Mr. Speaker, pursuant to House Resolution 1363, I call up the bill (H.R. 3221) to provide needed housing reform, and for other purposes, with the Senate amendment to the House amendments to the Senate amendment with an amendment thereto,…
Mr. Speaker, pursuant to House Resolution 1363, I call up the bill (H.R. 3221) to provide needed housing reform, and for other purposes, with the Senate amendment to the House amendments to the Senate amendment with an amendment thereto, and ask for its immediate consideration in the House.
Mr. Speaker, I offer the motion at the desk.
Mr. Speaker, I recognize myself for such time as I may consume.
Let me concur with the remarks of the gentleman from Louisiana. I don't like everything in this bill either. It is inconceivable to me that anybody would like everything in this bill, because it is the product of a very significant set of compromises. To some extent, frankly, the challenges the Congress faced and the administration faced in dealing with the housing crisis--remember, we are here in substantial part because of a terrible housing crisis that has affected the economy of the U.S. and the world. We are dealing with the consequences of bad decisions and inaction and malfeasance from years before.
Obviously it requires a joint effort. To some extent, this is a test of our ability as a self-governing people to govern. Because if everybody held off and said I am only going to support a bill with which I am in complete agreement, we would not be able effectively to respond to this crisis.
So I appreciate the President's policy statement saying I don't like everything in this bill, but I'm going to sign it and you should pass it quickly. I think that's true of all of us who have looked at this.
Now I do want to refute some of the myths. One, we heard reference to a $300 billion program. My colleague, the ranking member, sent out a Dear Colleague letter that said the part of the bill that tries to avoid mortgage foreclosure is a $300 billion program. In fact, it's a $1.7 billion program, according to CBO.
Yes, it's $300 billion, $300 billion is the total amount of mortgages that could be insured. It would cost $300 billion only if no one who had one of those mortgages ever made a payment of a penny and the houses were worth nothing. Obviously it's not a $300 billion program. That's why CBO said our version was $1.7 billion.
We also heard from some of the Republicans that it is a $5 trillion program. What they call a $5 trillion program, the stand-by authority that the President has asked us to give the Secretary of the Treasury, the Congressional Budget Office says is a $25 billion program but probably won't be spent.
So I think we need to understand conservative Republican arithmetic. It is the most inflationary arithmetic I ever heard. $1.7 billion of CBO becomes $300 billion. $25 billion from CBO becomes $5 trillion. I hope it will be very clear to people that these numbers that are being thrown around are simply inaccurate and misleading.
I also want to talk now to some of my friends on the left and others who have, I think, been misrepresenting what we are doing with regard to Fannie Mae and Freddie Mac giving stand-by authority, saying this is bailing out the corporations, that this is welfare for the rich.
Let me read the list of people, organizations, who have specifically endorsed what this bill does with regard to stand-by authority to keep Fannie Mae and Freddie Mac from collapsing:
The Consumer Federation of America, the Lawyers' Committee for Civil Rights Under Law, the Leadership Conference on Legal Rights, the League of United Latin American Citizens, the Mexican American Legal Defense Fund, the National Association of Consumer Advocates, the National Council of La Raza, the National Urban League, the National Fair Housing Alliance, the National Low Income Housing Coalition.
Mr. Speaker, apparently there has been some infiltration. Apparently the corporate welfare advocates have taken over all the liberal organizations in America. We will probably have to investigate that, because all of the organizations with which I have worked for 28 years, who are the effective advocates for low-income housing, say pass this bill, please, and please specifically help Fannie Mae and Freddie Mac.
So the amount of misinformation here is enormous.
Finally, I want to address the question of procedure. Everything in this bill, with the exception of the emergency request from the President for stand-by authority for Fannie Mae and Freddie Mac, has been fully debated in the Financial Services Committee and voted on and debated on the floor of this House.
We are repackaging a number of things. Sometimes it takes our friends in the Senate two, three and four tries to get something done, so we keep serving the ball to them. Everything in this bill, with the exception of the emergency stand-by authority, has been thoroughly debated and voted on the floor of the House, and no part of it got less than 260 votes. So we're hardly rushing through things for the first time.
July 17, 2008.
Statement on Recent Federal Action To Provide Stand-by Support to
Fannie Mae and Freddie Mac
The undersigned consumer, civil rights and fair housing
organizations commend U.S. Treasury Secretary Paulson,
Federal Reserve Board Chairman Bernanke and leaders of the
Senate Banking and House Financial Services Committees, for
acting quickly to provide for stand-by support to Fannie Mae
and Freddie Mac, the two government sponsored housing
enterprises (or GSEs). This support reaffirms the importance
of the two companies in providing liquidity and stability to
the housing market during this tumultuous period.
The U.S. economy has a deep stake in the success of Fannie
Mae and Freddie Mac as companies with an essential public
mission. As history has shown, both GSEs are vital to the
long-term health and success of our nation's housing finance
system. Furthermore, their public mission activities have
been and must continue to be instrumental in expanding
opportunities for homeownership and affordable rental housing
for consumers.
