number nine, business as usual at freddie mac and fannie mae. and number 10, our republican substitute ends the bailouts, restores market discipline and protects consumers, small businesses and taxpayers. reject this rule. reject this legislation. we can do better. we have it in hour hands, mr. speaker. and i yield back. the speaker pro tempore: the gentleman from california yields back the balance of his time. the gentleman from colorado is recognized. . mr. perlmutter: they try to compare the 170-page proposal they made with the 1,300 pages we have. in proposal he doesn't deal with hedge funds, with credit rating agency, he doesn't deal with derivative he doesn't deal with excessive compensation to executives, hn he doesn't deal with life insurance, he doesn't

deal with a whole range of things, just deals with one thing. let's put them in bankruptcy. let's do a chapter 11. let's let these things go on forever in a chapter 11. ladies and gentlemen we can't afford this anymore. the status quo, which is more or less what the republicans are proposing, they should call their bill, let's protect wall street. that's all it does. doesn't change anything. when we lose trillions of dollars and people's livelihoods and retirement funds and pension plans and jobs are lost, and they come in here and say, oh, theirs is 1,300 pages, that's got to be bad because ours is 170 page, when people's lives have changed? the debate on this floor and the debate about americans' futures is more than that. this is about restoring confident in a -- confidence in

a financial system that was aloud to be the wild west under george bush and think republicans. this is no longer going to be the case. we're going to have reasonable regulation that people can rely on, that certainty will be restored, and confidence in this system regained. there are nine sections, consume brother text, investor protection, dealing with derivatives, dealing with credit rating agencies, dealing with executive compensation, dealing with hedge funds, and specifically and most importantly, dealing with those financial institutions, that have become so risky, they're going to cause a collapse of our entire banking system which we cannot allow. we require those institutions to post themselves $150 billion so they can be liquidated without any cost to the taxpayer. their proposal is nothing but bailouts. their proposal is nothing but protecting wall street. we've got to change that. this bill changes the future of

our financial system in a way we haven't seen since the new deal. we need to restore confidence, that's what we do. i urge a -- i urge a yes vote on the previous question and the rule. with that, i yield back the balance of my time, mr. speaker. the speaker pro tempore: the gentleman from colorado yields back the balance of his time. does the gentleman have a motion? mr. perlmutter: i move the previous question. the speaker pro tempore: without objection, the previous question is ordered. the question is on the adoption of the resolution. those in favor say aye.

during consideration of h.r. 4173, pursuant to h.res. 956, the chair of the committee of financial services be permitted to control 10 minute the time allocated to the chair of the committee on energy and commerce. the speaker pro tempore: without objection. for what purpose does the gentleman from texas rise? >> mr. speaker, i ask unanimous consent that during consideration of h.r. 4173, pursuant to h.res. 956, the chair of the committee on financial services be permitted to control 10 minutes of the time allocated to the chair of the committee on energy and commerce. the speaker pro tempore: does the gentleman's u.c. refer to

the ranking member of the committee? mr. barton: it does. the speaker pro tempore: without objection, so ordered. mr. waxman: i ask unanimous consent that all members have five legislative days to revise and extend their remarks on h.r. 4173 and insert extraneous material therein. the speaker pro tempore: without objection. the speaker pro tempore: pursuant to house resolution 956 and rule 918, the chair declares the house in the committee of the whole house on

the state of the union for consideration-o.r. 4213. the chair orders a representative to preside over the committee of the whole.

the chair: the house is in the committee of the whole house on the state of the union for the consideration of h.r. 4173 which the clerk will report by title. the clerk: a bill to provide for financial regulatory reform to enhance -- to protect consumers and investor, regulate the over the counter derivatives market and for other purposes. the speaker pro tempore: pursuant to the rule, the bill is considered read the first time and the amendment printed in house report 111-365 is adopted. general debate shall not exceed three hours, with two hours and 20 minutes equally controlled and divided by the chair and ranking minority member of the chair on financial services committee, 30 minutes equally controlled and divided by the

chair and ranking minority member of the committee on agriculture and 10 minutes equally controlled and divided by the chair and ranking minority member of the committee on energy and commerce. the gentleman from massachusetts, mr. frank and the gentleman from alabama, mr. bachus will each control one hour. the gentleman, mr. peterson, the gentleman mr. lucas, the gentleman from california, mr. waxman and the gentleman from texas, mr. barton, each will control a 15 minutes. the chair recognizes the gentleman from california, mr. waxman. mr. waxman: mr. chairman, i rise in strong support of h.r. 4173, the wall street reform and consumer protection act of 2009. as long -- i have long advocated for comprehensive regulatory and financial reform. last year as chairman of the oversight committee we held many hearings examining the causes of the financial crisis.

those hearings showed government regulators were asleep at the switch while wall street banks drove our economy off a cliff. change is necessary and i believe this legislation will strengthen the federal government's ability to prevent and respond to future crises. consumer protection is a central element of the energy and commerce committee's jurisdiction and i support the reforms in the bill. the legislation provides four essential improvements to the operations of the federal trade commission. these improvements allow f.t.c. to seek civil penalties and enforcement actions against violations of the f.t.c. act, not just violations of rules and orders, as the f.t.c. act currently allows. enforce against those who provide substantial assistance to entities that commit fraud,

promulgate rules using the standard procedures act processes used by virtually all other agencies and litigate its own cases without delay when it seeks civil penalties against fraudulent actors. each of these four provisions will strengthen f.t.c.'s consume prior text abilities and enable it to be a powerful partner with the consumer protection agency in protecting consumers from financial fraud. the energy and commerce committee shares jurisdiction over the new consumer financial protection agency with the financial services committee and i am pleased that chairman frank and i were able to find a compromise in this area. under the agreement we have reached, the agency will start off with a single director who can take early leadership in establishing the agency and getting it off the ground. after a period of two year the agency will continue operations

with the leadership from a bipartisan commission. i've also been concerned about the provisions of this legislation relating to the regulation of financial instruments associated with the energy sector. i'm pleased it to report that the agriculture committee and the energy and commerce committee reached an agreement to address potential regulatory conflicts where the jurisdiction of the commodity future trading commission as enhanced by the proposed bill could overlap with the jurisdiction of the federal energy regulatory commission. i want to thank chairman frank and his staff for leading this important legislation through congress. i also want to thank commerce trade and consumer protection subcommittee chairman bobby rush for taking an early lead in examining the proposal in his subcommittee and chairman dingell for ensuring that we enhance f.t.c.'s role. ranking member barton worked

closely with us on our proposal to create a commission to lead the cfpa and i finally want to thank chairman peterson for working with us to resolve the energy regulatory issues. i urge all my colleagues to support this legislation and i yield back the balance of my time. the chair: the gentleman yields back. the gentleman from texas is recognized. >> thank you, mr. speaker. i yield myself four minutes. the chair: the gentleman is recognized for four minutes. mr. barton: i ask unanimous consent to revise and extend my remarks. the chair: without objection. mr. barton: thank you, mr. speaker. first let me say that i rise in strong opposition to this bill. i did support marking it up at the energy and commerce committee to maintain jurisdiction over this agency and other agencies in our committee's jurisdiction. i did work with chairman waxman

to make some perfecting changes to the bill that's before us. but having said that i think that it is a bad bill, it's an unnecessary bill and it's a bill that will have unintended quentses -- consequences of a negative fashion if enacted in its current form. i'm glad that some of the federal trade commission's jurisdiction that was originally stripped from the bill and given to the new agency has been retained and put back with the f.t.c. i also think, though, that a new agency cobbled together by congress from existing regulatory structure will not eliminate one of the world's oldest sins. hurricanesters and scam artists will not hold up their hands and turn honest because there's a new federal regulator on the block. they'll simply find new ways to cheat the government as it tries to get on its wobbly new feet. bureaucracies, particularly new ones, don't move at the speed of

businesses, especially shady illegal businesses and they certainly don't move at the speed of fraudsters. i want to commend chairman frank for his hard work on a tough issue. having said that the outcome of his hard work is an enormous bill and an enormous bureaucracy that in my opinion just won't do the job. having said that the obama administration apparently wants this new so we're going to get it. at least we're going to attempt to get it through the house on the floor this evening or tomorrow, whenever the vote may occur. i wish that a super regulator could find and repair the underlying problems with the housing and mortgage markets but i don't think that it can. empowering a new agency with nearly limitless power to deem almost any product or service of financial activity is questionable at best and tir ancal at worst. this legislation even fails to create a national standard for the super regulator to enforce. instead it adds another layer of

federal regulation on top of existing state laws. finally the legislation gives broad new authority to the f.t.c. that really has nothing to do with the proposed agency and covers everything beyond consumer financial products. mr. speaker, i rise in opposition to the bill and i would hope that we would defeat it. with that i want to yield the balance of my time that i control to the distinguished chairman of the financial services, the distinguished ranking member of the financial services committee, congressman bachus of alabama. the chair: the chair cannot entertain that request in the committee of the whole. mr. barton: all right. i reserve the balance of my time. the chair: the gentleman reserves. the gentleman from massachusetts is recognized.

mr. frank: mr. chairman, i begin by yielding four minutes to one of the members of the house who has a very significant imprint in this bill, all to the protection of investors and the integrity of our markets. the chairman of the capital markets subcommittee, the gentleman from pennsylvania, mr. kanjorski, four minutes. the chair: the gentleman from pennsylvania is recognized for four minutes. mr. cannon: mr. chairman, i -- mr. kanjorski: mr. chairman, i want to thank the chairman of the full committee recognizing me and to assert for the record in the full house that although today is a huge bill of 1,300 pages or 1,200 pages will be difficult to describe and probably not well understood by the people watching this proceeding or all the members of the house, i want to say that i'm proud to have worked under the fought tolage of the chairman, mr. frank, and i think that in years to come historians will look back at in this moment and say, when there was need in

this country for reformation it was had in the major part of this bill. mr. chairman, i have had the pleasure of participating in major portions of the bill, title 5, title 6 and part of title 1. what we tried to do in essence so that the viewing public can understand is to recognize some of the problems, not all the problems, but some of the problems that we were facing as a result of the actions of last year, of the capital markets of the united states. first and foremost we discovered that there were greating regulators in transparency and accountability in the rating agencies as they acted to evaluate various sets of securities in the world markets. and when we examined the rating agency in great detail and through hearings and examination

we found that these entities were poorly -- not really regulated at all, but certainly poorly accounting for their own responsibilities in the system. we found that they were enticing investors throughout the world to buy securities that rated a.a.a. when in fact some of those securities weren't even of b-class quality. as a result millions of people around the world and billions of dollars came in to the purchase of these securityized -- or these securities and as a result when the market failed, they failed and there was an impression around the world created that the american government, the united states of america, stood behind these rating agencies when in fact we didn't. and that there was a great compromise, some of these rating agencies, because of the internal conflicts within the agencies, were taking great liberty in evaluating and analyzing the values of certain securities to the extent that

because they were paid by the individuals that were issuing the agency, there was an internal conflict. whether that conflict caused to a large extent scandal or caused failure in the system, one will probably never know. but certainly the aspects of the operations of the rating agencies have been called into question, were called into question at the time, and certainly have been since our examination. so what have we done? we have developed a set of principles and rules to account for accountability and transparency in the rating agencies in the united states. will that cure the problem? no. we're going to have to watch very closely, monitor very closely, that these rating agencies do not stray from the straight path. if they do we'll have to come backage impose greater restrictions on them and take extraordinary actions in the future if necessary.

