[Congressional Record (Bound Edition), Volume 155 (2009), Part 9]
[House]
[Pages 11845-11847]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   BANKSTERS CAUSE ECONOMIC MELTDOWN

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, one can sure ask: Is it more than 
coincidence that the very Wall Street banksters who are holding up our 
Republic are also causing the economic meltdown affecting community 
after community and millions upon millions of our fellow citizens? Is 
it any coincidence that these banksters are also the ones who are still 
being rewarded day after day by their acolytes in Washington?
  In today's Huffington Post, filmmaker Michael Moore in a piece 
entitled ``Bernie Madoff, Scapegoat'' writes: ``Why did we allow those 
same banks to create the scam of a subprime mortgage? Instead of 
putting the people responsible in the cell block in Lower Manhattan, 
where Bernie now resides, why did we give them huge sums of our hard-
earned tax dollars to bail them out of their self-inflicted troubles? 
Bernie Madoff is nothing more than a scab on the wound. He's also a 
continental distraction. Where's the photo on the list of the ex-
chairman of AIG, Merrill Lynch, Citigroup, JP Morgan Chase, Goldman 
Sachs, Bank of America, and the list goes on.''
  Michael Moore is exactly right.
  Now the Center for Public Integrity reports the very list of the 
``Who's Who'' of these exalted top bankster lenders responsible for the 
subprime loan fraud and our economic crisis.
  Let me place their names into the Record tonight, and what we know so 
far of the extent of their damage. These 25 lenders are responsible for 
almost $1 trillion of subprime loans, more than $7.2 million high-
interest loans made just from 2005 to 2007.
  Together, these companies account for about 72 percent of the high-
priced loans reported to the government at the peak of the subprime 
market.
  But their Ponzi scheme had been cleverly set in place during the 
1990s.

[[Page 11846]]

We need to follow their tracks back to the start of this trail of 
tears. Mr. Speaker, we need to go back to the roots of the subprime 
scam that, once established, just kept getting juiced more and more 
with each passing years. Securities created from these subprime loans 
have been blamed for the economic collapse from which the world's 
economies have yet to recover.
  My question is this: When will these Wall Street wrong-doers be 
brought to justice rather than rewarded?
  A couple of names on the list you'll probably recognize. Everyone has 
heard of Countrywide. Well, they floated about $97.2 billion of 
subprime loans.
  Chase Home Financial, JP Morgan Chase, they floated about $30 
billion.
  Citi Financial, Citigroup, they floated $26.3 billion that we know 
of.
  American General Finance, AIG, at least $21.8 billion and counting.
  And Aegis Mortgage Corporation, they are number 25 on the list, at 
least $11.5 billion.
  Meanwhile, the special inspector general for oversight on the Wall 
Street bailouts being paid out by our Treasury through our taxpayers 
has now reported that the major institutions receiving tax dollars to 
cover their losses are none other than the very same group.
  I wish to place their names on the Record tonight as just one part of 
the Treasury's report.

