To amend the Internal Revenue Code of 1986 to treat amounts paid for umbilical cord blood banking services as medical care expenses.

Mr. Chairman, I rise to claim time in opposition to the amendment.

Mr. Chairman, I yield myself such time as I may consume.

There are some provisions in this amendment that I support and there are some that I don't.

One of the parts of it that I do support is the amendment does call for a GAO study to analyze the effectiveness of the risk-retention provisions of this bill and make recommendations to Congress. My only regret is I wish we could have done a study before we implement this particular piece of legislation.

As you know, section 213 of the bill requires creditors to retain an economic interest in at least 5 percent of the credit risk of each loan that is not a qualified mortgage that the creditor transfers, sells, or conveys to a third party.

I think a lot of people feel that this skin in the game may be a good provision. I think the question that arises is what will be the impact on small lenders and small community banks across the country? One of the things that we want to make sure is that the bill is not really clear about the mechanism or the mechanics of how this provision would be implemented, and we're going to have to have regulatory clarification on that. I wish that, again, we could have had a study in advance of that so that we could then make sure that, as we are implementing this bill, that the regulators have some direction of how to go to make sure we implement this provision without causing major disruption in the mortgage process. Again, I wish we could have done that before.

There are concerns that I have about the manager's amendment as well, Mr. Chairman. First of all, rather than clarifying provisions related to broker compensation, yield-spread premiums, and ensuring all types of mortgage creditors are covered by equal antisteering provisions, this amendment adds further inequity and confusion.

Congressman Miller offered an amendment during the Financial Services Committee markup that would have preserved the careful balance of banning steering while preserving a consumer's ability to finance the closing costs and origination fees associated with their loan.

In committee, Chairman Frank said he felt that he and Mr. Miller had agreed in principle about only banning incentivized compensation and not direct compensation. Mr. Miller withdrew his amendment, given the agreement by the chairman to work with him on details of the language. The manager's amendment does not reflect that agreement, and the Rules Committee did not make in order an amendment submitted by Mr. Miller. Really instead of clarifying the ability of consumers to finance closing costs and origination fees through rate or principal, the manager's amendment removes that option to finance through the rate completely.

Additionally, the manager's amendment says all origination fees must be collected either up front or all fees shall be in the rate. This means consumers, again, will no longer have the option of paying some closing costs up front and some through the rate.

Consumers should be able to finance closing costs and origination fees as they deem appropriate for their individual circumstances. Clarifications were expected to ensure the preservation of this option, but the only clarification made was that the bill will now only prohibit this option in the manager's amendment.

What does that mean? Well, that means when an individual goes to their mortgage lender or to their local community bank, in the past they have had an option to say, you know, I would need to put a certain amount of my closing costs in the loan and maybe that would be reflected in the rate. Maybe part of it would be reflected in the principal balance. But now we're going to take away the option for the banker to offer that to the individuals. And I think that's what our opposition has been to this bill from the very beginning, that while we are trying to prevent predatory lending, and everybody is against predatory lending, at the same time we've started down a road where we are going to limit the available products to individuals. We're going to raise the cost of these mortgages to individuals, and, more importantly, we're going to cause mass confusion in the marketplace.

There are some very punitive things in this bill that if someone is ``steering,'' that could result in a lawsuit. And steering could be, well, I think this mortgage, if I offered you this one, it would be beneficial to you but I also think if I offered you this mortgage. But I think it's going to deter a lot of mortgage bankers and community bankers from offering two different options to individuals because they're going to be afraid that somehow they are steering.

I have some other concerns which I will express further into the debate here.

At this time, Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I appreciate the chairman's sensitivity to this because I think it is a very important issue that we need to resolve in this legislation before it becomes law.

I yield to the gentleman.

Thank you.

Mr. Chairman, at this time it's my privilege to yield 2 minutes to the gentlewoman from West Virginia (Mrs. Capito).

I want to speak to the gentlewoman's provision in this bill, and one of the concerns I have, I mean, there is a lot of people that want to debate States' rights versus Federal rights. One of the concerns I have about the provision in the manager's amendment is that it says yes. It says, yes, there is Federal jurisdiction and, yes, there is State jurisdiction.

What I am concerned about is that could cause some potential conflicts, and that States would think they had jurisdiction, the Federal Government would think they have jurisdiction, and that States might get the opinion that they might have jurisdiction on some of the other provisions in this bill.

And so one of the things that I think we need to make sure of, as we move forward on this legislation, is we have, maybe, clearer lines on this preemption statute to make sure that everybody understands what the rules of engagement are, as this particular piece of legislation is being implemented.

So one of the other pieces of opposition that we have to this is that we need a clear, I think a clearer preemption wording in this bill to make sure that we understand what the States' jurisdiction is over this bill and what the Federal jurisdiction is over this bill.

