[Congressional Record Volume 164, Number 41 (Thursday, March 8, 2018)]
[Senate]
[Pages S1569-S1574]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



    Economic Growth, Regulatory Relief, and Consumer Protection Bill

  Mr. MENENDEZ. Mr. President, I rise to explain my opposition to the 
bill that is before the Senate, the banking deregulation bill, S. 2155.
  First, I would like to say I am appalled this is how the Senate is 
spending its time this week. Three weeks ago, 17 students and teachers 
were murdered when a teenager, armed with an AR-15 decorated with 
swastikas, opened fire at Stoneman Douglas High School in Florida, but 
this week we are not banning the sale of high-capacity magazines that 
enable mass shooters to fire 30, 40, or even 100 rounds without 
stopping to reload; we are not closing the gun show loophole or 
stopping violent people from buying assault weapons online with the 
click of a mouse; we are not taking steps to report more cases of 
severe mental illness to the National Instant Criminal Background Check 
System; we are not even passing President Trump's proposal to raise the 
age one can buy an assault weapon to 21 years. Simply put, this week we 
are not doing anything to stop the next mass shooting from taking 
place.
  So what are we doing this week?
  Well, this week the Republican majority has brought to the floor 
legislation rolling back safeguards we passed after the financial 
crisis of 2008--not exactly something the American people have been 
clamoring for.
  I want to be clear why I oppose this bill as written. It is not that 
I don't support measures that provide meaningful relief to small banks, 
credit unions, and consumers. I do. It is not that I don't believe in 
reexamining regulations and ways to reduce compliance costs. I do. It 
is not that I don't agree with efforts to better calibrate the rules of 
the road for small banks and credit unions while strengthening 
protections for consumers investors and taxpayers. I do. Indeed, I 
would support a bill like that, but that is not the bill we have before 
us today.

  The bill before us today brings back risky mortgage lending practices 
that increase the likelihood of foreclosures. It undermines our efforts 
to police discriminatory lending practices, and it would allow 25 of 
America's 38 biggest banks to escape the safeguards we adopted after 
the 2008 financial crisis--a crisis that destroyed more than $12 
trillion worth of American wealth, required huge bank bailouts, sent 
our economy into a tailspin, and saddled us with the great recession.
  Ten years later, it is worth remembering what caused that crisis--
mortgages designed like ticking timebombs for home buyers and for our 
economy at large, large financial institutions making risky bets on 
those risky mortgages, and regulators who turned a blind eye to these 
risks. Borrowers were steered into loans with low interest rates, often 
below 4 percent at the start, but once the promotional period ended, 
these teaser rates disappeared, higher interest rates kicked in, and 
millions of borrowers suddenly saw their mortgage payments go through 
the roof--even doubling, in many cases. Between 2004 and 2006, one-
third of all adjustable rate mortgages were designed this way, and at a 
time of stagnant wages, millions of families couldn't keep up. That is 
why a wave of foreclosures overtook our housing market--displacing 
families, decimating home values, and destabilizing neighborhoods. From 
2006 to 2014, more than 9.3 million families lost their homes to 
foreclosure, sold their homes at a significant loss, or surrendered 
their homes to the bank.
  For communities of color, the crisis was even worse. African-American 
and Latino borrowers were at least twice as likely to receive a higher 
cost loan than White applicants, even when controlling for income and 
credit scores, and they were nearly 50 percent more likely to face 
foreclosure during the crisis.
  So what did we do about it? Well, we passed laws to stop lenders from 
offering mortgages that were, in many ways, doomed to fail. We said 
that from now on banks and mortgage lenders would have to make a 
reasonable and good-faith determination that borrowers could pay back 
