[Congressional Record Volume 163, Number 187 (Wednesday, November 15, 2017)]
[Senate]
[Pages S7252-S7253]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                          Republican Tax Plan

  Mr. VAN HOLLEN. Mr. President, we are having a chance now to take a 
look at the House and Senate Republican tax plans. Both of these plans 
were cooked up largely in secret, and as more information comes out, we 
see more and more how much damage they are going to do to our country.
  The plans have many features that overlap, and one of those 
overlapping features is that both of them provide a massive tax 
giveaway to big corporations and powerful special interests. The Wall 
Street Journal, in an article just a little while back that was looking 
at the House plan, talked about a provision that is also in the Senate 
plan. They said that, at a 20-percent corporate tax rate, banks stand 
to be among the biggest winners from tax reform according to S&P Global 
Market Intelligence. The five biggest diversified U.S. banks alone 
might have had tax savings of $11.5 billion in 2016 at that rate. In 
other words, if that 20 percent rate had been in place back in 2016, 
those big banks--the biggest banks--would have seen that huge windfall, 
that huge additional profit.
  A recent analysis from Bloomberg Law estimates that banks could see a 
12-percent drop in their effective tax rates and an 18-percent increase 
in their profits. This is at a time that the biggest banks in the 
United States--not the community banks, but the biggest banks in this 
country--are already making huge profits, and this just provides them 
with an extra tax windfall that is going to be paid by millions of 
middle-class taxpayers and paid by increasing our national debt.
  Of course, as the national debt goes up, people will come around and 
say: OK, let's also pay for them by cutting Medicare and Medicaid. In 
fact, that is right there in the Senate Republican budget. So the 
bottom line is that both the House and the Senate Republican tax plans 
are big giveaways to big corporations, paid for by many other 
Americans.
  Now, this is not the only way the Trump administration is working to 
provide big giveaways to the biggest banks. We remember back during the 
financial crisis and the meltdown that taxpayers had to be brought in 
to save big financial institutions in order to protect the larger 
economy. It was a terribly difficult decision people had to make to 
protect the economy, and at that time we said: Never again are we going 
to allow the big banks on Wall Street to gamble in a way that leaves 
taxpayers--all of our constituents--on the hook. They can take risks, 
but they shouldn't be taking risks with taxpayer money. That was the 
whole purpose of the Wall Street reforms.
  Now comes the Trump administration, and in addition to a tax plan 
that wants to provide big corporate breaks to the biggest banks, they 
want to take down a lot of the guardrails that prevent banks from 
taking big risks that taxpayers will end up paying for. One of the ways 
they are trying to bring down those guardrails is by appointing people 
to very important positions within the government who oversee the big 
banks but who have a history of very cozy relationships with those big 
banks, so that they can bring down the guardrails which, once again, 
will expose taxpayers to the risks of gambling on Wall Street.
  Mr. President, that brings me to the nomination that is before the 
Senate today, the nomination of Joseph Otting to be the next 
Comptroller of the Currency. With so much going on right now, I wish to 
take one moment to step back and talk about what the Comptroller does, 
because the Comptroller of the Currency plays a critical role in 
ensuring the stability of our national banking system. It is there to 
make sure that our banks don't blow up our financial system in the kind 
of way we saw happen in 2008 and the years leading up to that.
  The OCC has been an independent agency since the Civil War. The 
Comptroller has to be confirmed with the advice and consent of the 
Senate, and the reason that process was put in place was to make sure 
we preserved the agency's independence and safeguarded our financial 
system from the whims of the executive branch. You don't want somebody 
at the head of the OCC who is simply the lackey for the 
administration--whatever administration might be in power.
  Now, the OCC is responsible for the supervision of more than 1,400 
national banks and Federal savings associations and about 50 Federal 
branches and agencies of foreign banks in the United States. These 
institutions together comprise nearly two-thirds of the assets of the 
commercial banking system. They require prudent, smart, reasonable 
regulation to ensure that they comply with the laws that Congress has 
passed to prevent another financial crisis--to prevent another 
financial crisis in which it was not Wall Street executives who, at the 
end of the day, were left holding the bag, but it was the American 
people who had to pay the bill and who took it on the chin in the form 
of a collapsing economy and lost jobs and wages.

  Yet we see this President and the Secretary of the Treasury, Mr. 
Mnuchin, continuing down the path to lower those guardrails and expose 
taxpayers to greater risk. One of the things they need to do that is to 
have somebody at the head of OCC who is not going to be an independent 
person but somebody who is willing to do the bidding of the Secretary 
of the Treasury and the President of the United States.
  As I said, normally the OCC leader is supposed to go through the 
confirmation process to preserve that independence, but under the Trump 
administration, they wanted to get going right away in lowering the 
guardrails and giving big banks more running room even if that put 
taxpayers at risk. So rather than offer a Senate nominee early in the 
year, the President and Secretary Mnuchin used an underhanded tactic to 
install a person by the name of Keith Noreika as Comptroller.
  By using this procedure, they sidestepped the Senate confirmation 
process and, by the way, also allowed Mr. Noreika to sidestep the Trump 
administration's ethics pledge and ethics requirements. So that is who 
is there right now--Mr. Noreika--and he has spent most of his career, 
prior to taking that position, telling big banks how they can avoid 
regulations that are designed to protect taxpayers and protect the 
economy. In fact, if you look at the ethics forms that he did file, he 
had to recuse himself from virtually all the major banks that the OCC 
regulates. His work in the private sector created an unprecedented 
series of conflicts of interests far more than any other person in that 
position and underscoring the need for someone to have to go through 
the Senate confirmation process, rather than trying to short-circuit 
that process with underhanded tactics.
  I was very concerned about the use of this runaround and asked the 
Secretary's inspector general to initiate an investigation into the 
means and

