[Congressional Record Volume 164, Number 43 (Monday, March 12, 2018)]
[Senate]
[Pages S1619-S1626]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ECONOMIC GROWTH, REGULATORY RELIEF, AND CONSUMER PROTECTION ACT
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of S. 2155, which the clerk will
report.
The senior assistant legislative clerk read as follows:
A bill (S. 2155) to promote economic growth, provide
tailored regulatory relief, and enhance consumer protections,
and for other purposes.
Pending:
McConnell (for Crapo) modified amendment No. 2151, in the
nature of a substitute.
Crapo amendment No. 2152 (to amendment No. 2151), of a
perfecting nature.
The ACTING PRESIDENT pro tempore. The majority whip.
Mr. CORNYN. Madam President, this week, we will complete work on an
important bipartisan bill. Thanks to the leadership of the Senator from
Idaho, Mr. Crapo, who is chairman of the Banking Committee, they passed
it out of the Banking Committee, and now it is time for us to do our
job and pass it out of the Senate. Last week, we voted to proceed, and
we will vote to pass it out of the Senate in the next few days.
Senator Crapo explained why this work is so important. Since the
passage of the Dodd-Frank legislation in 2010--as we all recall, after
the great recession of 2008, when Wall Street melted down together with
our financial institutions, there were reform efforts undertaken known
as Dodd-Frank--Senator Dodd and Congressman Frank--which imposed
regulatory requirements on banks large and small. The problem is, the
small community banks--the ones that are disproportionately harmed by
this overregulation--weren't the cause of the great recession, the
financial meltdown of 2010 and 2009, but they are the collateral
damage. What has happened is, there has been a lot of consolidation.
Many small community banks and credit unions have simply had to close
or been consolidated with other larger banks and institutions. It has
taken a toll on our economy, and it has taken a toll on our communities
across the country. What happens is, these community banks have less
money to loan because they have had to use the money they would loan to
hire more people to help them comply with all the unnecessary redtape
because of the Dodd-Frank overregulation. Some have had to basically
defer that sort of investment in their communities and
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others have had to shutter completely because of the financial burden.
The second-order effect is, some people don't have access to capital;
that is, to loans they need. They can't get credit they need in order
to start a small business, grow an existing business, or even get a
mortgage to buy their first home.
Let's be clear, though, about which financial institutions this bill
is tailored toward helping. It is small community banks, midsized
regional ones, as well as credit unions. The bill we are considering
somehow does not exempt large banks from those regulations, and saying
it does, which some have said, doesn't make it so. It is a claim too
eagerly peddled by those who want to maintain the status quo, to the
detriment of our smaller communities and small businesses. Large banks
are still subject to measures designed to protect the stability of the
overall economy, like rigorous stress testing.
After all, this bill is called the Economic Growth, Regulatory
Relief, and Consumer Protection Act. What it actually does is rightsize
those regulations. It does this by providing targeted exemptions from
risk-weighted capital requirements, for example, and the Volcker rule.
It also provides a qualified mortgage safe harbor for small banks and
raises the SIFI threshold so community banks are not lumped into the
same overall category as giant financial institutions operating on Wall
Street.
The majority leader recently said: ``In an era of online banking and
multinational corporations, smaller institutions remain uniquely able
to build community connections,'' and that is important to our civic
fabric as well as the economies in rural and smalltown America.
Based on research, community banks provide more than half of all
small business loans. That could translate into small banks getting to
know their customers on a personal level and then extending credit to
entrepreneurs and families who might not have access otherwise.
That is certainly the situation in parts of my State, the State of
Texas. I have heard from banks and communities there that are more than
ready to finally be freed of the shackles of Dodd-Frank.
As the chief executive officer of the Independent Bankers Association
of Texas put it, ``Congress holds the key to unchain community banks
from the burden pushing them toward consolidation''--in other words,
mergers, forcing them to become big banks, which seems to me to be an
odd way to deal with this problem, to be sure, or putting them out of
business altogether.
In the IBAT's view--Independent Bankers Association of Texas--rules
meant to curb the abuses of banks deemed too big to fail have instead
trickled down to harm their much smaller counterparts. Because of this
effect, in essence, community banks have become too small to survive as
mergers and acquisitions have occurred all over the map.
Independent bankers have reported that since 2009, Texas has lost
nearly one-third of its banks--one-third of its banks. They have said
that based on Federal data on rural counties, approximately one-third
don't have a local credit union or bank at all. This bill addresses
that situation. It enjoys wide bipartisan support, and I hope my
colleagues will join me in supporting passage before the end of the
week.
Fix NICS Bill
Madam President, on another matter, I want to emphasize another point
and talk about a new milestone reached and announce some good news.
We have now reached 64 total cosponsors for a bill I have introduced
with the junior Senator from Connecticut, Mr. Murphy, called the Fix
NICS, which is the background check reform bill we cosponsored
together.
In an institution like this, during polarized times, it is pretty
remarkable that you have 64 Senators--32 Democrats and 32 Republicans--
coming together and saying: Yes, we have a problem, and, yes, we want
to work together to fix it.
This is the kind of legislation the Nation has been waiting for, as
people continue to be frustrated, frightened, and depressed by random
acts of violence that have broken out in and around some of our
churches, our cities, and our schools. I am talking about shootings
like those that occurred at Sutherland Springs, TX, outside of San
Antonio, in Las Vegas, and, of course, Parkland, FL. With Fix NICS, we
are saying the status quo is not acceptable.
I am happy to hear my friend the Democratic leader, Senator Schumer,
say there are other things he and his colleagues on the other side of
the aisle would like to do. I would just quote to him some ancient
wisdom; that ``the journey of a thousand miles begins with a single
step.'' We ought to take that first step and do what we can do today
and do what is achievable in order to make our communities safer.
