is a wonderful 
member of our committee. He has made a significant contribution to this 
bill. This bill can bear his name on it as having contributed a major 
portion of the effort we are trying to achieve. I thank him for that.
  We have a ways to go now on the floor in the debates that come here, 
but I am grateful to him for his consistent support, his ideas he has 
brought to the product we have now before us. I thank him not only on 
behalf of his colleagues but on behalf of the American people. He may 
represent one State, but his language here affects every State and 
every person in it. That is a significant contribution. I thank the 
Senator for it.
  Mr. AKAKA. Thank you very much, Mr. Chairman, for your great 
leadership.
  Mr. DODD. Mr. President, I did not get a chance to respond to our 
colleague from Virginia, Senator Webb, and, first of all, to commend 
him. His wonderful service to our country in uniform is known by many, 
but every year he comes to the floor and takes a moment to talk about 
the conflict in Vietnam, where he played such a significant role in the 
fall of Saigon. We are grateful to him for his service to our country.
  We are a better Chamber because of Jim Webb's presence here and the 
knowledge and understanding he brings. I know the Presiding Officer, as 
his colleague from Virginia, appreciates the relationship he has with 
him and the difference he has made in the Senate by being here. So I 
thank Jim Webb for that.
  He has offered an idea, as well, to this financial reform package, 
one to which I am very sympathetic. There are some constitutional 
issues we have with tax measures that have to originate on the House 
side rather than on the Senate side under the Constitution. I know my 
colleague from Virginia is probably aware of that, but nonetheless his 
ideas have some merit. Obviously, when he brings it up, we will have a 
chance to talk about it, but I would be remiss if I did not mention 
that particular issue.
  I see my colleague from North Dakota, who is here with some thoughts.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Franken). The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I wanted to, in a few minutes, talk about 
the START treaty. But before I do that, I would like to engage in some 
discussion with the Senator from Connecticut about financial reform.
  Even as I do that, and I will do that briefly, I wanted to say that 
not many Members of the Senate understand how much time and effort the 
Senator from Connecticut has put into this product of financial 
reform--Wall Street reform, as it is called. I, for one, very much 
appreciate the work that has been done. There is a lot in the bill that 
has been brought to the floor by Senator Dodd that is commendable and 
that is right on point. There are some areas where I, perhaps, will 
want to offer suggestions. Maybe the Senator will agree with them, 
maybe not.
  I wish to say as a starting point that I am very pleased that we have 
the bill on the floor now, open for debate, open for amendment next 
week. I hope we keep it on the floor and improve it in areas where it 
can be improved, make modifications where necessary, but in the end be 
able to vote for a piece of legislation that will allow us to tell the 
American people: We understand what happened, and we have tried to take 
steps now to make sure it cannot and will not happen again.
  One of the areas where I will offer an amendment--and I understand it 
will be a controversial amendment--is on the issue of too big to fail.
  My colleague from Connecticut and others on the Banking Committee 
have constructed one approach on too big to fail, and I will be 
supportive of that approach. But I do think the too-big-to-fail issue 
at its root is, if you are too big to fail, from my standpoint, you are 
too big. And I come down on the side of one-fourth of the Governors of 
the Federal Reserve Board who have said this, and many others. I come 
down on the side of those who have said: If you are too big to fail, 
you are too big.
  I think the council that is established under this legislation ought 
to at that point--once designating a company that has become too big to 
fail, that is too big to fail, that causes a moral hazard and an 
unacceptable threat and risk to our economy, then I think divestiture 
is in order of that portion of the company that puts this country at 
risk as a result of them being too big to fail. That is a different 
approach than is used by the committee but an approach that I think is 
still credible; an approach, in fact, that has been described by the 
former Chairman of the Federal Reserve, Greenspan, by, as I said, three 
members of the Federal Reserve Board saying: There ought to be 
divesture. That would be one of the amendments I will offer next week 
and discuss.

  Again, what has happened leading up to and since the near collapse of 
our economy, as a result of unbelievable activities at the top of our 
financial food chain, the largest financial enterprises have actually 
become much larger because of actions of the Federal Government, among 
other things, to encourage them to become larger. I think an 
appropriate amendment would be for us to have a real discussion about, 
should we not just decide if you are too big to fail, you are just too 
big.
  Mr. DODD. Will my colleague yield?
  Mr. DORGAN. I am happy to yield.
  Mr. DODD. One of the powers of the systemic risk council is, in fact, 
the power to break up large financial institutions. It is not one of 
the things they would do, but it is a power which resides in our bill 
for them to do that. I couldn't agree more about the excessive risks 
that institutions have taken,

[[Page S2998]]