I reserve the balance of my time.

Mr. Chairman, another provision in this that has caused concern is the tenant provisions.

This amendment would require property owners to promptly notify any tenants or potential tenants upon becoming subject to foreclosure or defaulting on their mortgage loan. This language requires the owner to provide information on the circumstances with respect to the property and the effect of the default or foreclosure.

Notice to tenants is important. However, in multifamily projects such as apartments, a receiver is typically put in place to manage the property so that residents can remain in their apartments with no disruption. Mandating a notice to residents, if not done correctly, could cause alarm and maybe not even needed alarm.

I have a letter from the National Apartment Association where they have concerns about this very issue, that if you have got an apartment complex, the owner may be temporarily in default. You give notice to the tenants that you are temporarily in default. The tenants get scared, they start looking for other places to live, and, basically, creating vacancies, and, in fact, maybe making the default permanent by the fact that there will not be sufficient revenues to make the payments. So I have very large concerns about that.

Additionally, the amendment allows HUD to step in to troubled properties, transfer a multiproperty project, if delinquent, at the risk of fault or disinvestment or foreclosure.

This is a fairly major expansion of HUD's authority and could be considered to be a property taking. Property of this type may not be in foreclosure as yet, yet the provision would force properties into foreclosure or over into government control, again, a major expansion, quite honestly, a move away from what the original intent of this legislation was.

The original intent of this legislation was to prevent predatory lending. And now we are prescribing how tenants are going to be treated, whether we are going to force property owners to make disclosures about their financial condition, a major diversion from what I think is the intent of this legislation, and, again, one of the reasons that I do not support this amendment.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I, again, rise in opposition to this amendment. One of the purposes of this legislation, again, we said, was to prevent predatory lending. But, unfortunately, the consequences of this legislation are going to be to increase the cost of mortgage financing for consumers.

It's going to raise the monthly payments for many consumers over what their choices would have originally been. It's going to limit the choices that are available to them. It's going to force lenders to provide maybe only one choice. It's also, I think, going to continue to cause a major disruption in the mortgage system.

As one of the speakers originally said, the market is very fragile right now, and some of the provisions in this amendment, I think, contribute to that.

With that, I encourage Members to vote against this.

I yield back the balance of my time.

I offer amendment No. 1.

Mr. Chairman, this is a somewhat bigger than usual manager's amendment because, frankly, we are responding to the interest of the Members in trying to leave. I prevailed on some Members who had amendments to put them in the manager's amendment. They are not 100 percent agreed to, I think, in every case, but none of them are major changes. There are some major changes that we will be dealing with separately. So my intention during the time that I have will be to yield to those Members who very graciously have agreed to have their amendments put in the manager's amendment.

Mr. Chairman, I will begin by yielding 1\1/2\ minutes to the gentleman from Maryland (Mr. Sarbanes).

Mr. Chairman, I yield myself such time as I may consume.

The gentleman from Texas is correct. I did tell my friend Mr. Miller from California we will work on it. It slipped. But I have spoken to him. The gentleman presented things very accurately. As I talked to Mr. Miller, I think what we have to do, and we will do this before this bill becomes law, is spell out exactly what's allowed. I think we have conceptual agreement on what should be banned and what should be allowed. Sometimes people want to leave too much implicit. I'm a great believer that redundancy is better than ambiguity. So I have given the gentleman from California my commitment that before this bill becomes law, if it does, we will spell out what is permitted, much of what the gentleman said.

Mr. Chairman, I submit the following correspondence:

Congress of the United States, House of Representatives,

Committee on the Judiciary,

Washington, DC, May 7, 2009.

Hon. Barney Frank,

Chairman, Committee on Financial Services, House of

Representatives, Washington, DC.

Dear Chairman Frank: This is to advise you that, as a

result of your having consulted with us on provisions in H.R.

1728, the ``Mortgage Reform and Anti-Predatory Lending Act,''

that fall within the rule X jurisdiction of the Committee on

the Judiciary, we are able to agree to discharging our

committee from further consideration of the bill in order

that it may proceed without delay to the House floor for

consideration.

The Judiciary Committee takes this action with the

understanding that by foregoing further consideration of H.R.

1728 at this time, we do not waive any jurisdiction over

subject matter contained in this or similar legislation. We

appreciate your continued willingness to consider further

clarifications and refinements to the provisions in our

jurisdiction as the legislation moves forward. Finally, we

reserve the right to seek appointment of an appropriate

number of conferees to any House-Senate conference involving

this important legislation, and request your support if such

a request is made.

I would appreciate your including this letter in the

Congressional Record during consideration of the bill on the

House floor. Thank you for your attention to this request,

and for the cooperative relationship between our two

committees.