I have talked about it before, but if the background check system had
been working the way Congress intended, the shooter who murdered 26
people as they worshiped on Sunday morning in Sutherland Springs,
outside of San Antonio, and injured 20 more would not have been able to
legally purchase firearms because the background check system would
have reflected the fact that he was a convicted felon, he had been
convicted of domestic violence, and he had been in a mental
institution. All three of those things are disqualifiers from being
able to legally purchase firearms under current law, but if the
background system isn't uploaded with the appropriate information for
the FBI to maintain, then those convictions will never be discovered,
and someone can merely lie their way into purchasing firearms and
committing atrocities like we saw in Sutherland Springs.
Fix NICS is designed to make sure convicted felons can't get access
to firearms because, under current law, they are disallowed from doing
so. It is designed to make sure people who commit domestic violence
can't buy a firearm because they are currently prohibited by law from
doing so. It is designed to make sure people who are dishonorably
discharged from the military can't legally get a firearm because the
current law prohibits them from doing so.
Sometimes criminals with domestic abuse convictions, records of
mental illness, and violent erratic behavior slip through the cracks
and get their hands on guns, despite what the law already prohibits.
That is why it is so important for us to pass this legislation now--
again, with 64 cosponsors of the legislation, evenly divided between
Republicans and Democrats.
The effectiveness of doing this sort of background check system has
been confirmed by academic research. A recent study by RAND Corporation
found evidence that dealer background checks may decrease firearm
homicides by as much as 20 percent or more. In other words, it saves
lives. One specific part of that study further suggested that enforcing
background checks for felony records may have a similar diminishing
effect. In other words, enforcement matters, and enforcement is what we
are trying to ensure.
We have learned from Sutherland Springs that the NICS system is not
operating as Congress intended and that the military, in this instance,
was not uploading certain records, but they are not alone. Recent news
reports out of places like Ohio have shown it is often the case at the
State level as well. We know, a few years back, the shooter at Virginia
Tech, near Washington, DC, had been adjudicated mentally ill by the
State of Virginia, but the State had never uploaded that information on
the background check system, so he was able to purchase a firearm.
This bill will save lives. I know my friend the Democratic leader,
the minority leader, has said: Well, it is not enough, but if it saves
lives, isn't it a good start? I am grateful to him for cosponsoring the
legislation. You couldn't tell he cosponsored the legislation by his
comments here, acting like this is somehow not a very important step,
but it is because it will save lives.
This bill has the backing of the President as well, whom I have
spoken to personally, and the minority and majority leaders in the
Senate and is supported by gun groups across the spectrum from--yes,
the National Rifle Association but also Everytown for Gun Safety. They
are at the opposite ends of the ideological spectrum when it comes to
the Second Amendment. It is not just them. It is others like the
National Coalition Against Domestic Violence, Sandy Hook Promise, the
National Shooting Sports Foundation, the
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National Domestic Violence Hotline, and the National Sheriffs'
Association.
It really is remarkable when you have groups with such widely
divergent views, when it comes to the Second Amendment, come together
and say: Well, this is where we can find common ground. This is where
we can actually do something. That is reflected in the 64 bipartisan
cosponsors we have for the bill.
The bill would do this: First, it would require Federal agencies and
States to produce NICS implementation plans, in other words, to fix
what is broken, including measures to verify the accuracy of the
records.
It would hold Federal agencies accountable if they fail to upload the
relevant information.
I think it is accurate information, but I have heard that after the
shooting in Sutherland Springs, the military has now gone back and
uploaded 4,000 additional records into the NICS background check system
that weren't previously loaded. Those are 4,000 people now in the
system who, if they attempted to buy a firearm legally through a gun
store or Federal licensed firearm dealer, would not be able to do so
because there would be a hit on the FBI background check system.
I think if we provided similar incentives to the States, we would see
a similar increase in compliance and public safety continue to be
enhanced.
This bill would reward States that comply with their NICS
implementation plan through Federal grants incentives. It would
reauthorize and improve law enforcement programs to help State
governments share relevant criminal record information. Let's not
forget, this is not just a Federal problem.
Finally, the bill would provide important technical assistance to
Federal agencies and States that are working to comply with NICS
record-sharing requirements.
We have all the support we need. What we need is a vote. I know that
despite the minority leader's comments here today, he does not oppose
this bill. He says it is merely not enough, but why can't we pass this
bill that we all agree on and then build from there? I am not afraid of
having any debate or any vote on any matter related to the Second
Amendment. That is why our constituents sent us here, to debate and to
vote and to be held accountable for those votes.
I know there is pressure from those who want more controversial
measures to be added, but frankly they are ones that can't pass the
Senate, much less the House, or be signed into the law. I would hope we
focus--focus our attention on what is achievable, what is bipartisan,
what brings people together at the opposite ends of the ideological
spectrum and pass the Fix NICS bill. Again, NICS is the National
Instant Criminal Background Check System. It will improve our
background check system and in the process save lives.
If we did nothing else--and I am not advocating that for a moment,
but if we did nothing else in this space other than pass this
background check reform system, we would save lives. I don't know why
that is not compelling enough to everyone to actually get it done. I
hope it is, and I hope we do so without further delay.
I yield the floor.
I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Ms. WARREN. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Ms. WARREN. Thank you, Madam President.
Ten years ago today, at breakfast tables all around the country,
Americans read a shocking headline: ``Fed assumes the role of lender of
last resort.'' The biggest investment banks on Wall Street were getting
their first taxpayer bailout, but some of the banks were so addicted to
poisonous scam mortgages that even that bailout wasn't enough. Within a
week, Bear Stearns--an 85-year-old fixture on Wall Street--would fall,
and the financial crisis would begin.
