[Congressional Record Volume 156, Number 66 (Wednesday, May 5, 2010)]
[Senate]
[Pages S3147-S3157]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     RESTORING AMERICAN FINANCIAL STABILITY ACT OF 2010--Continued


                           Amendment No. 3737

  The PRESIDING OFFICER. There is now 4 minutes of debate equally 
divided prior to a vote on the Boxer amendment.
  The Senator from California.
  Mrs. BOXER. Mr. President, I would like everyone to take a look at 
these headlines from September 2008: ``Nightmare on Wall Street, Where 
Do We Go From Here?'' All of us who went through this, whether we were 
in the Senate or we were looking at what was happening to our 
investments on Wall Street, we saw over 3 short days in September of 
2008, Lehman Brothers, Merrill Lynch, and AIG collapsed and the stock 
market plunged. Seniors lost their retirement savings, and families 
lost their jobs and homes. Small businesses stopped hiring. It was a 
nightmare. That is what it was. If there is one thing we should all be 
able to agree on, it is this: The American taxpayer should never again 
have to bail out Wall Street firms that gambled away our savings and 
wreaked havoc on our economy.
  My amendment is very clear. It is not a sense of the Senate. It has 
the force of law. It is straightforward. It is an ironclad assurance 
that a failing, insolvent Wall Street firm must be liquidated, and the 
cost of that liquidation must come either from selling off the firm's 
assets or from industry assessments of the big Wall Street firms.
  I will retain the remainder of my time in case there is a debate. I 
hope this is close to a unanimous vote. It is clear, and I hope we will 
agree.
  I retain the remainder of my time.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SHELBY. Mr. President, I yield back the time and ask for the yeas 
and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be.
  The question is on agreeing to the amendment.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from West Virginia (Mr. Byrd) 
and the Senator from Massachusetts (Mr. Kerry) are necessarily absent.
  I further announce that if present and voting, the Senator from 
Massachusetts (Mr. Kerry would vote ``yea.''
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from Utah (Mr. Bennett).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 96, nays 1, as follows:

                      [Rollcall Vote No. 130 Leg.]

                                YEAS--96

     Akaka
     Alexander
     Barrasso
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Bond
     Boxer
     Brown (MA)
     Brown (OH)
     Brownback
     Bunning
     Burr
     Burris
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Coburn
     Cochran
     Collins
     Conrad
     Corker
     Cornyn
     Crapo
     DeMint
     Dodd
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Franken
     Gillibrand
     Graham
     Grassley
     Gregg
     Hagan
     Harkin
     Hatch
     Hutchison
     Inhofe
     Inouye
     Isakson
     Johanns
     Johnson
     Kaufman
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     LeMieux
     Levin
     Lieberman
     Lincoln
     Lugar
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Mikulski
     Murkowski
     Murray
     Nelson (NE)
     Nelson (FL)
     Pryor
     Reed
     Reid
     Risch
     Roberts
     Rockefeller
     Sanders
     Schumer
     Sessions
     Shaheen
     Shelby
     Snowe
     Specter
     Stabenow
     Tester
     Thune
     Udall (CO)
     Udall (NM)
     Vitter
     Voinovich
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                                NAYS--1

       
     Kyl
       

                             NOT VOTING--3

     Bennett
     Byrd
     Kerry
  The amendment (No. 3737) was agreed to.
  Mr. DODD. I move to reconsider the vote.
  Mr. INOUYE. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Alabama.


                Amendment No. 3827 to Amendment No. 3739

  Mr. SHELBY. Mr. President, I call up my amendment, which is at the 
desk.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Alabama [Mr. Shelby], for himself and Mr. 
     Dodd, proposes an amendment numbered 3827 to amendment No. 
     3739.

  (The amendment is printed in today's Record under ``Text of 
Amendments.'')

[[Page S3148]]

  The PRESIDING OFFICER. There will be 4 minutes of debate, evenly 
divided, on the amendment.
  The Senator from Alabama.
  Mr. SHELBY. Mr. President, I yield back my time. I think we have 
debated this quite a while this afternoon. Most people know about it.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, again, I thank my colleagues. I thank 
Senator Corker, Senator Warner, and Senator Shelby. A lot of work went 
into this amendment. I urge my colleagues to support it.
  I yield back our time and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the amendment.
  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from West Virginia (Mr. Byrd) 
is necessarily absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from Utah (Mr. Bennett).
  The PRESIDING OFFICER (Mr. Franken). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 93, nays 5, as follows:

                      [Rollcall Vote No. 131 Leg.]

                                YEAS--93

     Akaka
     Alexander
     Barrasso
     Baucus
     Bayh
     Begich
     Bennet
     Bingaman
     Bond
     Boxer
     Brown (MA)
     Brown (OH)
     Brownback
     Bunning
     Burr
     Burris
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Cochran
     Collins
     Conrad
     Corker
     Crapo
     Dodd
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Franken
     Gillibrand
     Graham
     Grassley
     Gregg
     Hagan
     Harkin
     Hutchison
     Inhofe
     Inouye
     Isakson
     Johanns
     Johnson
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     LeMieux
     Levin
     Lieberman
     Lincoln
     Lugar
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Mikulski
     Murkowski
     Murray
     Nelson (NE)
     Nelson (FL)
     Pryor
     Reed
     Reid
     Risch
     Roberts
     Rockefeller
     Sanders
     Schumer
     Sessions
     Shaheen
     Shelby
     Snowe
     Specter
     Stabenow
     Tester
     Thune
     Udall (CO)
     Udall (NM)
     Vitter
     Voinovich
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                                NAYS--5

     Coburn
     Cornyn
     DeMint
     Dorgan
     Hatch

                             NOT VOTING--2

     Bennett
       
     Byrd
       
  The amendment (No. 3827) was agreed to.
  Mr. DODD. Mr. President, I move to reconsider the vote.
  Mr. SHELBY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                 Amendments Nos. 3755 and 3757, En Bloc

  The PRESIDING OFFICER. The Senate will now vote on the two Snowe 
amendments en bloc.
  If there is no further debate on the amendments, the question is on 
agreeing to the amendments en bloc.
  The amendments (Nos. 3755 and 3757) were agreed to.
  Mr. DODD. Mr. President, I move to reconsider the vote.
  Mr. SHELBY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.


                Amendment No. 3826 to Amendment No. 3739

  Mr. SHELBY. Mr. President, I rise to bring up amendment No. 3826, the 
Republican consumer protection alternative. This amendment has been 
cosponsored by 14 of my colleagues. It is amendment No. 3826.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Alabama [Mr. Shelby], for himself, Mr. 
     McConnell, Mr. Bennett, Mr. Crapo, Mr. Corker, Mr. Johanns, 
     Mrs. Hutchison, Mr. Vitter, Mr. Bunning, Mr. Chambliss, Mr. 
     Cornyn, Mr. Bond, and Mr. Enzi, proposes an amendment 
     numbered 3826 to amendment No. 3739.

