To extend the temporary suspension of duty on phenyl (4,6-dimethoxy-pyrimidin-2-yl) carbamate.

Madam Speaker, I yield myself such time as I may consume.

I rise today in opposition to this rule and to the underlying legislation. This structured rule does not call for the open, honest debate that has been promised by my Democrat colleagues time and time again; yet here we are again discussing the mortgage reform bill for the second day.

It is essential to provide for more transparency and accountability in the lending process, but there is also a laundry list of important issues that face this Congress. And all this week we will have but one bill on the floor of the House of Representatives to debate. I think that's unfair to the American taxpayer when there is much work to be done.

Today not only will we be discussing the flawed underlying legislation, which is already addressed in Federal statute, as we spoke about yesterday being on the floor, that Federal Reserve has already issued the rules and regulations as a result of feedback from industry last year, but what we are here to do is to try to redo that to put the majority's mark on that legislation, which already takes care of the problem.

But this legislation that we're going to handle again today limits choice, reduces credit, and increases costs to consumers and taxpayers at a time when the effort should be about making home mortgages more reliable, least cost conscious, and making sure that consumers would be able to have an opportunity to have a chance to have a home. But what we are going to do is, by allowing a patchwork of State laws to confuse the system, we are going to now create qualified mortgages which require lenders to hold 5 percent credit and creates a $140 million slush fund for trial lawyers. So what we are going to do is limit choice, reduce credit, and increase costs, and make sure now there is a slush fund for trial lawyers to sue the same companies that we were trying to encourage

to lend to the marketplace so people could have money.

Madam Speaker, you will also hear about the amendments that our Democrat majority has made in order and failed to make in order today, no matter how substantive those amendments were.

We have heard the number of amendments that were made in order. My good friend knows that there were about 20 Democrat amendments that were put into the manager's amendment. So the 8-5 ratio is a little bit deceptive. It should be 8 plus 20, it's 28 versus 5 Republican amendments.

I offered two amendments in the Rules Committee last night, and both were struck down on party line vote--I guess that's no surprise. One was to limit trial lawyers access to taxpayer funds, and one was to ensure organizations like ACORN or any organization that receives money from the Federal Government, are more transparent and accountable with any government funds they receive.

At the end of 2007, the Board of Governors of the Federal Reserve undertook careful review of the abuses in the mortgage process system, and they took public comments, held public hearings across the country. And after careful deliberations, they finalized new comprehensive mortgage rules. These rules are going to take effect 5 months from now in October.

So not only are we spending all of 1 week on one piece of legislation, but the necessary regulations already exist in Federal statutes, and companies all across this country are already aiming at implementing those rules and regulations being ready for October.

This legislation fails to address the uneven patchwork of state mortgage lending laws and leaves lenders and consumers with unfair and confusing laws where the costs will ultimately be borne by customers. While this legislation attempts to establish is a new class of loans called qualified mortgages which will enjoy safe harbor and exemption from further restrictions in this bill, this will ultimately limit consumer choice on mortgages and unduly burden the mortgage industry, essentially excluding numerous safe and affordable mortgage products that serve and have been good to borrowers as well.

Madam Speaker, the Democrats are here today to say that they are on the side of the consumer and the borrower, even if it limits choices and raises interest rates for every single consumer that chooses to use this avenue to buy a home. Mr. Michael Menzies, on behalf of the Independent Community Bankers Association, in committee hearings on April 23, 2009, stated, ``Lots of this legislation simply increases our cost of doing business rather than helping us do a better job with our customers.''

Another regulation that will narrow choice, lessen credit and increase costs for borrowers and taxpayers is the lender risk retention provisions requiring lenders to retain at least 5 percent of the credit risk presented by all loans that are not deemed qualified mortgage. While I do believe that it is important to have some ownership in your investments, these far-reaching requirements would make it impossible for many lenders to operate, especially small and local lenders.

With the current economic crisis and all the efforts to inject capital into the financial services sector, why would we want to limit the use of capital and threaten to further impair banks' abilities to lend? Madam Speaker, this is not a solution for the ailing economy.

In addition, this legislation directs HUD to establish a brand-new $140 million slush fund for legal organizations to provide a full range of foreclosure-related services. Madam Speaker, my friends on the other side of the aisle actually take these steps simply to fund trial lawyers in this legislation.

If this doesn't force a flood of litigation, I really don't know what will. And Margot Saunders of the National Consumer Law Center, a consumer-advocate organization, said on April 23, 2009, in the Financial Services hearing, ``We have tried to propose repeatedly that you draft a simple bill that creates market-based incentives for enforcement rather than litigation opportunities,'' and I might say, which is full in this bill.

In other words, what we are doing is looking for paying lawyers to come and do what we should do here in this body with thoughtful, honest, straightforward legislation, which is why I offered an amendment in the Rules Committee last night, that of course was defeated on a party-line vote.

Madam Speaker, I include the amendment in the Record.

Amendment to H.R. 1728, as Reported Offered by Mr. Sessions of Texas

After section 220 insert the following new section:

Madam Speaker, we began this debate and discussion yesterday where we were trying to talk about the impact of this bill and what feedback would come as a result of hearings that Chairman Frank did have, and one of them, one of the outcomes of that, was a letter dated May 5, 2009. The letter comes from the Mortgage Bankers Association, one of the primary impacting organizations and, certainly, they are there in communities to serve on behalf of the American people for people's housing needs.

