and the like the things because there are so many good things in grain in this country, but then, there are so many lies and distruths and dishonesty. the way we have treated the native americans, and the way the media never talks about these things. people basically are looking for hope. host: jim, we're going to leave it there. guest: is true, the u.s. does look to the u.s. for leadership. the one thing we found is people want the u.s. to take their interests into account when making decisions about foreign policy as well. that is one area that has been a weak spot for america's image in recent years. in lots of countries, people say the u.s. does not think about them when making foreign policy. . .

we will see you tomorrow morning at 7:00 eastern. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] ♪

>> president obama is now in canada for the g-8 in g-20 summits. we will have live coverage of the closing news conference which gets underway at noon eastern. tomorrow, president obama will meet with the head of the g-20 countries including leaders from south korea, india, and china. you can see live coverage beginning at 5:00 p.m. eastern on sunday here on c-span. next week, watched the confirmation hearings for supreme court nominee elena kagan. you can watch replays of each day's hearing every night at 9 eastern on c-span2. and now a house hearing on home mortgage foreclosure prevention. the witnesses are top executives

from some of the country's largest banks. this is about two hours and 20 minutes. >> good morning and thank you for coming. it took millions of taxpayers' dollars to prevent banks from going into disaster. the banks and the financial system are now stabilized. the major banks are beginning to make money again. unfortunately the same cannot be said for millions of people who are unemployed or who are in danger of losing their homes. the threat of foreclosure is still at an all-time high.

more than three. million americans are delinquents on their mortgage by 60 days or more. a letter from the bank or phone call from the mortgage company is still keeping many home owners awake at night agonizing over potential loss of their home. for these people, the economic crisis is far from over. as i have said before, to its great credit, the obama administration recognized early on an important part of the nation's economic recovery is keeping as many people as possible in their homes. this makes sense from both the economic standpoint of and a public policy stand point. i salute him for that. the home affordable modification program is a central piece to

carry out that objective. it had a troubled start. it appears that some significant improvements have recently been made. more than 1.2 million homeowners have now started a trial modification. 346,000 have obtained modification. the savings to these home owners is a little over $500 per month. the number of permanent modifications as more than doubled in the last three months. there are still major problems. the chief complaint is a slow pace at which services are currently modifying current mortgages. there is still considerable

concern over confusing and conflicting, keep -- communication from loan services and powers. well and more permanent modifications are being made, fugleman would bars appeared to be qualified for it. many of them who have obtained a trial modification dropped out of the program later. it appears that the majority of the mortgage modifications paid under this program may not be successful. a separate and deeply troubling issue is raised by the center for responsible living. it found minority communities continue to experience significantly high foreclosure rates than whites. that is regardless of their income level. this confirms similar findings reported by the national

community and the committees last hearing. today, i would like to hear from the banks exactly how this disparity can be addressed. clearly, we need to do a lot better than what we have done in the past. this is not just about this program. i think the mortgage banking industry has got to recognize that this cannot be the only solution to the foreclosure crisis. some of the bank's appearing today have begun to save homes from foreclosure with second lane modifications and other help for the unemployed. these sound like good first steps. i want to hear more. i want to see brought persist patient brought mortgage loan industry. foreclosure is a losing proposition for everybody

involved. the homeowners lewis, the house, the bank loses a big chunk of its investment, and the community loses a family with a stake in the community. what i am asking the banks to do is to help us find an effective way to stop these foreclosures. i want to thank my witnesses today for appearing. but the forward to your testimony. i will allow you five minutes. let me say this before we move further. we will get five additional minutes from each side. five minutes on the democratic side and five minutes on the republican side. as many ways as you want to split it up, but you have a five minutes.

>> thank you mr. chairman. thanks for holding these hearings. at the outset, i express extreme disappointment that we will not hear from the treasury department today. since the last hearing, it has continued its pattern of secrecy. they have refused to implement the generals recommendations for the program and continues to misrepresent the original goals of the program to disguise its ineffectiveness. the obama administration's tinkering has continued to fail the american people. this week, treasury's kicked more people out of this program than have received sustainable mortgage modifications. many of these americans are worse off for relying on the administration's promises. a look forward to hearing from the mortgage services today and play by erosion the process and

their perspective is necessary and helpful for this program. ignoring the designers of the program and the people responsible for the waste of 7 $5 billion in tax payer money is a failure of oversight. in one personsted that was disinvited from the hearing. i want to focus on mortgage services that coincides with the testimony in this hearing. their testimony would have been liable for this committee here. i and urge you to invite the treasury department to reserve for its affairs. there is a joint response ability to the american people to hold this administration accountable regardless of political affiliations. those we hear from today have worked to comply with 800 rolls issued in of for 15 different set of guidelines. they have been able to offer far

more mortgage modifications privately outside of the program than with senate. ultimately, the best mortgage modification is a job. this congress and administration has stifled private sector job creation through their big government, agenda. these mistakes are being felt by former homeowners across this great country. thank you and i yield back. we did have treasury and g.a.o. you can only do that so much in monday. >> thank you for holding the hearing. i am concerned about the claims by the "washington post" that a growing number of borrowers has failed to move and the initial stages of this program to a

permanent loan modification. with the 100,000 hours lost mortgages in may. about half of those dropped from the federal program received a number -- another type of loan modification from their banks according to government data. complained that those loan modifications are not as generous as what the government program offers and would often comes with hefty up-front fees. i am interested to see how these options will be communicated with the powers and getting started could be one of the toughest processes in the loan modification efforts. over the last 15 months, and i have had foreclosure prevention workshops in my district. the key is we have to have effective and the essential programs. it is one thing to talk about

it. it is another thing to carry it out. hopefully he will testify before if they can help us get a better insight as to how we can keep people in their homes. i told my constituents that they must protect their home. that is the no. 1 investment in most instances. it is a very important investment. we need to be doing more and more to help people retain their home said they can have stability and keep born their family stable in their neighborhoods stable. with that, i yield back. >> the gentleman yields back. >> can you clarify how the time runs? and you saying there is five minutes over there and five minutes over here? >> there is still three minutes

left on this side. >> i wanted passant here. >> kkew it knowledge the requests -- you acknowledge the requests. we have come back. we are a hard-working committee. >> we have had treasury. >> you have not had them since monday. there was a report issued that this program is failing. i have very serious questions. just yesterday, the treasury secretary appeared before the panel where he was asked a question about the program and he said this program was not designed to prevent foreclosures. it was not designed to sustain home ownership at a level that would be unachievable and prudent to try to do. when someone asks him, it should

go to 65% of home ownership level. he said you are discovering those that have described this program. one person said are was very surprised and frustrated by the notion that the secretary seemed to be saying that a program that only helps a tiny handful of families facing foreclosures is a successful program, because in effect, the rest deserve to lose their homes. she said, i think that is shocking. i find it inconsistent with the chairman's opening statement as to what this program is to do. responsible for ensuring the success of the program. it is inconsistent with what the cult -- president told the american people what this program would do. the foreclosure rate in my community is staggering. they continue to mount.

this clearly needs to be addressed that only by treasury giving real answers to its goals and objectives, but also the financial institutions. those financial institutions goddess and this mess. it was by their lending practices that did not make sense and run not sound business decisions. they did not protect capital investments. every member of congress can tell you the realtors say it is virtually impossible to get a loan servicers, banks, financial institutions to work with the home buyer to get a short sale to do things that will avoid foreclosure. the test on the program is to preserve capital for the banks. apparently it is not a program

that the banks are pursuing. when you look at the market, anytime we can avoid a foreclosure, you make more, you preserve your capital, the market's sustained more. and families are sustained. what are to operating in what we believe is a marked standard of capital preservation because we are proceeding toward foreclosure at great where we all know people are approaching the financial institutions with the deals and offers that are being rejected that would have a higher return. >> i now recognize the percentage.

>> i will take one minute if you let me know when that is done. we know the state of ohio received millions of dollars so people could be counseling. servicers have been referring eligible borrowers to foreclosure until they have been evaluated. the treasury had to intervene to put a stop to the practice. bankamerica has 13% permit modifications. jpmorgan chase 20%. we are finding that the server serves -- servicers are not

stepping up in a way that can encourage more people to station. people are not given understandable reasons wider home affordable modification program is denied. it is sketchy as to how people appeal a denial. they have their denials review before they face foreclosure we are glad you are doing what you're doing, but it is not enough. >> two minutes left. >> i officiate the steadfastness for it is better and working.

they allow for no or loose regulation that created the sub- prime mortgage bubble in the first place. not one person in america would have been held in their vote had been a majority vote in the american recovery reinvestment act. i will not yield. they're not succeeding to the post extent. there are some among us that are helpful and not at all. thank you, mr. chairman.

>> my colleague on the left is flat wrong. we want a workable program that will help homeowners not one that is expensive to health -- taxpayers and a failure to homeowners. %hey will tell you it is not working. i have been front and center on this issue. it was the party over there that would do nothing about fannie mae and freddie mac. we are trying to work through this now. rather than this guy blamed bush, let's move forward and do something reasonable for home owners. we are tired of this petty politics. we want to fix this problem not throw some money at it. we want a workable solution, not

empty rhetoric. with that, we are happy to yield back. >> the gentleman's time has expired. there is enough blame to go around. we have put things in a certain context. this committee has been on more than three hours on the performance of hamp. now it is the banks turn. we will hear from them today. this is a part of the solution. it is not the whole solution we need the cooperation of

everybody across the board, even this committee. one minute from this side. i think the american homeowners greeting right now to not care if it is this program or something else but the bank. i think it is shameful that my colleagues want to point a finger when one or the other. the conflict of interest that exists for there is a mortgage in a second mortgage and the servicer as an interest in the second mortgage and will not negotiate a modification with the first mortgage. that is a really serious issue that we need to address today. i yelled back. >> all time has now expired.

we would have that all witnesses be sworn in. do you solemnly swear to tell the truth, the whole truth and nothing but the truth, so help you god? -the record reflect that all witnesses answered in the affirmative. the chief executive officer of city mortgage. this is the president of bank of america home long, the nation's largest home mortgage service. welcome. mr. david freeman is the president and chief executive officer of american home mortgage services, the nation's

largest independent service. welcome. this is the co-president of wells fargo home lending which services one out of every six mortgage loan in the nation. welcome. and the chief executive officer chase home finance. and this is the real estate financial services consultant. we're delighted to have you here as well. there is a light that comes on and is green. after four minutes, it has a

caution and then it turns red. red means stop. i want to remind you how it works. we will start with you and come right down the line. this will allow us an opportunity to raise questions. >> members of the committee, we want to describe our process of the hamp. im sickest city. i am honored to be -- i am ceo of a city mortgage. i am honored to be speaking with you today.

we want to help families stay in their homes. as one recent example, we became the first major lender to announce a moratorium on mortgage foreclosures in the gulf coast region. our goal is to help families that in hard hit by the devastating will spill to remain in their homes. we are focused on a couple of priorities -- working hard to make the program as successful as possible and providing solutions to distressed farmers that have fallen out of this process. our focus has produced significant results. we are consistently ranked among the top performances had more than 900,000 families in their efforts to avoid foreclosure. we know that this process can be

somewhat complicated. we have tried to make it easier for our customers. we have given them the still training. we have added more than 1400 new employees to support our foreclosure prevention efforts. we have an impressive in ever processing systems so they can live view their application status and document on-line. we have learned that borrowers can be reluctant so we work with third parties in local communities and mortgage modification outreach. be a partner is in face-to-face meetings that bars that need help. our goal is to get every distressed our the opportunity to reach us for assistance.

we have designed and implemented procedures to ensure fair dealings for all applicants. despite this, challenges remain. hamp has been revised multiple times since two dozen 9. each change has additional training and systems that are required which impact program deficiencies. factors beyond our control often prohibit customers from moving from a trial modification to a peemanent modification. required documents are not submitted, trial payments are not made, or the power is inevitable for the program. orrower is -- barbo inevitable for the program.

as part of this effort, we offer a number of supplemental modification programs that are designed to address customer needs on a case by case basis. these solutions deal with the homeowners unique circumstances and gives them an outcome that is affordable and long-lasting. we are assisting customers with a variety of solutions such as unemployment and utilizing a variety of strategies to solve ford different payment. we believe the issue of affordability is an important consideration in modification. there is not a one-size-fits- all. for those that face hardship,

there are a number of customizable solutions. they will participate in different programs this summer. it will allow for a dignified transition for the rest of their lives. they support the programs to help consumers. thanks for allowing me to speak before this committee. i will be happy to answer any full -- any questions. >> we continue to work.

