[Congressional Record (Bound Edition), Volume 153 (2007), Part 23]
[House]
[Pages 31686-31692]
[From the U.S. Government Publishing Office, www.gpo.gov]




  PROVIDING FOR CONSIDERATION OF H.R. 3915, MORTGAGE REFORM AND ANTI-
                     PREDATORY LENDING ACT OF 2007

  Mr. ARCURI. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 825 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 825

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 3915) to amend the Truth in Lending Act to 
     reform consumer mortgage practices and provide accountability 
     for such practices, to establish

[[Page 31687]]

     licensing and registration requirements for residential 
     mortgage originators, to provide certain minimum standards 
     for consumer mortgage loans, and for other purposes. The 
     first reading of the bill shall be dispensed with. All points 
     of order against consideration of the bill are waived except 
     those arising under clause 9 or 10 of rule XXI. General 
     debate shall be confined to the bill and shall not exceed one 
     hour equally divided and controlled by the chairman and 
     ranking minority member of the Committee on Financial 
     Services. After general debate the bill shall be considered 
     for amendment under the five-minute rule. It shall be in 
     order to consider as an original bill for the purpose of 
     amendment under the five-minute rule the amendment in the 
     nature of a substitute recommended by the Committee on 
     Financial Services now printed in the bill. The committee 
     amendment in the nature of a substitute shall be considered 
     as read. All points of order against the committee amendment 
     in the nature of a substitute are waived except those arising 
     under clause 10 of rule XXI. Notwithstanding clause 11 of 
     rule XVIII, no amendment to the committee amendment in the 
     nature of a substitute shall be in order except those printed 
     in the report of the Committee on Rules accompanying this 
     resolution. Each such amendment may be offered only in the 
     order printed in the report, may be offered only by a Member 
     designated in the report, shall be considered as read, shall 
     be debatable for the time specified in the report equally 
     divided and controlled by the proponent and an opponent, 
     shall not be subject to amendment except as specified in the 
     report, and shall not be subject to a demand for division of 
     the question in the House or in the Committee of the Whole. 
     All points of order against such amendments are waived except 
     those arising under clause 9 or 10 of rule XXI. At the 
     conclusion of consideration of the bill for amendment the 
     Committee shall rise and report the bill to the House with 
     such amendments as may have been adopted. Any Member may 
     demand a separate vote in the House on any amendment adopted 
     in the Committee of the Whole to the bill or to the committee 
     amendment in the nature of a substitute. The previous 
     question shall be considered as ordered on the bill and 
     amendments thereto to final passage without intervening 
     motion except one motion to recommit with or without 
     instructions.
       Sec. 2. During consideration in the House of H.R. 3915 
     pursuant to this resolution, notwithstanding the operation of 
     the previous question, the Chair may postpone further 
     consideration of the bill to such time as may be designated 
     by the Speaker.

  The SPEAKER pro tempore. The gentleman from New York is recognized 
for 1 hour.
  Mr. ARCURI. Mr. Speaker, for purpose of debate only, I yield the 
customary 30 minutes to the gentleman from Washington (Mr. Hastings). 
All time yielded during consideration of this rule is for purpose of 
debate only.
  I yield myself such time as I may consume.


                             General Leave

  I also ask unanimous consent that all Members be given 5 legislative 
days in which to revise and extend their remarks on House Resolution 
825.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. ARCURI. Mr. Speaker, House Resolution 825 provides for 
consideration of H.R. 3915, the Mortgage Reform Anti-Predatory Lending 
Act of 2007, under a structured rule. The rule provides 1 hour of 
general debate controlled by the Committee on Financial Services. The 
rule waives all points of order against consideration of the bill, 
except for clause 9 and clause 10 of rule XXI. The rule makes in order 
the Financial Services Committee-reported substitute. The rule also 
makes in order 18 amendments printed in the Rules Committee report.
  Mr. Speaker, let me begin by thanking and congratulating Financial 
Services Committee Chairman Frank and Ranking Member Bachus for truly 
working in a bipartisan fashion to develop this legislation. I would 
like to point out that the legislation was approved by the Financial 
Services Committee last week by a vote of 45-19 with support of nine 
Republicans, including the ranking member. It is this type of 
bipartisan spirit that the American people demand from Congress, and we 
as the new majority will continue to provide that.
  Mr. Speaker, the subprime lending crisis threatens our Nation's 
economic security and the dreams of homeownership for many American 
working families. Now more than ever, American families are at risk of 
losing their homes. In the second quarter of this year, more than 
286,000 mortgage loans entered the foreclosure process.
  With the housing market in decline, foreclosures pose a grave danger 
to the stability of local property values and to our national economy. 
This lending crisis can be traced to rapid increases in the subprime 
mortgage, most of which were made with no Federal supervision. This 
lack of supervision allowed some lenders, not all, to prey on innocent 
consumers' dreams of achieving homeownership and force punitive 
subprime mortgages upon them.
  Many of these predatory loans feature low teaser introductory rates 
which lure borrowers who may be eligible for lower fixed rates into 
loans they have little chance of repaying once the rates increase.

