Restoring American Financial Stability Act Of 2010 - Motion To Proceed - Continued

Floor Speech

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Mr. DURBIN. Madam President, it has been over 2 years since Bear Stearns failed. It has been over 18 months since Wall Street collapsed and the economy teetered on the brink of depression. It has been almost a year since the administration offered a detailed proposal to reform Wall Street. It has been 4 months since the House passed its version of Wall Street reform. Yet, unfortunately, the minority party, the Republicans in the Senate, still want to delay any Wall Street reform. They want to put off Wall Street reform for another day.

Yesterday, the Republicans in the Senate had a chance to vote to end their filibuster on Wall Street reform so that we could start to debate this issue and consider amendments from both sides of the aisle, almost the way we remember learning about the Senate in school: a real place where there is a real debate, differences of opinion, votes, winners, losers--an amazing concept. We don't see much of it anymore, do we?

There are a lot of empty chairs here. There is very little actual debate leading to a vote. So yesterday we said to the Republicans: After all this time since this started, after 2 years since Bear Stearns failed and all we have been through, isn't it about time for us to roll up our sleeves and get down to work? Shouldn't we bring some reform and transparency to Wall Street so we don't have to go through this ever again? Wall Street got away with murder and the taxpayers ended up holding the bag, remember?

The previous administration asked us to send almost $800 billion to Wall Street to save the institutions that made some of the greediest, stupidest decisions in the history of American business. I was in those meetings. I can remember sobering moments--I will bet the chairman of the Banking Committee can remember them as well--when the Treasury Secretary, Mr. Paulson, and the Chairman of the Federal Reserve, Mr. Bernanke, looked us in the eye and said: If we don't put $85 billion in AIG today, it will fail and the American economy will fail with it. It takes your breath away. We do a lot of important things here but nothing like that. Then, it wasn't 2 weeks later that they came back and said: It is not enough. We need up to $800 billion to buy toxic assets with something called TARP.

Well, let me tell my colleagues, I am a liberal arts lawyer. I have spent a lifetime in politics. I can't really start quibbling and arguing about puts and calls and derivatives and CDOs and all the rest of it. At some point, you take the word of the people who are in charge, and I voted for it. The alternative was unthinkable.

So where are we today? Sadly, some of those same firms we rescued with taxpayers' dollars sent us a thank-you card which had a postscript that said: Incidentally, we have just declared that we are going to give one another $10 million bonuses for our wisdom. How do you buy that? How do you sell it to the American people?

So we have come here with the leadership of Senator Dodd on the Banking Committee and Senator Lincoln on the Agriculture Committee, which has a piece of this, and said: We are going to change this story. We are going to have more accountability, we are going to have more transparency, and, frankly, we are going to put a cop on the beat when it comes to Wall Street. We are going to make sure they don't get involved in this mess again.

I don't often come to the floor to plug a book, but I am going to: Michael Lewis, ``The Big Short.'' I recommend it if you can stand it. He tells the inside story of what happened on Wall Street. These so-called great, wise men didn't know what they were doing other than making a lot more money every single day. They were building this house of cards, and eventually it fell. He tells the story about the folks who profited when it fell. They were completely out of favor for years. People said: Shorting the housing market? Are you crazy? There is no way to go but up when it comes to housing. Well, they made a lot of money, shorting the market, and the folks who came up with these crazy vehicles to package all these mortgages left us and America holding the bag.

This recession we are in took $16 trillion to $17 trillion out of the American economy. I don't need to tell anybody about it. If you look at your savings account before and after, you know what I am talking about--savings, retirement, the business down the street that closed, the neighbor who lost his job. You know the story, as we all do. It took $16 trillion to $17 trillion. That is more than the total value of all of the goods and services produced in the United States of America in any year--the total value--yanked out of the economy because of the stupidity of these folks.

Now we come before the Senate and say: Do you want to risk going through that again? Shouldn't we learn something in the process here that avoids that problem? The Republicans yesterday said: No, thanks. We don't care to vote on this.

Well, in an hour they are going to have another chance. I hope they have come to their senses. I hope the people they represent have led them to their senses. We have given them ample opportunity, and will, to offer their amendments. Let's hear their ideas. I am going to be open to them. I certainly don't want to water down this bill. I think it is a good bill. I want to try to make it stronger. If they want to water it down, we will have a vote, debate and vote, almost like the U.S. Senate. It will be amazing.