The establishment of a strong independent regulator, as
provided for by the housing measure pending before Congress,
will serve to maintain public confidence that Fannie Mae and
Freddie Mac remain safe and sound and thus able to continue
to carry-out their vital public mission. Immediate action on
GSE regulatory reform signals that Fannie Mae and Freddie Mac
functions are essential to the housing market and to
consumers.
Center for Responsible Lending
Consumer Action
Consumer Federation of America
Consumers Union
Lawyers' Committee for Civil Rights Under Law
Leadership Conference on Civil Rights
League of United Latin American Citizens (LULAC)
Mexican American Legal Defense Fund (MALDEF)
National Association of Consumer Advocates
National Association of Neighborhoods
National Community Reinvestment Coalition
National Consumer Law Center (on behalf of its low-income
clients)
National Council of La Raza
National Fair Housing Alliance
National Low Income Housing Coalition
National Urban League
Opportunity Finance Network
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield myself 1 minute.
I welcome the evolution in the gentleman's thinking. A week ago he sent me a letter saying we should not do the FHA modernization, so he has apparently expanded that, and I appreciate that.
There is one other myth, though, that I forgot to refute that he trotted out, namely, that this is going to force the FHA to take bad loans. That could not be further from the truth. This bill explicitly leaves the FHA in complete control of the decision to guarantee a loan or not. Nothing in this bill coerces the FHA. The lenders, to be eligible, would have to write down the loan by a significant percentage. An independent decision is then made by the FHA as to whether or not they want to guarantee it.
I now yield 3 minutes to the gentlewoman from California, a major author of important parts of this bill.
I now recognize the Chair of the Financial Institutions Subcommittee, the gentleman from Pennsylvania, for 1\1/2\ minutes.
Mr. Speaker, I yield myself 45 seconds to say that the gentleman from Alabama suggested that I was misrepresenting his letter. Here is the last paragraph: There is need for expedited legislation, and that action is a basic GSE reform bill that can be drafted, and taken to the floor with minimal preparation, since we have had hearings, not FHA modernization and not a tap standby authority. That's what he asked for a week ago, only GSE reform and not anything else.
Secondly, the minority leader has understated the administration's position. I'm sure that he wants to be accurate. They are not simply saying the President would sign the bill, the statement of administration policy urges the House to pass it expeditiously. So they are not simply going to sign it, they want us to pass it expeditiously. I know the minority leader wouldn't want to understate the position of the administration.
I now yield 2 minutes to the gentleman from Georgia (Mr. Marshall).
Would the gentleman yield?
The gentleman from Georgia has been a diligent advocate for a sensible public policy, and I admire both his diligence and his grasp of the issue. He is correct. Nothing in this title changes existing Federal law with respect to the authority of the Office of Thrift Supervision and the Office of the Comptroller of the Currency's preemptive authority, and their right to regulate and oversee a depository institution's products and services marketing and distribution system, and they do obviously have definitional authority under this legislation.
Mr. Speaker, I yield 1 minute to a very diligent member of the committee, the gentleman from New Hampshire (Mr. Hodes).
Mr. Speaker, another one of the most active members of our committee, the gentleman from Texas (Mr. Al Green) is recognized for 1 minute.
Mr. Speaker, I yield to the gentleman from California (Mr. Baca), and there is language in the bill dealing with in-person counseling of which he is the main author, and I yield to him now for a unanimous consent request.
(Mr. BACA asked and was given permission to revise and extend his remarks.)
Mr. Speaker, I yield 1 minute to the majority leader.
Mr. Speaker, I yield for the purpose of making a unanimous consent request to the gentleman from Connecticut (Mr. Shays).
(Mr. SHAYS asked and was given permission to revise and extend his remarks.)
Mr. Speaker, I yield 1 minute to the gentleman from Texas (Mr. Hinojosa), a very active member of the committee.
(Mr. HINOJOSA asked and was given permission to revise and extend his remarks.)
Mr. Speaker, I am glad now to yield to my neighbor, the gentleman from Rhode Island (Mr. Langevin), 1 minute.
(Mr. LANGEVIN asked and was given permission to revise and extend his remarks.)
That's very generous of my friend. If he wishes to give another minute, I certainly would want to facilitate that.
I believe you can get unanimous consent, but if the gentleman's time has expired it would then be within the prerogative of the gentleman from Alabama to yield him another minute.
Mr. Speaker, I yield 1 minute to my colleague from Massachusetts (Mr. Lynch), a valued member of our committee.
I now yield to an alumnus of our committee, the gentleman from New Jersey (Mr. Sires), 1 minute.
I yield 1 minute to a member of the Ways and Means Committee, the gentlewoman from Nevada (Ms. Berkley).
I yield 1 minute to another member of the committee, the gentleman from Indiana (Mr. Carson).
I yield 1 minute to a very active member of the committee, the gentleman from Florida, Mr. Klein.
Mr. Speaker, yet another very active and important member of our committee, the gentleman from New York (Mr. Meeks). I yield him 1 minute.
I now yield 1\1/2\ minutes to the Chair of the Small Business Committee and a member of our committee, the gentlewoman from New York (Ms. Velazquez).