but we will have rating agencies now that can be sued when they could never be sued before. we will have rating agencies that will have the responsibility to provide disclosure, who will have the responsibility of showing their methodologies and explanation to the buying public of the securities they rate and analyze. to that extent we hope the public will be protected. next we looked at who is accounted for in our system and we found, as we've all known, that some 10, 12 years ago hedge funds were denied the examination of the securities and exchange commission. we have now formed what is known as the private fund investment advisors registration act which is title 5 of this act, part a, and that provides that all advisors that want to play in the capital markets must register and must disclose certain information so that

knowledge of what capital is doing, where it is and what amounts will be known by our regulators. that's the first time in the history of the united states that that will prevail. it should go a long way of having inside information in the role of the regulator of the united states as to what is at risk. then finally we created an investors protection act. the ininvestors protection act has done so -- investors protection act has done so many things. but the s.e.c. gave recommendations which were incorporate rated in the bill, things they saw -- incorporated in the bill. things that they saw -- the chair: the gentleman's time has expired. mr. kanjorski: with that conclusion, i think -- the chair: the gentleman is recognized for one extra minute. mr. kanjorski: then finally we have something new, we created the federal insurance office that for the first time will encompass information encompassing the insurance

industry of the united states. finally, i'm proud to say i had a major part in putting together an amendment to the act in the first provision, act 1, that allows for too big to fail protection in the united states. for the first time the regulators of the united states will have the opportunity to analyze the structure of corporations in the financial service industry, that item may be too large, interconnected or too large in scope or too unexperienced in management or some other condition, that may in the future cause them to be of systemic risk to the economic system of the united states and we've empowered the regulators to move in and require changes, controls and regulations to prevent that occurrence so that never again, we hope, economies will be too large to fail but in fact will be too large in fact not to fail.

so with that i recommend to all my colleagues on both the democratic side and the republican side to stop for a moment to think what we've done here and may i call the attention of the republican side, three of the eight bills we passed through our committee went through with significant -- the chair: the gentleman's time has expired. mr. kanjorski: thank you, mr. chairman. mr. barton: may i inquire how much time i still control? the chair: the gentleman has two minutes remaining. mr. barton: i yield two minutes to the gentleman from california, mr. royce. the chair: the gentleman is recognized for two minutes. mr. royce: thank you. the gentleman from california referred to the wild west earlier. no two institutions better fit that description than the government-sponsored enterprises fannie mae and freddie mac. over the years, some of us pleaded for additional regulations. you may recall in 2005 we tried to pass strong legislation to fix this problem and bring reforms to the

government-sponsored enterprises. i brought an amendment to this floor to give their regulator the ability to rein in their mortgage portfolios that were spiraling out of control. the federal reserve came to us and said, these institutions at the heart of the u.s. mortgage market pose a systemic threat to our economy. that is why i offered my amendment which was defeated, as were others, that would have provided stronger regulation. that is why senator chuck hagel offered similar legislation which passed the senate banking committee on a party line vote but was blocked by the senate democrats from coming to the floor. we understood the risk posed by those government-backed companies, especially when it came to the affordable housing goals the democratic-controlled congress mandated in 1992. those affordable housing goals led the g.s.e.'s into the subprime market and they ultimately led to their collapse.

former president bill clinton understands this epic blunder. last september the former president said in an interview, i think the responsibility that the democrats have may rest more in resisting any efforts by republicans in the congress or by me, when i was president, to put some standards and tighten up a little on fannie mae and freddie mac. this is one of the main reasons why our economy is where it is today and this is why we must reform the g.s.e.'s which this bill does not do. instead this bill creates a perpetual bailout fund and ensures the too bill to fail doctrine is with us indefinitely. for the first time in its history, washington will officially become the center of our financial system. regulators will be able to rescue certain companies -- i'd ask for an additional minute. .

the chair: the gentleman is recognized for an additional minute. mr. royce: they will be able to pay off some creditors and counterparties and not others and keep failing companies operating in the market for years and they will be able to dismantle a healthy institution that they believe may pose a risk. if there is any doubt that this type of authority will be abused, look at how the administration handled the chrysler bankruptcy earlier this year. it was their desire to do away with the clearly defined rules of the road found in the bankruptcy code in order to reward their political allies. those rules of the road that that were so easily dismissed have acted as the bedrock of our capital markets for decades.

they differentiate us and attract capital from all the corners of the globe. this bill froze that model and replaces objectivity with subjectivity. what is the likely outcome of all of this? the largely politically institutions will have the edge of over their competitors. the speaker pro tempore: the gentleman's time has expired. the gentleman from minnesota is recognized. mr. petri: i yield myself such time as -- mr. peterson: i yield myself such time as i may consume. i rise in support of this bill which will be considered at a later time. i want to thank chairman frank and his staff working with us and our staff over the last few months on the amendment and on the provisions in the underlying bill that affect both of our committees.

passing this bill is necessary to improve the financial regulatory structure in america. and the house agricultural committee has played a significant role in contributing to this legislation and while it may not -- while i may not agree with every provision, i support the goals of increased oversight, more transparency and an end to taxpayer bailouts of large financial institutions. our committee has spent over two years examining various elements of derivative markets and we have focused specifically on their contribution to the financial meltdown. most notably the prevalence of heavily traded bilateral swaps used by large financial institutions that have either collapsed or received large taxpayer bailouts. now derivatives in and of themselves were not the cause of the financial meltdown in the second half the last year but did play a role. had the provisions of the

peterson-frank amendment been in place last year, financial institutions like a.i.g. would have never gotten themselves into a position to keep them selves solvent. the resolution provided for in the underlying bill will mean large financial institutions and not the taxpayers will be financially responsible for their own undoing. i thank chairman frank for the work he did on ensuring that this legislation does not have unintended consequences for the farm system. the chairman, farm credit had nothing to do with the financial crisis and in fact, the strong underwriting capital security appraisal and repayment statutory standards that we mr. putnam: in place after farm country went through its

consequence had a more financial network. the treasury department agreed when they said it was not their intention to bring farm credit into the regulatory discussion and i thank chairman frank for recognizing this. with that, i still have some concerns with some parts of the underlying bill, particularly the establishment of a systemic risk regulator and empowerment of the federal reserve to take a leading role. the real power resides in the federal reserve instead of the oversight council established by this bill, particularly the ability to impose whatever prudential standards it sees fit. and there doesn't seem to be any mechanism for the council to check the power of the federal reserve if it believes that the fed is going too far. while i think the systemic lanching needs much more refinement i will not let these concerns deter my support for the underlying bill and the much needed amendment that will shed light on the previous dark

markets for the overthe counter derivatives and never threaten the stability of our financial system. i urge my colleagues to support the bill and i reserve my time. the speaker pro tempore: the gentleman reserves the balance of his time. the gentleman from oklahoma is recognized. mr. lucas: i yield myself such time as i might consume. the speaker pro tempore: the gentleman is recognized. mr. lucas: i rise in opposition to h.r. 4173, regulatory reform of our financial system is indeed needed. however, rather than using this opportunity to enact meaningful reform that creates financial stability and encourages economic growth, the majority has constructed a massive piece of legislation that wim restrict credit vaket and does little to address the real problems in the financial industry. in addition to expanding the power of the federal reserve and establishing what is a

credit czar who will have unlimited authority to restrict consumer choices, this bill creates a permanent bailout, some would call slush fund for some too big to fail companies funded by $150 billion tax on financial institutions. this tax will reduce available capital for lending and will be passed on to consumers in the form of higher fees. as the ranking member of the agriculture committee, i rise in opposition to title 3, the o.t.c. derivatives title that is currently in h.r. 4173. this same title was adopted by the financial services committee. i opposed this title in the committee where i'm also a member, because it makes it too costly for end users to manage risk and unnecessarily ties up capital that could other wise be used to create jobs and grow businesses. however, chairman peterson and

chairman frank will bring an amendment to the floor that will strike and replace this derivative title. this amendment is the product of negotiations between our two committees. i prefer, i must admit, the version reported by the agriculture committee. but this compromise is significantly better than the current title in the bill and i will support its inclusion. but i support its inclusion only if the other secondary amendment that may be offered by my friends on the other side of the aisle are defeated, save one. i would be remiss if i didn't thank chairman mr. petri: ter son with the agriculture committee republicans when our committee reported out h.r. 977. chairman peterson worked in good faith to work with our members and we learned together the concerns of all our

participants in over the counter derivative markets. many still concerns are still unresolved. we were able to improve areas that were important to end users, manufacturers and food producers that manage price risk so they can provide low cost products. they should not be major financial houses residing on wall street. they did not cause the financial collapse and should not be regulated like they did. i would have preferred language that would have made clear that only those entities that can have a significant adverse impact on the u.s. financial system be regulated as major swap participants. similarly, i don't understand why market makers that only deal in clear products need to have additional capital and margin requirements imposed upon them by the federal

government. fible finally, we should not forget that new opportunities, innovative products and services and ultimately economic growth are borne from people willing and able to take risk and invest. we should not attempt to regulate risk out of existence. as it stands now, the peterson-frank amendment allows the appropriate financial regulator to closely market trends and market participants who may generate too much risk for a healthy robust financial system. this amendment gives the regulator the appropriate tools to reduce risk before it can negatively affect our economy. the peterson-frank amendment isn't perfect, but it is a marked improvement over other legislative efforts either proposed or considered. mr. chairman, i reserve the balance of my time. the chair: the gentleman

reserves. the gentleman from massachusetts is recognized. mr. frank: i yield myself such time as i may consume. the chair: the gentleman is recognized. mr. frank: my republican colleagues are in the throes in regret that things they would have liked are not in this bill. there will be a certain amount of fantasy on the floor of the house as they lament the existence of things that aren't here. one of the major bailout instruments, section 1303 of the federal reserve act was used during the bush years to bail out not the institution, but the creditors of bear stearns, but then it was used by a unilateral by the federal reserve with no congressional input in september during the bush years of 2008, to provide substantial amounts of money to a.i.g.