but the acquisition of countrywide, this changed dramatically in loan type and volume to nearly 40 million customer loans. we want to address the needs of distressed homeowners. [unintelligible] bank of america has participated in several community outreach events to help customers understand their options. there have been a rough spots

and customers have experienced service that is inconsistent with our standards. we have to learn and improve during these difficult times, netting the -- never losing sight on the impact that foreclosure has on the individual and the community. we have momentum in the program. bank of america became the first servicer to take a step to verify customers with the more affordable combined monthly mortgage payment. this march we announced a reduction program for qualifying customers that owed significantly more than would their homes are worth. we provided immediate relief for those in the most imminent danger of foreclosure. we announce a similar principle

reduction program that will be effective later this year and a working to align our own -- own program with theirs. as it executes an invite programs that can expand the reach, many customers do not and will not qualify for this. within hours servicing portfolio, 1.4 million customers of more than 60 days delinquent on their mortgage payment. of them, treasury estimates that thousands are eligible for a modification through this program. bank of america has more than 1 million solicitations by the end of may. we made trial offers to over 400,000 customers. we have a 70,000 permanent

modifications on hand. as our results demonstrate, this has been successful in making offers to customers. getting customers to except the offer and complete the requirements to obtain a permit modification has been a challenge. in april, bank of america began process changes reported trial time has started. many customers will not be able to afford to stay in their homes. they are considering short sales or programs to support a dignified transition from home ownership to a different form of housing. for customers that have not met the requirement, they receive letters that clearly state the reason for an eligibility can

more than 40% of the clients we have mailed is for missed payments in the trial time frame. bank of america provided dedicated toll free number for customers to appeal the decision, provide updated information, or discuss other options. we will not complete a foreclosure sale until the appeal time has expired. three of tried to help customers sustain on a ship and bank of america is trying to sustain them as well. we are taking seriously our role. thank you, and there will be pleased to take your questions. >> thanks. >> we appreciate your

consideration on the complex issues surrounding the this issue. we have a non prime residential servicer that does not own, a richmond, or have any interest in any other loans that we service. however focus is on keeping those in their homes while taunting our obligation to provide -- while maintaining our obligation to provide cash for other services. we aggressively look for any modification opportunities. although we have made many solicitation efforts of our

portfolio, we are in the process of resuscitating every person potential for hamp eligibility. to assess -- a system in avoiding foreclosure, we have established a dedicated team for loss mitigation opportunity. we have invested in the3 relationships with housing agencies and health alliances, participated extensively in outreach events. we're abll to offer this modification. we offered some other foreclosure alternative solutions for a corporate.

even with relaxed standards, are unable to divide documents or choose not to do so. services have a expect default rates that are less than industry averages should be allowed to rely on less stringent requirements. others are confused about program enhancements. a reduction program has increased strategic falters and enabled our worst that have stopped paying on their -- borrowers that have stopped

paying on their mortgage to seek assistance. this program has significant issues in converting the trial time frame modifications. many failed to make the required payments and are prominently in eligible for hamp. many failed to turn in time sensitive agreements despite our efforts to collect the documents. the complexities of this program reporting system has made it difficult to report many permit modifications. not all qualify for this modification. the property may not be the primary residence, that is one reason why they are not eligible. the person may have failed to an appeal process has been.

given. those that do not qualify are reviewed to determine if other options will prevent foreclosure. maintain a robust complaint tracking solution dedicated to candling all complaints. . we take it seriously. major finding or unfortunate actions. this compliance imposes unnecessary burdens on activities.e deferre in conclusion, we are committed to the goals and standards of

this purpose. we want it to succeed. you want to implement any needed improvement. thanks for your time. >> thanks. >> thanks for allowing us to share the results that wells fargo has achieved on behalf of those in america. our delinquency and foreclosure rates was three-fourths of the industry average. [unintelligible] since january 2009 through may 2010, we have helped to 0.2 million homeowners with a new low rate loans to purchase a home or refinance their existing

mortgage. we have assisted many with trial or completed loan modifications. we have assisted more than 100,000 unemployed customers with short-term loan modifications. we have given more than $3 billion in principal for several customers that amounts to thousands of dollars per loan. we have helped or are helping those affected by the oil spill in the gulf coast. we must balance the needs of homeowners during financial distress as low as with those that are diligent in maintaining their loan payments. we cannot lose sight of the fact that 92% of the mortgage customers are in home payments in the first quarter of 2010.

this is only part of the story. only three of every 10 customers have -- are potential candidates for this program. taking all of these programs into account, about two-thirds of these customers or the 60 days behind in their home payments are provided an option to prevent foreclosure. the industry was not prepared for the significant number of customers that would face a economic hardships as the economy would remain challenging. over the past year, we have tremendous resources and believe we have come a long way with providing our service.

we have hired more than 10,000 people for 17,000 home base preservation jobs. by the end of this month, will complete the process by assigning one person to manage one loan modification from beginning to end. we continue our work with other industry participants setting a five day decision process as compared to 30 days. we have improvements and participated in more than 300 events they are home preservation events. we of home reservation centers in several states. we give homeowner loan customers a short sell decision and we have a dedicated phone line for your staff to use.

wells fargo will continue to lead the industry in methods to assist home owners. we feel very deeply about our responsibility to help home owners. our actions demonstrate our commitment. thanks for your time. >> thanks. thanks for the opportunity to appear before you today. jpmorgan chase share for commitment to helping homeowners and stabilize -- stabilizing our homeowning market. rio to prevent hundreds of thousands of foreclosures through the hamp and other

agency programs. we are completing more than 10,000 permanent modifications per month. on average, home owners are seen their monthly payments reduced by more than $500 and a reduction of more than 28%. we are adopting in implementing the alternative program and secondly modification program to help war barbers. we want forbearance agreements similar to the press recently announced by the administration. from the beginning of 2009 to may 2010, we offered thousands of modifications to struggling homeowners and made 172,000 of

those modifications permanent and did this and other programs. this is one of the tools we use to help borrowers. of these 88,000 are inactive trials and some a converted to permit modifications. these loans have a meaningful reduction in monthly payment and perform very well. s have completed the trial time frame, they perform better than predicted. we conduct extensive outreach and make significant investments in people, technology, and infrastructure. we have developed more creative approaches to each -- -- far worse in ways that work for them. be a 51 chase home ownership centers in many states. we are 88,000 hours face-to-face

with those countless. we have also launched a court of nine cities where they need more help. the last a couple of days and our staff across the weekend s the we can help borrower challenges they face with their mortgages. many are dedicated to helping homeowners. they are alone counselors that deal only with long modifications and those in financial difficulty. there are several challenges. the biggest is that it was helped to help a specific population. as illustrated in a recent report, only one-third 60 days are past due are eligible. other documentation is required

up front where they are no longer relying on state income. we expect the conversion rate to improve substantially. the lawyer to make the required payment should be the primary reason if someone does not convert from a trial to a permanent modification plan. another has been the continuing evolution. there have been a good number of reasons as to why we train our people as the program evolves. it is expanding the opportunities to keep people in their home. we do not want to miss an opportunity to help a borrower station their home. it is important to note that where they are making their improvements, a man that ultimately qualify for a permanent modification through this program. we do look at other modification programs to help them.

similar to our loan origination business, the will of full compliance with the letter and spirit of all lending lost seats to make them free guarded -- regardless of race, gender, or any other wise. we want to share our progress with you. we look forward to working with members of congress, the administration, and our community leaders to help families stabilized themselves in the u.s. economy. >> thanks. >> thanks for the opportunity to testify today. it is useful to recall the original goals of this program. we want to help as many struggling homeowners avoid foreclosure, modifying loans to a level that is affordable for

them now and sustainable for long term. it is to determine their eligibility up front. last february, we testified before the domestic committee and advised that rather than avoid 4 million foreclosures, it would help to under 50,000 homeowners station their homes. it was pretty close to the mark. the success rate is so low due to governments mandates. this legacy for week loans that makes it so difficult to achieve successful modification. a high default rate works to keep them low. 4% will default began.

there are clear and consistent guidelines. there are a few words to describe it. at last count, there were 800 requirements. the treasury also promised that their eligibility would be determined up front as recently observed in "the wall street journal". eager for result, the obama administration wants to start people in trials without obtaining documents proving they were eligible. that has led to many crushed hopes. instead of a quick yes or no, they have been placed in trawl modification limbo. the january pipeline revealed to under 50,000 homeowners to avoid foreclosure under this program. camp activity has slowed in recent -- hamp activity has

slowed in recent months. the number of new permanent modifications last month was 30% below april. as of may 31, 2010, there were 340,000 active modifications assuming the default rate, only 200,000 were likely to be successful over short-term -- over the long term. there were other active trial modifications. perhaps 75,000 will be successful. there may be 100,000 more successes in future modifications. there have been other repercussions. homeowners willing to the fold

-- defaults, even if they can afford to pay off their mortgage. researchers at northwestern university found that the percentage of foreclosures that perceives to be strategic is 31% and it is up dramatically than the 22% from march to a dozen 9 -- 2009 when hamp started. many can walk away from their homes even if they can afford the monthly payment. 2013 or 24 team could be the extension of this difficulty. the greatest shortcoming could be that it derailed efforts in the private sector to modify loans.

charts one demonstrates the private sector had been rapidly wrapping up its modification efforts in 2008 and 2009. those efforts were derailed when the program started. chart to indicates that the private sector is having greater and greater success in reducing the real default rate on loans. they were being done outside of the hamp program. and charged three shows the slowdown of this program as neutral modifications had fallen off precipitously. now it has started dropping. we should ask the treasury department where are the modifications that it was on track to produce? this committee and the people deserve an honest assessment. thanks, and i will be happy to answer questions at the appropriate time. >> i thank all of you for your

testimony. why has there not been more primitive mortgage modifications? why the think there have not been more? we have put an enormous amount of resources to make sure that we open this up to its main trial modifications as possible. it really opened the door to as many people as possible. >> how long should that take? >> it takes us about four months, which is the fastest in the industry.

to answer your question, the reason it is not as high as expected is in many cases, they do not match with what was stated at the time of the modification. those are the two principal reasons. >> under the program, the primary reason that 40% that the s have failed to make a payment, it is reflective of the ongoing stress on them. it is important to look at the number of permanent modifications. when you look at our number, hamp is a small number of the

much larger total of the modifications. it is something that we use for borrowers. >> same question please. >> we serve as a lot of loans that do not qualify under the guidelines. such s, nonconforming loans -- such as nonconforming loans. the vast majority of the real issue is that we are so limited under this 31% that in our particular book, they must occupied the property as their primary place of residence. also, the documentation issued -- up front, initially, we had

done these verification and requested documents of front. them in our's planet, we had a high conversion rate. but a lot of it is on their side or the complexity of the program itself. >> i'd like to add in the >> the vast majority of those or permanent modifications. inside the h.a.m.p. program, the primary factors are the same, lack of documentation. that has since changed. once documents are received, customers go to a cancellation faphase

. some customers do not make the pre-trial payments within the h.a.m.p. program. the vast majority of modifications getting done are happening outside of the h.a.m.p. program. >> missed payments and no documents are the reasons modifications are rejected. those that do give us documents total in one-third. . >> is a lack of communication? >> we have made extensive refinements in our process.

we continue to communicate with borrowers. the process has evolved over time. now we are equipped to adequately committed with borrowers. >> very quickly, is the communication a problem? >> as you analyze the contract rates, it seems that at the late stages of the then 20, and customers have there been no contact rates. >> is there anything we need to do? people are losing their homes. i cannot see that a person using their house is not going to

cooperate with documentation. they are asking for help. that is what i do not quite understand. >> there is a lot going on when a customer is in fear of losing their home. a couple of the documents that were troubles some is that the h.a.m.p. program requires tax returns. that enhances fear. it is a very scary process. people are reluctant and fearful. what else might happen? it is not the communication between the servicer and home owner. this is a matter of working very diligently to make sure for closure does not happen.

>> mr. jordan. >> i believe h.a.m.p. has actually harm families. it has derailed private-sector efforts to help. it is not a failure to help. it also causes harm to the very people they are trying to provide help to. i have 900,004 cities and 846,004 j.p. morgan.

900,000 modifications you have made. >> since 2007, we have helped 900,000 homeowners. recently, we offered h.a.m.p. to 50,000 customers. >> a small percentage. >> 630,000 modifications since 2008. 70,000 or through h.a.m.p.. >> we have about 60,000 currently in trial. . period. >> wells fargo? >> we have 500,000 modification. 20,000 of them are inside

h.a.m.p. 45,000 are in permanent modification. >> 2507000 in h.a.m.p. >> how many are permanent? 10%?s than the people who qualify for h.a.m.p. went through this process. i just described the intimidating process they had to go through. how many of those -- the people who qualify for h.a.m.p., would any of those not qualify for your own modification programs? >> for the people who fell out of camp, we were able to save about 50% more. >> and it is working?

>> it is working. >> the potential does exist. and the treasury enabled it to make more sense for the investor. >> manning? >> many, but i do not know the exact number. >> the question, i believe, was how many would have qualified under proprietary modification programs. about 66% of those would have. >> of those who got into permanent status, which any of those not have gotten into permanent status with your program? >> only those who would be limited by certain investor concerns. it would be a small amount.

