car and way ahead -- >> do the reporter on the battle bus believe nick clegg will transform politics? >> he's very cleaver with labor and the conservative parties as they avenge. he talks about the old parties. i don't think the liberals are all that new. i think people have kind of -- >> they are ahead of the century. >> exactly. i think people are walking up to that fight. >> in the elections, parties get a popular vote. i think if that happens, this sort of fame that clegg has from debating, if they can get over majority, things would move on so quickly, that perhaps the reform may fade away. :

>> in case anyone is in doubt in how shy the stakes might be in tomorrow's vote, there's been an air of unreality here about any of the party's claims on what they'll do to confront the economic crisis. there they'll sort out of mess. such anxiety and anger that today, there were riots on the streets, which took the lives of three people in central athens.

as our economic reporter reports, the stakes are rising all the time. >> clear cloor. clear cloor. >> for >> for weeks, the unrest smoldered. today, it caught light. three bank workers burned to death. the streets of athens breathed in tear gas. the greek bailout deal this weekend was designed to put the lid on the sovereign debt crisis, but it hasn't. the reason is, though the deal itself is much bigger than initially designed, few people believe the greek people will stand for the level of austerity demanded and today's events will reinforce that. the bailout gives greece access to 110 billion euros of e.u. and

loans. and you the deal, greek b.a.t. will rise to 23%. they will slash pensions and public sector pay to the tune of 5.44 euros. the greek economy will shrink. >> to get the bailout money, they have to get this through parliament by the end june. but the greek parliament was visibly shocked today. the p.m. said this is where uncontrolled violence leads and this is where political responsibility takes us. but for the market, even if the unrest blows over, a bigger probable harriet miers remains. >> this package would only provide greeks' financial needs for the next couple of years and then it would still be left with a huge interest burden to pay and it would probably not have much growth f any growth in the intervening period. it's more likely the recession there will continue, so i think the markets are also looking forward saying ok, this might

tide them over for the next year or so, but what happens then. >> for the past two days, global markets have been failing as the details of the bailout filtered through. if balancing the books can push greece into recession, it can do the same to portugal, spain, and ireland, all under pressure to produce more credible plans, and people in the market say, spain is what frightens them. it's too big to of is a, even as the political willpower could be found. its deficit is lower than ours, but the markets think its growth projections are rubbish, so investors are demanding spain pay 1.3 few percentage points above what germany pays to borrow money and that so-called spread is the highest it's been since the euro was formed. and now it's the credibility of the euro itself is under pressure, the greek bailout will cost the german taxpayer 22 billion euros. with elections due, chancellor merkel faces have to sell the

bail. >> the assistance is needed to secure the financial stability of the euro. we are therefore protecting our own currency when we act. >> in the very near future, you can see more problems developing in the banking system. that in turn could push the euro into a recession and that concern could actually make the whole government financing problem a lot worse. >> britain stands outside the euro's own, but our deficits are going to be bigger in percentage terms than that of greece. at root, the danger facing us is the danger facing them. but the cuts, whether they come this here or next, push the country into a double dip recession. if they do, then all budget deficit projections will have to be revised because they're based on a strong recovery. it's worth remembering that the greek crisis was triggered when the incoming government suddenly discovered that the national accounts were wrong. couldn't happen here. well, today, the man who could be chancellor by friday said britain's national occurrence,

were a work of fiction. >> well, there was one remark, which all the main party leaders here came out with today. it's what they say towards the end of every elect campaign, that there's only one poll which counts, and it's the one which happens tomorrow. it's no less true, because it's a cliche, but the only evidence we have of what the public will say is the series of opinion polls conducted throughout the campaign. jeremy vines explains. >> let have a look at the polls going back to the start of the campaign and see whether david cameron can have any of confidence that he could get an overall majority and go through the door number 10. so april 6, the campaign starts and you can see the concern is on 38%, labor in red on 31%, and the thumping along in that position for months, but then we have the game change, the television debate and look at this demarkble ramping effect on

the libdam vote and juddly it's a tussle for second place and you can see the river being driven into this psychologically difficult position, 28% which is what michael foot got in the disasterrous 1983 election. result. 28 for labor. 27 for the libdams by the end of the campaign. it is not deflated and 36 for the conservatives, leaves them actually below where they were at the very start. they've come down a bit, probably because the libdams have come up. where does that leave david cameron, does he any chance of getting all the way down downing street? let's have a look. here we have downing street on the far end. at the other end is the door of number 10. he needs some paving stones, doesn't he? here they come. each paving stone has the name of a seat on it. these are the 116 seats that the conservatives need for an overall majority in the house of commons. so, for example, will the

hamptons southwest here conservative for decades, nicholas budgeon, attorney blair took it in 1997. they need that, but as you go down the streets, the seats get harder to win and we have here, did you doily south, ian peterson, standing down, north hampton north, 5.5% swing needed for those two seats. can the conservatives get them? they get harder still. the polls suggest they come down as far as popular, and then they stop. they don't get the extra ones they need, they don't get the 116th seat, but there is an additional problem for the conservatives. because as they came down the street, there were a number of libdam seats they needed to take. for example, cornwell north, richmond park, suther. as they advanced, they would have taken them, but the libdam search may well protect the

seats against the conservative advance, so in the libdams are protected here, david cameron needs more labor seats to get further down in this direction, and as he tries for those safer labor seats, they're better protected against the conservative advance. the thrust of all of this is that david cameron doesn't yet have enough to come to the doorstep of number 10, and go thousand the door with an over -- through the door with an overall majority. >> so this extraordinary election takes place with no one knowing our it will turn out. the talk of course is of a hung parliament, or what the liberal democrats like to call a balanced parliament. we haven't seen anything like it in a generation, not since harold wilson led the labor department and mr. heath tried to hang on to the keys of downing street and mr. heath's private personal secretary wrote this confidential account of what happened then. he's in westminster now. lord armstrong, if gordon brown

were not to get the largest number of constituency, could he remain as prime minister? he could explore whether there was any means by which he could make a coalition or an understanding or an arrangement with the liberal democrats. such as to give him, with the two of them, either an overall majority, or an understanding of -- which would give him the assurance he could carry on. >> how long would he to do that? >> as long as it takes. he -- it's up to him. he remains prime minister unless and until he resigns. >> where is the justice of that, if he hasn't got the largest number of seats? >> the justice would be, i suppose, that as he himself has been saying, there's an

anti-conservative majority and he would be putting that at the head of affairs of the house of commons. >> now, constitutionally, could david cameron at the same time be trying to assemble some sort of group sufficiently large to overwhelm the majority? >> he certainly could. he could be talking to the libdams or possibly other groups to see if he could conjure up, put together a package, which would enable him to have a sufficient majority, or i suppose if he had the largest number of seats, he might decide that he would do as harold wilson did in 1974, and run the minority government. hope that he could make arrangements on each particular issue, to enable him to get through. >> now this is a very british way, always comes down to the queen. and what the queen is going to be asked to do.

given the sensitivity about involving her in politics, how do you keep her out of it? >> well, the prime minister remains the prime minister unless and until he resigns. and then if he does resign, it's his duty to recommend the queen, whom she should send for as his successor. she's not bound constitutionally bound to accept that recommendation, but he has a duty not to put a recommendation forward, which is unlikely to reach a working success. >> what i'm getting at, for example, is the suggestion that's being made that nick clegg wouldn't necessarily want to do any sort of deal or ad hoc arrangement with labor party there by gordon brown, but he might consider such a thing, if another person were to be leader of the party. there's no one else who could go to the queen and put that to her, is there? >> no, it would be up to him, and the queen would be bound to leave is to him to sort out what

that position was. he is the prime minister, and so long as he stays there, he continues to be the prime minister. whether he would need no doubt to consider him seand consider with his colleagues whether to stand down, in order to make an arrangement possible. in 1974, mr. heath would not have been prepared to do that. >> from a civil servant's point of view, are there any advantages to dealing with a hung parliament or some ad hoc arrangement of government living by day-to-day? >> i should say that there were more disadvantages than advantages. because it means that arrangements have to be made, new arrangements on each issue, or like we had the libdam packet arrangements in 1977 to 1979. and it does not make for decisive government or a

care line. >> michael clegg joins us again from whitney. michael, what's your instinct about what the result will be? >> well, the big problem we have here is there are so many uncertainties, particularly as you saw in my package today from new town and did you doily. the large -- dudley. the large candidates have said they haven't decided yet and of course we don't know the effect of all of these m.p.'s who have stepped down because of the expenses crisis and so on and i think it's going to be a patchy election. i think we're going to find they're really not the uniform swing we've known in other places. we're going to find a lot of surprise results, we're going to say gosh, how did so and so manage to hang on there. cranky, wasn't it surprising that so and so lost their seats. as an example of a possible surprise, i've buckingham palace hearing from both labor and from the conservatives tonight that

the government chief whip, for instance, nick brown is under a lot of pressure from the liberal democrats in his new cassel seat, but at the end of the day, my feeling is that david cameron will become prime minister in the next few days, probably on friday or saturday, probably -- >> michael, -- >> there's some imbecile behind you doing funny faces and doing funny walks. >> i think he's done away now. >> all right. continue with your dissertation then. go on. >> as i say, i think david cameron will probably become prime minister in the next few days with the caveat of all the unknowns that i mentioned earlier. >> ok. thanks a lot michael. well, now for positively the last time in this election, news night's political panel, danny finkelstein, a former libdam's communications chief, molly grinnedder and peter himer.

do any of you have any idea what's going to happen tomorrow? >> he's going to lose the election, i hope. >> that's really, really insightful. >> it is a good starting place. i think it's going to be a very bad month for the labor party and i think they may defeat the liberal democrats. it does look a little bit in the polls as though they will do that now and they've held up the campaign reasonably well, but they're going to lose a lot of seats, including, you just heard that snippet about nick brown and they're going it lose a lot of seats in the north and in the cities where the swing wouldn't necessarily justify it, so the liberal democrats may do a little less well than it seemed they would do a week ago, but alet better in seat terms. >> are you surprised, danny, it's so close to call at this stage? that is the surprise of this election much given 13 years of labor, given some of the mistakes, the duffy incident, given the torrey press's range against labor. so on that fight alone, it's

closer than it should be. >> come to this question of how well or badly cameron has done in detoxifying the brand, but i want to ask you, ol lin e, before these people cut you out completely in a very rude way, do you think there's any remote possibility of a liberal tory deal? >> i think -- michael said the other day and i think he was right, that the will of the nation will be revealed tomorrow and i think that will give us something to go on. i mean, personally, you know, when i look across the country and you look at how many councils are working together, you know, at the moment, there's a fight going on to wrestle control from labor and what will possibly end up is a an alliance. it's not -- -- you know, there e some sticking points in terms of policy and it will always -- i'm just going to finish here. it will always come down to

policy in the end, because it has to be policy specific. there's no point in it being based on personality or emotion, you know, what you have to do is get very rigorous about the policies you want and nick started out the campaign with the policy pledges and they're there for a purpose. >> sure. but you won't tell us which ones are the top priority. >> because he said the package is failed. >> it may be all or nothing. >> it is all or fog. >> you don't believe that. you don't get the change on taxation, for example. >> i think if you look at north of the border and how it shook down in scotland, there was some certain critical packages that absolutely had to be delivered on when the negotiations took place between the liberal democrats, and the labor party and it was on the basis of policy. >> in 1974, the situation we were discussing, labor and the conservatives came very close to each other. this time, that's why i started with someone who is going to lose the election. this time that isn't going to

happen. there's going to be a very big gap between the conservatives and the labor party. the conservative party will i think, get more than 300 seats. the labor party may have get more than 200, but i don't think it's going to get a huge amount more than 200. the liberal democrats will have a trial. >> now that will produce a different situation. i don't think it will incidentally produce a coalition situation. if the conservatives fall short of a majority, the conservatives will have to make concessions on policy in order to get their legislation through, but it's unlikely they would -- >> why should the torys go -- they will governor as a minority party. >> is that all it takes? >> you know, the question is, when and if they would need -- as a strategic matter, if i were the liberal democrats, i would prefer the conservatives to win the majority. >> that's the interesting point. it will not be a majority.

