[Congressional Record Volume 156, Number 79 (Monday, May 24, 2010)]
[Senate]
[Pages S4130-S4138]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           RESTORING AMERICAN FINANCIAL STABILITY ACT OF 2010


                          Motions To Instruct

  Mr. BROWNBACK. Mr. President, under the previous agreement, I call up 
a motion to instruct conferees that I have at the desk and ask for its 
immediate consideration.
  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume the motions with respect to H.R. 4173, which the clerk will 
report.
  The legislative clerk read as follows:

       A bill (H.R. 4173) to provide for financial regulatory 
     reform, to protect consumers and investors, to enhance 
     Federal understanding of insurance issues, to regulate the 
     over-the-counter derivatives markets, and for other purposes.

  The PRESIDING OFFICER. The clerk will report the motion to instruct.
  The legislative clerk read as follows:


                      Motion to Instruct Conferees

       The Senator from Kansas (Mr. Brownback) moves that the 
     managers on the part of the Senate at the conference on the 
     disagreeing votes of the two Houses on H.R. 4173 (the 
     Restoring American Financial Stability Act) be instructed to 
     insist that the final conference report include the House 
     position relating to the exclusion for motor vehicle dealers 
     from the rulemaking, supervisory, enforcement, or other 
     authority granted to the Director of the Consumer Financial 
     Protection Agency, as such exclusion is contained in section 
     4205 of H.R. 4173, as passed by the House, and that the final 
     conference report preserves the additional provisions, 
     definitions, and protections provided to such motor vehicle 
     dealers and servicemembers and their families in Senate 
     amendment 3789, as further modified, to S. 3217.

  The PRESIDING OFFICER. The Senator is recognized for 10 minutes.
  Mr. BROWNBACK. Mr. President, I wanted the clerk to read the full 
motion to instruct conferees so my colleagues could understand the 
simplicity and directness of this motion. It is a very simple motion to 
instruct conferees to recede to the House position in regard to auto 
dealers in the Consumer Financial Protection Bureau. The House 
considered this in committee, and two-thirds of the committee members--
half the Democrats, all the Republicans--voted to exclude the retail 
auto dealers from the Consumer Financial Protection Bureau. That is the 
way they voted. It came up

[[Page S4131]]

on the House floor, and it was defeated as far as to put the auto 
dealers in the regulatory process, so it was excluded in the House--
full consideration at the committee; at the full House level, excluded.
  What we are asking, now that this bill has passed, is in the motion 
to instruct our conferees, the Senate conferees, in going with the 
financial regulatory reform bill, to recede to the House position 
regarding the auto dealers.
  I think this is a good motion to instruct conferees. I think it is 
something we ought to do. I think it is something that will be very 
helpful. I make this simple point to my colleagues: Under the Consumer 
Financial Protection Bureau, 100 percent of all auto loans will still 
be covered. If you vote for the Brownback instruction, if we recede to 
the House position, 100 percent of the auto loans will still be 
covered. We are saying in this, and the House position says: If you 
actually loan the money--if you are GMAC, if you are some other 
financiers up the street, you are under the CFPB. If you are simply the 
retail storefront, which is what the auto dealers are, you are not 
covered under the Consumer Financial Protection Bureau. You are not 
covered if you are just the storefront arm of this, but 100 percent of 
the loans are covered.
  If you are an auto dealer and you make the actual loan yourself and 
it is your money you are lending, you are covered under the Consumer 
Financial Protection Bureau. If you are simply the storefront operation 
out here doing this, you are not covered.
  The auto dealers are asking for this. They do not want the additional 
cost and burden of this regulation on them. They are the quintessential 
Main Street business throughout the country. There is not a single auto 
dealer on Wall Street--none of them, not one. You can go up there today 
and try to buy a car and you cannot get one.
  These are Main Street businesses, and they took it on the chin last 
year. We lost, last year alone, 1,700 dealerships across America 
resulting in the loss of approximately 88,000 jobs. Why would we want 
to put a duplicative set of regulations on top of them that are already 
covered upstream and they have already had these sorts of losses and 
difficulties in a Main Street business?
  We need people to create 88,000 jobs, not to eliminate or lose 88,000 
jobs. Franchised auto dealers are the retail outlets. They are the 
storefronts that process the paperwork for various well-known brands 
with large financial arms. Under the House provision that my motion 
instructs us to recede to, these financial arms would still be 
regulated, but the dealers who process the paperwork would not.
  Additionally, even if my motion is agreed to, auto dealers would 
still be regulated by the FTC and various State laws, so consumers 
would still have protections to ensure the truth in lending still 
applies.
  In fact, I have a couple of pages here of regs--excuse me, of 
regulatory entities that auto dealers still apply to. I ask unanimous 
consent this list be printed at the conclusion of my comments.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. BROWNBACK. I want to also point out what typically happens. This 
is a letter I am going to read from the Dale Willey auto dealership in 
Kansas. Dale Willey, the auto dealership in Kansas, said this about the 
financing that happens. I am reading from this:

       Each month we have 3 to 5 buyers who tell our financial 
     service members--

  There are three to five people coming in, telling our financial 
service managers:

     if our dealership can match or beat their bank's or credit 
     union's interest rate, they will then finance through our 
     dealership. To match the buyer's offer of rate terms simply 
     provides a convenience to our buyers. To offer a better term 
     and/or at a better rate enhances the buyer's savings by doing 
     business with our dealership.

  In other words, this is a competitive situation that typically people 
go into.
  I will read again from the letter:

       We have buyers also who are unable to secure a loan through 
     their normal bank, credit union or lender, and yet we are 
     able to submit the buyer's application to several of our 
     lenders with which we have agreements, discovering that one 
     or more are willing to make these loans to this buyer. Not 
     only does this provide a convenience to the buyer, but it 
     truly allows the buyer to secure a better level and lower 
     operating cost vehicle than provided by their older current 
     vehicle.

  This is a competitive situation. It also positions people so that 
sometimes they are able to get loans they could not get on their own.
  I want to address as well another situation that has come up in this 
debate that people have raised: that this protection is needed for 
military personnel in particular. A couple of weeks ago the Senate 
adopted an amendment offered by Senator Reed of Rhode Island and Brown 
of Massachusetts that creates the Office of Service Member Affairs at 
the CFPB.
  My motion that we are voting on today, instructs the current 
regulatory authorities to work with this office when they detect abuses 
by auto dealers. So we are saying, if you detect an abuse by auto 
dealers, then this should be worked on particularly by the CFPB and 
this office of servicemember affairs.
  I recently received a letter from the Under Secretary of the Army for 
Personnel and Readiness, Clifford Stanley. In it he writes this:

       DOD would welcome and encourage CFPA protection for 
     servicemembers and their families with regard to unscrupulous 
     automobile sales and financing practices, provided such 
     protections would not limit access to legitimate products.

  That is exactly what motion does. Military personnel would have 
strong protections by the CFPB but without the adverse effect of 
limiting their access to credit. If you want to protect the military 
and maintain all their options for buying a car, you should vote in 
favor of this motion.
  I point out these matters because there has been a lot of discussion 
and debate going on about the auto dealers amendment throughout the 
proceedings of this entire bill, which has gone on for some period of 
time. This makes sense to do this the way the House did it. It makes 
sense for us to move forward with this motion to recede to the House 
position.
  The House has established this position. They have thought it 
through, and 100 percent of auto loans will still be covered. It is 
just the auto dealership will not be the one that is covered, the 
upstream financer will, unless the auto dealership is loaning their own 
money, and then they will be covered.
  If you are concerned about military personnel, there is a particular 
direction in here regarding military personnel. Again, any loans are 
covered. It is the upstream position that is covered, and it is where 
it should be. That is the actual person or group that is making the 
loan. That is the one that should be covered.
  Instead of putting an additional burden on dealerships that have 
already lost lots of jobs, we are saying: No, let us recede to the 
House position.
  I reserve the remainder of my time. I urge my colleagues to vote yes 
on the Brownback motion to recede to the House position.

