[Congressional Record Volume 156, Number 100 (Wednesday, June 30, 2010)]
[Pages H5233-H5261]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                        CONSUMER PROTECTION ACT

  Mr. FRANK of Massachusetts. Mr. Speaker, pursuant to House Resolution 
1490, I call up the conference report on the bill (H.R. 4173) to 
provide for financial regulatory reform, to protect consumers and 
investors, to enhance Federal understanding of insurance issues, to 
regulate the over-the-counter derivatives markets, and for other 
purposes, and ask for its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 1490, the 
conference report is considered read.
  (For conference report and statement, see proceedings of the House of 
June 29, 2010, book II.)
  The SPEAKER pro tempore. The gentleman from Massachusetts (Mr. Frank) 
and the gentleman from Alabama (Mr. Bachus) each will control 60 
  The Chair recognizes the gentleman from Massachusetts.

                             General Leave

  Mr. FRANK of Massachusetts. Mr. Speaker, at the outset I ask 
unanimous consent that all Members have 5 legislative days in which to 
revise and extend their remarks on this matter.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  Mr. FRANK of Massachusetts. Mr. Speaker, to begin, I want to yield 
for a colloquy 3 minutes to one of the leaders in the House and 
certainly in our committee in forging this particular legislation and 
in fighting to make sure that fairness is done throughout all of our 
efforts, the gentlewoman from California (Ms. Waters).
  Ms. WATERS. Mr. Speaker, Members, I would like to begin by thanking 
the chair of the Financial Services Committee, my colleague, Mr. Barney 
Frank, for the leadership that he has provided in bringing us to this 
point in doing regulatory reform. There were times I thought it would 
never happen, but because of his brilliance, and because of his 
leadership, and because of his ability to listen to all of the Members 
who serve not only on that committee but on the conference committee, 
we finds ourselves here.
  But I would like at this point in time to engage my chairman to make 
sure that I understand one particular word that was used in this 
conference committee report.
  So if I may make an inquiry of the gentleman from Massachusetts. I'm 
trying to understand the meaning of the world ``initiated'' in 
paragraph 5 of the conference report. Would ``initiated'' include any 
program or initiative that has been announced by Treasury prior to June 
25, 2010? And if so, I assume that that means that programs such as the 
FHA refinance program, which would address the problem of negative 
equity and which I understand Treasury and the FHA are working on but 
is not yet publicly available, would be included as would the Hardest 
Hit Fund program, which is not fully implemented yet.
  And this would not prevent, for example, within the $50 billion 
already allocated for HAMP, perhaps adjusting resources between 
already-initiated programs based on their effectiveness.
  Mr. FRANK of Massachusetts. If the gentlewoman would yield.
  The answer is a resounding yes. And I certainly have been following 
her leadership in trying to make sure that these programs do more than 
many of them have done.
  So the answer to her question is yes. Nothing new can be started 
after June 25, but it does not reach back and strangle in the cradle 
those programs that were under way. I confirm that the conference 
report would not prevent adjusting resources between already initiated 
programs based on their effectiveness.
  Ms. WATERS. Thank you. I appreciate that.
  Mr. BACHUS. Mr. Speaker, I yield myself 5 minutes.
  Mr. Speaker, today I would like to address the good, the bad, and the 
ugly in this bill.
  The good: There is consumer protection. There is more disclosure and 
transparency. There are some bipartisan provisions in this bill that 
add a whistleblower office to the SEC. But the bad and the ugly far 
outweigh those.
  In total, this bill is a massive intrusion of Federal Government into 
the lives of every American. It is the financial services equivalent of 
ObamaCare, the government takeover of our health care system.

                              {time}  1540

  If finally enacted, it will move us further toward a managed economy, 
with the Federal Government's making decisions that have been and 
should stay

[[Page H5234]]

in the hands of individuals and private businesses.
  For instance, it will make the compensation of every employee of a 
financial firm subject to rules set by a government overseer. Can you 
imagine anything as basic as what an employer pays an employee 
controlled by a Federal bureaucrat in Washington? It will even apply to 
clerical employees. Government regulators will be empowered to seize 
and break up even healthy firms they decide are systemic risks and to 
even appoint new management to run these private companies.
  As I said on the floor earlier today, this bill will institutionalize 
AIG-type bailouts of creditors and counterparties, and it will saddle 
taxpayers with the losses resulting from out-of-control risk-taking by 
Wall Street institutions--gamblers. My colleagues on the other side of 
the aisle will tell you this bill does not include a bailout fund. They 
are wrong.
  As I explained earlier, here it is, laid out. You can lend money to a 
failing company. Now, how do you get money back from a failing company? 
You can purchase their assets. You can guarantee their obligations. You 
can sell or transfer their assets. It is there.
  What does this cost?
  As I explained earlier, the FDIC can borrow up to 90 percent of a 
firm's assets. That's $2 trillion in the case of Bank of America alone. 
They could borrow $2.1 trillion in that case alone. That is a bailout 
fund, period.
  Not only will it make bailouts permanent, but it will empower 
government employees to go around settled bankruptcy law in so-called 
``resolutions,'' done behind closed doors, with unequal treatment of 
creditors at the whim of politically influenced government officials. 
This has already happened. A financial firm's ability to survive a 
crisis like the one we went through 2 years ago will depend, as it did 
then, on whether its CEO can get the President of the New York Fed on 
the phone on a Saturday night, as one firm did. Friendships and being 
well-connected should not determine the success or failure of private 
  Finally, it imposes an $11 billion tax disguised as an FDIC 
assessment. To fund this new government spending, they tax Main Street 
banks and financial institutions. They raise their FDIC premiums even 
though those premiums would go to bail out Wall Street firms and not to 
save depositors, as the system was designed to do.
  Mr. Speaker, if you voted against this bill on the floor, if you 
voted against it in committee, you need to vote against it again, 
because it is even worse than when it came out of the House.
  We have seen the anger and frustration generated by the injustice of 
too-big-to-fail bailouts. We have seen the folly of implied guarantees 
as with Fannie and Freddie. We have seen, time after time, the failure 
of government-run schemes to create jobs and to grow the real economy. 
Nevertheless, here the majority party is again, doing the same thing 
over and over, blindly hoping that, suddenly, this time, they will get 
a different result. Well, you're right. The American people are 
demanding a different result, and in a series of recent elections, they 
have told incumbents to go home and to spend their own money, not 
theirs--not the taxpayers'.
  In conclusion, if you choose to bail out the creditors and 
counterparties of the big Wall Street firms or to loan them money when 
they get in trouble, don't expect the voters to bail you out come 
  I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as 
I may consume to correct a very incomplete picture that was just given.
  The gentleman keeps quoting that one section. I'm astonished--
astonished--that he quotes it so blatantly out of context. Yes, there 
are powers that are given. Clearly, in the bill, it is only once the 
entity has been put into receivership on its way to liquidation.
  The gentleman from Alabama has several times today talked about the 
powers as if they were just randomly given. I will be distributing the 
entirety of this, and it is the most distorted picture of a bill I have 
seen. The title, by the way, is headed: Orderly Liquidation of Current 
Financial Companies. The purpose of this title is to provide the 
necessary authority to liquidate failing financial companies. Again, I 
am astonished that he would not give the Members the full picture that 
comes as part of a subtitle that reads: Funding for Orderly 
  Mr. BACHUS. Will the gentleman yield?
  Mr. FRANK of Massachusetts. Yes.
  Mr. BACHUS. When I say they shouldn't bail out the creditors and 
counterparties, I don't care whether they are in receivership or not. 
They should not bail them out, period.
  Mr. FRANK of Massachusetts. Reclaiming my time, Mr. Speaker, please, 
let's get this started on the right point. Instruct the gentleman as to 
the rules. I thought he was going to ask me about what I said.
  He has consistently read a part of this section, leaving out the part 
that would help Members understand it. He didn't say what he just said. 
He said he read these as if they were there in general. The powers he 
talked about come in the subsets of the section: Funding for Orderly 
  Those powers are just upon the appointment of a receiver. So this is 
not to keep an institution going. This is not AIG. Yes, he can be 
critical about the Bush administration on its own, without Congress, 
with regard to AIG. We repeal in this bill the power under which they 
acted and with the Federal Reserve's concurrence. By the way, it also 
says in here that those powers are subject to section 206.
  Again, I don't know why the gentleman--I guess I do know why they 
would want to read this, but let me read it because it corrects 
entirely the wholly inaccurate picture he gave people. The actions that 
he read can be taken if the corporation determines mandatory terms and 
conditions for all orderly liquidation actions.
  AIG was kept alive. This cannot be kept alive. This happens only as 
the death of the institution comes. He may think the Bush 
administration picked its friends. I think he is being unfair to Mr. 
Bernanke. I think he is being unfair to Mr. Paulson and Mr. Geithner. 
Anyway, here are the rules they would have to follow:
  First, they would have to determine that such action is necessary for 
purposes of the financial stability and not for the purpose of 
preserving the covered company.
  Two, they would have to ensure that the shareholders do not receive 
payment until the claims are paid.
  They would have to ensure that unsecured creditors bear losses in 
accordance with the priority of claims in section 210. That is the 
  They would have to ensure that the management is removed, and they 
would have to ensure that the members of the board of directors are 
  So it is quite the opposite of what the gentleman talked about. It 
says that, if an institution has gotten so indebted that it should not 
be able to pay its debts, we would step in, and we would put it out of 
business. It is totally different from what happened with AIG. It does 
then say, yes, in some circumstances, there may be an ability to do 
these things but only after the institution has been liquidated.
  The gentleman never mentioned that. The gentleman talks about it and 
talks about it, and he never mentions that this is only as the 
institution is being put out of business. It is also very clear 
elsewhere in here that any funds expended will come from the financial 
institutions, not from the taxpayers.
  Now, we had a good piece of legislation that we had adopted in 
conference in order to try to do that here. Unfortunately, to get the 
Republican votes necessary in the Senate for an otherwise very good 
bill, we had to back that down, but it didn't change in here.
  So, yes, there are provisions that the gentleman read, but unlike the 
way he presented them, they don't stand by themselves. They come only 
after it has been determined by the administration in power that the 
financial stability of the company requires, first, that the company be 
liquidated and, second, that some attention be given to its debts, but 
it will be funding out of the other financial institutions, not from 
the taxpayers.
  I reserve the balance of my time.
  Mr. BACHUS. At this time, I yield 3 minutes to the gentleman from 
Texas (Mr. Smith), the ranking member of the Judiciary.

[[Page H5235]]

  Mr. SMITH of Texas. I thank the ranking member, the gentleman from 
Alabama, for yielding.
  Mr. Speaker, over a long history rooted in our Constitution, we have 
relied on the rule of law and on impartial bankruptcy courts to resolve 
the debts of failed enterprises. History has proven us correct.
  Exhibit 1, for the benefits of the bankruptcy system, is the recent 
case of Lehman Brothers. As the peak of the 2008 financial crisis 
approached, Lehman declared bankruptcy. Within a week, it had sold its 
core business. Within 6 weeks, its third-party credit default swaps had 
been dissolved. That sealed off risk to other firms.
  Experts have shown that the Lehman case didn't cause the financial 
system to melt down. This bill discards our proven bankruptcy system 
for something the American people forcefully reject: government-
sponsored bailouts. The roller coaster bailout ride of 2008 is what 
caused the financial meltdown. Yet this bill just builds a bigger, 
faster bailout roller coaster. The bill's sponsors openly admit that 
they don't know if it will work, but they urge us to build it anyway.

                              {time}  1550

  The question is why, and the answer is simple: When government picks 
the winners and losers, government becomes more powerful. So do the 
Wall Street winners that government picks. Meanwhile, Main Street and 
free enterprise lose.
  This administration and its congressional allies embrace what the 
Founders fought against, ever-expanding government power over the lives 
of free men and women. The Founders rejected this approach, the 
American people reject it, and so should we.
  Mr. FRANK of Massachusetts. Mr. Speaker, producing this legislation 
has been one of the most impressive team efforts in which I have ever 
participated, and an indispensable member of the team going back to the 
early part of this century and his concern for mortgage lending and 
fairness in the rules is the gentleman from North Carolina (Mr. Watt) 
to whom I yield 3 minutes.
  Mr. WATT. Mr. Speaker, I want to thank my colleague for the time and 
for his leadership in this tremendous effort.
  I would like to spend some time just challenging a notion that is out 
there that this whole meltdown was unforeseeable by anybody, that 
nobody could have foreseen it, and dispel that notion by understanding 
that on March 16, 2004, the first anti-predatory lending bill was 
introduced in this House of Representatives by Brad Miller of North 
Carolina and myself. We saw forthcoming the possibility of this 
substantial meltdown, because we knew that predatory loans were out 
there being made to people who could not afford to pay them back.
  Again, on March 9, 2005, in the 109th Congress we reintroduced the 
bill, the anti-predatory lending bill. On October 22, 2007, we 
reintroduced the anti-predatory lending bill in the 110th Congress. 
Finally, finally, in this term of Congress, on March 26, 2009, we 
reintroduced it for a fourth time, and finally it is incorporated into 
this legislation.
  Now, why is that important? It for the first time puts around loans 
some prudential rules that say you ought to exercise some common sense 
when you make a loan to somebody.
  Don't do a loan to people without proper documentation of their 
income. Don't give them a teaser rate for six months and then escalate 
it by two or three percentage points and increase their fees and their 
payments exponentially so that they can't pay it back. Don't give them 
yield spread premiums that reward the people who get people into the 
worst kind of loans, rather than giving them the best loans available. 
Don't charge a prepayment penalty for allowing somebody to get out of a 
higher interest rate into a lower interest rate. Make sure that when 
you refinance, somebody gets some net tangible benefit out of the 
refinance, other than the person that is making the loan. Don't allow 
people to steer to the highest interest rate and worst possible 
predatory loan when there are other loans available. Don't fail to give 
the proper disclosures about what is going on. And don't prevent the 
State Attorneys General from enforcing their own State laws, when we 
don't even have a Federal law on the books.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield the gentleman 1 
additional minute.
  Mr. WATT. All of that is in this bill. If we had had this kind of 
legislation in effect when we first started introducing it back in 
2004, we could have avoided this.
  Don't let anybody say that this was an unforeseeable chain of events 
that led to this meltdown. We need to correct it and make sure that 
going forward those kind of predatory practices never, never, never, 
never occur again in our country.
  Mr. BACHUS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Missouri (Mr. Blunt).
  Mr. BLUNT. I thank the gentleman for yielding and for the hard work 
he has done on this bill.
  Mr. Speaker, clearly the country would like to see the right things 
done for the economy. I think this bill fails to do many of the basic 
things it should have done and does the things that we shouldn't have 
  It doesn't end too-big-to-fail, Mr. Speaker. In fact, it 
institutionalizes too-big-to-fail. Treasury will be able to front money 
to wind down these failing firms, but also Treasury can decide if they 
are at risk of failure. There is way too much involvement with the 
taxpayers in coming in and doing exactly what the American taxpayers 
are tired of seeing us doing.
  The government-sponsored entities, Fannie Mae and Freddie Mac, that 
we have talked about and will talk about more on this floor today and 
have talked about for months as one of the prime causes for the 
economic problems we face, as far as I can tell, they are not 
mentioned, and if they are mentioned, Mr. Speaker, there is no reform. 
The root cause of the problem we have in the economy today was caused 
by these entities, and they are not addressed, and it was said they 
would not be addressed.
  More control, Mr. Speaker, by the Federal Reserve of more things and 
more regulation. There is a new agency under the Federal Reserve that 
will be in charge of setting new rules for the banking sector of the 
country in its entirety.
  Credit, Mr. Speaker, will not be more available. It will be less 
available. People who are in the job-creating business are already 
making announcements about what they will do as they respond to this. 
Why is that? Because this bill steps further into managing the economy. 
The government may be able to do lots of things, but making business 
decisions is not one of them. Utility companies, food processors, 
others who routinely try to protect themselves in a volatile 
marketplace will not be able to do this.
  Mr. Speaker, this bill will cost jobs at the very time we ought to be 
figuring out how to increase jobs. I hope our colleagues will turn it 
down and go back and do the right thing.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 15 seconds to 
correct the gentleman.
  We have not created a consumer bureau under the Federal Reserve. It 
will be housed in the Federal Reserve. The Federal Reserve will have no 
ability to interfere. Some on the other side wish it would. But it will 
be a fully independent consumer bureau. It will get its mail at the 
Federal Reserve, but nobody there will be able to open it.
  I now yield 4 minutes to the gentleman from Pennsylvania (Mr. 
Kanjorski), one of the leaders in putting together this bill in the 
area specifically of investor protection.
  (Mr. KANJORSKI asked and was given permission to revise and extend 
his remarks.)
  Mr. KANJORSKI. Mr. Speaker, I rise in support of the conference 
  Mr. Speaker, this is not a perfect bill, but this is a darn good 
bill. I know we are going to hear objections on both sides of the 
aisle, but if you have a chance to look at it, and it is a lengthy 
bill, the 2,600 pages that are presented to both the House today and 
within a week or so to the Senate constitutes the first revolutionary 
change of securities laws in the United States since the Great 
Depression. At that time we had a tremendous collapse, and our 
forefathers and predecessors rose to the occasion by establishing a 
regulatory platform within the United States that made us the envy of 
the world.

[[Page H5236]]

  We had in 2008 a collapse and a failure of that system. It primarily 
grew out of the failure of the regulatory system to use all the powers 
it had and to keep track with our highly speculative and greedful 
nature at the time to allow us to go into the tremendous credit crisis 
that we faced in 2008.
  To now make an argument that we need do nothing and we will recover 
and we will prosper is pure ludicrousness. The fact of the matter is 
there are holes, there are loopholes, there are failures within our 
system. We have to cleanse that system and fix that system, and that is 
exactly what this bill does.
  I am pleased to say that I had a part in doing that. I helped prepare 
one amendment, the too-big-to-fail amendment. What we can say to our 
successors and to our constituents is that never again in the future 
will there be an unlimited power for financial institutions to grow 
either in size, interconnectedness or other negative factors that they 
can remain and put in jeopardy systemically the economy of the United 
States and the world.

                              {time}  1600

  We have the authority vested in our regulators to see that that 
doesn't happen. If our regulators are able and will use those powers, 
never again will we face the too-big-to-fail concept of having to bail 
out some of the largest institutions in the world.
  Secondly, a large part of this was devoted to investor protection. I 
can't go through all the elements, but for the first time in history 
we're going to allow the regulators to study and come up with rules and 
regulations that allow a fiduciary relationship between broker-dealers, 
investment advisers, and their clients--their customers. Most people in 
this country think that already exists. It doesn't. After this bill and 
the use of those new regulations, it will. You can then trust that the 
advice being given by the broker-dealer or the investment counselor is 
in your best interest as a customer and not in theirs.
  We also call for the largest comprehensive study of the Securities 
and Exchange Commission in the history of the commission. It will put 
into place the tools necessary to revise the entire SEC in the future. 
It also will be the predicate for that type of a comprehensive study to 
be used in other agencies and commissions of government to allow us the 
long road of reform in the American government. These things are in the 
bill. Beside that, we have the capacity to require that no one in the 
future need worry about the responsibility of the companies they're 
dealing with as to whether or not they will have counterparties, 
whether they are relying on representations that are true or false, 
because we're going to have transparency within the system.
  In the other areas dealing with derivatives, we're going to have 
exchanges. We're going to have disclosure. Never has that happened in 
the history of the United States. Over the years, the last two decades, 
we have made attempts and have always failed. This time we have 
  Mr. Speaker, without reservation, I recommend to my colleagues a vote 
of ``yes'' on this bill.


  Mr. Speaker, after nearly two years of study, discussion, hearings, 
and intense legislative negotiations, we have produced a final bill 
that will considerably strengthen our financial services 
infrastructure, a system that not only underpins the American economy 
but one that also serves as a cornerstone of our global markets. This 
bill also represents the most significant overhaul of our Nation's 
financial services regulatory framework since the reforms put in place 
during the Great Depression.
  This landmark agreement touches upon nearly every corner of our 
financial markets. Among other things, this bill ends the era in which 
financial institutions can become too big to fail in several ways, 
including my provision to allow regulators to preemptively break up 
healthy financial firms that pose a grave threat to the U.S. economy. 
Additionally, the bill regulates financial derivatives for the first 
time, establishes procedures for shutting down failing financial 
companies in an orderly manner, forces the registration of hedge fund 
advisers, and holds credit rating agencies accountable through greater 
liability. This bill also greatly expands investor protections by 
setting up a fiduciary standard for broker-dealers offering 
personalized investment advice, allowing shareholders to nominate 
candidates for corporate boards, and creating a bounty program to 
reward whistleblowers whose tips lead to successful enforcement 
  Moreover, this legislation enhances the powers and resources of the 
U.S. Securities and Exchange Commission, SEC. The pending conference 
agreement also forces a comprehensive study of the way that the SEC 
operates which will lead to much needed management reforms. 
Furthermore, the conference agreement creates for the first time a 
Federal office to monitor insurance matters. Finally, this bill will 
comprehensively modify mortgage lending practices--including escrow 
procedures, mortgage servicing, and appraisal activities.
  In short, the conference report on H.R. 4173 is a very good package 
that will restructure the foundations of the U.S. financial system. It 
will enhance regulation over more products and actors, create 
additional investor protections and consumer safeguards, and promote 
greater accountability for those who work in our capital markets. For 
these reasons, I urge my colleagues to vote in favor of this momentous 

                         ENDING TOO BIG TO FAIL

  Historians will likely long argue about the causes of the 2008 credit 
crunch, but one cannot deny that one huge contributing factor was the 
failure of government regulators to rein in dangerous financial 
institutions. Giant films like American International Group, AIG, as 
well as many smaller firms, engaged in recklessly risky behavior that 
rewarded them with huge profits during the build-up of the housing 
bubble, but then nearly wiped them out as the bubble burst. Actually, 
AIG and other firms would have collapsed and our economy would have 
been sent back to the Dark Ages, except for the request of the Bush 
Administration to establish the $700 billion Troubled Asset Relief 
Program to prop up our country's teetering financial system.
  Those terrifying months in late 2008 convinced me that the Federal 
government needed to play a far more vigorous role in policing the 
activities of the major financial players in our economy. During the 
last two years, my top priority has therefore been to avoid having any 
future Congress face the same dilemma that we faced in 2008: ``bail 
out'' Wall Street to save Main Street or risk the collapse of the 
entire American economy. I decided that the most important element of 
any reform of the financial system needed to ensure that no financial 
firm could be allowed to become so big, interconnected, or risky that 
its failure would endanger the whole economy.
  In this regard, I am pleased that this legislation helps bring an end 
to the era of too-big-to-fail financial institutions in at least three 
significant ways. First, it achieves this end by establishing new 
regulatory authorities to dissolve and liquidate failing financial 
institutions in an orderly manner that protects our overall economy. 
The Obama Administration proposed these much needed reforms as an 
initial step for ending the problem of too big to fail.
  Second, the conference agreement incorporates my amendment vesting 
regulators with the power to limit the activities of and even disband 
seemingly healthy financial services firms. Specifically, the Kanjorski 
amendment permits regulators to preemptively break up and take other 
actions against financial institutions whose size, scope, nature, 
scale, concentration, interconnectedness, or mix of activities pose a 
grave threat to the financial stability or economy of the United 
  Third, the final agreement contains a fairly strong Volcker rule that 
will limit the activities of financial institutions going forward and 
prevent them from becoming too big to fail. Inspired by the legendary 
former Federal Reserve Chairman, Paul Volcker, this rule will bar 
proprietary trading by banks, significantly curtail bank investments in 
private equity funds and hedge funds, and cap the liabilities of big 
banks. As a result, the Volcker rule will prohibit banks from engaging 
in highly speculative activities that in good times produce enormous 
profits but in bad times can lead to collapse.
  Together, these three reforms will better protect our financial 
system and mitigate the problem of too big to fail. The Kanjorski 
amendment and the Volcker rule will also substantially resurrect the 
barrier between commercial and investment banking that resulted in a 
stable financial system for more than 70 years after the Great 
  As the Wall Street Journal on Saturday reported, ``. . . the bill 
gives regulators power to constrain the activities of big banks, 
including forcing them to divest certain operations and to hold more 
money to protect against losses. If those buffers don't work, the 
government would have the power to seize and liquidate a failing 
financial company that poses a threat to the broader economy.'' I 
wholeheartedly agree with this independent assessment.
  In sum, the conference agreement on H.R. 4173 represents an historic 
achievement. By addressing the problem of too big to fail, this 
legislation will lead to a new era of American prosperity and financial 
stability for decades to

[[Page H5237]]

come. For this reason alone, this bill deserves to become law.


