[Congressional Record (Bound Edition), Volume 156 (2010), Part 1]
[House]
[Pages 123-124]
[From the U.S. Government Publishing Office, www.gpo.gov]




               MISTAKES OF BANKS TRANSFERRED TO TAXPAYERS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, the conventional wisdom flowing through the 
media to our Nation is that without

[[Page 124]]

the Wall Street bailout, America would have gone into economic 
depression and many banks would have failed. Well, the bailout passed. 
But think about it, then America fell into depression. Unemployment 
skyrocketed, and since January of last year, 141 banks have failed and 
been resolved through the Federal Deposit Insurance Corporation with 
more to come. Yet the biggest banks that did the damage were rescued 
rather than broken up and held accountable. These big banks gambled 
wildly, taking huge risks with our money and our mortgages, and now 
they are transferring their trillions of dollars of mistakes to our 
taxpayers for generations to come. What's wrong with this picture?
  The public's anger is rising, rightly. That can make a difference 
because that will affect elections. Yet the powerhouses of Wall Street 
who took TARP money within a year are earning the strongest profits in 
America compared to every other business, and they are handing 
themselves exorbitant bonuses, over $150 billion and counting. Clearly 
what Congress did was incorrect.

                              {time}  1645

  America has fallen into a deepening depression, more unemployment, 
with projections for a jobless recovery, with rising trade deficits, 
which weren't supposed to happen because of the value of the dollar. 
Why? Because the financial crisis was resolved in the wrong way. The 
financiers who created this house of cards are still rewarding 
themselves and doing a reverse Robin Hood--taking from others to reward 
the privileged few. That doesn't sound like the America I know.
  Credit remains frozen across our country. Credit being frozen means 
no more jobs. It means jobless recovery, because businesses cannot make 
payroll. They cannot buy supplies. They cannot maintain their 
inventories. When five megabanks in our country control nearly half the 
deposits of the American people, that is too concentrated. It is too 
unaccountable. And it is too much of a transfer of power from the many 
to the few. That isn't what America is about.
  Alone, or joined together in groups, these big banks successfully 
lobbied Congress to weaken financial regulatory reform and defeat one 
of the most powerful and necessary reforms rebuilding the protective 
walls between regular, prudent commercial banking and speculation. 
Financial reform should have deconstructed the too big to fail firms 
that caused this economic crisis, but the bill that whizzed through 
this Congress a few weeks ago did exactly the opposite. It enshrined 
them, it grandfathered them.
  I introduced H.R. 4377, called the Return to Prudent Banking Act, 
which would restore the Glass-Steagall protections, which were 
overturned a decade ago in a bill called Gramm-Leach-Bliley that sailed 
through this Congress. Our bill would restore the barriers between 
commercial banking and speculation, not allowing this transfer of power 
to the abusers.
  I look forward to working with my other colleagues, like Congressman 
Maurice Hinchey of New York, such a leader on this issue, to combine 
our bills, to return our financial system to a prudent banking system, 
one in which credit is no longer seized up because we fixed what is 
wrong with the fundamentals.
  Our citizens demand a more competitive banking system, one that is 
less concentrated, and without the systemic risks our current one 
encourages. The momentum is building for real change, and I am glad 
there is an election this year. Because despite the work of the 
megabanks to enshrine themselves, we still have hope because more 
Americans are paying attention.
  There is an article in the Wall Street Journal today by Thomas Frank 
entitled Bring Back Glass-Steagall. He is right. The so-called 
financial regulatory reform bill that moved through this House too 
quickly last year before examining the root causes of this crisis has a 
bottom line. The House bill basically grandfathered the megabanks, 
which set the stage for a future meltdown in our economy because the 
Federal Government becomes the open arms for Wall Street's high risk 
future behavior. The big banks of course will fight any effort to 
reform the current system, but speculators shouldn't be given free 
rein. They have to let the American people know that in fact if they 
are high risk, hey, you are on your own. But those firms should not be 
allowed to gamble with regular commercial banking.
  The American people should think about how to restore normal credit 
flows, because until we do that this economy is not going to heal.

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