>> i think a time stamp on this is important. the issue is right now. to the point about customers who are canceling out of camp, treasury provided some statistics, 70% to 80% result in saving the home or avoiding for closure. >> we have a program that is promising helping people and it has only helped 75,000 people. those who that kick out -- where are also finding out that the majority of them you could have helped. >> about 60% of all h.a.m.p.

modifications are fannie and freddie mac. they do not need to be paid to do what they need to do. gentle gentle man's -- man's time has expired. >> h.a.m.p. is fine, but my constituents want to have some kind of relief. whatever it takes to accomplish that, that is what we are trying to do. in my district, we hold foreclosure prevention conferences. we have done fours of them so far. as i listen to your testimony, i

understand why we are able to save at least 60% of the homes. when you talk about document, what we found in our offense is backed -- is that a lot of times it is an intimidating process. we have two people on our staff. what they do full-time is help people with foreclosures. it is not the easiest of processes. i want to ask a question. you say that one of the reasons it is so difficult -- the reason people stay in the temporary phase is that they are not getting in the documents. what we have found is that a lot

of times the mortgage companies are understaffed. i can tell you that for a fact. it has gotten better. when people call in, they could not get anyone on the phone. if they got someone on the phone, they got the runaround. if they thought someone and was able to avoid the runaround, the paper work got mixed up. i have seen instances where the paper work has been sent to folks and it went to the mortgage company four or five times. and the same companies that are sitting here now have said to my people that they never got it. we have actually sent paper work from our office. so i want to know what you all have done with regard to staffing, that is training staff. it is one thing to have staff.

it is another thing to have staff that is properly trained. it seems like you are saying that in order for people to move from a temporary to a permanent, paperwork is one of the main thing holding them up. i heard you, ms. desoer, say that some people are not making payments. we do not find that to be the case. we find people who want to make the payments. we find people who made payments and the mortgage company said they did not make the payments. my staff would have the copy of the check or the money order in their hand. there is a disconnect here. the question is, outside of you, mr. heid, why don't you tell us what you all are doing with regard to that. ? have you found that to be

something of significance and how did it affect the operation and the result? >> we have made and lot of progress. most importantly, we have implemented our one-to-one approach. everyone on our side knows who they are accountable for. with an over 10,000 people over the course of the last year. >> it is kind of expensive. would you rather see someone stay in their house rather than be foreclosed upon? >> absolutely. >> why is that? lacks a lot of reasons. it is the right thing to do. economically, it is in the customer interest to do all that

we can to keep the custom in the home or find an alternative to foreclosure. foreclosure is absolutely the last resort. >> mr. towns, i sit on the committee for wall street reform. there was an amendment to help people who may have lost their jobs. every single republican voted against it. i heard some of them say that they were concerned about what was being done by congress. fortunately, it passed by the house. my time is up, but i would like to know if you believe such a thing is important. >> mr. turner. >> thank you all for being here.

as you know, we are all struggling and trying to figure this out. in the issue of what is happening in the market, i appreciate that you have been so forthcoming. as i said in my opening, the treasury secretary said yesterday about campus -- h.a.m.p., this program was not designed to prevent foreclosures. he was back and asked about the home ownership rate level. would it be a market-efficient number. someone offered 65% in he tended to agree that that was an adept -- an objective.

that near said he agreed with the assessment -- the treasury secretary said he agreed that the market will stabilize what homeowners become renters. do you agree with that? >> i am not qualified to answer for the treasury secretary's response. when we focus on h.a.m.p. as an industry, we wanted to create a base line across the country. last year, h.a.m.p. has done a great deal to get a uniform base line. there will be fought out. i believe the focus needs to move above and beyond modifications.

there are other programs we should focus on. >> ms. desoer, do you believe other people should be renters? >> h.a.m.p. has set a new standard for the industry. there are a large number of people who would not qualify. i agree that, at some point, if they cannot afford to sustain a mortgage payment at a level commensurate with their income, they need to move on to alternative housing. that is what this and other programs are attempting. we are working hard to make sure there is a dignified transition. >> i disagree with the treasury secretary.

we are not talking about the individuals decision. he finds himself in an untenable debt position and make the choice to leave the home and become a renter. he is saying that for housing prices to stabilize, more homeowners should become renters. that seems contrary to this program. this program was not designed to prevent foreclosures. but that is what president obama says it is supposed to do. mr. friedman, what do you think? >> i believe it is a fact that not all homeowners can afford their mortgage payment. like many of us, when you spend too much money on something, you

have to cut something else out. that could very well be what he meant. i think home ownership is a great thing. if they can pay the mortgage and afford the things that they want. >> in listening to all of the testimonies about how you have been approaching homeowners, there have been stories that we hear from realtors, as people tried to assist homeowners is that the loan servicers are not responsive, even when you have a social worker guiding processes. you are making decisions that do not respond to the market. one thing would be really helpful to have known services

on one side of the room and have realtors on the other side of the room. we are hearing a different story from what you are telling. >> your time has expired. mr. kucinich. >> to the gentlelady at the table. each of you represents lenders. i remind each of you that without the continued support of the american taxpayer, there would be zero residential housing activity. the issue is why are you denying loan modifications? there is a federal program that pays you as an incentive to

modify the mortgages. would you like to respond? >> we are helping all of the people that come to us and that we contact. we have extensive investments in people, systems, infrastructure . the people who do not get a modification to not get it for two reasons. they fail to pay us or they do not qualify for the program. or they did not provide the required documents. >> let me share this with you. at the end of may, my state of

ohio had 136,000 seriously delinquent loans. only 12.5% of those loans were modified. the ratio of h.a.m.p. to ser iously delinquent loans -- in cleveland, ohio, i heard from many homeowners. chasee has been especially slow to process paper work. chase denied borrowers modifications without providing reasons. of the four largest mortgage servicers represented here today, why is the average length of trial modifications for chase

mortgagors nearly seven and a half months? >> at all of us have mentioned, the resources needed for this program has outstripped the people in seats. >> so you do not have enough people to handle them? >> we were one of the first out of the box when the program was announced. we are accepting applications -- >> sorry to interrupt you. the program has been going on for 19 months. it seems to me -- >> we have had thousands of people apply. >> if you know there is a

demand -- i just wonder how hard you are really trying. that is the concern that i have. when i get reports from my constituents that you are denying modifications without supplying the reasons and you leave borrowers in foreclosure limbo, your explanation does not cut it. >> we have increased our staff and invested in our system. we have had a backlog of loans in the trial. we are looking at every loan that is in trial and looking at them loan by loan and not leaving any stone unturned. >> when do i tell my constituents? >> they should call the 1-800

number. >> i should call that number? i should call you? we will chat afterwards. >> absolutely. we have a number, 1-800-335-0123 for anyone who has constituent complaints. >> i is what to make sure that it is not like those bumper stickers, "if you do not like my driving call 1-800." >> we have a memo that says more about wars have been kicked out of -- borrowers have been kicked out of h.a.m.p. that have

received modifications. i am now told that it was estimated that 75% of the payment modifications have defaulted. i have also been also beentarp -- also been told that tarp set aside 7 $5 billion for this program. it seems ridiculous to set aside that much money for now what seemed to be a failed program. i just heard from chairman jor dan that many of your loan

modifications are not under h.a.m.p.. many of them you would have tried to work out under your own private modifications. i have never heard of a program that is doing less and working in a worse way. i am wondering if any of you would dispute what mr. pinto said when he estimated that h.a.m.p. would only meet 6% to 8% of its or original goal.

do any of you dispute that estimate that he has presented here today? would any of you to speed his description of any of your requirements as being numbing in complexity? >> i am not sure i would use the phrase to describe h.a.m.p. we all stood behind h.a.m.p. in creating it with the treasury department. we are focused on scale. it is important for us to understand that we all collectively that behind this program and focused on scale. last year, that was not the case. more importantly, we got to the gse's to come behind the program. our loss litigators have one program they have to deal with.

this problem is moving forward. i believe we now need to focus on the fault -- defaults. h.a.m.p. needs to evolves. it has served its purpose. i want to applaud my colleagues for having tried as hard as they did. it was an important response to homeowners at the time. >> i just had one other thing. - thee h.a.m.p. - significant benefit of h.a.m.p. has been establishing a standard.

we have the ability to work on behalf of investors. that is a significant advantage. >> if it is working the way it should, your company would stand to make a lot of money and become government contractors with this program. that you very much. >> following up on that, if you have the hired debt to ratio, at 45% or 55%, did you have more loans going out today? time isgentleman's expired?

. >> i want to thank the witnesses will come in to help us. i have to ask, in my state, we have seen the number of foreclosures double this past month. it has gone up 120%. unlike when this housing crisis first struck and people were in homes they cannot afford, now the greatest correlation is unemployment with people not being able to stay in their homes. i am wondering if this tool is the right tool to deal with that type of problem. if there is not a stream off

income to support a mortgage, it does not matter how you design it, if there is no income, it is going to end up in foreclosure. i see all the attempts you are making. i also see the 430,000 people who were kicked out of the trial program because they had no income. what i am afraid is happening here is that, under tarp, which i voted against because i did not approve of the bailout, in this program, you are being paid a lot of money to process these attempted modifications, these

trials. after you do all this work that you are being paid for with taxpayer money, i see 430,000 people kicked out of the program. those foreclosures were delayed for a little bit. it allows you to be paid for that attempt. at the end of the day, the taxpayer money was spent because 50% of the second mortgage market is sitting at the table right there. this is a sign of the national second liens. % of the national second liens. the homeowners are not being held in a significant way.

i understand the dynamic that is out there. people are unemployed. in some cases, you can not modify that because there is no income stream. that to me ask you, do you think this program should be continued past october? there have been very few people helped through this program. at the people who are administering this and seeing how many people are being helped and how much money is being spent, do you think this program should be extended come october given the fact that we have streams of foreclosures coming down the pike? mr. das? >> i believe this program should be continued.

there could be a lot of consumer confusion as we saw at the beginning of last year. this program needs to be enhanced. unemployment is a big issue. not being able to have a sustainable income stream to make the payment -- >> i did not have a lot of time. i just wanted to find out if you wanted the program to be continued. mr. towns -- ms. desoer? >> i believe the program should be extended. we need to determine if it can be used to help more bowers -- more borrowers stay in their

homes. >> i think it will actually help see much more positive results. >> for the 8% of the modifications inside the program -- 80%, i would continue it and continue the enhancements. i would not expand it. >> i would ask treasury to provide very clear information, which they promised many months ago about redefault rates. you need to know how this program is doing compared to the way occ has been tracking modifications for 18 months. >> thank you.

i yield five minutes to the from california. >> we need to have treasuries back here well before october to talk about lessons learned and to talk about extensions. wouldn't you agree? >> we have had treasury in here. it is not something we have not done. there are a lot of questions that should be raised. let me give you a classic example. you have people who were put into mortgages who are no longer working for the bank. now they are coming in.

we spend time talking to the services and people who have experience in these things. they got fired because they put people into mortgages because -- mortgages that they should not have gotten into. these are questions we need to ask. >> thank you, mr. chairman. before i come to -- give me your correct pronunciation before i come to you. >> desoer. >> a new level of income to debt has been established. with state income, someone could have 100% in some to debt. many people have much higher

ratios and are relying on to and comes at their highest levels. >> that is correct. >> when we look at failures, an artificially high ability to make a loan, allowing a much higher ratio was part of the situation. if there was any pickup in the income, ultimately there was a problem we were heading toward. now that you have the opportunity to look back in the case of certain districts -- >> the programs are intended when there is a hardship and in gum is disrupted. >> at 31%, is this the right

number going forward? when i was a kid, it was lower. 25% was a stretch in many cases. what would be the right number to have enough cushion for normal ups and downs and still be able to stay in your home. ? >> i believe 31% is appropriate, but not for everyone. we have been recommended treasury considered lowering that. >> i think that is good judgment and something that i do not think is partisan here. let me ask one question to all of you. if we had known in years ago what we know now and the borrowers new 10 years ago what they know now -- knew 10 years

ago what they know now, which they have bought the house they are in now? if they had chosen orrwere able to think again 10 years back and buy a home in a different price range that they might be good homeowners or would you have a hard time keeping them in the home they have? >> based on what we know now, absolutely. >> yes, it is the reason bank of america exited the subprime loan business. >> back to the debt-income ratio, you have to look at the whole totality of the ball or situation. h.a.m.p. only deals with the housing fees. it does not deal with the

debtor's entire situation. >> the key is achieving affordability for homeowners who have the ability to stay in their homes. >> i know you say that we suckered peoppe into the expense of homes. >> yes. the total debt ratio is running 64%. that is before food, clothing, anything. >> my follow-up on this is, knowing what we know now from 10 years ago, in many cases, isn't our real goal to keep people in the house keeping them in a house that is bigger and more expensive even after reductions that it would have been for them to begin with? if the federal government is going to find affordable housing

for people on the edge, in some wise -- income-wise, isn't there a components missing from h.a.m.p.? it keeps people in the house they are in rather than evaluating if there is an affordable non-renter situation that is eclipsed by the fact that they are in the house they are in now. as wethat something that, are bringing treasury up, if there ii going to be an extension that is fundamentally missing? affordable housing starts, not with a house you pick, but with the house that is affordable? >> you make a very important and and very interesting point. i would agree. >> yes.