  As the House developed this legislation, I played a key role in 
drafting the title concerning investor protection and securities 
reform. The Administration's proposal and the Senate's bill contained 
some important improvements, but the initial House plan had many, many 
more. I am pleased that the final package more closely resembles the 
initial House legislation rather than the original Administration and 
Senate plans.
  Among its chief reforms in the area of investor protection, the 
conference agreement provides that the SEC, after it conducts a study, 
may issue new rules establishing that every financial intermediary who 
provides personalized investment advice to retail customers will have a 
fiduciary duty to the investor. A traditional fiduciary duty includes 
an affirmative duty of care, loyalty and honesty; an affirmative duty 
to act in good faith; and a duty to act in the best interests of the 
client. Through this harmonized standard of care, both broker-dealers 
and investment advisers will place customers' interests first.
  Regulators, practitioners, and investor advocates have become 
increasingly concerned that investors are confused by the legal 
distinction between broker-dealers and investment advisers. The two 
professions currently owe investors different standards of care, even 
though their services and marketing have become increasingly 
indistinguishable to retail investors. The issuance of new rules will 
fix this long-standing problem.
  Additionally, the legislation adopts recommendations made by SEC 
Chairman Mary Schapiro, SEC Inspector General David Kotz, and Harry 
Markopolos, the whistleblower who sought for many years to get 
regulators to shut down the $65 billion Ponzi scheme perpetrated by 
Bernard Madoff. Specifically, the conference agreement provides the SEC 
with the authority to establish an Investor Protection Fund to pay 
whistleblowers whose tips lead to successful enforcement actions. The 
SEC currently has such authority to compensate sources in insider 
trading cases, and the whistleblower provision in this bill would 
extend the SEC's power to compensate other tipsters who bring 
substantial evidence of other securities law violations.
  The conference agreement also responds to other problems laid bare by 
the Madoff fraud. These changes include increasing the line of credit 
at the U.S. Treasury from $1 billion to $2.5 billion to support the 
work of the Securities Investor Protection Corporation, SIPC, and 
raising SIPC's maximum cash advance amount to $250,000 in order to 
bring the program in line with the protection provided by the Federal 
Deposit Insurance Corporation.
  This bill additionally increases the minimum assessments paid by SIPC 
members from $150 per year, regardless of the size of the SIPC member, 
to 2 basis points of a SIPC member's gross revenues. This fix will help 
to ensure that SIPC has the reserves it needs in the future to meet its 
obligations. Finally, in response to the Madoff fraud, the final 
product includes my legislation to allow the Public Company Accounting 
Oversight Board to examine the auditors of broker-dealers.
  For too long, securities industry practices have deprived investors 
of a choice when seeking dispute settlement, too. In particular, pre-
dispute mandatory arbitration clauses inserted into contracts have 
limited the ability of defrauded investors to seek redress. Brokerage 
firms contend that arbitration is fair and efficient as a dispute 
resolution mechanism. Critics of mandatory arbitration clauses, 
however, maintain that the brokerage firms hold powerful advantages 
over investors and hide mandatory arbitration clauses in dense contract 
  If arbitration truly offers investors the opportunity to efficiently 
and fairly settle disputes, then investors will choose that option. But 
investors should also have the choice to pursue remedies in court, 
should they view that option as superior to arbitration. For these 
reasons, the final package provides the SEC with the authority to 
limit, prohibit or place conditions on mandatory arbitration clauses in 
securities contracts.
  Another significant investor protection provided in this conference 
agreement concerns proxy access. In particular, H.R. 4173 clarifies the 
ability of the SEC to issue rules regarding the nomination by 
shareholders of individuals to serve on the boards of public companies. 
These provisions regarding proxy access will enhance democratic 
participation in corporate governance and give investors a greater 
voice in the companies that they own.
  A myriad of problems presently confronts the SEC, perhaps none more 
urgent than the need for adequate resources. Chairman Schapiro and 
others have repeatedly stressed the need to increase the funding to 
ensure that the agency has the ability to keep pace with technological 
advances in the securities markets, hire staff with industry expertise, 
and fulfill one of its core missions: the protection of investors. In 
response, this agreement slightly increases the independence of the SEC 
in the appropriations process, doubles the authorized SEC budgets over 
5 years, and creates a new reserve fund to support technology 
improvements and address emergency situations, like the flash crash 
that occurred in May 2010.
  Moreover, H.R. 4173 modifies the SEC's structure by creating a number 
of new units and positions, like an Office of the Investor Advocate, an 
office to administer the new whistleblower bounty program, and an 
Office of Credit Ratings. However, the SEC's systemic failures to 
effectively police the markets in recent years required Congress to do 
even more to shake up the agency's daily operations. As such, the 
legislation includes my provision mandating an expeditious, 
independent, comprehensive study of the securities regulatory regime by 
a high caliber body with expertise in organizational restructuring to 
identify deficiencies and reforms, and ensure that the SEC and other 
regulatory entities put in place further improvements designed to 
provide superior investor protection. My hope is that this study will 
ultimately become the model for reforming other agencies. The final 
bill also includes my deadlines generally forcing the SEC to complete 
enforcement, compliance examinations, and inspections within 180 days, 
with some limited exemptions for complex cases.
  The conference agreement on H.R. 4173 additionally modifies, enhances 
and streamlines the powers and authorities of the SEC to hold 
securities fraudsters accountable and better protect investors. For 
example, the SEC will have the authority to impose collateral bars on 
individuals in order to prevent wrongdoers in one sector of the 
securities industry from entering another sector. The SEC will also 
gain the ability to make nationwide service of process available in 
civil actions filed in Federal courts, consistent with its powers in 
administrative proceedings.
  The bill further facilitates the ability of the SEC to bring actions 
against those individuals who aid and abet securities fraud. The 
Securities Exchange Act of 1934 and the Investment Advisers Act of 1940 
presently permit the SEC to bring actions for aiding and abetting 
violations of those statutes in civil enforcement cases, and this bill 
provides the SEC with the power to bring similar actions for aiding and 
abetting violations of the Securities Act of 1933 and the Investment 
Company Act of 1940. In addition, the bill not only clarifies that the 
knowledge requirement to bring a civil aiding and abetting claim can be 
satisfied by recklessness, but it also makes clear that the Investment 
Advisers Act of 1940 expressly permits the imposition of penalties on 
those individuals who aid and abet securities fraud.

  One final investor protection reform that I drafted and want to 
highlight concerns the new authority of the SEC and the Justice 
Department to bring civil or criminal law enforcement proceedings 
involving transnational securities frauds. These are securities frauds 
in which not all of the fraudulent conduct occurs within the United 
States or not all of the wrongdoers are located domestically. The bill 
creates a single national standard for protecting investors affected by 
transnational frauds by codifying the authority to bring proceedings 
under both the conduct and the effects tests developed by the courts 
regardless of the jurisdiction of the proceedings.
  In the case of Morrison v. National Australia Bank, the Supreme Court 
last week held that section 10(b) of the Exchange Act applies only to 
transactions in securities listed on United States exchanges and 
transactions in other securities that occur in the United States. In 
this case, the Court also said that it was applying a presumption 
against extraterritoriality. This bill's provisions concerning 
extraterritoriality, however, are intended to rebut that presumption by 
clearly indicating that Congress intends extraterritorial application 
in cases brought by the SEC or the Justice Department.
  Thus, the purpose of the language of section 929P(b) of the bill is 
to make clear that in actions and proceedings brought by the SEC or the 
Justice Department, the specified provisions of the Securities Act, the 
Exchange Act and the Investment Advisers Act may have extraterritorial 
application, and that extraterritorial application is appropriate, 
irrespective of whether the securities are traded on a domestic 
exchange or the transactions occur in the United States, when the 
conduct within the United States is significant or when conduct outside 
the United States has a foreseeable substantial effect within the 
United States.


  The bill that we are considering today contains a number of other 
worthwhile elements that should become law, and I want to highlight 
several issues on which I personally worked or in which I have a deep, 
long-standing interest.
  First, the bill creates a Federal Insurance Office within the 
Treasury Department. A key

[[Page H5238]]

component of our financial services industry, insurance is too often 
misunderstood or left behind in decisions made by the Federal 
government. As a result, I have long worked on the creation of this new 
office that will effectively monitor this industry sector for potential 
risks going forward. As a result of this new office, the United States 
will for the first time speak with a uniform voice on insurance matters 
on the international stage and have the authority to stand behind its 
words. I am therefore pleased that the Federal Insurance Office is 
finally becoming law.
  Second, I have worked diligently on the title concerning the 
registration of hedge fund managers and private equity fund advisers. 
To promote market integrity, we need those individuals who handle large 
sums of money and assets to register with the SEC and provide 
information about their trades and portfolios. While I remain concerned 
about the registration exemptions put in place by others during the 
legislative process, I believe that these reforms are necessary to 
improve the quality of regulation and protect against systemic risk.
  While hedge funds may not have directly caused this latest financial 
crisis, we do know that these investment vehicles have previously 
contributed to significant market instability, as was the case in the 
collapse of Long-Telin Capital Management in 1998. Thus, this reform is 
an important step in understanding and controlling systemic risk.
  Third, this legislation greatly increases the accountability of 
credit rating agencies. The overly optimistic assessments by Moody's, 
Fitch, and Standard and Poor's about the quality of structured 
financial products constructed out of garbage aided and abetted the 
financial crisis. By imposing structural, regulatory, and liability 
reforms on rating agencies, this agreement will change the way 
nationally recognized statistical rating organizations behave and 
ensure that they effectively perform their functions as market 
gatekeepers going forward.
  Fourth, I am very pleased that this agreement will modify escrowing 
procedures, mortgage servicing, and appraisal activities. I began 
working 9 years ago on these issues after identifying predatory 
practices, faulty appraisals, and other problems in the Poconos housing 
markets. These reforms are long overdue.
  Among other things, these new mortgage lending standards will include 
a requirement that all borrowers with higher-cost mortgages have an 
escrow account established in order to pay for property taxes and 
homeowners' insurance. Studies have shown that at the height of the 
crisis, borrowers with higher-cost mortgages were substantially less 
likely than borrowers with good credit records to have an escrow 
account. Borrowers with less than perfect credit records, however, need 
more help in budgeting for these sizable expenses. This bill fixes this 
  Title XIV of the bill also has reforms with respect to force-placed 
insurance. Predatory lenders often impose costly force-placed 
insurance, even though the homeowner may already have a hazard 
insurance policy. This legislation will clarify the procedures for when 
a servicer can force place insurance. The bill's bona fide and 
reasonable cost requirements will also ensure that mortgage servicers 
shop around for the best rates for the force-placed insurance that they 
impose. Moreover, the bill's force-placed insurance reforms will ensure 
that consumers who are erroneously billed for such premiums will have 
the monies refunded within 15 business days.
  Additionally, the bill's appraisal reforms will update Federal 
appraisal laws for the first time in a generation. We now know that 
inflated appraisals and appraiser coercion and collusion contributed 
greatly to the creation of the housing bubble. We must respond by 
putting in place a strong national appraisal independence standard that 
applies to all loans. We must also comprehensively reform the appraisal 
regulatory system. This bill does both things.
  Fifth, I am extremely pleased that this bill provides $1 billion for 
a national program to offer emergency bridge loans to help unemployed 
workers with reasonable prospects for reemployment to keep their homes. 
This new national initiative is based on Pennsylvania's successful 
Homeowners' Emergency Mortgage Assistance Program, HEMAP. Since 1983, 
HEMAP has saved 43,000 homes from foreclosure by helping to cover 
mortgage payments until homeowners find new jobs. With unemployment 
rates still unacceptably too high and far too many homeowners 
experiencing problems in paying their mortgages through no fault of 
their own, the time has come to replicate HEMAP at the national level.
  Finally, the lack of regulation of the over-the-counter derivatives 
market has been a serious concern of mine for many years. In 1994, for 
example, I introduced a bill to regulate derivatives and other complex 
financial instruments. This conference agreement finally addresses the 
utter lack of regulation in this enormous market by mandating the 
clearing of most derivative contracts on exchanges so that we have more 
transparency. For those derivatives that are not cleared, the bill's 
reporting and disclosure requirements ensure that information on the 
transaction is maintained.

                           LONG-TERM CONCERNS

  A sweeping, industry-wide regulatory reform bill like this one rarely 
comes along. As has been the case after the enactment of other overhaul 
bills, we can expect problems to manifest themselves and unintended 
consequences to occur.
  While this bill incorporates the major goals of the Volcker rule, I 
had hoped for an even stronger version. Unfortunately, the ban on 
investments in or sponsorship of hedge funds and private equity is not 
as robust as I would have liked. The Volcker rule could have been 
stronger had the conferees accepted my amendment to provide for a de 
minimis exemption of tangible common equity, as opposed to Tier 1 
capital, and a dollar cap on the investment. This amendment would have 
tightened the bill and better protected our financial markets from 
systemic risk.
  Regrettably, the legislation also permanently exempts small public 
companies from the Sarbanes-Oxley Act's requirement to obtain an 
external audit on the effectiveness of internal financial reporting 
controls. This exemption disregards the significant concerns of 
investors--those that provide capital and bear the risk of losing their 
retirement savings.
  External audits of internal control compliance costs have 
dramatically decreased in recent years. The stock prices of those 
companies that have complied with this law have significantly 
outperformed the stock prices of those that have not complied. 
Additionally, evidence suggests that 60 percent of all financial 
restatements have occurred at companies that will never be required to 
comply with the law's external audit requirements.
  Together, these facts certainly suggest that the Sarbanes-Oxley 
exemption provision has no place in a reform bill that is supposed to 
strengthen investor protections. Moreover, I am worried about the 
investors at the more than 5,000 public companies now exempted who may 
one day wake up to discover their hard earned savings pilfered by 
corporate accounting misdeeds as was the case in Enron, WorldCom, and 
  As previously mentioned, I have additional worries about the 
exemptions granted to the registration of private fund advisers. There 
are many other types of exemptions embedded throughout this bill, 
including exemptions in the derivatives title and in the powers of the 
new Consumer Financial Protection Bureau. While I hope that regulators 
and the entities that they regulate will prudently apply these 
exemptions, I have apprehensions that in the long term the exemptions 
will swallow the rules. We must remain vigilant against such an 
  Similarly, the success of this landmark reform effort will ultimately 
depend on the individuals who become the regulators. The key lesson of 
the last decade is that financial regulators must use their powers, 
rather than coddle industry interests. In this regard, I hope that 
regulators will judiciously use the new powers that I have drafted 
regarding the break up of too-big-to-fail firms. If just one regulator 
uses these extraordinary powers just once, it will send a powerful 
message to industry and significantly reform how all financial services 
firms behave forever more.
  Additionally, I continue to have apprehensions about the interchange 
provisions inserted into this legislation by the Senate. This issue, 
without question, would have benefitted from additional time and study. 
I am hopeful that we got the balance right and that these new 
limitations do not ultimately impair the performance of credit unions 
and community banks. If necessary, I stand ready to change the new law 
in this area.
  There are several other lingering concerns that I have about this 
bill, as well. For example, it grants the Federal Reserve far more new 
powers than I would have liked. The bill also sets a very high bar of a 
two-thirds supermajority vote of the Financial Stability Oversight 
Council to take action under my too-big-to-fail amendment. There is 
some wisdom in this requirement, but if too many individuals with an 
anti-regulatory bias serve on the Council they will neglect to use the 
powers that Congress gave them in order to protect our financial 
  Finally, our work today is only a beginning, not an end. Going 
forward, Congress needs to attentively watch our changing financial 
marketplace and carefully monitor our regulators in order to protect 
against systemic risk, forestall potential abuses of corporate power, 
safeguard taxpayers, and defend the interests of consumers and 
investors. Moreover, the United States must continue to encourage its 
allies abroad to adopt strong financial services regulatory reforms so 
that we will have a strong, unified global financial system.
  Although we may be completing our work on this bill, it is important 
for us to remain vigilant in each of the areas about which I have

[[Page H5239]]

raised concerns. I, for one, plan to continue to closely monitor and 
carefully examine each of these matters.


  Before closing, Mr. Speaker, I wish to congratulate the gentleman 
from Massachusetts, Financial Services Committee Chairman Barney Frank, 
for his outstanding leadership in guiding this extremely complex bill 
through the legislative process. This conference marks the culmination 
of a long, thoughtful series of hearings, markups, floor debates, and 
conference negotiations. Chairman Frank performed exceptionally at 
every stage of the process, and his name deserves to be attached to 
this landmark agreement. Senate Banking Committee Chairman Christopher 
Dodd deserves similar praise for his hard work. This is why I offered 
the amendment in conference to name this law the Dodd-Frank Wall Street 
Reform and Consumer Protection Act.
  Additionally, I want to counter the comments of those who have 
myopically criticized this package because it does not abolish Fannie 
Mae and Freddie Mac. By reforming the securitization process, risk 
retention requirements, and rating agency accountability, this bill 
lays the foundation for our upcoming work to address the future of 
these two institutions and, more broadly, the entire housing finance 
system. The reform of Fannie Mae, Freddie Mac, and the housing finance 
system is the next big legislative mountain that the Financial Services 
Committee must climb, and when the Congress returns after Independence 
Day, I will convene additional hearings to advance work on legislation 
to achieve this objective.
  Mr. Speaker, while I may have some lingering doubts about this 
legislative package, it is overall a very good agreement. In short, the 
conference report represents a reasoned, middle ground that strikes an 
appropriate balance and does what we need it to do. It ends the problem 
of too-big-to-fail financial institutions, effectively regulates the 
derivatives products which some have referred to as financial weapons 
of mass destruction, and it greatly strengthens investor protections. 
It also regulates many more actors in our financial markets, 
establishes a Federal resource center on insurance issues, and holds 
rating agencies accountable for their actions. In sum, Mr. Speaker, I 
support this bill and urge my colleagues to vote for it.
  Mr. BACHUS. At this time I yield 3 minutes to the gentleman from 
Indiana (Mr. Pence).
  (Mr. PENCE asked and was given permission to revise and extend his 
  Mr. PENCE. I thank the gentleman for yielding.
  Mr. Speaker, I rise in opposition to the conference report for H.R. 
4173, the so-called ``Restoring American Financial Stability Act.'' 
We're used to creative titles around here, but I've got to tell you, 
during a time of extraordinary economic duress, millions of Americans 
unemployed, failed economic policies, it is darkly ironic that a bill 
that will do anything but restore financial stability is named for that 
  The truth of the matter is, when you look at this legislation, it's 
proof positive again that this majority just doesn't get it. The 
American people are not looking at Washington, D.C., and clamoring for 
more spending, more taxes, and more bailouts. They're looking at 
Washington, D.C., and saying, When are you going to focus on creating 
jobs? When are you going to set partisan differences aside, power 
grabs, and Big Government agendas aside to do something to put 
Americans back to work?
  Under the guise of financial reform, Democrats today are pushing yet 
another bill that will kill jobs, raise taxes, and make bailouts 
permanent. Let me say that again. This legislation will kill jobs by 
restricting access to credit, it will kill jobs by raising taxes on 
those that would provide loans and opportunity to small business owners 
and family farmers, and it makes the bad ideas of the Wall Street 
bailout permanent.
  Free market economics depends on the careful application of a set of 
ideals--traditional American ideals and principles. Chief among them is 
the notion that the freedom to succeed must include the freedom to 
fail. Personal responsibility is at the very center of the American 
experiment from an economic standpoint. It is that center from which we 
have become not only the freest, but the most prosperous Nation in the 
history of the world.
  As my colleagues on the other side of the aisle know, I vigorously 
opposed the Wall Street bailout because I thought it departed from that 
fundamental principle of personal responsibility and limited 
government. And I rise today to vigorously oppose this legislation that 
takes the bad ideas of the Wall Street bailout and makes them 
  This legislation codifies the notion of too big to fail, a policy and 
an approach the American people have roundly rejected. It will give 
government bureaucrats more power to pick winners and losers. When a 
financial firm is failing, the Treasury Secretary and the FDIC will 
actually have the authority to take taxpayer dollars and decide which 
creditors to pay back and how and when they'll get paid.
  The American people don't want Washington, D.C., in that business. 
They want a refereed private sector that says ``yes'' to traditional 
bankruptcy and ``no'' to bailouts, because we're here to protect 
taxpayers and not Wall Street. This bill fails in that regard. I urge 
it be rejected and let's start over with legislation that's built on 
American ideals.
  Mr. FRANK of Massachusetts. I now yield 3 minutes to one of the 
leaders in fashioning protection for consumers, the gentlewoman from 
New York (Mrs. Maloney).
  Mrs. MALONEY. Thank you, Chairman Frank, for yielding, for your 
leadership, and for presiding over the most open and transparent 
conference process in the history of this Congress.
  The Dodd-Frank bill is landmark legislation which will protect 
consumers and investors while allowing our financial services industry 
to continue financing the creativity and innovation which has, even in 
these very difficult times, made the American economy the envy of the 
world. This bill restores safety and soundness, reduces the likelihood 
of another systemic crisis, restores faith and confidence in our 
institutions and markets, while safeguarding Americans from predatory, 
unfair, and deceptive practices.
  I have made it a mission throughout my career to help put consumers 
on an equal footing with their financial institutions through laws like 
the Credit Card Act. And today, we can take a huge step forward toward 
a more level playing field with the creation of the Consumer Financial 
Protection Bureau.
  For far too long in our financial system and its products, any 
concerns about consumer protection came in a distant second or a third 
or none at all. Now, anyone who opens a checking or savings account, 
anyone who takes out a student loan or a mortgage, anyone who opens a 
credit card or takes out a payday loan will have a Federal agency on 
their side to protect them. For the first time, consumer protection 
authority will be housed in one place. It will be completely 
independent, with an independently appointed director, an independent 
budget, and an autonomous rulemaking authority. And, very importantly, 
it will have a seat at the table at the Financial Stability Oversight 
Council. Continuity and oversight of our financial system will consider 
not only safety and soundness but also the best interests of the 
American consumer, the American taxpayer, the American citizen.
  I am particularly pleased that two items that I offered were included 
that will give consumers direct access to the CFPB through a consumer 
hotline and consumer ombudsperson. The bill also addresses the 
challenge of interchange fees. Working with Senator Durbin and 
Representative Meeks, we were able to craft a balanced compromise that 
addressed both the concerns of merchants about high interchange fees 
and the concerns of the financial sector to be fairly compensated for 
their services. This bill ensures transparency, establishes 
accountability, and protects consumers and investors.
  America has long been the world leader in financial services. With 
this landmark bill, we can set an example and take the lead in global 
financial reform. I urge a ``yes'' vote.
  Mr. BACHUS. At this time, Mr. Speaker, I yield 2 minutes to the 
ranking member of the Subcommittee on International Monetary Policy and 
Trade, the gentleman from California (Mr. Gary G. Miller).

