Economic Growth, Regulatory Relief, and Consumer Protection Act

Floor Speech

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Mr. SANDERS. Mr. President, I wish to thank the young people throughout this country who have the courage to do what the U.S. Congress is not doing; that is, to lead us forward in a way to lower the slaughter we are seeing from coast to coast in terms of gun violence.

The bad news is that people continue to be killed every day. The good news is that the American people have come together around commonsense solutions to lower the level of gun violence we are experiencing. The American people know that we need to expand and improve background checks, that we need to do away with the gun show loophole, and that we need to do away with the straw man provisions. More and more Americans understand that we should ban the sale and distribution of military- style weapons.

In my small State of Vermont between 2011 and 2016, 42 people were killed by guns. Some of them are Lara Sobel, Julie Falzarano, Regina Herring, Rhonda Herring, Molly Helland, Molly McLain, Kevin DeOliveira, Rhonda Gray, Marcus Austin, and Obafemi Adedapo. These are just some of the people who lost their lives to gun violence in Vermont.

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Mr. SANDERS. Madam President, according to the latest Gallup poll, 81 percent of the American people disapprove of the way Congress is doing its job--81 percent. I suspect the other 19 percent are not really paying attention. If you want to know why the American people have so much anger and contempt for what goes on in Congress, it is because, time after time, what we are seeing is Congress under the Republican leadership doing exactly the opposite of what the American people want.

This week could mark a new low for the Republican leadership in the Senate in terms of ignoring what the American people want and doing what they don't want. Today marks the 1-month anniversary of the tragic mass shooting at Marjory Stoneman Douglas High School in Parkland, FL. I just had the opportunity to be outside, in front of the Capitol, with thousands of beautiful, beautiful young people from all over--I think all over the country. The young people are saying to the Congress: Do something about the gun violence.

Everyone knows there is not an easy solution; this is not an easy problem to solve. There are hundreds of millions of guns in this country. There are 5 million assault weapons. The young people are saying: Do something. Have the courage to take on the NRA.

The American people overwhelmingly want to expand and improve background checks. They want to do away with the gun show loophole. They want to do away with the straw man provision. More and more people think we should be banning military-style assault weapons--whatever. The American people want us to do something. I don't see anything happening here. The American people want it. It is not happening.

The American people want us to deal with the high cost of prescription drugs. In the State of Vermont, elderly people are cutting their pills in half. I don't see any legislation to deal with the high cost of prescription drugs, to have the courage to take on the pharmaceutical industry.

The American people, overwhelmingly--Democrats, Republicans, Independents--want to raise the minimum wage to a living wage. I don't see anything happening on that issue.

On issue after issue, the American people want action, and they are not getting it. What they are getting is exactly what they don't want but what powerful special interests do want.

This month marks the 10th anniversary of the collapse of Bear Stearns, one of the largest investment banks in America, whose greed, recklessness, and illegal behavior triggered the worst economic crisis since the Great Depression. What is the response of the U.S. Senate to that? Are we talking about breaking up the large banks that have become much larger? Is that what we are talking about? Are we talking about protecting consumers who are paying 20 percent, 25 percent in interest rates on products they buy at a department store? Are we talking about taking on the payday lenders who are squeezing the lifeblood out of poor people who, in desperation, have to borrow money from them? No, that is not what we are talking about. We are not talking about the need to guarantee healthcare to all people. We are not talking about the affordable housing crisis. We are not talking about the fact that millions of moms and dads in this country can't afford childcare. We are not talking about the global crisis of climate change. We are not talking about our crumbling infrastructure, our rigged trade deals that have resulted in the deindustrialization of America. That is not what we are talking about.

What we are talking about at this particular moment, right here in the U.S. Senate, is the deregulation of some of the largest banks in America, some of the very same banks that nearly drove the economy off a cliff in 2008. That is what we are talking about.

Just last week, the Congressional Budget Office told us that the legislation on the floor right now will ``increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail.''

We are not talking about protecting consumers. We are not talking about breaking up large banks. We are not talking about taking on the power of Wall Street.

What we are talking about is deregulating some of the very same banks that drove this economy into the worst economic downturn since the Great Depression. In other words, this legislation will make it more likely that we will see another financial crisis, another taxpayer bailout, and massive dislocation of our economy.

What CBO tells us is that this legislation will increase the deficit by more than $450 million over the next decade--$450 million. This bill, which benefits some of the largest banks in America, will cost us over $450 million. Who is going to pay for that? The big banks? No. It will be the American taxpayers who will be picking up this tab.