                               Exhibit 1

         Legal & Regulatory Group, National Automobile Dealers 
           Association, McLean, VA.

   Federal Consumer Protection Regulations Applicable to Automobile 
                     Dealers' Financial Operations

       1. Anti-Discrimination
       a. Equal Credit Opportunity Act--Federal Reserve Board 
     (FRB) Reg B
       Prohibits creditors from engaging in discriminatory 
     practices against credit applicants; establishes guidelines 
     for gathering, evaluating, and retaining credit information; 
     and requires written notification when credit is denied.
       b. Fair Credit Reporting Act (FCRA)--Medical Information 
     Rule (FRB Reg FF)
       Generally prohibits creditors from obtaining and using 
     medical information when determining an applicant's 
     eligibility for credit; also restricts sharing medical 
     information with affiliates.
       2. Unfair & Deceptive Acts or Practices
       a. Federal Trade Commission (FTC) Act--FTC Credit Practices 
     Rule
       Requires creditors to provide written disclosures to 
     cosigners before they sign a retail installment sales 
     contract; also prohibits unfair credit practices, deceptive 
     cosigner practices, and pyramiding late charges.
       b. FTC Act--Unfair & Deceptive Acts & Practices
       Generally prohibits businesses from engaging in unfair or 
     deceptive acts or practices.
       3. Credit Disclosures
       a. Truth In Lending Act (FRB Reg Z)
       Imposes disclosure, advertising, and other requirements on 
     consumer credit sales.
       b. Federal Consumer Leasing Act (FRB Reg M)

[[Page S4132]]

       Imposes disclosure, advertising, and other requirements on 
     consumer leasing.
       4. Financial Privacy
       a. FCRA--Obtaining Credit Reports
       Requires that businesses have and certify a permissible 
     purpose to obtain a consumer's credit report and imposes 
     restrictions on a creditor's ability to purchase prescreened 
     lists of customers from consumer reporting agencies for 
     credit solicitation purposes.
       b. FCRA--FTC Prescreen Opt-Out Disclosure Rule
       Requires that creditors provide prescreened customers to 
     whom they send credit solicitations with a long and short 
     form notice with instructions on how to opt-out of future 
     prescreened solicitations from creditors.
       c. FCRA--Affiliate Information Sharing
       Restricts the disclosure of credit report information.
       d. FCRA--FTC Affiliate Marketing Rule
       Restricts using credit report information to market to the 
     customers of an affiliate.
       e. Gramm Leach Bliley Act (GLB)--FTC Privacy Rule
       Requires financial institutions to provide finance and 
     lease customers with a notice that accurately describes the 
     institution's privacy policy and restricts the disclosure of 
     customers' personal information.
       5. Accuracy of Credit Reports
       a. FCRA--FTC Address Discrepancy Rule
       Requires users of credit reports to develop procedures to 
     ensure that credit reports ordered from consumer reporting 
     agencies that contain a ``Notice of Address Discrepancy'' 
     pertain to the correct customer.
       b. FCRA--Adverse Action Notices
       Requires users of credit reports to notify customers in 
     writing when adverse action is taken against them based in 
     whole or in part on information contained in a credit report.
       c. FCRA--Risk-based Pricing Notices
       Requires users or credit reports to notify customers in 
     writing when they obtain credit on unfavorable credit terms 
     (relative to the user's other credit customers).
       6. Identity Theft
       a. GLB Act--FTC Safeguards Rule
       Requires financial institutions to develop a comprehensive 
     written program to protect their customer information.
       b. FCRA--FTC Disposal Rule
       Requires users of credit reports to develop procedures to 
     properly dispose of credit report information.
       c. FCRA--FTC Red Flags Rule
       Requires creditors and financial institutions to develop a 
     written program that contains procedures to identify, detect, 
     and respond to ``red flags'' indicating the possibility of 
     identity theft.
       d. FCRA--Fraud & Active Duty Alerts
       Requires users of credit reports who receive a fraud or 
     active duty alert on a credit report to develop procedures to 
     verify the customer's identity before extending credit to the 
     customer.
       e. FCRA--Credit & Debit Card Truncation
       Requires persons to truncate the expiration date and all 
     but the last 5 numbers on electronically printed credit and 
     debit card receipts given to cardholders at the point of 
     sale.

  Ms. MIKULSKI. Mr. President, the Restoring American Financial 
Stability Act is supposed to regulate Wall Street, not Main Street. It 
is Wall Street whose greed brought us the economic crisis. That is why 
I am voting for the Brownback motion to instruct conferees to support 
the House provision regarding the regulation of auto dealers.
  We need a tough financial reform bill that focuses on the abuses that 
led to the economic crash. This bill is intended to primarily regulate 
major institutions that deal nationally and globally and to improve 
government coordination to ensure that there is an early warning and an 
early response system in place to prevent a future crisis like the one 
we were faced with in 2008. Automobile dealers were not part of the 
problem that led us to where we are today and therefore should not be 
subject to this legislation.
  We must make sure that laws that are already on the books are being 
implemented and enforced. Under current law, car dealers are subject to 
extensive Federal regulation. Dealers' retail financing activity is 
regulated by the Federal Reserve Board and the Federal Trade 
Commission, and car dealers are subject to tough Federal laws, 
including the Truth in Lending Act and the Fair Credit Reporting Act. 
Those laws must be enforced. Predatory lending practices must be 
stopped, and there are tools in place to do so.
  I believe that auto dealers are best regulated by State and local 
consumer protection agencies. Main Street should be regulated by people 
who are closer to its daily activities. Governors and attorneys general 
must make sure that consumers are protected from bad actors. The 
Consumer Financial Protection Bureau should focus on Wall Street, not 
Main Street, and should not be used to increase unnecessary regulations 
on small businesses.
  During debate on the Brownback amendment, it became clear that the 
men and women of our military have been targeted by unscrupulous auto 
dealers. This is an outrage. I never want to see our military personnel 
being taken advantage of. Our service men and women have dedicated 
their lives to this country, and we have a responsibility to make sure 
they, and their families, are treated with respect and that we do 
everything we can to reduce their increasing stress. That is why I 
voted to create an Office of Service Member Affairs within the Consumer 
Financial Protection Bureau to educate the men and women of our 
military, and their families, to make better informed financial 
decisions and to strengthen coordination of consumer protections for 
members of our military. We must crack down on those who are taking 
advantage of our military families and communities. However, I do not 
think we need a new regulatory structure to do so. A Washington 
regulatory agency is not the best suited to regulate outside of 
military bases in Maryland or North Carolina.
  As I said on the floor when we began debate of this bill, now is our 
opportunity to pass real financial reform that puts in place the 
strongest consumer financial protections and ensures the greed of Wall 
Street doesn't trump the needs of Main Street. That is why I support 
the House provision on the regulation of auto dealers.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, how much time remains for my friend from 
Kansas?
  The PRESIDING OFFICER. There is 1 minute 56 seconds.
  Mr. DODD. Mr. President, let me begin by saying that Sam Brownback 
and I are good friends. We have a different point of view in this 
matter. But that in no way at all should be reflected in our 
relationship with each other, as we have served together for many 
years. I fundamentally disagree with him about this.
  Instructing conferees is an interesting motion in many ways. As we 
will be going to conference with the other body, I will be delighted to 
listen to these various ideas. But this is a matter which does deserve 
to be protected.
  First of all, let me say that when it comes to automobile dealers, 
they are no different than community banks or other financial 
institutions; the overwhelming majority are good people and do a good 
job. But we do not pass laws in this country because a majority of the 
people commit crimes. We pass laws for the minority who can abuse their 
relationship with customers or with people. That is no different in 
this particular case at all.
  So this is not about whether you like automobile dealers or do not 
like them. The simple question is: The second largest purchase that 
most Americans make is the purchase of an automobile. We do not buy 
stocks. We do not buy fancy institutions and so forth. We buy a home 
and we buy an automobile, and they are expensive undertakings.
  So the question is very simply: We have established in our 
legislation, for the first time in the history of our country, a 
Consumer Financial Protection Bureau that will watch out for the 
average American citizen when it comes to financial practices. We have 
a Consumer Product Safety Commission. We have the Food and Drug 
Administration which protects you against products that you ingest, so 
you have some ability to respond if they do you harm.
  If you buy a lawn mower or you buy any other consumer product, we 
have a place you can go to get a recall when that product does injury 
or could do injury to you. Yet we have no place in this country, where 
you can be ruined by a financial product, to get you any redress.
  So this legislation, for the first time in our Nation's history, 
establishes a Consumer Financial Protection Bureau to watch out for bad 
mortgages, car loans, watch out for other financial activities in which 
the average individual may engage.
  As I said, one of the most principal activities that people engage in 
as consumers is the purchase of an automobile. So we are trying to 
protect people. If we are going to say to community banks and to credit 
unions and other financial institutions: You must comply with these 
rules, they will be