Madam Speaker, I would submit for the Record a letter that was sent to Speaker Pelosi and Leader Boehner about their feedback about this legislation.

Mortgage Bankers Association,

Washington, DC, May 5, 2009.

Hon. Nancy Pelosi,

Speaker of the House, U.S. House of Representatives,

Washington, DC.

Hon. John Boehner,

Republican Leader, U.S. House of Representatives, Washington,

Madam Speaker, at this hearing that was held about this bill, a lot of feedback was provided by the marketplace--people who were impacted the most; people who every day are in front of lenders and trying to get people in homes.

Part of the feedback was provided from the American Bankers Association. I'd like to insert into the Record a letter related to that meeting and this legislation.

American Bankers Association,

Washington, DC May 6, 2009.

To: Members of the House of Representatives.

From: Floyd E. Stoner, Executive Vice President, Government

Relations and Public Policy.

Re: H.R. 1728, the Mortgage Reform and Anti-Predatory Lending

Act of 2009.

I am writing on behalf of the members of the American

Bankers Association regarding H.R. 1728, the Mortgage Reform

and Anti-Predatory Lending Act of 2009, which the House of

Representatives is scheduled to consider beginning on

Wednesday, May 6, 2009.

H.R. 1728 is far-reaching legislation designed to prevent a

recurrence of the problems in the subprime market that have

harmed many American homebuyers. We appreciate that this

legislation seeks to address the source of most of these

problems, the loosely regulated and largely unexamined

mortgage originators operating outside of the regulatory

structure within which federally insured depository

institutions function.

However, we are concerned that this major legislation can

have a negative impact on both insured depository

institutions and credit-worthy borrowers seeking to buy

homes--impacts which have the potential to impair economic

recovery. In considering any new legislation, it is critical

to recognize the significant regulatory and structural

changes that are already underway in the mortgage industry

that will provide much greater protections to consumers. It

is essential to recognize that the further changes proposed

in H.R. 1728 will be cumulative to the changes already being

implemented under revisions to Truth in Lending Act, Real

Estate Settlement Procedures Act, and Home Mortgage

Disclosure Act regulations.

We have worked with the Financial Services Committee and

are pleased that a number of concerns were addressed either

prior to, or during, Committee consideration of the

legislation.

While we greatly appreciate the comprehensive, inclusive

consultation that has gone into the drafting process so far,

and the desire to avoid unduly restricting credit, we remain

concerned that the bill still, in our view, needs serious

work.

We plan to work with the Congress as the legislation moves

forward to clarify additional areas of concern. To that end,

we offer the following comments.

Safe harbor: The legislation creates a category of

``qualified mortgages'' which are given a safe harbor from

the expanded liability of the legislation. ``Qualified

mortgages'' are also exempt from certain other key

restrictions in the bill, including the risk retention

requirements. While the very narrow safe harbor included in

the original bill has been expanded beyond just 30 year fixed

rate loans, we are concerned that it is still far too narrow.

An amendment adopted during Committee consideration of the

bill expanded the safe harbor to include fixed rate loans of

terms other than 30 years, as well as some adjustable rate

mortgages. However, the language on adjustable rate mortgages

(ARMs) remains too restrictive. To qualify for the safe

harbor, ARMs would have to be underwritten to the maximum

rate possible during the first seven years of the loan.

Consider the example of a five year ARM with the initial

rate set at 5 percent and with caps on increases in later

years set at 2 percent per year. Under the pending bill, this

loan would have to be underwritten at a rate of 9 percent

(because in the seventh year of the loan the rate could--but

by no means is likely--to go to 9 percent for that year). In

this instance, even though the borrower could not pay more

than 5 percent for the first five years of the loan, and not

more than 7 percent in the sixth year, they would have to be

able to afford the loan at 9 percent for all seven years in

order to qualify. This will shut the door to affordability to

many borrowers. We strongly recommend that this provision be

altered to reflect a more realistic underwriting standard.

Similarly, we are concerned that to be included in the safe

harbor, loan points and fees must be limited to not more than

2 percent of the loan amount. The bill should be clarified to

ensure that bona fide discount points paid by a borrower to

reduce the interest rate on a loan are not included in this

calculation. The relevant threshold in this instance should

be the annualized percentage rate (APR) as currently defined

in regulation implemented pursuant to the Truth in Lending

Act. We also believe that the 2 percent cap should not be

statutory, but instead should be determined by the federal

bank regulators to accommodate small dollar loans which may

carry fixed fees taking the loan beyond a 2 percent cap. The

bank regulators are better suited to determining the

appropriate cap on fees paid in association with different

loan products.

Risk retention: We are pleased that the bill was modified

during Committee consideration to provide the bank regulatory

agencies with the authority to exempt loans (beyond those

exempted under the safe harbor) from the 5 percent credit

risk retention provisions of the bill. While this expanded

regulatory discretion is a step in the right direction, we

remain firm in our conviction that federally regulated and

examined insured depository institutions should be exempt

from risk retention requirements. Insured depositories

already have significant risk retention--and the capital to

back that risk. Loans sold by insured depositories into the

secondary market frequently include recourse agreements, so

that if there is an underwriting or other error or omission,

the depository can be forced to buy the loan back. Again,

because insured depositories have strong capital positions,

they can and do buy back recourse loans. The same cannot be

said of other lenders who lack capital. For these lenders,

greater risk retention is needed. For insured depositories,

it is not. We recommend excluding insured depositories from

the risk retention provisions of the bill.