their loans by looking at income, employment, credit history, monthly 
expenses, and other metrics. We prohibited banks from using these 
teaser rates to determine whether a borrower could repay a loan. We did 
the sensible thing, and we required them to make sure that borrowers 
could actually afford their payments once the higher interest rates 
kicked in.
  We also passed reforms to better catch discriminatory lending 
practices because we know that, in many cases, the riskiest products 
were offered to minority communities. We asked banks to provide data 
that they already collected on things like debt-to-income ratios, 
credit scores, loan-to-value ratios, interest rates, and loan terms. 
This way, we could better identify emerging risks and possible 
discriminatory lending practices in our communities. Were all of these 
reforms perfect? Of course not. Have they made our mortgage lending 
system safer, smarter, and fairer for credit borrowers? Absolutely. 
Does that mean we still don't face challenges? No. New Jerseyans know 
that. Our State still suffers the highest rate of foreclosure in the 
Nation, and many New Jersey neighborhoods still struggle with frequent 
foreclosures, abandoned homes, and their painful consequences.
  Likewise, discrimination still persists. I was appalled by a report 
released in January that showed African-American and Latino families--
even controlling for income, loan amount, and location--continue to be 
disproportionately denied conventional mortgages. These practices are 
nothing short of modern-day redlining. We see it in Camden, NJ, for 
example, where Black applicants are still more than 2\1/2\ times 
likelier to be denied than White applicants.
  Now, 10 years after the crisis, Congress is poised to turn back the 
clock. Under this bill, some banks will once again be able to offer 
mortgages with teaser rates of 4 percent that more than double in just 
2 years, without ever verifying if a borrower could afford a 9-percent 
interest rate, and all they have to do is keep the loans on their 
books.
  This bill will excuse 85 percent of banks from sharing the data we 
need to identify discrimination and ensure all creditworthy borrowers 
have a fair shot at the American dream of home ownership. So if this 
sounds familiar, that is because it is. History is repeating itself.
  Beyond making mortgage lending riskier and less fair, this bill 
removes guardrails we put in place for 25 of the 38 largest banks in 
the country. These are the banks identified as systemically important 
during the crisis--the banks that received $47 billion in bailouts.
  Now, I appreciate my colleagues who point out this bill's benefits 
for community banks and credit unions--and I mean that. That is a good 
thing. But I fear these provisions mask giveaways that will make big 
banks bigger and, ultimately, hurt smaller banks struggling to compete. 
Under title IV, for example, this bill significantly cuts oversight of 
banks with assets between $50 billion and $250 billion.
  Have we forgotten so quickly the lessons we learned after the crisis? 
Do we not remember how the government had to arrange forced mergers of 
Countrywide, with $200 billion in assets, and National City, with $145 
billion in assets, because their near-failures worked to spread risk 
from Wall Street to Main Street?
  Do we really want to weaken these guardrails--the stress tests and 
the capital planning requirements to ensure that banks can survive a 
crisis, the living wills that ensure they have a feasible way to unwind 
if things go badly, and the minimum liquid assets they must hold in the 
event they lose access to funding markets?
  When taxpayer dollars are on the line, I don't think it is unfair to 
ask big banks to be safe and smart. On the contrary, it is unfair to 
the American people who will have to bail them out when and if they get 
into trouble.
  Supporters of this bill are quick to point out that it preserves the 
Federal Reserve's authority to take action if they become concerned 
about a bank with less than $250 billion in assets. Well, forgive me 
for not having confidence in regulators with a long history of doing 
too little too late. That is exactly the kind of risk that taxpayers,