  Mr. SHELBY. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  The PRESIDING OFFICER. The Senator from Connecticut is recognized.
  Mr. DODD. Mr. President, before they begin debate on the next 
amendment, I thank my colleagues. This has been a difficult time even 
getting to this point. I thank Senator Shelby and his staff and my 
staff and others. We have had a vote on the Boxer amendment, 96 to 1. 
We had a vote, 93 to 5, on the Shelby-Dodd amendment. We adopted two 
Snowe amendments in the last hour. That is a pretty good beginning on 
this bill.
  I want to tell my colleagues I have received about 95 amendments to 
the bill that people will propose. I believe Members ought to be able 
to be heard on their amendments. This is something that will have to be 
self-imposed discipline, to some degree, but if Members will restrain 
themselves on time, more colleagues will get a chance to be a part of 
the bill and to be heard. If you ask for too much time, it will make it 
difficult. I just ask people to be considerate of each other. Most 
times, an amendment can be made--a big amendment--with an hour or two 
of debate and others less than that, maybe 20 minutes or 30 minutes 
equally divided. Again, I am not suggesting some amendments are more 
important than others. If you bring the amendments to us for review, 
perhaps we can adopt some or make them part of a managers' amendment. 
We will both have to check them out. If we can do that, we can reduce 
the number significantly. I think we have some smart proposals. I 
cannot do that alone. My colleague will have to agree with that.
  It would help us a great deal if we can move this along, and I say 
that respectfully. I don't know whether we have an agreement on when we 
might vote on this amendment. I will ask my colleague to give us some 
idea. I would like you to think about how much time you would like, and 
keep in mind your fellow colleagues who would like to be heard on their 
amendments.
  Mr. DORGAN. Will the Senator yield for a question?
  Mr. DODD. Yes, I am glad to yield.
  Mr. DORGAN. I think it is commendable that there has been a burst of 
activity on the Senate floor in the last couple of hours. We have had a 
number of votes. It took some while to wait for this to happen. I agree 
with the Senator from Connecticut and the Senator from Alabama that to 
the extent we can accommodate votes on a wide range of subjects--this 
is an issue that is very consequential to the future of the country, 
and we want to get it right.
  From my standpoint, I have a couple of amendments I think are very 
important. Time agreements are not a problem for me. I am interested in 
having the opportunity to explain an amendment and have a short debate 
and then have the Senate register its judgment. I appreciate what the 
Senator just said. He would like to see us move along and be able to 
offer amendments. There are a lot of them on too big to fail and credit 
default swaps. I will talk to the managers. I hope I will have an 
opportunity to get them on the floor and get them offered.
  Mr. DODD. I hope we can stay away from filibusters and get everybody 
to have an up-or-down vote. This is a very important bill, and it is 
also about how this institution functions and whether we trust each 
other to be able to offer an amendment, have an adequate amount of time 
to debate, and then vote up or down. That is how we ought to function.
  I hope this bill will not only produce a good product in the end but 
will also have the healing quality this institution needs. We have been 
through a lot in this Congress. We need to get back to acting like 
colleagues, respecting each other's opinions, having a good partisan 
debate but doing it in a civil fashion, having the consideration each 
person deserves to be heard, and having a vote up or down. I offer that 
as a suggestion on how we might proceed.
  Mr. SANDERS. If the Senator will yield, do we have any sense of what 
is happening this afternoon?
  Mr. DODD. I will find out from my colleague.
  Mr. SHELBY. Mr. President, I join my colleague from Connecticut. We 
have had a burst of activity this afternoon. I think we are off to a 
good start. We have to remember that this bill is

[[Page S3149]]

about 1,500 pages. This doesn't only affect a little bit of our 
economy, it affects all of our economy in one way or the other.
  I have just laid down an amendment--the Republican alternative to the 
consumer products--and a lot of people are going to want to debate it 
on both sides. We are not here to delay this bill in any way. I think 
it is so important and it is so comprehensive that we are going to have 
a healthy debate. I appreciate the remarks of the Senator from 
Connecticut. I believe he understands that very well.
  Mr. DODD. My colleague from Montana wishes to speak.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. TESTER. Mr. President, I inquire of Senator Dodd, at this point 
in time, does he want me call up my amendment No. 3749 or just talk 
about it?
  Mr. SHELBY. The Senator can call it up.
  Mr. DODD. My friend can call up his amendment.


                Amendment No. 3749 to Amendment No. 3739

  Mr. TESTER. Mr. President, I ask unanimous consent to set aside the 
pending amendment, and I call up amendment No. 3749.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The legislative clerk read as follows:

       The Senator from Montana [Mr. Tester], for himself, Mr. 
     Conrad, Mrs. Murray, and Mr. Burris, proposes an amendment 
     numbered 3749 to amendment No. 3739.

  Mr. TESTER. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To require the Corporation to amend the definition of the 
                       term ``assessment base'')

       On page 368, strike line 3 and all that follows through 
     page 369, line 14, and insert the following:
       (b) Assessment Base.--The Corporation shall amend the 
     regulations issued by the Corporation under section 7(b)(2) 
     of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) 
     to define the term ``assessment base'' with respect to an 
     insured depository institution for purposes of that section 
     7(b)(2), as an amount equal to--
       (1) the average consolidated total assets of the insured 
     depository institution during the assessment period; minus
       (2) the sum of--
       (A) the average tangible equity of the insured depository 
     institution during the assessment period; and
       (B) in the case of an insured depository institution that 
     is a custodial bank (as defined by the Corporation, based on 
     factors including the percentage of total revenues generated 
     by custodial businesses and the level of assets under 
     custody) or a banker's bank (as that term is used in section 
     5136 of the Revised Statutes (12 U.S.C. 24)), an amount that 
     the Corporation determines is necessary to establish 
     assessments consistent with the definition under section 
     7(b)(1) of the Federal Deposit Insurance Act (12 U.S.C. 
     1817(b)(1)) for a custodial bank or a banker's bank.

  Mr. TESTER. Mr. President, I rise to urge my colleagues to support 
the Tester-Hutchison amendment. My colleague from Texas and I came to 
the floor yesterday to talk about this bipartisan, commonsense 
amendment to hold banks accountable for their behavior and to preserve 
the integrity of the FDIC deposit insurance fund.
  Our amendment would force big banks to pay their fair share of 
insurance by basing assessments on assets rather than deposits. It 
would fix the lopsided assessment system that we have now, which 
unfairly burdens our community banks. It would ensure that the FDIC has 
the necessary resources to maintain the health of the deposit insurance 
fund.
  Senator Hutchison and I think this amendment makes a good deal of 
common sense. I am pleased this is one of the first amendments up for 
consideration because it highlights the fact that Democrats and 
Republicans do agree on ways we can strengthen what is already a very 
good bill. Senator Hutchison and I are joined by Senators Conrad, 
Murray, Burris, Brown of Massachusetts, Harkin, Shaheen, Cornyn, 
Johanns, Nelson of Florida, and Nelson of Nebraska in offering this 
important bipartisan amendment.
  After working on this bill for months with the good Senator Dodd and 
the Banking Committee, I am pleased we are finally getting an 
opportunity to debate this bill and move it forward.
  I know there are a number of other bipartisan amendments like this 
one where Members can join together to work to improve this bill. I 
look forward to considering them also.
  With that, when the time is right, when leadership has agreed, I hope 
we can get a vote on amendment No. 3749.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. DORGAN. Mr. President, before the Senator from Rhode Island 
speaks, let me just ask if he will yield so that I may ask a question.
  Mr. WHITEHOUSE. Yes.
  Mr. DORGAN. Mr. President, the Senator from Montana has offered an 
amendment. I am trying to determine if there is a list and how I might 
get on the list. I might propound the question to the Senator from 
Connecticut. There has been a Republican amendment offered, and that 
was set aside and the Senator from Montana offered one. I would like to 
talk to whoever is making a list.
  Mr. DODD. There isn't one. This amendment will be agreed to. It is 
not going to require a vote. Other matters will require debate and 
discussion. That was the only reason to do this--to get it in the 
queue--and at some point today there will be an agreement to accept 
that amendment. They just didn't do it yet. I don't have a particular 
queue lined up.
  It is my intention to ask Senator Sanders to offer his, once we 
complete this--to be the next in line. I ask my colleagues to, instead 
of jumping up one after another trying to get in the queue, come and 
talk to us and let us orchestrate it in a way that will allow for 
consideration of various parts of the bill.
  Mr. DORGAN. Mr. President, I thank my colleague from Rhode Island for 
his courtesy, and I thank Senator Dodd. I was here earlier. I will come 
and talk about that queue as it exists. I hope my amendment on too big 
to fail will be part of the early amendments.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. Mr. President, I was delighted to give the 
distinguished Senator from North Dakota a chance to clarify that.
  I will speak just for a minute about amendment No. 3746, which I will 
not be calling up right now but which I intend to work with Chairman 
Dodd on to call up later.
  I wanted to mention that this afternoon this amendment received the 
endorsement of Americans for Financial Reform, a coalition of dozens of 
national and State consumer groups that are working to help pass the 
critical legislation we are debating today.
  In addition to the coalition as a whole, the amendment has been 
endorsed by individual members as well, including the AARP, the 
Consumer Federation of America, Consumers Action, Consumers Union, and 
on behalf of its low-income clients, the National Consumer Law Center.
  These groups have sent a letter to each of my colleagues which reads 
in part:

       On behalf of consumers, AFR strongly urges you to support 
     Whitehouse's Interstate Lending Amendment. By reinstating 
     protections that existed prior to the U.S Supreme Court's 
     decision in Marquette National Bank of Minneapolis v. First 
     of Omaha Service Corp (1978), Congress will take a step in 
     the right direction toward protecting consumers and leveling 
     the playing field between national credit card companies and 
     their local and community oriented counterparts.
       The Whitehouse Interstate Lending Amendment takes a strong 
     step towards restoring to each state the ability to protect 
     its citizens from lenders based in other states. We strongly 
     urge you to vote in favor of this Amendment and in favor of 
     the consumer protections this Amendment promotes. By leveling 
     the playing field between national banks and local lenders, 
     you will send a strong signal to Main Street that their 
     interests count. We urge adoption of this modest, yet 
     tremendously helpful amendment.