Within a year, American workers' retirement accounts had lost $2.7
trillion, almost one-third of their value. No one bailed them out.
Within 2 years, 8.8 million Americans had lost their jobs. No one
bailed them out. Within 3 years, more than 4 million homes had been
lost to foreclosures, and millions more were in danger. No one bailed
the homeowners out. Now, to mark the 10th anniversary of that
devastating crisis, the Senate is on the verge of rolling back the
rules on the big banks again.
Last week I talked about how this bill guts important consumer
protections, how it weakens the oversight of banks with up to a quarter
of a trillion dollars in assets, and how it could set the stage for
another financial crisis, just like past bipartisan bills to roll back
the financial rules. But the bill will also roll back the rules on the
very biggest banks in the country, the true Wall Street banks,
including JPMorgan Chase, Citigroup, and the rest--banks that taxpayers
spent $180 billion bailing out in 2008. And no matter what the
supporters of this bill say, there are three glaring parts of this bill
that without question help the very biggest Wall Street banks.
First, this bill opens the door to easing up on big banks' stress
tests. Right now, about 40 of the biggest banks go through stress tests
every year, simulating a financial crisis and making sure that if it
happened, they could survive. This bill says that 25 of them can just
skip the hard test from now on, and the remaining 15 or so--well, they
don't necessarily have to do those tests every single year. For the
banks that are still going to be doing stress tests, they can now be
done, under this bill, ``periodically.'' Who decides what
``periodically'' means--the former investment bankers Donald Trump has
nominated to lead the Fed and to head up the Fed's supervisory work?
Does that make you feel safe?
Second, the bill gives the biggest banks a new legal tool to fight
for weaker rules. Right now, the law says that the Fed ``may'' tailor
capital and other rules for the biggest banks. This bill says the Fed
``shall'' tailor the rules for the banks with more than $250 billion in
assets--the very biggest banks in this country. That one word--the
switch from ``may'' to ``shall''--may not seem like much, but it means
everything to the high-priced lawyers who represent these banks.
Here is what Jeffrey Gordon, a professor at Columbia Law School, had
to say about that one-word change:
This apparently minor change is likely to produce
significant degradation of financial stability, especially
over the long run. The change would expose the Fed to
litigation challenges to its enhanced standards, in
particular whether they are already adequately tailored. . .
. The statute thus empowers the largest firms which pose the
biggest risks to bargain with the Fed for laxer standards
with the threat of a well-resourced litigation challenge in
the background. Over time this bargaining for laxity will
produce a race-to-the-bottom dynamic that will dramatically
increase the chance of another financial crisis.
Professor Gordon of Columbia Law School says that will dramatically
increase the chance of another financial crisis.
If you think the one-word change from ``may'' to ``shall'' won't
change much, consider this: Opponents to the bill have been pointing
out this problem loudly and publicly, but the bill's sponsors won't
change it. They won't change that one word. Why? Because the giant
banks want the change.
The third bank giveaway in this bill undercuts capital requirements
for the biggest banks. The best way to stop another taxpayer bailout of
the big banks is to make sure they have enough capital on hand to
withstand a crisis. That is why Congress and the regulators established
tougher capital requirements for the big banks after the last financial
crisis. This bill reverses direction, opening the door to big banks
like JPMorgan and Citigroup facing much lower capital requirements than
they do now. In fact, the independent Congressional Budget Office says
there is a 50-percent chance that JPMorgan and Citigroup can take
advantage of a provision in the bill to reduce their capital
requirements.
The Wall Street Journal editorial board--no fan of tough regulation--
wrote that the change proposed in the banking bill is dangerous and
``will make the financial system more vulnerable in a panic.'' The
Bloomberg editorial board says the bill ``chip[s] away at the bedrock
of financial resilience--the equity capital that allows
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banks to absorb losses and keep on lending in bad times.'' And the
consequences could be huge. According to the FDIC, this provision could
lower capital requirements for JPMorgan by $21.4 billion and for
Citigroup by $8.6 billion.
At the end of last week, the supporters of the bill introduced a new
amendment that they claimed would address the problems in this bill,
but that amendment did nothing to address these three glaring big-bank
giveaways: The stress test provision is unchanged, the litigation
provision is unchanged, and the capital requirements provision is
unchanged. Victories for the big banks have been preserved 100 percent.
But it is not just the big-bank giveaways that remain unaddressed in
this new amendment. Over the last week, we have heard a lot of
criticism about this bill from experts and from civil rights groups and
from consumer advocates and from former regulators, and, most
importantly, from our constituents back home. They don't like it. This
banking bill undermines civil rights laws. It weakens consumers
protections on mortgages and mobile home purchases. It rolls back rules
on 25 of the 40 largest banks in the country. It does almost nothing to
protect consumers. Let me be perfectly clear about this. The new
amendment does not address a single one of these legitimate criticisms.
It is a bunch of fig leaves designed to let supporters of the bill
pretend that they have addressed those criticisms without actually
addressing them. In some cases, these little fig leaves actually make
things worse.
Let's start with the fake fixes--first, mortgage discrimination.
Mortgage discrimination is real in America. Some banks charge African
Americans more for loans than they charge Whites with similar credit.
Some deny loans to Latinos or to single women. How do we know that?