[[Page S1570]]

homeowners, and investors can't afford.
  As the chairman of the Financial Crisis Inquiry Commission recently 
wrote, ``history has shown, time and again, that the failure of 
financial firms that are not among the largest mega-banks can pose 
systemic risks to financial stability.'' According to the Congressional 
Budget Office, these weaker protections make it even more likely that 
taxpayers will once again have to bail out banks.
  At the end of the day, this bill injects tremendous risk into the 
system and undercuts our tools to have our financial cops on the beat 
actually work to monitor the risk. So that leaves taxpayers on the hook 
if risk then turns into crisis. Rather than protecting families, this 
bill is packed full of goodies for large banks and special interests, 
because consumers--the families who would suffer the most in another 
crisis--don't have a seat at the table.
  As a member of the Banking Committee, I worked in good faith to amend 
this bill and make it better. I offered an amendment called 
Christopher's Law to better protect consumers like the Bryski family in 
New Jersey. While mourning the tragic loss of their son Christopher, 
the Bryskis were stunned to learn that they would be responsible for 
paying an education their son could never use because they had cosigned 
his private student loan. I appreciate that my colleagues incorporated 
major components of Christopher's Law to protect families that suffer 
the tragic loss of a loved one into the manager's package for this 
bill.
  When you look at the totality of the bill's provisions, the fact 
remains that we couldn't get an inch for consumers in exchange for the 
miles this bill gives to big banks. Take, for example, my amendment to 
enhance protections for military servicemembers who often struggle to 
protect their credit while they are serving our country abroad or the 
amendment I offered to prevent the rewards of this bill from flowing to 
banks that adopt punishing, Wells-Fargo-style sales cultures that put 
consumers at risk. These are just some of the pro-consumer, commonsense 
amendments that were rejected in the Banking Committee.
  Ultimately, I still believe Congress could pass legislation that 
provides targeted relief to community banks and credit unions, but not 
in exchange for erasing the standards that protect working families and 
our economy from systemic risk. So you can bet that I will be working 
here on the floor to get those amendments included in full. Senator 
Cortez Masto and I will offer an amendment to ensure that banks report 
the data we need to police against discriminatory lending practices.
  Likewise, I am offering an amendment to require that consumer 
reporting agencies like Equifax quickly disclose data breeches and 
require a Federal study of how these breeches impact consumers over the 
long haul.
  Finally, I am proposing an amendment that requires mutual funds to 
disclose to their shareholders whether they invest in the gun industry, 
because it is downright offensive to be considering a banking bill this 
week instead of pressing corporate America to step up in the fight 
against gun violence that rips our country apart year after year.
  These measures, if adopted, would make a bad bill a bit better, but 
as we quickly approach the 10-year anniversary of the government-backed 
bailout of Bear Stearns, I cannot, in good conscience, vote to remove 
the guardrails we put in place to prevent big banks from playing fast 
and loose with our economy in the first place.
  The financial crisis and recession stripped trillions of dollars in 
wealth from communities all across the country. While banks were bailed 
out, families were left reeling with the consequences. From foreclosure 
to job losses to hard-hit retirement accounts and falling home values, 
the American people bore the brunt of the financial crisis. For years, 
Washington protected Wall Street from sensible regulations when we 
should have been protecting consumers. Unfortunately, it took the 
greatest financial crisis since the Great Depression for us to pass the 
Wall Street Reform and Consumer Protection Act for us to make a 
fundamental choice to reject a system that took advantage of consumers 
and instead stand for a banking system that is more fair, transparent, 
and accountable to the American people.
  To quote the Spanish philosopher George Santayana, ``those who cannot 
remember the past are condemned to repeat it.'' Only in Washington 
would anyone think it is a good idea to commemorate the 10-year 
anniversary of the financial crisis with a bill that dares big banks to 
get bigger and increases risks to taxpayers.
  I look forward to the day when this Congress strives to do better by 
the working families who lost their homes, their jobs, and their life 
savings during the crisis. Hard-working families had to fight their way 
back from the recession without bailouts and are counting on us to 
fight for them in Washington, and that is what I intend to do.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CRAPO. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CRAPO. Mr. President, I rise again today to speak further on S. 
2155, the Economic Growth, Regulatory Relief, and Consumer Protection 
Act.
  We have had a lot of discussion on the floor about this bill in the 
last few days. Anybody who took the opportunity to watch all of that 
debate sees that there is a strong bipartisan support for this bill and 
a strong debate coming from some quarters trying to say that the bill 
creates greater risk in our financial community. I would like to 
address exactly what this bill does and then respond to some of those 
charges, which I consider to be completely unfounded.
  The Economic Growth, Regulatory Relief, and Consumer Protection Act 
is aimed at rightsizing regulation for financial institutions--
including community banks and credit unions--making it easier for 
consumers to get mortgages and to obtain credit.
  I have said a number of times, and I will repeat, back when we were 
debating the Dodd-Frank legislation about 10 years ago, it was marketed 
to the public as a bill to address excesses and problems on Wall Street 
by the big megabanks of our country, but its provisions hit hardest on 
Main Street.
  As I have said, I actually held a news conference in Boise, ID--in my 
home State--on Main Street. I said the crosshairs of this bill and the 
bulls-eye are on Main Street, not Wall Street.
  What has happened in the last 10 years? The Wall Street banks have 
been phenomenally profitable. They have been very successful, and the 
smaller banks--the credit unions, the community banks, even the 
regional banks--have been hammered.
  We are losing credit unions and, more specifically, community banks 
across this Nation at an alarming pace, and the reason--the primary 
reason--is the phenomenally significant increased regulatory burden 
they face.
  I have heard colleagues of mine on the floor in the last couple of 
days talking about specific community banks and credit unions in their 
States that have had so much pressure put on them, so much burden and 
financial costs put on them by the excessive regulations that they have 
either gone out of business or stopped issuing mortgages, just stopped 
doing mortgage business or stopped doing loans of certain types that 
are beneficial to our small businesses. So the real victims aren't even 
just the community banks and credit unions; they are the people--the 
people who want to get a loan in their local communities and who are 
entirely worthy of getting a loan to buy a house, but their credit 
unions and community banks are no longer in that business or they are 
no longer in existence. That is what this bill is addressing.
  The bill also increases important consumer protections for veterans, 
senior citizens, victims of fraud, and those who fall on tough 
financial times. The provisions in this bill will directly address some 
of the problems I frequently hear about from financial institutions. 
Let me explain in a little more detail just what that is. I have 
already discussed some.

