Financial Institution Customer Protection Act of 2015
Floor Speech
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Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman and Members, if you listen carefully to my colleague on the opposite side of the aisle, Mr. Luetkemeyer, you would think that the major point of this bill is the Choke Point controversy.
Considerable time was spent by my colleague on the opposite side of the aisle talking about Choke Point. Well, I do not want that discussion to obscure the real problem with this very bad legislation.
H.R. 766 eliminates core provisions of the Financial Institutions Reform, Recovery, and Enforcement Act, or FIRREA, that the Justice Department has used to investigate and prosecute bank fraud. This is what this discussion should be about: bank fraud.
FIRREA has proven to be the Justice Department's most effective tool for holding Wall Street accountable. We hear a lot of talk about Wall Street. We went through 2008 and the subprime meltdown, the bailout, and all of that.
Most of the Members on both sides of the aisle agree that we had to rein in the practices of Wall Street. Here we have a bill today that would basically protect them and take away the very tool that is used in order to make them accountable.
After using FIRREA to secure historic settlements against Wall Street, including a $7 billion settlement against Citibank, a $5 billion settlement against Goldman Sachs, a $13 billion settlement against JPMorgan Chase, and a historic $16 billion settlement against Bank of America, now H.R. 766 seeks to stifle the Justice Department's investigative powers over financial fraud. In fact, there are still ongoing settlement negotiations with banks like Wells Fargo and Goldman Sachs that were announced just this week.
Without investigatory powers and an extended statute of limitations granted to the Justice Department by FIRREA, it would be impossible for us to identify and rectify the fraudulent activity that set us up for a crisis 10 years ago.
Apparently, H.R. 766 supporters believe that actually holding banks accountable for fraud was too much of a burden for them, replacing our system of too big to jail with one where our biggest banks are now too frail to fine.
H.R. 766 also invites the next crisis by imposing burdensome requirements--listen to this--imposing burdensome requirements on the Justice Department's ability to investigate bank fraud, allowing fraud schemes to continue at the expense of consumers and the financial system.
The Justice Department's ability to identify and rout out fraud would be critical in averting future crises, and H.R. 766 would be a free pass to banks that make their money by breaking the law.
That would include banks like Plaza, Commerce West, and Four Oaks, all of which knowingly aided fraudsters, despite the many red flags raised by their financial activities.
At Commerce West in particular, the bank admitted fraud for failing to file suspicious activity reports with regulators even after the bank's own employees determined that one of their customers was routinely submitting fraudulent checks to the bank.
According to the Justice Department's complaint, the bank also failed to heed the warning of other banks that pointed out to Commerce West that some of their customers were fraudulent businesses.
Furthermore, H.R. 766's account closure provisions are a solution in search of a problem as regulators are now forcing financial institutions to close customer accounts.
Every Federal banking regulator has been clear, except for rare cases involving national security or systemic risks. The responsibility for closing accounts is a decision for financial institutions.
Some financial institutions are simply deciding that they would rather lose a customer than invest in the resources needed to ensure that our financial system is not being used for money laundering or other criminal activity.
In order to protect our economy from the next financial crisis, regulators have to have the necessary tools to prevent fraud and protect consumers.
Americans are still reeling from the effects of the financial crisis. We should be in the business of seeking ways to continue to hold banks more accountable for their misconduct, not rolling back the Federal Government's most effective tool for protecting consumers, investors, and taxpayers from bank fraud. Banks that break the law don't deserve get-out-of-jail-free cards.
The administration will veto H.R. 766. I urge my Democratic colleagues to oppose H.R. 766.
I just want to say that, despite yesterday when we had five bills that had been rolled into one that I warned our Members of Congress about because of what they literally did, particularly in terms of allowing corporations to not have to disclose information about the stock that they were giving to their employees, and I talked about how bad that was.
This is worse. This is worse because we are able to call names and to point out banks because we have the information. It is real.
We are able to point out how the Justice Department has been affected in making these banks accountable. So why in the world would we want to take away the Justice Department's tool that is FIRREA? Why would we want to prevent the Justice Department from going after these banks who know they are dealing with crooks and fraudsters?
I would ask for a ``no'' vote on this bill.
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Ms. MAXINE WATERS of California. Mr. Chairman and Members, I would simply like to point out that Mr. Mulvaney just continued in the vein that Mr. Luetkemeyer started out in, obscuring the real point of this bill.
