[Congressional Record (Bound Edition), Volume 156 (2010), Part 5]
[Senate]
[Pages 6458-6459]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      FINANCIAL REGULATORY REFORM

  Mr. McCONNELL. Mr. President, yesterday, I came to the floor and 
noted that an increasing number of businesses large and small have been 
weighing in on the financial regulatory bill. And what we have seen 
from these groups is a growing concern about the adverse effect this 
bill could have on their businesses. Everyone from candy bar companies 
to motorcycle makers, it seems, is now worried about the impact of this 
bill.
  So this has been a very useful exercise: by giving people time to 
actually look at this bill and study the details for themselves, we 
have enabled them to assess not only potential impact of the actual 
text of the bill itself but also some of the unintended consequences it 
could have.
  As we know, this is something Americans were denied in the lead-up to 
the vote on the stimulus bill. Democrats insisted we vote on that bill 
about 18 hours after we got the text. And we have seen how that turned 
out. This is something Americans were denied again on the health 
spending bill, which was basically written by a few guys in a room, 
then jammed through the Senate during a blizzard on Christmas Eve. And 
we have seen how that turned out: a bill that was sold on the promise 
of lower costs and lower premiums is now expected to lead to higher 
costs and higher premiums.
  So this time people have actually had a chance to look at one of 
these massive Democrat bills for a change, and what is perfectly clear 
to most of them is that this bill needs some work, which is precisely 
what Republicans have been saying for the last 2 weeks.
  Let's just start with the basics. The first thing we had to ensure 
with this bill is that it did not leave taxpayers on the hook for any 
more Wall Street bailouts. And that is the first thing some of us on 
this side of the aisle noticed: the loopholes. So I raised the alarm on 
that issue, and the two parties have been looking into it.
  But there are other problems. In particular there is growing concern 
that in an effort to hold Wall Street accountable, this bill could 
catch the little guys up in the same net as the big banks. And this is 
now a major concern for a lot of people, a concern we need to address 
head on.
  For instance, whether the authors of this bill intended it or not, 
there is real concern that this bill could penalize anyone in this 
country who buys or sells something on an installment plan, as a result 
of some language in section 1027.
  As the New York Times put it this morning, and here I am quoting the 
Times, ``this bill gives broad powers to a consumer protection agency 
to regulate almost any business that extends credit, meaning that 
companies like car dealers and professionals like orthodontists who 
allow customers to pay over time could be subject to a new regulatory 
and supervisory regime.''
  Does this mean that some graduate student in Louisville looking to 
buy an engagement ring would now be required to pay a higher interest 
rate, or that the jeweler wouldn't do the deal because this bill would 
create new oversight over any nonfinancial institutions that lend money 
to consumers? What about the parent trying to spread out payments for 
their child's braces? Will they now have to pay for it all upfront? 
Will the orthodontist be willing to expose his or her practice to 
Federal supervision because they allow patients to pay the bill in more 
than four installments?
  I don't know the answer to these questions. But I do like to have a 
good answer if one of my constituents asks me about it. Right now I 
don't. No one can deny that the language of the bill is ambiguous, that 
it lends itself to broad interpretation. So let's tighten it up. And 
why shouldn't we? Why shouldn't we tighten up the language to make it 
crystal clear exactly what

[[Page 6459]]

