To establish as a standing order of the Senate that a Senator publicly disclose a notice of intent to objecting to any measure or matter.

RESTORING AMERICAN FINANCIAL STABILITY ACT OF 2010--Continued

The PRESIDING OFFICER. The Senator from New Jersey.

UNANIMOUS-CONSENT REQUEST--S. 3305

Mr. MENENDEZ. Mr. President, I rise to discuss legislation I have
offered with some of my colleagues here: The Big Oil Bailout Prevention
Act. It is legislation that would make absolutely certain big oil
polluters pay for oilspills and the consequences of those spills, and
not the American taxpayer, not small business owners, not States or the
Federal Government.
For some time now we have been told by big oil companies that what is
happening in the gulf simply couldn't happen; that it was impossible;
that multiple redundant safety systems were in place to prevent it.
Well, we have learned there is no such thing as too safe not to spill.
Supposedly, the unthinkable has happened, and not only that, but it has
happened before.
Last year in Australia, the Montara oilspill began on August 21. By
some estimates, the spill sent over 80,000 gallons of oil a day into
the waters off the coast of Australia. It was months before they could
staunch the flow of oil, and it resulted in one of the largest
environmental disasters in Australian history. We should have learned
from that experience. But, no; we now have the challenge before the
Nation today. In comparison, the deepwater well that is leaking in the
gulf is sending nearly 210,000 gallons of oil a day into the gulf; over
twice the flow from the Australian spill; several million gallons
already; and just like the Australian spill, it could take months to
drill the relief well. Two disasters in 1 year, yet big oil companies
say over and over again that the technology was simply so safe, a spill
such as this could never happen.
The reality is much different than industry claims. There simply is
no safety system too safe to fail and no rig that is too safe not to
spill. There is no doubt the damages that will be caused by this spill
will be enormous. Unfortunately, Federal law sets a $75 million limit
on how much an oil company has to pay for damages--not the cleanup;
that, they are clearly going to have to pay--but for the damages. So BP
would not have to pay more than a total of $75 million to small
businesses from lost revenues for fishing, tourism, damage to the
environment, the coastline, or the lost tax revenues of State and local
governments.
That is why, along with Senators Nelson and Lautenberg, I have
introduced the Big Oil Bailout Prevention Act to raise the liability
cap for offshore oil well spills from $75 million to $10 billion. That
will make sure that taxpayers, small business owners, States, and local
and Federal governments will not bail out big oil polluters for this
spill or any other.
This spill should serve as a rallying cry for holding big oil
accountable for the damages of this disaster and any future one, but it
should also be a rallying cry to rethink expanding offshore drilling in
places that are not already open to offshore drilling, such as my home
State of New Jersey. Instead of expanding drilling and doubling down on
19th century fuels, we should be investing in a new 21st century green
economy that will create thousands of new jobs, billions in new wealth,
and help protect our oil and water from pollution.
We will revisit that debate soon enough, but for now I think we all
should be able to agree that when an oil company causes damage by
spilling oil into American waters, the oil company bears the
responsibility to pay for the damage it caused. My mom taught me
growing up that when you mess up, you clean up, and you are responsible
for it. Oil companies should get that message as well. This will help
make gulf communities whole and it will provide a stronger safety net
for our communities along places such as the New Jersey shore who are
looking warily at future plans for drilling along the east coast.
With that, Mr. President, I plan to ask unanimous consent on this
issue, but first I wish to yield to my other colleagues who wish to
speak on this issue as well. I yield 5 minutes to Senator Lautenberg
and then 5 minutes to Senator Nelson.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. LAUTENBERG. Thank you, Mr. President. I thank my colleague for
initiation of this bill. It will protect the American taxpayers and say
to big oil: You did it, you pay for it; that is the way it goes.
I was lucky. I had two lifetime experiences that have stayed with me.
One was growing up in a blue-collar family where we worried almost
daily about how we would pay our bills. My father was sick for 13
months before he died at age 43 and we owed everybody--the pharmacist,
the hospitals, the doctors. No insurance. No protection for the average
person. Then I was fortunate enough to be able to be engaged in a
business with two other fellows who had success beyond our wildest
dreams. The company we started with nothing now has 46,000 employees in
26 countries, headquartered in New Jersey, of course.
I learned something in those experiences. I learned that if you
fouled up, you were responsible for cleaning up, as mentioned by
Senator Menendez.
The American people want those responsible for doing dirt to clean up
that mess, just as families do in their own lives. But the oil
executives and

[[Page S3685]]

their lobbyists don't see things that way. They want to continue
gouging the public whom they have by the tank and by the throat. They
want to continue to accrue billion dollar profit gains year after year
and leave the American family, the average American family, stretching
daily to pay their bills.
Look at this. The profits of the big oil companies in the last
quarter alone are so astounding they are almost unimaginable. BP had a
$5.6 billion profit quarter, a gain of $3.2 billion over last year when
America was still in some significant economic problems. Exxon, by way
of example, had a $6.3 billion profit quarter. It goes beyond, again,
the wildest imagination.
We have to draw the line. Our Big Bailout Prevention Act would raise
the damage cap for all oilspills from a measly, a pittance, $75
million. My colleagues heard me. We compared it to a $5.2 billion
quarter--not a year, a quarter--and they want to hide behind a $75
million cap on damages. Well, fortunately, we are here to say to the
average working family: No, we are not going to let them get away with
your money. We are not going to let them get away with walking away
from this, hiding behind that ridiculous cap. It could be called in the
vernacular a spit in the ocean, $75 million. So we can't afford to let
those companies bail out, especially when workers' lives are at stake,
the gulf environment hangs in the balance, and coastal communities are
at risk.
I challenge my colleagues, especially those who on the other side of
the aisle have had a habit of saying no. If you want to say no to the
taxpayers, say it out loud. Say it out loud. But don't try to protect
the oil companies that are stuffing profits so much that they are
gorging themselves on it. They are like pigs at the trough.
The United States has seen too many oil spills, more than any other
country in the world. It is time to end the special favors for big oil,
get on the side of the American people, and make sure that when a
catastrophe occurs, the American taxpayers don't get the bill for the
oil companies' carelessness and recklessness.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Florida.
Mr. NELSON of Florida. Mr. President, if this gusher continues--and
we hope and pray that by some miracle there is going to be some capping
at the seabed of this well that is spewing at least 5,000 barrels of
oil a day--but if this thing continues and it doesn't stop until they
get the relief well, which is another 3 months--one coming from one
side, one coming from the other side, another 3 months--it is going to
cover up the gulf coast. Then, as soon as the winds shift from the
north coming south, it is going to take that big spill about 90 miles
to the south where the loop current is, which is a current that comes
up the west side of the Gulf of Mexico off the Yucatan Peninsula, into
the northern Gulf of Mexico, and because of the rotation of the Earth,
it causes it to come around to the east and then flows south. That loop
current comes right around the Florida Keys and becomes the gulf
stream. It hugs the Florida Keys and the southeast coast of Florida--
and when I say hug it, I mean right off the coast--all the way up to
the middle of the peninsula of Florida at Fort Pierce. There it leaves
the coast a little bit, but follows the coast all the way up to Cape
Hatteras, NC, where it leaves the coast of the United States and goes
across the Atlantic to Scotland. It is the old gulf stream that the
Spanish galleons used to catch going back to Europe from their
discoveries in the New World.
Come back to the wind shifting. The wind shift from the north coming
south brings that spill down to the loop current. Last weekend, I had
testimony by ocean specialists from the University of Miami who said
that once that oil gets in the loop current, it will be at the Florida
Keys in 10 days. Eighty-five percent of the live coral reefs of the
United States are in the Florida Keys. The gulf stream goes right by
those delicate coral reefs. The gulf stream comes up and goes right by
Miami, Key Biscayne, Fort Lauderdale, West Palm Beach, and as far north
as Fort Pierce, which is only about 10 miles offshore. Can my
colleagues imagine what this is going to do in economic damages?
We have been fortunate thus far that the winds have been from the
east to the west--fortunate for Florida, unfortunate for Louisiana--
because that oil is off all of those delicate bays and estuaries where
so much of the Gulf of Mexico marine life is spawned. Sooner or later
the winds are going to shift, and they are going to go from the west to
the east. It is going to take that oil down there off the world's most
beautiful beaches and those bays and estuaries where so much of marine
life is spawned that happens to be off of Florida.

Let me tell you what the President of the Hotel and Restaurant
Association told me 2 days ago. This is the Hotel and Restaurant
Association of Florida. He said he had called a number of the hotels on
the northwest gulf coast of Florida. This is the beginning of their
season. He said normally they would be 85 percent occupied now. Their
occupancy is 18 percent. Can you imagine the economic impact of this
oilspill?
What about the economic impact of the lost sales tax to the State and
local governments, the counties, and the cities that if they do not
have all these tourists coming to the beach, they are not buying
things, and there is less revenue coming into the States.
We start to see the picture of the enormous economic damage, well
over and above the cost of the cleanup. That is why an artificial
figure of--$75 million cap is so artificially low. I am not sure $10
billion is going to be enough as a cap, but it was a target. Let's hope
it never gets to that. Thus far, nothing has worked because those
backoff safety systems did not work.
The PRESIDING OFFICER. The Senator's time has expired.
The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, in view of the fierce urgency of now,
there is harm already being levied upon these communities, commercial
fishermen, tourism, and others, and because $75 million is less than 1
day of BP profits, I ask unanimous consent that the Environment and
Public Works Committee be discharged from further consideration of S.
3305, the Big Oil Bailout Prevention Liability Act of 2010, and that
the Senate proceed to its consideration; that the bill be read three
times, passed, and the motion to reconsider be laid upon the table.
The PRESIDING OFFICER. Is there objection?
The Senator from Alaska.
Ms. MURKOWSKI. Mr. President, reserving the right to object.
The PRESIDING OFFICER. The Senator from Alaska.
Ms. MURKOWSKI. Mr. President, I do reserve the right to object, and I
would like to take a few minutes this afternoon to explain why I will
be objecting to this unanimous consent request.
I sat and listened to my three colleagues. I have great empathy for
the concern they share. I share it as well. I represent a State that
was devastated a little more than 20 years ago when the Exxon Valdez
hit the rocks. We lived with oil on our beaches. We know the economic
impact. We know the social impact that a spill can cause. We want to
all be working together to ensure that whether it is the devastation we
see in the hotels in Florida or whether it is the loss to the
fishermen, that we ensure those who are responsible pay for the
economic loss, for the damages that are incurred. We are with my
colleagues on this issue.
The reason I stand and object at this point in time is I do not
believe that taking the amount of the liability cap from $75 million,
where it is currently, to $10 billion in strict liability, 133 times
the size of the current strict liability limit, is where we need to be
right now.
I am not just the only one who suggests that maybe we need to
understand a little bit better as to how much we might need to look at
raising the limit. The administration, just yesterday in their oilspill
legislative package, has proposed an effort. Their proposal, would
raise the caps on liability for the responsible parties. ``The
administration looks forward to working with Congress to develop levels
for the various caps that provide for substantial and proportional
increases.''
Mr. LAUTENBERG. Will the Senator yield for a question?
Ms. MURKOWSKI. If the Senator will allow me to conclude, I will be
happy to yield.
I do think we need to look at the liability cap and consider raising
it, but

[[Page S3686]]

I think we need to be careful about unintended consequences of picking
a number, $10 billion.
Let me outline what I am talking about when I say ``unintended
consequences.'' This has been named the Big Oil Bailout Prevention
Liability Act. I think we have some irony in that what this would do is
give all of America's offshore oil resources to the biggest of big oil.
It would be impossible, or perhaps close to impossible, for any energy
company that is smaller than the supermajors, smaller than the national
oil companies, to operate in the OCS. Mr. President, $10 billion in
strict liability would preclude their ability to obtain financing, to
obtain the bonds or insurance for any exploration.
Look at who is producing in the offshore. It is the independents.
They produce two-thirds of the natural gas, one-third of the oil. If we
move forward in raising this liability cap to $10 billion, the only
companies that are going to be able to self-insure against this level
of strict liability are the national oil companies, the supermajors.
And we all know who they are. There is the Saudi Aramco. There is
Exxon. There is the Chinese National Oil Company and, of course,
British Petroleum.
It has been mentioned a couple different times now that we need to
ensure that BP, as the responsible party, pays. The comment has been
made that $75 million is not going to be sufficient.
What people need to remember is that the cap on the strict liability
only applies to what the responsible parties have to pay back in the
context of OPA, the Oil Pollution Act. The law expressly--expressly--
allows for unlimited damages in State courts where compensatory and
punitive damages are already being sought. As we speak, there have been
numerous claims filed. Back on April 28, the Louisiana shrimpers filed
a class action lawsuit against BP, Transocean, Halliburton, and Cameron
for their economic losses, alleging negligence and seeking both
economic and punitive damages.
The State of Florida on May 10 announced it had assembled a legal
team to file suit against BP. Then just 2 days after that, on May 12,
the fishermen filed another such lawsuit in Mississippi, recognizing
that, again, they have the ability to go after unlimited damages in
those forums.
Again, I am open to raising the liability cap, but we have both a
directive from the White House and the American people who, I believe,
still support offshore drilling. We need to adjust these liability caps
in a way that does not give the biggest oil companies a monopoly over
the entire OCS.
Mr. President, I object to the unanimous consent request at this
time.
The PRESIDING OFFICER. Objection is heard.
The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, what is the business before the Senate?
The PRESIDING OFFICER. We are now supposed to turn to the Sessions
amendment.
Mr. MENENDEZ. Is that by order?
The PRESIDING OFFICER. It is by order.
Mr. MENENDEZ. Is debate on the Sessions amendment now available?
The PRESIDING OFFICER. There is 5 minutes of debate in order on the
Sessions amendment, followed by a vote.
Who yields time?
The Senator from Alabama.
Mr. SESSIONS. Mr. President, I ask unanimous consent--I think this
has been discussed on both sides--that we have up to 30 minutes equally
divided on this amendment before the vote.
The PRESIDING OFFICER. Is there objection?
Mr. MENENDEZ. Reserving the right to object, and I am not inclined to
object, what is the request? Thirty minutes instead of five minutes?
The PRESIDING OFFICER. Thirty minutes equally divided.
Is there objection? Without objection, it is so ordered.
Mr. MENENDEZ. Mr. President, if the distinguished Senator from
Alabama will yield for a moment, since I chose not to object, would he
allow me to take 2 minutes of our time just to follow the sequence of
the previous discussion so I will not interrupt the essence of his
amendment?
Mr. SESSIONS. I have no objection.
Mr. MENENDEZ. I thank my distinguished colleague. I appreciate what
my colleague from Alaska had to say. Here are a couple of problems with
it. First of all, when we call these companies ``independent
drillers,'' some of these independent drillers who are portrayed as
small mom-and-pop, some of them are like $20 billion companies. So they
are not quite the mom-and-pop view we have of small mom-and-pop
businesses, No. 1.
If you drill, you need to be able to pay for the damages because
otherwise, imagine if this particular spill had been done by a ``small
company.'' Then who would be responsible just because they were too
small? The risk is what has to be calculated.
Also I simply say, I have a problem saying the administration did not
say $10 billion is not the right figure by any stretch of the
imagination. Quite the contrary. They said they are for lifting the
liability cap. When BP makes $5.6 billion in 3 months, when the top
five companies make $25 billion in 3 months, $10 billion is a drop in
the bucket.
Finally, the suggestion that those who are harmed--the fishermen, the
commercial fishermen, the tourism companies, and others--ultimately
will be in a position to make claims in State court, I know my
distinguished colleague from Alaska knows what happened in the Exxon
Valdez case. That took 20 years for claimants to try to get their just
response. Some of them fell off the way because they just could not
keep hanging in there, and they lost everything.
I do not want Americans to have to wait 20 years to get their
response to what an oil company did. Lifting the liability caps takes
care of that circumstance so you do not have to litigate in State
courts and then go all the way to the Supreme Court and get turned down
at the end of the day.
The PRESIDING OFFICER. The Senator's time has expired.
The Senator from Alabama is recognized.

Amendment No. 3832

Mr. SESSIONS. Mr. President, I appreciate the efforts of those who
have worked on this financial responsibility bill. I wish to say,
however, that I do not believe they have reached a successful
conclusion, one that is principled and lawful in describing and
mandating how a company that cannot pay the bills should be dissolved.
Throughout America, hundreds of thousands of businesses every day
that are unable to pay their bills seek protection, as they often call
it, in bankruptcy. All the claims against the company are stayed. A
bankruptcy judge, skilled in these matters, in an open, public hearing,
with witnesses under oath, determines whether the company has a
realistic chance to survive and help structure the bankruptcy
reorganization so it can survive, or it determines that the company is
unable to survive, that it is unlikely they could pay off their
creditors and most likely would only add to the debt, and they close
the company down.
This is and has been the law in America since virtually the founding
of the Republic. It is something that is principled, well settled as to
how it occurs.
This legislation is the exact opposite, in a sense, it
institutionalizes the TARP process. Only now, they will not have to
come to Congress, as they did this last time, over how to dissolve some
big company. They will have too much power, in my view, in a sealed
proceeding--not public, not under oath--too much like the last time
when the Secretary of the Treasury meets in private meetings with
bankers and doles out billions and billions of dollars, puts $100
billion, $80 billion in an insurance company, AIG, all without any
accountability, all without any oversight, all without the kind of
integrity that is the essence of the American legal system.
I am concerned about it. My amendment would make bankruptcy more
usable for large, complex cases that have derivatives in it. It would
allow the cases to be brought in large bankruptcy court areas so that
there is sufficient expertise and personnel to handle it, and it would
deal with the problem of derivatives that some have raised and gives
the courts more flexibility to do that. I think it is the better
approach. It is our historic, fair approach. The American people will
know the same judgment that falls on them and their small businesses
will fall on the big boys.

I appreciate the opportunity to make these brief remarks. I see
Senator Corker and Senator Kyl are here, and I will yield.

[[Page S3687]]

The PRESIDING OFFICER. The Senator from Tennessee.
Mr. CORKER. Mr. President, I thank my colleague from Alabama for the
work he has done in trying to craft a bankruptcy title that more fully
suits financial institutions.
This body is an interesting body because you don't have the chance to
do anything but vote yes or no on particular pieces of legislation.
Just last week, the Republicans--all Republicans--had a filibuster
while they waited for the leaders on each side of the Banking Committee
to reach a compromise, and it was supported, I think, 94 or 96 to 1.
That compromise was on title II, the orderly liquidation title. So here
we have an amendment that basically is to strike something this body,
in essence, adopted 96 to 0.
I spent a lot of time on that title myself working with Mark Warner.
I appreciate greatly the partnership we had working on a resolution
title. I thank Senator Shelby and Senator Dodd for the work they did to
try to improve that title, and we held out on this side until that
occurred. So now we have a vote, the Sessions vote, that would strike
that.
I wish to say, I am at the point in this bill where I am under no
illusion that the bill is going to get any better. I know there are a
lot of messaging amendments that will begin to take place, and many of
us will have the opportunity, through our votes, to express how we may
feel about certain aspects of this bill. When Senator Warner and I were
working on the resolution, it was with the intent that bankruptcy be
the default. That would be the place where almost every financial
institution would go. There may be that rare instance--that rare
instance--when resolution was necessary, but it would be due to some
systemic risk. It was our hope the Judiciary Committee would actually
develop a title that would allow that to happen, but it did not take
place.
As a matter of fact, many of the judicial reviews that Senator Warner
and I wanted to see take place in the resolution title did not occur.
There is no judicial review overpayments by the FDIC or those kind of
things that we would like to see as part of the rule of law in this
country. Well, let me not speak for him--that I would like to see.
What has happened is, we have developed a resolution title that was
to be used only very rarely because we had hoped a bankruptcy title
would be developed that financial companies would go into. That hasn't
happened. So what does that mean? That means it is far more likely--far
more likely--the resolution title would actually be used instead of
bankruptcy.
The fact is, I am under no illusion that Senator Sessions' amendment
is going to pass. As a matter of fact, I doubt seriously the amendment
is going to pass. My intent, in voting for the Sessions amendment, is
not to say I disavow the work Senator Shelby and Senator Dodd did. It
is not to disavow the work Senator Warner and I spent a great deal of
time working on. It is to say I do believe, as part of this bill, we
should have done the work necessary to make sure there was a bankruptcy
title that would work for financial institutions. That has not been
done.
I wish to thank Senator Sessions for giving us the opportunity to
voice the fact that we believe the Bankruptcy Code in this country
should be made so it works far better for financial institutions. I
would like for this to have been melded in a little differently than
the way the Senator is putting it forth, but I wish to thank him for
his work and to signify my intent to support his amendment on the basis
of the fact that the bill, the way it has been crafted, should have
respected judicial review more than it has been; and secondly, the fact
that we should have, as part of this thoughtful process, done something
in this bill to greatly expand the ability of the judicial system to
deal with a large, highly complex financial company.
I yield the floor.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. KYL. Mr. President, I wish to briefly echo the sentiments of both
Senators Sessions and Corker. They have both given a great deal of
thought to the problems here.
These are not political issues that capture the imagination of either
the news media or the American people, but they are very important, and
they are both working to solve a difficult problem in a very reasonable
way that recognizes the importance of the rule of law.
One of the great distinguishing characteristics of the United States
versus some other countries, many other countries in the world, is that
we follow a rule of law. It makes commercial dealings, and therefore
expansion of our economy, so much easier when everyone knows what the
rules are and they can plan based upon those rules.
One of the bodies of law that is most contributory to that is our
Bankruptcy Code. For over a couple centuries, we have had a process and
a set of rules that governs what happens when businesses can't pay
their debts and have to go out of business or be reorganized. Those
rules, in effect, set the rules of the road--the things people can
count on both at the time a business gets into trouble but also far
before that, when people are making decisions on whether to lend to or
invest in a business.
They know, for example, if they are going to be a secured creditor of
a business that, in the event something goes wrong, they will be quite
high on the list of businesses that get paid. If they are an unsecured
creditor, they are going to be lower on that list. They will probably
get more for their lending because they are unsecured, but they will be
lower on the list. So people can calibrate the kind of equity
investment or lending they want to engage in based upon what they know
the rules will be in the event something goes wrong.
If you do away with that and just say that in the event something
goes wrong, a government bureaucracy--and I don't use that word
pejoratively--a group of government employees in an agency are going to
decide that something needs to be done and decide what that is and it
is basically unconstrained by any set of rules and practices such as
the Bankruptcy Code has provided, that is scary to folks. It is going
to mean we will have less lending and capital formation for businesses
because they are going to be uncertain about the rules of the road.
Secondly, it is going to create the potential for unfairness and,
frankly, poor decisions if companies do have to get unwound.
So what we are giving up by not adopting an amendment such as the
Sessions amendment is certainty, predictability, and decades of
understanding of what the law is in the event something such as this
occurs.
What Senator Corker has said is also true; that these financial
institutions may present some very unique circumstances, and some of
them may be so large and so potentially affecting of other institutions
that it may be that the relatively slow pace of bankruptcy--and I don't
mean to suggest it is very slow--may mean that we need something more
quickly to intervene and ensure that whatever happens with this
particular business, it doesn't adversely affect others or that there
may be other reasons to have a more immediate infusion of some
intervention. I will put it that way.
It was for that reason that all of us supported the Dodd-Shelby
compromise. Our view was, as Senator Corker said, it is better than the
underlying bill, although I don't think it satisfied at least the three
of us that it went far enough in creating these rules of
predictability. The Sessions amendment, as has been described, does
that.
I think Senator Corker has it exactly right; we are under no illusion
this will replace the Dodd-Shelby compromise. In that respect, we have
to just hope, in the further process of legislating on this bill, that
compromise can be informed by additional debate and discussion and
maybe improved. By supporting the bankruptcy-related amendment of
Senator Sessions, what we are trying to do is to send the message that
we compliment Senators Dodd and Shelby for what they did, but a little
more dose of the predictability and certainty and judicial process of
bankruptcy would be very welcomed in this process.
Therefore, to the extent that we can have a good vote on this
amendment, perhaps they and others will look to other ways in which
they can continue to modify this language for the very best result we
can achieve. This is a very important issue. It deserves our very best
attention.