There is a second provision in here for consumer financial protection. Right now, strung out across our government are all of these agencies that are supposed to be watching out for us. We have agencies that make sure the toaster you bought over the weekend doesn't explode, catch fire, and burn down your house. We expect that, don't we? That is the Consumer Product Safety Commission. But we don't have an agency that makes sure the mortgage you signed doesn't explode and you lose your house. That is what happened: stuck in mortgage provisions.

Have you ever been through a real estate closing? There is a stack of pages turned at the corner; sign as fast as you can; at the end of 15 or 20 minutes, you have writer's cramp; a check; a key to the house, and you are out the door. Oh, you didn't check that line, the middle of the page, the 35th document that you signed? It had a prepayment penalty in there for your mortgage. Prepayment penalty, so what? Well, it just says that when the interest rate goes up, you can't refinance it. Oh, I didn't know that. Of course you didn't. Lawyers don't catch those things.

So we want to create the strongest consumer financial protection law in the history of the United States not to create a massive agency--it won't be--but to empower consumers so that when you sit down at that closing or you decide to take out a credit card or a student loan or an auto loan, you know what you are getting into. The basics are in front of you in plain English. Wall Street hates this idea like the Devil hates holy water. The notion that there would be some agency there looking over their shoulder sends fear into their hearts. I think it is a good idea. If someone wants to come here and debate it, I am ready, but I think we ought to have a debate. What are the Republicans afraid of?

The PRESIDING OFFICER. The Senator has consumed 7 1/2 minutes.

Mr. DURBIN. Let me go to my blazing close.

Let me just say that at the end of the day--currently, lobbyists are being paid $120,000 a day by Wall Street to stop this bill. So far, they have Republicans on their side and they have been successful. In an hour, I hope that all changes. Let them join us in a bipartisan effort to make this economy stronger, make the rules work for average people, and to put some protection in there for the consumers of America.

I yield the floor.

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Mr. DURBIN. Mr. President, again today, for the second day in a row, we have failed to break the Republican filibuster on the Wall Street reform bill. The votes are very clear. With one or two Democrats out--one who is opposed to breaking the filibuster and the other absent--there was not a single Republican vote in support of moving to the debate on the Wall Street reform bill.

Tomorrow, there will be another opportunity, and it appears the other side, the Republican side, of the aisle is deciding they do not want to debate this issue. The Senate as an institution is designed to give people a chance to express themselves, both by votes and amendments they might offer. That is what we have offered.

It is interesting to me, this bill which is before us, the Restoring American Financial Stability Act--I am just checking on how many pages it is; we count pages around here now--is 1,400 pages. OK. And I am not being critical of the size of this bill. It is a big challenge to make sure we pass the laws that are necessary to promote financial stability.

But it was not but a few months ago that the Republicans were arguing that the health care reform bill was so big that we had to have it right out here in front of us and we should not be negotiating behind closed doors with secret negotiations on the bill; it ought to be right here on the Senate floor; let's have the amendments. Now comes this bill on Wall Street reform, and the Republican position is exactly the opposite. They say: We do not want to have an amendment process on the floor; we want you to agree ahead of time behind closed doors on what the bill is going to say. I do not know if they have noted the inconsistency of their position, but it is fairly clear.

I think they probably have some good ideas to change this bill. I am anxious to see their amendments. I think we have some good ideas to improve the bill. I would like to offer a few amendments. It is almost sounding
like the U.S. Senate, isn't it--amendments on a bill and votes and speeches and debate. It really sounds like the good old days here. But we do not have the good old days anymore. We just lurch from one vote to an empty floor to the next vote to an empty floor to the next vote. People who are following this debate on the outside have to be wondering what we are trying to achieve.

Unfortunately, for some, what they are trying to achieve is absolutely nothing. They want to stop the Senate from acting. They believe it is in their best political interest--maybe in the best interest of the country, from their point of view--that we do nothing.

How could you take that position when it comes to Wall Street after what we have been through as a nation? How could you take the position that we should do nothing when it comes to the Wall Street banks and financial institutions? These banks and financial institutions got away with murder when it came to corrupting our economy and leading us into the most painful recession in modern memory. How could you take the position, as some Republicans have, that we should not debate or vote on a bill to try to avoid that catastrophe from recurring? That, to me, is so basic and fundamental.

It strikes me that the American people have it right. They understand what we have been through. They understand that after the great minds of Wall Street made the greatest mistakes in modern economic history, they came whining and crying to the Federal Treasury to bail them out. They asked for hundreds of billions of dollars from hard-working families across America to get through their individual economic crises at their banks and their financial institutions. I will concede that I voted for that idea because the alternative was a disaster in our economy.

