[Congressional Record (Bound Edition), Volume 155 (2009), Part 9]
[House]
[Pages 11952-11963]
[From the U.S. Government Publishing Office, www.gpo.gov]




 PROVIDING FOR FURTHER CONSIDERATION OF H.R. 1728, MORTGAGE REFORM AND 
                       ANTI-PREDATORY LENDING ACT

  Mr. CARDOZA. Madam Speaker, by direction of the Committee on Rules, I 
call up House Resolution 406 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 406

       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 further 
     consideration of the bill (H.R. 1728) to amend the Truth in 
     Lending Act to reform consumer mortgage practices and provide 
     accountability for such practices, to provide certain minimum 
     standards for consumer mortgage loans, and for other 
     purposes. No general debate shall be in order pursuant to 
     this resolution. 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, 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.

  The SPEAKER pro tempore. The gentleman from California is recognized 
for 1 hour.
  Mr. CARDOZA. Madam Speaker, for the purpose of debate only, I yield 
the customary 30 minutes to the gentleman from Texas (Mr. Sessions). 
All time yielded during consideration of the rule is for debate only.


                             General Leave

  Mr. CARDOZA. Madam Speaker, I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
on House Resolution 406.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. CARDOZA. Madam Speaker, I yield myself such time as I may 
consume.
  House Resolution 406 provides for consideration of H.R. 1728, the 
Mortgage Reform and Anti-Predatory Lending Act, under a structured 
rule. The rule makes in order 14 amendments, which are listed in the 
Rules Committee report accompanying the resolution. Five Republican 
amendments, eight Democratic amendments, and one bipartisan amendment 
have been made in order. Each amendment is debatable for 10 minutes, 
except the manager's amendment, which is debatable for 30 minutes. The 
rule also provides for one motion to recommit with or without 
instructions.
  Finally, I would like to take a moment to make a clarification 
regarding the description of one of the amendments that has been made 
in order under the rule, specifically amendment No. 2 by Chairman 
Frank. The Rules Committee report inadvertently listed a description 
from an earlier version of this amendment. The amendment was later 
modified, but the change to the description was not updated. I want to 
emphasize that the actual amendment text which was made in order is 
correct.
  Madam Speaker, I ask unanimous consent to submit for the Record the 
correct description for the Frank amendment listed as No. 2 in the 
Rules Committee report.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
       Corrected description for the Frank amendment No. 2 listed 
     in the Rules Committee report:
       2. Frank--would provide that no funds in this bill for 
     legal assistance or housing counseling grants may be 
     distributed to any organization which has been or which 
     employs an individual who has been convicted for a violation 
     under Federal law relating to an election for Federal office,

  Mr. CARDOZA. Madam Speaker, as we all know, our country is at a 
significant crossroads, the likes of which we have never known. 
Businesses continues to shed payroll, job losses continue to mount, and 
hardworking families across America continue to struggle.
  Many economists have correctly stated that the foreclosure crisis is 
the root of our economic meltdown, and I firmly believe that until the 
housing market is stabilized, the economy will continue to worsen and 
people will continue to spend less, more businesses

[[Page 11953]]

will shut their doors, and mass layoffs will further spread.
  Until that happens, however, more and more American families are at 
risk of losing their homes. In the first quarter of 2009, more than 
800,000 mortgage loans entered into the foreclosure process, with over 
340,000 in March alone. Both are record highs, which goes to show that 
the foreclosure crisis is far from over.
  I can personally attest to the damage the foreclosure crisis has left 
in its wake and the long effects it will have into the future. I have 
the honor of representing California's 18th Congressional District, 
which encompasses the San Joaquin Valley, but today my district is 
suffering like no other. My district has the highest rates of 
foreclosure in the Nation and a loss of 70 percent of home equity over 
the last 3 years. And with each passing month, it seems that the 
numbers are worsening.
  As a result of the rampant foreclosures in my district, once vibrant 
neighborhoods have become vacant yards overgrown with weeds, and houses 
are crumbling from vandalism and disrepair. Swimming pools are 
abandoned at these houses and have become havens for mosquitos. Crime 
and vandalism are on the rise in what were previously safe 
neighborhoods.
  Yet that's not all. Home values in surrounding areas are also 
beginning to plummet, and what started out as a foreclosure crisis in 
my district is quickly spinning out of control, creating economic 
disasters. In many parts of my district, they now face unemployment 
rates of over 20 percent. Small businesses and neighborhood restaurants 
which were once packed with customers are now almost empty and are 
shutting their doors at alarming rates. Our longest-serving community 
bank was swept up in the foreclosure crisis and recently closed. On top 
of that, my dairy farmers are in crises and we have one of the worst 
droughts in the country.
  Madam Speaker, as I have been saying for quite some time, the 
devastation that has hit my district is massive and widespread and is 
somewhat similar to what Katrina left behind, only it was not caused on 
a single day by an extreme event but over the course of weeks, months, 
and years.
  Long after the foreclosure crisis has come and gone, the Central 
Valley will continue to cope with the aftermath of this economic 
devastation for many years to come. My district and our Nation will not 
overcome this crisis overnight, and it will take unprecedented action 
to help us rebuild and recover.
  Congress has taken several important steps and actions not just to 
combat this crisis but to ensure a housing crisis of this magnitude 
will never happen again. The bill before us today is one more step in 
that direction.
  Some say the foreclosure crisis can be traced back to the rapid 
increase in subprime mortgages and risky underwriting practices, most 
of which were made with no Federal supervision. Many of the families 
targeted by subprime lenders were, in fact, low-income families with 
poor credit histories who felt this was the only opportunity for them 
to achieve the American Dream. They were lured into low ``teaser'' 
introductory interest rates which morphed into loans which they had 
little chance of repaying once rates increased, starting the uptick in 
the foreclosure market.
  H.R. 1728 is aimed at preventing these predatory practices in the 
future. Among other things, H.R. 1728 requires lenders to prove 
borrowers can actually repay their loans in order to ensure that 
vulnerable consumers aren't pressured into loans at terms that they 
can't meet. It eliminates incentives to steer consumers into high-cost 
loans. It also provides much-needed regulation of the lending industry.
  H.R. 1728 is not a cure for the foreclosure crisis, but it is an 
important component in eliminating the unscrupulous practices that ran 
amok and helped lead the collapse of the housing market.
  I want to thank Chairman Frank for once again bringing this bill 
forward and for his continued commitment to turning the tide on our 
Nation's foreclosure crisis. I want to take this opportunity to thank 
Chairman Frank for working with me to insert language into the 
manager's amendment of this bill that would create and make publicly 
available a national database of foreclosure and default statistics, 
which we don't currently have. The Federal Government keeps track of 
many economic indicators, including home price declines and 
unemployment, but right now there is no government agency that keeps 
tabs on defaults and foreclosure rates.
  As the foreclosure crisis has taught us, foreclosure and default 
rates are critical statistics not only for monitoring the Nation's 
economy but also for determining which areas of the country have been 
hardest hit in the downturn. My amendment calls on the Secretary of HUD 
to create this database so that the Federal Government and Congress can 
better detect and assess the housing crisis so that we can respond in a 
timely and targeted manner.
  Again, I thank Chairman Frank for incorporating my amendment, and I 
ask my colleagues on both sides of the aisle to support the manager's 
amendment and the underlying billing so we can stop predatory lending 
and establish a federally maintained database on foreclosures and 
defaults.
  Madam Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Madam Speaker, I yield myself such time as I may 
consume.
  I rise today in opposition to this rule and to the underlying 
legislation. This structured rule does not call for the open, honest 
debate that has been promised by my Democrat colleagues time and time 
again; yet here we are again discussing the mortgage reform bill for 
the second day.
  It is essential to provide for more transparency and accountability 
in the lending process, but there is also a laundry list of important 
issues that face this Congress. And all this week we will have but one 
bill on the floor of the House of Representatives to debate. I think 
that's unfair to the American taxpayer when there is much work to be 
done.
  Today not only will we be discussing the flawed underlying 
legislation, which is already addressed in Federal statute, as we spoke 
about yesterday being on the floor, that Federal Reserve has already 
issued the rules and regulations as a result of feedback from industry 
last year, but what we are here to do is to try to redo that to put the 
majority's mark on that legislation, which already takes care of the 
problem.
  But this legislation that we're going to handle again today limits 
choice, reduces credit, and increases costs to consumers and taxpayers 
at a time when the effort should be about making home mortgages more 
reliable, least cost conscious, and making sure that consumers would be 
able to have an opportunity to have a chance to have a home. But what 
we are going to do is, by allowing a patchwork of State laws to confuse 
the system, we are going to now create qualified mortgages which 
require lenders to hold 5 percent credit and creates a $140 million 
slush fund for trial lawyers. So what we are going to do is limit 
choice, reduce credit, and increase costs, and make sure now there is a 
slush fund for trial lawyers to sue the same companies that we were 
trying to encourage to lend to the marketplace so people could have 
money.

