Floor Statements

Madam President, I ask unanimous consent that the Judiciary Committee be discharged from further consideration of S. Res. 512 and the Senate proceed to its immediate consideration.

I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and that any statements be printed in the Record.

I suggest the absence of a quorum.

I ask unanimous consent that the order for the quorum call be rescinded.

I ask unanimous consent that when the Senate completes its business today, it adjourn until 10 a.m. on Tuesday, June 8; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and the Senate recess from 12:30 to 2:15 to allow for the weekly caucus luncheons.

When it is available tomorrow, it is the majority leader's intention to ask the Chair to lay down the House message with respect to H.R. 4213, the tax extenders legislation. Rollcall votes are expected to occur throughout the day in relation to the tax extenders legislation.

If there is no further business to come before the Senate, I ask unanimous consent that it adjourn under the previous order.

Mr. President, I came to speak on the Merkley- Levin amendment, which I think is so important. I will speak about that in a moment.

I am a little surprised to hear another health care debate comment. Last year, through much of the year, there was opposition--a lot of opposition--to the health care bill. Most of the opposition came about because of the kinds of things that were said on the Senate floor that simply weren't true: that this bill would mean the government would put a bureaucrat between your doctor and yourself as a patient, that it was a government takeover, that it was socialism.

In fact, the arguments they used last year against the health care bill were the same arguments they used against Medicare in 1965: socialism, government takeover, and bureaucrat between you and your doctor. Those things didn't pan out with Medicare. The same arguments were used, but they clearly weren't true in 1965, when conservatives, including the John Birch Society and others similar to that, did everything they could to defeat Medicare. They were not successful then and they weren't successful on the health care bill now.

When I hear that kind of discussion from colleagues on the other side of the aisle, when I hear the most conservative Members of this institution saying we should repeal the new health care bill, I guess the questions to ask are: Do they want to repeal the provision when my friend's 22-year-old daughter comes home from college or his son comes home from the military

and they can't find a job with insurance? Are they going to repeal the section that says they can stay on their parents' health insurance? It was a great idea that the young men and women coming home from the Army or from school can stay on their parents' health care insurance until they are 27. I guess they want to repeal that.

I guess they want to repeal the tax breaks that this health care bill gave to small businesses so they can insure their employees. I guess they want to repeal the support for those who fall into the doughnut hole for prescription drugs, those seniors continuing to pay their premiums and get that benefit from it. They want to repeal the benefit this bill is going to give them. They want to repeal the prohibition on preexisting conditions. During much of last year, I would come to the floor and read letters from constituents--Ohioans from Ravenna, Toledo, Hillsboro, to Wilmington.

These letters would be mostly from people who thought they had good health insurance until they got sick and needed it. This legislation will not let insurance companies knock people off the rolls because of a preexisting condition or knock them off the rolls because they got too sick and expensive, will not let them knock them off the rolls if they had a child born with a preexisting condition. All of those issues were resolved, and we are beginning to see all of these benefits from this health care bill. The American public knows that.

I wish my colleagues, rather than advocate for repeal of something that has moved this country forward, would work with us on issues such as the Merkley-Levin amendment. Let me for a moment discuss that amendment.

It is a good amendment. It will make this final bill stronger. It is worthy of an independent up-or-down vote. It is worthy of a majority vote. If we get 51 votes, we ought to be able to adopt an amendment in this body to add to this legislation.

Republicans have criticized this bill for weeks. They have blocked us from bringing it up for debate because they said it did not address the problem of too big to fail. But the first major amendment we considered which would have addressed the problem of too big to fail--that is, too big to fail is too big--would have meant those huge banks would have had to sell off a part of their assets.

Let me give a number. The total assets of the six largest banks in this country 15 years ago was 17 percent of gross domestic product. The total assests of those six largest banks today are 63 percent of the gross domestic product. Too big to fail is, in fact, too big.

Every Republican, with the exception of Senator Ensign from Nevada, Senator Coburn from Oklahoma, and Senator Shelby from Alabama, every single Republican voted against that, again siding with the big banks, the six big banks, against the country, against manufacturers in Dayton, OH, against the small-town bank in Dover or New Philadelphia, OH, against the regional banks in Cleveland, Cincinnati, or Columbus, against the small business guy or woman who wants to get a loan. By voting for the big banks and giving them even more advantage, it was discriminating against the regional banks, the community banks. It was hurting the manufacturer in Shelby, OH, or Mansfield, OH, that needs a loan to build their business. That was the first chance.

I cannot think of another proposal that deals with the problem of too big to fail better than the Merkley-Levin amendment. There are all kinds of parliamentary shenanigans going on around this amendment trying to block it. Let me talk about the amendment for a moment.

