[Congressional Record Volume 161, Number 171 (Thursday, November 19, 2015)]
[Senate]
[Pages S8136-S8137]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         DODD-FRANK LEGISLATION

  Mr. MERKLEY. Mr. President, 7 years ago, Wall Street came closer to 
imploding than at any other time since the Great Depression. Wall 
Street had stacked the deck for themselves and against consumers by 
turning a banking system that in the past had helped families and 
businesses build their prosperity into a casino for Wall Street's own 
big bets. When things went badly, taxpayers were left holding the bag.
  While our economy has slowly returned, the memory of the crisis is 
fresh in the minds of American families--millions of families who lost 
their jobs, millions of families who lost their homes, millions of 
families who lost their retirement savings.
  For this reason, there is broad bipartisan support across America for 
not allowing the return of the Wall Street casino, with 9 in 10 likely 
voters saying it is important to ensure they are safe and fair for 
consumers and that they are designed to build the success of consumers.
  Through the Wall Street reform bill, we ended predatory home lending 
practices. We stopped teaser rates that then had exploding interest 
loans. These loans went from 3 or 4 percent in the beginning, and then, 
after 2 years, would turn into 9 percent or 10 percent, ensuring that 
the family was unable to make their payments. We stopped the kickbacks 
that went to loan originators to steer their unsuspecting home-buyer 
clients into high-cost loans. We stopped the liar loans designed to 
fail just after originators got their commissions. In short, we 
restored home ownership and home loans as a powerful, wealth-building 
tool for the middle class in America. Indeed, over the course of the 
post-World War II history, home ownership has been the most significant 
wealth builder for the middle class. Wall Street turned it into a 
predatory, wealth-stripping experience, and we restored it to ensure 
the financial success of working families.
  We ensured that banks and financial institutions have skin in the 
game, mandating they retain risk in the products they sell. We 
established the Consumer Financial Protection Bureau, or CFPB, to 
prevent scams from stripping wealth from our working families.
  Before we established the Consumer Financial Protection Bureau, 
consumer protection was handled by the Federal Reserve. The Federal 
Reserve also handled monetary policy. Monetary policy was much more 
exciting, and perhaps they thought it was more up to their 
sophisticated educations. They took consumer protection and put it in 
the basement of the Federal Reserve, and they locked it up and then 
threw away the key. They never honored their responsibilities for 
consumer protection, allowing all of these predatory practices that we 
had to end through the Dodd-Frank legislation.
  To date, the CFPB has returned more than $11 billion to 25 million 
wronged consumers. That is a pretty impressive record. Show me 
something else that has brought a little bit of justice and a lot of 
financial restitution to 25 million wronged American citizens.
  The commonsense reforms we established laid the groundwork for a 
financial system that is not premised on elevating quarterly profit 
margins on Wall Street. It is not about the size of bonuses on Wall 
Street but is instead about providing a foundation for our businesses 
and families to thrive financially. That is building the future 
prosperity of America.
  Nobody wants to repeat the financial collapse, the bailouts, and the 
economic recession. We spent 6 years digging out of the hole that was 
created. But despite the fact that to return to this model would be so 
destructive to American families, there are at this very moment 
colleagues of mine gathering in rooms in the Senate and in the House 
who are preparing policy riders to return us back to those dark days. 
They want to add policy riders to the financial year 2016 
appropriations bills designed to turn back these improvements that 
restored home ownership for American families, that restored financial 
systems for small businesses. I wholeheartedly oppose attaching these 
policy riders to the spending bills. And the American people don't like 
it either.
  So what is going on? One conversation is to design policy riders to 
reverse the improvements we made in mortgage guidelines, to ensure that 
mortgages did build the wealth of the middle class instead of preying 
on the middle class.
  Second, there are conversations going on about policy riders designed 
to weaken the tools and authorities of the Financial Stability 
Oversight Council, or FSOC. During 2002, 2007, 2008, we didn't have 
anyone systemically looking at weaknesses in the system. I remember 
looking at a chart that laid out the vast growth in predatory teaser 
rate loans that started in 2003. As that chart surged upwards for those 
loans as a percent of all loans done in America, the number of prime 
loans came down just as dramatically. We now understand why. The 
originators were telling their customers: You don't want this prime 
loan--this low-interest rate locked in for 30 years. You want this 
teaser rate loan. You get a little bit of a lower rate in the 
beginning.
  They never explained to their customer that their interest rate was 
going to go up dramatically just 2 years later to a level they wouldn't 
be able to afford, and yet that originator was getting undisclosed 
kickbacks.
  I say this because had there been an FSOC in place, we would have 
been reviewing that chart and saying: Wait; what is going wrong? From 
2003 to 2005, we have this huge surge in predatory lending. Why do we 
have this huge collapse of prime lending?
  They would have talked to the Wall Street Journal. The Wall Street 
Journal ran an article, an analysis, a study that looked at this and 
virtually said that all those folks who are being steered into these 
subprime loans qualified for prime loans. This is the essence of a 
predatory practice. An FSOC would have seen that and said that 
something needs to be done. That is why we have it--to look at bubbles 
or possible bubbles in our economy or practices in our economy that are 
going to cause a future collapse and to remedy these problems before 
they happen. Despite that, we have folks right now trying to undo the 
creation of the FSOC or disable it from being able to do its job.
  There is another group that is gathering to try to undermine the 
success or ability of having a watchdog--the Consumer Financial 
Protection Bureau--on the beat, ending predatory loan practices from 
here forward.
  They can't just go through statute, because as soon as they outlaw 
this practice over here, another one develops over here. There are 
newly invented strategies to continuously find new ways to turn solid, 
successful financial products into predatory products--misleading 
products, gouging products, products that explode in a couple years 
that consumers are not fully informed on. So we have to have a 
commission to be able to stop those practices.
  It is the same thing we have in consumer products. We don't have 
detailed legislation that says: You can't design a toaster with this, 
this, this, and this. Instead, we have a Consumer Product Safety 
Commission that looks at it and says: These new products are unsafe, 
and for these reasons they can't be allowed. New products come in, they 
get examined, and they make sure we continue to have safe products. It 
should be the same for our financial products.

[[Page S8137]]

  The CFPB has done an extraordinary job ending predatory practices and 
returning funds to ordinary working families. If you want working 
families to fail, then allow predatory products. If you want them to 
succeed, if you have a vision for America that involves the success of 
families, then let's end these financial wealth-stripping predatory 
practices. That means the CFPB has to be able to do its job. So it 
would be 100 percent the wrong direction to put these policy riders in 
the dark of night to dismantle the Dodd-Frank protections on these 
spending bills.
  The Senate Democratic caucus is going to keep fighting for our 
American families. We are going to keep fighting for our American 
consumers. We are going to keep fighting for the success of individuals 
across this country and to ensure that the Wall Street casino stays 
closed.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. COONS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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