                              {time}  1030

  Madam Speaker, you will also hear about the amendments that our 
Democrat majority has made in order and failed to make in order today, 
no matter how substantive those amendments were.
  We have heard the number of amendments that were made in order. My 
good friend knows that there were about 20 Democrat amendments that 
were put into the manager's amendment. So the 8-5 ratio is a little bit 
deceptive. It should be 8 plus 20, it's 28 versus 5 Republican 
amendments.
  I offered two amendments in the Rules Committee last night, and both 
were struck down on party line vote--I guess that's no surprise. One 
was to limit trial lawyers access to taxpayer funds, and one was to 
ensure organizations like ACORN or any organization

[[Page 11954]]

that receives money from the Federal Government, are more transparent 
and accountable with any government funds they receive.
  At the end of 2007, the Board of Governors of the Federal Reserve 
undertook careful review of the abuses in the mortgage process system, 
and they took public comments, held public hearings across the country. 
And after careful deliberations, they finalized new comprehensive 
mortgage rules. These rules are going to take effect 5 months from now 
in October.
  So not only are we spending all of 1 week on one piece of 
legislation, but the necessary regulations already exist in Federal 
statutes, and companies all across this country are already aiming at 
implementing those rules and regulations being ready for October.
  This legislation fails to address the uneven patchwork of state 
mortgage lending laws and leaves lenders and consumers with unfair and 
confusing laws where the costs will ultimately be borne by customers. 
While this legislation attempts to establish is a new class of loans 
called qualified mortgages which will enjoy safe harbor and exemption 
from further restrictions in this bill, this will ultimately limit 
consumer choice on mortgages and unduly burden the mortgage industry, 
essentially excluding numerous safe and affordable mortgage products 
that serve and have been good to borrowers as well.
  Madam Speaker, the Democrats are here today to say that they are on 
the side of the consumer and the borrower, even if it limits choices 
and raises interest rates for every single consumer that chooses to use 
this avenue to buy a home. Mr. Michael Menzies, on behalf of the 
Independent Community Bankers Association, in committee hearings on 
April 23, 2009, stated, ``Lots of this legislation simply increases our 
cost of doing business rather than helping us do a better job with our 
customers.''
  Another regulation that will narrow choice, lessen credit and 
increase costs for borrowers and taxpayers is the lender risk retention 
provisions requiring lenders to retain at least 5 percent of the credit 
risk presented by all loans that are not deemed qualified mortgage. 
While I do believe that it is important to have some ownership in your 
investments, these far-reaching requirements would make it impossible 
for many lenders to operate, especially small and local lenders.
  With the current economic crisis and all the efforts to inject 
capital into the financial services sector, why would we want to limit 
the use of capital and threaten to further impair banks' abilities to 
lend? Madam Speaker, this is not a solution for the ailing economy.
  In addition, this legislation directs HUD to establish a brand-new 
$140 million slush fund for legal organizations to provide a full range 
of foreclosure-related services. Madam Speaker, my friends on the other 
side of the aisle actually take these steps simply to fund trial 
lawyers in this legislation.
  If this doesn't force a flood of litigation, I really don't know what 
will. And Margot Saunders of the National Consumer Law Center, a 
consumer-advocate organization, said on April 23, 2009, in the 
Financial Services hearing, ``We have tried to propose repeatedly that 
you draft a simple bill that creates market-based incentives for 
enforcement rather than litigation opportunities,'' and I might say, 
which is full in this bill.
  In other words, what we are doing is looking for paying lawyers to 
come and do what we should do here in this body with thoughtful, 
honest, straightforward legislation, which is why I offered an 
amendment in the Rules Committee last night, that of course was 
defeated on a party-line vote.
  Madam Speaker, I include the amendment in the Record.

  Amendment to H.R. 1728, as Reported Offered by Mr. Sessions of Texas

       After section 220 insert the following new section:

     SEC. 221. LIMITATION ON ATTORNEY'S FEES.

       Section 130 of the Truth in Lending Act (as amended by 
     section 211) is further amended by adding at the end the 
     following new subsection:
       ``(l) Certain Attorney's Fees.--With respect to any action 
     brought under this section based on a right of action created 
     by amendments made to this title by the Mortgage Reform and 
     Anti-Predatory Lending Act--
       ``(1) the award of attorney's fees shall be limited to a 
     reasonable hourly fee, as determined by the court; and
       ``(2) a person may not enter into a contingency fee 
     agreement with an attorney to bring such an action.''.

  This amendment would limit attorneys' fees for filing a right of 
action created by this legislation to ensure the borrower or victim of 
predatory lending, not trial lawyers, are fairly compensated for their 
hassle.
  Madam Speaker, a month ago Congress took great strides to protect 
taxpayers from executives getting bonuses from TARP money. Yet today 
here we are allowing trial lawyers to seek compensation from the same 
banks that received TARP funding. I stand here today for the American 
taxpayer, not the trial lawyers or special interest groups, like my 
friends, obviously, on the other side.
  Madam Speaker, I offered a second amendment in the Rules Committee 
yesterday, which I would submit for the Record.

  Amendment to H.R. 1728, as Reported Offered by Mr. Sessions of Texas

       After section 407, insert the following new section:

     SEC. 408. ACCOUNTABILITY AND TRANSPARENCY FOR CERTAIN GRANT 
                   RECIPIENTS.

       Section 106 of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x), as amended by the preceding 
     provisions of this title, is further amended by adding at the 
     end the following:
       ``(i) Accountability for Covered Organizations.--
       ``(1) Tracking of funds.--The Secretary shall--
       ``(A) develop and maintain a system to ensure that any 
     covered organization (as such term is defined in paragraph 
     (3)) that receives any grant or other financial assistance 
     provided under this section uses such amounts in accordance 
     with this section, the regulations issued under this section, 
     and any requirements or conditions under which such amounts 
     were provided; and
       ``(B) require any covered organization, as a condition of 
     receipt of any such grant or assistance, to agree to comply 
     with such requirements regarding assistance under this 
     section as the Secretary shall establish, which shall 
     include--
       ``(i) appropriate periodic financial and grant activity 
     reporting, record retention, and audit requirements for the 
     duration of the assistance to the covered organization to 
     ensure compliance with the limitations and requirements of 
     this section and the regulations under this section; and
       ``(ii) any other requirements that the Secretary determines 
     are necessary to ensure appropriate administration and 
     compliance.
       ``(2) Misuse of funds.--If any covered organization that 
     receives any grant or other financial assistance under this 
     section is determined by the Secretary to have used any such 
     amounts in a manner that is materially in violation of this 
     section, the regulations issued under this section, or any 
     requirements or conditions under which such amounts were 
     provided--
       ``(A) the Secretary shall require that, within 12 months 
     after the determination of such misuse, the covered 
     organization shall reimburse the Secretary for such misused 
     amounts and return to the Secretary any such amounts that 
     remain unused or uncommitted for use. The remedies under this 
     clause are in addition to any other remedies that may be 
     available under law; and
       ``(B) such covered organization shall be ineligible, at any 
     time after such determination, to apply for or receive any 
     further grant or other financial assistance under this 
     section.
       ``(3) Organizations.--For purposes of this subsection, the 
     term `covered organization' means--
       ``(A) the Association of Community Organizations for Reform 
     Now (ACORN); or
       ``(B) any entity that is under the control of such 
     Association, as demonstrated by--
       ``(i)(I) such Association directly owning or controlling, 
     or holding with power to vote, 25 percent or more the voting 
     shares of such other entity;
       ``(II) such other entity directly owning or controlling, or 
     holding with power to vote, 25 percent of more of the voting 
     shares of such Association; or
       ``(III) a third entity directly owning or controlling, or 
     holding with power to vote, 25 percent or more of the voting 
     shares of such Association and such other entity;
       ``(ii)(I) such Association controlling, in any manner, a 
     majority of the board of directors of such other entity;
       ``(II) such other entity controlling, in any manner, a 
     majority of the board of directors of such Association; or
       ``(III) a third entity controlling, in any manner, a 
     majority of the board of directors of such Association and 
     such other entity;
       ``(iii) individuals serving in a similar capacity as 
     officers, executives, or staff of both such Association and 
     such other entity;

[[Page 11955]]

       ``(iv) such Association and such other entity sharing 
     office space, supplies, resources, or marketing materials, 
     including communications through the Internet and other forms 
     of public communication; or
       ``(v) such Association and such other entity exhibiting 
     another indicia of control over, control by, or common 
     control with, such other entity or such Association, 
     respectively, as may be set forth in regulation by the 
     Corporation.''.

  This amendment would have ensured that ACORN and any organization 
affiliated with ACORN would need to provide more transparency with the 
Federal funds they received through this legislation and all housing 
and urban development grants. The amendment would have required them to 
submit a report on what they spent those taxpayer dollars on and, if 
they were used improperly, they would be forced to repay funds and 
would be banned from any future grants in the future. Yet, my friends 
on the other side of the aisle, once again, chose to side with special 
interests instead of the American taxpayer, and the amendment failed.
  After a conversation with Chairman Frank and his statement to the 
Rules Committee Tuesday afternoon, my impression was that the chairman 
supported transparency and would be inclined to support and include any 
disclosure amendments in the manager's amendment. Unfortunately, since 
my amendment was too specific, it was not included, even though it 
simply asked for the same transparency with government funds that 
Congress has asked our financial institutions to provide.
  Even with the recent news reports of two senior employees of ACORN in 
Nevada that were charged in 26 counts of voter fraud, my Democratic 
colleagues still voted against my amendments.
  Madam Speaker, I have an Associated Press article dated May 5, 2009, 
of this week, which I submit for the Record.

                [From the Associated Press, May 5, 2009]

           Nevada Charges ACORN Illegally Paid To Sign Voters

                            (By Ken Ritter)