[[Page S3688]]

I wished to compliment again both Senator Sessions and Senator
Corker, two of the very thoughtful Members of this body, for the way
they have approached this issue, without any political consideration
but simply to try to make this process better, fairer, more predictable
and, therefore, better for the businesses involved and for the economy
of the United States.
Mr. SESSIONS. Mr. President, how much time remains on this side?
The PRESIDING OFFICER. One minute fifty-five seconds.
Mr. SESSIONS. Mr. President, I wish to share a few things briefly
before we move into the vote. William Kristol today raised a
fundamental question in a blog site regarding the way this bill is
written when he said:

This is a giant power grab for the FDIC and Treasury, who
could use their new powers to tug the strings of our
country's largest financial institutions like a puppeteer.

I would also refer to a letter of April 12, from the Judicial
Conference of the United States. This is a thoughtful letter in
response to an inquiry from Patrick Leahy, the Judiciary Committee
chairman, in which they express grave concerns about the legislation.
Among other things, the Judicial Conference says:

The legislation does not envision objection, participation,
or input from the bankruptcy creditors (whose rights will be
affected) in the course of appointing the FDIC as receiver.
Indeed, the legislation proposes to deal with this petition
in a sealed manner, only the Secretary and the affected
financial firm would be noticed and given the opportunity of
a hearing.

I think that is insufficient.
Finally, I received a letter today from a number of superb and well-
known economists, legal scholars and leaders--Darrell Duffie, Dean
Witter Distinguished Professor at the Graduate School of Business,
Stanford University; Tom Jackson, Distinguished University Professor,
University of Rochester; Kenneth Scott, Parsons Professor Emeritus of
Law and Business, Stanford Law School, George P. Shultz, Distinguished
Fellow, Hoover Institution, David Skeel, Professor of Corporate Law,
University of Pennsylvania and John B. Taylor, Professor of Economics,
Stanford University.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. SESSIONS. I ask unanimous consent for 30 additional seconds.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. Mr. President, these individuals put forth in detail
their concerns about this procedure, and they point out why bankruptcy
is necessary, because the rule of law applies and the process is more
defined in this appropriate way. They tell us, with much care, why my
amendment would be the best way to solve this problem. They say, in
part, the following:

Despite the best intentions by the sponsors of Title II,
our view is that it will increase rather than decrease the
likelihood of financial crises . . . It might be preferable
for the Congress [to] wait until the Financial Crisis Inquiry
Commission completes its report . . . In the meantime,
however, proposed amendment No. 3832, which has been filed by
Ranking Member Sessions of the Senate Judiciary Committee,
takes a bankruptcy route . . . Amending Title II along these
lines would be a big step toward the bankruptcy approach we
favor, and we urge you to move in this direction.

Mr. President, I ask unanimous consent to have printed in the Record
the three items I have just quoted from.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Weekly Standard, May 13, 2010]

Bailout Nation v. Rule of Law

(By William Kristol)

Financial regulatory ``reform'' has been wending its
desultory way through Congress for quite a while, and one can
lose track of where things stand and what's important.
But there's a vote scheduled for the Senate floor today
that matters. It will be on an amendment--offered by Sen.
Sessions--that would strike the entire Orderly Liquidation
Authority (OLA) from the Dodd bill. It would instead make
needed adjustments to a few provisions of the U.S. Bankruptcy
Code to make it more flexible to deal with the failure of
large financial firms (such as Lehman). The bankruptcy code
amendment is clearly a superior alternative to OLA, which
scraps the Code, the primary vehicle to reorganize companies
for over a century, and replaces it with a wholly untested
process to seize firms that are merely in danger of default.
It replaces the Code's strict adherence to the rule of law
with a system governed by the FDIC, which is given incredibly
broad discretion to treat creditors as it wishes. This is a
giant power grab for the FDIC and Treasury, who could use
their new powers to tug the strings of our country's largest
financial institutions like a puppeteer.
It's increasingly clear in the age of Obama that two very
different visions of the relation of the private sector to
the state are competing to shape the future of this country.
With respect to financial reform, this amendment, more
perhaps than any other, clarifies and signifies what's at
stake in this debate. Whether or not the amendment passes, if
Republicans unite behind it, they will show voters the choice
in 2010 and 2012--not the status quo vs. reform, but
``reform'' that would further increase the arbitrary power
and scope of government vs. real reform that would safeguard
the financial system in accord with limited government and
the rule of law.
____

Judicial Conference

of the United States,

Washington, DC., April 12, 2010.
Hon. Patrick J. Leahy,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: I am writing in response to your letter
of March 25, 2010, seeking the views of the Judiciary with
regard to provisions relating to bankruptcy that are
contained in the financial regulation bill recently approved
by the Senate Committee on Banking, Housing, and Urban
Affairs. We appreciate your soliciting the views of the
courts on this matter. You identified several of the issues
that are of concern to the courts, and I will address each of
those.
As you noted, Title II would create an ``Orderly
Liquidation Authority Panel'' within the Bankruptcy Court for
the District of Delaware for the limited purpose of ruling on
petitions from the Secretary of the Treasury for
authorization to appoint the Federal Deposit Insurance
Corporation (FDIC) as the receiver for a failing financial
firm. This is a substantial change to bankruptcy law because
it would create a new structure within the bankruptcy courts
and remove a class of cases from the jurisdiction of the
Bankruptcy Code. The legislation, by assigning to the FDIC
the responsibility for resolving the affairs of an insolvent
firm, appears to provide a substitute for a bankruptcy
proceeding. The Judicial Conference has not adopted a
position with regard to the removal from bankruptcy court
jurisdiction of the class of financial firms identified in
this legislation.
We note, however, that the legislation will result in the
transition of at least some bankruptcy cases to FDIC
receivership in situations where a firm is already in
bankruptcy, either voluntarily or involuntarily. Section
203(c)(4)(A) provides that a pending bankruptcy case would be
evidence of a firm's financial status for purposes of
triggering the Treasury Secretary's authority to seek to
appoint the FDIC as receiver. The bill does not specify how
the transition from a bankruptcy proceeding to an
administrative proceeding would be effected. Further, the
bill does not specify the effect of the transfer on prior
rulings of the court. For example, would any stays or other
rulings continue in effect or be dissolved upon the transfer
to the FDIC? This could be especially problematic if
creditors have changed position based upon rulings in the
course of the bankruptcy proceeding. The legislation does not
envision objection, participation, or input from the
bankruptcy creditors (whose rights will be affected) in the
course of appointing the FDIC as receiver. Indeed, the
legislation proposes to deal with this petition in a sealed
manner; only the Secretary and the affected financial firm
would be noticed and given the opportunity of a hearing. The
financial position of affected creditors may have been
changed within the context of the firm's bankruptcy case in
such a way that the creditors' rights might have changed
dramatically. Any resulting due process challenges would
impose a significant burden on the courts to resolve novel
issues, for which the bill provides no guidance.
In addition, we note that petitions under this title
involving financial firms would be filed in a single judicial
district. The Judicial Conference favors distribution of
cases to ensure that court facilities are reasonably
accessible to litigants and other participants in the
judicial process. Although we are aware that a large number
of companies are incorporated in Delaware, it is not clear
that Delaware would necessarily be a convenient location for
many of the affected companies, nor indeed the proper venue
for that petition, absent changes to title 28, United States
Code.
We also note that the legislation requires the designation
of more bankruptcy judges for the panel than are permanently
authorized for Delaware under existing law. The District of
Delaware is authorized one permanent bankruptcy judge and
five temporary judgeships. If Congress were to choose not to
extend these judgeships or convert them to permanent status,
it would be impossible to implement section 202's requirement
to appoint three judges to the Orderly Liquidation Authority
Panel from the District of Delaware.
With respect to the limited review to be conducted by the
panel created in section 202, we note that the authority may
exceed what is constitutionally permitted to a non-Article
III entity. A previous statute was held unconstitutional
because it conferred on the bankruptcy courts the authority
to decide matters that are reserved for Article

[[Page S3689]]

III courts. Northern Pipeline Const. Co. v. Marathon Pipe
Line Co., 458 U.S. 50 (1982). The review of the Secretary's
decision in this instance appears to resemble more closely
appeals of agency decisions under the Administrative
Procedure Act than a bankruptcy petition and, therefore,
appears more appropriate for an Article III court. Moreover,
the affirmation of the Secretary's petition to designate the
Federal Deposit Insurance Corporation as a receiver
effectively removes a case from the application of bankruptcy
law. Accordingly, it seems anomalous to subject this petition
to review by a bankruptcy court.
Your letter particularly questioned whether the time limit
of 24 hours for a decision by the panel would be sufficient
or realistic. The Judicial Conference has consistently
opposed the imposition of time limits for judicial decisions
beyond those already set forth in the Speedy Trial Act or
section 1657 of title 28. We appreciate that a matter
affecting the operation of the national economy warrants a
prompt resolution. We note that the courts, recognizing this
concern, have already demonstrated an ability to move swiftly
in resolving bankruptcy petitions involving large
corporations with broad impact on the national economy. In
each of these instances, the initial determinations were
made by a single judge. The resulting appeals in some
cases were also adjudicated on an expedited basis without
a statutory requirement to do so.
Requiring a panel of three judges to assemble, conduct a
hearing, and craft a written opinion within 24 hours presents
practical difficulties that may be insurmountable. Although
Sec. 202(b)(l)(A)(iii) could be read to limit the court's
review to the question of whether the covered financial
company is in default or danger of default, the Secretary is
required to submit to the panel ``all relevant findings and
the recommendation made pursuant to section 203(a),'' which
specifies consideration of multiple factors (repeated in
subsection (b) of that section as the basis for the
Secretary's petition). Even with the full cooperation of the
financial firm affected by the proceeding, which is not a
predicate for the consideration of a petition, it would
appear difficult to hear and consider the evidence and
prepare a well-reasoned opinion addressing each reason
supporting the decision of the panel within 24 hours. Even
assuming that factors other than the solvency of the firm
would be excluded from this special panel's review, it may
well be that the subject financial firm or one of its
creditors would seek judicial review of one of the prior
administrative evaluations of the statutory factors, either
in the course of the hearing conducted by the Orderly
Liquidation Authority Panel or in another court. Such
challenges would also make it difficult to meet the proposed
timeline. It is possible that the facts of a particular case
may be so clear that a decision could be rendered within 24
hours, but the statutory requirement of such speed seems
inconsistent with the thoughtful deliberation that would be
appropriate for a decision of such great significance.
Although it is to be hoped that only a small number of
large financial firms would ever become subject to this
legislation, each of the petitions would involve large
volumes of evidence regarding complex financial arrangements.
Thus, the legislation could result in a large proportion of
the judicial resources of a single bankruptcy court being
devoted exclusively to review of the Secretary's petitions.
Further, the bill provides that the Secretary may re-file a
petition to correct deficiencies in response to an initial
decision, thus extending the time in which the court's
resources would be diverted from other judicial business. The
District of Delaware is one of the busiest bankruptcy courts
in the nation; to draw the court's limited judicial resources
away from the fair and timely adjudication of those
bankruptcy cases to process petitions under this bill would
be inequitable and unjust to the debtors and creditors in
those pending cases. If, as seems possible given recent
economic developments, the failure of one firm weakens other
firms in the financial services sector, the demand could
exceed the court's resources. This consideration alone
counsels against the assignment of all such cases to a single
court.
Finally, we note that both the Administrative Office of the
United States Courts (AO) and the Government Accountability
Office (GAO) are directed to conduct studies which will
evaluate:
(i) the effectiveness of Chapter 7 or Chapter 11 of the
Bankruptcy Code in facilitating the orderly liquidation or
reorganization of financial companies;
(ii) ways to maximize the efficiency and effectiveness of
the Panel; and
(iii) ways to make the orderly liquidation process under
the Bankruptcy Code for financial companies more effective.
With respect to those firms that are to be treated under
Chapters 7 and 11 of the Bankruptcy Code, the vagueness of,
and/or lack of criteria for determining ``effectiveness''
will hamper the ability of the AO and GAO to produce
meaningful reports. Some would regard rapid payment of even
small portions of claims as an effective resolution, while
others would prefer a delayed payment of a greater share of a
claim. There would also be significant disagreements between
creditors holding different types of secured or unsecured
claims as to the most effective resolution of an insolvent
firm. Some would argue that effectiveness should be measured
by the impact of the resolution on the larger economy,
regardless of the impact on the creditors of the particular
firm. Without clearer guidance for the studies, both agencies
will be required repeatedly to expend resources on the
development of reports that may not provide the information
Congress is seeking.
Thank you for seeking the views of the Judiciary regarding
this legislation and for your consideration of them. If we
may be of assistance to you in this or any other matter,
please do not hesitate to contact our Office of Legislative
Affairs.
Sincerely,
James C. Duff,
Secretary.
____

Hoover Institution,

Stanford University,

Stanford, CA, May 13, 2010.
Hon. Harry Reid,
Majority Leader, U.S. Senate,
Washington, DC.
Hon. Mitch McConnell,
Minority Leader, U.S. Senate,
Washington, DC.
Hon. Christopher Dodd,
Chairman, Senate Committee Banking, Housing, and Urban
Affairs, U.S. Senate, Washington, DC.
Hon. Richard Shelby,
Ranking Member, Committee on Banking, Housing and Urban
Affairs, U.S. Senate, Washington, DC.
Dear Leader Reid, Minority Leader McConnell, Chairman Dodd,
Ranking Member Shelby: We are writing to you regarding Title
II ``Orderly Liquidation Authority'' of the ``Restoring
American Financial Stability Act of 2010.'' Despite the best
of intentions by the sponsors of Title II, our view is that
it will increase rather than decrease the likelihood of
financial crises. Our view is based on experiences during the
financial crisis, especially the events surrounding the
disruptive failures of such firms as Bear Stearns, Lehman,
and AIG. In order to avoid such harmful disruptions in the
future, any failure of a large and complex financial firm
must be made more orderly and predictable so that market
participants can anticipate the process and adjust their
positions more smoothly and gradually without chaotic
spillover effects to the financial system and the economy.
However, in our view the new discretionary powers given to
government officials and agencies under Title II will not
result in a more orderly and predictable process. Indeed, it
is likely to have the opposite effect. The legislation would
give authority to officials at the Federal Deposit Insurance
Corporation (FDIC) to take over and dismantle any large
complex financial services business which appears to be
failing. We doubt the ability of the FDIC to dismantle such
complex financial institutions in a smooth and orderly way.
There would be great uncertainty about who will lose and who
will gain. The decisions will be made by government officials
without knowledge of the circumstances underlying different
claims, rather than by the rule of law. The unpredictability
of the discretionary process would increase the likelihood of
runs: whenever there is rumor of a government official or
agency thinking of a takeover, creditors will take their
money and run. There are also technical problems with Title
II which would cause financial instability. For example, the
nature of the delay in applying the exemption from the
automatic stay for qualified financial products will lead to
more runs.
Fortunately a more orderly and predictable approach is
available. All that is required is an adjustment to the
bankruptcy law to make it apply to nonbank financial firms in
a clear way which the firms, their counterparties, and their
creditors can understand and count on. With these changes,
bankruptcy would be the mechanism to deal with financial
institutions, and thus provisions for a government agency
resolution process to override bankruptcy could be
eliminated. If these changes had been in effect at the time
of the Lehman bankruptcy, it would have been far smoother and
less disruptive than what happened in September 2008.
The main advantage of bankruptcy is that the rule of law
applies and the process is thus much more defined. The mere
existence of an orderly Chapter 11 process will greatly
reduce the likelihood of bailouts. There are alternative ways
to change the bankruptcy law to make it apply to nonbank
financial firms. Some of us and others have proposed such
changes and work is continuing. For example, one change could
involve creating a team of experts knowledgeable about the
bankruptcy law and about financial markets and institutions,
which would be ready to go in a financial emergency. Another
change is to allow regulators to initiate a petition as
prescribed by the law. The government could also file a
reorganization plan with the bankruptcy court. The new law
could also give a right of relief from the automatic stay
upon petition by a counterparty seeking to sell collateral in
the possession of the debtor to the extent the collateral
consists of highly-marketable securities or other cash-like
collateral.
To be sure the issues are complex and amending legislation
on the Senate floor rather than in committee or conference is
difficult. It might be preferable for the Congress to wait
until the Financial Crisis Inquiry Commission completes its
report, which will provide additional information and a
better understanding of the issues which bear on this
legislation. In the meantime, however, proposed amendment No.

[[Page S3690]]

3832, which has been filed by Ranking Member Sessions of the
Senate Judiciary Committee, takes a bankruptcy route. The
amendment is called ``The Bankruptcy Integrity and
Accountability Act'' and would replace the currently proposed
Title II. Amending Title II along these lines would be a big
step toward the bankruptcy approach we favor, and we urge you
to move in this direction. We would be happy to provide more
details about these issues to you or your staffs.
In sum we urge you to replace Title II, reinstate the rule
of law, reduce the likelihood of future financial crises, and
prevent bailouts by instituting an orderly and predictable
bankruptcy regime for large nonbank financial firms.
Sincerely,
Darrell Duffie,
Dean Witter Distinguished Professor at the Graduate School
of Business, Stanford University.
Tom H. Jackson,
Distinguished University Professor at the University of
Rochester.
Kenneth Scott,
Parsons Professor Emeritus of Law and Business at the
Stanford Law School.
George P. Shultz,
Distinguished Fellow at the Hoover Institution.
David Arthur Skeel,
Professor of Corporate Law, University of Pennsylvania.
John B. Taylor,
Professor of Economics, Stanford University.

