Economic Growth, Regulatory Relief, and Consumer Protection Act--Motion

Floor Speech

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Ms. WARREN. Mr. President, I want to commend Senator Brown for leading the fight to oppose rollbacks for Wall Street banks. He has been tireless in the fight on behalf of Ohio families and on behalf of families all across this country, and I thank him very much for his work.

This is a tough fight. This week, nearly 10 years to the day after we first discovered that big banks crashed our economy, Washington is about to take many of those same giant banks off the government watch list. I doubt that this makes any sense to any of the millions of Americans who experienced firsthand the economic horrors of the financial collapse. Oh, but it makes perfect sense in Washington, where swarms of lobbyists seem to have the power to erase politicians' memories.

The Senate is debating a bill that would roll back the rules designed to protect consumers and prevent another economic meltdown. Yesterday I talked about how this bill scraps a lot of important consumer protections for American families buying homes. In addition to squeezing consumers, this bill also loosens our hold on some of the very same giant banks that wrecked our economy.

Ten years ago, a bunch of enormous banks got giant bailouts, while American consumers got a punch in the gut. The excuse in Washington was, well, these banks were so interconnected with one another and with the overall economy that the failure of one could bring down the rest of the system too. Too bad, they said, we have to bail them out. Individual families, however, could be crushed underfoot; they weren't big enough to be worth saving by Congress.

Congress passed a huge bailout, but to keep this from ever happening again, Congress decided to put the small number of American banks that control more than $50 billion in assets--this is about 40 of the largest banks in the country--on a watch list. Those banks would be subject to tougher Federal oversight and would be subject to some stronger rules to stop them from bringing down the economy again. A small bank in Adams, MA, would be regulated one way, and a giant bank, with offices around the country and around the globe, would get a much closer look. That makes real sense.

If this bill passes, Washington will scrap those rules for 25 of those enormous banks. Under this bill, a bank that controls up to a quarter of a trillion dollars in assets and has offices around the country and around the globe will follow the same rules and regulations and have the same oversight as a tiny little bank in Adams, MA. That is great if you are a quarter-of-a-trillion-dollar bank but not so great for anyone else.

This bill isn't about restrictions on asset measures and investments. It is not about appropriate leverage ratios and proprietary trading. It is about keeping hard-working American families from getting crushed by another financial crisis. It is about a Congress that isn't here to do the bidding of quarter-trillion-dollar banks. It is about a Congress that is supposed to be working for the American people.

Right after the financial crisis, before I ever thought about running for the Senate, Congress put me in charge of an independent panel that was supposed to police the bailout money. We held hearings around the country to talk to people who had been punched in the gut by the financial crisis.

I will never forget one witness I met at a hearing in Las Vegas. His name was Mr. Estrada. He was a father of two little girls, and he wore a jacket over his T-shirt. He had on a red U.S. Marine Corps baseball cap. He and his wife both worked. They stretched their budget to buy a home that would get their girls into a good school, and the house was right across the street from their school. He was very proud of his house. When payments on their mortgage jumped, Mr. and Mrs. Estrada fell behind. He tried to negotiate with the bank, thought that the bank had arranged a settlement, and then, poof, the house was sold at auction.

``So at the end,'' he said, the bankers ``tell me that I have fourteen days to get my children out of the house.''

Mr. Estrada explained what happened next:

My six-year-old came home the other day with a full sheet of paper with all of her friends' names on it. And she told me that these were the people that were going to miss her because we were going to have to be moving. And I told my daughter, I says, ``I don't care if I have to live in a van. You're still going to be able to go to this school.'' I'm trusting in God that we're going to be able to be back into this home again.

Several times while he testified, Mr. Estrada paused to try to get control of himself, and his pain and desperation seemed to push all the air out of the room.

I am here today to ask who in the U.S. Senate will fight for Mr. Estrada? Who will fight for the millions of other Americans who paid the price because big banks gambled with the economy and lost? I am here to fight for everyone who in 2008 had to tell their children: Pack up your toys because we have to move. I am here to fight for every American who worked a lifetime, did everything right, saved for retirement, only to watch their savings go up in smoke. I am here to fight for every small business owner who had to shut their doors after years of long hours and sweat and hope and tell their employees not to come back the next day. I am here to fight for those hard-working employees who lost their jobs. I am here to fight for all those Americans who kept fighting through the crisis, no matter how hard it was, who kept pushing, and who, years after corporate profits rebounded and the banks were riding high on Wall Street again, finally got their families back on their feet. They are who I am fighting for.