say you're looking at it -- >> i want to ask one other area of speculation. what happens to gordon brown if the maybe party comes third or even second? >> well, if david comes in number 10, normally what happens is then the lead are resigns -- >> can he even continue as leader of the party if he comes second if terms of -- >> look, this is a chance they could do a deal with the libdams, because the seats are better than we all thinking, then he'll hang around for a bit. he's been in power for 13 years, he's as chancellor or prime minister. if itch was him, i would -- if i was him, i would want to go anywhere. >> let's deal with things we do know about. i like to look back on the campaign. what was the highlight for you, danny? >> well, i think it has to have been -- i don't think it was a political highlight, but the personal highlight was the comment, just because it was so much like an episode in the thick of it. obviously the political highlights of the campaign was

the debate. it was clear that what really influenced this election much more than we all thought was the expenses dissolved, which meant the conservative party running for a time election campaign was running the feeling under the theme, you're all the same, you haven't changed and that gave clegg an opportunity, which in that debate he seized. i don't think he's capitalized on it since he's done then, but he's certainly seized on that. >> besides peter ballroom dancing. >> i think it was a great highlight. look, nick, this election, on my view of the elections is they don't change and the last few elections, whatever the polls were in january, wasn't going to change by the time of the election and i thought that would be the same this time. actually, nick clegg popping up in this first debate and surprising everyone is clearly the thing that really made this election close, because it took away from cameron, who was relying on the fight being entirely against gordon brown and looking fresh in the change candidate. it was suddenly taken from under

him. i don't think cameron quite got it right after that. i think clegg hasn't had a response to doing so well. it shocked the libdams. >> my highlight was the kind of extraordinary sense of after the first leaders debate. we all knew about nick clegg, but the nation didn't, and the fact that you could actually go out on hyde street and had conversation with people that you normally never get that extraordinary opportunity to do and to me, it was this sense of young people registering to vote and swayed, so there's an increase -- >> that was really striking. whatever else happens, they may grow out of it, may grow into it. >> it may be a generation engaged in politics for the first time in a long time. >> we had a debate if school today with 100 students who are completely engaged debating all these issues. the debates were critical, but i think the beginning of the campaign was also very interesting. a feeling of tremendous alienation against politics and

politicians, a feeling that people weren't interested in politics. you had a whole week about the discussion of the national insurance change. >> do you think people have thought that all of these parties are refusing to talk about, in any detail, about what they're going to do about this ridiculous glaring deficit? >> i think people have talked back and i think that is going to be an extremely serious problem. the point ollie made after the third debe, precisely how they're going to solve some of the most serious problems that face government if modern tools, but they've dropped their come uppan with sir humphrey. today, sir humphrey comes to grips with the labor manifesto. ♪ >> it's always a pleasure to

read manifestos, especially if you have a taste for fantasy fiction. they are remarkable anth ole of creative writing. so what does the labor party have to say about immigration? numbers? no. budget? no. dates? no. but they're also unpoetic. people need to know that immigration is controlled. excellent. after all, the ride of a rocket into the stratosphere is controlled. now what have we here? at the heart of our growth plan is the commitment to a high-speed rail line. well, i think we've got a figure for that somewhere. here. yes.

30 billion pounds. where is that going to come from, i wonder? oh, the scheme is due for completion in 2032. well, i put a ticket on it to celebrate -- i must book a ticket on it to celebrate my 80th birthday. the department has noted the government's bold and imaginative commitment to a new high-speed rail network and we'll be conducting preliminary investigation ins to engine design, financial structures, environmental safeguards, commercial arrangements and health and safety considerations with immediate effect. at least that will save us having to spend any money for four years. freedom of information. oh, dear, oh dear. we strongly support measures that improve the transparency of parliamentarian institutions and government.

well, they can't say we didn't warn them. but i think there's a way to clip its wings a bit. we fully support the government's commitment to transparency, but we should point out, that meeting requests for information has already cost over 30 million pounds. in view of the critical state of the u.k.'s finances, we recommend that the annual budget be capped in the future to, say, two million pounds a year, to be allocated by a departmental committee, which i shall chair. house of lords reform. it's so nice to meet an old friend. it was promised 13 years ago. i wonder when it will actually happen. i'm betting on a dead heat with the new high-speed rail line. meanwhile, there's the little matter of the budget deficit in britain's history and a forecast debt for getting on for

1.5 trillion pounds by 2015. well, they say they'll solve it, but they don't say exactly how. well, you don't want to spoil a good story. >> british voters are heading to polls today to elect a new parliament and prime minister. learn about the candidates and the issues online at the c-span video library. search it, watch it, clip it and share it. watch what you want, when you want. and you can watch election results this afternoon, just before 5:00 p.m. eastern on c-span3. c-span two, one of c-span's public affairs offerings, weekdays, live coverage of the u.s. senate and weekends, book tv. 48 hours of the latest non-folks authors and -- non-fiction authors and books. sign up for schedule alert e-mails at c-span.org. >> the u.s. senate is galling into resume work on a financial regulations bill. yesterday, they voted 93-knife

to remove a $50 billion fund to recover costs arising from the liquidation of large financial firms. at 10:00 a.m. eastern, the senate is expected to vote on a requirement by the fdic to determine how much banks should done tribute for winding down insolvent financial institutions. also in the bill, a provision to regulate the derivatives market. debate on the bill and vote expected throughout the day. the presiding officer: the senate will come to order. our visiting chap lane today is father claude pamerleau, from

the university of pouredland. he will lead us in prayer. the guest chaplain. let us pray. o lord, master of the universe and everything in it, your generosity gives us life, gives us hope, gives us the imagination to envision a world where no child weeps, where violence is a dark memory, where peace is the story of every day and year. as the gift of this day unfolds, as the creative men and women in this chamber turn their gifts and talents to making laws that seek to elevate and protect the lives of millions of their fellow americans, do not let them lose the sweet peace and long vision of this first moment. in the face of so many

distractions and challenges, may they be filled with grace and generosity, wisdom and wonder, calm and compassion. open their hearts, lord, and open their minds, and fill them with your love, and make of them beacons of your light, so that their deliberations this day take this country and this sweet planet ever closer to your peace and your joy. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all.

the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c, may 6, 2010. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable patrick j. leahy, a senator from the state of vermont, to perform the duties of the chair. signed: robert c. byrd, president pro tempore. mr. reid: mr. president? the presiding officer: the majority leader smed. mr. reid: following leader remarks, the senate will resume consideration of s. 3217, which is the wall street reform legislation. the time until 10:00 a.m. will be for debate with respect to the tester hch hutchison-hutchit dealing with fdic. at 10:00 a.m., the senate will road to vote in relation to that amendment. additional votes are expected to occur with respect to the wall street reform bill. currently the shelby amendment regarding consumer protection is pending. the next amendment upon disposition of that will be the

sanders amendment regarding audit of the federal reserve. that's amendment number 3738. as a reminder, there will an all-senators briefing on the start treaty related to national security issues from 4:30 to 5:30 p.m. we will remain in session during that period of time. we expect to arrive at a time for voting on the shelby amendment. if not, there will be a motion to table that amendment. so we have a lot of amendments to get through. we're going to work into the night. we have work that we need to do tomorrow. so everyone should be aware that we have a lot of issues that we have to resolve on this most important legislation. mr. leahy: madam president? the presiding officer: the senator from vermont. mr. leahy: madam president, i would thank the distinguished republican leader for letting me step forward ahead of him. i just wanted to note what a great pride it is in our family to have welcomed the visiting

pastor today, father claude pamerleau, who's also my wife marcel's brother. and he is, with the gracious concurrence of our chaplain, dr. black, has opened the senate on other occasions, but it is a great deal of pride for both marcel and myself that he is here and has a chance to visit with us. father pamerleau is a dear friend of all our family and has been a guide and spiritual leader for our family for decades. and, madam president, i would ask unanimous consent that a short bioof him by the -- bio of him by the university of portland -- which even speaks about his clarinet playing -- be

made part of the record at this point. the presiding officer: without objection, so ordered. mr. leahy: and, again, i would thank our leaders and would yield the floor. mr. mcconnell: madam president? the presiding officer: the republican leader. mr. mcconnell: madam president, last night the senate fobbing a strong stance on protecting taxpayers from the unintended consequences of a bill that was originally meant to hold wall street accountable for its mistakes. put aside for a moment the latest talking points the other side is using about republicans, our goal throughout this debate has been to protect taxpayers who got burned during the last crisis and last night's vote showed that those efforts are beginning to yield results. a $50 billion fund for failing financial firms that would have distorted the market by encourage the same kinds of risky investments that led to the last crisis is now out of the bill. a provision that would have given investors in failing firms special treatment is out. and congress will now have to

approve any government effort to insure bank debt. so improvements are being made to this financial regulatory bill in the right direction. now it's time to focus on what emerged as another central point of contention: that's the new government bureaus this bill would create over at the fed. the first thing to know about this new agency is that congress wouldn't have any power over t the second thing to know is what it would do. some of that is still vague, but the ambiguities are part of the problem. what we do know is that this new agency would be authorized to gather information on banking and purchasing patterns and on anyone -- anyone -- operating in consumer financial markets. one provision, section 1071, could leave financial institutions to maintain a

record on the number and dollar amount that each customer deposits at bank branches and a.t.m.'s. now, understand ably, a lot of americans and a lot of small business owners have serious concerns about all of this. they're also concerned about the potential of this bill to further drive credit at a time when they're trying to dig themselves out of a recession. we received a letter just yesterday from groups representing hundreds of thousands of businesses -- from florists to orthodontists to builders to car dealers -- all concerned about the potential impact this new agency would have. let me state the obvious. none of these businesses had anything do with the financial crisis. none of these businesses had anything to do with the financial crisis. why on earth would we want to punish them for the reckless behavior that we saw on wall

street? why on earth would we want to punish these small businesses for the reckless behavior that we saw on wall street? the fact is, this agency is more about using this crisis as an opportunity to slip a vast new european-style regulatory bureaucracy past the american people than it is about holding wall street accountable. i say, let's focus on wall street and the g.s.e.'s and leave ordinary americans out of this. let's put the middle-class families and small business owners who shouldered the burden of this crisis ahead of the bureaucratic wish list here in washington. at a moment of near-double-digit unemployment and exploding debts and deficits, let's have at least one democratic idea for expanding the reach of government on the shelves. later today the senate will have an opportunity to blunt the potential impact of this easmghts senator shelby and i

have joined senato several cosps on an amendment to that defrect the focus of this bill from main street and back to wall street where it belongs. let's take this bill off the main street and send it back to wall street, where it belongs. the national federation of independent business supports our amendment because in place of this new bureaucratic agency it would establish a new division within the fdic that would oversee mortgage originators and other big financial service providers. that's where target should lie, not on the backs of america's small businesses and middle-class americans who expected to be protected by this bill, not punished by it. i would urge my colleagues on both sides of the aisle not to lose focus in this debate. i would also urge everyone to support the shelby-mcconnell amendment. madam president, i yield the floor.