this bill means and what it doesn't mean?
  The last thing we want is for the little guy to get hurt by a piece 
of legislation that is intended to rein in bankers on Wall Street. But 
that is precisely why we have gotten so many letters of opposition to 
this bill over the last few days from groups like the National 
Federation of Independent Business, the U.S. Chamber of Commerce, 
Americans for Tax Reform, and the National Taxpayers Union.
  That is also why we have gotten so many letters expressing serious 
concerns from groups like the United States Automobile Association, the 
Military Officers Association of America, the National Council of 
Farmer Cooperatives, the Farm Credit Council, the American Council of 
Life Insurers, the Housing Policy Council, the National Association of 
Home Builders, the National Association of Manufacturers, and the 
Fertilizer Institute. The list goes on.
  In fact, the only people who seem willing to come out in support of 
this bill are the executives at Goldman Sachs, the biggest bankers at 
the biggest Wall Street firm of all. The CEO of Goldman Sachs was here 
on the Hill yesterday discussing his firm's role in the financial 
crisis, and the point he made about this bill is that he agrees with 
the President, who said last week that the biggest beneficiaries of 
this bill are on Wall Street.
  So the supporters of this bill may have locked up the support of the 
folks at Goldman Sachs. But Republicans aren't about to rush this bill 
just to make Lloyd Blankfein happy, and not before there's an ironclad 
protection against any taxpayer funding of Wall Street firms like his. 
Americans want to knew that this bill will protect them too. And right 
now, they have got more questions than answers.
  I already mentioned concerns about section 1027. How about section 
1022? It relates to government collection of information through a new 
Bureau of Consumer Protection. Here's what that section of the bill 
says: ``In conducting research on the offering and provision of 
consumer financial products or services.'' It continues: ``The Bureau 
shall have the authority to gather information from time to time 
regarding the organization, business conduct, markets, and activities 
of persons operating in consumer financial services markets.''
  It continues:

       In order to gather such information, the Bureau may make 
     public such information obtained by the Bureau under this 
     section, as is in the public interest in reports or otherwise 
     in the manner best suited for public information and use.

  I have a question: Does having a credit card make you a person 
operating in consumer financial service markets? What if you sell 
something on eBay and someone pays you with their credit card through 
Paypal? Does that make you someone operating in consumer financial 
service market? I am sure it is not the intent of the chairman to give 
the government the authority to collect personal financial information 
on Kentuckians who use Paypal. But why not make it clear?
  These are just some of the questions people are asking once they have 
had a chance to look at this bill. And I am just talking now about the 
unintended consequences. Plenty of other groups have pointed out some 
of the real, practical adverse consequences of this bill on people who 
had absolutely nothing to do with the financial crisis.
  For instance: I have heard from a number of utilities in Kentucky 
that use traditional derivatives as a way of keeping prices low for 
themselves and, by extension, for homeowners and small business owners 
across my state. General Electric employs more than 5,000 people in 
Kentucky, so I want to hear what they have to say about this bill. And 
what they are telling me is that this bill could really hurt them. They 
have got a lot of concerns. They are concerned this bill will increase 
the cost of managing foreign exchange risk associated with their vast 
global supply chain.
  They are concerned about the potential cost increases related to the 
hedging of commodities they use in the manufacturing process. And they 
are concerned about increased hedging costs related to the financing 
they provide to suppliers and retail customers who buy GE appliances 
like washers and dryers and water heaters that are made in Louisville.
  Homeowners and small business owners in Kentucky didn't have anything 
to do with the financial crisis. I am sure none of the Kentuckians who 
work at GE in Louisville had anything to do with it either. But because 
this bill doesn't distinguish between utilities that use derivatives 
for a legitimate use and those who abused them, ratepayers and others 
in my State will almost certainly get hit by this bill.
  These are some of the concerns people are raising about this bill. 
And the fact is, those concerns are only magnified by the recent 
performance of the Democrat majority. I am afraid those who claim that 
this bill wouldn't do any of the things people are afraid of now have a 
higher hurdle to cross after the assurances they gave the American 
people on the stimulus, the debt, and health care. A lot of people took 
Democrats at their word in those debates, and they got burned. Now they 
want more than a verbal assurance that this bill doesn't allow 
bailouts. They want proof.
  I don't think anybody really thinks the Fertilizer Institute is 
responsible for the financial crisis. And I don't think the authors of 
this bill think Kentucky farmers are to blame for the collapse of 
Lehman Brothers. But whether they intended to or not, this bill would 
punish them. And that is not right.
  So Americans want a number of things in this bill fixed. And they 
want more than verbal assurances. At this point, Americans want the 
supporters of this bill to put a highlighter through the relevant 
passages and then tab the pages. Americans expect us to prove we are 
doing what we say we are doing. And after the past few debates, I don't 
blame them one bit. None of this should be viewed as a burden. After 
all, isn't that how the legislative process is supposed to work: major 
legislation is proposed, the American people get to take a look at it, 
they let us know how it would affect them, and then we weigh those 
concerns against the various problems at hand? The authors of this bill 
may believe some of these concerns are misplaced. But they are going to 
have to prove it.
  I yield the floor.

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