[[Page S4133]]

enforced at the local level. But you have a community bank on one 
corner, a credit union on the other corner and a car dealer on the 
third corner and all three would like to compete for that business. To 
the credit union and the community bank we say: You have to comply with 
rules that protect consumers. But you, Mr. Auto Dealer over here, you 
do not have to do that. You can go off and do exactly as you want.
  That is a mistake and why we have insisted that these provisions 
include automobile dealers. So I rise in opposition to this proposal.
  A lot is said in this body about our men and women who serve in 
uniform. We all believe that, just as those heroes stand for us every 
single day, in bodies such as this we ought to stand for them. I wish 
to focus my remarks on what happens to men and women in uniform today 
because it is that constituency alone that ought to be reason to defeat 
this motion.
  As we considered financial reform, then, we strove to heed the words 
of groups such as the Military Coalition, a consortium of over 30 
nationally prominent military and veterans organizations, representing 
more than 5.5 million current and former servicemembers and their 
families, including such groups as the Veterans of Foreign Wars, the 
National Guard Association, the Military Officers Association, the 
Military Order of the Purple Heart, and many others.
  All these groups have written a letter in which they say, in part: 
The most significant financial obligation for the majority of 
servicemembers is auto financing.
  It is also the place where servicemembers are most likely to be taken 
advantage of. Recently, the New York Times reported on one case, that 
of Matthew Garcia, a 25-year-old Army specialist who was recently 
subjected to a trick called yo-yo financing by an unscrupulous car 
dealer, just as he was preparing to deploy for Afghanistan.
  According to the story in the press, Specialist Garcia, stationed at 
Fort Hood, TX, bought an automobile at a used car lot, signed up for a 
loan at a 19.9 percent interest rate. That would be bad enough, but 
that is not the worst of it, the high rate of interest. The problem 
came when Specialist Garcia drove the car home.
  The dealer called Specialist Garcia several days later to say the 
financing contract had actually fallen through and demanded an 
additional $2,500 in cash from Specialist Garcia. To make sure he paid 
up, the dealer blocked the soldier's car so no one could leave.
  That is the way some--a few but some--auto dealers are treating our 
men and women in uniform. It is not enough that I tell you this story 
or one story in the press account. Under Secretary of Defense Stanley--
in fact, my good friend, Senator Brownback, quoted from the letter from 
Clifford Stanley. But listen to the operative sentence in the letter 
from Under Secretary Stanley:

       The Department's position as stated in my letter to 
     Assistant Secretary Barr remains unchanged. The Department of 
     Defense would welcome and encourage the CFPA protections for 
     Servicemembers and their families with regard to unscrupulous 
     automobile sales and financing practices provided such 
     protections would not limit access to legitimate products.

  Which they do not at all. So we are hearing from Under Secretary of 
Defense Stanley, in which he says: ``Bait and switch'' financing, 
falsification of loan applications, failure to pay off liens on trade-
in vehicles, ``packing'' loans with items whose price bears little, if 
any, relationship to their real cost, and discriminatory lending are 
the kinds of problems members of our Armed Forces and their families 
face when dealing with financing their cars with car dealers.
  In fact, Secretary Stanley reports that 72 percent of military 
counselors and attorneys surveyed had cited problems with auto dealer 
abuses in just the past 6 months alone, 72 percent cited it as a major 
problem. The Department of Defense is telling us that our men and women 
in uniform are at risk of being ripped off, as they are every single 
day.
  That is why, of course, we adopted, 98 to 1, by the way, the 
amendment offered by Scott Brown, our colleague from Massachusetts, and 
Jack Reed, our colleague from Rhode Island. That amendment said we must 
have an office of servicemember affairs in the consumer bureau. Why did 
we establish that office there? What is the principal obligation that 
these service men and women get into that causes so much difficulty? It 
is automobiles sales. That is why we put it in.
  What an irony it would be that we vote 98 to 1 to say we ought to 
establish that office within the consumer financial bureau and then 
turn around and adopt the Brownback amendment or insist upon it in a 
conference report, which basically exempts every one of these auto 
dealers from having to comply with the consumer protection laws. That 
would be an irony beyond ironies in a way, to on one hand say: We want 
to help you and protect you and then, on the other hand, take away the 
major organizations out there that do the most damage to them.
  The Brownback motion would steal away this protection from our Armed 
Forces by creating a loophole for the exact sector of the financial 
services industry in which servicemembers are most vulnerable, and that 
is in auto sales. Let me be clear. All of us have relationships with 
auto dealers. I have a wonderful relationship with the people in my 
State of Connecticut whom I have worked closely with over the years.
  All of us support those businesses. As I said at the outset of these 
remarks, the overwhelming majority of them do a good job and do not 
engage in unscrupulous behavior. But the laws are not written for the 
many, they are written for the few out there who do take advantage of 
these young men and women.

  As we know from the evidence supplied by our military organizations 
and others who have written, rarely do they ever get involved in a 
matter such as a Banking Committee matter, to have the Under Secretary 
of Defense, the Secretary of the Air Force, the Secretary of the Army, 
the Veterans of Foreign Wars, the Order of the Purple Heart, and the 
Officers Association, all of them, 30 organizations saying: Do not do 
this.
  Yet we are about to turn around and undo the efforts we have made to 
see to it that these young men and women, whom we all talk about in 
Memorial Day speeches, and so forth--what a great job they do for our 
country, and then turn around, in the one area they get taken to the 
cleaners on day after day, which is in this one particular area, and to 
exempt them entirely from the consideration of the Consumer Financial 
Protection Bureau.
  The community bankers oppose this. The credit unions oppose this as 
well. They want a level playing field. They would like to compete for 
that business. They have to comply with the rules. How can you turn 
around and say to that community bank or that credit union: You have to 
live with these rules, but the guy on the other corner does not have to 
do so. How is that fair when it comes to financing, as I said have 
said, the second largest purchase that anyone would make, that most 
people make in their lives?
  So it is unfair, it seems to me, to have two sets of rules for the 
same product. That is what we would be doing if this amendment were 
adopted, and, of course, the conferees were required to insist upon 
supporting language in the House bill. Military leaders such as Michael 
Donley, the Secretary of the Air Force, support this approach because, 
in his words:

       Protection from unprincipled automobile lending enables our 
     Airmen to concentrate on their primary mission--to fly, fight 
     and win in air, space, and cyberspace.