the bill before us today wipes that power out. there will be no more use of section 1303 to provide funds to any existing institution. as the republican bill also says, the ability to fund an instrument to which companies can apply if they are solvent in the midst of a national liquidity crisis, but nothing like a.i.g. there is a fund in here for the fdic to use and if a financial institution has to be put out of existence because it had become too indebted and unable to meet its debts and it was big enough that its failure would cause the systemic negative kind of consequences. last year, lay man brothers went under and the bush administration felt they couldn't pay anybody. and the bush administration said then, we have to pay everybody because we can't pick

and choose. we end that dilemma and we say and this is absolutely crystal clear in the bill, it says, if an institution gets to the point where it cannot pay its debts and it is of such size that those debts threatens systemic negative consequences going throughout the economy, it dies. there's no bailout. there's no continuation of that entity. it is a dissolution fund and it is put into receivership. there is a fund raised by the assessments on the financial institutions. i don't want to strain their compensation and they don't want to contribute to expenses that may be incurred by their own responsibility. that is the difference between us. we say that if the federal agency that is putting this out of business and takes it over and yeah, there is a takeover

of failing institutions who threaten by the size and complexity of their indebbedness to threaten the strength of the country, the share holders are wiped out -- these are all absolute conditions that have to be met. and it may be in winding them down, some money has to be spent. you don't walk in and say, ok, the door's closed. that is irresponsible. we say it may take some money to wind them down. we assess the community that caused these problems for that. if there is a need and a shortfall if this happens before the fund is built up, money will be borrowed from the treasury with an absolute requirmente of repayment in this fund. there are no taxpayer dollars that will be used. it will be lent in some cases as has been lent in other cases, but they must be repaid and must be a repayment schedule. the assessments will continue

until they are repaid. i apologize to my colleagues that the bill is too big. i don't know if that means it was too much to read or too heavy to carry or short ones can't see over it when they are sitting down. i don't know what the problem is. this notion that the value of a piece of legislation is inversusly related to its size is rather odd, but let me tell you how they manage to slim down, which i would like to do now, but i have to start my diet next week. how do they slim it down? they don't do anything in their bill about executive compensation. we say that the kind of bonuses and large payments to take risks and not be penalized if they fail, we have language in there to stop that, they don't. we say let's ban the kind of subprime loans. we have a lot of language to ban subprime loans.

they don't. save some more pages. we do regulation in other ways that they don't do. they don't have registration of hedge funds. they don't have requirements of private advisers. so it is true if you avoid subjects, you shrink the size of the bill. by the way, as to the size of the bill, this didn't -- sometimes it's not what is nt there is relevant and i appreciate that about the process. we began marking up the elements of this bill before the summer recess. we have had a large number of hearings and have spent over 50 hours in actual markup debate on this bill. there have been hundreds of amendments offered and some have been accepted from the republican and democratic side. it was vetted. it was made public and available. i'm sorry they had to read a lot of pages. they don't like to be reminded

of compensation abuses or hear about subprime. but we do. we want to stop it. there is no bailout fund. the bailouts of a.i.g. and bear stearns, not possible, illegal under this bill. if a company fails, it will be put to death. we have death panels, but they have the death panels in the wrong bill. they are in this bill and we will spend the money to get rid of them in ways that will minimize damage, money that will come from the financial community. . we heard it's going to have a restriction on credit. it's true, many were opposed to the credit card bill. many voted for it. they say there's a credit czar. that one is too odd to put any meaning behind. i'd like them to point to the sections that do it, maybe if it's too much to read all at once they can divide it up. there's 177, if they each read

eight pages i think they could get the whole bill done. maybe then they could find the credit czar in there. i can't. we do say that if you're identified by the systemic risk council as overleveraged and you're big we will step in and tell you as the gentleman from pennsylvania's amendment said, you're too big, raise your tap tal. maybe that's a credit czar. maybe when someone would have told a.i.g. a couple of years ago, stop selling those credit default swaps that you can't back up, because mortgages that you are ensuring against loss can lose money, maybe they think that's a credit czar if you tell a.i.g. don't do it. because nothing in that bill, zero in that bill would have interfered with a.i.g.'s recklessness. not a word in here that would have done that in terms of the overleveraging of a.i.g. nor of the subprime loans that were there. so, yeah, the lack of regulation over many years allowed big problems to grow up and it takes a fairly comprehensive bill to do it. we have been working on this bill for literally months.

we have had days and days and days of hearings, we have voted on it, we have amended it, it's been available. so i would hope that that would stop complaining about the size. i would hope that would deal with the substance but the real subject of this bill, not a bailout that does not exist and wait for someone to read me the sections that show that there's taxpayer money that can go to keep a failing institution going, there absolutely is not. aye like them to tell me, do they think we should do anything about subprime loans, anything about executive compensation, anything about hedge funds? so, yeah, here is the situation. years of an absence of regulation, both an absence of the world of regulate, mostly under republican rule, lead to the largest crisis in recent memory, since the depression, they talk about job loss. as i said before, what a terrible day january 21 was. apparently there was a wonderful economy up until january 20.

barack obama took power and millions of jobs disappeared retroactively. a deficit strung up that had not been there. bailouts were retroactively pushed back to september. the major factor in job loss was this terrible crisis. what we do for jobs is to say, you will not be allowed once again the financial irresponsibility of some in that community to get us into trouble and the republican proposal is very clear. do not interfere with the ability of an a.i.g. or a lehman brothers or a city corps or countrywide or any of those other financial entities, do not prevent them from doing again what they did before. if and when they have done such a bad job that they're collapsing, then let them go bankrupt and don't do anything to deal with the consequences. let's have another lehman brothers. we say no. let's try to stop them from getting there. if they do get there, yes, we will put them out of business. but in a more orderly way. i reserve the balance of my

time. the chair: the gentleman reserves. the gentleman from alabama is recognized. mr. bachus: mr. chairman, i yield myself such time as i may consume. the chair: the gentleman is recognized. mr. bachus: i ask unanimous consent to address the house from the floor. the chair: the gentleman is recognized. mr. bachus: mr. chairman, this is a great country. and i think we're all proud of our country. it is no small tribute to our country that people all over the world dream about coming to america. our forefathers, they were either born here or they dreamed of coming to america. and america is not just a country, it's an ideal and that idea is about the individual. that's the basis of our country. it's not about the government, it's about the individual, it's

about the citizen, it's about freedom, it's about choice and, mr. chairman, the problem with this bill isn't the size of the bill, the problem with this bill is that it goes right to the heart and strikes a wound against the character of our country. it's the character and the culture of this legislation that is so wrong and not the size. individuals in this country ought to have the right to choose. they ought to have the right to choose their health care provider, their doctor. they ought to be able to make choices, health care choices, treatment choices between themselves, their doctor, their family, not the government. we see with health care that

this idea of the individual, this idea of choice, this idea of freedom to make those choices is under attack. we found that with energy that not the individual but the government determined that we weren't going to utilize coal, our most abundant resource. we weren't going to use oil, that we were going to tax, that we were going to tax energy, we were going to discourage that, we're taxing health care and the health care bill and in this bill we levee taxes. we have sanctions. people may still be able to make choices but they'll be discouraged or they'll be taxed when they make those choices. you know, the decision about

seeking the doctor of your choice or the decision about borrowing money or the choice about lending money or the choice about the terms of that loan, those ought to be choices between individuals, those should not be managed by the government. now the chairman has rocked this legislation before and it is his legislation -- brought this legislation before and it is his legislation. his image and his imprint is clear on each and every page of this legislation. i'm not really seeing -- i've not really seen such an individual drive such legislation since perhaps the first lady, hillary clinton, brought her government-managed health care to the floor in the early 1990's. and this is just simply another way of an attempt on the part of

really -- and i think the chairman really has faith in the government and the government's ability to manage and the government's ability to make decisions, that he actually has sincere faith. in fact, members of this committee, members of this committee on tv this morning, democratic members, actually made references to europe, the way they do things in europe. the fact that the government is making these decisions in europe. we are the greatest, as i said, the greatest country on the face of the earth and we didn't get there through government management. we didn't get there through government management of health care wesh won't get there by government -- care, we won't get there by government manage of credit or lending or other financial services. it won't happen. we're the largest economy in the world, it's not the british

economy, it's not the french economy, it's not the chinese economy, it's not the japanese economy. it's the american economy. how did we get to be the largest economy in the world, three times larger than the next largest economy, the japanese economy? bigger than the chinese economy, the japanese economy, the british economy and the french economy put together. we got there with faith in the individual, not in the government. and that is what's wrong with this bill. and you can clearly look and no more is it more evident in this bill that not only do we not have faith in the individual and the individual responsibility and in individual's right sometimes to take risk, but we also give individuals the right in this country to succeed. but when you do that, unlike in

other countries, you've given them the right to fail and this bill clearly establishes a bailout fund and it says, when the largest companies in this country, when the largest companies in in this country, when they fail we're going to establish a $150 billion fund, a permanent fund, a permanent tarp . the democratic gentleman from california, mr. brad sherman, said tarp on steroids and where do you get this money from? well, actually it's $200 billion. $150 billion you get not from the companies that are failing but from their competitors who are succeeding and you transfer that money to those companies that have taken risks they shouldn't have taken. you take it from those companies that didn't take those risks.

that's not competition. that's socialism. now you can call it what you want to, but it's socialism, it's government-managed, it's not what america's about. and let me reserve the balance of my time but before i do let me say this, this is not about what -- a crisis that occurred last september. this is not about the continuing bailouts that started with the federal reserve, an independent body, but continues and have grown in intensity under the obama administration. but there is enough fault to go around but cannot we agree on one thing, that it is time that we allow people in this country to succeed and we allow them to fail? isn't it time in this country that we decide that there's no more too big to fail? because if you make that determination, you make the determination, as we have over

the past year, that there are thousands of small businesses and medium-sized businesses and companies that were too small to save. and that's not fair. that's not what america is about. it is not about taking from people who pay their mortgage and no matter what the circumstances of those who failed to pay their mortgage, it's not about transferring money from one to the other. that's not about america. it might be about charity, it might be about neighbor helping neighbor, but that is not what this country was established about. so, let's -- let's not use the crisis that we have experienced in this past year to create the calamity of a government-managed

country where the individual, where freedom, where choice is a thing of the past. i reserve the balance of my time. the chair: the gentleman reserves. . the chair: the gentleman from ohio is recognized. >> thank you, mr. speaker. in this season of yule tiding, gift giving, silver and gold, what are my republicans attempting to give americans with their opposition to this bill. my colleagues would rather give gold to the corporate goldman sachs rather than put silver

and gold under the christmas tree of ordinary americans, bah humbug. they would stand with corporate executives and thousand dollar suits than those in the unemployment lines. they would rather bail out the big banks rather than americans keep their homes on main street. bah humbug. they would like to protect the pensions of bill corporate executives and stand with hedge fund managers who are betting on the price of oil going up and price of food going up and americans failing to pay their mortgages rather than helping those families that are sfang in lines at food banks this holiday season, bah humburg.