Because banks have to disclose information about the loans they provide
under something called the Home Mortgage Disclosure Act, or HMDA. Using
HMDA data, a new report shows that in 61 different cities around the
country, minority borrowers were more likely to be denied a mortgage
than White borrowers with the same income. But this bill--the bill that
is pending on the floor of the Senate--now exempts 85 percent of banks
from reporting any HMDA data, making it much harder to discover and
stamp out discrimination.
Senator Cortez Masto had a great idea for fixing this: Take the HMDA
provision out of the pending bill. Leave HMDA alone. If the authors of
this bill really wanted to fix this problem, they would support her
amendment and insist that without that amendment, they would withdraw
their support for the bill. But now the bill's supporters have a fig
leaf. They say that of the 85 percent of banks that no longer will have
to report information about discrimination, if one of those banks
flunks two consecutive examinations under the Community Reinvestment
Act, those banks will have to start reporting discrimination data. If
that looks like a tiny little fig leaf, consider this: Banks get tested
at most every 3 years, which means it would take 6 years of
discrimination to flunk twice. This fig leaf is so small, it is
basically invisible.
Now, for some of these so-called consumer protection fig leaves--the
problems are real; it is just the solutions that are fake. For example,
there is a provision to deal with private student loans from banks. It
says that if a student loan borrower dies, then the bank can't go after
the cosigner of the loan for the full balance. That sounds really
good--at least until you read the fine print. It turns out that spouses
don't count. So the bank will still be free to hound widows and
widowers for the balances of their deceased spouses. And the loan isn't
actually forgiven. That means the bank can still go after the dead
borrower's estate for the loan, maybe take half of the house or take
whatever is in the checking account or savings account. It is a
nightmare for a grieving family--and it is also perfectly OK under this
fig leaf amendment.
In some places, it isn't even a fig leaf that pretends to address
problems with the bill; it is just new provisions to create new
problems--like a section that blows a hole in regulators' ability to
require banks to hold capital for commercial real estate. Does anyone
remember that risky commercial real estate investments were a factor in
Bear Stearns' failure 10 years ago this week? Does anyone remember that
6 months later, commercial real estate losses would help blow up Lehman
Brothers? I guess not--at least not right here in Congress, because 10
years later--right now, this week--Congress wants to let banks take one
more commercial real estate fix with less oversight.
Banks of all sizes are making record profits. Only in Washington
would people think it is time to scrap the protections that have kept
us safe for a decade, all so that these same profitable banks can make
even more money. It is the same mindset that set the stage for the
savings and loan crisis in the late 1980s and the financial crisis of
2008.
America's working families will pay the price if we make the same
mistakes again. It isn't too late. We should stop this bill from
becoming law.
Thank you, Madam President.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Florida.
Gun Violence
Mr. NELSON. Madam President, so many are still grieving from the
atrocious killing of 17 people at the high school in Florida. Indeed,
our entire State is grieving. Broward County is grieving. Parkland is
grieving. I think we are going to find on March 24, in the rallies and
the marches that will occur in 500 cities around this country and will
have a focus of the main one in Washington, that a lot of people are
grieving, because a lot of people all across this country have been
touched by these massacres that continue to occur, starting almost
three decades ago at Columbine in Colorado. We have certainly had our
fill of it in Florida just in the last 2 years: 49 people gunned down
with an assault rifle, a Sig Sauer MCX, at the Pulse nightclub; another
assault pistol used to gun down 5 people in the Fort Lauderdale
Airport; and now an AR-15 used to gun down 17. He would have gotten a
lot more had he been able to open the third-story window overlooking
the courtyard from a perch as the students fled across the courtyard to
get out of the schoolyard. He couldn't get the window open. He tried to
shoot it open, but it was hurricane-proof glass, and it only shattered;
it didn't break.
It has been almost 1 month since the tragic shooting. Those 17
families--14 students and 3 adults--are certainly grieving, and we have
seen in the last few weeks many of the parents, students, families, and
community leaders stand up to say that enough is enough. They are
asking us, the U.S. Congress, to enact meaningful legislation to reduce
gun violence.
The action starts in Tallahassee, and the students are going there
while the State legislature is still in session, talking about
commonsense solutions, such as enacting universal background checks in
the purchase of a gun; not allowing a gun show loophole or a private
transaction loophole; not allowing a loophole for orders on the
internet; universal background checks that would include mental
problems; if you have been on the terrorist watch list, that would
include, of course, criminal records but also mentally adjudicated
records; universal background checks in the acquisition of a gun,
particularly an assault rifle. But we can't get that passed here
because some folks aren't listening.
Take, for example, what was said at the White House just last night.
Giving in to the will of the NRA, the White House announced that it
would provide Federal funding for firearms training for teachers and
other school personnel. This Senator thinks that arming teachers is a
terrible idea. It is not what the students are asking for. It is not
what the teachers are asking for. It is not what the American people
want us to do.
Just last week, the Florida legislature passed and the Governor
signed into law a bill--a watered-down version, but it is still arming
school personnel, and it falls short on what is really needed to reduce
gun violence and especially the massacres that are occurring. While
what Florida has done is a step in the right direction, particularly
with regard to mandating 3-day waiting periods in the purchase of an
assault rifle, we are far from where we need to be in addressing gun
violence if
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we are talking about putting more guns in our schools, and if--as the
President suggested last night--we arm teachers. The teachers don't
want it, and I can tell you who else doesn't want it. The SWAT teams
that have to storm the building looking for the shooter don't want to
encounter a teacher with a gun and mistakenly think that teacher is the
shooter. It is common sense.
What studies do supporters of this idea cite, suggesting that arming
teachers will reduce gun violence at schools? Why even propose this
solution before seeing what policies are proposed by a new Federal
commission on school safety, which has now been developed? Why don't we
at least see what they are proposing? No, this is to sell more guns by
arming teachers.