Mr. SESSIONS. I thank the Chair, and I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, how much time remains?
The PRESIDING OFFICER. Twelve minutes fifty seconds.
Mr. DODD. I will not use all of 12 minutes. I will take a few
minutes.
I spoke last evening about my friend's amendment, and it wasn't to a
packed Chamber, I can tell you, at 8 o'clock last night. But I am sure
the Senators all received copies of it or listened to it intently as
you were dozing off last evening.
Let me, first of all, thank Jeff Sessions. He is a good pal and
friend, and we have worked together on a number of issues. Senator
Corker, who is on the floor as well, in many ways--both Bob Corker and
Mark Warner of Virginia--is as much the coauthor of the very section we
are talking about as anyone in this Chamber. He spent a lot of hours
trying to put this together.
But here is the quandary with the Sessions amendment. One of the
things we have tried to avoid is, of course, getting back to too big to
fail. The presumption of our bill is bankruptcy. Clearly, we want to
get people into bankruptcy, if they deserve to be there. If they
deserve to fail, they should fail. The problem is, when you end up
pushing some large, highly complex entity into bankruptcy, it can have
the unintended collateral damage effect of affecting otherwise solvent,
good companies that are well managed, well run, and who employ a lot of
people and are doing a good job. When these highly complex entities are
shoved into bankruptcy, there can be collateral damage and other
companies can suffer.
I am shorthanding this, in a way. So the idea was, on some rare
occasions, and hopefully they are very rare, when that possibility
occurs and you have to go through a number of hoops to get to that
conclusion, that we would have a mechanism for a resolution, a winding
down of that entity, to avoid the kind of collateral damage that could
cause if bankruptcy were the only option for those complex entities.
What you are faced with, if the Sessions amendment is adopted, is
right back where we were in the fall of 2008 where the choices are
bankruptcy or bailout, in a sense, where bankruptcy would pose, as
Lehman Brothers potentially did, as we saw, a lot of collateral damage
because there was not a wind-down resolution mechanism. Whether it
should have been used in that particular fact situation, I don't want
to try to make that case. That is not my point, not making my case. But
let's say it is a Lehman Brothers-like situation where we would all
agree that company ought to be put out of its misery, but to go through
traditional bankruptcy would have the collateral effect of taking a lot
of other people with it in the process who do not deserve to go down,
not to mention the jobs and the impact on the economy.
Senator Corker, Senator Warner, and others obviously working with it,
came up with this. They listened to a lot of people. Again, no one ever
knows if you have this exactly right. We talked about all the things.
We had exactly right what we want to do. We know what we want the
outcome to be. Whether we did it right so it will work exactly as we
planned we will never know until the first case pops up and determines
whether what we put in place achieves its goal. But in the absence of
that, we are right back where we were.
If someone said to me: What is the most critical part of this bill--
that is a hard thing to ask someone who has been involved in a lot of
it, but if you said: We are only going to let you keep one section of
this bill; you are going to have to get rid of everything else; which
section would you keep, Senator, this is what I would keep because this
is what exposed the American taxpayer to that $700 billion check they
had to write because we didn't have an alternative in place to deal
with moments like that. Hopefully, they rarely come.
There were a lot of events that led up to it that we tried to deal
with in this bill as well, including the underwriting standards and all
sorts of things to minimize ever getting to that point where you have
to make that decision. But we have all been around long enough to know
they can happen, and when they happen again, what will be our answer?
We had an option out there, but we got rid of it.
America, you have to make a choice. A lot of other people are going
to suffer unnecessarily, but bankruptcy is the only choice to go. We
would look back and say: Why didn't we put in place some alternative
mechanism in those most rare occasions where some alternative other
than bankruptcy should be in place?
That is the shorthand version of a lot of conversation, a lot of talk
over a lot of months to this point.
Senator Leahy, the chairman of the Judiciary Committee, opposes the
amendment. Other members of the committee may agree with Senator
Sessions. I don't want to suggest this is necessarily broad dissent,
one side or the other. But this is as critical as it gets on this bill.
I say to my colleagues, there are a lot of amendments being offered,
and frankly I might be against them or for them. If they are excluded
or included, I might be disappointed one way or the other. If we get
rid of this, I don't know how in good conscience you can walk out of
the Chamber and look the American taxpayer in the eye and say again: We
have now protected you against too big to fail.
For those reasons, I urge the rejection of the Sessions amendment,
and I say that respectfully of a good friend.
I yield back the remainder of my time.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
Mr. DODD. I have to ask for the yeas and nays under the order, don't
I?
Mr. CORKER. Will the Senator yield for a couple of minutes over here?
I know we are under time anyway.
Mr. DODD. I will be glad to yield. Instead of yielding my time, let
me yield 2 minutes to my friend from Tennessee.
Mr. CORKER. I thank the Senator. I know I spent a great deal of time
on the floor.
I thank the Senator from Connecticut. First, I thank him for the work
he did to make the resolution title better. I know that after he and
Senator Shelby finished, I came down and thanked him but expressed
concerns about the fact that many of the judicial reviews that I
believed were important were not included. Yet the bill was better, and
I thank the Senator for that.
I realize that in this body, as I said that day on the floor, nothing
ever works out exactly as you wish. This bill is not going to be
exactly the way the Senator would wish.
We are going to pass a bill that, to me, is incomplete. One of the
things I think all of us, including the Senator from Connecticut, had
hoped would occur is that the Judiciary Committee would actually work
on a title that

[[Page S3691]]

would make the resolution title much less necessary because it would
enhance the ability to deal with these complex financial companies.
That has not happened. I know we have not dealt with Freddie and Fannie
in this bill. I know you would have liked to have dealt with that. I
hope you would have liked to. We are not going to deal with it.
You are going to be leaving this body after a distinguished career
here. But I think what we are trying to say is that, look, we still
have work to do. The Judiciary Committee has to develop a better
bankruptcy title for financial companies, and I think all scholars have
said that is the case. There is no question that we have to deal with
Fannie and Freddie. We will do that soon, I hope.
I know the outcome of this, and the Senator knows what the outcome of
this is going to be. I think there are numbers of us who would just
like to see us really focus on this bankruptcy title to do--what you
just said is exactly right, and that is that resolution is only used
rarely. But right now, the way the Bankruptcy Code is, it is going to
be used in every case one of these large companies fails because we
haven't done the work we need to do to make the Bankruptcy Code work.
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. DODD. I will take 30 more seconds.
Here is the concern. With smaller entities, I can see the case where
they should go to bankruptcy, and that may happen. We are talking about
very complex, interconnected ones.
My colleague is correct, by the way. I should have made note of this.
We did try. And, again, it is not the fault of the Judiciary Committee.
They have been overwhelmed with judicial nominations and everything
else.
The present bankruptcy process does pose an issue with large, complex
entities for the very reason I outlined, and therefore you need some
mechanism because then the alternative is bailout, I presume, rather
than having a lot of innocent companies fail, with a lot of
unemployment occurring and damage to the economy. There is a step that
will have to be worked on.
I don't disagree on GSEs. I care deeply about that, and it is an area
that needs to be reformed. But at this juncture, to strip this out is
to throw us right back. My concern is not what else needs to be done
down the road, but if you strip this out at this juncture, we leave
ourselves very vulnerable.
With the Shelby-Dodd amendment that passed 93 to 5, I think it was--
we tried to fill in a lot of gaps people have. We got rid of that
prepayment issue that people had a lot concerns about, and it is a
postpayment system. All of the issues we tried to resolve.
I appreciate the comments of my colleague from Tennessee.
With that, I yield back the remainder of my time and ask for the yeas
and nays.
The PRESIDING OFFICER. Is there a sufficient second? There appears to
be a sufficient second.
The question is on agreeing to the amendment.
The clerk will call the roll.
The bill clerk called the roll.
The result was announced--yeas 42, nays 58, as follows:

[Rollcall Vote No. 148 Leg.]

YEAS--42

Alexander
Barrasso
Bennett
Bond
Brown (MA)
Brownback
Bunning
Burr
Chambliss
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
DeMint
Ensign
Enzi
Feingold
Graham
Grassley
Gregg
Hatch
Hutchison
Inhofe
Isakson
Johanns
Kyl
LeMieux
Lugar
McCain
McConnell
Murkowski
Risch
Roberts
Sessions
Shelby
Snowe
Thune
Vitter
Voinovich
Wicker

NAYS--58

Akaka
Baucus
Bayh
Begich
Bennet
Bingaman
Boxer
Brown (OH)
Burris
Byrd
Cantwell
Cardin
Carper
Casey
Conrad
Dodd
Dorgan
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Inouye
Johnson
Kaufman
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
McCaskill
Menendez
Merkley
Mikulski
Murray
Nelson (NE)
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Sanders
Schumer
Shaheen
Specter
Stabenow
Tester
Udall (CO)
Udall (NM)
Warner
Webb
Whitehouse
Wyden
The amendment (No. 3832) was rejected.
The PRESIDING OFFICER (Mr. Warner). The Senator from Washington.
Mrs. MURRAY. I ask unanimous consent for 8 minutes equally divided
between myself and Senator Cantwell in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.

National Police Week

Mrs. MURRAY. Mr. President, I come to the floor today to commemorate
and celebrate the lives of seven police officers from my home State of
Washington who lost their lives in service to their communities last
year.
I am proud to join today with Senator Cantwell during National Police
Week to introduce the Washington State Law Enforcement Memorial
resolution to extend the condolences of the Senate to the families,
loved ones, and communities of our State's fallen heroes.
This week tens of thousands of people from across the country are
going to be gathering at the National Law Enforcement Officers Memorial
in Washington, DC--friends and families of fallen officers, ordinary
citizens, elected officials, and fellow police officers. They will be
joining together in the heart of our city in a tree-lined park splashed
with daffodils and lined with two curving blue-gray marble walls. On
those walls--the ``Pathways of Remembrance''--are engraved the names of
Federal, State, and local law enforcement officers who have made the
ultimate sacrifice for the safety and protection of our Nation and its
people--18,600 of them, dating back to the 18th century.
Among those crowds at that memorial this week will be men and women
from the State of Washington who have flown all the way across the
country to be here as seven new names are unveiled and carved into the
marble and preserved for our Nation to honor.
The seven officers from Washington State who lost their lives last
year in the line of duty are: Deputy Sheriff Stephen Michael Gallagher,
Jr. of the Lewis County Sheriff's office; Officer Timothy Brenton of
the Seattle Police Department; Officer Tina Griswold of the Lakewood
Police Department; Officer Ronald Wilbur Owens II of the Lakewood
Police Department; Sergeant Mark Joseph Renninger of the Lakewood
Police Department; Officer Gregory James Richards of the Lakewood
Police Department; and Deputy Sheriff Walter Kent Mundell, Jr. of the
Pierce County Sheriff's Department.
These seven remarkable and selfless officers represented the best of
their communities. They were seven heroes who served proudly as a brave
boundary between civil society and the worst elements of lawlessness
and unrest; seven husbands, wives, fathers, and mothers whose losses
have devastated families and torn apart communities and whose deaths
have weighed heavily on every member of our State's law enforcement
community. Each of these tragedies sheds new light on the enormity of
the sacrifice police officers make every day in Washington State and
across the country. I know our officers feel this weight, but I have no
doubt they will never let it stop them from continuing to put
themselves in harm's way in order to serve our communities. That is a
testament to the commitment they make to serve and protect us. It is an
oath they honor each day, and it is a reminder to all of us that these
brave men and women deserve every ounce of support we can provide to
keep them safe.
It is with great pride that I introduce the Washington State Law
Enforcement Memorial resolution to commemorate and celebrate the lives
of those seven officers. My thoughts and prayers continue to be with
their families, and I join their communities, Washington State, and the
entire Nation in gratitude for their service.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Ms. CANTWELL. Mr. President, I thank my colleague for her leadership
in having this resolution on the floor today. She is always focused on
those who are on the front line of defense in our country and, clearly,
in Washington State. I appreciate her leadership in honoring the fallen
officers from Washington State.
This week does mark National Police Week where officers from across
the

[[Page S3692]]

Nation will travel here to honor fallen comrades. Because we in
Washington State have done so much of this lately, we understand how
important this type of activity is for remembering the men and women
who serve us. During this week, we reflect on the brave men and women
who have made the ultimate sacrifice to our community.
Mr. President, 2009 was one of the deadliest years in Washington
State in more than 70 years. Seven officers were killed in the line of
duty. These heroes put their lives at risk for our safety. They will be
missed, but they will not be forgotten. The men and women in blue keep
our communities safe, and they do so at tremendous sacrifices.
Deputy Mike Gallagher from Lewis County Sheriff's Office was killed
after his car was struck on his way back from responding to a domestic
violence incident. Timothy Brenton from Seattle was shot while sitting
in his car on Halloween in Seattle. We thought those two incidents were
enough to rock our community. But then, in one of the most heinous
murders in the State of Washington history, four Lakewood police
officers were shot and killed while on duty in Parkland: Sergeant Mark
Renninger, Officer Ronald Owens, Officer Tina Griswold, and Officer
Greg Richards. It was a short time later that Deputy Kent Mundell, Jr.
of the Pierce County Sheriff's office died from wounds sustained in
responding to a domestic violence call.
We have seen in Washington State the sacrifice of these men and
women, all they do to keep us safe and all that their families go
through when those who are in the line of duty pay the ultimate
sacrifice.
I hope my colleagues will remember law enforcement across the country
and in their individual States. I hope they will take time, as they see
officers here in the Capitol and throughout the Washington, DC area, to
thank them for their service. Let's commemorate the activities of those
who have fallen and also remember those who are still working to
protect us every single day.
I thank my colleague from Washington for this resolution, and I hope
for its urgent passage today.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. BURRIS. Mr. President, I ask unanimous consent to speak for 5
minutes as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.

Celebrating the Life of Lena Horne

Mr. BURRIS. Mr. President, in 1933, a 16-year-old girl named Lena
Horne joined the chorus at a famous nightclub in Harlem known as the
Cotton Club.
This young woman was passionate about performing so she jumped in
with both feet.
And she never looked back.
The following year, Lena Horne made her debut on Broadway. And not
long after, she became the first African American performer to sign a
long-term contract with a big Hollywood studio, MGM.
She blazed a trail. She knew that her talent could outshine the
ugliness of racial prejudice so, in the 1940s, she became a major movie
star.
But despite her success, Lena Horne never forgot her roots or the
plight of those who were subjected to hatred and bigotry on a daily
basis.
She knew that she was a role model and an authority figure--and she
used her fame as a platform to raise these issues, and to fight against
intolerance.
She partnered with First Lady Eleanor Roosevelt to pass anti-lynching
legislation. After the Second World War, she worked with Japanese
Americans who had suffered internment and discrimination.
And all the while, her star was on the rise.
In 1957, she recorded ``Lena Horne at the Waldorf-Astoria'' a record
that would become the best-selling album by a female singer in the
history of RCA.
During the civil rights movement, she stood with leaders like Dr.
King at the famous march on Washington.
She spoke out for racial equality, and became involved with the NAACP
and other groups.
And she never stopped doing what she loved: performing.
In 1981, she returned to Broadway in a one-woman show, which won a
Tony Award, two Grammies, and endless critical acclaim.
And she kept creating original material well into the next decade.
Mr. President, Lena Horne departed this life only a few days ago on
May 9 at the age of 92.
As a performer, her legacy is unsurpassed.
She rose to become one of the most successful entertainers of the
last century, and blazed a trail for countless other minority
performers to follow.
Her personal legacy is no less remarkable. She consistently lived out
her values, and did not shy away from opportunities to stand up for
what she believed in.
She embraced every chance to make a positive difference in the lives
of others and that, more than anything, is what she will be remembered
for.
Lena Horne left an indelible mark on this Nation. And that is why I
am proud to join Senator Gillibrand in sponsoring a resolution in her
honor.
I ask my colleagues to stand with us in celebrating the life of this
remarkable woman--a trailblazer who achieved great success in the face
of tall odds, and then used that success to better the lives of others.
Lena Horne is gone.
But in her classic recordings--in the lives she touched, the movies
she made, and the change she helped to bring about she will always be
with us.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. BURRIS. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BURRIS. Mr. President, in recent days, since the Chamber opened
debate on Chairman Dodd's financial reform bill, we have all heard a
lot of talk about the irresponsible behavior on Wall Street. We have
heard about the recklessness that cost this country trillions of
dollars in lost savings, not to mention 8 million American jobs. We
have heard about the consumers, especially minority populations and the
elderly, who have suffered a great deal as a result of this economic
crisis.
I thank my colleagues on both sides of the aisle for joining in the
debate about how to address these issues, and I am confident we can
reach and find common ground.
Just yesterday, I came to the floor to voice my strong support for
the Consumer Financial Protection Bureau that would be created under
Chairman Dodd's bill. I believe this bureau should be at the heart of
any reform legislation--to end abusive practices, serve as an advocate
for ordinary Americans, and make sure everybody can get a fair deal. It
would even help to prevent a similar financial crisis from taking place
in the future.
But we need to make sure our bill is about more than prevention. We
need to be proactive about finding solutions for millions of
Americans--especially minority individuals--who are hurting right now.
We need to start by expanding access to credit.
Under the Dodd bill, the Secretary of the Treasury will be authorized
to establish a multiyear program of cooperative agreements, financial
agency agreements, and grants--all designed to make credit more
available to low- and middle-income Americans. For the first time in
years, our legislation would give ordinary consumers access to
mainstream financial institutions and provide alternatives to those
payday loan operations. It would help defray the costs of programs that
make small loans so folks could find it easier to get the resources
they need without incurring unnecessary risks.
Our Consumer Financial Protection Bureau would also play a
significant role in making credit more available. Currently, 16 percent
of minority households do not have bank accounts, compared with only 4
percent of White households. As a result, African Americans and other
minorities are more likely to use payday lending services, some of
which are questionable practices, to take advantage of their customers.
That is why our Consumer Financial Protection Bureau would have the
authority to supervise large, nonbank financial companies to cut down
on abusive tactics. It would also help enforce fair credit card laws,
rein in automatic overdraft programs, and clarify the complex web of
rate charges.

[[Page S3693]]

In short, this legislation would reduce or eliminate many of the
factors that keep people away from banks. It would help raise financial
literacy and establish reasonable terms and conditions for loans. At
its core, it would significantly expand access to credit--especially
among those who continue to feel the worst effects of this economic
crisis.
That is why I am proud to support the Wall Street reform bill that
has been introduced by my good friend, the distinguished Senator from
Connecticut, Chairman Dodd. I urge my colleagues to join me in passing
this important legislation.
Mr. President, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendments Nos. 4019 and 3987 to Amendment No. 3739

Mr. DODD. Mr. President, I ask unanimous consent that the pending
amendment be set aside so that I may call up Senator Wyden's amendment
No. 4019 and Senator Thune's amendment No. 3987.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report.
The assistant bill clerk read as follows:

The Senator from Connecticut [Mr. Dodd], for Mr. Wyden, for
himself, Mr. Grassley, Mr. Inhofe, Mr. Bennett, Ms. Collins,
Mr. Udall of Colorado, Mr. Brown of Ohio, and Mr. Merkley,
proposes an amendment numbered 4019 to amendment No. 3739.

The amendment is as follows:

(Purpose: To establish as a standing order of the Senate that a Senator
publicly disclose a notice of intent to objecting to any measure or
matter)

At the end of the amendment, insert the following:

SEC. __. ELIMINATING SECRET SENATE HOLDS.

(a) In General.--
(1) Covered request.--This standing order shall apply to a
notice of intent to object to the following covered requests:
(A) A unanimous consent request to proceed to a bill,
resolution, joint resolution, concurrent resolution,
conference report, or amendment between the Houses.
(B) A unanimous consent request to pass a bill or joint
resolution or adopt a resolution, concurrent resolution,
conference report, or the disposition of an amendment between
the Houses.
(C) A unanimous consent request for disposition of a
nomination.
(2) Recognition of notice of intent.--The majority and
minority leaders of the Senate or their designees shall
recognize a notice of intent to object to a covered request
of a Senator who is a member of their caucus if the Senator--
(A) submits the notice of intent to object in writing to
the appropriate leader and grants in the notice of intent to
object permission for the leader or designee to object in the
Senator's name; and
(B) not later than 2 session days after submitting the
notice of intent to object to the appropriate leader, submits
a copy of the notice of intent to object to the Congressional
Record and to the Legislative Clerk for inclusion in the
applicable calendar section described in subsection (b).
(3) Form of notice.--To be recognized by the appropriate
leader a Senator shall submit the following notice of intent
to object:
``I, Senator _______, intend to object to ________, dated
_______. I will submit a copy of this notice to the
Legislative Clerk and the Congressional Record within 2
session days and I give my permission to the objecting
Senator to object in my name.'' The first blank shall be
filled with the name of the Senator, the second blank shall
be filled with the name of the covered request, the name of
the measure or matter and, if applicable, the calendar
number, and the third blank shall be filled with the date
that the notice of intent to object is submitted.
(b) Calendar.--Upon receiving the submission under
subsection (a)(2)(B), the Legislative Clerk shall add the
information from the notice of intent to object to the
applicable Calendar section entitled ``Notices of Intent to
Object to Proceeding'' created by Public Law 110-81. Each
section shall include the name of each Senator filing a
notice under subsection (a)(2)(B), the measure or matter
covered by the calendar to which the notice of intent to
object relates, and the date the notice of intent to object
was filed.
(c) Removal.--A Senator may have a notice of intent to
object relating to that Senator removed from a calendar to
which it was added under subsection (b) by submitting for
inclusion in the Congressional Record the following notice:
``I, Senator _____, do not object to _______, dated
_____.'' The first blank shall be filled with the name of the
Senator, the second blank shall be filled with the name of
the covered request, the name of the measure or matter and,
if applicable, the calendar number, and the third blank shall
be filled with the date of the submission to the
Congressional Record under this subsection.
(d) Objecting on Behalf of a Member.--If a Senator who has
notified his or her leader of an intent to object to a
covered request fails to submit a notice of intent to object
under subsection (a)(2)(B) within 2 session days following an
objection to a covered request by the leader or his or her
designee on that Senator's behalf, the Legislative Clerk
shall list the Senator who made the objection to the covered
request in the applicable ``Notice of Intent to Object to
Proceeding'' calendar section.

The assistant legislative clerk read as follows:

The Senator from Connecticut [Mr. Dodd], for Mr. Thune,
proposes an amendment numbered 3987 to amendment No. 3739.

The amendment is as follows:

(Purpose: To provide for increased Congressional oversight through a
sunset of the authority created under title X related to the creation
of the Bureau of Consumer Financial Protection)

On page 1208, between lines 12 and 13, insert the
following:
(f) Expiration.--Notwithstanding any other provision of
this Act, the Bureau, and the authority of the Bureau under
this title, shall terminate 4 years after the date of
enactment of this Act, unless extended by an Act of Congress.

Mr. DODD. Mr. President, I ask the senior Senator from Oregon, does
he want to be heard on his amendment?
Mr. WYDEN. Yes.
The PRESIDING OFFICER. The Senator from Oregon.

Amendment No. 4019

Mr. WYDEN. Mr. President, thank you very much.
Let me particularly express my appreciation to the chairman of the
full committee, Senator Dodd. He has been extraordinarily patient, and
especially with the large bipartisan coalition that has come together
behind this amendment to ensure that finally the secret hold in the
Senate--one of the most powerful tools a Senator has in the Senate--is
no longer.
I say to the Presiding Officer, you have done very good work on this
issue, along with a number of colleagues on both sides of the aisle.
The reason we feel so strongly is because the secret hold in the Senate
is an indefensible violation of the public's right to know.
We all understand every time we are home in our States how frustrated
people are with the way business is done in Washington, DC. One way to
send a message we are going to start doing business differently is to
throw open the doors of government and to make sure nominations and
legislation that is important gets debated in public, and people
actually get to see the give-and-take of colleagues on both sides of
the aisle--Democrats and Republicans--that is essential to making good
policy.
Most Americans have no idea what a secret hold is, and I have said on
many occasions that my guess is a lot of them think this is some kind
of hair spray or something. But the fact is, this is an extraordinary
tool that Senators have to effect the lives of our people, and it ought
to be something that is exposed to public scrutiny and public
accountability.
When asked why he robbed banks, Willie Sutton said: That is where the
money is. In the Senate, secret holds are where the power is.
What our bipartisan group has said is, it is wrong for a Senator to
block a piece of legislation or a nomination in secret by simply
telling the leader of their party of their desire. What this has
meant--and there have been scores and scores of these secret holds in
recent years--is that one person, without any public disclosure
whatsoever, can keep the American people from even getting a small peek
at what is public business. That is not right, and it is time to
eliminate secret holds.
In 2007, Senators on both sides of the aisle sought to finally bring
some sunlight to this practice. Senator Grassley, the distinguished
Senator from Iowa, and I have worked on this for over a decade.
Unfortunately, a number of loopholes have been developed since that
provision was accepted, and today too much Senate business is done in
the dark, unaccountable, and away from public scrutiny and public
exposure.
This amendment closes the loopholes, and it is going to be enforced.