a senator: madam president? the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will resume consideration of s. 3217, which the clerk will report. the clerk: calendar number 349, s. 3217, a bill to promote the financial stacket of the united states by improving accountability and transparency in the financial system and so forth and for other purposes. the presiding officer: under the previous order, the time until 10:00 a.m. will be for debate on amendment number 3749, with the time equally divided and controlled in the usual form. the senator from nebraska. mr. johanns: thank you very much, madam president. i'm just going to speak two minutes this morning. but i would like to stand to take a moment to voice my support for the tester-hutchison amendment. this amendment will ensure that banks of all sizes pay their fair share by broadening the assetment base that is used by

the fdic. the fdic would determine bank premiums by basing it on total assets, not just domestic deposits. for far too long, community banks have paid a disproportionate share of the deposit insurance premiums. this amendment really levels the playing field. it's good piece of policy. it will put community banks on a more equal footing with the large bank conglomerates, so i urge my colleagues to vote for this commonsense amendment. let me just wrap up by saying the independent community bankers have looked at this amendment. this amendment would reduce assessments for 98% of the banks with less than $10 billion in assets, keeping nearly $4.5 billion in the banks, much-hee

much-needed capital to make our economy grow. madam president, i thank you. i yield the floor. the presiding officer: who he would i do not see time? -- who yields time? mrs. hutchison: madam president? the presiding officer: the senator from texas. mrs. hutchison: how much time is on our side? the presiding officer: eight mings. mrs. hutchison: would you notify me when i have consumed five minutes, because there is -- the presiding officer: yes. mrs. hutchison: thank you. madam president, i want to join my colleague, senator tester, and an increasing number of cosponsors to support our amendment which will ensure that banks of all sizes pay their fair share in deposit insurance for the risk they pose to the banking s our amendment is intended to level the playing field for our safe community banks who for if a too long have paid -- for far too long have paid assessments into the fdic insurance fund above and beyond the risk they pose. the fdic levies deposit

insurance premiums on a bank's total domestic deposits. but domestic deposits are not the best means to analyze the safety of banks. financial assets other than deposits create risk in the system, nondeposit assets are held disproportionately by largerrer, noncommunity banks and can be more complex and asse assets that are more likely to show a bank's skphoe sure to -- skphoe sure to risks -- exposure is to risks. the meltdown was caused by bad mortgages which were packaged into risky mortgage-backed securities which were used to create derivatives. these risky financial instruments and the large institutions that created and held them are what led to our financial crisis. so our amendment is particularly timely because the fdic has now said that banks are going to

have to prepay into the insurance fund for three years, and all of that will be due this year. so, a three-year assessment due at the end of this year, it is so important that we have a fair assessment ratio. and that's what the tester-hutchison amendment will do. it will have a ratio for the, what a bank owes into the deposit fund that is based on its risk, based on assets minus capital. so i'm very pleased to be the sponsor of this amendment. i worked on this amendment in committee. i did the research on it to try to make sure that we were doing the right thing. i'm pleased that senator tester joined me in this effort and we have a very bipartisan group of supporters of this amendment. and it is my hope that we pass an overwhelming -- by an overwhelming vote this amendment

which will put into the law that the fdic deposit insurance will be based on a standard that levels the playing field for community banks so that big banks don't have an advantage over our community banks. it is our community banks that are giving the loans to businesses throughout our country. they are the ones who were there in the crisis as best they could to try to put liquidity into the market. they didn't cause the crisis, and they certainly shouldn't pay the price for it. and i urge all of my colleagues to support the tester-hutchison amendment. thank you, madam president, and i yield the floor. mr. dodd: madam president? the presiding officer: the senator from connecticut. mrs. hutchison: madam president, i was going to suggest that we allocate the time that is being used up

against both sides. that would be be my motion, madam president. the presiding officer: without objection. mrs. hutchison: and i suggest the absence of a quorum. mr. dodd: no, i want to say something. mrs. hutchison: excuse me. mr. dodd: madam president? the presiding officer: the senator from connecticut. mr. dodd: let me commend our two colleagues, senator tester and senator hutchison, for this proposal. as i said several times yesterday, i think this is a very sound contribution to this bill, and for the very reasons that have been outlined this morning by senator hutchison and senator tester earlier, reducing the cost to our community banks at a time when obviously they're all feeling tremendous pressures under this economy. so i'm a strong and ardent supporter of their proposal and hopefully confident it will be overwhelmingly supported by our colleagues. let me quickly add we're going to be moving on after that vote to the shelby et. a amendment regarding consumers protection.

i know my colleague has written to my colleague from -- my colleague from texas has written to me along with jay rockefeller regarding the federal trade's interest. we worked out, i believe to the satisfaction of my colleagues on the commerce committee. i draw to the attention of members the amendment we will be voting on does great damage to the fdic's rulings. i ask my tkhraoegz look at what we're going -- ask my colleagues to look at what we're going to support because it deprives the f.t.c. of rulings we want to support. i'll address the shelby amendment after the hutchison and tester amendment is disposed of. let me say in response to the minority leader, one of the strongest features, what's happened to our country in the last several years is we've had seven different federal agencies that have divisions on consumer protection. they have been around for a long time. and the reality is most of them

are asleep at the switch. we're treated as second-class operations within their prudential regulator to such a degree that we saw even though we mandated legislatively to protect home mortgages and people, never even promulgated a single regulation in this area. small businesses watched credit card rates go through the ceiling, as i pointed out. many people rely on that, watching rates go from 5% to 22% was not uncommon. the idea this has been a division between bureaucracy in washington and what happens in main street is a complete aberration here. when you watch 7 million people lost their homes, many of them because they were lured into deals that they never could afford at the fully indexed price. we saw the outrage expressed by consumers. we saw credit cards, when the rates skpwhroeded, making -- exploded making it difficult.

there's all sorts of features here. this bill only covers financial products and financial services. this myth that butchers and dentists on the street are going to be affected by this is a complete myth. the provisions in the bill couldn't be more clear about it. there are no new regulations. we're taking existing consumer laws, some legislation go back 50 years to protect consumers from the activities people have to worry about every day. the question is whether or not anybody's going to enforce any of this at all. so by setting up this agency under the -- in the federal reserve, giving them independent rulemaking authority, appointed by the president, confirmed by the senate as an operation and then working in consultation with prudential regulators so you don't end up with a conflict between the safety and soundness requirements of our financial institutions and the consumer protection issues.

in the absence of this, what we're confronted with every year is having to draft legislation to deal with one consumer problem after another. we know how long that can take if it ever gets done at all. in the meantime we see what happens to average citizens. the whole shadow economy -- community banks, here they are located on one street corner and they've got a payday lender, on another corner, completely unregulated. the community bank has to go through the regulatory process and then the shadow company maybe 100 yards away and no regulations. this bill requires assessments of community banks to pay for the regulation of the nonbank. our bill does none of that. the cost of the consumer protection agency comes out of fed money. no appropriation to support it. this one here requires an assessment. here we are going to adopt an amendment, here the hutchison-tester amendment, which reduces the cost to 98% of

consumer banks and the next assessment adds -- amendment adds an assessment on here. that's what the shelby amendment does, an assessment in his bill on the community banks. nonbanks will pay some. the other ones do. we don't do that in our bill. i think there are so many assessments out there already that shouldn't be the case. we consolidate so you get clarity. not seven agencies telling you what consumer regulation you ought to follow or not. they deserve clarity and thought so there is a consistent line of what's occurring out there and that interpretation of cooperation with prudential regulation so you don't have the conflict. we spent a lot of time going through this. this was worked on, by the way, on a bipartisan basis as we were drafting it here so we can have this feature of the bill. again, i'm willing to listen to ideas on how we can strengthen this and make it even more clear. again, some of the accusations we're reaching into main street with this legislation, nothing could be further from the truth. we're not reaching into it at

all. but obviously any proposal here deserves to be looked at again and other ideas that can tweak it and make it work better. but the idea we're going to level assessments, the f.t.c. gets damaged under this amendment, in my view, as it's presently written, i think people need to read carefully what they're going to be asked to vote on in the shelby amendment and to walk away from. it is worse than the status quo in many ways. it takes a huge step back. if anything we've learned in the last two years is those small businesses, those people out there who rely on the flow of credit, the access to capital to see to it there is going to be someone watching out on a consistent basis to what happens to them, we believe we have a very strong provision in our legislation. i want to turn -- senator tester is here to close on the hutchison amendment. i apologize. i drifted into some other area. i see my colleague from massachusetts. senator tester, i know you want to be heard. i apologize to my colleague. i yield the floor. mrs. hutchison: madam president, the senator from montana, i believe, is

gesturing that the senator from massachusetts could have up to three minutes. thank you. mr. brownback: -- mr. brown: thank you to my colleague from montana and senator from texas as well. we've been working hard on this amendment. the senator just got through speaking, i just want to commend him privately and publicly for really taking this effort and trying to work through in a bipartisan manner, because as i've said publicly many times, this is an issue that affects the american people in very serious ways. and i don't want to rush it. i want to do it right so we don't have to come here next year or next month and try to fix the problems that we may have inadvertently created here. so i appreciate you allowing me to come and speak to you privately in your office, and your staff, and work through

this. and i'm hoping we can continue with that bipartisan effort. as a reflection of that, i've signed on to many amendments, some by my democratic colleagues and some by my republican colleagues. i'm thankful that the majority leader has said publicly that we're going to get a full and fair discourse on these issues. and the one that i'm referring to here today is the tester-hutchison amendment of which i'm also a cosponsor, number 3749 because the presence of fdic deposit insurance has meant americans who deposit savings in an insured bank account can sleep soundly at night. that's kind of a basic part of having a smaller community bank that you know when you give your money to a bank it's not going to be treated like a casino. it's going to be protected. but as our banking sector has consolidated and large national banks emerged, our smaller community banks have been getting squeezed. these small banks pay approximately 30% of the total of the fdic assessments but hold

only 20% of the nation's banking assets. it's time, i feel, for the larger institutions to pay their fair share. and this amendment, mr. chairman, will improve competition in the marketplace and help small businesses. and everyone knows that small businesses across the country are having a hard time getting loans. and lowering the assessments on these community banks, i believe and others believe who are sponsoring this amendment, would help increase loans to small businesses on a relative basis our small community banks are far more active in the market compared to larger banks. as somebody who in a prior life before i got here, was involved in representing some of those banks, i can tell you that they are the ones continuing to keep the economic engine going in these small towns. and i'm pleased that the amendment we will vote on today also makes sure that the institutional custodial banks a and bankers banks are protected from unfair assessment levels

that are not in line with the true role in the financial system. this matters a great role to my state of massachusetts, the global hub of institutional asset management, and will allow us to restore fairness to the fdic assessment system without imposing large unjustified assessment increases -- the presiding officer: the senator's time has expired. mr. brown: -- i urge my colleagues to support the amendment and thank you, madam president, and the senator from montana, thank you. mr. tester: madam president? the presiding officer: the senator from montana. mr. tester: thank you, madam president. first of all, i want to thank the senator from massachusetts for his comments. i very much appreciate your cosponsorship and support of this amendment. i also want to thank senator hutchison's hard work on this amendment. i very much appreciate her ability to get things done in a fair way. and i thank you very much for that, senator hutchison. senator hutchison and i have come to the floor several times to talk about this amendment, a bipartisan amendment, a commonsense amendment to hold banks accountable for their

behavior and to preserve the integrity of the fdic deposit insurance fund. has been said before tph-ld direct the fundamental -- this would direct the fdic to force banks to pay their fair share under the fund. fixing the lopsided system that we have now. it would also protect the integrity of the deposit insurance fund which is critically important, insuring that it has the resources to be self-sufficient and prepared to address any future crisis. let me say, madam president, that senator hutchison and i think this amendment makes a great deal of common sense, as do the other 13 cosponsors of this legislation. i'm pleased that we are joined by so many of our colleagues on this important amendment and that it is one of the first amendments up for consideration. with that, i mean, it is really a question of equity. it is really a question of making sure that the fdic

insurance fund is solvent for years and decades to come. with that, i want to thank all the people who have cosponsored. once again thank senator hutchison and thank the chairman of the banking kph-d, senator dodd, for working with us on this amendment. with that, i would -- is it afroapts ask for the yeas and nays? the presiding officer: is there a sufficient second? there appears to be. the yeas and nays are ordered. if all time is yielded back, under the previous order, the question is on amendment 3749. the clerk will call the roll. vote: vote:vote:

vote:

the presiding officer: on this vote the jayce are 98 -- the nays are 98, the nays are zero. the amendment is agreed to.