>> yes. >> the key to h.a.m.p. is to make sure it is affordable now. >> i can settle for an yes for now. i yield back. >> mr. lowman, he said h.a.m.p. has been strong. can you explain how h.a.m.p. augment your other modification programs? >> h.a.m.p. is the top of the waterfall. it is the first program that we offer. if the -- if a person does not

qualify for h.a.m.p., whether it is a loan that was done passed the effective date of h.a.m.p., or it has fallen out of h.a.m.p., we use our proprietary program. >> so one augment or complement the other? >> yes. >> can you elaborate on how h.a.m.p. has strengthened assistance beyond other programs? >> when you think about how h.a.m.p. was first created, at that time, most of the loan modifications required individual improvement -- approval from an investor.

it served as a catalyst to get other programs going. it pushed other investors to move in an investor -- a direction of modifications. that is what i meant that there was a broader affect. >> it actually leveraged other private-sector programs. but for h.a.m.p., they would have been slower, smaller, or nonexistent. >> greater than -- it sped things along. >> what falls in that category of additional modification programs in addition to h.a.m.p.? >> there were definitely loan

modification to attempt to out. the idea of h.a.m.p. was a national, systematic program. national programs are always useful. >> thank you. it was implied that h.a.m.p. was displacing private modification programs. others on the panel said h.a.m.p., with the proprietary loan modification programs of bank of america and others. can you elaborate? >> it goes back to the point of which loans and which customers are eligible for h.a.m.p. as i said, out of 1.4 million customers delinquent 60 days or more, there are 100,000 who qualify for h.a.m.p. for the rest of the customers,

we are doing modifications. the advantages that h.a.m.p. provide -- customers that are not explicitly eligible for h.a.m.p. by its definition. >> it provides a certain framework for you to build upon and expand. >> that is correct. >> mr. chairman, i yield back. >> i yield five minutes to the congresswoman from california, ms. speier. >> thank you, mr. chairman. i am struck by the questioning offered by mr. lynch when he asked if you wanted to see the

program continued. virtually everyone of you said yes. my colleagues on the other side of the aisle want to see the program disappeared. it would be helpful to us if you can provide to the committee why you think the program should continue. mr. lowman, i think congress man mr. kucinich said he had great difficulty with your current -- which your company. i have a number of cases here that are truly disturbing. they are loans by chase. this couple, a retired school teacher, retired husband. chase has lost four sets of applications. this is a story we hear over and documentation is sent and documentation is lost. when a consumer since it in four

times and you cannot find it, that is your problem. it reminds me a little bit of the issue of the mineral mine serve as. basically, if they did not permit the deep verizon rig -- horizon rig within 30 days, it was automatically approved. at some point, the lender had to take responsibility for not having the documentation when it has been sent over and over again. i have people dedicated to doing only foreclosures and modifications in my office. everyone on this panel would say the same thing. i would ask you to create an individual within each of your companies that we can call. i would like you to contemplate

that. if you are going to do it, i would like you to identify who that is and presented to the committee. if you are not going to do it, i would like you to explain why you not going to do it. if we are going to get to the bottom of this. , we have got to have more accountability everywhere. i did not have a question. i just had a series of statements. >> and it should not be a 1-800 number. i yield to the gentlemen from -- gentleman from ohio. >> i will try to be brief so that my colleague can get this question in. it has been suggested that minority homeowners have been

disproportionately affected by this crisis. i think many people agree with that. secondly, they suggest some of them have been targeted by subprime loans. are your company's doing anything -- companies doing anything as you do loan modifications to take those factors in account so that these individuals can experience modifications? >> @ citimortgage we have a program where individuals are dedicated to working with communities. we send people to the sites to help people with the

documentation process. they are very closely aligned with the community. >> anyone else? >> @ bank of america, we take a similar approach. we get 360 community events. those events take place in communities where the need is the greatest. we are intentionally supplementing our outreach via letters and telephone calls. there are community events we produce it in and nonprofits will help fund to sponsor those events. >> i yield back my time. >> also, i would like you to

respond to ms. speier's question in writing. from ohio.an i am sorry my colleagues from the other side have left. i wanted to refresh their memories. we did know about the problems eight years ago because we did a very extensive study about subprime lending in the state of ohio. the democrats pushed hard for legislation that would have cracked down on subprime lending. it was my colleagues across the aisle that held it up. in 2001, predatory lending legislation was introduced. it was done year after year.

the voters have to understand that the reason we are here today talking about loan modifications is not just because of the economy today and the foreclosures due to unemployment, but because of all of the poor underwriting and securitized asian -- securitization of supply -- of subprime lending. we want to address the underlying problems of the lack of regulation. my republican colleagues are again standing in the way and trying to prevent any systemic changes to the system that got us here in the first place. i think it is sad that we are here today talking about all of

these loan modifications. i do not think many of these loans should that happen in the first place. while i appreciate that some of the financial institutions stop writing in the subprime market years ago, some were very active in the subprime market. i have gotten a lot of complaints back home as we look at people trying to seek modifications. although the this -- the discussions have started, the banks continue to proceed with foreclosures. this is sending mixed messages. treasury has sent out some directives on this recently. i am concerned that we are sending mixed messages to homeowners about modifications, but are hearing from the bank that they are being foreclosed upon. i would like to hear from the

panel if we should stop no modifications so that it does not lead to the homeowners backing out because they fear their home is going into foreclosure anyway. mr. das, we will start with you. >> for closure is the last resort. we all for homeowners a whole range modification alternatives. if they fail them, we offer them short sales. >> if i can interrupt you, what i am trying to find out is this. when you began the discussion on a loan modification, do you stop the foreclosure process? or do you allow it to continue until the modification is finalized? >> we stop the process.

>> we have significantly enhanced the unification to try to mitigate the concern of the dollar -- borrower. >> i have a concern. it sounds as if you are reaching out to the consumer and trying to work on a modification. at the same time, the hand is reaching out and you are about to slap it. wouldn't it be better for us to back off on the foreclosure system. foreclosure is the last thing that you want anyway. allow the modification time to work. if it does not work, proceed with the foreclosure process. this dual track is sending mixed

messages. >> we are trying to balance is -- the interests of all those involved. we are trying to preserve the time line. we have significantly enhanced communication. >> our process is the same as the bank of america. >> we stopped the foreclosure process. we make sure to take a second look to make sure every opportunity has been exhausted. >> we have a similar process. one before we commence the foreclosure and one right before

sale to make sure that we do not foreclose on someone in the middle of the process. >> people are generally working and trying to save their homes, but fear that the bank is going to move forward anyway because they are bent on having a foreclosure. we are all saying that for closure is the last thing we want to do, i think we are sending a mixed message when we are>> i am going to ask a questn in the absence of the chairman. perhaps we had our hopes to high, but in administration

keeps trying. here is a question about what would perhaps be the most difficult aspect of the program. we announced the home affordable unemployment program that provides three-six months of forbearance to homeowners while they seek employment. we understand that some companies have provided such forbearance to unemployed borrowers before. i am sure that in the normal course of the downturn, for example, that was not unusual. let me ask all of you, have any of you -- and tell me the extent to which any of you have

participated in the forbearance program. >> we launched an unemployment assistance program in 2009. there was not a denominator to calculate the debt to income ratios. the paperwork might have been a little more nuanced than one would have wanted. we needed proof of unemployment and if it was an owner/occupier , and what it did was it caused the whole foreclosure process and the people missing payments process, and it late -- it enabled people to get things in hand.

>> are you continuing with this forbearance? >> absolutely. we are extending the program. we started up on our own, and i am delighted to see that it has had positive results. >> we are looking at the program, and we have our own proprietary program. >> we had forbearance prior to the program. i know that we are considering a launder situation. the pickup -- along your situation. -- a longer situation.

we have to make payments on behalf of the borrower, so anything blogger than a three month period becomes very expensive -- anything all longer than three months becomes us.y expensive for a spirite >> we will continue to help customers to do not qualify. >> we have always offered forbearance and will participate in the treasury bill. >> could i ask that all of you provide to the chairman the number of homeowners beginning with the beginning of this year to whom you have given forbearance?

i am understand that this, of course, is something you might have routinely done before. it was the appropriate thing to do under the circumstances. of course, circumstances are different because there are high levels of unemployment. i would be interested in your view of how successful forbearance has been in avoiding foreclosure. does it just spread the time out, or, what is your view based on your own experience, whether this delay in foreclosure for an unemployed homeowner, what is your view of its success or its effect? >> i believe that the idea of

delay is not as best as it's made out to be. sometimes, oftentimes, homeowners need a pause so that they can focus on getting employment as opposed to their home. unemployment assist has allowed people to get into alternative programs with very powerful outcomes. >> i believe is very dependent on the situation of the customer and the length of unemployment. >> i recognize that. there is a vastly different universe out there, but i am asking a general question. >> certainly, i would believe the temporary relief from an obligation that a customer had would enable them to more successfully bridged that

economic hardships that they are experiencing, yes. >> i would concur with her assessment as well. >> i agree, and i think the design of the program, where there is some amount of cash flow every month, is actually better for the customers so that there is not a huge shock three or four months down the line. >> i concur also. >> if you're looking for quantitative information, you may want to go to the occ, ocs, where they may have the data you see. >> this is a real perfect storm of unemployment meet mortgage crisis. normally, an employment does not meet that kind of crisis, exacerbating the situation for

people who all along have kept up their mortgage payments. i recognize that you all want to do the right thing and that to some extent you have been doing in. with this relatively new program and its structure, one of you indicated that beyond three months it is difficult. i am not sure any of you do it beyond three months. >> it was i that said that. we're not part of a bank or have departed -- have of deposit base like the other folks around the table. we, because we do a lot of

securitization, we do not own the loan out right. we have to make payments to the investors month in and month out whether the borrower makes payments to us or not. >> is that the case for anyone else? >> the same requirements apply to everybody. >> we are going to leave the last few minutes of this program to go live to canada for the closing news conference of the g-8 summit. prime minister stephen harper is expected to take questions and give a statement. you're watching live coverage now on c-span. >> the g-eight has committed $5 billion over the next five years of new money. we have commitments from all of the partners that raised this to $7.3 billion.

we insisted on the need to be accountable for our actions, and we have discussed many international issues, nuclear proliferation, iran, and the implementation of the resolution 1929 of the un and the attack by north korea, the iranian and north korean governments. the iranian and north korean governments have chosen to threaten their neighbors with arms. we need to ensure that these expenditures are not the only costs associated to this, so we have also discussed afghanistan, pakistan, and stability in that region.

and the situation in the middle east and climate change. we must stick to our commitments because this put into play our credibility. the g-eight needs to be stronger and have common goals, and i am now looking forward to welcoming the g-20 countries. >> we have refocused the g8 in strength, development, peace and global security challenges. the g8 has committed an additional $5 billion over the next five years, and with our partners, as i mentioned yesterday, bringing the total to $7.3 billion on the initiative on maternal and child newborn health. this will be the key as we move forward, and we have put

increased emphasis on that. we also discussed a further range of global challenges, nuclear proliferation, iran, the implementation of the sanctions by united nations resolution 1929, also north korea and the incidence. the governments of iran and north korea have chosen to acquire weapons to threaten their neighbors. the world must see to it that what they spend on these weapons will not be the only costs that they incur. we also have discussed afghanistan, pakistan, government stability in that particular region, of course, the middle east, and climate change. is essential that the g8 keep its promises going forward. this is essential for the credibility and effectiveness of this forum as an organization. the g8 has been reshaped and reenergize. its members share a common

objective in the world, and i now look forward to meeting my colleagues of the g-20 in toronto. >> we have a few moments for some questions. we will begin with cnn. if you could stand up, the microphone will come over to you. >> mr. prime minister, you have mentioned that you have refocused and reenergize the d.a., however, as you go into the g-20, we know that the economic issues that have been handed over to the g-eight, many members of the g-20 would like to see handed over. many people say this could be the last g-8 that we see in north america. >> i seriously doubt that.

last year at this time there was a lot of talk around the table. i think this be clearly for all leaders of the g8. we had a discussion last night about international institutions and international architecture. i think there is a greater understanding. as we get into the g-20 process, there is a greater understanding of the necessity of also having a forum of like-minded advanced countries who can exchange of views in a much less formal setting, and you can sometimes quickly bring resources to bear that others do not have on certain types of complex world problems. the g-20 has done a magnificent job so far in the year and a half that it has been around. it has been tackling the economic crisis. but there are, quite frankly, limits to what you can discuss

and achieve in a group of 20. of course, there are always other participants as well. it leads to much less formal discussion then you are able to have in a group like the g-8. there is also much less commonality of purpose then you have at the g-8. all the leaders, at this point, i think would be pretty strong in their view that the g-8 is an essential organization going forward. but our coordination with the g- 20, the united nations, and other international institutions remains equally vital. >> radio canada. >> mr. harper, you said that it is not very probable that this is the end of the g-8, because you said that for the last year

and have you have managed to prove the importance of the summit. is it the fact that you're not called upon to deal with economic issues anymore? have you given these over to the g-20? >> firstly, the g-8 and discuss whatever it once, because the g-8 can have discussions on all sorts of areas, including the economy, but our shared idea around the table is that it is is essential to have a larger group, a more representative group, to face the challenges posed by the world economy today. there is no longer enough of the

orld economy around the deg-8 table for us to take decisions for the whole world. at the same time, the g-8 brings together countries that have common values, developed countries, and on a much larger scale than the g-20, the g-8 is able to have a more formal discussion and arrive at a consensus for action. for all of those reasons, the g-8 will remain important, but the other international bodies will also remain important for us. >> mr. prime minister, what was

the nature of discussions as far as fiscal consolidations are concerned? i wonder if the g-8 has reached some sort of target you can bring to the g-20, and was for the targets were proposed? >> there was a formal discussion on a number of matters, including economic matters. we have not attempted to arrive at consensus positions, in order not to prejudice discussions of the d-20. as you know, i have written to my colleagues in the g-20 on a couple of occasions to emphasize the importance of fiscal consolidation going forward. we believe fiscal consolidation and reduction of debt levels, and not in and of itself, but partly as a range of tools that

we are going to need to entrench and maintain the global recovery. we are going to have good discussions around that in toronto, but my sense is that there is a strong consensus around the necessity for midterm plans on fiscal consolidation and invest countries. -- in advanced countries. >> yes, mr. harper, on the question of climate change, you spoke about this. i would like to know what the heritage will have been on climate change. infor both of the summit's, fact, we have our declaration

here, but at the end of the day, this is a discussion to prepare. it is an extremely important discussion. more discussions will take place in the un process. i think that the countries gathered here today recognized the need to work together so as to lead to achieve -- so as truly to achieve a legally binding climate change agreement. but in the end, the u.n. process process, and we are determined that this process will be successful. >> the language on bilateral trade deals have you conceded

that the debt is not really going anywhere? and on afghanistan, is very clear that things are quite complex. how much confidence is there really that things are going to get better in afghanistan? >> to give good questions. first of all, on trade, i do not think it is any secret that we have run into difficulty. everybody around the table agrees that in the future at some point we must complete the doja round. we are looking for language that we can apply to the g-20 as to how to achieve that objective. we have raised our level of

ambition, but in the meantime it is no secret that the government of canada and many other governments are committed to aggressively pursuing bilateral trade deals as a way of ticks starting the process while we see the talks remaining stalled. canada and the european union are involved in a very important discussions on a potential free- trade deal between our partners in north america. we will continue to look for ways to move forward. i would not say that doja is dead. at the same time, those of us who favor legalized trade are going to make sure that we work through all possible avenues to advance the objectives. me about afghanistan.

on afghanistan, look, everybody recognizes that the challenges there remain significant. we are under no illusion. just about every country around the table was involved in afghanistan. we realize the challenges remain pretty severe. that said, i think there is a general recognition around the table that we have to continue to put our shoulder to the wheel to ultimately ensure that what we leave behind is a stable afghanistan that will be a positive contributor to the world, to world security, and not a potential source of terrorism or a failed state. we all agree that this remains an overriding, essential objective for all of the countries in the world.