They are going to keep telling you it is all about Choke Point. What they are not going to talk about is taking away the Justice Department's ability to use FIRREA to go after these banks that are committing crimes.
I don't want the Members to be misled. Ask them why they are refusing to talk about the main point of this bill.
I yield 4 minutes to the gentleman from Minnesota (Mr. Ellison).
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Ms. MAXINE WATERS of California. Mr. Chair, I yield an additional 1 minute to the gentleman.
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Ms. MAXINE WATERS of California. Mr. Chair, I yield 3 minutes to the gentleman from Washington (Mr. Heck), a valued member of the Committee on Financial Services.
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Ms. MAXINE WATERS of California. I yield an additional 1 minute to the gentleman.
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Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such time as I may consume.
Again, my friends on the opposite side of the aisle will talk about guns. They will talk about Choke Point. They will talk about unfairness to businesses based on a bank's ability to close accounts. They will talk about everything except the real point of this legislation.
I don't know why, I don't know where it came from, and I don't know who can convince a serious public policymaker that somehow you are to take away the investigative power of the Justice Department, a Justice Department that has proven that it could use FIRREA--that is the Financial Institutions Reform, Recovery, and Enforcement Act--to investigate banks that are guilty of fraud. I don't know where this would come from. Given what we have gone through in this country, starting in 2008, I don't know why any serious public policymaker would want to do that.
What have we witnessed in this country, based on the predatory practices of banks? We have seen whole communities devastated. We have seen foreclosures and people lose their homes. We have seen homes underwater. We have increased homelessness. We have seen the targeting of some of the most vulnerable communities in our country, based on the fraudulent practices of banks.
The Justice Department has a tool, and they are using this tool. Why would any credible Member of Congress want to take away the Justice Department's ability to investigate and to fine these institutions?
No, ladies and gentlemen, this is not about Choke Point. This is not about guns. This is not about any of that other stuff that they are trying to make you believe you should pay attention to.
Every legislator and every public policymaker should ask themselves: Do I want to be a part of ever allowing this institution to once again revert back to the practices that caused people to lose their homes, that threw this country into a recession, that still has us reeling from the negative impacts of those decisions by a bank?
Why would anybody want to take away the Justice Department's investigative powers? In addition to that, this bill will not even allow the Justice Department to exercise its authority to subpoena. Why do you want to do that? It doesn't make good sense.
Again, you can talk about Choke Point all night long. You can describe it as being unfair to businesses, you can talk about what we need to do, but that is not what this is about.
I know why you don't want to talk about it because you have got to be ashamed of it. You have got to be ashamed of the fact that you are leading this institution to do away with investigative powers of the Justice Department.
Let me just say this. The Department of Justice has relied heavily on the powers granted under FIRREA to pursue billions of dollars of mortgage fraud cases since the financial crisis. In these cases, financial firms defrauded the government by knowingly selling faulty mortgages while representing them as high quality.
Without FIRREA, investigations would have stalled and taxpayers would have been left on the hook for even more losses. FIRREA powers were also instrumental in securing the historic $25 billion mortgage servicing settlement.
As many of our colleagues know, there are still many more problems in the mortgage servicing industry, and eliminating this tool would encourage fraudulent practices by mortgage services that end up wrongfully kicking Americans out of their homes.
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Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such time as I may consume.
Let me draw Members' attention to what is being attempted on the opposite side. They keep talking about Choke Point and how they want to save payday lenders and rent-to-own and pawnshops and all of that. I may have some issues with some of that, but that is not what this is about today. Today, this is about the fact that they refuse to tell you what is really in this bill.
They cannot stand up and defend why in the world they would be taking away the Justice Department's ability to investigate bad banks. They cannot tell you why they are ignoring the lessons of 2008 and predatory lending and what the Justice Department has been able to do using FIRREA and investigating and fining and getting settlements.
They cannot tell you why they would ignore the fact that many innocent middle class folks who work every day and who fought hard to make down payments and signed on the dotted line for mortgages didn't know that they were being tricked into signing mortgages that they could never really keep up with and that the interest rates would reset and go higher and higher and they were going to lose their homes.
They cannot defend the predatory lending practices. They cannot defend the fraud. They cannot defend the undermining of the average American family. They cannot defend the fact that Americans lost their homes. So they are going to keep talking about Choke Point and how they have got to protect payday lenders and how they have got to protect pawnshop owners and how they have got to protect rent-to-own and all those businesses they hold so dearly and want to protect.
