Nomination Of Elena Kagan To Be Associate Justice Of The Supreme Court Of The United States - Continued

Floor Speech

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Mr. DURBIN. Mr. President, I wish to thank the Senator from Minnesota. I certainly concur with his conclusion. We serve on the Judiciary Committee together. We both heard the testimony of Elena Kagan as well as had a chance to ask her questions and listen to her responses to other Senators. She is an extraordinarily talented woman who could bring to the Supreme Court a wealth of experience. I couldn't agree with the Senator from Minnesota more that the fact that she has not worn a judicial robe before does not in any way disqualify her. She has an exemplary resume.

I thank the Senator for noting the most important element here is that many of the arguments that have been used against judicial nominees in the past have evaporated on the other side of the aisle because the Roberts Court is in the midst of an activist phase--something they promised would never happen, and it has happened, but it has happened to the satisfaction of one part of the political spectrum, where there are fewer critics as a result.

I thank the Senator from Minnesota for his eloquent remarks in relation to Elena Kagan.

CREDIT CARD REFORM

Mr. President, this morning I took a look at the Wall Street Journal Web site, and there was an article entitled ``The New Credit Card Tricks.'' I thought to myself, I hope my wife doesn't get a chance to see this because ever since last year when we reformed credit cards in America, I come home on the weekends to Springfield, IL, and my wife hands me a new envelope she has opened.

Guess what they are doing, Mr. Senator.

In that envelope will be the latest changes in our credit cards from these companies. I have to say we pay off our credit cards. We do our best and almost always pay them off on a monthly basis. We have a pretty good credit rating--maybe not the best but a pretty good one. Yet we have been receiving notices for the last year from these credit card companies about changes and to read the contract. I wear these glasses, but I need a magnifying glass to read the contract, and I am a lawyer. Trying to understand what they are doing to me is very hard. But then in bold print you will see an interest rate number that has just gone up or a charge that has just gone up.

My wife said to me: What is this all about? I thought you reformed credit cards.

This morning's Wall Street Journal, in an article entitled ``The New Credit Card Tricks,'' tells the story about what has been happening since 2009 when we decided to reform credit cards. Well, as one man said, whose name is Victor Stango and who is an associate economist with the Federal Reserve Bank of Chicago--he has been analyzing the Credit Card Reform Act, and he said it is a race between regulators writing ever more complex laws and credit card companies setting up evermore complex fees.

Just to give an idea of what we are talking about, the article says:

So the banks are getting aggressive. According to a July 22 report from Pew Charitable Trust, a nonpartisan research group, the industry's median annual fee on bank credit cards jumped 18 percent to $59 between July of 2009 and March of this year, 2010.

Credit unions, which are often viewed as the hometown, smalltown mom-and-pop, closest to the people, your best friends when it comes to banking--listen to this:

At credit unions, annual fees soared 67 percent in that same period to $25. During the same period, the median cash-advance and balance-transfer fees jumped by 33 percent.

So it isn't just a matter of raising fees; it turns out they are raising them at a gallop, at a fast rate, trying to get ahead of the credit card reform bill.

They have also dreamed up a dozen different ways to beat the law. Give us a year, they said, so we can change our books and get everything ready for the new credit card reform. They spent their year with their lawyers and accountants dreaming up new ways to avoid the law. We should have known it. We shouldn't have given them all this time.

They have dreamed up something called professional cards. These are like corporate cards but carry the same terms as consumer cards and they aren't covered under the new law. They are reinventing the credit card with a new name and a higher fee and a higher interest rate, and they skirt around the laws we passed.

We said in the law--incidentally, we stipulate that late-payment fees shouldn't be triggered on a Sunday or a holiday because you couldn't put anything in the mail. Well, here is a man, whom they talk about in this article, by the name of Alan Condon of Woodstock, GA. He ended up facing one of these penalty fees, and he noticed that the day it was triggered was a Sunday. He has read the new Credit CARD Act. That is not supposed to happen. You can imagine what it took for Mr. Condon to challenge the Discover Card, which eventually, after all of his protests, waived the late fee they charged him. How many people have that kind of determination to stick with it, as he did?

They have new cards such as a rebate card which, if you don't read it carefully, sounds like a great deal on a credit card and ends up taking money away from you.

I could go on and on.

Mr. President, I ask unanimous consent that this article be printed in its entirety in the Record.

There being no objection, the material was ordered to be printed in the Record

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Mr. DURBIN. Mr. President, I say to those who will be critical of the remarks I am about to make, this is not from some French Socialist journal; this is not from some left-leaning magazine; this is a news story in the Wall Street Journal this morning which is talking about what the credit card companies are doing.

So the obvious question one would ask if you live in Illinois or any other place, for that matter, and which we should ask ourselves is, Are we powerless to stop this? Are we powerless to stop these banks, credit unions, and credit card companies from basically ignoring reform in the law, from finding ways to skirt the law and charge even more?