this bill will help and will protect small businesses and from the unnecessary risk by wall street risks and speculators and brings transparency and accountability to a financial system that has run amuck. this bill is about instituting commonsense reforms, holding wall street and big banks accountable. now republican leaders would rather vote to rescue big banks on wall street than find it in their hearts to help struggling americans on main street. don't be a scrooge. help our people or surely you will be visited by the ghost of christmas past. i yield back my time. the chair: the gentleman yields back the balance of his time..

the gentleman from oklahoma. mr. lucas: i yield to mr. moran 2 1/2 minutes. mr. moran: i rise this evening as one might expect in my opposition to h.r. 4173 certainly as written. this massive as the gentleman from massachusetts has said, massive general regulation bill. we have 1,200-plus pages, so-called reform bill that would dramatically increase government involvement in our economy. if this congress is serious about economic recovery, we should be reducing burdensome regulations, not increasing them. i have heard from many about their inability to access credit from their local lending institutions. small businesses and farmers rely to make payroll and expand and make their ends meet. local lending institutions would love to make these loans but the overly broad

regulations and ininconsistency together with higher fdic insurance premiums has restricted family and small business access to capital. this house should be more focused on the credit crunch and helping institutions cut through the bureaucracy and lend money, not creating more layers of regulation. among the provisions i oppose within this regulation is to create a permanent tarp bailout authority. this will shield firms from their mistakes and pass their costs onto the american taxpayer. the regulation takes an approach disrupting markets that have performed well and placing regulatory burdens in the places where they are not needed. one of the changes that this legislation would make is not the overthe counter derivatives markets.

in the wake of last year's collapse, these markets performed relatively well under the regulatory regime. they allowed regulators to adapt their regulatory approach. rather than recognize the success, this legislation replaces those core regimes with a rules-based structure that has failed. this legislation also redefines the definition of a hedging transition and contract market so narrowly that it will be difficult to properly hedge their risk. these changes will hurt, not help and introduce less, not more volatility. and i yield back mu my time. the chair: the gentleman yields back the balance of his time. the gentleman from massachusetts. mr. frank: with all these assertions that it's going to hurt credit and small banks, the independent community

bankers association, a great representative of small banks support this bill. now they will be upset if we do bankruptcy. as far as the bill is concerned, the independent community bankers association support this bill and they believe the opposite about credit. and i yield four minutes to the the gentleman from california, mr. sherman. the chair: the gentleman is recognized. mr. sherman: tarp on steroids that was the original bill that was submitted to us by the secretary of the treasury. this bill is very different. i want to thank chairman frank for all the changes we have been able to make and declare that this bill is now a step forward in limiting on balance the power of the executive branch to put taxpayer money at risk or to bail out private institutions. the bill does include two provisions that those concerned

with bailouts might object to, but these are limited to amount and purpose, and they are sunseated in 2013. finally, while taxpayer money might be put at risk initially, ultimately the cost is initially. you can't call this bill tarp on steroids and quote me to that effect without noting the major change this bill now makes in the section 1303 of the federal reserve act. that is the most dangerous provision in the u.s. code and this bill is a major step toward limiting that section. code section 1303 now allows the federal reserve to lend at times of systemic risk that they declare to be in existence unlimited amounts to just about

anyone on whatever terms the fed thinks is adequately secured, unlimited amounts. they have already done about $3 trillion and under current statute, they could do $30 trillion. and the republican alternative does nothing to limit section 1303. it leads the giant freeway of bailouts open forever. in contrast, this bill continues three important limitations. the first was drafted by the chairman and it says that 1303 can only be used to put money in the economy in general, not to bail out one or two firms. and i thank the chairman accepting two of my amendments. and it does not adjust that amount to inflation so the power of the fed will decline with inflation over time, which is only fair, since it's the fed that is supposed to be in charge of eliminating

inflation. second amendment was the idea of acquiring the highest possible security for amounts of credit extended under 1303. this bill is a step towards limiting the power of the executive branch to put money, taxpayer money at risk. it does contain section 1109 and 1604, both of whichr pursuant to an amendment accepted in committee, which i authored, sunseated in 2013. section 1109 replaces 1823 under current statute, so it doesn't expand bailout authority. in fact, it contrasts it because it is limited to $500 billion while 1823 which is suspended, is unlimited amount. 1109, as will appear in the manager's amendment requires an advanced fee so the taxpayers

are compensated for any money put at risk and any losses to be collected from those companies which participate in the section 1109 loan guarantee program. section 1604 does provide funds to resolve insolvent institutions. but as the chairman points out, it's a death panel, not a bailout. it's only for institutions that are going to be lick which dated and limited to $150 $-- the chair: the gentleman is recognized for one minute. mr. sherman: section 1604 is sunseated in the year 2013. taken as a whole, this is anti-bailout legislation and contrasts with the republican alternative that does nothing to limit section 13-3 which has

been used cheefl under the bush administration to put over $3 trillion of taxpayer money at risk. it does provide for section 1109 and 1604. they are limited in amount and temporary in time. and most importantly, it limits section 13-3, threeways, as to dollar amount, the purpose that money is put at risk and the degree of risk which the fed is able to take. what i said about this bill when it was originally was proposed may well have been true. the bill now is a step away from the tarp approach and step away from bailouts. the chair: the gentleman's time has expired. the gentleman from alabama is recognized. mr. bachus: i yield four minutes to the ranking member of the subcommittee on

oversight and investigations, ms. big erts, four minutes. the chair: the the gentlewoman from illinois is recognized. mrs. biggert: thank you, mr. chairman and thank you for giving me the time. i appreciate it. there's no question and no disagreement among members from both sides of the i'll that we need -- aisle that we need financial reform for the industry and for the economy. but this bill isn't the answer. you can find some good bipartisan provisions in this bill. mr. kanjorski and i worked out insurance language to bridge the gap and communication among regulators and address problems with businesses like a.i.g. mr. hinojosa bolstered housing counseling efforts and credit agency reform. unfortunately, the good does

not outweigh the bad. small businesses are struggling to keep their doors open and record number of americans are jobless. a report issued yesterday, the number of homeless and hungry families is still on the rise. we need a bill to unfreeze the credit markets so financing is available to allow u.s. businesses to grow and create jobs. we need a bill to improve regulation. we need a bill to help americans get back to work so they can provide for their families and put food on their table. mr. frank's bill sets us back and imposes a tax on financial institutions and diverts away from lending and creates a permanent bailout fund tarp two. taxpayers will pay in advance for the failings for those that are reckless. and taxpayers are on the hook once again, if there isn't enough money. does that sound familiar?

of course. it is more of the same. this double downs the instrution of the government. increases fees. instead of strengthening consumer protection, it creates a giant federal bureaucracy. it will tell groups across america, anyone involved in financial activities, including churches that provide payment plans for funerals, what products and services they can offer. the churches cause the financial meltdown? no. why not address the disconnect among existing federal agencies before layering on another one. are we creating a new agency. we need straightforward derivative reform and don't need regulation that charges regulators with creating a one size fits all approach to regulate compliance and justify mandates and kill jobs. this crackdown on illegal and deceptive activity, regulate

gaps and strengthen enforcement agencies. we should have transparency and accountability on wall street that will discourage and never say that those too big to fail. that's what our republican alternative aims to do. my republican colleagues on the financial services committee and i have offered every step of the way solutions for stronger financial regulations and yet the bill, mr. frank's bill steamrolls ahead and threatens to weaken the competitiveness of our markets and tie the hands of businesses, limit consumer choice and this bill is an overreach and overreaction and should be thrown overboard. we need bipartisan reform to

get our financial system and our country back on track. americans, consumers, taxpayers, job seekers, the homeless, hungry and main street businesses deserve real financial reform. this bill is not it. i urge my colleagues to oppose the bill and support the republican alternative. i yield back. . the chair: the gentleman from minnesota is recognized. mr. peterson: thank you, mr. chairman. what i'd like to do is engage chairman frank in a short colloquy and then give the rest of our time on our side to mr. murphy who is our last speaker. so if mr. frank would be willing, i would yield myself as much time as it will consume and would like to enter into a colloquy with my good friend. the chairman of the financial services committee. title 1 of this legislation creates a systemic risk oversight regulatory structure that enables regulators to raise capital requirements and impose

heightened proinvention standards on firms that could pose a threat to financial stability. the legislation also empowers the federal reserve board to pose a host of additional requirements on constitutional activities deemed systemically important. it appears that this new structure is not intended to replace or duplicate regulation of securities or derivative exchanges that are already subject to regulations by the s.e.c. or the cftc. in looking at the statutory criteria for determining whether financial companies should be subjected to stricter standards, it is hard to visualize the application of these criteria to derivatives and securities exchanges. changes are not the players who have performed the trading but the administrators of the marketplace where such trading occurs. do you agree that while derivatives and security exchanges would certainly qualify for definition of financial company in title 1, the intent of the legislation is targeted more at the players in the marketplace as opposed to the administration of the marketplace?

mr. frank: if the gentleman would yield, the answer is yes, i agree completely they've operated as they are going to operate, as they are intended to function, as marketplaces rather than themselves the operators, it is inconceive to be me that they could be designated in that way. mr. peterson: i thank the chairman for the clarification of the intent and i recognize the gentleman from new york, mr. murphy, a new member of our committee who has actually got some real world experience in this area and has been a great member in helping us put this together, for the balance of our time. the chair: the gentleman from new york is recognized. mr. murphy: thank you, mr. chairman. and also thank you to ranking member lucas. the work we did on the ag committee is the kind of commonsense solution that the americans are looking for. we worked together to come up with regulatory reform in the ag committee with respect to the driventives legislation -- legislation and we saw overwhelming support from not just democrats but republicans because people in that committee know what the american people knows.