without objection. mr. johanns: madam president? the presiding officer: the senator from nebraska. mr. johanns: madam president, thank you. the presiding officer: the senate will be in order. mr. johanns: madam president, thank you. i rise today to discuss the

consumer protection piece of the financial reform bill that we have been debating. let me start out and express my appreciation for the good work of chairman dodd and the good work of ranking member shelby and others who are making their way, i think, through a thoughtful process to try to get a bill, an overall bill that will work. this piece of the bill, though, in my judgment, needs a tremendous amount of effort and attention and work yet. it's generated a lot of debate, the consumer protection piece. we have all asked the question in banking committee hearings and on the floor here: what is the best way to protect consumers? let me underscore that, madam president. this has not been a debate about whether we do or not. no one is talking about ignoring this piece of the legislation.

no one is advocating that we do nothing on consumer protections. what we are trying to focus on is the best way of doing it. we need to keep that perspective in mind as this debate unfolds and motives and words get distorted and stretched. the bill before us establishes a consumer protection regime that's going to be housed at the federal reserve. but let me emphasize, that does not mean it's under its supervision. it really functions like a stand-alone agency. this new -- quote -- "bureau" will have whaeub describe as unpress -- what i would describe as unprecedented powers, with power over nearly everything, anything that resembles the term

"financial" in nature will come within the purview of this bureau. i must admit, as this debate was going on, i found it surprising, if not shocking, that folks like car dealerships, accountants, hrours -- lawyers were showing up at my office to talk about the impact on them. it is no wonder that so many business groups have come out in opposition to this current piece of this legislation. and i'm not talking about banks. i'm talking about business groups. the chamber of commerce sent a letter outlining concerns on april 28 on behalf of -- i'm using their language -- "hundreds of thousands of nonfinancial services businesses." unquote. these hundreds of thousands of

businesses, many of them small businesses, had absolutely nothing to do with the last crisis. yet, with this new bureau, i believe they'll be punished, or at a minimum tied up in red tape. now there are many pieces of this that i could spend a lot of time on the floor about, but what i've tried to do today is to just encapsulate my thoughts into five areas, five concerns, if you will. the first area is the unlimited rule making authority provided for in this legislation. because the term -- quote -- "abusive" was added to the unfair and stkaoep alternative acts -- and deceptive acts or standards, there is no limit to the kind of rules this new bureau can write. we also know the term "abusive" is entirely subjective. so how do you determine abusive?

well, you make each customer take a financial literacy test? is abusive different for mike johanns than it is the next customer? because abusive can be defined so differently from one customer to the next, you can kind of see the unlimited problem that is created here. the second area: no veto power. i've consistently said that it is a mistake to separate consumer protection from the issues of safety and soundness of the institution. if a proposed rule will have a negative effect on the safety and soundness of financial institutions, then we need some kind of checks and balances. checks and balances are a good thing. in this bill under debate, this new agency only has to list the regulator's concerns, not take

them into any kind of meaningful consideration. the third area: privacy rights. while there are a lot of privacy concerns here, two major ones come to mind. let me dp to th go to the langue bill itself. section 1022 mandates the bureau to -- quote -- "gather information regarding the organization, business conduct, markets, and activities of persons operating in consumer financial service markets." a person is defined in the bill as a -- quote -- "individual" -- unquote. so do you follow me? what this means is that the bureau can look into the business conduct of the average person out there. section 1071 requires any deposit-taking financial

institution toe to geo code customers and maintains records for at least three years. as the cato institute described it, "think of having your own google map of where you and your neighbors do your banking." is that what americans want out of this bill? the fourth item: irk the preemption standard. the current bill really changes current federal law under the guise of giving states more power over their consumer protection laws. this worries me. this will wreak havoc for financial companies operating in more than one state. what you are saying is that they will have to comply with a

patchwork of 51 state laws and state ag's will have the power to enforce laws against national banks. now, if this were the way since the beginning of time, you would say, well, they've adapted to it. but to put them in this kind of regimen is literally to say to them, you are going to have to choose up mountains of capital to -- chew up mountains of capital to try to comply with all of these various rules and regulations and laws of the various states and then the fifth item i wanted to mention is just the expansive reach. this bill includes what i regard as an overly broad definition of -- quote -- "consumer financial product or service" -- unquote -- and -- quote -- "service provider" -- unquote. specifically, section 1027 will subject numerous merchants to the regulation of this new bureau just because the business

provides the ability to their customers to repay in four installments. just imagine: you oord cam cored fo camcorder. this company provides you with the flexibility of making four installment payments. this new company could be swept under this new bureau. how long do you think companies will continue to provide that kind of flexible option to consumers if they're going to be buried in regulation? that's why the dentists, the lawyers, the advertising agencies, the accountants, and even the florists are concerned with this bill and are showing up in our offices saying, what are you doing? i don't know about anyone else, but i could make the case without any hesitation that my local florist doesn't come to mind when i think about the

players who brought our economy to the edge. in response to this expansive and unfettered bureau, i'm proud to announce my support for an alternative. this alternative, led by senator shelby, is well-thought-out. it's a reasonable approach, and i believe a compromise to a very difficult issue in this legislation. it would establish a consumer protection division within the fdic, which cybill a natural fit -- which i believe is a natural fit, since this agency is already tasked with protecting consumer deposit accounts. this new division would have authority to make rules relative to consumer protection. all rules and regulations and orders would receive the approval of the board of the fdic, an important check and balance.

this very important -- this is a very important distinction in terms of what we're pea debating today. board approval will ensure that actions taken by the division appropriately consider safety and soundness of the financial institution while ensuring that consumer safeguards are in place. while it allows primary supervision and enforcement to exist with the existing regulators, it does not bring in nonbank mortgage originators for supervision. i'll end with a final thought. many have claimed that these mortgage insurers acted unfairly and that they preyed upon unsophisticated borrowers during the last crisis. this ensures the mortgage broker operating out of his garage or whatever is going to be regulated. and finally, this new agency

will be able to go after the bad actors. and that's what we should be doing. anyone who shows a pattern of material violations will be brought under this new fdic division. let me wrap up where i began, madam president. i applaud all of my colleagues who have spent so much time and energy focusing on the consumer piece of this regulatory reform. chairman dodd led us through hearing after hearing trying to figure out the best way to protect consumers. senator shelby, our ranking member, worked on those issues in concert. we can get this right. now, in my judgment, where we're at today with the proposed legislation on the floor does not get it right.

let's focus on getting it right, getting the bad actors. i believe that the approach that is being championed by our ranking member shelby is a reasoned one that elevates consumer protection while keeping safety and soundness as a paramount consideration. i ask my colleagues to support the alternative, and i yield the floor. mr. dodd: madam president? the presiding officer: the senator from connecticut. mr. dodd: madam president, let me first of all, if i may, acknowledge the contribution of the presiding officer, my colleague from new york, who is a, while, a new member of this body, like everyone here, everyone brings value to this chamber from time to time based on their -- what they've done in

their earlier lives. and i just want to thank her immensely for bringing her background and experience to this critical debate we're having. she spent a lot of years working in this area of the law and knows it well. and i've come to appreciate her counsel and advice and thoughts on all of this. and i just want to acknowledge that, if i may. mr. president, this is -- we've resolved -- as i said at the outset, there are four major pieces of this bill of ours. and i'll add a fifth, obviously, dealing with the derivatives section that was worked on -- the presiding officer is a member of the agriculture committee, blanche lincoln, chairman of the agriculture committee. title 7 deals with that section of the the banking side deals with the four other major parts of this bill. they are, one, end too big to fail. recipient an early warning system, number two. and i'm being very simplistic. recipient an early warning system, deal with the derivatives and the so-called

exotic instruments, and have a strong consumer protection feature to this bill. those are the four points. we've resolved, i believe, to virtually all of our satisfaction the too big to fail argument. we did that yesterday and i again thank my colleague, particularly senator shelby, for helping us work through that and come to a conclusion that ends the debate as to whether or not the bill before us ends too big to fail. that in itself would be justification for supporting the legislation. knowing that we, if we don't adopt this legislation, as i'm hopeful we will, and, lord forbid, we're confronted with another major economic crisis, that we'll not be faced with a choirks as we were in the fall of -- that we'll not be faced with a choice, as we were in the fall of 2008. we wrote a check for $700 billion to bail out major financial institutions that were on the verge of collapse and we were told if they did so, that the financial system of our

country and possibly globally, would melt down to use their words what. we wanted to avoid is ever being put this that position again where you had the implicit guarantee that the federal government would write that kind of a check. we have done that now in this bill. so let's check that box. too big to fail is over with. and this bill takes care of that. we need to pass the bill. we need to have the president sign it so that it becomes law. as of right now, we're far closer to resolving that issue than ever before. the derivatives section of the bill and so forth -- i know people are working on this, worging with senator lincoln and others about that section of the bill, and i respect immensely their efforts to make sure we can arrive. we think we've got good provisions in the bill, but i think all of us recognize that other ideas and thoughts are always welcome. so that's being worked on. the sort of radar, look-ahead approach to our legislation -- i don't think there's any debate about it. so that box has sort of been checked. maybe someone has some

amendments. the idea that we have an early warning system so that we pick up these problems far earlier than we did or were willing to acknowledge, as they were developing within the residential mortgage market. as early as 2005 and 2006, beginning to explode in 2007 and then of course watching the events of 2008 culminating in the fall with the decisions we had to make in order to stablize our financial system in the country. had we had that early warning system, more than just one set of eyes, the federal reservation, which did-- --the federal reserve, which did a fairly inadequate job of picking up what was occurring in the real estate bubble, we would have never had ourselves in the situation we found our country in in the fall of 2008. the early warning system, we believe, will be a major step in limiting the kinds of problems that we've seen in the last

couple of years. it does not stop the next economic problem. there will be another economic crisis. future generations will deal with them in our country. there's nothing in this bill that probabilitie prohibits us s us that we have once and for all avoided economic crisis. how many more headlines do we have to read about grease and what's occurring -- about greece and what's occurring there, the riots and the stabilizing of their country is having an effect globally. so while we can do a lot of things to minimize what happens here, we recognize we live in a far more interconnected world that poses its own set of risks. but nonetheless, i think the fact that we've established on a bipartisan basis -- and again our colleagues, mark warner and bob corker, along with other members, did a great job, in my view, in crafting that part of

the bill. i think we've done a good job there and i see very little dissent about it. the fourth piece -- the consumer protection -- is the one we're engaged in. and this isn't debate that i believe is worth having over the next hour or two and then vote. let me say to my friend from alabama, the author of the amendment, and thinks cosponsors. we've got to come and debate this stuff. i'm here and i will a.b.a. glad to engage in the debate. -- and i'll be glad to engage in the debate. but i've got one other colleague here right now engaged in this question. this is a major part of the bill. people have told me overed and over again, this is a big issue for them. i'm willing to accept their determination. i think it is a big issue, too. but we've got about 100 amendments that people wants to omplet we've got about -- that people want to offer. we've got about 39 legislative days until the end of this congress.