[[Page S7253]]

manner of that appointment, because what happened was that Mr. Noreika 
was designated what is called ``a special government employee,'' or an 
SGE. When you use that mechanism, you are only supposed to have the 
person serve in that position for 130 days of the year. It is a very 
unusual type of appointment and almost never used when it comes to the 
head of an agency. In fact, this may be close to the first time.
  Well, that 130-day deadline, if you count by calendar days, expired 
in September. Yet now we have a new interpretation of the law, which is 
a wild stretch, saying: Well, it is not calendar days. We are going to 
count it as business days. But the whole point here is that this 
mechanism--this underhanded mechanism--has been used to allow this new 
person, Mr. Noreika, at the OCC.
  In that period of time, by looking at what he has done, we can see he 
wasn't installed there just to be a caretaker. He has been very active 
in those early months in working very hard to lower many of the 
protections we have put in place for taxpayers and for our financial 
system. He was in the middle of the effort to repeal the Consumer 
Financial Protection Bureau's mandatory arbitration rule, to roll back 
the OCC's Community Reinvestment Act supervisory guidance, and to 
eliminate the deposit advance guidance rule, which is a rule that makes 
it more difficult for national banks to provide payday loans at 
outrageous rates that are unaffordable to the people who take them out.
  Since Mr. Noreika has been at the OCC, the OCC has been involved in 
helping one of his former clients circumvent Federal guidance intended 
to prevent banks from shopping around for hands-off regulators who will 
not scrutinize their activities--in other words, forum shopping for 
bank regulators.
  Just this morning, the Wall Street Journal reported that on November 
7 the Bank of Tokyo converted the license of its New York State branch 
from a State license to a Federal license. So why did they do that? Why 
did they do that at this time? Well, this decision to change regulators 
came in the middle of an ongoing investigation by the New York 
Department of Financial Services into that bank's lack of scrutiny of 
its clients, some of whom are suspected of evading U.S. sanctions on 
Iran and North Korea.
  Now, the OCC's licensing manual says that it draws heavily on 
information received from the Office's current U.S. supervisor and 
other confidential and supervisory information available to the OCC 
when considering the application from a financial institution that 
wants to switch from State supervision to Federal supervision. That 
courtesy and that guideline were not applied in this case. That 
information and that notice were not provided to the New York 
Department of Financial Services, and the OCC has refused to act in 
response to this effort by the financial institution to evade 
oversight.
  As a result, the Bank of Tokyo--which is a former client of the 
current head of the OCC, Mr. Noreika--is now going to be supervised by 
his office. It appears to have successfully dodged an active 
investigation into its clients' potential evasion of U.S. sanctions on 
foreign adversaries--in this case, North Korea and Iran. So that is the 
person who was installed by the Trump administration during these first 
months, from the beginning of the year until now, using this 
underhanded method.
  Finally, we now have the nomination put forward for the person who 
will permanently be proposed to head up the OCC, Joseph Otting. In Mr. 
Otting, we have another example of somebody whose entire career has 
been spent working with banks and other major financial institutions to 
try to evade important consumer protections and taxpayer protections.
  In fact, Mr. Otting and his bank were able to profit very handsomely 
from the mortgage crisis. The CEO of OneWest during part of that crisis 
was the person who is now Secretary of the Treasury, Stephen Mnuchin. 
He was the head of OneWest during the foreclosure crisis. During that 
time, OneWest had what many have called a foreclosure machine in place. 
Mr. Otting, who is going to be the head of the OCC--and whom we would 
hope would be more independent, as required by the charter of the OCC--
was there working for the Secretary of the Treasury, Steve Mnuchin, at 
OneWest. Mr. Otting was there working at OneWest when the bank 
foreclosed on nearly 40,000 Americans. OneWest received more than $1 
billion in taxpayer money to cover OneWest's losses.
  Those are exactly the kind of losses we are trying to avoid in the 
aftermath of the crisis; that we are trying to avoid by adopting the 
Wall Street reform bill Dodd-Frank so taxpayers--our constituents--
aren't left holding the bag for decisions made by people like Mr. 
Otting or Mr. Mnuchin.
  According to one media summary, OneWest Bank ``rushed delinquent 
homeowners out of their homes by violating notice and waiting period 
statutes, illegally backdated key documents, and effectively gamed 
foreclosure auctions.''
  In the reverse mortgage business, OneWest-controlled firm Financial 
Freedom engaged in practices that led to more than 16,000 foreclosures, 
a far greater number than would be expected based on the company's 
market share.
  Elderly individuals who had recently suffered the death of a spouse 
were victimized. In one case, Financial Freedom attempted to evict a 
90-year-old woman from her home over a 27-cent error on her insurance 
payment.
  In another case, a New York State Supreme Court judge called 
OneWest's foreclosure practices ``harsh, repugnant, shocking, and 
repulsive.'' Yet the person who has now been nominated to lead the 
OCC--Office of the Comptroller of the Currency--a person who is 
supposed to be looking out for consumers' and taxpayers' interests and 
providing for a sound banking system that doesn't melt down our 
economy, is Mr. Otting. He was the person who was in the middle of 
these OneWest foreclosure transactions.
  I hope this body will not support that nomination.