for the last 10 years washington has failed to regulate our financial markets. and as a result some of those on wall street and at the big financial firms have taken that opportunity to gamble with our money. they've put our future at risk and they've put the very american dream that so many americans spend their time hoping and praying for at risk. and it is time for us to respond to that. they per siptated the failures in washington and the failures on wall street precipitated the worst financial crisis since the great depression and it's our job here and now to come up with solutions to that. wall street melted down and main street paid the price. this cannot happen again. so what do we need to do? we need to regulate what wasn't regulated. so many people now recognize that no one was looking at systemic risk, no one was looking at the a.i.g.'s of the world and seeing what they were up to. there were whole sections of the drisktive marketplace that no

one was regulate -- derivative marketplace that no one was regulating, in fact, by law that was passed here in washington, no one was responsible for looking at it. that cannot continue. there were whole parts of the consumer world that were not regulated, mortgage brokers, payday lenders. this cannot continue. we must regulate what was unregulated to bring everything into the system. we need to protect our consumers. we talked about payday loans and mortgage brokers and the kind of liar loans that were put out there in the past. no one was responsible strictly foring at protecting our consumers. this legislation will do that. with the consumer financial protection agency there will be a focus on protecting our consumers. that's something that's common sense, that's something that all americans want us to do here in washington. and the last thing that everybody in my district wants, and i think americans all over this country want, is they want protection from taxpayers having to fund any future bailouts. nobody thinks that main street

should be bailing out wall street. shouldn't have happened in the past and it sure should not happen again in the future. it's critically important that we fix that. the bill that we have in front of us does set up disillusion authority. it's funded by the large financial institution to help shut down those that fail. that's what needed to happen in the past, that's what needs to happen in the future, that's the kind of commonsense reform that we all need to come behind. we need to regulate what wasn't regulated, we need to protect our consumers and we need to make sure that taxpayers never again have to fund a bailout. that's what we're working on here, that's what this legislation would do and i think it's very important that we come together to pass this and protect america's taxpayers, protect our financial system and get our economy moving again. thank you, mr. speaker. the chair: the gentleman yields back. the gentleman from oklahoma is recognized. mr. lucas: mr. chairman, i yield to the gentleman from iowa, mr. king.

the chair: the gentleman from iowa is recognized. mr. king: thank you, mr. speaker. i thank the gentleman from oklahoma for yielding and i appreciate the debate that we have here tonight. i'm going stand with the gentleman from oklahoma and i thank the gentleman from minnesota for the work that they've done on the credit default swaps and the regulation that is there. i do think it's an improvement and i'm certainly going to support that amendment. but i think it's important for us as members of this congress to bring a perspective to this and in the words of mr. bachus from alabama oakow in my ears, mr. speaker, and that is that it isn't so much about this stack in the bill that mr. frank says might be too heavy for to us carry, it's about the culture of the bill that might be too heavy for the american people to carry. it's about the difference between believing the federal government can regulate more aspects of our society, more aspects of our economy, and the difference in believing whether people can become and entities

can become too big to be allowed to fail or whether small businesses might be too small to be allowed to succeed. and it's about the difference between the free enterprise economy and a managed and controlled economy. it's about the difference between liberty and the difference between a socialized economy. and i've watched this economy -- as this economy has spiraled downward over the last 15 or so months and we've been involved in this. we've been engaged in it intensively. and it comes down to two divergent philosophies. one of those philosophies is echoed in some advice that we got from one of our top economic advisors who i'm going to remain name ms who said to us 2 1/2 years ago at the beginning of the subprime mortgage discussion, said, what's going on is these large financial institutions are doing what everybody else does. they're doing that because the other people are making money and they're making money. and their psychology is, if things fall apart and melt down, there's likely to be a bailout.

if they do what everybody else does they'll get bailed out like everybody else. that's at the root of this. whether you can be allowed to fail so that we have a free enterprise system. there's a stack of immigration cards produced by the u.s. citizenship immigration services, glossy flash cards and you look through those flash cards and it asks, who's the founder of our country? george washington. turn another one, what's the basis of our economy in the united states, flip the other side, free enterprise capitalism. it is a principal tenant of the american way of life that you must answer that question accurately if you want to become a zpwen of the united states and yet -- citizen of the united states and yet here we're debating to have a free market. and, mr. speaker, i'm going to submit that we've got to be able to take a chance to succeed and fail. ok, i'm -- mr. lucas: i yield the gentleman an additional 30 seconds. mr. king: i thank the gentleman

for yielding. we had a chance and we should continue forward to repeal the investment act, we should regulate fannie mae and freddie mac, we should require them to meet the same standards of every other financial institution in the united states, we should let people fail, though, and so that others can succeed and a.i.g. should be split up. this is the seventh federal agency when we have already too many. we need to have free enterprise succeed and that, mr. speaker, i appreciate it and i yield back the balance of my time. the chair: time has expired. for what purpose does the gentleman from massachusetts rise? mr. frank: i'd like to yield myself 15 seconds to invite members to show me the part of the bill where there's a bailout that goes to failed institutions and keeps them going? i will read the parts that make it clear that's not the case but maybe there's something i didn't read. so anybody who tells me there's a bailout that goes to continue business institutions -- the chair: the gentleman's time has expired.

mr. frank: i yield 15 more seconds. yes, i yield to the gentleman. i yield myself two more minutes and yield to the gentleman. >> i appreciate the gentleman yielding. mr. frank: two minutes. mr. sherman: the language of the bill says that -- mr. frank: what page? mr. sherman: i'm sorry? mr. frank: page. mr. sherman: i'm looking right now. the one section -- one second -- mr. frank: give me a page or we can't have a serious discussion, obviously. mr. sherman: the language of the bill gives the authority to set up a -- mr. frank: i want to take back my time. if the gentleman will point to the page -- the gentleman rose voluntarily, i would assume he had the language. i yield to him again. mr. garrett: page three of the judiciary committee, self-executing amendment. mr. frank: says what? mr. garrett: it says on page 291 after line 4, insert the following subsection, conversion to bankruptcy, conversion, the corporation may at any time with the approval of the secretary, when meeting the treasure

secretary, and after meeting with the council, consult the proceeding under chapter 7 or chapter 11 of title 11 united states code by filing a petition against the covered financial company under section 303-n of such title. it goes on page 4. the corporation will -- the corporation may serve as a trustee. basically what you have established here is a political decision by the treasury secretary to take an institution that they decide that they are going to put into receivership which you said before would be the end game and allow them to convert back into a 7 or 11 bankruptcy. your statement before and this goes back to my opening comment which you respondsed to, why are we concerned with such a large bill? the reason we're concerned with such a large bill is because obviously the chair and members of your side of the aisle have not read the entire bill. the reason we presented a much smaller bill was because obviously you have not read our bill either. i note your opening comment -- i still have the time.

mr. frank: it's my time and i take back -- mr. garrett: you yielded it to me. i'm responding. mr. frank: i a want to respond to the response -- i want to respond to the response. i said i took -- i took two minutes for myself and yield time -- mr. garrett: i'm sorry. i thought you wanted a response. i'm sorry. the chair: both minutes have expired. mr. frank: i yield myself 30 seconds to explain to the gentleman who misunderstands the rules. i yielded myself two minutes so we could have the conversation. he then used up both minutes. it was not within my power to continue it. i will get back to it now, i don't want to keep my friend, i yield four minutes to the gentleman from illinois. mr. garrett: hopefully i answered your question. mr. frank: i yield to the gentleman from illinois. the chair: the gentleman from illinois is recognized for four minutes. >> thank you, mr. chairman, i rise in strong support -- mr. frank: the gentleman -- temporarily i move the committee do now rise. the chair: for what purpose does the gentleman from massachusetts -- mr. frank: i move the committee

do now rise. the chair: the question is on the motion that the committee rise. those in favor say aye. those opposed, no. the ace have it. the motion is say -- the ayes have. it the motion is adopted. accordingly, the committee rises. the speaker pro tempore: mr. chairman. the chair: mr. speaker, the committee -- the committee of the whole house on the state of the union has had under consideration h.r. 4173, directs me to report that it has come to no resolution throne. the speaker pro tempore: the chairman of the committee of the whole house on the state of the union reports that the committee has had under consideration h.r. 4173 and has come to no resolution thereon.

for what purpose does the gentleman from colorado rise? >> thank you, mr. speaker. i send to the desk a privileged report from the committee on rules for filing under the rule. the speaker pro tempore: the clerk will report the titles. the clerk: report to accompany house resolution 962, resolution waving a requirement of -- waiving a requirement of clause 6-a of rule 13 with respect to certain resolutions reported on the committee of rules. the speaker pro tempore: referred to the house calendar and ordered printed. pursuant to house resolution 956 and rule 18 the chair declares the house in the committee of the whole house on the state of the union for the further consideration of h.r. 4173. will the gentleman from new mexico, mr. teague, kindly resume the chair? .

the chair: the house is in the committee of the whole house of the state of the union for further consideration of h.r. 4173, which the clerk will report by title. the clerk: a bill to provide for financial regulatory reform to protect consumers and investors to enhance federal understanding of insurance issues to regulate the over the counter derivative markets and other purposes. the chair: 108 1/4 minutes remained in general debate. the gentleman from massachusetts has 46 3/4 minutes. mr. bachus as 56 1/2 minutes remaining and the gentleman from oklahoma has five minutes remaining. who yields time. mr. frank: i yield four minutes to the chairman of the subcommittee of financial

institutions. the chair: the gentleman is recognized for four minutes. >> i rise in strong support of h.r. 4173, the wall street reform and consumer protection act of 2009. this legislation that is vital to making our financial institutions better capitalized, our consumers safe and our economy stronger so we can emerge from the recession that is caused by the very financial institutions we are now fighting tooth and nail to defeat this legislation. i was proud to work with the chairman to include my amendment and i understand that my parents came to this country and didn't speak english so the first five years, i spoke another language other than english. but i have had the bill examined by those who speak the english language all of their lives and they cannot find the bailout fund in the bill. now, i have worked with the

chairman. i wrote the dissolution fund. i wrote the fund and put it in the bill. it's my amendment. now the fund means that firms that could ultimately be dissolved by this fund would have to pay at least. but what my friends on the other side said, and they finally used it, mr. chairman, in all the committee hearings. they didn't call it socialist. they waited to get to the house floor before they used the dreaded word of socialism. and what did they say? they said the socialists, that means, the democrats, created a bill in which -- and this is mr. bachus and he can check his words, he said, they created a bill and made all the institutions pay into it and he said that's socialism and then when one of them fails and doesn't do something right, all of those people who paid into the funds, well, i guess geico

is socialist, state farm and all state is socialist, because when i drive my car and never have an accident, i pay into the insurance fund. so that when maybe some other member of the oil gets into an accident, i par foit. what they won't tell you, unlike everybody in this room who has to take out an insurance policy to drive a car, they want wall street and goldman sachs to be able to drive our economy into the ground without paying a cent of insurance incase they act recklessly. and all we're saying is, if you want to do business in america and you threaten the economic stability of our country, then you got to pay into an insurance fund.