we've all been debating consumer protection for years now particularly over the last 18 months of this bill. there's no reason to have a protracted debate on this question here. my republican friends have offered a substitute to my bill on this issue. and i welcome that substitute. we need to now debate it and then vote on it and move on to the next issue, and i'm delighted to see my good friend, who just arrived here to engage in this discussion. so, mr. president, let me address this issue of consumer protection. in terms of both what we have in the bill, reetding the languageg the language of it, and what the alternative would do. i listened to my friend from nebraska, senator johanns, and a wonderful member of our committee, a person i've come to respect very, very much. he's been very, productive and very helpful in the banking committee. but the idea, to use his language that we're covering florists and accountants and

lawyers and dentists -- nothing could be further from the truth. you know, i guess the old adage is if you say something often enough and repeat it often enough, and if it goes unchallenged it becomes a fact. well, it's not a fafnlg fact. it's anything but a fact in this bill. so i know that they like to use that argument to try and pass their amendment or to defeat the sections of our bill that i've included, but i can't say it anymore clearly to my colleagues. i believe it's section -- i should know this, but -- 1027 of the bill. you've all got copiese bill on the desk. read section 1027 when you come to the floor. it's not complicated legislative language. it says specifically the only reason you'd be covered by the consumer protection language of this bill is if you are significantly involved in financial services or financial

products. i realize the word "significantly" people want to work on and i'm willing to listen to ideas on how we can define that word significant. that's not a bad point. i understand that. don't tell me it covers a floor rift. -- a florist. under any definition of the word significantly involved excludes retailers and merchants across the country. i'm willing to debate all sorts of language here but don't make me debate just complete false allegations about what's in the bill. at any rate, madam president, we've been working on our bill for a long time. again, my compliments and thanks to my colleague from alabama for the efforts yesterday and so forth. but this is a very important part of the bill. we worked too big to fail. but the consumer protection is critical because it goes to the very heart of what we're trying to do. in fact, it was consumers, businesses -- small businesses,

families, individuals, farms that were adversely affected. wall street did fine. some people lost some jobs along the way. a couple of these large institutions did collapse. but we've heard about the bonuses that went to top executives, the buildings are still there. they're making record profits over the last couple of years. but what happened to those 7 million people who had a home which now is gone? what happened to those 8.5 million jobs? gone. what happened to those retirees in our country that watched 20% of their retirement evaporate. q. what happened to the people who had a house but the value of that home declined by 30% in the last year and a half. i don't know what you call them but i call them consumers, the average person in our country that didn't do anything except try to hold body and soul together. they got lured into a bad deal by people who are unregulated and are willing to convince them they could buy a home they never

could afford knowing the fully indexed adjustable rate mortgage was going to wipe them out. i talked about delores king, the first witness i brought to our committee three years ago, january, february of 2007. retiree in chicago. worked as a librarian for 30, 40 years, husband died, had about a $4,000 or $5,000, i think, credit card debt. and some unscrupulous broker came in and convinced her she needed to rewrite her mortgage and convinced her an adjustable rate mortgage would work for her. delores king lost everything. 70% of her retirement fixed income went to pay that mortgage. when people tell me about you can't have consumer protection, when that automobile company a few weeks ago had to recall its cars because the accelerator got stuck, they got recalled. did delores king get her mortgage recalled because it was faulty, when she lost her home?

that's what consumer protection does. if you're in the business of financial services and products that having someone walking out to the average citizen ought not to be a radical idea when we talk about financial reform in our country. we have written this in a way on a bipartisan basis, i might add. it sets up an independent consumer protection agency housed at the federal reserve. its director is appointed by the president, confirmed by the united states senate. it has the authority to write rules on consumer protection in the financial services area where products are involved. then of course it has examination and enforcement authority only for those institutions that have assets more than $10 billion for enforcement. otherwise it's done at the local level. the rules are the same. we don't really write any more rules. the rules are there. they have been around in some

cases for 50 years. truth in lending, fair credit, rspa. all we're saying is could someone enforce an examining institutions to see whether or not they're living up to them. there are seven agencies that have a consumer protection division, and for a huge part of our economy no one is watching them. one of the very legitimate kphaeupbts our -- complaints our community banks make, we get regulated but that guy down the street, that pay-day lender, no one is watching what he's doing everything. our bill stops that. now if you're a payday lender, you're going to be under the same kind of rules that bank would be, at least have someone watching what you're doing out there. that's a major step forward. we recognize that a major part of our economy collapse, or near collapse was in the shadow area of our economy. our legislation fills those gaps. we understand, madam president,

again -- or we should understand how important having an independent agency with rule making authority. now, again, the issue is well, wait a minute, you've got to be careful, senator, because you've got safety and soundness. prudential regulators have to be considered in all of this. that's a legitimate point. i don't disagree with that. although i think sometimes the accusation there is this great conflict is exaggerated. our bill says that the prudential regulators have to examine and look at the rules coming out. and if they vote, two-thirds of them, and say that rule creates a conflict or some problem, it doesn't go into effect. there is not another agency in government that can have its own regulations or rules vetoed by another group of regulators. that was a suggestion, again, by republican colleagues to include in our bill to provide the kind of safeguards against a potential conflict of interest between safety and soundness and consumer protection. so, madam president, again,

today with seven agencies tasked with consumer protection, not one of which did the job to anyone's satisfaction to lead up to this crisis ought to be justification alone for what we're trying to do. our legislation will have an independent director, as i said, appointed by the president, confirmed by this body. they'll have a dedicated independent budget paid for by the federal reserve board. the proposal we're being asked to vote on adds additional assessments to banks and to nonbanks. we just got through adopting the tester-hutchison amendment regarding assessments. to reduce the assessments on community banks. if you adopt the shelby amendment, you're going to add assessments on again. if we vote on one hand to take them away, and now with an amendment at hand to put them back on and asking our community banks for additional assessments to cover the activities of nonbanks. i thought i heard my colleagues say around here we ought to be more sensitive to what's

happening to the community bank level. yet, this amendment here does just the opposite that my colleagues are going to be asked to vote for. so be very careful when you get up and vote for this amendment, explain why later, if in fact it gets adopted, this bill does, why we're adding assessments to those banks. we'll have a, our bill we have an office of financial literacy to ensure that consumers are able to understand the products and services being offered, which is a major problem in the last crisis, and a national toll-free consumer complaint hotline so that members have some where to go when they need to report a problem. mr. president, it will be empowered, our bill, to write consumer protection rules regarding any institution, whether a bank or payday lender that offers consumer financial services or products. and only those businesses that do that. in short, we're ending the alphabet soup of distracted and ineffective regulators and

replacing it with one single empowered focus cop on the consumer protection beat. again, a complaint i think legitimately when you've got seven agencies with divisions of consumer protection, a lack of clarity, i think, is important. and i think members understand that or should understand that. my colleague from alabama has come out with a republican substitute for the consumer protection financial bureau. i have to say i'm somewhat surprised. i knew that my republican friends weren't going to agree with the consumer protection divisions as strong as the ones in our bill. some of my more pessimistic moments, i thought they might even want to maintain the status quo. but this substitute is worse than the status quo. this is a major step back, madam president. this substitute actually goes backwards, making it easier for unscrupulous lenders to wr*eup off the american -- to rip off the american public, businesses and individual families. it is a stimulus package for stapl artists -- for scam

artists. ii cannot understand how after months of hearings, months of analysis regarding this financial crisis started with the failure of consumer protection, anyone would think the right solution is less consumer protection. yet that's exactly what this amendment does. it's like we're in a deep hole and we spent a full year debating how to get out, and our republican friends, their solution is keep digging. madam president, i'm going to walk through the provisions of their substitute. but in short, here's why it's simply unacceptable. first, it comes -- when it comes to writing new consumer protection rules, the wall street substitute -- and that's what it is -- relies on the same regulators who screwed up the country in the first place. why would you ask them to do it again? secondly, when it comes to enforcing rules, the plan actually makes things worse, reducing regulator's ability to stop rip-offs and leaving

american families more vulnerable. third, the republican substitute wants to raise taxes on community banks and credit unions to pay for the regulation that won't happen. fourth, they want to make it easy to sell american mortgages they can't afford. if you have been paying any attention at all to what's going on in the last 18 months is the very reason as to how we got in this mess in the first place. make it easier for american mortgages -- to sell, rather, americans mortgages they can't afford. fifth, madam president, to top it all off, this substitute eliminates the provision of any consumer protection proposal that targets discrimination in lending. how on earth could anyone be against ending discrimination in lending? yet, that's also a part of this substitute. madam president, if you look at how we got into the crisis and you conclude that the answer is to weaken consumer protection, whether you are doing it -- well, you are doing it all wrong. let me go into a bit more detail and then i see my colleagues that want to be heard on this as

well. the first important change in the substitute is that instead of having an independent agency write consumer protection rules, it puts the task in the hands of the same distracted and ineffective regulators who failed so badly in the first place. what would that mean for consumers? here's a preview. one of those regulators has already demonstrated himself to be anticonsumer, opposing proposed rules to keep credit card companies from retroactively raising interest rates on outstanding balances. and i could speak firsthand. i'm the guy who wrote the credit card bill. the agency that fought me on it now is going to be tasked with the job of protecting people from it. for the life of me, all the agencies you pick to run this thing in your bill, you pick the one agency that has fought us on credit card reform. stunning to me that someone would actually write a substitute knowing that this agency did so much damage, opposed to the idea that we put limits on the count of interest

rates to be charged on outstanding balances. that's not putting consumer protection at the heart of our financial system. that's putting consumer protection at the back seat where it's been for if a too long. that's not the worst of t. the republican substitute limits enforcement powers. and i quote -- "limits enforcement powers to large nonbank mortgage originators. large nonbank mortgage originators." other finance companies women avoid -- will avoid enforcement unless they demonstrate a practice of consumer abuses. in other words, their version won't be allowed to prevent abuses committed by commercial or banks or payday lenders, check cashers, credit card companies, debt collectors, car dealers who are involved in the finance business, and a wide range of the worst actors in the subprime mortgage industry until it's already too late for potentially thousands of consumers to be protected. it's like they want to create a police department that's only

allowed to enforce laws against littering. maybe they'll cut down on littering, but by leaving the same ineffective regulators to deal with the rest of the financial sector, they're turning a blind eye to every other crime out there. in fact, it's like they're legalizing those crimes because the substitute actually eliminates the existing federal trade commission's authority to police unfair and deceptive financial practices in these other sectors. the substitute is worse than the status quo, madam president. the status quo, mr. president, is very bad indeed. meanwhile, the substitute raises taxes on while potentially any nonbank financial service company that allows the federal deposit insurance corporation to raise assessments on banks. their plan would ask community banks and credit unions to pay for the regulation of their nonbank competitors. the same competitors who will be getting a free ride exempted

from any federal oversight whatsoever. our plan is to have the fed, federal reserve pay for enforcement. their plan is to have community banks pay for enforcement. and then do not have enforcement, of course. that's a tax increase they don't need. and one that our deposit torry institutions so critical to rebuilding our economy cannot afford. the amendment also prohibits the establishment of strong underwriting standards. we all know how important it is to establish better underwriting standards. we have had rules in place two years ago that required banks and mortgage lenders to make loans only to people who can show that they have the aability to repay them. we wouldn't be in the mess if that had been the case. the amendment before us would probability the new division that is being proposed -- to create from issuing commonsense rules like these. if you had to pick one thing in this bill to undermine -- to ensure that we have another financial crisis, in my view, madam president, this would be it.