[[Page S3694]]

With this approach, every hold--every single hold--is going to have a
public owner within 2 days.
I want to close by just briefly describing how this would work. Under
this proposal, if a Senator puts a hold on a bill or a nomination, they
are required to submit a written notice in the Congressional Record
within 2 days. When that bill or nomination comes to the floor, and any
Senator objects to its consideration on the grounds of a hold, one of
two things is going to happen: either the Senator placing the secret
hold is going to have their name publicly released, or the Senator who
objected on their behalf is going to own that hold. That Senator will
own it. Their name is going to be published in the congressional
calendar.
So for the first time--after all of these months and months of debate
about secret holds in the Senate--there is going to be public pressure
and peer pressure on those who try to do Senate business behind closed
doors.
Two last points with respect to reforms included in this amendment:
The proposal eliminates the ability that a Senator now has to lift a
hold before the current 6-day period expires and never have it
disclosed.
The Presiding Officer and I have talked a bit about this matter of
revolving holds in a 6-day period. This has been a huge abuse. It has
allowed a Senator to do business in secret and never have it recorded.
With this new bipartisan proposal, if a Senator places a hold, even for
a day, even for a minute, the hold is going to be disclosed.
Finally, the proposal makes it harder for a group of Senators to
replace revolving holds on a nomination or bill. With the 6-day time
period, a group of Senators can pass a hold from one colleague to
another and never have it discussed. By requiring all holds to be made
public, it will be much more difficult to find new Senators to place
revolving holds.
The last point: It seems to me, in addition to taking a step the
country feels very strongly about, which is doing more public business
in public, this is being done in a bipartisan way. This is being done
in a way that can bring Democrats and Republicans together, in a way
that doesn't involve a lot of fingerpointing. I wish to mention a
number of colleagues: the Presiding Officer, the distinguished Senator
from Virginia, has been very constructive and has had many
conversations with me about this; Senator Inhofe, Senator Collins, and
Senator Grassley. Senator Inhofe has been talking about this issue with
me and others for almost a decade as well. Senator Bennet, Senator
Merkley, Senator Whitehouse, all of these Senators, a large, bipartisan
group come together to urge the passage of this amendment. I want to
single out too, though, for particular commendation, Mrs. McCaskill,
the Senator from Missouri, because we wouldn't be on this floor today
had not the Senator from Missouri prosecuted this cause relentlessly.
She has brought to light the number of holds. When we have talked about
it, she has made the point that this has gone on on both sides of the
aisle. She deserves great credit for this reform being made today.
Let me also thank Senator Coburn--Dr. Coburn--of Oklahoma. He has
been very involved in reform issues for many years. We are looking
forward to an additional reform he is going to be advancing that I look
forward to sponsoring.
I wrap up only by way of trying to highlight that after the Senate
has spent a lot of time discussing secret holds over the last few
months, on a bipartisan basis, the Senate comes together today with an
approach that has actually brought Senators together and is going to
ensure that every single secret hold is going to have an owner. That is
going to be a big change. It is high time. The public deserves to have
public business actually done in public, and with the adoption of this
amendment, that will be done.
The chairman of the full committee has been very gracious to me. I
wish to ask for the yeas and nays at this time, and I wish to engage
the chairman of the full committee in a colloquy. The chairman has been
very helpful with respect to scheduling this.
Is it the pleasure of the chairman of the committee that now, having
debated this, we set it aside for a vote later in the day?
Mr. DODD. My pleasure is we have the vote on the Wyden-Grassley
amendment. So whenever that can occur, I am for it. We can do it right
now. I am for it now.
Mr. WYDEN. I am ready to go to the yeas and nays.
Mr. President, I ask for the yeas and nays.
Mr. President, I withdraw that request. I thank the chairman of the
committee.
Mr. DODD. It is not my sole decision, of course.
Mr. WYDEN. The chairman of the full committee has been very patient
with us. He has done an extraordinary amount of work. Let us, with that
request, hold off on the yeas and nays, and I ask the chairman that it
be scheduled with the next group of votes.
Mr. DODD. I can say to my colleague from Oregon that I expect
momentarily we will work out some time agreements and we will schedule
a vote fairly quickly.
Mr. WYDEN. I thank the chairman.
The PRESIDING OFFICER. The Senator from South Dakota.

Amendment No. 3987

Mr. THUNE. Mr. President, I understand amendment No. 3987 has been
called up by the manager of the bill, and I think it has been made
pending, so I wish to speak to it. I hope at the appropriate time we
will be able to get an agreement for a vote on it, and I will ask for
the yeas and nays following my remarks.
This amendment is a very simple, straightforward one. It is one
paragraph long. It is not complicated. What it essentially does is it
sets a sunset date for the newly created bureau of consumer protection,
allowing Congress to reevaluate the bureau after 4 years.
I think most Americans, if they knew we were creating a big new
bureaucracy here in Washington, DC, would want us to have some
oversight. They would want some accountability. They would want to make
sure their tax dollars are being spent wisely and well.
This new consumer protection bureau will have lots of new Federal
employees here in Washington, DC. It will spend hundreds of millions of
dollars every single year. Yet Congress has literally no oversight or
authority with regard to this new bureau.
It seems to me, at least, that when we have a fiscal situation as we
have today in this country where we are running trillion dollar
deficits literally every year, where our debts are continuing to pile
up to the tune of doubling our Federal debt, publicly held debt in 5
years, tripling it in 10 years, we would want to do something to make
sure that any new expenditure of taxpayer dollars is spent efficiently,
effectively, and that we are being as frugal as we possibly can.
I, for one, would not like to see us go down this path. I don't think
creating a huge new bureaucracy here in Washington, DC, is necessary. I
think we can address the issue of consumer protection through existing
agencies and authorities. Frankly, I wish to see this particular title
in this legislation go away entirely, but it doesn't look as though
that is going to happen. We offered an amendment earlier this week that
would have been a substitute for this consumer protection title in the
bill and addressed it in what we think is a more reasonable way, but
that was voted down.
My amendment simply says that 4 years from now, once this bureau has
been created, let's have it sunset, and then, if necessary, Congress
can come back and reauthorize it. Congress then would have an
opportunity to fine-tune it, perhaps. Congress would have an
opportunity to look and see if it is performing the function it was
intended to perform; whether it is doing it in an efficient and cost-
effective way. Clearly, we have a responsibility to the American
taxpayer to have some accountability with this new bureaucracy we are
going to create as a result of this legislation.
It is straightforward. We have other agencies of government that we
do this with--that we sunset, that we reauthorize. We just did that
with the CFTC, which is an agency that was reauthorized during the farm
bill last year. When we did that, we were able to fine-tune its
mission. It also gives

[[Page S3695]]

the opportunity to reorganize an agency, if it has to go through a
reauthorization process and a sunset process. I don't think it is
asking too much, when we are talking about literally hundreds of
millions of dollars annually and what would appear to be thousands of
new Federal employees in this new agency, and what would also appear to
be incredibly broad and vast new powers and authorities that will be
unchecked because there isn't any accountability to the Congress--
Congress is not going to appropriate annually as we do with most
agencies the power of the purse. This is all going to be run through
the Federal Reserve. Yet it is taxpayer dollars that are at risk here.
It is taxpayer dollars that are being used to finance this new
bureaucracy.

I hope my colleagues will be able to find their way to support this
amendment. I think it is a reasonable approach. Again, I don't think it
is asking too much. The American taxpayers are paying the bills every
year for this government and are having to deal with the burden of debt
we are piling on them because of the spending going on in Washington.
Of course, if you look at what we are spending this year and what we
spent last year in the Federal Government, much of it was borrowed. Out
of all the spending last year, about 43 cents out of every dollar was
borrowed. This year it is about 39 cents out of every dollar. When we
are running those kinds of deficits and piling up that kind of debt
with this kind of spending going on in Washington and the fiscal
problems we have as a Nation, it makes perfect sense to me. I think it
makes perfect sense to the American taxpayer. If we are going to create
a huge new bureaucracy--which I said I don't believe is necessary, but,
nonetheless, if it is going to happen in this legislation--let's take a
look at this again 4 years from now. Let's allow it to sunset and allow
us to go through a process where we reauthorize, reevaluate and review
and see if it is functioning the way it is intended, and whether these
authorities and powers created by this new bureaucracy is what the
American people want to see happen.
One final point I will make. There are lots of entities out there
other than banks that are worried about this particular title of the
bill because of the rulemaking authority that exists. We have auto
dealers, jewelry businesses, furniture stores, orthodontists, and lots
of small businesses that are concerned they are going to be covered by
the reach of this new agency with these broad new authorities with very
little accountability and oversight by the Congress. That is a concern
to a lot of small businesses to whom we look to create the jobs and,
hopefully, initiate an economic recovery in this country and get the
economy growing and back on track. This, in fact, could put lots of new
burdens, lots of new bandaid, lots of new costs on many of these small
businesses. That is yet another reason why I believe this is a bad idea
in the first place, but at a minimum we ought to allow it to sunset so
we have an opportunity to review it and reevaluate it and make some
decisions with regard to its future 4 years from now.
It is very straightforward. It is one paragraph long. Sunset the
Bureau of Consumer Financial Protection and allow Congress to
reevaluate that bureau after 4 years.
I hope my colleagues will support this amendment. I ask for the yeas
and nays and would hope at the appropriate time to be able to have a
recorded vote.
I yield the floor.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The Senator from Illinois.

Amendment No. 3989 to Amendment No. 3739

Mr. DURBIN. Mr. President, I am hoping that later this afternoon
there will be a unanimous consent request that relates to an amendment
I have introduced, amendment No. 3989, and I wish to take a few minutes
now since there is no one else seeking recognition on the floor to
describe this amendment in the hopes that when it comes up later, we
can move to it and to a vote very quickly.
I have spoken on the floor of the Senate several times about the
amendment because it is complicated in one respect. This amendment
relates to the fees charged by credit card companies such as Visa and
MasterCard to the retailers and businesses that accept the credit
cards. So if you are a customer of a shop and you purchase something,
you present a credit card. There are then two transactions taking
place, at least. One transaction is between you and your credit card
company, because you put the credit card out there and you have to pay
the bill later on. The other transaction relates to the business, the
shop that accepts your credit card. By accepting your credit card, they
also accept an obligation to pay the credit card company or the bank
issuing the credit card. It is called an interchange fee. There is
another one called a swipe fee. So the credit card company is getting
paid both ways. They get paid by the customers who pay interest on
outstanding balances on their credit cards, and they get paid by the
retail establishments that accept the credit cards. The credit card
companies have a lucrative business going on both sides of the
transaction.
This amendment I am speaking about relates not to you as a customer
owning a credit card, but rather to the shop or retail establishment
that accepts the credit card. What is a reasonable amount for them to
pay?
There are two major types of credit cards. One is a credit card and
the other is a debit card. A credit card is basically that. You are
buying on credit with the promise to pay when your monthly bill comes
around. The debit card is different because it takes the money directly
out of your checking account and gives it to the shopowner. They are
different in that, No. 1, there is more risk, because people may not
pay their credit card balance at the end of the month, so risk is
associated with it; and in the other there is very little, if any,
risk. If there is no money in the checking account, then it isn't going
to be paid to the shopowner. It is a very simple transaction much like
writing a check and the bank honoring the check.
My amendment addresses the interchange fee. That is the amount paid
by the retail establishment to the credit card company when a customer
presents a credit card.
The two major credit cards in America are Visa and MasterCard. They
account for over 80 percent of the credit and debit card business in
the United States. They are the giants in America. There are others--
Discover, American Express, and others. But the two, Visa and
MasterCard, are the two big kids on the block. They have established
legal arrangements with the businesses that accept their credit cards.
It is those legal arrangements we are questioning with this amendment
which I am going to propose later in the day.
This amendment will help small businesses, merchants, and consumers
by providing relief from high interchange fees for debit card
transactions. We are focusing on debit card transactions because those
are the ones that have much less, if any, risk involved to them.
On the floor of the Senate, we are working on a bill to prevent the
big banks from basically rigging the financial system in a way that
helps Wall Street and hurts the shops on Main Street. If we are going
to look at the rigged financial systems that hurt small businesses, we
have to include the credit and debit card industries.
Credit and debit cards are rapidly replacing cash and checks in the
American economy. There are over 1 billion credit and debit cards in
America. Think of that: 300 million people and 1 billion credit and
debit cards. That gives you an idea of the number of cards people own.
Last year, Americans conducted $1.7 trillion in transactions on
credit cards and $1.6 trillion on debit cards, which are becoming more
and more popular. Credit and debit cards are now used in more than half
the retail sales in the United States of America. Yes, being able to
pay with plastic is a great convenience, but there is another reality.
The shift from cash and checks to credit and debit means that the way
we do business in America is increasingly falling under the control of
these two giants of the credit and debit card industry--Visa and
MasterCard.
These card networks dominate the credit and debit industries, as I
mentioned earlier. They are used in 80 percent of all such
transactions. Unfortunately, these two companies are looking for
profits, and they are not always looking out for the best interests of
the merchants, the small businesses, the

[[Page S3696]]

retail businesses or the consumers. Interchange fees are a classic
example.
A lot of people in Congress do not want me to bring up this issue.
They have told me this is the wrong bill to talk about it. I think not.
I tried to bring it up under credit card reform and they said: No,
Senator Durbin, that is the wrong bill. Now I want to bring it up on
the Financial Stability Act, and they say: No, it is the wrong bill. I
do not think it is. I do not think there is a right bill with an issue
that is this controversial and complex. But it is an important enough
issue that we should address it and we should vote on it.
Visa and MasterCard require interchange fees every time someone uses
a debit or credit card. The fees range from 1 percent to 3 percent of
the amount of the transaction. It is a convoluted system. Visa and
MasterCard charge interchange fees to the merchants, but instead of
keeping the money, they pass the money to the banks that issue the Visa
and MasterCard. Why do they do this? Some of it is to help the banks
cover the cost of conducting the transaction. Most of it is to induce
banks to issue more Visa and MasterCard credit cards.
Around $50 billion in interchange fees were collected in 2008, with
about 80 percent of that money going to 10 of the largest banks in
America--80 percent of it. The card-issuing banks use this interchange
revenue to pay for ads, to offer rewards, to issue more cards. Not
surprisingly, the revenue also helps banks make large profits and give
bonuses to their CEOs. Banks love the money, and they love the current
interchange system.
As interchange fees go up, it means banks get more money to issue
more cards and increase their profits. Rising interchange fees also
benefit Visa and MasterCard because it means more cards will be issued,
and with each card comes another fee, called a network fee, every time
the card is used.
What a great system--as long as interchange fees are increasing, both
the card networks and the banks could not be happier.
The troubling thing about interchange fees is they are deducted from
every transaction left for the seller. This is very different from cash
and check systems. When a business makes a cash sale, it gets full
payment in hand, and the Federal Reserve requires the checks clear at
their full face value. So a $100 sale by cash or check is a $100 sale.
But when a business makes a $100 sale by credit or debit card, the
banks and their card networks take a cut. The business may end up with
only $98 out of $100 that is on the debit card, maybe less. The
business is getting shortchanged the actual face value of the
transaction.
To make up for interchange fees, businesses are forced to raise their
prices, cut back on expenses or something such as that. They may even
cut back on employees to keep up with these interchange fees. In a
normal market, you see banks competing with one another to do business
with the restaurants, shops, and the merchants. With that competition,
things would be a lot better. But, in fact, the real world of credit
cards with the two giants, Visa and MasterCard, is a world where there
is little or no competition.
The credit and debit card markets are not normal. Visa and MasterCard
unilaterally set interchange fee rates that apply to all banks within
their card networks. There is no negotiation between the banks and
merchants over reducing interchange rates. Individual businesses in New
Hampshire, Illinois, New York, and all across America have no
bargaining power with these giant credit card companies. They set the
rules, they fix the fees, take it or leave it.
Visa and MasterCard have every incentive to continue to raise
interchange fees because that additional revenue makes it more likely
banks will issue more cards.
What can businesses do to stop these rising interchange fees? Almost
nothing. Some--very rarely--businesses say they do not accept credit or
debit cards, but the vast overwhelming number of businesses do. They
have to. It is part of doing business in America.
Visa and MasterCard have 80 percent of the credit and debit market.
Merchants have to use them. They tell the merchants: If you want to
take our card, you live with the fees we charge. That is not a
competitive situation at all.
This current system is not sustainable. If left alone, it is going to
get worse for small businesses that face higher fees, for consumers who
face higher prices, and for everyone but the banks and credit card
networks.
Here is the most unbelievable part. Businesses in every other country
in the world get a better interchange deal from Visa and MasterCard
than businesses in the United States of America. I told that to
someone, and they said: It sounds like pharmaceutical drugs, where you
can buy the U.S. pharmaceutical drug more cheaply in Canada, Mexico,
and Europe. It is the American consumers paying more.
The same thing is true when it comes to Visa and MasterCard. They
charge American businesses higher interchange fees than they charge
businesses around the world. Visa and MasterCard already charge the
highest interchange rates in the world to American businesses, and the
rates keep going up.
There was a GAO report last year. It found that Visa and MasterCard--
listen to this--had voluntarily reduced the interchange fees on
businesses in other countries. Just last month, Visa voluntarily
lowered many of its European debit rates by 60 percent--unilaterally
lowered them by 60 percent. What happened in the United States? They
raised the fees by 30 percent on American businesses trying to fight
their way out of this recession.
These huge credit card companies had some sympathy for Europe but not
for America. That is unacceptable, and we need to do something about
it. That is why I offer this amendment.

The amendment requires that debit card interchange fees be reasonable
and proportional. I do not pick a number. I do not set a fee. We want
to make sure they are proportional and reasonable to the cost incurred
in processing the transaction.
Debit card transactions are fundamentally different from credit card
transactions. All that happens in a debit card transaction is you
deduct money from your bank account. It is akin to writing a check.
That is why debit cards are advertised as check cards.
Right now in the United States, there are zero transaction fees
deducted when you use a check. The Federal Reserve does not allow
transaction fees to be charged for checks. But when it comes to debit
cards, Visa and MasterCard charge high interchange fees just as they do
for credit. Why? Because they can get away with it. There is no
regulation, there is no law, there is no one holding them accountable.
An estimated $20 billion was collected from businesses and consumers
across America in debit interchange fees last year--$20 billion. That
money comes from the bottom line of every small business in every town
in America that accepts payments by debit card.
My amendment will bring some reasonableness to the system. It tells
the Federal Reserve to ensure that debit fees are reasonable and
proportional to cost and not just a way of generating huge profits at
the expense of small businesses. If we can reduce debit interchange
fees to a reasonable level, it would be similar to a tax break on every
debit card sale a merchant makes. Think how much that would help small
businesses on Main Street.
One of my colleagues said: Even if the businesses save money and do
not have to pay more to the credit card companies, what makes you think
they are going to give the consumers a break with it? They may take it
in profits. They can. There is no way to police that.
I just had a press conference with the National Association of
Convenience Stores. We know them as the small shop on the corner that
has some groceries and maybe candy bars, slurpies--whatever you want to
stop and buy. It also turns out these convenience stores sell 82
percent of the gasoline sold in America. They are part of the same
association.
I said to the man who ran the association: What guarantee do we have,
if we reduce the amount you have to pay the credit card companies, that
the consumers will feel it? He said: We are the only business that
posts prices right out on the sidewalk for all the motorists to see of
our most popular

[[Page S3697]]

item, our gasoline. We fight over pennies. If we can reduce it a penny
or two a gallon, we are going to attract more customers. If we can save
money when it comes to these interchange fees, it puts us in a more
competitive position to bring in more customers to buy gasoline. That
is one side of the argument that could inure to the benefit of the
consumers. There are no guarantees.
In the world I am talking about, you get to shop around. As the
customer, you pick the convenience store, you pick the grocery store,
you pick the prices. When it comes to the owners of the store using
credit cards, they do not get to shop. They get a ``take it or leave
it'' from MasterCard and Visa and have no bargaining power whatsoever.
Many Senators are worried about community banks that also issue
credit cards. One thing I hear over and over from my colleagues is we
do not want to hurt smalltown banks, regional banks, banks that are not
the big boys on Wall Street that issue credit cards. That is why I
amended my amendment and said we will exempt all banks with less than
$10 billion in assets. If you have more than $10 billion in assets, it
would be hard to call you a community bank. You are a much bigger
operation.
Under my amendment, Visa and MasterCard could continue to set the
same debit interchange rates they do today for small banks and credit
unions. Ninety-nine percent of banks, 99 percent of credit unions have
assets of less than $10 billion. Of all the credit unions in the United
States, only three have assets over $10 billion.
One of my colleagues said: I am very close to the credit unions. I
say to my colleague: I am sure you are also close to the small
businesses in your State, and in this situation, 99 percent of the
credit unions, virtually every credit union in your State would be
exempt from this law, but your small businesses may benefit from it
because the largest banks have the largest impact on credit card
interchange fees.
My amendment would subject the biggest banks in America, the ones
that issue the vast majority of debit cards and get the vast majority
of interchange fees, to a reasonable fee requirement.
I hear the so-called independent community banks of America oppose my
amendment. I could not understand it. If I exempted banks with less
than $10 billion, that would exempt 99.8 percent of all of the so-
called community banks in America. Why do they still oppose it? I have
learned why. The Independent Community Bank Association is a major
issuer of credit and debit cards. They are one of the top 25 credit
card issuers in the United States and are the 23rd largest debit card
issuers. They make a lot of money off interchange fees. They do not
have clean hands in this debate. They are, in fact, conflicted in this
debate. They are not arguing on behalf of small banks. Sadly, they are
arguing on behalf of their own trade association credit cards and the
fact they receive these generous interchange fees.
ICBA, so-called Independent Community Bankers Association, profits
from the unfair swipe-fee system just like the biggest banks in America
today. That is a conflict of interest.
Is this Washington trade association truly representing small banks
that will get higher interchange fees than the big banks under my
amendment or is it just interested in protecting its own revenue
stream? I called back to some of my friends in downstate Illinois,
where I come from--small town, small city America--and I talked to them
about this. I said: I am exempting banks with assets of less than $10
billion.