On the other side, there is an army of bank lobbyists who are fighting for some of the biggest banks in this country. Now, that is not what they are telling you. They will tell you: Oh, this isn't about big banks at all. The lobbyists swear up and down that they are fighting for small banks--banks that aren't risky and didn't cause the financial crisis--and they will make up all sorts of false claims about how the banks are struggling under these new rules, never mind that banks of all sizes are literally making recordbreaking profits. Give me a break.

This bill is about goosing the bottom line and executive bonuses at the banks that make up the top one-half of 1 percent of banks in this country by size--the very tippy, tippy top. Your local community bank doesn't have a quarter of a trillion dollars in assets. Your local community bank doesn't own the naming rights to a stadium or a ballpark. This bill is designed to help a handful of giant banks that together control more money than the nominal GDP of more than 100 independent nations on planet Earth. These are not small banks, and the idea that these wealthy and powerful banks need Congress to step in and protect them from having to follow some commonsense rules would be downright laughable if it weren't so dangerous.

How big and important are these banks to the financial system? Just look at what happened in 2008. During the financial crisis, some of the very same big banks that will be deregulated by this bill sucked down nearly $50 billion in taxpayer bailout money. That is taxpayer money-- money that could have gone to building roads or building bridges or building schools or medical research, but that money instead went to propping up big, failing banks. Now the Senate wants to turn loose those big banks again.

It is not just the bailouts. Banks with less than a quarter of a trillion dollars in assets helped cause the financial crisis in the first place. Remember Countrywide? In its 2006 annual report, right in the heart of the housing boom, Countrywide reported that it had $199 billion in assets, which would put it right smack in the middle of the pack of banks that would be taken off the watch list.

Countrywide made billions of dollars by scamming consumers. At its peak, it was the biggest mortgage lender in the country. It was also a subprime specialist--an expert on trapping people into tricky loans that they didn't understand and couldn't afford. Countrywide was obsessed with making as many loans as possible and squeezing out the competition. They gobbled up fees and downpayments and then sold those risky loans before they blew up. Wall Street gobbled up those loans, packaged them, and sold them on down the line just as quickly as Countrywide could make them.

How could this happen? How could it happen? One reason is the Feds had been really easy on Countrywide. In fact, Countrywide was allowed to pick its own regulator--the Office of Thrift Supervision, which cuddled up so close to these banks that it was supposed to be policing that after the financial crisis, Congress actually abolished the regulator.

Eventually, Bank of America bought the bank at a bargain price, and its owners lost money on the Countrywide deal. Poor Bank of America. Of course, that was nothing--nothing--compared to what people with retirement accounts lost when their investments tanked. It was certainly nothing like what Mr. Estrada and his little girls suffered because banks like Countrywide pushed off mortgages with hidden fees or exploding payments on their little family.

Countrywide's scam mortgages were one of the main causes of this financial crisis. If Countrywide were still around today, this bill would make it easier for them to escape government oversight, and that is just plain reckless.

We know banks of this size can help bring down the financial system. We know banks of this size demand billions of dollars in taxpayer bailouts when things go wrong. That should be the end of the conversation, but it isn't, not here in Washington.

Consider this: The banks that are being deregulated under this bill have done nothing--nothing--to earn our trust and deference since the financial crisis. Instead, these banks have engaged in breaking the law left and right. Let's talk about a few of them.

Take SunTrust. SunTrust has $208 billion in assets and so would be deregulated under this bill. They would be cut loose. In 2014, SunTrust agreed to pay $320 million to settle claims that it misused bailout money that was supposed to help distressed homeowners. The law enforcement agency that led this investigation said that the bank literally took homeowners' applications to modify their mortgages, tossed them in a room, and ignored them. There were so many applications that the floor in that room buckled under the weight of the documents. Think about that. They got almost $5 billion in taxpayer bailout money, they promised to help homeowners, and then they just tossed application forms for that help onto a pile that was so big that it made the floor buckle. And now this Congress is offering to help loosen the oversight on that bank.

How about Santander Bank. Santander has $132 billion in assets. They could be cut loose by this bill. Less than a year ago, Santander was nabbed by the attorneys general of Massachusetts and Delaware for funding auto loans it knew its customers couldn't repay, using paperwork they knew was doctored--pretty brazen fraud. Now this Congress is offering to help loosen oversight on Santander as well.

Then there are the financial institutions that have been caught discriminating against customers.

Ally Financial has $164 billion in assets. They would be cut loose by this bill. In 2013, Ally Financial paid $98 million to settle charges that it discriminated against minority borrowers in providing auto loans. The scam was actually pretty straightforward: Charge African Americans and Latinos more than White people. The scale was huge-- 235,000 non-White borrowers on average paid 200 to 300 bucks more than White borrowers with similar credit profiles. Now this Congress is offering to help loosen oversight of this bank as well.