the substitute also eliminates, as an objective of the new consumer deficiency the goal of eliminating discrimination. this goal is essential to restoring america's faith in our markets. in short, mr. president, i find it impossible to work with this proposal. there are ideas i'm willing to listen to here that we can define significantly. i understand that. but this approach just does more damage than you could imagine. again, go back to what i said at the outset. a lot of time is spent talking about what happened to the big firms and wall street and what happens to large institutions and large manufacturers. the root cause of the problem we're in began because there was a total disregard for small business and families and individuals out there, that they could take advantage of them, as they did, because they could sell off, they get paid off, they securitize these crummy mortgages out there leaving the homeowner in a situation they

could never afford to sustain. the house of cards came to tumbg down. it all began with that. i say respectfully but this proposal goes right at the heart of very issue we must address in this bill, flyings to all the other aspects we're -- in addition to all the other aspects we're talking b there's no more important vote this awe'll cast than this one. if we walk away from providing the safeguards for the average american, i don't care what their politics are i don't care what their ideology is, anything else. they deserve to know in this debate, at long last, they're being considered. we're watching out for them as part of this. the outrageous case that this somehow reaches in to retailers and merchants is highly offensive. it is the last thinged a ever suggest, that we somehow get into the business as federal regulators pouring over florists

and den dentists and lawyers. nothing could be further from the truth. this goes out to those involved in financial services and products and it does so in a way that provides clarity, provides an opportunity for those institutions to be regulated, to know what rules they have to follow and who's in charge of insisting that they meet those obligations. with that, madam president, i urge my colleagues to vote against this amendment. and my hope is we'll vote fairly soon on in. again, we've got hundreds of amendments almost that people want to be heard on. we don't have all the time in the world to deal with them. we have got to move on on these issues. people understand the debate. i urge people to read section 1027, the section dealing with consumer protection, dealing with whose a covered, and then we will -- dealing with who's covered, and then we will have a vote. madam president, i ask unanimous consent that the senate proceed -- is this to be -- all right,

madam president, i ask unanimous consent that the senate proceed to executive session to consider calendar number 78 the, the nomination of larry robinson to be assistant secretary of commerce for oceans and atmosphere. the motion to reconsider moshi r be laid on the table that any statements appear in the record as if read, the president be immediately note fisted senate's action and the senate resum legislative session. the presiding officer: is there on objection? without objection, so ordered. mr. dodd: i yield the floor. the presiding officer: the senator from north dakota. mr. dorgan: madam president, i will join my colleague from connecticut in opposing the substitute, but i -- i don't come to speak about that at the moment. i wanted to speak about an amendment that i've discussed previously on the issue of too big to fail. let me say that there is -- there is much yet to do on this subject of too big to fail. i recall in a room just steps

from here on a friday, i believe it was, the freash secretary leaning over the -- the treasury secretary leaning over the lecture in a very stern way saying to the caucus that i was involved in that if within three days a three-page bill granting $700 billion to the secretary of the treasury with which to provide funds to stablize some of the biggest financial institutions in the country, if that did not come about, our economy could very well collapse completely. i remember that moment and remember thinking that it's pretty bizarre that our country got to that point, that all of a sudden one day after being told month after month that the economy is strong, the economy is in good shape, there are some ripples and hickups here and there but things are on course and we have confidence in the strength of the economy, that now we're now told the economy may well collapse in days unless

the codges comes up with $700 billion. why was that the case? because institutions that were so large in this country at the top of the financial industry were so important to the economy that their failure could very well result in the failure of the entire american economy. that is what is called too big to fail. now, let me show a chart that shows the six largest financial institutions in the country and what has happened to them since 1995. this is their growth as a percentage of g.d.p. and it shows that they are getting larger and larger and larger and larger, and much, much larger, even during this period of near collapse. the same institutions that were judged too large to fail and judged to represent a grave risk to the entire economy, have gotten larger. than just too big to fail. now, we had a vote yesterday, but that cannot bein be the endf

this discussion about how do you address too big to fail. the vote yesterday was rather byzantine as far as i was concerned cht i was not someone who was a big fan of the $50 billion fund for resolution of too-big-to-fail companies. but having said that, to decide that $50 billion, which would come from the very institutions that are too big to fail, should be abolished and that the funds instead would come from the fdic, which is the american taxpayer, as you true i to resolve -- us a try to resolve the problems of a too-big-to-fail institution, made very little sense to me to substitute funds from the biggest banks to funds from the fdic, which is going to come from the american taxpayer and then suggesting that that'll be all right because the fdic will be repaid with the sail assets. oh, really? firms that are too big to fail that are going to get in trouble if the future aren't going to have too many set as. they'll be in trouble because of

dramatic overleveraging, and when the firm comes tumbling down, i fail to see where assets are going to exist in substantial quantity to repay the taxpayer. but that was yesterday. and i -- you know, i didn't support that. but that was yesterday. this issue of creating a circumstance of early warning on too-big-to-fail firms is not satisfactory to me. the only way you resolve too big to fail is to abolish too big to fail. i mean, abolish too big to fail. that means having firms that are not too big to fail, that will not cause a moral hazard or a grave risk to the entire economy should they fail. do you believe that's the case with this -- this graph? and is there anything here that if this graph shows we have firms that are too big -- far too big to fail, is there anything here that's going to solve this in this bill? the answer is "no." the only direct and effective

way to address this is to decide, if you are in fact too big to fail, then there has to be some sort of divestiture or dissolution to bring that firm back down to a point where it is not, in size and scornings where it is not too big to fail and is not causing the kind of dramatic special risk to the country's economy. that it would bring the economy down with it. that's the only direct and effective solution. now, is that radical? well, i have an amendment that requires that. if you are determined to be too big to fail, then we'd begin a process over two years of breaking away those parts that make you too big to fail. is it a radical idea? i don't think so. one-fourth of the board of governors of the federal reserve board says we oughte ought to d. richard fisher, president. dallas fed says "too big to fail is not a policy, it is a problem." he says we ought to break them up.

federal reserve bank of st. louis, james bullard, president and cleave executive officer. "i do kind of agree that 'too big to fail' is too big it exi exist." the economist joe stiglitz, nobel-prize winner, "to atoo-big-to-fail banks have perverse incentives, if they gamble and win, they walk off with the proceeds. if they gaicialg taxpayers pick up the tab." alan greenspan, i seldom ever agree with him. but i use add quote of hi his to describe where we're now. he was around signature on his hands for a good many years while these problems developed despite the fact that he had the tort authority to avoid them. now he's written a book while all this went on. now he says, "the notion that risks can be aidentified in a sufficiently timely manner to enable the liquidation of a large failing bank with minimum loss has proved untenable during this crisis and i suspect in future crises as well."

simon johnson, professor of entrepreneur shrng the sloan school. "there is simply no evidence -- and i mean absolutely none -- that society gains from having a balance sheeft larger than $100 billion." his point is that too big to fail means too bismght arnold king,cato. i seldom quote cato on the floor of the senate. quig big banks are bad for free markets. there is a free manufacture market case for break up large financial institutions: that our big banks are the product, not of economics, but of the politics." and finally -- let me use another one. the president of the federal reserve bank of kansas stirks the third fed press. "i think stheshed be broken up, and in doing so, i think you'll

make the financial system itself more stable, more competitive and i think you'll have long-run benefits over our current s" we broke up standard oil into 23 different piece and it turned out that 23 pieces were more valuable than standard oil wassments i'm not saying break up things just for the purpose of breaking things up. if there is a standard by which you judge an institution is too big to fail and causes a dramatic risk to the economy as a whole should it fail arc moral hazard arksd unacceptable risk to the entire economy, then it seems to me like this issue of creating early warnings and stop signs and sirens and so on is largely irrelevant. what we need to do is do something direct and effective and something we all knew we should do, and that is to say, if you are too big to fail and judged to be so ans judged to pose -- and judged to piece those kinds of risks to our economy, then you must break off pieces and we would over a two-year period require that to happen until you are not stwail. the first chart i showed -- let

knee show a couple of quick charts. this one shows the top financial institutions, the big get bigger. this chart shows the same thing, measuring assets and liabilities, the big get bigger, much, much bigger. the first chart that i showed today demonstrates why if we're don't pass the amendment, the type of amendment wee i suggest, we can thumb our suspenders and crow all we want in every hallway. we will have not done what was necessary to be done to address too big to fail. we just will not do it. so i have an amendment. i am here because i'm pestering those who are lining up amendments to make certain i have a chance to debate and vote on that amendment. and that will be the test of whether this congress has learn add lesson, whether when someday a treasury secretary leans history of a lectern and say, if i don't get $700 billion to bail out the big interests that ran

in country into ditch, our whole economy is going to the ditch. so i hope very much that we'll have the opportunity to both simply and effectively do what's necessary to really finally and thoughtfully address this issue of too big to fail. madam president, i yield the floor. mr. merkley: madam president? the presiding officer: the senator from colorado. mr. bennet: thank you you madam president. i see our chairman and ranking member on the committee on which i serve. we're finally doing some work around here and doing it in a bipartisan way. and i think this bill is going to improve over the course of this debate. it is an enormously important tiewrnts to safeguard -- opportunity to safeguard our economy from the reckless danger that got us into this mess.

i'm hopeful that we can wade through all this washington wrangling and get something done to protect america's financial future. madam president, there's a shared understanding of what got us here and that's the good news. some on wall street took all the risk, yet it's the american people who paid the price. small businesses, homeowners and working families were forced to clean up this mess. it's our responsibility to learn the lessons from the last collapse to help this economy recover and head off the kinds of problems that can lead to another financial crisis. in short, madam president, we have to fix this economy, ensuring that there will never have to be another taxpayer-sponsored bailout. as someone who sits on both the agriculture and banking committees, the chair jurisdiction over this bill, i can assure you, madam president, that this package reflects months of hard work and incorporates ideas and concepts from both political parties. we've examined the problems that

brought us to the financial brink nearly two years ago. and together, these two committee bills create a thoughtful and comprehensive plan to increase transparency, reduce systemic risk and strengthen our commitment to protecting consumers. in resraougt merits of the bill -- reviewing the merits of the bill i think it's important to analyze how it would address so many of the problems that led to the financial collapse in 2008. too often we don't ask the question what problem is it we're trying to solve and then we get busy solving problems that didn't exist or creating unintended consequences from our work. i think we've worked hard on this legislation for it not to be so. had this legislation been the law of the land, we wouldn't be talking about that $700 billion taxpayer-funded rescue of our nation's largest bank holding companies. we would have been able to see many of the dangerous trends develop earlier, and we would have required these systemically

risky companies to have more capital and less debt. had any of these companies failed, we would have resolved them without transforming them into wards of the state like a.i.g. second, had a strong consumer protection infrastructure existed, we could have stopped the subprime mess before it spiraled out of control. for example, the subprime giant ame r*euquest would have been subject to meaningful rule making authority. this bill represents substantial and meaningful progress on the consumer protection front. third, had the bill's derivatives reforms been in place, it is much less likely -- much less likely -- that the federal government would have been forced to spend tens of billions of taxpayer dollars to rescue a.i.g. from its own sloppiness and greed. in total, the plan before us represents a strong and thoughtful measure that rewrites

the rules of the road for wall street. and through the amendment process here, we can make it even better. for example, i think we need to ensure that certain state-chartered community banks that did little to contribute to the current crisis don't have to change their prudential regulator. in so many of our towns, community banks play an important role in providing credit to our local economy. many of these small institutions are struggling due to this difficult economy which means less available credit for families and small businesses. i have concerns that a change in prudential regulation may exert further pressure on these small banks which continue to serve their local communities. it's my hope that we can balance the need to reduce regulatory arbitrage while preserving the existing prudential supervisory structure for some of these start-chartered banks. and i also believe it is time for us to take advantage of this opportunity to begin to move

away from the last bank bailout, the tarp. while there are 100 opinions in this chamber about how effective tarp was, there really is a broad consensus here and in the country that it's time to wind down tarp, recapture what we can for taxpayers and prevent banks from tapping into the treasury going forward. that's why in the coming days i will be pushing bipartisan legislation that would do exactly that. it would use recaptured tarp funds, borrowed from our children, $180 billion so far and counting, for deficit reduction. and it would take important steps to end the tarp. more broadly, i also think we need to be aggressive about strengthening this bill to further protect consumers, and i will be supporting amendments which do exactly that. when it comes to wall street reform, we simply can't afford to delay any longer. recently the tarp inspector general underscored this point better than i could. he stated that -- quote -- "even

if tarp saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car. in short, bailing out companies has made the future risk of our financial system even worse by creating the moral hazard that a financial firm that participates in risky behavior is going to somehow be bailed out by the government, by the taxpayer. this wall street reform package takes a strong step toward restoring some degree of sanity to our financial system in making that moral hazard a thing of the past. finally, madam president, coloradoans and the american people are expecting us to act. i'm confident we're going to succeed. lobbyists may have been able to slow down wall street reform temporarily, but the american people want it, as well they should. we're getting closer and closer every day to sustaining a workable bill that can pass this

chamber and that we can eventually send to the president for his signature. we can't allow the status quo to maintain its grip on our financial system. we have to work together and pass this groundbreaking reform package. madam president, i want to close again by thanking the chairman of the banking committee who is here today for his leadership throughout the months not just on this issue, but on health care as well. but particularly sticking with this issue. i don't think we'd be having this debate right now were it not for the work that the chairman did. and as a member of the banking committee, i appreciate it very much. madam president, i yield the floor. mr. dodd: madam president? the presiding officer: the senator from connecticut. mr. dodd: let me just say how fortunate i've been as chairman of the committee for the last three years to have senator bennet as a member of our committee. i really want to thank him immensely. a new member of the committee, but again, like the presiding officer, like my colleague from

new york, just having people who understand this and bring to this chamber a previous life, a rich experience of understanding these issues; i can't begin to tell you how valuable it was. and so let me thank the people of colorado for having you here, and what a difference you've made in the consideration of this. some of the newest members of our committee -- and my colleague from new york could acknowledge this -- some of the newest members of the committee made the most valuable contributions to this product. further evidence you don't have to be here long. sometimes the shorter you're here to bring that kind of fresh experience from the states across our country. i wouldn't want the moment to pass without expressing to michael bennet of colorado my deep, deep appreciation for your leadership, your thoughtfulness and the contributions you've made not only to this product but the others here. and i thank you. mr. schumer: madam president? the presiding officer: the senator from new york.