>> now we will go to cbc. >> i wanted to ask you as you go into the g-20, what concerns you have both for canada and for the global recovery if country greece is forced to restructure? >> i think what all leaders recognize, and i think we do not speak here simply for the g-8, but i can speak a little bit to the g-20 conversations i have had, we all realize that the world economic recovery is fragile. we all realize that there are many risks going forward to the recovery. that said, i think what we'll recognize is the following, that what we must avoid at just about

all costs is some kind of cataclysmic event along the lines of lehman brothers. we cannot afford some particular event that would cause a series of cascading events and a downward spiral of confidence in global markets. that, i think that lesson from two thousand eight and that risk today is what overwhelmingly drives all p-20 leaders as we look at the problems we -- all g-20 leaders as we look at the problems we see before us. there has been a lot of talk about debt crises and defaults. there has been taught in various countries about the pressures from the banking system. but every time you have seen those kind of problems, the countries involved, working with their g-8 and g-20 counterparts,

have worked very quickly to know short-term cataclysmic event occurs that would throw us all off track. week to week and day-to-day we remain very engaged. the g-20 is an opportunity for us to take a somewhat longer time horizon. in this case, we're talking about a three-five-year horizon as opposed to a year to year or month to month horizon. >> we have time for one last question. we are going to go to toronto. ct. >> prime minister, when we headed into this summit, there was a lot of talk about the positions of europe and the united states when it came to deficit-reduction and stimulus spending. as you go into tonight's meeting, how confident are you that the leaders will agree to

your proposal for the terms of getting their deficit in half by 2013 and getting debt to gdp levels down, or is the consensus that each country will just go in its own direction? >> i am confident that we will have good discussions. my observation at this particular g-8, i have never 8, where,a g- regardless of the topics, i have never been at a summit where leaders seemed to more deeply feel the necessity of common action and common purpose. why is that? some of its maybe -- some of it

may be the personalities around the table and the generational change that has taken place over the past few years. some of it, i am sure, are the enormous challenges facing us all, the crisis we have had in the global economy that instantly affected every country, and some of the major security and development challenges around the world, some of which i mentioned earlier, iran, north korea, the middle east, some of which really do represent threats to the stability of any economic prosperity of every country. i would say that given the generational change a robust years, given the nature of the events and the challenges that confront us, i have never seen more fundamentally united in purpose and frank in its discussions.

i think that will carry into the g-20. we obviously will have a great deal more diversity in terms of the kinds of societies and economies these leaders are covering. nevertheless, my sense is that the commonality of purpose will moved forward and that people will understand the necessity of arriving at a good and solid way to move forward with the global economy. >> a thank you everyone. >> canadian prime minister stephen harper wrapping up a closing news conference of the g-8 summit, a group of the world's eight top industrial countries. he will be issuing a joint statement the did not go as far as some nations, including the

u.s., wanted. they will be calling on iran to do more to respect human rights. also, according to that associated press, following tensions -- they have called tensions in the gaza unsustainable, and are calling for an exit strategy in afghanistan. as the summit wraps up and we see the g-20 summit now beginning in toronto, a larger group of 20 countries, president obama in canada for several bilateral meetings with leaders, and the group that makes up the do-20 include south korea, indonesia, india and china. the first meeting of the g-20 is scheduled for saturday evening.

there will be discussing the global economic crisis. there will be a closing press conference on sunday evening hosted once again by the canadian prime minister. we will bring that to you live here on c-span. early friday morning, the house senate conference committee on financial regulation and legislation wrapped up its work. on a party-line vote they voted out the bill. in debt, mortgage lenders will have potential borrowers prove that they can pay their mortgage. a consumer protection bureau will be formed. the legislation now goes back to both chambers for final consideration. house chairman barney frank said he hopes to see it signed into law with the president's support by july 4th. this portion of the proceedings is one hour and 55 minutes. [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2010] portentious than the -- here we believe a lot of progress to be made. i'm grateful to all parties. i think some fairly profound differences of a philosophical and economic and ideological nature have been debated.% a great number of amendments have been stopped from both sis. here's what i think we should do for the rest of the day. we have derivatives as we make our title. my view, i believe senator dodd said is before we get to derivatives, we should dispose of the volcker rule. there's an overlap in the concerns of the overlap of financial institutions. we believe and i know you would concur by the agriculture committee chairman on the house side. so we are -- i know the senate has been working on it an offer to the volcker rule. when we get that, we will respond. that means we'll get the derivatives later in the day

after we have the volcker rule in place. i think we all agree that you should know what that is as you consider the derivatives. we have some responses to make to some senate offers, a couple of cases, a couple of titles could be closed out right away. a couple of counteroffers will be accepted. we will making progress there. and i cerinly on the house side a package of miscellaneous amendments. i've spokening to the republican side about it. there are a couple of amendments that the gentleman from california mr. isa has in this regard. and what i'm going to do is -- when we get to it, i'm going to offer the package that we circulated. but any member that wishes to get a separate debate on any one of them simply needs to move to do that. we won't treat that as a partial division of the question. so we will -- we will begin with those miscellaneous amendments -- first, let me -- we will begin with sending the senate and some counteroffers, on one counteroffer, the gentleman from illinois has an

amendment. d a coouple of others which none of which i think are going to be very much the source of debate except i think one on tth the -- the counter offer on the consumer. so -- >> let me -- >> mr. chairman, i know this is rare for someot statement and ask a question. first of all, i want to say to -- to our esteemed chairman this side -- i've watched how few senats over very parochial single issue items ar hijacking the process. and i just want to say to my friend, there are numbers of ways to get 60 votes. and sometimeoncan get very focussed on a path and get in the middle of a battle and

forget that there are numbers of ways to get to 60. and i just want to say that. that is said with good will. there are numbers of us that would like to see a balance of bil it wouldn't take much. it wouldn't take much at all. and that's all in the eyes of the beholder. i realize what a balanced bill is. but i just want to say there's more than one path to get to . and it is fascinating to watch that how a few senators who haven't spent a lot of time on this issue, over one issue potentially hijacked the process. i'll let that lay and say that certainly should the good senator decide he wants to pursue another path, i'm ready to talk to you. and to the chairman on the other side, i -- i read this morning in the papers like we all do this is not a contentious -- but i saw where the bill passed last

week in the house regarding accounting standds or how you would deal with bad loans with smaller institutions. and i understand the desire to help smaller institutions, but it was a pretty scary thought that we might do something that dramatic. and i just wondered -- again, the conference, how are we going to handle the conference? will it be solely those things we deal with like we've been dealing with? or is there a chance? >> would gentleman yield? that item is not in this conference. >> i understand. >> you mean when we get to a conference on that bill? >> no, no, no. i know these rules are very loose the conference. and there's no thought tt we might -- >> you're asking me whether we're going to slip that amendment in when you go to the bathroom in this bill? no. senator, go to the bathroom with complete freedom. because we're not going to try to incorporate that bill into this. >> and i didn't ask that with any dege of contention.

>> i understand. it's a perfectly reasonable qqestion about if i was going to do something sneaky. and the answer is no. >> let me just say too to my colleague and friend, i've managed a lot of bills over the years, there's all sorts of ways to get there. but one of the things you have to know is there's a possibility people are not only going to come to the table but be the. that's the issue the chairman has to weigh. i'm all for proving the bill and listening to ideas. i think i've demonstrated that the last two weeks in the conference. but at some point, people have to let me know whether or not ey're going t actually be there. i can't sort of wait and hope they're going to be there and find out. i've got to produce a result, but i've got to produce the votes. >> i understand that. >> let me say too to my house colleagues. and the chairman frank. just in terms of proceeding. as i gather you're going to send us some stuff and we can -- we

could also do the same. we finished a tle 8 last night and sent it over to you with one ight -- in title one. we had one slight modification, a little bit of debate. senator greg offered an amendment that was modified that we added title eight, which we sent over, which i hope you'll be able to agree to and then title one we sent over, as well. >> we're ready to send back title one and accept what you sent us. >> that's great. then we can close that title. >> on title eight, we have to wait because that's primarily in the jurisdiction of our senate -- house agriculture committee. mr. peterson is working on something on that. i would then move that the house send back to the senate title one receding to the senate on the question of the one amendment that they rejected. all in favor, say aye. opposed, the ayes have it. let me say, thatas an amendment to the collin amendment that our colleague mr. moore had.

we made and i appreciate the bipartisan efft here. we made, i think, significant prgress in amending the amendments. but it's not nearly -- some of the probls some of us saw have been resolved. so with that, mr. chairman, we agree totally to title one. next, i have on title nine subtitle d, which is risk retention. move that we accept the senate counter offer with three modifications. have those been presented to the members? let me ask the staff. well, maybe i can't move that. have the modifications been distributed to the members of the conference on the house side? let me again say i do not want to move anything where there has not been a distribution. on title one, there's no reason for adding anything. have they been distributed?

>> yes. >> these are first on 9-d? >> yeah. >> the amendments deal with, i believe, fiduciary responsibility. there was a senate proposal for a mandate to the s.e.c. to do a study which we acquiesce to with some changes, but the essence of it. with regard to proxy access, we have submitted instead of specific numbers, instructions to the s.e.c. the instruction to take in a minimum amount of sharehoer earning to guarantee you have people with a real interest. and what was the third one? >> what's the third modification?

>> i read the wrong thing. i was talking about investor protection. i apologize. there are three amendments to risk taking. >> mr. chairman, i'm not sure we have them -- >> well, i withdraw that. will the staff please make re that nothing is offered is offered until what's being offered is distributed? and i understand this is a difficult process and i appreciate what people are doing. yes. >> so if we can get a copy, as well, we could probably maybe before you send us something, we'd be able to agree to something -- >> i take it back. your mike isn't on. your mike. >> members have a paper, yes, the gentleman from alabama has it. those are the summaries on the front side, the actual texts are

on the backside. >> do we have this? >> i don't think we have that yet. >> no, we will send it over. let me now move -- >> mr. chairman. >> yes? >> i don't know that we've all gotten them. >> it says house counter, counter offer. itay be in that pile? >> actually, mr. chairman, i'm told that it was distributed yesterday. >> all right. well, we all lose paper. let's redistribute it. >> yeah. >> they can have my copy. these two copies, give these here. i apologize, the staff had apparently --

>> chairman frank, i was going to suggest just talking to our staff over here. on this proposal, i think we're very close, and i was going to recommend that the staffs might spend a little time -- >> all right, well -- >> and that might short circuit a little bit. let me go first -- and i appreciate the staff has distributed them. if it's possible to makenew copies for our republican members on the title 9-d and 14, which we're ready to offer today soon. now i'm going to turn instead then while that's being studied to the package of miscellaneous amendments that was discussed. >> mr. chairman? >> yes. >> can i strike the last word on the provision you're dealing

with before you go to miscellaneous? >> no, because we'll get back to it. why have the debate twice? i want to debate that when we debate it. we didn't get into the substance because we deferred the debate. >> okay. >> so whatever you want to say will be in order when we geto it. we'll do it all at once. we'll have the debate twice. we'll have it once, i promise. on the miscellaneous amendment, it's been distributed with -- now does any member wish to have a separate debate on any of these in the package? at first i ask unanimous consent, and i'm told we have agreement on this to add the minority and technical amendment. is there objection? i hear none. so that's part of this. let me say, after we do these, i'm then going to turn to the gentleman of california who is goingo offer two more in this miscellaneous category.

is there any instance debating any of these technical separately? if not, the question now is on the technical amendments. all in favor say, aye. opposed, no. they are adopted. and the gentleman from california is now recognized -- the gentleman from california is now recognized to ofr. there are two amendments? >> well, we have one endment that's at the desk. we have one that has been -- >> let's do the one that's ready. the clerk willesignate the gentleman's amendment. >> which one? amendmnt to hr-4173. >> i ask the amendment be considered and read and the gentleman is recognized. >> mr. chairman -- kelly, is the other one ready? >> yeah. >> no. >> let's do this. >> this one -- >> my recommendation would be we will have the public debate and r staff can do the real work while we're talking. >> as usual. thank you, mr. chairman. mr. chairman, i -- this is

fairly straightforward. as you know, transparency is a team effort during the period of the study, wesimply wantto have the freedom of information act apply to and assist in the study. we have no other intention. this particular provision would expire when the study is completed, but we believe that for your request by interested parties, will add to the benefit and the amount of eyes that participate. >> and i -- this is an amendment to a provision that's in the base text. it applies to the study that's already been ordered, which to, i believe the gentleman has a constructive amendment and i thank him for. >> thank you, i yield back. >> all of those in favor say aye. >> aye. >> opposed, no. the ayes have it. >> mr. chairman. i have an amendment at the desk. >> to which title? >> title 10. >> okay, yes.