This really doesn't have anything to do with that. If they want to have a real discussion about Choke Point, we are willing to do that; but, this is not the time to do it.
This is not the time to use this to hide behind the fact that you want to protect the big banks. As a matter of fact, this is so outrageous, it basically says that, instead of the Justice Department or anyone going after the banks, it would protect the banks by saying that you can't go after the banks and you have to protect them and you can't go against them.
I am simply saying over and over again that I don't care how many Members they call up and I don't care how many Members come and talk about Choke Point, somebody needs to tell us why they can't talk about taking away the investigatory powers and the power to subpoena from the Justice Department, a Justice Department that has proven that it is willing to use its investigatory powers in order to deal with these big banks.
So listen very carefully and listen to all this Choke Point stuff that they are trying to ram down your throats. Listen and look them in the eye and see if they can look you back in the eye and defend what they are doing.
Don't allow them to mislead you, Members of this Congress, into thinking that this bill is all about protecting payday lenders and rent-to-own and pawnshop owners and all these businesses that they care so much about.
This is about stripping the Department of Justice of their power to investigate and subpoena. This is about pulling the rug out from under the citizens of this country who have tried to own homes and who have not been protected by their own government until we had reform. This is about saying they don't care what the Justice Department has been able to do to rein in these practices. They are going to come here today with a bill and tell you it is all about Choke Point.
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Ms. MAXINE WATERS of California. Mr. Chairman, I continue to reserve the balance of my time.
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Ms. MAXINE WATERS of California. I yield myself such time as I may consume.
Mr. Chairman and Members, after the Justice Department finally began to use the Financial Institutions Reform, Recovery, and Enforcement Act that we refer to as FIRREA to create some semblance of justice for financial crisis-era bank fraud and misconduct, my Republican colleagues respond by restricting the Department of Justice's most powerful tool for holding banks accountable.
This is an interesting debate that we are having. We are sitting here wondering why it is that not one Member on the Republican side of the aisle who has taken to the floor to debate this bill will talk about FIRREA and will talk about the Justice Department and what you are doing in stripping away their powers.
I know why. Because you know that, if, in fact, you really got up and talked about what you were doing, you would lose all of the votes even on your side of the aisle. This is outrageous. So you are hiding behind Choke Point.
Not one Member on the opposite side of the aisle has the guts to get up and say: I can't do this. I am going to talk about what this bill is really about.
And so they continue to march down here, taking their orders to talk about Choke Point, Choke Point, Choke Point.
No. No. No. This is about stripping the Justice Department of its investigatory powers and its subpoena powers.
FIRREA is the last line of defense between consumers and investors and bank fraud. Central to the DOJ's ability to investigate fraud and to build cases against financial institutions is its subpoena power, power that H.R. 766 singles out for unprecedented and burdensome restrictions.
Instead of bolstering the Justice Department's ability to investigate mortgage fraud, H.R. 766 seeks to actually protect the banks and to insulate them from accountability. Wow. Wow.
Can you just imagine that anyone could go home to their constituents and say: I just voted for a bill that would actually protect banks and insulate them from accountability, I just voted for a bill to strip the Justice Department of its power to investigate?
Bank fraud should be met with the full force of the Federal Government. H.R. 766 is a dangerous step backwards for an economy still reeling from financial crisis-era fraud and misconduct.
Every regulator has been clear that account closures aren't the result of pressure from regulators, but from banks that have decided that, for some customers, they would rather lose their business than investigate any anti-fraud practices to protect our financial system from money laundering.
Look, you have got people who are willing to work on that part of public policy that you would like to see some changes in, but this is not it.
When you couple that discussion to overshadow what you are doing, to strip the Justice Department of its powers to investigate, what you are doing is you are setting up a situation to take us backwards and to harm so many people.
Have you forgotten the lessons already of 2008? Have you forgotten already what this country went through? Have you forgotten that the citizens of this country had to bail out the biggest banks to keep us from going into a depression?
We went into a recession. We tore up communities. We threw people out of their homes. We increased homelessness.
Now you want to come back and give the banks an opportunity to do what got us into trouble in the first place? Well, I can't imagine that you are prepared to defend that.
The common theme throughout H.R. 766 and many of the proposals that, unfortunately, cleared the Financial Services Committee is that, even in the aftermath of the financial crisis, my Republican colleagues would have you believe it is the big banks that are the ones in need of protection, protection from the Consumer Financial Protection Bureau.
