Restoring American Financial Stability Act Of 2010 - Motion To Proceed

Floor Speech

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Mr. SANDERS. Mr. President, if my friend will yield for a few minutes, I understand my friend from New Hampshire had something to say.

Mr. DODD. What time is the vote to occur?

The PRESIDING OFFICER. At 5 p.m.

Mr. DODD. The Senator from Vermont better take the next 3 minutes.

Mr. SANDERS. Mr. President, I will do what I can in 3 minutes.

My good friend from New Hampshire, my colleague from across the Connecticut River, apparently does not have a problem with the fact that the largest financial institutions in this country that we bailed out because of their recklessness, greed, and illegal behavior have, since the bailout, become even larger. Three out of the four major financial institutions, all of which were bailed out, have become larger. No matter what anybody tells you, when one of these institutions is about to tip over and take a good part of the economy with them, despite the rhetoric today, people are going to be bailing them out, and they are going to lose millions of jobs if we don't.

The reality is, we have a situation now where the top six banks in this country, despite what the Senator from New Hampshire has suggested, now have total assets in excess of 63 percent of GDP. We are talking over $7 trillion. When you have six institutions with 63 percent of total assets compared to GDP, I think we have a problem, and we have a problem for two reasons. No. 1, we have a problem in terms of taxpayer liability and the fact that we will, once again, have to bail these behemoths out. Secondly, as Teddy Roosevelt told us 100-plus years ago, it is time to break up these guys because they have incredible concentration of ownership over our entire economy.

It is incomprehensible to me that the Senator from New Hampshire can be
comfortable as a conservative--doesn't like big government but apparently doesn't mind huge financial institutions.

So I think that anyone who is not worried about the concentration of ownership within our financial institutions is missing an enormously important point, not just from too big to fail but economic concentration of ownership.

With that, I thank my friend from Connecticut and I yield the floor.

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Mr. SANDERS. Madam President, I am disappointed but not surprised that our Republican colleagues have chosen not to go forward in terms of financial reform because we should be very clear that when we do financial Wall Street reform, we are taking on not only the most powerful people in the United States of America but some of the most powerful people in the world--people of endless resources.

When Congress deregulated Wall Street, against my vote, Wall Street and their allies, over a 10-year period, spent $5 billion fighting for deregulation so they could be in a position to do anything they wanted, which was, of course, what brought us the terrible recession we are currently in. Last year alone, in 2009, the financial interests spent $300 million in lobbying, campaign contributions, in order to fight finance and Wall Street reform. So I am not surprised that at this point our Republican friends have not chosen to go forward. I hope they change their mind, and I hope they know back home the American people are profoundly disgusted at the behavior of Wall Street, and they want to make sure we never again will be placed in the position of having to bail out people who, through their greed and recklessness, have brought suffering to tens and tens of millions of Americans.

As we proceed--and I believe we will proceed--to Wall Street reform, it is also important we not just pass something for the sake of a press release but we do something substantive. There are a lot of issues out there. I know Senator Dodd has brought forth a bill with 1,600 pages in it. There are dozens and dozens and dozens of important issues. I want to touch on simply three that I believe are essential if we are going to be serious--underline ``serious''--about Wall Street reform.

Issue No. 1. I receive calls every week from Vermonters--and I suspect the Presiding Officer does from people in New Hampshire--who are disgusted by having to pay 25-, 30-, 35-percent interest rates on their credit cards. In my view, usury is immoral. If you look at Christianity or Judaism or Islam or any of the major religions, they make the point that charging outrageous interest rates to desperate people is immoral.

We finally have to end usury in the United States. We have to put a cap on the interest rates that financial institutions can charge when they issue credit cards. The amendment I will be bringing before the floor is similar to what has existed for several decades now for credit unions. Credit unions today are doing just fine, but they cannot charge more than 15-percent interest rates, except under exceptional circumstances. If it is good for credit unions, it is good, in my view, for Wall Street and large financial institutions.

Second of all, I think there is great skepticism about the role of the Fed and the lack of transparency that exists in the Federal Reserve. About a year ago, Chairman Bernanke came before the Budget Committee on which I serve and I asked him a pretty simple question. I said: Mr. Chairman, you have lent out trillions--underline ``trillions''--of dollars in zero or near-zero interest loans to the largest financial institutions in America. Could you please tell me and the American people who received those trillions of dollars in loans?

I do not think that was a terribly unfair question to ask. Mr. Bernanke said: No, I am not going to tell you. He gave me his reasons why. I disagreed. The American people have a right to know who received those loans. The American people have a right to know whether some of those large financial institutions took those zero-percent interest loans and then went out and bought government bonds, T bonds, at 3-percent interest, which, if true--as I suspect it is--is a huge scam, a huge scam. So we need transparency in the Fed, and I am going to bring an amendment to the floor to do that.

The third point I want to make is, in, I believe, November of 2009 I introduced legislation--three pages--very simple legislation, which called for breaking up large financial institutions. As this bill proceeds, my colleagues Senator Brown and Senator Kaufman are going to be offering a bill along those lines, which basically says if an institution is so large that its collapse will bring systemic damage to the entire economy, we have to start breaking up those institutions--break them up. If a financial institution is too big to fail, in my view, it is too big to exist.

The issue here is not just the liability, the potential liability for the taxpayers of this country if a large financial institution collapses and we have to bail them out, it is also an economic issue. Are we comfortable when, according to Simon Johnson, the former chief economist of the IMF, ``as a result of the crisis and various government rescue efforts, the largest six banks in our economy now have total assets in excess of 63 percent of GDP. ..... This is a significant increase from even 2006. .....''

I find it quite interesting the senior Senator from New Hampshire was on the floor a little while ago attacking me because in the Budget Committee I brought up a resolution which lost 12 to 10 to begin to break up these large financial institutions. I get a little bit tired of our conservative friends who say: Oh, the government cannot do anything. We hate big government. But apparently they do not hate large financial institutions, six of which have assets equivalent to over 60 percent of the GDP of this country.

Teddy Roosevelt, a good Republican, over 100 years ago started breaking up large financial institutions, large corporations. What we are talking about now is a handful of corporations, of financial institutions that play a very negative role in creating a stranglehold and a lack of competition in our entire economy. I intend to be strongly supporting the amendment brought forth by Senator Brown and Senator Kaufman. I think it is moving exactly in the right direction.

So I am disappointed but not surprised that the Republicans have not chosen to go forward on Wall Street reform. I hope they will reconsider that. When we do go forward, I hope we listen to the American people, we take serious action, and we start the process of standing up to some of the most powerful people not only in this country but in the world.

With that, Madam President, I yield the floor.

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