  Advocates such as Holly Petraeus, wife of GEN David Petraeus, the 
director of the Better Business program for military families, at a 
press conference, strongly supports the protections we have in this 
bill. They know the hardships military families face and believe it 
should not be compounded by shady lenders.
  By the way, it is not just our servicemembers who suffer from lending 
abuse in this sector as well. There is a long and sad history of racial 
discrimination in auto lending. For example, African-American borrowers 
who are charged more than 2.5 times the amount in subjective rate----
  The PRESIDING OFFICER. The Senator's time on the motion has expired.
  Mr. DODD. I ask unanimous consent for 1 additional minute and provide 
1 additional minute for my friend from Kansas as well.
  The PRESIDING OFFICER. Without objection, it is so ordered.

[[Page S4134]]

  Mr. DODD. Let me, if I can, because my friend from Kansas cited this, 
about separating out the financing from the lenders. There was a court 
case. Listen to what one of these witnesses, involved in that 
distinction, had to say. Some argue that auto dealer financing 
operations are not the lenders, they are merely processing the 
paperwork.
  According to court testimony of a former finance and insurance 
manager from a Tennessee auto dealer:

       The standard industry practice is to prepare the financing 
     documents so that the customer is not alerted in any manner 
     that the person with whom he is dealing has the ability to 
     control the customer's price of credit. This allows the 
     finance arranger to present himself as the ally of the 
     customer, which further relaxes and disarms the customer. The 
     nature of the transaction creates the perfect opportunity for 
     a dealer to obtain a large kickback from an unsuspecting 
     customer by subjectively inflating their interest rates.

  This is not a time to do so much damage, in my view, to these young 
men and women in uniform.
  I ask unanimous consent that several letters we have from the various 
military organizations in opposition to the Brownback amendment be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                             Independent Community


                               Bankers of America',

                                     Washington, DC, May 11, 2010.
     Hon. Christopher Dodd,
     Chairman, Committee on Banking, Housing and Urban Affairs, 
         Washington, DC.
     Hon. Richard C. Shelby,
     Ranking Member, Committee on Banking, Housing and Urban 
         Affairs, Washington, DC.
       Dear Chairman Dodd and Senator Shelby: On behalf of the 
     Independent Community Bankers of America and its nearly 5,000 
     member banks, I write to oppose Sen. Brownback's amendments 
     SA 3789 and SA 3790 to the Restoring American Financial 
     Stability Act of 2010 to exempt most automobile dealers from 
     the jurisdiction of the proposed Consumer Financial 
     Protection Bureau (CFPB).
       ICBA believes the CFPB should be focused on the under-
     regulated financial services providers rather than highly-
     regulated community banks. When automobile dealers offer 
     financing to customers--generally as a conduit for 
     manufacturers' captive finance arms--the dealers provide 
     consumers loans and leases that are second only to home 
     mortgages in importance to most families. Yet, their 
     financing activities are not subjected to the same level of 
     regulatory scrutiny as the auto lending activities of 
     community banks. Exempting automobile dealers would create a 
     gaping loophole in the CFPB and would give automobile 
     dealers--as well as the manufacturers' captive finance arms 
     that provide financing through them--a competitive advantage 
     over community banks and reduce consumer choice in auto 
     loans.
       I urge you to oppose exemptions to the CFPB for non-
     depository lenders, including automobile dealers.
       Thank you for your consideration.
           Sincerely,
                                                   Camden R. Fine,
     President & CEO.
                                  ____



                                       The Military Coalition,

                                   Alexandria, VA, April 15, 2010.
     Hon. Christopher J. Dodd,
     Chairman, Banking, Housing & Urban Affairs, Washington, DC.
     Hon. Richard C. Shelby,
     Ranking Member, Banking, Housing & Urban Affairs, Washington, 
         DC.
       Dear Chairman Dodd and Ranking Member Shelby: The Military 
     Coalition, a consortium of nationally prominent military and 
     veterans organizations, representing more than 5.5 million 
     current and former servicemembers and their families and 
     survivors, would like to express our opposition to Senator 
     Brownback's amendment to the Restoring American Financial 
     Stability Act of 2010. Senator Brownback's amendment would 
     exclude auto dealers and their lending practices from the 
     financial reform bill.
       The most significant financial obligation for the majority 
     of servicemembers is auto financing. Including the auto 
     dealers financing and sales in the financial reform bill will 
     provide greater protections for our servicemembers and their 
     families.
       Providing a ``carve-out'' for auto dealers does just the 
     opposite--it will allow unscrupulous dealers to continue to 
     take advantage of servicemembers and their families.
       In a recent letter from the Under Secretary of Defense for 
     Personnel and Readiness (USD P&R) to the Department of the 
     Treasury's Assistant Secretary for Financial Institutions 
     (attached), Dr. Clifford Stanley states that the Department 
     of Defense would welcome protections provided to 
     servicemembers and their families with regard to unscrupulous 
     automobile sales and financing practices.
       Additionally, Dr. Stanley highlights the extent of the 
     problem in a recent informal polling of installation 
     attorneys and personal financial managers/counselors. Of the 
     659 counselors and attorneys who responded, 72% stated that 
     they counseled servicemembers in the past six months on one 
     or more unscrupulous practices (e.g., ``bait and switch'' 
     financing, falsification of loan documents, failure to pay-
     off liens, and ``packing loans'') when covering auto 
     financing with their client.
       Again, the Coalition wishes to reiterate our collective 
     opposition to any ``carve-out'' of auto dealership financing 
     from the financial reform bill and we thank you for your 
     attention to this important issue impacting military members 
     and their families.
           Sincerely,
         Air Force Association, Air Force Sergeants Association, 
           Air Force Women Officers Associated, American Logistics 
           Association, AMVETS (American Veterans), Army Aviation 
           Association of America, Association of Military 
           Surgeons of the United States, Association of the 
           United States Army, Association of the United States 
           Navy, Chief Warrant Officer and Warrant Officer 
           Association, U.S. Coast Guard, Commissioned Officers 
           Association of the U.S. Public Health Service, Inc., 
           Enlisted Association of the National Guard of the 
           United States, Fleet Reserve Association, Gold Star 
           Wives of America, Inc., Iraq & Afghanistan Veterans of 
           America, Jewish War Veterans of the United States of 
           America, Marine Corps League, Military Chaplains 
           Association of the United States of America, Military 
           Officers Association of America, Military Order of the 
           Purple Heart, National Guard Association of the United 
           States, National Military Family Association, National 
           Order of Battlefield Commissions, Naval Enlisted 
           Reserve Association, Non Commissioned Officers 
           Association, Reserve Enlisted Association of the United 
           States, Society of Medical Consultants to the Armed 
           Forces, The Retired Enlisted Association, United States 
           Army Warrant Officers Association, United States Coast 
           Guard Chief Petty Officers Association, Veterans of 
           Foreign Wars of the United States.