They said to me: Well, that is perfectly reasonable. It won't touch
any community banks you know in downstate Illinois.
That is an indication to me that this trade association out here is
not speaking--really speaking--for community banks when they say they
oppose this amendment as amended.
My amendment also aims to make sure Visa and MasterCard can't block
merchants from offering discounts to their customers. For example, Visa
has a provision in its contract with all of the businesses that accept
it that the business cannot offer a customer a discount to use a
competing credit card, such as a MasterCard. MasterCard has a similar
provision. So they are protecting one another. You can't say, for
example, that your shop prefers Visa cards because the Visa card
charges you less as a business. They prohibit that back and forth.
Some people say: Well, maybe that is okay. Would it be okay if we
take it to the next example: It is like Coca Cola saying that a store
can sell Coke but only if it agrees not to sell Pepsi at a lower price,
and it is like Pepsi saying the same thing. Who loses in that deal? I
can tell you who loses--the customer, because there is no competition
and the business because it does not attract the customers with
competition and lower prices. Translate that into credit cards, and
that is what Visa and MasterCard are doing today. My amendment strips
these provisions from Visa and MasterCard contracts so merchants can
offer discounts without penalty.
My amendment would also allow merchants to offer discounts for
customers who pay by cash, check, or debit card as opposed to credit
cards. Sometimes, Visa and MasterCard threaten to fine merchants who
offer discounts for these cheaper forms of payment. My amendment would
end those threats once and for all. This type of effort to promote
noncompetitive practices should not be allowed, and my amendment would
bring it to an end.
Nothing in my amendment would allow merchants to discriminate against
cards issued by small banks and credit unions. That was another
comment. They said, well, listen, Durbin, if your amendment passes,
they will say: This establishment will not accept credit cards from a
small bank that issues these cards. We make it express in the amendment
that we are offering that you cannot discriminate against the issuer,
that is, the bank, of the credit card. You can only say you prefer one
network over another because the interchange fees on your business
happen to be lower, but you can't pick out banks. You may say: We
prefer Visa or MasterCard, but you cannot pick them out by banks.
Interchange fees have real-life consequences on businesses across
America. I have been receiving calls and letters from small business
owners all over the State asking Congress to fix this rigged
interchange system. Last week, my office received petitions signed by
92,000 Illinois consumers seeking to reform credit and debit
interchange fees. The amendment has also been endorsed by 203 national
and State trade associations representing every type of business you
can think of, and it has been endorsed by Americans for Financial
Reform, a coalition of over 250 consumer, civil rights, labor, retiree,
and business groups.
If you talk to Visa, MasterCard, and the biggest banks, all you will
hear is how well the current system is working and how we ought to keep
our hands off it. But if you talk to the local grocery store owner or
the person who owns the local restaurant in your hometown or the man
who owns the gas station or the family who runs a local diner--small
businesses and merchants across America--they will tell you stories
about dealing with Visa and MasterCard and what it has meant to them in
their business.
This afternoon, Art Potash, who owns some grocery stores in Chicago,
came by my office. We had a little press conference. He talked about
the competitiveness of the grocery business, where the return is
usually 1 or 2 percent and he ends up paying 2 to 3 percent back to the
credit card companies for people who use credit and debit cards. He is
stuck because if he doesn't accept credit and debit cards, he is really
trying to fight the tide. More and more people are using them. But he
is paying a fee, which is cutting right into the bottom line. With this
interchange fee at a more reasonable level, he would be able to expand
his business and hire more people. Wouldn't that be a good outcome in
an economy where we are desperate to deal with unemployment?
Let's put Main Street above the big banks and credit card companies.
I ask my colleagues to help me in passing this amendment.
Madam President, I have received letters and comments from merchants
and businesses across the State of Illinois supporting my amendment for
interchange reform. I have received them from James Phillip of
Phillip's

[[Page S3698]]

Flower Shops in Westmont, IL; Robert Jones, president of American Sale
patio store in Tinley Park, IL; George LeDonne, owner of LeDonne
Hardware in Berkeley, IL; Russ Peters, owner of Mobile Print in Mount
Prospect, IL; Jim Dames, owner of Snackers Cafe in Western Springs;
George Preckwinkle, a friend of mine and president of Bishop Hardware
and Supply, with 10 locations in central Illinois; Paul Taylor, owner
of Taylor's Gifts and Bonsai; Rattanaporn Deeudomchan, owner of the
King and I Thai Restaurant in Oak Park; Yvonne Francois, who owns
Queenie's Court, a restaurant in the food court at the Ford City Mall
in Chicago; and John Gaudette, director of the Illinois Main Street
Alliance, representing 450 small businesses across the State.
I ask unanimous consent to have printed in the Record at this stage
of the debate some of the comments and letters which have been sent to
me.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Americans for Financial Reform,

Washington, DC., May 13, 2010.
Senator Durbin,
U.S. Senate,
Washington, DC.
Dear Senator Durbin: We write on behalf of Americans for
Financial Reform, an unprecedented coalition of over 250
national, state and local groups who have come together to
reform the financial industry. Members of our coalition
include consumer, civil rights, investor, retiree, community,
labor, religious and business groups as well as Nobel Prize-
winning economists. We support a strong Consumer Financial
Protection Bureau and oppose weakening amendments to the
Restoring American Financial Stability Act, S. 3217.
Durbin Amendment #3989 is a move towards helping Main
Street.
Americans for Financial Reform supports the Durbin
Reasonable Fees and Rules for Payment Card Transactions
Amendment #3989 because it is good for merchants and good for
consumers. The bank payment networks, Visa and MC, impose
high, nonnegotiable interchange fees for accepting credit and
debit cards and use other unfair contractual practices that
mean all consumers pay more at the store and more at the
pump, whether they pay with cash or plastic. The bulk of the
$48 billion estimated yearly take from interchange fees flows
to the largest Goliath banks. Giving merchants more
flexibility against unfair bank and card network practices
will result in more payment choices for consumers and lower
merchant costs.
For information, please contact Ed Mierzwinski.
Sincerely,
Americans for Financial Reform.
____

May 12, 2010.
To the Members of the United States Senate: The undersigned
organizations, representing a diverse array of interests
including small business, state, organizations, dentists,
retailers, restaurants, grocery stores, convenience stores
and others, write in strong support of S. Amdt. 3989,
sponsored by Senator Richard Durbin, regarding interchange
fee reforms to S. 3217, the Restoring American Financial
Stability Act of 2010 now before the Senate. Unless relief is
granted, interchange ``swipe fees,'' which amounted to $48
billion in 2008, will continue to rise as card companies and
issuing banks seek even higher profits, primarily on the
backs of our organizations' members. This comes at a time
when businesses, state agencies and charities--all of whom
pay interchange fees--are struggling to help the economy grow
again and when consumers can least afford pricing increases.
Despite Congress' efforts to reign in abusive practices,
credit card companies continue to take advantage of a major
loophole in financial regulation. In fact, they announced
interchange rate increases just months after the passage of
the Credit Card Accountability, Responsibility and Disclosure
Act of 2009 (Credit CARD Act), effectively circumventing many
of the reforms instituted by Congress. More recently, Visa
Europe announced last month that it was voluntarily dropping
debit card interchange fees to 0.2% in Europe, a decrease of
60%, while earlier in the month Visa increased rates on
similar transactions in the United States by some 30%. Quite
literally, at a rate of approximately 2.0% on debit card
interchange fees, which is 10 times higher in the United
States, American businesses are subsidizing European
transactions.
Simple, common-sense reforms are needed to correct this
market imbalance, which would give our organizations' members
additional tools to manage our costs related to interchange
fees. First, the amendment would give the Federal Reserve the
authority to conduct an open and fair rulemaking--without
prescribing an outcome--in order to develop regulations to
ensure that interchange fees imposed on debit card
transactions be ``reasonable and proportional'' to the cost
incurred in processing the transaction. Debit transactions
are not an extension of credit and are directly drawn from a
consumer's checking account, yet the interchange rate on
debit transactions continues to increase. Small banks, credit
unions and thrifts with assets of under $10 billion would be
carved-out from these rules, meaning that 99% of all banks,
99% of all credit unions, and 97% of all thrifts would be
exempt, allowing them to continue to receive the same
interchange fees they receive today.
Second, the amendment would prohibit anti-competitive
restrictions on discounts and the setting of minimum
transaction levels, providing entities with the freedom to
choose their preferred method of payment. Under current
rules, any business, charity or government agency that
accepts credit or debit cards is prohibited from setting a
minimum transaction level, such as $3, even though the entity
may actually lose money on the transaction because of slim
profit margins. Visa and MasterCard can and do impose fines
on small businesses up to $5,000 per day for such offenses,
which has the effect of ensuring that the card companies and
big banks turn a profit even if the small business loses
money on the transaction. In addition, the amendment allows
businesses to incentivize the use of one card network over
another (e.g., a discount may be provided for Discover cards
if they carry a lower interchange rate) and allows businesses
to offer discounts on certain forms of payment (e.g., a
discount may be offered for cash, check, PIN debit, etc., all
of which carry lower rates than credit cards). This amendment
would not enable merchants to discriminate against debit
cards issued by small banks and credit unions. Visa and
MasterCard require merchants to accept all cards within their
networks, and this amendment does not change that
requirement.
By providing these and other important reforms, the
Congress will send a strong message that it supports
modernizing and updating our financial payments systems while
providing relief to businesses owners who have seen their
interchange credit card assessments skyrocket--for many
businesses exceeding the cost of providing health care
benefits to their employees.
In closing, we are very concerned about the unintended
consequences of not addressing interchange fees will have on
our industries as the card companies and big banks continue
to seek higher profits as a direct result of financial
regulatory reform legislation, and other failing portfolios,
through ever increasing interchange fees. We ask that you
support S. Amdt. 3989, sponsored by Senator Durbin, to the
Restoring American Financial Stability Act of 2010 when it
comes up for a vote in order to ensure that financial
regulation reform is comprehensive and complete. We look
forward to working with you and your staff to incorporate
these meaningful, common-sense reforms as part of the
financial regulatory reform legislation.
Sincerely,
National Trade Associations.
American Apparel & Footwear Association, American
Association of Motor Vehicle Administrators, American
Beverage Licensees, American Booksellers Association,
American Dental Association, American Home Furnishings
Alliance, American Hotel & Lodging Association, American
Nursery & Landscape Association . . .

Mr. DURBIN. Madam President, I see one of my colleagues on the Senate
floor, so I am going to yield. And I say to my colleagues, I am hoping
this amendment comes up this afternoon. I will take less time to
describe it then, but I wanted to use this time to put my full
statement in the Record. I will just say to my colleagues that there
won't be another amendment that we will consider this week or in the
near future of such importance to small businesses across America.
Let's stand up for these small businesses and give them a fighting
chance against giants in the credit card industry. It is only fair, and
it is a good way to revive this economy and put people back to work.
Madam President, I yield the floor, and I suggest the absence of a
quorum.
The PRESIDING OFFICER (Mrs. Shaheen). The clerk will call the roll.
The assistant editor of the Daily Digest, proceeded to call the roll.
Mr. KOHL. Madam President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KOHL. Madam President, I rise today to speak about amendment No.
3788, an amendment essential to protecting consumers. As we work to
rein in the excesses of Wall Street and shore up our economy, we must
do all that we can to ensure consumers can get discount prices from
retail stores at the very time when they need them the most.
My amendment will restore the nearly century old rule that made it
illegal under antitrust law for a manufacturer to set a price below
which a retailer could not sell a product--a practice known as ``resale
price maintenance'' or ``vertical price fixing.'' This rule was
overturned in June 2007 by a narrow 5-4 majority of the Supreme Court
in the Leegin case. My amendment is

[[Page S3699]]

identical to the Discount Pricing Consumer Act--a bill which has 10
cosponsors and passed the Judiciary Committee last month. Our bill has
been endorsed by 39 State attorneys general, the leading consumer
groups, as well as numerous antitrust experts, including former FTC
Chairman Pitofsky.
For 96 years until the Leegin decision the rules were clear.
Manufacturers could not set a retail price, and retailers could not be
prevented from discounting. Millions of consumers saw the benefits of
discount prices every day. Thousands of retailers all across the
country were able to discount their products and sell their goods at
the most competitive prices. Many credit the ban on vertical price
fixing with the rise of today's low price, discount retail giants--
stores like Target, Best Buy, Walmart, and the Internet sites Amazon
and EBay, which offer consumers a wide array of highly desired products
at discount prices.
But the consequences of the Leegin decision should worry all of us.
Allowing manufacturers to set retail prices threatens the very
existence of discounting and discount stores, and leads to higher
prices for consumers. In his dissenting opinion in Leegin, Justice
Breyer cited economic studies that estimated that if only 10 percent of
manufacturers engaged in vertical price fixing, retail bills would
average $750 to $1,000 higher for the average family of four every
year.
And the experience of the last 3 years since the Leegin decision is
beginning to confirm our fears regarding the dangers of permitting
vertical price fixing. The Wall Street Journal has reported that more
than 5,000 companies have implemented minimum pricing policies.
Internet monitors scour the Web at the behest of manufacturers to
prevent discounting. And there have been many reports of everything
from consumer electronics and video games to baby products and toys,
rental cars and bathtubs being subject to minimum retail pricing
policies.
My amendment is quite simple and direct--it merely returns us to the
state of the law the day before Leegin was decided. It would simply add
one sentence to section 1 of the Sherman Act--a statement that any
agreement with a retailer, wholesaler or distributor setting a price
below which a product or service cannot be sold violates the law. No
balancing or protracted legal proceedings will be necessary. Should a
manufacturer enter into such an agreement it will unquestionably
violate antitrust law. Instead of the complexity of the ``rule of
reason'' announced by Leegin, we will once again have a simple and
clear legal rule banning vertical price fixing--a legal rule that will
promote low prices and discount competition to the benefit of consumers
every day.
In the last 50 years, millions of consumers have benefited from an
explosion of retail competition from new large discounters in virtually
every product, from clothing to electronics to groceries, in both ``big
box'' stores and on the Internet. My amendment will correct the Supreme
Court's abrupt change to antitrust law, and will ensure that today's
vibrant competitive retail marketplace and the savings gained by
American consumers from discounting will not be jeopardized by the
abolition of the ban on vertical price fixing. I urge my colleagues to
support this amendment.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant editor of the Daily Digest proceeded to call the roll.
Mr. UDALL of Colorado. Madam President, I ask unanimous consent that
the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. UDALL of Colorado. I ask unanimous consent that Senators Schumer
and Levin be added as original cosponsors to amendment No. 4016.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. UDALL of Colorado. I thank them for their support. I also want to
first thank Senators Lugar and Bond for the efforts they brought forth,
along with those on our side, for this important amendment.
This amendment will make it a fact of life that individual Americans
can more easily access their credit score. I have come to the floor of
the Senate on a number of occasions over the last week to push for an
important change in the world of credit bureaus and credit reports and
now credit scores.
A credit score impacts consumers' interest rates, monthly payments on
home loans, and can even affect a consumer's ability to buy a car, rent
an apartment, and get phone or Internet service. I have been working
with Chairman Dodd, the Treasury Department, the Federal Reserve, and
other colleagues in the Senate to reach a compromise that will help us
achieve those objectives I just outlined.
I am very pleased to say I think at this fairly late hour on a
Thursday that we have agreed to an approach that will give millions of
Americans unsolicited access to their genuine credit score. I have
talked about the difference between the score and the report. The
report is a valuable tool, but unless people have their score they do
not know where they stand.
Our bipartisan amendment will build upon existing law and require
disclosure of credit scores to consumers whenever their credit score is
used against them. So under our amendment, if they are turned down for
credit because of their credit score, which is not an unusual
occurrence, frankly, they have the right to see the credit score that
was used against them.
Under this amendment, if they are charged a higher interest rate or
get less favorable terms on a loan because of their score, they will
also receive notification of that score.
So this amendment, again, for which we have bipartisan support,
corrects one of the inequities in our financial system which keeps
Americans from accessing this very important tool that, frankly, I
think is as important as their health statistics: their blood pressure,
heart rate, and so on. But people have not been able to access that
credit score.
So there is a fundamental principle that is at stake. If their credit
score is being used against them, they ought to have the right to at
least see it. This Wall Street accountability package we are
considering, at the heart of it--I think the Senator from New Hampshire
knows this--we want to give Americans more tools so they are more
financially literate. They can take control of their financial future.
So the best part of this amendment is that consumers will receive
notification of their score without any red tape. This is good
government. It is pure transparency reform that will empower Americans,
as I have said, with critical information about their financial health.
This makes common sense.
Let's put Americans in charge of their financial future. So as I
close, I thank, in turn, Chairman Dodd, Senator Lugar, Senators Levin,
Bond, Schumer, Begich, Lautenberg, and all of the 20-plus additional
Senators who helped push for this important reform.
I especially thank Senator Pryor who has worked with us to find
something everyone can agree on. I look forward to this amendment being
called up later, and I urge all colleagues to support this commonsense
reform that will give Americans control over their financial futures.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DeMINT. I ask unanimous consent that the order for the quorum
call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 3852 to Amendment No. 4019

Mr. DeMINT. Madam President, I call for the regular order with
respect to the Wyden amendment No. 4019 and call up my amendment No.
3852 as a second-degree amendment.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:

The Senator from South Carolina [Mr. DeMint], for himself
and Mr. Vitter, proposes an amendment numbered 3852 to
amendment No. 4019.

Mr. DeMINT. I ask unanimous consent that reading of the amendment be
dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To require the completion of the 700-mile southwest border
fence not later than 1 year after the date of the enactment of this
Act)

At the appropriate place, insert the following:

[[Page S3700]]

SEC. __. BORDER FENCE COMPLETION.

(a) Minimum Requirements.--Section 102(b)(1) of the Illegal
Immigration Reform and Immigrant Responsibility Act of 1996
(8 U.S.C. 1103 note) is amended--
(1) in subparagraph (A), by adding at the end the
following: ``Fencing that does not effectively restrain
pedestrian traffic (such as vehicle barriers and virtual
fencing) may not be used to meet the 700-mile fence
requirement under this subparagraph.'';
(2) in subparagraph (B)--
(A) in clause (i), by striking ``and'' at the end;
(B) in clause (ii), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(iii) not later than 1 year after the date of the
enactment of the Restoring American Financial Stability Act
of 2010, complete the construction of all the reinforced
fencing and the installation of the related equipment
described in subparagraph (A).''; and
(3) in subparagraph (C), by adding at the end the
following:
``(iii) Funding not contingent on consultation.--Amounts
appropriated to carry out this paragraph may not be impounded
or otherwise withheld for failure to fully comply with the
consultation requirement under clause (i).''.
(b) Report.--Not later than 180 days after the date of the
enactment of the Restoring American Financial Stability Act
of 2010, the Secretary of Homeland Security shall submit a
report to Congress that describes--
(1) the progress made in completing the reinforced fencing
required under section 102(b)(1) of the Illegal Immigration
Reform and Immigrant Responsibility Act of 1996 (8 U.S.C.
1103 note), as amended by this section; and
(2) the plans for completing such fencing not later than 1
year after the date of the enactment of this Act.

Mr. DeMINT. I yield the floor.
Mr. DODD. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. KAUFMAN. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KAUFMAN. Madam President, I ask unanimous consent to speak as in
morning business for up to 5 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.

Tribute to Cathleen Berrick and Cynthia Bascetta

Mr. KAUFMAN. Madam President, I rise today to speak once more about
our Nation's great Federal employees.
Henry Clay once said:

Government is a trust, and the officers of the government
are trustees; and both the trust and trustees are created for
the benefit of the people.

Every dollar of the taxpayers' money that we in Congress spend on
their behalf must be accounted for and every program rigorously audited
to prevent waste and fraud. That job belongs to the tireless and
persistent employees of the Government Accountability Office.
Since its founding in 1921, the GAO has been called ``the taxpayers'
best friend.'' It is the people's watchdog, the home of over 3,000
Federal employees whose main task is to save the American people money
by analyzing how public funds are spent. They make recommendations to
Congress on how best to eliminate waste and make programs more
efficient. If our elected officials have been entrusted to guard over
public business, surely it is the men and women of the GAO who, in the
words of the ancient adage, ``watch over the guardians.''
Today, I want to highlight the achievements of two outstanding
employees of the GAO.
Cathleen Berrick has spent her whole career as a public servant.
First in the Office of the Inspector General at the Pentagon and with
the Air Force Audit Agency, and later with the Postal Service's
Inspector General and the GAO, Cathleen has been at the forefront of
ensuring the accountability of government for many years.
As a Managing Director at the GAO for Homeland Security and Justice,
she has led comprehensive analyses of potential security
vulnerabilities at the Transportation Security Agency and suggested key
improvements.
In 2008, when assigned to review the plan for the TSA's Secure Flight
Program, which screens air passengers against terrorist watch lists,
Cathleen identified flaws and offered sound recommendations. She also
conducted studies and authored reports recommending more oversight in
how we secure our Nation's mass-transit systems and passenger rail.
Cathleen has testified before congressional committees over 20 times
and has proven to be an expert resource for policymakers.
The second person whose story I will share is Cynthia Bascetta.
Cynthia had worked for the GAO for 30 years when she was set to retire.
However, the devastation wrought by Hurricane Katrina caused her to
delay her retirement, and she decided to remain in public service.
As the GAO's Director for Health Care, Cynthia leads two major
reviews of public health care infrastructure in New Orleans to ensure
recovery funds are being spent wisely and for the greatest benefit. In
her three decades of service at the GAO, she has fought to improve
Federal disability policies, urged making HIV treatment and prevention
a national priority, and recommended changes to Social Security that
helped beneficiaries return to work without losing health care
benefits.
One of the areas of focus throughout Cynthia's career has been
improving care for our wounded veterans. She testified at the first
congressional hearing to investigate the conditions at Walter Reed
Medical Center, and her reviews were critical in understanding where
changes needed to be made.
Since we passed the Recovery Act last year, the GAO has been
preparing reports every 60 days on how funds are being used. Cynthia
has been working recently as the GAO's State lead for Illinois,
carefully reviewing every dollar from the Recovery Act being spent
there.
Madam President, employees of the GAO continue to ensure government
programs work for the American people. They remain ever-vigilant to
ensure all of our public funds are spent wisely and carefully.
I hope my colleagues will join me in thanking Cathleen Berrick,
Cynthia Bascetta, and all of the outstanding public servants at the
Government Accountability Office for their service to our Nation. They
are all truly great Federal employees.
Thank you, Madam President. I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Madam President, before our colleague from Delaware leaves
the floor--I said this once before, but I want to repeat it. Our
colleague from Delaware has only been here a few months, I guess--a
little over a year now; it goes by very quickly--having stepped in
after our colleague, Joe Biden, became Vice President, and I do not
know how well noticed it goes, but Senator Kaufman, I believe almost on
a daily basis or something like that----
Mr. KAUFMAN. Weekly.
Mr. DODD. On a weekly basis--takes a few minutes to recognize people
whose names and faces I am sure most Americans have never known or
seen. Their families and neighbors are familiar with them. But he
chooses three or four people who have worked on behalf of all of us, in
many cases for years, without ever getting the kind of notoriety and
celebration people in elective office receive. I wish to thank him for
doing it. It is not a piece of legislation. It is not an amendment to a
bill. It is not some ordinance or some treaty this Senate has an
obligation to engage in; it is merely taking a little time to recognize
some very fine Americans. We all hear about the ones who mess up and do
things that are wrong. They get the headlines. But every day, there are
literally thousands of people in this country who go to work on behalf
of the American public who do their jobs diligently and serve us all
tremendously well. The fact that one Member in this body every week
takes a few minutes to say thank you is something I deeply appreciate,
and I thank him.