[[Page S1571]]

  Community banks and credit unions are simple institutions, focused on 
relationship lending and have special relationships with the people in 
their communities. The bankers and their customers go to church, play 
ball, or their kids go to school with each other. They know their 
customers, and they are willing to work with them to help them be 
successful. They provide credit to traditionally underserved and rural 
communities, where it may be harder to access banking products and 
services or to get a loan.
  Dodd-Frank instituted numerous new mortgage rules and complex capital 
requirements on community banks and credit unions that have hindered 
consumers' access to mortgage credit and lending more broadly.
  I guess I will just insert here, this phenomenon we often see in 
Washington of one-size-fits-all or cookie-cutter solutions to a problem 
is directly the kind of problem we are seeing here.
  Our smaller financial institutions are treated as though they were 
large megabanks and as though their business models and their 
portfolios contain the same kind of risk as the larger banks. Yet they 
don't have the same business models; they don't have the same risk 
footprint, but they are forced to go through phenomenally expensive 
regulatory burdens for no good reason.
  I can't tell you how many of these small bank and credit union folks 
have said to me: Our industry did not cause or have any part in the 
financial crisis, but we are being asked to pay the price. That is what 
this bill deals with.
  In July of 2016, the American Action Forum attempted to estimate the 
number of paperwork hours and final costs associated with these rules 
and regulations that I am talking about. In total, the forum estimated 
that the law had imposed more than $36 billion in final rule costs and 
73 million paperwork hours as of July 2016. What does that mean? To put 
these figures into perspective, the costs are nearly $112 per person or 
$310 per household.
  Additionally, it would take 36,950 employees--that is 36,950 
employees--working full time to complete a single year of the law's 
paperwork based on the agency's calculations themselves.
  Our bill is focused on providing meaningful relief to our community 
banks and credit unions, helping them to prudently lend to consumers, 
home buyers, and small businesses--small businesses that we all 
acknowledge are the engines of our economy, yet lack credit and lack 
access to capital because of these unnecessary rules. That is why the 
first part of the name of this bill is ``economic growth.'' This bill 
will provide a needed shot in the arm for our economy across this 
country.

  By responsibly expanding the qualified mortgage safe harbor, 
addressing severe appraiser shortages in rural areas, reducing 
superfluous HMDA reporting requirements, and exempting certain loans 
from escrow requirements, our bill will ease the compliance and 
regulatory reporting requirements borne by many of these small 
financial institutions and free up scarce resources for their 
communities, enabling more individuals to find a home loan or get the 
funding to start a business. And this does not increase financial risk.
  A number of local credit unions have weighed in on the positive 
impact our bill will have on increasing access to affordable mortgage 
credit.
  Additionally, had our bill's provisions on a rule called TRID--a 3-
day waiting period--had they been in place in 2017, it would have 
helped over 1.5 million credit union members at over 3,800 credit 
unions throughout the Nation, enabling them to take advantage of a 
lower interest rate and to avoid potential delays in the mortgage 
origination process. I will tell my colleagues, anybody who has had to 
go through the mortgage origination process today knows the paperwork I 
am talking about.
  Our bill also drastically simplifies the capital regime for certain 
highly capitalized community banks compared to the current Basel III 
requirements that are more appropriate for larger, sophisticated 
financial institutions.
  Rebecca Romero Rainey, the former chairman and CEO of Centinel Bank 
of Taos and CEO-elect of the Community Bankers of America, made a 
commonsense observation. She said:

       Under Basel III, community bank capital regulation has 
     become significantly more punitive and complex. Do we really 
     need four definitions of regulatory capital, a capital 
     conservation buffer, and impossibly complex rules governing 
     capital deductions and adjustments?
       Applying the rule to community banks in a one-size-fits-all 
     manner harms the consumers and businesses we serve.

  She added:

       I seriously doubt that my grandfather would have founded 
     Centinel if he had to comply with Basel III and the other new 
     regulations that exist today.

  We want to encourage people to bank in their communities.
  Dodd-Frank also dealt with midsized and regional banks, and our bill 
does too. Dodd-Frank swept many simple midsized and regional banks into 
its enhanced prudential standards, but it was meant for the largest and 
most complex institutions. Each new regulation poses a tradeoff between 
hiring new employees to help comply with those standards versus 
employees to provide customers the products and services they want and 
need.
  Deron Smithy, executive vice president and treasurer for Regions 
Bank, a regional bank based in Alabama, described the implications of 
this on his institution, saying, ``We now have more people in our 
organization devoted to compliance-related matters than we do for 
commercial lending'' and that ``the direct cost, as well as 
management's time and attention to meeting these rules, creates a 
disproportionate burden on regional banks. Collectively, the 
incremental cost of regulatory compliance exceeds $2 billion 
annually.'' The $2 billion in costs that Mr. Smithy mentioned were just 
the direct costs. Indirect costs include management and other business 
units' time being diverted from fully serving their clients.
  These are not just empty numbers; behind these numbers are real 
economic consequences. That is a fact Mr. Smithy noted in his testimony 
before the Banking Committee.

       For a company like Regions, that standard being lifted 
     would likely liberate as much as 10 percent additional 
     capacity for lending, which--

  In his bank's case--

     would be $8 billion to $10 billion.
       That is capital and access that are not available to 
     individuals, families, and small businesses in this Nation. 
     That is one bank.