but there is a distinction. I always think it is more about what risks 
these institutions pose. Do they have capital standards, leverage 
standards, liquidity standards that are in place? As we were discussing 
earlier, of the 10 largest financial institutions in the world, the 
United States has 1. Of the top 50, 5 are in Canada, a country with 
which my colleague is more familiar than most. We have four. They have 
had very few financial problems during this crisis, not because of the 
size of their institutions so much as they are far better regulated in 
terms of what they can do, what risks they can assume. There are other 
things they engage in as well.
  The point my colleague is making is a very sound one, to make sure we 
are not seeing our system exposed to the kind of actions that can bring 
it down. But I wanted to at least mention to him that we do have the 
power to divest, and we are trying to work on that issue of excessive 
risk. I appreciate his comments.
  Mr. DORGAN. First, the point the Senator from Connecticut made, which 
is so important, is effective regulatory authority. If we don't have 
regulations that work or regulators who care, what happens is what 
happened to us in the last couple years. We have a buildup of 
substantial risk, effectively allowing some to gamble rather than 
invest. We desperately need effective regulatory capability and 
regulators who care. I understand the risk council in the underlying 
bill is allowed to go toward divestiture but not require it.
  Mr. DODD. That is true.
  Mr. DORGAN. My point is, I will offer an amendment that would 
actually require it at the front end, simply saying, if we have a 
category that is described as too big to fail, meaning this is too 
large an organization to be allowed to fail, which in my lexicon is no-
fault capitalism, if they are now at such a size that they are too big 
to fail, they pose a moral hazard, a grave threat and risk to the 
economy, if they were to fail, then I say do as we have done on some 
other occasions. We broke up Standard Oil into 26 parts, and it turns 
out the value of the parts was substantially greater than the value of 
the whole. It turned out to be a pretty wonderful thing. We broke up 
AT&T for other reasons. I am not rushing to try to break up anybody, 
but if we are serious about describing that which we think creates 
substantial, additional risk in the future, then we should take action 
to eliminate those kinds of risks, if the risk is, in this case, too 
big to fail.
  I would like to get rid of the category of too big to fail. The 
Federal Reserve Board has had such a category for a long time. We have 
always known that if one is too big to fail, they are at a significant 
advantage to virtually every other financial institution. They can do 
business. They can take risks, but they can't fail. They are too big to 
fail and, competing with them, they have a safety net. My amendment 
will be simply, if you get to that point where this council judges you 
to be too big to fail without substantial grave risk to the country's 
economy, then I think divestiture that is sufficient to get the 
institution back to an area where it is not too big to fail would be in 
the public interest. My amendment would require divestiture.
  The other amendment I will be offering is one that is also perhaps 
controversial. That is on the issue of naked credit default swaps or 
what some people call synthetic default swaps. They have been 
described, accurately so, as betting or wagering rather than investing. 
I have heard the descriptions of the investment bankers about why they 
are useful in dealing with risk and so on. But it is not useful, from 
my perspective, to have the largest financial institutions collecting 
fees for the purpose of arranging wagers. There are places to make 
wagers, if we call the wager simply gambling. Las Vegas and Atlantic 
City come to mind. But with respect to credit default swaps, which is a 
new term in the discussion these days, credit default swaps themselves 
represent insuring against a bond default, for example. But a naked 
credit default swap means you have no insurable interest in anything. 
You are simply betting someone else about something that might happen 
with a bond issue, despite the fact neither of you own the bond. I 
began thinking about a column Mr. Pearlstein wrote in the Washington 
Post. He always writes interesting columns. He said: Why should there 
be allowed more insurance against bonds than there are bonds? Then I 
read a piece that in England they actually tried to categorize it, what 
percent of the credit default swaps were synthetic or naked, having no 
insurable interest? The answer was about 80 percent. Think of that. 
About 80 percent of these naked credit default swaps have no insurable 
interest on anything. It is just a way to wager.
  I believe that is a category that ought not be allowed. I will offer 
an amendment on that. I recognize that that may also be a controversial 
issue but one, nonetheless, I think is important.
  Nobody knows this better than the chairman of the committee. I think 
it is important we have a productive sector to produce things, to 
produce things that might have a label that says ``Made in America.'' 
It is important we have a financial sector because we can't produce 
without finance. Production is necessary for finance as well. If you 
look at a couple hundred years of economic history, you will find that, 
in some cases for decades, production has the upper hand and finance is 
out here sort of moving at the beck and call of production. Then, in 
other areas, the financing industry has the upper hand. You see it move 
back and forth. We have been through a couple decades in which finance 
has the upper hand and has been calling the shots.
  It is critically important to have a system of finance, and that 
system includes investment banks, FDIC-insured banks, venture capital 
funds, a wide array of financial institutions. We desperately need 
that. We can't have an economy that grows without it. But it is very 
important that financial system be one that has proper, effective 
regulation so we don't see it spin out of control as we have seen in 
the last 10 or 15 years.
  In 1994--15\1/2\ half years ago--I wrote the cover story for the 
Washington Monthly magazine. The title of my cover story was ``Very 
Risky Business.'' I took a part of a title of a movie back then. At 
that point, I think there was something like $18 or $28 billion 
notional value of derivatives out in the economy. I talked about the 
risk those derivatives posed to our banking institutions that were 
trading on their own proprietary accounts on derivatives. It is not as 
if I have just discovered this issue. With Senator Feinstein from 
California and others, I have been on the floor many times talking 
about the need to regulate derivatives and regulate hedge funds. We 
have been spectacularly unsuccessful in that over the years, but now at 
long last, with the legislation that is coming to the floor and the 
opportunity to have a wide-open debate with a lot of amendments, I 
think all of us can believe that if we are successful--and I believe we 
can be--we will do something that has merit for the future stability of 
this country's economy.
  Again, I know there is a lot of language about banking and investment 
banking out there. I use some of it, perhaps, that is pretty hot 
language. Some of it is well deserved by a lot of people who made a lot 
of money, as they steered this country's economy into the ditch. But 
let it be known we need a financial system that works in order to 
finance production. All of us want the same thing. We want to put this 
country back on track and expand the economy and create jobs once 
again. That is the purpose of all this.

  I used to teach a bit of economics in college. I always described to 
students that the economy is not like some engine room on the ship of 
state where, if you get down in the engine room and find the right 
dials and switches and push them all just right, that the ship of state 
will move forward. It is not that at all. It is about confidence. If 
the American people are confident in the future, they do things that 
manifest that confidence and expand the economy. They buy a new suit of 
clothes, a car, a house, take a trip. They do the things that manifest 
their confidence in the future. That is expansive to the economy. If 
they are not confident, they do exactly the opposite. That contracts 
the economy.
  That is why this legislation is going to go a long way toward saying 
to the American people: You can have confidence this sort of thing is 
not going to happen again. That is the precursor

[[Page S2999]]

to allowing us to see an economy that expands because people have some 
confidence in the future.
  I started by saying thank you to the Senator from Connecticut. I say, 
again, there is a lot of work that has gone into this. It is not 
perfect bill. There will be much that is controversial. I will offer a 
couple controversial amendments. At the end, I hope we will all have 
worked together to accomplish the same thing for the country--the 
opportunity for more economic growth and expansion and more hope and 
opportunity for American families.
  I ask unanimous consent to speak in morning business for as much time 
as I may consume.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.