       Las Vegas--Nevada authorities filed criminal charges Monday 
     against the political advocacy group ACORN and two former 
     employees, alleging they illegally paid canvassers to sign up 
     new voters during last year's presidential campaign.
       ACORN denied the charges and said it would defend itself in 
     court.
       Nevada Attorney General Catherine Cortez Masto said the 
     Association of Community Organizations for Reform Now had a 
     handbook and policies requiring employees in Las Vegas to 
     sign up 20 new voters per day to keep their $8- to $9-per-
     hour jobs.
       Canvassers who turned in 21 new voter registrations earned 
     a ``blackjack'' bonus of $5 per shift, Masto added. Those who 
     didn't meet the minimum were fired.
       ``By structuring employment and compensation around a quota 
     system, ACORN facilitated voter registration fraud,'' Masto 
     said. She accused ACORN executives of hiding behind and 
     blaming employees, and vowed to hold the national nonprofit 
     corporation accountable for training manuals that she said 
     ``clearly detail, condone and . . . require illegal acts.''
       Nevada Secretary of State Ross Miller emphasized the case 
     involved ``registration fraud, not voter fraud,'' and 
     insisted that no voters in Nevada were paid for votes and no 
     unqualified voters were allowed to cast ballots.
       Law enforcement agencies in about a dozen states 
     investigated fake voter registration cards submitted by ACORN 
     during the 2008 presidential election campaign, but Nevada is 
     the first to bring charges against the organization, ACORN 
     officials said.
       ACORN has said the bogus cards listing such names as 
     ``Mickey Mouse'' and ``Donald Duck'' represented less than 1 
     percent of the 1.3 million collected nationally and were 
     completed by lazy workers trying to get out of canvassing 
     neighborhoods. The organization has said it notified election 
     officials whenever such bogus registrations were suspected.
       ACORN spokesman Scott Levenson denied the Nevada 
     allegations on behalf of ACORN, which works to get low-income 
     people to vote and lists offices in 41 states and the 
     District of Columbia. He blamed former rogue employees for 
     the alleged wrongdoing.
       ``Our policy all along has been to pay workers at an hourly 
     rate and to not pay employees based on any bonus or incentive 
     program,'' he said. ``When it was discovered that an employee 
     was offering bonuses linked to superior performance, that 
     employee was ordered to stop immediately.''
       Levenson said the two former ACORN organizers named in 
     Monday's criminal complaint--Christopher Howell Edwards and 
     Amy Adele Busefink--no longer work for ACORN and would not be 
     represented by the organization.
       Edwards, 33, of Gilroy, Calif., and Busefink, 26, of 
     Seminole, Fla., could not immediately be reached for comment.
       Masto identified Edwards as the ACORN Las Vegas office 
     field director in 2008, and said timesheets indicate that 
     ACORN corporate officers were aware of the ``blackjack'' 
     bonus program and failed to stop it. The attorney general 
     said Busefink was ACORN's deputy regional director.
       The complaint filed in Las Vegas Justice Court accuses 
     ACORN and Edwards each of 13 counts of compensation for 
     registration of voters, and Busefink of 13 counts of 
     principle to the crime of compensation for registration of 
     voters. Each charge carries the possibility of probation or 
     less than 1 year in jail, Masto said.
       A court hearing was scheduled June 3 in Las Vegas, 
     prosecutor Conrad Hafen said.

  This article states that ACORN has been investigated by dozens of 
States regarding fake voter registration cards. Nevada is the first 
State to bring charges against ACORN for illegally paying canvassers. 
Nevada's attorney general states that not only was ACORN's field 
director intimately involved, but the time sheets indicate that ACORN 
corporate officers were aware of the bonus programs and failed to stop 
it. Since the beginning of Congress, it has been a congressional 
priority to provide for the appropriate accountability and transparency 
in all aspects of the private markets, but my friends in the Democrat 
majority refused the same accountability for ACORN.
  Madam Speaker, I strongly believe that the American public deserves 
more and better from elected officials. This legislation falls 
extremely short of providing any positive outcomes to our current 
economic problems. In fact, I believe that this will only hurt future 
borrowers in finding a product that fits their needs.
  Americans pride themselves on the availability of free market and 
choice, and yet, today, Congress will pass legislation that limits 
choice, raises interest rates and increases costs for all Americans, 
while endorsing special interests and rewarding trial lawyers and 
irresponsible groups like ACORN.
  Madam Speaker, I encourage my colleagues to vote against this rule.
  I reserve the balance of my time.
  Mr. CARDOZA. Madam Speaker, I would just respond briefly on a couple 
of points and say that the gentleman continues to advocate for the 
policies that got us into this crisis. And, in fact, we need to 
regulate this industry, not because all mortgage bankers are evil; they 
are not. There are some very good ones. But the few have caused 
significant pain to both the economy, to our Federal Treasury and to 
individual homeowners.
  Mr. Frank has designed a 5 percent solution that, in fact, I believe 
keeps the mortgage bankers with having skin in the game, so that they 
can't just sell off these loans, give bad ones and absolve themselves 
of responsibility and let the problem fall on the taxpayers.
  Madam Speaker, I yield 3 minutes to the gentlewoman from California, 
my colleague on the Rules Committee, Ms. Matsui.
  Ms. MATSUI. I thank the gentleman from California for yielding me 
time.
  Madam Speaker, I rise today in support of the rule and the underlying 
legislation, the Mortgage Reform and Anti-Predatory Lending Act of 
2009.
  The subprime housing crisis is the root cause of the current economic 
recession. It has led to the collapse of our financial system, 
increasing unemployment, and a housing and credit crisis. Even more so, 
it has had a devastating effect on our families, our neighbors and our 
communities.
  My home district of Sacramento ranks among the hardest-hit areas in 
the country. I have heard countless stories from my constituents who 
have been victims of predatory lending and were steered into high-cost 
bad loans.
  Now, many of these homeowners are seeking assistance and modifying 
their loans to more affordable loan terms. Yet many of these 
individuals are now being tripped by scam artists posing as so-called 
foreclosure consultants.
  As such, I have an amendment that has been included in the manager's 
amendment, and I thank the chairman very much for including this. This 
amendment directs the GAO to conduct a study of current government 
efforts

[[Page 11956]]

to combat fraudulent foreclosure rescue and loan modification scams and 
to educate consumers of these scams.
  I will also soon be introducing legislation to direct the FTC to use 
its authority to initiate a rulemaking process relating to unfair or 
deceptive practices and foreclosure rescue. Madam Speaker, these 
harmful activities must end. This bill is a step in the right 
direction.
  The bill establishes standards for home loans, while holding lenders 
and brokers accountable. It also prevents lenders and brokers from 
steering future homeowners to high cost, subprime loans just to make a 
quick extra buck.
  Madam Speaker, Congress needs to be a partner with the communities in 
which we serve. We must continue to work together to find a 
comprehensive strategy that will protect our homeowners.
  Mr. SESSIONS. Madam Speaker, we began this debate and discussion 
yesterday where we were trying to talk about the impact of this bill 
and what feedback would come as a result of hearings that Chairman 
Frank did have, and one of them, one of the outcomes of that, was a 
letter dated May 5, 2009. The letter comes from the Mortgage Bankers 
Association, one of the primary impacting organizations and, certainly, 
they are there in communities to serve on behalf of the American people 
for people's housing needs.
  Madam Speaker, I would submit for the Record a letter that was sent 
to Speaker Pelosi and Leader Boehner about their feedback about this 
legislation.

                                 Mortgage Bankers Association,

                                      Washington, DC, May 5, 2009.
     Hon. Nancy Pelosi,
     Speaker of the House, U.S. House of Representatives, 
         Washington, DC.
     Hon. John Boehner,
     Republican Leader, U.S. House of Representatives, Washington, 
         DC.
       Dear Speaker Pelosi and Leader Boehner: On behalf of the 
     2,400 members of the Mortgage Bankers Association (MBA), we 
     are writing with regard to H.R. 1728, the Mortgage Reform and 
     Anti-Predatory Lending Act, a bill the House is scheduled to 
     consider later this week.
       Congress is facing a once-in-a-generation opportunity to 
     improve the mortgage lending process. If carefully crafted, 
     improved regulation is the best path to restoring investor 
     and consumer confidence in the nation's lending and financial 
     markets and assuring the availability and affordability of 
     sustainable mortgage credit for years to come. At the same 
     time, if regulatory solutions are not well conceived, they 
     risk exacerbating the current credit crisis.
       While we applaud the comprehensive nature of H.R. 1728, we 
     believe this legislation misses the opportunity to replace 
     the uneven patchwork of state mortgage lending laws with a 
     truly national standard that protects all consumers, 
     regardless of where they live.
       MBA is also concerned with the bill's requirement that 
     lenders retain at least five percent of the credit risk 
     presented by non-qualified mortgages. While this provision 
     was improved by the Financial Services Committee, it will 
     still make it highly problematic for many lenders to operate, 
     particularly smaller non-depositories that lend on lines of 
     credit. It will also necessitate that larger lenders markedly 
     increase their capital requirements. Both results will narrow 
     choices, lessen credit, and force an inefficient use of 
     capital at the worst possible time for our economy.
       Finally, MBA believes the bill's definition of ``qualified 
     mortgage'' is far too limited and will result in the 
     unavailability of sound credit options to many borrowers and 
     the denial of credit to far too many others. We urge the 
     House to expand the definition and to provide a bright line 
     safe harbor so that if creditors act properly, they will not 
     be dogged by lawsuits that increase borrower costs.
       MBA would like to commend the House for the priority it has 
     given to reforming our mortgage lending process. It is 
     imperative that we continue to work together to stabilize the 
     markets, help keep families in their homes and strengthen 
     regulation of our industry to prevent future relapses.
           Sincerely,
     John A. Courson,
       President and Chief Executive Officer.
     David G. Kittle, CMB,
       Chairman.

  Madam Speaker, what this says is that not only are they concerned 
about this legislation, but they say that this will result in narrow 
choices, lessening credit and force an inefficient use of capital at 
the worst possible time for our economy.
  So the feedback that came directly to Members of Congress from people 
representing those that are in the business that have come face-to-face 
with consumers every day and who understand the needs of the 
marketplace, point blank have said narrow choices, which means fewer 
people will have fewer choices that are available to them, lessen 
credit, which means that there will be less money that is available in 
the marketplace for people to come and get a loan, and it will force an 
inefficient use of capital at the worst possible time for our economy.