  During another Banking Committee hearing, Robert Hill, CEO of South 
State Corporation, a midsized bank, noted that when their institution 
crossed the $10 billion threshold, ``South State was impacted by over 
$20 million per year, a significant sum for a bank our size. What 
impact does that have on our local communities? For us, that equates to 
300 jobs. Approximately 10 percent of our branches were closed, and 
even more jobs diverted away from lending to regulatory compliance.''
  Section 401 of our bill raises the SIFI threshold for applying 
enhanced prudential standards from $50 billion to $250 billion--a level 
that many, many financial experts have encouraged for years--and the 
$10 billion threshold for applying an annual, company-run stress test 
to midsized banks while maintaining important safeguards against risks 
to the U.S. financial system. This will free up valuable financial and 
human resources to help keep more branches open, increase lending to 
consumers and small businesses, and lower the cost of borrowing for 
consumers.
  The bill also deals with housing policy. Our bill provides some 
important improvements to HUD programs, making them more effective and 
efficient and enabling public housing authorities across the country to 
better address the housing needs of their local community.
  Our bill enhances HUD's Family Self-Sufficiency Program, which will 
enable a greater number of families currently assisted by HUD to obtain 
job training, education, childcare, and ultimately achieve financial 
independence. Specifically, the bill would broaden the scope of 
supportive services that can be offered to these participants, 
including home ownership assistance, training in asset management, 
obtaining a GED, and education in pursuit of a postsecondary degree or 
certification. It would also streamline the administration of the 
program, making it easy for local public housing authorities to deliver 
it in their communities.

[[Page S1572]]

  For the first time ever, our bill will enable many families who live 
in privately owned apartments backed by project-based rental assistance 
to also participate in the FSS Program.
  Our bill would also provide targeted regulatory relief to small 
public housing agencies operating in rural communities. While smaller 
public housing authorities typically have far fewer staff and resources 
than larger urban agencies, they, too, are currently held to many of 
the same burdensome regulatory requirements as some of the largest ones 
in the country. As a result, this means that more of their time and 
money are spent completing paperwork and less are able to be dedicated 
to promoting access to affordable housing in these communities.
  Our bill would provide tailored regulatory relief that recognizes the 
unique challenges faced by smaller public housing authorities in rural 
areas. Specifically, it would provide a simpler option for calculating 
utilities, simplify environmental review requirements for new 
developments, streamline inspection requirements, and make it easier to 
coordinate efforts, such as enabling shared waiting lists with 
neighboring agencies and enabling neighboring agencies to pool their 
resources to develop larger projects.
  These changes will set up these small agencies for success and enable 
them to direct a greater amount of time, effort, and resources toward 
their core mission: promoting access to affordable housing.
  The bill is also a consumer protection bill. It ensures that key 
consumer protections remain in place and increases protections for 
consumers who have fallen on hard financial times or become victims of 
fraud.
  Following the Equifax data breach, we held two credit bureau 
hearings. These hearings demonstrated bipartisan support for some 
important measures. The bill provides 1 free year of fraud alerts for 
consumers potentially impacted by the Equifax breach or other instances 
of fraud. It gives consumers unlimited free credit freezes and 
unfreezes during the year. It allows parents to turn on and off credit 
reporting for children under 16.
  The bill also includes important protections for veterans and senior 
citizens. The Department of Veterans Affairs Choice Program provides 
veterans non-VA medical care if they can't access care at a VA medical 
facility. Unfortunately, the VA Choice Program has been rife with 
issues, including delayed payments and misassigned medical bills to 
veterans. As a result, veterans have experienced negative credit items 
on their reports, which unnecessarily complicates their and their 
families' lives.
  The largest credit reporting agencies took a step to alleviate this 
problem by delaying reporting medical debt on a consumer's credit 
report for 180 days, but more can still be done. Our bill goes a step 
further by prohibiting medical debt arising from the Choice Program and 
other non-VA healthcare providers from being reported to credit-
reporting agencies for 1 year and provides veterans a process to 
dispute or remove incorrect information already on their reports.
  According to a study conducted by MetLife, seniors lose at least $2.9 
billion annually in reported cases of financial exploitation. Despite 
the prevalence of senior financial fraud, the National Adult Protective 
Services Association estimated that only 1 in 44 cases of financial 
abuse is ever reported.
  Current bank privacy laws make it difficult for the financial 
institutions and their employees to report any potential fraudulent 
activity without incurring legal liability, and as a result, few cases 
of financial abuse are reported. Our bill would give financial advisers 
civil liability protection when reporting suspected financial abuse of 
seniors. This will empower and encourage our financial service 
representatives to identify warning signs of common scams and help stop 
financial fraud targeting our seniors.
  Now I wish to turn for just a moment--I have gone over some of the 
positive benefits and provisions in this bill. I would like to turn for 
a moment to the criticisms, because, if my colleagues have been 
listening to the attacks, the attacks are that this is an effort to go 
help the big banks in America get richer at the expense of poor people. 
This is a very common type of attack on almost any proposal to fix a 
regulation in the financial system.
  One of the things we have heard is that it gives the regulators too 
much flexibility to tailor regulations to the size of the institution 
being regulated. This bill carefully balances the need to provide 
regulators with the appropriate discretion at the technical level, 
while imposing specific directions to ensure appropriate tailoring for 
Main Street banks and maintaining core supervisory tools for the 
largest banks.
  Regulators will still be required to ensure that banks operate in a 
safe and sound manner and still retain extensive authorities to do so.
  The bill also requires regulators to do more to tailor regulations to 
ensure that the level of regulation and scrutiny of banks reflects the 
potential risks posed by the institutions--something that folks in my 
State would say is just common sense.
  In the face of all of this, we have talked to a lot of the regulators 
themselves to see what they think of the idea, and they are 
consistently saying: Let us have the flexibility to regulate 
appropriately, and we will do the job. We will ensure that we have 
safety and soundness, and we will ensure that we are not putting undue 
regulatory burdens on our financial institutions, particularly the 
smallest ones.
  Federal Reserve Chairman Jay Powell said:

       You know, we really want the most stringent things to be 
     happening at the systemically important banks--the most 
     stringent stress tests, in particular--and we want to tailor 
     or taper, as we go down into less significant, less 
     systemically important institutions.

  Powell added: ``Those banks [below $100 billion] are not systemically 
important.
  What he meant by that is they don't present systemic risks to the 
economy. We should analyze them and regulate them and supervise them in 
a more appropriate fashion.
  Federal Reserve Vice Chairman for Supervision Randy Quarles has also 
noted the importance of tailoring, saying:

       One of the important general themes of regulation is 
     ensuring that the character of the regulation is adapted to 
     the character of the institution being regulated, what has 
     become the word ``tailoring.''
       I fully support that, and I think that it's not only 
     appropriate to recognize the different levels of risk, and 
     types of risk that different institutions in the system pose, 
     but that it also makes for better and more efficient 
     regulation, and efficient regulation allows the financial 
     system to more efficiently support the real economy.

  That is what we are talking about here.

       So I do think that we should look very carefully . . . at 
     tailoring capital regulation and other types of regulation to 
     the particular character of the institutions that are 
     regulated, and that includes their size, and that includes 
     other aspects of the character.

  Another critique I have heard is that the bill erodes the power of 
stress testing as a supervisory tool. In one way or another, many have 
stood on this floor and talked about the need to have this kind of 
flexibility, and others have stood on this floor and said it creates a 
huge threat to our economy.
  We have a hearing each year called the Humphrey-Hawkins hearing when 
the Chairman of the Federal Reserve comes and testifies to the Senate 
and then to the House. This year, the Chairman of the Federal Reserve 
came before the Senate. To ensure that people and Members understood 
what this bill does, I asked Chairman Jay Powell: If this bill were to 
pass, is it accurate that the Federal Reserve would still be required 
to conduct a supervisory stress test for any bank with total assets 
between $100 billion and $250 billion to ensure that it has enough 
capital to weather economic downturns?
  He replied: Yes, it is.
  I asked: Is it accurate that the bill's change of the threshold from 
$50 billion to $250 billion for enhanced prudential standards does not 
weaken oversight of the largest, globally systemic banks?
  He said: That is correct.
  The Dodd-Frank Act established a $50 billion asset threshold to apply 
enhanced prudential standards to banks. Applying enhanced standards 
broadly to regional banks with simple business models and low-risk 
profiles has had significant consequences in the marketplace. Although 
there has been much debate about the appropriate

[[Page S1573]]

level for the threshold, there is bipartisan agreement that $50 billion 
is too low, including among Federal Reserve Chairman Powell, former 
Federal Reserve Bank Chairman Yellen, former Acting Comptroller 
Noreika, and former Comptroller Curry.
  Current Federal Reserve Chairman Jay Powell said: ``Our view has been 
that that combination of raising the threshold and giving us the 
ability to go below it in cases where needed gives us the tools that we 
need.''
  Former Federal Reserve Chair Janet Yellen has said:

       We've already said that we would favor some increase, if 
     Congress sticks with a dollar threshold--that we would 
     support some increase in the threshold. An approach based on 
     business model or factors is also a workable approach from 
     our point of view. Conceivably, some of the enhanced 
     standards should apply to more firms with lower levels of 
     assets, and others with higher levels. So I think either type 
     of approach is something that we could--we could work with 
     and would be supportive of.