  Mr. President, I ask unanimous consent to have printed in the Record 
this letter dated today from Americans for Financial Reform.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                     Americans for


                                             Financial Reform,

                                      Washington, DC, May 5, 2010.
     Re Support for Whitehouse Interstate Lending amendment to S. 
         3217.

     U.S. Senate,
     Washington, DC.
       Dear Senator: The consumer, employee, investor, community 
     and civil rights groups

[[Page S3150]]

     who are members of Americans for Financial Reform (AFR) write 
     to express strong support for the Whitehouse Interstate 
     Lending Amendment that will be offered during floor debate on 
     S. 3217, the ``Restoring American Financial Stability Act.''
       This amendment will restore to the states the ability to 
     enforce interest rate caps against out-of-state lenders. By 
     so doing, the amendment will help level the playing field so 
     that intrastate lenders such as community banks, local 
     retailers, and credit unions no longer are bound by stricter 
     lending limits than national credit card companies.
       Under current law, national banks are bound only by the 
     lending laws of the state in which the bank is based. As a 
     result, the current system gives lenders an incentive to 
     locate in states with weak or non-existent interest 
     restrictions. A handful of states, eager to attract lucrative 
     credit card business and related tax revenues, have all but 
     eliminated their consumer protections.
       On behalf of consumers, AFR strongly urges you to support 
     Whitehouse's Interstate Lending Amendment. By reinstating 
     protections that existed prior to the U.S. Supreme Court's 
     decision in Marquette National Bank of Minneapolis v. First 
     of Omaha Service Corp (1978), Congress will take a step in 
     the right direction toward protecting consumers and leveling 
     the playing field between national credit card companies and 
     their local and community oriented counterparts.
       The Whitehouse Interstate Lending Amendment takes a strong 
     step towards restoring to each state the ability to protect 
     its citizens from lenders based in other states. We strongly 
     urge you to vote in favor of this Amendment and in favor of 
     the consumer protections this Amendment promotes. By leveling 
     the playing field between national banks and local lenders, 
     you will send a strong signal to Main Street that their 
     interests count. We urge adoption of this modest, yet 
     tremendously helpful amendment.
       Please direct questions to Maureen Thompson.
           Sincerely,
                                   Americans for Financial Reform.

  Mr. WHITEHOUSE. Mr. President, I know the membership of this 
organization that supports the amendment includes AARP, as I mentioned, 
that also supported it individually, the Center for Responsible 
Lending, Common Cause, Consumers Union, the NAACP, the National 
Association of Investment Professionals, the National Council of La 
Raza, and the Veterans Chamber of Commerce, in addition to a great 
number of other organizations.
  This is an important amendment. It closes a loophole that was opened 
by the Supreme Court decision of 30 years ago, the decision to define 
the term ``located'' in the National Banking Act from way back in the 
Civil War era, 1863, as meaning the location where the bank is located, 
not the location where the consumer is located, so that when there is a 
bank in one State doing business with a consumer in another State, the 
laws of the bank's State govern.
  There is nothing particularly wrong with that decision. The problem 
is that the banks figured out that they could go to States that had the 
worst consumer protections or go to States that would be willing to 
chuck their consumer protections in return for the influx of business. 
From those States which have the worst consumer protection laws, they 
could then market their products around to other States and undercut 
and dodge around the laws of Rhode Island, the laws of Minnesota, the 
laws of Connecticut, the laws of Iowa, the laws of Virginia--the laws 
of all the States that for more than 200 years, in the history of our 
Republic, had this authority to regulate interest and to protect our 
consumers.
  This is an unintentional loophole. It has created grievous abuse of 
consumers who for the first time in the history of America are paying 
30-plus interest rates under the law. When you and I were growing up, 
Mr. President, if a flier came in the mail that offered a credit card 
with a 30-percent interest rate, that would probably be a matter to 
bring to the attention of the authorities because it would be illegal. 
Now they market this stuff at will, and too many Americans, too many of 
our State residents, too many consumers are paying exorbitant and what 
would in that State be illegal interest rates because of that loophole. 
It is long past time to change it. This amendment would close it.
  I urge the support of my colleagues, and I look forward to the chance 
to call up this amendment.
  I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  Mr. HARKIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3812

  Mr. HARKIN. Mr. President, I come to the floor to speak about an 
amendment I have filed along with Senators Schumer and Sanders, 
amendment No. 3812. The purpose of the amendment is very simple: to 
protect consumers from being charged unfair and unreasonable fees by 
ATM machines.
  How often have you gone to an ATM machine to access your own cash 
from your own credit union or your own bank and they charge you a 
couple bucks, $2.50, $2.25, $3, $4? We have seen as high as $5 in parts 
of the country. I wish to talk about that issue, how unfair it is.
  In recent years, Congress has acted to protect consumers by setting 
appropriate limits on the types of fees that financial institutions can 
charge consumers in areas such as credit cards, and spurred by a good 
proposal by Chairman Dodd, the Federal Reserve is now considering rules 
regarding overdraft fees. One area that remains unregulated is the fees 
consumers pay to use ATMs.

  Right now there is no limit that the operator of an ATM can charge a 
consumer for using that machine. Currently, the only regulation in this 
area--clearly insufficient, I might add--is that the operator must 
disclose how much they will charge. So when you access an ATM it has to 
tell you how much they are charging you and you can then refuse to do 
that, if you want. But this nominal disclosure requirement does nothing 
to ensure the charges are not arbitrary ways for banks and third-party 
owners of these machines to make an unreasonable sum on the backs of 
consumers.
  Some of my colleagues may remember that until 1996, most processing 
networks actually prohibited the operators of ATMs from adding an 
additional surcharge for the use of the ATMs. Instead, to cover the 
cost of the transactions, banks paid fees that passed between the 
consumers' banks, the ATM operating bank, and the card network. That 
fee of about 50 cents still changes hands today to cover the cost of 
processing. Simply put: By charging consumers these fees while 
collecting fees from other banks, these big banks are double-dipping on 
the backs of consumers. My amendment would end that double-dipping.
  Enticed by the prospect of easy money, in 1996 the rules that 
prevented banks from charging consumers were overturned by the big card 
networks--Visa, Mastercard, and the big banks. For this reason, in, 
1997, I was a cosponsor, along with Chairman Dodd and others, of a 
measure introduced by then-Banking Committee Chairman D'Amato that 
would have required the card networks to restore these rules and charge 
nothing for ATMs. Unfortunately, we were unsuccessful in that effort. 
But it was bipartisan. Chairman D'Amato was a Republican.
  As a result, because we were unsuccessful in 1997, the amount of fees 
that consumers pay has skyrocketed. According to estimates by the 
Federal Reserve, the average surcharge fee paid by consumers for 
accessing their own money is $2.66. As I said, in some cases--in 
airports and other places--it is as much as $5 for gaining access to 
your own money.
  That doesn't seem right to me, and it doesn't seem right to a lot of 
consumers. It is unfair for people to pay that much to access their own 
cash. If ATM operators want to charge a fee to cover the cost of 
providing a service, I can understand that. But that fee needs to 
relate to what it actually costs to process the transaction, not just 
the maximum they think they can get away with.
  To ensure these fees are reasonable and related to the costs of 
processing the transaction, my amendment would require the new Consumer 
Financial Protection Bureau to ensure that fees charged consumers at 
ATMs bear a reasonable relation to the cost of processing the 
transaction.
  The best data available suggests that the cost of processing a 
transaction today--ready for this--is 36 cents. Think about that the 
next time you go to the ATM and you have to get some cash and it comes 
up and says they are charging $2.50. The real cost of that is