                              START Treaty

  Mr. DORGAN. Mr. President, yesterday there was a hearing in the 
Senate on the Strategic Arms Reduction Treaty we have negotiated with 
Russia. I was not on the committee, but there was testimony by Dr. 
James Schlesinger and Dr. William Perry, two of the most veteran arms 
control experts, who came to the Foreign Relations Committee and said 
they support the Strategic Arms Reduction Treaty with Russia.
  I was in Russia a couple weeks ago and had an opportunity to tour a 
number of sites that we are actually funding from the United States 
through the Cooperative Threat Reduction program, the partnership we 
have with Russia in a number of areas, stemming from, among other 
things, what is called the Nunn-Lugar law, the Nunn-Lugar program. I 
have long supported the Cooperative Threat Reduction Program called 
Nunn-Lugar, named after two of my colleagues, Senators Sam Nunn and 
Richard Lugar.
  In the early 1990s, they wrote legislation that allows us to work 
with the Russians and other former Soviet states to deactivate nuclear 
weapons and to destroy delivery systems.
  I wish to show a couple of the photographs and if I might show 
something I have had in my desk for a while. I ask unanimous consent to 
do that. This is a photograph of a blackjack Russian bomber being 
dismantled. This is the wing strut from that bomber. I have a piece 
that was sawed off from the bomber's wing strut in my desk simply 
because it was given to me, and I thought it was so significant that 
the wing of a Soviet bomber that used to carry nuclear weapons, part of 
that wing is now in my Senate desk, not because we shot the Russian 
bomber down; it is because we actually provided the funding to saw the 
wings off and destroy the bomber. That is success.
  This is a photograph of a missile silo in the Ukraine. I have in my 
desk, as well, a hinge. This hinge came from that missile silo. That 
missile silo held an SS-18 missile with a nuclear warhead aimed at the 
United States of America.

  Now, where that missile silo once existed, with a missile and a 
warhead aimed at America, is now a field of sunflowers. You can see 
from this picture the missile silo was blown up, dismantled. I actually 
have a piece of the hinge. What a great success. The missile silo did 
not have a missile delivered to destroy a city in America. We actually 
spent the money to pay for the destruction of the missile silo under 
the Nunn-Lugar program. What a spectacular success that is.
  This next picture is of a submarine being dismantled. It is a Russian 
submarine. It is a Typhoon class ballistic missile submarine, and it 
would have carried missile tubes, and those missile tubes in that 
submarine under the water would have contained nuclear warheads that 
would have been used to destroy our country.
  Here, in this picture, is an example of the missile tubes on that 
submarine. These too were destroyed. I have a little vile of copper 
wire that was ground up that came from that submarine. Now, we did not 
sink that submarine in an act of warfare. We actually paid to have that 
submarine dismantled and the copper wiring ground up. I have some of 
the copper wiring here in my desk, just to remind us how important this 
program has been.
  Now, we have on this Earth about 25,000 nuclear weapons, roughly. 
This comes from the Union of Concerned Scientists in 2010. It is 
estimated Russia has about 15,000 nuclear weapons; the U.S. probably 
about 9,000-plus; China, a couple hundred; France, several hundred; 
Britain, a couple hundred. So here is the quantity of nuclear weapons 
on our planet. The question is, What would happen if someday in some 
way someone detonates a nuclear weapon in the middle of a major city on 
this planet? I know what will happen. It will change life on Earth as 
we know it.
  So let me describe a story. And keep in mind, we have 25,000 nuclear 
weapons on the planet. Let me describe a story. One month after 9/11, a 
CIA agent nicknamed Dragonfire reported to the CIA that he had evidence 
that a 10-kiloton Russian nuclear weapon had been stolen and had been 
smuggled into New York City and was to be detonated. That was 1 month 
after 9/11. It was October 11, 2001, to be exact. Dragonfire reported 
that al-Qaida terrorists had stolen a 10-kiloton nuclear bomb from the 
Russian arsenal and may have smuggled it into New York City.
  It was not reported at that point, but there was an apoplectic 
seizure here. The President and others who had this information were 
not sure whether it was accurate or not. It was a report from a CIA 
agent, and they--just in the shadow, 1 month later, of 9/11 of course--
were very much on their guard. Our country was pretty much shocked by 
everything that happened.
  So this report by Dragonfire meant that Vice President Cheney moved 
to a secret mountain facility, along with several hundred government 
employees, we are told. So they were the core of an alternative 
government that would operate if Washington, DC, were destroyed by a 
nuclear weapon.
  We are told that President Bush dispatched a nuclear emergency 
support team to New York to search for a weapon. To not cause panic, no 
one in New York City was informed of the threat, not even the mayor of 
New York. After a few weeks, the intelligence community determined that 
Dragonfire's report of someone having stolen a Russian nuclear weapon 
and smuggling it into this country was probably a false alarm.
  But when they did the post-mortem on it, they all understood it was 
perfectly possible that a nuclear weapon could have been stolen from 
the Russian arsenal, perfectly possible that a nuclear weapon could 
have been smuggled in to New York City or Washington, DC, and possible 
for terrorists to disarm the safeguards and explode the bomb.
  No one said it was impossible that a terrorist group would want to 
kill several hundred thousand Americans with one bomb in the middle of 
an American city. On the contrary, all of the experts knew this was 
possible. Now, all of that--by the way--all of that angst was about one 
10-kiloton, rather small Russian nuclear weapon reported by a CIA agent 
to have been stolen.
  But there is more than one nuclear weapon; there are 25,000 nuclear 
weapons on this planet. Think of the concern about the potential 
stealing of one, and then ask the question, What do we have to do to 
make sure that nuclear weapons that now exist are safeguarded, that 
there is adequate security, and, even more important, that we stop the 
spread of nuclear weapons to others, other countries, and certainly 
terrorist groups who want to acquire nuclear weapons?
  The description of Dragonfire's report comes from a former Clinton 
administration official, Graham Allison, an expert on nuclear 
proliferation. He wrote about the incident in a book called ``Nuclear 
Terrorism: The Ultimate Preventable Catastrophe.'' The description I 
have just read is a part of the book by Mr. Allison.
  Now, even though the Cold War ended two decades ago, we still have, 
as I have indicated, about 25,000 nuclear weapons in the world. Mr. 
President, 95 percent of them are owned by the United States or by 
Russia. We are now operating under the Strategic Offensive Reduction 
Treaty, also known as the Moscow Treaty. It requires the United States 
and Russia, by our agreement, to have no more than 2,200 
``operationally deployed'' strategic nuclear weapons by 2012. But it 
does not do anything to restrict nuclear delivery vehicles--bombers, 
missiles, submarines. And it does not have any verification measures. 
It expires in 2012.
  A few weeks ago President Obama and Russian President Medvedev met