  That is the former Chair of the Federal Reserve.
  Our bill rightsizes regulations by raising the $50 billion threshold 
to $250 billion. Banks with total assets below $100 billion are exempt 
immediately from these enhanced standards, while those with between 
$100 billion and $250 billion are presumed exempt 18 months after the 
bill is enacted unless the Federal Reserve Board determines that they 
need to have some additional level of standard applied, and the Federal 
Reserve is given full authority to do so. The provision allows the 
Federal Reserve to tailor regulations to a bank's business model and 
risk profile.
  This provision in no way diminishes the effectiveness of prudential 
regulations, and it provides the Federal Reserve sufficient regulatory 
and supervisory discretion to apply these enhanced standards on any 
firm it deems a threat to systemic risk or safety and soundness.
  Let me restate that. If you have heard any of the attacks, you have 
heard that the Federal Reserve will not be able to adequately regulate 
the banks anymore. The past two Chairmen of the Federal Reserve have 
said that is not correct, but the bill itself provides that the Federal 
Reserve continues to have the authority to apply enhanced standards on 
any firm it deems a threat to systemic risk or safety and soundness.
  So, again, for those who are attacking the bill, I think their 
arguments are unfounded and, frankly, based in an effort to try to 
create concern about a risk that does not exist.
  This provision also requires the Federal Reserve to apply a periodic 
supervisory stress test to banks with between $100 billion and $200 
billion in assets, something that is often overlooked by those 
commenting on the bill.
  I have tried to go over some of the positive aspects of this bill and 
explain why its title is Economic Growth, Regulatory Relief, and 
Consumer Protection Act and respond to some of the false, unfounded 
attacks on this bill.
  This bill does not create any increased risk at the level of 
supervision for the megabanks, those that were intended to be the 
target of Dodd-Frank when it was adopted, but it does provide increased 
support for those community banks and credit unions, and those regional 
banks and midsized banks that are being so badly hurt and whose 
customers are being so deprived of needed and justified access to 
credit and capital. That is what this debate is about.
  I encourage all of my colleagues to support this legislation as we 
move forward and help us bring economic growth, regulatory relief, and 
consumer protection to all Americans.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. MARKEY. Mr. President, anyone tuning into the Senate floor this 
week is probably very confused right now, and that is because we are 
not debating how to address the scourge of gun violence plaguing this 
country, just 22 days after the horrific Parkland mass shooting and 
following a near-universal call from the American people for Congress 
to get serious about guns. They are debating it in the State 
legislature in Florida, but we just don't have time in the U.S. Senate 
to debate this overarching issue of gun safety in our country.
  The American people may be confused because we are not debating the 
fate of the 800,000 Dreamers and the uncertainty they still face; 
confused because we are not debating our crumbling infrastructure 
which, despite repeated calls from this President, we have seen nothing 
resembling a credible plan from him to fix our Nation's bridges, roads, 
and water systems and provide broadband for rural Americans.
  Democrats do have a real plan, and we should be debating that. But 
no. Instead, just 3 months after the passage of massive tax giveaways 
that handed over more than $1 trillion to the wealthiest Americans and 
megacorporations, we are here debating a giveaway to the world's 
biggest banks.
  We have moved on from tax handouts to the wealthy, to taxpayer-funded 
bailouts for Wall Street megabanks. That is not my opinion. The 
nonpartisan Congressional Budget Office released their analysis of this 
bailout bill and noted that the risk of a financial crisis would go up 
under this legislation.
  Why in the world is Congress doing anything that increases the risk 
of a financial crisis? It has only been 10 years since the great 
recession, but Republicans seem to have forgotten about that. Maybe 
that is why this week is so confusing--because the backers of this bill 
are not talking about the risk to the entire financial system they are 
enabling. They have forgotten that and are only talking about the 
benefits to community banks.
  Yes, there are some benefits. Those of us on the other side of this 
legislation are not arguing about that point. You could probably find 
consensus among all 100 Senators in this body that there is a 
legitimate, targeted relief we can and should provide for those 
community banks, but that is far from all this bill does. This 
community bank relief is being used to protect the giveaways for some 
of the biggest banks in this country.
  Anyone listening to the supporters of this legislation would have no 
idea that 25 of the 38 largest banks in the United States will have 
critical Dodd-Frank rules rolled back for them. Anyone listening would 
have no idea that banks with up to $250 billion in assets are being 
told the current rules are too tough for them. These banks received $48 
billion in taxpayer-funded bailout money. Those banks are not community 
banks.
  Now, a decade after the financial collapse of 2008, we are saying it 
is probably OK. We are pretty sure they have learned their lessons. We 
are pretty sure that now the big banks will put the economic security 
of the country ahead of their own profits.
  So the bottom line: This bill, the Economic Growth, Regulatory 
Relief, and Consumer Protection Act, will increase risks to our entire 
economy, and the fact that the words ``consumer protection'' are 
mentioned last should make clear they are simply an afterthought.
  When large institutions fail--whether it is Lehman Brothers, Enron, 
AIG--it is everyday working consumers who get hit the hardest and pay 
the highest price.
  There is the rule on Wall Street: On the way up, the big guys clean 
up; on the way down, the little guys get cleaned out. We saw that 
during the last financial crisis, when millions of Americans lost their 
jobs or their homes, and we are seeing it today, with increasingly 
common data breaches that compromise Americans' financial and personal 
information.
  In recent years, devastating data breaches have become the new 
normal. The likes of Target, JPMorgan Chase, Yahoo, eBay, T.J.Maxx, 
Home Depot, and Sony are among so many who have become synonymous with 
massive data breaches.
  Of course, there is Equifax, which is both a credit reporting agency 
and a data broker. Equifax's sole mission is using and profiting from 
consumers' most personal information, and they failed to protect that 
information. More than 145 million Americans' Social Security numbers, 
birth dates, addresses, and, in some instances, even driver's license 
numbers and credit card numbers were compromised because Equifax failed 
to institute even the most basic security protocols. It seems that, for 
the American consumer, every year is the year of the data breach, and 
they are sick and tired of their information falling into the wrong 
hands.