[[Page S3151]]

about 36 cents. Where does the rest of the money go? The rest of the 
money goes to the big banks and the big card networks, and they are 
making a fortune.
  We got that data from a survey conducted by the Office of Thrift 
Supervision, which suggested in 1997--the time we had our amendment--
that the cost of processing a transaction was only 27 cents. So we 
factored in inflation, and that would bring the cost to about 36 cents 
today, and that assumes any improvements in technology have not brought 
down costs, which, obviously, they have. We have new technologies, 
faster speed networks, which probably has brought the cost down. So 
when I say the cost of going to an ATM machine to access money is 36 
cents, that is on the high side.
  So what our amendment basically says is that they can set up a 
reasonable charge based upon what the costs are, but we put an upper 
limit. We say no more than 50 cents per transaction. So our amendment 
would basically say anytime you go to your ATM machine they have to 
charge you a reasonable fee based upon what would be set, but in no 
case more than 50 cents, in no case more than 50 cents.
  Again, I would just point out that until 2002, in my State of Iowa, 
the law required any bank establishing an ATM had to make that 
available at no cost--no fee to all users. So Iowa did not charge any 
fees at all, and Iowa banks did just fine under this agreement. Iowa 
consumers were protected from unfair fees.
  But in 2002, this reasonable Iowa law was preempted by Federal 
banking regulators. Federal banking regulators preempted this. Again, 
in the absence of these laws, the Federal banking regulators have taken 
no action to limit the amount of fees consumers can be charged. 
According to the New Rules Project, national banks--these big banks--
collected almost $5 million in ATM fees from Iowa consumers in the 
first 6 months after the Iowa law was overturned. Iowa credit unions 
data said it was about $10 million just in the first year. Well, add 
that up, and that can come to a lot of money.
  Anyway, I bring this example of how things were in Iowa before 2002 
because it is the kind of balance that the bill pending before us 
should restore. Quite frankly, things have tipped so far in favor of 
big banks in this country, and so far away from consumers, that we 
often don't even know what a reasonable balance looks like anymore. But 
the example of Iowa from several years ago in which consumers were 
protected from unfair ATM fees while banks still profited, is an 
example--I think an excellent example--of the balance we need to return 
to.
  So this broader bill that Senator Dodd and Senator Shelby have 
brought forward isn't antibusiness or antibank, but it does seek to 
return us to a situation in which the needs of consumers and the rights 
of businesses are considered alongside one another. It restores some 
balance for consumers in our society.
  When I looked at this bill, I thought: Well, there is one area that 
kind of seems to be getting overlooked. I suppose a lot of people might 
say: Well, $2 is not much. Well, here is the other unfair thing about 
it. The average person going to an ATM machine probably takes out $20, 
$50 to get them through a day or 3 or 4 days in the week, and they are 
charged $2.50 for accessing that $20 or $50. Someone else goes in and 
wants to get $500, and they are charged the same $2.50. So the burden 
falls more heavily on low-income people, moderate-income people who 
need to use the ATM machines to get some cash to get them through. That 
is grossly unfair.
  It is unfair that the banks and the ATM operators can charge whatever 
they want to charge. As I pointed out earlier, according to the Office 
of Thrift Supervision and the data they collected, the average cost of 
processing this ATM transaction is only 36 cents. Why are you being 
charged $2.50 or $3 or as much as $5? Well, that is what this amendment 
seeks to stop; again, to get this balance back where it should be.
  My amendment is also supported by the U.S. Public Interest Research 
Group, the Consumer Federation of America, Consumer Action, Consumers 
Union, and the National Consumer Law Center on behalf of its low-income 
clients.
  I close by thanking my colleague, Senator Dodd, for his tireless work 
to move this critical bill forward and to again help establish that 
balance in our country between our consumers, our depositors, our 
community banks, and the big banks. As I said, we have gotten so far 
off track we hardly recognize what a balance is any longer. I think 
this bill does a great thing in trying to restore that balance. I just 
want to make sure that consumers are no longer taken advantage of by 
these unfair ATM fees that are out there, and that is why I will be 
offering this amendment at the appropriate time.
  Mr. President, I see the chairman is here.
  Mr. DODD. If my colleague will yield.
  Mr. HARKIN. Sure.
  Mr. DODD. I just want to thank him for all his work. We have spent a 
lot of time in the last year or so on the health care debate, where we 
sat next to each other day after day going through all of that. We, 
obviously, go back a lot longer than that.
  The Senator from Iowa and I arrived here on the very same day. The 
pages have oftentimes asked me when did I get here, and I have said: 
Thomas Jefferson was President when I arrived.
  It wasn't quite that long ago, but we arrived together on the same 
day, 35 years ago, in the House of Representatives, and we have been 
great friends and colleagues.
  No one cares more about not only his State but people all across this 
country who struggle. He is the author of the Americans with 
Disabilities Act, affecting millions of Americans, and I have a family 
member who benefitted from Senator Harkin's work. I wish there had been 
someone around in the 1930s when she was born who might have stood up 
and recognized her talents and ability. Fortunately, she grew up in a 
family where they did some things and she ended up helping restore the 
American Montessori system of teaching as an early childhood 
development specialist. But had she been born under different 
circumstances, I suspect she would have been doing piecemeal work 
somewhere.
  So there is a lot for which our country has to thank the Senator from 
Iowa. I appreciate his efforts on this amendment and thank him for his 
general concerns on the bill as well.
  Mr. HARKIN. I thank my friend from Connecticut. Every time I see my 
good friend here, I think of all the work that he did in getting our 
health care bill through, and now this. Talk about going out on a high 
note. I am sorry, as he knows, that he is not going to be here after 
this year.
  Again, I think the fact that Senator Dodd did the health care bill 
and got it through was a great achievement for the people of this 
country and now this financial reform, to make sure we don't go through 
what we did a few years ago again and to help our consumers have a 
little better balance in their dealings with the big banks and the big 
investment houses. This is a great bill, and I compliment him for it.
  I know it has been a long tough slog, as they say, but future 
generations will look back and thank Senator Dodd both for the health 
care bill, and I think for this financial reform bill. A lot of people 
may not understand all the intricacies of it--the high finance and all 
that stuff. Sometimes you can get a little dizzy thinking about all 
this stuff. But he understands it. He gets it. And Senator Dodd has 
done a magnificent job in putting this bill together. It is going to 
help protect our consumers in this country.
  So that is why I am proud to support it. I hope he doesn't mind if I 
offer an amendment to it, as I am going to do on the ATM piece. But I 
thank the Senator, and I yield the floor. I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. MENENDEZ. Mr. President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MENENDEZ. Mr. President, I come to the floor this afternoon to 
talk about the bill before us. I commend my colleague, the chairman of 
the Senate Banking Committee, Senator Dodd, for his leadership on this 
crucial reform.
  I want to start off by reiterating what I know many of my colleagues

[[Page S3152]]