                              {time}  1045

  Madam Speaker, I do understand that in Washington we're smarter than 
everybody else on a regular basis, but it seems like, to me, that the 
people who are providing the feedback, who really are with consumers 
and are trying to provide a product, that we would listen to them and 
attempt to change the bill. That's not what happened.
  So the mortgage bankers are here saying, We have got a problem with 
the legislation that we're trying to pass today. One would think that 
Members of Congress would listen and reject this bill.
  I reserve the balance of my time.
  The SPEAKER pro tempore. Without objection, the gentlewoman from 
California (Ms. Matsui) will control the time.
  There was no objection.
  Ms. MATSUI. Madam Speaker, I yield 3 minutes to my colleague on the 
Rules Committee, the gentleman from Colorado (Mr. Polis).
  Mr. POLIS. I rise in support of the rule, and ask my colleagues to 
join me in voting ``yes'' on the rule and the underlying bill.
  I'd like to thank my colleagues, Representative Miller, 
Representative Watt, and Representative Frank, for their instrumental 
role in bringing this package on mortgage lending reforms to the floor, 
as well as the committee staff that worked tirelessly on this bill.
  In Colorado and across the country, we have seen the house of cards 
built by Wall Street collapse onto Main Street. Hungry commodities 
traders needed a constant supply of raw materials--namely, new 
mortgages--to be cut up, bundled together, and shipped out to keep Wall 
Street executives flush in commissions. But these exotic loans turned 
into a very common problem for our communities, as risk was outsourced.
  ``Volume and profit at all cost'' became the paradigm, and 
production, regardless of quality, was rewarded handsomely. With the 
knowledge that someone else would be responsible, lenders abandoned 
prudent underwriting standards, knowing they could sell the loan to 
someone else before the ink even had a chance to try.
  We frequently hear about homeowners who bought more than they could 
afford, but predatory lenders set their sights on a wide range of prey, 
including low-income families, minorities, and the elderly. People who 
had considerable equity in their home were deceived into refinancing 
with an ``offer you can't refuse.''
  As these poisonous loans reset, families lost a lifetime of equity to 
foreclosures. In Adams County, which I have the honor of representing, 
predatory lenders preyed on minorities and low-income families and 
turned once-thriving working class communities into a sea of 
foreclosure signs.
  Clearly, losing a home is a traumatic experience for a family, but 
foreclosure has a broader negative impact on the entire community. 
Foreclosures drive down the value of other properties, resulting in 
declining revenues for local governments. Municipalities are forced to 
provide fewer services and even take police off the streets or teachers 
out of the classroom.
  A mortgage is a private agreement between a borrower and a lender. 
However, the potential for disastrous and systemic impacts on 
communities when these deals go bad is, unfortunately, all too clear. 
Therefore, it is the obligation of Congress to ensure that these loans 
are made with the highest ethical standard.
  The Mortgage Reform and Anti-Predatory Lending Act will give 
consumers the confidence to return to the marketplace and bring much 
needed stability to the lending industry.

[[Page 11957]]

  Madam Speaker, the majority of the lending industry has learned that 
being on the side of customers is best for the bottom line. Lenders who 
are doing the right thing by their customers need more than 
recognition; they need tools to do more.
  I would like to thank the committee and Chairman Frank for accepting 
my amendment that will allow lenders to give additional weight to their 
customers' mortgage payment history when refinancing loans.
  If a family is struggling due to reduced income, unexpected health 
care costs, or the rising cost of education for their children, the 
last thing they need is to add foreclosure to the list of their 
problems.
  Too often, hardworking American families who pay their mortgages are 
turned away because credit blemishes in other areas prevent them from 
refinancing their hybrid loan. My amendment would give banks the option 
of considering their payment history with their bank in establishing 
the terms for resetting a mortgage.
  Lenders know that preventing foreclosure is in their best interest. 
Allowing lenders to refinance hybrid loans would help families stay in 
their homes.
  I urge a ``yes'' vote on the bill and the rule.
  Mr. SESSIONS. Madam Speaker, at this hearing that was held about this 
bill, a lot of feedback was provided by the marketplace--people who 
were impacted the most; people who every day are in front of lenders 
and trying to get people in homes.
  Part of the feedback was provided from the American Bankers 
Association. I'd like to insert into the Record a letter related to 
that meeting and this legislation.

                                 American Bankers Association,

                                       Washington, DC May 6, 2009.
     To: Members of the House of Representatives.
     From: Floyd E. Stoner, Executive Vice President, Government 
         Relations and Public Policy.
     Re: H.R. 1728, the Mortgage Reform and Anti-Predatory Lending 
         Act of 2009.
       I am writing on behalf of the members of the American 
     Bankers Association regarding H.R. 1728, the Mortgage Reform 
     and Anti-Predatory Lending Act of 2009, which the House of 
     Representatives is scheduled to consider beginning on 
     Wednesday, May 6, 2009.
       H.R. 1728 is far-reaching legislation designed to prevent a 
     recurrence of the problems in the subprime market that have 
     harmed many American homebuyers. We appreciate that this 
     legislation seeks to address the source of most of these 
     problems, the loosely regulated and largely unexamined 
     mortgage originators operating outside of the regulatory 
     structure within which federally insured depository 
     institutions function.
       However, we are concerned that this major legislation can 
     have a negative impact on both insured depository 
     institutions and credit-worthy borrowers seeking to buy 
     homes--impacts which have the potential to impair economic 
     recovery. In considering any new legislation, it is critical 
     to recognize the significant regulatory and structural 
     changes that are already underway in the mortgage industry 
     that will provide much greater protections to consumers. It 
     is essential to recognize that the further changes proposed 
     in H.R. 1728 will be cumulative to the changes already being 
     implemented under revisions to Truth in Lending Act, Real 
     Estate Settlement Procedures Act, and Home Mortgage 
     Disclosure Act regulations.
       We have worked with the Financial Services Committee and 
     are pleased that a number of concerns were addressed either 
     prior to, or during, Committee consideration of the 
     legislation.
       While we greatly appreciate the comprehensive, inclusive 
     consultation that has gone into the drafting process so far, 
     and the desire to avoid unduly restricting credit, we remain 
     concerned that the bill still, in our view, needs serious 
     work.
       We plan to work with the Congress as the legislation moves 
     forward to clarify additional areas of concern. To that end, 
     we offer the following comments.
       Safe harbor: The legislation creates a category of 
     ``qualified mortgages'' which are given a safe harbor from 
     the expanded liability of the legislation. ``Qualified 
     mortgages'' are also exempt from certain other key 
     restrictions in the bill, including the risk retention 
     requirements. While the very narrow safe harbor included in 
     the original bill has been expanded beyond just 30 year fixed 
     rate loans, we are concerned that it is still far too narrow. 
     An amendment adopted during Committee consideration of the 
     bill expanded the safe harbor to include fixed rate loans of 
     terms other than 30 years, as well as some adjustable rate 
     mortgages. However, the language on adjustable rate mortgages 
     (ARMs) remains too restrictive. To qualify for the safe 
     harbor, ARMs would have to be underwritten to the maximum 
     rate possible during the first seven years of the loan.
       Consider the example of a five year ARM with the initial 
     rate set at 5 percent and with caps on increases in later 
     years set at 2 percent per year. Under the pending bill, this 
     loan would have to be underwritten at a rate of 9 percent 
     (because in the seventh year of the loan the rate could--but 
     by no means is likely--to go to 9 percent for that year). In 
     this instance, even though the borrower could not pay more 
     than 5 percent for the first five years of the loan, and not 
     more than 7 percent in the sixth year, they would have to be 
     able to afford the loan at 9 percent for all seven years in 
     order to qualify. This will shut the door to affordability to 
     many borrowers. We strongly recommend that this provision be 
     altered to reflect a more realistic underwriting standard.
       Similarly, we are concerned that to be included in the safe 
     harbor, loan points and fees must be limited to not more than 
     2 percent of the loan amount. The bill should be clarified to 
     ensure that bona fide discount points paid by a borrower to 
     reduce the interest rate on a loan are not included in this 
     calculation. The relevant threshold in this instance should 
     be the annualized percentage rate (APR) as currently defined 
     in regulation implemented pursuant to the Truth in Lending 
     Act. We also believe that the 2 percent cap should not be 
     statutory, but instead should be determined by the federal 
     bank regulators to accommodate small dollar loans which may 
     carry fixed fees taking the loan beyond a 2 percent cap. The 
     bank regulators are better suited to determining the 
     appropriate cap on fees paid in association with different 
     loan products.
       Risk retention: We are pleased that the bill was modified 
     during Committee consideration to provide the bank regulatory 
     agencies with the authority to exempt loans (beyond those 
     exempted under the safe harbor) from the 5 percent credit 
     risk retention provisions of the bill. While this expanded 
     regulatory discretion is a step in the right direction, we 
     remain firm in our conviction that federally regulated and 
     examined insured depository institutions should be exempt 
     from risk retention requirements. Insured depositories 
     already have significant risk retention--and the capital to 
     back that risk. Loans sold by insured depositories into the 
     secondary market frequently include recourse agreements, so 
     that if there is an underwriting or other error or omission, 
     the depository can be forced to buy the loan back. Again, 
     because insured depositories have strong capital positions, 
     they can and do buy back recourse loans. The same cannot be 
     said of other lenders who lack capital. For these lenders, 
     greater risk retention is needed. For insured depositories, 
     it is not. We recommend excluding insured depositories from 
     the risk retention provisions of the bill.
       Uniform national standards: We are gravely concerned with 
     the enforcement provisions of the bill, especially in light 
     of an amendment adopted in Committee which would grant state 
     attorneys general enforcement authority over the Truth in 
     Lending Act provisions added by the bill. The current 
     language of the bill will lead to conflicting enforcement 
     actions between state attorneys general and federal banking 
     regulators. It will cause confusion to consumers and lenders 
     alike and will generally undermine the regulatory framework 
     for mortgage lending in the nation. A confusing enforcement 
     scheme is likely to harm borrowers and provide the 
     unscrupulous with new opportunities. At a minimum, we urge 
     you to adopt clarifying provisions which would give the 
     federal banking regulators notice of a state attorney 
     general's intention to act, and allow the federal regulator a 
     reasonable time to act before the state is allowed to do so. 
     Such a framework is needed to bring order and clarity to the 
     process.
       We anticipate a number of amendments during floor 
     consideration. As a general rule, we oppose amendments which 
     would increase regulatory burden on banks and their 
     employees, and support amendments which recognize the role 
     that regulated, insured, and examined institutions play in 
     protecting consumers' interests and in providing products and 
     services which benefit our national marketplace.
       We appreciate the working relationship that has been 
     established between the Members of the Committee and all 
     interested parties, and we shall continue working with 
     Members of Congress as this legislation moves through the 
     legislative process.

  This letter goes to all Members of the House of Representatives. So 
each of my colleagues openly received a copy of this. It is from Floyd 
Stoner, executive vice president with the American Bankers Association.
  Here is what their conclusions are after seeing the legislation. They 
are ``concerned that this major legislation can have a negative impact 
on both insured depository institutions and creditworthy borrowers 
seeking to buy homes--impacts which have the potential to impair our 
economic recovery.''

