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mr. dodd: mr. president? mr. president? the presiding officer: the senator from connecticut is recognized. mr. dodd: mr. president, i just spoke with senator shelby on the phone, and we have an agreement regarding the title -- the presiding officer: the quorum call -- mr. dodd: i ask unanimous consent the call of the quorum be rescinded. the presiding officer: without objection, so ordered. mr. dodd: as most of our colleagues are aware, senator shelby and i have been working to reach an agreement on the so-called too big to fail sections of the bill, and i just spoke with him on the phone, and while he will be coming over shortly and we'll have a vote on this early this afternoon, the leaders will have to set the

time, but i presume shortly after the chairman's lunch and the steering committee's lunch, we'll be able to have a vote on this, boxer amendment and this and other matters. i will leave it up to the leaders. i won't ask for any unanimous consent requests here. i want to describe briefly to my colleagues what we have agreed to to hopefully resolve this matter of too big to fail. for over a year now, senator shelby and i have been working on ways to end bailouts. all of us agree that that ought to be done. while we have had our differences in other areas, we have always shared a commitment to ensuring that taxpayers would never again be forced to bail out giant wall street firms that fail. last november, i asked our colleagues from virginia and tennessee, senator warner and senator corker, i asked them, i tasked them with producing an agreement on how best to resolve failed companies. they did a tremendous job, mr. president. i want to commend both of our

colleagues. they worked very hard and their staffs as well to draft language that is part of the underlying bill. the package they have produced would create an effective oversight for large firms, make these firms pay for the risks they pose to the country and to the economy. their agreement put a mechanism in place to guarantee that when large firms fail, they fail. the management is fired, creditors and shareholders take losses, the company is liquidated, and taxpayers aren't on the hook. that's what they worked on. this is a complicated area, and a number of my colleagues on the other side of the aisle had raised some reservations. so i spent the last few months working with senator shelby to clear up any misconceptions people may have had and otherwise address their concerns. after weeks of negotiations, months, really, if you consider all the work that has gone in on this piece of legislation over the last year, year and a half, i'm proud to say that the two of us have an agreement in this area. we intend to offer it as an amendment to the bill early this afternoon.

let me go over the amendment, if i can. first, let me say that most of the provisions stay intact because we agree on the fundamentals of this bill. there will be an orderly liquidation mechanism for fdic, the federal deposit insurance corporation, to unwind failing systemically significant financial companies. secondly, shareholders and unsecured creditors will bear losses and management will be removed. third, regulators will still have the authority to break up a company if it poses a grave threat to the financial stability of the united states, a very important point. large bank holding companies that have received tarp funds will still not be able to avoid federal reserve supervision by simply dropping their banks. most large financial companies are still expected to be resolved through the bankruptcy process. and the bill will continue to eliminate the ability of the federal reserve to prop up failed institutions like a.i.g. was. these measures represent a

fundamental change, mr. president, in our country's ability to protect taxpayers from the economic fallout of having a large, interconnected firm collapse. these measures will end the idea that any one company is too big to fail. these measures will prevent large failing firms from holding our country hostage, extorting giant taxpayer-funded bailouts under the threat of economic disaster. and so today we announce a few changes to the larger package. first, as i have said, one of the ideas proposed by some of our colleagues here, including our friends from the other side, was to create a fund paid for in advance by the largest financial firms to cover the costs of liquidating failed companies. this was not in our initial draft that i offered in november and was opposed by the obama administration. other republicans have now expressed concerns about the prepaid fund. so because whether they pay in advance or after the fact, these

costs will be paid by wall street and not taxpayers, i have no objections to dropping that provision. in fact, i was rather agnostic on it, as many of my colleagues were. we had the common goal of making sure taxpayers would not bear any costs. that's what we have tried to achieve with this bill. there are a variety of ways of doing it. there were those that raised concerns about the so-called prepayment program raised the possibility or at least the spectrum or the optics that somehow they would be getting some preferred status in all of this. that was never of course the intent of those who offered it, but nonetheless because people were concerned about the optics of it, we agreed to have it a post payment responsibility, a fund that would be borne by creditors or the industry itself based on whether or not there were enough assets in the failed institution to pick up the costs of winding down that firm that was failing. so that's where this comes from. creditors would be required to pay back the government any

amounts they received above what they would have gotten in liquidation. those who directly benefited from the orderly liquidation will be the first to pay back the government at a premium rate. congress must approve the use of debt guarantees that is also included in this proposal, and the federal reserve can only use its 133 emergency lending authority to help solvent companies and regulators can ban culpable management and directors of failed firms from working in the financial sector. that's an add-on. mr. president, i understand that makes some sense. if you have been involved in the mismanagement of a company and you have caused this kind of potential disruption to our economy, then requiring that they be banned from engaging in further economic activities makes some sense. with this agreement, there can be no doubt in my view that this senate is unified in its commitment to end taxpayer-funded bailouts. now, there are some other provisions which i will run down here very briefly. callbacks of excess payments to

credit tors. this would -- creditors. this would allow them to receive what creditors would otherwise have received in liquidation. there is a 100% taxpayer protection through assessments. the assets of the failed companies and the callbacks from creditors are not enough to pay back all the treasury borrowing with interest, fdic will charge interest with assessment to large firms. a term limit on receivership. management gets paid last any salaries and other compensation owed executives. the failed company would pay last after all of the creditors. there is a ban on management, as i mentioned a moment ago, from going to work in the financial sector. as a judicial check in this amendment, an i.g. review, inspector general review requires the inspector general of various agencies, the fdic, treasury, and other regulators to review actions taken under the orderly liquidation authority.

financial company definitions are included in this. reports in testimony on top of the requirements and the underlying bill the fdic will have additional reporting requirements that will have to testify before congress. as i mentioned, the 13.3 lending restrictions only apply to solvent companies as well, and congressional approval of fdic emergency debt guarantees is included in this package as well. so there are a number of provisions here, all of which we think are -- basically make some sense. we never argued with these ideas at all, and the idea of whether it's prepayment, postpayment, as i said, was an argument that went back and forth without any necessarily strong objections. in fact, many of us who looked at it at the time were just trying to figure out the best way to do this so the taxpayers would not be left on the hook. now, obviously, i want to leave time for senator shelby to come over and talk about it as well, but i wanted to give my colleagues some idea of this agreement which i am prepared to support when senator shelby offers this as an amendment. with that, i see my friend and

colleague from new hampshire on the floor. i don't want to take any more time than i need to, but i will be glad to share this information and other parts of this bill with my colleagues as they see fit. mr. president, i yield the floor. mr. gregg: mr. president? the presiding officer: the senator from new hampshire is recognized. mr. gregg: thank you. i rise to speak about another part of the bill, but i want to congratulate the chairman and his work with the ranking member, senator shelby, on reaching this agreement, on resolution in too big to fail. it's an important step forward on this piece of legislation. a critical part of the legislation. and i think it shows that there is really a lot of places where we can reach bipartisan consensus on this bill. it's my sense that the great and very positive work which was done here on resolution authority will hopefully -- i would hope would carry over with things like the derivatives issue which needs to be worked on, issues like underwriting standards which need to be worked on, how the regulatory

structure is created and how the chairs are moved around in that area. all these issues, i think, have -- are fertile ground for reaching consensus, and i know the senator from connecticut has been very constructive in his efforts to reach across the aisle, and i just hope we can make progress on all these items because this bill can be a very strong and positive piece of legislation. and i hope it will end up that way. i think this is a strong -- a good step in that direction, a very good step, the announcement by the chairman on agreement on resolution authority. i wanted to speak about a part of the bill that has really been ignored because there have been so many other big issues. that's what happens when you bring a bill this large to the floor -- it's over here. 1,400 pages. it's a big bill. it's got a lot of language in it. it had to be a large bill because it deals with a complex issue. but included in this bill are -- is some language which was sort of baggage thrown on the train

is the way i would describe it. it's in the area of corporate governance. in fact, to a large degree, by its own definition, it has virtually nothing to do with financial regulatory reform. this language does a series of things. primarily it federalizes corporate law relative to the manner in which stockholders and directors are vetoed, and executives of corporations. not limited to financial institutions but to any publicly traded company. parents what's known as proxy access under federal law. that's a right that has traditionally been set up by states. it sets up standards for how directors are elected under federal law, for all companies. that's a right that's usually been reserved for the states. it even puts in place a

requirement the corporations disclose certain information which has absolutely no relevance at all to finance reform because it deals with every company in america that's publicly held, such as the ratio of compensation between different workers within a company, and the manner in which boards of directors are elected whether they are all elected at once or whether they are elected under staggered terms. it is a major push by the federal government into an arena which has always historically been primarily the role of states, and it really steps all over states' rights. and, in my opinion, the right of shareholders to have companies which they are comfortable with,

are being well managed for the purposes of returning a reasonable return to the shareholders, and it will undermine shareholders' rights, in my opinion, not increase them. if you look at the proposal specifically, let's take proxy access, this is a term of art which essentially says that any group of shareholders would be able to put on a proxy statement a proposal for how the company should be run. if you want to balkanize the company, there is probably no quicker way to do it than to have unilateral proxy access for any issue that is of concern or interest to some group that buys shares. this type of language is essentially put in to promote special interest activity. now, we all hear around here about how terrible special interests are. well, this language is special interest language for the purposes of promoting special interest groups, starting with

the trial lawyers, of course. but followed up by various people who have a social justice purpose relative to some corporation. let's take a group, a company like mcdonald's. let's say that some group feels that mcdonald's is selling too much food that creates the opportunity for people to eat too much and causes obesity. you could have a special interest group and force a proxy statement fight over what type of food mcdonald's should sell. it doesn't stop there, of course. there are all sorts of issues that special interest groups want to promote and change corporate governance about. now, how you manage a corporation is supposed to be primarily in the hands of the boards of directors who are answerable to the stockholders and the purpose, of course, is

to increase the value of the stockholders as a whole and their return on investments. in most instances, that's the primary purpose of a corporation. but this proxy asset is all about the opposite. it's about pushing the agenda on to the management through the board of directors through the proxy and very special oriented and narrow and not direct at return on investment for the stockholders. just the opposite, in fact. short-term objectives become the standard of the day under this type of approach rather than a long-term view which is what most of your board of directors are supposed to take relative to these decisions. the immediate -- the cause of the day, the cause could be any number of things, you know, that happens to be the activist view of the day becomes the issue

under corporate governance v. the purpose of managing the corporation well over a long term in order to get adequate to run the shareholders. it's really a -- and i inappropriate idea -- an inappropriate idea, especially the federal government, to put it buried in this bill. it applies to every publicly traded corporation in america, this language, not just the financial institutions. so why is it buried in this bill? it shouldn't be in here. the same can be said of the way this bill -- this language approaches directors and how -- what the shareholders' rights are relative to directors. these have historically been state decisions. in fact, the state of delaware, which is the leading state on the issue of corporate governance and really has developed the uniform corporate governance structure, which my state of new hampshire tracks

delaware, to a large degree. that has been the law of the land for all intents and purposes, settled law, predictable law the purpose of which is to have fair an adequate corporate governance where the directors are responsible to the shareholders under a structure that everybody knows the rules and which is controlled by the states. and, yet, this bill comes in and does fundamental harm to that. for what purpose? well, because there's an agenda in this congress to usurp the state's rights to be able to manage corporate law and to put in place of it opinions and ideas which are only supported by a very narrow group of special interests who basically have gotten the ears of people in this -- in this congress. i mean this is the ultimate special interest legislation. and the implications for these various companies is that it's going to be darn expensive if

you're a smaller, middle-sized company to deal with this type of -- this type of federal interference with the management of the company and the proxy process. very inappropriate initiative. furthermore, you create this atmosphere where nobody's really going to know who's governing what because you're going to now have state law and you're going to have federal law and you're going to have the s.e.c.'s responsibility increase dramatically. now we already know the s.e.c. is strained to do what we've asked them to do. and they've got some big responsibility. they've got big responsibility in the financial reform area, they've got big responsibility in corporate governance generally. to put this further burden on them is really going to be very

difficult for them to meet. i happen to be a strong supporter of having a strong, robust s.e.c. but we should not burden them with an unnecessary whole new set of corporate governance rules which are already accurately and appropriately addressed by state law. primarily the delaware state law, but other states which have their own corporate rules. and, more importantly, we shouldn't undermine the rights of stockholders across this country to be able to get a reasonable return on their investments by being reasonably assured that their management, specifically the directors of the company, are working for the purposes of the company's financial return and strength as versus for some special interest group that wants to come in and put special interest legislation in the middle of the corporate

governance effort. this is what this language is proposed for. that's why it's here. the only reason this language has come forward is that there are a lot of self-proclaimed social justice groups in this country who have decided they want better access to corporate boards than to have this federal proxy access which will basically balkanize the process of governing and leading these businesses which most americans are invested in. the vast majority of americans in this country either have a pension fund, have i.r.a.'s, from 401(k)'s or are personally invested in the stock market. now and why do they invest? they invest to get a reasonable return on that investment. either in the way of appreciation or in the way of dividends or maybe a combination. that's what they do.