Well, the answer is we are not. I will tell you why. Because last week President Obama signed into law the strongest consumer financial protections in the history of the United States. The bill, which was authored by Senator Chris Dodd, chairman of the Senate Banking Committee, and Congressman Barney Frank, his counterpart in the House, the Wall Street Reform and Consumer Protection Act included many provisions that will help consumers immediately--especially regarding mortgages and credit cards. Make no mistake, as this article tells us, the big banks on Wall Street are working overtime already to dream up ways to avoid this new law as well. The law will never keep up with their lawyers and accountants. They will always find a way around it.

That is why the bill included something we have never had before in the United States: a Bureau of Consumer Financial Protection.

This bureau has one responsibility: to make consumer financial markets work for American families, not just for the banks. The bureau will ensure that sellers of mortgages, credit cards, private student loans, pay-day lenders, and other types of financial products must compete for customers based on the quality of their products, rather than the number of tricks and traps they can hide in the fine print they stick behind your monthly statement.

Here is the thing. This agency is only going to be as effective as the people who run it and work for it. That is even more true for a brandnew agency such as this one. The person who is chosen as the first leader will set the tone for the regulators for years to come, even decades.

It is critical that the Bureau of Consumer Financial Protection be put in place with a director who is aggressive, intelligent, and understands the challenge they will face; a director who is fair, one who believes in the power of the marketplace but understands that markets work better if everybody participating in those markets benefits; a director who will listen to what bankers are saying but can see through them when they try to slant lending markets too far in their favor; a director who thinks, first and foremost, about how American families can thrive in today's complicated economy.

Fortunately, there is a person who can fill that job effectively. Her name is Elizabeth Warren.

Professor Elizabeth Warren first proposed the creation of an independent financial regulator to look out for consumers 3 years ago, in 2007. In 2008, she helped me draft a bill based on her idea. We called it the Consumer Credit Safety Commission back then.

In the spring of last year, she worked to change the bill, and we renamed it the Financial Product Safety Commission.

Last summer, when the Obama administration released its plan for reforming Wall Street, our idea was rechristened as the Consumer Financial Protection Agency.

It is now officially called the Bureau of Consumer Financial Protection, and it is now the law of the land. Whatever the name, Professor Elizabeth Warren of Harvard Law School, more than any person in this country, was the driving force behind the creation of this agency.

Years ago, Professor Warren made a name for herself when she wrote a book called ``The Two-Income Trap,'' in which she described how hard it is for working families to get by in today's economy. She taught a popular course at Harvard on bankruptcy and has written extensively on how difficult it is for many families to start over when their lives take a turn for the worse.

She has most recently last served as a watchdog, a chairwoman of the congressional oversight panel for the Troubled Asset Relief Program, otherwise known as TARP. She has taken a look at the money--the taxpayer dollars--given to these banks to make sure we weren't cheated and to blow the whistle on banks that didn't do the right thing.

She has done that and done it extremely well. For the past 3 years, she has advocated tirelessly for the creation of this agency. The purpose of this agency is to empower every single one of us, as consumers, to get the right information and not be tricked or deceived, so we can do the right thing for ourselves and our families and our small businesses.

Throughout her work, a common theme has emerged: Government should work for the American people and not the other way around. Elizabeth Warren is the right person to head this new agency.

Much has been written--some of it critical--on the prospect of Professor Warren being nominated as Director of this new consumer bureau. Wall Street banks anonymously argue to the media--and even to Senators--that she would restrict access to credit. Nonsense. The only types of credit she would restrict are predatory loans. That is just a smokescreen for saying the banks are going to face their responsibilities and perhaps not take all the profit they want at the expense of consumers who are deceived.

Professor Warren has said publicly--and I believe her--that she doesn't begrudge banks making profits; they are in business. She would prefer--as I and I think most Americans would--that banks make money by providing American families with good products, good credit cards, good mortgages, and good student loans.

The banks also argue she doesn't understand their business well enough to regulate it. They are afraid of her. They know how smart she is and that she would not be teaching at Harvard Law School successfully and leading so many efforts forward for this country if she didn't have the skill and intelligence it takes.

Professor Warren will bring to the bureau passion and compassion, a big-picture vision and nuts-and-bolts knowledge. She is the right person for the most important job in the country.

I say to my wife and to anybody who read the Wall Street Journal this morning, with the right person at this new Consumer Financial Protection Bureau, help is on the way. We need to put into place someone who will blow the whistle on those who break the law, abuse the law, and engage in practices that deceive Americans and American families. We need somebody at that agency who empowers us, as consumers, to make the right decisions for our families. Elizabeth Warren, professor of Harvard Law School, is the right person.

I yield the floor.

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