Congressional Record, Volume 156 Issue 63 (Friday, April 30, 2010)

[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call be rescinded.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

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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

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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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