                              {time}  0930

  Mr. Speaker, the Mortgage Reform and Anti-Predatory Lending Act would 
require lenders to prove that borrowers can in fact repay their loans 
and ensure that vulnerable consumers aren't pressured into refinancing 
their loans unless the refinanced loan will be to their benefit. And to 
further protect borrowers, the legislation would curb incentives to 
steer consumers to high-cost loans and enhance consumer protections for 
high-cost mortgages.
  Finally, the legislation would also provide long overdue and much 
needed regulation of the lending industry by requiring that mortgage 
lenders be licensed by States.
  Mr. Speaker, every American deserves the opportunity to achieve the 
American Dream of homeownership. I am proud to stand here today with my 
colleagues from both sides of the aisle as we take meaningful, 
commonsense steps to help more American families achieve that dream.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I want to thank the 
gentleman from New York (Mr. Arcuri) for yielding me the customary 30 
minutes, and I yield myself such time as I may consume.
  Mr. Speaker, this rule allows for the consideration of the Mortgage 
Reform and Anti-Predatory Lending Act, aimed at reforming mortgage 
lending practices in order to prevent subprime mortgage problems in the 
future.
  I support efforts to better protect homeowners through simplified 
borrower disclosure, greater focus on deceptive practices, and enhanced 
education, training and oversight of lenders.
  While I recognize that several significant changes were made to 
address some of the most concerning parts of this legislation during 
the committee markup, additional improvements and clarification are 
still needed. Consumers must have protections without unduly 
restricting credit opportunities or creating enormous liability for the 
mortgage lending industry.
  We must improve the mortgage process to empower consumers to make 
good choices among competitors, not limit options for them. Also, we 
must ensure that this bill does not hurt the consumers that it is 
intended to help, especially those consumers with less than perfect 
credit histories that hope to achieve the American Dream of 
homeownership.
  The current climate of rising defaults and foreclosures, especially 
in the subprime market, has shown us that poor lending decisions and 
abusive lending practices must be addressed. And while we must deal 
with the bad actors in the lending industry, let's not forget about the 
good lenders and investors that have helped thousands of families 
successfully purchase their homes.
  This bill is a step in the right direction, but improvements should 
be made as this legislation moves forward. I was hoping that the 
Democratic-controlled Rules Committee would see fit to provide an open 
rule for consideration of this bill. Under an open rule, Members could 
come to the floor and offer amendments in their effort to perfect this 
bill. While this rule allows several amendments to be offered, it is 
unfortunate that this restrictive rule also prevents Members of 
Congress from offering amendments on the floor during debate of the 
bill.

[[Page 31688]]

