Start Of The Financial Crisis

Floor Speech

The SPEAKER pro tempore. Under a previous order of the House, the gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.

Ms. KAPTUR. Mr. Speaker, today marks the 1-year anniversary of the fall of Lehman Brothers. Just prior to that, former Treasury Secretary and former Goldman Sachs executive Hank Paulson; Fed Chairman Ben Bernanke; and then-President of the Federal Reserve Bank of New York and now Treasury Secretary, Tim Geithner, bailed out Fannie Mae, Freddie Mac, and orchestrated the first of multiple tranches of taxpayer money to AIG.

Some mark the fall of Lehman as the start of our financial crisis, but it started long before. It started on Wall Street, the very place that President Obama gave his financial regulatory reform speech today. The President stated, Restoring a willingness to take responsibility--even when it is hard--is at the heart of what we must do. Very carefully worded, Mr. President. But what real reform will assure it?

Willing to take responsibility. Mr. President, Wall Street has responsibility for the greed they bred, for ripping off American taxpayers and taking exorbitant profits, destroying anything and anyone in its path, and then taking more bonuses and continuing to live their high life.

Wall Street will never willingly and openly accept its responsibility for their role in our financial system's downfall. It's our responsibility to hold them accountable.

It is too late to ask Wall Street to play nice and make reforms. They had their chance, and they blew it. You can be sure they are going to pay millions to lobbyists and PACs to protect their bonuses, loopholes, their safety nets, and the current structure of banking in this country.

It's time to face down Wall Street and stand up for Main Street. The time spent waiting for Wall Street's willingness to change is over. The results of the taxpayer bailout are clear: More profits for Wall Street, plus massive bonuses, while foreclosures skyrocket across this country.

Wall Street had its chance to open credit lines to business, as well as to direct funds they got from the taxpayers to help millions of families facing foreclosure work out those loans, but instead they took the money for themselves and racked up huge profits in the last quarter.

Wall Street had its chance to be responsible as stewards of the tax dollars they got. They failed. They didn't even try. Wall Street banks cannot even tell us where the TARP dollars, that is, the taxpayer dollars, went.

The arms of their businesses which service loans are moving at a snail's pace to help people find ways to work out their mortgages. Why? Because they can make more money when loans are delinquent. The pace of loaning to businesses and people is almost stuck. What are fast and furious are the payouts of bonuses and profits.

Wall Street executives like Lloyd Blankfein of Goldman Sachs are waltzing around the changes they should make around compensation and bonuses, but talk is cheap because it costs them nothing. It's a good press release. Name me one Wall Street money-center bank that has restructured its compensation structures. Wall Street is fighting to have custom credit default swaps and other derivative instruments remain unregulated in the coming reforms.

This moment in history marks the time for each Member of Congress and public servants at the FDIC, the SEC, the Federal Reserve, the Treasury, and associated regulators to act and create the kind of reform that creates a credit system which stands strong for generations and contains moral hazard.

Will America allow itself once again to be bought out by Wall Street? Or will we stand together thoughtfully, deliberately to empower regulators and to reform this system with a new banking system that respects communities, encourages savings, assures sound credit? Will we break up the megabank trusts or continue to allow the concentration of financial power in the few greedy hands that are holding it today? Will we move forward with a stronger, more creative, more prudent, more sound community-oriented financial system again?

It's time to work on a bipartisan basis to do this. We can't race. We have to debate real financial reform here, not cosmetic bills that are brought up on this floor. We must share the rationale behind reform and make it real. And we must shift the balance of credit power from Wall Street back to Main Street and the American people.

The challenge is crystal clear. The question is: Do we have the will to do it here--to create a financial regulatory system again for the betterment of all people in our Nation, to strengthen community lending and sound and prudent credit practices at the local level and, in turn, the world's financial system? The jury is out.

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