[Congressional Record (Bound Edition), Volume 156 (2010), Part 5]
[Senate]
[Page 6129]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 FINANCIAL SERVICES INDUSTRY REGULATION

  Mr. BENNETT. Mr. President, I rise to discuss the issue that is 
before the body and before the country right now with respect to 
control and regulation of the financial services industry. The 
President of the United States has given a number of speeches on this 
one. I understand the latest one was today, in which he attacked 
Republicans for listening to the big banks of Wall Street in our 
concern about the details of the bill that has been offered out of the 
Banking Committee by Chairman Dodd.
  I am a member of the Banking Committee. I voted against the bill in 
the Banking Committee. It came out on a straight party-line vote. For 
that I am being castigated by the President and others for being a tool 
of Wall Street and the big banks.
  I want to make it very clear that my opposition to parts of this bill 
have nothing whatsoever to do with Wall Street and the big banks. I 
have not been to Wall Street to discuss this with any executives of any 
of the big banks. I have been in Utah, and I have been discussing this 
with businesses in Utah, businesses that you normally would not think 
would have any interest whatsoever in regulation of financial services.
  We think of financial services as insurance companies and brokerage 
houses and banks. What I have discovered, hearing from my constituents, 
is that the people who are the most worried about this are small 
business men and women who have nothing to do with banking but who do 
have a program in their business to extend some degree of consumer 
credit.
  I will give an example: a furniture store that sells furniture and 
advertises you buy the furniture now and payment is delayed for 90 days 
as a come-on to get people to come in. Mr. President, you have seen 
those ads in the paper in Washington. I have seen those ads. It is the 
kind of thing that goes on.
  Businesses extend credit in one way or another. It is not the core of 
their business, it is just a way of trying to attract customers. 
Suddenly they discover, if this bill passes, they will be under the 
control of the Consumer Protection Agency that is being created for 
this, and Federal officers will have the right to show up on their 
premises and say: This is not a proper handling of this credit. We are 
going to treat you as if you were Citicorp or Goldman Sachs or 
whatever. We are going to come down with the heavy hand of the Federal 
Government to tell you how you can do your business and fine you or 
produce other kinds of barriers to your doing business.
  The fellow says: Look, I just want to sell a sofa, and I just want to 
be able to sell it on credit to somebody who wants to buy it on credit. 
What is wrong with that?
  No, under the terms of this bill, the Consumer Protection Agency of 
the Federal Government will be looking down your throat.
  As I move around the State, I have one small business man or woman 
after another come up to me and say: What in the world are you people 
in Washington thinking about, the kinds of regulations you are going to 
put on me and my business? Some of them are saying they are afraid they 
are going to have to close their doors rather than deal with this 
significant challenge.
  We are, in this bill, overreacting to the seriousness of the crisis 
that has put us in this recession. I have a friend who has been a 
Washington observer for many years, and he says whenever faced with a 
crisis, Congress always does one of two things: nothing or overreacts. 
This is a classic example of overreacting.
  By creating a Consumer Protection Agency with the sole focus to 
protect the consumer, we run the risk of doing the kind of damage I 
have described to small business. I say to people, if safety is the 
only criterion by which you are going to judge an institution, the 
safest institution in which no one will lose any money is the one whose 
doors are closed, the one that offers no risk anywhere because all 
business is a risk. If you are going to say, no, you are going to 
protect the consumers absolutely, the way to protect the consumers 
absolutely so that they will never lose a dime is not allow them to 
make a purchase, not allow them to ever get a loan, not allow them to 
ever receive any credit.
  If this bill passes in the form it came out of the House Banking 
Committee, that will be the impact of this bill. Across the board it 
will be to reduce credit, it will be to reduce opportunity, it will be 
to damage small businesses.
  Again, I have not talked to the people on Wall Street. I have talked 
to the people on Center Street--I would say Main Street because every 
town in America has a Main Street, but in Utah, in addition to Main 
Street, we have Center Street in many of these small towns. That shows 
how close to the issue the people in Utah are.
  There is another issue I feel strongly about, and that is the 
definition of ``too big to fail.'' This creates and solidifies the 
notion that some people, some institutions are too big to fail. I 
believe one of the lessons we have learned out of the crisis we went 
through starting in September of 2008 is that nobody should be deemed 
too big to fail; and, indeed, we should create a circumstance where the 
bankruptcy courts handle things and there is no Federal bailout in the 
fashion of saying: You are too big to fail and the government will 
protect you from failing.
  I remember years ago when we had the first bailout with Chrysler at 
the time. Lee Iacocca made his reputation bringing Chrysler out of the 
bailout and repaying the government with interest. People point to that 
and say: The government kept Chrysler from going under. The money was 
repaid. It was just a loan guarantee. The government didn't lose any 
money.
  I remember one observer, when asked about it, said: I am not worried 
about whether the bailout will save Chrysler. What I am worried about 
long term is that it will work.
  There were people saying: What happens if it fails?
  He said: I am not worried about it if it fails. I am worried about it 
if it works and the Federal Government gets the appetite to step in, in 
example after example, and always point to the Chrysler bailout and 
say: Well, we made money on that, so we can do it again.
  By creating that kind of moral hazard of stating these institutions 
are too big to fail, we run the risk of seeing a repetition rather than 
avoidance of the crisis we had that created all of the difficulties in 
our economy today.
  So, on the one hand, I speak for the small businessman and the small 
businesswoman who say this bill will be a disaster for them. On the 
other side, I say let's not create, in the name of protecting the 
customer, a circumstance where institutions are deemed as too big to 
fail and can be guaranteed, once again, a degree of government backing 
that the marketplace would not give them. I trust the marketplace. We 
have learned to do that as we go through the wreckage of what happened 
in the housing crisis.
  I think we need to be very careful with this bill. Do we need 
financial reform? Yes, we do. Would I vote for a sensible bill? Yes, I 
would. Am I a supporter of the status quo? No, I am not. But I do not 
believe the bill that came out of the Banking Committee is an 
improvement.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.

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