Financial Regulatory Reform

Floor Speech

Mr. SANDERS. Mr. President, a front-page story of the New York Times today points to the fact of the enormous power of big money in terms of financial reform. They say:

With so much money at stake, it is not surprising that more than 1,500 lobbyists, executives, bankers and others have made their way to the Senate committee that on Wednesday will take up legislation to rein in derivatives. .....

When Congress deregulated Wall Street and allowed them to do pretty much anything they wanted to do--which brought us to where we are today; i.e., a massive recession--they spent, over a 10-year period, $5 billion--$5 billion--in order to work their way on Congress.

Last year, as we began to address financial reform, they spent $300 million. So the issue we are debating now is not whether Congress will regulate Wall Street, it is whether Congress will continue to be regulated by Wall Street.

Their power is extraordinary. Their money is unlimited. If there was ever a time in American history where the Senate had to start standing up to big money interests and represent the needs of ordinary Americans, this is the time. The American people are looking.

Let me just touch on four issues that I think are key, if we are serious--underline ``serious''--about financial reform.

No. 1, we have to break up the huge financial institutions which are at the cause of the crisis we are in and which exert so much power over our economy. The four major U.S. banks--Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo--issue two-thirds of the credit cards in this country, write half of the mortgages, and collectively hold $7.4 trillion in assets, about 52 percent of the Nation's estimated total output last year. Despite the fact that we bailed these banks out because they were too big to fail, incredibly, three out of four of these institutions are now larger today than they were when we bailed them out.

Enough is enough. I am joined as a progressive by many conservatives who understand that we cannot continue to have that concentration of ownership, not just in terms of the liability to the American people in terms of too big to fail but in terms of their monopoly control on the entire economy. So if we are serious about financial reform, now is the time to start breaking up these behemoths that exhibit certain enormous impacts on our whole economy.

No. 2, we have to end the absurdity of a Wall Street selling trillions of dollars in exotic financial tools, instruments, at the same time small and medium-sized businesses are unable to get the loans they need in order to create the jobs our country desperately is in need of. At a time when we are in the midst of a major recession, at a time when we are losing our competitive advantages in the global economy, it is absolutely absurd that our largest financial institutions continue to trade trillions in esoteric financial institutions which make Wall Street the largest gambling casino in the world. We need to have them start investing in the real economy, the productive economy, in small and medium-sized businesses, in transforming our energy system and helping us rebuild our infrastructure, and in transportation and other desperate needs. They can no longer live isolated from the real world and engage in bets on whether oil is going to go up 6 months from now or whether the housing market goes down.

If we are serious about real financial reform, we need to pass national usury legislation. I get calls every week from Vermonters who are sick and tired of paying 25-percent or 30-percent interest rates on their credit cards. Every major religion points out that usury is immoral. It is wrong to charge people outrageously high interest rates when they are in desperate need. We need national usury legislation. I will be offering an amendment which will cap at 15 percent the amount financial institutions can charge on credit cards, which is exactly what exists for credit unions today.

Lastly, if we are serious about real financial reform, we need transparency at the Federal Reserve. The Fed cannot continue to operate in almost total secrecy. During the bailout, large financial institutions received trillions of dollars in zero or near-zero interest loans. Who received those loans and what were the terms? The Fed is not telling the American people. Did some of those banks turn around and in a mammoth welfare scam invest that Fed money, zero-interest money, in government Treasury bonds at 3 percent or 4 percent? The Fed is not telling us the answer to that question as well. It is time we had transparency at the Fed so the American people know what our Central Bank is doing.

Most of all, we need to end the ``heads bankers win, tails everybody else loses'' financial system that currently exists in the United States today. The American people are profoundly disgusted with the greed and recklessness and illegal behavior on Wall Street. They cannot understand how the very same people who created this recession in which millions of workers have lost their jobs, people have lost their homes, people have lost their savings, that these very same people are now receiving multimillion dollar bonuses. People don't understand that, nor do I, in fact. So we need a new Wall Street. We need real financial reform. I hope, in fact, that the Senate and the House are prepared to stand up to the very powerful special interests who do not want us to do that.

With that, Mr. President, I yield the floor.

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