mr. schumer: first i want to join the senator from connecticut in praising senator bennet who has had an amazing effect and steady hand in bringing this bill to the floor. also my colleague from virginia, senator warner, the new members have had a tremendous effect on this bill. this reflects the way the senate works these days, and i think it's all to the better. to have their input and experience has been vital. but, mr. chairman, i would also say that you are full of fresh ideas and vim and vigor. and just because you've been around here a long time doesn't mean that in fact you've had the wisdom to encourage some of our new members to actively participate, and confidence to do that as well. i also don't want to fail to note my colleague from new york, senator gillibrand, who sits in the chair, has done a fabulous job too, particularly on the agriculture portion of the bill on the committee on which she sits. mr. president, i come to the floor today and rise against the

consumer amendment posed by senator shelby that is before us. i come to the floor to speak about the need for a strong independent consumer watchdog. i am here to talk about the proposal put forward by some of my republican colleagues to place a new consumer protection division within the fdic and significantly reduce the ability of that division to carry out its mission. the amendment before us greatly weakens the bill in terms of consumer protections. in fact, it is not just a step backward from the bill before us, it is a step backward from the status quo. if we were to pass the amendment on the floor, consumer protections, weak as they are today, would be even weaker. this amendment would leave the consumer naked and unprotected.

this amendment strips the bill of some of its strongest protections. not every financial institution preys on consumers, but those who do would be given too free a hand if this amendment were to pass. and i urge strong toppings it. -- strong opposition to it. one of the roots -- let me explain. one of the roots of this financial crisis was undoubtedly that total failure of our consumer protection regime. americans were sold products they didn't understand and couldn't afford by mortgage originators eager for a fee and happy to sell those loans off into the great securitization machine which was given a virtual carte blanche by the credit rating agencies. after the events of the last several years, no one can argue that fundamental reform of our consumer protection regime is not necessary. no one can argue that the status

quo is the way to go. the status quo simply won't do. there's no accountability in the current system. consumer protection is split among seven different regulatory agencies. for that reason, madam president, i was an early supporter of efforts to create a truly independent consumer protection agency, and i'm still working with many of my colleagues, including senator jack reed and senator durbin, to strengthen the provisions of the bill proposed by chairman dodd. one of the key authorities of any new consumer protection division or agency is that it must be able to adopt rules to protect consumers without being overruled by banking regulators who would rather allow tpwaofrpbgz pad their bottom lines by -- allow banks to pad their bottom lines. some argue you can't split consumer protection from safety and soundness, but historically, in the present setup, every time

there's a conflict, the consumer loses. consumers deserve an accountable regulator with oversight of consumer financial products as its primary objective, not as an afterthought. the republican proposal being discussed is totally inadequate. it would allow the same bank regulators who stood in the way of meaningful consumer protection for years to veto consumer protection rules proposed by the head of the division -- of the new division. for example, the comptroller of the currency who publicly opposed the fed's new credit card rules, would under the shelby amendment get to vote on future credit card rules. so we're saying that the regulators who don't really care -- some of them -- about consumer protection, would be given a veto power. the kpweufgs would have no -- the division would have no examination or enforcement power over any banks of any size or affiliates.

some of the worst actors in the subprime mess were bank subsidiaries. even worse, it could only do examinations of nonbank consumer finance companies if they -- quote -- "demonstrate a pattern or practice of violations" of consumer law. in other words, only after consumers have been harmed repeatedly, that's what one could call too little too late. even the fed recently deleted this requirement from rules governing subprime mortgages because it hampered enforceability of those rules so severely. now, even the banks want the new consumer division to be able to enforce its rules at nonbanks. this is amazing. some of the most rapacious institutions that prey on consumers are not banks. they operate outside the scope of the federal regulatory agencies. they're often responsible for many of the most egregious

abuses and predatory lending practices. many of the products provided to consumers by these nonbanks played a direct role in the financial crisis, and many of these businesses, payday lenders, rent-to-own companies, currently operate below the radar screen to prey on vulnerable communities. how can we exempt some of these payday lenders and rent-to-own companies? i've seen them prey on poor people in my state. how can we exempt them from regulation, when they often are worse than many of the financial institutions? the republican amendment would also prohibit the consumer division from issuing any rules that affect any underwriting standards of deposit institutions and their affiliates. after the crisis we just went through, which was in part created -- in large part created by bad mortgage underwriting standards, be i can't believe

that anyone can propose this with a straight face because let me repeat what it does. the consumer division can't issue rules that affect any underwriting standards of deposit institutions. it's saying let's repeat the mortgage crisis over again. it makes no sense. if the consumer division were in place in 2008, the one proposed by my colleagues here, it would not have had the power to write the mortgage rules establishing the minimum ability to pay standards that the fed issued. and as we know, the fed was not an extreme watchdog by any sense. mr. president -- madam president, i have worked long and hard in the area of consumer protection. i've worked with these regulators. i see how slowly they work. it took more than 10 years to get them to go along with the so-called schumer box, where credit card interest rates were made clear and visible to

perspective credit card purchasers. it worked. but why did it take so long? and then when the banks came with new ways of getting around the rules, again it took me forever to get the fed to move. because the fed, frankly, and chairman bernanke, to his credit, admitted this, did not make consumer protection a high enough priority. so we need, in my judgment, an independent agency. that would be the best solution. and second best would be an agency, even if it's within the fed, that is largely independent in both the rules it can promulgate and its enforcement. we need strong, forward-looking financial reform, and i have always said i want the reform to be constructive, not punitive. but if we go through all of this and fail to leave consumers better protected than they were before this crisis, we will have totally failed in our mission to serve the american people.

i strongly urge that this amendment be rejected by a large and hopefully bipartisan majority. madam president, i yield the floor. the presiding officer: the senator from wisconsin. mr. feingold: thank you, madam president. i'm glad the senate is finally considering the critically important issue of financial regulatory reform. few things are as important as ensuring we never again suffer the kind of meltdown in the financial markets that shoved our economy into the worst recession since the great depression. and i think it still remains to be seen if this bill will do that. while it certainly includes some good reforms, more needs to be done, and the track record of congress in this area is, at best, checkered. for the last 30 years, presidents and congresses have consistently given in to wall street lobbyists and wea weakend essential safeguards.

and as has been the case in so many different areas, members of both political parties are to blame. legislation that paved the way for the creation of massive wall street entities and removed essential protections for our economy passed with overwhelming bipartisan support. from the savings-and-loan crisis in the late 1980's to the more recent financial crisis that triggered the horrible economic downturn from which we are still recovering, those three decades of bipartisan blunders have been devastating to our nation. and the price of those blunders has been paid by homeowners, main street businesses, retirees, and millions of families facing an uncertain economic future. the impact of the recent financial crisis on the nation's economy has been enormous. millions have lost their jobs and millions more are lucky enough to have a job are forced to work fewer hours than they want and need to work.

according to a study done by the pew trust, the financial crisis cost american households an average of nearly $5,800 in lost income. and, of course, families lost a significant amount of their personal savings. as a nation, we lost $7. $7.4 trillion in stock wealth between july 2008 and march 2009 and another $3.4 trillion in real estate wealth during that same time. we simply cannot afford to continue down the path that policy-makers have said over the past 30 years. the test for this legislation, then, is a simple one, whether or not it will prevent another financial crisis. and central to that test will be how this bill will address too big to fail. this is a critical issue that has been growing for some time now as an increased

concentration in the financial services sector has put more and more financial assets under the control of fewer and fewer decision-makers. madam president, years ago, a former senator from wisconsin, william proxmire, noted as banking assets become more concentrated, the banking system itself becomes less stable, as there is greater potential for systemwide failures. sadly, senator proxmire was absolutely right, as recent events have proven. even beyond the issue of systemic stability, the trend toward further concentration of economic power and economic decision making, especially in the financial sector, simply is not healthy for the nation's economy. now, banks have a very special role in our free market system. they are rationers of capital. when fewer and fewer banks are making more and more of the critical decisions about where capital is allocated, then there is an increased risk that many worthy enterprises will not receive the capital needed to

grow and flourish. for years, a strength of the american banking system was the strong community and local nature of that system. locally made decisions made by locally owned financial institutions, institutions whose economic prospects are tied to the financial health of the community that they serve, have long played a critical role in the economic development of our nation and especially for our smaller communities in rural areas. but, madam president, we've moved away from that system. directly as a result of policy changes made by congress and regulators, banking assets are controlled by fewer and fewer institutions. and the diminishment of that locally owned and controlled capital has not benefited either businesses or consumers. and, of course, most dramatically, taxpayers across the country must now realize that senator proxmire's warning about the concentration of banking assets proved to be all too prescient when president bush and congress decided to bail out those mammoth financial

institutions rather than allowing them to fail. madam president, that was a bailout that i strongly opposed. the trend toward increased concentration of capital was greatly accelerated in 1994 by the enactment of the riegle-neil interstate bank and branching act, especially in 1999 by the enactment of the gram leach bliley act which tore -- gramm leach bliley act which tore down the walls between investment banking and firms. those fire walls has been established in the wake of the last country's great financial crisis 80 years ago by the banking act of 1933, the famous measure -- reform measure also known as the glass-steagall act. prior to glass-steagall, devastating financial panics have been a regular feature of our economy, but that changed with the enactment of that momentous legislation, which stabilized our banking system by implementing two key reforms. first, that established an insurance system for deposits,

reassuring bank customers that their deposits were safe and thus forestalling bank runs. and second, it erected a firewall between securities underwriting and commercial banking. so financial firms had to choose which business to be in. now, that firewall, madam president, was a crucial part of establishing another protection: deposit insurance. because it prevented banks that accepted fdic insured deposits from making these speculative investments, bets with that money. the gramm-leach-bliley act tore down that fire wall as well as the firewall that separated insurance from wall street banks, and we have seen the disastrous results of that policy. madam president, i voted against tearing down the firewall that separated main street from the wall street banks. i did it for the same reason i voted against the wall street bailout, because i listened to the people of wisconsin, who did not want to give wall street more and more power. wall street was gambling with the money of hard-working

families. too many members of congress voted to let them do it. i didn't support it before and i won't support it now. we've got to get this legislation right, protect the people of wisconsin and every state, protect them from something like this ever happening again. so i was pleased to join the senator from washington, senator cantwell, and the senator from arizona, mr. mccain, introducing legislation to correct that enormous mistake that congress made in passing gramm-leach-bliley. and i look forward to supporting an amendment to this measure based on the cantwell-mccain-feingold bill. the measure before us seeks to make up for the lack of protective firewall between the speculative investments, bets made by wall street firms and the safety net backed activities of commercial banking by imposing greater regulatory oversight. we have seen just how creative financial firms can be at eluding regulation when so much profit is at stake. no amount of regulatory

oversight can take the place, madam president, of the legal firewall established by glass-steagall. so when it is offered, i urge my colleagues to support senator cantwell's amendment to restore that sensible protection. rebuilding the glass-steagall firewall is essential in preventing another financial crisis. but even if we restore glass-steagall, there are additional steps we should take to address too-big-to-fail in this bill. i'm pleased to be joining the senator from north dakota in offering his amendment to address the problem directly by requiring that no financial entity be permitted to become so large that its failure threatens the financial stability of the united states. and i'm also looking forward to supporting an amendment that will be offered by the senator from ohio, mr. brown, and the senator from delaware, mr. kaufman, who's in the chamber, that proposes bright-line limits on the size of financial institutions. the disposition of these -- of those three proposals that i have just reviewed will go a long way in determining my vote for the final version of this