have said, that this is a strong bill and it is a necessary bill. There 
is no doubt that we need Wall Street reform and we need it now. When 
tens of millions of Americans have lost their jobs, homes, and savings, 
Americans cannot wait any longer to end the reckless Wall Street 
practices that caused those problems.
  I certainly never want to see us again be in a position where we had 
the Chairman of the Federal Reserve come to us, about a year and a half 
ago, and say to members of the Senate Banking Committee, you need to 
act because financial institutions are on the verge of collapse and 
their collapse would create a consequence to the national economy of 
enormous proportions.
  I will never forget the dialog that took place there, in essence when 
Chairman Bernanke was asked, the Chairman of the Federal Reserve, what 
happened? Don't you have enough time, some tools at the Federal Reserve 
to get us through this period of time? He basically said, if you don't 
act you will have a global meltdown which basically means a new 
depression in the 21st century. Certainly a depression in the 21st 
century is much different than the depression this country lived 
through under President Roosevelt.
  Since he is someone whose expertise is in Depression era economics, 
how we got into the Depression, what made it worse, how we got out of 
it, it was a pretty compelling set of arguments.
  So here we are. What we want to do is make sure we are never put at 
that risk again; that there is not anything that is too big to fail 
because, in doing so, you can make all the wrong decisions knowing that 
even when you make the wrong decisions, and they are risky, the 
taxpayers will have to bail you out because we cannot have the 
country's whole economy go under. At the same time, we want to try to 
strengthen our regulatory process so we not only not face that reality 
but we create clear rules of the road.
  I am for a free market. I believe in a free market. But there is a 
difference between a free market and a free-for-all market. There is a 
difference between when someone takes their own capital, whether as a 
company or as an individual, and makes an investment and when the 
investment does good, good for them; but when the investment goes bad 
we all have to pay for it. We cannot have a system where profits are 
privatized but losses become the general public's responsibility. That 
is, in essence, the core of what we are trying to do here--to make sure 
that such a system, which is what we have had, not a free market but a 
free-for-all market, gets changed so we never face that again.
  As I said, I think this is an incredibly strong bill. But even a 
strong bill can have suggestions to make a good bill even stronger. I 
commend Chairman Dodd for being open to ideas to make this bill even 
stronger, regardless of which side of the aisle they come from. Now 
that we have broken the Republican logjam that has been holding this 
bill up for over a week, I hope we can get to the business of fully 
legislating in a full and open debate. I know that is what the American 
people want and expect, that the Senators they sent to Washington 
actually get to work on the business of fixing these problems; not that 
they sit on their hands while one party holds up debate because the 
bill didn't do everything they wanted it to or because we had 
conversations--some of our colleagues on the other side of the aisle 
had conversations with Wall Street and basically they don't like a lot 
of what we are doing here. But, in fact, it is critical to the Nation's 
economic security.
  I am glad to see that we have colleagues now on the train. I hope 
people do not try to pull the emergency brake switch to try to stop us 
from going to where we need to go.
  I think this is a great bill but there are some amendments I plan to 
offer to the bill. I think they make the bill even stronger. I have 
filed an open books amendment, to require companies to be more 
transparent in their financial reporting. Many experts believe one of 
the reasons we got into this mess in the first place was because no 
one--not investors, not regulators, not counterparties, not even the 
people running the companies--could actually figure out the true value 
of these big Wall Street banks. That is because banks hid a significant 
percentage of their liabilities, their risks, off their balance sheets. 
For example, Lehman Brothers treated $50 billion in repurchase 
agreement transactions as sales instead of financing transactions on 
their balance sheets, misleading everyone about the state of Lehman's 
finances.
  The bottom line, you know, may sound very technical but if I can take 
my liabilities off of my personal balance sheet and put them somewhere 
else and look as though I am better off than I am, that is 
fundamentally wrong. Clearly, had there been more transparency we might 
have dealt with the Lehman situation sooner, thus reducing the 
repercussions of a catastrophic bankruptcy.
  The amendment I am proposing is simple. It requires companies that 
are designated as systemically risky to disclose all their off-balance 
sheet activities in their annual 10-K report to the Securities and 
Exchange Commission, and provide detailed justifications for why they 
are keeping those liabilities off their balance sheets.
  It also requires disclosure of daily average leverage ratios in 
quarterly reports. This will prevent companies from moving liabilities 
off their balance sheets only days before when they are reporting 
earnings, as Lehman and others allegedly did.
  It is a step toward transparency. We know capital markets work best 
when they are transparent. That is the thrust of what this bill is 
trying to do. Put simply, the largest banks should not be able to 
deceive regulators, investors, counterparties, and the public, by 
hiding their liabilities in off-balance vehicles. We need transparency 
and clarity, not trickery and deception.
  I also am happy to join with Senator Akaka, who is leading on this 
particular amendment but I am his prime cosponsor, to require 
stockbrokers to act in the best interests of their clients. What a 
revolutionary concept, that stockbrokers act in the best interests of 
their clients. Brokers are not required to act in the best interests of 
their clients and can sell clients worse investments because they make 
more money on them, without the client ever knowing it. Brokers are 
only required to have reasonable grounds to believe that a property 
they are recommending is suitable for the customer, even if it is not 
the best product for the customer. Typically, brokers do not have to 
make disclosures about conflicts of interest or past infractions. In 
contrast, investment advisers are legally and ethically bound to put a 
client's interest ahead of their own--in essence to have a fiduciary 
duty; and to fully disclose those conflicts they may have.
  All brokers currently have exactly the same conflict of interest that 
Goldman Sachs had in its civil fraud case by the Securities and 
Exchange Commission: financial incentives to steer clients toward bad 
investment products that brokers made more money on.
  But retail investors are confused. They commonly think the services 
that investment advisers and brokers provide are nearly identical. An 
SEC Commission study in 2008 by the RAND Corporation found that 
investors were confused about the differences. So I don't think we need 
further studies. Senator Akaka's amendment and mine would end the 
confusion. It would require brokers to act in the best interests of 
their clients, just as investment advisers already do. It requires 
brokers to disclose conflicts of interest, so brokers would have to 
tell retail clients if they get more fees for selling a particular 
mutual fund or annuity product.
  It gives the FTC discretion to apply a fiduciary duty standard for 
all types of investors which would include institutional investors who 
are victimized by the allegations in the Goldman Sachs case. Investment 
advice should be transparent. If there are conflicts of interest or 
higher fees for a particular product, investors should know about it. 
Investors need to know that brokers have a duty to act in their best 
interest.
  I also have an amendment to expand the opportunities for women and 
minorities in banking. Currently, the staff of financial regulatory 
agencies lags in diversity. According to the Office of Personnel 
Management, minorities comprise only 18.7 percent of financial 
institution examiners; women comprise 34 percent.

[[Page S3153]]