[[Page 11958]]

  So what the American Bankers are saying is that the answer, the 
antidote, the medicine that now-Speaker Pelosi is coming up with will 
actually have the potential to impair economic recovery.
  So every single Member of Congress got this letter. We will find out 
today what their views are. But the American Bankers Association also 
said, and pretty much ends their letter by saying: ``The bill still, in 
our view, needs serious work.''
  We should reject this bill. We should understand that the people who 
are engaged in trying to make sure people have loans and are worried 
about our economy are saying it not only has the potential to impair 
economic recovery, but the bill needs serious work.
  I reserve the balance of my time.
  The SPEAKER pro tempore. Without objection, the gentleman from 
California (Mr. Cardoza) controls the time again.
  There was no objection.
  Mr. CARDOZA. I would just reply to the gentleman from Texas that I 
anticipate that this bill will get wide bipartisan support. So we will 
in fact see if it does and see who comes forward and supports this bill 
further today.
  Madam Speaker, I yield 3 minutes to the gentleman from Ohio (Mr. 
Driehaus).
  Mr. DRIEHAUS. Thank you to the chairman of the committee and the 
sponsor of the bill for this very important piece of legislation.
  I hear with dismay, Madam Speaker, the other side, the Republican 
minority, suggest that we are moving too quickly on this bill. Now, 
predatory lending legislation was introduced in this House in 2000, and 
in 2001 and 2002, and a version of this bill was introduced in 2003. 
And then they failed to consider it in 2004, in 2005, in 2006--all 
years when the Republican majority controlled this body.
  They decided that it wasn't necessary to address predatory lending 
legislation, that everything was just fine; that the markets would 
regulate themselves; that, for some reason, these individuals that were 
preying upon our poorest citizens, these individuals that were preying 
upon our low-income neighborhoods and our minority communities, that 
would regulate itself; that they would stop that behavior.
  This chart, Madam Speaker, shows the results of that inaction. We 
could have acted in 2003. We could have acted in 2004. We could have 
prevented the meltdown of the financial industry. We could have 
prevented this recession. But the Republicans still suggest that we are 
acting too quickly.
  The American people understand. They understand that it is the 
inaction of the Republican majority in these past years that has gotten 
us to the situation we are in today.
  This is a critically important piece of legislation that puts us on 
the right path. We have a choice today as Members of Congress. We can 
stand with homebuyers, we can stand with the communities that have been 
impacted by predatory lending, we can stand with those schools and 
those small businesses who are feeling the impact every day of 
vacancies in their neighborhoods, or we can stand with the sharks. We 
can stand with the predatory lenders. We can remain silent and pretend 
like the problem doesn't exist.
  This is an important step in the right direction, and I am proud to 
support the rule and the underlying bill. I appreciate the work of the 
chairman and the sponsor.
  Mr. SESSIONS. I yield myself such time as I may consume.
  I appreciate the gentleman coming down and talking about how 
Republicans are to blame for all this mess, but I'd like to harken back 
to September 25, 2003, at a hearing that was held back in the Financial 
Services Committee.
  Our current chairman, Barney Frank, who's a very thoughtful and 
diligent chairman, thoughtful on the ideas of the entire industry, 
said, ``I don't think we face a crisis.'' This is 2003. ``I don't think 
we face a crisis. I don't think that we have an impending disaster. We 
have a chance to improve regulation of two entities I think that, on 
the whole, are working well.''
  So perhaps the most thoughtful person in the country, certainly in 
this Congress, back on September, 25, 2003, is saying, ``I don't think 
we face a crisis, and I don't think we have an impending disaster.''
  Further, he said, ``I don't see any financial crisis. You can always 
make things better, but I do think we should dispel the notion that we 
are here today because something rotten has gone on.'' That was Barney 
Frank. That was Barney Frank at the hearings.
  So the gentleman wants to blame Republicans. And yet, here we had the 
lead, very thoughtful and articulate, Democratic ranking member, 
arguing that there was nothing wrong and nothing was about to happen. 
Yet, today, what we have is another answer: Oh, I'm sorry. We forgot to 
say, and we know that the Fed has already taken care of this problem 
with rules and regulations that are already known and will be in place 
in October.
  Here we have now legislation to re-address that issue. And the answer 
that comes back from the marketplace is, This legislation limits 
choice, reduces credit, and increases cost to consumers and taxpayers.
  I would have assumed that if there was nothing wrong in 2003, and now 
we corrected it with a series of hearings, including the Federal 
Reserve, that we would want to help the marketplace--not limit its 
ability, its choices, and put exposure to taxpayers. That's why we're 
opposed to this.
  We're opposed to it not because we're trying to stop it, but because 
we're trying to make it better. We think what should have been made 
better has already been done by the Fed. This Congress knows it.
  Every single Member of Congress got a letter to their office directly 
from the American Bankers Association saying serious flaws in this 
legislation.
  I reserve the balance of my time.
  Mr. CARDOZA. I'd like to inquire at this time how much time each side 
has remaining.
  The SPEAKER pro tempore. The gentleman from California has 14 minutes 
remaining; the gentleman from Texas has 10\1/2\ minutes remaining.
  Mr. CARDOZA. Thank you, Madam Speaker. I would at this time yield 3 
minutes to the chairman of the Financial Services Committee, the 
gentleman from Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Yes, in 2003, I said I didn't see a 
crisis. What I didn't see was at that time the Bush administration was 
engaging in activity that helped us get to a crisis.
  I refer Members again to page 183 of the bill, the amendment authored 
by the gentleman from Texas (Mr. Hensarling), which notes that in 2004, 
the year after I made the statement, the Bush administration ordered 
Fannie Mae and Freddie Mac substantially to increase the number of 
mortgages it bought from low-income people. It went from 42 percent to 
56 percent--a very significant increase in mortgages of people below 
median income--and set up a special category for low-income mortgages.
  As Mr. Hensarling's amendment also shows, from 2001 until 2006 there 
was an enormous increase in subprime mortgages.
  So, yes, in 2003, I was not aware of what was going on in that 
context, and I certainly didn't predict what was going to happen in 
2004. When the Bush administration made that decision in 2004, 
according to the amendment from the gentleman from Texas (Mr. 
Hensarling), I objected to it. I said they were going to put Fannie Mae 
and Freddie Mac in danger and give people mortgages they couldn't pay 
back.
  I then decided that we did need to do legislation. So I joined the 
chairman of the committee, Mr. Oxley, in trying to regulate Fannie Mae 
and Freddie Mac more.
  In 2005, I voted with him for a bill that passed the committee to 
regulate Fannie Mae and Freddie Mac. I disagreed with the version on 
the floor because it cut affordable rental housing, not homeownership.

                              {time}  1100

  But the bill passed the House. It then died because, according to Mr. 
Oxley,

[[Page 11959]]