gentleman from texas is recognized. can i get that amendment? somebody gave it to me. >> yes, mr. chairman, style number four. >> clerk will designate the amendment. >> i don't have it. >> the -- >> amendment to the house offer offered by -- >> i ask unanimo consent that it be considered read and i reserve a point of order. gentman is recognized. >> thank you, mr. chairman. i just don't know exactly what the point of order is being reserved for. we have tried to structure amendments dealing with the government-sponsored enterprises. this particular amendment alts language.

what this particular amendment would do would be strike the word may, insert the word shell. clearly it is obvious to us that we are not being allowed to offer amendments that reform the government-sponsore enterprises. we're not being allowed to offer amendnts that could honestly account on budget for the $147 billion in counting that taxpayers have had to expend on the government-sponsored enterprises. we can't offer amendments in this conference, apparently, to limit ultimately the taxpayer bailout. but there is a study. so i would hope that we could at least offer an amendment dealing with the study that is contained within the base bill, particularly, again, given the chairman's ruling, you know, with respect to the gentle lady from california's amendment dealing with the stone ridge

case. so that's what this particular one does. now, again, i have disagreed with the chairman on his ruling. i think that it takes some amount of tortured logic to allow in an amendnt dealing with the stone ridge case. but it's the chairman's rules. i understand that. we have no other alternative but to respect it. but i do think that frankly, aside from the question of procedural unfairness, i think frankly we have a substantive unfairness here that something that is absolutely at the root cause of the financial crisis that we have today. two institutions that represent the largest existent bailout today, institutions that at the height of the crisis owned or guaranteed the lion share of problematic mortgages within the system to be limited to a study,

frankly, i think is unconscionable. i've heard the pushback that, you know, we haven't had time to study this. they've been a conservatorship for almost two years. come september, fannie mae and freddie mac would have been a conservatorship for a full two years. people say it's complicated. well, i assume systemic risk is complicated, yet we're legislating on it. derivatives are complicated, yet we're legislating on it. in fact, this is one of the most complicated regulatory regime bills ever passed by congress, but somehow trying to -- trying to figure out a mortgage market is parently beyond the expertise of members of congress. so my simple amendment is, gain, if ian't offer a legislation that i offered two years ago that would ultimately transition oer a five-year period, fannie and freddie back

into a competitive market that would ultimately put an end to the taxpayer hemorrhage because today status quo, status quo is perpetual conservatorship at taxpayer expense. so instead of having an option to study, we at least compel a study and the study says how do we go about ending what i thought there was unirsal agreement on. and that is you cannot have a company that practices capitalism on the way up, socialism on the way down, privatizes their profits, socializes their losses. i thought i'd heard universal agreement on that proposition. now here's not agreement on what to do with fannie and freddie. the study would put language in that would deal with how do we get rid of the hybrid public/private status. and ultimately instead of having language that talks about

minimizing the cost of the taxpayers,et's have a study to decide how do we ultimately make taxpayers whol is there a way to do that? i don't know. if i'm only limited to a study, we ought to at least study it. but again, it goes the heart of the -- of this legislation. if you have the wrong diagnosis, you end up with the wrong remedy. and we had federal policies that strong arm and incented people who couldn't afford to pay it back. and fannie and freddie are at the center of this. >> the gentleman's time has expired. i recognize myself on the issue and i do not address the point of order. first as to the part about substituting its amendment to the study. the first part putting in hybrid -- ending the hybrid

public/private status, i completely agree. i think this makes perfect sense. the public/private status will be ended and i agree on that. on the second one, i want to raise this issue. i would yield to the gentlemen, it does not mandate there'd be no taxpayer losses, but kes that an option, is that correct? >> i'd say yes to the chairman. >> the problem is this, if it were totally perspective, it'd be different. initiated by secretary paulson in 2008 is still going on. i don't think obviously you can't do that retro actively for obligations were occurred at the time. >> would the chairman yield? >> yes. >> again, it's simply a study that is trying to study a -- it can't mandate. >> the gentleman's being argumentative unnecessarily. i'm asking the questions

because -- let me take back my time to say this. we accepted an amendment from one of the members on the minority side to strike the exclion of fannie e and freddie mac from the list of entities to be resolved. we have since heard a great deal of distress from our major financial institutions who feel that this might put them on the hook for this. i don't believe that was the intent. but i can't be sure it's not the impact. and i know the senate's going to have to be considerate of that. but we have said no taxyer bailout, and we have said we have to assess the large financial institutions. they with some justification think this may have been an implication. i want to make very clear that's not going to further exacerbate this. so i -- even though it's just a study, i want to note the problem is you have some of the major financial institutions saying, well, we know there were losses out there. you hope to minimize them and not having any going forward. but there are some costs

already. if you say there's no tpayer payment for them, does that mean they become part of the assessment of large financial institutions? so i would ask the gentleman that question. when we talk about costs that were already incurred during the period of the conservatorship. and in fact, costs that the conservatorship inherited. well, it does say exercise of authority under the conservatorship. i assume it would not be covered by this. i would ask the gentleman if he's concerned about the fears that have been expressed by the large financial institutions that there may be a cost shifting to the i'd yield to him. >> i thank the gentleman for yielding, i'm not sure what the relevance is to this particular amendment. if we're having a discussion about the previous amendment, this amendment like the previous amendment like my underlying legislation all has the purpose of trying to alter the status quo. >> i'll take back my time. i'm sorry the gentleman doesn't

want to engage in a serious issue. we can continue to have the arguments back and forth about the general point. what the financial institutions have raised a serious concern because of a republican amendment that we adopted. namely that the effect of it might be a cost shifting to them of costs that were currently to be borne by the axpayers. i think that's a legitimate concern. i asked the gentlemen who gaged that -- that's not the question of changing the status quo. i agree, and we have, in fact, initiated after the change of status quo. we've had hearings on it. i am committed to doing that. that does not override the questions whether or not this will override the fears of cost shifting. and i think that's unfortunate because i think it was a legitimate concern raised by major financial institutions. i yield back the balance of my time. >> would the chairman yield for a quick question? >> yes. >> on this point and the previous one you're talking about, wouldn't it be a question of perfecting an enactment date

ratio both for the bank's concern and for this study? >> i don't know the answer. that's, you know, the amendment came up, we hadn't had any previous discussion. i thought -- on its merits, i thought it was reasonable. and having not seen the full implicatio implications, i'm not going to give an off the top of the head answer on a further one. i do think they raised a legitimate concern. we're talking not just about the reality, but the perception of investors and others. and i raise the same concern about this. and i'm sorry my colleague doesn't want to engage it. >> mr. chairman? >> yes. >> well, i think that makes one of our points over on this side of the aisle. >> well, thgentleman wants to make his point, i'll be glad to recognize him on his own time. is there further debate on the amendment? gentleman from california? >> yeah. i think i will make that point. one of the concerns here that you're seaking to at the moment is the fact that in

conservatorship, this was a cap of $200 billion. as the estimates climb to $450 billion and now we see the potential for actually $1 trillion cost, there is a lot of focus on this issue. but that is why the other amendments in addition to this one that we put forward attempted to address changing now the moral hazard problem that we've created here. and i think the reason it's important for us to hear this debate is because 68% of the subprime lending that went on was involved with the gses. with fannie, freddie, and the federal home loan bank. and for those of us on this side of the aisle who have witnessed the collapse of the housing market and the failure in this legislation to address this issue, we see a moral hazard problem that has already taken down, you know, this segment,

the housing segment of this economy and many institutions that relied upon it or were involved with it. but now looking forrd, we're looking at a cost to the taxpayer, which is far in excess of what to date has been admitted. this is why we had amendments suggested to put this on budget so that we could deal with it in the budget. again, that has been rejected to date. this is why i tried to offer an amendment on a cap. and so going forward, i think the gentleman's amendment at least moves us in the right direction in terms of looking at how we change this hybrid status that exists out there where -- where frankly we had institutions which created in the marketplace an abnormal, an abnormal housing bubble because they could borrow it near government rates and they could form these portfolios and take these massive risks and transfer

that risk on to the taxpayers or potentially on to other financial institutions, depending on who ultimately has to pay for this. this is why we should address or allow the amendments that we've discussed earlier to be adopted in our legislation. and i will yield back. >> is there further debate? question is now -- the gentleman from new jersey. gentleman from north carolina. >> thank you, mr. chairman. i'll be brief. and i'll try to do it with less passion than i did it yesterday. but it seems to me that for the last two weeks, my colleagues have been trying to change the focus of the debate from the content of this bill to something that we obviously will have to deal with at some point. that's the gses. i too have been contacted about the concern that had been raised by major financial institutions that to the extent that we want

to make it clear that taxpayers are not going to be on theook for any of these costs and losses that we ought also be making it clear that they won't be on the hook for it because they didn't create fannie or freddie. maybe they contributed to it. but so -- we've been engaged in -- my colleagues have been engaged in my opinion in an effort to message something without understanding the logical consequences or potential consequences of what it is they are talking about. once again, this whole effort to

message something as a poliical matter is counterproductive to the substance of what we're trying tdo. this is kind of like the same issue that we debated yesterday on shore bank. it really -- it's a tangential issue and about messaging something to the public rather than getting serious about the substan of this bill. and i think that's a serious mistake. we could he serious potential consuences here of just acting on something that has not been thoroughly thought through that may have the effect of cost-shifting from taxpayers to other people who really shouldn't have the cost shifted tohem either. >> gentleman yield? >> let me yield to the chairman. >> thank the gentleman for that. the first part of the amendment

that says substitute ending the hybrid private/public. i would accept that easily. >> even that, mr. chairman, i think would be preordaining the outcome of the study that is going to -- >> well, we might differ on that one. but i fully agree with the gentleman on the other. my republican colleagues offered an amendment which we accepted. it has caused wide concern in the financial community. it's not one that has any real impact one way or the other. but they believe that it is leading to a perception that they're going to be on the hook for money and it is disarranging the investment perceptions. i asked the gentleman to address it. his general dislike of fannie and freddie, which we have all commied to, i believe, not i believe to getting rid of fannie and freddie and replacing it. so we have rhetoric about -- they're not trying to do it overnight. so we have a second part of the amendment that will without question add to the fears that

there could be cost shifting. and i understand i want to make political points, but to do that in a way that's going to disarrange the investment climate, i think, is a disinvestment. >> i reclaim my time. and yield to the gentle lady of new york. >> i'd like to state that the earlier senator dodd called the focus on the gses a stall technique. and i agree with my colleagues that they're getting away from the purpose of this bill. and i'd like to note that the losses that cause the financial crisis were not totally related to gses purchases. the vast majority of the loans were privately securitized and purchased by private buyers. and the losses of subprime rtgages and cdos that damaged aig, the investment banks were privately securitized residential mortgage back securities. this is a topic that a chairman has pledged to have his full attention after we complete this bill. and again i feel we should get

back to the bill and stop the stall refocussed efforts by some of my friends and colleagues. >> would theentle lady yield on that point? >> it's my time, and i will yield back. >> is there further debate, gentleman of new jersey? >> very briefly then i'll yield. to the gentleman of north carolina, you're absolutely correct. we aretrying to not change the debate but focus the debate on at the american public is most concerned about. and that is where their $400 billion is going and growing. and that, of course, is the gses, and we are just like much of the american public disheartened this bill is in essce silenced. and making a telling statement when he said that these financial institutions did not cause the demise or the problems with the gses, although you say they may have benefitted from it. andherefore they should not be on e next part on the hook for it. these financial institutions did not cause the demise of other institutions, as well, b the

majority apparently is willing to put them on the hook for all the demise of bad risks that are taken by -- >> will gentleman yield? >> frst to the gentleman of texas then remaining time. >> i thank the gentleman for yielding. first i would make the observation to some of my colleagues that when they run out of logic, when they run out of reason, when they run out of facts, they resort to questioning the motives of their opponents. something i would hope that all of our colleagues would at least attempt to avoid. second of all with respect to the exchange with the chairman, it seems to me he's avoiding the subject at hand. let's remember there's an amendment here dealing with a study, the least we could do is study it. i know the administration has wanted to study it for days, weeks, and months and years. it's the only amendment we can

offer. now, he brings up a previous amendment and says big banks have great angst about previous amendments. something that those on this side of the aisle have opposed. it's the resolution authority that creates the problem. it is the chairman's bill that sets up the whole too big to fail regime. and so if the chairman who is concerned that somehow big banks have concerns that aren't being sufficiently addressed, it's his bill, i'm sure he and senator dodd, they're concerned about it, can work it out. if the chairman is saying is this an unintended consequence? my guess is there's probably three unintended consequences on every single page of this bill. you're going to have a revolution authority that sets up a regime of too big to fail,

why do you leave out the two largest most expensive government created too big to fail institutions in the land, the government-sponsor enterprises of fannie mae and freddie mac. and as the chairmmn cut me off and i thought he was inquiring about why i introduced the amendment and what my purpose was and i was stating what my purpose was on the earlier amendment. but given that we're only given five minutes. >> will the gentleman yield? >> well, it's not my time. >> gentlem from new jersey? >> i'd be happy to recommend that he yield. >> i wasn't asking the gentleman what his purpose was. concerns were raised by the bank. i did not ask e gentleman what his purpose was. i asked him ecifically what his reaction was to those concerns that had been addressed by t banks about the earlier republican amendment. >> yield my time to the gentleman from texas. >> again, i would say that i believe it is of unconscionable

that we would not be dealing with the government enterprises now. and i know earlier the chairman spoke abouthe fact we need to reduce uncertainty in the marketplace. that includes the government-sponsored enterprises. if this study -- i don't know what people have to fear about a study. but obviously this has created great angst. but the chairman of the federal reserve in a question dealing with the government-sponsored enterprises said, "i think if we canegin to map out a future for the gse sooner rather than later, even if we don't execute it immediately, it' remove some certainty from the mortgage market. and it will also help give confidence about the future of the federal budget because it'll give clarity about what obligations implicit or explicit the federal government is taking on." we ought to have a fannie and fddie plan today.