and most of the savings, a lot of the savings of this country are tied up in that. so why would this language appear which will basically undermine those stockholders' rights and ability to be, presume and expect that their directors are going to be managing for the purposes of the stockholders at large as versus for a single interest group within the stockholder group that happen to want -- put a social justice agenda into the management of that corporation? makes no sense at all really unless you happen to be a special interest group. and so we rail around here all the time. i hear ironically from a lot of these groups who are sponsoring this, like "public citizen" that they're against special interests and yet here we have the most significant piece of special interest legislation in this whole bill, it's an attempt to bootstrap up special interest groups' social agenda and force them on corporations and

stockholders who would otherwise not pursue those agendas because they're interested in getting a return on their investment. it is really going to, as i mentioned earlier, make it much more difficult for us to have a vibrant stock market and a -- and a corporate structure in this country which is rationed and certainly will undermine significantly the states' in the area of corporate governance which have always historically been at primary responsibility for setting up the rules by which our corporations operate. so i would hope that as this bill moves down the road, this type of language, which is extraneous, totally extraneous to the financial reform effort because it affects all public corporations, and ironically, the three financial corporations

which -- which are at the core of the problem which we had in 2008 relative to visibility -- a.i.g., lehman and i believe one other, maybe citibank -- had a couple of these rules in place anyway. so obviously they -- it was -- they had nothing to do with th the -- with reducing the implications of the event. rather, this language is simply put in because some group had somebody's ear. and i would hope would be taken out before we get to the end of the day. madam president, i yield the floor. mr. burris: madam president? the presiding officer: the senator from illinois. mr. burris: thank you, madam president. roughly two years ago, the american economy stood on the verge of collapse. after years of growth and seemingly endless prosperity and the honeymoon was suddenly over. the bubble burst, the world was plunged into recession.

banks began to fail, foreclosures skyrocketed, business struggled and many americans lost their jobs. working families saw their hard-earned economic security evaporate almost overnight, madam president. some of our largest and most respected financial institutions were forced to close their doors and others were in intimate danger. near washington, policy-makers -- here in washington, policy-makers found themselves face to face with the worst economic crisis since the great depression, so they took action, madam president. they were forced to make some difficult decisions but they -- they stopped the bleeding. and set america back on the road to recovery. it's well-known that reckless actions by large wall street firms helped get us into this economic mess. these companies skirted rules

and regulations. they gambled with the securities of the entire financial system and, madam president, they lost. but my colleagues knew that these large dpaish these large e institutions collapsed, they would bring down the rest of our economy with them. they had become, as we say on this floor, too big to fail, madam president, too big to fail. so in the face of the potential catastrophe, many of my colleagues summoned the kind of political courage that is rare in this town: they bit the bullet and voted to bail out these large firms. not because the firms deserved government help but because it was the only way to stop this recession from turning into a depression. it must have been a painful

decision but it provided stability at a volatile moment. it propped up ailing markets all over the world and helped pull this country out of an economic tailspin. today our recovery remains fragile but we're moving in the right direction. too many americans remain unemployed but the economy has started to grow again. key indicators are finally turning around. so as this chamber considers wall street reform, i believe it's time to make sure that this can never happen again. let's protect our financial system from the kind of recklessness and abuse that has cost us so much. let's make sure that we never again be forced to prop up big banks or risk total collapse. madam president, let us end

too-big-to-fail. but as a former banker, i have a deep understanding of the role that our financial institutions play. banks have direct investments to local communities. they provide credit to small businesses and security to working families. and when they make bad decisio decisions, they deserve to suffer the consequences of those decisions. that's how our free market system works. so when big banks try to get around these responsibilities, when they packaged these risky investments and sell them -- sell off the risk to someone else, that isn't banking, madam president, that is gambling. our commonsense regulations and rigorous oversight, wall street becomes a casino. i heard my distinguished colleague from nevada mention

that nevada is the gambling capital of the world. but nevada wouldn't even buy when these odds some of these banks are involved in. but sometimes these companies get lucky and they -- and their bets may pay off, but other times they're not so lucky. that's when they look to working families to either bail them out or suffer a second great depression. so, madam president, we need to make sure americans never have to face this choice again. we have to prevent firms from growing so large and wreck thals they threaten our entire -- reckless that they threaten our entire economy. that's why i support the bill introduce bide chairma -- introy chairman dodd and say it is a good bill, it is a strong bill which will end taxpayers' bailout, restore oversight and set basic rules of the road.

so we can make sure that too-big-to-fail is a thing of the past, that this bill will institute the volcker rule which will restore and modernize some of the key protections of the glasglass-steagall act of 1933. and, madam president, i am also cosponsor of an amendment that's coming forward. i really support us going back to glass-steagall. having been a banker during those days when you couldn't invest in insurance companies, you couldn't invest in mortgage banking activity, had you to be a commercial bank that took in the lending and the security of people's assets and made loans and that regard. so this will help prevent fraud, discourage conflict of interest and keep brangs banks from banko thrarnlg at the threaten our economic security. it will also give us the tool to monitor big banks for risky behavior so that we can crack down on irresponsible practices that caused this mess in the

first place. so, madam president, i urge my colleagues to pass this bill as it will be amended. i call upon them to join my senator friend boxer and n passing her -- boxer in passing her amendment which will help us bring down large, unstable institutions without taxpayers' bailout. the taxpayers aren't going to take it anymore. we aren't going to be bailing out these big institutions to watch them turn around and then spite us and pay tremendous bonuses to their top officials. madam president, over the past two years, we've made great strides in helping to turn our economy around. in the last congress, members of both parties did what was necessary to stop the recession from deepening. a little more than a year ago, i was proud to join many members of this body in passing the american recovery and reinvestment act, a landmark bill that continues to bring

prosperity back to communities all across this country. as a result of these bold actions, our economy is finally on the right track. so let us in this body this time finish this job. let's pass this wall street reform bill, as amended, so that we can establish basic rules of the road, allow our free markets to thrive again. let us end, madam president, too-big-to-fail so no large bank will be able to gamble away our economic security. let us do it now, madam president. the time is now. i yid the oor. the presiding officer: the senator from michigan.

mr. levin: madam president, i want to start with a poem in honor of marie hardwell, who passed away yesterday, and this is the way for decade after decade the great broadcaster of the detroit tigers started when the first game of the season came along. he said: "for lo the winter has passed, the rain is over and gone, the flowers appear on the earth. the time of the singing of birds has come and the voice of the turtle is heard in our land." well, madam president, for four decades, a man named ernie harwell would recite those words and he would recite them at the beginning of the first baseball broadcast of spring training and those are the words that would

tell our people that the long, cold winter was over. ernie was the radio voice of the detroit tigers for 42 years, and in that time, there may have been no michiganan more universally beloved. our state mourns today at his passing yesterday evening after a long battle with cancer. he fought that battle with the grace, the good humor, and the wisdom that michigan had come to expect and even depend on from a man that we came to know and love. this gentlemanly georgian adapted our team, he adopted our state, he adopted them as his own and their families. and his career would have been worthy had he done nothing more than bring us the sound of summer over the radio, recounting the tigers' ups and downs with professionalism and wit, as he did for all those years. but without making a show of it,

ernie harwell taught us in his work and his life, he taught us the value of kindness and respect. he taught us that in a city and a world too often divided, we could be united in joy at a great catch of al caline's our a lou whitaker home run or a mark fiderich strikeout. he taught us not to let life pass us by, in his words, "like the house by the side of the road." in 1981 when he was inducted into the hall of fame, ernie told the assembled fans what baseball meant to him, and these are his words. "in baseball, democracy shines its clearest. the only race that matters is the race to the bag. the creed is the rulebook and color merely means something to

distinguish one team's uniform from another." that was a lesson that he taught us so well in everything that he did in his life. i will miss ernie harwell personally and deeply and fond fondly. all of us in michigan will miss the sound of his voice telling us that the winter has passed, that the tigers had won a big game or that they'd get another chance to win one tomorrow. we'll miss his georgia drawl, his humor, his humility, his quiet faith in god, and in the goodness of the people that he encountered. but we will carry in our hearts always our love for ernie harwell, our appreciation for his work, and the lessons that he gave us and left us and that we will pass on to our children and to our grandchildren. madam president, i yield the floor and note tencef a quorum. the presiding officer: the clerk will call the roll.

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and environmental disaster that

is occuring as we speak in the gulf of mexico. it was in an exploratory rig that is almost unbelievable how far that they can now drill beneath the surface of the water. in this case 5,000 feet. and then at the ocean bottom and then to be able to drill another 13,000 feet down to find a pocket of oil all of which caused this explosion because of the pressure of the oil and the gas -- the natural gas creating such an overpressure that it exploded at the well head at the

sea bottom and the so-called device blowout preventer that had three safety mechanisms in order to stop the flow of oil in the case of a blowout, none of those three safety mechanisms have worked. the first was a mechanism that would be activated by a switch 5,000 feet up from the seabed on the surface of the gulf of mexico on the floating exploratory rig. there were actually two switches. one was flipped closer to the surface by workers on the rig that, unfortunately, lost their

lives and they have not been found. the second switch was switched at a higher level. i think they refer to it at the bridge as -- as the bridge and those workers were rescued and they confirmed that that switch was flipped which was to automatically cause the first safety device to go into activation which was to drive metal plates like pistons together over the wellhead to cut off the flow of oil as it was gushing upwards from the pressure beneath. that activation mechanism did not work.

the second safety mechanism was one called a deadman switch, and that is whenever power was interrupted that automatically the second safety mechanism was to activate driving those metal plates together to shut off the flow of oil. that did not work as well. the third safety mechanism was to use robotic submersibles that are quite sophisticated that have manipulator capability, even at that depth, the depth of a mile, to go in and physically

get hold of a handle -- an act n actuating device that would drive the plates together to shut off the well. that third safety device did not work either. now this safety device, referred to as a blowout preventer, was designed and built by a company that was contracted to a b.p., british petroleum, called tan tans -- transocean. we know now that as far back as

10 years ago in the year 2000, that british petroleum had been concerned with the safety devices working and had asked transocean who built the devices about this. when i asked the c.e.o. yesterday -- the c.e.o. of british petroleum -- what he -- what occurred 10 years ago, you were put on notice there was a safety mechanism that maybe was not working. he said that was raised and they worked it out. well, apparently 10 years later the safety devices did not function so that they worked it out. well, as you know, what's

happening, the initial results provided by b.p. was that it was 1,000 barrels of oil a day. the coast guard has estimated that it is now five times that much and we are waiting for updates. so what is gushing from the ocean floor below is 5,000 barrels of oil a day. that's in excess of 220,000 gallons of oil a day that are coming into the waters of the gulf of mexico. it has created this slick that is now because of the southeasterly winds are to start encountering the barrier islands off the southeast coast of louisiana, and lord knows where this is going to go. so what do they do now? right now, they are constructing

a fancy dome. this is a multistory structure. probably ten times my height. that has worked in other blowouts but only at depths of 300 and 400 feet. now they have to try to place this dome 5,000-feet deep over the well head to see if they can then collect that escaping oil into this dome and then run it up a pipe to a transport and collect the oil there. but by the way, we don't know that it's going to work at 5,000 feet because of the pressure. we don't know if they can actually locate it 5,000 feet

over the well head, and what comes up if they do and collect it is not just oil but there would be a rush of oil, then there would be a rush of natural gas, there would be a rush of seawater, and all along having sand corroding the inside of that pipe like sandpaper as it rushes up the pipe 5,000 feet to the surface tanker. let's hope it works, because if it doesn't, then we have to wait three months until the rescue well that is presently being dug from the side to go down

13,000 feet to the pocket of oil to start sucking the oil out through the rescue well, thereby relieving the pressure up through the defective well that exploded. and they will have to, in fact, drill not one but two rescue wells from the side. but the estimates are that that will take 90 days. if this dome does not work, which they are to insert in the ocean in the next few days, then we are looking at the possibility of that oil continuing to gush for three months, and you can see after two weeks how much of an oil slick there is out there. you can imagine if you go on for

another 13 weeks and how that could start to cover up the gulf of mexico and much worse as the prevailing winds from the south would carry it on to some of the world's most beautiful beaches. that along the northwest coast and the gulf coast of florida. but oh, by the way, madam president, there is another threat now, and that is something that mother nature has designed known as the loop -- luke current. the luke current is a current of water that comes up the western side of cuba in between cuba and the yucatan peninsula of mexico, up into the northern gulf of mexico, loops and comes from the south off of the southwest coast of florida, loops down around

the florida keys and turns northeast and northward, hugs the florida keys, becomes the gulf stream, which hugs the keys and those delicate coral reefs. 85% of north america's coral reefs are in the keys. and then hugs the shore of florida along the southeast coast all the way up to central florida to fort pierce, florida, where it then leaves the coast of florida, goes across the atlantic ocean and ends up over close to scotland. that's the gulf stream. it was the stream that 500 years ago used to carry the spanish galleons along with the wind back from their discoveries of the new world as they went back to europe. now, you can imagine if the

spill gets so big in the gulf of mexico, that then it encounters the loop current and that spill then starts carrying that oil down the southwest coast of florida, around the florida keys, hugging the florida keys and the coral reefs and up the east coast of florida. we are looking at potential major economic and environmental loss. so the question is what do we do? well, first of all, i have not only requested but in my kind of mild way, madam president, have

strongly suggested that we stop all exploratory drilling, at least until the investigation that we, many of us here in this chamber have asked for, until that investigation is over as to what went wrong and what we can do to prevent it in the future. and oh, by the way, that's not going to be a few weeks' investigation. by the time you get through with all of this, it's going to be months. so we shouldn't be doing any more exploration with the possibility of more explosions like this. i didn't say production wells. they need to keep producing. this risk, this blowout was in an exploratory rig.