The question we have to ask ourselves, which we don't very often-- although the American people, I think, understand this emotionally in their guts--is this: How does it happen that a bill like this gets to the floor while we are not dealing with the issues the American people are concerned about, whether it is gun safety, whether it is DACA and protecting the 1.8 million young people who are eligible for that program, whether it is the high cost of prescriptions? How does this particular bill get to the floor of the Senate? The answer is pretty obvious. Follow the money.

Since the 1990s, the financial sector has given more than $3.2 billion in campaign contributions. Let me repeat that. Since the 1990s, the financial sector--Wall Street, other parts of the financial sector--has given over $3.2 billion in campaign contributions. Last year alone, the financial sector spent over $200 million on lobbying. That is why Congress is spending day after day trying to make life easier for large financial institutions while continuing to ignore the needs of working families.

Instead of listening to lobbyists in Washington, maybe, just maybe--I know it is a very radical idea, but maybe, just maybe, we might want to listen to the American people. The American people believe, as I do, that we should strengthen, not weaken Wall Street regulations.

Now is not the time to be talking about deregulating large financial institutions. Now is the time to take on the greed and power of Wall Street, break up the large financial institutions in this country, and stop big banks from ripping off the American people by charging outrageous and usurious levels of interest rates. That is why I have submitted two amendments to this bill that I would like the Senate to vote on this afternoon.

The first amendment would break up large financial institutions so that the taxpayers of this country will never have to bail them out again. The second amendment would establish a 15-percent cap on the interest rates private banks charge their customers on credit cards and other consumer loans.

Before I talk about these amendments, let's be clear. Fraud is the business model of Wall Street. It is not the exception to the rule; it is the rule. Since 2009, major banks in this country have been fined more than $200 billion for reckless, unfair, and deceptive activities. By the way, those fines take place within a very weak regulatory climate, but here are just a few examples of the kinds of activities that large banks have engaged in.

In August 2014, Bank of America paid $16 billion to settle charges that it lied to investors about the riskiness of the mortgage-backed securities it sold during the runup to the financial crisis.

In November 2013, JPMorgan Chase settled for $13 billion for lying to Fannie Mae and Freddie Mac about the quality of the mortgage-backed securities it sold them. Settlement documents revealed how every large bank in the United States committed mortgage fraud.

In April of 2016, Goldman Sachs reached a $5 billion settlement for marketing and selling fraudulent mortgage-backed securities that were the foundation of the housing crisis.

In July of 2014, Citigroup reached a $7 billion settlement for mortgage fraud. Then-Attorney General Eric Holder said that Citigroup's ``activities contributed mightily to the financial crisis that devastated our economy in 2008.''

If you are thinking that the illegal behavior of Wall Street executives was limited to the housing crisis, that it was a one-time thing, guess again. Let me give some more examples.

In May of 2015, five banks, including JPMorgan Chase and Citigroup, paid $5.4 billion in fines after pleading guilty to ``a brazen display of collusion and foreign exchange rate market manipulation,'' according to then-Attorney General Loretta Lynch.

In March of 2014, the FDIC accused 16 large banks, including Bank of America, Citigroup, and JPMorgan Chase, of fraud and conspiracy in an epic plot to manipulate bank-to-bank interest rates that underpinned at least $350 trillion in global financial transactions.

In April of 2011, Wachovia was fined for laundering billions of dollars in illegal drug money. The Federal prosecutor said, ``Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations.'' That was from the Federal prosecutor. The fine was less than 2 percent of the bank's $12.3 billion profit.

On and on it goes. Mortgage fraud, money laundering, currency manipulation, bribery, conspiracy, rate tampering, and collusion are the routine practices of Wall Street; they are not the exception. This is their business model.

Our country can no longer afford to tolerate the culture of fraud and corruption on Wall Street. Let us never, ever forget--although, I fear many people have already here in Congress--that during the financial crisis of 2008, the American people were told that they needed to bail out huge financial institutions because those institutions were too big to fail. Do people remember that? They were just too big to fail. If they had gone down, the whole economy would have gone down with them. Yet the four largest financial institutions in this country--JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo--are, on average, 80 percent larger today than they were before we bailed them out. Today, they are 80 percent larger than they were before we bailed them out because they were too big to fail. Does that make sense to anybody? Left alone, that is not even an issue that will be talked about here on the floor of the Senate.