I have spoken to many teachers, students, and families. I haven't
found one person who wants teachers to be armed, including the teachers
themselves. There is near universal agreement that arming teachers is a
terrible idea. Yet such an idea continues to direct Congress's
attention away from obvious and commonsense solutions supported by most
Americans, which are universal background checks and getting the
assault rifles and banana clips that have 30 rounds off the streets.
I have supported several bipartisan bills--some with my colleague
from Florida, Senator Rubio--that address background check issues and
seek to make sure our schools have the resources to keep our students
safe.
Senator Rubio and I announced last week that if there are red flags,
they need to be brought to the attention of law enforcement. We are
offering in our bill a Federal incentive program to the States to get
those red flags about a problem person to the authorities before it is
too late. But ideas like arming teachers and putting more guns in our
schools are just plain dangerous.
Mr. President, I know you have backed off of certain things because
the NRA wanted you to, and I know you are now proposing arming
teachers. Let's get down to some real commonsense solutions. Let's work
on how to prevent assault weapons from getting into the wrong hands and
to stop the massacres that continue to plague this country. The people
of America want no less.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Moran). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BOOZMAN. 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. BOOZMAN. Mr. President, I ask unanimous consent to be able to
complete my remarks and for the Senator from Arizona to follow me.
The PRESIDING OFFICER. Without objection, it is so ordered.
National Nutrition Month
Mr. BOOZMAN. Mr. President, I rise to recognize the role of nutrition
in the health and wellness of our Nation and the development of our
children. Arkansas' agricultural producers play a vital role in
providing affordable, nutritious food, not only for our State and
country but for the entire world.
March is recognized as National Nutrition Month. This is a time to
focus attention on the importance of a balanced diet and healthy eating
choices. As a cochair of the Senate Hunger Caucus, I am committed to
supporting and raising awareness of efforts that provide nutritious,
healthy meals; creating policies that fight hunger; and supporting
programs that have proven successful.
The Department of Agriculture's Child and Adult Care Food Program is
a unique effort that uses public-private partnerships to meet the
nutritional needs of vulnerable children and adults. This has become a
critical tool in the fight against hunger.
Senator Klobuchar and I recently introduced a resolution designating
this week as National Child and Adult Care Food Program Week to honor
and raise awareness of the important role the Child and Adult Care Food
Program plays in the health of those in Arkansas, Minnesota, and
throughout the country. Through this program, more than 4 million
children and 130,000 adults in childcare centers, adult daycare homes,
and afterschool programs receive nutritious meals and snacks daily.
Studies show that access to the Child and Adult Care Food Program can
measurably and positively impact the cognitive, social, emotional, and
physical health and development of children, leading to more favorable
outcomes, such as decreased likelihood of being hospitalized, an
increased likelihood of healthy weight gain, and an increased
likelihood of a more varied diet.
As a member of the Senate Agriculture Committee, I will be working to
ensure that individuals who need food assistance are able to access
affordable, nutritious meals. I will also continue to press for
flexibility in the Department of Agriculture's Summer Food Service
Program so children who rely on school meals when class is in session
can access healthy, nutritious meals during the summer in order to have
a seamless transition from the school year to the summer programs.
In Arkansas, more than 50,000 children receive nutritious meals
through this program. For many rural areas of the country, like the
Natural State, this one-size-fits-all approach fails to meet the needs
of communities and the children who are most in need.
More than 60 percent of Arkansas' children rely on free or reduced
meals during the school year, so we need to modernize the program so
that summer meal sites are available to children no matter where they
live. Arkansas is blessed to have the support of schools, churches,
Boys & Girls Clubs, libraries, and other organizations that serve as
host sites for summer meal programs, and we need to allow them the
flexibility that is necessary to reach the students in their
communities. It is time that Federal policy responds to this need.
I have seen how community involvement in Arkansas is fighting food
insecurity. Efforts like the Cooking Matters at the Store Initiative,
launched by the Arkansas Hunger Relief Alliance, teaches families who
are on budgets to compare prices, read food labels, and buy fruits and
vegetables.
This month is recognized as School Breakfast Month in Arkansas. State
educators have seen how essential breakfast is to students' progress,
so they have instituted programs to promote breakfast and are helping
to grow gardens where the food produced is used in school lunches.
Grocery stores are allowing SNAP beneficiaries to purchase locally
grown produce at a discount. Proper nutrition is crucial to our well-
being.
Creating opportunities to access healthy, nutritious food is also
important to our State's and the Nation's economic development. In
order to break the cycle of food insecurity, we must work together.
Hunger knows no boundaries, but it is preventable, and we have the
tools to help fight it. We have made significant gains in Arkansas,
across the country, and throughout the world to improve nutrition for
the most vulnerable in our society, and I will continue to be a
champion of efforts to improve access to healthy nutritious, foods.
I yield the floor.
The PRESIDING OFFICER. The Senator from Arizona.
(The remarks of Mr. Flake pertaining to the introduction of S. 2538
are printed in today's Record under ``Statements on Introduced Bills
and Joint Resolutions.'')
Mr. FLAKE. I yield the floor.
Cloture Motion
The PRESIDING OFFICER. Pursuant to rule XXII, the Chair lays before
the Senate the pending cloture motion, which the clerk will state.
The legislative clerk read as follows:
Cloture Motion
We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
do hereby move to bring to a close debate on Senate amendment
No. 2151, as modified, to Calendar No. 287, S. 2155, a bill
to promote economic growth, provide tailored regulatory
relief, and enhance consumer protections, and for other
purposes.