                              {time}  1610

  Mr. GARY G. MILLER of California. Mr. Speaker, I rise today in 
opposition to this bill. This country is going

[[Page H5240]]

through a period of great economic distress; and ultimately, this bill 
would only serve to heighten uncertainty in the marketplace, restrict 
access to credit, and place more and more undue burdens on the backs of 
American small businesses.
  This bill eliminates consumer options in housing markets. This bill 
includes language that alters ways consumers choose to pay their 
mortgage origination fees. Currently, consumers have the choice to pay 
origination fees up front, partially finance costs through the rate, or 
some combination of the two. This bill eliminates the consumer's 
ability to partially pay up front and partially finance costs through 
the rate, ultimately leading to higher costs and fewer options 
available to home buyers.
  This bill favors the Federal Government over the private market. This 
bill places several new onerous restrictions on private community banks 
and then explicitly exempts the Federal Government from these same 
restrictions. The effect of these new restrictions is that consumers 
will be steered toward the government when seeking financing options 
and encouraging a greater takeover of the economy by the Federal 
  This bill once again breaks our promise to the American people that 
excess TARP funds would go to pay down the debt and deficit. When this 
body enacted TARP in an effort to stave off a total economic collapse, 
we promised that any return the Federal Government made from the 
taxpayers' investment into the financial sector of this economy would 
go directly to paying down the deficit and the national debt, currently 
over $13 trillion. Instead, this bill breaks that promise by taking 
remaining TARP funds and using them to pay for the Federal takeover of 
the economy.
  What we should do instead, we need to get the Federal Government out 
of the way so that small businesses can begin to innovate and expand. 
We need to provide a regulatory framework that provides community banks 
and small businesses the ability to make their own financial decisions.
  Mr. Speaker, we cannot continue to break our promise to the American 
people. The future of this great Nation and that of its sons and 
daughters depends on the actions we take here today. And I can only 
conclude that this legislation will prolong this recession and lead us 
further down the road of high deficit and greater debt. I urge a ``no'' 
vote on this bill.
  Mr. FRANK of Massachusetts. I yield 1 minute to the gentleman from 
Georgia (Mr. Barrow).
  Mr. BARROW. Mr. Speaker, I rise in support of H.R. 4173, the Wall 
Street Reform and Consumer Protection Act, because I believe this bill 
takes positive steps to protect us from the risky and abusive behavior 
that took our country to the verge of financial ruin.
  I voted against the bank bailout bill because there wasn't enough 
accountability for how that money was going to be used. It also didn't 
get at the root of the problem. This legislation gets at the root of 
the problem by protecting consumers from abusive and predatory 
financial practices. It also gets banks back in the business of making 
good loans instead of gambling with our money. I look forward to 
passage of this legislation, and I urge my colleagues to lend their 
support as well.
  Mr. BACHUS. Mr. Speaker, at this time I yield 2 minutes to the 
gentleman from Georgia (Mr. Price), the chairman of the Republican 
Study Committee.
  Mr. PRICE of Georgia. Mr. Speaker, look, this ought to sound pretty 
familiar. Here's just part of this bill, another 2,000-page 
monstrosity. Look at it, Mr. Speaker. It's down there held together by 
rubber bands. It is called the Dodd-Frank Wall Street reform bill. 
Senator Dodd even said about it, ``No one will know until this is 
actually in place how it works.'' That's no way to do business.
  The fundamental assumption of this bill is that since the smart 
people regulating banks let us down, we should just hire really, really 
smart people to prevent it from happening again. That assumption is not 
only false, it's dangerous. When the government picks winners and 
losers, the Nation loses. If my colleagues on the other side of the 
aisle believe that the same regulators who failed to see the housing 
crisis are now going to see the next crisis thanks to heavy-handed 
government regulation, then the American people would say to the 
Democrats in charge that they put too much faith in the power of 
Washington to see the future.
  The fundamental question we've got to answer is, If this law were in 
place in 2008, would it have prevented the crisis? The answer to that 
question is clearly ``no.'' More oppressive job-killing regulation 
isn't the answer. What we need is flexible and accountable and nimble 
regulation. This bill does not do it.
  What will it do? It will ensure bailouts. It puts bailouts in place 
forever. It doesn't address Fannie and Freddie, at the epicenter of the 
problem. It doesn't address it at all. It kills American jobs with 
oppressive regulation, and it will decrease the availability of credit 
and increase the cost of credit to all the American people. And that's 
even more angering to Americans because they know that there are 
positive solutions.
  H.R. 3310 is the bill that we put forward nearly a year ago now that 
would make certain that we address the issue of regulatory reform in a 
positive way that makes it more flexible and nimble, that addresses the 
issue of Fannie and Freddie, actually solves the challenge that got us 
into this crisis in the first place, and makes certain that we end 
bailouts. The American people are sick and tired of bailouts. That 
bill, Mr. Speaker, will ensure that bailouts continue. The American 
people are urging us to vote ``no'' on this bill.
  Mr. FRANK of Massachusetts. I yield 2 minutes to the gentleman from 
New York (Mr. Meeks), a very important member of the committee who was 
helpful in forging some of the pieces of this.
  Mr. MEEKS of New York. I thank the chairman for yielding.
  Today is truly a historic day largely because of the great, 
magnificent job of our chairman, Barney Frank, who we are so proud of. 
Very few people could have marshaled this bill in the way that he did. 
And because of him and that leadership, today we end too big to fail. 
We implement unprecedented consumer protections, and we issue rules 
that will prevent taxpayers from footing the bill for the irresponsible 
behavior of others while still--because I'm a New Yorker--maintain New 
York's standing as the world's financial capital.
  As Chairman Frank is fond of noting, this bill has death panels for 
the greedy financial institutions. If you are an institution that is 
causing systemic risk, this bill allows regulators to resolve you and 
dissolve you without recourse to any taxpayer money. I repeat. Let me 
emphasize, taxpayers will bear no cost for liquidating risky 
interconnected financial firms.
  This bill includes strong investor protections and transparency 
mechanisms. Through the use of stress tests, which Representative 
Dennis Moore and I advocated for and the results of which will be 
published, it will increase transparency for investors and increase the 
amount of information available for investors to make wise decisions 
with their hard-earned savings.
  Most importantly for my constituents, this bill establishes a 
Consumer Financial Protection Bureau to police lenders to ensure that 
the predatory lending that Mr. Watt was talking about that ensnared so 
many unsuspecting Americans will be halted. Led by an independent 
director, this office will be able to act swiftly so consumers will not 
need to wait for an act of Congress for years and years and years to 
receive protection from unscrupulous behavior.
  As to interchange, we have placed explicit language in the bill to 
prohibit intrabrand price discriminations which would have put credit 
unions and community banks at a disadvantage. To address the concerns 
to the State treasurers and prepaid card providers for the underbanked, 
we explicitly exempt them from interchange fee regulation. And finally, 
by fixing concerns the Federal Government had, we potentially save the 
taxpayer $40 million per year, according to Treasury estimates.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. I yield the gentleman an additional 15 
  Mr. MEEKS of New York. We need this bill. It is the right bill. 
Without lending from Wall Street, there could be no Main Street. This 
bill responsibly

[[Page H5241]]

regulates the former to ensure the vitality of the latter.
  Mr. BACHUS. I yield 2 minutes to the gentleman from California (Mr. 
  Mr. McCARTHY of California. I thank the gentleman for yielding.
  Mr. Speaker, I rise today in opposition to this conference report. 
You know, at a time when California has 12.4 percent unemployment, and 
my district's even higher at 16.5 in my home county of Kern County, my 
constituents are asking me, What is being done to create jobs?
  For the folks that have been following this debate today, this is 
just another example of Washington not listening to their concerns. 
Instead of policies that promote private sector job growth, this bill 
would create more government. This bill before us today would create a 
new bureau at the Federal Reserve with sweeping authority and a budget 
to create plenty of new government jobs in Washington, D.C. It also 
creates a new office of Financial research, empowered to collect 
personal information about all of our international transactions. This 
office can actually issue subpoenas to get the information these 
unelected bureaucrats want to have about us.
  But aside from the personal concerns we may have about this, what is 
being done to help create a private sector job? Well, this is not job 
creation for families in my district. This is just part of the 
majority's continuation of an overreach and expansion of government. 
First, it was the $787 billion stimulus that failed to keep 
unemployment down, then a national energy tax, then a $1 trillion 
government takeover of health care, and now another expansion of 
government that will raise costs for consumers and small businesses.
  Well, Mr. Speaker, Republicans offered an alternative to this report 
that would have ended bailouts, would have addressed too big to fail 
and the failures of Fannie Mae and Freddie Mac; but that was rejected. 
Congress needs to be focusing on pro-small business policies, policies 
that make it easier for banks to lend to job creators that are at the 
heart of our communities, job creators that are at the heart of what we 
all want, a job-filled recovery instead of a jobless recovery. 
Unfortunately, this conference report will do none of these things, and 
I urge a ``no'' vote.

                              {time}  1620

  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to my 
colleague from Massachusetts (Mr. Capuano), another member of the 
committee who has played a major role in this.
  Mr. CAPUANO. Mr. Speaker, I will tell you that this bill is one of 
the best bills I've ever been involved with in the 12 years I've been 
in Congress. Like any bill, it doesn't give me everything that I want. 
I don't think anybody would say that, including Mr. Frank. But it is a 
bill that moves us back towards thoughtful oversight of the financial 
institutions of this country.
  For 70 years, from the Glass-Steagall Act until about the 1980s, 
1990s, depending what you count, we had the best financial 
institutions, the best financial system in the world. Every other 
country tried to emulate us.
  What happened? Slowly but surely, this country, through its Congress 
and its President, decided that we wanted to deregulate everything. 
Let's look at nothing, let everything go. What was the result of it? A 
financial meltdown. That was in the economic sector. What was the 
result of it in the gulf? An oil spill of ultimate proportions.
  The concept that government can't regulate has been proven wrong time 
and time again. Nobody argues for overregulation. That's a fair 
argument. Where is the appropriate line?
  In this case, in the financial institutions case, we went years with 
loans that nobody knew what the standards were. We went years with 
credit rating agencies giving everybody a AAA rating without having a 
clue what was behind those papers. We went years with people betting, 
literally betting with our money, our pension fund money and other 
money that we didn't want to do, on things that didn't exist. They 
didn't exist. The result of it was a financial meltdown.
  This bill brings us toward a more thoughtful regulatory regime that 
will ensure the stability of our economic system. And that's what this 
is all about. It's not about raising revenue. It's not about killing 
  My district has a very vibrant financial sector and we want to keep 
it that way, but I also want be to make sure that it's stable. That's 
more important than anything else. This bill accomplishes that, and 
that's why we should support it.
  Mr. BACHUS. I yield 2 minutes to the gentleman from Florida (Mr. 
  Mr. PUTNAM. Mr. Speaker, I rise in opposition to the Frank-Dodd bill 
that would not reform Wall Street but, instead, create a permanent 
taxpayer backstop and fail to provide consumer protection and doesn't 
prevent a future crisis.
  The permanent bailout would ensure that the Federal Government, 
through the FDIC and the Treasury, maintains the ability to use 
taxpayer funds to bail out financial institutions deemed too big to 
fail. That may be what's important to the D.C. bureaucrats, but to the 
community banks and credit unions back home and the communities they 
serve, I can assure you it's not. They're treated as too small to save.
  Our community banks, our credit unions, our small businesses don't 
receive the special treatment accorded to the big guys in this bill. 
Instead, they go through the bankruptcy process. Why the double 
standard? Why the double standard for our communities? They didn't 
cause Wall Street's collapse, and yet they're held to a different 
standard. This is harmful to Main Street's small businesses.
  The legislation creates an Office of Financial Research to ``monitor, 
record, and report on any financial transaction, including consumer 
transactions,'' without the consent of the consumer. That's right. 
Monitor, record, and report any transaction without your approval.
  This new ``Big Brother Bureaucracy'' will be funded through 
assessments on financial institutions that trickle down to consumers 
through higher fees. According to the CBO, ``The cost of the proposed 
fee would ultimately be borne to . . . customers, employees, and 
  The legislation welcomes a new ``Washington Knows Best'' bureau. 
Housed within the Federal Reserve, the credit czar will dictate which 
financial products can and cannot be made available to consumers and 
will have broad authority to set sales practices, limit products, and 
mandate compensation. The bureau misses its mark to actually protect 
consumers and will, instead, create more barriers to consumers' ability 
to obtain credit, to pursue their dreams, to buy a home, to refinance, 
or to expand or save their small business.
  This conference report, totaling over 2,300 pages, is bad for small 
business, and I urge its defeat.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to the 
gentleman from Pennsylvania (Mr. Fattah), who gave us an inspiration 
for trying to help unemployed people with their mortgages.
  Mr. FATTAH. Mr. Speaker, the American people, as always, almost 
always, get it right. When they wanted to pick a party that would 
finally rein in the abuses of Wall Street, they gave the majority in 
the House and the Senate to the Democrats. And you can hear from the 
other side that they obviously made the right choice because there's no 
willingness to deal with some of these challenges from my colleagues on 
the other side.
  I want to congratulate Chairman Barney Frank. I met with him over a 
year ago about some of the challenges in terms of foreclosures in our 
country. In this bill is the result of language that I authored which 
replicated a very successful program in Pennsylvania that we believe 
will help others throughout the country.
  I want to thank my great colleague from California, Congresswoman 
Waters, for her efforts to make sure that this was fully engaged by the 
  But beyond my proposal that is included in terms of homeowners 
assistance, in terms of foreclosures, this is a very good bill in terms 
of its regulation of Wall Street, in terms of consumer protection. This 
House, I urge and encourage that we vote in favor of the Wall Street 
reform bill.

[[Page H5242]]

  Mr. BACHUS. I yield 2 minutes to the gentleman from Virginia (Mr. 
Cantor), the Republican whip.
  Mr. CANTOR. I rise in opposition to this conference report.
  Mr. Speaker, the flow of credit and capital throughout the financial 
system is the building block of American prosperity. It has enabled 
entrepreneurs to pursue their ideas. It has enabled people to balance 
their budgets, to achieve a better standard of living. But when 
businesses and families cannot access capital from banks, consumers 
don't spend, small businesses hunker down, and investment dries up. The 
economy simply can't grow jobs.
  This legislation is a clear attack on capital formation in America. 
It purports to prevent the next financial crisis, but it does so by 
vastly expanding the power of the same regulators who failed to stop 
the last one.
  Dodd-Frank is the product of a tired and discredited philosophy. It's 
the notion that you can solve a problem by reflexively piling vast new 
layers of bureaucracy, regulatory costs, and taxes on it. And who'll 
pay the price? It won't merely be the big banks who the bill's 
supporters rail against. Smaller, less-leveraged community banks will 
have a more difficult time surviving the regulatory costs. And most 
alarming, costs will be passed on to consumers and businesses in the 
form of higher prices for credit. We know this because last year's 
Credit Card Act is already having just that effect.
  Before it was passed, Republicans warned that more government 
expansion and more Washington proscription would create additional 
costs borne by the consumer. It was common sense, and sure enough, we 
were right. In response to that legislation, lending rates were reset 
higher as credit became less available. Meanwhile, free checking 
accounts are becoming a relic of the past for all but the wealthiest 
bank customers.
  Republicans agree that the financial system needs a shake-up to bring 
transparency and stability. But the fact is, Mr. Speaker, this 
legislation does not accomplish this goal. It's bad for private 
business. It's bad for families, and I urge my colleagues to vote 
``no'' before we do any more damage.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 4 minutes to the 
gentlewoman from California (Ms. Waters), one of the leaders in housing 
and matters of fairness in our committee, the chairman of the Housing 
  Ms. WATERS. Mr. Speaker and Members, I am pleased and proud to stand 
here today in support of this most significant piece of legislation 
that is before this House.
  Again, I thank Chairman Frank for his leadership, and I'm especially 
proud that this work of the conference committee was done by such a 
diverse group on this side of the aisle. I'm especially proud that 
members of the conference committee included not only women, but 
African Americans and Latinos and Anglos. It was truly diverse, and you 
can see that work reflected in what came out of the conference report.

                              {time}  1630

  For example, the CBC members of the Financial Services Committee 
worked on a number of these issues over the past several years, and we 
came up with those things that had been brought to our attention year 
in and year out that are finally paid attention to in the conference 
  The Federal Insurance Office, we will be asking them to gather 
information about the ability of minorities and low-income persons to 
access affordable insurance products. To give consideration and 
mitigation of the impact of winding down a systemically risky 
institution on minorities and low-income communities. The expansion of 
the Consumer Financial Protection Bureau's advisory board to include 
experts in civil rights, community development, communities impacted by 
high-priced loans, and others. And perhaps most importantly, the 
establishment of the Offices of Minority and Women Inclusion at each of 
the Federal financial services agencies.
  These offices would provide for diversity in the employment, 
management, and business activities of these agencies. The data for the 
need for these offices speaks for itself. Diversity is lacking in the 
financial services industry, with the GAO reporting from 1993 to 2004 
the level of minority participation in the financial services 
professions only increased marginally, from 11 percent to 15.5 percent. 
We took care of that in this bill. And now we have the opportunity to 
not only give oversight to diversity, but to help these agencies 
understand how to do outreach, how to appeal to different communities 
so that we can get the kind of employees that will create the diversity 
to pay attention to all of the needs of the people of this country.
  In addition, Mr. Speaker, I am pleased to note that this conference 
report includes a provision that I championed to allow the SEC to issue 
rules on proxy access, giving the Nation's pension funds and other 
long-term institutional investors a say in the governing of the 
companies in which they own stock.
  Additionally, I am pleased that this bill addresses foreclosures, 
which have single-handedly inflicted tremendous damage on neighborhoods 
in my district in California and across the country. It has long been 
my position that this bill would be incomplete without directly 
addressing the needs of America's homeowners and neighborhoods. That is 
why I have fought for an additional $1 billion in funds for the 
Neighborhood Stabilization Program, a program whose authorizing 
legislation I wrote in 2008. And it is helping neighborhoods all across 
this country that have foreclosed properties and rundown properties 
that are driving down the price of other homes in that community. Now 
we can rehabilitate those properties and keep the values up of the 
homes in the neighborhood.
  I am also pleased that an additional $1 billion in emergency 
assistance for unemployed homeowners was included in this bill. Reports 
indicate that 60 percent of individuals seeking help in avoiding 
foreclosures are doing so because they are unemployed.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. FRANK of Massachusetts. I yield the gentlewoman 1 additional 
  Ms. WATERS. I thank the chairman.
  This funding will provide a critical bridge for homeowners during 
periods of joblessness, and allow them to maintain stable housing for 
their children. This $2 billion, combined with an additional $6 billion 
I have secured for NSP through two rounds of funding, is another step 
toward addressing the foreclosure crisis. But more needs to be done. 
That is why I am pleased that the Treasury has committed to providing 
another $2 billion for unemployed homeowners in addition to the amounts 
provided under this bill. And that is why I will continue to fight for 
both additional funding and for loss mitigation legislation, which 
would make it mandatory for banks to offer real sustainable loan 
modification offers.
  Chairman Frank, thank you for your assistance, thank you for your 
support, thank you for your leadership. I am proud to be a part of this 
Congress, so proud to have been a part of the conference committee. And 
I think we are doing all Americans justice in this bill as we pay 
attention to needs that have been so long overlooked.
  Mr. BACHUS. Mr. Speaker, at this time I yield 4 minutes to the 
gentleman from California (Mr. Issa), the ranking member of Oversight 
and Government Reform.
  (Mr. ISSA asked and was given permission to revise and extend his 
  Mr. ISSA. Mr. Speaker, others will rise and they will talk about the 
underlying bill. Although I was on the conference committee, and for 2 
weeks Chairman Frank, Ranking Member Bachus and the rest of us were 
together, I do not claim and will not claim to be an expert on all the 
things that led to the financial meltdown or all the things which will 
preclude the next.
  I do rise to oppose the Dodd-Frank bill, and I do so because I don't 
believe that it will preclude another meltdown and another crisis. I 
don't do that because I am an expert on the financial system. I am not. 
The people I served with on conference, many of them are. I am not 
concerned that the process was not open. I think Chairman Frank allowed 
us an unusually great amount of time to be heard. But I am disappointed 
that at the end of the day so many things were left out.

[[Page H5243]]

  I appreciate Chairman Frank's offering for a separate bill to make up 
for the fact that the transparency and data issues that I worked for 2 
weeks to put in this bill, because they were rejected by the Senate, we 
will have to send them again and hope that the Senate is more 
benevolent when we simply ask these agencies to have data standards 
that allow for the kinds of transparency among the regulators that will 
in fact see reckless behavior ahead of time, or at least allow us to 
know the underlying value of assets when the markets begin to melt.
  The reckless behavior that led to the meltdown will be debated for 
years, but the absence of transparency at the time of the meltdown, an 
inability for our regulators, our banks, or anyone else to actually 
tell us what the underlying value of various assets were, were in no 
small part the result of arcane systems that underlie these very modern 
  You cannot have paper copies sitting in banks to tell you the details 
about a loan and then cut it into thousands of pieces, spread it around 
the world, and hope that somebody can have confidence in the document 
when things start going wrong.
  Technology transparency is the most important thing missing from this 
bill. I hope to work with the majority and the minority to bring that 
in the coming days. I don't do it for my committee. I do it because the 
next time there is a hiccup anywhere in the world, even if that's 
simply a massive power outage leading to a confidence loss, we need to 
have the ability for regulators with confidence to say we have 
transparency, we know what these assets are worth, and we can assure 
  This bill does do a few good things, and I would be remiss if I 
didn't mention that the ability for banks to trust each other in 
financial transfers of non-interest-bearing large amounts is in no 
small part something that will keep the market going if otherwise there 
is a lack of confidence in the bank.
  I do object to the way this bill is paid for. I believe that it was 
inappropriate. And unfortunately, people at the conference were not 
willing to consider a real pay-for, not even a real rollback in 
unexpended funds that would otherwise be available.
  Mr. Speaker, this bill is done. We cannot look to what this will or 
won't do. We have to look to the future. Will we do a better job in 
data management, in transparency, in creating the tools that would 
allow the financial oversight board and the financial industry 
regulators to do the job the next time that they didn't do the last 
  Mr. Speaker, I do not have high confidence that it will be done. I 
have high confidence that this body will work together to produce a 
bill, send it to the other body, and try, try to get them to understand 
that data transparency is essential if we are not going to have another 
  Mr. FRANK of Massachusetts. I yield 2 minutes to the gentleman from 
Florida (Mr. Hastings).
  Mr. HASTINGS of Florida. Chairman Frank, I first want to commend you 
on an extraordinary effort and your dedicated leadership in bringing 
this bill to the floor. I look forward to supporting this legislation.
  Before that, however, I would like to clarify a few points as they 
pertain to the intent of the bill. It's my understanding that certain 
provisions which are intended to improve access to mainstream financial 
institutions are not intended to further limit access to credit and 
other financial services to the very consumers who are already 
underserved by traditional banking institutions.
  As you know, each year over 20 million working American families with 
depository account relationships at federally insured financial 
institutions actively choose alternative sources and lenders to meet 
their emergency and short-term credit needs.

                              {time}  1640

  These alternative sources and lenders often offer convenient and less 
expensive products and services than the banks where these consumers 
have relationships.
  Further, as the demands for short-term, small-dollar loans continues 
to increase as a result of the current economic environment, 
nontraditional lenders have filled the void left by mainstream 
financial institutions in many of our Nation's underbanked communities.
  Mr. Chairman, I have a longer statement, and with your permission 
would skip to the clause that I think is particularly important and 
include my full statement in the Record in the interest of time.
  Rather, I feel that the financial services should be well-balanced 
and carried out in a manner that encourages consumer choice, market 
competitions, and strong protections. It is my sincere hope that this 
legislation is designed to carefully and fairly police the financial 
services industry treating similar products in the short-term credit 
market equally while encouraging lending practices that are fair to 
  Is this the intent?
  Mr. FRANK of Massachusetts. If the gentleman would yield, first, let 
me say that anybody who asks has my permission to skip any statement. 
That is an example I am going to try to follow myself sometimes.
  Beyond that, I completely agree with the gentleman.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. I yield an additional 15 seconds to the 
  Mr. HASTINGS of Florida. I yield to the chairman.
  Mr. FRANK of Massachusetts. We do want to make sure it's an informed 
choice, and we're going to work on financial literacy. But, no, it is 
not our intention to deny anybody that choice.
  Mr. HASTINGS of Florida. Thank you very much, Mr. Chairman, and I 
really commend you for your efforts to pass meaningful financial 
regulation reform in this Congress. I deeply thank you.
  Mr. BACHUS. Mr. Speaker, at this time I yield 3 minutes to the 
gentleman from Texas (Mr. Paul), the ranking member of the Domestic 
Monetary Policy Committee.
  (Mr. PAUL asked and was given permission to revise and extend his 
  Mr. PAUL. I thank the gentleman from Alabama for yielding.
  Mr. Speaker, I rise in opposition to this piece of legislation. I'm 
afraid it is not going to do much to solve our problems. I know it's 
very well intended, and it's believed that more regulations will solve 
the problems; but, quite frankly, the problems that we're facing come 
from a deeply flawed monetary system.
  I had made an attempt to emphasize this point by talking about a full 
audit of the Federal Reserve, and fortunately this House was strongly 
in support of this piece of legislation. There are 320 cosponsors of 
this bill. It passed rather easily on the Financial Services Committee, 
and then it was put into the House version of this reform package. But 
it was removed in conference.
  Although there is some attention given to getting more information 
from the Fed, it truly doesn't serve as a full audit. If we don't 
eventually address the Federal Reserve in depth, we will never fully 
understand how financial bubbles are formed and why more regulations 
tend to fail. If the financial markets were pleased with what we're 
doing here today and the discussion of the last several weeks, they 
wouldn't be reeling as they are at this very moment.
  So I would say that we should be very cautious in expanding the role 
of the regulatory agencies, which does not solve the problem. At the 
same time, giving more power to the Federal Reserve doesn't make much 
sense if the theory is right that the Federal Reserve is the source of 
much of our problems.
  Now, some objected to the transparency bill of the Federal Reserve 
and said that that was too much information, that the Federal Reserve 
had to be totally independent. The Federal Reserve Transparency Act 
doesn't do anything about removing transparency. It doesn't change 
monetary policy. It just says that the American people and the Congress 
have a right to know what they do.
  After the crisis hit, the Federal Reserve injected $1.7 trillion and 
guaranteed many more trillions of dollars, and it was very hard to get 
any information whatsoever. So an ongoing audit to find out exactly 
what they do and why they do it, I think, would be a first step to 
finding out the relationship of the Federal Reserve system to

[[Page H5244]]

the banking system and the financial community.
  Transparency is something the American people have been asking for 
and they want. They didn't like the lack of transparency with the TARP 
funds; and once the American people found out about what goes on at the 
Fed, they want transparency of the Fed.
  So fortunately today we will have a chance to vote on this because it 
will be in the recommittal motion, and it will give us a chance to put 
the language back in, the H.R. 1207, the Federal Reserve Transparency 
Act, a chance to audit the Fed. So this will be a perfect opportunity 
to emphasize the importance of the Fed and to say that we do need a 
full audit.
  Mr. FRANK of Massachusetts. I yield 3\1/2\ minutes to the gentleman 
from Illinois (Mr. Gutierrez), who's the chairman of the Financial 
Institution Subcommittee and has done a great deal of work to improve 
our financial situation through this bill.
  Mr. GUTIERREZ. Chairman Frank, I want to commend you, first of all, 
for your hard work in getting this legislation through Congress and 
your dedication to reforming our financial system.
  The legislation we have before us takes a multi-pronged approach to 
ending the problem of ``too big to fail'' by giving regulators the 
tools, only when it is necessary, to decrease the size of financial 
institutions, limit their risky behaviors, and wind down systemically 
significant firms if they threaten the health of our financial system.
  The most direct way to end ``too big to fail'' is to stop firms from 
growing too big in the first place. To limit their size and complexity, 
this legislation would impose increasingly strict rules on capital 
levels and leverage ratios which would limit a firm's risky behavior 
and diminish its potential threat to the stability of our financial 
system. By implementing a strong Volcker rule and limiting proprietary 
trading by insured depository institutions, we minimize a bank's 
ability to use subsidized funds for risky trading practices.
  Additionally, the Dodd-Frank bill will create a financial stability 
oversight council that will be able to force a company, as a last 
resort, to divest some of its holdings and shrink its size if the 
council determines it poses a risk to the stability of the financial 
system. It has tools.
  The most important part of this legislation that will help to end 
``too big to fail'' is the resolution authority we create to safely 
wind down a failed significant firm and to prevent any further bank 
bailouts. This legislation ends individual open-bank assistance. Let me 
repeat: this legislation ends individual open-bank assistance, meaning 
that if the resolution authority, the death panel, the burial panel, is 
applied to a bank, it will not be bailed out but allowed to safely fail 
and prevent containment from spreading to the markets. Let me repeat 
this: no more bailout. We have a funeral fund.
  One thing I want to note, though, at every opportunity Democrats have 
insisted that banks, the financial institutions, not the taxpayers of 
America, pay for this resolution authority, and the Republicans have 
said ``no'' every single time. In both the House and the Senate, they 
refuse to support a pre-funded funeral fund that would be paid for by 
the riskiest and biggest banks. No. The big bankers don't pay. Main 
Street has to pay.
  Opposition from certain Republican Senators--and I won't mention 
their names--forced us to strip the bank assistance from the conference 
report just last night. Republicans have sided with big Wall Street 
banks at every opportunity. They even opposed an amendment in the 
conference to increase the FDIC insurance to help protect people's 
hard-earned deposits along with community banks and small businesses.
  So let's be clear. Combine this refusal to guarantee that the banks 
pay to clean up any future messes that they make with open opposition 
to this legislation and it is obvious where the line has been drawn by 
Republicans. If it helps Wall Street banks, they favor it; but if it 
helps Main Street and regular Americans, they won't vote for it, and we 
don't think they will today.
  Mr. Speaker, I won't hold my breath for any Republican support of 
this historic legislation. But I do urge all of our Members to support 
this vital bill.
  Mr. BACHUS. I yield myself 15 seconds.
  Mr. Speaker, I don't think you would go to a funeral home and lend 
the corpse money. So I don't know why you would lend money to a failing 
firm. You ought to just go ahead and put them in bankruptcy like we 
want to do.
  Mr. Speaker, at this time I yield 3 minutes to the gentlelady from 
Illinois who's the chairman of the Financial Services Oversight 
Committee (Mrs. Biggert).