that ought to be stopped. i asked the c.e.o. of b.p. yesterday, have you stopped exploratory drilling? he says yes. i said where? he said in the gulf of mexico. i said how about worldwide? he said no. only in the gulf of mexico. well, what should the president do other than what he is doing, and that is -- and i give credit where certainly credit is due to the operation being taken over by the top four-star admiral of the coast guard since they have the lead. i have talked to the chairman of the joint chiefs, the united states navy is fully supporting

the lead which is the coast guard. all the agencies of government. noaa, dr. lucinko, the department of interior, our former colleague from here, secretary ken sal a czar. you can -- ken salazar. you can go down the list. they are all pouring in to try to help because we have a disaster of monumental pro portugals that's in the making. on ruining people's lives, their livelihoods, their incomes, their way of life, their culture. we're talking about all of the above. so i strongly suggest to the president that he ought to abandon his five-year plan that was for offshore drilling in the outer continental shelf but of which he proposed it, at least in the continental u.s., he

proposed it only in the gulf of mexico and off the mid-atlantic coast. i suggest that he withdraw that. if he does not, i believe that it is dead on arrival. where do we go from here in the future? potentially, we're looking at extraordinary financial loss. so i asked the chairman and c.e.o. of british petroleum, yesterday afternoon, i said you realize that existing law on liability says that you handle the cleanup costs but that the existing law has a cap on your liability of $75 million.

do you agree that the economic loss is going to exceed exceed $75 million? and he said yes. and i said to him you have been saying on tv that you think that british petroleum will be responsible and be the responsible party and take care of this. when it exceeds $75 million, are you going to accept all that liability? he said we will work that out. i said well, if i understand that as far back as 2000 that your company had a problem with transocean and their safety devices in the blowout preventer, are you not going to have some considered lawsuit

against transocean for a defective piece of equipment? and he said we're going to work that out. so i suspect, madam president, that what we're going to see is some of the most enormous and complicated lawsuits that you have ever seen, with a lot of finger pointing that's going to be going around many, many different circles, and of which the question of liability for all these people that are going to be losing their jobs and their livelihood and their cultures if this gusher, this underwater volcano is not cut off. i suspect that what we're going to see is an attempt to avoid that economic liability, and therefore that's why senator

menendez and senator lautenberg and i filed monday night a bill that will lift that liability cap from a meager $75 million to to $10 billion, because you can see that $10 billion economic loss is not an unrealistic figure, what could happen if this oil continues to gush for another three months. well, madam president, let me just complicate things a little bit because if the gusher continues for three months, do you know what starts on june 1? hurricane season. and do you know that it has been historically a fact that several

hurricanes brew up in the month of june in the gulf of mexico? and so can you imagine a big part of the gulf of mexico being polluted with oil and suddenly having that all stirred up with the complications of a hurricane? madam president, this is not a pretty picture. it is a major environmental and economic disaster of the most gargantuan proportions that we could ever imagine. and for my final comments, madam president, let me say i have -- this senator has often been derided for standing up for the economic and environmental interests of my state, my state of florida, which has more

coastline than any other state save for alaska, and certainly has more beaches than any other state. i am trying to protect those interests as well as the interests of the united states military, since most of the gulf of mexico off of florida is the largest testing and training area for the united states military in the world. and two successive department of defense secretaries, rumsfeld and then gates, i have in writing that the policy of the defense department is in place that oil activities and oil structures are incompatible with the testing and training necessities of the department of defense. in the preparation for our national security interests.

this senator will continue to protect all of those interests, and it's my hope that people will understand the tradeoffs of drilling close to florida are just simply not worth the risk. and why is that? because of the department of interior's own statistics of the undiscovered oil in the gulf of mexico. 90% of that oil is not off of florida, it's in the central and western gulf. of the department of interior's own statistics, only 10% of that undiscovered oil is off florida. is it worth the risk for that de

minimis oil to have future potential economic and environmental disasters? and the answer from this center has been for over 30 years that i have been doing this battle, first as a young congressman 30 years ago and now in the position of representing all of florida, clearly the answer is the tradeoff of the risk is not worth it. so, madam president, i wanted to bring this to the attention of the senate. unfortunately, this story is a continuing story, because although this story began over three decades ago, it is still a

drama that continues to unfold with tragic consequence. mr. sanders: madam president? the presiding officer: the senator from vermont. mr. sanders: thank you, madam president. madam president, as soon as i possibly can, i intend to bring up an amendment which calls for transparency at the fed. and i must tell you that this amendment is one of the more unusual amendments that has been brought up here in the senate i suspect for many, many years because of the rather strange coalition that has come together around this amendment. how often do we have the afl-c afl-cio, a progressive

organization, and freedom works, a very conservative organization, supporting the same effort? how often are the sciu, the largest union in the america, moveon.org, some 5 million members as a progressive organization, "public citizen," another progressive organization striving for the same goal as the national taxpayers' union or the eagle forum or americans for tax reform, very conservative organizations? and how often do you have some of the most progressive members in congress -- and i include myself within that fold -- working with some of the more conservative members? doesn't happen everyday but that is what is happening on this amendment. and i want to talk just for a few minutes about this amendme amendment, what it does and why so many diverse groups representing tens and tens of

millions americans are coming together in support of this, and i also want to suggest to you what it does not do and some of the ways that it has been distorted by the fed and other groups that are opposed to it. and i have seen some of the statements made by the fed which are just absolutely untrue in terms of what this amendment does and does not do. madam president, the origin for me -- the origin of this amendment came on march 3, 2009, when, as a member of the budget committee, i asked the chairman of the fed, ben bernanke, a very simple question. i asked him if he would tell me and the committee and the american people which financial

institutions received over $2 trillion in zero interest or near zero interest loans during the start of the economic crisis, during the bailout period. some $2 trillion of taxpayer money was lent out, and my question was: mr. chairman, who received that money? i don't think that that is an unfair question. you and i, madam president, have heard great debates here on the floor of the senate about $5 million or $10 million. to ask who received over $2 trillion in zero or near zero interest loans is something that i think should be answered by the fed and they should make that information public. but mr. bernanke said no, he gave his reasons, and on that very day i introduced legislation that would require the fed to put this information

on its web site, make it public just like congress required the treasury department to do with respect to the $700 billion tarp program. you may like tarp, you may not like tarp; you may have voted for it, you may not. but the information about who receive the money, when it was paid back, et cetera, is right there on the web site of the treasury department. madam president, this $2 trillion in zero or near zero interest loans does not belong to the fed, it belongs to the american people. and the american people have a right to know where trillions of dollars of their taxpayer dollars are going. that's not complicated. you don't need an m.b.a. from wharton to know that. and that is why i -- that is why millions of americans, whether you're conservative, whether

you're progressive or whether you are inbetween, have come together to say that we need transparency at the fed. madam president, this amendment not only requires that the fed tell us who has received the $2 trillion it lent out in the midst of the financial crisis, but similar to the language incorporated in the house bil bill -- it's already in the house bill -- it calls for an audit of the fed by the g.a.o. and as we all know, the g.a.o. is the nonpartisan government accountability office who does a great job in trying to figure out where there's waste and fraud within our government. and that's it, madam president. this is a very, very simple, short amendment. i think it's five pages. it calls for transparency at the fed and a straightforward audit. who got what?

what did they get it? on what basis, on what snerms who was a -- on what basis, on what terms? who was at the meetings? who made the decisions? and were their conflicts of interest? simple factual questions that the american people deserve answers to. that's what it is. it's not complicated. madam president, i understand that this amendment will not be supported by everyone. some may suggest inaccurately that this amendment -- and i quote, because i've heard this statement already -- "takes away the independence of the federal reserve and puts monetary policy into the hands of congress." let me address those concerns by simply reading exactly what is in the amendment. this is not complicated. and i growth page 4 of the amendment. this is what it -- and i quote from page 4 of the amendment. this is what it says. i don't think you can be more straightforward than this.

quote -- "nothing in this amendment shall be construed or interference in or dictation of monetary policy by the federal reserve system by the congress or the government accountability office." you can't be simpler, you can't be more straightforward than the language in this amendment. so when people tell you that this amendment is going to interfere and have congress dictate monetary policy, it is simply not true. in other words, madam president, this amendment does not take away the quote, unquote, independence of the fed and it does not put monetary policy into the hands of congress. this amendment does not tell the fed when it cut short-term interest rates or when to raise them. it does not do that. it does not tell the fed what banks to lend money to and what banks not to lend money to. it does not tell the fed what foreign central banks they can do business with and which ones

it cannot do business with. it does not impose any new regulations on the fed nor does it take any regulatory authority away from the fed. it does none of those things. no matter what anybody coming to the floor may say. madam president, what the opponents of this amendment are doing is equating independence, which we support, with secrecy, which i do not support. at a time when our entire financial system almost collapsed, we cannot let the fed continue to operate in the kind of secrecy that they have operated in for years. the american people have a right to know. you know, madam president, very often we see senators coming down here to the floor and they make the point that the american people, working people, have to

play by the rules. play by the rules. how often have we heard that rhetoric? well, what are the rules governing the fed? who makes those rules? or do they just make them up as they go along? madam president, there are -- let me just list a few, a very few, of the questions that millions of americans are asking, members of congress are asking that a g.a.o. audit might help to answer. let me just rattle off a few of them and i'm sure that there are many, many more. question: why was lloyd blankfein, the c.e.o. of goldman sachs, invited to the new york federal reserve to meet with federal officials in september of 2008 to determine whether

a.i.g. would be bailed out or allowed to go bankrupt? i wasn't invited to that meeting. i don't think you were invited to that meeting. lloyd blankfein was invited to that meeting. when the fed and treasury decided to bail out a.i.g. to the tune of $182 billion, why did the fed trophy tell the american people -- why did the fed refuse to tell the american people where that money was going? why did the fed argue that this information needed to be kept secret -- quote -- "as a matter of national security"? when a.i.g. finally released the names of the counterparties receiving this assistance, how did it happen that goldman sachs received $13 billion of this money, 100 cents on the dollar on what a.i.g. owed them?

how did that happen? i don't know. you don't know. the american people don't know. but i think we have a right to know. did goldman sachs use this money to provide $16 billion in bonuses to their top executives the next year? all over this country americans have lost their jobs, they've lost their homes, they've lost their savings, they've lost their ability to send their kids to college because of this recession caused by wall street, and yet goldman sachs gets $13 billion, 100 cents on the dollar, after a.i.g. is bailed out in a meeting in which lloyd blankfein is at that meeting. i think it's an interesting question. i don't know the answer but i think the american people have a right to know.

a g.a.o. audit of the fed might help explain to the american people if there were any conflicts of interest surrounding that deal. who got what? on what basis? on what terms? who was at the meetings? who made the decisions? and were there conflicts of interest? madam president, in 2008, it seems to me -- you know, i didn't go to harvard business school but it does seem to me that there was an apparent conflict of interest at the federal reserve bank of new york with steven freedman, the head of the new york fed, who also served on the board of directors of goldman sachs. let me repeat it. he was the head of the new york fed, he also served on the board of directors of goldman sachs and the new york fed approved

goldman's application to become a bank holding company giving it access to cheap loans from the federal reserve. let me quote from an article published in "the wall street journal," on may 9, 2009, and let the american people determine whether or not this deserves a g.a.o. audit. "wall street journal" -- quote -- "goldman sachs received speedy approval to become a bankholding company in september of 2008. during that time the new york fed chairman, steven friedman, sat on goldman's board and had a large holding in goldman stock, which, because of goldman's new status as a bankholding company, was a violation of federal reserve policy. the new york fed asked for a waiver which, after about 2 1/2 months, the fed granted.

while it was weighing the requests, mr. friedman bought 37,300 more goldman shares in december. they have since rise risen $1.7 million in value. mr. friedman, who once ran goldman, said none of these events involved any conflicts." end of quote, "wall street journal", may 9, 2009. well, you know, maybe mr. friedman is right. maybe there's not a conflict of interest. it seems to me like there's a very apparent conflict of interest. that's an issue that maybe a g.a.o. audit might want to look at. madam president, it is a -- as a result of the bailout of bear stearns and a.i.g., the fed now owns -- this is pretty amazing -- now owns credit default swaps betting -- credit default swaps betting that

california, nevada, and florida will default on their debt. let me repeat that. the senators from california, nevada, and florida might be interested in this. as a result of the bailout of bear stearns and a.i.g., the fed now owns credit default swaps betting that california, nevada, and florida will default on their debt so the federal reserve stands to make money if california, nevada, and florida go bankrupt. what can i tell you? this is the reality. i know it will seem strange to the american people that the fed makes money and is betting that three of our great states go bankrupt. madam president, this may make sense to the fed, it may make sense to some of my colleagues here in the senate. it does not make sense to me.

and, frankly, i do not believe that it makes sense to the american people. but this is what an audit of the fed will allow us to better understand whether we want the fed to be betting against some of our great states that they will go bankrupt. madam president, it has been reported that the federal reserve pressured bank of america into acquiring merrill lynch, making this financial institution even bigger and riskier. allegedly threatening to fire its c.e.o. if bank of america backed out of this merger. when the merger went through, merrill lynch's employees received $3.7 billion in bonuses. was this a good deal or a bad deal for the american taxpayer? perhaps a g.a.o. audit can help us find out. madam president, when the fed

provided a $29 billion loan to j.p. morgan chase to acquire bear stearns, the c.e.o. of j.p. morgan chase, mr. dimed, served on the board of directors at the new york federal reserve. let me repeat that. when the fed provided a $29 billion loan to j.p. morgan chase to acquire bear stearns, the c.e.o. of j.p. morgan chase, mr. dimed, served on the new york federal board of reserve. did it represent a conflict of interest? to my mind it does. maybe i'm wrong. but that's what a g.a.o. audit can explain to the american people. and i know that we're going to have senators running down here saying, oh, we're trying to break the independence of the fed. we are not trying do that.