Mitch McConnell, Tom Cotton, Bob Corker, Ron Johnson,
John Barrasso, Cory Gardner, Steve Daines, Mike Crapo,
Deb Fischer, Shelley Moore Capito, Mike Rounds, Jeff
Flake, John Kennedy, Johnny Isakson, James Lankford,
Bill Cassidy, John Cornyn.
The PRESIDING OFFICER. By unanimous consent, the mandatory quorum
call has been waived.
[[Page S1624]]
The question is, Is it the sense of the Senate that debate on
amendment No. 2151, as modified, offered by the Senator from Kentucky,
Mr. McConnell, to S. 2155, a bill to promote economic growth, provide
tailored regulatory relief, and enhance consumer protections, and for
other purposes, shall be brought to a close?
The yeas and nays are mandatory under the rule.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. CORNYN. The following Senators are necessarily absent: the
Senator from Arizona (Mr. McCain) and the Senator from Kentucky (Mr.
Paul).
Mr. DURBIN. I announce that the Senator from Illinois (Ms. Duckworth)
and the Senator from New Mexico (Mr. Heinrich) are necessarily absent.
The PRESIDING OFFICER (Mr. Lankford). Are there any other Senators in
the Chamber desiring to vote?
The yeas and nays resulted--yeas 66, nays 30, as follows:
[Rollcall Vote No. 50 Leg.]
YEAS--66
Alexander
Barrasso
Bennet
Blunt
Boozman
Burr
Capito
Carper
Cassidy
Cochran
Collins
Coons
Corker
Cornyn
Cotton
Crapo
Cruz
Daines
Donnelly
Enzi
Ernst
Fischer
Flake
Gardner
Graham
Grassley
Hassan
Hatch
Heitkamp
Heller
Hoeven
Inhofe
Isakson
Johnson
Jones
Kaine
Kennedy
King
Lankford
Lee
Manchin
McCaskill
McConnell
Moran
Murkowski
Nelson
Perdue
Peters
Portman
Risch
Roberts
Rounds
Rubio
Sasse
Scott
Shaheen
Shelby
Stabenow
Sullivan
Tester
Thune
Tillis
Toomey
Warner
Wicker
Young
NAYS--30
Baldwin
Blumenthal
Booker
Brown
Cantwell
Cardin
Casey
Cortez Masto
Durbin
Feinstein
Gillibrand
Harris
Hirono
Klobuchar
Leahy
Markey
Menendez
Merkley
Murphy
Murray
Reed
Sanders
Schatz
Schumer
Smith
Udall
Van Hollen
Warren
Whitehouse
Wyden
NOT VOTING--4
Duckworth
Heinrich
McCain
Paul
The PRESIDING OFFICER. On this vote, the yeas are 66, the nays are
30.
Three-fifths of the Senators duly chosen and sworn having voted in
the affirmative, the motion is agreed to.
The Senator from Ohio.
Mr. BROWN. Mr. President, when you went to a local bank in Mansfield,
OH, to buy a house 30, 40, or 50 years ago, you knew the lender, and
the lender knew you. You saw him or her at the grocery store. Maybe
they went to your church or synagogue. Your kids probably went to the
same school. You knew that your deposits at the bank helped fund your
neighbor's house or the hardware store down the street. A lot of banks
and credit unions don't work this way.
The 2008 crisis taught us that finance has changed. Now a mortgage in
Zanesville, OH, is diced and sliced and sold to an investor in Zurich,
Switzerland. Banks in Frankfurt place bets on loans in Fostoria.
When the system went bust a decade ago and predatory loans began to
fail, Ohio taxpayers picked up the tab, including for foreign banks
headquartered an ocean away. The Federal Reserve opened up a spigot of
cheap money to keep the global economy from tanking. Banks in Spain,
France, Japan, Canada, and Korea all came to the United States for help
to weather the financial storm.
Think about this. An analysis of the Fed's lending from February 2008
to 2009 showed that the vast majority of loans went to foreign banks.
After the crisis, records released to the public showed that foreign
banks took more than 70 percent of the Fed's loans during the crisis
and 65 percent of loans from other emergency programs.
Under one bailout scheme, British Barclays alone borrowed $232
billion from the Fed at a sweetheart interest rate--the kind of rate a
hardware store in Hillsboro, OH, could never get on a loan to keep them
afloat back in 2008. Think about that. British Barclays got a
sweetheart deal, a better deal than a hardware store in Ohio could get
from a bank.
After the crisis, Congress responded with a law, the Wall Street
reform act, to ensure that taxpayers would never again have to send
bailout money to British and Swiss megabanks. We ordered the Fed to
keep a closer eye on the big banks--to use their power to make sure the
largest global banks did not again crash the economy.
Congress instructed that the Fed apply the strictest protections to
the biggest banks--those with more than $50 billion in assets. We know
that.
When the Fed implemented these rules, they applied some standards to
banks that have more than $50 billion across the globe, but for global
banks that have more than $50 billion in the United States, the Fed
applied the strongest standards. For foreign banks with not only
trillions worldwide but systemic operations in the United States, the
Fed wrote rules that are as strict as those for our domestic megabanks,
standards that former Fed Governor Dan Tarullo called ``special
prudential measures.'' They are standards that ensure that we only
import Swiss chocolate, not Swiss bank failures. These special measures
are important.
Last year, the Office of Financial Research released a report showing
that foreign banks in the United States are riskier than similarly
sized U.S. regional banks. Hear that again. Foreign banks in the United
States are riskier than similarly sized U.S. regional banks. Think of
that in terms of what this bill that we just voted cloture on actually
does.
This legislation threatens to undo important rules protecting us from
risk. The legislation puts taxpayers on the hook for bailouts. That is
what the Congressional Budget Office said.