the Bush administration opposed it for ideological reasons.
  So, yes, in 2003 I didn't see a crisis, because I didn't see what was 
happening in the subprime market; by 2004, I did; and, in 2005, I 
joined in trying to restrain that. It is also the case that, in 2003, 
two of my colleagues, Mr. Miller and Mr. Watt of North Carolina, began 
pushing for subprime reform because they were informed about what was 
happening. I joined them. So we did try to legislate. So the answer is 
yes, in 2003 we didn't see what was happening.
  I commend Members again to page 183 of the bill. Mr. Hensarling from 
Texas had given you the statistics. Subprime mortgages were 
skyrocketing in that period. Fannie Mae was being pushed by the Bush 
administration to do something, and we then tried to deal with it.
  The last point that I find very surprising is that conservatives say 
here, as some of them said on credit cards: Oh, no, do not have the 
elected representatives of America decide this; let the Federal Reserve 
make public policy. I had thought there was some concern about 
undemocratic decisions by the Federal Reserve.
  The gentleman from Texas has said today, as others said last week: 
Oh, the Federal Reserve has done it. There is no need for the elected 
officials to do it. Well, in fact the Federal Reserve hasn't done 
anything because they cannot change statute. But even if they had, they 
could change it in the future. But the notion that we should defer on 
major policy decisions, not technical monetary policy issues but major 
policy decisions about credit cards or about what kind of mortgages we 
issue to the Federal Reserve, and not legislate is surprising.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. CARDOZA. I yield the gentleman an additional 30 seconds.
  Mr. FRANK of Massachusetts. I admire the people at the American 
Bankers Association, and they do some useful things. But I am surprised 
that Members would think that, on the question of mortgage relief and 
regulating the mortgage market, the bankers of America are the ones to 
listen to. I am pleased that the Realtors, who do not have an economic 
interest in what kind of mortgages are there but have a genuine 
interest in promoting home ownership, are on our side and strongly 
support this bill.
  So I would say to my friends and the American bankers, I understand 
that there are things here that we are telling you that you can't keep 
doing, but I think the answer is that they were things you shouldn't 
have done in the first place.
  Mr. SESSIONS. Madam Speaker, I appreciate the gentleman. By the way, 
the gentleman and I are friends. We are speaking about policy here, 
disagreements.
  I would say to the speakers that have come on the Democratic side 
today, it sounds like an argument they are having within their own 
party. Everybody is trying to blame the Republican party and George 
Bush for what happened; yet, if the gentleman didn't like 2003, I will 
go to the end of 2004, December 16, 2004, if we need to get more 
current. And I will quote the gentleman, the chairman of the committee:
  ``The SEC's finding that Fannie Mae used incorrect accounting is 
serious and disturbing. While these improper decisions by Fannie Mae do 
not threaten the financial soundness of the corporation, and should 
have been used by anyone in an effort to cut back on Fannie Mae's 
housing efforts, they do not reveal troubling deficiencies in its 
corporate governance.''
  All of these signals that came to Members of Congress from people who 
were on the committee, including one of the most distinguished members 
of the committee, said: We don't have a problem. There is no soundness 
problem. There is no weakness problem. I don't see a financial crisis. 
Sure, we can always do things better, but I think we should dispel the 
notion that we are here today because there is something that is rotten 
that has gone on.
  Well, why are we trying to extend blame? Why don't we just talk about 
the problem that we are in today? And if we are going to do that, my 
notion would be that what we should do is listen to the people who are 
in the banking business saying this is a problem. This bill has serious 
flaws.
  Madam Speaker, I yield 5 minutes to the gentlewoman from Minnesota 
(Mrs. Bachmann).
  Mrs. BACHMANN. I thank the gentleman from Texas for his work and also 
for yielding to me this morning. Madam Speaker, I rise in opposition to 
this rule and to the underlying bill.
  H.R. 1728 is far-reaching legislation, and it will significantly 
restrict access to credit for consumers and it will ultimately hurt 
consumers across the Nation, the very people that this bill seeks to 
help.
  At a time when the financial markets are still fragile and they are 
working so hard to recover, I want to caution my colleagues on both 
sides of the aisle who support this bill and hope that they will think 
about the potential, even if unintended, consequences that this 
legislation could provoke. It sounds good and it makes a great sound 
bite, but I am afraid that it will deliver a very dramatic blow to 
consumers all across our very fragile economy.
  The bill imposes harsh penalties on lenders for violations of vaguely 
defined and, some would even say, undefined lending standards. For 
instance, how does one truly define what a net tangible benefit to the 
consumer is or what a reasonable ability to pay really means? The bill 
leaves it up to banking regulators to determine answers to these 
questions. But we all know, and we should be concerned about how they 
might define such vague terms and what criteria they might choose to 
apply. Every person's financial circumstances are different, and they 
don't lend themselves to a broad rulemaking process.
  During the committee consideration of this bill, I asked these 
questions to Sara Braunstein. She is the Director of the Division of 
Consumer and Community Affairs over at the Federal Reserve. And I asked 
her how the Fed and others would define these terms, and it wasn't 
surprising, really. She stressed how challenging it would be to define 
them, but promised that the Fed would try.
  It is not hard to see how their trying would simply open the door to 
a barrage of lawsuits. That is how this works. And that outcome will 
ultimately restrict access to credit for families all across our 
country. But even more troubling is that the bill would take this lack 
of clarity just one step further, and it would say that assignees and 
securitizers must also comply with these same standards when they 
purchase or assign loans.
  So let's remember that these are parties that were not at the table 
when the loan originated. Think about that. The last thing our economy 
and our housing markets need as they struggle to recover is an unknown, 
widespread shadow of liability cast over them, and one that their 
government puts over them, by the way.
  The uncertainties that will stem from this provision pose serious 
threats to liquidity and our already fragile financial marketplace. We 
should be looking for ways to help ease liquidity pressures, not forge 
greater obstacles. And, on principle, how can we expect those who had 
nothing to do with the loan origination to be held responsible for it 
later on? It goes against the very principles of law that our Nation is 
founded on. And I fear the chilling effect this would have on the 
housing market, and this is not a good time to do more harm than good 
to the housing market.
  I would also like to point out that during our committee markup of 
the bill I offered an amendment to prevent organizations that have been 
indicted for voter fraud or who employ people who have been indicted 
for such crimes from being eligible for housing counseling grants and 
foreclosure legal assistance grants authorized by the underlying bill. 
I was very pleased when the gentleman from Massachusetts and our 
committee Chair accepted the amendment right in front of the whole 
committee and the amendment was passed unanimously by voice vote.

[[Page 11960]]

  I assumed the easy passage was because my amendment used the very 
same language that this body approved last year as part of the Housing 
and Economic Recovery Act of 2008. So you can imagine, I was quite 
surprised when later in that markup, during the day, the committee 
chairman flipped his position and said he wanted to strip down the 
amendment and that he would move to amend the language himself during 
House consideration.
  Apparently, the intention might be to lower the bar so that 
organizations continue to have access to taxpayer money even after they 
have been involved with defrauding the American people and violating 
the American trust not just once, not just twice, but repeatedly, after 
almost every election cycle.
  So make no mistake about it. The Chair will talk today about the 
bedrock legal principle of innocence until proven guilty, but that is 
not what this is about. The language in the bill today doesn't 
jeopardize that principle at all. Decisions on criminal guilt will 
remain in the capable hands of a jury of peers. That is where it 
should. But it is not only legitimate for Congress to decide the 
threshold for accessing taxpayer funds, it is incumbent upon us to do 
so. We have a fiduciary duty to the taxpayers of this country, and for 
too long Congress has cavalierly distributed taxpayer money.
  Today, each and every one of us can go on record saying we will no 
longer set the bar so low; that we will require organizations that want 
to use taxpayer funds to prove that they are worthy of the taxpayers' 
trust.
  There's a saying: Fool me once, shame on you. Fool me twice, shame on 
me. ACORN and organizations like it have fooled us not once, not twice, 
but over and over again. The stories of their indictments for voter 
fraud for violating their tax status, for voter registration 
improprieties abound. Grand juries across the nation have found them 
and their employees lacking. Yet, we continue to funnel millions of 
dollars into their coffers.
  Just this week, in fact, the headlines out of Nevada were 39 counts 
of voter registration fraud against ACORN and two of its former 
employees.
  How many felony charges does it take to see that this organization 
has violated the public trust? Congress is not the arbiter of guilt or 
innocence; but Congress does decide how to spend the people's money. At 
what point do we say that this organization is not worthy of the hard-
earned bucks of the American taxpayer?
  The amendment offered by the gentleman from Massachusetts has been 
made in order under today's rule and if passed it will eviscerate the 
taxpayer protections in the underlying bill.
  I look forward to further debating this issue later today and I urge 
my colleagues to make clear today that they stand with the people, not 
with ACORN.
  Mr. CARDOZA. Madam Speaker, I yield 3 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Let me thank the gentleman from California 
for his leadership and his personal commitment to these issues.
  It is interesting to hear a good friend on the other side of the 
aisle talk about protecting the taxpayers' money. In fact, this week, 
this Congress, this new leadership has done just that. Last week, we 
passed the Credit Card Bill of Rights. As a member of the House 
Judiciary Committee, I was very pleased that we passed a judiciary bill 
dealing with protecting taxpayers against fraud prospectively, and now 
we stand on the floor today protecting taxpayers and future homeowners 
and homeowners again with mortgage lending reform in 1728.
  I wonder if any of us can recall the peaking of the crisis dealing 
with mortgage foreclosures. Those of us who represent our constituents 
certainly can. I can pointedly in a hearing about 3 or 4 years ago in 
the lower end of Manhattan when I listened near Wall Street in a church 
to homeowners in that community or in New York speaking about this 
thing called subprime and adjustable rate, a transit worker who had 
purchased a home and was paying a $3,000 a month mortgage and all of a 
sudden it jumped to $6,000 a month. How many stories like that?
  And how many times can Members or others point to the actual 
beneficiary of the mortgagee as at fault? How many times can we blame 
the hardworking American taxpayer who simply tried to get a home? How 
many times can we blame them for papers that they signed that were then 
altered, ultimately? How many times can we blame the innocent who has 
paid over and over again? The cafeteria worker who had been in an 
apartment for 20 years, but the particular financial entity that she 
dealt with said, yes, you can get into this home. And she had been 
making payments, but with the economy she fell on hard times. Or the 
person who was divorced or catastrophic illness? But because their 
mortgage was fraudulently done, they suffered the consequences.
  So I support this rule and the underlying bill, because it will 
protect this structure of buying a house. Borrowers can repay the loans 
they are sold. Mortgage lenders make loans that benefit the consumer 
and prohibit them from steering borrowers into higher costs. Why isn't 
that protecting the taxpayer? All mortgage refinancing provides a net 
tangible benefit in the consumer.
  The secondary mortgage market, for the first time ever, is 
responsible for complying with commonsense standards, and so we don't 
have this horrible grid that shows us that it has been going up and up 
and up.
  Madam Speaker, I think it is important to acknowledge that we have 
made this bill better, and I am glad that my amendment is in the 
manager's amendment that indicates in the case of a residential 
mortgage--
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. CARDOZA. I yield the gentlelady an additional 15 seconds.
  Ms. JACKSON-LEE of Texas. The total amount of interest that the 
consumer will pay over the life of the loan as a percentage of the 
principle loan, this will help the consumer know better about what they 
are paying. I had hoped my financial literacy amendment would get in 
and also the predatory lending, but I support the underlying bill and 
the amendment. We are trying to work to help the taxpayer and the 
American consumer.
  Madam Speaker, I rise today in strong support of the rule for H.R. 
1728. I would also like to thank Chairman Frank of the Financial 
Services Committee for his hard work on this issue and for sponsoring 
this timely and important piece of legislation. I am also pleased to 
have worked with Chairman Frank and the staff of the Financial Services 
Committee. Lastly, I would like to give a special thanks to my 
Legislative Director, Arthur D. Sidney, for his work on this issue.
  I offered three amendments to this bill. My first amendment was 
included in the Chairman Frank's manager's amendment.


                            FIRST AMENDMENT

  My first amendment would require a change to the Truth in Lending Act 
to allow for the disclosure of the following:
  ``In the case of a residential mortgage loan, the total amount of 
interest that the consumer will pay over the life of the loan as a 
percentage of the principal of the loan. Such amount shall be computed 
assuming the consumer makes each monthly payment in full and on-time, 
and does not make any over-payments.''
  This last point is related to a concept called actual cost of credit, 
where the annual percentage rate of a loan is disclosed to the public. 
Currently, the annual percentage rate is required to be disclosed on 
all mortgages. However, in certain instances disclosure of the annual 
percentage rate alone is not accurate.
  For example, the mere disclosure of the annual percentage rates for 
loans under 12 months or those over 12 months it is not an accurate 
reflection of the total cost of the mortgage or the actual cost of 
credit. Under my amendment--the actual cost of credit--the annual 
percentage rate would be disclosed and the total loan cost would be 
included in the disclosure.
  My amendment would require an additional disclosure informing the 
consumer of the actual amount of interest paid by the borrower over the 
life of the loan. The additional disclosure required by my amendment is 
best explained by an example.
  Take for example a $200,000 fixed mortgage. On a $200,000, 30 year 
fixed mortgage at 5% annual percentage rate, you would pay roughly 
$600,000 on the house, which is actually about 300 percent interest. It 
is important that the real cost of borrowing, the true cost of

[[Page 11961]]

credit be disclosed to the consumer. My amendment will certainly do 
this. This language is included in the Manager's amendment. I urge my 
colleagues to vote affirmatively for this amendment.