                              {time}  1650

  Mrs. BIGGERT. I thank the gentleman for yielding.
  Mr. Speaker, I rise in opposition to this conference report and the 
  In the fall of 2008, our entire financial system and economy were on 
the verge of collapse. The $750 billion TARP program was hastily 
proposed. I, for one, would never have backed it were it not for the 
taxpayer protections--a promise that the taxpayers would be repaid.
  This bill flat out breaks that promise to taxpayers. It siphons away 
unspent money from the TARP program. Instead of returning it to the 
taxpayers or instead of paying down our $13 trillion debt as promised, 
it uses the money to pay for new Federal spending.
  Contrary to my colleagues' rhetoric, this bill makes bailouts 
permanent. Look at section 210N(5) and section 210N(6). These 
provisions authorize bureaucrats to bail out the six largest too-big-
to-fail Wall Street firms to the tune of $8 trillion. What you have is 
taxpayers footing the bill to pay for failed Wall Street firms. That is 
a bailout.
  My colleagues on the other side of the aisle claim that this bill 
requires that taxpayers be paid back. Yet how in heaven's name can 
taxpayers believe that when this very bill breaks the earlier promise 
that taxpayers would be paid back for TARP?
  This bill also fails to reform Fannie Mae and Freddie Mac, the two 
mortgage giants at the center of the housing crisis. Taxpayers have 
bailed Fannie and Freddie out to the tune of $150 billion and billions 
more to come, but this bill doesn't reform them. It merely calls for a 
study, and it fails to include as part of our Federal budget the 
trillions in liabilities taxpayers now face because the Federal 
Government owns and operates both Fannie and Freddie.
  Finally, let's not forget our hidden costs in this bill. Our Midwest 
manufacturers had nothing to do with the housing crisis or with the 
financial meltdown. Yet this bill requires them to divert trillions of 
dollars of working capital to pay for financial transactions, which may 
stifle job growth and raise the cost of commodities for American 
  What is the cost to small businesses? It is job growth. According to 
the U.S. Chamber of Commerce, it is taxpayers, small businesses and 
consumers as they pick up the tab for new Federal bureaucrats, 355 new 
rules, 47 studies, and 74 reports.
  In the name of financial reform, we must not stifle job creation by 
saddling our small businesses and manufacturers with additional 
burdens. We need to get financial reform right so that innovators and 
entrepreneurs can secure credit and can expand and create desperately 
needed jobs. We need to get reform right, but this bill doesn't pass 
the test.
  I urge my colleagues to oppose this conference report and bill.
  Mr. FRANK of Massachusetts. I yield 1\1/2\ minutes to a very diligent 
member of our committee who has fought hard for the manufacturing 
interests of this country, the gentleman from Michigan (Mr. Peters).
  Mr. PETERS. I thank the chairman for yielding.
  Mr. Speaker, the Dodd-Frank Wall Street Reform bill is an historic 
piece of legislation that will protect consumers, reduce the risk of 
future economic failures, and provide for the increased oversight of 
our entire financial system. However, it also strives to protect job-
creating Main Street businesses.
  For example, this legislation will, for the first time, bring 
transparency and oversight to the currently unregulated $600 trillion 
derivatives market. However, because commercial end users, who are 
those who use derivatives to hedge legitimate business risks, do not

[[Page H5245]]

pose systemic risk and because they solely use these contracts as a way 
to provide consumers with lower cost goods, they are exempted from 
clearing and margin requirements.
  I offered an amendment that would permanently extend the end user 
exemptions for clearing and margin to certain captive finance companies 
that use swaps to hedge their interest rate and foreign currency risks 
arising from their financing activities. The amendment was narrowly 
tailored to ensure that a captive finance company can only qualify for 
the exemption if 90 percent of its business derives from financing the 
sale or lease of its parent company's manufactured goods.
  There is another provision of this bill which provides a 2-year 
transition period for affiliates.
  I would like to yield to Chairman Frank so he can clarify that what 
these two provisions do is provide a limited exemption from clearing 
and margin requirements for qualifying captive finance companies and a 
2-year transition period for all other captives that would not qualify 
for the limited exemption created by the Peters amendment.
  Mr. FRANK of Massachusetts. If the gentleman would yield, the answer 
is absolutely. He has crafted this very well with our cooperation, and 
he has stated this completely accurately.
  Mr. BACHUS. Mr. Speaker, I yield 7 minutes to the gentleman from 
Oklahoma (Mr. Lucas), who is the ranking member of the Agriculture 
Committee, to then yield time to his members.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Alabama?
  Without objection, the gentleman from Oklahoma will control 7 
  There was no objection.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 13 minutes of my 
time to the gentleman from Minnesota (Mr. Peterson), the chairman of 
the Agriculture Committee, our co-conferee, and ask unanimous consent 
that he control that time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
  Mr. PETERSON. I thank the gentleman for yielding.
  Mr. Speaker, I rise today in support of the conference report on H.R. 
4173, The Wall Street Reform and Consumer Protection Act.
  I want to start by thanking Chairman Frank, who has demonstrated his 
great policymaking skills and leadership on this important issue.
  The staffs of both the House Agriculture Committee and the Financial 
Services Committee have worked closely on this legislation for the past 
year, and it is thanks to our efforts that we have a conference 
committee report for us today.
  One of the bill's key components is title VII, which brings greater 
transparency and accountability to derivative markets. When the House 
considered financial reform in December, derivatives were one area in 
which we had strong bipartisan support. The House produced a very good 
product. The Senate's efforts on derivatives went in a very different 
direction. As with any legislation with such stark differences, 
compromises had to be made.
  This comprehensive legislation represents a middle ground between the 
House and Senate products. While no one got everything they wanted in 
this bill, I think we got a bill that will help prevent another crisis 
in the financial markets like the one we experienced in 2008.
  The House Agriculture Committee started looking at some of the issues 
addressed in this legislation even before evidence of the financial 
crisis started to appear. I am pleased that the conference report 
contains many of the provisions the House Ag Committee endorsed over 
the course of passing three bills on this topic. Let me briefly talk 
about some of those provisions.
  Our in-depth review of derivative markets began when we experienced 
significant price volatility in energy futures markets due to excessive 
speculation--first with natural gas and then with crude oil. We all 
remember when we had $147 oil. The Ag Committee examined the influx of 
new traders in these markets, including hedge funds and index funds, 
and we looked at the relationship between what was occurring on 
regulated markets and the even larger unregulated over-the-counter 
market. This conference report includes the tools we authorized and the 
direction to the CFTC to mitigate outrageous price spikes we saw 2 
years ago.
  The House Agriculture Committee also spent a great deal of time 
considering the role of derivatives in the collapse of the financial 
markets and debating different approaches to regulating these financial 
  In the end, it was the Agriculture Committee, on a bipartisan basis, 
that embraced mandatory clearing well before the idea became popular. 
Clearing is not only a means to bring greater transparency to the 
derivative markets, but it also should reduce the risk that was 
prevalent throughout the over-the-counter market. The conference report 
closely follows the House approach to mandatory clearing.
  In crafting the House bill and the conference report, we focused on 
creating a regulatory approach that permits the so-called end users to 
continue using derivatives to hedge risks associated with their 
underlying businesses, whether it is energy exploration, manufacturing, 
or commercial activities. End users did not cause the financial crisis 
of 2008. They were actually the victims of it.
  Now, that has been of some concern and, frankly, a misinterpretation 
of the conference report's language regarding capital and margin 
requirements by some who want to portray these requirements as applying 
to end users of derivatives. This is patently false.
  The section in question governs the regulation of major swap 
participants and swap dealers, and its provisions apply only to major 
swap participants and swap dealers. Nowhere in this section do we give 
regulators any authority to impose capital and margin requirements on 
end users. What is going on here is that the Wall Street firms want to 
get out of the margin requirements, and they are playing on the fears 
of the end users in order to obtain exemptions for themselves.

                              {time}  1700

  One of the sources of financial instability in 2008 was that 
derivative traders like AIG did not have the resources to back up their 
transactions. If we don't require these major swap participants and 
swap dealers to put more backing behind their swap deals, we will only 
perpetuate this instability. That is not good for these markets, and it 
is certainly not good for end users.
  I am confident that after passing this conference report we can go 
home to our constituents and say that we have cracked down on Wall 
Street and the too-big-to-fail firms that caused the financial crisis.
  With that, I urge my colleagues to support the passage of this 
conference report.
  I reserve the balance of my time.
  Mr. LUCAS. Mr. Speaker, I yield myself 3 minutes.
  Mr. Speaker, I rise in opposition to this job-killing conference 
report. At a time when Congress should be focused on economic 
expansion, the majority brings us this conference report, which will 
kill jobs and make financial transactions more expensive.
  Last December, this Chamber supported a bipartisan effort to bring 
transparency and regulation to the over-the-counter derivatives market 
while allowing for the management of legitimate risk. It recognized 
that mom-and-pop shops on Main Street were not the villains behind the 
economic collapse. They did not cause the financial crisis and should 
not be treated as if they did.
  The derivatives title this Chamber passed reflected the need for 
commercial end users to lay off risk so they could offer their products 
at reasonable and stable prices. Unfortunately, the Senate decided that 
only some industries, only some, were worthy of inexpensive risk 
  Despite the overwhelming bipartisan support our derivatives language 
enjoyed, during a meeting in the dark of night our bipartisan language 
was stripped out. A title that we passed by voice vote was only going 
to survive if offered as an amendment. So that is

[[Page H5246]]

what my good friend from New Jersey (Mr. Garrett) and I did. As the 
conferees from this Chamber, we defended the House position. 
Unfortunately, at dawn last Friday, our amendment was defeated on a 
party-line vote, stripping away the only remaining protection for end 
users. American small businesses were told by the majority they would 
be regulated as though they were Wall Street.
  A report released yesterday believes the language change by the 
majority could cost U.S. companies $1 trillion in capital and liquidity 
requirements. This isn't money to pay lavish bonuses; this is money to 
pay salaries, fund research and development, and pay construction 
  Further analysis of this language concludes that $400 billion would 
be needed for collateral for businesses to post with dealer 
counterparts to cover the exposure of their existing over-the-counter 
derivatives. It is estimated that another $370 billion represents the 
additional credit capacity that companies could need to cover future 
  Despite the majority's voracious appetite for spending, these are 
enormous dollar amounts. Rural America doesn't have the option of 
waiving phony PAYGO requirements. These costs are real and the ability 
to pay them does not exist. Business will now have to cut spending, 
which, simply put, means job losses or hold on at its very own risk, 
thereby further concentrating risk.
  You know, once upon a time this bill was supposed to avoid risk 
concentration. That was once upon a time.
  Mr. Speaker, I reserve the balance of my time.
  Mr. PETERSON. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Pennsylvania (Mr. Holden).
  Mr. HOLDEN. I thank the chairman for yielding.
  I rise today in support of H.R. 4173.
  I serve as chairman of the House Agriculture Subcommittee on 
Conservation, Credit, Energy, and Research. As such, we have 
jurisdiction over the institutions of the Farm Credit System that serve 
agriculture as well as rural communities across the country.
  Over 20 years ago, the Agriculture Committee put in place a revised 
legislative and regulatory regime for the Farm Credit System that has 
successfully stood the test of time in ensuring that these institutions 
operate safe and sound.
  Farm Credit System institutions are regulated and examined by a fully 
empowered independent regulatory agency, the Farm Credit 
Administration, which has the authority to shut down and liquidate a 
system institution that is not financially viable. In addition, the 
Farm Credit System is the only GSE that has a self-funded insurance 
program in place that was established to not only protect investors in 
farm credit debt securities against loss of their principal and 
interest, but also to protect taxpayers.
  These are just a few of the reasons why the Agriculture Committee 
insisted that the institutions of the Farm Credit System not be subject 
to a number of the provisions of this legislation. They were not the 
cause of the problem, did not utilize TARP funds, and did not engage in 
abusive subprime lending. We have believed that this legislation should 
not do anything to disrupt this record of success.
  Mr. Speaker, I now would like to enter into a colloquy with the 
chairman of the Agriculture Committee.
  Mr. Chairman, the conference report includes compromise language that 
requires the Commodity Futures Trading Commission to consider exempting 
small banks, Farm Credit System institutions and credit unions from 
provisions requiring that all swaps be cleared. We understand that 
community banks, Farm Credit institutions and credit unions did not 
cause the financial crisis that precipitated this legislation. While 
the legislation places a special emphasis on institutions with less 
than $10 billion in assets, my reading of the language is that they 
should not in any way be viewed by the Commodity Futures Trading 
Commission as a limit on the size of the institution that should be 
considered for an exemption.
  Mr. Chairman, would you concur with this assessment?
  Mr. PETERSON. Yes, I fully agree. The language says that institutions 
to be considered for the exemption shall include those with $10 billion 
or less in assets. It is not a firm standard. Some firms with larger 
assets could qualify, while some with smaller assets may not. The 
regulators will have maximum flexibility when looking at the risk 
portfolio of these institutions for consideration of an exemption.
  Mr. HOLDEN. I thank the chairman.
  Mr. LUCAS. Mr. Chairman, I now yield 2 minutes to the gentleman from 
Texas (Mr. Neugebauer), who is a very significant participant on both 
the Financial Services Committee and the Agriculture Committee.
  Mr. NEUGEBAUER. Mr. Speaker, I rise in strong opposition to this 
conference report. Financial regulatory reform is needed, but this 
2,300 page bill is the wrong solution for the taxpayers, and it won't 
help build strong capital markets needed to fuel growth and new jobs 
for our country.
  If you liked the bailouts of the last few years, you are going to 
love this new financial bill. If you are a consumer who wants fewer 
choices, higher costs of credit and new fees, this bill has some great 
deals for you.
  This bill will vastly expand the powers of the government regulators. 
Those are the same regulators who fell short of the job the first time 
around, and now they are asking us to trust them and they tell us that 
the outcome will be different next time. But the outcome won't be 
different, because this bill sets up a permanent bailout regime that 
puts the government in charge of picking winners and losers.
  Under this bill, if the government says to your company it is too big 
and too important to fail, your company gets an implied backing and 
serious advantages over its competitors, especially your smallest 
competitors. If the government determines a company should be shut 
down, the government gets to decide how everyone that does business 
with that company is treated, ignoring the rule of law, just like they 
did with AIG and the automobile companies behind closed doors.
  And if those problems weren't serious enough, now the majority is 
playing fast and footloose with the taxpayers. In a move that could 
only make Bernie Madoff and Enron proud, the majority is now taking the 
unused and paid-back TARP funds that were supposed to pay down the 
national debt and double-counting the deposit insurance premiums to pay 
for the $19 billion cost of this bill.
  American families can't double-count their income from their 
paychecks. What kind of accounting is Congress using that will let us 
double-count the money?
  Mr. Speaker, bills sometimes have good titles but they don't 
accomplish what they are supposed to do. There is no real financial 
reform in this bill. I wish there was. I want to vote for real 
financial reform. But the big losers here are the American people. They 
stay at risk. Their choices are going to be limited, because now we are 
going to have a new credit czar determine what kind of financial 
products that the American people get to look at.
  If you want real reform, vote against this bill.

                              {time}  1710

  Mr. PETERSON. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Iowa (Mr. Boswell).
  Mr. BOSWELL. Mr. Speaker, I would like to engage the chairman in a 
  I would like to briefly clarify an important point with the chairman 
regarding the intention of one of the exclusions from the definition of 
``swap.'' The exclusion from the definition of swap for ``any sale of a 
nonfinancial commodity or security for deferred shipment or delivery, 
so long as the transaction is intended to be physically settled,'' is 
intended to be consistent with the forward contract exclusion that is 
currently in the Commodity Exchange Act and CFTC's established policy 
on this subject. Physical commodity transactions should not be 
regulated as swaps as that term is defined in this legislation. This is 
true even if commercial parties agree to ``book-out'' their delivery 
obligations under a forward contract.
  For those who may not be familiar with terminology used in the trade, 
a book-out is a second agreement between two commercial parties to a 
forward contract who find themselves in a delivery chain or circle at 
the same delivery point. They can agree to settle

[[Page H5247]]

their delivery obligations by exchanging a net payment if there has 
been some change arising since the initial forward contract was entered 
into. Simply put, book-outs reduce transaction costs, and that saves 
consumers money.
  Can the chairman clarify this for me?
  I yield to the chairman.
  Mr. PETERSON. The gentleman is correct. My interpretation of the 
exclusionary provision from the definition of swap that he mentioned is 
that the exclusion would apply to transactions in which the parties' 
delivery obligations are booked-out, as the gentleman described. The 
fact that the parties may subsequently agree to settle their 
obligations with a payment based on a price difference through a book-
out does not turn a forward contract into a swap.
  Excluding physical forward contracts, including book-outs, is 
consistent with the CFTC's longstanding view that physical forward 
contracts in which the parties later agree to book-out their delivery 
obligations for commercial convenience are excluded from its 
jurisdiction. Nothing in this legislation changes that result with 
respect to commercial forward contracts.
  Mr. BOSWELL. I thank the chairman for the clarification.
  Mr. PETERSON. I thank the gentleman.
  I encourage people to support the conference report.
  I have no further requests for time, and I yield back the balance of 
my time.
  Mr. LUCAS. Mr. Speaker, I yield the remaining 2 minutes to the 
ranking member on the Small Business Administration Committee and a 
very valued member of the Agriculture Committee, the gentleman from 
Missouri (Mr. Graves).
  Mr. GRAVES of Missouri. Mr. Speaker, everyone agrees it's critical to 
restructure the regulatory oversight of our Nation's financial sector 
to help prevent future crises. Unfortunately, not only does this 
conference report fail to achieve this most basic goal, it also creates 
harmful new hurdles for small businesses. As ranking member of the 
House Small Business Committee, I cannot support this legislation.
  Some of my colleagues are quick to state publicly that small 
businesses are going to bring us out of this economic downturn, yet 
they turn their backs on small firms and promote policies that severely 
hinder their growth. Through this legislation, Congress is once again 
ignoring the voice of the entrepreneur.
  The conference report includes a massive new government bureaucracy 
that supporters claim will protect consumers from overzealous sellers 
of credit. However, the breadth of the rulemaking authority is 
astounding and will likely affect millions of credit transactions 
between small businesses and their customers. Even if the new agency 
only controls credit offered by regulated financial institutions, the 
additional burdens will raise the cost of credit for small businesses.
  Of further concern is the language in the current bill that makes 
commercial end users who hedge their exposure to risk susceptible to 
unnecessary margin requirements through the use of cash collateral. 
Forcing sophisticated end users to increase capital set-asides to cover 
margins will ultimately raise the cost of products purchased by small 
businesses. Given the state of the economy, raising the costs on small 
businesses is one of the worst things that can be done.
  The adverse long-term consequences of this legislation is nothing 
short of startling. At a time when American small businesses need it 
most, this bill may seriously restrict their access to capital. 
Additionally, this legislation will negatively affect small business 
investment companies from allowing regulators to decide whether these 
institutions can obtain capital from banks.
  In closing, I strongly urge my colleagues to join me in opposing this 
ill-conceived conference report. If Congress expects small businesses 
to help turn around the economy, we have got to focus on developing 
legislation that helps them do just that.
  Mr. BACHUS. Mr. Speaker, can I inquire as to the time left on both 
  The SPEAKER pro tempore. The gentleman from Alabama has 21\1/4\ 
minutes remaining. The gentleman from Massachusetts has 11 minutes 
  Mr. BACHUS. At this time I yield 2 minutes to the gentleman from New 
Jersey (Mr. Garrett), who is the ranking member of the Capital Markets 
  Mr. GARRETT of New Jersey. I rise in opposition to this job-killing 
continuation of a bailout bill. Earlier, Chairman Frank said he was 
astonished by our interpretation this is a bailout bill. Well, what is 
even more astonishing is the fact that this is the same chairman who 
was here last session leading the efforts in our last bailout bill. And 
here he is, once again, leading the effort on this bill for a 
continuation of bailout. What is perhaps even more astonishing than 
that is that here he stands as the author of the bill, with the 2,300 
pages in front of him, holding up and actually reading the bill, and he 
fails to see that this underlying piece of legislation continues to 
bail out creditors at the expense of U.S. taxpayers.
  Just as we saw with the situation of AIG, where the creditors on Wall 
Street and the creditors over in China and such areas as that were 
bailed out at a hundred percent, we see the same thing possibly going 
forward here in this legislation as well. Perhaps that explains to us 
all why Wall Street is applauding this bill--because they know that 
they will continue to see the bailouts that they saw in the past. So it 
is astonishing to see that we're repeating history.
  Now, I know the chairman will say, Well, this is not going to happen 
because there is the opportunity for receivership. But the chairman 
well knows if he looks into the bill that that receivership is not for 
a day or two--it's for a year or 2 or 3 or 4 or 5 years that we can 
continue to see American taxpayers putting out their money to bail out 
these failed, risky institutions.
  It seems that at every turn the Democrats who wrote this bill chose 
to endow the same failed regulators who failed to foresee the last 
crisis with more and more power. At every single turn the Democrats 
chose more government bureaucracy and more government outreach into our 
economy. And at every turn the Democrats threw up policies that will 
kill jobs and restrict credit.
  Now, on the one hand, this isn't surprising. We've seen this all 
before, when you think about it, whether it was in the area of cap-and-
trade or in health care proposals, among others we saw before.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. BACHUS. Mr. Speaker, I yield the gentleman 1\1/2\ additional 
  Mr. GARRETT of New Jersey. On the other hand, it is disappointing 
when you consider the history of the failed efforts in the area of 
health care or the failed efforts on the other side in the area of cap-
and-tax that they haven't learned by now from their past mistakes. 
Think about it for a moment. Think about what we hear when we go back 
to our districts. That the American people are delivering a strong 
message to those of us in Washington willing to listen, a message 
saying that they do not want a continuation, Mr. Speaker, of the failed 
policies that you brought to the floor in the past with your bailouts 
of Wall Street. The American people say that they do not want to be on 
the hook for the tens--no--the hundreds of billions of dollars to bail 
out institutions on Wall Street that made bad risks. They want it to 
end now. And they want to end it today. They want less failed 
government overage into their lives and into the economy. They do not 
want institutions yet again created that can look at every single 
transaction that they make, whether it's at the ATM that the government 
can now look down into those transactions, whether it's opening up a 
credit card account someplace that the Federal Government can now look 
into those transactions, whether it's any transaction whatsoever that 
you or I make or anyone listening to this speech tonight will be able 
to make, because bureaucrats, unelected, unaccountable bureaucrats, 
will be able to look into those transactions.
  They want less failed government overage into their lives. They want 
less intrusions into the economy. What, you ask them, do they want? 
They simply want more opportunities--opportunities to work and to 
provide for their

[[Page H5248]]

families. And they want those opportunities without pushing our country 
into greater debt. Unfortunately, this bill fails on all accounts.