  TABLE 1.1--TOTAL FUNDS SUBJECT TO SIGTARP OVERSIGHT, AS OF MARCH 31,
                                  2009
                              [$ Billions]
------------------------------------------------------------------------
                                    Brief          Total      Projected
           Program              description or   projected       TARP
                                 participant      funding      funding
------------------------------------------------------------------------
Capital Purchase Program       Investments in        $218.0       $218.0
 (``CPP'').                     532 banks to
                                date; 8
                                institutions
                                total $125
                                billion.
Automotive Industry Financing  GM, Chrysler,          $25.0        $25.0
 Program (``AIFP'').            GMAC, Chrysler
                                Financial.
Auto Supplier Support Program  Government-             $5.0         $5.0
 (``ASSP'').                    backed
                                protection for
                                auto parts
                                suppliers.
Unlocking Credit for Small     Purchase of            $15.0        $15.0
 Businesses (``UCSB'').         securities
                                backed by SBA
                                loans.
Systemically Significant       AIG Investment.        $70.0        $70.0
 Failing Institutions
 (``SSFI'').
Targeted Investment Program    Citigroup, Bank        $40.0        $40.0
 (``TIP'').                     of America
                                Investments.
Asset Guarantee Program        Citigroup, Bank       $419.0        $12.5
 (``AGP'').                     of America,
                                Ring-Fence
                                Asset
                                Guarantee.
Term Asset-Backed Securities   FRBNY non-          $1,000.0        $80.0
 Loan Facility (``TALF'').      recourse loans
                                for purchase
                                of asset-
                                backed
                                securities.
Making Home Affordable         Modification of        $75.0        $50.0
 (``MHA'') Program.             mortgage loans.
Public-Private Investment      Disposition of       $500.0-        $75.0
 Program (``PPIP'').            legacy assets;     $1,000.0
                                Legacy Loans
                                Program,
                                Legacy
                                Securities
                                Program
                                (expansion of
                                TALF).
Capital Assistance Program     Capital to               TBD          TBD
 (``CAP'').                     qualified
                                financial
                                institutions;
                                includes
                                stress test.
New Programs, or Funds         Potential             $109.5       $109.5
 Remaining for Existing         additional
 Programs.                      funding
                                related to
                                CAP; AIFP;
                                Auto Warranty
                                Commitment
                                Program; other.
                                               -------------------------
    Total....................                     $2,476.5-      $700.0
                                                   $2,976.5
------------------------------------------------------------------------
Note: See Table 2.1 in Section 2 for notes and sources related to the
  information contained in this table.


     TABLE 2.2--EXPENDITURE LEVELS BY PROGRAM, AS OF MARCH 31, 2008
                              [$ BILLIONS]
------------------------------------------------------------------------
                                                             Section
                                  Amount    Percent (%)     Reference
------------------------------------------------------------------------
Authorized Under EESA........       $700.0
Released Immediately.........       $250.0        35.7%
Released Under Presidential         $100.0        14.3%
 Certificate of Need.
Released Under Presidential         $350.0        50.0%
 Certificate of Need &
 Resolution to Disapprove
 Failed.
    TOTAL RELEASED...........       $700.0       100.0%
------------------------------------------------------------------------
Less:
Expenditures by Treasury
 Under TARP a
Capital Purchase Program
 (``CPP''):
    Bank of America                  $25.0         3.6%
     Corporation b.
    Citigroup, Inc...........        $25.0         3.6%
    JP Morgan Chase & Co.....        $25.0         3.6%
    Wells Fargo and Company..        $25.0         3.6%  ``Capital
                                                          Investment
                                                          Programs''
    The Goldman Sachs Group          $10.0         1.4%
     Inc..
    Morgan Stanley...........        $10.0         1.4%
    Other Qualifying                 $78.8        11.3%
     Financial Institutions c.
        CPP TOTAL............       $198.8        28.4%
------------------------------------------------------------------------
Systemically Significant
 Failing Institutions Program
 (``SSFI''):
    American International           $40.0         5.7%  ``Institution-
     Group, Inc. (``AIG'').                               Specific
                                                          Assistance''
        SSFI TOTAL...........        $40.0         5.7%
------------------------------------------------------------------------
Targeted Investment Program
 (``TIP''):
    Bank of America                  $20.0         2.9%  ``Institution-
     Corporation.                                         Specific
                                                          Assistance''
    Citigroup, Inc...........        $20.0         2.9%
        TIP TOTAL............        $40.0         5.7%
------------------------------------------------------------------------
Asset Guarantee Program
 (``AGP''):
    Citigroup, Inc.d.........         $5.0         0.7%  ``Institution-
                                                          Specific
                                                          Assistance''
        AGP TOTAL............         $5.0         0.7%
------------------------------------------------------------------------
Automotive Industry Financing
 Program (``AIFP''):
    General Motors                   $14.3         2.0%  ``Automotive
     Corporation (``GM'').                                Industry
                                                          Financing
                                                          Program''
    General Motors Acceptance         $5.0         0.7%
     Corporation LLC
     (``GMAC'').
    Chrysler Holding LLC.....         $4.0         0.6%
    Chrysler Financial                $1.5         0.2%
     Services Americas LLC e
     *.
        AIFP TOTAL...........        $24.8         3.5%
------------------------------------------------------------------------
Term Asset-Backed Securities
 Loan (``TALF''):
    TALF LLC.................         $20.         2.9%  ``Term Asset-
                                                          Backed
                                                          Securities
                                                          Loan
                                                          Facility''
        TALF TOTAL...........        $20.0         2.9%
------------------------------------------------------------------------
        SUBTOTAL--TARP              $328.6        47.0%
         EXPENDITURES.
TARP REPAYMENTS f............       $(0.4)       (0.1)%
BALANCE REMAINING OF TOTAL          $371.8       53.1%
 FUNDS MADE AVAILABLE AS OF
 MARCH 31, 2009.
------------------------------------------------------------------------
Note: Numbers affected by rounding.
a From a budgetary perspective, what Treasury has committed to spend
  (e.g., signed agreements with TARP fund recipients).
b Bank of America's share is equal to two CPP investments totaling $25
  billion, which is the sum $15 billion received on 10/28/2008 and $10
  billion received on 1/9/2009.
c Other Qualifying Financial Institutions (``QFIs'') include all QFIs
  that have received less than $10 billion through CPP.
d Treasury committed $5 billion to Citigroup under AGP; however, this
  funding is conditional based on losses realized and may potentially
  never be expended.
e Treasury's $1.5 billion loan to Chrysler financial represents the
  maximum loan amount. This $1.5 billion has not been expended because
  the loan will be funded incrementally at $100 million per week. As of
  3/31/2009, $1,175 million out of the $1.5 billion has been funded.
f As of 3/31/2009, CPP repayments total $353.0 million and AFP loan
  principal payments (Chrysler Financial) total $3.5 million.
 