           
                                  ____
                                                     May 19, 2010.
     U.S. Senate,
     Washington, DC.
       Dear Senator: We are writing to voice our opposition to the 
     modified version of Senator Brownback's Amendment #3789, 
     which would exempt auto dealers from the Consumer Financial 
     Protection Bureau. The changes made to the amendment do 
     nothing to stop automobile dealers from engaging in 
     fraudulent or abusive practices. Instead, the revised 
     amendment provides financial education for military families 
     who are targeted by unscrupulous dealers with these tactics.
       While good financial counseling can help consumers make 
     smart purchasing decisions, it is no substitute for 
     vigorously enforcing the law to prevent unfair and deceptive 
     practices. In fact, the modified Brownback Amendment #3789 
     would shift the burden onto the military and individual 
     Service members to avoid being defrauded by car dealers, 
     rather than protecting our troops and all Americans with a 
     new consumer agency that polices auto dealer financing and 
     enforces already existing consumer protection laws.
       Senator Brownback's modification requires the Federal 
     Reserve and the Federal Trade Commission--two agencies that 
     to date have failed to adequately protect consumers from 
     abusive auto lending practices--to work with the Office of 
     Service Member Affairs to ensure that ``Service members and 
     their families are educated and empowered to make better 
     informed decisions regarding consumer financial products and 
     services offered by motor vehicle dealers.'' However, many of 
     the scams perpetrated on our troops cannot be eliminated 
     through education, since fraud by its very nature is designed 
     to deceive and is often perpetrated without the consumer's 
     knowledge or awareness. For example, some car dealers engage 
     in ``powerbooking,'' a scam in which the victim does not have 
     access to the documents the dealer submits to the finance 
     company and therefore has no knowledge of the phantom add-ons 
     the auto dealer claims are part of the vehicle. Some dealers 
     falsify loan applications, in which case the victim does not 
     have access to the loan documents that falsifies pay stubs 
     and statements of income. In another scam, the auto dealer 
     promises to pay off the lien on the victim's trade-in at the 
     time of sale, but does not, so the consumer is unknowingly 
     left with the responsibility to pay off the new car as well 
     as the car that was traded in. There is no way for the victim 
     to know in advance that the dealer doesn't intend to pay off 
     the lien. Senator Brownback's modified amendment would do 
     nothing to stop these abuses.
       The modified Brownback Amendment maintains the status quo 
     that has failed to adequately protect U.S. troops and the 
     American consumer from auto scams up until now. The Office of 
     Service Member Affairs would in no way have the authority to 
     actually require the Federal Reserve to issue meaningful new 
     rules and/or require the FTC to enforce the already existing 
     rules.
       We urge the Senate to vote no on the Brownback auto dealer 
     exemption.
           Sincerely,
     Fleet Reserve Association.
     Military Officers Association of America.

[[Page S4135]]

     Navy Marine Corps Relief Society.
     Center for Responsible Lending.
     Consumer Federation of America.
     National Association of Consumer Advocates.
     National Consumer Law Center (on behalf of its low-income 
     clients).
                                  ____

                                                      Credit Union


                                         National Association,

                                     Washington, DC, May 10, 2010.
     Hon. Christopher Dodd,
     Chairman, Committee on Banking, Housing and Urban Affairs, 
         U.S. Senate, Washington, DC.
     Hon. Richard Shelby,
     Ranking Member, Committee on Banking, Housing and Urban 
         Affairs, U.S. Senate, Washington, DC.
       Dear Chairman Dodd and Ranking Member Shelby: On behalf of 
     the Credit Union National Association (CUNA), I am writing in 
     opposition to the Brownback amendments (SA 3789 and SA 3790) 
     to S. 3217, the Restoring American Financial Stability Act, 
     which would exempt auto dealers from the bill. CUNA is the 
     largest credit union advocacy organization in the United 
     States, representing nearly 90 percent of America's 7,800 
     state and federally chartered credit unions and their 92 
     million members.
       As we have said from the beginning of this debate, 
     consumers of financial products provided by unregulated 
     entities need greater protections. One of the ways that the 
     legislation seeks to provide these greater protections is 
     through the creation of the Bureau of Consumer Financial 
     Protection (BCFP), which is intended to be the exclusive 
     federal rulemaking entity for laws designed to protect 
     consumers of financial products. Excluding any non-depository 
     institution provider of financial products, including auto 
     dealers, from the rules promulgated by the BCFP would defeat 
     the purpose of creating the new consumer regulator, would put 
     credit unions at a competitive disadvantage in the new 
     regulatory regime, and could cause confusion for consumers of 
     financial products.
       We encourage the Senate to reject amendments, including the 
     Brownback amendments, which would upset the balance of the 
     consumer protection title by exempting any currently 
     unregulated providers of financial services from the Bureau's 
     rules.
       On behalf of America's credit unions, thank you very much 
     for your consideration.
           Sincerely,
                                                   Daniel A. Mica,
     President & CEO.
                                  ____



                                        Secretary of the Army,

                                     Washington, DC, May 12, 2010.
     Hon. Christopher Dodd,
     Chairman, Committee on Banking, Housing and Urban Affairs, 
         U.S. Senate, Washington, DC.
       Dear Mr. Chairman: I am writing regarding the legislation 
     before the Senate which would establish the Consumer 
     Financial Protection Agency (CFPA) and delineate the limits 
     of its authority.
       I understand that an amendment may soon be introduced that 
     would exempt automobile dealerships from any financial 
     oversight under the CFPA. The Army would have strong concerns 
     with any such amendments.
       Over the years, many of our Soldiers have fallen victim to 
     predatory lending practices and have entered into contracts 
     for prohibitively expensive financial products promoted by 
     some unscrupulous car dealerships and lenders. Though the 
     Army does educate our Soldiers about buying cars in our 
     normal financial education curriculum, the fact remains that 
     junior enlisted Soldiers--many of whom are drawing a regular 
     paycheck for the first time in their lives and are 
     inexperienced in financial matters--remain an easy target for 
     dishonest brokers. We owe them the protection and oversight 
     that would be afforded by the CFPA.
       In an era of persistent conflict and multiple deployments, 
     our Soldiers and their Families are under increasing stress. 
     In surveys conducted by the Department of Defense, finances 
     rank among the primary causes of stress for most military 
     Families. As auto loans are often the most significant 
     financial obligations of our Soldiers--particularly within 
     the junior enlisted grades--we believe that greater 
     government oversight of auto financing and sales for our 
     Soldiers will help protect them and reduce unnecessary 
     financial strain on our already overburdened Army Families.
       Soldiers who are distracted by financial issues at home are 
     not fully focused on fighting the enemy, thereby decreasing 
     mission readiness. Protection from unprincipled auto lending 
     enables our Soldiers to concentrate on their primary 
     mission--protecting our great Nation.
       Thank you for your continued support of our Soldiers and 
     their Families.
           Sincerely,
     John M. McHugh.
                                  ____