[[Page S3000]]

in Prague, the Czech Republic, and signed a new strategic arms control 
treaty. It is called START. It limits each side to 1,550 deployed 
strategic nuclear warheads--30 percent lower than the existing treaty. 
It limits each side to 800 deployed and nondeployed ICBM launchers, 
SLBM launchers, and heavy bombers equipped for nuclear armaments--one-
half of what the START treaty allowed. It sets a separate limit of 700 
deployed ICBMs, deployed SLBMs, and deployed heavy bombers that are 
equipped. It has verification regimes for on-site inspections, 
telemetry exchanges, data exchanges, and so on.
  Now, I know this treaty will be controversial in some quarters, but I 
want to describe what ADM Mike Mullen, Chairman of the Joint Chiefs of 
Staff, has said just in the last month, because some are worried about 
whether our nuclear weapons work, whether our stockpile is reliable. 
What if we use it? Can we expect it to work? Well, the other side of 
the nuclear debate is, if you use it, you probably will never be around 
to wonder whether it works. I think the face of this Earth will change 
if there is ever an exchange of nuclear weapons of any kind between 
adversaries that have multiple nuclear weapons.
  ADM Michael Mullen, the Chairman of the Joint Chiefs of Staff, says:

       I, the Vice Chairman, and the Joint Chiefs, as well as our 
     combatant commanders around the world, stand solidly behind 
     this new treaty, having had the opportunity to provide our 
     counsel, to make our recommendations, and to help shape the 
     final agreements.

  So the Chairman of the Joint Chiefs says they are satisfied with this 
treaty, believe it is a good treaty.
  Linton Brooks says something very important. He is the former NNSA, 
National Nuclear Security Administration, Administrator from 2003 to 
2007. He says:

       START . . . is a good idea on its own merits, but . . . for 
     those who think it's only a good idea if you only have a 
     strong weapons program, I think this budget ought to take 
     care of that.

  He is talking about the budget the President has sent to the Congress 
for life extension programs and the other things we do to make sure the 
nuclear stockpile is up to date.
  He said:

       Coupled with the out-year projections, it takes care of the 
     concerns about the complex and it does very good things about 
     the stockpile and it should keep the labs healthy. . . .

  He said:

       . . . I would've killed for this kind of budget.

  The reason I mention this is that we have people coming to the floor 
of the Senate now, and in public discussion--and Douglas Feith is an 
example of them. He says:

       Since the administration is so eager for [the treaty], the 
     main interests of conservatives will relate to modernization. 
     Republicans are interested in the U.S. nuclear posture, the 
     political leverage they have will be the treaty. . . .One of 
     the hot issues is going to be the replacement warhead. . . .

  What does that mean? That means we have had people in this Chamber 
and others--including the neocons, and Mr. Feith and others--they have 
always wanted to begin building new nuclear weapons. It started with: 
What we need to do is, we need to build new designer nuclear weapons. 
We need to build earth-penetrating bunker-buster weapons so we can use 
them. In Afghanistan there were some folks who were hold up down, well 
underground, and so: What we need to do is develop designer nuclear 
weapons, earth-penetrating bunker-buster nuclear weapons.
  Well, Senator Feinstein and I and some others got that abolished. It 
makes no sense to me for us to be off building new nuclear weapons. It 
just does not make any sense. The fact that the bunker-buster earth-
penetrator was not built--that does not matter--then they came with the 
RRW, reliable replacement weapons. Substantial costs of additional 
funding to build new nuclear weapons called the replacement weapons.
  Here are some statements by some skeptical U.S. Senators about this 
START treaty:

       Well, I can tell you this, that I think the Senate will 
     find it very hard to support this treaty if there is not a 
     robust modernization plan. . . .

  Another Senator:

       The success of your administration in ensuring the 
     modernization plan is fully funded in the authorization and 
     appropriations process could have a significant impact on the 
     Senate. . . .

  It means you have to be building additional nuclear weapons, you have 
to spend X amount of money here and there in order for us to support 
the START treaty.
  Another Senator says:

       My vote on the START treaty will thus depend in large 
     measure on whether I am convinced the administration has put 
     forward an appropriate and adequately funded plan to sustain 
     and modernize the smaller nuclear stockpile it envisions.

  Let my say what the JASON says about all this. It is an organization 
that really knows what it is talking about and issues a lot of reports 
with respect to the science of nuclear weapons, because some have said: 
We have to build a lot of new nuclear weapons here because the nuclear 
weapons we have--dealing with the degradation of the pits and other 
things--we are not going to be able to have confidence they even work. 
So here is what the JASON says:

       JASON finds no evidence that accumulation of changes 
     incurred from aging and LEPs--

  Life extension programs--

     have increased risk to certification of today's deployed 
     nuclear warheads.

  They are saying, quite clearly, there is no evidence there is an 
increased risk to be able to certify that our nuclear stockpile is 
reliable.

       Lifetimes of today's nuclear warheads could be extended for 
     decades, with no anticipated loss in confidence, by using 
     approaches similar to those employed in [the life extension 
     programs] to date.

  So to those who want to go off and spend a lot of money building new 
nuclear weapons, at a time when we are deep in debt, and leverage that 
in exchange for voting on the START treaty, I say you are wrong. You 
are just dead wrong. We have to get about the business of reducing 
nuclear weapons. We have to get about the business of agreeing to 
treaties like this because it is our responsibility. It falls on our 
shoulders here in the United States to be the world leader to steer us 
away from nuclear catastrophe.
  Now, I understand nobody is talking about disarmament here. But we 
are talking about a circumstance where there is able to be 
certification that our nuclear stockpile is reliable. That certainly 
ought to satisfy the appetite of those who want to build more nuclear 
weapons. We should not be building more nuclear weapons. What kind of a 
message does that send to the rest of the world? We have 25,000 nuclear 
weapons on the planet already--the loss of one which caused an 
apoplectic seizure around this place, for those who knew it, because 
they wondered what would happen.
  Mr. President, 9/11 was several thousand people. What would happen if 
several hundred thousand people were murdered with a nuclear weapon 
being exploded in a major city--and not just a U.S. city, any major 
city on this planet? It will dramatically alter life on this planet.
  So I just wanted to say, this START treaty--I commend the President: 
a job well done. This is a very good and important treaty for our 
country and for the world. I am going to be strongly supporting it. We 
will have sufficient resources--the President has seen to it--
sufficient resources for the life extension program to make sure our 
nuclear stockpile is reliable.

