Executive Session

Floor Speech

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Mr. MERKLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

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Mr. MERKLEY. Mr. President, I thought I would make a couple of comments regarding the activities of this Chamber a few minutes ago. We had 71 votes in favor of closing debate on the nomination of Richard Cordray to be Director of the Consumer Financial Protection Bureau, the CFPB. The CFPB is vested with the responsibility of protecting consumers from predatory financial practices.

We all discovered in the runup to the great recession just how important this protection is. We had many crazy predatory practices.

On credit cards we had fees that came out of nowhere and shifting time periods from month to month in terms of when the payments were due, even shifting destinations of where the credit card payments got mailed to, and also fees that could be wracked up on unsuspecting consumers.

We certainly found out on mortgages how important financial protection is because we had, starting from 2003 forward, a booming industry in predatory teaser rate mortgages, where the mortgages might be 4 percent for 2 years but then were changed after 2 years to 9 percent. One would think most would-be homeowners would look at that deal and say: That is not a good deal. But here is what happened. They went to a mortgage broker, and the mortgage broker said: I am your financial adviser. Mortgages have gotten very complex, they are very thick, and there is a lot of fine print, so you are paying me to sort through and find the best deal for you.

So first-time home buyers trusted their mortgage brokers. Unbeknownst to the new homeowners, those brokers were being paid kickbacks called steering payments. They were being paid special bonuses outside the framework of the deal in order to steer the unsuspecting first-time home buyer--the customer--into a predatory loan when the first-time customer actually qualified for a prime fixed-rate mortgage. Well, those predatory mortgages proceeded to be put into securities, and those securities were bought up by financial institutions across America and beyond because the folks who were buying the securities understood that in a couple of years the interest rate would go way up and they would make a lot of money off those securities.

So this was a system rigged against the first-time home buyer, against the home buyer who wanted to start their journey to owning their piece of the American dream.

Those predatory practices should never have been allowed. Some here will remember the responsibility for consumer protection was vested in the Federal Reserve. But what happened in the Federal Reserve? The Federal Reserve carried on with its responsibility on monetary policy, but it put its responsibility for consumer protection down in the basement of its building. They locked the doors, they threw away the key, and they said let the market be the market. They abandoned our consumers across this country.

That is why we need a Consumer Financial Protection Bureau. It doesn't have a conflict in its mission. It is not obsessed with a different mission such as monetary policy. We need a bureau that says: New predatory techniques will crop up and we will try to end them, try to end practices in predatory payday loans that can charge 350 to 550-percent interest on unsuspecting citizens. We need a bureau that will look out and say we need to stop the practice on which online payday lenders get your bank account number and, without your permission, do a remotely generated check and reach in and grab the funds out of your account. The list of predatory practices is endless because the human mind is endlessly inventive. So we have an important bureau--but an important bureau that cannot do its job unless there is a director to run it.

Two years ago Richard Cordray was nominated to head the Bureau. He has been waiting to get cloture on his nomination and a subsequent vote for 2 years. He has been an interim appointee during that period of time and, by all accounts, from everything I have heard from folks in this Chamber, doing a very good job, working very hard with the great technical details of the financial world to find a fair and solid way forward.

The fact is his nomination, so long delayed, is not a reflection on him personally. In fact, many Senators who have opposed allowing the vote to take place have come forward and said it is not about him personally; it is about the Consumer Financial Protection Bureau. Forty-three Senators in this Chamber wrote a letter to say they would oppose any nominee for the Consumer Financial Protection Bureau. It was a bold attempt to change back to a situation where there was no one to fight for consumer protection for our citizens in this Nation.

Today we end that drama in favor of fairness for American citizens, in favor of taking strong action against predatory mortgages and the predatory practices of the future. In 8 hours we will be voting up or down on his nomination, as we should have long ago.