what we are trying to do is to allow the american people to get a glimpse and an understanding of some of the actions of the fed involving huge sums of money. madam president, currently some 35 members of the federal reserve's board of directors are executives at private financial institutions which have received nearly $120 billion in tarp funsdz. but, madam president, we -- tarp funds. but, madam president, we don't know how much these big banks receive from the fed. a g.a.o. audit could answer this question. -- could answer that question. madam president, and here's a very interesting point that i know a lot of senators have raised in different context, but if the goal of the huge amounts of money in fed loans, trillions of dollars in fed loans to large financial institutions, was to

achieve the goal of getting credit flowing to small and medium-sized businesses that were cash, that were crying out for credit, why is small business lending in freefall? what happened? we gave the large financial institutions trillions of dollars, presumably to get out the small-and-medium sized businesses, but they haven't gotten any. question, i think it's a reasonable question, i don't think anybody else is asking it: how much of those zero interest or near zero interest loans that the huge corpses received from the fed that were invested in government bonds that were earning an interest rate of 3% or 4%? in other words, are we looking at a huge scam? and i can't think of a better word. you give these large financial

institutions trillions of dollars in zero interest loans in order to help -- in order to enable them to provide desperately needed loans to small-and-medium sized businesses so that those businesses can expand and create jobs, yet that appears not to be happening. question: how much of those several trillion dollars in loans simply went from the fed to the financial institutions in order to purchase government-backed obligations at 3% or 4%? and if that's the case, that's just giving away money, zero interest coming in, you get 3% or 4% guaranteed by the faith and credit of the united states of america. well, you know what? i don't know. i don't know how much. i suspect other people suspect that was done. how much? i don't know. maybe the g.a.o. can tell us. madam president, this amendment

is virtually identical to legislation that i've offered on the subject that has 33 cosponsors. and just as we have a very broad spectrum of political ideology from grassroots organizations on the left and the right, conservative, progressive, democrat, republican, supporting this amendment, so we have had widespread, across ideology support for this legislation. let me just mention who the 33 cosponsors are and you will see how people with very different political ideologies have come together. and the names of those people are barrasso, bennett of utah, cochran, dorgan, feingold, graham, grassley, harkin, hatch, hutchison, inhofe, isakson, leahy, lincoln, mccain, risch, sanders, thune, vitter, wicker,

and wyden. those are the people supporting the legislation. this amendment coming to the floor has 20 cosponsors, republicans and democrats alike, and i want to thank all of those 20 senators for their support. madam president, in terms of progressive grassroots organizations, this amendment enjoys the strong support of the afl-cio, the sciu, america steel workers of america, public citizen, the center for economic policy and research, the roosevelt institute, the u.s. public interest research group and americans for financial reform, which, in itself, is a coalition of over 250 consumer employee investor community and civil rights groups. and let me just read you a letter of support that i received for this amendment from bill samuel, the legislative director of the afl-cio. and this is what the afl-cio

said and i quote -- "on behalf of the afl-cio, i am writing you to support" -- this is a letter going out to other senators -- urge you to support the grassley mccain vitter brownback amendment, working people want to know who benefited from the liquidity provided by the taxpayers during the crisis and this amendment will assure that we receive this amendment. end of quote, afl-cio. let me also quote from a letter i received from andy stern, the president of the sciu, also the president of the steel workers united yoond a number of other academics and economists. and this is what they write and i quote -- "since the start of the financial crisis, the federal reserve has dramatically changed its operating procedures. instead of simply setting interest rates to influence

macroeconomic conditions, it rapidly acquired a wide variety of private assets and extended massive secret bailouts to major financial institutions. there are still many questions about the fed's behavior in these new activities. the federal reserve balance sheet expanded to more than $2 trillion, along with implied and explicit back stops to wall street firms that could cost even more. who received the money, against what collateral, on what terms and conditions? the only way to find out is through a complete audit of the federal reserve, that is why we support the sanders, feingold, demint, grassley, vitter mccain, brownback amendment. end of quote. that's what leading progressive economic, and social justice organizations are saying about this amendment. let me briefly, if i might, quote from some of the conservative organizations. and one of the large ones is the national taxpayers' union.

i don't usually quote from the national taxpayers' union. i'm not rated very highly on their chart, but this is what they say in support of this amendment. i quote -- "the national taxpayers union urges all senators to vote on s. amendment 3738. this amendment introduced by senator sanders an demint would require an audit of the federal reserve. transparency is not a democrat or republican issue but rather an issue of right or wrong. if the senate insists on further expanding the fed's reach, americans deserve to know more about the workings of a government sanction entity whose decisions directly affect their economic livelihood. a yes vote on s. amendment 3738 will be significantly waiting as a pro-taxpayer vote in our annual rating of congress. end of quote. that's from the national tags pairs' union.

we have support from other organizations, including the americans for tax reform, eagle forum, freedom works and the center for fiscal accountability. i will submit for the record some of their statements. let me just conclude saying a few other words. and that is, madam president, this amendment is not a radical idea. i've just indicated to you you have progressive groups representing millions of people, you have conservative groups representing millions of people, the aaarp representing i think tens of millions of americans. i should also mention to you that as part of the budget regulation liewtion debate -- resolution debate in april of 2009, the senate voted overwhelmingly in support of this basic concept by a vote of 59-39. in the house of representatives this concept passed the house financial services committee by a vote of 43-26 and was

incorporated into the house version of wall street reform that was approved by the house last december. in other words, a lot of what we are saying here, what i'm talking about is in the house bill. not a radical concept. this idea has the support of the speaker of the house, nancy pelosi, who said that congress should ask the fed to put this information -- quote -- "on the internet like they've done with the recovery package." end of quote. and that's what this amendment does. this concept has also been supported -- this is important. and i know my friend from texas wants to speak. i'm winding down. i apologize for going on this long. but it's important to point out that this concept has also been supported by two federal courts that have ordered the fed to release all of the names and details of the recipients of more than $2 trillion in federal reserve loans since the financial crisis started as a result of a freedom of information act lawsuit filed by

bloomberg news. mr. president -- madam president -- mr. president, you have become a man now. it's mr. president, the fed has argued in court that it should not have to release this information, citing, according to reuters, "an exemption that let's said federal agencies keep various trade secrets and commercial for financial information." end of quote. this is what the u.s. appeals court in new york said in disagreeing with the fed, and i quote -- "it was a unanimous three-judge appeals court. to give the fed power to deny disclosure because it thinks it best to do so would undermine the basic policy that disclosure, not secrecy, is the dominant objective. if the board believes such an exemption would better serve the national interests, it should ask congress to amend the statute." so let me conclude by saying

this. we now have 59 senators having voted for transparency, 320 members of the house, and two u.s. courts. all we want to know is who got trillions of dollars? that's what we want to know. we want to know also on what basis, on what terms, who was at the meetings, where key decisions were made. mr. president, this is an important amendment, and it is an amendment that millions of people want to see passed, and i hope that we will have an opportunity to offer it as soon as possible, and i hope that it is passed. i yield the floor. mrs. hutchison: mr. prede? the presiding officer: the senator from texas is recognized. mrs. hutchison: mr. president, i appreciated hearing the senator from vermont describing the amendment, and i haven't seen the text of the amendment, but i am a cosponsor of the bill that would do exactly what he says.

i think transparency at the fed is something that we can agree on, so i look forward to seeing the rest of the amendment, and if it's just that, i would be very pleased to -- to work with him for passage. mr. president, i am rising to speak today on the hutchison-klobuchar amendment. my colleague, senator klobuchar, from minnesota is also on the floor. we want to take a moment to talk about our amendment that is going to assure that community banks have a more level playing field than could be the case if the bill that is before us, the dodd bill passes without our amendment. our debate to reform our financial regulatory structure should focus first and foremost on filling the gaps in regulation that led to our financial crisis. i'm encouraged by the good-faith

efforts of senators dodd and shelby to end too big to fail, and i certainly hope that we will see language on that so that that is put aside, because i think that is the most important area of this bill. we must end too big to fail, and when senator dodd and senator shelby produce the language that they have agreed on, i think that will open the rest of this bill for the amendments such as the hutchison-klobuchar amendment that we're discussing now that i think should be part of overall reform. we have got to look at other areas of concern besides too big to fail, such as the lax underwriting standards and the lack of transparency over our derivatives markets. those are amendments that also will be coming to the floor to assure that we address those key issues in the financial reform. one area on which we can find agreement is that our nation's

community banks were not a cause of the financial collapse that we saw in the last 18 months. they didn't have risky loans and financing schemes that sent our economy into a downward spiral. financial reform should not punish the financial institutions such as community banks for the faults they did not commit. if anything, financial reform should reflect what we learned from safe and sound practices that are used by community banks. we should learn from the example of texas first bank, galveston county's largest locally owned family of community banks. on september 13, 2008, hurricane ike made landfall over galveston, texas, packing strong winds and a high storm surge that ravaged much of the texas gulf coast. just two days later, on monday,

september 15, 2008, texas first bank was open for business, and many of its locations provided hurricane ike relief loans and other services to area families and small businesses reeling from ike's damage. senator mary landrieu and i visited galveston several weeks later. i was there a day or so after the surge that came over galveston in a helicopter, but i couldn't get on the ground at that point, but we came several weeks later, senator landrieu and i, because we wanted to look at the recovery because senator landrieu, of course, has had so much experience with hurricane katrina, and we wanted to do everything to get help to these people. and so we had a press avail at a small neighborhood restaurant, and there was the community banker from hometown bank who also was applauded by the owner

of the little italian restaurant, and he said the banker was in there helping us clean up the restaurant and make sure that we had the liquidity to open our doors because there was no food to be had on galveston island at that point, and they wanted to get up to serve their customers and their community banker was right there with them. president obama himself has said that community banks are intimately woven into the fabric of the community. banks such as texas first bank and hometown bank and galveston county are examples of this. in the uncertain financial times, community banks worked hard to steady the financial hands at the wheel. community banks provide depository and lending services critical to america's families and small businesses. despite holding just 23% of the banking assets in our nation,

they make two-thirds of the loans to small businesses. small businesses must have support from community banks to invest and to expand and create jobs. despite the widespread recognition of the importance of community banks, the current bill imposes on them a regulatory structure that punishes them. i am particularly concerned about a provision in the current bill under which the federal reserve will only retain supervisory authority over bank holding companies that have over $50 billion in assets. republicans and democrats agree that we don't want too big to fail any more, because too big to fail means taxpayer bailouts. so what does a bill that says large banks over $50 billion will have the implicit backing

of the government? it means they will be too big to fail. creditors expecting to be made whole through this banking will offer cheaper credit to the large banks, putting community banks at a competitive disadvantage through no fault of their own. that's the first reason that we need to pass the hutchison-klobuchar amendment. the second reason is that this provision arbitrarily shifts many community banks out of their current prudential regulator, the federal reserve. the federal reserve supervises more than 6,800 banks of all sizes in all parts of the country. these banks include large bank holding companies like bank of america, chase, j.p. morgan. the fed also supervises smaller community banks -- citizens national gang of nagadoches, in addition to the first state bank

of mineral wells and 33 other state-chartered banks that are members of the federal reserve in dallas. i have heard from the president of the federal reserve bank in dallas, richard fisher, as well as presidents of federal reserve banks of kansas city, minneapolis, philadelphia and richmond, all of whom are in town today and all agree stripping the fed of its supervisory authority will drasticcally reduce the fed's ability to achieve its objective of maintaining sound monetary policy for our country. under the federal reserve act, the fed is mandated to effectively promote goals of maximum employment, stable prices and moderate long-term interest rates. implicit to this mandate is a goal of fostering stable long-term economic growth, which would require stability in the banking and financial system.

for the fed to have proper insight into the banking system, it must maintain supervision over a wide breath of banks located across the country. in curtailing the scope of the federal reserve's supervisory authority, senator dodd's bill does the opposite. the fed will lose its 845 state member banks which are so vital in providing a good sense of underlying economic forces in their respective localities. this will leave the fed to call information about the state of our -- to cull information about the state of our economy from where? from the banks that are $50 billion and above in assets, meaning monetary policy is going to go forward, reflecting our largest financial institutions. well, monetary policy can't and shouldn't be geared toward the new york banks and the washington policymakers.

the federal reserve needs insight into the health of our banking system and economy as a whole. that's why we have regional fed banks. it is important that they have the supervisory authority of banks of all sizes and in all parts of our nation. mr. president, i want to ask my colleague, senator klobuchar, who has stepped up to the plate to be a cosponsor of this amendment, and now we have bipartisan sponsors on both sides, to just say a word. i'd like to yield to the senator from minnesota for a few minutes to have the minnesota perspective and make sure the people know that the community banks of this country should not speak in a whisper to the on high in washington and new york. no. they should be speaking in a loud voice to all of us through their federal reserve banks, which means the hutchison-klobuchar amendment should pass. mr. president, i would yield the rest of my time to the senator from minnesota.