Mr. KAUFMAN. Madam President, I thank the Senator from Connecticut. I
thank him for what he does, and I wish to say to all the world, he is
truly one of the great Federal employees. So I thank the Senator from
Connecticut.
Mr. DODD. I note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. ENZI. Madam President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

[[Page S3701]]

Amendment No. 3776

Mr. ENZI. Madam President, I rise to speak about Specter amendment
No. 3776, which has already been debated by the Senator from
Pennsylvania, but I wish to bring up the other side because it is a
very technical, legal issue which crosses professional fields of
accounting, tax preparation, and legal counsel. However, to understand
where Senator Specter would take this amendment, I wish to explain
where we have been.
In 1995, Congress rightly decided that the Securities and Exchange
Commission--the SEC--should have sole authority and ability to
prosecute criminals violating securities laws. The decision was made
because we knew private securities lawsuits would be driven by the
wrong factors. At that time, we saw how just a handful of law firms
were using class action lawsuits to clog up the courts and to tie up
companies in litigation for years for mere fluctuations in company
stock prices. Private lawsuits would have negative impacts on the
economy, and private securities lawsuits would potentially open small
businesses to unwarranted liabilities just as these small businesses
are struggling to make a comeback and hope to hire more workers to
stimulate our economy.
Fifteen years later, in 2010, Senator Specter has introduced an
amendment which would run contrary to Congress's decision. Senator
Specter's amendment would create what is called a ``private right to
action,'' meaning trial lawyers are going to have a field day with
this. What is worse, though, is this legal standard included in this
amendment doesn't hold water. The standard for ``aiding and abetting''
in this amendment has been adjusted three times in 2 weeks, and it
still isn't right. The standard in this amendment requires ``actual
knowledge of the improper conduct underlying the violation'' and of
``the role of the person assisting in such conduct.'' Now, this
standard is only slightly better than the first two proposals discussed
earlier in the debate.
At first glance, this standard may seem as though it is all that is
needed to show that someone has aided another in the act of committing
a crime. It would seem that if a person has knowledge of improper
conduct and knows they are helping that person, it would be a simple
legal matter. However, that is absolutely not the case, and I will
explain why in just a minute.
I am not a legal mind debating legal standards or case law. However,
I am a businessman and an accountant by trade, and I can see what this
poor legal definition will do not only to the business of accounting
but to our domestic securities industry as well. Tinkering with the
language of this amendment doesn't conceal the fact that the real-world
impact of this provision has not changed.
I need to point out the legal standard this amendment would set has
holes. Using the language laid out in the Specter amendment, here is
another example: You notice this person running through the park.
Having seen the person, you now have knowledge that person was running.
As a passerby, you got out of the way so they could continue on their
run. If we were to apply the Specter standard, even if you never met
this person, you would have knowledge of that person's action--you knew
he was running--and you got out of the way so he could use the
sidewalk. That is aiding. If this person just robbed a bank, under this
standard you could now arguably be considered a secondary accomplice.
In another hypothetical example, if a lawyer reviews a client's
statement to their investors, approves what has been written, and the
client falsified those statements, the lawyer is completely liable,
despite not knowing that the client's disclosures were false.
Although changes from the first draft of this amendment to what is
before us now are somewhat better, this amendment is still
unacceptable. This amendment does not require that the person in
question has knowledge the primary violator has broken the law. It is a
very important part of this. You may have seen him, you may have moved
aside for him, but you didn't know he was breaking the law. That is a
very important requirement.
The Specter amendment just requires the person is aware of the
conduct itself, not whether it is illegal. In other words, one doesn't
have to know they are helping someone violate the law, which is what
aiding and abetting is. One just has to know that the conduct happened.
I will say that again. This standard only requires that one knows of
the ``improper conduct,'' not that he ``knows that the conduct is
improper.'' This is a critical and unacceptable difference. To be
clear, the standard does not even meet what is used by the SEC to
prosecute criminal aiding and abetting charges. The SEC standard is
significantly higher. Because the standard in this amendment is so
flawed, we would be opening thousands of innocent small businesses to
secondary charges of fraud.
Again, we are not talking about criminal charges. These charges would
be strictly considered in a civil court. Keeping this standard would
give profit-motivated trial lawyers a vague statutory standard to work
from--not a good combination. They would be able to cast a wide net for
defendants, and this opens professionals in their company to the costs
of discovery and trial, in addition to potential liability for damages
awarded in the rest of the criminal case.
Let's not forget we are talking about accountants, tax preparers, and
attorneys who aid everyday companies. This means these professionals
would be faced with a standard of evidence they cannot refute or argue,
and they could likely be facing unfounded charges.
An accountant looks at the books, has knowledge of it, but that
doesn't mean he knows it was improper. Most of the accounting audits
are not of every single transaction. For a big corporation, an audit of
every single transaction might take 3 or 4 years to cover 1 year's
worth of transactions. It can't be done. But under that circumstance,
the accountant might have knowledge, and because he signs off on the
papers, he might be aiding them under this definition.
Their options under this standard would be pleading out for millions
of dollars, even if innocent, or losing even more in the long process
of discovery and trial in order to defend themselves and their work.
All this for someone who may not even know the criminal or have known
that the person's actions were criminal. Is this how our country's
legal system is supposed to work? Are we going to incentivize frivolous
lawsuits? The Specter amendment standard may even go so far as to hold
these professionals liable for not finding fraud.
I also wish to note that this proposed amendment also goes beyond
just the actions of some accountants and lawyers involved in the
securities industry. Senator Chuck Schumer and Mayor Michael Bloomberg
from New York City commissioned a report which found that meritless
securities lawsuits are driving up the cost of doing business in
securities and driving away foreign investors, making the United States
less competitive worldwide. Having a standard like the Specter
amendment proposal means foreign trading partners may be reluctant to
bring business here right when our country needs the investment the
most.
Foreign investors will not want to bring business here if doing so
exposes them to the private liability standard that Specter's amendment
would create.
As an accountant and former small business owner, and for each of the
reasons I have outlined, I urge my colleagues to oppose this ill-
conceived amendment.
I would be happy to answer questions of any of my colleagues if they
have any. Again, I ask them to just ask their accountant what they
think about this particular standard which could lead to lawsuits,
discovery, a lot of costs--and needlessly. We are trying to pass a law
that would take care of 1 percent of the problem and penalize the other
99 percent. So I hope we will reject the Specter amendment. I yield the
floor.
Madam President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mrs. FEINSTEIN. Madam President, I ask unanimous consent that the
order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. FEINSTEIN. Madam President, I rise to speak on an amendment that

[[Page S3702]]

I have offered, amendment No. 3939. I ask unanimous consent to add
Senator Snowe as a cosponsor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. FEINSTEIN. Madam President, this amendment is cosponsored also
by Senators Levin and Cantwell. The Dodd-Lincoln bill, as currently
drafted, takes major steps to reform the $600 trillion derivatives
market. I don't think people understand how big this market is. It
would require every trade to be reported in real time to the Commodity
Futures Trading Commission. It would require that all cleared contracts
be traded on an exchange or on a swap execution facility, therefore,
guaranteeing transparency. It would require that speculative position
limits be set in aggregate for each commodity instead of contract by
contract--to assure effectiveness. It would require foreign boards of
trade to adhere to minimum standards comparable to those in the United
States, including reporting requirements. The provision is designed to
address the underlying problem of the so-called London loophole.
I very much support these positions. However, I am very concerned
that the bill doesn't go far enough to address the London loophole.
This loophole has allowed for the trading of United States energy
commodities, such as crude oil, on foreign exchanges, without oversight
from the United States regulators. This means there is no cop on the
beat to shield U.S. oil prices from manipulation or excessive
speculation when they are traded in foreign markets, such as
commodities exchanges in London, Dubai, or Shanghai.
The amendment I am proposing along with my colleagues would allow the
CFTC to require foreign boards of trade to register with the CFTC,
which would give the Commodity Futures Trading Commission the
enforcement authority it needs. It is supported by the chairman of the
CFTC, Gary Gensler. This provision was in President Obama's original
proposed financial reform bill, and I think it is critical to pass in
this bill.
Let me explain what has become known as the London loophole. In the
wake of the California energy crisis, we learned that most energy
trading had been exempted from regulation by the Commodity Futures
Modernization Act of 2000, at the urging of a company by the name of
Enron. Using the Enron loophole, this notorious firm pioneered over-
the-counter energy derivatives trading. It set up EnronOnline, an
electronic market for trading physical and derivatives energy
contracts. It was a marketplace with no transparency, no paper trail
that could be audited, no speculative position limits, and absolutely
no government oversight to prevent fraud, manipulation, or protect the
public interest. Enron was a participant in every trade, and only Enron
knew the prices. It used EnronOnline and other trading forums to fleece
California consumers for $40 billion over 2 years of increased energy
prices.
Shockingly, much of what Enron had set up was legal because Congress
had stripped the Commodity Futures Trading Commission of its
enforcement power. Terrible.
From 2002 on, I worked with Senators Snowe, Cantwell, Levin, and many
others to restore regulatory oversight to energy derivatives. We tried
in 2002 on this floor, and in 2003 and 2004 to regulate energy
derivatives, but we were stopped and stymied. Opponents, such as Alan
Greenspan, have since said their opposition was mistaken.
Finally, in 2008--6 years after we started--we were able to close
this notorious Enron loophole in an amendment to the farm bill, of all
things. The amendment imposed meaningful regulation, including
speculative position limits and market oversight. So the CFTC began
monitoring these markets for fraud and manipulation for the first time
in 10 years.
But as Congress took steps to establish regulatory oversight of
domestic energy derivatives markets, Wall Street traders moved to avoid
U.S. regulation. They began to turn to offshore markets.
The successor to EnronOnline, the Intercontinental Exchange in
Atlanta, bought a London exchange, converted it into an electronic
exchange, and began listing American oil futures abroad. That is a way
speculators could go right around American regulation and avoid it.

West Texas Intermediate crude has been one of the highest volume
contracts on this London exchange since 2006. This contract has what is
called a price discovery impact because it is commonly referenced as
the standard market price of oil. This new regulatory loophole has thus
become known as the London loophole. But firms also listed American
energy commodity derivatives in Dubai and Singapore and opened their
electronic platforms to American traders.
This new electronically traded marketplace allows American traders,
simply put, to evade American market oversight and speculation limits.
The practical implication of this is that U.S. traders can use offshore
electronic exchanges to artificially drive up prices of U.S.
commodities without any consequences from our Nation's market
regulators. This is a big problem.
In 2008, a CFTC report found that traders using this London exchange
to trade U.S. crude oil futures held positions far larger than would be
allowed by American regulators. In fact, from 2006 to 2008, at least
one trader position exceeded United States speculation limits every
single week on the London exchange, and British regulators have done
nothing about it. The good news is that some steps have been taken
administratively to address this loophole.
In 2008, the Commodity Futures Trading Commission negotiated an
agreement with British regulators to bring greater oversight to
American commodities contracts traded in London. The agreement called
for speculation limits for the electronic trading of U.S. energy
commodities, such as crude oil on foreign exchanges, and required
recordkeeping and an audit trail so you can look at them for fraud or
manipulation. Without an audit trail, it is all in the dark. But CFTC--
and here is the cruncher--has limited legal authority to enforce this
agreement.
Bottom line: We need to make sure the CFTC can oversee trading of
American commodities, whether it happens through a computer server
located on Wall Street or in Singapore.
The Dodd-Lincoln bill currently before us includes some important
provisions to help close the London loophole. As drafted, the bill will
require foreign boards of trade that provide access to American traders
to comply with comparable rules enforced by a foreign regulator, to
publish trading information daily, to supply data to the CFTC, and to
enforce position limits. However, the CFTC is unable to force a foreign
board of trade to comply with those requirements. And that is just
fact. This is because the CFTC's current method of overseeing foreign
exchanges has tenuous legal underpinnings due to a Commodity Exchange
Act provision forbidding the CFTC from regulating foreign boards of
trade. In many instances, our regulatory body, the CFTC, can take
action against a U.S. trader trading a U.S. commodity on a foreign
exchange to prevent manipulation or excessive speculation only with the
cooperation and consent of the foreign regulator.
The other more controversial option is for the CFTC to completely ban
the foreign exchange from all U.S. operations. Not surprisingly, they
shy away from enforcement in the face of these regulatory obstacles.
We have a bill that still does not provide strong regulation. It
still allows American derivatives traders to avoid American regulations
by trading on a foreign electronic platform in Dubai, London, and other
places as well. That is why we--Senator Snowe, Senator Levin, Senator
Cantwell, and I--are offering a proposal to allow the CFTC to require
foreign boards of trade to register with the CFTC, which would give it
the enforcement authority it needs.
Quickly, here are the benefits of the amendment.
First, the registration process itself would give CFTC the authority
to impose regulatory requirements as a condition of registration.
Second, a formal registration process would assure that foreign
boards of trade all follow the same set of rules.
And third, the registration process would provide a much clearer
basis for CFTC decisions to refuse or withdraw permission to foreign
boards of trade wishing to allow American traders on their exchange.

[[Page S3703]]

Finally, and most important, all of CFTC's existing enforcement
authorities apply to registered entities under the Commodity Exchange
Act. This amendment would allow the Commodity Futures Trading
Commission to enforce its own statute with regard to foreign exchanges
operating in the United States. This is a moderate, practical amendment
to assure that we give our regulator the authority to enforce the
statutory provisions already in the legislation.
There are powerful interests out there that are opposed to this. They
want to be able to avoid our law. They want to be able to trade over
the London exchange. We negotiated with them to close the Enron
loophole. We had ICE in our office. They agreed to it. It took 6 months
of negotiation. Do you know what they did? They then went offshore,
bought the London exchange, changed it to an electronic trading
platform to avoid the very agreement they agreed with, that we
legislated and enacted. That is fact. Guess what. It burns me up. And I
do not intend to quit because I do not like to be duped that way,
whether it is Goldman Sachs and ICE or anybody else. If you give your
word, you make an agreement. You do not go offshore to avoid that
agreement.
Now that I have cooled down, this is a moderate, practical amendment
to assure that we give the Commodity Futures Trading Commission the
authority to enforce the statutory provisions already in the proposed
legislation. Why would we want legislation which cannot be enforced?
Why would we want legislation that ties their hands? Why would we want
legislation that allows somebody simply to avoid this law by trading
what amounts to $600 trillion of derivatives in Dubai or in London or
in Shanghai or anywhere else?
Guess what. These electronic exchanges will be set up everywhere to
avoid this bill. That is why we have to give the Commodity Futures
Trading Commission the authority to see that these foreign exchanges
register with them and agree to abide by the laws of the United States
of America.
I think it is important that we do this, and I do not intend to quit
one way or another, if it takes me 6 years to get it done, as it did
the last one. I have no respect for traders who look to go around U.S.
law.
As we crack down on traders in our markets, we must be ever vigilant
to assure that traders sitting on Wall Street do not avoid our
regulations by trading on electronic exchanges with computer servers in
London or Dubai or Singapore.
This amendment is an improvement of the London loophole provisions in
the Dodd-Lincoln bill by making these provisions easily enforceable. It
is the final piece to go in, to close the London loophole, which should
never have been opened in the first place, and to ensure that our
government has what it needs to protect American markets from
manipulation and excessive speculation, no matter where U.S. energy
commodities are traded.
I expect the big boys to speak out against it. But I will tell you
something: Everybody in the West who knows how they were fleeced back
in 1999 and 2000 by Enron clearly will understand the value of being
able to enforce the law of this country. We should ask for no less.
I know I cannot call up the amendment at the present time, but I hope
I will have that opportunity to do so later.
I yield the floor. I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Burris). The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 4019, Withdrawn

Mr. DODD. Mr. President, what is the pending question?
The PRESIDING OFFICER. The DeMint amendment is pending for the Dodd-
Wyden first-degree amendment.
Mr. DODD. Mr. President, I now withdraw the Wyden amendment.
The PRESIDING OFFICER. The Senator has that right.
The amendment is withdrawn.

Amendments Nos. 3989, as modified, and 3987

Mr. DODD. Mr. President, I ask unanimous consent that the Senate now
resume consideration of the Durbin amendment No. 3989 and the Thune
amendment No. 3987; that the Durbin amendment be modified with the
changes at the desk; that the amendments be debated concurrently for a
total of 10 minutes, with the time equally divided and controlled in
the usual form; that no amendment be in order to any of the amendments
in this agreement prior to a vote; that upon the use or yielding back
of time, the Senate proceed to vote in relation to the following
amendments; that the Durbin amendment be subject to an affirmative 60-
vote threshold; that if the amendment achieves the threshold, then it
be agreed to and the motion to reconsider be laid upon the table; that
if the amendment does not achieve the threshold, it be withdrawn:
Durbin amendment No. 3989, as modified; Thune amendment No. 3987; that
after the first vote, the succeeding vote be limited to 10 minutes,
with 2 minutes of debate prior to each vote, equally divided and
controlled.
The PRESIDING OFFICER. Is there objection?
Mr. GREGG. Reserving the right to object.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mr. GREGG. I make a point of order that a quorum is not present.
The PRESIDING OFFICER. The Senator does not have the floor.
Mr. GREGG. Do I have the right to object?
Can you do a quorum for a second?
Mr. DODD. Mr. President, I couldn't hear. What is the situation we
are in?
Mr. GREGG. I am reserving the right to object and asking the Senator
if he can put us in a quorum for a minute or two so we can clear this
issue on our side.
Mr. DODD. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant editor of the Daily Digest proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. Mr. President, I renew my unanimous consent request.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The amendment (No. 3989), as modified, is as follows:

At the end of subtitle G of title X, add the following:

SEC. 1077. REASONABLE FEES AND RULES FOR PAYMENT CARD
TRANSACTIONS.

The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.)
is amended--
(1) by redesignating sections 920 and 921 as sections 921
and 922, respectively; and
(2) by inserting after section 919 the following:

``SEC. 920. REASONABLE FEES AND RULES FOR PAYMENT CARD
TRANSACTIONS.

``(a) Reasonable Interchange Transaction Fees for
Electronic Debit Transactions.--
``(1) Regulatory authority.--The Board shall have authority
to establish rules, pursuant to section 553 of title 5,
United States Code, regarding any interchange transaction fee
that an issuer or payment card network may charge with
respect to an electronic debit transaction.
``(2) Reasonable fees.--The amount of any interchange
transaction fee that an issuer or payment card network may
charge with respect to an electronic debit transaction shall
be reasonable and proportional to the actual cost incurred by
the issuer or payment card network with respect to the
transaction.
``(3) Rulemaking required.--The Board shall issue final
rules, not later than 9 months after the date of enactment of
the Consumer Financial Protection Act of 2010, to establish
standards for assessing whether the amount of any interchange
transaction fee described in paragraph (2) is reasonable and
proportional to the actual cost incurred by the issuer or
payment card network with respect to the transaction.
``(4) Considerations.--In issuing rules required by this
section, the Board shall--
``(A) consider the functional similarity between--
``(i) electronic debit transactions; and
``(ii) checking transactions that are required within the
Federal Reserve bank system to clear at par;
``(B) distinguish between--
``(i) the actual incremental cost incurred by an issuer or
payment card network for the role of the issuer or the
payment card network in the authorization, clearance, or
settlement of a particular electronic debit transaction,
which cost shall be considered under paragraph (2); and
``(ii) other costs incurred by an issuer or payment card
network which are not specific to a particular electronic
debit transaction,

[[Page S3704]]

which costs shall not be considered under paragraph (2); and
``(C) consult, as appropriate, with the Comptroller of the
Currency, the Board of Directors of the Federal Deposit
Insurance Corporation, the Director of the Office of Thrift
Supervision, the National Credit Union Administration Board,
the Administrator of the Small Business Administration, and
the Director of the Bureau of Consumer Financial Protection.
``(5) Exemption for small issuers.--This subsection shall
not apply to issuers that, together with affiliates, have
assets of less than $10,000,000,000, and the Board shall
exempt such issuers from rules issued under paragraph (3).
``(6) Effective date.--Paragraph (2) shall become effective
12 months after the date of enactment of the Consumer
Financial Protection Act of 2010.
``(b) Limitation on Anti-competitive Payment Card Network
Restrictions.--
``(1) No restrictions on offering discounts for use of a
competing payment card network.--A payment card network shall
not, directly or through any agent, processor, or licensed
member of the network, by contract, requirement, condition,
penalty, or otherwise, inhibit the ability of any person to
provide a discount or in-kind incentive for payment through
the use of a card or device of another payment card network,
provided that the discount or in-kind incentive only
differentiates between payment card networks and not between
other issuers.
``(2) No restrictions on offering discounts for use of a
form of payment.--A payment card network shall not, directly
or through any agent, processor, or licensed member of the
network, by contract, requirement, condition, penalty, or
otherwise, inhibit the ability of any person to provide a
discount or in-kind incentive for payment by the use of cash,
check, debit card, or credit card.
``(3) No restrictions on setting transaction minimums or
maximums.--A payment card network shall not, directly or
through any agent, processor, or licensed member of the
network, by contract, requirement, condition, penalty, or
otherwise, inhibit the ability of any person to set a minimum
or maximum dollar value for the acceptance by that person of
credit cards, provided that such minimum or maximum dollar
value does not differentiate between issuers or between
payment card networks.
``(c) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Debit card.--The term `debit card'--
``(A) means any card, or other payment code or device,
issued or approved for use through a payment card network to
debit an asset account for the purpose of transferring money
between accounts or obtaining goods or services, whether
authorization is based on signature, PIN, or other means;
``(B) includes general use prepaid cards, as that term is
defined in section 915(a)(2)(A) (15 U.S.C. 1693l-1(a)(2)(A));
and
``(C) does not include paper checks.
``(2) Credit card.--The term `credit card' has the same
meaning as in section 103 of the Truth in Lending Act (15
U.S.C. 1602).
``(3) Discount.--The term `discount'--
``(A) means a reduction made from the price that customers
are informed is the regular price; and
``(B) does not include any means of increasing the price
that customers are informed is the regular price.
``(4) Electronic debit transaction.--The term `electronic
debit transaction' means a transaction in which a person uses
a debit card to debit an asset account.
``(5) Interchange transaction fee.--The term `interchange
transaction fee' means any fee established by a payment card
network that has been established for the purpose of
compensating an issuer or payment card network for its
involvement in an electronic debit transaction.
``(6) Issuer.--The term `issuer' means any person who
issues a debit card or credit card, or the agent of such
person with respect to such card.
``(7) Payment card network.--The term `payment card
network' means an entity that directly, or through licensed
members, processors, or agents, provides the proprietary
services, infrastructure, and software that route information
and data to conduct transaction authorization, clearance, and
settlement, and that a person uses in order to accept as a
form of payment a brand of debit card, credit card or other
device that may be used to carry out debit or credit
transactions.''.