  This President has said, to his credit, that our job, our 
responsibility as a world leader is to provide leadership to stop the 
spread of nuclear weapons, to do everything that is necessary to keep 
nuclear weapons out of the hands of terrorists and rogue nations. Our 
job is to find ways to reduce the number of nuclear weapons on this 
planet.
  The President of the United States hosted at the convention center 
here in Washington, DC, I think the largest gathering, perhaps, of its 
kind in history, of world leaders who came here to talk about securing 
loose nuclear materials and nuclear weapons. Some make light of that: 
Well, a little gathering; good for all them. No one should make light 
of that gathering. It was historic and unbelievably important. A very 
small amount of highly enriched uranium--the size of a 2-liter of soda 
in the store--is enough to build a nuclear weapon. The loose nuclear 
materials, highly enriched uranium and plutonium that is available 
around the

[[Page S3001]]

world, must be gathered together and must be safeguarded and kept out 
of the hands of terrorist organizations. That is what this President 
was doing: cementing together the will and the agreement with other 
leaders from around the world to do that. That is unbelievably 
important. No one should make light of that and everyone should 
understand the historic importance of what this President has done.
  Finally, this START treaty, as I indicated, I think has much to be 
commended to this country, and this Senate ought not find itself in the 
kind of dispute it almost always has on everything these days. If there 
is anything this Senate ought to be able to agree upon, it is that it 
is our responsibility and in our interests--in our long-term survival 
interests--to find ways to reduce the number of nuclear weapons on this 
planet, reduce delivery vehicles, and reach agreements with adversaries 
and potential adversaries so all of us understand that we cannot allow 
a nuclear weapon to fall into the hands of terrorist organizations.
  I commend the administration. I hope on a bipartisan basis we can 
give a very strong vote to the START treaty when the hearings are 
completed and when we have a debate on it on the floor of the Senate.
  Mr. President, I yield the floor and note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DODD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. Mr. President, we have been having a conversation this 
morning. Senator Corker of Tennessee was on the floor, a member of our 
Banking Committee, and he and I engaged in a conversation about our 
legislation. Senator Akaka from Hawaii, a member of the committee as 
well, was here to talk about the bill. Senator Dorgan was here talking 
about arms control, but also about our legislation. Senator Jim Webb 
was also here this morning to talk about provisions in the bill. While 
there are no votes today, it was an opportunity for people to come and 
talk about either what they are in support of or what they object to 
and what additions they may wish to make.
  Let me emphasize again my hope that today and over the weekend and 
Monday, Members who have amendments to this bill, Democrats and 
Republicans, if they would let us know what those amendments are so we 
can begin to process them and possibly accept, hopefully, as many as we 
possibly can as additions to the bill, and modify some, making them 
acceptable, without having necessarily to go into votes. Of course 
there will be some that will require a debate and discussion and votes 
on the floor. We wish to accommodate as many Members as we can over the 
next couple of weeks on these matters. I know the leader has indicated 
to me that his intention is to come in very early every day and to stay 
late next week and the week after if necessary so we can accommodate as 
many Members as possible in this debate. I know the floor staff of the 
Senate is delighted to hear those comments about being in early and 
staying late, but obviously we want to get this bill done if we can. It 
is an important piece of legislation. I know there are others who want 
to be heard on it. Obviously it is an emotional issue, given what our 
country has gone through over the last 2 years. So I lay that out as a 
backdrop for my colleagues and ask them to let us know how we can be 
helpful to them.
  I will also respectfully ask that when Members bring up their 
amendments, if we can limit the time of debate so we don't have 
extended debate. A good, strong debate can occur over a half an hour or 
45 minutes and might be more than adequate, and to then give our 
colleagues an opportunity to vote.
  Briefly, this afternoon, before closing out this discussion, I wish 
to talk about a very important part of this bill. We have been hearing 
a lot of discussion about too big to fail and about the derivatives 
sections of the bill and the early warning system. One of the major 
attributes of this legislation is the establishment of a Consumer 
Financial Protection Bureau or division. We have never had one before. 
In fact, we have had many of them, but not one. We have around seven of 
them at the Federal level, various prudential regulators. I have great 
respect for the people who work in these divisions.
  Candidly, as I think many of them would attest, the predominant 
function of the regulator has been the safety and soundness function, 
and the consumer side of that equation has always been sort of 
relegated to a second-class status in too many cases. As a result, over 
the years we have seen that consumer protection has not had, when it 
comes to financial services, the elevated status it deserves. So I wish 
to talk about briefly what is in our bill. I wish to take great 
exception to some of the falsehoods that are being bandied about to 
describe what is in this bill, address them each directly by quoting 
from the bill. Members themselves can then read the legislation to 
determine whether they think the language is adequate. Obviously we 
don't want to overly burden anyone, nor do we want to leave a situation 
where people are burdened, tremendously so, when their homes, their 
incomes, their retirement have been lost because consumer protection 
was not being considered at all during the time the economic crisis was 
emerging and during the time it exploded.
  I would be very surprised if any Member of this body comes to the 
floor and says, Well, I don't think we need to put a focus on consumer 
protection. Virtually everyone I have spoken to has said this is very 
important. We need to have consumer protection in the financial 
modernization and financial reform bill. After all, I think it is 
widely understood that it was a failure of consumer protection that was 
at the very heart of the financial crisis. It was, of course, these bad 
mortgages that were being sold and that people were being lured into 
that caused the fires that began and that consumed our economy, or 
nearly consumed our economy. Over the last year and a half, in fact, as 
the Banking Committee has held a long series of hearings on the root 
cause of the crisis, the pattern has been clear. Americans, as we now 
know painfully, were sold mortgages they never understood and could 
never have afforded.

