Economy Is Not Doing Better

Floor Speech

Madam Speaker, just this morning to a roomful of Members of Congress, Secretary of Treasury Tim Geithner said, and I quote, ``Our economy is doing better.'' Boy, is he out of touch. Let him come to Ohio. Let him see where our people are living and what we are enduring.

Like many communities across our country, our region has been devastated by the irresponsibility of the big banks where he came from. We have local banking institutions that were prudent in their lending and had strict underwriting. They belong to the Federal Deposit Insurance Corporation, and they have for many decades. They adhere to real rules and regulation, and they have regulators in their banks frequently, and they don't look for special privileges or taxpayer bailouts.

Overall, these community banks did not contribute to the downfall of our economy, and they were not propped up by the Federal Government. Why is this important? Because locally owned and operated banks and credit unions create real economic opportunity in their communities across this country. They invest local capital. They fund local, small and medium-size businesses, and they are accountable to their customers. They know them by name.

Right now, in most economically depressed communities, because of what happened on Wall Street and the megabanks, credit is shut down. It's hard for our small businesses to keep their doors open. They don't want money from TARP and the Federal Government like the Wall Street banks. They just want to return to business as it used to be, prudent, responsible, innovative, creating local capital in the marketplace.

But in America, there is no business as usual right now. On Monday, I met with many of these local bankers and credit unions, and what I heard makes me sad and makes me angry, and it makes me troubled for the future of our Nation. One banker told how he worked his way up in one of the big banks and then saw how capital moved away from our community to where that bank was headquartered. He didn't want to leave our community, so he went to work for a local bank, where he has now become the head of that bank.

What's on the horizon for that institution? The FDIC fees that have to be paid by these local banks that didn't do anything wrong are going up astronomically, from maybe $37,000 or $40,000 a year to over $450,000 a year, because of what the big banks did, not because of what they did. Why should our local banks be made to pay the price of the excess of Wall Street?

Credit unions, they told us one that had a $20,000 fee in their share insurance fund. They are going up to over $240,000 this year. That could shut down credit unions across this country. Why? Because the ``too big to fail'' banks are dipping into the coffers. What's happening at the local level is that as these higher fees have to be paid, those local institutions can't make loans.

I will tell you what's going on: A further concentration of our banking system in the hands of too few. Five banks in our country now have 37 percent of the deposits in our Nation. What does that say to you?

When will the price of credit be controlled by the very few? In fact, it is right now. Smaller banks are drying up. The FDIC has had to resolve dozens and dozens of them, and more are on the chopping block. Nearly 100 banks have been resolved this year alone, and the FDIC fund has taken a serious hit. It is going to take a bigger hit. Now they are going to the healthy banks to try to pay for the ones that didn't do it right in the first place.

So, who should step in? Where's Congress? What are we doing? We are diddling at the edges rather than dealing with the reality of what's happening in communities across this country.

You know what? It's time to break up these big financial institutions. We ought to take them into receivership like other Presidents have done in prior years in prior decades. We ought to resolve the loans on their books, and we ought to incentivize the part of our economy and those banks and credit unions that didn't do anything wrong.

That isn't happening. ``Too big to fail'' has to leave our financial vocabulary. It's time to return to Banking 101.

Wall Street was rewarded for bad behavior, and they have been rewarded for the last 15 years. They will do it again, and they are being rewarded again. So what do you think they are going to do again?

No more rewards.

Madam Speaker, the culture of greed and excess has to go if America is to survive this terrible meltdown. The big banks should be taken into receivership, their books resolved, and their burden taken off the rest of us, our financial system and the good actors in it, our taxpayers, so our economy can grow again. Nothing else should be acceptable to the President, the Congress and this country. It's long overdue to stop the billion-dollar bonuses and restore finance as usual in our country.

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