Uniform national standards: We are gravely concerned with

the enforcement provisions of the bill, especially in light

of an amendment adopted in Committee which would grant state

attorneys general enforcement authority over the Truth in

Lending Act provisions added by the bill. The current

language of the bill will lead to conflicting enforcement

actions between state attorneys general and federal banking

regulators. It will cause confusion to consumers and lenders

alike and will generally undermine the regulatory framework

for mortgage lending in the nation. A confusing enforcement

scheme is likely to harm borrowers and provide the

unscrupulous with new opportunities. At a minimum, we urge

you to adopt clarifying provisions which would give the

federal banking regulators notice of a state attorney

general's intention to act, and allow the federal regulator a

reasonable time to act before the state is allowed to do so.

Such a framework is needed to bring order and clarity to the

process.

We anticipate a number of amendments during floor

consideration. As a general rule, we oppose amendments which

would increase regulatory burden on banks and their

employees, and support amendments which recognize the role

that regulated, insured, and examined institutions play in

protecting consumers' interests and in providing products and

services which benefit our national marketplace.

We appreciate the working relationship that has been

established between the Members of the Committee and all

interested parties, and we shall continue working with

Members of Congress as this legislation moves through the

legislative process.

This letter goes to all Members of the House of Representatives. So each of my colleagues openly received a copy of this. It is from Floyd Stoner, executive vice president with the American Bankers Association.

Here is what their conclusions are after seeing the legislation. They are ``concerned that this major legislation can have a negative impact on both insured depository institutions and creditworthy borrowers seeking to buy homes--impacts which have the potential to impair our economic recovery.''

So what the American Bankers are saying is that the answer, the antidote, the medicine that now-Speaker Pelosi is coming up with will actually have the potential to impair economic recovery.

So every single Member of Congress got this letter. We will find out today what their views are. But the American

Bankers Association also said, and pretty much ends their letter by saying: ``The bill still, in our view, needs serious work.''

We should reject this bill. We should understand that the people who are engaged in trying to make sure people have loans and are worried about our economy are saying it not only has the potential to impair economic recovery, but the bill needs serious work.

I reserve the balance of my time.

I yield myself such time as I may consume.

I appreciate the gentleman coming down and talking about how Republicans are to blame for all this mess, but I'd like to harken back to September 25, 2003, at a hearing that was held back in the Financial Services Committee.

Our current chairman, Barney Frank, who's a very thoughtful and diligent chairman, thoughtful on the ideas of the entire industry, said, ``I don't think we face a crisis.'' This is 2003. ``I don't think we face a crisis. I don't think that we have an impending disaster. We have a chance to improve regulation of two entities I think that, on the whole, are working well.''

So perhaps the most thoughtful person in the country, certainly in this Congress, back on September, 25, 2003, is saying, ``I don't think we face a crisis, and I don't think we have an impending disaster.''

Further, he said, ``I don't see any financial crisis. You can always make things better, but I do think we should dispel the notion that we are here today because something rotten has gone on.'' That was Barney Frank. That was Barney Frank at the hearings.

So the gentleman wants to blame Republicans. And yet, here we had the lead, very thoughtful and articulate, Democratic ranking member, arguing that there was nothing wrong and nothing was about to happen. Yet, today, what we have is another answer: Oh, I'm sorry. We forgot to say, and we know that the Fed has already taken care of this problem with rules and regulations that are already known and will be in place in October.

Here we have now legislation to re-address that issue. And the answer that comes back from the marketplace is, This legislation limits choice, reduces credit, and increases cost to consumers and taxpayers.

I would have assumed that if there was nothing wrong in 2003, and now we corrected it with a series of hearings, including the Federal Reserve, that we would want to help the marketplace--not limit its ability, its choices, and put exposure to taxpayers. That's why we're opposed to this.

We're opposed to it not because we're trying to stop it, but because we're trying to make it better. We think what should have been made better has already been done by the Fed. This Congress knows it.

Every single Member of Congress got a letter to their office directly from the American Bankers Association saying serious flaws in this legislation.

I reserve the balance of my time.

Madam Speaker, I appreciate the gentleman. By the way, the gentleman and I are friends. We are speaking about policy here, disagreements.

I would say to the speakers that have come on the Democratic side today, it sounds like an argument they are having within their own party. Everybody is trying to blame the Republican party and George Bush for what happened; yet, if the gentleman didn't like 2003, I will go to the end of 2004, December 16, 2004, if we need to get more current. And I will quote the gentleman, the chairman of the committee:

``The SEC's finding that Fannie Mae used incorrect accounting is serious and disturbing. While these improper decisions by Fannie Mae do not threaten the financial soundness of the corporation, and should have been used by anyone in an effort to cut back on Fannie Mae's housing efforts, they do not reveal troubling deficiencies in its corporate governance.''

