[Congressional Record (Bound Edition), Volume 156 (2010), Part 4]
[Senate]
[Pages 5593-5594]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            FINANCIAL REFORM

  Mr. SANDERS. Madam President, my understanding is, our Republican 
colleagues have been on the floor and have expressed their concerns 
about financial reform and their desire to work in a bipartisan way. I 
welcome that. I am going to lay out some ideas I hope could have 
Republican support. I am not sure they will, but I would love to see it 
because the vast majority of the people in our country are profoundly 
disgusted with the behavior on Wall Street, the greed, the 
recklessness, the illegal behavior which has led us to the terrible 
recession we find ourselves in today. I wish to tick off a couple 
issues I hope my Republican colleagues would be interested in working 
with me on.
  Every week I receive--and I suspect others do as well--telephone 
calls and letters and e-mails from people in my State who are outraged 
by the kind of interest rates they are forced to pay, interest rates 
which are nothing less than usury, usury which has been condemned by 
every major religion in this world, which has been condemned throughout 
history by some of our great philosophers and writers who have 
basically said it is wrong and immoral to force desperate people who 
are in need of loans to pay outrageous interest rates.
  Yet today more than one-quarter of all credit cardholders in this 
country are paying interest rates above 20 percent and, in some cases, 
as high as 79 percent. That is not providing credit. That is loan 
sharking. That is doing precisely what criminals do when they lend 
people money and then break their kneecaps if they don't pay it back on 
time--except the loan sharks who are doing this now wear three-piece 
suits. They don't break kneecaps, but they destroy lives by forcing 
people to pay outrageously high interest rates when people are using 
their credit cards to buy groceries, to fill the gas tank to get to 
work, to pay for basic needs their families have.
  Millions of credit cardholders have received letters from Citibank, 
Bank of America, Wells Fargo, and JPMorgan Chase notifying them that 
their interest rates are going up, in some cases to 30 percent. A point 
that has to be made is that these four large banks, the four largest 
banks in a America, issue two-thirds of the credit cards. These four 
banks are ripping off the American people from one end of the country 
to the other. It is time that outrageous behavior ended.
  I hope my Republican colleagues who have come to the floor expressing 
concern about Wall Street, I hope what they are saying is more than 
just rhetoric, that they truly want to do something. If they want to do 
something, I hope they will join me when I offer an amendment as part 
of financial reform to cap credit card interest rates at 15 percent. 
That is the same statutory cap that has been in existence for 30 years 
at credit unions all over the country. Credit unions are doing just 
fine, but by law, they cannot ask for more than 15 percent, except 
under certain circumstances, when it can go up to 18 percent. If that 
is good enough for credit unions, it should be good enough for 
Citibank, Bank of America, Wells Fargo, JPMorgan Chase, and other large 
financial institutions.
  If my Republican friends are sincere, I hope they will join me in 
supporting efforts to bring transparency to the Federal Reserve. An 
amendment I intend to offer will do that. What we need to do, among 
many things, is to understand which financial institutions during the 
bailout received over $2 trillion in secret taxpayer-backed loans 
virtually interest free. Who are they? Last year, as a member of the 
Budget Committee, I asked Fed Chairman Bernanke that simple question. 
He said, no, he is not going to tell me which financial institutions, 
he is not going to tell the American people which financial 
institutions received trillions of taxpayer dollars. I have a problem 
with that. I believe the American people do. We are going to offer an 
amendment as part of financial reform in order to understand what, in 
fact, is happening, to demand transparency there.
  In April of last year, the Senate voted 59 to 39 on an amendment I 
offered with Senators Webb, Bunning, and Feingold to the budget 
resolution calling on the Fed to release this information. Yet as of 
this day, the Fed has refused to do so. In August of last year, Federal 
U.S. district judge Loretta Preska, nominated by President George W. 
Bush, ordered the Federal Reserve to release this information. The Fed 
appealed that decision and last March the U.S. appeals court in 
Manhattan upheld that decision. Yet the Fed has still not disclosed 
this information. Over 300 Members of Congress have cosponsored 
legislation calling for an independent audit of the Fed. In other 
words, we now have 59 Senators, over 300 Members of Congress, a U.S. 
district court judge, and a U.S. appeals court that have said to the 
Chairman of the Fed, Mr. Bernanke, in no uncertain terms, that the 
American people have a right to know the names of the largest banks 
that have received over $2 trillion in taxpayer-backed loans from the 
Federal Reserve.
  If my Republican friends are sincere, if they truly want to take on 
the greed and the recklessness of Wall Street, if they want to give the 
American people transparency as to what is happening on Wall Street, I 
certainly hope they will support that amendment.
  I also hope we can receive support to address the issue of too big to 
fail. In that regard, I have offered legislation which is pretty 
simple. It says the Treasury Department would provide a list to 
Congress of all the too-big-to-fail banks in this country within 90