Mr. Speaker, I am about to yield to the Speaker, but I yield myself 30 seconds to say to my friend from Illinois who wonders about this newfound confidence in the President. My confidence in giving him power is growing as his time in office diminishes.
I now recognize the Speaker of the House for 1 minute. Her leadership has been very important on this.
Mr. Speaker, I yield 1 minute to the gentlewoman from Ohio (Mrs. Jones) who has been very concerned with this crisis given the impact that it has in her home district.
I yield the gentlewoman an additional 30 seconds.
I accept that we should. The imbalance is not intentionally done, just we're better at time management.
I now yield 3 minutes to one of the leading members of our committee in the preparation of this bill, the gentleman from North Carolina (Mr. Watt).
Would the gentleman yield to me at this time?
All the debates I've heard about civil litigation have been concerned that plaintiffs' lawyers would initiate lawsuits. We're talking here, as the gentleman well knows, about citizens who are finding themselves as defendants in foreclosures, and I can't imagine that people meant to exclude the ability of lawyers to defend people when we've got a record of some of these foreclosure packages being abusive.
So I would agree with the gentleman, and if necessary, I would hope we could make that very clear that defending someone who's being foreclosed upon, when there have been inappropriate practices isn't what has generally been meant here by a stopping the initiation of civil litigation.
I want to now yield to the chairman of the Budget Committee who has been a very important factor in our being able to pull this together, the gentleman from South Carolina (Mr. Spratt), 2\1/2\ minutes.
Let me inquire of my colleague, I understand he only had one more speaker?
Well, we have two. So I will now yield to the gentlewoman from California (Ms. Waters) for 2 minutes and then I'll be closing on our side.
Would the gentlewoman yield?
We were able to postpone the deadline there of October 1. There is also an issue on risk-based pricing. I believe we will have both of those resolved in a more flexible way before October 1 so that seller financing and risk-based financing, appropriately done, will not go out of existence.
Regular order.
Mr. Speaker, I yield myself the balance of my time.
The resemblance between reality and the rhetoric from New Jersey is even thinner at this point than it usually is. In fact, in 2003 and earlier, many of us were trying to do some reforms.
In 2005, I supported Michael Oxley, the former chairman of the committee and others, in enacting reform. The fact is very clear-- Republican rule for 12 years, no Fannie Mae/Freddie Mac reform. We took office, and 3 months after the Democrats became the majority, the Financial Services Committee, under the Democrats, and this House, passed a bill that increased regulation of Fannie Mae and Freddie Mac to the satisfaction of this administration. Twelve years of inaction under the Republicans, in 3 months----
No.
In 3 months we did it in the House, and it took the Senate, and there was, unfortunately, obstruction from Senate Republicans, but it finally got done.
Secondly, we have the myth of the $5 trillion, the silliest single misleading statistic I have ever heard. $5 trillion is the total value of mortgages held by people insured by Fannie Mae and Freddie Mac. The gentleman from Texas said this could reach $5 trillion. It will reach the sky on a broomstick before that.
No. I ask the gentleman to stop harassing me. He had his time. I would like to conclude. We had equal time here.
The $5 trillion means that--in the first place, nothing in this bill assumes any responsibility for any of those mortgages. Zero. It is stand-by authority to the Secretary of the Treasury to make the loans.
As the gentleman from New Jersey acknowledged, the CBO said this might cost $25 billion. It will probably cost nothing. It might cost $25 billion. How did $25 billion become $5 trillion? By fantasy. In fact, what you have is if every single mortgage held by Fannie Mae and Freddie Mac were to pay zero, then you would have a $5 trillion problem, but it wouldn't be ours.
Mr. Speaker, this bill is not to the liking of any single individual in all of its aspects, but it shows our ability to govern, because every single organization that has been advocating for low-income housing, all of the organizations that are in the business of building and selling housing, the organizations concerned with the financial health of this country, and the mayors and the Governors all support the bill, the Financial Services Roundtable, the American Bankers Association, the Mortgage Bankers Association, the National Association of Realtors, the National Association of Home Builders, the United States Conference of Mayors, the National Governors Association, and all the advocacy groups, the National Association of Consumer Advocates, National Community Reinvestment Coalition, National Consumer Law Center, National Fair Housing Alliance, National Low Income Housing Coalition.
The point is this. If we had a bill that was perfect for any one of these groups, you wouldn't have this coalition. These are people who, unlike my conservative colleagues who think that their administration has suddenly lost all of its moorings and they think that the Realtors and the home builders and the Financial Services Roundtable and the Low Income Housing Coalition and the home builders, all of these people don't understand. That's because they know the difference between a $5 trillion fantasy and a $25 billion stand-by authority to prevent terrible economic damage.
Here is the final point. No solution to a problem could be more elegant than the problem. We are in this problem because of excessive deregulation that led to the subprime explosion. The gentleman from Alabama and I and other members of the committee, my two colleagues from North Carolina, tried several years ago to prevent it. I acknowledge that we worked together. We were overruled by higher political authority at the time under the Republican-controlled Congress.
We are suffering from the results of the subprime. As to Fannie and Freddie, yes. That's a hybrid form that none of us here created that we should look at, and we will look at. But to deny a emergency response until we do that would be inviting disaster.