Then there are the banks that cheated investors. Barclays U.S. has $175 billion in assets. They could be cut loose by this bill. In 2015, Barclays was among the handful of banks that were charged record fines by the Federal Reserve for manipulating foreign exchange markets. Barclays traders colluded with traders from other banks to share intel and to push the market up or down in whatever direction profited them, and now this Congress is offering to help loosen oversight on Barclays.

Last year, the Fed caught BNP Paribas USA in the same game. BNP Paribas has $146 billion in assets, and they could be cut loose by this bill. Now Congress is offering to help loosen oversight on BNP Paribas.

Finally, there are the banks that got caught violating sanctions. The Bank of Tokyo Mitsubishi has $155 billion in assets. They could be cut loose by this bill. In 2013, the Bank of Tokyo Mitsubishi settled with the New York Department of Financial Services for $250 million over charges that it cleared tens of thousands of transactions. DSF estimated that the bank wired more than $100 billion to countries that were under U.S. sanctions, including Iran, Sudan, and Burma. The bank specifically tried to evade sanctions by telling employees to leave destination information out of the wire instructions of money going to those countries so they could fool the regulators. Now this Congress is offering to help loosen oversight on the Bank of Tokyo Mitsubishi.

Let's pause on this one. Washington thinks this bank needs less oversight. A year after it got caught funneling money to dangerous regimes and then trying to cheat rather than fix the problem, a State banking regulator was so alarmed by this that they actually put an independent monitor inside the bank to keep an eye on them. Now Republicans and Democrats have decided this is a bank we can trust.

This is nuts. These are banks that taxpayers bailed out 10 years ago. They have cheated customers, cheated communities, cheated markets, and endangered our national security, and still Republicans and Democrats are joining together to loosen oversight over these banks.

So what is this all about? What is it really all about? You will not hear this coming from the supporters of this bill, but it is the truth. It is about letting these banks snap up smaller banks. It is about more consolidation in the banking industry. It is about goosing banking profits and expanding executive bonuses.

It sure as heck is not about increased lending. These banks are sitting on mountains of cash that they could lend at any time. Just look at their profits. BB&T made more than $2.25 billion. SunTrust pocketed a cool $2.3 billion. M&T clocked in at $1.3 billion. I could go on and on.

In fact, instead of lending more money, these banks have been plowing their massive earnings into stock buybacks. Just last month, M&T Bank announced it was spending an additional $745 million to repurchase stock. A few weeks later, Fifth Third authorized buying back $3 billion in stock. Every single one of those dollars could have been put to new small business loans or it could have been put to home mortgages. Instead, they went to goosing the banks' stock price and putting bigger bonuses in executives' pockets. Does anyone really think that if the banks have even more money to burn they will completely change course and pour that money into lending? To ask the question is to answer the question.

These banks aren't exactly acting like they are starving for cash, at least not when they send their executives' paychecks. In 2016, the head of Regions made $14 million all in. The CEO of Huntington, almost $9 million, not including almost another quarter of a million dollars that the company spent to cover the CEO's personal use of its jet. The CEO of Keycorp made $7.1 million. The CEO of CIT Group made the same--up from $3.2 million the previous year.

That is not all. The good times are rolling at these banks. Zions Bank held a swanky party to kick off the Sundance Film Festival this year with a cute little hot chocolate bar. American Express just opened a shiny new regional headquarters building which cost $200 million.

If this law passes and if these bankers, sitting around a shiny new table in their gorgeous new headquarters, decide to gamble just a little bit more, just like they did in the lead-up to the financial crisis, regulators may not even know it. If lying back in their plush seats of their corporate jets they cook up some kind of risky, complicated investment that nobody understands until after it goes bad, regulators probably will not catch it in time. If their bets fail, these more dangerous banks are more likely to crumble and more likely to bring the rest of the economy with them.

This is madness. This is greed run wild. These rules have kept us safe for almost a decade, even as the same banks have chomped at every regulation and tried to evade every rule. Now Washington is about to make it easier for the banks to run up risk, make it easier to put our constituents at risk, and make it easier to put American families in danger, just so the CEOs of these banks can get a new corporate jet and add another new floor to their shiny corporate headquarters.

Despite everything they have already done to cheat their customers and endanger the financial system, those big banks will always have their advocates here in Washington. What about Mr. Estrada, and what about the millions of working Americans like him who want Washington to think about them for a change? Mr. Estrada can't afford to hire a lobbyist and he can't cut a $1,000 campaign check and he can't host a fundraiser at a DC steakhouse. The result, it seems, is that every Republican in this Chamber--and far too many Democrats--will lie down with the banks and ignore Mr. Estrada and his two little girls.

We should be working for people like Mr. Estrada and not for the big banks. Mr. Estrada earned it; the big banks did not.

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