Mr. DODD. Mr. President, I ask unanimous consent that upon
disposition of the above-mentioned amendments, the Senate resume
consideration of the Collins amendment No. 3879 and that the amendment
be considered and agreed to and the motion to reconsider be considered
made and laid upon the table.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. Mr. President, I ask unanimous consent that the following
be the next first-degree amendments in order: Rockefeller-Hutchison,
the FTC amendment; Senator Crapo, the GSE on budget amendment; Senator
Mark Udall of Colorado, No. 4016 regarding credit scores; Senator
Shelby's amendment No. 4010 re: the consumer bureau; Senator
Whitehouse's State usury laws; Senator Vitter, No. 4003, the
manufacturing amendment; Senator Cantwell and Senator McCain's Glass-
Steagall amendment; and Senator Cornyn, No. 3986 regarding the IMF.
The PRESIDING OFFICER. Without objection, it is so ordered.
Under the previous order, there will be 10 minutes of debate equally
divided.
The Senator from Illinois.
Mr. DURBIN. Mr. President, I ask the Chair to inform me when I have 1
minute of my 5 minutes remaining.
I think this is an amendment that is well known to my colleagues. I
have spoken on the floor several times. It is about the interchange
fees charged to small businesses across America for the use of credit
cards.
This amendment does the following things: It directs the Federal
Reserve to ensure that debit fees on debit cards are reasonable and
proportional to processing costs; it stops Visa and MasterCard from
imposing any competitive restrictions; it ends prohibitions on
discounts for use of different network cards; it ends prohibitions on
discounts for cash, debit, or credit; and it ends prohibitions on
minimum purchase levels for paying with a credit card.
It does not affect credit card interchange rates. We do not establish
a rate. That is left entirely to the Federal Reserve to review. We do
not allow discrimination against small banks or credit unions. The
modification specifically prohibits any discrimination against the
issuer of a credit card. A merchant may decide to favor one network
over another but cannot favor one bank over another that issues a card.
So there can be no discrimination against a credit union, community
bank, or a large bank, for that matter. It doesn't set interchange
prices.
By putting a $10 billion threshold in terms of the banks issuing the
cards, we literally exempt 99 percent of all banks and credit unions
from the application of this law. Still, just going for the largest
banks in America--86 banks in America--we will cover 65 percent of all
the credit and debit transactions in this country. So it is a
significant amendment, and it protects the community banks and the
credit unions.
I will tell you that I am very concerned and disappointed by the so-
called Independent Community Banks Association, which continues to
oppose this amendment despite my best efforts to exempt virtually all
of their members from being covered. I understand they have a conflict
of interest because they are in the top 25 issuers of credit and debit
cards in the United States. They make a lot of money under the current
situation. They may not want to change it, but it is not fair to small
banks in Illinois and across the Nation for them to speak to this issue
when they have this conflict of interest.
The second thing I want to say to the credit unions is that there are
8,200 credit unions in America, and all but 3 are exempt from this
law--99.999 percent of credit unions are exempt from this law. For them
to be opposing it because of three of the biggest credit unions in
America is unfair to the rest of their members and certainly unfair to
the merchants who do business with them every day.
This is the single most important amendment for small business and
retail business in America that we will consider on this bill. In a
time of recession, when we need small businesses to step up and create
jobs, this is a way to move forward.
Members have heard from all across the country, from small businesses
and retail merchants who are asking for some fairness, some justice
when it comes to these major credits cards that literally dictate the
terms of their agreements with these small businesses. I urge my
colleagues to support the Durbin amendment.
Mr. President, I am going to reserve the remainder of my time.
The PRESIDING OFFICER. Who yields time?
If no time is yielded, the time will be charged to both sides
equally.
Mr. DURBIN. Mr. President, how much time do I have remaining?
The PRESIDING OFFICER. One minute, 15 seconds.
Mr. DURBIN. I yield to the Republican side, if there is opposition to
the amendment.

[[Page S3705]]

Mr. KYL. Mr. President, as far as I know, there is no one else on our
side wishing to speak; therefore, we can yield back time of the
minority.
Mr. DURBIN. I say to my colleagues, I know this is a complex and in
some ways a controversial amendment. But I can't think of a better way
for us to establish a reasonable standard that debit cards, which are
now becoming more common and are equivalent to a check, are going to be
charged against the merchant that honors the card only in a reasonable
and proportional way by the same agency we used under the consumer
credit card reform bill of just last year.
I urge my colleagues, if they are listening to small businesses
across America, struggling to survive, trying to add new employees,
give them a helping hand by voting for the Durbin amendment so they can
have reasonable charges for the use of credit cards and debit cards at
their establishment. I urge the passage of this amendment and I yield
the remainder of my time.
I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There appears to
be a sufficient second.
If all time is yielded back, the question is on agreeing to the
Durbin amendment, No. 3989, as modified.
The yeas and nays have been ordered.
The clerk will call the roll.
The bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from West Virginia (Mr. Byrd)
and the Senator from Florida (Mr. Nelson) are necessarily absent.
Mr. KYL. The following Senator is necessarily absent: the Senator
from Texas (Mrs. Hutchison).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote
The result was announced--yeas 64, nays 33, as follows:

[Rollcall Vote No. 149 Leg.]

YEAS--64

Barrasso
Begich
Bennet
Bingaman
Boxer
Brown (MA)
Brown (OH)
Burr
Burris
Cantwell
Cardin
Casey
Chambliss
Collins
Conrad
Crapo
Dodd
Dorgan
Durbin
Ensign
Enzi
Feingold
Feinstein
Franken
Gillibrand
Graham
Grassley
Hagan
Harkin
Inouye
Isakson
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
LeMieux
Levin
Lincoln
Lugar
Menendez
Merkley
Mikulski
Murray
Nelson (NE)
Pryor
Reed
Reid
Risch
Rockefeller
Sanders
Schumer
Shaheen
Snowe
Specter
Stabenow
Udall (CO)
Udall (NM)
Vitter
Webb
Whitehouse
Wicker
Wyden

NAYS--33

Akaka
Alexander
Baucus
Bayh
Bennett
Bond
Brownback
Bunning
Carper
Coburn
Cochran
Corker
Cornyn
DeMint
Gregg
Hatch
Inhofe
Johanns
Johnson
Kaufman
Kyl
Lieberman
McCain
McCaskill
McConnell
Murkowski
Roberts
Sessions
Shelby
Tester
Thune
Voinovich
Warner

NOT VOTING--3

Byrd
Hutchison
Nelson (FL)
The amendment (No. 3989), as modified, was agreed to.
The PRESIDING OFFICER. Under the previous order, the motion to
reconsider is considered made and laid upon the table.
The majority leader is recognized.
Mr. REID. Mr. President, if I can have everyone's attention, I will
be as quick as possible. Mr. President, we have dealt with 31
amendments on this piece of legislation. Until today, this last
amendment, they have all been 50-vote margins. There has been no
tabling of motions.
We now have six amendments pending. We have unanimous consent that
eight more can be offered. There is talk between the two managers of
the bill. There are Democratic amendments we think the Republicans will
agree to; there are Republican amendments that we will agree to.
We are moving toward wrapping up this bill. There will be a number of
votes on Monday night starting at 5:30. Everyone should be aware of
that. Tonight the managers are here. They are going to try to work
through a couple of amendments. We have one more vote. After that,
there will not be any more votes until Monday night.

Vote on Amendment No. 3987

The PRESIDING OFFICER. Under the previous order, the question is on
agreeing to Amendment No. 3987 offered by the Senator from South
Dakota.
The yeas and nays have previously been ordered.
The clerk will call the roll.
Mr. DURBIN. I announce that the Senator from West Virginia (Mr.
Byrd), the Senator from New Jersey (Mr. Lautenberg), the Senator from
Michigan (Ms. Stabenow), and the Senator from Florida (Mr. Nelson) are
necessarily absent.
Mr. KYL. The following Senator is necessarily absent: the Senator
from Texas (Mrs. Hutchison).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 40, nays 55, as follows:

[Rollcall Vote No. 150 Leg.]

YEAS--40

Alexander
Barrasso
Bennett
Bond
Brown (MA)
Brownback
Bunning
Burr
Chambliss
Coburn
Cochran
Corker
Cornyn
Crapo
DeMint
Ensign
Enzi
Graham
Grassley
Gregg
Hatch
Inhofe
Isakson
Johanns
Kyl
LeMieux
Lincoln
Lugar
McCain
McConnell
Murkowski
Risch
Roberts
Sessions
Shelby
Snowe
Thune
Vitter
Voinovich
Wicker

NAYS--55

Akaka
Baucus
Bayh
Begich
Bennet
Bingaman
Boxer
Brown (OH)
Burris
Cantwell
Cardin
Carper
Casey
Collins
Conrad
Dodd
Dorgan
Durbin
Feingold
Feinstein
Franken
Gillibrand
Hagan
Harkin
Inouye
Johnson
Kaufman
Kerry
Klobuchar
Kohl
Landrieu
Leahy
Levin
Lieberman
McCaskill
Menendez
Merkley
Mikulski
Murray
Nelson (NE)
Pryor
Reed
Reid
Rockefeller
Sanders
Schumer
Shaheen
Specter
Tester
Udall (CO)
Udall (NM)
Warner
Webb
Whitehouse
Wyden

NOT VOTING--5

Byrd
Hutchison
Lautenberg
Nelson (FL)
Stabenow
The amendment (No. 3987) was rejected.

Amendment No. 3879

The PRESIDING OFFICER. Under the previous order, the question is on
amendment No. 3879, offered by the Senator from Maine.
The amendment is agreed to, and the motion to reconsider is
considered made and laid upon the table.
The amendment (No. 3879) was agreed to.
Mr. DODD. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. WYDEN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WYDEN. Mr. President, I ask unanimous consent to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.

Secret Holds

Mr. WYDEN. Mr. President and colleagues, the American people are
furious at the way business is done in Washington, DC. Today, on the
floor of the Senate, we saw a pretty good reason why.
For many months, a large group of Senators on both sides of the
aisle--Senator Grassley, Senator Inhofe, Senator Collins, and Senator
Bennett, among the Republicans; a host of my colleagues on our side of
the aisle, led by Senator McCaskill--have been working to try to
eliminate the secret hold in the Senate, which is, in my view, one of
the most pernicious, most antidemocratic practices in government.
What the secret hold allows is for just one Senator--just one--to
anonymously keep the American people from getting any sense of a
particular piece of legislation, someone who has been nominated for an
appointment--any sense of some of the most important business that is
before the Senate.
The Senator from Missouri, who is in the Chamber, has noted that at
times there are scores and scores of these secret holds. I have pointed
out this has happened for years on both sides of the aisle.

[[Page S3706]]

So this has been an opportunity, when the country is crying out for
bipartisanship, for Democrats and Republicans to together--as our large
group has done--fix this, to open our government, to ensure that
democracy is accountable, and that public business is actually done in
public.
Until about an hour or so ago, I thought we would win a dramatic
victory for the cause of open government. We had a good debate this
morning on the measure. Colleagues on both sides of the aisle talked
about it.
Not one Senator objected, not one was willing to say in public they
were in favor of secret holds. Quite the opposite: We talked for some
time, and no one objected at all. We were under the impression that the
matter would be scheduled for a vote this afternoon.
Given that, I was flabbergasted that right before it was time to
vote, one Senator--just one--without any notice whatever--no notice to
me, no notice to any of the other sponsors, sponsors on the other side
of the aisle--one Senator sought to attach to our amendment, which
would have received a resounding vote because Senators are not going to
vote in favor of secrecy when they are on the record--one Senator
attached a completely unrelated matter, a very controversial matter.
I say to the Chair, I say to all my colleagues, I never, ever would
have done that to another colleague. I have felt for many years now
that the great challenge in the Senate is to have colleagues work
together, to have colleagues come together on both sides, because that
is going to help us advance the cause of open government, it is going
to help us get the best possible policy.
So if I had been in our colleague's shoes, and I was interested in
advancing this other issue, I would have come to that particular
Senator and said: How can we work this out? That did not happen. So all
of us, at the last minute, when we were looking forward to celebrating
what, in my view, would have been a historic vote for open government,
after all these months of Democrats and Republicans debating secrecy in
government, we now sit here on Thursday evening, with secrecy having
won once more, doing government in the shadows winning once more,
denying the American people the accountability this institution is all
about winning once again.
I think the American people deserve better. We spent a lot of time
today bringing all sides together. The chairman of the committee,
Senator Dodd, is here with us. The whole essence of the Wall Street
legislation has been to ensure more openness and more accountability in
these essential financial transactions. Chairman Dodd has done a superb
job in advancing that case.
What Senators on both sides of the aisle sought to do, until there
was an objection from one Senator at the last minute--with no notice--
what we sought to do was to say: If we are going to open our system of
financial transactions so there would be more transparency and more
accountability, let's also open the way we do business in the Senate so
the American people are not kept in the dark any longer about major
judgments with respect to legislation or nominations. One Senator--just
one--without notice, kept us from bringing that new accountability and
openness to the Senate.
I know colleagues want to bring up other matters. I simply wish to
say--I think I have been in this body now for a little over a decade--I
cannot recall another instance where the cause of open government took
a beating, took a blindsiding, like the cause of open government took
this afternoon.
I wish to tell my colleagues, I intend to come back to my post here
again and again and again until we abolish the secret hold, until we
ensure that the American people see that government is being brought
out of the shadows and debates are out in the open, where they ought to
be.
We did not win this afternoon because I think we got kneecapped. I do
not know how to describe it any other way. But I do not think, at this
time in American history, where the American people are this angry--
this angry--at the way Washington, DC, does business, that those who
advocate secrecy are on the right side of history. I do not think they
are going to be able to defend in broad daylight opposing a bipartisan
coalition.
Senator Grassley has worked with me on this for a decade. He has,
again and again, championed the cause of transparency and openness in
government, not just on this question of abolishing secret holds but on
inspectors general and a variety of other practices.
So these are colleagues--Democrats and Republicans--who want to show
the American people they are going to stand for open government, and
they are going to do it in a way where the American people will say:
Those folks finally get it. Instead of spending their time in these
petty food fights, they are a group of Democrats and Republicans who
acted like adults and got together and solved a major problem--a major
problem--by eliminating secrecy and making government more open.
So it is my intent to come back, if possible, day in and day out
until this changes. I think this is unconscionable. I can tell you, I
have never seen anything like this in my time in the Senate: one
Senator coming in, at the last moment, with no notice, trying to derail
the cause of open government.
I am not going to stand for it. I do not think the American people
are going to stand for it. We will be back here for as long as it takes
to bring some real sunshine to this cause of the Senate doing its
business in public rather than in the shadows.
I yield the floor.
The PRESIDING OFFICER. The Senator from Missouri is recognized.
Mrs. McCASKILL. Mr. President, I ask unanimous consent to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. McCASKILL. Mr. President, I know someone is going to be able to
use the figleaf and stand behind the argument that the amendment that
was offered at the very last moment this afternoon was about something
they cared about and something we need to vote on. It is a subject
matter we care about that we need to work on. But really? It is pretty
transparent what is going on here: that at the very last moment, when
all of a sudden we were this close for everyone having to go on record
about secret holds, that someone shot it out of the sky like a clay
pigeon. That is what this amendment did.
So the argument is: Well, the Wyden-Grassley amendment on secret
holds is not really about the financial reform bill. Why does it get a
chance to be voted on? It is very simple. The reason the Wyden-Grassley
amendment should be considered germane to every bill we debate in this
body is because it is about the way we do business. Every day that goes
by that we do not try to reform this nasty habit of secret holds, we
diminish the shine and the glory that is our democracy. We diminish
what this body should stand for and what our priorities should be.
Every day we allow the secret hold process to continue to take root and
grow and flourish, we are failing in our job as Senators who are here
to do the public's business.

We are not here to go in back rooms and get something for our secret
hold. We are not here to go in back rooms and leverage our secret hold
for something else we want. We are not here to go in back rooms and
have secret holds to keep this administration from succeeding or
filling the jobs that need to be filled. We are here to be accountable.
Of all the amendments out there that can be second degreed, this
amendment that would reform our process is selected to slow it down and
obviously, hopefully, kill it. Well, I have bad news for my friends
across the aisle who want to kill the longstanding attempts of Senators
Wyden and Grassley at reform, and my recent attempts, along with
Senator Bennet, Senator Whitehouse, Senator Udall, Senator Warner, and
others who have come to the floor and spoken on secret holds: We are
not going anywhere. It is probably a fault I have, but I am pretty darn
stubborn. In fact, I am probably stubborn to a fault. I think this is
something we all ought to be stubborn about.
We have different kinds of Senators. We have some who are kind of
feeling as though they are being marched to the gallows as they
grudgingly support cleaning up secret holds. We have others who want to
pound their chests and shout from the rooftops about trying

[[Page S3707]]

to get rid of secret holds. And we have others who are hiding in the
crevices, the little, bitty, tiny dark places, who are trying to keep
secret holds without anybody knowing who they are.
I will say this. One can make the assumption that whoever offered
this amendment to try to kill this amendment probably is a big fan of
secret holds. Because it seems to me if they wanted this amendment to
pass, they would have at least talked to the sponsors before they
offered the second-degree amendment. That is the common courtesy around
here; they would have at least given everyone some notice. But they saw
this amendment speeding toward the finish line. They realized they were
going to be called for the yeas and nays on reforming the Senate, and
they decided to take the path of least resistance and that is try to
kill the bill another way.
But along with my colleague and mentor on this subject, Senator
Wyden, and Senator Grassley, whom I have met with a number of times
over the last week, we are going to stay with it. I know I speak for my
colleagues who have been here 4 years or less, the freshmen and
sophomores in this body. I know how strongly we feel about this.
I wish to remind my colleagues, if I am wrong about you, if you are
against secret holds, the letter is still open. We have 60 Members who
have signed the letter. Sixty Members of this body, all of the
Democrats but one, both of the Independents, and now two Republicans
have signed the letter saying we will not exercise a secret hold and we
want to abolish secret holds. I look forward to seeing my colleagues on
the other side of the aisle, more Republicans joining in the signing of
this letter. It is available. I hope they will contact us. Senator
Warner, Senator Whitehouse, and I are the lead signators on this
letter. But it is time for everyone--by the way, if we get to 67
signatures, guess what we can do. We can amend the standing rules of
this place. We could say that an objection will not be in order if it
is anonymous. We could do that with 67 votes. What a great day that
would be. Wouldn't that be a wake-up call to the American people that
maybe we get it. Maybe we get why our approval ratings of Congress are
near historic lows for all the nonsense, ridiculous games that get
played around here.
Let's do the public's business and let's do it in public and let's
end the secret holds, the nasty habit we can no longer afford.
I will look forward to visiting with my colleagues on the other side
of the aisle and see if we can prevail upon them to withdraw their
second-degree amendment so we can go forward or find some other way
forward. But make no mistake, we will find a way forward and we will
end the secret hold. I am confident it will happen. So you can fight as
long and as hard as you want, but we are not going to give up.
Thank you, Mr. President.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. BENNET. Mr. President, I will take a couple of minutes. I have
been here a smaller amount of time than anybody who is on this floor.
The chairman has been here longer than I have been here; Senator Wyden,
Senator McCaskill, and others. I have been here about 15 months. What I
can tell my colleagues is that this place doesn't operate like any
other place in the universe. This secret hold business we are talking
about right now, so people understand, allows a Senator to be able to
hold up a nomination or a piece of legislation without having to tell
anybody who they are. I spent half my career in business. No business I
have would have ever tolerated a rule such as that. I have worked in
local government. No local government I have ever been part of would
have tolerated a rule such as that. There are city councils and State
governments, county governments all over this country right now--by the
way, they are probably still at work, unlike us, trying to figure out
how to balance their budgets in the most savage economy since the Great
Depression. They are not using secret holds to stop their ability to
respond to the American people, and we shouldn't either.
One of the things I want to say is that Senator Wyden should be
congratulated, because this is not a partisan piece of legislation. The
No. 1 question I hear from people when I go home is, Why can't you guys
work together? We lack confidence in what you are doing. There are
Democrats, Republicans, unaffiliated voters who say, Why can't you work
together? It looks like a partisan food fight back here because it is,
but it is a little more complicated than that. In this case, we have a
bipartisan piece of legislation that has broad support in this Chamber,
as do the nominees who are being held up whom we have brought forward.
We haven't brought forward nominees who got just Democratic votes; they
are nominees who were passed out of the relevant committee of
jurisdiction on a bipartisan basis, and somebody has decided that they
want to hold these people up for reasons that have nothing to do with
the quality of the nominees or because they were passed out on a
partisan way, which they weren't. They are bipartisan.
So this isn't about everybody on the other side of the aisle holding
up this legislation. This is bipartisan legislation. We should be here
tonight. It is only 7:30. We should be here tonight debating this
amendment, allowing people to come together in a bipartisan way to
support the amendment, just as we should allow people to come together
in a bipartisan way to support the nominees who have come forward and
passed out of committee. There is no difference. The difference is that
this rule allows some individuals to bring it to a grinding halt, to
create more division rather than less division which, at least in my
view, is what we need as a country.
In my State, no matter where I am--in blue parts of the State, in red
parts of the State--my sense is that people have a pretty common set of
aspirations for our State, for our country, for their kids, for our
grandkids. They expect us to act on those aspirations rather than on
the divisions that are so easy to create for just political gain. That
is what has been happening when it comes to these secret holds. There
are other issues as well that relate to the rules of this place that
need to be changed, but this is one that is indefensible.
I came to the floor this morning and I said it reminds me a little
bit of a car trip with my three little girls who are 10, 9, and 5. It
happens every single time we are in the car: The first hour goes great;
everybody is fine. But then they start to fret with each other, they
get frustrated with each other. You can hear it. Any parent knows, the
hair on the back of your neck starts to rise, and you know something
bad is about to happen, and it does. Usually somebody slugs somebody
else, and then you look behind you and no one will admit what they have
done. No one will take responsibility for their bad act. We don't
tolerate that in my household, by the way. We try hard to get to the
bottom and the truth. We don't always, but we usually do.
This is the same thing. I am not saying people shouldn't be able to
hold things up on the merits, but they ought to have to come to the
floor and tell the American people who they are and why they are
holding it up. They may have good arguments to make. That is what this
is about. It is about debate, and that is what we need more of in this
country because we are wasting the American people's time. We are
wasting the American people's money, and we can't even get a debate on
a lot of the issues this country faces.
I am going to try hard to do everything I can to contribute to a
civil debate rather than an uncivil debate, and I think getting rid of
these holds is going to be one of the ways forward. It is not the only
thing we need to do.
I wish to thank Senator Wyden for all of his good work on this issue,
and Senator Whitehouse for his good work, and the chairman's indulgence
for letting us have this conversation tonight. Thanks for everything
you have done to advance Wall Street reform this week.
By the way, on that, the American people should know that this bill,
the Wall Street reform bill, is a very good bill. Unlike some other
work we have done recently, it actually has the benefit of being worked
on in a very bipartisan way, with a lot of amendments from Democrats
and Republicans which I think have improved the legislation. I can't
predict the future, but my guess is that it is going to pass with broad
bipartisan support.