it's not the kind of insurance fund when you get into an accident and take your car and physical it and give it back to you knew. no, no. in our insurance fund, you know what happens? we chop up your car into pieces and sell it and pay back the fund. the bill is a funeral fund. you guys love to talk about the death and death when it comes to health care insurance. why don't you talk about our death panels now. you don't want to talk about it now because you know why? because yesterday they had 100 lobbyists out here in washington, d.c. how many of those lobbyists you think met with the other side of the aisle and said we are here to make sure our small farm is protected against goldman sachs. how many lobbyists do you think said, tomorrow, can you make sure that that bill protects my

401k. how many of those lobbyists do you think said, make sure it protects my home, my small business. i don't think any of those lobbyists came to ask my friends on the other side of the aisle -- could i have one minute. mr. frank: another minute. the chair: the gentleman is recognized. mr. gutknecht: this side of the aisle -- mr. guthrie: now, if you believe that the men and women at goldman sachs, tonight and into the future when they make an economic decision, they say, this might harm homeowners, we shouldn't do that, i'm sure goldman sachs are worried. these kids might not be go to college if we make this decision. goldman sachs isn't worried. you mean small businesses may suffer? banks may go under if we make those decisions? i'm sure the men and women at

goldman sachs, they think every day about the poor american public and the risk they put us through. if you believe that, then do nothing. if you believe we should protect the american worker each and every day and make sure there is a pension, and make sure there is a home, then i say support this bill. thank you very much. the chair: the gentleman from oklahoma is recognized. mr. lucas: i yield to the distinguished the gentleman from indiana, mr. burton. the chair: the gentleman is recognized for three minutes. mr. burton: i get into that. shakespeare, a rose by any other mean would smell as sweet. when we talk about socialism, go look in the dictionary and see what it says.

my democratic colleagues have moved to take over the auto industry, the health industry, the energy industry and now they are trying to do it through the bureaucracy and the banking industry and the financial institutions. when the government takes over the private sector, that's socialism. and if you don't believe it, look it up in the dictionary. you know, this was tried back in the 1930's when roosevelt was president. he passed what was called the national recovery act. and he tried to do it in one fell swoop. you guys are doing it increment tale. there were two guys that came over from europe that sold chickens and they were in a crate and let people pick out the chickens because people could pick out the ones they wanted. and the national recovery act, officials said, you can't do that, you have to take the first chicken, because you might leave some of the skinny ones.

that case went all the way to the united states supreme court and justice brandeis who was a liberal judge, he wrote the opinion and the vote was 9-0 saying it was unconstitution saying that it was socialism and that's what you are doing. and everybody in america that is paying attention really understands it. you are running us in the ground financially and putting all the control you can under the government and the future generations are going to suffer. i would like to say to my colleagues tonight on the other side of the aisle, we believe we should solve these problems and there are problems, but we believe we should do it the way ronald reagan did instead of taxing the people, putting more control in government and putting us in a debt we'll never get out of it and saddle our kids with something they'll curse us for down the road.

and i hope my colleague is still around here, he probably left, go to the dictionary and if you need one, i'll get it for you and look up socialism and see what you're doing is socialism. i yield back. the chair: the gentleman yields back the balance of his time. mr. frank: i yield myself 15 seconds and say i wish we had the agency already in place because the gentleman could get a refund on his dictionary because someone sold him a bum dictionary and i yield four minutes to the the gentleman from georgia. mr. scott: i rise in support of this legislation. when you talk about socialism, these are the same arguments that were held when franklin roosevelt and members of this same body on the democratic side of the aisle came forward to respond to the crisis in that generation and there's no difference here today. oftentimes when we have had

great debates and people get heated in the call of the debates, when there is no other point, you can always rely on socialism or communism. no, what this is is good old americanism. this is the most severe financial crisis since the depression. and it requires this congress to step forward with the intelligence and the sobermindedness to respond. this isn't socialism. this is good old-fashioned, free-enterprise americanism. let me talk about one of the major issues, that this is not an end to bailout. this is an end to taxpayer bailout, to protect the american economy and american

taxpayers from ever, ever again having to pay for a bailout. we don't know what the future holds in terms of ups and downs. this is not a socialist system. this is a free enterprise system. and that means we're going to be governed by the rigors of the markets, by supply and demand, by all of those things that are unforeseen. but the one thing we do know that never again will the taxpayers have to foot the bill. that's what this does. it has worked well for us with fdic. nothing more that we're doing here with the system with these large firms that are above $50 billion in assets or hedge funds, than assessing them a simple insurance fee. if situations arise? which they become a systemic risk and have to be dismantled,

then the taxpayer shouldn't have to pay for that. let the financial services do it in that industry that is causing that problem. that's the american way. let us go to the issue of executive compensation. which know that one of the major reasons why we're in the situation we're in is because of incentives that required risk and encouraged executives to take awesome risk as a feature for their bonuses or their compensation packages. are we saying the government now will determine their salaries and bonuses? no. we're incorporating the plan to this problem within the free enterprise concept, by telling the share holders that allowing them to have a say in that pay, they own the company, why

shouldn't they be able to have a say-so in that pay so they'll know what that risky behaviors are and that's what they're doing in the executive pay and the compensation package. and in the derivatives, we know what happened with lehman and that is a new, unregulated area. and so we move to regulate over -the-counter derivatives and putting them in exchange or electronic platforms. and finally, i want to add one other point, there has been a disproportionate platform in this crisis and those people who have lost their jobs and are on the verge of losing their homes, we put $3 billion in here for that and to help

with economic stablization and to address their concerns. and i urge my colleagues to support the underlying bill. mr. lucas: can i inquire how much time i have remaining, please? the chair: the gentleman has 3 1/2 minutes remaining. mr. lucas: i yield myself such time as i might consume. the chair: the gentleman is recognized. . mr. lucas: thank you, madam chairwoman. in conclusion, i'd like to say, you can have a 1,00 page bill. you can hire an army of faceless bureaucrats to enfoors all of that stuff. to make decisions for the economy. to make decisions for business. to make decisions for people. but you can't repeal the laws of supply and demand.

if you add enough fees and enough rules and regulations to the process of delivering credit, you'll drive away the sources of credit. reduce the supply of credit. at the same time, we hope to reinvigorate this economy, start it growing again. demand for credit will go up. what happens when you lower the supply of credit and you raise the demand for credit? through pieces of legislation like this? ultimately you drive up the cost of credit for everyone. the laws of supply and demand. i know my friends believe they're sincerely doing the right thing. but the right thing in this scenario will drive down the availability of credit while at

the same time, demand goes up and costs will go up too. and that will affect every business, every person, every entity that needs credit. i come from a capital-starved district in oklahoma. credit is important over the farmer, rancher, business person, every person engaged in the industry of energy production. every individual with a family trying to send their kids to school. let's not make every -- make everything they do cost more. i yield back the balance of my time, madam chair. first i would yield to the gentleman from the financial services committee, mr. bachus. mr. bachus: i thank the gentleman. mr. gutierrez came to the floor and he made a point that we want to avoid what happened in a.i.g. but in fact, i think he reminded the body of a very important thing.

that's, what did happen in a.i.g. large counterparties and creditors were bailed out and whether you call it a permanent bailout authority, as we do, of $150 billion, or as the gentleman from illinois says, a funeral fund, it is $150 billion and it is used to bail out creditors and counterparties. now isn't that what happened in a.i.g.? isn't that what the gentleman from illinois and the chairman of the committee say they want to avoid? yet they create a fund to bail out large counterparties and creditors. and in a.i.g., they bailed out 12 large counterparties, 10 of them foreign banks. two of them wall street firms. they didn't bail out cities,

didn't bail out any county, didn't bail out any community banks and over 1,000 were earned money. and they're creating another funt to -- fund to do exactly that. i see my time has expired. mr. chairman, i yield five minutes to the gentleman from texas. the speaker pro tempore: the gentleman is recognized. >> i thank the gentleman from alabama for yielding me time. madam chair, congress today faces a once in a generation decision to respond to the financial meltdown of 2008, congress can enact reforms that respond to the true causes of calamity or pass reforms that fly in the face of the facts. the first course will protect america from the same fate we had last fall. the second will pave the way for our next potentially worse crisis. that's what the wall street reform and consumer protection act does. why? because as we have investigated

the causes of the financial crisis, one conclusion has become clear. what caused the financial crisis of 2008 was government intervention in the economy. that intervention swept from the community reinvestment act to fannie mae and freddie mac to the bear stearns and a.i.g. bailouts and beyond. it destroyed financial incentives, promoted dangerous risk taking and provoked full blown market panic. yet what does this legislation do? it provides supersized tools for ever more invasive government control of the economy. it further entrenches the community reinvestment act, fails to reform fannie mae and freddie mac and institutionalizes billion-dollar bailouts. for example, take the act's provisions that allow the federal government to take over and wind down the liabilities of financial institutions. this empowers the federal government to determine which of our biggest financial institutions live and die.

it is backed by a $200 billion bailout fund. it has never before existed and should not be created now. for over 100 year the bankruptcy code has been america's trusted means for dissolving or reorganizing failed or failing firms. the administration this bill sponsors sends the bank remedy -- bankruptcy remedies to the trash heap. they do so on the theory that lehman brothers bankruptcy triggered the panic in september of 2008. if bankruptcy triggered the panic, we have to look beyond the bankruptcy code to reform the banking system. the problem is, the so-called lehman brothers theory is a myth. the market took lehman brothers bankruptcy more or less in stride. what triggered panic was actions of the federal reserve and treasury.