All of these signals that came to Members of Congress from people who were on the committee, including one of the most distinguished members of the committee, said: We don't have a problem. There is no soundness problem. There is no weakness problem. I don't see a financial crisis. Sure, we can always do things better, but I think we should dispel the notion that we are here today because there is something that is rotten that has gone on.

Well, why are we trying to extend blame? Why don't we just talk about the problem that we are in today? And if we are going to do that, my notion would be that what we should do is listen to the people who are in the banking business saying this is a problem. This bill has serious flaws.

Madam Speaker, I yield 5 minutes to the gentlewoman from Minnesota (Mrs. Bachmann).

Madam Speaker, at this time I yield 2 minutes to the gentleman from Egan, Illinois (Mr. Manzullo).

Madam Speaker, I am really down to no speakers and just my closing statement. So I would encourage my friends to go ahead and utilize their time, and then I will close as appropriate.

Madam Speaker, in closing, I would like to thank the gentleman from California and each of the Members from his side who have participated today, including the gentleman, Mr. Frank. I would like to stress that while my friends on the other side of the aisle claim to be protecting consumers and have said that people want to delay this legislation, that is not true. It has already taken place. Whatever we need, the Federal Reserve has already done.

What we will say is that what this legislation is doing is benefiting trial lawyers with tax dollars. And perhaps more importantly, it is causing this circumstance to be aggravated and to be worsened.

We already understand there will be less credit that will be available. This will raise the costs of loans and mortgages that people will want to receive. At a time, especially, when the economy needs help, this will harm the economy. And that is directly what the American Bankers Association has said in a letter to every single Member of Congress. So I hope every single Member should hear this. They need to be talking to their staff, ``hey, did that letter come in on this legislation that we are handling today?'' And that letter says, ``serious flaws, serious flaws, bigger problem.''

We need to be providing for jobs. We need to be encouraging economic growth. We need to encourage investment. And this legislation does not accomplish that.

Madam Speaker, on that I demand the yeas and nays.

Madam Speaker, by direction of the Committee on Rules, I call up House Resolution 406 and ask for its immediate consideration.

Madam Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Texas (Mr. Sessions). All time yielded during consideration of the rule is for debate only.

General Leave

Madam Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks on House Resolution 406.

Madam Speaker, I yield myself such time as I may consume.

House Resolution 406 provides for consideration of H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act, under a structured rule. The rule makes in order 14 amendments, which are listed in the Rules Committee report accompanying the resolution. Five Republican amendments, eight Democratic amendments, and one bipartisan amendment have been made in order. Each amendment is debatable for 10 minutes, except the manager's amendment, which is debatable for 30 minutes. The rule also provides for one motion to recommit with or without instructions.

Finally, I would like to take a moment to make a clarification regarding the description of one of the amendments that has been made in order under the rule, specifically amendment No. 2 by Chairman Frank. The Rules Committee report inadvertently listed a description from an earlier version of this amendment. The amendment was later modified, but the change to the description was not updated. I want to emphasize that the actual amendment text which was made in order is correct.

Madam Speaker, I ask unanimous consent to submit for the Record the correct description for the Frank amendment listed as No. 2 in the Rules Committee report.

Madam Speaker, as we all know, our country is at a significant crossroads, the likes of which we have never known. Businesses continues to shed payroll, job losses continue to mount, and hardworking families across America continue to struggle.

Many economists have correctly stated that the foreclosure crisis is the root of our economic meltdown, and I firmly believe that until the housing market is stabilized, the economy will continue to worsen and people will continue to spend less, more businesses will shut their doors, and mass layoffs will further spread.

Until that happens, however, more and more American families are at risk of losing their homes. In the first quarter of 2009, more than 800,000 mortgage loans entered into the foreclosure process, with over 340,000 in March alone. Both are record highs, which goes to show that the foreclosure crisis is far from over.

I can personally attest to the damage the foreclosure crisis has left in its wake and the long effects it will have into the future. I have the honor of representing California's 18th Congressional District, which encompasses the San Joaquin Valley, but today my district is suffering like no other. My district has the highest rates of foreclosure in the Nation and a loss of 70 percent of home equity over the last 3 years. And with each passing month, it seems that the numbers are worsening.

As a result of the rampant foreclosures in my district, once vibrant neighborhoods have become vacant yards overgrown with weeds, and houses are crumbling from vandalism and disrepair. Swimming pools are abandoned at these houses and have become havens for mosquitos. Crime and vandalism are on the rise in what were previously safe neighborhoods.

Yet that's not all. Home values in surrounding areas are also beginning to plummet, and what started out as a foreclosure crisis in my district is quickly spinning out of control, creating economic disasters. In many parts of my district, they now face unemployment rates of over 20 percent. Small businesses and neighborhood restaurants which were once packed with customers are now almost empty and are shutting their doors at alarming rates. Our longest-serving community bank was swept up in the foreclosure crisis and recently closed. On top of that, my dairy farmers are in crises and we have one of the worst droughts in the country.

Madam Speaker, as I have been saying for quite some time, the devastation that has hit my district is massive and widespread and is somewhat similar to what Katrina left behind, only it was not caused on a single day by an extreme event but over the course of weeks, months, and years.

Long after the foreclosure crisis has come and gone, the Central Valley will continue to cope with the aftermath of this economic devastation for many years to come. My district and our Nation will not overcome this crisis overnight, and it will take unprecedented action to help us rebuild and recover.