  Mr. Speaker, I reserve the balance of my time.
  Mr. ARCURI. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
California (Ms. Matsui), my colleague from the Rules Committee.
  Ms. MATSUI. I thank the gentleman from New York for yielding me time.
  Mr. Speaker, I rise today in support of the rule and the underlying 
legislation, the Mortgage Reform and Anti-Predatory Lending Act of 
2007.
  The subprime housing crisis is a real threat to our economy. It has 
already had a devastating impact on our families, our neighbors, and 
our communities. My home district of Sacramento ranks among the hardest 
hit areas in the country.
  My district ranks fifth in the Nation in adjustable rate mortgages 
that are expected to reset to higher rates in the future, putting more 
homeowners at risk of foreclosures. Just last quarter, close to 4,000 
homes were foreclosed upon. Without decisive action, this crisis will 
continue to threaten many more hardworking Americans. As property 
values continue to fluctuate, it has become harder for many borrowers 
who are currently locked into these so-called teaser rates to refinance 
to more affordable loans.
  Mr. Speaker, this crisis has affected every aspect our economy. 
Coupled with the rising gas and heating prices, our country is entering 
into a very cold winter indeed. In response, the Federal Reserve has 
cut interest rates and produced more currency, which has further 
weakened the U.S. dollar to new lows, prompting inflation fears.
  Mr. Speaker, we in Congress have a duty to address this crisis. 
Chairman Frank's bill is a step in the right direction. The bill 
establishes standards for home loans, while holding lenders and brokers 
accountable. The bill also prevents lenders and brokers from steering 
consumers to high-cost subprime loans just to make a quick extra buck.
  Mr. Speaker, Congress needs to be a partner with the communities 
which we serve. We must work together to find a comprehensive strategy 
that will protect our homeowners.
  Mr. HASTINGS of Washington. Mr. Speaker, I reserve my time.
  Mr. ARCURI. Mr. Speaker, I yield 6 minutes to the gentleman from 
Georgia (Mr. Scott).
  Mr. SCOTT of Georgia. I thank my distinguished colleague from New 
York (Mr. Arcuri). I really appreciate this opportunity.
  Mr. Speaker, I stand here with 100 percent support for H.R. 3915. Let 
me just start off my comments by sharing with you and the Members of 
the House and the people of this country how severe this issue within 
the mortgage industry is, particularly within my district and my 
beloved State of Georgia. We are one of the leading States that have 
been victims of abusive lending practices, predatory lending, and 
certainly we are at the epicenter of this mortgage crisis facing us in 
this country.
  For example, Mr. Speaker, 40 percent of the loans in my district are 
in the subprime area. Homeowners in my district have lost $159 million 
in home equity value. One of the counties in my district, Clayton 
County, is one the leading counties in this State that has suffered so 
desperately from home foreclosures due to subprime lending, abuses 
within the lending practice, and certainly the epicenter of it all, the 
eye of the storm, is predatory lending.
  My State of Georgia has been fighting this battle for an awfully long 
time. Even during my days in the Georgia State Legislature as a Georgia 
State Senator, we had to deal with this issue of abuse from Fleet 
Finance.
  So I want to just start with laying that out, Mr. Speaker, so you can 
see how critical this issue is, not only within my State of Georgia, 
but facing this entire Nation. That is why we have this bill. It is an 
important bill, and it is important because it is urgent that we move 
in a timely manner.
  Let me just state very quickly, Mr. Speaker, if I may, what the key 
areas are in the reform of this bill.
  First of all, it creates a new licensing structure for mortgage 
brokers and loan originators. This is done to ensure that they are 
licensed and that they are held accountable for the quality of the 
loans that they originate. This is very important.