                                  National Council of La Raza,

                                     Washington, DC, May 12, 2010.
     U.S. Senate,
     Washington, DC.
       Dear Senator: On behalf of the National Council of La Raza 
     (NCLR)--the largest national Latino civil rights and advocacy 
     organization in the United States--I urge you to oppose 
     Senator Carper's (D-DE) Amendment #3949 to the ``Restoring 
     American Financial Security Act of 2010'' (S. 3217). 
     Amendment #3949 undermines sustainable and meaningful 
     consumer protection. We call on the Senate to vote for 
     ordinary families who benefit from having extra cops on the 
     beat, rather than for banks seeking to avoid enforcement for 
     violations of consumer protection, equal credit, and fair 
     lending laws.
       Communities of color have been hit hard by predatory 
     lending in all forms. Now our families are struggling with 
     rising household debt, record-high foreclosure rates, and the 
     erosion of their financial safety net. They need a strong 
     Consumer Financial Protection Bureau (CFPB) to level the 
     playing field by enforcing our nation's consumer protection 
     laws. Moreover, since individuals will not have a right to 
     enforce the CFPB rules themselves, they will need law 
     enforcement, including their state attorneys general, to 
     enforce the rules.
       The Carper amendment raises two serious concerns:
       1. Attorney General Enforcement--The amendment takes state 
     cops off the predatory lending beat, weakening the already 
     compromised enforcement provisions in the bill. It would 
     prevent state attorneys general from enforcing CFPB rules 
     against national banks and federal thrifts and could weaken 
     their ability to enforce other laws. Under another provision 
     of the bill, the CFPB will have no enforcement authority 
     against 98% of banks, making it that much more critical that 
     attorneys general be able to enforce the federal rules on 
     behalf of the state's residents. This amendment would leave 
     enforcement for most banks entirely up to bank regulators, 
     whose lax enforcement led to this crisis in the first place.
       2. State Law Preemption--The amendment would prevent states 
     from addressing new bank abuses not yet covered by federal 
     protection before they spread nationally. It would remove a 
     critical provision that requires the Office of the 
     Comptroller of the Currency (OCC) to consider whether a state 
     law addresses problems not covered by federal law before it 
     gives banks a free pass to ignore that law. The Senate 
     compromise provision in the bill already gives the OCC, an 
     agency with a history of open hostility to consumer 
     protection, far too much power to wipe out state consumer 
     protection laws. The provision should not be weakened 
     further.
       States are first responders that can stop local abuses from 
     spreading to become a national problem. Their laws are most 
     important when there is a gap in federal law. Moreover, 
     before bringing an enforcement action, attorneys general 
     already must consult with the CFPB and bank regulators, and 
     the CFPB may intervene or clarify its rules, ensuring 
     consistency in enforcement standards.
       Anyone who violates the law should be held accountable. Do 
     not give banks that violate specific CFPB rules a special 
     pass against vigilant enforcement. Should you have any 
     questions, please contact Graciela Aponte, Wealth-Building 
     Legislative Analyst.
           Sincerely,
                                                    Janet Murguia,
                                                President and CEO.

  The PRESIDING OFFICER. The Senator from Kansas.
  Mr. BROWNBACK. Mr. President, well, if this motion to instruct did 
what Senator Dodd had suggested, I would probably vote against it as 
well. It does not.
  I appreciate my colleague from Connecticut, who is obviously a great 
persuader, does a great job, and whom I share a great friendship with 
and great admiration for and who has served this body very well.
  The problem is, if we have three places sitting here--we have a 
community banker, we have a credit union, and we have an auto dealer--
all three are still covered. They are all three still covered if they 
make the loan. If they originate, if they make the loan, they put the 
money out there, all three are covered.
  What we are saying in this motion is, if it is your money that you 
are loaning, you are covered. But if you are simply writing paper or 
trying to help someone upstream and options for the person who is 
coming in and you are saying: We have option A, B or C, from this 
credit union, from that bank or from GMAC, whichever it may be, they 
are not covered.
  The authors of the bill want to put belts and suspenders on auto 
financing. Why would we double regulate in this particular area when we 
are already going to have the cost and the burden of doing it? And on 
top of all that, we already have a set of regulations in this field.
  My colleague talked about yo-yo and bait-and-switch financing. They 
are illegal at the State level now. State attorneys general are going 
after these people now, and they should, particularly if it targets 
military personnel. That person who walks into a dealership in my State 
or some other State

[[Page S4136]]

will be covered by the Consumer Financial Protection Bureau. It is 
going to be at an upstream location, but it is covered. One hundred 
percent of them are covered. Why would we put this extra cost and 
expense on the retail operation that is not loaning the money? They are 
not doing this.
  If my colleagues are concerned about this area, do this. If they are 
concerned about having overregulation and overreach by Washington, 
support my motion. The loan is still covered, and we are not having 
this double coverage of belts and suspenders on auto loans that is 
going to hurt the ability of people to get loans, and it is going to 
drive up the cost of auto financing. It is going to hurt Main Street 
businesses that we lost 1,700 of last year and that lost us 88,000 
jobs. I thought this bill was targeted at Wall Street, not at Main 
Street where we didn't have this problem going on. We haven't had this 
problem within auto loans as far as causing the financial meltdown. The 
regulation is already there. The regulation will be there. This extra 
regulation is not needed.
  I ask my colleagues to support Main Street on this one. Support the 
local auto dealers out there, those who are working with the community, 
trying to help the community thrive and survive, instead of putting a 
double dose of regulation on top of them that is going to hurt the 
business, hurt auto sales, hurt financing opportunities.
  I urge support for the Brownback motion.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. DODD. All time has expired on Brownback?
  The PRESIDING OFFICER. All time has expired.


                      Motion to Instruct Conferees

  Mrs. HUTCHISON. I call up the Hutchison-Hagan motion to instruct 
conferees.
  The PRESIDING OFFICER. The clerk will report the motion.
  The assistant legislative clerk read as follows:


                      Motion to instruct conferees

       The Senator from Texas (Mrs. Hutchison) moves that the 
     managers on the part of the Senate at the conference on the 
     disagreeing votes of the two Houses on H.R. 4173 (the 
     Restoring American Financial Stability Act) be instructed to 
     insist that the final conference report ensure that 
     proprietary trading restrictions do not prevent insurance 
     company affiliates of depository institutions from engaging 
     in such trading as part of the ordinary business of 
     insurance, especially insurance company affiliates serving 
     military service members and their families, as such 
     restrictions would result in higher costs and significant 
     inconveniences to those sacrificing in service to our 
     country.