Congress has taken several important steps and actions not just to combat this crisis but to ensure a housing crisis of this magnitude will never happen again. The bill before us today is one more step in that direction.

Some say the foreclosure crisis can be traced back to the rapid increase in subprime mortgages and risky underwriting practices, most of which were made with no Federal supervision. Many of the families targeted by subprime lenders were, in fact, low-income families with poor credit histories who felt this was the only opportunity for them to achieve the American Dream. They were lured into low ``teaser'' introductory interest rates which morphed into loans which they had little chance of repaying once rates increased, starting the uptick in the foreclosure market.

H.R. 1728 is aimed at preventing these predatory practices in the future. Among other things, H.R. 1728 requires lenders to prove borrowers can actually repay their loans in order to ensure that vulnerable consumers aren't pressured into loans at terms that they can't meet. It eliminates incentives to steer consumers into high-cost loans. It also provides much-needed regulation of the lending industry.

H.R. 1728 is not a cure for the foreclosure crisis, but it is an important component in eliminating the unscrupulous practices that ran amok and helped lead the collapse of the housing market.

I want to thank Chairman Frank for once again bringing this bill forward and for his continued commitment to turning the tide on our Nation's foreclosure crisis. I want to take this opportunity to thank Chairman Frank for working with me to insert language into the manager's amendment of this bill that would create and make publicly available a national database of foreclosure and default statistics, which we don't currently have. The Federal Government keeps track of many economic indicators, including home price declines and unemployment, but right now there is no government agency that keeps tabs on defaults and foreclosure rates.

As the foreclosure crisis has taught us, foreclosure and default rates are critical statistics not only for monitoring the Nation's economy but also for determining which areas of the country have been hardest hit in the downturn. My amendment calls on the Secretary of HUD to create this database so that the Federal Government and Congress can better detect and assess the housing crisis so that we can respond in a timely and targeted manner.

Again, I thank Chairman Frank for incorporating my amendment, and I ask my colleagues on both sides of the aisle to support the manager's amendment and the underlying billing so we can stop predatory lending and establish a federally maintained database on foreclosures and defaults.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I would just respond briefly on a couple of points and say that the gentleman continues to advocate for the policies that got us into this crisis. And, in fact, we need to regulate this industry, not because all mortgage bankers are evil; they are not. There are some very good ones. But the few have caused significant pain to both the economy, to our Federal Treasury and to individual homeowners.

Mr. Frank has designed a 5 percent solution that, in fact, I believe keeps the mortgage bankers with having skin in the game, so that they can't just sell off these loans, give bad ones and absolve themselves of responsibility and let the problem fall on the taxpayers.

Madam Speaker, I yield 3 minutes to the gentlewoman from California, my colleague on the Rules Committee, Ms. Matsui.

I would just reply to the gentleman from Texas that I anticipate that this bill will get wide bipartisan support. So we will in fact see if it does and see who comes forward and supports this bill further today.

Madam Speaker, I yield 3 minutes to the gentleman from Ohio (Mr. Driehaus).

I'd like to inquire at this time how much time each side has remaining.

Thank you, Madam Speaker. I would at this time yield 3 minutes to the chairman of the Financial Services Committee, the gentleman from Massachusetts (Mr. Frank).

I yield the gentleman an additional 30 seconds.

Madam Speaker, I yield 3 minutes to the gentlewoman from Texas (Ms. Jackson-Lee).

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

I yield the gentlelady an additional 15 seconds.

Madam Speaker, I yield 2 minutes to my friend and colleague from North Carolina (Mr. Miller), a sponsor of the bill.

Madam Speaker, I thank my colleague from Texas.

At this time, I would like to yield 2 minutes to the gentleman from North Carolina, a member of the Financial Services Committee, Mr. Watt.

Madam Speaker, I am the last person to speak, and I would like to reserve to close.

Madam Speaker, I would like to thank the gentleman from Texas for engaging with us this morning on a very constructive debate. However, we have serious disagreements on what this bill should look like.

Madam Speaker, in the last 18 months, the foreclosure crisis has not improved in our districts. And in most places, in fact, it has become significantly worse. In 2009, millions of Americans will default on their mortgages, and millions more will see their home equity drop precipitously. All of us know the potential consequences of this crisis. And for far too many of us, including those in my district, we are well acquainted with the depths of despair and destruction the foreclosure crisis has been inflicting on us.

Still, in spite of all the signs, small businesses that have closed on Main Street, foreclosure signs lining the neighborhoods, the unmistakable despair in the neighborhood coffee shops, I do believe there is reason for hope. The fundamentals of our economy and the spirit of the American people are simply too strong to throw in the towel because it may be an easier path. It is not time to give up. Rather it is time to redouble our efforts, strengthen our resolve, and focus not on what we have done, but what we will do to turn this economy around. If we do just that, I have no doubt we will overcome whatever challenges we may face, and we will fix this problem of foreclosures with the economy and the mortgage crisis.

I urge all my colleagues to support taking another step forward to stabilizing our housing market and helping our economy recover once and for all.

Madam Speaker, I urge a ``yes'' vote on the rule and on the previous question.