Mr. Chairman, I yield back the balance of my time.
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Ms. MAXINE WATERS of California. Mr. Chairman, I would like to thank the gentleman from California who has shown his concern about the Choke Point provisions of the bill. He is absolutely right. Both of these issues are in this bill. We cannot divide it in the way that we are moving forward. And it means that if this bill passes, no matter what the concern may be, the overriding concern must be about stripping the Justice Department of its investigatory power and its subpoena power. It must be about undermining the Justice Department's ability to hold these big banks accountable.
I don't think you can divide this. This is one bill.
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Ms. MAXINE WATERS of California. Mr. Chairman, I claim the time in opposition.
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Ms. MAXINE WATERS of California. Mr. Chairman, Mr. Gosar's amendment is a dangerous amendment to an already highly problematic bill. As the OCC deputy comptroller noted in 2015 testimony before our committee: ``In the rare cases where a customer has engaged in suspected criminal or other illegal activity,'' the OCC ``may order the bank through an enforcement action to terminate the customer's account.''
H.R. 766 creates a national security exception for customer notice, but it leaves the term undefined in a case where the illegal activity does not pose a threat to national security. Mr. Gosar's amendment would potentially force banks to tip off someone engaging in criminal activity, frustrating regulators' oversight of Federal anti-money laundering laws.
Mr. Gosar's amendment exacerbates an already highly problematic proposal, and I would urge my colleagues to oppose this amendment.
Mr. Chairman and Members, again, I just want to point out, since I have time on this amendment, that this bill is not about all of this anyway. They keep focusing on Choke Point, and they come up with these questionable amendments, et cetera, such as Mr. Gosar's.
This is about the Republicans on the opposite side of the aisle stripping the Justice Department of its authority to go after these too big to fail banks and taking away their investigatory powers and their subpoena powers, thus threatening the citizens of this country once again to the kind of predatory lending that helped to almost bring down this economy starting in 2008.
I ask for a ``no'' on this amendment, and I am going to ask for a ``no'' on the bill.
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Ms. MAXINE WATERS of California. Mr. Chairman and Members, I would ask the Members of this Congress to not pay attention to what has been attempted by the opposite side of the aisle.
Again, I challenged them and I asked them to talk about FIRREA. I asked them to talk about the bill that takes away the investigatory powers of the Justice Department. I asked them to explain why they would take away subpoena powers from the Justice Department. I asked them if they remembered what happened when this country went into a recession, almost a depression, because of predatory lending. I asked them did they want to have their name and their vote behind big banks that are guilty of fraud, who have been fined enormous sums of money by the Justice Department because they were found guilty, and I am asking them to talk about this. So this is a distraction. This is obscuring the real bill that is before us.
Forget about this Choke Point part of the bill. We have time to work on that. There are some Members on the opposite side of the aisle that share some of those concerns, but not in this bill. They coupled it with this taking away of the Department of Justice power because they knew that they could somehow divert the attention over to the so-called Choke Point and talk about this administration and talk about guns and talk about payday loans and talk about rent to own and pawn shops and all that.
This is not about small business protection. This is about using the Choke Point argument as a way to divert attention away from what they are really doing.
Ladies and gentlemen, you can't go home and explain to your constituents why you would protect the too big to fail banks, why you would take away the power to make them accountable. They have harmed this country. They have harmed our citizens. They have caused people to lose their homes, and they have increased the homelessness with their predatory lending.
We have reform that we are trying to implement. I know every trick in the book has been played to try to undermine Dodd-Frank and to keep us from having the kind of reform because there are people who are just very close to the big banks and they are not going to cross the big banks. As a matter of fact, they used too much of their career to protect the big banks.
This is an outrage. I want the Members of this Congress to understand, we have got time to have a discussion about Choke Point and all of that. We have Members on both sides of the aisle who would work with you on those issues. This is not it.
You should not have placed this part in this bill. You should not have had to try and make believe that this is all about Choke Point when, in fact, the real big deal in this bill is about how you are going to try to protect the biggest and the worst banks.
We have pointed out to you in this discussion all of the big fines that have been imposed against these banks. Did these banks say, ``No, we didn't do it''? Did these banks say, ``I am not going to accept this. I am going to court, and I am going to fight''? You know they rolled over because they are guilty, and you know that they are.
Please do not be diverted from the real meaning of this bill. This bill is about crippling the Department of Justice and not about Choke Point.
I yield back the balance of my time.
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