Under this bill, foreign banks that took billions in bailouts would
be able to take more risk under a less watchful eye. Who are some of
them? Deutsche Bank, Santander, and UBS would all be treated more like
they were an Ohio regional bank. Deutsche Bank, the Trump family's
personal business bank; Santander, the bank in Spain that repossessed
the cars of hundreds of service men and women cars while those service
men and women were serving our country overseas; UBS, the Swiss bank
that illegally financed Iranian activities--they would all be treated
more like they were Huntington in Columbus, or Fifth Third in
Cincinnati, or KeyBank in Cleveland. What is right about that? What is
fair about that? What is smart about that?
Don't take my word for it. Secretary Mnuchin sat right in front of
the Banking Committee; Senator Crapo, the chairman, and I, as the
ranking member, looked straight at him just a few weeks ago. He
confirmed that this bill would treat foreign banks with up to $250
billion in assets the same as U.S. regional banks. So they are up to
$250 billion, just like Huntington, just like KeyCorp, just like Fifth
Third in Ohio. Secretary Mnuchin said: We are going to treat those
foreign banks the same if they are up to $250 billion in assets. That
may be the first direct answer I have ever heard from Secretary
Mnuchin. I sit on the Finance Committee and the Banking Committee, and
he has trouble giving direct answers. He did at least that time.
It makes sense because he was just confirming his intention. From
what he and the Treasury Department wrote in a report last year, that
is precisely what this administration wants to do. That is what they
said in this report that we should do--deregulate these foreign banks
that have assets under $250 billion in the United States. They wrote it
into their banking deregulation blueprint back in June.
I give credit to Secretary Mnuchin, and I give credit to the Trump
administration. While I don't give them credit for the White House
looking like a retreat for Wall Street executives, I do give them
credit for at least finally owning up in that report, in the
legislation, and in his answer to my question in the Banking Committee
hearing that, yes, they are going to deregulate these foreign, huge
megabanks--Deutsche, Santander, UBS, and Barclays--as long as they have
under $250 billion of assets in the United States, and they do.
Paul Volcker, former Chairman of the Fed, is worried, as I am, that
this bill deregulates the U.S. operations of foreign banks. Sarah Bloom
Raskin, former Fed Governor and Deputy Treasury Secretary, said this
bill ``removes necessary guardrails that were installed to reduce the
chances of foreign megabanks drawing on U.S. bailout funds.''
[[Page S1625]]
I have watched the Presiding Officer--the junior Senator from
Oklahoma--serve with integrity and honesty. I don't think you, any of
my colleagues on this side of the aisle, or anybody else wants to face
the voters 5 years from now, 10 years from now if what we voted on
today and will vote on this week results in our bailing out foreign
banks. Americans were angry that we bailed out the big U.S. megabanks.
Imagine the anger if the story is focused more precisely on the fact
that we bailed out foreign banks--which we actually did--but the story
was more about Wall Street. Imagine if that were the story.
Former Treasury officials Michael Barr and Antonio Weiss are worried
that this bill is rolling back rules that protect the U.S. economy from
foreign bank risk. The former CFTC Chairman, Gary Gensler, thinks we
need to amend this bill to make sure that foreign banks don't get a
windfall. These are across-the-board regulators, present, past,
Republicans, Democrats. That is quite a list of watchdogs, but what is
most interesting: Do you know who else is under the impression this
bill helps foreign banks? Foreign bank lobbyists.
I offered an amendment during the committee markup to close the
loophole. I am offering it again on the Senate floor if Republican
leadership allows amendments on the Senate floor. My amendment would
have ensured that foreign megabanks in the United States are watched
over just as closely as Wall Street banks. They are roughly the same
size; some are bigger, but because their assets are smaller in the
United States, we are going to treat them like Huntington and Key and
Fifth Third rather than treating them like JPMorgan Chase and Bank of
America and Wells Fargo.
Foreign bank lobbyists--they are American citizens. They are
lobbyists for foreign banks; they are not foreign lobbyists, a
difference. These lobbyists for foreign banks, representing Deutsche
and UBS--most of them--wrote a letter opposing my amendment, saying it
was unfair for me to try to keep these rules in place. They said their
banks should be treated like U.S. regional banks, not like the global
giants they are. That amendment was defeated in the committee; we will
leave it at that.
Now, why is that such a problem? Let's look at the rap sheet on some
of these foreign banks. Santander, a Spanish bank, failed a stress test
3 years in a row. It would have its rules rolled back under this bill.
Stress tests are exercises, as my colleagues know, to ensure that a
bank can survive an economic downturn without a bailout. So this
Spanish bank, Santander, failed not once, not twice but three times.
What that failure means--most people, if they fail three times, they
flunk out. If they fail three times, they get in this bill, and they
get a potential bailout. What is smart about that? What is honorable
about that? What is good economic policy about that? What is fair about
that? What is just about that?
In addition to failing its stress test, it is a bank that illegally
repossessed cars from 1,100 American service men and women while they
were serving our country. I spend a lot of time at the Wright Patterson
Air Force Base, the largest employer in Ohio. I see all kinds of
financial institutions that prey on those young airmen and their
families. Airmen and women, young Americans serving in the Air Force--
particularly when they are 18, 19, 20, 21 years old--are more
financially vulnerable. They are a little less sophisticated than
somebody 10 years older. They don't make much money. Their families are
always anxious when their husband or wife or mother or father serve
overseas. This Spanish bank repossessed the cars of 1,100 American
service men and women while they were serving our country. We are going
to give them a break?