  The PRESIDING OFFICER. The Senator is recognized for 10 minutes.
  Mrs. HUTCHISON. I ask to be notified at the end of 5 minutes so I may 
yield the floor to Senator Hagan for the rest of the time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. HUTCHISON. Mr. President, the Hutchison-Hagan motion to instruct 
is trying to narrow the definition that falls under the Volcker rule 
and the underlying bill. I believe our amendment would have passed 
overwhelmingly if we had been able to get it up before cloture was 
invoked. I appreciate there was a lot going on last week, but this is 
the way we hope to be able to assure that our amendment is a part of 
the final bill. The Volcker rule contained in the measure before us 
seeks to restrict or ban risky proprietary trading at depository 
institutions. As currently written, the rule brings about some 
unintended consequences that could be disastrous for our financial 
system and to a special class of customers--American service men and 
women. The major problem with the current language is that its reach 
extends beyond the bounds of the depository institution to a bank's 
affiliates and subsidiaries, including insurance companies. For 
diversified financial institutions that serve as one-stop shops of 
banking and insurance products, especially those serving our military 
service men and women and their families, the extension of the Volcker 
rule's proprietary trading restrictions to a depository institution's 
insurance company affiliates threatens their ability to address the 
special financial needs of the U.S. military community. The Hutchison-
Hagan motion to instruct conferees seeks to ensure that the Volcker 
rule's proprietary trading restrictions do not extend to the normal 
operations of insurance affiliates of insured depository institutions 
so that we can preserve convenient access to the full spectrum of 
financial services for the U.S. military community.
  It is important to note that the proprietary trading that insurance 
entities engage in is significantly different from the proprietary 
trading that is the target of the Volcker rule.
  First, insurance companies use premiums to fund trades, not customer 
deposits. Thus, insurers are trading their own funds, not those of 
depositors. Insurance company trades are generally low risk, focus on 
long-term payment of claims and profitability, and are already heavily 
regulated by State insurance regulators. Simply put: Proprietary 
trading is essential to the life insurance and property and casualty 
insurance business. Proprietary trading is what allows insurers to 
offer annuities and other insurance products that can protect consumers 
in the long term.
  The motion to instruct is narrowly drafted. We have worked with the 
majority staff as well as the minority staff of the Banking Committee 
to assure that the drafting is in line with what we all intend to do. 
It doesn't speak to the Volcker rule's impact on depository 
institutions at all. It merely seeks to allow regulated insurance 
entities to continue to operate as they currently do in a manner that 
ensures payment of claims and annuities for years to come.
  I urge my colleagues to support the Hutchison-Hagan motion. We have 
worked on this for several weeks together. I believe this bipartisan 
motion to instruct will be overwhelmingly approved because so many 
people have heard from their constituents.
  I ask unanimous consent to have printed in the Record a letter from 
the Non Commissioned Officers Association of the United States of 
America, the Air Force Sergeants Association, the Naval Enlisted 
Reserve Association, and the TIAA CREF, a national financial services 
organization dedicated to serving the financial needs of those who work 
in the academic, medical, and cultural fields, all in support of our 
amendment and our motion to instruct.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         Non Commissioned Officers Association of the United 
           States of America,
                                           Selma, TX, May 3, 2010.
     Hon. Christopher Dodd,
     Chairman, Committee on Banking, Housing and Urban Affairs, 
         U.S. Senate, Washington, DC.
     Hon. Richard C. Shelby,
     Ranking Member, Committee on Banking, Housing and Urban 
         Affairs, U.S. Senate, Washington, DC.
       Dear Chairman Dodd and Ranking Member Shelby: I write on 
     behalf of the Non Commissioned Officers Association of the 
     United States of America (NCOA), representing active duty, 
     enlisted service members of all military services, the United 
     States Coast Guard, associated Guard and Reserve Forces, 
     retirees and veterans of all components. NCOA has strong 
     concerns regarding the impact of the Restoring American 
     Financial Stability Act of 2010's (S. 3217) ``Volcker Rule'' 
     provisions on NCOA members and for that matter, the entire 
     U.S. military community.
       NCOA is dedicated to providing for service members and 
     their families through every stage of their military career 
     from enlistment to eventual separation, retirement and 
     continuing to provide services to veterans' surviving family 
     members. We understand and respect the achievements and 
     sacrifices made by all service members and their families and 
     are committed to ensuring that the military community has 
     access to the ``one stop shop'' providers of financial 
     services necessary to address their unique banking and 
     insurance needs. This ease of access to essential financial 
     resources is crucial to minimize the financial stresses and 
     other burdens accompanying military life.
       S. 3217's Volcker Rule, as currently proposed, threatens 
     this essential access to one stop shop providers of financial 
     services for NCOA members and their families. Limiting thc 
     provision's proprietary trading restrictions by excluding the 
     insurance affiliates of insured depository institutions is 
     necessary to maintain access to financial products and 
     services that meet the unique needs of the military 
     community. Making this small change to the Volcker Rule 
     language will ensure that the financial stability of enlisted 
     service members and their families is not put in jeopardy. 
     Thank you for your thoughtful consideration of this issue and 
     its

[[Page S4137]]

     impact on NCOA members and the entire U.S. military 
     community.
           Sincerely,

                                           H. Gene Overstreet,

                                        12th Sergeant Major of the
     United States Marine Corps (Ret.), President.
                                  ____

                                                         Air Force


                                        Sergeants Association,

                                 Temple Hills, MD, April 29, 2010.
     Hon. Christopher Dodd,
     Chairman, Committee on Banking, Housing, and Urban Affairs, 
         U.S. Senate, Washington, DC.
     Hon. Richard C. Shelby,
     Ranking Member, Committee on Banking, Housing and Urban 
         Affairs, U.S. Senate, Washington, DC.
       Dear Chairman Dodd and Ranking Member Shelby: I am writing 
     on behalf of the Air Force Sergeants Association (AFSA), the 
     global, 120,000 member strong organization dedicated to all 
     enlisted grades of Air Force Active Duty, Air National Guard, 
     and Air Force Reserve Command, retired, veteran and family 
     members. AFSA has strong concerns regarding the impact of the 
     so called ``Volcker Rule'' provisions in the American 
     Financial Stability Act of 2010, S. 3217, on AFSA members and 
     the entire enlisted military community.
       AFSA members and their families have made many sacrifices 
     in order to invest their lives in the cause of freedom. They 
     require access to ``one stop shop'' providers of financial 
     services to address their unique banking and insurance needs. 
     Ease of access to essential financial resources is 
     particularly crucial today as our American military community 
     faces the financial stresses and other burdens accompanying 
     multiple deployments and frequent and costly relocations 
     during times of active conflict. S. 3217's Volcker Rule 
     provisions, as currently drafted, will prevent financial 
     services providers from offering both banking and insurance 
     products to AFSA members and their families tailored to their 
     specific financial needs.
       Making a small change to the bill's current language to 
     ensure the Volcker Rule's proprietary trading restrictions 
     are not extended to the insurance affiliates of insured 
     depository institutions would allow one stop shop providers 
     of financial products and services to continue meeting the 
     unique needs of the military community. If the language is 
     not corrected, this ease of access to important financial 
     resources by American servicemen, women and their families 
     will be in jeopardy. Thank you for your thoughtful 
     consideration of this issue and its impact on AFSA's 
     membership and the entire U.S. military community.
           Sincerely,

                                    John R. ``Doc'' McCauslin,

     CMSgt, USAF, Retired, Chief Executive Officer.
                                  ____



                           Naval Enlisted Reserve Association,

                                    Falls Church, VA, May 5, 2010.
     Hon. Christopher Dodd,
     Chairman, Committee on Banking, Housing and Urban Affairs, 
         U.S. Senate, Washington, DC.
     Hon. Richard C. Shelby,
     Ranking Member, Committee on Banking, Housing and Urban 
         Affairs, U.S. Senate, Washington, DC.
       Dear Chairman Dodd and Ranking Member Shelby: I am writing 
     on behalf of the Naval Enlisted Reserve Association (NERA), a 
     voluntary, nonprofit organization of active duty and retired 
     enlisted reservists and other dedicated persons committed to 
     promoting and maintaining the Navy Reserve, United States 
     Marine Corps Reserve, and United States Coast Guard Reserve. 
     NERA has strong concerns regarding the impact of the 
     Restoring American Financial Stability Act of 2010's (S. 
     3217) ``Volcker Rule'' provisions on NERA members and the 
     entire U.S. military community.
       NERA is dedicated to protecting the individual rights, 
     benefits, and privileges our American servicemen and women 
     have earned through their commitment to military service and 
     their access to ``one stop shop'' providers of financial 
     services that understand their unique banking and insurance 
     needs. Ease of access to essential financial resources for 
     active duty and retired enlisted reservists and their 
     families is crucial to minimizing the financial stresses and 
     other burdens accompanying military life.
       S. 3217's Volcker Rule provisions, as currently drafted, 
     threaten this essential access to comprehensive financial 
     services for NERA members and the entire enlisted community. 
     Making a small change to the Volcker Rule language to ensure 
     that the proprietary trading restrictions are not extended to 
     the insurance affiliates of insured depository, institutions 
     would allow one stop shop providers of financial products and 
     services to continue meeting the financial needs of NERA 
     members and their families.
       If the Volcker Rule language is not corrected, the entire 
     military community's access to essential financial resources 
     will be in jeopardy. Thank you for your thoughtful 
     consideration of this issue.
           Sincerely,