Sincerely,

John Conyers, Jr.,

Chairman.

Will the gentleman yield?

It's my fault it wasn't done. I guarantee to you it will be done before the bill, and I appreciate the indulgence. And I have apologized to Mr. Miller.

Mr. Chairman, I now yield 1\1/2\ minutes to one of the Members of the House who has been most concerned with stopping this abuse, the gentlewoman from Maryland (Ms. Edwards).

Mr. Chairman, first I would say to my friend from Texas that we wanted some protection to States that don't have the option of seceding. States that could secede don't need this protection. But those that plan to stay in the Union, we thought we would try to recognize it to try to protect them.

I yield 1\1/2\ minutes to the gentleman from Rhode Island (Mr. Langevin).

(Mr. LANGEVIN asked and was given permission to revise and extend his remarks.)

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, how much time do I have remaining?

I yield back the balance of my time.

I would like to thank the gentleman for yielding to me.

I would like to talk about the bill in general, Mr. Chairman. This legislation was just introduced on March 23, and less than a month later, which included our 2-week District Work Period, we had one hearing and then it was followed by a 2-week markup, and we're hearing now where things are still needing to be clarified, which I think goes to my first point. I think it's important for my colleagues to realize that this legislation has the potential to forever change the mortgage market, and I have concerns that, while changes are indeed needed, maybe we may be moving too briskly on broad legislation that could have some serious unintended consequences.

The credit risk-retention provision, the skin-in-the-game provision, while it's supported in concept by most, it's still being worked out. There is no consensus on whom the scope of this provision would encompass or what the effect would be on the liquidity in the market. According to the Mortgage Bankers Association, a record number of borrowers are delinquent, the housing market is still very fragile, and what is needed is a sense of certainty that we can accept a floor in the market. We don't need constant tinkering and changing so that that stability is not there.

A glaring omission in this legislation, also, is it does nothing to address the future of the GSEs Fannie and Freddie. These two entities provide the lion's share of liquidity in the mortgage market, and any mortgage reform legislation should include provisions defining the future role of GSEs in the market.

I supported this legislation last week in the Financial Services Committee and I will support it again today, but I do have real concerns about some of the provisions that are still left in limbo. I don't believe, and I don't think anybody does, we should be cutting off dollars to homebuyers and homeowners while trying to prevent a problem from happening again.

I thank the gentleman for yielding.

Mr. Chairman, I rise in strong support of H.R. 1718, the Mortgage Reform and Anti-Predatory Lending Act and the manager's amendment that's before us today, which I know will bring greater transparency to lending practices nationwide.

Unconventional mortgages have left countless Americans facing foreclosure, and this is especially true in my home state of Rhode Island, with one of the highest foreclosure rates in the country.

With this bill, we will combat unscrupulous lending practices and bring transparency to the process by requiring mortgage originators to be licensed and mandating full disclosure of loan terms. Perhaps, most importantly, mortgage originators would certify that consumers have a reasonable ability to pay back the loans that they were applying for and that they are not predatory in nature.

We have seen too many lenders steer consumers into loans that they cannot afford. We cannot allow that practice to continue or to ever happen again. I am also pleased that this measure includes protections to renters of foreclosed property.

H.R. 1728 will address persistent problems in the housing market, bring financial stability to families and ensure that the appropriate measures are in place to prevent this kind of mortgage foreclosure crisis from ever happening again in the future.

I want to thank and commend the gentleman from Massachusetts, Chairman Frank, for his outstanding leadership on this important measure. I urge support of this bill and the manager's amendment before us today.

Let me thank the Chair for his shepherding this critically important piece of legislation to the floor and getting us to this point.

Mr. Chairman, I am very grateful that the Chair and all the members of the committee were able to include in the manager's amendment what I believe is almost the very heart of the problem here, and that is that people who qualified for certain kinds of loans were steered to loans that made certain other folks more wealthy and other people who were out to seek loans had their credit ratings mischaracterized. Sometimes people had appraisals that were false and not true, and then, of course, people who were eligible for certain loans were literally discouraged from shopping around to get a better loan.

This type of steering is not ambiguous; it's not middle-of-the-road stuff. It is just wrong. And I am glad that the manager's amendment is going to direct the Secretary to promulgate rules that will put certain no-nos into the bill that would prevent steering.

I think if we had not had the level of steering that we had, we would not have the number of exotic subprime loans that we had, predatory loans. And if we didn't have that, we very likely would not be at the depth of trouble that we're in right now.

So I'm very happy that this is included in the manager's amendment, that we will have some clear don'ts that we will ask rules to be promulgated on, prohibiting mischaracterizing of appraisals, prohibiting discouraging shopping around, prohibiting mischaracterization of credit scores and others.