                              {time}  1720

  Mr. FRANK of Massachusetts. I yield 1 minute to my colleague, the 
gentleman from Minnesota (Mr. Peterson), the chairman of the 
Agriculture Committee.
  Mr. PETERSON. Mr. Speaker, I would like to enter into the Record a 
letter that Chairman Frank and I received from Chairmen Lincoln and 
Dodd on the treatment of end users under the derivatives title of the 
bill. As the letter makes clear, we have given the regulators no 
authority to impose margin requirements on anyone who is not a swap 
dealer or a major swap participant.
  While the regulators do have authority over the dealer or MSP side of 
a transaction, we expect the level of margin required will be minimal, 
in keeping with the greater capital that such dealers and MSPs will be 
required to hold. That margin will be important, however, to ensure 
that the dealer or major stock participant will be capable of meeting 
their obligations to the end users. We need to make sure that they have 
that backing.
  I would also note that few, if any, end users will be major swap 
participants, as we have excluded ``positions held for hedging or 
mitigating commercial risk'' from being considered as a ``substantial 
position'' under that definition.
  I would ask Chairman Frank whether he concurs with my view of the 
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. I yield the gentleman 15 additional 
  And the gentleman is absolutely right. We do differentiate between 
end users and others. The marginal requirements are not on end users. 
They are only on the financial and major swap participants. And they 
are permissive. They are not mandatory, and they are going to be done, 
I think, with an appropriate touch.

                                                  U.S. Senate,

                                    Washington, DC, June 30, 2010.
     Hon. Chairman Barney Frank,
     Financial Services Committee, House of Representatives, 
         Rayburn House Office Building, Washington, DC.
     Hon. Chairman Collin Peterson,
     Committee on Agriculture, House of Representatives, Longworth 
         House Office Building, Washington, DC.
       Dear Chairmen Frank and Peterson: Whether swaps are used by 
     an airline hedging its fuel costs or a global manufacturing 
     company hedging interest rate risk, derivatives are an 
     important tool businesses use to manage costs and market 
     volatility. This legislation will preserve that tool. 
     Regulators, namely the Commodity Futures Trading Commission 
     (CFTC), the Securities and Exchange Commission (SEC), and the 
     prudential regulators, must not make hedging so costly it 
     becomes prohibitively expensive for end users to manage their 
     risk. This letter seeks to provide some additional background 
     on legislative intent on some, but not all, of the various 
     sections of Title VII of H.R. 4173, the Dodd-Frank Act.
       The legislation does not authorize the regulators to impose 
     margin on end users, those exempt entities that use swaps to 
     hedge or mitigate commercial risk. If regulators raise the 
     costs of end user transactions, they may create more risk. It 
     is imperative that the regulators do not unnecessarily divert 
     working capital from our economy into margin accounts, in a 
     way that would discourage hedging by end users or impair 
     economic growth.
       Again, Congress clearly stated in this bill that the margin 
     and capital requirements are not to be imposed on end users, 
     nor can the regulators require clearing for end user trades. 
     Regulators are charged with establishing rules for the 
     capital requirements, as well as the margin requirements for 
     all uncleared trades, but rules may not be set in a way that 
     requires the imposition of margin requirements on the end 
     user side of a lawful transaction. In cases where a Swap 
     Dealer enters into an uncleared swap with an end user, margin 
     on the dealer side of the transaction should reflect the 
     counterparty risk of the transaction. Congress strongly 
     encourages regulators to establish margin requirements for 
     such swaps or security-based swaps in a manner that is 
     consistent with the Congressional intent to protect end users 
     from burdensome costs.
       In harmonizing the different approaches taken by the House 
     and Senate in their respective derivatives titles, a number 
     of provisions were deleted by the Conference Committee to 
     avoid redundancy and to streamline the regulatory framework. 
     However, a consistent Congressional directive throughout all 
     drafts of this legislation, and in Congressional debate, has 
     been to protect end users from burdensome costs associated 
     with margin requirements and mandatory clearing. Accordingly, 
     changes made in Conference to the section of the bill 
     regulating capital and margin requirements for Swap Dealers 
     and Major Swap Participants should not be construed as 
     changing this important Congressional interest in protecting 
     end users. In fact, the House offer amending the capital and 
     margin provisions of Sections 731 and 764 expressly stated 
     that the strike to the base text was made ``to eliminate 
     redundancy.'' Capital and margin standards should be set to 
     mitigate risk in our financial system, not punish those who 
     are trying to hedge their own commercial risk.
       Congress recognized that the individualized credit 
     arrangements worked out between counterparties in a bilateral 
     transaction can be important components of business risk 
     management. That is why Congress specifically mandates that 
     regulators permit the use of non-cash collateral for 
     counterparty arrangements with Swap Dealers and Major Swap 
     Participants to permit flexibility. Mitigating risk is one of 
     the most important reasons for passing this legislation.
       Congress determined that clearing is at the heart of 
     reform--bringing transactions and counterparties into a 
     robust, conservative and transparent risk management 
     framework. Congress also acknowledged that clearing may not 
     be suitable for every transaction or every counterparty. End 
     users who hedge their risks may find it challenging to use a 
     standard derivative contracts to exactly match up their risks 
     with counterparties willing to purchase their specific 
     exposures. Standardized derivative contracts may not be 
     suitable for every transaction. Congress recognized that 
     imposing the clearing and exchange trading requirement on 
     commercial end-users could raise transaction costs where 
     there is a substantial public interest in keeping such costs 
     low (i.e., to provide consumers with stable, low prices, 
     promote investment, and create jobs.)
       Congress recognized this concern and created a robust end 
     user clearing exemption for those entities that are using the 
     swaps market to hedge or mitigate commercial risk. These 
     entities could be anything ranging from car companies to 
     airlines or energy companies who produce and distribute power 
     to farm machinery manufacturers. They also include captive 
     finance affiliates, finance arms that are hedging in support 
     of manufacturing or other commercial companies. The end user 
     exemption also may apply to our smaller financial entities--
     credit unions, community banks, and farm credit institutions. 
     These entities did not get us into this crisis and should not 
     be punished for Wall Street's excesses. They help to finance 
     jobs and provide lending for communities all across this 
     nation. That is why Congress provided regulators the 
     authority to exempt these institutions.
       This is also why we narrowed the scope of the Swap Dealer 
     and Major Swap Participant definitions. We should not 
     inadvertently pull in entities that are appropriately 
     managing their risk. In implementing the Swap Dealer and 
     Major Swap Participant provisions, Congress expects the 
     regulators to maintain through rulemaking that the definition 
     of Major Swap Participant does not capture companies simply 
     because they use swaps to hedge risk in their ordinary course 
     of business. Congress does not intend to regulate end-users 
     as Major Swap Participants or Swap Dealers just because they 
     use swaps to hedge or manage the commercial risks associated 
     with their business. For example, the Major Swap Participant 
     and Swap Dealer definitions are not intended to include an 
     electric or gas utility that purchases commodities that are 
     used either as a source of fuel to produce electricity or to 
     supply gas to retail customers and that uses swaps to hedge 
     or manage the commercial risks associated with its business. 
     Congress incorporated a de minimis exception to the Swap 
     Dealer definition to ensure that smaller institutions that 
     are responsibly managing their commercial risk are not 
     inadvertently pulled into additional regulation.
       Just as Congress has heard the end user community, 
     regulators must carefully take into consideration the impact 
     of regulation and capital and margin on these entities.
       It is also imperative that regulators do not assume that 
     all over-the-counter transactions share the same risk 
     profile. While uncleared swaps should be looked at closely, 
     regulators must carefully analyze the risk associated with 
     cleared and uncleared swaps and apply that analysis when 
     setting capital standards for Swap Dealers and Major Swap 
     Participants. As regulators set capital and margin standards 
     on Swap Dealers or Major Swap Participants, they must set the 
     appropriate standards relative to the risks associated with 
     trading. Regulators must carefully consider the potential 
     burdens that Swap Dealers and Major Swap Participants may 
     impose on end user counterparties--especially if those 
     requirements will discourage the use of swaps by end users or 
     harm economic growth. Regulators should seek to impose 
     margins to the extent they are necessary to ensure the safety 
     and soundness of the Swap Dealers and Major Swap 
       Congress determined that end users must be empowered in 
     their counterparty relationships, especially relationships 
     with swap dealers. This is why Congress explicitly gave to 
     end users the option to clear swaps contracts, the option to 
     choose their clearinghouse or clearing agency, and the option 
     to segregate margin with an independent 3rd party custodian.

[[Page H5249]]

       In implementing the derivatives title, Congress encourages 
     the CFTC to clarify through rulemaking that the exclusion 
     from the definition of swap for ``any sale of a nonfinancial 
     commodity or security for deferred shipment or delivery, so 
     long as the transaction is intended to be physically 
     settled'' is intended to be consistent with the forward 
     contract exclusion that is currently in the Commodity 
     Exchange Act and the CFTC's established policy and orders on 
     this subject, including situations where commercial parties 
     agree to ``book-out'' their physical delivery obligations 
     under a forward contract.
       Congress recognized that the capital and margin 
     requirements in this bill could have an impact on swaps 
     contracts currently in existence. For this reason, we 
     provided legal certainty to those contracts currently in 
     existence, providing that no contract could be terminated, 
     renegotiated, modified, amended, or supplemented (unless 
     otherwise specified in the contract) based on the 
     implementation of any requirement in this Act, including 
     requirements on Swap Dealers and Major Swap Participants. It 
     is imperative that we provide certainty to these existing 
     contracts for the sake of our economy and financial system.
       Regulators must carefully follow Congressional intent in 
     implementing this bill. While Congress may not have the 
     expertise to set specific standards, we have laid out our 
     criteria and guidelines for implementing reform. It is 
     imperative that these standards are not punitive to the end 
     users, that we encourage the management of commercial risk, 
     and that we build a strong but responsive framework for 
     regulating the derivatives market.
     Chairman Christopher Dodd,
       Senate Committee on Banking, Housing, and Urban Affairs, 
     U.S. Senate.
     Chairman Blanche Lincoln,
       Senate Committee on Agriculture, Nutrition, and Forestry, 
     U.S. Senate.

  Mr. BACHUS. At this time I yield 4 minutes to the gentleman from 
California (Mr. Royce), a senior member of the committee.
  Mr. ROYCE. Mr. Speaker, yesterday a small community banker in Ohio by 
the name of Sarah Wallace wrote a letter. She wrote about what she 
believed will be the end of community banking as we know it. And Sarah 
Wallace notes, in her words: ``Going forward, we will no longer be able 
to evaluate loan applications based solely on the creditworthiness of 
the borrower. We will be making regulation compliance decisions instead 
of credit decisions.''
  And this gets to the heart of the issue with the underlying 
legislation that we're discussing. Despite the fact that every failed 
financial firm had some type of Federal regulator overseeing it, the 
answer put forward in this bill is to give broad, largely undefined 
powers to those regulators and not, by the way, in the interest of 
safety and soundness. If the objective was safety and soundness, the 
amendment that I put forward to allow the safety and soundness 
regulator to overrule the Consumer Financial Protection Bureau in cases 
where safety and soundness was at stake, that would have been upheld. 
No, that's not the goal here.
  And to get back to the point that Sarah Wallace makes, her 
observation is that instead of focusing on providing credit and 
providing the best possible service to the customers in these small 
towns that need that credit, these institutions will instead focus 
their efforts on appeasing the Federal Government and on appeasing 
their allies in Congress.
  Well, why should that give us concern? It should worry us because 
whether it is striving toward another altruistic goal, such as 
Congress' interest in subsidizing housing--and by the way, that's what 
happened during the housing crisis--or whether it's funneling cash into 
friendly community activist organizations, like ACORN, the fact is, the 
closer big government gets to business, the more likely these favors 
will become the rule instead of the exception.
  What I don't like about this is the political pull that comes out of 
it. What I don't like about it is the market discipline being replaced. 
And I think on a massive scale, this bill replaces objectivity with 
subjectivity. It replaces the market discipline on Main Street with 
political pull in Washington, and regulators will now decide which 
firms will be treated differently and, therefore, moved through the 
resolution process and which firms should be left to the bankruptcy 
  Why would we care about that in terms of these big firms having this 
ability now to have this alternative means of resolution? Well, once in 
the resolution process, the government will have the authority to 
provide a 100 percent bailout to whichever creditor it favors while 
imposing severe losses on other institutions who bought the exact same 
bonds. Should we be concerned about abuse in this respect? I think so, 
because this type of bureaucratic discretion has led to abuse in the 
  We have already seen that abuse in the Obama administration's 
handling of the Chrysler bankruptcy last year. Secured creditors, 
typically entitled to first priority payment under the absolute 
priority rule, ended up receiving less than the union allies of the 
administration who held junior creditor claims. The fact that the 
regulatory reform approach injects politics into the process ensures 
this kind of favoritism in the future.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to the 
gentleman from Maryland (Mr. Hoyer), the majority leader.
  Mr. HOYER. I thank the chairman for yielding, and I congratulate the 
chairman for the extraordinary work he has done. I thank Mr. Bachus 
too, who is, I think, one of the really responsible leaders in the 
minority in terms of issues of substance. And when there are 
differences, they are honest differences.
  Mr. Speaker, I come to the floor, and when I do, I hear portions of 
the debate, sometimes not all of the debate. I want to make an 
observation, though. I listened to the gentleman from New Jersey, and 
he remarked on what the people were saying. And I think that, frankly, 
his remarks reflected the difference in the perspective between the two 
  Indeed, that perspective has been reflected in my three decades here, 
under Mr. Reagan and others who have served as President and lastly 
with Mr. Bush, Mr. Obama's immediate predecessor. And that perspective 
was, if the regulators would simply get out of the way, things would be 
fine. Mr. Royce indicates that the market will take care of things. 
``The market will discipline itself,'' he said. Phil Gramm said that 
with respect to the derivatives.
  Unfortunately, I voted for that bill that Mr. Gramm was for. I made a 
mistake. Brooksley Born was correct. The market did not discipline 
itself. In fact, the market took extraordinarily irresponsible steps. 
What I hear, I tell my friend from New Jersey, the people saying is, 
Don't let the big guys trample on us. Don't let the big guys put us at 
great risk. Don't let the big guys make decisions that they take the 
risk and we take the loss. That's what I hear the people saying, and 
that's what I think this bill is designed to respond to.
  This week Mr. Boehner compared reforming Wall Street to killing an 
ant with a nuclear weapon. Well, that may sound colorful, but this is 
the greatest economic crisis that any of us--I'm looking around on this 
floor--have experienced in our lifetimes. And I am closer to 
experiencing the last one than any of you, I think, on the floor are. 
But none of us, even at my advanced age, were alive during the Great 
Depression. So this is the first time that we have experienced such a 
deep, deep recession.
  But I will tell you, the 8 million Americans whose jobs it took away 
think it was a mighty big ant that squashed them and their families, or 
the millions more who saw their savings devastated or the families in 
every one of our districts who have lost their homes. They're thinking 
to themselves, Mr. Boehner, that was a mighty big ant that came my way. 
And not to more than half of the Nation's working adults who report 
that they have been pushed by the recession into ``unemployment, pay 
cuts, reduced hours at work or part-time jobs,'' according to a Pew 
Research Center Survey reported in today's Washington Post.

                              {time}  1730

  Now, some of you may think that was an ant that walked through here, 
but some think it was a pretty big elephant. It squashed them and hurt 
  I don't mean an elephant in the symbol of your party, a respected 
animal with a long memory.

[[Page H5250]]

  But we have differences, and the differences are, as I've said 
before, that you perceive regulation as harmful.
  My analogy is, if you take the referee off the football field, I 
guarantee the split end's going to leave early. He's going to try to 
get an advantage. And I guarantee the little guys on the field are 
going to get trampled on by the big guys because there's no referee to 
say, Time out. You broke the rules.
  This bill is about putting the referee back on the field and saying, 
Obey the rules. Do not trample on the little people. Don't take risks 
that you will expect them to pay for.
  More than half, Mr. Speaker, of today's families have been affected. 
There is no way to overstate what happened to them, and there is no 
mistaking the cause of the crisis: The Wall Street culture of reckless 
gambling, and a culture of regulatory neglect that the last 
administration wants to perpetuate it, and some want to return to.
  I simply think that would be a mistake. I tell my friend from New 
Jersey, the people I talk to think it would be a mistake as well. They 
don't like what's happened. They don't want it to happen again, and 
this is an effort to make sure that's the case.
  Never again. Never again should Wall Street greed bring such 
suffering to our country. And never again should Washington stand by as 
that greed manifests itself as irresponsible risk taking where a few 
share the profits, but Main Street bears the brunt of Wall Street's 
lost bets.
  Now, let me say that I voted for that bill--I was wrong--the Gramm 
bill that said Brooksley Born was wrong, we didn't need to regulate 
derivatives. And by the way, there were a number of Democrat leaders 
who said that as well, that we didn't need to, and Mr. Greenspan said 
it as well. He's admitted he made a mistake, and he was distressed by 
that mistake.
  Now, we can't erase that crisis, but we can work to rebuild what we 
lost. As Democrats have done every time, we've supported job creation, 
from the Recovery Act to ``Cash for Clunkers'' to the HIRE Act to the 
additional tax relief for small businesses, that's, frankly, been 
obstructed by the minority party in the other body who have made a 
high-stakes political bet on recovery's failure. That would be a shame.
  We can also, just as any responsible family would, ensure ourselves 
against a repeat crisis and protect America's jobs from another 
devastating collapse. The Wall Street Reform and Consumer Protection 
Act, which Mr. Frank and Mr. Dodd have led to this point, means an end 
to the irresponsible practices of the big banks.
  And I want to say the community banks, which I think Mr. Royce 
referred to, he's absolutely right. They were not the problem, none of 
our community banks. They, frankly, cared that people could pay their 
money back, and they were careful in giving loans and careful in making 
sure that people to whom they gave loans could pay them back.
  It was those who securitized them, that put them in these big, fancy 
documents, that didn't care whether they could pay them back because, 
for the most part, they made their money on the transaction, not on the 
long-term responsibility of the debtor.
  I'm happy that among our financial institutions there are responsible 
actors who appreciate effective oversight and understand that it 
stimulates investment, enterprise, entrepreneurship, and job creation. 
Why? Because people can trust the system because they know the referee 
is on the field watching, and they know, therefore, the game will be 
  No bill, of course, can create an economy without risk, nor should 
it. But this bill will bring accountability to Wall Street and 
Washington, protect and empower consumers, forestall future financial 
meltdowns, and prevent taxpayer money from being put on the line again 
to bail out Wall Street excess.
  I want to say to my friend who mentioned that we bailed out Wall 
Street, how quickly you forget that it was President Bush and Secretary 
Paulson and Ben Bernanke, appointed as Chair of the Federal Reserve by 
President Bush, that asked for that bill; and that your leadership, for 
the most part, supported and urged its adoption. So, with all due 
respect, it was President Bush's administration that asked for that 
bailout, not Democrats.
  What Democrats did, when they said there was a crisis, acted in a 
bipartisan way to respond to that crisis. And, very frankly, I think we 
precluded a depression.
  Americans have an obligation of responsible borrowing, but financial 
companies also have responsibilities to make loans fair and 
transparent. By creating a Consumer Financial Protection Bureau, we can 
make sure that both sides live up to that bargain.
  The Consumer Financial Protection Bureau will strengthen and 
modernize oversight of Wall Street by putting the functions of seven 
different agencies in one accountable place. It seems to me that that 
would appeal to people who want not so much proliferation of various 
agencies crossing one another.
  In addition, corporations like AIG and Lehman Brothers will no longer 
be able to make the kind of gambles that risk the health of our entire 
economy and, indeed, the world's. Institutions that place the biggest 
economic bets will be required to keep capital on hand to meet their 
obligations, should those bets fail, and not expect the taxpayer to do 
  This bill also reduces the conflicts of interest that allowed credit 
rating agencies to wrongfully declare such institutions in good health 
long after they were dangerously overloaded. Of course, the regulators 
weren't watching. There was a philosophy, of course, that regulation 
got in the way.
  And it prudently regulates the inherently dangerous derivatives that 
Warren Buffett called, and I quote, ``weapons of financial mass 
destruction'' for the ability to bring down entire economies when bets 
go bad.
  Should a major firm still find itself on the verge of collapse, this 
bill insulates the rest of the economy and keeps taxpayers off the 
hook, off the hook for any future bailouts.
  Mr. Speaker, a tremendous amount of irresponsibility in Washington 
and on Wall Street went into the crisis from which we are still 
struggling to recover. That crisis, of course, started in December 
2007. Actually, it started long before that, as I said, in the late 
nineties. Middle class families who worked hard and played by the rules 
overwhelmingly paid the price.
  But there's a kind of irresponsibility even worse, failure to learn. 
We know what greed and neglect can do. None of us can plead ignorance.
  Let's show, Mr. Speaker, ladies and gentlemen of this House, that 
we've learned something from the crisis. Let's keep it from happening 
again. That is, I tell my friend, what I hear from my constituents. 
They want to have us stop it from happening again. They're angry about 
it. I'm angry about it. I'm sure that the ladies and gentlemen on both 
sides of the aisle are angry about it. This is an opportunity to 
ensure, to the extent we possibly can, that this tragedy to so many 
millions of families does not happen again.
  Mr. GARRETT of New Jersey. Will the gentleman yield for a question?
  Mr. HOYER. I yield to my friend.
  Mr. GARRETT of New Jersey. I thank the gentleman, and I appreciate 
the gentleman's comments.
  Would the gentleman just agree with this statement, though, that 
neither I nor, I think, anyone on our side of the aisle take the view 
that we want no regulation, that we are proposing no reform; that, 
actually, we have presented a proposal for reform, prior, to the 
administration, that we do believe we need some reform differing in 
approach and an approach that we and some believe would end the 
perpetual bailouts? Would you agree that we just come from a different 
perspective and just want to have a different proposal?
  Mr. HOYER. Reclaiming my time, I thank the gentleman for his 
  As I said at the outset, I do believe we come from a different place. 
And I do believe it is accurate to state that all of the Republican 
Presidents who have served during the time that I have served have 
advanced the proposition that regulation at the Federal level was 
overburdensome and it ought to be reduced.
  Certainly, we ought to reduce regulation that is neither effective 
and is intrusive to the growth of our economy and to the effective 
operation of businesses. But with respect to that, I say to my friend, 
I think what we saw during the last decade was an excessive

[[Page H5251]]

commitment, as Mr. Greenspan pointed out, to the proposition, as Mr. 
Royce stated, Just get out of the way; they will discipline themselves.