                                     Senior Chief Nick Marine,

                                                  U.S. Navy (Ret.)
     National President.
                                  ____



                                                    TIAA-CREF,

                                     Washington, DC, May 24, 2010.
     Hon. Kay Bailey Hutchison,
      U.S. Senate,
     Washington DC.
       Dear Senator Hutchison: On behalf of TIAA-CREF, a national 
     financial services organization dedicated to serving the 
     financial needs of those who work in the academic, medical, 
     and cultural fields, I write to express our support for your 
     amendment (SA 4055) to the financial services regulatory 
     reform legislation, which is likely to be offered as a motion 
     to instruct conferees on Monday, May 24th.
       TIAA-CREF is pleased to serve 3.7 million individual 
     participants, and we endeavor to assist them to and through 
     retirement. Passage of your amendment will send a strong 
     message that insurers should continue to be able to make 
     appropriate investments on behalf of their participants to 
     adequately provide for their retirement savings.
       Thank you for proposing this significant improvement to the 
     legislation. If our company can be of additional assistance 
     to you or your staff in this endeavor, please do not hesitate 
     to contact me or Langston Emerson, Director of Federal 
     Government Relations.
           Sincerely,
                                                 Daniel J. Keniry,
                      Senior Vice President, Government Relations.

  The PRESIDING OFFICER. The Senator from North Carolina.
  Mrs. HAGAN. Mr. President, I rise in support of the motion to 
instruct offered by my colleague from Texas, Senator Hutchison. I thank 
the Senator from Texas for her leadership on this issue of importance 
to members of the military in our States and across the country. 
Section 619 of the Restoring American Financial Stability Act of 2010 
bans certain activities not only at depository institutions but also at 
bank affiliates, including insurance affiliates. In doing so, section 
619 inadvertently jeopardizes access to the important financial 
resources offered by diversified financial institutions to service men 
and women and their families. Section 619 bans proprietary trading, but 
proprietary trading by insurance entities is significantly different 
than the risk that comes with banks' proprietary trading. Insurance 
companies use premiums to trade funds, not the consumer deposits that 
this provision targets. Insurance trades are generally low risk and 
focus on long-term payment of claims and are already heavily regulated 
by State insurance regulators.
  Servicemembers and their families rely on the ability of diversified 
financial service firms to provide both insurance and banking services 
under one roof. I am concerned that section 619 may force military 
members to change their current financial service providers and 
possibly subject the service men and women to unnecessary cost and 
burdens. That is why Senator Hutchison and I have worked for several 
weeks to correct this oversight, and why I introduced amendment 3799 
with Senators Hutchison, Carper, Cornyn, Begich, Webb, Burr, and 
Isakson. Amendment 3799 was a narrow change that addressed the issue. 
To my knowledge, it was not opposed by anyone. While amendment 3799 was 
not voted on, Senator Hutchison's motion to instruct provides clear 
guidance to the conferees to ensure that proprietary trading 
restrictions do not prevent insurance company affiliates of depository 
institutions from engaging in such trading as part of the ordinary 
business of insurance.
  It is critical that we adopt this motion so that diversified 
financial institutions may continue to provide low-cost and convenient 
access to diversified financial services for those sacrificing in 
service to our country. I urge my colleagues to vote yes on this 
motion.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, I commend both of my colleagues, Senator 
Hutchison and Senator Hagan, my good friends from Texas and North 
Carolina. They have done a great job and deserve our thanks for the 
work they have put into this proposal. I am supportive of the motion to 
instruct. As a conferee, I will have something to say about this, I 
presume, in the conference. I thank them for their efforts. They have 
laid this out pretty well. I don't need to take a lot of time. I have 
some further remarks that lay out why I think this is a good proposal. 
I appreciate very much their efforts in this regard.
  I am prepared to yield back time on this matter and urge colleagues 
to support the Hutchison-Hagan motion to the financial reform package. 
It is a good proposal, one that deserves all of our support.
  The PRESIDING OFFICER. The Senator from Texas.

[[Page S4138]]

  Mrs. HUTCHISON. Mr. President, I thank the distinguished chairman of 
the committee. He has been supportive of this amendment from the 
beginning. Senator Hagan and I can say that we have regularly 
communicated with the chairman, and maybe he would even consider that 
we have hounded him to death. But nevertheless, I know he was helping 
us all along. We worked on the drafting to assure that the language met 
both the minority and majority requirements. I am pleased he has worked 
with us on this amendment. I thank Senator Hagan as well for being such 
a staunch cosponsor of this amendment.
  I yield back my time and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  Mr. DODD. Have the yeas and nays been ordered on both motions?
  The PRESIDING OFFICER. They have not.
  Mr. DODD. I don't see my colleague from Kansas but I know he wants 
the yeas and nays.
  I ask for the yeas and nays on the Brownback motion.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. DODD. I ask for the yeas and nays on the Hutchison-Hagan motion.
  The PRESIDING OFFICER. Is there a sufficient second? There appears to 
be a sufficient second.
  The yeas and nays were ordered.
  Mrs. HUTCHISON. Mr. President, I ask the distinguished chairman, when 
we start the vote at 5:30, it will be the Brownback motion first and 
then Hutchison-Hagan.
  Mr. DODD. Brownback would come first and then the Hutchison-Hagan 
motion.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant 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.
  The question is on agreeing to the Brownback motion to instruct 
conferees.
  The yeas and nays have been ordered.
  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), the Senator from Arkansas (Mrs. Lincoln), the Senator from 
Missouri (Mrs. McCaskill), the Senator from Oregon (Mr. Merkley), the 
Senator from New York (Mr. Schumer), and the Senator from Virginia (Mr. 
Warner) are necessarily absent.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Georgia (Mr. Chambliss), the Senator from Oklahoma (Mr. Coburn), 
the Senator from Georgia (Mr. Isakson) and the Senator from Mississippi 
(Mr. Wicker).
  The PRESIDING OFFICER (Mrs. Shaheen). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 60, nays 30, as follows:

                      [Rollcall Vote No. 163 Leg.]

                                YEAS--60

     Alexander
     Barrasso
     Bayh
     Begich
     Bennett
     Bond
     Boxer
     Brown (MA)
     Brownback
     Bunning
     Burr
     Cardin
     Cochran
     Collins
     Conrad
     Corker
     Cornyn
     Crapo
     DeMint
     Ensign
     Enzi
     Graham
     Grassley
     Gregg
     Hagan
     Hatch
     Hutchison
     Inhofe
     Johanns
     Kerry
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     LeMieux
     Lieberman
     Lugar
     McCain
     McConnell
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (NE)
     Nelson (FL)
     Pryor
     Reid
     Risch
     Roberts
     Rockefeller
     Sessions
     Shaheen
     Shelby
     Snowe
     Specter
     Thune
     Vitter
     Voinovich
     Wyden

                                NAYS--30

     Akaka
     Baucus
     Bennet
     Bingaman
     Brown (OH)
     Burris
     Cantwell
     Carper
     Casey
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Franken
     Gillibrand
     Harkin
     Inouye
     Johnson
     Kaufman
     Leahy
     Levin
     Reed
     Sanders
     Stabenow
     Tester
     Udall (CO)
     Udall (NM)
     Webb
     Whitehouse

                             NOT VOTING--10

     Byrd
     Chambliss
     Coburn
     Isakson
     Lincoln
     McCaskill
     Merkley
     Schumer
     Warner
     Wicker
  The motion was agreed to.
  Mr. BROWNBACK. Madam President, I move to reconsider the vote, and I 
move to lay that motion on the table.
  The motion to lay on the table was agreed to.

                          ____________________