  The very first witness we had before the Banking Committee when I 
became chairman in January and February of 2007--I had never been 
chairman of a committee before, until the retirement of my great pal 
and friend and wonderful chairman, Paul Sarbanes, who had served as 
chairman, and as Richard Shelby, my now ranking member had been 
chairman. In February the very first hearings we held were on the 
mortgage crisis.
  The very first witness we had was a woman named Delores King, who is 
an elderly woman from Chicago. She is retired. She worked all her life. 
She had lost her husband, as I recall, but they had been able to buy a 
home years before. They had lived in that home and raised their family. 
She tragically lost her husband and she was on in years. She had a very 
small amount of debt. I don't know whether it was a credit card debt or 
utility debt, but I am talking small--$2,000 or $3,000, as I recall 
now. Three years ago she appeared as my first witness as chairman of 
the committee to talk about the mortgage crisis in January and February 
of 2007.
  What happened to her happened, unfortunately, over and over again. A 
mortgage broker came and said: I know how to take care of that debt you 
have, Mrs. King. What we will do is rewrite your mortgage for you on 
your home. Here she was on a fixed income as a retiree in our country, 
trying to make ends meet. She had not a lot of retirement income. I 
think she may have worked in the postal department. She worked in the 
library. I thank my staff member here recalling from 3 years ago who 
was with me that day. She worked in a library in Chicago, obviously not 
making a lot of money as a librarian, or working in the library. So she 
was on a very fixed, narrow income as a retiree. That mortgage this guy 
sold to her ended up exploding on her in a matter of months to the 
point where it consumed 70 percent of her fixed income and she lost the 
home. Here is a woman who had done everything right, and that went on 
over and over again.
  If you want to know why we are in the mess we are in, although things 
are getting better, it was Delores King's story being repeated over and 
over and over and over and over again that

[[Page S3002]]

caused the situation we are living in today.
  So when I say the root cause of what happened to us financially began 
in the living rooms of Delores King and those like her, that is exactly 
what happened. There are other factors as well, but that is the root 
cause. So to talk about drafting a bill on financial reform and 
excluding the kind of protections that would have avoided Delores King 
losing her home and going through the financial turmoil as a retiree 
must be a critical part of this legislation and why I feel so 
passionately and strongly about this in our bill.
  The regulators today we have in place simply can't get this job done. 
I won't dwell on it. I have great respect for people who work in our 
respective public sectors at the local, State, and national level. I am 
sure there are many good and talented people. But when you are 
subjected to a division or a bureau that kind of separates you out in 
sort of the basement or wherever else you are, if not physically at 
least how you are treated in the context of everything else, you get 
some flavor of what has happened here. Their jobs in these seven other 
regulatory bodies have been divided up among different regulators where 
consumer protection is an afterthought to their primary safety and 
soundness missions and responsibilities. So the legislation we have 
before us replaces that failed setup with a single regulator, with the 
independence and authority to do the job right. That is what we are 
trying to do.
  This regulator will be a watchdog with a bark and bite, one with the 
ability to take meaningful action to stop the ripoffs and the mission 
to empower consumers to make good financial decisions.
  The bureau will force large banks and credit card companies to 
explain their offerings in plain English so that you do not need a 
master's in business administration to be an informed consumer. It will 
shut down the scam artists and the sleazy lenders--and they are out 
there in droves--before they can take advantage of the Delores Kings 
again. There would not, of course, be scam artists and sleazy lenders 
if these abusive practices were not profitable--and they are 
profitable--when we have large Wall Street firms that have earned--
``earned'' is not the right word--gained, they gained billions of 
dollars by engaging in these practices. Don't think they were not. They 
were not the broker who walked into Delores King's house. They were not 
the small banks that decided to write that mortgage. But these large 
firms were involved in the securitization, the marketing of these 
products all bundled together.
  We have now learned even in the hearings last week that they knew 
what crummy bundles they were. There was a lot of junk and trash in 
there. Delores King was given a mortgage knowing she could not pay, she 
was on a fixed income, they knew it would balloon to the point that it 
would consume 70 percent of her income--don't tell me they did not know 
what that was. And expecting that 80-year-old woman to read and 
understand all she was going to be subjected to in the fine print of 
the mortgage contract is ridiculous. Yet that is how this daisy chain 
worked and why we ended up in the mess we did. This consumer bureau 
must be a part of our bill.
  The Chamber of Commerce is circulating some talking points about what 
this bureau is and how it will impact American businesses. Tom Donahue 
and I are good friends. I have known Tom a long time. We have worked on 
issues together. He runs the chamber. It saddens me that an 
organization such as that would put out a piece of paper with that much 
false information. I know they do not like consumer protection at the 
Chamber of Commerce. That has been a standard, unfortunately, for too 
many years. I don't mind them taking on and arguing with me about the 
bill if they want to, and you are entitled to all the opinions you wish 
to have, but you are not entitled to your own facts, as the old saying 
goes. What they put out is factually wrong.
  I want to spend a couple of minutes addressing each one of their 
false accusations in the document they are spreading around and address 
them directly.
  The chamber claims that the bureau would regulate ``virtually every 
business that extends credit.'' Suddenly, they will have you believe 
that anyone who bills you at the end of the month will be caught up in 
sweeping new regulations. That sentence is totally false.
  You may not accept what I said, that it is totally false, so let me 
read from the bill. The bill is here, this tome, these 1,400 pages. Let 
me read from the section of the bill that covers this particular point. 
I will read it carefully:

       The Bureau--

  Speaking about the Consumer Financial Protection Bureau--

     may not exercise any rulemaking, supervisory enforcement, or 
     other authority under this title with respect to a merchant, 
     retailer, or seller of nonfinancial goods or services that is 
     not engaged significantly in offering or providing consumer 
     financial products or services.

  I don't know what part of that sentence they do not understand, but 
that is about as clear as it could possibly be. You must be 
significantly involved in the selling of financial services and 
products. A dentist, a butcher, a retailer who sells you products and 
allows you to pay later or on some delayed paying process is not in the 
business of financial services and products. Allowing their clients, 
their patients, their customers to have some delayed payment process 
does not bring them under the purview of this law.
  The line that ``virtually every business that extends credit'' is a 
completely false sentence, and yet it is in the talking points of the 
Chamber of Commerce.
  I will read the sentence again in the bill:

       The Bureau may not exercise any rulemaking, supervisory 
     enforcement, or other authority--

  Other authority, Mr. President--

     under this title with respect to a merchant, retailer, or 
     seller of nonfinancial goods or services that is not engaged 
     significantly in offering or providing consumer financial 
     products or services.