But let me shift gears here and say the vote we took today is symbolic of much more than the important function of establishing an effective Consumer Financial Protection Bureau. The vote we took a short while ago is central to ending the paralysis that has generally haunted this Chamber. That paralysis is something new. In the time from Eisenhower's Presidency through Ford's Presidency, there was not one filibuster of an executive nominee. In President Obama's 4 1/2 years, there have been 16 such filibusters. So if we talk about the norm and tradition of the Senate, the norm and tradition of the Senate is a reasonable and timely up-or-down vote. That is the tradition, and it is a tradition that fits with the Constitution. The Constitution calls for a supermajority for treaties to be confirmed, but it only embeds a simple majority requirement for nominations. There is reasoning behind that: because our Founders envisioned three coequal branches of government. They could never have envisioned it would be OK for the minority of one branch to be able to deeply disable another branch, be it the executive branch or be it the judiciary.

So the vote we took today is part of a larger conversation about ending the paralysis and focusing on the challenge of executive nominations getting timely up-or-down votes.

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Mr. MERKLEY. Absolutely.

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Mr. MERKLEY. I would say to my colleague from Illinois that, indeed, these are key milestones where the journey is to restore the functionality of this Senate so it can take on the significant issues Americans expect us to take on.

The path forward is not yet one without obstruction. We have these two important milestones--one of going forward on immigration, a second of going forward in terms of putting a functioning Consumer Financial Protection Bureau fully together. We have had some other recent moments that fit this pattern, including passing the farm bill out of this Chamber for the second time, passing a Water Resources Development Act that would fund enormous amounts of infrastructure across this country to help provide both water supply infrastructure and wastewater treatment infrastructure. These are good moments. But we also are reminded that the path is not completely clear.

For example, at this moment we should be in the middle of a conference committee on the budget. The Senate passed a budget and the House has passed a budget, but the conference committee is being filibustered by this Chamber. That is evidence of the model we are trying to break that is unexplainable to the American people. Folks back home want to know why we can't get a bill on the floor of the Senate to address the sequester. Because fewer kids are getting into Head Start, fewer kids are getting their inoculations, title I schools are not getting their funding. And, of course, there is a lot of concern within the military world about our national security where programs are being compromised. But we couldn't get the bill to the floor of the Senate because it was filibustered.

So we have important milestones to grab hold of that are presenting a vision of the restoration of this Senate as a deliberative body, but we are going to have to work together in this bipartisan fashion we speak of to continue on this road.

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Mr. MERKLEY. Madam President, I appreciate my colleague from Illinois emphasizing the important role of bipartisanship in making this Chamber work. His question gave me an opportunity to talk about what has just transpired as an important victory--an important victory for this Chamber and its deliberation, an important victory for people across America, families working to have their financial foundation solid rather than torn asunder by predatory practices.

In this journey, this effort to achieve a Senate that can again function as a deliberative body, I want to take this moment to thank my colleague Tom Udall. Tom Udall and I came into the Senate together. Tom Udall immediately recognized that the Senate needed to address its internal functioning because we were becoming more and more paralyzed. He proposed before this body that we have a conscious debate every 2 years about how to adjust the rules and to make this Senate Chamber work much better, because we are not only being paralyzed on executive nominations but we have this terrible paralysis on legislation, with a few important exceptions that my colleague from Illinois and I spoke about.

I want to thank Tom for his work to help motivate this body to take on these issues and to restore the functionality. I have been pleased to be a partner with him on this journey. I know it is a journey that is not yet done, but I do thank my colleagues--across the aisle and on this side of the aisle--for the very frank discussions last night in which for 3 hours we bared our hearts, if you will, about what is working and not working in this Chamber. That too is an important moment
in this journey to make the Senate work. So I applaud the spirit that came into the Chamber today that resolved the 2-year standoff in regard to having a functioning chair of the Consumer Financial Protection Bureau, and to set the tone, hopefully, for changing dramatically the partnership to restore the functioning of the Senate going forward.

I yield the floor.

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