I yield back the balance of my time, and I move the previous question on the resolution.

The previous question was ordered.

Mr. Chairman, and Members of the body, this discussion is a discussion that has been going on for 5 or 6 years. In fact, it predates that.

In 1999, this body discussed the fact that Freddie and Fannie were being pushed into making loans without a down payment. And the New York Times, in an article in September, 1999, actually quoted Peter Wallison as saying that you are not requiring a down payment, and now the Clinton administration is pushing Freddie and Fannie to lower the credit standards. And he makes the statement in there that, if they fail, the government will have to step in and bail them out the way it stepped up and bailed out the thrift industry. In 2005, I made another statement that some people considered wild-eyed, and I said that if we don't reform the subprime lending market, we are going to have a similar situation that we faced with subprime lending.

Mr. Kanjorski, listening to him reminded me that he and I pretty much, I thought, put together a bill--or he said bipartisan legislation, what he was talking about is, we were drafting it, and Chairman Frank was working on it. And I actually made the statement in 2005, and I will read my statement: ``Uniform standards in the marketplace are essential if the primary and secondary markets are to continue to serve as a vital source of liquidity to make mortgages available to homebuyers with less than perfect credit. I am committed to finding ways to end predatory lending while also preserving and promoting access for all homeowners to affordable credit.'' That was in May of 2005.

Chairman Frank said--and I think said accurately--earlier on the floor that he and I came awfully close to a consensus in 2005 for a bill. I don't, quite frankly, know what happened. I am reading a Charlotte Observer statement, and I know Mr. Miller was concerned about putting some things in the bill that even some Democrat legislators objected to and I felt would limit access to credit. It is striking that I look at this House bill, 1728, and I will say this, Mr. Miller and Mr. Watt, this is essentially what you were advocating back in 2005. But at that time, I thought there was a bipartisan feeling--that I actually submitted in draft form--that didn't contain some of these things. Because I really sincerely believe that you will eliminate many worthy borrowers with this legislation because it is almost a one-size- fits-all.

There's going to be a lot of loans that could be made and people could buy a home, and that's a delicate balance. That's a balance we obviously violated throughout the 1990s by putting people in homes that shouldn't be there. And

Mr. Miller, I think, and Mr. Watt have argued that if they have to pay a certain price, it just won't work, and many of my Republican colleagues agree to that. And as I said, I submitted draft legislation for consideration, but we couldn't get there.

If you will recall, the other body said they were not going to take a provision on securitization. They weren't going to take it. And here we are today, 4 years later, and we all agree that there needs to be skin in the game, but this legislation before us is not the legislation that Mr. Kanjorski has talked about that I was ready to move in 2005 or 2006, that Mr. Frank talked about, and it was essentially the legislation of Mr. Watt. I believe it was wrong then; I believe it's wrong now.

Let me tell you what I believe, and I believe Mr. Watt and Mr. Miller are sincere. According to the Charlotte Observer, we were close to an agreement. I have no idea what happened.

But let's talk about today. Let's talk about today, and let's assume and I assume, and I think I'm right, that we have all been very concerned about this. The legislation today, I think all the testimony in the hearings has been that poor origination standards plagued the mortgage industry and we need origination reform. We did something last year. We started proposing in 2005 registration of all brokers.

To register all mortgage originators, and that has been a tremendous success. We have got a lot of people committing fraud in starting those loans, and I think we are putting an end to that through legislation.

We need to work on something else, and I think we all agree. I have an amendment that I'm going to the Rules Committee to propose, and I think there are some Democratic amendments. There are now people coming in and promising people they'll work out these foreclosures, and they are defrauding people who are actually going through a foreclosure, which is outrageous; and this bill needs a strong provision on that.

But here's what it doesn't do: Chairman Frank and I supported in the last Congress H.R. 3915. Look at that bill and look at this bill. That included licensing and registration of originators as the first title. That's what I had proposed. The Senator from California proposed a similar thing and introduced it in the Senate. I introduced it in the House. That's now passed. It was approved by a large bipartisan majority.

But H.R. 1728, the bill before us, it strikes a far different balance, and I believe it's one that will undermine the mortgage market at the worst possible time. We are just starting to see preliminary signs of a possible housing recovery. Look at the numbers. Loans are being made. But H.R. 1728, the bill before us, it lacks clarity needed to provide, I think, meaningful protection to consumers. That was the testimony in the hearings from a coalition of consumer advocacy groups and labor groups. It manages to punish both responsible industry participants and worthy borrowers at the same time.

I am going to go fairly quickly, Mr. Chairman.

Rather than focusing on basic underwriting standards we were doing in 2005 and 2006 and in Chairman Frank's bill last year, we are not doing that anymore. Now, part of that is the Federal Reserve has adopted comprehensive antipredatory lending regulations. Mr. Garrett mentioned that. And those are going forward, and it's almost like this bill doesn't realize what has happened over the last year or two. It will expose the mortgage financial industry to substantial litigation risk. There was plenty of testimony on that. The cost of these inevitable lawsuits are going to be passed on to consumers.

I actually proposed in my draft an individual right of action if people violated the standards that we were close to agreeing to. Many lenders have said they'll stop offering certain mortgage products that people are taking now. They're successful in paying them back.