Sources: EESA, P.L. 110-343. 10/3/2008; Library of Congress, ``A joint
  resolution relating to the disapproval of obligations under the
  Emergency Economic Stabilization Act of 2008,'' 1/15/2009,
  wwww.thomas.loc.gov, accessed 1/26/2009; Treasury, Transactions
  Report, 4/2/2009; Treasury, responses to SIGTARP data call, 4/6/2009
  and 4/8/2009.


[[Page 11847]]

  So far, Bank of America has gotten $25 billion from our taxpayers.
  Citigroup got $25 billion.
  JP Morgan Chase got $25 billion.
  Wells Fargo and company got $25 billion.
  Goldman Sachs got a minimum of $10 billion but probably more with 
their related interest in AIG which sat on their board, but of course 
they are not telling us about that. They got, AIG, over $70 billion. 
The amounts are staggering.
  Morgan Stanley got $10 billion. And other financial institutions thus 
far have gotten $78 billion as of the first quarter of this year. And 
what have our taxpayers gotten? We have gotten the bills, and we have 
gotten unemployment, home foreclosures, depleted 401(k)s.
  And now let me ask a question, pretty please: Can Bank of America or 
Goldman Sachs or JP Morgan or Citigroup or Wells Fargo or Morgan 
Stanley tell us what they have spent the money on, because it is sure 
not shaking out to communities. In fact, our Realtors tell us that JP 
Morgan is the worst at trying to do loan workouts.

                              {time}  1630

  Just Ohio needs $20 billion to refinance and restore neighborhoods 
struggling under the weight of this financial crisis.
  So far, it's trillions for Wall Street and zero for Ohio. What is 
fair about that? What is just about that? It's truly a crying shame.
  Mr. Speaker, I will place into the Record this report from the 
Special Inspector General, as well as the information from the Center 
for Public Integrity on these 25 institutions, and I will try to read 
in my remaining time: Countrywide Financial Corporation, Ameriquest 
Mortgage Company/ACC Capital Holdings Corporation, New Century 
Financial Corporation, and the list goes on, through Aegis Mortgage 
Corporation/Cerberus Capital Management, to the tune of $11.5 billion 
of subprime loans, and still counting.