  A recent GAO report found that among minority banks, only about one-
third thought their regulators were doing a good or very good job of 
making an effort to protect or promote their interests and less than a 
third of minority-owned institutions have utilized services offered by 
the regulators in the last 3 years.
  Only 5.7 percent of African-American firms and 5.6 percent of 
Hispanic firms obtained bank loans to start their businesses, compared 
to 12 percent of nonminority firms.
  The amendment I am proposing would rectify this by creating the 
Offices of Minority and Women Advancement at all the major financial 
regulatory agencies. Those offices would be responsible for all matters 
of diversity, including diversity in agency employment and contracts. 
Office directors would provide annual reports to Congress on diversity 
issues, with recommendations for improvements.
  The amendment would also require publicly traded companies to provide 
in annual SEC filings ``diversity report cards'' which would break down 
by gender and race the percentages of officers and employees who are 
minorities and women and the percentage of total compensation they 
receive.
  Finally, it extends the minority banking requirements under section 
308 of the Financial Institutions Reform, Recovery and Enforcement Act 
to the Federal Reserve and the OCC. A similar amendment has already 
passed the House of Representatives unanimously. I would certainly hope 
we could do the same here.
  Diversity within the Federal banking agencies will help ensure 
different perspectives are being brought to bear on issues and enhances 
the likelihood these solutions will be comprehensive and inclusive of a 
broad range of views. It will make our banking system fairer, more 
stable, and more just.
  I also have an amendment with Senator Merkley, to prohibit corporate 
executives and highly paid employees from hedging against any decrease 
in the market value of their employer's stock. This amendment is one 
that I think is very important because I am concerned there are a lot 
of bad incentives undermining the goals of executive compensation.
  A recent study found that at least 2,000 cases at 911 firms over an 
11-year period in which executives tried to profit by betting against 
their own company--by betting against their own company. Hedging 
undermines, in my mind, the whole point of incentive compensation to 
make sure that executives only benefit when the company does well.
  If they can hedge their stock, then it does not matter how well the 
company does, because either way the executive makes money. Tails they 
win, heads they win. That simply is fundamentally wrong. Worse, it may, 
in some cases, give executives an incentive to sort of ``throw the 
game,'' to use their privileged position to take a position that may 
very well not be in the company and its employees' best interests and 
then make a killing by selling the company stock short. Not good for 
the company, not good for the employee, not good for investors. My 
amendment would place a ban on stock hedging by executives and highly 
paid company employees, namely those making more than $1 million per 
year, preventing them from betting against their own company.
  Put simply: Executives and highly compensated employees should never 
have financial incentives to act against the best interests of their 
very own company.
  I am hoping some of these may very well be able to see their way into 
a managers' package. I hope we do not have to come to the floor to 
offer all of them.
  The recession has hit everyone. Community Development Financial 
Institutions have been hit hard, especially hard. They are in a tough 
position because they have got to rely on the big banks for capital, 
which is neither affordable nor easily accessible.
  My amendment would authorize the Treasury Department to guarantee 
bonds issued by qualified Community Development Financial Institutions 
for the purpose of community and economic development loans. There is 
also no cost to the taxpayers to do this. CDFIs have a track record of 
job creation and community development. They are the most effective way 
to infuse capital in low-income communities because the capital goes 
directly into those communities and economic development efforts.
  In focusing on the finances of Wall Street, I think this is an 
opportunity not to forget about the finances of Main Street, where most 
of the jobs are and the devastating impact that Wall Street's actions 
have had on Main Street.
  Lastly, I wish to talk about whistleblower protections. They are the 
first and most effective line of defense against corporate fraud and 
other misconduct, yet because of inadequate protections against 
retaliation, would-be corporate whistleblowers often keep quiet when 
they could be protecting the public from illegal activity.
  As we have seen in the emerging Lehman Brothers scandal, a 
whistleblower who tried to alert management to illegal accounting 
tricks was fired. Though the Sarbanes-Oxley Act of 2002 did much to 
expand protection of corporate whistleblowers from retaliation, it 
lacks several modern whistleblower protections that have been standard 
in every piece of legislation since 2006.
  My amendment updates Sarbanes-Oxley protections against retaliation 
by giving whistleblowers 180 days to file a claim instead of the 90 
that exists right now; giving whistleblowers their day in court with a 
clearer right to a jury trial; clarifying that whistleblowers are 
entitled to compensatory damages; strengthening due process rights for 
whistleblowers by eliminating inconsistencies in current law; 
preventing employers from gagging whistleblowers by holding them to 
contractual obligations; ensuring that whistleblowers will be protected 
for all disclosures of material misconduct.
  We think those opportunities strengthen a citizen to be able to 
engage and to come forth in a way that protects the company, that 
protects the investors, that protects all of us in the economy at 
large. So, again, I want to commend Chairman Dodd for his leadership in 
this effort. It has been a pleasure, as a member of the Banking 
Committee, working with him on some of the underlying provisions that 
he has already included in the bill that makes it so strong.
  I stand ready to work together to address these remaining issues, 
some of which I hope we can work through and get accepted, others 
which, if necessary, I am ready to come to the floor and seek to offer.
  At the end of the day, I want a bill that puts New Jerseyans in a 
position, and all Americans, in which they will never be asked to reach 
into their pockets to take care of the excessive decisions of companies 
that privatized the profit but then said, when it went bad and the 
gamble did not go well, that all of us should pay. We cannot have that. 
That is what the core of this bill does. That is why I have been proud 
to work with the chairman.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, before our colleague from New Jersey leaves, 
let me thank him. He is a member of our Banking Committee, and a very 
valuable member. He has been tremendously helpful as we have worked 
together, through my 37 or 38 months as chairman of the committee, very 
closely on the housing issues, on the credit card legislation.
  There have been some 42 measures that have come through the Banking 
Committee in the last 38 months, 37 of which have become the law of the 
land. That is a pretty good record out of our committee. It reflects 
the tremendous effort of members of that committee to help pull 
together sound pieces of legislation.
  Senator Menendez has been critical in so many of those efforts. I 
want to thank him for that and I want to thank him for his ideas on 
this bill. We are hoping we get many of these amendments up and have a 
chance to debate them. But I thank him for his contribution already.
  The PRESIDING OFFICER. The Senator from Texas.


                           Amendment No. 3749

  Mrs. HUTCHISON. Mr. President, I rise to speak on the Hutchison-
Tester amendment. This is an amendment that truly will help community 
banks. It will level the playing field for them. It is something I have 
been working on

[[Page S3154]]

for several months, during all the consideration this bill has gone 
through in committee. This was one of the first things I wanted to 
attack.
  I am pleased we are going to get a vote very soon on this amendment, 
either a voice vote or a record vote. I know that with the bipartisan 
support we have, we will pass this amendment.
  I thank the cosponsors of the amendment: Senators Conrad, Murray, 
Burris, Brown of Massachusetts, Harkin, Shaheen, Cornyn, Johanns, 
Nelson of Florida, and Nelson of Nebraska, as well as, of course, 
Senator Tester and myself.
  We are trying to level the playing field for community banks. The 
underlying bill sets a way of assessing the banks by the FDIC. There 
has been flexibility in the past, but we are going to set in statute 
with this amendment that banks will be assessed based on assets minus 
capital. That should be the way to assess.
  Community banks, with less than $10 billion in assets, rely heavily 
on customer deposits for funding. But that penalizes these very safe 
institutions with these customer deposits by forcing them to pay 
deposit insurance premiums far beyond the risk they would pose to the 
bank system. Despite making up just 20 percent of the Nation's assets, 
these community banks contribute 30 percent of the premiums to the 
FDIC. At the same time, large banks hold 80 percent of the banking 
industry's assets but pay only 70 percent of the premiums. There is no 
reason for community banks to have to make up this gap.
  What we need is a level playing field. It is the community banks that 
are loaning to our businesses. It is community banks that are keeping 
our communities supported in so many ways, from the football programs, 
to the scoreboards in stadiums, to making sure small businesses have 
inventory loans. Community banks didn't cause the problems. To have 
them pay more proportionately in FDIC insurance than the big banks do 
is unfair.
  Senator Tester and I want to correct this inequity. That is exactly 
what the Hutchison-Tester amendment does.
  I appreciate very much Senator Dodd saying he agrees with us, that he 
will work with us to pass this amendment. I am pleased we have such 
bipartisan support. It will immensely improve the bill and give 
community banks one of the pieces they need to stay in business and 
hopefully free them to provide more liquidity to the businesses in 
communities all across America.
  I yield the floor.
  Mr. DODD. Mr. President, I thank my friend from Texas, a member of 
our committee, Senator Hutchison. There are a lot of amendments people 
will offer that subtract or add provisions to the bill. Her amendment 
with Senator Tester and others is a very important piece. This could be 
a separate bill. It could be a freestanding idea. This would qualify as 
such an idea. Maybe it doesn't sound like much to people, but to 
consider the liabilities, that really gives a far more accurate picture 
of the financial condition of a smaller bank. Therefore, the 
assessments make so much more sense if you have a fuller view of how 
that institution is doing.
  It is so painful, on Friday afternoons after 4 or 5 o'clock, every 
week, 5 banks, 6 banks, 10 banks--I feel so bad when I hear the names--
a lot of them in small towns in our country, maybe small amounts, some 
of them a little larger--you think about a small town where there might 
be one lending institution, maybe two but not much more than that--when 
one closes its doors, what it means to a community to lose that lending 
institution where everybody knows everybody and you don't have to have 
a computer printout to know whether Mrs. Hutchison or Mr. Dodd is going 
to be able to meet that obligation; they have known the family. They 
know how it works, to be able to help them by reducing the burden 
financially on them.
  At the same time, we need to keep up that insurance because you want 
to protect depositors. However badly you feel--and I do every week when 
I read the names of the smalltown banks that have to close their 
doors--you want to make sure those customers can show up Monday morning 
and handle their finances. Shifting the burden a bit more to larger 
institutions that can afford to do so is a great idea.
  As my colleague knows, I was prepared to accept it this afternoon. I 
don't have the right to do that on my own. If I did, if I were king for 
a moment, I would say: Let's accept the Hutchison-Tester amendment. I 
am confident we will.
  I thank my colleague and Senator Tester for offering a very sound, 
very worthwhile proposal that will be a help to community banks.
  Mrs. HUTCHISON. I thank the distinguished chairman of the committee. 
Of course, we could take over the world right now, since he and I are 
the only ones on the floor.
  Seriously, Mr. President, this is significant because I do believe 
this bill is going to pass. We are working very productively to try to 
make some changes in the bill that will make it much better for 
community banks.
  As the chairman knows, the FDIC has decided to prefund its deposit 
insurance fund for the next 3 years by the end of this year. If we 
change this formula and ensure community banks will not carry the 
heavier burden, that is going to have an impact this year in the 
liquidity of those banks and their capability to lend.
  I appreciate very much the chairman's support. I look forward to 
having our amendment either voice voted or a record vote. I think we 
will win overwhelmingly with the support of the chairman and ranking 
member.
  Mr. LEAHY. Mr. President, last week we began debate on Senator Dodd's 
Wall Street reform legislation. This is the culmination of a lengthy 
dialogue on how best to rein in Wall Street's excesses, and bring about 
a new era of corporate responsibility. I have pushed, and will continue 
to push, for reform that preserves the role of the antitrust laws as a 
tool to keep Wall Street honest and promote competition in the 
financial industry.
  The recent economic crisis showed all of us that corporations do not 
act responsibly without adequate oversight. As we work to pass this 
landmark legislation, it is important to remember that, today, there is 
another industry that is not required to even play by the same rules of 
competition as everyone else. Benefiting from a six-decade-old special 
interest exemption, the health insurance industry is not subject to the 
Nation's antitrust laws. We can surely agree that health insurers 
should not be allowed to collude to fix prices and allocate markets.
  Large corporate interests impact the daily lives of hardworking 
Americans and must be regulated. When any large corporation acts 
irresponsibly, whether it is a financial institution or a health 
insurance company, Americans pay the price. Today I filed the Health 
Insurance Industry Antitrust Enforcement Act as an amendment to the 
Wall Street reform bill. This amendment, which is cosponsored by 21 
other Senators, will repeal the health insurers' antitrust exemption 
and ensure that they follow basic rules of fair competition. 
Competition ensures that consumers will pay lower prices and receive 
more choices.
  Congress and the President have recently enacted comprehensive health 
insurance reform. It was clear from that debate, and from the Judiciary 
Committee's hearing on this issue in October, that the time to repeal 
the health insurers' antitrust exemption is now. The language I am 
offering today passed overwhelmingly in the House, and it is supported 
by the President. It has received a cross-section of support from 
groups such as the Consumer Federation of America, the Consumers Union, 
and the American Antitrust Institute. This repeal will ensure that 
basic rules of fair competition apply to those reforms included in the 
new health insurance reform laws.
  Last fall, I introduced similar legislation to repeal the health 
insurers' antitrust exemption. The Judiciary Committee hearing I 
chaired examined the merits of this repeal. The lack of affordable 
health insurance plagues families throughout our country, and this 
amendment is an important step towards ensuring that health insurers 
are subject to the laws of fair competition.
  Today, I renew my call for the Senate to take up and pass this 
amendment to repeal the antitrust exemption for health insurance 
companies. I hope all Senators will join me in support.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.