these signaled that the government anticipated a market collapse and did not have an adequate plan of action. in a self-fulfilling prophecy, it was only after the fed ratcheted everyone up into a panic that the market itself collapsed and not after their earlier decision to let lehman brothers go into bankruptcy. other government actions also contributed to the panic. these included the inconsistent treatment of bear stearns and a.i.g., which it bailed out, and lehman brothers, which it did not. yet what does today's bill do? it expands and cements into place the government's thrt to to engage in wave after wave of ad hoc bailouts. it sews the community reinvestment act into the very fabric of the consumer protection agency and fails to reform fannie mae and freddie mac and throws out the one tool that's worked to resolve a giant failing company, that

tool is a -- is the bankruptcy code which was used successfully to wind down lehman brothers. we have no reason to avoid the bankruptcy code and other sound measures that can avert future financial distress. what america should renounce is the supercharged government control of our economy that the bill represents. we do not need government control that lets federal agencies and government employees distort who gets credit, displace private enterprise and determine behind closed doors what companies live and tie. we tried that before and it brought us the meltdown of 2008. madam chair, i yield back the balance of my time. the chair: the gentleman yields back. the gentleman -- the gentleman from massachusetts reserves. the gentleman from new jersey. >> i yield the gentleman from new york three minutes. the speaker pro tempore: the --

the chair: the gentleman from new york is recognized. >> thank you. with unemployment currently in the double digits and a federal deficit of over $12 trillion, congress should be focused on creating jobs and keeping taxes low. instead, before us today is another staggering bill, 1,300 pages in all, which will add to the deficit and shift thousands of jobs overseas. this bill creates yet another new government agency which will be headed up by yet another new czar. in this case a new credit czar. who will limit consumer choices, ration credit, and increase the cost of doing business. it's outrageous we want to give this new credit czar virtually unchecked authority to restrict financial product choices for businesses and consumers at a time when this economy is in dire straits. studies suggest this agency

will reduce new job creation by at least 4.3% and worse then credit crunch that businesses of all sizes are currently facing. this bill also establishes a permanent bailout fund for financial institutions. washington should finally abandon this notion of too big to fail. i can tell you my constituents are surely sick and tired of the bailouts of wall street firms. one thing i know, there's no such thing as a free lunch. unfortunately, the $150 billion costing -- costs of this new bailout fund will rest on the shoulders of consumers and investors in the form of higher interest and increased fees. the financial crisis showed us that reforms are needed, but this bill will do far more harm than good. this bill is simply the wrong approach at absolutely the wrong time and i urge all of my

colleagues to oppose it. with that, i yield back the balance of my time. the chair: the gentleman yields back. the gentleman from massachusetts. mr. frank: i yield four minutes to the gentleman from minnesota. the chair: the gentleman is recognized. >> madam speaker, let me thank the chairman and ranking member and remind my colleagues that we are not here by accident. we are here because over the course of several years, lax regulation and failure and inadquacy of law landed us at a -- inadquacy of law landed us at a point where we have seen two million foreclosures this year alone. by september of 2008, the average house price had climbed by 20%. more 60% of subprime loans went to people who could have qualified for her costs. nearly one in four borrowers

owes more than their home is worth. this in large measure happened, madam speaker, because mortgage brokers unregulated family -- mortgage brokers, unregulated, leuered families with low teaser rates and incomprehensible terms and conditions that brought on the housing crisis and undermined the financial system. i want to rise in favor of the wall street reform and consumer protection act which includes a strong consumer financial protection. one of the most important causes of the financial crisis is the utter failure of consumer protection. the most abusive and predatory lenders were not federally regulated, were not regulated at all in some cases, while regulation was overly lax for banks and other institutions that were covered. to address this problem, i believe we need a new agency

dedicated to consumer financial protection a consumer financial protection agency. one agency, not a bunch, one, that takes the interest of the consumer and puts them first, not let's work on the consumer, not let's see what we can do for the consumer when we get to it, but the interest of the consumer up front. such an agent agency as contemplated in this legislation would have the power to stop abusive financial products and services. it would require financial institutions to provide concise, clear, and easy to understand disclosures on the terms and conditions of consumer credit products. of course there are some who would like to keep the same regulators on the job and piece together shards of a broken system, but what we need is real reform to protect nottle on the individual consumer but our economy as a whole. right now, many people are fighting tooth and nail to

weaken and eliminate the consumer financial products proposal, spending millions of dollars on a scare campaign that spreads false claims about the agency. how can they do this in lifingt the over two million foreclosures we have seen? consumers all across america can't afford what these lobbyists are selling to certain members of our body. the sale of risky and irresponsible credit products has cost over 10 million jobs, two million home we can't afford to lose anymore. and that is why we need a consumer financial protection agency that is the cornerstone of any real regulatory reform. now this bill, madam speaker, is comprehensive. it talks about derivatives, credit rating agencies, executive compensation and it ends bailouts. but make no mistake about it, it is protection of the consumer, the average person purchasing a financial product that is the cornerstone of this

legislation and it is why i urge my colleagues to support it. i yield back the balance of my time. the chair: the gentleman yields back. the gentleman from new jersey. >> madam chair, can you advise time remaining on both sides? . the chair: from massachusetts 33 1/2 minutes remaining. mr. garrett: i now yield to the gentleman who is leading the fight against this bill, the gentleman from from illinois, mr. mann zuleao, two minutes. mr. manzullo: i have great concerns about this bill. it creates yet another czar.

and look at the groups that will be impacted by this bill. financial advisers, anyone providing financial advice, educational classes, custodian of money, private pools of capital, municipalities who issue bills on utilities, waters, sewer, like that, waste collection, et cetera, courts dealing with fees, fines, taxes paid on installment basis for counties and municipalities, schools, tuition, installment, room and board, third-party agencies handling fee process ing, merchants, layaway plans, real estate activities, brokers, appraisers, title companies, auction nears, inspectors, survares, cockroach

inspectors for homes are covered under this bill. what is fnshal about that snr doctors, issuers of credit, point of sale, lawyers, disbursing money to a trust account, real estate transaction. madam speaker, this bill is so pervasive that the term anybody involved in a financial transaction literally covers someone writing checks on behalf of his mother who is in a nursing home. this bill is dangerous. we can't proceed on a bill like this and have all these different groups that are impacted, most of these groups will have no idea they will be governed by the so-called financial czar. we don't need another czar. we need a lot more freedom in this count thri try. -- country. the chair: the gentleman yields

back the balance of his time. the gentleman from massachusetts. the gentleman reserves the balance of his time. the gentleman from new jersey. mr. garrett: i now yield to another leader in the fight against this bill which perpetrates the idea of continued taxpayer bailouts to the the gentleman from florida, three minutes. the chair: the gentleman is recognized. >> unfortunately, this well-intentioned legislation misses the marks when it comes to attacking future meltdowns. they have failed to acknowledge the reasons behind the current meltdown and point to wall street as the cause of the meltdown and direct most of their efforts in this bill at further regulating the private marketplace. the actions taken by some on wall street were responsible at least in part for the financial meltdown. this should be part of the

reform, however, there are many factors that contributed to the meltdown and by assigning a disproportionate share of the blame to any one party, they lead in place the practices that contributed to the meltdown. if we base this that the financial meltdown was caused by the private sector and the regulators lacked the necessary tools, we are bound to repeat the mistakes of the past. the crafters have failed to assign blame. a major culprit of the financial meltdown was the government itself and the government's policies, including policies that were advocated by members of the congress. government-sponsored enterprises, freddie mac and fannie mae wre were key players and were largely responsible. fredy and fannie were regulated and carried a guarantee, yet, what did they do?

they purchased over $1.9 trillion in subprime loans between 2002 and 2007 that according to a report by the government oversight and reform committee represented 53% of all such mortgages purchased in those years. in purchasing these subprime loans they were encouraging lenders who make more of them. had freddie mac and fannie mae not been ready buyers, many of the loans would not have been made, that is not to say that the private sector would not have made such loans, but had they done it, they wouldn't have done it on the grand magnitude since freddie mac and fannie mae wouldn't have been standing ready to buy the loans. the fed and other central banks around the world keep interest rates at low levels between 2002 and 2006. making access to money so easy

and cheap intensified and inflated the boom in the early to mid-2000's as well as the burst in 2008. common sense would suggest that we would learn from these mistakes. h.r. 4173 significantly expands the power of the federal reserve, the very entity that was responsible for but failed to identify the systemic risk. the chair: the gentleman's time has expired. mr. garrett: i yield one additional minute. mr. posey: it creates a tarp-like bailout authority and will promote systemic risk and undermine financial stability, another blamed failure of the regulators is the s.e.c. failure to pursue an investigation of madoff.

they presented a report alleged ly fraud by bernie madoff. while they had the necessary tools, their failure to use these tools and launch a full investigation allowed him to perpetrate his ponzi scheme. as further evidence, it is wrong to empower bureaucrats not one s.e.c. employee has even had their wrist slapped. we have had concerns from small businesses that it will restrict their access to credit. not only is this troubling -- the chair: the gentleman's time has expired.. the gentleman from massachusetts. mr. frank: i yield to the the gentleman from ohio, who i understand would like to engage in a colloquy.

>> i would like to address the provisions of section 1103 which specifies the criteria to be considered in whether a financial company might be subjected to stricter standards. nondeposit tower kpts do not impose the type of risk. nondeposit tower finance companies typically financing on a none revolving basis to dealers. as such, they are involved in a narrow scope of financial activity. equally important their loans are made on a depreciating as set, a fact taken into account. if they are not deposit tower institutions, they have nowak cease to federal deposit insurance safety net. it is my understanding that it is the intent of the committee that these companies are not the type of finance companies that should be subjected to stricter standards under

section 1103, is that correct? mr. frank: she is correct and she is diligent in trying to protect this kind of financing. and that company is again inconceivable that they would rise to the level of risk that would be the systemic risk. the chair: the gentleman from new jersey. mr. garrett: i yield three minutes to the gentlelady from minnesota. the chair: the gentlelady is recognized. mrs. bachmann: an economist from arizona state of university that since bailout nation in 2008, the federal government has taken ownership or control of 18% of our economy and if president obama gets his way and takes over the health care industry, that's another 18% of our economy or

48%. then if president obama and former vice president al gore have their own way and cause like that rates to unnecessarily skyrocket by taking over the energy industry, that would mean the government takeover of another 8% of the economy for a total of 54%. and as harmful to freedom as these billsr they don't hold a candle to the government takeover and control of every financial transaction of the financial industry. and why? because when government controls credit, when government rations credit and bails out its political well-connected friends, that's gangster government and that throws the net of government control over every financial transaction entered into in this country.

some experts say that is government control of another 15% of the economy for a total of 69%. this is stunning. nothing less than stunning. could it be that not in our life times, but in less than 18 months' time, the federal government will take over or control nearly 70% of the american economy? and the majority has the awe dassity to berate this side of the aisle suggesting the word socialism. heaven help the american taxpayer. heaven help the american entrepreneur. heaven help freedom for our people and the sake of the continueance of the constitution of these great united states. and i yield back to mr. garrett of new jersey.