the presiding officer: the senator from minnesota is recognized. ms. klobuchar: well, thank you so much to my friend from texas. i'd like to thank her for her leadership on this issue. as she mentioned, our amendment seeks simply to preserve the federal reserve's authority to supervise community banks and bank holding companies and also preserve a system, mr. president, that ensures the institution charged with our nation's monetary policy has a connection, not just to wall street but to main street. as you know, mr. president, for the most part, our mid-sized banks, small banks in the states throughout this country, in texas and the midwest, they stayed out of these risky deals. they stayed away from these high-flying, way too risky deals for the past decade. they made mete and potato loans, mr. president, to businesses and consumers in their communities. they did well for their consumers. these main street banks did not dance down the yellow brick road to wall street deal making or

washington hobnobbing. when the pavement on wall street began to buckle and collapse, these community banks did not panic and run to washington with tin cups in outstretched hands. they continued to conduct their business, behaving the way -- well, the way banks are supposed to behave. the federal reserve bank of minneapolis, along with 11 other regional banks, provide a presence across this country that gives the fed grassroots connections, insights into local economies, as well as legitimacy when they have to make tough decisions that affect not just wall street but the small local banks that serve so many of our communities. through their working relationships with community banks, the regional federal reserve banks also collect and analyze important information about the movements and trends in local economies. the relationship is a two-way street. it also provides a voice for our community banks that would be lost if the federal reserve were to only supervise the largest banks. as the president of the federal

reserve bank of minneapolis noted, it would be shortsighted to conclude that the federal reserve, quote -- "can safely be stripped of its role as a supervisor of small banks." end quote. as he noted disruptions in the financial system can come from all sectors and the connection the regional federal reserve banks provide to local economies can be vital, ensuring the stability of the entire financial system. and i would say to my friend from texas, ending with this. just this morning noel wilcox, president of the grand rapids state bank in grand rapids, minnesota, a part of our country that has been most hurt by this economic downturn caused by wall street, he wrote to me and he said this -- "all senators should be reminded that the federal reserve system was created to serve all of america, not just wall street." i thank you for your leadership, senator hutchison, look forward to working with you on this amendment. i was glad to hear that senator murray joined our amendment last night. i know we have a number of sponsors.

thank you very much. mrs. hutchison: thank you, senator klobuchar. and, madam president, i appreciate the bipartisan nature of this amendment. i think when people look at this amendment, both sides of the aisle, that it will be clear that the community banks need this amendment to keep a level playing field and to assure that there is no concept left in this country of too-big-to-fail. and i thank my colleague from minnesota, senator klobuchar, and yield the floor. mr. shelby: mr. president? the presiding officer: the senator from alabama is recognized. mr. shelby: mr. president, as drafted, the bill before us we're considering this week, allows for bailouts, i believe. as a result, what my friends on the other side like to call "wall street reform" is actually a wall street dream and a main street nightmare for all of us. i have over the last several weeks clearly articulated what needs to be changed in the underlying bill because we must do everything that we can to create a credible resolution

regime, mr. president, that protects not only our financial system but, more importantly, the american taxpayer. fortunately, the chairman of the banking committee, senator chris dodd, and i have worked through a number of issues and resolved to our satisfaction the concerns that some of us have expressed about government bailouts. i believe, mr. president, that it is simply unacceptable to expose innocent tax-paying american families to the excessivelexcessively risky praf wall street gamblers who are happy to enjoy the upside but want to socialize the downside. mr. president, taxpayers i believe should not incur losses from the bad outcome of private risk that they did not undertake. in order to achieve this, our amendment, the dodd-shelby amendment, we will offer eliminates the $50 billion

bailout fund some people have called the honey pot. it would significantly tighten up language in the bill dealing with the federal reserve's ability to provide liquidity to the financial system in times of severe market distress. and it requires the approval of the treasury secretary before the federal reserve can undertake any emergency lending. it also establishes strict solvency and collateral requirements for any emergency fed lending and, mr. president, establishes strict accountability standards for any emergency fed lending. all of this is something that we didn't have 18 months ago when the financial crisis came upon us. together, we've tightened up the resolution language to ensure that the creditors of failing firms will receive bankruptcy-like treatment. a resolution regime for large failing financial institutions is simply i believe not credible

unless we make clear in language that backdoor bailouts are impossible. in this amendment that we would be offering, we have significantly tightened up language in the bill dealing with the provision of debt guarantees by the fdic and the treasury. and any such guarantee will now require prior congressional approval. we've also clarified and tight end the language in the bill -- and tightened the language in the bill regarding resolution and the powers of the fed, the federal deposit insurance corporation, treasury and others to prevent bailouts. we have included provisions requiring post-resolution reviews to determine, mr. president, whether regulators did all that they were supposed to do to prevent failures of a systemically significant institution. such a review i believe's storable hold regulators accountable for their actions or

inaction, as the case may be. mr. president, i believe we must put an end to the ad hoc responses of the federal government which only lead to fear and to panic. i believe these changes will help us do that. i want to thank at this time the committee's chairman, senator chris dodd, for working with me to tighten the language in this part of the bill. and i also want to thank our respective staffs who worked day and night, weekend after weekend to get us where we are this afternoon. all of these changes are important and necessary to make bailouts a thing of the past. with these changes, i believe that we have done what congress can do to prevent any future bailouts. but, mr. president, it will now be up to the regulators to follow the law and do what we expect them to do: to do their jobs. mr. president, i strongly support these changes and i urge my colleagues to support them as

well. however, i want to point out to leave the impression that i support the entire bill, like anybody at this time, because we're making these necessary changes is not -- we're not there yet. beyond resolution and government powers in a crisis, this over 1,500-page bill contains a broad reach into the global financial system and the american economy. now that we're over this, hopefully this particular hurdle, we will be addressing many additional concerns that we have in the coming days. but for now, this afternoon, i'm pleased to join with chairman dodd in supporting this amendment to the senate. thank you. mr. dodd: mr. president? the presiding officer: the senator from connecticut recognized. mr. dodd: i know my colleague from arkansas wants to be heard and i'll be very brief. i just want to say to my friend and the former chairman of the banking committee, senator shelby, i appreciate his comments on this as well. there are four major parts of our -- of this very large bill, which we admit, given the complexity of the issues.

one was too big to fail, the other is the early warning system, consumer protection, and dealing with the exotic instruments, the so-called exotic instruments. there's a lot in this bill besides those four major points but those are the four major thrusts of the legislation. and so i hope that our colleagues will support this amendment when we vote shortly on it, that it will help us now reach agreement on -- on i would argue maybe one -- "the" major part, and that is never again do we want to see taxpayers confronted with having to underwrite a failed institution. and so i have been -- there's been a lot of hard work to get here and a lot of work, a lot of negotiation. not going back just the last couple of days, going back weeks. and i particularly want to thank mark warner of virginia and i want to thank bob corker of tennessee as well. they spent a lot of time on this issue literally going back months ago on it and we wouldn't be in the position we're in today were it not for their labors and efforts. and i notice my colleague from virginia is on the floor and at

some point i gather he's going to want to say a few words. i know my colleague from arc, amounts to be heard as well. but i just want to again thank senator shelby and thank our staffs as well for their effor efforts. i thank senator boxer too, because she'll have an amendment up which also strengthens the point on this issue of too-big-to-fail and taxpayers. but thank you. we've got more work to do. i know that. but this is a good beginning of a piece of legislation. so, mr. president, i thank -- i thank aga senator shelby. i yield the floor. mrs. lincoln: mr. president? the presiding officer: the senator from arkansas is recognized. mrs. lincoln: thank you, mr. president. i first rise today to speak in support of the boxer amendment. it is no taxpayer funds will again be used to bail out the risky gambles that too many on wall street have conducted. the amendment should passes past with a hundred votes and i hope that it will. i'd also like to speak, mr. president, about the derivatives title which is the bipartisan product that was reported out of the senate agriculture committee two weeks ago. specifically, there's been

statements in the press and here certainly in the senate chamber that i believe need to be corrected regarding section 716. as chairman of the senate agriculture committee, i'm proud to have included provision in the wall street reform legislation approved on a bipartisan vote by our committee two weeks ago. and i'm also proud that it is included in the dodd-lincoln legislation that we are now considering today. this provision seeks to ensure that banks get back to the business of banking. under our current system, there are a handful of big banks that are simply no longer acting like banks. by this time, surely every member of this body is aware that the operation of risky swaps, those activities was really the spark that lit the flame that very nearly destroyed our economy in this great country. in my view, banks were never intended to perform these activities which have been the single largest factor to these institutions growing so large

that taxpayers had no choice but to bail them out in order to prevent total economic ruin. my provision seeks to accomplish two goals. first, getting banks back to performing the duties they were meant to perform: taking deposits and making loans for mortgages, small businesses, and commercial enterprise. and, second, separating out the activities that put these institutions in peril. this provision makes clear that engaging in risky derivative dealing is not central to the business of banking. under section 716, the federal reserve and fdic will be prohibited from providing any federal assistance and funds to bail out swap dealers and major swap participants. currently, five of the largest commercial banks account for 97% of the commercial bank notional swap activity.

this is a huge concentration of economic power, which is why i'm in no way surprised that several individuals are seeking to remove it from the bill. this provision will ensure that our community banks on main street won't pay the price for reckless behavior on wall street. community banks on the backbone of economic activity for cities and towns throughout this great land. they dent deal in risky swaps that put the whole financial institution in jeopardy. instead, they perform the day-to-day business of banking, making the smart, conservative decisions that banking institutions should be making. unfortunately, mr. president, we saw the five largest banks begin to fail in part because of that risky swap activity. those swaps activity that should never have been part of their operation in the first place. sadly, it was our community bankers and their depositors who were left footing the bill. community banks were forced to

pay for a problem they did not create. mr. president, small banks are still paying that price. in 2009, we saw 140 bank failures, and now the cost of the fdic insurance premiums are skyrocketing for our community banks all across the country. higher interest rates mean less lending. less lending means that now individuals and small businesses are also paying the price. the fdic reported that in 2009, the bank industry reduced lending by 7.4%, the biggest decrease since 1942. mr. president, i am a strong believer that you build on -- an economic recovery from the ground up, and if small- and medium-sized businesses aren't getting the capital they need to grow their businesses, something is wrong. the economy simply will not recover unless we free up lending. unfortunately, wall street lobbyists are doing everything

they can to distort this provision, spreading misinformation and untruths. mr. president, the suggestion that this provision will force derivatives into the dark without oversight is absolutely force. the dodd-lincoln bill makes it abundantly clear that all swaps activity will be vigorously regulated by the fed, the commodities futures traight commission -- trading commission, and the securities and exchange commission. my good friend from new hampshire, senator gregg, my friend from tennessee, mr. corker, senator corker, wall street lobbyists and others in recent days have somehow argued that by pushing out risky swaps from the nation's largest banks, like j.p. morgan and bank of america, wells fargo, goldman sachs and citigroup, that somehow swaps will no longer be regulated. this is just plain wrong. just because these swap desks will no longer be overseen by the fdic does not mean that they

will not be subject for this will's strong regulation -- this bill's strong regulation by the market regulators, the f.t.c. and the cftcn. short, they simply ignore -- cftc. in short, they simply ignore the strong provisions included in the rest of the underlying bill. that's convenient for their argument but not so convenient when seeking the truth. let me reiterate, mr. president, every swaps dealer and major swap participant will be subject to strong regulation. wall street lobbyists have also argued that this will prevent banks from using swaps to hedge their risk. again, completely false. banks who have been acting as banks will be able to continue doing business as they always have. community banks using swaps to hedge their interest rate risks on their loan portfolio will continue to be able to do so. and most importantly, we want them to do so. community banks offering a swap in connection with a loan to a commercial customer are also still in the business of banking and will not be impacted.

using these products to manage risk or designing exotic swaps which have led to the financial demise of places like jefferson county, alabama; orange county, california; and the country of greece are two very different things, mr. president. hopefully, this is somet -- hopefully, this is something my colleagues will understand. wall street lobbyists have also said this provision will move $300 trillion worth of swap activities outside of the banks. my question is:, why is this activity there in the first place? i agree that regulated, transparent swap activity is a necessary part of our economy in managing risk. it just has to place inside of a bank where too many innocent bystanders are put at risk. mr. president, despite what those on wall street may be saying, this provision is an important part of real wall street reform.