Well, after sending the money to Wall Street, they showed their gratitude by giving one another bonuses, multimillion-dollar bonuses, for their bone-headed stupidity that led us into this mess and then deciding that once they were solvent again and moving forward, they would stop loaning money to businesses across America that are trying to survive and get out of this recession. It is the ultimate in irresponsibility, and it is what we have come to expect from some of the people on Wall Street.

I mentioned earlier that many of us have been reading this book, ``The Big Short'' by Michael Lewis. He tells the story of how we got into this mess, how these people dreamed up ways to create these financial instruments, which almost defy description, where they would take thousands of mortgages from all around the United States and package them into a little bundle and put some code name on them that only the insiders could understand and then decide to sell them in pieces--tranches, they called them. And they were betting that the value of real estate would continue to go up and the default rate would not. They guessed wrong on both accounts. The default rate on these rotten mortgages increased and the underlying value of the homes and businesses and other entities began to decline and the bottom fell out. Lewis tells the story about those who saw it coming and ended up making a lot of money because they shorted the market, as they say. They guessed that the real estate bubble was going to burst. How many more times do we need to go through that as a nation before we change the rules on Wall Street in terms of their conduct and what they can do?

We think it is time. This bill is a product of the Senate Banking Committee and a lot of hard work. Senator Dodd, the Democratic chairman of the committee, met for several months with the Republican Senator who ranks No. 1 on that committee, RICHARD SHELBY of Alabama, and they could not reach an agreement.

Senator Dodd then said, I will meet with Senator Corker of Tennessee, also on the committee, and sadly that didn't result in an agreement either. Then Senator Dodd said, Let's have a hearing and let's put this bill right on the table and let people offer amendments to it. The Republicans prepared over 400 amendments to this bill, and when Senator Dodd convened the committee, they refused to call up a single one of them--not one of them--to be put on this bill or voted on.

So the bill comes to the floor in that situation and the Republicans refuse to let us move forward. That is because under the Senate rules we need 60 votes. We only have 59 on a good day here, and we clearly need Republican help to move this bill forward. They have decided as a party caucus to stand by Wall Street and to stand against reform. I don't understand it. I can't imagine that they are hearing anything that is different than what I hear when I go home. When I go home, basically people tell me that they believe it is time for accountability from the banks and the speculators on Wall Street and they believe we ought to do it now. They want to see us put a cop on the beat. They want to see the government keeping an eye on these big financial institutions, establishing standards of conduct, establishing margin requirements so we know they are not overextended again as they were leading into this recession, and they want to make sure we are doing something that is going to avoid a replay of what we have just been through.

There is another aspect of this bill. When I spoke to one of the Republicans during the vote today, I said to him: What is the problem here? Why aren't you joining us in this Wall Street reform? Don't you hear the same things at home that we do?

He said: My big concern is the consumer financial protection agency in here.

Well, I am the wrong person to raise that issue with, because I happen to believe in it. We have created safety standards for the inspection of certain products across America. When you buy toys for your kids during the holidays, you want to make sure they don't have lead paint on them or tiny pieces the kids might ingest and choke on. The Consumer Product Safety Commission is supposed to watch out for those sorts of things, and they do. But when it comes to our financial instruments that we have as part of our daily lives, there is no real watchdog. I am talking about mortgages on our homes and credit card agreements, student loans, automobile loans, retirement plans, things that make a big difference in our lives and that can go bad and cost us dearly. This bill sets up within the Federal Reserve an agency for consumer financial protection. It will be the strongest consumer financial protection law in the history of the United States, and it isn't a massive bureaucracy. What it basically does is empower consumers across the country so that when they sit down to sign an agreement, the basics are explained to them. It also puts that watchdog in place to keep an eye on those banks when they start sneaking in new terminology, these tricks and traps that can explode on you at a later date. That is the part this one Republican Senator said has to go. We don't want this consumer financial protection.

Well, the Senator may not want it; the banks don't want it either. They don't want someone looking over their shoulder, but I think the American people not only want it, they deserve it after what we have been through.

I was standing in the airport in Chicago on Monday on my way out here and a fellow came up to me, a businessman in Chicago, and said: Oh, what a coincidence. I am on my way out to see you.

I said: Good.

He said: I am here so that we can exempt our business from the Consumer Financial Protection Agency.