[[Page S3708]]

I congratulate Chairman Dodd on his leadership and getting that done
in a way that gives the American people confidence that we are actually
doing their business.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. WHITEHOUSE. Mr. President, I wish to join my colleagues in
expressing our support for Senator Wyden's continued efforts to get
this rule changed.
The circumstances in which these secret holds take place are quite
remarkable. Over and over again we see a committee vote clearing a
nominee for the floor, often unanimously, or by heavy, huge bipartisan
majorities; clearly qualified candidates; clearly candidates who enjoy
bipartisan support and, in many cases, candidates who are unanimously
supported. Even in this contentious and cantankerous time in this body,
they come through the committee with that kind of support.
Then they come through on the floor in some cases 98 to 0, 100 to 0.
But between that unanimous committee vote and the unanimous floor vote
is an endless, endless, endless delay. Many of them stack up and never
get that floor vote. We have had as many as 100 stacked up, waiting for
that floor vote on the Executive calendar.
What is happening between a unanimous committee vote and a unanimous
floor vote that creates all this hassle and delay and leaves people in
limbo for months and months, 100 at a time on the Executive calendar,
all of whom are in responsible positions in our Federal Government that
we need to have staffed? It is the secret hold. It is the secret hold
where you don't have to disclose who you are so you don't have to
disclose why you are holding. Because you don't have to disclose who
you are or why you are holding, you don't have to have a good reason.
You could have a downright nefarious reason and you could still use the
hold. It is pretty widely known that deeds that are done in the dark
are not the deeds we are proud of, and this is a deed that is by
definition always done in the dark. Senator Wyden and Senator
Grassley's long efforts to get rid of it are very commendable. We are
going to work very hard to make sure we have their back on this rule.
In this particular circumstance, Senator Wyden has been here 14
years. He has never seen a stunt like this one. I have only been here 3
years; I can't say that. But 14 years of service in the Senate and he
has never seen a stunt like this particular one.
The idea that this is on the merits, the idea that this is about
trying to get a vote on that second-degree amendment, seems mighty
improbable. Of all of the amendments on this bill, of all of the
amendments we have voted on, of all the amendments that are pending, of
all the amendments people are arguing for to get on the floor, which is
the one amendment that somebody chose to drop this second-degree
amendment on and jam up its passage through this body?
Which is the one? It is the secret hold. In kind of a perverse way,
it is actually sort of appropriate that a procedural vehicle, the
secret hold, that has such an odor of mischief around it--that the
reform of that should itself be blockaded by a procedural trick that
also has that same odor of mischief about it.
But what we want to do is get through that mischief so that the
business of this body no longer wreaks of the odor of mischief and
instead gives off the healthy air of open debate and public process and
transparency. I thank Senator Wyden and Senator Grassley, who is not on
the floor. We will continue to push on this.

Amendment No. 3746 to Amendment No. 3739

If I could change to a different piece of business, I will take this
opportunity to call up amendment No. 3746. I thank Senator Dodd and I
will say a few words about it.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:

The Senator from Rhode Island [Mr. Whitehouse], for
himself, Mr. Merkley, Mr. Durbin, Mr. Sanders, and Mr. Levin,
proposes an amendment numbered 3746 to amendment No. 3739.

Mr. WHITEHOUSE. Mr. President, I ask unanimous consent that reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To restore to the States the right to protect consumers from
usurious lenders)

On page 1320, strike line 23 and all that follows through
the end of the undesignated matter on page 1321 between lines
17 and 18 and insert the following:
``(g) Transparency of OCC Preemption Determinations.--The
Comptroller of the Currency shall publish and update not less
frequently than quarterly, a list of preemption
determinations by the Comptroller of the Currency then in
effect that identifies the activities and practices covered
by each determination and the requirements and constraints
determined to be preempted.''.
(b) Clerical Amendment.--The table of sections for chapter
one of title LXII of the Revised Statutes of the United
States is amended by inserting after the item relating to
section 5136B the following new item:

``Sec. 5136C. State law preemption standards for national banks and
subsidiaries clarified.''.
(c) Usurious Lenders.--Chapter 2 of the Truth in Lending
Act (15 U.S.C. 1631 et seq.) is amended by adding at the end
the following:

``SEC. 141. LIMITS ON ANNUAL PERCENTAGES RATES.

``Effective 12 months after the date of enactment of this
section, and notwithstanding any other provision of law, the
interest applicable to any consumer credit transaction (other
than a transaction that is secured by real property),
including any fees, points, or time-price differential
associated with such a transaction, may not exceed the
maximum permitted by any law of the State in which the
consumer resides. Nothing in this section may be construed to
preempt an otherwise applicable provision of State law
governing the interest in connection with a consumer credit
transaction that is secured by real property.''.

Mr. WHITEHOUSE. I don't want to speak long. I want to, first, join
Senator Bennet's appreciation of Senator Dodd for the long and
successful way in which he has managed this bill. It has not gone
unnoticed by the American people how contentious and cantankerous the
environment is around the Senate. Notwithstanding that inhospitable
environment, he has done an extraordinary job of bringing this
legislation forward and continuing through the deliberative process,
where people are getting amendments and votes are being taken. There
are no motions to table so far. Only one vote has required 60 votes. It
has been going by the regular order of the Senate and not the usual
procedures that often have been forced by the recent obstructionism we
have seen. I commend him and thank him for allowing this amendment to
be called up and to go forward.
I want to add a sponsor, Senator Tom Udall, of New Mexico. I ask
unanimous consent that he be added as the amendment's 15th cosponsor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WHITEHOUSE. I very much hope this can go with bipartisan support.
Senator Cochran on the Republican side is a cosponsor as well. It is a
bipartisan amendment. This is a situation that the Congress never voted
on, the situation that is here to cure. We never made a decision that
an out-of-State bank should be able to come into your State and violate
your State's law about interest rates. We could have. That is within
Congress's power to say. But we never did. We are in that circumstance,
however, for an unusual reason--because many years ago, 30 years ago,
the Supreme Court made a technical decision about the National Banking
Act, determining that when you have a transaction between a bank in one
State and a consumer in another, where is the transaction located for
regulatory purposes? They decided to locate it where the bank is. They
had to pick one or the other.
That didn't seem very systemically important at the time. But the big
banks--the Wall Street banks--have very crafty lawyers. The very crafty
lawyers saw the loophole that this innocent technical decision opened.
So they started moving their credit card businesses, their divisions,
into States that had the worst consumer protection laws--the ones where
you could charge any interest rate you wanted, where there was the
worst protection for the consumer. From that base of the worst consumer
protection in the country, they could move out and sell their products
and do business in all of the other States, whose laws were still on
the books, whose laws still protected their citizens, whose laws had
stood since the founding of the Republic, since the establishment of
the

[[Page S3709]]

States, and they could get around those laws because of this loophole
that the Supreme Court decision opened.
It is way past time that we close this loophole. In Illinois,
Connecticut, and Rhode Island, over and over and over we hear from
people who are suffering because they were late with a payment or they
fell into one of the tricks and traps in the credit card contract or
for no reason at all, just because they can do it, the credit card
company jacked the interest rate up to or over 30 percent. Suddenly,
boom, they are in what one expert called the ``sweat box.'' They cannot
pay what they owe. It is all they can do to stay even all the time. The
big company milked them and charged an interest rate that would be
illegal under the laws of that State. Before 1978, the solicitation for
that credit card that had the tricks and traps, and that hidden 30-
percent penalty rate, would have been a matter for the authorities. Now
it is the way they do business.
This amendment will put that back. For 202 years of this Republic,
that was the way things were. States could protect their own citizens
from unfair and excessive interest rates. That is the way it should be.
That is what federalism is all about. That is what States rights are
all about. So I hope that my amendment will go forward.
People believe in history--the more than two centuries of history of
the States protecting their consumers, and a tradition of protection
against abusive rates that goes back before the founding of our
country, back to ancient Roman law, and all of the world's major
religions. This is a longstanding tradition with a very strange little
loophole that created a peculiar historic anomaly that allows these big
corporations to take terrible advantage of ordinary Americans. Not only
are Americans being taken advantage of, but local banks suffer as well
because they have to play by the rules. If you haven't played that
stunt of headquartering your bank in another State so you can work your
way back and market in that same State, but under the nonexistent
consumer protections of the home State, then you are stuck, and it is
not fair.
I ask my colleagues to protect consumers in your home States and be
true to history and States rights, protect your local banks have to
follow local State laws. Let's put this brief moment in history into
the ash heap of history, where it belongs as an anomaly where
Americans, for the first time, had no protection from giant
corporations gouging them with 30 percent and higher interest rates.
That is not the way America was founded. That is not what we stood for
for centuries. It is only because of this peculiar loophole that we
have this situation. We have it within our power to change that. We
have it within our power to go back to our home States and say to the
people in our home States: We have done you a real good deed. We have
allowed your State government, your Governor and legislature in the
home State, to protect its own citizens against abusive out-of-State
interest rates.
A lot of this bill is very technical. It is preventive medicine to
rebuild the Glass-Steagall firewall, to regulate collateralized debt
obligations, to enhance leverage requirements--things that are hard for
people to grasp if they have not been steeped in these technicalities
for these many weeks. It is important stuff, but if you want a clear,
deliverable way to explain about this bill when you go back to your
home State--when Senator Cochran, my cosponsor, goes back to
Mississippi, if this amendment passes, he will be able to say to his
fellow Mississippians: Ladies and gentlemen, the State of Mississippi
is empowered to protect you now. An out-of-State company can no longer
take your interest rates, and for a lousy reason, or for no reason at
all, suddenly jack them up to 30 percent or more. It is simply wrong to
leave ordinary Americans subject to that kind of abuse, to all the
crafty, heavily lawyered, carefully designed, socially engineered
tricks and traps they have built into these complicated, complex,
tricky credit card agreements.
Now 50 States can stand against it. Attorneys general can proceed to
defend these laws. It puts the government of this country back where it
should be--in the hands of the people. Some people here would rather
have the big corporations rule over the States. I believe that the
States should trump even the big corporations when it comes to matters
of protecting their citizens. That is the way it should be. That is the
way the country was founded and, if this amendment passes, that is the
way it will be again.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut is recognized.
Mr. DODD. Mr. President, I thank my colleague from Rhode Island for
his very generous comments. We have worked closely together. He hasn't
been here a great deal of time, but he was an invaluable asset last
year about this time when we were spending an awful lot of time
together. I had become sort of the acting chairman of the HELP
Committee when my dearest friend in this Chamber became terribly ill,
Senator Kennedy. He asked me to take over that committee for him. We
were charged with the responsibility of putting together a sizable
portion of the health care proposal. The Senator from Rhode Island was
an invaluable asset in that process. We had some critical moments,
which I will not go into now, but in those critical moments, he played
a remarkably important role. Some day, I will have time to spend more
time going back and writing or talking about those days. I can point to
several moments when, in the absence of Senator Whitehouse's
involvement, I am not sure we would have ever concluded the process as
successfully as we did. I am eternally grateful to him for that. He has
since then moved off that committee and he is doing other things. He is
terribly interested in this subject matter, financial reform. I commend
him for his passion and determination to have these issues raised.

Mr. WHITEHOUSE. Mr. President, if I may reply. As a new Senator in
this body, who had not had legislative experience--I came out of an
executive and law enforcement background--I have enjoyed the privilege
of serving on that committee under the Senator's leadership. And now to
have had the privilege of seeing him work this bill on the floor, for a
new Senator, it has been a master class in leadership and legislation.
I will never forget it. I feel very privileged to have had that
experience. I thank the chairman.
Mr. DODD. Mr. President, I am going to be very brief. Our staff has
been very patient all week. You only get to see them when the cameras
pull back and we are in a quorum call. The wonderful floor staff people
do a remarkable job. Our reporters of debates here do a terrific job
reporting the words of every Senator who has spoken. I am grateful to
them.
I briefly say, Mr. President, we have now, I think, done some 30, 35
amendments on this bill. We have been at this for a couple of weeks.
The legislative days, I think, are 6 working days--maybe 7, which
doesn't seem like much, but it is an awful lot. Important amendments
have been debated, accepted, and rejected on both sides of the aisle.
I was determined at the outset to prove not only that we can pass
important legislation, but that we can do it with a strong dose of
civility in the process, and that while we have strong views and we
speak, as I do from time to time, with some degree of emotion and
passion about things I care deeply about, that should in no way be a
reflection of my feelings for my colleagues. We have allowed a lack of
civility in recent years, which makes it more difficult to get our jobs
done. We didn't get elected here to let those emotions dominate our
jobs on behalf of the people who sent us here.
In the last couple of weeks, we have produced a good bill, a stronger
bill, but in a way the American people can take pride in how their
Senate is operating. I am grateful to all my colleagues and the staffs
and others who make it possible for us to do this. These people are
knowledgeable about what needs to be done to work out language that
allows us to move forward. They don't get mentioned or talked about,
and they don't give speeches, but they play an integral and important
role in how this institution works.

[[Page S3710]]

Amendment No. 3758 to Amendment No. 3739

Mr. DODD. Mr. President, I ask unanimous consent that the pending
amendment be set aside, and on behalf of Senator Rockefeller, I call up
amendment No. 3758 and ask that once it is reported by number, it be
set aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report.
The legislative clerk read as follows:

The Senator from Connecticut [Mr. Dodd], for Mr.
Rockefeller, for himself, Mrs. Hutchison, Mr. Dorgan, and Mr.
Pryor, proposes an amendment numbered 3758 to amendment No.
3739.

Mr. DODD. Mr. President, I ask unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To preserve the Federal Trade Commission's rulemaking
authority and for other purposes)

On page 1237, line 6, strike ``law,'' and insert ``law
(other than section 1024(g) of this title),''.
On page 1254, line 15, strike ``To'' and insert ``Except as
provided in paragraph (3), to''.
On page 1255, line 10, strike ``(a)(1)(A),'' and insert
``(a)(1),''.
On page 1256, line 25, strike ``law,'' and insert ``law
(other than subsection (g)),''.
On page 1257, after line 25, insert the following:
(g) Preservation of Federal Trade Commission Authority.--
(1) In general.--No provision of this title shall be
construed as modifying, limiting, or otherwise affecting the
authority of the Federal Trade Commission under the Federal
Trade Commission Act or any other law, other than an
enumerated consumer law.
(2) Certain enforcement actions.--The Federal Trade
Commission may enforce, under the Federal Trade Commission
Act, a rule with respect to an unfair, deceptive, or abusive
act or practice issued by the Bureau as to a person subject
to the Federal Trade Commission's jurisdiction under that
Act, and a violation of such a rule shall be treated as a
violation of a rule issued under section 18 of that Act (15
U.S.C. 57a) with respect to unfair or deceptive acts or
practices. The Bureau may enforce, under subtitle E, a rule
with respect to an unfair or deceptive act or practice issued
by the Federal Trade Commission as to a covered person.
On page 1375, beginning with line 7, strike through line 5
on page 1376 and insert the following:
(5) Federal trade commission.--
(A) Transfer of functions.--The Federal Trade Commission's
authority under an enumerated consumer law to conduct a
rulemaking, issue official guidelines, or conduct a study or
issue a report mandated by such law, shall be transferred to
the Bureau on the designated transfer date. Nothing in this
title shall be construed to require a mandatory transfer of
any employee of the Federal Trade Commission to the Bureau.
(B) Federal trade commission authority.--The Bureau shall
have all powers and duties respecting rulemaking, issuing
guidelines, conducting mandated studies, and issuing mandated
reports contained within the enumerated consumer laws that
were vested in the Federal Trade Commission relating to
consumer financial protection functions on the day before the
designated transfer date.
On page 1462, line 5, after ``agency'' insert ``(other than
the Bureau of Consumer Financial Protection)''.
On page 1464, line 10, after ``agency'' insert ``(other
than the Bureau of Consumer Financial Protection)''.
On page 1472, line 4, after ``agency'' insert ``(other than
the Bureau of Consumer Financial Protection)''.
On page 1477, strike lines 15 through 21 and insert the
following:
``(e) Regulatory Authority.--
``(1) Bureau of consumer financial protection.--The Bureau
shall prescribe such regulations as are necessary to carry
out the purposes of this Act. Except as provided in paragraph
(2), the regulations prescribed by the Bureau under this
subsection shall apply to any person that is subject to this
Act, notwithstanding the enforcement authorities granted to
other agencies under this section.
``(2) Federal trade commission.--The Federal Trade
Commission shall issue regulations to implement sections
615(e) and 628 of this Act with respect to entities within
its authority under section 621 of this Act. The regulations
issued by the Bureau under paragraph (1) shall not apply to
those entities.''; and
On page 1482, line 1, after ``agency'' insert ``(other than
the Bureau of Consumer Financial Protection)''.
On page 1485, line 24, strike ``and'' after the semicolon.
On page 1486, line 2, insert ``and'' after the semicolon.
On page 1486, between lines 2 and 3, insert the following:
(C) by adding at the end the following: ``Notwithstanding
the preceding sentence, only the Federal Trade Commission
shall prescribe regulations to implement section 501(b) with
respect to entities subject to Federal Trade Commission
enforcement under section 505(a).''.
On page 1500, line 23, strike the closing quotation marks,
the semicolon, and ``and''.
On page 1500, between lines 23 and 24, insert the
following:
``(3) Subject to subtitle B of the Consumer Financial
Protection Act of 2010, the Federal Trade Commission shall
enforce the rules issued under paragraph (1) in the same
manner, by the same means, and with the same jurisdiction as
though all applicable terms and provisions of the Federal
Trade Commission Act were incorporated into and made part of
this section.''; and
On page 1516, line 1, after ``agency'' insert ``(other than
the Bureau of Consumer Financial Protection)''.

Ms. COLLINS. Mr. President, I rise today to speak on the amendment
that Senator Murray and I have been working on together that would
expand the Financial Stability Oversight Council established in S. 3217
to include as nonvoting members a State insurance commissioner, a State
banking supervisor, and a State securities commissioner. Concomitantly,
I seek to remove the independent voting member position having
insurance expertise, as that would create a duplicative position.
It is critically important that the Council incorporate State
regulators. State banking, insurance, and securities regulators are on
the front lines of financial regulation and therefore have information
and perspectives that are necessary components of an effective
regulatory structure. State regulators could act as ``first
responders'' to the Council, in that they see trends developing at the
State level. They could serve as an early warning system, identifying
practices and risk-related trends that are substantial contributing
factors to systemic risk.
I ask for unanimous consent that the joint letter from the Conference
of State Bank Supervisors, the National Association of Insurance
Commissioners, and the North American Securities Administrators
Association supporting this amendment be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

National Association of

Insurance Commissioners,

May 13, 2010.
Hon. Patty Murray,
Hon. Susan Collins,
U.S. Senate,
Washington, DC.
Dear Senators Murray and Collins: The Conference of State
Bank Supervisors (CSBS), the National Association of
Insurance Commissioners (NAIC) and the North American
Securities Administrators Association (NASAA) are writing in
support of your amendments providing for non-voting
membership for state banking, insurance and securities
regulators on the Financial Stability Oversight Council
(FSOC).
Including state regulators on the FSOC is both necessary
and appropriate. State banking, insurance, and securities
regulators are on the front lines of financial regulation and
bring information and perspectives that are necessary
components of an effective regulatory structure. In all
financial sectors, state regulators gather and act upon large
amounts of information from industry participants and from
investors. State regulators would bring to the FSOC the
insights of a team of ``first responders'' who see trends
developing at the state level, which have the potential to
impact the larger financial system. Consequently, they serve
as an early warning system identifying practices and risk-
related trends that are substantial contributing factors to
systemic risk.
Matters of financial stability and systemic risk have far-
reaching implications and benefit from a diversity of
regulatory perspectives. By including state regulators in the
FSOC, your amendments create a more comprehensive and
efficient approach that will benefit from access to all
relevant information regarding the accumulation of risk in
our financial system.
Thank you for your efforts and we look forward to working
with you to secure passage of your amendments.
Sincerely,
Joseph A. Smith, Jr.,
Commissioner of Banks, North Carolina, Chairman, Conference
of State Bank Supervisors.
Denise Voigt Crawford,
Texas Securities Commissioner, NASAA President.
Jane Cline;
West Virginia Insurance Commissioner, NAIC President.

Ms. COLLINS. Mr. President, I also wish to speak briefly on my
amendment, No. 3879, which would help raise capital and risk standards
for banks, bank holding companies, and nonbank financial institutions.
It is not my intent that this amendment affect the treatment of small

[[Page S3711]]

bank holding companies as provided under the Federal Reserve's Small
Bank Holding Company Policy Statement, nor do I intend that the
amendment apply to Federal Home Loan Banks. Likewise, I would like the
record to reflect that the effective date for bank holding companies
owned by foreign banking organizations that obtained an exemption from
capital requirements pursuant to the Federal Reserve's Supervision and
Regulation Letter SR-01-1 should be 5 years after enactment.
I look forward to working with my colleagues to ensure that this
intent is properly reflected in the final language of this reform bill.
Mr. DODD. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

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