                              {time}  1740

  Frankly, the split end that leaves 2 seconds early because the 
referee is not on the field is not a bad person. He is trying to get an 
advantage. And that's the difference I think between our perspectives. 
I understand that difference of the perspectives, so I agree with you 
that we do have a difference in perspective. I believe this strikes the 
right balance.
  And I yield to my friend the chairman.
  Mr. FRANK of Massachusetts. I would just say to the gentleman from 
New Jersey, I can only judge by what I see. When the House voted on 
this bill last December, the minority had certain amendments made in 
order by the rules, not as many as they would have liked or as I would 
have liked, but in the end they had the motion to recommit, over which 
they had complete editorial control. The motion to recommit on this 
version of this bill that passed the House last December from the 
minority said no regulation, no reform of regulation.
  It had one provision. It said kill everything in the bill. It didn't 
say do it differently. It didn't amend it. It didn't change it. It said 
do not change anything. Do not reform anything except end the TARP, 
which thanks to the Senate we are now doing in this bill.
  So I can only judge by what I see. When the gentleman says that, when 
the minority had a chance to offer their own version of this, they 
offered a version that said no, no reform, no change, no regulation, 
leave the status quo.
  Mr. HOYER. Reclaiming my time, and I will now leave the stage after a 
little more than my minute, I will say to my friend that the chairman's 
answer, I think, reflects my view of our different perspectives.
  Mr. BACHUS. Mr. Speaker, at this time I yield 5 minutes to the 
gentleman from Texas (Mr. Hensarling), the ranking member on the 
Financial Institutions Subcommittee.
  Mr. HENSARLING. I thank the gentleman for yielding.
  Mr. Speaker, the cause of our financial crisis is really Federal 
policy that strong-armed, that cajoled, that facilitated financial 
institutions to loan money to people to buy homes who couldn't afford 
to keep them, and people who decided to buy more home than they could 
afford and now expect their neighbors who didn't to bail them out.
  I mean, Mr. Speaker, it's not a matter of deregulation; it was a 
matter of dumb regulation. And there was no dumber regulation than that 
which created the government-sponsored enterprises, and gave them an 
affordable housing mission, and ended up buying the lion's share of 
troubled mortgages, or insuring the troubled mortgages in the system. 
Again, it wasn't deregulation; it was dumb regulation. And all this 
bill before us does is perpetuate the same dumb regulations that got us 
into this financial pickle in the first place.
  The bill before us doesn't go to the root cause. It leaves the 
government-sponsored enterprises, which represent among other things 
the mother of all taxpayer bailouts, $147 billion and counting, with $1 
trillion of taxpayer exposure. They are left in place. Amendments 
Republicans offered to reform the government-sponsored enterprises, no, 
those are somehow out of order. Amendments that would have put them on 
budget, no, those are somehow out of order.
  And in fact, an amendment--there is only one little study in this. 
There are lots of studies; only one study dedicated to the government-
sponsored enterprises. An amendment that would have ensured the study 
at least try to figure out how to make the taxpayer whole, the 
Democrats voted that down. They are even scared of a study that would 
somehow try to make the taxpayers whole.
  Instead, what does this bill do, Mr. Speaker? It creates a permanent 
bailout authority. There is only one reason to have a bailout 
authority, and that's for bailouts. If you want more taxpayer-funded 
bailouts, this is the bill for you. To paraphrase a line from the old 
Kevin Costner movie ``Field of Dreams,'' If you build it, they will 
come. That's the whole reason to have a bailout authority.
  The Federal Government can lend to failing firms. They can purchase 
the assets of failing firms. The Federal Government can guarantee the 
obligations of failing firms. The Federal Government can take a 
security interest in the assets of failing firms. This is a bailout 
authority. The big will get bigger, the small will get smaller, the 
taxpayer will get poorer.
  Now, I know our friends on the other side of the aisle continue to 
say, well, the taxpayer's not going to have to pay anything. Well, the 
Congressional Budget Office, headed by a Democrat, they seem to differ. 
I have a copy of their analysis of the bill dated June 28. ``CBO 
estimates that enacting the legislation would increase direct spending 
by $26.9 billion. Most of that amount would result from provisions that 
would establish a program for resolving certain financial firms that 
are insolvent or in danger of becoming insolvent.'' Now, they are 
notorious for low-balling these estimates, but even they say that 
ultimately taxpayers will be called upon for this bailout authority.
  Mr. Speaker, the best way to end taxpayer bailouts of failing firms 
is to end taxpayer bailouts of failing firms. And that's really the 
choice presented before us. Bankruptcy versus bailouts for failed Wall 
Street firms. The Democrats obviously choose bailouts.
  Second of all, Mr. Speaker, this is a job killer, pure and simple a 
job killer. It creates a new Federal institution to ban and ration 
consumer credit. The Chamber of Commerce, representing Main Street not 
Wall Street, estimates this will increase consumer interest 1.6 percent 
and that 4.3 percent fewer new jobs will be created.
  I hear from community bankers in my district. Cad Williams, East 
Texas National Bank: ``If I have more compliance costs, and the Federal 
Government is going to limit the types of customized credit products I 
can offer, we will lose jobs in Anderson County, Texas.''
  I hear from constituents. Small businessman Tim Ratcliff of Combine, 
Texas: ``I own a small business. I am a distributor for promotional 
products that come from suppliers all over the country. Without easy, 
reliable access to that credit, I am out of business.''
  Mr. Speaker, again, this is a job killer. I haven't even talked about 
the huge new expansion of government within this bill. This should be 
  Mr. FRANK of Massachusetts. I yield 1 minute to the Speaker of the 
  Ms. PELOSI. I commend the gentleman for his great leadership, and I 
thank him for yielding time.
  Mr. Speaker, as I listened to the debate here, I can't help but 
remember, and I have a vivid memory of it, a couple of years ago, 
almost 2 years ago, September 18, a Thursday afternoon, we were 
gathered in our office, and had just seen in the week and a half 
preceding, a week and a half to 2 weeks preceding that day, some 
unusual events that related to Lehman Brothers, Merrill Lynch, and then 
AIG and the Fed bailout of AIG.
  I called the Secretary of the Treasury and said, We are meeting here 
in my office, and wondered if we could be helpful in any way in terms 
of public policy, because what we seem to see coming out from the 
executive branch is chaos. Different responses to different challenges 
that were not adding up to us. Could you, Mr. Secretary, come to the 
Congress tomorrow and give us a report on what is happening? And I said 
could you be here at 9 o'clock tomorrow morning to tell us what is 
happening to the markets? Secretary Paulson said, ``Madam Speaker, 
tomorrow morning will be too late.'' Tomorrow morning will be too late. 
``Why, Mr. Secretary, have you not notified Congress? Why have you not 
called us sooner? Why would it take a call from me to ask you to report 
to us to tell us that tomorrow morning will be too late?''
  Without going into his response, which I am happy to do, but in the 
interests of time I won't now, I then called the Chairman of the Fed, 
Chairman Bernanke, and asked him to join the Secretary of the Treasury 
at my office later that day.
  The meeting turned into a meeting that was House and Senate, 
Democrats and Republicans gathered together to hear from the Secretary 
of the Treasury the condition of the markets. The

[[Page H5252]]

Secretary, who had told us that we couldn't even wait until the next 
morning, described a very, very grim situation.

                              {time}  1750

  The chairman of the Fed, who was an expert on the Great Depression, 
told us that the situation was so grim that if we did not act 
immediately, there would be no economy by Monday. This is Thursday 
night. There would be no economy by Monday. How could it be? We, the 
greatest country in the world with the strongest economy, yet we needed 
to act immediately.
  The response from the Bush administration was a bailout of the banks. 
And at a 24-hour/48-hour period they produced a bill, $700 billion, 
that they asked the Congress to pass to bail out the banks. It was 
necessary to do because of the recklessness of the Bush 
administration's economic policy, because of the lack of supervision, 
discipline, regulation. The recklessness on Wall Street had taken us to 
the brink of a financial crisis of such magnitude that the chairman 
said there wouldn't be an economy by Monday.
  Took us into deep recession where 8\1/2\ million jobs were lost. 
People lost their jobs, therefore in many cases their health insurance. 
They lost their pensions, they lost their savings, they had to live off 
savings, and they lost their investments for their children's 
education. Because of recklessness on Wall Street, joblessness was 
rampant on Main Street.
  One of the reasons was there was no credit. It's interesting to hear 
my colleagues talk about the importance of credit to Main Street, but 
not one of them voted for the Small Business Credit bill that passed in 
this Congress about a week ago.
  But in any event, joblessness, lack of credit, suppressing the 
entrepreneurial spirit of the United States of America, because there 
were some, not all, but some on Wall Street who decided it was okay to 
privatize the game as long as they were making money and nationalize 
the risk. Send the bill to the taxpayer when they were not. That's why 
we are here today to make sure that never happens again, to say to them 
that the party is now over.
  And it's interesting to note that in that message, not one Republican 
participated when this bill came to the floor originally. And that was 
the end of last year. Years of allowing Wall Street to do anything it 
wants, beyond laissez faire, to be overleveraged, no transparency, no 
accountability, produce the most severe financial crisis and economic 
downturn since the Great Depression--and the American people paid the 
  Again, 8 million jobs, nearly $17 trillion in net worth disappeared. 
A record number of foreclosures ravaged our communities. And, again, 
credit disappeared from small businesses. This also had a tremendous 
impact on construction in our country because of the lack of loans.
  Today, I rise with the clear message that the party is over. No 
longer again will recklessness on Wall Street cause joblessness on Main 
Street. No longer will the risky behavior of a few threaten the 
financial stability of our families, our businesses, and our economy as 
a whole.
  The Wall Street Reform and Consumer Protection Act has been 
appropriately named for Chairman Dodd and Chairman Frank, and I thank 
them for their leadership. In doing so, in bringing this legislation 
before the Congress, Chairman Frank and Chairman Dodd are making 
history. For decades to come their names will be identified with 
historic reforms to protect the economy of our country and the 
financial and economic security of the American people.
  I also want to acknowledge Chairman Collin Peterson who carefully 
negotiated some of the most contentious positions of this legislation 
working with Chairwoman Lincoln on the Senate side. All of the 
Democratic conferees, I thank you for your commitment for making the 
strongest bill possible and for always putting America's consumers 
  Today we will follow the lead of those on the committee enacting 
historic legislation to bring transparency to our financial markets, 
lowering the leverage that got us into this trouble in the first place, 
bringing tough oversight to Wall Street, and bringing consumer 
protection to Main Street and to the American people.
  By voting ``yes,'' we will pass the toughest set of Wall Street 
reforms in generations. This comprehensive and far-reaching legislation 
injects transparency and accountability as it lowers leverage and to 
the financial system run amok under the Republicans' reckless economic 
  This legislation makes commonsense reforms that end the era of 
taxpayer bailouts and ``too big to fail'' financial firms. It 
establishes a new independent agency solely dedicated to protecting 
Americans from anticonsumer abuses. The bill closes the door on 
predatory lending and regulates payday lenders. It includes provisions 
to allow us to conduct oversight over the Fed, establishes tough rules 
for risky financial practices, enhances oversight for credit rating 
agencies, and reins in egregious CEO bonuses by giving shareholders a 
say on executive pay.
  It sheds light on the darkest corners of the derivatives market and 
is fully paid for. And how is it paid for? By shutting down the Bush-
era bailout fund known as the TARP and using the savings for financial 
  As we cast our votes today, each Member of this body faces a choice. 
We have had these choices before. Democrats wanted to rein in health 
insurance companies; the Republicans said no. Democrats wanted to rein 
in Big Oil; the Republicans said no. Democrats want to rein in the 
recklessness of some on Wall Street; the Republicans are saying no.
  Each Member of this body will have a choice. We can place our bet on 
the side of those on Wall Street who have gambled with our savings and 
lost, or we can stand with Main Street and the middle class. Will we 
preserve a status quo? And if this bill were to fail, we would be 
preserving a status quo that has left our economy in a wretched state. 
Or will we guarantee the American people strong reforms and effective 
vigilance to prevent another financial crisis?
  How can we possibly resist the change that must happen? How can we 
forget that the chairman of the Fed said if we do not act, we will not 
have an economy by Monday--4 days from when we were having the 
conversation? How can we let the status quo that created that condition 
to continue?
  I urge my colleagues to choose on the side of Main Street. I urge you 
to build a future of stability and security for America's families, 
consumers, and small businesses. I urge you to vote ``aye'' on the 
Dodd-Frank Wall Street Reform and Consumer Protection Act.
  Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I hear two people that I know are leaders of the 
majority; and they each, Mr. Hoyer and Ms. Pelosi, I know they appear 
to be sincere when they say that never again will the American people 
be asked to bail out those on Wall Street who made reckless deals; no 
longer will the taxpayer be put on the hook.

                              {time}  1800

  Yet there is an inconvenient truth here for my Democratic friends, 
and that is the clear wording of the bill. I mean I think it is 
elementary that before we pass legislation that we read it. I would not 
repeat this except that my colleagues in the majority continue to say 
time after time after time that there is no bailout, and there is. 
There is an AIG-style bailout. Now, AIG cannot be saved under this 
legislation. In fact, we changed that, and we both insisted in a 
bipartisan way that the AIGs of today will not survive. They will not 
survive under this bill. AIG, under this bill--and in bipartisan way we 
agree--failed. We say we put the AIGs into bankruptcy, and they are 
resolved in that way. My Democrat colleagues say that an AIG-like 
failing company will be put in an FDIC supervised resolution authority.
  Now, Mr. Frank is correct when he says, Wait a minute. Wait a minute. 
This only occurs when these firms are being placed in liquidation. They 
are being liquidated.
  Well, now, I agree with him, but is there no bailout of anyone on 
Wall Street? Well, of course there is. It is a very expensive bailout.
  In the Dodd-Frank bill, it is section 204D(1-6). I mean, go write 
this down. Go and read it. It says that the FDIC can, one, lend to a 
failing firm; two, purchase the assets of a failing firm; three, 
guarantee the obligation of a

[[Page H5253]]

failing firm; four, take a security interest in the assets of a failing 
firm; five, and/or sell the assets that the FDIC has acquired from the 
failing firm.
  Why would you lend a failing firm money? I keep asking that. The 
second thing is: Where is the bailout fund in this bill?
  There is no bailout fund in this bill. There is $19 billion that is 
assessed towards community banks. They are FDIC assessments that are 
raised, which are about $9 billion, and there is the TARP program that 
ended 3 months sooner than it should have. We were told somehow, 
because we were not going to start any new programs in that 3 months, 
that somehow--hocus-pocus--it saves us about $10 billion. It is hocus-
pocus because you cannot spend the money on the new programs in this 
bill and then turn around and suddenly pull out of a hat that same 
money and give it back to the taxpayers. It just doesn't happen.
  Also, Speaker Pelosi may forget that one of the first signs of 
trouble was not in September of 2008 but in July of 2008 when we 
suddenly realized that Fannie and Freddie were insolvent and that many 
of our banks, almost all of our banks, had major positions in their 
shares. Why did they have major positions in the shares of Fannie and 
Freddie? They lost all of that money because the government had said, 
If you'll invest in that, we'll give you a special rating, and we'll 
count it as the same as treasuries. It disappeared overnight.
  Now, that was in July, not in September. Banks took a hit on that. 
The Democrats said at that time--and the Bush administration and 
Secretary Paulson--we've got to give $400 billion to Fannie and Freddie 
because, in 1999, under the Clinton administration, you said let's loan 
to people with poor credit; let's loan to people without much of a 
downpayment. Republicans and Democrats both rushed to use this as a 
source of cheap money, and it failed.
  Republicans said--and still say and say as this bill is on the 
floor--wait a minute. You're going to reform these companies before you 
pour taxpayer dollars in them. Every Republican in the House voted, no, 
we will not give them taxpayer money until they are reformed and there 
is a plan to liquidate them.
  The chairman says we need to liquidate them. What about Fannie and 
Freddie? Why aren't we liquidating them? We're not. The biggest bailout 
that we've had is of Fannie and Freddie. Who did we bail out? Did we 
bail out the banks that had shares? No, we bailed out the Chinese 
bondholders. Secretary Paulson said, You know what? The Chinese might 
not lend us any money.
  Let me tell you that we'll sure need the Chinese to lend us money if 
this bill passes, because there is a derivatives section in here.
  Now, we have a letter that Chairman Peterson produced, which said 
this doesn't affect end users, but it's a letter. The truth is we were 
in conference last week when we fought this out, and we voted for an 
exemption for end users. The Democrats voted against one. We've been 
told in the past 48 hours, 72 hours, by groups like the International 
Swap and Derivatives Association that this bill will cost businesses $1 
trillion. $1 trillion. That is capital. It doesn't matter whether they 
trade on the derivatives or if someone does it for them. Someone has to 
post that capital, and that goes through and is an expense for that 
commercial company.
  If you take $1 trillion out of the economy suddenly, sure, you are 
going to have a crisis like this bill anticipates. This bill says, if 
there is such a crisis, then a receiver is appointed. Chairman Frank 
keeps saying, A receiver is appointed. A receiver is appointed.
  That's right. That receiver, after 30 days, is authorized to borrow 
90 percent of the fair value of the failing companies.
  Chairman Frank, that is $8.5 trillion. That money is not in this 
bill. There is not even $10 billion in this bill for this type of 
resolution. So you have to go to the banks or you have to go to the 
financial companies or you're going to get it after the fact. If 
they're failing, how are they going to pay it?
  I want to close with a positive. The 320 Members of this House who 
took a stand can take a stand in just a few minutes.
  Collin Peterson, Chairman Peterson, said that there are no 
requirements that end users post margins. We all agree that, if they 
had to, it would be $1 trillion out of these companies. $1 trillion, 
according to Joe Biden, will produce 700,000 to 1.4 million jobs and 
will produce as many as 200,000 jobs a month. So that is the hit to 
this economy if this does apply to end users.
  So we have a motion to recommit. First, it says there is an exemption 
on end users. Now, you have said that there is one, and you have this 
letter from Chairman Dodd and Blanche Lincoln saying there is one, so 
that's half of it. So you'd vote for that because you're saying it's in 
  Secondly, there is the Federal audit. We need the taxpayers to 
demand--and the voters are demanding--of Mr. Hoyer transparency at the 
Fed. They are spending trillions of dollars. They are committing 
trillions of dollars. Let's have this audit of the Fed.
  Mr. Speaker, the American people are sick and tired of back room 
deals and secret manipulations of the economy to benefit political 
cronies at the expense of taxpayers.
  The voters and taxpayers are demanding transparency and 
accountability and they will not be pacified with false promises or 
misdirection. Calling a bank tax an ``assessment'' fools no one, 
especially the voters.
  That's why I will be offering a motion to recommit at the conclusion 
of this debate that will replace the weak Federal Reserve Audit in the 
conference report with a robust provision patterned after a bill co-
sponsored by 320 members of this House when it was offered by 
Congressman Paul.
  Taxpayers want to see for themselves what their government is doing 
with their money. And that includes specifically the Federal Reserve, 
an institution that has unfettered powers and whose errors of judgment 
were a contributing cause of the financial crisis.
  Monetary policy fueled the credit boom and bust cycle. The Fed needs 
to be held accountable for any mistakes it has made in the past and any 
it may be making now. Failing to hold the Fed accountable increases the 
likelihood of those mistakes being repeated in the future, and exposes 
taxpayers to an unacceptable level of risk.
  The American people support a full audit of the Federal Reserve 
System to achieve the level of transparency needed to protect taxpayer 
dollars and ensure accountability.
  With each taxpayer dollar it committed during the financial crisis, 
the Fed assured the American people they would not take losses. 
American taxpayers deserve more than the central bank's assurances; 
they deserve proof. A full audit of the Federal Reserve System is the 
only way to create the openness that a democratic society like ours 
  The second element of the Motion to Recommit attempts to correct one 
of the most damaging aspects of this bill and that is saying a lot 
because there are a number of seriously misguided provisions in this 
  Several items in the conference report will impact companies' ability 
to create jobs.
  It has been reported that BP and Enron have tried to manipulate 
markets using derivatives but we do not need any new law to regulate 
that kind of illegal activity. It is already illegal. We do need 
regulators to enforce the rules.
  The lack of an end user exemption for commercial companies in the 
derivatives title will pull an estimated one trillion dollars of 
resources from job creation and investment.
  Coincidentally, the combined stimulus packages enacted in the last 
two years also amounts to about one trillion dollars. Vice President 
Biden told us on June 2nd that the Obama stimulus package alone would 
result in the creation of between 700,000 and 1.4 million jobs in the 
remainder of 2010. Under the vice president's logic, diverting one 
trillion dollars from productive commercial business capital could 
presumably destroy up to 1.4 million jobs.
  Instead of allocating precious resources to hire more people or 
increase wages, commercial companies will have to post capital every 
time they enter into a derivatives contract to hedge against legitimate 
business risk.
  If this legislation--supposedly intended to regulate the financial 
services industry--is enacted, capital requirements will force non-
financial companies to abandon legitimate hedging strategies and accept 
excessive volatility at a cost that will ultimately be borne by their 
customers and employees.
  Margin requirements for ``end-users'' are not a new issue for Members 
of the House. Chairman Frank tried to insert an amendment in the House 
bill last December which would have explicitly allowed regulators to 
set margin requirements for end-users. It failed overwhelmingly, by a 
vote of 150 to 280.
  Withdrawing a trillion dollars from the private sector could well sow 
the seeds of the

[[Page H5254]]

next crisis because it could destabilize the financial system, possibly 
triggering another vicious cycle of government bailouts to correct the 
results of bad government policy.
  The House should ensure that the potential economic harm in these 
derivative provisions is avoided by approving this Motion to Recommit 
and sending this defective legislation back to the conference to be 
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. I yield myself the balance of my time.
  The SPEAKER pro tempore. The gentleman has 7\3/4\ minutes remaining.
  Mr. FRANK of Massachusetts. Mr. Speaker, to begin, I want to address 
the Members who are concerned that the interchange amendments will 
unduly affect smaller financial institutions. The interchange amendment 
wasn't part of the bill here. It was put in by a very heavy vote in the 
Senate, and the conference process means you compromise.
  There is in that amendment, as Senator Durbin put it in, an exemption 
for any fee setting by the Federal Reserve for smaller institutions. 
They then feared that they would be discriminated against, so we 
amended the amendment with the participation of the Senate, obviously. 
There are three provisions that protect the smaller institutions, 
community banks and credit unions.
  There is an antidiscrimination provision that says that merchants and 
retailers cannot refuse to accept a debit card. There can be no 
discrimination against small banks for their credit cards. The Federal 
Reserve, the instructions to the Federal Reserve, include making that 
antidiscrimination work, and we can guarantee people we will do it.
  So, yes, as the amendment passed the Senate, it said that these 
smaller institutions were exempt but that they might have suffered 
discrimination. They are protected in this bill. That's why, for 
instance, the small banks in Illinois have endorsed this bill.
  I also want to talk briefly about what has happened with the TARP. We 
had the two last Republican speakers. One hailed the CBO as an 
unassailable authority. Then the final speaker said it was hocus-pocus. 
It is apparently unassailable hocus-pocus, which I don't want to get 
into. It's too late at this time.
  This is how the TARP thing works. There are two parts to the TARP. 
The bill does say that repayments go to debt relief. There have been 
substantial repayments from the banks, and those go to debt relief. 
They are unaffected by the amendment. What the amendment says is there 
are still tens of billions of dollars of TARP money that could be 
committed. The amendment we adopted in conference says no more, that 
they cannot do that. That's where the savings comes. So the savings 
comes from not allowing additional TARP spending.
  You know about the Republicans with regard to cutting off TARP? They 
were for it before they were against it. They used to be all for 
cutting out the TARP until it came up here. Now, let me say I don't 
like that way to do it. I prefer what we had in our provision, which 
was to assess the Goldman Sachs, JPMorgan Chase, Mr. Paulson's hedge 
fund. That's the way we wanted to do it, but we couldn't get it through 
the Republicans in the Senate. So, first, Republicans in the Senate 
tell us, Don't do it. Then other Republicans in the Senate say, Why 
didn't you do it?
  So I'll make Members a pledge right now: The committee I chair will, 
I hope, bring out a bill that revives that assessment on the financial 
institutions above $50 billion and the hedge funds. So Members who 
missed it will get a chance to show us they really care. We will bring 
them there, and we will have that come forward.
  Now, I do want to talk a little bit about subprime lending and about 
the partial history we get.
  The fact is that the Republican Party controlled the House and the 
Senate from 1995 to 2006. During that period, they showed remarkable 
restraint. As eager as they were to restrain subprime lending and as 
passionate as they were to reform Fannie Mae and Freddie Mac, they 
didn't do it. That's a degree of abstinence unparalleled in political 
history. They were in charge.
  Whose fault was it? Apparently, it was our fault. It was my fault. As 
I said before, people have accused me of being this secret manipulator 
of Tom DeLay. Well, if that were the case, you wouldn't have cut taxes 
for very rich people. You wouldn't have gone to war in Iraq. As I said, 
if he were listening to me, he wouldn't have gotten on the dance show. 
So I don't take responsibility for Mr. DeLay. The Republican Party 
didn't do it.
  Now, the gentleman from California (Mr. Royce) said he tried in 2005. 
He had an amendment to the bill of Mr. Oxley. Mr. Oxley, the Republican 
chairman of the committee, brought out a bill. Mr. Royce didn't like 
it. He brought up his amendments. If no Democrat had voted either in 
committee or on the floor of the House on that bill, it would have 
looked exactly as it looked. The majority was Republican. So, 
apparently, the gentleman from California (Mr. Royce) wasn't able to 
persuade even a third of his fellow Republicans to vote with him.
  I'm sorry he wasn't able to do better. I'm not an expert in how to 
get Republicans to vote with you, so I can't offer him any help. Maybe 
he can find somebody who can teach him how to get better votes among 
Republicans, but it's not our fault that the Republican Party didn't do 
  By the way, in 2003, I did say I didn't see a problem with Fannie Mae 
and Freddie Mac. Then, in 2004, President Bush said to Fannie Mae and 
Freddie Mac, I order you. He had the power and he used it. He used it 
to order them to increase their subprime lending purchases. By the way, 
he wasn't alone in that. A June 22 article from the Wall Street Journal 
quotes a Member of Congress, in 2005, at a hearing, saying, ``With the 
advent of subprime lending, countless families have now had their first 
opportunity to buy a home or perhaps be given a second chance.'' Fail 
once. Get it again.
  The American Dream should never be limited to the well-offs or to 
those consumers fortunate enough to have access to prime rate loans. 
That is from the gentleman from Texas (Mr. Hensarling). So George Bush 
wasn't alone in that.
  Then 2007 came, and the Democrats took power. We passed a bill, for 
the first time in this House, to regulate Fannie Mae and Freddie Mac. 
Secretary Paulson liked the bill. He said it didn't go as far as he 
would have liked, but it was a good bill. In 2008, it finally passed, 
and Fannie Mae and Freddie Mac were put in a conservatorship. They were 
the first major institutions to be reformed.
  By the way, in 2007, in this House, we also passed a bill to control 
subprime lending. Now, the gentleman from Alabama had been the chairman 
of the subcommittee with jurisdiction over subprime lending during some 
of those Republican years, and he never produced a bill. He said it was 
our fault. He wrote us a letter--myself, Mr. Watt of North Carolina, 
and Mr. Miller of North Carolina--and we didn't tell him we'd vote for 
  You know, I wish I could have it back. I wish I knew I was secretly 
in charge of the Republican agenda. I wish I knew they wouldn't do 
anything unless I said they could and that they would do something if I 
said they should, but no one told me. Where were they when I needed 
them to be more powerful? He didn't bring it forward. It wasn't my 
fault. The Republicans never checked with me as to what they were 
supposed to do.
  In 2007, we did pass such a bill to restrict subprime lending, and 
The Wall Street Journal attacked us. It said it was a ``Sarbanes-
Oxley'' for housing. Sarbanes-Oxley is about as nasty as you can get in 
The Wall Street Journal, and here is what they said about subprime 
lending in 2007.