  Second, it creates a new minimum standard for mortgages and 
protections to ensure that all loans are properly underwritten, and 
eases the way for high-quality or qualified loans, qualified mortgages, 
to be securitized. This is very important. This is especially important 
because it ensures continued liquidity in the mortgage securities 
market, and that is what we really need to make sure that we do 
foremost, is to make sure we have the money there, to make sure we have 
the liquidity there.
  The third key area is it expands the definition for high-cost 
mortgages, which greatly increases the protections available for 
consumers if they desire to select a subprime mortgage.
  Now, this bill also addresses reckless loan underwriting, it 
addresses abusive subprime payment penalties, and it deals with direct 
incentives for mortgage brokers to steer families into expensive and 
risky loans. There are a lot of these kinds of unsatisfactory practices 
that are going on in this industry, let me say not by everyone, but 
there are some bad actors in this mortgage industry situation. This 
bill attempts to weave a delicate balance to move in and deal with 
those that are doing wrong and provide the kinds of protections that 
our consumers need.
  This legislation is needed because all Americans should be protected 
against predatory lenders. Those are the ones that we are after the 
most, these folks that sit there and they look and they target areas. 
They target the most vulnerable people among us. They target 
minorities. They target African Americans especially. They target 
Hispanics. They target senior citizens, some of the most vulnerable 
people. They take advantage of the significant complexity of the 
language and the complicated situations that are involved in the 
mortgage industry, so that many people don't know what they are signing 
for on the bottom line, and they take advantage of that.
  We need this legislation because consumers should get good credit. 
The best thing we can do for consumers currently on bad loans and for 
future borrowers is to ensure that they can get good credit.
  This legislation is needed because credit availability must be 
preserved, especially in the troubled market that we are in right now. 
Lenders should not make loans that they know that the consumer cannot 
pay back.
  Mr. Speaker, it is almost unspeakable for many of these loan 
originators, who know that many of these people can't pay these loans, 
but they go ahead and they deal with it.
  Let me just deal finally with the arguments that there are some on 
the side that say the legislation is too weak. There are others that 
say the legislation is too strong. Well, I would just like to say we in 
Congress have to work with almost everything. It is sort of like making 
sausage. We have to pull this. We have to pull that. We have to try to 
come up with a bill that, first of all, we can get through the 
Congress.
  But I am willing to bank my stake on it, Mr. Speaker, that this is a 
good bill. This is a bill which is a first step which we can deal with. 
And if they say that this bill is so weak, why are my phones ringing in 
my office, ringing both here and in Atlanta, Georgia, from bankers and 
from brokers who are saying that this bill is too strong?
  This bill is an effort to move. It is important national lending 
legislation that, for the first time, prohibits steering a consumer to 
a loan that would do these four things: A loan that the consumer cannot 
pay, a loan that does not provide net tangible benefits, a loan that 
has predatory characteristics, and a loan that treats borrowers 
differently based on their race or their economic standing.
  In most cases, this bill also will allow States, if they want to, to 
have even a stronger bill, in most cases.
  Mr. Speaker, I really appreciate this opportunity. I thank Mr. Arcuri 
for your patience with me. I hope we will have a chance to come back 
later in the day and address some of the issues of signing liability 
and preemption.
  Mr. HASTINGS of Washington. Mr. Speaker, I reserve my time.