mr. garrett: i yield two minutes to the the gentleman from minnesota. mr. paulsen: this bill only continues the culture of bailouts and encourages firms to engage in risky behavior. as far as i'm concerned it will remove the element of surprise with the first amount of selective bailouts and this is not the right way to go. just look what it would do. the bill before us has provisions that take away capital needed by firms to help expand businesses, increase investments and ultimately create jobs. estimates show that the size of the fund could be more than $200 billion. this money has to come from somewhere and this will place a significant burden not only on these firms but also on credit that will get dried up. during these economic times with record unemployment at 10%, why would we make it more

difficult for getting credit for small businesses and job creation. why should a company have to pay for those companies that have been engaging in extensively risky behavior? madam speaker, it's worth mentioning the danger that is posed when we create institutions that are too big to fail. in doing so, we will define those businesses unfortunately that are too small to save and we aren't helping those. it is unacceptable to have a political economy, a two-tiered economy where the government is going to be picking winners and losers and codified into law. this bill does not shelter companies. we have heard in committee that this bill will harm consumers from access to credit and make services harder to get and when businesses can't access credit, why do we further stunt jobs

and hurt economic growth? studies have shown this is what this bill will do. jobs will be lost and continued bailouts in this legislation and that is unacceptable. and i yield back. the chair: the gentleman's time has expired. the gentleman from massachusetts. mr. frank: i yield to the the gentlewoman from california for three minutes. the chair: the gentleman is recognized. >> there are a couple of things i asked santa for christmas and one of them is that the colleagues that i have on the other side of the aisle might tell the truth. the words we have heard tonight, overregulation, government control, job loss, government takeover, bailout funds couldn't be further from the truth. let's go back in history. for over 60 years, the act worked in this country. it worked because the banks, the investment banks, the commercial banks, the insurance

companies had to be separate. and in the financial institutions came in 1999 and we offered them on a silver platter, which allowed them all to merge, which allowed them to become too big to fail. so what this particular bill is going to do is reverse that in many respects. it is going to create accountability. that fund we're talking about is not going to be paid for by the taxpayers but paid for by the companies themselves. it means that we aren't going to see the kind of job loss we have had over the last few years, because that all came from a period of time when there was no regulation where the s.e.c. was allowed to reduce the number of enforcement actions by 80% and disgeorgement actions were reduced by 60%. madam chair i ask santa and i

think we're going to get it and that is the wall street firms are going to find something new in their christmas stockings and it's called accountability. and i yield back. . the chair: the gentleman from florida. >> i now yield to a gentleman who knows that that act had nothing to do with the bailout and knows that the american people are tired of the bailout mentality. the chair: the gentleman is recognized. mr. butt nam: this bill will make recovery more elusive, particularly for small businesses. the bill creates a permanent bailout fund, totaling $200 billion for washington to prop up failing stewings. assuming, that is, the $150

billion tax proves insufficient. this tax will contract lending and cause the loss of hundreds of thousands of jobs. the legislation would create a new burden on end users of derivatives in every sector of our economy. commercial real estate, energy production, utilities, even en-- even health care. these types of businesses depend on hedging to protect themselves from price volatility. what's more, businesses that had nothing to do with the financial collapse will now be saddled by complex new regime of regulations. this will force businesses across america to use their working capital against a risk they never posed instead of creating new jobs, replacing equipment, or expanding their business. the legislation also welcomes a new bureaucrat the credit czar, our nation's capitol in the the form of a washington knows best agency.

the credit czar's job is to decide which financial products can and cannot be made available to consumers. the credit czar is required to place fees on entities that means more money -- less money to create jorks more fees to consumers and less access to credit for small businesses. what this does guarantee is a bigger washington bureaucracy. if you're serious about lowering the deficit and creating jobs, oppose this big government expansion and support the republican substitute. i yield back. the chair: the gentleman from massachusetts. mr. frank: i yield two minutes to the gentleman from ohio. the chair: the gentleman is recognized. >> i come to the floor tonight to support h.r. 4173, the wall street reform and consumer protection act of 2009. i've often said it's hard to play a fair game without a

referee and i believe that this bill will help us put the appropriate referees in place in our financial markets. it's a big step forward for more oversight, transparency, and consumer protection. before coming to congress, i served for many years on a small bank board back home in ohio. i know the small banks like the one in our community were not the problem that we're having today and they were not a part of the problem that led to our financial markets to the edge of collapse this last fall. i'm proud that this legislation acknowledges, by not putting unfair burdens on banking institutions that have shown themselves to be good corporate citizens. while the bill is not perfect, i support common sense regulation of our financial markets. we must put an end to the big -- the too big to fail phenomena. we must finally give consumers the long overdue protection that will be provided by consumer protection. and we have to continue making

significant improvements on mortgage lending standards so that we never again suffer from predatory lending and practice as we have in the past. i urge my colleagues to support this important legislation. thank you and i yield back the balance my time. the chair: the gentleman yields back. the gentleman from new jersey. >> i'd like to yield an additional four minutes to the gentleman from texas. the chair: the gentleman is recognized. >> before the gentleman proceeds, may i ask the chair the amount of time remaining on both sides? the chair: the gentleman from new jersey has 38 minutes. the gentleman from massachusetts has 30 1/4 minutes. the gentleman is recognized. >> sometimes we think the government's role is to save

the world. people would say there was a joke, i'm from the government, i'm here to help you. you know what i hear from small business men and women across the couldn't rye right now? it's please don't help us anymore. why are they saying that? because over the years, congress has amassed a huge amount of regulation and those have been put on the backs of businesses all across our country. and today, we're here to put another huge, big, mountain on top of the financial markets, the capital marketings, the very markets our small businesses commend on for capital in the name of trying to help them. i would tell you tonight, we're going to hurt them, we're going to cause people to lose their jobs because of this bill. a recent study at the university of chicago and george mason university estimated that passing this piece of legislation would reduce job growth by 4.3%. you say, how can a consumer

protection, how can a regulatory bill hurt small businesses? how can it cause job loss? let's look at some of the rules in here. we'll have a new regulator that can decide what banks and people who provide loans can hand out. if i need a specialized loan with a little bit different terms than normal my regulator, my lender is concerned that the regulator is going to look at that loan and say, you shouldn't be making those kinds of loans. and then in time when the president of the united states is even trying to look away -- look to find jobs, we're all looking for the jobs that supposedly the stimulus job created, but the truth of the matter is, this will kill jobs. it will hurt small businesses' ability to get capital. right now, we hear banks across the country are reluctant to loan money. why are they reluctant to loan

money? because the regulators are clamping down on them. now we're going to say to the regulator, you know you didn't clamp down hard enough, we're going to give you some new marching orders and put this new massive regulation in place and everybody thinks that's going to free up credit for small businesses to create jobs in america. it's not going to do that. the concern i have is that if we continue down this road of regulation, both in the financial markets, we're going to begin to limit the choices for these banks to provide financial products. the other thing this bill does is it picks winners and losers again. the distinguished chairman of the committee, who i have a great respect for, says the taxpayers' money aren't involved in here. maybe it's not tax money, but the consumers are going to pay for these bailouts. if you have an assessment and you assess an entity for bailing out its competitor and how that makes sense, i don't

know, and this assessment, who do you think is going to pay the initial cost that that company has to pay the assessment snp the consumer is. what is this going to do to small businesss? it's going to raise the cost of capital. the u.s. chamber of commerce and others say this will raise borrowing costs 1.5% for small businesses and consumers. how howe does that help the economy? it doesn't help the economy. it puts a weight on the economy and causes jobs to be lost in this country. so the question is, is why are we here tonight? why are we debating this bill? it's got a fancy title that says it's going to protect consumers and punish wall street. the issue is, it doesn't punish wall street. if you're a big entity, a big company this bill says, we've got a way to prop you up because we're going to get the

federal reserve to imply that you are too big to fail, picking winners and losers, and then what that gives an unfair competitive advantage to these banks and other entities that aren't on the too big to fail list. i encourage my colleagues to vote no on this piece of legislation and i yield back. the chair: the gentleman's time has expired. the gentleman from massachusetts. mr. frank: i yield four minutes to the gentleman from texas. the chair: the gentleman from texas is recognized. mr. green: thank you, madam chair. it is said that a politician will always rise to the occasion. many have tonight and many will. but it is also said that it takes a statesman to make the occasion. i can say to you without reservation, hesitation, or ekive case there is one great statesman among us tonight.

that is the honorable chair of the financial services committee, who has made this occasion. and it should be intuitively obvious to the most casual observer that he has made this occasion because of a mandate from the american public, but also in spite of the efforts of many. and i would have us note that this newfound theory of less is best, this newfound theory of 170 pages is better than 1,279, that this newfound theory can be improved upon. rather than have 170 pages, why not have just one page? one page with nothing on it.

or because we are all educated, let's just have one page with laissez-faire. because that's what got us here. laissez-faire. this is what produced 3-27, mortgages with three years of a fixed rate and 27 years of a variable rate. 2-28, two years of a fixed rate, many people are very much aware of what i speak because they have suffered from these insidious products. two years of a fixed rate, 28 years of a variable rate. then we have these teaser rates. that coincided with prepayment penalties. such that if you wanted to get out of the teaser rate before it set to an adjusted rate, you had to pay an enormous prepayment penalty that locked people into these teaser rates. of course we had the naked

short, people were betting the market would go down without money to cover the bets. and we had credit default swaps. the whole notion that you can bet that something won't fail and not have the money to cover your bets. even in vegas, you have to have the money to cover your bets. a.i.g. was engaging in a gambling racket that at any other time and place could have been declared unlawful and people could have gone to jail. and of course, there laissez-faire, hands-off attitude gave us the so-called too big to fail. too big to fail. which is just the right size to regulate. just the right size to separate into smaller pieces. and just the right size to eliminate which is what this bill, h.r. 4173 does.

it puts too to big to fail in a position such that it will not only be regulated, but it will be eliminated and it will be done in an orderly process, very much akin to the way we move in when banks are failing and on one friday it closes, on monday, a new bank opens. perhaps not as fast. but the concept is the same. too big to fail will no longer exist. mr. chairman, i want to commend you and i want to thank you for allowing me to be part of this process and a part of this legislation. i want to thank you because i want you to know that there would be no h.r. 4173 without your leadership. your leadership has clearly -- the chair: the gentleman extends one additional minute. mr. green: your leadership has clearly made a difference in the lives of so many in this un