Incredibly, since the financial crisis, JPMorgan Chase has increased its assets by more than $1 trillion. Bank of America has seen its assets grow by more than $800 billion. Citigroup has grown by over $547 billion. After Wells Fargo acquired Wachovia, it nearly tripled in size.

No single financial institution should be so large that its failure would cause a catastrophic risk to millions of Americans or to our Nation's economic well-being. No single financial institution should have holdings so extensive that its failure would send the world economy into crisis. If an institution is too big to fail, it is too big to exist, and we should break it up.

Let me be very clear. We should not just be concerned about the danger these institutions pose to taxpayers. The enormous concentration of ownership within the financial sector is harming the middle class and damaging the economy by limiting choices and raising prices for consumers and small businesses.

Today--and it is important that people understand this, but unfortunately it is not an issue that is discussed at all, not here in Congress and not much in the media--the six largest banks in America have over $10 trillion in assets, equivalent to 54 percent of the GDP in America. When we talk about having the United States move in the direction of an oligarchy, when we talk about a handful of institutions and billionaires controlling the economic and political life of this country, this is what we are talking about.

Let me repeat. The six largest banks in America have over $10 trillion in assets, equivalent to 54 percent of our GDP. The top six banks hold more than half of all credit card debt, control over 90 percent of all bank derivatives, underwrite about a third of all mortgages, and control over 40 percent of all bank deposits.

If Teddy Roosevelt were alive today, I have a sense about what he would be saying. He would say break them up, and he would be right. That is exactly what my first amendment would do.

Specifically, this amendment would require the Federal Reserve to break up any financial institution whose total exposure is greater than 2 percent of our Nation's GDP over the next 2 years. These banks would include JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, Bank of America, Morgan Stanley, U.S. Bancorp, PNC Financial Services, Capital One, and the TD Group--financial institutions that have a combined total exposure of more than 77 percent of our Nation's GDP. None of these institutions would be able to receive a taxpayer bailout from the Federal Reserve or gamble with the federally insured bank deposits of the American people. Under this amendment, no financial institution could have a total financial exposure above $398 billion.

Call me old-fashioned, but I believe the function of banking should be boring. The function of banking should not be about making as much profit as possible in gambling on derivatives and other esoteric financial instruments. The function of banking should be to provide affordable loans to small businesses in order to create jobs in the productive economy. The function of banking should be to provide affordable loans to Americans to purchase their homes and their cars. Wall Street cannot be an island unto itself, and I hope very much that my colleagues will support this important amendment.

Not only do we have to break up these very large banks, but we also have to stop them from ripping off the American people by their charging outrageous interest rates and fees, and that is exactly what my second amendment would do.

Incredibly, since the Wall Street crash, credit card companies have raked in over $1.2 trillion in revenue from interest and fees they charge consumers, including over $160 billion in 2016 alone. That is unacceptable. At a time when the American people hold a recordbreaking $1 trillion in credit card debt and desperately need some relief on that debt, my second amendment would establish a national usury rate of 15 percent on credit cards and other consumer loans.

In America today, incredibly, millions of our people are now paying credit card interest rates of 20, 25, or even 30 percent. I am not just talking about the payday lenders who are acting in a way that is totally unbelievable in ripping off the poorest people in our country. Let's be clear. When credit card companies charge over 20 percent in interest on credit cards, they are not engaged in the business of making credit available; what they are involved in is extortion and loan sharking. That is what they are engaged in.

Interestingly enough, if you read the religious tenets of the major religions throughout history, whether it be Christianity, Judaism, or Islam, what you will find is a universal objection and disgust to usury. This has existed for thousands and thousands of years. People know that it is immoral to lend money to poor people, struggling people, and then charge them excessive interest rates. That is in the religious teachings of Christianity, Judaism, Islam, and other religions.

In the ``Divine Comedy,'' Dante reserved a special place in the Seventh Circle of Hell for people who charged usurious interest rates. Today, we don't need the hellfire and the pitchforks, and we don't need the rivers of boiling blood, but we do need a national usury law that caps interest rates on credit cards and consumer loans at 15 percent.

Despite the fact that banks can borrow money today at less than 1.5 percent from the Fed, the average credit card interest rate today for consumers is now 16.84 percent. Borrow money at 1.5 percent from the Fed, and then charge consumers an average of 16.84 percent.