[[Page 31689]]


  Mr. ARCURI. Mr. Speaker, I yield 5 minutes to the gentlewoman from 
New York (Mrs. Maloney).
  Mrs. MALONEY of New York. I thank my colleague from the Empire State, 
the Great State of New York, for yielding to me, and for his leadership 
on the Rules Committee and in so many other areas in our Congress.
  Mr. Speaker, I rise in strong support of this rule for H.R. 3915, the 
Mortgage Reform and Anti-Predatory Lending Act. I would like to thank 
the Rules Committee Chairwoman, Louise Slaughter, for crafting this 
rule, and I would like to thank her for making in order 18 amendments, 
and one amendment that I will offer later on reforms for prepayment 
penalties on subprime loans.
  I congratulate Chairman Frank for his stewardship on this difficult 
legislation, and I thank my colleagues, Congressman Watt and 
Congressman Miller from the Great State of North Carolina, which passed 
antipredatory lending in their State legislature that has been 
referenced many times in committee meetings and hearings.
  I also thank the staff on the Democratic and Republican side that 
have worked very, very hard, our individual staffs and staffs of the 
committee, on facing this difficult challenge.
  Mr. Speaker, I believe that this legislation has been done in a fair, 
open, and bipartisan process. During the committee markup last week, we 
entertained numerous amendments and consistently worked with the 
ranking member and the other Republicans on the committee. The result 
of all the chairman's hard work on this bill was demonstrated when this 
bill passed the committee on a bipartisan vote of 45-19.
  The bill we are considering today is carefully crafted legislation 
that was developed after our committee carefully considered the 
testimony and advice of many experts and witnesses.

                              {time}  0945

  I know the Financial Institutions and Consumer Credit Subcommittee, 
which I chair, held a series of hearings looking into what can and 
should be done. I am happy to see a number of suggestions recommended 
by witnesses reflected in this legislation.
  This was no easy task. As each and every one of us knows, the 
mortgage market is incredibly complex and any new proposal to clamp 
down on abusive practices must be done in a way that does not disrupt 
what is working correctly. I am proud to say that I believe this 
legislation has struck that delicate balance. The rule protects this 
legislation from amendments that may disrupt that balance, yet fairly 
allows for amendments that could enhance this legislation. I urge all 
of my colleagues to vote for this fair rule and for the underlying 
legislation.
  Any legislation on this issue must strike a very careful balance that 
provides enhanced consumer protections without unnecessarily limiting 
the availability of loans to creditworthy borrowers. This bill contains 
a number of provisions that strengthen underwriting standards and 
provide additional protections for consumers while not unduly 
constraining sound lending and the secondary market. These include 
setting a clear standard that mortgages should be made based on a 
borrower's ability to repay, which is absolute common sense; setting up 
a system for licensing nationally; setting professional standards for 
mortgage brokers and an appropriate system of registration for loan 
officers; and setting a reasonable limits on assignee liability to 
ensure that investors will want to provide liquidity for housing 
finance.
  This bill, I think, is a very strong one. It adds accountability and 
transparency to the system. It builds investor confidence in the 
system; and without that confidence, we will continue to face a growing 
market crisis.
  We heard in our hearings from 2 to 5 million people, depending on the 
economists who were testifying, may lose their homes. That is more than 
lost their homes during the Great Depression. So the committee focused 
in two areas: first, on helping people stay in their homes with various 
measures that we passed, and this legislation going forward will 
prevent the types of abuses and really the turmoil in the market that 
was not in place because there were not oversight transparency and 
safeguards.
  I congratulate Chairman Frank on a very difficult balancing act, and 
I believe the legislation before us will not only help individuals stay 
in their homes, prevent abuses in the future, but will help the 
liquidity, stability, and creditworthiness of our entire economy. I no 
longer call it a subprime crisis; it's a credit crisis. We need to 
address it. This is tremendously important. We must pass this bill, and 
I urge all my colleagues to join me in voting for it.
  Mr. HASTINGS of Washington. Mr. Speaker, I am pleased to yield 4 
minutes to the gentleman from Texas, a member of the Financial Services 
Committee (Mr. Hensarling).
  Mr. HENSARLING. I thank the gentleman for yielding.
  Mr. Speaker, I rise in opposition to this rule.
  I am very disappointed that one of the most substantial portions of 
the bill will not be able to be debated today as it was in committee. 
That has to do with the entirety of the issue of what is known as 
``assignee liability.'' It's a very important part of the provision. It 
deserves to be fully aired on the floor of the House. I am disappointed 
that the Rules Committee did not find this particular amendment in 
order.
  Mr. Speaker, I submitted 2 amendments to the Rules Committee, 1 of 
which I have been led to believe the chairman of the full committee is 
going to accept. So it's kind of interesting, the one of the more 
controversial nature, and actually one that is more substantive, 
unfortunately, was not found in order.
  Mr. Speaker, we know how important it is that we have a vibrant 
secondary market to add liquidity to that market so that people can 
realize their dream, the American Dream of owning their own home. 
Nobody denies that we face great challenges in our subprime market, and 
I don't think anybody denies that it has the potential to have a great 
disruption in our economy. But many of us question whether this bill is 
going to make matters worse or make it better. I believe, Mr. Speaker, 
it is going to make matters worse.
  And one of the matters in the bill that is going to make matters 
worse is assignee liability. People who choose to invest by having a 
piece of a group of mortgages and they buy that on what is known as the 
secondary market, all of a sudden they are going to have legal 
liability for what somebody else may or may not have done.
  So investors not just all over America, Mr. Speaker, but all over the 
world are going to have options that they look at on where they want to 
invest their hard-earned money, and many of them are going to say all 
of a sudden there is all this murky uncertainty, Do I really want to 
invest in the secondary mortgage market when all of a sudden somebody 
could turn around and sue me? I didn't originate the mortgage. I don't 
know the homeowner. I don't even know the person who signed the loan 
documents. I'm just trying to have an investment for my family, and all 
of a sudden I can be held liable. Maybe I'll go invest in something 
else.
  At a time when we need even more liquidity in the market this 
provision will lead to less liquidity.
  And all of a sudden we have this murky legal standard. All of a 
sudden we have got loan originators having to identify loan products 
that are ``appropriate.'' Well, if you want to talk about a standard 
that's in the eye of the beholder, it's ``appropriate.'' We talk about 
``net tangible benefit.'' Well, who is supposed to determine that? How 
is that going to be discerned? Loans with ``predatory 
characteristics,'' well, one person's predatory characteristics may be 
another person's homeownership opportunity.
  We still have to remember, Mr. Speaker, that for all the subprime 
loans that have gone bad, millions and millions of Americans have had 
an opportunity to own their first home because of the subprime market. 
And here we are again moving in the exact opposite direction. And I 
think that this assignee liability, this could prove