it has broad support from the independent community bankers of america, the consumer federation of america, the aarp, labor unions, and leading economists like nobel prize-winning joseph stiglitz, among others. let me read just what a few of these groups and individuals are saying about this provision. americans for financial reform, which include groups such as the afl-cio, the naacp, and consumer unions, write, "the over 250 consumer and civil rights groups who are members of the americans for financial reform write to express strong support for section 716, prohibition against federal government bailout of swaps entities as part of the dodd-lincoln stewart substitute to restoring financial stability act of 2010. it is now almost universally recognized that the fuse that lit the economic meltdown in the fall of it 2508 was the $of

trillion severely undercapped alliance and unretted regulated swaps market dominated by the world's largest banks. section 716 is designed to ensure that the american taxpayer is not the banker of last resort as was true in the bank bailout in 2008 and 2009. for casino-like investments marketed by large wall street swap dealer banks. section 716 is a flat ban on federal government assistance to any swap entity, especially anyone substances where theantsty cannot fulfill obligations emanating from highly risky swaps transactions. by quarantining those highly risky swaps -- the high-risky swap training from banking altogether, federal depositors will not be put at risk by toxic swap transactions and moreover banks will be forced to behave

like banks focusing on extending credit in a manner that builds economic strength." again, mr. president, from the nobel prize-winning economist and former chairman. council of economic advisors during the clinton administration, joseph stiglitzs writes," one provision holds particular prominence and has the banks especially riled up. this is the idea that the government should not be responsible for the counterparty risk. the risk that a derivatives contract cannot be fulfilled. it was a.i.g.'s inability to fulfill its obligations that led to the u.s. government to step into the breech and to the tune of $182 billion. the modest proposal of the agriculture committee is that the u.s. government, the federal deposit insurance corporation stops underwriting these risks. if banks were to wish to write those derivatives, they would have to do so through a separate affiliate within the holding

company, and if the bank made bad gambles, the taxpayer wouldn't have to pick up that tab. requestes "another, mr. president, from the independent community bankers of america. icba strongerly supports section 106, which is the section in our bill of the derivatives bill, "this section prohibits federal assistance including federal deposit insurance and access to the fed's discount window to. swaps entities in connection with their trading in swaps or security-based swaps. main street and community banks have suffered the brunt of the financial crisis, a crisis caused by wall street players and not community banks. assessments to replenish the deposit insurance fund have increased dramatically for community banks. large financial players have received hundreds of billions in financial assistance while community banks have been allowed to fail. section 106 of senator lincoln's derivatives legislation would be an important provision to help ensure that taxpayers and

community banks are not on the chopping block should another financial crisis occur. we strongly urge retention of this provision this week and thank you for keeping community bankers in mind." i ask unanimous consent that these three letters from the americans for financial reform, professor stiglitz and the independent community bankers be entered into the record. the presiding officer: without objection, so ordered. mrs. lincoln: thank you, mr. president. i look forward to working with my colleagues to ensure that this legislation remains strong and new loopholes are not created on behalf of wall street. mr. president, this is a legislative body. it is designed for debate, and i welcome that debate and welcome the debate of my colleagues. in terms of what we're trying to do here. we have seen an historic economic crisis. banks no longer look like banks, and for people in my hometown across arkansas, that's a frightening thing. the status quo is certainly not

acceptable, and i think we all have to look at what it is we can do to come together with some type of assurance and confidence to the people of our states that we're not going to let the status quo remain what we have seen. i believe we need to take the necessary steps to create that confidence for investors and consumers that what we experienced will not be able to happen again, that these financial entities cannot become so big that they cannot fail or that we would not allow them to fail and that, worst of all, that taxpayers will have to bail them out again. i would just say, mr. president, to my colleagues, i am a very pragmatic person, pretty simplistic in what it is that i want to achieve and what we have worked to achieve. and i hope that all of my colleagues will continue to work together to find out what it is that we can responsibly hand to the people of this great country

and say to them, we not only have seen what has happened, but we're going to dare to produce something that will ensure that it doesn't happen again. and, as i said, work in a pragmatic way, i think we can come up with a good, strong piece of legislation that all of us, democrats and republicans, no matter what regions of the country we come from, will actually say to the american people, we saw what happened, and we're going to make sure it doesn't happen aga. thank you, mr. president. mr. dodd: mr. president? the presiding officer: the senator from connecticut is recognized. mr. dodd: let me thank our colleague from arkansas, the chairperson of the agriculture committee as well for the work of her staff and for others and for her statement once again today, inviting all of us to be involved in this process here. i commend her to that and thank her for the fine work. mr. president, i'm going to propose a unanimous consent request now that has been cleared by a respective leaders. so i would ask unanimous consent

that at 2:45 p.m. today, the senate proceed to executive session to consider the following calendar numbers, 728, 701 on the one hand 702, that prior to each vote, there be two minutes of debate equally divide i had and controlled in the usual form, that upon confirmation of the nominations, the motions to reconsider be laid on the table en bloc, the president be immediately notified of the senate's action and the senate then resume legislative session, that upon resuming a legislative session, there be four minutes of debate prior to a vote in relation to the boxer amendment, number 3737; that upon disposition of the boxer amendment, the senate then proceed to a vote in relation to the shelby-dodd amendment which is at the desk, with four minutes of debate prior to a vote in relation to the amendment, with all time divided in the usual form, with no amendments in order to the amendments covered in this agreement prior to a snroa -- pa vote in relation thereto fnlgt

the senate then consider the snowe amendments 375 and 3757 with no further debate in order, with respect to the snowe amendments. and with no amendments in order to the snowe amendments, that the next amendments in order be one from the republican leader or his designee regarding consumer protection and that the tester hch hutchison amendment number 3749. the presiding officer: is there objection? without objection, so ordered. mr. dodd: thank the chair. mr. president, i see two of my colleagues who have been deeply involved. i mentioned them earlier in their arks but i wanted to thank senator corker and senator warner for their hrd work. as i say, this goes back months, in title one and title two of the bill. i thanked them a lot already. i know they put in an awful lot of time on how best to traft n and so there's always -- everybody always can have ideas and thoughts about it but i am grateful to both of them for their effort and that of their

staffs. i want to give them each a chance to comment on this. mr. corker: i want to thank the connecticut, and i'll be very breevment i know we're bumping umagainst a vote. my friend from virginia is here, mark warner, who senator dodd and senator shelby have allowed us to work on this portion of the bill and i want to thank him for being such a great partner. i think one of the things you learn around this body very quickly is you certainly don't end up getting everything the way you'd like for it to happen. and i want to thank both senator shelby and senator dodd for the way they've worked together over the last week or so to improve this bill. look, i think senator warner and i -- i'll speak for myself. obviously there are some pieces i wish were a little din. i wish that the length of receivership was not five years. it is a much shorter period and we wound these companies down a lot quicker. i wish we had judicial resue so that -- review so that if a

company is place place into thie of resolution, they have the opportunity to have that resued in a much better way. i wish we had a bankruptcy court title. and i know senator shelby and warner and others would like it see that happen. i'm hoping that over the course of the amendment process that will happen. judicial review of claims -- i wish that were owe cumpleg i know that's not part of this title. and also i wish there was judicial review of the valuation process that goes through. so there are a number of things that i wish were better, but i will tell you, the work that the two of you have done today, i think, is good. i plan to support this. and i would say to my colleagues on this side. aisle that want even to see the bankruptcy process be the process, that i think they should still support what you've done because what you've done is tighten this resolution title up to make it much better. i'd like to defer to my friend from virginia, if i could,

because i know he's going to talk about some aspects of this bill that are not talked about much, and i think they're preventive measures -- or at least of this title -- to keep us from being in a situation where resolution is even as necessary, because of the precaution nature place -- issues that are put in place. so with that, i want to thank the two of you. i want to four the involvement. -- i want to thank you for the involvement. and i want to thank you for the way you've worked together to make this bill better with the process that's taken place over the last week. mr. warner: mr. president? the presiding officer: the senator from virginia is is recognized. mr. warner: let me follow on my colleague's comment. he is my colleague and friend and my partner for the last year. i think we've both, as former business guys, said this is not an issue that should be partisan. we need to check our d & r hats at the door and find a way to figure out some new financial rules so we never have to face what we faced in 2008. i think some of the original approaches that we had might

have been titled. i know we talk add little bit off the floor about the notion that actually some of the borrowing authority that now exists might be larger than what we initially had proposed. but at the end of the day what is important is that one, taxpayers are protected, and that's what the shelby-dodd approach has. it has no recouping from the financial industry. and, two, to make sure there's montana to be able to wind these firms down in an orderly fashion. we've seen with lehman, a year and a half after the fact, literally hundreds of billions -- millions, close to billions of dollars, that are being used to unwind that process. it takes time and money. i again share the concern of the senator from tennessee that we ought to do this in as limited time as possible. let me just take two quick more minutes and say what i'm glad has not been the subject of a lot of this discussion is that if we've done our job right --

and i hope we've done a framework -- we're never going to have to get to resolution because bankruptcy should always be the preferred process and we should put the appropriate speed bumps on these firms that become large and systemically important. higher capitals requirements, better review of the leverage, making sure they've got good risk-management claims and two new tools -- two new tools that haven't gotten any discussion but i know in our hundreds of meetings that we had coming back time and again, one was the creation of a whole new set of capital that would be convertible debt that would convert from debt into equity in a firm even gets into a problem. and, second, a funeral plan that has to be blessed by the regulator that would show how these large -- particularly firms with international ormses all over the world, can wind themselves down through bankruptcy and if the blain is not apriewrvetiond the regulator can take more dramatic action. so, i think the heart and soul of our challenge, which was to

end too big to fail, make sure taxpayers weren't exposed, has been accomplished. i want to thank the chairman and ranking member shelby for their work in this. adds i look forward to supporting this -- and i look forward to supporting this amendment as well. i want to conclude with my thanks to my colleague and friend from tenton. i think we did check our hats and put a business approach on trying to get these titles right, and i agree with his comments that we appreciate any improvements made by both the chairman and rank member. look forward to supporting this part of the legislation and hope we can continue to work through on the balance of the titles in the same form. thank you, mr. president.. the presiding officer: under the previous order, the senate will proceed to ecive seion to consider nominations which the clerk will report. the clerk:. nominations, judiciary. gloria m. navarro of nevada to be united states district judge of nevada. nancy freudenthal to be united

states district judge of the district of wyoming. and denzil price marshall of arkansas to be united states district judge for the easte district of arkansas. mr. reid: mr. president? the presiding officer: under the previous order -- mr. reid: mr. president? mr. president? the presiding officer: the majority leader is recognized. mr. reid: mr. president, let me use some of my leader time right now. i ask consent that be the case. i first of all want to express my appreciation to senator warner and senator corker for their work in work to go improve this bill -- in working to improve this bill. they are very fine senators. my friend, the senator from virginia, senator warner, has been such a great addition to the caucus, the senate and the country. his experience as governor of the state has served him well, and he does a wonderful job for the people of virginia and of course our country. i would ask consent -- it's my understanding there is a consent agreement now in effect that has three votes on three judges and then two other matters related to the banking bill.

is that true? the presiding officer: the senator is correct. mr. reid: i would ask that be modified to have the first vote 15 minutes and the next four votes, ten-minute votes. the presiding officer: is there objection? without objection, so ordered. mr. reid: i'm going to say a few words about the first vote we're going to have today. i'm very happy i had the opportunity and the privilege to nominate gloria m. navarro to be a federal judge for the district of nevada. what a wonderful, wonderful addition she will be to the federal judiciary. she has a number of outstanding qualities. the first is she is such a fine human being. she is -- has a wonderful family. she has a husband who supports her tirelessly on this terrifically important job that she's going to take. he's an accomplished lawyer himself. she has wonderful children. she has a mom that supports her. she is a nevadan who has been

educated in the nevada school system. she's attended some of the finest universities in the country: university of southern california, university of arizona -- i'm sorry. arizona state. in my interviews with her, i was very, very impressed. she has proven she embodies the values of our country. hard work, discipline and respect for the rule of law. i've been impressed time and time again by this nevadans' record and commitment to public service in all areas of her life. she worked for two decades in the private and public sectors and has experience in handling every aspect of the law. complex litigation at the federal and state levels; murder cases. she is currently the chief deputy in the clark count district attorney's office writing for the board of commissioners. she worked for the board of defenders.

she also worked in private practice representing clients in federal and state litigation relating to criminal, civil and family law. in 2001, she was awarded the very prestigious louis weiner pro bono service award. she's committed to the state of nevada. she is committed to her community. she created the latino bar association. it's my pleasure, mr. president, to have recommended her to be a judge, and everyone can rest assured that she will do an outstanding job for the people of nevada in representing and dispensing fair, equal justice under the law. the presiding officer: is there debate in opposition to the nomination? if not, the question is on the nomination of gloria m. navarro of nevada to be united states district judge. is there a sufficient second?

there appears to be. there is. the clerk will call the roll. vote: vote: vote:

vote:

vote: the presiding officer: are there any senators wishing to vote or to change their vote in -- vote? if not, the ayes are 98, the nays are zero, and the nomination is confirmed. the presiding officer: there will now be two minutes of

debate equally divided on the nomination of nancy freudenthal of wyoming to be united states district judge. a senator: mr. president, could we have order? the presiding officer: the senate will come to order. please carry your conversations outside the chamber. a senator: mr. president, the senate is still not in order. the presiding officer: the senate is not in order. a senator: mr. president, i will support this nominee, but i should note that the senate republicans have not allowed us to vote on a judicial nominee for almost two weeks. by this date in george w. bush's presidency, -- and democrats have been in charge prior to that -- the senate had confirmed 52 federal circuit and district court judges. as of today, we have been allowed only 20 by the senate

republicans. incidentally, during the same period of time under president bush's presidency, republicans were in charge during part of that time. they didn't confirm a single one of president bush's nominees. democrats confirmed 52. there are two dozen additional nominations stalled. it shouldn't take two weeks to try to get through the secret. we have -- the secret holds. we have people who were confirmed in the committee, have been confirmed unanimously on the floor, it is unconscionable to hold them up week after week after week. a senator: mr. president? the presiding officer: the senator from wyoming. mr. enzi: thank you, mr. president. rising in support of the nominee. any delays that there have been on this has not been for this particular nominee nor has it been by the wyoming delegation at all, and i would mention that this is a position that has been

open now for over two years. the first nominee for this position got a hearing but could not get a vote in committee, and the nomination ran out and we now have a new nominee, which is mrs. freudenthal, nancy freudenthal, who is also the first lady of wyoming, but she in her own right is -- has been an attorney, has served with three different governors in the state of wyoming and does a phenomenal job. she has her law degree from the university of wyoming and would make an outstanding person to fill in this role. both senator barrasso and i are strongly in support of her and have been pushing -- mr. leahy: would the senator yield? the senator is absolutely right. the wyoming senators did not hold this nominee up, but the republican side did. mr. enzi: mr. president, the republican side may have been doing things to be sure we had votes on judges, which is the

same thing that the democrats did when we were in the majority. we had to have votes on all of these, and i'm glad that we finally got to a position of having a vote. i ask everyone to vote aye, and i would ask for the yeas and nays. the presiding officer: is there a sufficient second? appears to be. there is. the clerk will call the roll. vote:

vo:

the presiding officer: are there any senators wishi toe or to change their vote? seeing none, the ayes are 96, the nays are 1, and the nomination is confirmed. there will now be two minutes of debate equally divided and the nomination of denzil price marshall jr. of arkansas to be united states district judge. mrs. lincoln: mr. president? mr. president? mr. president? mr. leahy: mr. president, the senate is not in order. the presiding officer: the senate will come to order. the senator from arkansas. mrs. lincoln: mr. president, i am so pleased today to rise in support of judge price marshall, who's been nominated to fill the federal judicial vacancy in the eastern district of arkansas.