[[Page S1574]]

  So as the Senate debates how to ensure financial institutions do not 
endanger the American economy the way they did during the financial 
crisis, we cannot forget our constituents' calls for new data 
protection rules. That is why I have filed my Data Broker 
Accountability and Transparency Act as an amendment to this 
legislation. I thank Senators Blumenthal, Sanders, and Whitehouse for 
joining me.
  My colleagues and I--Republican and Democratic alike--were outraged 
when we learned about the Equifax hack and how it hurts our 
constituents across the country, but what have we accomplished in the 
U.S. Senate since then? Nothing, and the threat is only growing.
  We have an entire industry whose whole business model is predicated 
on profiting on Americans' most sensitive information. They are 
collecting it, storing it, selling it, and, in many instances, losing 
it in data hacks and breaches. Consumers don't even know who these 
companies are. They live in the shadows of our economy. Consumers 
rarely have any direct contact or business relationship with a data 
broker. Yet they know nearly everything about you. That is not just 
Social Security numbers, detailed credit histories, addresses, driver's 
license numbers. That is information on what you read, what music you 
listen to, your children, and your medical history.

  In today's economy, you--the American consumer--are the commodity 
that is bought and sold in the open market. Right now, you have no 
rights. Data brokers are collecting, using, sharing Americans' personal 
information without your knowledge, without your consent.
  Right now, American consumers are completely powerless. You can't 
say: Stop selling my information to any of these companies. That is 
unacceptable.
  We need transparency; we need accountability. That is why I urge my 
colleagues to support my Data Broker Accountability and Transparency 
Act. My amendment would hold data brokers accountable.
  First, my amendment allows consumers to access and correct the 
information that data brokers hold about them. Americans should be able 
to stop the spread of inaccurate information that could damage them 
personally and financially.
  Second, my amendment provides consumers with the right to stop data 
brokers from using, sharing, or selling their personal information for 
marketing purposes.
  Third, my amendment requires data brokers to implement comprehensive 
privacy and data security programs and to provide reasonable notice in 
the case of breaches. Equifax should have been required to have robust 
security to protect Americans' information. We must stop the next 
Equifax.
  It has now been 6 months since the public became aware of that 
breach, and Congress has yet to enact any major legislation in 
response. We are still in the data broker Wild West. American consumers 
are still powerless, and the next breach could be around the corner.
  Here is the financial services bill that we are taking up. Here is a 
bill that is directly related to these banks that we are talking about. 
Here is an opportunity for us to begin to figure out a way of 
protecting consumers in this data breach area where their financial 
records, where their health records, where their families' records 
could be compromised.
  What is the solution? We are moving through legislation that deals 
with the problems the bankers say they have, but we are not dealing 
with problems consumers say they have with these financial 
institutions. When do we take up that bill? When do we finally say to 
the largest companies: What are the protections? What are the 
safeguards that are going to be constructed so that people's personal 
information is not compromised, so the data brokers aren't able to 
create a world in which everyone's information is just part of their 
profit-making opportunity?
  That is what we should be talking about. Let's have a big debate 
here. Let's ensure that each and every one of these issues is dealt 
with.
  I urge my colleagues to support my amendment because we have to get 
to the heart of this Equifax issue. We have to actually deal with the 
world as it has changed. If the proponents of this bill say that the 
world has changed since the crash in 2008 and 2009, then the world has 
also changed with regard to the potential for the compromise of the 
information of every American. Let's have that debate, as well, in the 
same bill.
  I urge that my amendment be put in order, and I urge that the Members 
of the Senate support it. It is time for us to give those protections 
to consumers, which they are crying out for. No individual consumer is 
crying out for this change in the banking bill, but they are crying out 
for protections in a system where they have no voice, no way to ensure 
that their own family's personal data is not compromised.
  I yield back to the Chair.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. McCONNELL. 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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