                     Additional Amendments Offered

  I offered the following two amendments but they were not accepted 
into the bill.


                            SECOND AMENDMENT

  My second amendment will provide financial literacy training to 
persons seeking a mortgage and will require a minimum of 4 hours of 
counseling. Counseling will include the fundamentals of basic checking 
and savings accounts, budgeting, types of credit and their appropriate 
uses, the different forms of mortgages, repayment options, credit 
scores and ratings, as well as investing.


                            THIRD AMENDMENT

  My third amendment would exclude foreclosures that resulted from a 
default on predatory subprime mortgages from being included in the 
calculation of a consumer's credit score.
  Often the credit crisis has been wrongfully blamed on the 
unscrupulous borrowing practices of the consumer. The reality is that 
mortgage lenders were unscrupulous in their dealings with consumers.
  This amendment would prevent those most unscrupulous and predatory 
lenders from benefitting or causing harm to consumer. Therefore, any 
foreclosures that result from predatory, subprime mortgage lending 
should not be included in the consumer's credit score.


                          MANAGER'S AMENDMENT

  I support the Manager's Amendment. Specifically, it would add 
additional prohibitions on mortgage originator conduct within the anti-
steering section of the bill; would provide that regulations proposed 
or issued pursuant to the requirements of Section 106 shall include 
``model'' disclosure forms, and would also provide that the relevant 
financial regulators (HUD/Fed) may develop ``standardized'' disclosure 
forms, and may require their use, when they jointly determine that use 
of a standardized form would be of substantial benefit to consumers.
  The Manager's Amendment would require a study into how shared 
appreciation mortgages could be used to strengthen housing markets and 
provide opportunities for affordable homeownership; would allow 
creditors to consider a consumer's good standing with them above other 
credit history considerations in refinancing of hybrid loans.
  Further, the Manager's would require lenders who are subject to the 
Federal Truth in Lending Act or the Homeowners Equity Protection Act to 
disclose to borrowers that the anti-deficiency protections of the 
initial residential mortgage loan may be lost when a non-purchase money 
loan is received.
  The Manager's Amendment provides greater disclosure requirements. 
Specifically, it would require creditors to disclose their policy 
regarding the acceptance of partial payments for a residential mortgage 
loan and it would modify preemption language in section 208(b) to 
include any state that has a law at the time of enactment.
  Another important disclosure in the Manager's Amendment would require 
that mortgage disclosures for each billing cycle include contact 
information for local mortgage counseling agencies or programs.
  The bill before us today provides the folowing key benefits. Simply 
put, to help rebuild the American economy, the House is taking 
additional steps to bring common sense reform and consumer protection 
to the financial markets and mortgage lending. This legislation to stop 
the kinds of predatory and irresponsible mortgage loan practices that 
played a major role in the current financial and economic meltdown and 
prevent borrowers from deliberately misstating their income to qualify 
for a loan.
  These long overdue reforms, which Democrats have been advocating 
since 1999, perhaps could have prevented the current crisis. A similar 
measure (H.R. 3915) passed the House in 2007 by a vote of 291-127.
  To restore the integrity of mortgage lending industry, this 
bipartisan bill will make sure that the mortgage industry follows basic 
principles of sound lending, responsibility, and consumer protection, 
ensuring that: borrowers can repay the loans they are sold; mortgage 
lenders make loans that benefit the consumer and prohibit them from 
steering borrowers into higher cost loans; all mortgage refinancing 
provides a net tangible benefit to the consumer; the secondary mortgage 
market, for the first time ever, is responsible for complying with 
these common sense standards when they buy loans and turn them into 
securities; there are incentives for the mortgage market to move back 
toward making safe, fully documented loans; and tenants renting homes 
that are foreclosed would receive notification and time to relocate.
  These crucial efforts to restore accountability in the housing and 
financial markets are needed to rebuild our economy in a way that's 
consistent with our values: an economy that rewards hard work and 
responsibility, not high-flying finance schemes; an economy that's 
built on a stable foundation, not propelled by overheated housing 
markets and maxed-out credit cards. As Members of Congress, we want to 
build an economy that offers a broadly shared prosperity for the long 
run.
  Texas ranks 17th in foreclosures. Texas would have fared far worse 
but for the fact that homeowners enjoy strong constitutional 
protections under the state's home-equity lending law. These consumer 
protections include a 3 percent cap on lender's fees, 80 percent loan-
to-value ratio (compared to many other states that allow borrowers to 
obtain 125 percent of their home's value), and mandatory judicial sign-
off on any foreclosure proceeding involving a defaulted home-equity 
loan.
  Still, in the last month, in Texas alone there have been 30,720 
foreclosures and sadly 15,839 bankruptcies. Much of this has to do with 
a lack of understanding about finance--especially personal finance.
  Last year, Americans' personal income decreased $20.7 billion, or 0.2 
percent, and disposable personal income (DPI) decreased $11.8 billion, 
or 0.1 percent, in November, according to the Bureau of Economic 
Analysis. Personal consumption expenditures (PCE) decreased $56.1 
billion, or 0.6 percent. In India, household savings are about 23 
percent of their GDP.
  Even though the rate of increase has showed some slowing, 
uncertainties remain. Foreclosures and bankruptcies are high and could 
still beat last year's numbers.
  Home foreclosures are at an all-time high and they will increase as 
the recession continues. In 2006, there were 1.2 million foreclosures 
in the United States, representing an increase of 42 percent over the 
prior year. During 2007 through 2008, mortgage foreclosures were 
estimated to result in a whopping $400 billion worth of defaults and 
$100 billion in losses to investors in mortgage securities. This means 
that one per 62 American households is currently approaching levels not 
seen since the Depression.
  The current economic crisis and the foreclosure blight has affected 
new home sales and depressed home value generally. New home sales have 
fallen by about 50 percent.
  One in six homeowners owes more on a mortgage than the home is worth, 
raising the possibility of default. Home values have fallen nationwide 
from an average of 19 percent from their peak in 2006 and this price 
plunge has wiped out trillions of dollars in home equity. The tide of 
foreclosure might become self-perpetuating. The nation could be facing 
a housing depression--something far worse than a recession.
  Obviously, there are substantial societal and economic costs of home 
foreclosures that adversely impact American families, their 
neighborhoods, communities and municipalities. A single foreclosure 
could impose direct costs on local government agencies totaling more 
than $34,000.
  Recently, the Congress set aside $100 billion to address the issue of 
mortgage foreclosure prevention. I have long championed that money be a 
set aside to address this very important issue. I believe in 
homeownership and will do all within my power to ensure that Americans 
remain in their houses.
  A record amount of commercial real estate loans coming due in Texas 
and nationwide the next three years are at risk of not being renewed or 
refinanced, which could have dire consequences, industry leaders warn. 
Texas has approximately $27 billion in commercial loans coming up for 
refinancing through 2011, ranking among the top five states, based on 
data provided by research firms Foresight Analytics LLC and Trepp LLC. 
Nationally, Foresight Analytics estimates that $530 billion of 
commercial debt will mature through 2011. Dallas-Fort Worth has nearly 
$9 billion in commercial debt maturing in that time frame.
  Most of Texas' $27 billion in loans maturing through 2011--$18 
billion--is held by financial institutions. Texas also has $9 billion 
in commercial mortgage-backed securities, the third-largest amount 
after California and New York, according to Trepp.
  For the foregoing reasons, I support the final passage of this 
legislation. I urge my colleagues to support the bill and vote it out 
of the Congress.
  Mr. SESSIONS. Madam Speaker, at this time I yield 2 minutes to the 
gentleman from Egan, Illinois (Mr. Manzullo).
  Mr. MANZULLO. Madam Speaker, I rise in opposition to this bill.
  If you take a look at the different lock-in periods, add to that the 
additional cost for appraisals that are necessitated by a flawed system 
in this

[[Page 11962]]

bill, it is going to cost the industry close to $3 billion, or an extra 
$700 per loan. That is the hidden cost of this bill, and that is why 
the bill should be defeated.
  I had offered in the Rules Committee an amendment which, 
unfortunately, is not allowed to come to the floor. And I know that the 
taxpayers are greatly distressed that this body is supposed to be for 
free and open debate, and yet Members cannot freely allow amendments to 
come to the floor.
  There is an agreement that is signed between the Attorney General of 
New York and the people who regulate Fannie Mae and Freddie Mac on 
something called the Home Evaluation Code of Conduct. It is supposed to 
regulate the mischief that took place between the big lenders and the 
appraisers to cook the books in order to make the loans.
  The problem is this: The agreement still allows that collusion or the 
opportunity for collusion. In fact, the banks of this country can own 
appraisal management companies, which are supposed to be third-party, 
independent agents to find an independent appraiser in order to make 
sure that the property is valued correctly. And I asked that that 
agreement be put on hold for a year so that the collusion and the 
opportunity to stop the collusion could be studied and better 
safeguards put into effect.
  I was denied that opportunity. The American people were denied the 
opportunity to be heard on the floor because of the constrictive nature 
that the majority has placed upon us.