[[Page S3155]]

  The assistant editor of the Daily Digest proceeded to call the roll.
  Mr. FRANKEN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Dodd). Without objection, it is so 
ordered.
  Mr. FRANKEN. Mr. President, I would like to talk a little further 
about the problems with credit rating agencies. Yesterday, I filed an 
amendment to the Wall Street reform bill that would create a Credit 
Rating Agency Board and help encourage competition and, most 
importantly, accuracy in the credit rating system.
  The major role the credit rating agencies played in the recent 
financial crisis has been largely overlooked. Most of the blame has 
been directed at Wall Street's oversized banks and the investment firms 
that were securitizing any kind of debt they could get their hands on. 
Ultimately, these firms got their hands on quite a lot, and one of 
their favorite products became mortgage-backed securities.
  Investment banks and hedge funds realized there was a lot of money to 
be made--there is about $9 trillion worth of mortgage-backed securities 
in the market right now. So they securitized every mortgage they could 
find, and once this happened, this source of easy profits dried up. So 
Wall Street demanded more, and mortgage lenders all too happily lowered 
their lending standards and delivered a new fleet of subprime mortgages 
for Wall Street to securitize.
  As we all know, subprime mortgages are riskier than regular 
mortgages. That is why they are called subprime. Borrowers are more 
likely to default. Yet when these risky mortgages were packaged, firms 
were able to sell them easily.
  One of their biggest selling points? Well, they came with a nice big 
``AAA'' stamped on them--three letters that say: This product is safe. 
This product belongs as part of a pension fund, a retirement account or 
an educational endowment.
  So that is where many of these risky subprime mortgage-backed 
securities ended up. When they failed, they ended up costing working 
Americans billions and billions of dollars in losses to their savings. 
But much of this could have been prevented, if only the ratings for 
these exotic securities had reflected their true risk.
  We need to reform the way credit rating agencies do business. Right 
now, there is nothing to compel them to produce ratings that reflect a 
product's real risk. Quite the contrary, they are incentivized to 
provide highly inflated ratings so they can keep getting repeat 
business.
  That is why I have filed an amendment to change the incentives in the 
industry. My amendment, No. 3808, which I have crafted with Senators 
Schumer and Nelson, would finally encourage competition and accuracy in 
an industry that has little of either.
  To stop the jockeying by raters to get repeat business, my amendment 
would create a clearinghouse--a clearinghouse--to assign a rating 
agency to a product issuer for the purpose of an initial rating. The 
clearinghouse--which will be a self-regulatory organization called the 
Credit Rating Agency Board--will set up its own rules on how this 
assignment will work. It could be random, it could be formula based, 
just as long as the issuer does not choose which agency rates its 
product. This will eliminate the incentive for the rater to give an 
inflated rating in the hopes of getting that repeat business.
  The Credit Rating Agency Board would be comprised of industry 
experts: investors, issuers, raters, and, of course, independents. A 
majority of its members would be investors, including institutional 
investors who have experience managing pension funds and university 
endowments. They would have a vested interest in accurate credit 
ratings because they depend on them when making investments.
  Another key element of my amendment is that the Board will regularly 
evaluate the performance of the credit rating agencies, and they would 
have to take that performance into account in coming up with an 
assignment mechanism. In my mind, there is no better way to get 
accurate ratings than giving more initial rating jobs to the most 
accurate raters--and fewer jobs to those that repeatedly do a sloppy 
job.
  Finally, the Board will be able to prevent raters from charging 
unreasonable fees. This will strike at the heart of sweetheart deals, 
in which a rater asks for more money for a better rating. Make no 
mistake, that is what has been happening. Just last week, Chairman 
Levin held a hearing in the Permanent Subcommittee on Investigations. 
His team revealed many e-mail exchanges between issuers and credit 
rating agencies that exposed how they did business.
  Here is one e-mail from Moody's to Merrill Lynch, and I quote:

       We have spent significant amount of resources on this deal 
     and it will be difficult for us to continue with this process 
     if we do not have an agreement on the fee issue. . . . We are 
     agreeing to this under the assumption that this will not be a 
     precedent for any future deals and that you work with us 
     further on this transaction to try to get to some middle 
     ground with respect to the ratings.

  Does this sound like Moody's was objectively evaluating the value and 
risk of Merrill's product? It doesn't sound like that to me.
  I am confident the assignment process under my amendment will result 
in increased competition in the credit rating industry and provide 
incentives to produce accurate ratings. The amendment allows issuers to 
go to whichever rating agency they choose for second or third ratings, 
but these followup ratings will more likely be accurate because raters 
know they will be compared to the initial rating. More accurate ratings 
will mean safer products that end up in pension funds and in retirement 
accounts. Safer products mean more retirement security for working 
Americans.
  So, once again, this all boils down to security and stability in our 
financial system. The greed and recklessness driving Wall Street over 
the past decade has wreaked havoc on our economy, and we need to take 
bold action to rein it in.
  Ignoring the magnitude of this problem will only come back to haunt 
us. We simply can't let that happen. We must take action to 
fundamentally change the way the system works by putting accuracy first 
in these ratings.
  I call on my colleagues to join me and Senators Schumer, Nelson, 
Brown, Whitehouse, and Murray in supporting this essential reform to 
restore integrity to the credit rating agency system.
  Thank you, Mr. President. I yield the floor, and I note the absence 
of a quorum.
  The PRESIDING OFFICER (Mr. Begich). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. WICKER. 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. WICKER. Mr. President, I had not intended to speak tonight, but 
having heard my friend, the Senator from Minnesota, speak about the 
problems with the rating agencies, I thought I would rise to say that 
in very many respects the Senator from Minnesota is correct. It is my 
understanding that the underlying bill as yet has no provision 
whatsoever dealing with the rating agencies. I think certainly if that 
remains, it will be a major flaw in the legislation.
  I don't know the details of the amendment the Senator from Minnesota 
was referring to, but I certainly welcome debate about the rating 
agencies to make sure they are accurate and to acknowledge so many 
mistakes that have been made by those agencies in the past. So I wish 
to commend the Senator for his debate about this issue.
  Mr. DODD. Mr. President, will the Senator yield?
  Mr. WICKER. Mr. President, I have a couple more points I wish to 
make, and I don't have much more time. But I am happy to yield to the 
chairman.
  Mr. DODD. Mr. President, title IX of the bill--and I am not 
suggesting you are going to love every dotted i and crossed t, but in 
title IX of our bill we do cover rating agencies. Again, this is a 
complex area, and there are different ideas about how to do this. But 
the legitimate point made by the Senator from Minnesota about rating 
agencies is something we share, and in title IX we try to address ways 
in which we can get far more accountability out of these agencies.