  What does that mean? If you run a tab at your butcher or grocer, you 
are not covered. Again, merchants, retailers, sellers of nonfinancial 
services are not covered. If a doctor charges you a late fee, that is 
not covered. If a retailer refers a customer who has not paid his bill 
to a debt collector, that is not covered under this bill. If a store 
accepts credit cards, that is not covered. If your dentist or retailer 
or merchant allows you to pay your bill over time, they are not covered 
under this bill.
  The consumer bureau is not going to regulate accountants and 
orthodontists. It is not going to regulate anyone who--and I will quote 
again--``is not engaged significantly in offering or providing consumer 
financial products or services.''
  Any time we hear a Member of this body--and some already have--come 
to this Chamber to object to this bureau by invoking a small business 
in their State, keep your ears perked. The strong likelihood is that 
the false talking point is surfacing yet again.
  The second falsehood in the chamber's epistle: I heard people say 
that this is a wild new bureaucracy with powers that ``extend far 
beyond traditional financial services products to the entire economy. 
In short''--this chamber letter goes on--``In short, it creates a new 
regulatory overlay over the entire business community.'' Not true. 
Completely false.
  The powers under this bill already exist. I am not writing new powers 
under this bill. They exist under the Fair Credit Reporting Act, the 
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Home 
Mortgage Disclosure Act, the Home Ownership Equity Protection Act, and 
RESPA. There is a long list of legislation that passed years ago that 
is out there. This bill says those laws must be enforced. We are not 
writing new laws. These are the laws that are on the books.
  We add one new word. ``Deceptive and unfair practices'' is covered, 
and we had the word ``abusive.'' I acknowledge that. There is one new 
word called ``abusive'' that we add to the litany of the kinds of 
practices that have caused consumers the difficulties they have been 
through. There is no other new authority. The rest of the authority 
exists in current Federal law under the statutes I enumerated and there 
are many others, by the way, that are presently covered.
  All we are saying is, what is the point in having these laws? They 
are

[[Page S3003]]

on the books designed to protect people. The issue is whether anyone is 
able or willing to exercise the authority.
  Financial firms, I believe, will benefit from this in many ways when 
we streamline and minimize regulatory burdens. There are seven other 
agencies responsible to one degree or another for this list of existing 
Federal law. It seems to me the financial services sector will benefit 
by having a single regulator with the ability to enforce this 
collection of laws I described. It seems to me that would be a welcome 
opportunity rather than having so many different regulators to deal 
with. The single new agency will easily be held accountable for its 
performance as well.
  The third false claim. I quote again:

       The bill gives the consumer financial product agency 
     authority to write rules, enforce rules, conduct 
     examinations, require new review and approve disclosures 
     regarding consumer financial products, impose fees or 
     assessments on all covered persons, and require reports from 
     any covered entities.

  Again, false. Not true at all. This bill does not give this new 
bureau any authority to charge anyone a fee or assessment. There are no 
fees or assessments in our bill--this bill--on any of these entities. 
Yet the report that is out there indicates it does. Completely false. 
It does not create a new government power.

  What it does do is allow the Bureau to write rules that create a 
level playing field for small community banks and credit unions which 
today face unfair competition from largely the unregulated shadow 
banking industry. We heard from our community banks over and over about 
this point. Where is the level playing field? We get drawn in, we do 
our job, we are regulated, we operate carefully, and then you have 
these operators out there totally unregulated, and the reputation of 
everybody in the financial services sector suffers because of some of 
these unscrupulous payday lenders, these check-cashing operations that 
do not have any regulator at all. They are functioning, they are 
abusing or deceiving people. And that regulated bank on the corner is 
saying: Why isn't that guy being regulated? I am regulated.
  Our bill changes that situation. We apply those same rules, and that 
is a great advantage to the community banks in the country to have a 
level playing field. Because this new bureau will be able to write 
rules that prohibit unfair and deceptive practices in the shadow 
banking sector and conduct examinations and gather information from 
nonbank lenders and brokers. Those shadowy firms will not have an 
unfair leg up on our community banks, allowing those smaller 
institutions to compete more effectively and to provide capital more 
freely.
  The fourth false claim is the following, and again I am quoting from 
this document:

       The consumer financial protection agency would set the 
     floor, not the ceiling, regarding State consumer protection 
     laws. This will create a new regulatory regime companies will 
     be subject to and consumers will be lost in the maze of 
     Federal regulations and disclosures, 51 State laws and State 
     attorneys general interpreting and enforcing Federal law at 
     State level. This is directly contrary to the goals of 
     streamlining, modernizing, and simplifying the regulatory 
     system (and disclosure to consumers.)

  That is the claim. A Federal consumer law has historically 
established a minimum standard, and that is what this bill does as 
well. Ever since the Truth in Lending Act passed in 1968, Congress has 
allowed the States to adopt consumer protection laws as long as they do 
not conflict with Federal law. State attorneys general have always been 
on the front lines of consumer protection, and they will continue to 
play that role.
  Meanwhile, this single bureau will help to streamline, as I said a 
moment ago, and simplify disclosures. For instance, two agencies 
regulate mortgage laws, meaning consumers and community banks are 
forced to contend with two different Federal mortgage disclosures. 
Under our Consumer Financial Protection Bureau, we will eliminate that 
unnecessary duplication and create one single form.
  Fifth: The Chamber claims:

       The consumer financial protection agency will have the 
     authority to mandate that any company offering a consumer 
     financial product has to offer a product with terms and 
     conditions set by the government. Alternative products cannot 
     be offered unless the ``plain vanilla'' is extended. This 
     gives the largest banks a significant competitive advantage 
     over smaller banks, limits consumer choice, and will 
     significantly increase the cost of any alternative products 
     that are tailored for specific needs.

  This one is entirely made up of whole cloth. There is no such thing 
in our bill. None. I don't even know from where it comes. It is one 
thing to disagree over the wording of something, but when you make up 
one out of whole cloth entirely, I don't know how to address that. I 
don't know what they are talking about. This one comes out of the blue.
  Finally, I wish to address the claim that ``the bill gives the 
consumer financial protection agency the authority to request and hold 
reports from any covered entity--including reports from banks about 
their types of accounts and the balances in each account.
  In fact, just as regulators today collect and share information about 
the companies they oversee, the Consumer Financial Protection Bureau 
will be able to collect information and share it with other regulators. 
There is nothing new about that at all. But, unlike some of the claims 
that have been made that this information will be made public or sent 
to Wall Street--the idea is that this new government entity will be 
collecting private information about your finances and making it 
pubilc, that is not true either. That is false.
  Strong privacy protections are included in our bill to make sure that 
proprietary, personal, or confidential consumer information is kept 
just that--private.
  Think about this for a moment. Opponents of this new bureau are 
actually suggesting it will benefit consumers for regulators to have 
less information about what the companies they regulate are doing.
  I have said before people are welcome to their opinions but not their 
facts. Again, I am more than happy to consider ideas people have and 
how they think we can make this consumer bureau work better. I have not 
shut the door on any ideas people may want to bring up. But what I 
can't tolerate is people making totally false accusations to inflame 
the passions, to incorrectly and falsely cause great concern among 
retailers and merchants and others across the country. That is the 
intent of all this. I know what it is. They do not want to take on the 
bill itself and what it does, so they are out there propagandizing with 
false information about this to undermine what we are trying to 
achieve. Again, some of those very businesses are the ones that pay an 
awful price.