This is a bank that overcharged racial and ethnic minorities for car
loans. It is a bank that violated a Federal order to keep more capital
and instead improperly paid out money to its shareholders, and we are
going to give them a break? I don't pretend to understand the thinking
of that.
This bill helps Deutsche Bank, which the IMF called ``the most
important net contributor to systemic risks'' of all worldwide banks.
Deutsche Bank, a German bank, one of the biggest banks in the world,
the International Monetary Fund called it ``the most important net
contributor to systemic risks'' of all worldwide banks.
Deutsche Bank is the only bank that would lend to the Trump family
economic empire. Even after all of its failed business deals, they kept
lending, for whatever reason, to businessman Trump and the family. This
is a bank that every week is met with a new request for information on
shady financial arrangements with people in the White House.
I don't think my colleagues and I were sent here to serve Deutsche
Bank. I am thinking none of us goes back in our campaigns--I am on the
ballot this year. I am not going to go back and say: Please reelect me
so I can help Deutsche Bank, so I can bail them out, so I can pass a
bill that will actually give them something they don't deserve.
This bill would also help banks like Barclays and UBS and BNP
Paribas--banks that have rigged interest rates, helped people avoid
paying taxes, violated U.S. sanctions against Iran and Sudan, and
manipulated energy markets. These aren't banks down the street lending
to homeowners in Sandusky or businesses in Findlay or small companies
in my hometown of Mansfield; these are some of the most complex global
banks. They hold $1.4 trillion in assets. That is $1,400 billion--$1.4
trillion--in assets in the United States and more than $14 trillion in
assets abroad.
Listen to Paul Volker, listen to Sarah Bloom Raskin, listen to Gary
Gensler, listen to Michael Barr and Antonio Weiss. Believe Secretary
Mnuchin when he tells you what he wants to do. Believe the lobbyists
for these foreign banks when they say that is what they want. That is
why they oppose this amendment. This bill gives them exactly what they
want.
Let me talk about one change made to the substitute amendment.
Because I have come to this floor and some others have joined me in
objecting to this foreign bank provision, the leadership--Senator
McConnell and his office, I assume, down the way--I assume they huddled
and thought: We have to answer this somehow; we have to at least look
like we care about prohibiting a bailout of foreign banks. So they made
a change in the substitute. The new version of the bill came out last
week. There is a new provision that provides some window dressing. It
is a figleaf protection to try to convince the public that this bill
doesn't do what it actually does. It doesn't actually help Santander;
it doesn't actually help UBS; it doesn't actually help Barclays; it
doesn't actually help the President's bank, Deutsche Bank--but it
actually does. The provision provides some vague, ambiguous language
and puts the question to the Fed: You can regulate the foreign banks or
not; it is your choice. It doesn't require the Fed to deregulate. It
doesn't stop the foreign banks from suing if the Fed doesn't obey their
requests.
Why not just prohibit? Why not just say: No, we are not going to do
it. But they don't want to do that. They want to keep that door open
because they know the regulators on FSOC, whether it is the Chairman of
the Federal Reserve Jay Clayton, whether it is Mr. Otting of the SEC,
whether it is Secretary Mnuchin, or whomever they put at any of these,
we know what they are going to do. They have already said what they are
growing to do.
Even a writer at the Wall Street Journal agrees, saying it will be up
to the Fed to decide whether Deutsche Bank ``deserves a tighter
leash.''
So we are expected--we, in a pretty much party-line vote, because
most Democrats think you don't want Wall Street people in these
positions regulating the banks, in a party-line vote, Randal Quarles
was confirmed. His job is to be the Director of Supervision at the
Federal Reserve. So we are expected to trust Randal Quarles not to
weaken the rules in the foreign banks--to trust Quarles, even though he
himself missed the last crisis. He predicted as late as, I believe,
2007, as a member of the Bush administration, that the economy was
great, the banks weren't under duress, any of that. It might have been
2006, but I think 2007. He missed the last crisis and, I might add, he
personally profited from Wall Street malfeasance. I am not saying he
did it on purpose, but he personally profited because of Wall Street
malfeasance.
[[Page S1626]]
We are supposed to trust Quarles, even though just last week he spoke
at an international bankers conference, where a lot of those foreign
bank representatives and lobbyists were in attendance, including CEOs
and other executives, and he promised those bankers regulatory relief.
So we have the head of supervision at the Federal Reserve Bank of the
United States--one of the most powerful people in this country--
speaking to an international bankers group saying: Yes, we are going to
give you regulatory relief. Aren't you lucky you came to this
conference because I am in charge of these issues at the Federal
Reserve, and I am going to help you get regulatory relief as a foreign
bank. Congratulations.
Finally, this last point is technical, but it is important. The bills
make sure that a globally systemic U.S. bank will not benefit from any
deregulation, even if it has fewer than $250 billion in assets, but the
bill doesn't even do the same for foreign banks.
Let me repeat. State Street has fewer than $250 billion in assets.
State Street is called a custodial bank, located in Boston, as the
Presiding Officer knows. It has fewer than $250 billion in assets. The
bill says, because that bank is systemically significant, it doesn't
get a free pass. This legislation says that about State Street, but it
doesn't say the same for similarly--or, I would argue, way more--risky
foreign banks in the United States.
My amendment would close that loophole. It treats systemically risky
foreign banks like systemically risky U.S. banks. Why? Because why
treat Barclays and Santander and UBS and Deutsche Bank better than we
treat Huntington or Fifth Third or Key or Regents in Alabama or any of
these regional banks--many of which we want to help. If we want to help
community banks and credit unions and our regional banks to do the
right thing, let's help them. Foreign megabanks shouldn't get another
chance of a handout from American taxpayers--never.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative 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.
____________________