let's compel treasury to conduct a study on the issue. with respect to the other issue. again, if it is a concern of the chairman, we all know that what counts here is signatures on a conference report. if he's concerned about the concerns of the big banks, it's his bill, totally within his per view to fix it. and i thank the gentleman from new jersey for yielding. >> thanks, mr. chairman. mr. chairman, i think finally this debate has crystallized. and i think we really -- the core issue of this conference. and that's who pays for -- for two weeks, in fact this bill is called the wall street reform bill. and it's a resolution or a bailout fund for creditors and

counterparties. it sets up a fund that you can loan a failing company -- a financial company money. a so-called too big to failure because it would result in destabilizing the economy. now, for two or three weeks if not two or three months, what the american public has heard from my democratic colleagues is that wall street ought to pay. now, all of a sudden today, you're doing a 180. an amendmen that says the taxpayer shouldn't have to pay. it's all of a sudden, they're no longer the big wall street banks. all of a sudden they're financial institutions which have concerns.

because they might have to fund a bailout. i thought for two months the message the american people were hearing is we're not going to put this on the bks of the taxpayers. the large financi institutions are wall street is -- you've used that term -- they ought to pay. so that's what this amendment is all about. all of a sudden this concern in the last day for wall street by the democrats is a complete reversal. and i don't see this too much about the government-operated entity. i see this about if we're going to bailut someone. does wall street pay? or does the american people pay?

that's the question. now, these wall street institutions which have been legitimately concerned over how this impacts their business have gotten absolutely no sympathy from my democratic colleagues because you've accused them of all of these bad things and the economic calamity we faced. and you've accused us of defending wall street. what are you doing now? >> would the gentleman -- >> what are you doing now? >> would the gentleman yield? >> you're saying that they shouldn't have to pay. well, let me ask you this -- >> would the gentleman yield? >> who sold fannie mae and freddie mac these securitized -- who sold them these mortgages? was it the american people? was it the taxpayer? i don't think it was.

most of their problem was because they were sold alt-as and subprime loans and that's what we've been hearing from the democrats unless you all of a sudden change that it wasn't fannie and freddie. they didn't do anything wrong. it was all dumped on them. and they bought all this -- these toxic mortgages and it blew up. now, if that's true, should the taxpayers have the pay? i would say no. if you're going to defend the megafinancial institutions who have called you this week and told you don't put this on us, then go ahead and do it. but the american people are going to figure out that with the biggest bailout of all by far -- and mr. garrett has demonstrated several times this week that this is $1 trillion

obligation. if you want to put it on the american people, do it. if you want to assure your friends on wall street that you won't do anything to hurt them, thattyou'llsend this bill to the taxpayers, then do it. i mean, now's the moment of truth. and the ball is in your court. if you're going to design a bailout system, you're not going to put it on the taxpayer. >> gentle woman from west virginia. >> i'd like to yield my time to the gentleman from california. >> i thank the gentle lady for yielding. i would like to correct the record on maybe a misperception. the gentle lady from new york made the observation in terms of the role of the gses and the subprime lending. and one of the realities here, the richmond fed came out with

their studies. by 2002, 68% of the subprime mortgages were the result of the activity of fha and the gses. and i want to go here to a larger point. >> will the gentleman yield briefly on that? >> i will yield. >> that was 2002. >> right. >> what did the study say or did it say anything about the percentage? because my understanding was that the percentage went up subsequent to 2002. >> it wouldn't be odd, reclaiming my time, in the fact that you had government-sponsored enterprises then putting their stamp of approval on the idea these were safe mortgage-backed securities. so you would expect the market to assume, if these are safe for the government-sponsored enterprises, we ought to go -- >> will you yield? >> i will. >> after 2002, the gentle woman's remarks would be accurate? >> no. >> but it was the ult of the

poor government market? >> no, that's not true either. of course,ne of my reason we want adoption for these studies is we suspect it will show exactly what the richmond fed has shown, which is the government intervention into the market with the affordable housing goals, which mandated the gses reach these objectives and reach them through the -- through bing up the subprime and alt-a loans, they will show that that was the dominate factor in the market that drove up the moral hazard. but i want to go to another point. and that is the gses exclusion in the definition of a financial company, which we're talking about right now, and whether or not that should be resolved through this resolution process. that's the resolution before us right now in terms of the expressed concern that the

chairman raised. i think that this points out the greater concern over moral hazard to the entire resolution process. and here's why. we're asking the market to pay for the mistakes made by someone else on a truly herculean scale here. we are detaching risk taking from the consequences of those actions. we are on a major scale with this legislation now socializing losses and privatizing profits. we're doing that through this resolution authority. and this will be the model going forward. now market participants will know that someone else will end up paying for the risks that they are taking. and, of course, that is going to expand the moral hazard that the government intervention into the market with the affordable housing goals helped create in the first place with respect to the collapse of housing. now we're going to expand this throughout the financial market. everybody's going to know that

if you're a creditor and you make that loan to a major financial institution that's too big to fail, the fdic is likely going toive you back 100 cents on the dollar or very near it, you're going to do much, much better than your competitors out there. so you're going to loan at a lower cost, you're gng to loan at one full point of interest less. you're going to balloon up these large financial institution perhaps that's why the investment banks like this bill. except for this amendment that might ask them to share part of the cost. i think this is posing the problem with the underlying premise and why we should instead look at the republican alternative which is enhanced bankruptcy. >> is there further debate? >> . chairman, could i respond to one point he made? >> the gentle woman has not been recognized. she's recognized for five minutes. >> thank you very much, mr. chairman. i did want to respond to my

colleague's statement on the home purccase and refinancing of mortgages. the private market has not recovered from the financial crisis and his numbers were from 2002. i happen to have the numbers from 2006. the private sector issued almost half of all mortgage-backed securities. $91 billion. but after this crisis, the volume fell. and now in the year of 2009, the private sector only took up $31.9 billion and only $2.3 billion in 20. before the crisis, they were playing a significant half if not more. but fannie and freddie have been taking up the slack during this economic downturn. and they are right now the primary source of housing finance. i agree with my friends on both sides of the aisle that we need to discuss new ways of reforming our system of supporting the housing markets and determine whether there are more efficient ways of supporting home

ownership. but i agree as i said earlier with chairman dodd who has called this a stall technique. and i would hope the chairman would call the question so we could get back to the main bill. >> is there further debate? >> mr. chairman, i have a second-degree amendment at the desk. >> let me hold off. yes. the clerk will -- >> the second-degree amendment -- >> has it been distributed? >> now, sir. >> thank you. >> then, how long is it? >> one word. >> the clerk will read it. >> page 1629 line nine, conservatorship and insert public private status. line 13, strike while minimizing the cost to taxpayers and insert providing that taxpayers shall bear no new losses from the

exercise of any authority under their conservatorship. >> let me ask the gentleman. it's in addition to the word new? >> yes, mr. chairman. >> i would say note that the effect of this is simply to extend the debate. i'm sorry, that's the effect of it. the effect of this will be that everybody's already spoken will be allowed to speak again. i'm not going to sit and subject the members to a repeat of the speeches over a one word issue like this. so at some point we may move the previous question, but the gentleman's now recognized. >> i had not spoken -- >> i didn't say the gentleman had spoken, but everybody's spoken on the first one, the effect of this is to give them a chance to do it again. we're not going to have a series of secondary amendments that prolong this debate. >> i appreciate that, mr. chairman. i added the word new out of my concern for both this and the other amendmen thatou spoke

of earlier that although we cannot resolve here today all the concerns of wall street, we very clearly should try to in the study study as many things as we can that are relevant. and if as an outside conferee here, i would like to know to the greatest extent possible, are we able to minimize future losses if, in fact, there are -- >> would the gentleman yield for a question? >> of course. >> when would the new start from? as of what date? enactment of the bill? >> it would be my vision. >> any costs that were incurred after enactment of the bill? >> actually, it's as a result f of -- yes. >> thank you. >> so mr. chairman, i hope this perfecting -- this would perfect the amendment to allow for the expansion of the sty. i am deeply concerned that your new mechanism, whether we agree with it or not not bridge

further activity from what the americaneople already expect right or wrong are the losses that may ultimately be incurred. and so studying that we would not have additional losses as a result of if you will this bill seems to be a reasonable thing to direct. a i certainly would suspect that the chairman and other members of the financial services committee will be tively involved in making sure this study interprets new properly. >> would the gentleman yield? >> of course i would yield. >> i do appreciate the gentleman's second-degree amendment and if we're focusing on the underlying amendment, it's an important amendment because something that's been lost in the debate and i heard the chairman say it before, and i don't want put words in his mouth and he can correct if i have the wrong impression, that the losses to fannie and freddie have resulted from their previous activity. but according to the congressional budget office, and i don't have the number right in front of me, but they are predicting roughly a $6 billion

loss, give or take going forward in the 10-year budget window. so one could argue that maybe the lion share o losses are in the past. but according to the cogressional budget, there are losses in the future. and i think, again, a simple study to figure out are there ways to make the taxpayer whole as opposed to having a $65 billion loss is important. and then if the gentleman would allow me perhaps another 35 to 40 seconds. i want to make it very clear o the earlier discussion of last week's amendments. and i'm speaking just for myself. i've always degreed with any kind of regime that, for example, could force ford to have to bailout chrysler in gm. i've been against that regime. so should the big banks be concerned about this regime? the answer's yes. should they be concerned with the application of fannie and freddie? i believe the answer is yes, but

as i read the underlying law to put it in some kind of bill in context, number one, let's recall the secretary of treasury has for all purposes said the full faith and cret. although he won't use that phrase -- is behind fannie and freddie. it sounds like the taxpayers are stuck being on the hook. i think he just said we stand behind the gses. also to trigger this authority, i think, would take both a vote of systemic risk council and the treasury having to signff before the resolution authority would be triggered in the first place. so is the anxiety or fear well founded perhaps to what degree? i don't know. but again, i'm not here to punish banks, i'm here to protect taxpayers. that's my purpose. and i yield back to the gentleman of california. >> thank the gentleman. and before i yield back, i would just comment that i am concerned that freddie and fannie are being relied on, fha, relied on for more loans today.

i'm pleasedto say that even though i'm not in the hearing over in the house today that wells fargo, for example, is making 80% of their loan modifications outside of hamp and other federal-assisted programs. so the market is recovering. my hope is that the losses will start to abate, still, i think, we should never not want to know everything we can now and in the future. i would urge support and yield back. >> i want to explain the parliamentary situation. the effect of this amendment is to let everybody who has already spoken speak again. i do not think that would be beneficial to the process. but i do want to address the underlying amendment and the -- and the second-degree amendment. there is a distinction between past costs and current ones. yes, many of us believe that the people in the financial community should have to contribute some for some of these costs. i do n think it is reasonable for them to pay the entire past

cost of fannie mae and freddie mac. i don't think anybody else does either. that's simply ing advanced for political purposes. and there is a distinction between that and making some reasonable contribution for the increased adnistrative cost. i was struck by the gentleman, which he stopped in 2002, but he said while there was an increase as i understand it in private market activity subsequent, that was because in part the stamp of approval that'd been given by the gses. and that encouraged more to do that. and i want to subscribe to a theory that the fact that the gses buying subprime loans had very broad, persuasive effects. subsequent to 2002 as i read from a "wall street journal" article from june 22nd, 2010, i believe it's from then, study subprime lending, there's a quote from the gentleman from texas. and it says in this article,

government policies enjoyed bipartisan support, on the left easy lending policies helped fulfill social goals e. while on the right, they boosted the ownership society envision by the bush white house. there's a historical myth that only people on the left were pushing for it. president bush forced fannie and freddie over my objection to buy more loans in that category. and amo those who joined in this chorus was the gentleman from texas. quotes from a hearing in 2005. "with the advent of subprime lending, countless families have now had their first opportunity to buy a home or perhaps be given a second chance. the american dream should never be limited to the well off of those consumers fortunate enough to have access to prime a loans." at that time they were trying to get a republican-dominated financial services committee to accept a piece of legislation

that would've ressricted the loans. my republican colleagues wouldn't even consider it. some wanted to, but they were overruled. and then finally, when we were in the majority in 2007, we passed a bill to stop these bad subprime loans that we had tried to stop years before. many of the republicans on the conference committee criticized us. the "wall street journal" said we were creating a sarbanes-oxley for housing. let's be very clear where they came from. a lot of people participated, including people on the left and people on the right. gentleman from texas among others. as to this amendment, i do not think it is wise if it's simply talked about the hybrid issue, that's one thing. i do not think it's wise to further exacerbate the fears in the community. d i do think it is a different story. >> mr. chairman, mr. chairman, yield. i would ask for unanimo consent to withdraw the amendment then.

