[Congressional Record (Bound Edition), Volume 155 (2009), Part 1]
[House]
[Pages 464-465]
[From the U.S. Government Publishing Office, www.gpo.gov]




           THE $700 BILLION GOVERNMENT BAILOUT IS NOT WORKING

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Madam Speaker, in 2008, Wall Street's biggest banks got 
Congress to hand over to them $700 billion of your taxpayer money. Now 
they want more.
  Yesterday, Neel Kashkari, the Interim Assistant Secretary for 
Financial Stability, gave a speech at the Brookings Institution. He 
gave fancy sounding bureaucratic names to the $175 billion that he has 
already forked over. He called it Capital Purchase Program, Asset Grant 
Guarantee Program, Targeted Investment Program. Essentially he was 
talking about the $20 billion that went to Citigroup.
  He asked rhetorically, when will we see the new banks making loans? 
Well, that is part of his job, to get them to make the loans. But he 
said as long as confidence remains low, banks will remain cautious 
about extending credit.
  Oh, Mr. Kashkari, we know that well. The reason the auto industry is 
in trouble is because credit has dried up. Car loans can't be made.
  So let me get this straight: He wants more money, because he has only 
given $175 billion from the taxpayers' money out there in the country 
to the biggest banks that did the wrongdoing to begin with, and they 
are still reluctant to lend.
  Let me give Mr. Kashkari a dose of reality. Your program isn't 
working, and it is not working for Main Streets across this country.
  PNC Bank of Pittsburgh, Pennsylvania, one of the Nation's largest 
banks, now the fifth largest bank, has received $7.5 billion from Mr. 
Kashkari.

                              {time}  1415

  And instead of providing additional lending capacity and loan 
workouts for those mortgages to help resolve the problem, PNC took the 
money. And you know what they did? They came across the border to Ohio 
and they bought National City Bank in Cleveland.

[[Page 465]]

  I see my dear colleague from the city of Cleveland, Congressman 
Kucinich here this evening. He understands this well.
  National City has been a headquartered institution in Ohio, 
headquartered in Cleveland since 1845.
  Now, Treasury's money, the taxpayers' money, went to PNC and they 
came to Ohio and bought National City Bank, putting all those people 
out of work. And PNC became bigger. So what Mr. Kashkari did was take 
our money and give it to PNC, that hasn't worked down any of those 
loans, but they came to Ohio and bought out National City Bank. So PNC 
gets bigger, our banking system gets more concentrated, and PNC becomes 
more powerful. Some say they actually have price control power on the 
western side of Pennsylvania.
  So, PNC gets $7.5 billion. Cleveland and Ohio lose a Fortune 500 
company, and Ohio, where foreclosures are raging, gets nothing. We get 
nothing. We just get more foreclosures.
  In 2008, Citigroup, one of the main culprits that caused the 
financial meltdown, was given $25 billion. They got more than PNC. They 
got it from us, the taxpayer, and then they have foreclosed, just in my 
district, on another 235 families in Lucas County, Ohio.
  Last November I found an advertisement in my local paper that said 
there was going to be an auction in my home county. I was surprised. I 
didn't know the company coming in, called Hudson and Marshall of 
Dallas, Texas. So I went.
  Guess what? Citigroup was one of the banks selling properties. I 
attended and watched homes in my community sold for as little as 
$7,900, a price so low that the original owners could have gone back 
into those homes. Not only was Citigroup auctioning homes that night, 
but so were TARP money recipients; those are the banks that got the 
money through the Treasury from us, Wells Fargo, US Bank, Deutsche 
Bank, ABN/Amro, Chase Home Finance, Fifth Third Bank, Standard Federal 
and LaSalle. They all got money.
  It is clear that some of the recipients of the Treasury money are 
unwilling to craft real workouts. And so what happened in our region 
was people got kicked out of their homes. Wall Street hired the auction 
company from Dallas, Texas. They came to our region, they sold all 
those properties for very little money, and they're going to get big, 
huge tax losses written off on their IRS filings for the tax year of 
2008.
  But where are our families? Out on the street. Our people lost their 
homes.
  I would like to invite Mr. Kashkari, Secretary Paulson and all the 
PNC executives to come to Ohio, and I want them to live in the 
neighborhoods that their actions have affected. We'll give them a 
little heater, Bunsen heater overnight so they don't get too cold in 
the houses; and we'd like them to experience the results of what they 
have done to the American people.
  Last year, 4,100 homes in my region were foreclosed upon. In the last 
2\1/2\ years, 10 percent of the properties in my home community have 
been foreclosed. 10 percent of the housing stock. And as foreclosure 
rates continue to rise in places like Ohio, it's pretty obvious that's 
what's happening here in Washington isn't connecting to Main Street.
  Sadly, Hudson and Marshall, the auction house that Wall Street hired 
to sell all those homes in my community, are coming to your town too. 
This month alone they are slated to be in several cities in Michigan, 
Arizona, Connecticut, Massachusetts, Rhode Island and New Jersey, and 
they're going to auction another 1,455 properties. They've now sold 
over 70,000 homes in the last few years, and expect another 30,000 in 
the year 2009.
  Mr. Kashkari, your program isn't working.
  Madam Speaker, I would like to place the additional remarks that I 
have in the Record.
  What is happening is an outrage to the American people, and they're 
being asked to pay for it. There shouldn't be any more TARP bills 
clearing this Congress until hearings are held in the communities that 
have been affected. We need to use our power in order to go out to the 
voters that sent us here.
  Equity is bleeding profusely from our communities. The sheer volume 
of the properties sold at auction is disturbing. Financial institutions 
which have been capitalized through the TARP Program have failed to do 
mortgage workouts--FDIC and SEC should do their jobs, and they are 
not--and must be required to do mortgage workouts, rather than 
foreclosing on homes and participating in auctions. Hudson & Marshall 
stated in a press release that they have made $1.2 billion doing 
auctions.
  The intent of the TARP was to help stabilize our financial system, 
which includes in large measure our housing industry. Yet, we financial 
institutions enriching themselves, merging, and yet foreclosing on 
families rather than working to stabilize families in their homes. A 
stable home permits people to focus on obtaining and maintaining 
employment, purchasing food, and contributing to society in positive 
ways rather than relying on social services funded by State and Federal 
dollars. Furthermore, we see communities falling apart. Community 
members and local banks are effectively locked out of the opportunity 
to reinvest in themselves because monies from the Department of Housing 
and Urban Development which would allow community banks and members to 
purchase foreclosed homes have not yet arrived.
  No second round of TARP money should emerge from this Congress unless 
regular hearings are held and the victims of this crisis can have their 
voices heard in the deliberative process. The Committees should travel 
to the communities most affected. Why should we trust Wall Street Banks 
again as more families teeter on the edge.

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