Further, if you get a credit card from a store like Macy's, Kohl's, Lowe's, or Sears, interest rates are even higher. Stores like these are charging customers an average interest rate of 26 percent, and many of the stores rely on these high interest rate cards for more than a third of their revenue. They are making money not just by selling clothing or washing machines or shoes; a substantial part of their profit scheme comes from the high interest rates they are getting on these financial transactions. What that means is, if you buy a $500 refrigerator from Lowe's, Home Depot, or Sears on one of their credit cards, you will likely owe an additional $130 in interest on a $500 refrigerator. How is that? Do you think that is an issue we might want to talk about just for a moment? I know the consumers of this country don't pour hundreds of millions of dollars into lobbying or billions of dollars into campaign contributions. I understand that. But maybe, just maybe, we might want to remember the folks back home.

Establishing a usury law is not a radical concept. Up until 1978, about half of the States in our country had usury laws on the books that capped credit card interest rates, but those States' interest rates were obliterated by a 1978 Supreme Court decision, that of Marquette National Bank v. First of Omaha Service, which concluded that national banks could charge whatever interest rates they wanted if they moved to a State without a usury law. So all of these credit card companies moved to South Dakota. They moved to Delaware, which had no interest rate caps, and they charged people in Vermont or in Kansas--or in every other State in the country--interest rates of 20 to 30 percent.

This has to stop. The American people are sick and tired of being ripped off by the same financial institutions they bailed out 10 years ago--what a world. We bail out the crooks-- taxpayer money bails them out--and they charge the same people who bailed them out 20 to 30 percent interest rates on loans.

This amendment simply applies the same statutory interest rate cap on credit cards that Congress imposed on credit unions in 1980, capping interest rates at 15 percent, except under extraordinary circumstances. In other words, if you get a credit card through a credit union, you are going to be paying, in almost every case, no more than 15 percent. That is mandated by Federal law. By and large, that law has worked for about 40 years. Unlike big banks, credit unions do not come begging the American taxpayer for huge bailouts. Ten years ago they didn't come for a huge bailout. Credit unions have survived and thrived on a 15-percent cap, and the time has come to extend that cap to private banks as well. There is nothing radical about that. It exists for the credit unions in this country, and it should exist for the large banks.

There has even been support for this concept in the Senate. In 1991, former Senator Al D'Amato offered an amendment to cap interest rates at 14 percent that passed on a vote of 74 to 14. It was not a radical idea, and it passed by a huge vote in 1991.

Here is what Al D'Amato, the Republican chairman of the Senate Banking Committee, said in 1991:

Fourteen percent is certainly a reasonable rate of interest for banks to charge customers for credit card debt. It allows a comfortable profit margin but keeps banks in line so that interest rates rise and fall with the health of the economy.

That was an accurate statement in 1991. It is even more accurate today.

Let's be clear. Credit cards are no longer used just to buy luxury items. We all know that. All over this country, people are buying their groceries, their food, and other basic essentials with credit cards. Commuters are paying for the gas they put into their cars on their credit cards. Young people are paying their college expenses with credit cards.

According to the Federal Reserve, 44 percent of the American people could not pay for a $400 emergency expense, like a car accident, if they could not charge it on their credit cards or borrow money from a payday lender, a friend, or a family member. That is the reality of America today. It is not a reality we discuss here in the Senate, but that is the reality, nonetheless.

Given that reality, it seems to me that if we are going to respond to the needs of the American people, we need to deal with the issue of usury and stop large financial institutions from ripping off the American people.

2114 and the Sanders amendment No. 2155; further, that the Senate vote on the Sanders amendment No. 2114 without intervening action or debate; and that following disposition of the Sanders amendment No. 2114, the Senate vote on the Sanders amendment No. 2155.

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Mr. SANDERS. Madam President, I am distressed, although not surprised, by the objection. Apparently, the consumers of this country don't have the financial support to get their concerns onto the floor. So apparently we are not going to be discussing these items.

Madam President, I raise a point of order that the pending measure violates section 4106 of H. Con. Res. 71, the concurrent resolution on the budget for fiscal year 2018.

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Mr. SANDERS. Mr. President, I ask my colleagues for support on the point of order, not only from the deficit perspective but to tell the Republican leadership here in Congress that we want a serious debate on the serious financial issues facing the American people; that we want the ability to bring forth amendments, not just my amendment--there are a lot of good amendments on both sides--that at this particular moment, rather than just deregulating some of the largest banks in America, we need to protect consumers, we need to protect ordinary Americans, and we need to have a real debate. So I would hope very much that Members of the Senate would support my point of order.

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