[[Page 31690]]

to be a trial attorney's dream and a homeowner's nightmare. And I am 
very disappointed a major portion of this bill that was debated in 
committee will not be debated on the full floor.
  For this reason, I would certainly oppose this rule and oppose the 
underlying bill.
  Mr. ARCURI. Mr. Speaker, I yield 4\1/2\ minutes to the distinguished 
chairman of Financial Services, the gentleman from Massachusetts (Mr. 
Frank).
  Mr. FRANK of Massachusetts. Mr. Speaker, I will address much of the 
substance of the bill in the general debate. I do want to say we are 
here dealing with an issue, subprime mortgages, that is the single 
biggest contributor to the greatest financial crisis the world has seen 
since the Asian crisis of the late nineties.
  We are in a very difficult situation now in the financial markets; 
and wholly unregulated subprime mortgages, unregulated by the 
originator and then unregulated in the secondary market, has given rise 
to this.
  The previous speaker talked about the danger we could do with our 
liability for the securitizers. I would note that one of those who 
volunteered to our committee that we should do something, he wasn't 
specific about what, but something to put some liability there was the 
Chairman of the Federal Reserve, Mr. Bernanke, who has talked about 
what he called the originate-to-distribute model, i.e., people who give 
mortgages who are not themselves subject to regulation who then in turn 
sell into a secondary market, and what has been lost in that is the 
responsibility to worry about repayment. Now, we will talk more about 
this.
  There is a delicate balance here. I am not in favor and this bill 
does not in general preempt the rights of States to do what they think 
is necessary in the consumer protection area. But in the matter I just 
talked about, when we are talking about a national secondary market, we 
did believe some preemption is necessary. We have tried to define it 
precisely and hold it to a minimum necessary to have a functioning 
market. As I said, I will address some of those more.
  The bill, I believe, does strike a balance that can be a difficult 
one to achieve, particularly in that area of some preemption so that 
you have a functioning secondary market, but not to the point where you 
intrude on the rights of States to make these decisions.
  I do want to address the rule. At my request this rule does make in 
order a number of amendments from both parties. Several of the 
amendments offered by Republicans will be, I hope, accepted. The 
manager's amendment itself is a genuinely bipartisan amendment. Much of 
the manager's amendment, in fact, came from the minority; and, indeed, 
in our committee the ranking member had a major input into this. This 
bill did pass committee by a vote of 45-19, which was the Democrats 
and, not a majority, but a significant number of Republicans.
  We have, I believe, a rule that allows most of the issues that are at 
stake to be voted on. There are amendments that would strike major 
parts of the bill. The gentleman from North Carolina has one. The 
gentleman from Georgia has one. There is a third, the gentleman from 
New Jersey. Three amendments that would strike very much at the heart 
of the bill. I believe they should be debated and I would hope 
defeated, but they are made in order.
  I did consult very much with the ranking member, and I believe we 
have a procedure today that doesn't cover everything, but will have the 
major issues before us.
  At the end of today, I hope we will have passed a bill and it will be 
a bill which I must say will probably leave all parties at interest a 
little bit unhappy. I'm not pleased with that, but I think given the 
competing interests here, that is the best we can do, particularly on 
this issue of whether or not we preempt.
  I would note that while some of the groups that I work with in the 
consumer area are disappointed because they wanted no preemption at 
all, passage of this bill is supported by the Conference of State Bank 
Supervisors. They think there are some things they would like to see 
changed further on. It's supported by the NAACP and La Raza. And it 
has, we believe, the essential elements.
  The core is this: loans made by banks as originators subject to bank 
regulation have not been the problem. The problem has come when loans 
were originated by unregulated people, not that they were morally 
deficient, but there was no regulation. Here is the core of this bill: 
We have tried talking to the bank regulators and others to take the 
principles that the bank regulators have applied to loans originated by 
regulated depository institutions and apply them to the unregulated 
originators, the brokers. And it is not the case that the brokers were 
morally deficient. In all of these professions, we have an overwhelming 
majority of honest people. But the problem is, in the absence of any 
regulation and the availability of a secondary market with no rules, 
that minority that was not scrupulous caused us problems. This bill 
fixes that.
  Mr. HASTINGS of Washington. I yield myself 2 minutes, Mr. Speaker.
  Mr. Speaker, I just want to respond to my friend from Massachusetts 
when he outlined the amendments that were made in order and the 
substance of some of those amendments to be debated and also suggesting 
that he would oppose some and accept others. I have always admired that 
in him when he comes up to the Rules Committee and feels that that's 
part of the legislative process.
  The point that the gentleman from Texas was making, apparently he had 
two amendments, and one of them the gentleman from Massachusetts is 
going to work with him on; so that one will be resolved. But the 
gentleman from Texas felt very strongly that the amendment that was not 
made in order, really the only amendment that had any substance was not 
made in order, was his amendment, and we don't get a chance to debate 
it. I think that's a valid argument from his perspective. And I know 
the gentleman from Massachusetts had nothing to say obviously about 
that.
  So I just wanted to make that point, that, yes, there are a lot of 
amendments that were made in order. Some of the amendments that were 
made in order will be addressed later on. But I wanted to make the 
point of what the gentleman from Texas had made that his amendment was 
not made in order.
  Mr. FRANK of Massachusetts. Mr. Speaker, will the gentleman yield?
  Mr. HASTINGS of Washington. I yield to the gentleman from 
Massachusetts.
  Mr. FRANK of Massachusetts. I thank the gentleman. I appreciate his 
comments, and I think he's right.
  The gentleman from Texas' amendment not made in order was a 
substantive amendment. I do believe, as I looked at the amendments, 
every other amendment from either side that presented a substantive 
issue was made in order, and, frankly, I assumed that this could be the 
recommit, if the minority cared about it.

                              {time}  1000

  We did in the rule, as we should have, provide for every substantive 
issue to be debated, except that one. There is the motion to recommit, 
and that would be available for the motion to recommit.
  Mr. HASTINGS of Washington. The gentleman has always been open to 
debate. I am glad he has given us advice on maybe what we want to put 
in the motion to recommit. One of the easiest ways to do that obviously 
would be to have made that amendment in order. He had nothing to do 
with that decision. That was a decision of the Rules Committee. I wish 
it had been made in order. An amendment was offered to make that in 
order and was defeated on a party-line vote.
  Mr. FRANK of Massachusetts. Mr. Speaker, will the gentleman yield?
  Mr. HASTINGS of Washington. I yield to the gentleman from 
Massachusetts.
  Mr. FRANK of Massachusetts. I appreciate it. I don't contest anything 
he said. But I would say it did seem to me, as I looked at it in a 
neutral way, that