                              {time}  1815

  So maybe that is why George Bush expanded subprime lending.
  The Wall Street Journal said in 2007, complaining about our bill, 
``But for all the demonizing, about 80 percent of even subprime loans 
are being repaid on time and another 10 percent are only 30 days 
behind. Most of these new homeowners are low-income families, often 
minorities, who would otherwise not have qualified for a mortgage. In 
the name of consumer protection, Mr. Frank's legislation will ensure 
that far fewer of these loans are issued in the future.''
  Yeah. Unfortunately, a couple of years too late, because we couldn't 
get that through. But the Wall Street

[[Page H5255]]

Journal was right, we would limit them, but wrong, along with the 
gentleman from Texas (Mr. Hensarling) about the subprime loans. And I 
also wanted to do affordable rental housing, which that administration 
  This bill has the biggest package of increased consumer protections 
in the history of America. And it doesn't ban products or ration 
products. It says there is going to have to be fair dealing. This bill 
says that there is a fiduciary responsibility on people selling 
products to individual investors for the first time. It gives the SEC 
the power to do it, and they are going to do it. This bill reforms the 
system, and I hope it is enacted.
  This conference report would not have been possible without the hard 
work of staff on both sides of the Capitol. I thank them for their 
efforts and submit the following list:

                       Wall Street Reform--Staff

                   House Financial Services Committee

       Jeanne Roslanowick
       Michael Beresik
       David Smith
       Adrianne Threatt
       Andrew Miller
       Daniel Meade
       Katheryn Rosen
       Kate Marks
       Kellie Larkin
       Tom Glassic
       Rick Maurano
       Tom Duncan
       Gail Laster
       Scott Olson
       Lawranne Stewart
       Jeff Riley
       Steve Hall
       Erika Jeffers
       Bill Zavarello
       Steve Adamske
       Elizabeth Esfahani
       Daniel McGlinchey
       Dennis Shaul
       Jim Segal
       Brendan Woodbury
       Patty Lord
       Lois Richerson
       Jean Carroll
       Kirk Schwarzbach
       Marcos Manosalvas
       Marcus Goodman
       Garett Rose
       Todd Harper
       Kathleen Mellody
       Jason Pitcock
       Charla Ouertatani
       Amanda Fischer
       Keo Chea
       Sanders Adu
       Hilary West
       Flavio Cumpiano
       Karl Haddeland
       Glen Sears
       Stephane LeBouder

                     Office of Rep. Carolyn Maloney

       Kristin Richardson

                      Office of Rep. Gregory Meeks

       Milan Dalal

                     Office of Rep. Mary Jo Kilroy

       Noah Cuttler

                       Office of Rep. Gary Peters

       Jonathan Smith

                      House Agriculture Committee

       Clark Ogilvie

                         House Budget Committee

       Greg Waring

                  House Energy and Commerce Committee

       Phil Barnett
       Michelle Ash
       Anna Laitin

                       House Judiciary Committee

       George Slover

            House Oversight and Government Reform Committee

       Mark Stephenson
       Adam Miles

                       House Legislative Counsel

       Jim Wert
       Marshall Barksdale
       Brady Young
       Jim Grossman

                        Senate Banking Committee

       Ed Silverman
       Amy Friend
       Jonathan Miller
       Dean Shahinian
       Julie Chon
       Charles Yi
       Marc Jarsulic
       Lynsey Graham Rea
       Catherine Galicia
       Matthew Green
       Deborah Katz
       Mark Jickling
       Donna Nordenberg
       Levon Bagramian
       Brian Filipowich
       Drew Colbert
       Misha Mintz-Roth
       Lisa Frumin
       William Fields
       Beth Cooper
       Colin McGinnis
       Neal Orringer
       Kirstin Brost
       Peter Bondi
       Sean Oblack
       Steve Gerenscer
       Dawn Ratliff
       Erika Lee
       Joslyn Hemler
       Caroline Cook
       Robert Courtney
       Abigail Dosoretz

                      Senate Agriculture Committee

       Robert Holifield
       Brian Baenig
       Julie Anna Potts
       Pat McCarty
       George Wilder
       Matt Dunn
       Elizabeth Ritter
       Stephanie Mercier
       Anna Taylor
       Cory Claussen

                       Senate Legislative Counsel

       Rob Grant
       Alison Wright
       Kim Albrecht-Taylor
       Colin Campbell
       Laura McNulty Ayoud

                     Congressional Research Service

       Baird Webel

  Mr. LEVIN. Mr. Speaker, I rise in strong support of H.R. 4173, the 
Wall Street Reform and Consumer Protection Act.
  Almost two years ago, this House was faced with painful dilemma: risk 
the collapse of our financial system and a second Great Depression, or 
take action to stabilize financial markets. The comprehensive financial 
regulatory reform before us will help to ensure that we are never again 
forced to choose between bailing out banks and saving our economy.
  In the run up to the financial crisis, rampant speculation, and in 
some cases fraud, in the residential housing and mortgage markets 
combined with an explosion of complexity in our financial markets to 
create a bubble that when it burst, rippled through our entire economy. 
The financial crisis that began in 2008 was the worst since the Great 
Depression and was enabled and made worse by a lax regulatory 
environment that for many years failed to properly supervise financial 
markets and control the risks Wall Street was creating.
  Under the bill before us, for the first time, there will be a federal 
regulatory body with the responsibility to identify and address 
systemic risks to our economy. Transparency will be brought to 
derivatives markets so that these complex financial instruments cannot 
transmit shockwaves through our financial system. Consumers will be 
able to get the clear, accurate information they need to shop for 
credit cards, mortgages and other financial products, rather than being 
sold products that are too good to be true by unregulated lenders who 
know they are unaffordable.
  Mr. Speaker, the Wall Street Reform and Consumer Protection Act will 
restore responsibility, accountability and transparency to our 
financial markets. I urge all of my colleagues to stand with the 
working Americans who have been the victims of the financial crisis 
rather than defend a discredit ideology that says government is always 
wrong and markets are always right. We have seen in the last two years 
that markets can get out of control, and we need appropriate structures 
in place to ensure that our financial markets work for all Americans.
  Mr. BACHUS. Mr. Speaker, I want to add these comments regarding 
Section 913 of the Report calling for a review by the Securities and 
Exchange Commission, SEC, of the current regulation of investment 
advisers and broker-dealers.
  The Conference Report on H.R. 4173 directs the SEC to conduct a study 
to evaluate the effectiveness of current standards--both at the state 
and federal levels--with respect to investment advisers and broker-
dealers when providing personalized investment advice and 
recommendations about securities to retail customers.
  Before the SEC proceeds with any new rules and regulations in this 
area, it is critically important that the unique roles of different 
financial professionals, their distinct relationships with their 
customers, and the nature of the services and disclosures they provide 
be fully examined and well understood. These definitive factors should 
provide information to guide the SEC in determining if any new rules 
and regulations are needed and defining the details of any such 
measures that might be proposed.
  The conferees included the requirement for a comprehensive study for 
these purposes, and I anticipate that the SEC will follow the intent of 
Congress with a thorough and objective analysis in this regard.
  Mr. DAVIS of Illinois. Mr. Speaker, we are gathered today with the 
opportunity to implement Wall Street reform, and help make our 
financial markets safer for everyday American citizens, investors, and 
small businesses. At the center of our efforts today is the concept of 
power, and what it means to those who have it, and those who don't. 
Baltasar Gracian, a renowned Spanish Jesuit writer, once said that 
``The sole advantage of power is that you can do more good.''
  I think many people would agree with me that the corporations and 
executives on Wall Street have considerable power. The question 
remains, however, whether they are using that

[[Page H5256]]

power to do good things. People will point out, and I agree, that they 
are making many people very wealthy, but at what cost? For too long 
corporate interests have been allowed to dominate decision making in 
America's financial capital, and many times, this has meant unfair and 
predatory practices. As lawmakers, we should set out to make our 
financial markets a more evenhanded place for our citizens, and the 
consumers that put their trust and money on the line.
  One of the key things that H.R. 4173 will do is to create a Consumer 
Financial Protection Bureau, tasked with the responsibility of making 
sure consumer lending practices are fair. Also, under the Volcker rule, 
large financial institutions would no longer be allowed to engage in 
risky trading using federal dollars, supported by taxpayers. Throughout 
the many various initiatives and stipulations in the bill, one theme is 
clear: protecting American citizens, and maintaining a fair market that 
allows both informed consumers and powerful financial markets to thrive 
in tandem.
  H.R. 4173 does not set out to take power away from those on Wall 
Street, but to make sure they use their many strengths and abilities 
for the benefit of the average American investor and small business 
owner. I rise in support of H.R. 4173, the Restoring American Financial 
Stability Act of 2010, knowing that the benefits and wealth for the few 
should not come at the cost of the many.
  Mr. PETERSON. Mr. Speaker, I rise today to discuss some of the 
jurisdictional issues that arise out of Title VII of H.R. 4173. The 
bill brings a new regulatory regime to swaps as it will be defined 
under the Commodity Exchange Act, CEA. Title VII of H.R. 4173 extends 
the Commodity Futures Trading Commission's, CFTC's, exclusive 
jurisdiction under the CEA to also include swaps, except as otherwise 
provided elsewhere in Title VII. Also included in Title VII are two 
savings clauses for the Securities and Exchange Commission, SEC, and 
one for the Federal Energy Regulatory Commission, FERC.
  Title VII allocates authority over swaps and security-based swaps as 
follows. First, the CFTC has exclusive jurisdiction over swaps, 
including swaps on broad-based security indexes. Within the swap 
definition is a category of swaps called security-based swap 
agreements. For this specific category of swaps, the CFTC will continue 
to exercise its full jurisdictional authority, while the SEC may 
exercise certain specific authorities over these products, as outlined 
in Title VII. Title VII also clarifies that the SEC has jurisdiction 
over security-based swaps, which are swaps on narrow-based security 
indexes and single securities, and that the two agencies share 
authority over mixed swaps.
  Nothing in the SEC savings clauses, or any other provision of Title 
VII, alters the existing jurisdictional divide between the CFTC and SEC 
established by the Johnson-Shad Accord which, among other things, 
provides the CFTC exclusive jurisdiction over futures (and options on 
futures) on broad-based security indexes. Nor do these savings clauses, 
or any other provision of Title VII, divest or limit the authority that 
the CFTC shares with the SEC over security futures products as 
authorized by the Commodity Futures Modernization Act of 2000.
  This bill also clarifies the authorities of the CFTC and FERC over 
financial instruments--both swaps and futures--traded pursuant to FERC 
or state approved tariffs or rate schedules.
  Section 722 preserves FERC's existing authorities over financial 
instruments traded pursuant to a FERC or state approved tariff or rate 
schedule, which under current law does not extend to CFTC-regulated 
exchanges and clearinghouses, because these are within CFTC's exclusive 
jurisdiction. The CFTC's authorities over futures and swaps traded 
pursuant to FERC or state approved tariffs or rate schedules are also 
fully preserved. The bill further specifies that, outside of regional 
transmission organizations/independent system operators (RTOs/ISOs) 
markets, the CFTC shall continue to have exclusive jurisdiction over 
financial instruments traded on CFTC-regulated exchanges, such as NYMEX 
or ICE, traded through swap execution facilities, or cleared on CFTC-
regulated clearinghouses.
  To avoid the potential for overlapping or duplicative FERC and CFTC 
authority, the bill provides the CFTC with the authority to exempt 
financial instruments traded within an RTO/ISO from CFTC regulation if 
the CFTC determines the exemption would be consistent with the public 
interest and the purposes of the Commodity Exchange Act.
  Section 722 also preserves FERC's anti-manipulation authority as it 
currently exists under the Federal Power Act and the Natural Gas Act 
prior to enactment of this legislation.
  Mr. SKELTON. Mr. Speaker, thriving capital markets depend upon 
innovation to grow the economy and to generate jobs. Yet, market 
innovation must be conducted responsibly and must be carefully 
monitored by public regulators to ensure Wall Street's complex 
financial transactions do not put at risk the savings of average 
American families or the national economy as a whole. The famous quote 
by U.S. Supreme Court Justice Louis Brandeis indicating that ``sunlight 
is the best disinfectant'' certainly applies to Wall Street.
  In recent years, market innovation ran afoul of public regulators as 
financial giants gambled with the savings of working families and 
placed irresponsible bets that put in jeopardy America's financial well 
being. Titans of the financial industry acted not to promote the 
general welfare of the United States, as is outlined in the preamble to 
our Constitution, but against the well-being of the American public. 
And, as all of us know, broken regulations, greed, and incessant risk 
taking on Wall Street cost each one of us--the American taxpayers--who 
helped to save our economy from ruin in the fall of 2008.
  From the beginning of this crisis, I have felt strongly that Congress 
ought to consider authorizing tough new regulations on Wall Street to 
help shine a brighter light on extremely complex financial 
  In my view, writing into law mechanisms that prevent financial 
institutions from getting ``too big to fail;'' that reform the Federal 
Reserve; that better regulate hedge funds, securities, derivatives and 
credit rating agencies; and that give shareholders a greater say in the 
compensation of financial company executives makes good sense and, if 
done properly, would help to ensure American taxpayers are never again 
put on the hook for Wall Street's misbehavior while creating an 
environment for responsible market innovation.
  But, as important as new regulations are for our country, Congress 
must be careful in authorizing them. We must direct regulations at Wall 
Street and other bad actors while not wrapping America's home town 
financial institutions into costly and complex sets of new rules, such 
as those associated with the new Consumer Financial Protection Bureau. 
Community banks and credit unions are the heart of small towns across 
this country. For years, they have been conservative with their money 
and played by the rules. They ought not be forced to pay the price for 
Wall Street's transgressions.
  The Dodd-Frank Wall Street Reform and Consumer Protection Act is 
well-intentioned, and I support much of the legislation. But the 
measure falls short in my goal to target Wall Street without disrupting 
Main Street banks and credit unions and their customers.
  Home town financial institutions help to generate jobs and economic 
development in rural America by lending to families, small businesses, 
and farmers. They will be key to our nation's economic recovery and 
should be guaranteed more, not less, economic certainty by Congress. 
The uncertainty associated with the Dodd-Frank bill is why it is 
opposed by Missouri's small town banks and credit unions and by many in 
our nation's business community.
  Creating more economic certainty for Missouri's business community 
and improving rural economic development have been priorities for me 
during the 111th Congress. It is why I have sought to cut small 
business taxes and to cut red tape associated with government backed 
small business loans, opposed a massive health insurance overhaul bill, 
urged bank regulators to consider easing restrictive capital 
requirements on small banks that want to issue loans, and supported a 
$30 billion small business lending fund program to allow community 
banks to lend money to healthy small businesses that want to expand and 
hire workers.
  Wall Street reform is badly needed and the Dodd-Frank bill is a step 
in the right direction. However, I cannot lend my support to a bill 
that places costly new regulations on Missouri's home town banks and 
credit unions at a time when the government ought to be encouraging 
them to lend money to create jobs in the private sector.
  I urge the conference committee to return to work on the Dodd-Frank 
bill so it can fine tune the bill's new regulatory authority in a way 
that cracks down on Wall Street financial firms and irresponsible 
mortgage lenders without unduly targeting America's community banks. 
This action would be in the best interest of financial system reform 
and of the overall economic well being of small town America.
  Ms. CORRINE BROWN of Florida. Mr. Speaker, I rise today to speak 
about H.R. 4173, the Wall Street Reform and Consumer Protection Act.
  Credit unions have been good stewards of our money. I say our money, 
because while they have not been eligible for any of the TARP funds, 
they have not been involved in the subprime loan situation many have 
blamed as causing this economic crisis. When the stimulus went into 
effect, Credit Unions were the only ones trying to lend money.
  I have been hearing a lot from the credit unions and community banks 
in my district regarding the debit interchange provision. I am very 
concerned that the interchange provision

[[Page H5257]]

may have the unintended consequence of adversely affecting these small 
financial institutions. I know they are intended to be carved-out of 
this provision and I hope that my colleagues will join me in 
encouraging the Federal Reserve and the card payment networks to make 
sure that the carve-out envisioned under this provision is meaningful 
and effective.
  I was pleased to read the statement from Chairman Frank restating his 
views of the interchange amendment included in the conference report. I 
urge him to work with the Credit Union National Association as it works 
with the Fed to ensure that credit unions with under $10 billion in 
assets were held exempt from the Fed interchange changes. Chairman 
Frank's statement gives the Fed strong guidance to follow when this 
bill becomes law.
  In conclusion, the Interchange language exempts all community banks 
and credit unions with under $10 billion in assets. To achieve this, 
we: included language that explicitly prohibits intra-brand 
discrimination. Thus, if a merchant takes a Visa debit card, it must 
take all Visa debit cards. Also exempted credit cards. As Chairman 
Frank has noted, ``for good measure . . . merchants and retailers 
cannot discriminate against small banks for the credit cards they 
issue.'' Furthermore, when the Federal Reserve issues rules regulating 
interchange fees, it is directed, in Chairman Frank's words, ``to 
ensure that community banks and credit unions remain exempt from the 
requirements and are able to continue to issue their debit cards 
without any market penalty.''
  This exempts all but three credit unions nationwide.
  Beyond this, here are additional measures in the Interchange 
amendment that more broadly benefit working families: fixed states' 
concerns by removing government-administered pay programs from 
interchange fee regulation. Fixed concerns of pre-paid folks who offer 
services to the under-banked by removing them from interchange fee 
regulation. With respect to this, we also added pro-consumer language 
that Sander Levin has in a bill to prohibit overdraft fees and fees on 
the first monthly ATM withdrawal using one of these cards. Ensured that 
USDA's SNAP, food stamp, program is not affected.
  I look forward to passage of this bill and the fair treatment of 
Credit Unions by the Federal Reserve.
  Mr. HASTINGS of Florida. Mr. Speaker, I want to commend Chairman 
Frank on an extraordinary effort and for his dedicated leadership in 
bringing this bill to the floor. I look forward to supporting this 
  Before that however, I would like to clarify a few points as they 
pertain to the intent of this bill.
  It is my understanding that certain provisions which are intended to 
improve access to mainstream financial institutions are not intended to 
further limit access to credit and other financial services to the very 
consumers who are already underserved by traditional banking 
  As the Chairman knows, each year, over 20 million working American 
families with depository account relationships at federally insured 
financial institutions actively choose alternative sources and lenders 
to meet their emergency and short-term credit needs.
  These alternative sources and lenders often offer more convenient and 
less expensive products and services than the banks or credit unions 
where these consumers have relationships.
  Further, as the demand for short-term, small dollar loans continues 
to increase as a result of the current economic environment, non-
traditional lenders have filled the void left by mainstream financial 
institutions in many of our nation's underbanked communities.
  I agree with the Chairman that lenders should meet this demand 
responsibly with clear, well-disclosed product terms and conditions 
that do not encourage consumer dependence and indebtedness.
  I would also stress that regulation of this sector of the market 
should ensure strong consumer protections while encouraging a broad 
range of product offerings without discrimination as to the type of 
  Therefore, regulation of short-term credit products and of the 
lenders who offer them, whether they be traditional financial 
institutions or non-traditional lenders, should not be used to single 
out an entire sector.
  Rather, it should be well-balanced and carried out in a manner that 
encourages consumer choice, market competition, and strong protections.
  It is my sincere hope that this legislation is designed to carefully 
and fairly police the financial services industry, treating similar 
products in the short-term credit market equally while encouraging 
lending practices that are fair to consumers. Is this the intent of the 
  I thank the Chairman, commend his continued efforts to pass 
meaningful financial regulatory reform this Congress, and thank him for 
his previous efforts to ensure we responsibly address the role of non-
traditional financial institutions. I look forward to continuing our 
work together in this matter and as we further our efforts to put our 
nation back on solid financial footing.
  Mr. BLUMENAUER. Mr. Speaker, I rise today to support the Conference 
Report on H.R. 4173--the Dodd-Frank Act of 2010. This legislation will 
strengthen our financial system by providing new rules that bar big 
banks and Wall Street investment houses from the risky practices that 
badly damaged our economy. The legislation also enacts new consumer 
protections to block predatory lending practices and financial 
  It was famously remarked by Professor Elizabeth Warren that it is 
``impossible to buy a toaster that has a one-in-five chance of bursting 
into flames and burning down your house. But it is possible to 
refinance an existing home with a mortgage that has the same one-in-
five chance of putting the family out on the street.'' With passage of 
this bill, Congress has ensured stronger protections for families and 
small businesses by ensuring that bank loans, mortgages, and credit 
cards are fair, affordable, understandable, and transparent. The bill 
has been called the ``strongest set of Wall Street reforms in three 
generations'' by Professor Warren. I am proud of my work with Professor 
Warren and I commend her efforts in strengthening this bill.
  The financial crisis cost us 8 million jobs and $17 trillion in 
retirement savings. It was the worst financial crisis since the Great 
Depression. The financial crisis limited investment, cost jobs, put 
families on the street, and has ushered in a sense of financial anxiety 
that limits American imagination and opportunity.
  The Dodd-Frank Act establishes a strong set of consumer protections, 
including a Consumer Financial Protection Bureau that will be led by an 
independent director appointed by the President and confirmed by the 
Senate, with a dedicated budget in the Federal Reserve. The Bureau will 
write rules for consumer protections governing all financial 
institutions--banks and non-banks--offering consumer financial services 
or products and oversee the enforcement of federal laws intended to 
ensure the fair, equitable and nondiscriminatory access to credit for 
individuals and communities. The bureau will roll together 
responsibilities that are now spread across seven different government 
entities, providing consumers with a single, accountable, and powerful 
  The legislation also establishes strong mortgage protections. The 
bill requires that lenders ensure that their borrowers can repay their 
loans by establishing a simple federal standard for all home loans. 
Lenders also are required to make greater disclosures to consumers 
about their loans and will be prohibited from unfair lending practices, 
such as steering consumers to higher cost loans. Lenders and mortgage 
brokers who fail to comply with new standards can be held accountable 
by consumers for as much as three-years of interest payments, any 
damages, and any attorney's fees.
  The Dodd-Frank Act also disciplines Wall Street. It imposes tough new 
rules on banks to prevent the risky financial practices that led to the 
financial meltdown. Taxpayers will no longer pay the price for Wall 
Street's irresponsibility. The bill creates a process to shut down 
large failing firms whose collapse would put the entire economy at 
risk. After exhausting all of the company's assets, additional costs 
would be covered by a ``dissolution fund,'' to which all large 
financial firms would contribute.
  The dissolution of a failing firm will be paid for first by 
shareholders and creditors, followed by the sale of any remaining 
assets of the failed company. Any shortfall that results is paid for by 
the financial industry. The bill requires big banks and other financial 
institutions, those with $50 billion in assets, to foot the bill for 
the failure of any large, interconnected financial institution posing a 
risk to the entire financial system, as AIG did in the run-up to the 
2008 financial crisis. Financial institutions will pay assessments 
based on a company's potential risk to the whole financial system if 
they were to fail. Before regulators can dissolve a failing company, a 
repayment plan to charge Wall Street firms and big banks must be in 
place to recoup any cost associated with the shutdown.
  It has been remarked that the markets will discipline themselves, 
that all that stands between poverty and wealth is some mythical 
regulatory barrier. But that is not what we found in the financial 
world and not what recent history illustrated. Instead, the market 
allowed participants to take wild reckless risks. This legislation 
reins in these irresponsible risks that cost us millions of jobs, 
millions of hours of economic productivity, millions of homes that have 
been foreclosed, and trillions in American savings. I look forward to 
passing this important legislation.
  Mr. STARK. Madam Speaker, I rise today in support of the Wall Street 
Reform and Consumer Protection Act. This bill will protect consumers 
from ever again being forced to bail