[[Page S3156]]

  Mr. WICKER. Mr. President, reclaiming my time, I appreciate that. I 
think the Senator would also concede that there are many in this body 
and in this building who would make a case that the bill is far from 
adequate as regards to the rating agencies, and we will have debate 
about that.
  Mr. DODD. I accept that argument, but I would not accept the argument 
there is nothing in the bill about rating agencies.
  Mr. WICKER. I appreciate the Senator's statement. I hope we can 
strengthen the bill in regards to rating agencies. I also hope we can 
do this: We have an opportunity in some amendments later on in this 
debate--perhaps next week or perhaps the week after--to address this 
question of the GSEs, Fannie and Freddie. I think almost everyone would 
acknowledge that much of the problem that was caused in 2007 and 2008 
stemmed from the GSEs. There has been an effort on the part of Senator 
Shelby and others over time to rein in and have some important 
regulations for Fannie Mae and Freddie Mac. I would hope we could have 
an honest to goodness debate and include this very important aspect of 
financial reform in this legislation; otherwise, I think we haven't 
gotten to part of the problem.
  Then, I would say also, we are going to have debate over the next few 
days and perhaps weeks about this all-powerful consumer agency that 
would be created. Certainly, we need to protect the consumers. But as I 
understand this legislation which we will be asked to consider and to 
vote on and have an opportunity to debate, it creates one of the most 
important--one of the most powerful, all-powerful individuals in the 
entire Federal Government; someone who would not even have to answer to 
a board, as head of this all-powerful consumer protection agency. I 
think the fact that we are hearing more from Main Street rising up in 
dismay saying the Main Street agencies didn't cause these problems--the 
car dealers, the orthodontists who might finance payments over time, 
the medium-sized banks and credit unions--they say: Mr. Senator, we are 
not part of the problem. Why are we being penalized and brought into 
the purview of this all-powerful Washington, DC, regulator?
  I think the concerns of Main Street can be addressed by the Senate, 
and we can still pass a bill that will cover the abuses of Wall Street 
which, after all, is what we are after.
  So I wanted to use the remarks of the Senator from Minnesota as a 
springboard to begin to discuss a number of issues, including Freddie 
and Fannie, including dealing with too much power in the form of this 
regulator, as well as dealing with the issue which the Senator brought 
up of the rating agencies.
  I thank the President, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, just on my own time, again, I don't 
necessarily expect agreement on everything, but I wanted to make the 
point that 40 pages of our bill deals with rating agencies. This isn't 
a page or two or a thought or two. There are sections that go in this 
bill from section 931 to 939, with subtitle C: Improvements on the 
regulation of credit rating agencies. Forty pages of this book deals 
specifically with ways in which we try to get greater accountability 
and reform in the credit rating agencies--a very important issue, one 
that obviously people have additional ideas about, and I accept that. 
There might be ideas that even strengthen this; I don't claim 
perfection. But I want to make sure people have looked at the bill 
before they get up and suggest there is nothing in this bill about it. 
Quite the contrary, there is a very strong section on rating agencies.
  So, again, people are entitled to their own opinions but not their 
own facts. With all due respect to my friend from Mississippi who has 
unfortunately left the floor, I wish to make the point to him that he 
might not like what I have written--we have written--but there is very 
strong language in here on getting that greater accountability out of 
our rating agencies.
  With that, Mr. President, I notice at least one additional Member who 
perhaps is going to come over to be heard, so I note the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative 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, I ask unanimous consent that on Thursday, 
May 6, after the opening of the Senate, the time until 10 a.m. be for 
debate with respect to the Tester-Hutchison amendment No. 3749, with 
the time equally divided and controlled in the usual form; that at 10 
a.m., the Senate proceed to vote in relation to the amendment, with no 
amendment in order to the amendment prior to the vote; further, that 
the Sanders amendment No. 3738 be the next Democratic amendment in 
order, and to clarify for the Record, the amendment would be called up 
upon disposition of the pending Shelby amendment No. 3826.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. DODD. Mr. President, let me say this, if I can, while we are 
waiting to do the wrap-up here. We finished up on the series of votes 
sometime around 4 o'clock or 3:30 this afternoon. It is now 6:30. Other 
than some statements made by Members regarding various amendments, the 
pending amendment is the one offered by my colleague from Alabama 
dealing with the consumer protection part of the bill. I am anxious for 
us to debate that. I regret we didn't have any debate this afternoon.
  I made the point that Members have amendments--and we have all been 
around--most people--long enough to know that with some 90 amendments, 
it is not going to mean every amendment people have will be offered. 
But to the extent that time is used effectively, we can maximize the 
number of amendments that can be offered. Whether you agree with our 
colleagues or not, they ought to be given the opportunity to offer an 
amendment and to debate it and get a vote. Again, that doesn't mean 
every amendment will be treated equally here, but I have been 
determined to try to make this work for as many Members as 
possible. But when 2 or 3 hours go by and not a word is spoken about a 
pending amendment, the hour will come--and I can predict the debate: 
You have not given us enough time to debate our amendments. I am 
keeping score privately about the times that have gone vacant when no 
one has talked on a pending amendment.

  Tomorrow, after the disposition of the Tester-Hutchison, Hutchison-
Tester amendment, I will be asking at that time prior to that vote for 
a time agreement on the pending amendment. My hope is it will be 
reasonable, take an hour or so to do that. I understand that. But I am 
not going to tolerate a whole morning wasted on that with all these 
other amendments. We need to have that debate and then move along. I 
say that respectfully.
  We are not going to spend an endless number of days on this bill. 
There are a lot of other matters to be considered by this body. This is 
a very important bill, and it is important that we listen to the 
various ideas people want to offer to it.
  I say this to my colleagues: Try to keep the time requests short. 
This was a good beginning today, but I would have preferred we could 
have used the last 2 or 3 hours to debate the pending amendment and 
then schedule a vote in the morning. I believe 2 or 3 hours to debate 
an amendment ought to be adequate. I recognize that not every amendment 
is considered as important as others. Prioritizing the amendments is 
important.
  Senator Bernie Sanders has an amendment that will come up afterward. 
I cannot speak for him, but I asked him. He said he might take an hour. 
That is a reasonable request. He has an important amendment and wants 
to be heard on it. I hope Members will follow the Sanders example and 
be respectful of others so we can get many amendments in.
  My hope is that tomorrow evening we will be here later. We are going 
to be here Friday, I gather. I do not make those decisions, but I have 
been led by the leadership to believe we will be here Friday. If I had 
my way, we would be here Saturday and Sunday to get the bill done. I 
will be urging the leader to keep us here as long as necessary to have 
a full debate on this bill. I am not sure I will succeed in those 
requests, but I want to make them.

[[Page S3157]]

  Given the complexity of this bill and the interest Members have, if 
we utilize the time rather than sitting in quorum calls hour after 
hour--we will hear that bellowing that occurs: I never had a chance to 
be heard on my amendment. Why didn't I have time to be heard? The 
answer is going to be--I am keeping the record here--how much time I 
have been sitting around waiting for someone to come debate an 
amendment.
  If I sound a little frustrated--it is a little too early in the 
debate to get frustrated, but I wanted to express it in advance of the 
real frustration that will come later on.
  There will be no more votes this evening.
  I see my colleague from Colorado is here. I am going to do the wrap-
up and then allow my colleague to be heard.

                          ____________________