[[Page 31691]]

the minority did need some help on dealing with recommits.
  Mr. HASTINGS of Washington. I always appreciate the gentleman 
offering his advice.
  I reserve my time.
  Mr. ARCURI. Mr. Speaker, I yield an additional 2 minutes to the 
gentleman from Georgia (Mr. Scott).
  Mr. SCOTT of Georgia. Mr. Speaker, I think it is very important 
because the assignee liability issue did come up, and I think as we 
move through this debate it would be clear to get a clear understanding 
of what we have in that so we will have a point of reference.
  First of all, in this issue, if a consumer gets a loan that violates 
the minimum standards, in this bill are minimum standards, then the 
consumer has cause of action against assignees that have purchased that 
loan. The consumer may sue to rescind the loan and recoup other costs. 
There has to be an element of liability in the issue. We have worked to 
get a delicate balance that both protects the consumer while at the 
same time also saving some elements of liability so that we keep the 
market free of unnecessary suits.
  Further, when the holder of a bad loan initiates a foreclosure, the 
consumer may exercise a rescission right under this to stop 
foreclosure. This is important. If the rescission right has expired, 
the consumer may seek actual damages plus costs against the creditor, 
the assignee or the securitizer. This provision gives real power to the 
consumer who can sue to stop a foreclosure of a bad loan or to rescind 
the bad loan.
  Now, we also have some protections from liability for the loan 
originator. Number one, somebody may ask, why even give some protection 
from lawsuits to any entity that buys a loan? I believe that most 
consumers realize that the market provides the funding for loans and 
that the constant threat of legal action will indeed increase the cost 
of those loans for everybody. Somebody will have to pay that cost. And 
normally, that cost will fall on the consumer. So we have struck a 
delicate balance in the assignee liability.
  Mr. HASTINGS of Washington. Mr. Speaker, could I inquire of my friend 
from New York if he has any more speakers.
  Mr. ARCURI. I have no additional speakers.
  Mr. HASTINGS of Washington. So if the gentleman is prepared to close, 
I will close on my side.
  Mr. ARCURI. I am prepared to close, yes.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield myself the balance 
of the time.
  Mr. Speaker, it really is time for Congress to act and pass a stand-
alone veterans funding bill. For the last several weeks, I have 
encouraged my colleagues to vote ``no'' on the previous question so 
that we can amend the rule to allow the House to immediately act to go 
to conference with the Senate on H.R. 2642, the Military Construction 
and Veterans Affairs funding bill and appoint conferees.
  We have heard comments from Democrats that when Republicans were in 
charge that we did not get our work on the veterans funding bill 
completed on time. So I would ask my Democrat colleagues, if you don't 
like the way things were run then, then why are you exactly on the same 
path? Mr. Speaker, a final veterans funding bill is sitting waiting to 
be acted on. The Democrat leaders have bent over backwards to prevent 
Congress from passing the final bill. The stalling is costing our 
American veterans $18.5 million a day. Since the fiscal year began 46 
days ago, our Nations's veterans are out $851 million. The veterans 
funding bill passed the House this summer with over 400 votes and 
passed the Senate with over 90 votes, and the President will sign the 
bill. So let's stop delaying, and let's defeat the previous question so 
that we cannot just say that we are committed to providing for veterans 
the funding increase that they need, but we actually get this increase 
to them.
  Mr. Speaker, I ask unanimous consent to have the text of the 
amendment and extraneous material inserted in the Record prior to the 
vote on the previous question.
  The SPEAKER pro tempore (Mr. Pastor). Is there objection to the 
request of the gentleman from Washington?
  There was no objection.
  Mr. HASTINGS of Washington. Mr. Speaker, I urge my colleagues to 
oppose the previous question, and I yield back the balance of my time.
  Mr. ARCURI. Mr. Speaker, so the record is clear, as the distinguished 
chairman of the Military Construction VA subcommittee, Mr. Edwards, so 
eloquently stated many times right here on the floor of this House, 
there is a clear difference between the new Democratic majority's 
approach to veterans and the previous Republican leadership approach.
  The difference is that under the leadership of Speaker Pelosi and the 
new Democratic majority, supporting veterans is one of the highest 
priorities of this Congress. My colleagues on the other side of the 
aisle will claim that we are leaving veterans out in the cold. As 
elected Federal representatives, we are accountable for not only our 
words but our actions as well. What the other side won't tell you is 
that we had passed a continuing resolution in the beginning months of 
this Congress because the previous Congress failed to ever pass the 
MilCon-VA appropriations bill last year. They also won't tell you that 
the continuing resolution included an increase of $3.4 billion for 
veterans health care. The other side doesn't want to talk about the 
emergency supplemental spending bill we passed a few months ago which 
included an additional $1.8 billion for veterans discretionary 
spending. I am no mathematician, but $3.4 billion and $1.8 billion add 
up to $5.2 billion, which is larger than any increase in veterans 
spending passed by the previous Republican leadership.
  I admit I am a new Member, but I can still look back at the record to 
see that the last time the previous Republican leadership passed the 
Veterans appropriation bill on time was 1996. It sounds to me like the 
other side of the aisle is suffering from a case of selective memory.
  The new Democratic majority has not forgotten about our veterans. We 
have already passed legislation which has been signed into law that 
will provide an additional $5.2 billion for our veterans. Mr. Speaker, 
the numbers speak for themselves. The new Democratic majority has and 
will continue to provide for our Nation's veterans.
  Back to the issue, we are facing a national crisis with hundreds of 
thousands of families losing their homes and an expected 2 million more 
over the next 2 years. The Mortgage Reform and Anti-Predatory Lending 
Act provides long-overdue and much-needed protection to those families.
  As I said earlier, every American deserves the opportunity to achieve 
the American Dream of home ownership. It is because of the leadership 
and bipartisanship of Chairman Frank and Ranking Member Bachus that I 
am proud to stand here today as we make meaningful, commonsense steps 
to help more American families achieve that dream.
  I urge a ``yes'' vote on the previous question and on the rule.
  The material previously referred to by Mr. Hastings of Washington is 
as follows:

     Amendment to H. Res. 825 Offered by Mr. Hastings of Washington

       At the end of the resolution, add the following:
       Sec. 3. The House disagrees to the Senate amendment to the 
     bill, H.R. 2642, making appropriations for military 
     construction, the Department of Veterans Affairs, and related 
     agencies for the fiscal year ending September 30, 2008, and 
     for other purposes, and agrees to the conference requested by 
     the Senate thereon. The Speaker shall appoint conferees 
     immediately, but may declare a recess under clause 12(a) of 
     rule I for the purpose of consulting the Minority Leader 
     prior to such appointment. The motion to instruct conferees 
     otherwise in order pending the appointment of conferees 
     instead shall be in order only at a time designated by the 
     Speaker in the legislative schedule within two additional 
     legislative days after adoption of this resolution.
       (The information contained herein was provided by 
     Democratic Minority on multiple occasions throughout the 
     109th Congress.)

[[Page 31692]]



        The Vote on the Previous Question: What It Really Means

       This vote, the vote on whether to order the previous 
     question on a special rule, is not merely a procedural vote. 
     A vote against ordering the previous question is a vote 
     against the Democratic majority agenda and a vote to allow 
     the opposition, at least for the moment, to offer an 
     alternative plan. It is a vote about what the House should be 
     debating.
       Mr. Clarence Cannon's Precedents of the House of 
     Representatives, (VI, 308-311) describes the vote on the 
     previous question on the rule as ``a motion to direct or 
     control the consideration of the subject before the House 
     being made by the Member in charge.'' To defeat the previous 
     question is to give the opposition a chance to decide the 
     subject before the House. Cannon cites the Speaker's ruling 
     of January 13, 1920, to the effect that ``the refusal of the 
     House to sustain the demand for the previous question passes 
     the control of the resolution to the opposition'' in order to 
     offer an amendment. On March 15, 1909, a member of the 
     majority party offered a rule resolution. The House defeated 
     the previous question and a member of the opposition rose to 
     a parliamentary inquiry, asking who was entitled to 
     recognition. Speaker Joseph G. Cannon (R-Illinois) said: 
     ``The previous question having been refused, the gentleman 
     from New York, Mr. Fitzgerald, who had asked the gentleman to 
     yield to him for an amendment, is entitled to the first 
     recognition.''
       Because the vote today may look bad for the Democratic 
     majority they will say ``the vote on the previous question is 
     simply a vote on whether to proceed to an immediate vote on 
     adopting the resolution . . . [and] has no substantive 
     legislative or policy implications whatsoever.'' But that is 
     not what they have always said. Listen to the definition of 
     the previous question used in the Floor Procedures Manual 
     published by the Rules Committee in the 109th Congress, (page 
     56). Here's how the Rules Committee described the rule using 
     information from Congressional Quarterly's ``American 
     Congressional Dictionary'': ``If the previous question is 
     defeated, control of debate shifts to the leading opposition 
     member (usually the minority Floor Manager) who then manages 
     an hour of debate and may offer a germane amendment to the 
     pending business.''
       Deschler's Procedure in the U.S. House of Representatives, 
     the subchapter titled ``Amending Special Rules'' states: ``a 
     refusal to order the previous question on such a rule [a 
     special rule reported from the Committee on Rules] opens the 
     resolution to amendment and further debate.'' (Chapter 21, 
     section 21.2) Section 21.3 continues: ``Upon rejection of the 
     motion for the previous question on a resolution reported 
     from the Committee on Rules, control shifts to the Member 
     leading the opposition to the previous question, who may 
     offer a proper amendment or motion and who controls the time 
     for debate thereon.''
       Clearly, the vote on the previous question on a rule does 
     have substantive policy implications. It is one of the only 
     available tools for those who oppose the Democratic 
     majority's agenda and allows those with alternative views the 
     opportunity to offer an alternative plan.

  Mr. ARCURI. I yield back the balance of my time, and I move the 
previous question on the resolution.
  The SPEAKER pro tempore. The question is on ordering the previous 
question.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. HASTINGS of Washington. Mr. Speaker, on that I demand the yeas 
and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

                          ____________________