>> the amendment is withdrawn. i appreciate that. the question is now on the amendment, all in favor say, aye. >> aye. >> opposed, no. >> the nos have it. the clerk will call the roll. >> mr. chairman? >> no. >> the chairman votes no. mr. kanjorski? >> no. >> mr. waters? >> no. >> mrs. maloney? >> no. >> mr. gutierrez? >> no by proxy. >> mr. watt? >> no. >> mr. meeks? >> no. >> mr. moore? >> no. >> miss kilroy? >> no. >> mr. peters? >> no. >> mr. baucus? >> yes. >> mrs. bigart? >> aye. >> mr. henserling? >> aye. >> mr. garrett votes aye.

>> clerk will report, please >> mr. chairman on that vote there are six ayes and ten nees. >> let me turn to a house response to the senate. >> i now move the house nd to the senate subtitle -- title 9 subtitle d as in david. we accept the senate counter offer with three modifications involving the landru and capro amendments. are there any further discussns?

>> do you have a copy? >> i've since been informed we may have an agreement here. so i withdraw that amendment. i'm sometimes the last to know but at least still in time. so i -- do we now have a further one -- which one? and what's in the -- anything

else?

i now move a counteroften on title 14. we accept the senate counteroffer with the following changes. we want to modify the language regarding the authority of hud, the department of veterans affair, agriculture to define qualified mortgages. we want to modify the aamendment regarding mortgage fraud. we had some concern o our judiciary committee part about criminal activity, i believe i discussed that with senator leahy, there's been a clearing up of the criminal pieces. we have a provisional for treatment of private mortgage insurance and the fees calculation. there's a limitation on forced placed insurance charges on the question of appraisers, that's the gentleman from pennsylvania's provision.

we have some joint rule making authority. and exempting services providing coupon books from the fixed state loans for the piodic statement requirement. i move that offer s there any further discussion? if not -- gentleman from pennsylvania has an amendment. >> i have an amendment at the desk. >> crk will des nate. >> kanjorski amendment to house counteroffer, strike modification number 5 and insert. >> i would ask unanimous consent. is this something agreed to with the senate? >> i understand it has. >> we can take a brief description then and we'll send it over. repeat the description. >> it's right rite here. >> the counteroffer with the amendment modifies the house position on broker ordered appraisals and an issue that has

been a central element of the him. er childers amendment in the house. we have heard that the existing appraisal ordering system which is a result of the home valuation code of conduct effectively prevents consumers using a mortgage broker from ute ligz an appraisal report with more than one lender. the situation is otherwise known as lack of portability of appraisals. prerent vents brokers from shopping among lenders for a mortgage that suits borrowers. as a result borrowers have in many situations had have had to incur additional comforts to pay for additionals appraisals on the same property when they were shopping among lenders for a mortgage. niece costs can be considerable and often are $340 or more for each appraisal. to protect homeowners from these additional kofrts the house offer now contains language that would provide for the

portabili of the appraisals. regulators were issue rules to issue these portability standards. together, these reforms to allow for the portability of appraisals establish rule making authority and approve the language related to the cost of forced place insurance are sensible. i urge the senate to adopt them. >> is there further discuson? if not, those in favor say aye. those opposed no. the amendment is agreed to. i now move the sending of the offer the senate. which shall be accompanied by some ceremonyny. i have none. all those in favor of sending the countercounteroffer say aye. those opposed no. the offer is approved and sent over. a lot of this is done with conversation but i want to reiterate the results of every conversation that people have

had has been formally presented, the subject debate and eight vogted on. we are now, i guess, waving, we have the last part of time 6 the merck 88 amendment to send over. once we wef do that we're going to go on to derivatives. so i'll suggest we go into cree reigh kress until we deal with mercury 88. let me see if that makes sense. i'm suggesting we recess, we'll be ready to proceed your offer on mercury 88 and act on that and then go into derivatives. >> i want to send over for your consideration the s.e.c. funding one. we've also got -- is it 9 j? >> subtitle j of 9 we want to send you as well. >> how many subtitles does the

darn thing ve. >> a lot. >> geez. >> what was the third item? >> all right, well, senator, we'll receive all those, but i think it would be a good idea, again, i apologize i sometimes express expass is ration, the people who work for both committees and the individual member staff verse worked harder and more productively and more constructively than any group of people i've ever seen. so i want to acknowledge that. let's then take a little bit of a break. >> let me echo that point. last night, literally, people were up again all night on these matters and we're going to be prepared to work with you and share with you fairly qckly some language on the so-called voca rule and as well as the derivatives section. i want to publicly thank blanche lincoln and saxby chambliss and others and staffs who have worked very, very hard along with the banking committee staffs. there may be other issues we

have to work our way through, but a tremendous amount of effort has been made it put us in a suspicion where we know we've also received 200 suggestions from the house on the derivatives section, they've worked all night through that as well. a lot of work has been done. we hope again to get through that and the vocal ruled and other matters. i know there's work being don all night as well on the sections dealing with the fiduciary rule. i want to thank senator johnson and his staff, your staff, mr. chairman and others who worked on that as well as on the proxy access. a l of work has been done as well. so i know they're fairly close to making offers on those matters which we would like to consider as well when they're ready to present them to us. >> i reccize the ranking member of the committee on agriculture. >> if i could inquire about the recess. is this subject to the call of the chair? my understanding is we could tentially have a floor vote between 11:30 and noon. >> we certainly will.

let me put it this way. i know the agriculture committee people are interested in derivatives where their jurisdiction is at least equal to us. we will be doing the vocal rule, the senate will doing its verse and sending it to us. so there there will be plenty of notice w we start winding down on the vocal rule on the house side, that will be the signal we're about to take up derivatives so members have plenty of notice on that with that, we'll be in recess. >> i'm going to send over the s.e.c., the formally, that will be done and we'll send over j and 9 as well, we'll do those two. >> do you want to be informed? we'll stay in session. >> you don't have to stay and listen. >> mr. chairman -- just a technical request. our two sides have reached full agreement. >> we'll take it up when we come back. >> could we have permission to not only circulate on this side and the other side of the aisle to become familiar with. >> gentleman has permission to put it on the internet. >> thank you, mr. chairman.

not until its printed. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] six. >> altadis gay couple of minutes. the senate agriculture committee for a longer response but let me take a few minutes to give a general response to a title seven in the counter offer. a lot of work went into this last evening this is not

just all happening the last few minutes over 110 proposals for the conference based text and literally all night by staff state of with others to the evening to go through the 110 proposals we accept 85 of them. 15 of which we modified and their 25 proposals and we do that barely quickly for any further comments. let me go through the high points it will strengthen the margin requirements were a swap execution facilities for cleared and done cleared

swaps. it will tighten the definition of major swap purchase offense vs. what is clear and done a clear. to ensure that the end user will be exempt from exchange trading requirements to mitigate conflicts of interest with other entities and clarify to the bank's that they may be permitted to push up the businesses and to affiliate's to provide a transition period. very importantly the package imposes on parties to violate the clearing requirements mandates and regulators to prevent or e-bay as well. for the tyra this work of

chairman blanket and her staff and others very important contributions are made by reid, a senator mendez, tom harkin, senator feinstein, senator cantwell. now all negotiations of course, are simply some say that one side or the other have a hard time excepting. this process is no different and as i mentioned before there are some things we could not accept. have made the offer on foreign-exchange swaps that presumes these contracts are regulated unless the secretary treasury makes a written determination they should not be regulated as structured to evade the act. we have listed criteria that the secretary of the treasury must consider to make the determination.

many colleagues believe strongly this is a more responsible approach to regulating the market that is so large and complex. second the respect we reject the house proposal regarding cftc and the federal energy regulatory authority preserving language many colleagues believes it provides more clarity about the authority of these two agencies. third day we rejected the number was lower provisions some colleagues believe will weaken the cftc whistle-blower protection program and rejected the house offered for what is known as the lynch amendment imposing strict ownership caps on dealers and other investments and clearing houses and related entities.

requiring regulators to write rules to mitigate conflicts of interest which may include numerical limits on control and ownership of clearinghouses, exchanges and other entities and also add the language requirements that requires the regulators to consider any complex that may arise with a single investor now other proposals which three rejected of maurer are technical in nature. title seven over the last couple of years was possibly the most complex of all of the titles we grappled with. the financial reform bill at many colleagues have spent countless hours grappling in dealing with a very strong point* the financial sector staged services sector. a difficult job and literally spent hours to

increase transparency and accountability. with the derivatives markets these are profoundly important. i went to think you and chairman frank for all of your hard work i want to think chairman petersen for his hard work i know the magnitude of this has not been lost on anyone over the last few months not myself. we have talked about risk your job loss or stability

to cover common ground but more importantly how do we avoid the kind of circumstances that our constituents have suffered from in the financial crisis we have gone through what do we need to do we need to ensure that banks should the banks and risky business should be dealt with differently than it has over the past two years. the senate counter offer has been a very well described by chairman dodd and it is a testimony to the importance of working together and pulling together a good ideas there is a solution that the nation has raised. to negotiate a complicated bill finding a way forward manages to take the best of all sides and make it work

prepared financial system is complicated and integrated and our times zero ltd we cannot afford to dig in our heels but must do something. i would note to my colleagues in this conference that much attention has been focused on section 716 but i would also point* to my colleagues to look at the rest of what has been done in this title. preventing future bailouts. >> it will have banks to get back to the banks for those of us who grew up across america we know what that means and how important it is for those across the nation who want to create jobs that their traditional banks want to offer and will continue as destabilize the economy. lower systemic risk it

lowers risk and makes the entire financial system save two that is why removed in that direction. we bring 100% transparency which is of so critical we have dealt with the dark market and what we know what is behind us because we look into a rear view mirror it gives the opportunity to see what we're dealing with and what we see ahead of us we protect municipalities to have a fiduciary duty to put the interest of municipalities and pension funds as well as retirees and others first insuring that wall street does not take advantage of main street or taxpayers.

but they will be regulated wall street firms were knowingly helping clients to defraud third party or the public for the wall street banks with that deal. it is so important but not for specific spots i believe we found a way to regulate the financial system while protecting the main street businesses that are lifeblood of our economy. we looked at and users to use, use the swaps we're the management of risk to be able to manage the risk of 100% of the commercial rest. that means it is not allowed for speculation about four commercial risk.

. . >> we maintain an important end- user engagement. we provide flexibility to the regulators. the increase anti-fraud, anti- manipulation authorities. we tightened up definitions of major swap authorities. we target who we mean to target. we focus on risky behavior, and not legitimate hedging activity.

>> i am sorry. i have been asked if people in the room would keep more quiet. >> thank you, center. i appreciate that. we do know that risk is something that has to be managed. we know that is an important tool. we want to maintain that. we took a stand against big speculative money. we balanced a critical need to deal with conflicts of interest, and the need to encourage free market. most importantly, we listened to those who would be impacted, and adjusted accordingly, maintaining the strength of the two bills without harming our economy. this is such an important task. i know everyone here takes it seriously. i certainly do. in listening to my constituents who have approached me about the

serious nature of the economy that they had experienced, whether it is losing their children's college fund, whether it is retirement or other things, they want us desperately to get this right. i look forward to the discussions that we have, and finding a solution in a move in our financial regulatory system forward. we are looking to do what's right, and certainly with an open mind. thank you, mr. chairman. >> let me invite our colleagues here senator, do you want to be heard? >> i do not have a comment. i have an amendment. >> center read? >> amendment as well. comments. >> thank you very much

mr. chairman and while i appreciate the comments of both chairman peterson as well as chairman lincoln with respect to section 716, you know we have just passed a very strong volcker rule. the volcker rule that came out of the senate was in and of itself pretty strong rule but here tonight, we have according to the chairman himself, we have strengthened that rule even more. the end result of the volcker rule is the exact same end result that sought to be achieved by section 716 and that is to eliminate the speculative risk-taking associated with proprietary derivatives trading by banks. what section 716 does is it moves outside of tanks the swaps desk. the volcker rule in effect does that by eliminating the ability of banks to trade in a

proprietary way. since the volcker rule specifically does not allow banks to use their capital to engage in proprietary derivatives trading this means the speck of a risk-taking associated with proprietary trading is thereby eliminated. 716 is bad policy. it is good policy to promote safety and soundness. banks need to be able to hedge their own exposure. it is also good policy to promote responsible lending. bank should be allowed to do direct hedging of a customer's business transactions. 716 prevents both of them, eliminates the bank's ability to hedge a customer's business transaction. so mr. chairman, without further discussion i would simply say that 716 is unnecessary because of the volcker rule and it will result in banks not being able to appropriately hedged their

own and their customers risks, and i would urge the adoption of the amendment. it is my amendment number two which i understand has been distributed. >> it has been distributed and i returned to my colleague. >> as always i thank the gentleman from georgia and my ranking member on the ad committees for his thoughtfulness and offering amendments and is always trying to reach common ground, but i have to believe that, as we look at what we have done here, the volcker rule does-- it eliminates that proprietary trading and provides us again more stability, but it does not deal with the market making that also happens and i think our section 716 is all about getting bbnks back to being banks. aig failed in the u.s. government had to pony up $182 billion. for five largest bank accounts