       These top 25 lenders were responsible for nearly $1 
     trillion of subprime loans, according to a Center for Public 
     Integrity analysis of 7.2 million ``high interest'' loans 
     made from 2005 through 2007. Together, the companies account 
     for about 72 percent of high-priced loans reported to the 
     government at the peak of the subprime market. Securities 
     created from subprime loans have been blamed for the economic 
     collapse from which the world's economies have yet to 
     recover.
       1. Countrywide Financial Corp.; Amount of Subprime Loans: 
     At least $97.2 billion.
       2. Ameriquest Mortgage Co./ACC Capital Holdings Corp.; 
     Amount of Subprime Loans: At least $80.6 billion.
       3. New Century Financial Corp.; Amount of Subprime Loans: 
     At least $75.9 billion.
       4. First Franklin Corp./National City Corp./Merrill Lynch & 
     Co.; Amount of Subprime Loans: At least $68 billion.
       5. Long Beach Mortgage Co./Washington Mutual; Amount of 
     Subprime Loans: At least $65.2 billion.
       6. Option One Mortgage Corp./H&R Block Inc.; Amount of 
     Subprime Loans: At least $64.7 billion.
       7. Fremont Investment & Loan/Fremont General Corp.; Amount 
     of Subprime Loans: At least $61.7 billion.
       8. Wells Fargo Financial/Wells Fargo & Co.; Amount of 
     Subprime Loans: At least $51.8 billion.
       9. HSBC Finance Corp./HSBC Holdings plc; Amount of Subprime 
     Loans: At least $50.3 billion.***
       10. WMC Mortgage Corp./General Electric Co.; Amount of 
     Subprime Loans: At least $49.6 billion.
       11. BNC Mortgage Inc./Lehman Brothers; Amount of Subprime 
     Loans: At least $47.6 billion.***
       12. Chase Home Finance/JPMorgan Chase & Co.; Amount of 
     Subprime Loans: At least $30 billion.
       13. Accredited Home Lenders Inc./Lone Star Funds V; Amount 
     of Subprime Loans: At least $29.0 billion.
       14. IndyMac Bancorp, Inc.; Amount of Subprime Loans: At 
     least $26.4 billion.
       15. CitiFinancial/Citigroup Inc.; Amount of Subprime Loans: 
     At least $26.3 billion.
       16. EquiFirst Corp./Regions Financial Corp./Barclays Bank 
     plc; Amount of Subprime Loans: At least $24.4 billion.
       17. Encore Credit Corp./ ECC Capital Corp./Bear Stearns 
     Cos. Inc.; Amount of Subprime Loans: At least $22.3 billion.
       18. American General Finance Inc./American International 
     Group Inc. (AIG); Amount of Subprime Loans: At least $21.8 
     billion.***
       19. Wachovia Corp.; Amount of Subprime Loans: At least 
     $17.6 billion.
       20. GMAC LLC/Cerberus Capital Management; Amount of 
     Subprime Loans: At least $17.2 billion.***
       21. NovaStar Financial Inc.; Amount of Subprime Loans: At 
     least $16 billion.
       22. American Home Mortgage Investment Corp.; Amount of 
     Subprime Loans: At least $15.3 billion.
       23. GreenPoint Mortgage Funding Inc./Capital One Financial 
     Corp.; Amount of Subprime Loans: At least $13.1 billion.
       24. ResMAE Mortgage Corp./Citadel Investment Group; Amount 
     of Subprime Loans: At least $13 billion.
       25. Aegis Mortgage Corp./Cerberus Capital Management; 
     Amount of Subprime Loans: At least $11.5 billion.

                          ____________________