[[Page 5594]]

days of passage of that legislation and break them up within 1 year so 
they can no longer threaten to bring down the economy if, once again, 
they get into trouble. Quite amazingly--and I think most people don't 
understand this--under the leadership of the Bush administration and 
Fed Chairman Bernanke, the largest financial institutions since the 
bailout have not gotten smaller; in fact, they have become larger.
  In 2008, the Bank of America, the largest commercial bank in the 
country, which received a $45 billion taxpayer bailout, purchased 
Countrywide, the largest mortgage lender in the country, and Merrill 
Lynch, the largest brokerage firm. In other words, what we are seeing 
in at least three out of the four largest banks is, since the bailout, 
they have become even larger, becoming an even greater threat to the 
financial stability of the country if, once again, they are ever in a 
position to fail.
  The issue of large banks is not only that they are a threat to the 
stability of our economy, if they are about to fail. The other aspect 
of the problem is the concentration of ownership that currently exists. 
When we have four large financial institutions that issue two-thirds of 
the credit cards in the country and half the mortgages, we have a very 
dangerous and noncompetitive type of situation. Given the fact that we 
have seen these financial institutions issue esoteric and not 
understandable financial instruments whose only goal is to secure more 
money and profits and compensation packages for the CEOs of these 
institutions, we need to start breaking them up and have financial 
institutions that understand that their role is to provide credit to 
the productive economy, the businesses that actually produce real 
products, provide real services, and create real jobs. In other words, 
we need to break them up to create a new Wall Street which becomes part 
of the United States, part of our economy, not an isolated island whose 
only goal in life is to issue worthless financial instruments in order 
to make outrageous short-term profits. That is a huge issue that we 
have to deal with.
  If my Republican colleagues are, in fact, sincere, if they want to do 
more than follow pollster Frank Luntz's playbook and throw out certain 
words they think will work for them politically, I look forward to 
their support for real financial reform.
  The Bottom line is, we cannot continue to do what we have done for a 
number of years. We have to summon the courage, and it will take 
courage because Wall Street is enormously powerful. In order to get the 
deregulation that led us to the financial disaster we experienced a 
year and a half ago, over a 10-year period, Wall Street spent the 
unbelievable sum of money of $5 billion on campaign contributions and 
lobbying. Frankly, I don't even know how one can spend that kind of 
money. But nonetheless, it certainly worked. Against my vote, when I 
was in the House, they got the deregulation they wanted. Lo and behold, 
once they were deregulated, not to my surprise, they went out and did 
all kinds of strange things, reckless things, illegal things, which 
brought us to where we were a year and a half ago.
  What we need is real financial reform. We need a cap on interest 
rates so Wall Street cannot continue to rip off ordinary Americans. We 
need transparency at the Fed. We need to know which financial 
institutions are receiving trillions of dollars of taxpayer money. We 
need to begin the process of breaking up these huge financial 
institutions, not only from a too-big-to-fail concern but also from a 
concentration of ownership issue because we are going to need a lot 
more competition in the financial industry than we have now.
  We will find out soon enough whether our Republican friends are doing 
more than reading from a pollster's playbook or whether they are 
serious about taking on Wall Street. I have my doubts, but I hope I am 
wrong. I hope we will gain their support in bringing real reform to our 
financial institutions.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  Mr. DURBIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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