judge marshall has enjoyed an impressive and lengthy legal career in arkansas, where he has served as a judge on the arkansas court of appeals since 2006 and previously judge marshall practiced law in his hometown of jonesboro, arkansas for 15 years. as a principal at the firm of barrett and deacon. also clerked as a u.s. circuit judge under the u.s. circuit judge richard arnold from 1989-1991. he's a graduate of arkansas state university in john jonesbo where he currently serves as an adjunct professor of science. he also received a degree from the london school of economics -- the presiding officer: the senate will come to order. there are conversations in the well that should be carried outside. please give the senator from arkansas the opportunity to make her comments. mrs. lincoln: thank you, mr. president. judge marshall also received a degree from the london school of economics, graduated with honors from harvard law school in 1989. i just -- i think he's done a tremendous job and we are so pleased. he's very well-known in arkansas

as a gifted appellate advocate, brilliant legal mind and a well-respected man of integrity. so pleased that the senate is taking the role of moving him forward in this -- in this capacity. i want to thank chairman leahy and the judiciary committee for moving judge marshall's nomination forward. i have full faith and confidence in judge marshall's ability and encourage members of this body to support him. and i yield to my colleague from arkansas. mr. pryor: thank you, mr. president. mr. president, i don't think it's an exaggeration to say that when our founding fathers laid out article 3 in the constitution, they had people like price marshall in line. he's smart, he's hard working, he's a family man, he's involved in his community, he's involved in his church and in his legal profession. he's an elected member of the arkansas court of appeals and he just -- when he was in private practice had the reputation as a lawyer's lawyer. and i join senator lincoln in giving him my highest recommendation.

and, mr. president, i appreciate all my colleagues voting "yes" on price marshall. the presiding officer: all time is yielded back. the question is on the nomination. all those in favor say aye. all those opposed, no. the ayes appear to have it. the ayes do have it. and the nomination is confirmed. the motions to reconsider the vote are considered made and tabled. the president shall be notified of the senate action. and the senate will resume legislative session. there are now four minutes of debate evenly divided prior to a

vote on the boxer amendment. mrs. boxer: mr. president? the presiding officer: the senator from california. mrs. boxer: mr. president, i would like everyone, if they could, to just take a look at these couple of headlines from september 2008. "nightmare on wall street." "where do we go from here?" and i think all of us that went through this, whether we're in the senate or we were looking at what was happening to our investments on wall street, when we saw that over three short days in september 2008, lehman brothers, merrill lynch and a.i.g. all collapsed and the stock market plunged and seniors lost their retirement savings and families lost their jobs and homes and small businesses stopped hiring. it was a nightmare. that's what it was. and if there's one thing we should all be able to agree on is this: the american taxpayers should never again have to bail out wall street firms that gambled away our savings and

wreaked havoc on our economy. and my amendment is very clear. it is not a sense of the senate. it has the force of law. and very simply put, it is straightforward. it's an ironclad assurance that a failing, insolvent wall street firm must be liquidated. the costs of that liquidation must come either from selling off the firm's assets or from industry assessments on the big wall street firms. and, mr. president, i'm going to retain the balance of my time in case there is debate. i hope this is close to a unanimous vote. i think it's very clear, and i hope we will agree. and i would retain the balance of my time. a senator: mr. president? the presiding officer: the senator from alabama. mr. shelby: i yield back the time and ask for the yeas and nays. the presiding officer: is there a sufficient second? there is. there appears to be. there is. the clerk will call the roll.

vote:

vote:

the presiding officer: are

the ansetorsn the chamber wishing to vote or change their vote? if not, the ayes are 96, the nays are 1. the amendment is agreed to. mr. dodd: move t reconsider. a senator: move to table -- mr. dodd: notify lay it on the table. the presiding officer: without objection. the presiding officer: the chamber will come to order. the presiding officer: will senators please carry their conversations outside. the senator from alabama. mr. shelby: mr. president, (inaudible). the clerk: mr. shelby proposes an amendment numbered 3827. the presiding officer: there will be four minutes of debate evenly divided. shell shl i would yield back my

time. i think we've debated this quite a time this afternoon. most people know about it. mr. dodd: mr. president, again, i think that our colleagues, senator corker, senator shelby, senator warner. i urge my colleagues to support it. i yield back our time. and ask for the yeas and nays. the presiding officer: is there a sufficient second? there appears to be. there is. the clerk will call the roll. vote:

vote:

vote:

the presiding officer: are there any senators in the chamber who wish to change his or her vote? if not, the vote is 93 aye, five nay. the amendment is agreed to. a senator: move to lay it on the table. a senator: move to reconsider. a senator: move to reconsider. the presiding officer: without objection. a senator: mr. president? the presiding officer: the motion is tabled. the senate will now vote on the

two snowe amendments en bloc. if there's no further debate, the question's on the amendments. all those in favor say aye. all those opposed say no. the ayes appear to have it. the ayes do have it. the amendments are aagreed to en bloc. -- aagreed to en bloc. a senator: move to lay on the able. the presiding officer: without objection. a senator: mr. president? the presiding officer: the senator from alabama. mr. shelby: mr. president, i now rise to bring up amendment number 3826, the republican consumer protection alternative. this amendment has been cosponsored by 14 of my colleagues. amendment number 38 the presiding officer: the clerk will report. the clerk: the senator from alabama, mr. shelby for himself and others, proposes an amendment number 3826 to

amendment number 3729. strike title 10 and insert the following: -- mr. shelby: i ask unanimous consent to waive the reading of the amendment. the presiding officer: without objection. 150 mr. presint? the presiding officer: the senator from -- a senator: mr. president? the presiding officer: the senator from connecticut. mr. dodd: before they begin the debate on the next amendment, let me thank my colleagues. it's been a difficult time getting to this point. i want to thank senator shelby and his staff. we had a vote on the boxer amendment, i think 96-1. we had a vote on the shelby-dodd amendment, 93-5 and we adopted the two snowe amendments in the last hour. that's a pretty good beginning on this bill. and we're all in the sense -- and i want to tell my colleagues, i've already received 95 amendments to this bill that people are proposing. and i believe very strongly that members ought to have their right to offer amendments and be

heard. my hope would shall, and obviously this is something that would be self-imposed discipline to some degree, but if members will restrain themselves on time, then more of our colleagues will get a chance to be part of the bill or to be heard. and obviously if you ask for too much time, it's going to be difficult. i'm just asking people to be contract of -- considerate of each other. most amendments can be made in an hour or two hours, maybe less, 20 minutes, 40 minutes equally divided. i'm not suggesting some amendments are more important or less important than others. and then for amendments that senator shelby and i can look at to be made a part of a managers' amendment, let us know what they are. we'll look at them. we'll both have to check them out. we can cut into a number pretty significantly. there are a number that are smart, intelligent proposals, i would like to see a part of the bill. i can't do it alone.

my colleague from indiana will have to a -- from alabama will have to agree with that. i don't know if we'll get agreement on when we will vote on this. other than that, i would like to get, if we can, be thinking about how much time you'd like and keep in mind your fellow colleagues. they would all like to offer their amendments and be heard. mr. dorgan: will the senator yield for a a question? mr. dodd: i'll be glad to yield. mr. dorgan: it is commendable, there has been a burst of activity on the senate floor in the last couple of hours. we've had a number of votes for a couple of days it took some while to wait for these to happen. but i agree with the senator from connecticut, and i think the senator from alabama, that to the extent that we can accommodate votes on a wide range of subjects here, this is an issue that is consequential to future of the country and all of us want to get it right and i want to say from any standpoint, i have a couple of amendments that are very important.

time agreements are not a problem for me. what i'm interested in doing is having an opportunity to explain an amendment and have a short debate and have the senate register its judgment on the amendment. i agree with what the senator from connecticut just said, he would like to offer amendments, with there are a lot of them, too big to fail, naked credit default swaps, very important, i want to talk to the chairman and the ranking member about. i hope with a short time agreement, i will be able to get them on the floor. mr. dodd: my hope is that we can stay away from filibuster that's will give everyone a chance for an up or down vote so you don't have to reach very high thresholds that we've had in the past in order for a matter to be considered, people to be heard on the matter. beyond the issues of this bill, and this is a very important bill, mr. president, but it is also about how this institution functions and whether or not we trust each other to offer an

amendment, have an adequate amount of time and vote up or down. that's how the place ought to function. and my hope is that this bill will not only produce a good product at the end, but also have the healing quality that this institution needs. we've been through a lot in this congress and we need to get back to acting like colleagues, respecting each other's ps opinions, -- other's opinions, having a partisan -- having a debit and doing it in a civil fashion and to have each person heard and have a vote up or down. i offer that as a suggestion on how we might proceed. mr. sanders: would the senator yield for a brief second? do we have any sense of what's happening this afternoon? mr. dodd: i will find out from my friend from alabama. the presiding officer: the senator from alabama. mr. shelby: i would like to join my colleague from connecticut. we had a burst of activity this afternoon. we're off to a good start. but we have to remember here, this bill is about 1,500 pages, and this not only affects a

little bit of our economy, it affects all of our economy in one way or the other. and i have just laid down a bill as a republican alternative to the consumer products, and there are a lot of people who are going to want to debate it on both sides of the aisle. we're not here to delay in any way this bill, but i think it's so important, it's so comprehensive that we are going to have a healthy debate. and i appreciate the remarks of the senator from connecticut and i believe he understands that very well. mr. dodd: i thank my colleague from -- my colleague from montana? the presiding officer: the senator from montana. mr. tester: could i just inquire with senator dodd, at this point in time, do you want me to talk about amendment senate 3749? do you want me to call it up and set aid -- side the pending

amendment? what do you want to do? mr. tester: i appreciate that, senator dodd, senator shelby. mr. president? the presiding officer: the senator from montana. mr. tester: i ask unanimous consent to set aside the pending amendment and call up amendment 3749. the presiding officer: the senator has that authority and the clerk will report. the clerk: the senator from montana, mr. tester, for himself and others proposes amendment number 3749 to amendment 3739. mr. tester: mr. president, i ask that the reading of the bill be dispensed. the presiding officer: without objection. mr. tester: all right. mr. president, i rise today to urge my colleagues to support the tester-hutchison amendment. my colleague and i came to the floor yesterday to talk about this bipartisan amendment to preserve the integrity of the

fdic to pause insurance fund. our amendment would force the big banks to pay their fair share of insurance by basing assessments on assets rather than deposits. it would fix the lob sided assessment system that we currently have that unfairly burdens our community banks and would ensure that the fdic has the necessary resources to maintain the health of the deposit insurance fund. let me say, mr. president, that senator hutchison and i think that this amendment makes a good deal of common sense. i am pleased that this is one of the first amendments up for consideration because it highlights the fact that democrats and republicans do agree on ways we can strengthen what is already a good bill. senator hutchison and i are joined by conrad, burr, shaheen, johanns, nelson of florida and nelson of nebraska in offering this important bipartisan amendment. after working on this bill for months with good senator dodd in

the bapging committee, let me say how pleased i am that we're finally getting an opportunity to debate this bill and move it forward. mr. president, i know that there are a number of other bipartisan amendments like this one where members can join together to work to improve this bill, and i look forward to considering them also. with that, mr. president, when the time is right, when leadership has agreed, i would hope that we could get a vote on amendment 3749. with that, i yield the floor. a senator: mr. president? the presiding officer: the senator from -- i'm sorry. rhode island. a senator: mr. president, let me ask if the senator from rhode island would yield for a question. i noticed the senator from montana has now offered an amendment, and i'm trying to determine if there's a list and how i might get on that list of amendments. so the -- mr. dorgan: thank you very much. if i might propound a question to the senator from connecticut.