Consumer advocates, Federal regulators, Members on both sides of the aisle expressed reservation on the bill before us. Margot Saunders, and I'm going to quote here again, National Consumer Law Center, we worked with her, the gentleman from North Carolina and I, on trying to fashion a bill. She was for the bill last year. She says that this bill is ``convoluted and virtually impossible as a mechanism to solve the current problem.'' Now, she was testifying on behalf of a coalition of consumer advocacy groups.

The administration is working out a plan right now to resolve troubled mortgages, and we shouldn't make it more difficult for worthy borrowers to get home loans while they're doing that. A ``yes'' vote will do exactly that. It will raise the cost of mortgage credit, limit the availability to millions of Americans. It won't give the certainty that our mortgage market needs. It's poorly crafted and ill defined.

I think we will have a good debate today because it is not about not doing nothing, but it's about a difference of opinion of what the right thing to do is, because that's really, bottom line, what the American people want us to do.

They want to have a good mortgage and they want the right to have a mortgage that works for them. I think that the Republicans will articulate that we want them to have those choices.

It is now my pleasure to yield 3 minutes to the gentleman from New Jersey (Mr. Garrett).

Mr. Chairman, it is my pleasure now to yield 5 minutes to the gentleman from Texas (Mr. Hensarling), who has been a strong advocate of making sure that Americans have plenty of opportunities and plenty of choices when they look at their financial products.

Mr. Chairman, it is my honor now to yield 3 minutes to the gentleman from Minnesota (Mr. Paulsen).

Mr. Chairman, I yield myself 3 minutes.

The example I would use here today, imagine taking your car to the repair shop and saying, you know, my car is not running very well, it is running rough. And immediately the service attendant reaches over, pulls up your hood, and starts taking the engine out. And you stop and you say, wait a minute, what are you doing? And they say we are going to put a new engine in, you said your engine wasn't running correctly. That is before we did any diagnostic work to maybe determine whether it needed new spark plugs, or maybe it needed a new valve, or something like that.

And, really, we have started down a road here. We have had one of the most robust housing finance systems in the world. It has been the envy of the world. It has allowed record levels of homeownership for American families. Yes, it is running a little rough right now and we will need to get to the bottom of that, we need to diagnose what those problems are. The Federal Reserve is going down that road; they

have promulgated some new rules. We have said that now people who are going to originate mortgages are going to have to be registered.

But the problem here is that my friends are going down the road here without really determining all the places in the engine that could be causing the engine not to run correctly, they want to put a new engine in there--an untested engine.

Quite honestly, I spent a number of years in the housing business. I built houses, I made mortgage loans, I have borrowed money, I have originated mortgages. And one of the things I know is that not every mortgage fits every situation. A lot of people were able to enjoy the American Dream because they were able to get a mortgage tailored to their financial needs. What this bill does is says, you know what, the government is going to tell you what kind of mortgage you get. And if you don't take the government mortgage, it might not allow you to get the house that you want. It is like, not only is the government going to put a new engine in your car, but, by the way, the government says, scoot over, now we are going to drive.

We have seen, in the last few months, a major government intervention into financial markets, into automobile companies, into insurance companies. Last week, we saw that the Federal Government is going to tell you what kind of credit card you get to have now. And now my colleagues on the other side want to tell you what kind of mortgage you get, which is going to tell you what kind of house you get. That is not the American Dream; that's the Government Dream. Quite honestly, my colleagues are dreaming if they think this is not going to increase the cost of mortgages for families all across the country.

And you know what happens when you increase the cost of the mortgage? It reduces the affordability for those American families. That means many of them have to buy smaller houses, or, in some cases, many people are priced out of the housing market because they can't get the mortgage that meets their needs.

Let's let the American people have a choice to do that. Let's stop and look and give the regulatory measures that have already been proposed by the Federal Reserve time to work. And let's make sure that we are fixing the things that are broken before we throw out the whole engine and leave Americans without the ability to be able to have affordable mortgages and afford the American Dream.

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

Mr. Chairman, it is my pleasure now to yield 5 minutes to the ranking member of the full committee, the gentleman from Alabama (Mr. Bachus).

I yield the gentleman an additional minute.

I yield the gentleman an additional 2 minutes.

I yield the gentleman an additional 1 minute.

Mr. Chairman, I yield myself 2 minutes.

Mr. Chairman, I don't think that there's any disagreement in this House, and certainly not on our side, that predatory lending is bad, and we have taken steps to do that. The Fed has taken steps to do that. We want to make sure that people have the right choice of mortgage to be able to take a mortgage out that allows them to own a home.

The problem with this bill is that it really starts to mess up the conduit of how mortgages are made. And a little bit of history on that is a mortgage is made in your local bank or a mortgage banking company. It is then sold into the secondary market. Investors buy those mortgages so that those banks and mortgage companies can originate more loans, and that's how we have built this great housing market in this country.

What this bill does is it begins to put liability and uncertainty at a time there's already a tremendous amount of uncertainty in the secondary market. In fact, the secondary market in this country right now is shut down because of uncertainty, and now we want to dump a whole bunch or more of contingent liability and uncertainty on the secondary market to the point where I'm not sure whether we'll ever be able to start that engine.