                              {time}  1115

  Most Americans think that if a Member of Congress has an amendment, 
that amendment could easily come to the floor and be heard. That did 
not happen in this case. And because of that, it could cost the 
taxpayers an extra $3 billion a year because of this fatally flawed 
bill.
  Mr. CARDOZA. Madam Speaker, I yield 2 minutes to my friend and 
colleague from North Carolina (Mr. Miller), a sponsor of the bill.
  Mr. MILLER of North Carolina. Madam Speaker, I rise to respond to 
what several on the other side have said, Mrs. Bachmann, Mr. Sessions 
and others, that now is not the time to do this. Madam Speaker, I 
introduced this legislation or legislation like it in 2003, in 2005, in 
2007 and now again in 2009. It has never been the time by the likes of 
the members of the minority party and by the likes of the lending 
industry.
  Now their arguments have been a little different. In 2003 and in 
2005, they said, ``are you kidding? These loans are great. This is the 
unfettered market at its best, creating these innovative loans so 
people can get credit that they otherwise couldn't get. And those 
Democrats like Miller, who want to restrict it, they just don't know a 
good thing when they see it.'' In 2007, especially now, they are 
saying, ``isn't it terrible that all those liberals made the poor 
lenders make these loans? But now is not the time. Now is not the time 
to restrict credit.''
  Madam Speaker, they will never think it is the right time to protect 
the American people from abusive lending practices. We need, when 
credit starts flowing again, when the housing market revives again, the 
mortgage market revives again, we need to make sure there are rules in 
place so people can make an honest living by making reasonable loans to 
people who need to borrow money to buy a house. We don't need to go 
back to letting people make a killing by cheating people out of the 
equity in their home by predatory mortgages.
  Mr. SESSIONS. Madam Speaker, I am really down to no speakers and just 
my closing statement. So I would encourage my friends to go ahead and 
utilize their time, and then I will close as appropriate.
  Mr. CARDOZA. Madam Speaker, I thank my colleague from Texas.
  At this time, I would like to yield 2 minutes to the gentleman from 
North Carolina, a member of the Financial Services Committee, Mr. Watt.
  Mr. WATT. Madam Speaker, I thank the gentleman for yielding time.
  I just want to take the opportunity to thank some people. This 
actually has been the most challenging piece of legislation I have been 
involved in since I have been in Congress because we have been walking 
a very delicate balance between the various considerations that we have 
heard on the floor, making sure that consumers, borrowers, are 
protected from terrible loans without, at the same time, on the other 
hand, drying up the availability of capital to fund loans. And it has 
been inordinately difficult. And a number of people have been working 
aggressively to try to find that appropriate balance.
  The Chair of the Financial Services Committee has been absolutely 
wonderful to work with. But there are players in all segments of this 
industry who recognize that change needs to be made so that we don't 
get back into the situation that we ended up in and we are in right 
now. They have been working constructively. I have heard some reference 
to the fact that there are a number of people who oppose this bill. I 
really haven't seen any letters that say, ``I oppose the bill,'' 
because we have been in constructive dialogue with all of the players 
involved in this process trying to find the right balance.
  There are some people who are saying, ``look, I have some concerns 
about this provision. I want to continue to work with you as this 
process moves forward.'' And this is not the end of the process. We 
have assured everybody that we will continue to work to find the right 
balance in this bill. This is not the end of the game.
  I just want to thank everybody.
  Mr. CARDOZA. Madam Speaker, I am the last person to speak, and I 
would like to reserve to close.
  The SPEAKER pro tempore. The gentleman from Texas has 1\1/2\ minutes 
remaining.
  Mr. SESSIONS. Madam Speaker, in closing, I would like to thank the 
gentleman from California and each of the Members from his side who 
have participated today, including the gentleman, Mr. Frank. I would 
like to stress that while my friends on the other side of the aisle 
claim to be protecting consumers and have said that people want to 
delay this legislation, that is not true. It has already taken place. 
Whatever we need, the Federal Reserve has already done.
  What we will say is that what this legislation is doing is benefiting 
trial lawyers with tax dollars. And perhaps more importantly, it is 
causing this circumstance to be aggravated and to be worsened.
  We already understand there will be less credit that will be 
available. This will raise the costs of loans and mortgages that people 
will want to receive. At a time, especially, when the economy needs 
help, this will harm the economy. And that is directly what the 
American Bankers Association has said in a letter to every single 
Member of Congress. So I hope every single Member should hear this. 
They need to be talking to their staff, ``hey, did that letter come in 
on this legislation that we are handling today?'' And that letter says, 
``serious flaws, serious flaws, bigger problem.''
  We need to be providing for jobs. We need to be encouraging economic 
growth. We need to encourage investment. And this legislation does not 
accomplish that.
  Mr. CARDOZA. Madam Speaker, I would like to thank the gentleman from 
Texas for engaging with us this morning on a very constructive debate. 
However, we have serious disagreements on what this bill should look 
like.
  Madam Speaker, in the last 18 months, the foreclosure crisis has not 
improved in our districts. And in most places, in fact, it has become 
significantly worse. In 2009, millions of Americans will default on 
their mortgages, and millions more will see their home equity drop 
precipitously. All of us know the potential consequences of this 
crisis. And for far too many of us, including those in my district, we 
are well acquainted with the depths of despair and destruction the 
foreclosure crisis has been inflicting on us.
  Still, in spite of all the signs, small businesses that have closed 
on Main Street, foreclosure signs lining the

[[Page 11963]]

neighborhoods, the unmistakable despair in the neighborhood coffee 
shops, I do believe there is reason for hope. The fundamentals of our 
economy and the spirit of the American people are simply too strong to 
throw in the towel because it may be an easier path. It is not time to 
give up. Rather it is time to redouble our efforts, strengthen our 
resolve, and focus not on what we have done, but what we will do to 
turn this economy around. If we do just that, I have no doubt we will 
overcome whatever challenges we may face, and we will fix this problem 
of foreclosures with the economy and the mortgage crisis.
  I urge all my colleagues to support taking another step forward to 
stabilizing our housing market and helping our economy recover once and 
for all.
  Madam Speaker, I urge a ``yes'' vote on the rule and on the previous 
question.
  I yield back the balance of my time, and I move the previous question 
on the resolution.
  The previous question was ordered.
  The SPEAKER pro tempore. The question is on the resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. SESSIONS. Madam Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. The vote was taken by electronic device, and 
there were--yeas 247, nays 174, not voting 12, as follows:

                             [Roll No. 237]

                               YEAS--247

     Abercrombie
     Ackerman
     Adler (NJ)
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boccieri
     Boren
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Braley (IA)
     Bright
     Brown, Corrine
     Butterfield
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson (IN)
     Castor (FL)
     Chandler
     Childers
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly (VA)
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Crowley
     Cuellar
     Cummings
     Dahlkemper
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Donnelly (IN)
     Doyle
     Driehaus
     Edwards (MD)
     Edwards (TX)
     Ellison
     Ellsworth
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Foster
     Frank (MA)
     Fudge
     Giffords
     Gonzalez
     Gordon (TN)
     Grayson
     Green, Al
     Green, Gene
     Griffith
     Grijalva
     Gutierrez
     Hall (NY)
     Halvorson
     Hare
     Harman
     Hastings (FL)
     Heinrich
     Herseth Sandlin
     Higgins
     Himes
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Honda
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Johnson (GA)
     Johnson, E. B.
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick (MI)
     Kilroy
     Kind
     Kirkpatrick (AZ)
     Kissell
     Klein (FL)
     Kosmas
     Kratovil
     Kucinich
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee (CA)
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lujan
     Lynch
     Maffei
     Maloney
     Markey (CO)
     Markey (MA)
     Marshall
     Massa
     Matheson
     Matsui
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McMahon
     McNerney
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Minnick
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy (NY)
     Murphy, Patrick
     Murtha
     Napolitano
     Neal (MA)
     Nye
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor (AZ)
     Payne
     Perlmutter
     Perriello
     Peters
     Peterson
     Pingree (ME)
     Polis (CO)
     Pomeroy
     Price (NC)
     Quigley
     Rahall
     Rangel
     Reyes
     Richardson
     Rodriguez
     Ross
     Rothman (NJ)
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schauer
     Schiff
     Schrader
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Space
     Speier
     Spratt
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Teague
     Thompson (CA)
     Thompson (MS)
     Tierney
     Titus
     Tonko
     Towns
     Tsongas
     Van Hollen
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Yarmuth

                               NAYS--174

     Aderholt
     Akin
     Alexander
     Austria
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Campbell
     Cantor
     Cao
     Capito
     Carter
     Cassidy
     Castle
     Chaffetz
     Coble
     Coffman (CO)
     Cole
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dreier
     Duncan
     Ehlers
     Emerson
     Fallin
     Flake
     Fleming
     Forbes
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gingrey (GA)
     Gohmert
     Goodlatte
     Granger
     Graves
     Guthrie
     Hall (TX)
     Harper
     Hastings (WA)
     Hensarling
     Herger
     Hill
     Hoekstra
     Hunter
     Inglis
     Issa
     Jenkins
     Johnson (IL)
     Johnson, Sam
     Jones
     Jordan (OH)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Lamborn
     Lance
     Latham
     LaTourette
     Latta
     Lee (NY)
     Lewis (CA)
     Linder
     LoBiondo
     Lucas
     Luetkemeyer
     Lummis
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul
     McClintock
     McCotter
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy, Tim
     Myrick
     Neugebauer
     Nunes
     Olson
     Paul
     Paulsen
     Pence
     Petri
     Pitts
     Platts
     Poe (TX)
     Posey
     Price (GA)
     Putnam
     Radanovich
     Rehberg
     Reichert
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Rooney
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Schmidt
     Schock
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Terry
     Thompson (PA)
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden
     Westmoreland
     Whitfield
     Wilson (SC)
     Wittman
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--12

     Berry
     Capps
     Engel
     Fortenberry
     Heller
     Holt
     King (IA)
     Miller, George
     Nadler (NY)
     Scalise
     Stark
     Wamp

                              {time}  1153

  Mr. OLSON and Ms. GINNY BROWN-WAITE of Florida changed their vote 
from ``yea'' to ``nay.''
  So the resolution was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated against:
  Mr. HELLER. Mr. Speaker, on rollcall No. 237, the adoption of the 
rule on H.R. 1728, I was absent from the House at a family obligation. 
Had I been present, I would have voted ``nay.''
  Mr. KING of Iowa. Mr. Speaker, on rollcall No. 237, I was not able to 
reach the House floor to cast my vote before the vote was closed. Had I 
been able to cast my vote, I would have voted ``nay.''

                          ____________________