there's been a republican amendment offered. now that was set aside, the senator from montana's offered an amendment. if there is a list, i would like it talk to whomever is making a list. i didn't know there was a list at the moment. mr. dodd: there isn't. senator tester's and senator hutchison's amendment will be agreed on. there -- that was the only way to do this is to get one in the cue and they agreed yesterday. at some point today, today, or sometime today, there will be a vote on this amendment. i don't have a particular cue lined up. senator sanders, it would be my intention to ask bernie, senator sanders, to offer -- once we complete this amendment over here to have him be next in line. after that, i'd like to exphi colleagues to -- instead of jump one after the other to try to get in the cue to come here, to talk to us and let us orchestrate this in a way that

will allow for consideration some various parts of the bill and i will do my very best to make sure everyone gets time. mr. dorgan: mr. president, i thank my colleague for his courtesy and i thank my colleague from connecticut and let the record note i was here early and i will talk about that cue as it exists and hope that my amendment on too big to fail will be part of the early amendments. mr. whitehouse: thank you, mr. president. and i'm delighted to give the distinguished senator from north dakota the chance to clarify that. i'd like to speak just for a minute about amendment number 3746, which i will not be calling up right now, but which i intend to work with chairman dodd to calm later. i just wanted to mention that this afternoon this amendment received the endorsement of americans for financial reform. a coalition of dozens of national and state consumer groups who are working to help

pass the critical legislation that we are debating today. in addition to the coalition, as a whole, the amendment has been endorsed by individual members as well including the aarp, the consumer federation of america, consumers action, consumers union, and on behalf of its low-income clients, the national consumer law center. these groups have sent a letter to all of us, to each of my colleagues, which reads in part -- "on behalf of consumers, a.f.r. strongly urges you to support whitehouse's interstate lending amendment. by reinstating protections that existed prior to the u.s. supreme court's decision in marquette versus national bank of minneapolis vs. omar service corp. congress will take thea a step in the right direction between level the playing field between national credit card companies and their local and community

oriented count parts. the whitehouse interstate lending amendment takes a strong step toward restoring to each state the ability to protect its citizens from lenders based in other states. we strongly urge you to vote in favor of this amendment and in favor of the consumer protections this amendment promotes. by leveling the playing field between national banks and local lenders, you will send a strong signal to main street that their interests count. we urge adoption of this modest yet tremendously helpful amendment." and that's an end quote. mr. president, i would ask unanimous consent that the letter dated today from americans for financial reform be admitted into the record. the presiding officer: without objection. without objection. mr. whitehouse: i would note that the membership of this organization that has supported it includes aarp, as i mentioned, who have also supported it individually, the center for responsible lending, common cause, consumers union,

the naacp, the national association of investment professionals, the national council of laraza, and the veterans' chamber of commerce in addition to a great number of other organizations. so i think this is an important amendment. it closes a loophole that was open by the supreme court decision of 30 years ago. the decision defined the term located in the national banking act from way back in the civil war era, 1863, as meaning the location where the bank is located, not the location where the consumer is located, so that when there is a bank in one state doing business with a consumer in another state, the laws of the bank's state govern. nothing particularly wrong with that decision. the problem is that the banks figured out that that opened a loophole, and they could go to states that had the worst consumer protections or go to

states who would be willing to chuck their consumer protections in return for the influx of business, and from those states, which have the worst consumer protection laws, they could then market their products all around the other states and undercut and dodge around the laws of rhode island, the laws of minnesota, the laws of connecticut, the laws of iowa, the laws of virginia, the laws of all the home states who for more than 200 years in the history of our republic had this authority, to regulate interests and to protect their consumers. this is a -- an unintentional loophole. it has created grievous abuse of consumers who for the first time in american history are paying 30-plus interest rates under the law. when you and i were growing up, mr. president, if a flier came in the mail that offered a credit card with a 30% interest rate, that would probably be a

matter to bring to the attention of the authorities because it would be illegal. now they market this stuff at will and too many americans, too many of our states' residents, too many consumers are paying exorbitant and what would in that state be illegal interest rates because of this loophole. it's long past time to change it. this amendment would close it. i urge the support of my colleagues and look forward to the chance to call this amendment up. thank you. i yield the floor. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

a senator: mr. president? the presiding officer: the senator from iowa. mr. harkin: i ask that further proceedings on the quorum call be dispensed with. the presiding officer: without objection. mr. harkin: i ask unanimous consent that theodore dirks be granted full floor privileges for the duration of today's proceedings. the presiding officer: without objection. mr. harkin: i come to speak about an amendment i have filed, along with senators schumer and sanders, 3812. the purpose of the amendment is very simple -- to protect consumers from being charged unreasonable fees by a.t.m. machines. how often have you gone to an a.t.m. machine to access your own cash from your own credit union or your own bank and they

charge you a couple bucks? $2.50, $2.25, $3, $4, we have seen as high as $5 in parts of the country. well, mr. president, i want to talk a little about that, how unfair it is. in recent years, congress has acted to protect consumers by setting appropriate limits on the types of fees that financial institutions can charge consumers in areas like credit cards and spurred by a good proposal by chairman dodd, the federal reserve is now considering rules regarding overdraft fees. one area that remains unregulated is the fees that consumers pay to use a.t.m.'s. by now, mr. president, there is no limit on the fee that an operator of an a.t.m. can charge a consumer for using that machine. currently, the only regulation in this area -- clearly insufficient, i might add -- is that the operator must disclose how much they will charge so that when you access an a.t.m. and you want access and get a thing, it has to tell you how

much they are charging you, and can you refuse to do that if you want. but this nominal disclosure requirement does nothing to ensure that the charges are not arbitrary ways for banks and third party owners of these machines to make an unreasonable sum on the backs of consumers. some of my colleagues may remember that until 1996, most processing networks actually prohibited -- prohibited -- the operators of a.t.m.'s from adding an additional surcharge for the use of the a.t.m.'s. instead, to cover the cost of the transactions, banks paid fees that passed between the consumers' banks, the a.t.m. operating bank and the card network. that fee of about 50 cents still changes hands today to cover the cost of processing. now, simply put, by charging consumers these fees while

collecting fees from other ban banks, these big banks are double dipping on the backs of consumers. my amendment would end that double diptio dipping. enticed by the prospect of easy money, in 1996, the rules that prevented banks from charging consumers were overturned by the big card networks, visa, mast spur cards, and the big banks. for this reason, in 1997, i was a cosponsor, along with chairman dodd and others, of a measure sprowsed bintroduced by then-bag committee chairman d'amato that would have restored these rules and charged nothing for a.t.m.'s, nothing. unfortunately, we were unsuccessful in that effort, but it was bipartisan. chairman d'amato was a republican. now, as a result, because we were unsuccessful in 1997, the amendmenamount of fees that cons

pay has skyrocketed. now, according to estimates by the federal reserve, the average surcharge fee paid by consumers for accessing their own money is $2.66. as i said, in some places, in airports and other places, it's as much as $5. that's to access your own money. that doesn't seem right to me and it doesn't seem right to a lot of consumers. it's unfair for people to pay that much to access their own cash. if a.t.m. operators want to charge a fee to cover the cost, to cover the cost of providing a service, i can understand that. but that fee needs to relate to what it actually costs to process the transaction, not just the maximum that they think they can get away with. to ensure that these fees are reasonable and relate to the costs of processing the transaction, my amendment would require the new consumer financial protection bureau to

ensure that fees charged to consumers at a.t.m.'s bear a reasonable relation to the costs of processing the transaction. the best data available suggests that the costs of processing a transaction today -- are you ready for this? -- 36 cents. think about that the next time you go to the a.t.m. and you got to get some cash out and it comes up and says we're charging you $2.50. the real cost of that? about 36 cents. where does the rest of the money go? the rest of the money goes to the big banks and the big card networks, and they're making a fortune off of this. now, we got that data from a survey conducted by the office thrift supervision, which suggested in 1997, at the time we had our amendment, that the costcost of processing a transan was only 27 cents. 27 cents. so what we did is we factored in inflation. that would bring the dos about o

about 36 cents today. now, that consumes that any improvements in technology has not brought down costs, which obviously they have. we have new technologies, faster speed networks, probably has brought the cost down. so when i say that the cost of you going to an a.t.m. machine to access your money is 36 cents, that's on the high side. that's on the high side. so what our amendment basically says is that they could -- they could set up a reasonable charge based upon what the costs are. but we put an upper limit. we say no more than 50 cents per transaction. so our amendment would basically say that any time you go to your a.t.m. machine, they have to charge you a reasonable fee based upon what would be set but no case more than 50 cents. no case more than 50 cents. well, again, i just point out, mr. president, until 2002, in my state of iowa, the law required

that any bank establishing an a.t.m. had to make that available at no cost, no fee to all users. so iowans were not charged any fees at all and the iowa banks did fine under this arrangement. iowa consumers were protected from unfair fees. but in 2002, this reasonable iowa law was preempted by federal banking regulators. federal banking regulators preempted this. now, again, as i have pointed out, in the absence of these state laws, the federal banking regulators have taken no action to limit the amount of fees that consumers can be charged. according to the new rules project, national banks, these big banks, collected almost $5 million in a.t.m. fees from iowa consumers in revenue in the first six months. the iowa credit unions data show it was about $10 million just in the first year. well, you add that up, that can

come to a lot of money. well, anyway, i -- i bring this example of how things were in iowa before 2002 because it's a kind of a balance that the bill that is pending before us should restore. quite frankly, things have tipped so far in favor of big banks in this country and so far away from consumers, we often don't even know what a reasonable balance looks like anymore. but the example of iowa from several years ago in which consumers were protected from unfair a.t.m. fees while banks still profited is an example, i think an excellent example, of the balance that we need to return to. so this broader bill that senator dodd has brought forward, senator shelby brought forward isn't antibusiness, it's not antibank but it does seek to return us to a situation in which the needs of consumers and the rights of businesses are considered alongside one

another. restore some balance for consumers in our society. and so when i looked at this bill, i thought, well, there is one area that kind of seems to get overlooked. i suppose a lot of people say, well, two bucks, not much. well, you know, here's the other unfair thing about it. the average person going to an a.t.m. machine probably takes out 20 bucks, 50 bucks to get them through a day or a couple three or four days in the week and they're charged $2.50 for accessing that 20 bucks or 50 bucks. someone else goes in there and wants to get $500, they're charged the same $2.50. so the purd fall burden falls my on low-income people, moderate-income people who need to use the a.t.m. to get some cash to get them through.

grossly unfair. so it's unfair that the banks and the a.t.m. operators can charge whatever they want to charge. when i pointed out that according to the office of thrift supervision, the data they collected, the average cost of -- of this transaction, of processing an a.t.m. is only 36 cents. why are you being charged $2.50 or $3 or as much as $5? well, that's what this amendment seeks to stop. again, to get this balance back where it should be. my amendment is also supported by the u.s. public interest research group, the consumer federation of america, consumer action, consumers' union and the national consumer law center on behalf of its low-income clients. so i just want to close by thanking my colleague, senator dodd, for his tireless work to move this critical bill forward and to help try to again try to establish that balance in our

country between our consumers, our depositors, our community banks, the big banks, try to get a balance back. and as i said, we've gotten so far off track we hardly recognize what a balance is any longer. i think this bill goes -- does a great thing in trying to restore that balance. i just want to make sure that consumers are no longer taken advantage of by these unfair a.t.m. fees that are out there, and that's why i'm offering this amendment at the appropriate time, mr. president. and i see the chairman is here. mr. dodd: well, mr. president, if my colleague would yield. mr. harkin: sure. mr. dodd: i just to want say first of all, thank you for all his fine work. we spent a lot of time in the last year or so between the health care debate where we sit next to each other and day after day going through all of that and it obviously goes back a lot longer than that, mr. president. we -- the senator from iowa and i arrived on the very same day here. i was -- the pages have

oftentimes asked me when did i get here. and i said thomas jefferson was president when i arrived here. it wasn't quite that long ago. we arrived together the same day 35 years ago in the house of representatives and been great, great friends and colleagues. and no one cares more about not only his state but people all across this country who strugg struggle, the author of the americans with disabilities act, literally millions of americans, got a family member that benefited from senator harkin's work. wish there had been around someone in the 1930's when she was born that might have stood up and recognized her talents and abilities and grew up in a family where they did some things and she ended up becoming a -- helped restore the american montessori system of teaching and taught for 40 years as an early childhood development specialist. but had she been born under different circumstances, i suspect she would have been doing piecemeal work somewhere. so there's a lot to thank the senator from iowa for in our country, and i appreciate his efforts on this particular

amendment and his general concern about the bill as well. and i thank him for that. mr. harkin: well, i thank my friend from connecticut. every time i see my good friend here and all the work that senator dodd did in getting our health care bill through, now this, talk about going out on a high note. we're sorry that -- as he knows, i'm sorry he's not going to be here after this year. but again, i think the fact that he's -- senator dodd did the health care bill and got it through, a great thing for the people of this country. great thing. and now this financial reform bill, to make sure we don't go through what we did a few years ago again, and again to help our consumers have a little bit better balance in their dealing with the big banks and the bi big -- big investment houses. this is a great bill. it's a great bill, and i compliment him for it. i know it's been a long, tough slog, as they say.

but future generations are going to look back and thank senator dodd, both for the health care bill but also for i think -- i think also for this financial reform bill. a lot of people may not understand all the intricacies of it, high finance and all that stuff. sometimes you get dizzy thinkig aboudizzy -- get alittle dizzy l this stuff, but he understands it and he gets it, and senator dodd has done a magnificent job in putting this bill together that is really going to help protect our consumers in this country. and so that's why i'm proud to support it, hope he doesn't mind if i offer an amendment to it, as i'm going to do on the a.t. a.t.m. -- on the a.t.m. fees. so i thank the senator. i yield the floor. i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call: