[Congressional Record (Bound Edition), Volume 161 (2015), Part 9]
[Senate]
[Pages 11850-11852]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             DODD-FRANK ACT

  Mr. ENZI. Mr. President, first, I would like to thank the Senator 
from Georgia for his outstanding comments. He is truly a great addition 
to this body and to the Budget Committee, where I have watched him go 
through numbers. I once mentioned that he knew how to balance the 
budget because he had been in business before, at which point he 
corrected me and said: In business, you don't get to just balance the 
budget. He is very correct on that.
  We are at a point where we cannot afford to just balance the budget. 
We have to start paying down some of the debt if we expect our kids to 
ever be able to afford the interest. So I thank him for his comments. I 
am going to pile on with some more comments about some of those same 
things. I want to talk about what I have talked about several times 
over the past 5 years; that is the Dodd-Frank Act, which passed this 
body 5 years ago today, July 21, 2010.
  This mammoth bill, which totaled 2,300 pages, has, 5 years later, led 
to many thousands of pages of rules and regulations. It is estimated 
that only 238 of the 390 rulemakings required by the law have been 
completed--millions of pages, and we still only have 238 of 390 
rulemakings that the 2,300-page bill required. Theoretically, then, 
tens of thousands of pages of more regulations can be expected in the 
coming years--regulations that do not fix too big to fail, regulations 
that unduly burden our community banks and our credit unions, 
regulations that cover a host of industries that did not contribute to 
the financial crisis. And it does compromise the privacy of Americans.
  I would like to take this opportunity to expand on these ideas. First 
of all, I would like to point out that I actually

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read the whole bill. I read it. I highlighted it. I put in colored tabs 
in different sections so I could refer to them easily. Then I talked to 
my colleagues, and I spoke on the floor to raise concerns about the 
bill roping in industries that did not cause the financial crisis, 
about the fact that it did not fix too big to fail. I raised a real 
ruckus about the creation of the Consumer Financial Protection Bureau, 
known as the CFPB, when they were trying to just kind of gloss over it 
and its ability to collect the financial information of American 
citizens without their consent.
  I filed a simple amendment that would have required this Consumer 
Financial Protection Bureau to obtain written permission from consumers 
before collecting their information. Of course, my amendment was not 
allowed a vote and now the CFPB is collecting massive amounts of 
personal financial data. So here we are 5 years later, and hindsight 
has proven that many of the concerns I raised during the consideration 
of this bill were valid.
  I have often said that knee-jerk reactions to legislative form have a 
very real danger of overcorrecting and causing a myriad of problems. In 
fact, some people say that if it is worth reacting to, it is worth 
overreacting to. That is exactly what happened here.
  We did it through a comprehensive bill--2,300 pages. I do not like 
comprehensive bills. The purpose of comprehensive bills is so that they 
are incomprehensible, so that people cannot understand them. The best 
way to legislate is to take things in logical pieces and solve that 
problem in a way that all of America can come along with and 
understand.
  Those problems are unintended consequences when they are in 
comprehensive bills. In correspondence and conversation with folks from 
Wyoming over the years, I have said that I treat all legislation the 
same. I read it and I consider both intended and what might be 
unintended consequences of the legislation. What I am here to talk 
about today are some of the consequences of the Dodd-Frank Act after 5 
years.
  First, there is the too-big-to-fail question. The Dodd-Frank Act was 
supposed to make it so American taxpayers would, according to President 
Obama, ``never again be asked to foot the bill for Wall Street's 
mistakes. . . . there will be no more tax-funded bailouts--period.''
  Dodd-Frank increased capital requirements, it increased liquidity 
requirements, and it has been adding rules and new regulations steadily 
for the last 5 years. Folks who support the law would say all of those 
things are good things and make for a more secure financial sector. 
However, one of the contributors to too big to fail was the 
consolidation of banks and the financial industry, a byproduct of which 
was the reduction of the number of smaller community banks that serve 
small business owners, families, farmers, and ranchers, the people who 
actually know their customers. But thanks to the massive amount of 
rules and regulations, the Dodd-Frank has resulted in the compliance 
costs for community banks and credit unions going up significantly, and 
it increased the likelihood of consolidation. That fails the consumer.
  Smaller community banks struggled to keep up with the flow of 
regulations and compliance costs. For example, since the passage of 
Dodd-Frank, the average compliance cost for larger institutions is 
about 12 percent of operating costs. For community banks, the cost to 
comply with the same regulations, a one-size-fits-all approach is 2\1/
2\ times greater, or 30 percent of the operating costs. That is a big 
bite.
  I was visiting some of those community banks and listened to them 
talk about the different regulations they now had to comply with. One 
of them had made this magnificent chart so that all of their loan 
officers could both follow along and make sure they got all of the 
parts of the procedure that this law had in regulation at that time. 
Now, they had to hire a compliance officer as well.
  They had been able to handle that part themselves before. But after 
they explained all of this to me, I said: Now, let's see. My wife would 
kind of like to expand the kitchen in our house. We have added onto it 
once before. If I wanted to get a loan from you, how long would it take 
me to get the loan? I said: I have a house in Gillette, and I have a 
house in DC, and I have both of them paid for. So we really do not have 
any outstanding debt. How long would that take?
  They said: A minimum of 77 days. Then, of course, there would have to 
be an extra week so that if you decided it was not a good deal, you 
could undo the loan.
  I wanted the loan. I wanted it 77 days before. I had to wait that 
long, and then there is a week for it. But here is another kicker that 
is in the bill. The Consumer Financial Protection Bureau has up to 150 
days to tell me that I made a bad loan and cancel it. Hopefully, the 
construction would already be started by that time.
  Well, I remember when I wanted to do that addition on the house. I 
went to my banker, and I explained to him what I wanted to do. It took 
me a whole day to get that loan--a whole day. Now, it is going to take 
77 days, plus 1 week, and then I guess we have to wait 150 days to see 
if the Consumer Financial Protection Bureau is going to decide that 
they know better than I know.
  My State of Wyoming is one of the most rural in the country. We had 
mostly community banks in Wyoming. I can attest that every visit I have 
had with banks in Wyoming since this law passed has had one main 
subject that remains constant: We are being crushed under the weight of 
these regulations. We are having to make tough choices about the 
services we provide.
  Some of these banks are starting to consolidate with larger banks and 
become branches. Credit unions are not faring any better. According to 
the National Association of Federal Credit Unions, more than 1,250 
credit unions have disappeared since the passage of Dodd-Frank. Of that 
number, over 90 percent had fewer than $100 million in assets, and the 
No. 1 reason they give for having to merge out of the business was the 
inability to keep up with the regulatory burden they face.
  This is one unacceptable consequence of the Dodd-Frank law and one 
folks on both sides of the aisle should be appalled by. Now, equally 
appalling--maybe more appalling--is the importance the Dodd-Frank Act 
afforded to the agency it created, which the Senator from Georgia just 
talked about, the Consumer Financial Protection Bureau or the CFPB.
  Now, this is an agency that really doesn't come under our 
jurisdiction; it actually works under the Federal Reserve and gets, I 
think it is up to 12 percent of the revenues of the Federal Reserve 
now, plus inflation. They will get up to 15 percent, plus inflation. We 
have no say over that. They don't report to us in any way, shape or 
form.
  This agency has grown to over 1,450 employees. It has a facility 
whose offices' renovation budget has spiraled to over $216 million and 
faces almost no accountability to Congress. I don't have enough time 
allotted to talk about all the activities of the CFPB, but make no 
mistake, this agency's reach has increased exponentially over the past 
5 years to the point where it is now taking enforcement actions 
covering telecommunications companies and has broadened its authority 
over the auto industry, which was specifically exempted from the CFPB 
in the Dodd-Frank bill.
  Let me tell you how that happened. I did a bunch of speeches on the 
floor. I was interested in that third section. The first section was 
about the banks, the second was about hedge funds, and the third was 
about the new Consumer Financial Protection Bureau that wasn't going to 
have any control by anybody.
  I found that little paragraph in there that said they have the 
ability to cancel a loan up to 150 days after the bank and the person--
or whomever they are borrowing the money from--and the person receiving 
the money agreed to the loan. They can cancel it. I pointed that out in 
speeches.
  One group of people listened to me. It was the automobile dealers. 
The automobile dealers flooded Washington