  I had a wonderful couple last year in my State who had started a 
business 40 years ago. They are a family-run small business. They were 
late by 3 days for the first time in 40 years on a credit card 
payment--the first time in 40 years, 3 days late. They watched their 
interest rate go from 5 percent to 22 percent, and it put them out of 
business--after 40 years. That is a small business that extends credit, 
works with customers and others. They were taken to the cleaners 
because there wasn't anyone around to say: No, you can't jump from 5 
percent to 22 percent. That is unfair and that is wrong.
  I tried for 20 years to pass a credit card bill in this Chamber and 
was never able to get it up even for a vote, except on amendments to 
bills. Last spring, we were able to bring it up, and it passed 90 to 5 
in this Chamber, although it was a highly partisan vote coming out of 
the Banking Committee. As a result, today we have protections in place 
for that family in Connecticut, similar to so many others who have 
watched fees and interest rates skyrocket for almost no reason at all. 
In fact, the language of the contract says they can do just that, for 
no reason at all.
  Every time consumers get taken to the cleaners, it shouldn't take 20 
years to pass a law to address it. The power of the credit card 
companies was such they were able to stop me, year in and year out, 
from getting that bill passed. Why can't we have protection for 
consumers who purchase and use--as we all do today for toasters, cars, 
and other products--financial products?
  I have used the example lately of the Consumer Product Safety 
Commission. We have one in place. We all read the tragic stories 
recently of a car company that had problems with an accelerator. What 
happened? There was a recall of those automobiles to protect

[[Page S3004]]

people against the harm that could befall them if that happened to them 
while they were driving that automobile.
  When someone marketed a crummy mortgage in an unregulated sector of 
our economy and took Dolores King to the cleaners and ruined her life--
she lost her home, lost the earnings she had--where does she go? 
Nowhere. There is nowhere to go. Maybe some sympathetic banker might 
take pity on her. But why should Dolores King be subjected to financial 
ruin, when the producer of an automobile that is faulty is protected or 
a toaster or a television? For all these products, if they are faulty 
or deficient in some way, there are places we can go to get our 
situation addressed. Yet in the world in which we live today, of 
mortgages and credit cards and financial products, there is nothing 
that exists to give people a chance to get the protections they 
deserve.
  Our bill isn't perfect. I will be the first to admit there may be 
better ideas on how to do this. But I am not going to sit around and 
listen to people issue false statements about what is in this bill and 
inflaming innocent people who want good legislation that this bill will 
do them harm. It does the opposite.
  So next week we will begin the debate. I am sure there will be a ton 
of amendments that will try to undermine the consumer protection bureau 
we have established. But I would hope my colleagues--Democrats and 
Republicans--will join in an effort to write a good, strong consumer 
protection bill, along with the other pieces of this legislation, so we 
can provide at least a better sense of security.
  I will end on this note. I wish to pick up on a point Senator Dorgan 
talked about in his remarks earlier this morning--something I have 
addressed occasionally over the last number of days, but I don't think 
I have emphasized it as much as I should. I have been reciting 
statistics--8\1/2\ million jobs lost, 7 million foreclosures, 20 
percent decline in retirement, 30 percent decline in home values, $11 
trillion lost in household wealth. I hear the numbers and I have said 
them so many times I can recite them. But I don't have a number for--
and this actually worries me far more than those statistics, as 
devastating as those numbers are--I don't have a number for what the 
cost is to our country because the American people have lost faith and 
confidence in our financial system. I don't know how to put a dollar 
sign on that one for you. I don't know if anyone could. I don't believe 
anyone can.
  But I know this much. People don't trust and don't have faith that 
the system is going to work for them when they see, as we all have, 
these stories of these credit card fees and charges and every gimmick 
you can think of to reach into the pockets of hard-working families. 
You begin to understand why people have lost faith, when they see and 
hear stories about Dolores King and others who have done everything 
right in their life and someone comes in and decides to take advantage 
of them or they read these e-mails, as we had last week, of these 
arrogant characters up there laughing about the widows and orphans they 
have taken advantage of at a major investment bank. What do you do 
about that? What is the number to put on that one?
  I will tell you this much. We can write all the bills we want, we can 
pass all the regulations, but if we don't get back that confidence and 
faith, which has historically been very much a part of our system--I 
remember once I talked to a man who was not a citizen of our country, 
but he invested here. He took his money and invested it in the U.S. 
financial system. I said: Why do that? He said: One, you people are a 
strong economy and you do well. But more importantly is the second 
reason. He said: I have never lost a wink of sleep because I was 
investing in an economy or a structure that was unsafe. I may make a 
bad bet and lose because of that, but I have never worried about ever 
losing a nickel because someone in this country in your financial 
system would take advantage of me.
  A wonderful reputation to have had, and that reputation has been 
shattered, not just for some foreign investor but I think for people 
here at home. I am not suggesting that by the passage of this bill we 
will miraculously change all that, but I think it moves us in the right 
direction.
  I know my colleagues have a lot of good ideas. Some like what I have 
done, some don't think I have gone far enough, and some think I have 
gone too far with the bill. But what I have tried to do over the past 
few months is to put together the best ideas I could and to attract 
broad support from the 100 of us in the Senate. Ultimately, if I can't 
produce 60 votes or whatever we have to get these days, no matter how 
good the ideas are, they will not go anywhere. So I hope my colleagues 
will read this, and if they have constructive changes to make to the 
bill, I welcome those.
  I apologize for taking so long on this, and now, if I can, I wish to 
conclude the business of the Senate.

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