So what I think what our colleagues are trying to do is to say somehow that Republicans are not against the predatory lending. Of course we're against predatory lending, and steps have been taken. But what we are for is making sure that there is a mortgage market left when this all blows over. Yes, the market has had a hiccup and people are now trying to ascertain what the new rules are going to be. They've seen the government take over banks and get involved in all kinds of businesses. So there is a lot of uncertainty out there. And the question is, was a lot of this a lack of oversight or was it a lack of a bunch of regulations? I would submit in many cases this was a case where there was not appropriate oversight.

I yield myself an additional minute.

I thank the gentleman from Texas for his work and also for yielding to me this morning. Madam Speaker, I rise in opposition to this rule and to the underlying bill.

H.R. 1728 is far-reaching legislation, and it will significantly restrict access to credit for consumers and it will ultimately hurt consumers across the Nation, the very people that this bill seeks to help.

At a time when the financial markets are still fragile and they are working so hard to recover, I want to caution my colleagues on both sides of the aisle who support this bill and hope that they will think about the potential, even if unintended, consequences that this legislation could provoke. It sounds good and it makes a great sound bite, but I am afraid that it will deliver a very dramatic blow to consumers all across our very fragile economy.

The bill imposes harsh penalties on lenders for violations of vaguely defined and, some would even say, undefined lending standards. For instance, how does one truly define what a net tangible benefit to the consumer is or what a reasonable ability to pay really means? The bill leaves it up to banking regulators to determine answers to these questions. But we all know, and we should be concerned about how they might define such vague terms and what criteria they might choose to apply. Every person's financial circumstances are different, and they don't lend themselves to a broad rulemaking process.

During the committee consideration of this bill, I asked these questions to Sara Braunstein. She is the Director of the Division of Consumer and Community Affairs over at the Federal Reserve. And I asked her how the Fed and others would define these terms, and it wasn't surprising, really. She stressed how challenging it would be to define them, but promised that the Fed would try.

It is not hard to see how their trying would simply open the door to a barrage of lawsuits. That is how this works. And that outcome will ultimately restrict access to credit for families all across our country. But even more troubling is that the bill would take this lack of clarity just one step further, and it would say that assignees and securitizers must also comply with these same standards when they purchase or assign loans.

So let's remember that these are parties that were not at the table when the loan originated. Think about that. The last thing our economy and our housing markets need as they struggle to recover is an unknown, widespread shadow of liability cast over them, and one that their government puts over them, by the way.

The uncertainties that will stem from this provision pose serious threats to liquidity and our already fragile financial marketplace. We should be looking for ways to help ease liquidity pressures, not forge greater obstacles. And, on principle, how can we expect those who had nothing to do with the loan origination to be held responsible for it later on? It goes against the very principles of law that our Nation is founded on. And I fear the chilling effect this would have on the housing market, and this is not a good time to do more harm than good to the housing market.

I would also like to point out that during our committee markup of the bill I offered an amendment to prevent organizations that have been indicted for voter fraud or who employ people who have been indicted for such crimes from being eligible for housing counseling grants and foreclosure legal assistance grants authorized by the underlying bill. I was very pleased when the gentleman from Massachusetts and our committee Chair accepted the amendment right in front of the whole committee and the amendment was passed unanimously by voice vote.

I assumed the easy passage was because my amendment used the very same language that this body approved last year as part of the Housing and Economic Recovery Act of 2008. So you can imagine, I was quite surprised when later in that markup, during the day, the committee chairman flipped his position and said he wanted to strip down the amendment and that he would move to amend the language himself during House consideration.

Apparently, the intention might be to lower the bar so that organizations continue to have access to taxpayer money even after they have been involved with defrauding the American people and violating the American trust not just once, not just twice, but repeatedly, after almost every election cycle.

So make no mistake about it. The Chair will talk today about the bedrock legal principle of innocence until proven guilty, but that is not what this is about. The language in the bill today doesn't jeopardize that principle at all. Decisions on criminal guilt will remain

in the capable hands of a jury of peers. That is where it should. But it is not only legitimate for Congress to decide the threshold for accessing taxpayer funds, it is incumbent upon us to do so. We have a fiduciary duty to the taxpayers of this country, and for too long Congress has cavalierly distributed taxpayer money.

Today, each and every one of us can go on record saying we will no longer set the bar so low; that we will require organizations that want to use taxpayer funds to prove that they are worthy of the taxpayers' trust.

There's a saying: Fool me once, shame on you. Fool me twice, shame on me. ACORN and organizations like it have fooled us not once, not twice, but over and over again. The stories of their indictments for voter fraud for violating their tax status, for voter registration improprieties abound. Grand juries across the nation have found them and their employees lacking. Yet, we continue to funnel millions of dollars into their coffers.

Just this week, in fact, the headlines out of Nevada were 39 counts of voter registration fraud against ACORN and two of its former employees.

How many felony charges does it take to see that this organization has violated the public trust? Congress is not the arbiter of guilt or innocence; but Congress does decide how to spend the people's money. At what point do we say that this organization is not worthy of the hard- earned bucks of the American taxpayer?

The amendment offered by the gentleman from Massachusetts has been made in order under today's rule and if passed it will eviscerate the taxpayer protections in the underlying bill.

I look forward to further debating this issue later today and I urge my colleagues to make clear today that they stand with the people, not with ACORN.