[[Page H5258]]

out private financial institutions and brings overdue oversight to our 
financial markets.
  We learned the hard way that when private financial institutions grow 
too large, their failure will put our entire financial system and 
economy in peril. Mammoth companies like AIG, Citigroup, and Bank of 
America took excessive risks and invested in risky financial products. 
When the economy turned, it was taxpayers that bailed them out.
  This bill imposes new requirements to discourage companies from 
becoming too large and unstable. Financial institutions will be 
prohibited from taking on excessive debt. The new Volcker Rule will 
limit the amount of money a bank can invest in hedge funds and 
otherwise use to gamble for its own benefit. Risky derivatives 
contracts owned by the banks will be subject to regulatory oversight 
and approval by government agencies. The bill also arms regulators to 
dismantle failing financial companies at the expense of the financial 
industry, not taxpayers.
  This bill does more than just rein in the financial institutions, it 
will also protect families. I strongly support the provision that will 
create a new Bureau of Consumer Financial Protection. This independent 
bureau within the Federal Reserve will be on the front lines protecting 
taxpayers from predatory lenders and other unfair practices by mortgage 
brokers, banks, student lenders, and credit card companies.
  The bill goes a long way to prevent another foreclosure crisis by 
reforming the mortgage industry. The bill prohibits pre-payment 
penalties that trap borrowers into unaffordable loans. It outlaws 
financial incentives that encourage lenders to steer borrowers into 
complicated high-interest loans. There will be penalties for lenders 
and mortgage brokers who do not comply with these new standards. If a 
bad credit score negatively impacts someone in a hiring decision or a 
financial transaction, the consumer will have free access to their 
  This bill could be better. Breaking up the big banks would be the 
most effective tool to bring reform to Wall Street. This financial 
reform bill will usher in a new era for both financial institutions and 
consumers. Banks will have to learn to operate under increased scrutiny 
and face immediate consequences when they don't play by the rules. I 
support the Wall Street Reform and Consumer Protection Act and urge my 
colleagues to do the same.
  Mr. LANGEVIN. Mr. Speaker, I rise in strong support of the conference 
report to H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, which closes frequently exploited loopholes in our 
regulation system, puts an end to rewarding reckless investments, and 
demands responsibility and accountability from Wall Street to prevent 
another economic collapse.
  Over the past few years, the irresponsible actions of financial 
institutions and corporations have provided countless illustrations of 
the need to fix our broken system. As a result of the financial crisis, 
our country shed eight million jobs and Americans lost $17 trillion in 
retirement savings and net worth. My home state of Rhode Island was on 
the front lines of abusive and predatory lending practices, which led 
to one of the country's highest foreclosure rates, and has endured 
devastating job loss, now suffering the fourth highest unemployment 
rate in the nation at 12.3 percent.
  Like my constituents, I have been angered by the greed exhibited by 
Wall Street and other companies that took advantage of their investors, 
preyed on our citizens, and rewarded executives with outrageous pay 
packages. With this bill, consumer protection will come first, and 
irresponsible companies will be held accountable for their actions. 
H.R. 4173 establishes the Consumer Financial Protection Agency, which 
will protect families and small businesses by ensuring that bank loans, 
mortgages, credit cards and other financial products are fair, 
affordable and transparent. These new protections are targeted and 
fair: Merchants will be excluded from the oversight of the CFPA, and 
small banks and credit unions will not be subject to undue regulatory 
burdens. There will also be coordination with other regulators when 
examining banks to prevent undue regulatory burden.
  This measure also establishes an orderly process for dismantling 
large, failing financial institutions like AIG or Lehman Brothers, 
which will protect taxpayers and prevent ripple effects throughout the 
rest of the financial system. This bill also discourages financial 
institutions from taking too many risks by imposing tough new capital 
and leverage requirements. Most importantly, there will be no more 
taxpayer bailouts for ``too big to fail'' institutions. This 
legislation will also effectively end new lending under the Troubled 
Asset Relief Program.
  Additionally, H.R. 4173 responds to the failure to detect frauds like 
the Madoff scheme by ordering a study of the entire securities 
industry. This measure will also increase investor protections by 
strengthening the Securities and Exchange Commission and boosting its 
funding level. For the first time ever, the over-the-counter 
derivatives marketplace will be regulated and hedge funds will have to 
register with the SEC. And the bill takes steps to reduce market 
reliance on the credit rating agencies and impose a liability standard 
on the agencies. This legislation will help create an environment in 
which financial institutions take care of--and are held accountable 
to--their shareholders and customers.
  I would like to thank the committees for their work on this bill, and 
especially want to thank Chairman Frank for his leadership on this 
strong reform measure. This legislation represents a tremendous 
accomplishment for this Congress and this country. It is an urgently 
needed response to a crisis that should never have been allowed to 
happen, and its protections and reforms will benefit Americans for 
generations to come. I encourage all my colleagues to vote for this 
  Mr. BOEHNER. Mr. Speaker, the legislation before us fails the 
American people.
  Americans have suffered through a financial meltdown. A serious 
financial meltdown that destroyed millions of jobs and wiped out the 
savings of millions of American families. A devastating meltdown that 
slowed our economy, and raised new doubts about whether it's even 
possible any longer to pursue the American Dream.
  The legislation before us will do nothing to prevent it from 
happening to the American people again.
  The fact of the matter is, the financial meltdown was triggered by 
government mortgage companies, giving too many high-risk loans to 
people who couldn't afford them. And it was the policies of the 
leadership of this Congress that allowed it to happen.
  This legislation will do nothing--nothing--to fix those mistakes.
  The bill is more than 2,000 pages long.
  That in and of itself is an outrage. Haven't we learned our lesson 
yet? Any bill produced by this Congress that is 2,000 pages long can't 
possibly be good for jobs, or freedom, or our economy.
  In those 2,000 pages, there is not a single reform made to Fannie Mae 
or Freddie Mac, the government mortgage companies at the heart of the 
  Mr. Speaker, this is not reform. It's more of the same.
  This is not change. It's the status quo.
  It's a sham.
  Things could have been different. We could be here today passing a 
bipartisan bill to reform government-sponsored enterprises like Fannie 
Mae and Freddie Mae. Republicans, led by Spencer Bachus, offered such a 
  Instead of reforming Fannie and Freddie, we're doing this 2,000 page 
monstrosity that will destroy jobs.
  Mr. Speaker, what are we thinking? What are we doing?
  Today the president of the United States was in Wisconsin. He gave 
remarks there chastising Republicans for our objections to this bill. 
He suggested those who oppose the legislation before us are ``out of 
  The American people are tired of the rhetoric. They want solutions.
  What's ``out of touch'' are politicians who care more about elections 
and campaign ads than they do about solutions.
  What's ``out of touch'' are politicians who pass 2,000 page bills 
that will destroy jobs, at a time when 1 in every 10 Americans from our 
workforce is out of work.

  What's ``out of touch'' are politicians who believe it's OK to force 
responsible Americans to use their tax dollars to subsidize 
irresponsible behavior.
  Under this bill, Americans will have no choice but to keep on 
subsidizing the irresponsible behavior that got America into this mess.
  There is no reform to Fannie Mae and Freddie Mac. There's just 2,000 
new pages of bigger government, private sector mandates, and unintended 
  The American people are sick and tired of it.
  Mr. Speaker, when are we going to stop forcing responsible American 
citizens to subsidize irresponsible behavior?
  When are we going to stop passing massive bills that destroy jobs?
  When are we going to start working on real solutions to the 
challenges facing this country?
  Apparently, not today.
  I urge my colleagues--vote ``no'' on this job-killing bill, and let's 
get to work on a real reform bill that will fix the problems that led 
to the financial meltdown.
  Mr. FATTAH. Mr. Speaker, I rise in strong support of the Conference 
Report to Accompany H.R. 4173, the Wall Street Reform and Consumer 
Protection Act of 2010. Rectifying the worst economic crisis to impact 
the financial markets since the Great Depression, the Wall Reform and 
Consumer Protection Act of 2010 outlaws many of the egregious industry 
practices that marked the subprime lending boom, ensuring mortgage 
lenders make loans that benefit the consumer rather than incentivizing 
self-dealing profit maximization.

[[Page H5259]]

In supporting this legislation, Congress corrects the failures of the 
financial sector, preventing the calamity that transpired after the 
collapse of the financial markets from reoccurring in the future.
  One of the critical components of this legislation is the adoption of 
a provision that will end the practice of acting on behalf of financial 
institutions due to the determination that they are ``too big to 
fail.'' Taxpayers will no longer be asked to subsidize failing 
institutions due to their potential negative impact on the economy. The 
bill creates a new structure in which the orderly dissolution of failed 
financial firms can occur without fear of financial panic. The bill 
also imposes tough new capital and leverage requirements that create a 
disincentive for financial institutions to get too large without 
adequate structural support to ensure the financial soundness of the 
institution. Furthermore, the bill establishes rigorous standards for 
financial institutions in order to better protect the economy and 
American consumers, as well as investors and businesses.
  Another important component of this legislation is the creation of a 
new independent watchdog within the Federal Reserve that provides 
consumers with clear and accurate information needed to shop for 
mortgages, credit cards, and other financial products. The new 
regulatory structure protects consumers from hidden fees, abusive 
terms, and deceptive practices that were unfairly used against 
consumers with disturbing frequency. Furthermore, loopholes that allow 
financial institutions to engage in risky and abusive practices, 
including the unregulated exchange of over-the-counter derivatives, 
asset-backed securities, and hedge funds are eliminated.
  Most importantly, the Wall Street Reform and Consumer Protection Act 
includes the Emergency Homeowners' Relief Fund, which will provide 
desperately needed assistance to millions of homeowners who now find 
they are unable to meet their financial obligations due to the severe 
recession caused by the unbridled greed and recklessness of the 
financial services industry. The foreclosure rate in the United States 
has been rising rapidly since the middle of 2006. Losing a home to 
foreclosure can hurt homeowners in many ways. For example, 
homeowners who have been through a foreclosure may have difficulty 
finding a new place to live or obtaining a loan in the future. 
Furthermore, concentrated foreclosures can drag down nearby home 
prices, and large numbers of abandoned properties can negatively affect 
communities. Finally, the increase in foreclosures may destabilize the 
housing market, which could in turn negatively impact the economy as a 

  Although the economic recovery from the worst financial recession 
since the Great Depression is progressing steadily under the leadership 
of the Obama Administration and Democratic Leadership in Congress, the 
tragic rise of unemployed homeowners threaten a sustained recovery. 
Unemployment is now the leading cause for delinquency for families 
facing foreclosure. A recent study by NeighborWorks that examined the 
reasons why people are falling behind on their mortgages found that 58 
percent of delinquent homeowners were behind due to job loss. The 
impact of foreclosures is particularly acute in minority communities 
due to the disproportionately high rates of joblessness.
  Repossessions from housing foreclosures rose to a record high of 
92,432 in April 2010, which is up 45 percent from the previous year. 
Continual rates of high unemployment places additional pressures on a 
financial system already overburdened with requests to modify loans by 
mortgage servicers, with many of those requests being unfulfilled. 
Under the guidance of the Department of Treasury, the Obama 
Administration created the Home Affordable Modification Program (HAMP) 
as a part of the Making Home Affordable program to provide desperate 
relief to unemployed and underemployed homeowners.
  HAMP encourages servicers to provide mortgage modifications for 
troubled borrowers in order to reduce the borrowers' monthly mortgage 
payments to no more than 31 percent of their monthly income. In order 
to qualify, a borrower must have a mortgage on a single-family 
residence that was originated on or before January 1, 2009, must live 
in the home as his or her primary residence, and must have an unpaid 
principal balance on the mortgage that is no greater than the Fannie 
Mae/Freddie Mac conforming loan limit in high-cost areas ($729,750 for 
a one-unit property). Furthermore, borrowers must currently be paying 
more than 31 percent of their income toward mortgage payments, and must 
be experiencing a financial hardship that makes it difficult to remain 
current on the mortgage. Borrowers need not already be delinquent on 
their mortgage in order to qualify.
  Though the Obama Administration's efforts are commendable, the 
unprecedented scale of the problems facing homeowners demands that more 
needs to be done to prevent homeowners from losing their homes. In 
Pennsylvania, a major state initiative to combat family-devastating 
foreclosures has been operating with success for more than a quarter-
century, enacted in the wake of the severe recession of 1983. The 
Homeowners Emergency Mortgage Assistance Program (HEMAP) has provided 
loans to over 43,000 homeowners since 1984 at a cost to the Keystone 
State of $236 million. Assisted homeowners have repaid $246 million to 
date which works out to a $10 million profit for the state after 25 
years of helping families keep their homes.
  The Pennsylvania model will work nationally. It is with great 
gratitude that Chairman Frank and Chairman Dodd included my proposed 
mortgage relief provisions in the conference report that is being 
considered before the House today. Modeled after the bill I introduced 
in the House, the Emergency Homeowners' Relief Fund that is contained 
in the House-Senate conference bill establishes an emergency mortgage 
assistance program for qualifying homeowners who are temporarily unable 
to meet their obligations due to financial hardship beyond their 
  Under this program, homeowners would have the opportunity to regain 
financial stability without the immediate pressure of foreclosure. 
Specifically, a homeowner who indicated that he or she was unemployed 
would provide verification of unemployment compensation to the servicer 
and automatically be approved for a loan that would pay any mortgage 
above 31 percent of their income (the target amount in Making Home 
Affordable modifications). The Treasury would make payments for the 
homeowner on the homeowner's behalf until the borrower is able to 
resume payments to the lender. The Emergency Homeowners' Relief Fund 
would cut through the disorder of the loan modification program and 
slow the numbers of foreclosed properties on the market.
  Mr. Speaker, I wish to thank my colleagues on the House Financial 
Services Committee, Chairman Barney Frank, Congresswoman Maxine Waters 
and Congressman Paul Kanjorski. I also wish to thank my colleagues in 
the Senate, Banking, Housing and Urban Affairs Committee Chairman Chris 
Dodd, and Senator Bob Casey for their strong support of the mortgage 
foreclosure relief provisions contained in this bill. I also wish to 
thank the House Financial Services Committee staffers for their hard 
work in preparing this conference report, including Housing Policy 
Director Scott Olson and Deputy Chief Counsel Gail Laster. In addition, 
I would like to thank my Legislative Director, Nuku Ofori, for all of 
his efforts in getting this critical mortgage relief provisions 
included in the Wall Street Reform bill.
  Ms. ROS-LEHTINEN. Mr. Speaker, It is a great tragedy that the final 
version of the financial services bill which was approved by a House-
Senate conference, contained little or no help for the hundreds of 
victims of Ponzi schemes, many of whom reside in my Congressional 
  This bill fell far short of doing everything or even anything, to 
assure the average American investor in the stock market that we want 
to protect their interests.
  I proposed to the conferees certain amendments to the Securities 
Investor Protection Act (SIPA) in order to protect victims of Ponzi 
schemes. Unfortunately, these reforms which were designed after 
extensive discussions with many of the victims, were totally ignored.
  My amendments included an ``anti-clawback'' provision, designed to 
end the terror of thousands of Ponzi victims, who face years of 
prolonged litigation against the government, unless these proposals are 
  Under no circumstances, except complicity with a crooked broker--
should these investors be subject to clawback litigation.
  The opposition to this amendment has mainly come from the SEC/SIPC 
and Wall Street which seek to protect SIPC's right of subrogation, 
therefore taking money again from the victims and giving it back to 
SIPC. Not only is this disingenuous, but it shifts the burden of the 
financial loss to every taxpayer in America.
  The importance of this amendment is that SIPA was intended to instill 
confidence in the capital markets and impose upon the SEC the 
responsibility to monitor and supervise those markets.
  The idea that SIPC or the courts would hold innocent investors, who 
relied upon the SEC's endorsement of Madoff, to suffer judgments for 
amounts they took out of their accounts in good faith, is upsetting.
  One proposal suggests that clawbacks be allowed against so-called 
``negligent'' investors. How could they be negligent if the SEC and 
FINRA never spotted the fraud over a 20 year period? In fact, in 1992, 
the SEC endorsed Madoff as safe.
  Shouldn't that affirmative statement be enough to shield investors 
from being accused of ``negligence?''
  At a minimum, a defense against ``negligence'' requires innocent 
investors to spend vast amounts of money defending their conduct 
against a SIPC-funded trustee, who while making $1.4 million in fees 
per week, has

[[Page H5260]]

every incentive to prolong litigation against them.
  As a practical matter, the court could say that every Madoff investor 
was negligent because they never uncovered the crime.
  We should be protecting innocent victims of the SEC's negligence, not 
protecting Wall Street and its stepchild, SIPC.
  Another amendment I proposed would have provided for immediate 
payment to all Ponzi scheme victims of up to $500,000 in SIPC 
insurance. That payment should be based upon the last statement the 
victims' received from their broker. This amendment also clarifies that 
any person who invested in an ERISA-approved retirement plan is a 
``customer'' under SIPA.
  Americans have a right to rely upon the statements they receive from 
SEC-regulated broker/dealers. This was the Congressional purpose of 
SIPA in 1970 and it remains so today.
  Tens of thousands of Americans have lost their life savings because 
of the inaction of the SEC and its failure to close down the operations 
of Bernard Madoff, Allen Stanford, and others. Let's do the right thing 
for these people.
  The President said he does not want BP to nickel and dime the oil 
spill victims, why is it OK to nickel and dime victims of the SEC? 
These people lost their life savings because of the greed of Wall 
Street and the inaction of the SEC.
  We should have added these much needed amendments in order to ensure 
innocent investors that the American financial system is not rigged 
against them.
  Mr. DINGELL. Madam Speaker, I stood before this body in 1999 and gave 
full-throated opposition to the repeal of the Glass-Steagall Act. My 
opposition had the merit of being correct a decade ago and, at the very 
least, prophetic today. Indeed, Graham-Leach-Bliley gave rise to the 
creation of financial juggernauts, whose underhanded actions, gone 
unregulated by design of that Act and subsequent deregulation, have 
driven this great country over an economic precipice of proportions not 
seen since the Great Depression.
  I will vote in favor of the conference report today because it is, at 
its core, a good bill. In so doing, however, I admonish legislators and 
regulators alike never again to permit another economic calamity for 
want of vigilance. While history judges us for what we do, it will also 
condemn us for what we do not.
  The SPEAKER pro tempore. Pursuant to House Resolution 1490, the 
previous question is ordered.

                           Motion to Recommit

  Mr. BACHUS. Mr. Speaker, I have a motion to recommit with 
instructions at the desk.
  The SPEAKER pro tempore. Is the gentleman opposed to the conference 
  Mr. BACHUS. Yes.
  The SPEAKER pro tempore. The Clerk will report the motion to 
  The Clerk read as follows:

       Mr. Bachus moves to recommit the bill H.R. 4173 to the 
     conference on the disagreeing votes of the two Houses on the 
     Senate amendment to the bill H.R. 4173 and to instruct the 
     managers as follows:
       (1) To disagree to section 1109 (relating to the GAO audit 
     of the Federal Reserve facilities) of the conference report.
       (2) To insist on section 1254(c) (relating to audits of the 
     Federal Reserve), other than paragraph (1) of such section 
     1254(c), of the House bill.
       (3) To insist on section 4s(e)(8) of the Commodity Exchange 
     Act (relating to initial and variation margin), as proposed 
     to be added by section 731 of the Senate amendment.
       (4) To insist on section 15F(e)(8) of the Securities 
     Exchange Act of 1934 (relating to initial and variation 
     margin), as proposed to be added by section 764 of the Senate 

  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. BACHUS. Mr. Speaker, on that I demand the yeas and nays.

                         Parliamentary Inquiry

  Mr. FRANK of Massachusetts. Parliamentary inquiry, Mr. Speaker.
  The SPEAKER pro tempore. The gentleman will state his inquiry.
  Mr. FRANK of Massachusetts. This is a legitimate parliamentary 
inquiry, probably the first one I have ever made or heard. But there 
was a lot of confusion.
  Is it the case apparently that there is no debate on a motion to 
recommit on a conference report?
  The SPEAKER pro tempore. The gentleman is correct. There is no debate 
on this motion to recommit.
  The yeas and nays have been demanded.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, this 15-minute vote on the motion to recommit will be followed by 
5-minute votes on adoption of the conference report, if ordered, and 
the motion to suspend the rules on H.R. 4445, if ordered.
  The vote was taken by electronic device, and there were--yeas 198, 
nays 229, not voting 5, as follows:

                             [Roll No. 412]


     Barrett (SC)
     Barton (TX)
     Bono Mack
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Burton (IN)
     Coffman (CO)
     Davis (KY)
     Diaz-Balart, L.
     Diaz-Balart, M.
     Edwards (TX)
     Franks (AZ)
     Garrett (NJ)
     Gingrey (GA)
     Graves (GA)
     Graves (MO)
     Hall (TX)
     Hastings (WA)
     Johnson (IL)
     Johnson, Sam
     Jordan (OH)
     King (IA)
     King (NY)
     Kirkpatrick (AZ)
     Kline (MN)
     Lee (NY)
     Lewis (CA)
     Lungren, Daniel E.
     Markey (CO)
     McCarthy (CA)
     McMorris Rodgers
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy, Tim
     Poe (TX)
     Price (GA)
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Ryan (WI)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Thompson (PA)
     Wilson (SC)
     Young (FL)


     Adler (NJ)
     Bishop (GA)
     Bishop (NY)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Carson (IN)
     Castor (FL)
     Connolly (VA)
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis (TN)
     Donnelly (IN)
     Edwards (MD)
     Frank (MA)
     Gordon (TN)
     Green, Al
     Green, Gene
     Hall (NY)
     Hastings (FL)
     Herseth Sandlin
     Jackson (IL)
     Jackson Lee (TX)
     Johnson (GA)
     Johnson, E. B.
     Kilpatrick (MI)
     Klein (FL)

[[Page H5261]]

     Larsen (WA)
     Larson (CT)
     Lee (CA)
     Lewis (GA)
     Lofgren, Zoe
     Markey (MA)
     McCarthy (NY)
     Meek (FL)
     Meeks (NY)
     Miller (NC)
     Miller, George
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy (NY)
     Murphy, Patrick
     Nadler (NY)
     Neal (MA)
     Pastor (AZ)
     Pingree (ME)
     Polis (CO)
     Price (NC)
     Rothman (NJ)
     Ryan (OH)
     Sanchez, Linda T.
     Sanchez, Loretta
     Scott (GA)
     Scott (VA)
     Smith (WA)
     Thompson (CA)
     Thompson (MS)
     Van Hollen
     Wasserman Schultz
     Wilson (OH)

                             NOT VOTING--5

     Bishop (UT)
     Young (AK)

                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). There are 2 minutes 
remaining in this vote.

                              {time}  1846

  Messrs. OLVER, BRADY of Pennsylvania, POLIS, PRICE of North Carolina, 
JOHNSON of Georgia, Ms. CORRINE BROWN of Florida, Messrs. AL GREEN of 
GUTIERREZ and CONYERS changed their vote from ``yea'' to ``nay.''
EDWARDS of Texas, Ms. FOXX and Mr. BILBRAY changed their vote from 
``nay'' to ``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the conference report.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. FRANK of Massachusetts. Mr. Speaker, on that I demand the yeas 
and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 237, 
nays 192, not voting 4, as follows:

                             [Roll No. 413]


     Adler (NJ)
     Bishop (GA)
     Bishop (NY)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Carson (IN)
     Castor (FL)
     Connolly (VA)
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Donnelly (IN)
     Edwards (MD)
     Frank (MA)
     Gordon (TN)
     Green, Al
     Green, Gene
     Hall (NY)
     Hastings (FL)
     Herseth Sandlin
     Jackson (IL)
     Jackson Lee (TX)
     Johnson (GA)
     Johnson, E. B.
     Kilpatrick (MI)
     Klein (FL)
     Larsen (WA)
     Larson (CT)
     Lee (CA)
     Lewis (GA)
     Lofgren, Zoe
     Markey (CO)
     Markey (MA)
     McCarthy (NY)
     Meek (FL)
     Meeks (NY)
     Miller (NC)
     Miller, George
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy (NY)
     Murphy, Patrick
     Nadler (NY)
     Neal (MA)
     Pastor (AZ)
     Pingree (ME)
     Polis (CO)
     Price (NC)
     Rothman (NJ)
     Ryan (OH)
     Sanchez, Linda T.
     Sanchez, Loretta
     Scott (GA)
     Scott (VA)
     Smith (WA)
     Thompson (CA)
     Thompson (MS)
     Van Hollen
     Wasserman Schultz
     Wilson (OH)


     Barrett (SC)
     Barton (TX)
     Bishop (UT)
     Bono Mack
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Burton (IN)
     Coffman (CO)
     Davis (KY)
     Davis (TN)
     Diaz-Balart, L.
     Diaz-Balart, M.
     Edwards (TX)
     Franks (AZ)
     Garrett (NJ)
     Gingrey (GA)
     Graves (GA)
     Graves (MO)
     Hall (TX)
     Hastings (WA)
     Johnson (IL)
     Johnson, Sam
     Jordan (OH)
     King (IA)
     King (NY)
     Kirkpatrick (AZ)
     Kline (MN)
     Lee (NY)
     Lewis (CA)
     Lungren, Daniel E.
     McCarthy (CA)
     McMorris Rodgers
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy, Tim
     Poe (TX)
     Price (GA)
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Ryan (WI)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Thompson (PA)
     Wilson (SC)
     Young (FL)

                             NOT VOTING--4

     Young (AK)

                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Two minutes remain in this 

                              {time}  1854

  So the conference report was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.