measure. i very much want to craft in this body a bill that can prevent the kind of crisis we experienced in the future, but the bill before us needs some work before we can legitimately make that claim. i thank the president, and i yield the floor. mr. reed: madam president? the presiding officer: the senator from rhode island. mr. reed: madam president, the republican side has submitted a consumer protection amendment that can be briefly summarized: buyer beware. because they won't help you. this flows from a very simple premise that they've announced from the very beginning of these discussions and deliberations. they do not want a independent consumer protection agency that has the authority to make rules and enforce rules that protect consumers. so what they've suggested is a

classic bait-and-switch. we'll create a agency, quote, unquote, within the fdic and then we will deny them the power to regulate most of the financial sectors and institutions that affected the daily lives of americans: payday lenders, car loans, all those things. they're just off the table. so it amounts to a gesture, not good legislative policy. we are working -- we have been working, and senator dodd has taken the lead, to ensure that there is real consumer protection built into this wall street reform legislation. we believe that consumers need information to make good choices, and the thrust of our efforts is to ensure that the agency is able to provide that information through simplified forms, through simple products,

through those mechanisms thattal men and women who are engaged in raising children, keeping jobs, coaching little league can understand what they're putting their resources into. that is not what the republican amendment is proposing to do. they are creating a six-person council within the fdic with no real independence and even less authority, and one could question why the fdic is the logical place to put in a council like this. they would create an oversight agency but exempt, as i said, virtually the entire financial sector or sectors from oversig oversight. it's not like a watchdog, it's like a lap dog. it's bureaucracy and no bite. the dodd bill, in contrast, contains a very robust consumer protection provision. it creates a consumer financial

protection bureau with resourc resources -- i want to emphasize resources -- and authority to prohibit abusive practices and deceptive financial products ranging from credit card companies to mortgage brokers to banks and to others. for example, it would hold the credit card companies accountable and eliminate unfair lending practices, like penalty fees for paying off your debt on time. one of the big efforts that we are undertaking is increased transparency for wall street, and this consumer protection agency will provide that transparency to consumers. basic economics, econ 101, competitive marketplace. one of the presumptions, perfect information. we've seen, frankly, that individuals on wall street have made billions of dollars operating on imperfect information. in fact, one could even suggest

deliberately manipulating products so that they have the information and the consumer doesn't. we were all, i think, taken aback when we were listening to the hearing conducted by senator levin which talked about goldman sachs and their trader described the system in rather evocative terms. in his words, more and more leverage in the system. the entire system is about to crumble any moment. the only potential survivor, the fabulous fav. standing in the middle of all these complex, highly exotic leveraged trades without all the implications of those monstrosities. well, that seems to me very chilling, the fact that someone would admit that they didn't even know the products they were selling to consumers who assumed not only that they knew but also

that they would not be deliberately misleading. so that's an example, but the example doesn't stop on wall street. it extends out to main street, to people with credit arrangements, payday lenders, organizations charging huge interest charges, and it's designed, really, to exploit consumers. the republican proposal does little, if anything, to prevent that. so i would hope that on a bipartisan basis, as senator schumer suggested, that we reject this amendment. it is a -- as they say in some places, all hat and no cattle. we have an agency, but we have no enforcement of powers. we have an agency but they can't enforce their -- their rules and regulations on certain sectors, i.e., most of the sectors.

so if we want to protect consumers, we want also to have efficient markets, because one of the, i think, inaccurate premises that some people are suggesting is that consumer protection somehow is bad for business. well, i would argue very strenuously that consumer protection is very good for business. that if you take care of the consumer, if they feel and you provide value and good service, that used to be the american sort of maxim. that used to be the american byword for business. the consumer is always right. the consumer comes first. well, in the republican legislation, the consumer comes not first but last. the consumer should come first, i would hope this amendment would reject it and will support not only the underlying dodd bill, but i think it can be improved. i want to commend the senator from connecticut. he has done a remarkable job crafting the consumer protection

agency, but i think he can make improvements and i hope he can, but to accept this amendment for the republicans would be to turn our back on consumers and essentially reject the old american action i am -- axiom, the consumer is always right, the consumer comes first, and essentially leave everyone where we are today, buyer beware with the monstrosities in the marketplace. thank you. mr. kaufman: madam president? the presiding officer: the senator from delaware. mr. kaufman: i would like to follow on with the senator from rhode island in commending chairman dodd for his work on this bill. we have a good bill here. and i also want to rise to say that i will be opposing the bill on the floor. we need a strong, independent consumer finance protection agency. the problem with putting -- and i have heard many different proposals to put the consumer product finance protection agency here or there or everywhere, the problem with putting it in any institution

like the fdic or the fed or any of those is those institutions' number one responsibility is and should be to safety and soundness of the banks, financial institutions they are regulating. that is their key charge and that should be. the reason the fed had a consumer product agency, i think, which did not act to help consumers during the recent meltdown was that they first were concerned about safety and soundness. so we have to do that. at the same time, we have to be very careful that we don't put an undue burden on our community banks. our community banks were not involved, and what happened here, we should make sure that while we're looking out for consumers, we don't load up with regulation and overregulate these local banks. as i said, chairman dodd, we have a good bill here. i think the too big to fail part of the bill we're getting around to. i think the recent amendments on resolution, that if, in fact, a bank gets in trouble, we can

resolve it is a good approach. i'm sure we'll be talking about it some more, but basically a good approach but basically deal with the to fail part of too big to fail. but i don't think we have done nearly enough on the too big part of too big to fail. let me just go over the chart that just shows how big these banks have become. if you look at this, this is the average assets of our major banks relative to gross domestic product. if you look at this chart -- and i encourage comments from my colleague, the senator from ohio. if you look at this chart, you will see that just about the time we removed glass-steagall, this chart just went absolutely through the roof. and if you look at the concentration of the u.s. banking system, you see here that you have a chart that goes very similar to the first chart, which shows an exponential

increase in concentration. this is not good for the country. this is not organic growth. i hear people say this is organic growth. this is not organic growth. this is growth from mergers, and this does not even include -- neither one of these charts include the massive mergers that went on during 2008. this is just through 2007. it doesn't show the fact that washington mutual and bear stearns were consumed and j.p. morgan chase. it doesn't show the fact that wachovia went into wells fargo. it doesn't show the fact that merrill lynch went into bank of america. it clearly shows that the credible concentration just goes on. and what i'd like to do is alan greenspan made a number of decisions, a number of statements while this was going on about how we should proceed during the 1990's and early 2000 that turned out not to be -- and

he says himself, he said i thought regulation would work. i'm dismayed it didn't. he has come out with a couple of statements recently that i was so incredibly surprised when i heard this because i didn't know this. let me read this to you. "for years, the federal reserve had been concerned about the ever larger size of our financial institutions. federal reserve research had been unable, unable to find economies of scale in banking beyond a modest-sized institution. a decade ago "-- by the way, modest-sized institution, according to andrew haldane of the bank of england, is is $100 billion. he knows no reason why you would have under $100 billion. our top banks go as high as $2 trillion. "a decade ago, citing such

evidence, i noted that megabanks being formed by growth and consolidation are increasingly complex entities that create the potential for unusually large systemic risks in the national and international economy should they fail. regrettably, we did little to address the problem." i mean, i hear people now talking about we can't undo this. these banks, we need these big banks to compete internationally, and here is alan greenspan saying we don't need these for the economies, we don't need these to compete. mr. brown: will the senator yield? mr. kaufman: the senator from ohio. mr. brown: i thank you for bringing out -- there is such broad as we're seeing support by economists as conservative as alan greenspan, as progressive as bob reich and others that say that too big to fail means simply too big. you said something -- so our

amendment which will only affect the six largest banks, only affect their size. it will affect smaller banks and helping them be more competitive as you suggested, but you had said something on the floor yesterday, senator kaufman, that in effect the size of these banks gives them a subsidy, gives them 75 -- roughly three quarters of a percent, 75 basis points advantage in the capital markets. so this -- this amendment we have which is gaining increasing support -- we have gotten now, i believe, ten or 11 cosponsors to it. we're working with people on both sides of the aisle on this amendment. saying too big to fail is too big. talk to us for a moment of how these banks get their subsidies. in a sense, we're giving welfare to the wall street banks. because of their size, they are actually getting advantage on the capital markets because investors with their dollars understand that these banks are never going to be able to fail

unless we really keep them from getting too big. so explain that sort of wall street welfare, that we see these five literally trillion-plus dollar banks that they extract from the system. mr. kaufman: sure. i don't come at this, you know, from any other area except how important our capital markets are. i'm a market guy. i think that the two greatest things we have in this country are democracy and our capital markets and our -- the credibility of our capital markets. so when i want to find out what's going on in a financial area, i don't go out and do a survey of 27 people. i go and say what is the market telling us? what is the market telling us about what's going on? and what the market says, is that if you're a big bank like one of these top banks, this study that i talked about yesterday, if you're one of these big banks, you get a 70-80

basis point advantage when you come out to borrow money. you pay less than other people pay. mr. brown: will the gentleman yield? that means if one of the really huge wall street banks, one of these six banks is getting a .75%, roughly, interest rate differential, bonus, perhaps, that means banks in delaware and ohio that aren't so big are at a competitive disadvantage, which i assume also means that those big banks have opportunities to get larger. if they are -- if the field is not level, if the playing field is not level, those to whom it tilts, towards whom it tilts, gets other advantages and grow larger and larger and larger, making the point for our amendment that much stronger. mr. kaufman: absolutely. and obviously, that's the key point. and i'm really surprised that more of our smaller banks aren't coming forward and saying this isn't fair. they -- you know, the market says it's not fair. and the second point is the too

big to fail. now, you can argue we're not too big to fail, but the market thinks you're too big to fail and i listen to the market. that's one of the really important considerations. unless people misunderstand -- i hear people say oh, you want to destroy the banks and the rest of it. under our amendment, citigroup would be reduced to the size it was in 2002. now, 2002. were they able to compete overseas? were they able to do all the things they had to do in 2002? goldman sachs which is now about $850 billion under the brown-kaufman amendment, would be down to $350 billion. you might say whoa, that's a 50% increase. that's going to really hurt their opportunity. in 2002, they had $100 billion in assets. so all we're shrinking goldman sachs down to is three and a half to four times what they were in 2002. so this is not some draconian

effort in order to do it. and the second point, the point that we really -- we have been focusing on is the fact that we also went at risk. this is not about size. i commend everyone to page "the washington post" today -- i'm sure it's printed other places, but that's where i read it -- where jimmy kane testified to the financial crisis inquiry commission, that in his opinion as c.e.o. of bear stearns, they failed because it was leveraged 40 times over its capital base. 4-0, 40 times over its capital base. brown-kaufman would cap leverage at 16 times. so what he is basically saying is if brown-kaufman had been in effect when this went on, bear stearns would not have fell. now, i'm sure there are a lot of people that have a lot of different opinions, but that's what he says. so this is not just about size. this is about risk. what we're trying to do is target risk. and, you know, these banks don't fail -- you know, banks are

doing great now, profits are out the roof, but you don't fail on a nice, sunny day. you can't sit here today and say no problem. that's why the regulators never do anything because basically the banks are doing well. time and again we had the hearings before the permanent subcommittee on investigations, we heard from washington mutual, we heard from goldman sachs. look, they were doing so well, how can you go in and regulate them and make them change when they were doing so well? the fact they are doing so well by churning out absolutely mortgages that were doomed to fail is an indication they should have moved in, but the regulators didn't. so i just want to tell you -- and i'm not holding this out, but if you want to see what can happen under the worst case, take a look at europe today. look at the mess unfolding