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with lobbyists, and they got an exclusion in the bill for automobile 
loans. That is the only exclusion in there. Of course, they are being 
retaliated against now for that, and I will talk about that in just a 
minute too. The CFPB issued a final rule on June 10 that would allow it 
to supervise nonbank companies qualified as larger participants of a 
market for automobile financing, along with a separate rule defining 
certain auto leases as a financial product or service.
  What does this mean? It means the CFPB has expanded its oversight 
powers by saying: Oh, yes, auto leases are a financial product. They 
don't like what they did to us. It is a service, and we are allowed to 
regulate those. So we will just increase our level of oversight over 
this industry.
  In fact, they have even taken a look at some of the loans that have 
been resold by automobile dealers and said those were discriminatory 
because they weren't the same. Well, when you go to the bank to sell a 
loan, you don't get the same deal every day, so that is really not 
discrimination, but according to this group that doesn't have any 
oversight over it, it is.
  On the same day, the CFPB released its auto finance examination 
procedures for CFPB examiners to examine both banks and nonbanks. Keep 
in mind this is one example of hundreds of rules, enforcement actions, 
and other activities this agency is involved in across industries. 
Beyond increasing its incredible oversight reach, the CFPB has also 
engaged in massive data collection dating back to 2011. I spoke about 
this data collection, and the Senator from Georgia spoke about this 
data collection. I spoke about the data collection before the 
confirmation of Richard Cordray to be the Director of the CFPB on July 
16, 2013. I was the only Senator to speak before this vote, and I 
repeated something I said during the debate of the Dodd-Frank Act that 
I think bears repeating again. On May 20, 2010, I said:

       This bill was supposed to be about regulating Wall Street; 
     instead it's creating a Google Earth of your every financial 
     transaction. That's right--the government will be able to see 
     every detail of your finances. They can look at your 
     transactions from the 50,000 foot perspective or they can 
     look right down to the tiny details of the time and place 
     where you pulled cash out of an ATM.

  I talked about some of the data we had at that time. I am, 
unfortunately, going to expand on those comments because the CFPB 
continues to collect massive amounts of data without consent of the 
consumers.
  The Government Accountability Office, GAO, is a nonpartisan, 
independent agency that investigates how the Federal Government spends 
taxpayer dollars. They released an extensive report on September 2014 
detailing the data collection of the CFPB. Here is what they found.
  Of the 12 large-scale collections they reviewed, three included 
information that identified individual consumers. The CFPB said those 
three collections weren't subject to the Dodd-Frank prohibition on 
collecting personally identifiable information.
  What? The CFPB is collecting information on 700,000 auto sales per 
month, 10.7 million consumer credit reports per month, 25 million to 75 
million individual credit card accounts, 29 million active mortgage 
loans, and 173 million total loans, as well as one-time collections of 
5.5 million private student loans and 15 million to 40 million payday 
loans. This isn't the whole list, this is a sample rundown. Let's see, 
they are into the automobile sales, everything with your automobile 
sales, your consumer credit reports, your credit cards, your mortgage 
loans, your total loans, your student loans--and, if you do it, payday 
loans. Again, that is just a sample rundown.
  Let's take a minute to let these numbers sink in. The CFPB collects 
information on 25 million to 75 million credit card accounts on a 
monthly basis. They want to be able to monitor 95 percent of all credit 
card transactions by 2016. I don't know about you, but this is highly 
disturbing, especially in light of the fact that the GAO report found 
that CFPB did not employ sufficient security and privacy protections to 
make sure this data remains safe.
  In summary, the CFPB is collecting sensitive financial information on 
individuals by name, on millions of Americans, some of which has 
personally identifiable information that is supposed to be removed or 
not used, and they don't have the appropriate safeguard to protect this 
information.
  Considering the increase in cyber attacks faced across different 
sectors in our country, including the Federal Government, this 
information is not just troubling, it is terrifying, especially because 
there is no way for a single American to opt out of this collection or 
require notification that their information is being collected and 
stored.
  Let me assure you, it is, and not only that, there is no way for 
Congress to have a say to exert oversight to take a closer look at what 
the CFPB is up to. One thing that is clear to me, every American 
deserves better than this, and after 5 years, I think it is safe to say 
we can do much better than this--and we better do much better than 
this--or we will have what the book ``1984'' suggested is going to 
happen.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Daines). The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. DAINES. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Perdue). Without objection, it is so 
ordered.

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