I said: Save the money on the airfare, because I am not voting that way. I don't think we ought to start carving out all of the different special interests and business groups that want to come here and say we are the good guys, we are not the cause of the problem. The fact is if they are, in fact, good guys and good gals, if they are honest in their dealings, if they are treating customers honestly, if they are conscientious and ethical, what are they worried about? This is an agency we have created to go after the bottom feeders, the predators who are out there taking advantage of consumers in the name of consumer credit.

This has happened so many times in the time I have served in Congress, where you come in and say, We want to protect consumers from the worst in the financial industry, and the big banks come in and say, Oh, no, it is just a foot in the door. Pretty soon they will be looking at us too, and they stop any kind of basic surveillance.

Right now in Illinois--in fact, a couple of blocks from where I live in Springfield, IL--are a couple of operations that take this to the extreme--Payday Loans, Title Loans, Same Day Loans. It is an outrage. It is an outrage that my State lets them get away with it. They have tried to tighten up the law a couple of times, but these folks are slippery. They find a way around it. They charge outrageous interest rates. They are rolling over these debts time and time again until these people are absolutely out of luck. They have nowhere to turn.

I introduced a bill, a cap on interest rates, a usury bill, and I said if you want to meet every creepy, crawly, slimy reptile in the financial industry, introduce a usury bill, and they will all slide under your door to come in and meet with you and tell you how you just don't understand. Yes, they will say to me, it is 108 percent a year annual interest, but it is not what you think it is. It is what I believe it is, and it is a rip-off of consumers that has to come to an end. I am joining with Senator KAY HAGAN of North Carolina to put an end to some of these business operations. I don't think they do any good for America.

It has been about 10 years ago now that Senator Jim Talent, a Republican from Missouri, put an amendment on a bill that didn't attract much attention. The amendment he put on exempted military families from being business clients of these payday loan operations. Why would he exempt military families? Because the Pentagon had reported to him that in many military installations around the United States, soldiers--Air Force, others--were borrowing money from these fly-by-night operations, couldn't pay it back, and got so deeply in debt they had to be discharged from the service. Men and women trained in our military, because of the debt they had incurred as a result of these rotten operations, fly-by-night operations, had to leave the military service, and the Pentagon was saying to this Senator and others, We invested a lot of money training that person and now they are gone.

So we said 10 years ago that we were going to provide that these payday loan operations could not lend money to military families, and it passed and became the law. Well, if we are protecting military families and our national interests, why aren't we protecting all families? That is my point of view. I think Senator KAY HAGAN of North Carolina shares that point of view and I want to make sure we move forward on that. I also want to make sure interest rates are regulated. There is a limit to how much should be charged. There are people who exceed that limit and take advantage of those. Those are the kinds of things that are at issue here.

So this week, if you tried to follow what is going on in the Senate, sometimes there has been a big yawn, because the floor is empty. No one is here, because we are lurching to the next filibuster vote. We are going to ask the Republicans again tomorrow: Now is it possible for us to bring up this bill, a bill that will put consumers in control when it comes to some of the most basic decisions they have to make? Now is it time to have strict new regulations to stop Wall Street gambling from happening again in our financial sector? Now is it time to make sure that the agreements we enter into are in plain, understandable English?

Now is the time to end taxpayer bailouts once and for all. Banks and financial institutions, not American taxpayers, should foot the bill for their own mistakes. If the Republicans object to that, offer an amendment. Stand up here and say, I think we ought to be ready to bail them out.

I don't think they will. Also, it is time for consumers to have the information they need to compare rates so they can make the financial choices that are right for them and their families.

American voters get it overwhelmingly. They want us to pass this bill. But the Wall Street lobbyists get it too. This morning an analyst came forward and said the Wall Street firms are spending $120,000 every day on Capitol Hill for lobbyists. They are working the phones. They are working the corridors. They are doing everything they can to kill this bill. These special interest groups have a lot at stake here. If we do, in fact, come through with this reform, the party is going to be over at some of these banks and they know it, so they are fighting it tooth and nail. If we have a consumer financial protection agency, they are going to change the way they do business. They won't make as much money. They are going to be held to honest standards and they don't like it. So they are spending a fortune begging the Republicans to continue this filibuster to stop the Wall Street reform. I hope a few Republicans will break ranks and join us. If they do, I think many others will follow, but it will take a few courageous, forward-looking people to step up and say, That is enough. Two filibusters in a week is enough.

By Wednesday--by tomorrow--if we can get three or four Republicans to step up, we can start an honest, bipartisan debate that leads to the kinds of reforms we need to make our economy stronger, create more jobs, and protect American taxpayers from ever being soaked again for another bailout.

Mr. President, I yield the floor and suggest the absence of a quorum.

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