If they are successful in beating this amendment, it is clearly a win for the Wall Street banks. For too long these banks used their own capital or borrowed billions of dollars to invest in risky financial products. We know they did that. We know the damage it caused to our system, to our economy, to our country. After telling their clients to buy these risky products, big banks turned around and bet against their own clients to cushion their profits. With one hand, they sold a client a risky financial product--a subprime mortgage or a large debt obligation. With the other hand they placed bets on those products underperforming. That is how proprietary trading works. That is what they want to continue.

It is like me selling you a house and then taking out a fire insurance policy on it and starting the fire. Whether it was greed or arrogance run amok, these megabanks blew our economy apart--we know what happened--leaving taxpayers to piece it back together.

Proprietary trading is not just a gamble. It is a drag on sectors of our economy that traditionally have been supported by the banks. Propriety trading displaces lending to businesses small and large. It increases Wall Street's bottom line while leaving the rest of the economy behind.

Over the past dozen years, proprietary trading--as this reckless gambling is called--has become an increasingly larger portion of the business conducted by our largest financial institutions.

At the end of 2009, the large banks reported to the FDIC that their trading revenues, as opposed to revenues from lending and other traditional banking activities, accounted for 77 percent of their net operating revenues. At the same time over the last year, FDIC-insured banks' securities holdings have increased by 23 percent. Instead of lending to businesses, they lend to themselves.

It is no coincidence that manufacturing faltered, that millions of jobs were lost, and our Nation's unemployment rate hovers at 9.9 percent and higher in a dozen States such as Ohio. There is no room in the financial sector to absorb good-paying jobs in other sectors; and when banks stop lending, other sectors dry up. That is not sustainable.

We know in this country that 30 years ago one-third of our GDP was in manufacturing. Financial services accounted for only 10 or 11 percent of our gross domestic product. That really tells the story. As manufacturing declined as a percentage of GDP and financial services went up so much, that is clearly why we are where we are today. Financial services has accounted for 44 percent of corporate profits in recent years, again, instead of manufacturing, instead of contributing wealth to our country.

The support of the Merkley-Levin amendment makes sense. It is not a time to play games with the financial well-being of hard-working, middle-class Americans.

I urge my colleagues to support the amendment.

I yield the floor.

Mr. President, I ask unanimous consent that I be recorded as yea on vote No. 143. Doing so will not affect the outcome of the amendment.

Madam President, I appreciate the leadership of my colleague from Delaware who understands this Wall Street reform perhaps better than anybody in the Senate, and has particularly led the charge on working on too big to fail meaning too big. That the size of banks in this country--when the six largest banks' assets 15 years ago were only 17 percent of GDP, and today the assets of the six largest banks total 63 percent of gross domestic product, we know that too big to fail really is too big. I appreciate the work Senator Kaufman has done on that.

We know what a financial meltdown looks like. It means pensions shattered, it means homes lost, it means college plans delayed or even abandoned, it means good-paying jobs lost, it means middle-class security undermined. Two years after the financial collapse in March 2010, there were 655,000 unemployed Ohioans. Ohio's unemployment rate today is 11 percent. Three of the largest banks slashed their SBA lending by 86 percent from 2008 to 2009. In Ohio, small business SBA- backed loans went from 4,200 of them in 2007 to 2,100 of them in 2009. Wall Street's casino gambling with the housing markets has caused nearly 90,000 foreclosures in Ohio just in the year 2009. The average median sales price of existing single-family homes across eight of Ohio's metropolitan markets plunged by an average of 16 percent from 2007 to 2009.

So why are my colleagues on the other side of the aisle trying to maintain the regulatory environment that allowed Wall Street to squander middle-class wealth and security? It makes me incredulous to think there are people in this institution, and a number of them, who want to continue the way it is always done, who think Wall Street does not need further regulation.

They were the same people who in the Bush years pushed for deregulation, and then President Bush assisted his Republican friends by putting more pro-bank, pro-Wall Street bank regulators in place to regulate after already weakening the regulations.

Neither Republicans nor Democrats should be starting this debate, should be starting the legislative process, by thinking, well, what is best for Wall Street, and then by working backward to see which consumer protections Wall Street can live with. That is not how you start this debate.

You do not say: Well, we have got to decide, can Wall Street live with these protections? Are these protections okay? Does Wall Street approve of these protections before we do them? That is not the way we should be legislating. We should be starting with what will protect middle-class families from another devastating economic blow, and we should then move forward to put those protections in place. It should be as simple as that.

My Democratic colleagues and I are fighting for the strongest possible measures to hold Wall Street accountable. I hope my Republican colleagues resist the temptation, a temptation they usually succumb to, to water down reform and carve out loopholes for the special interests. That has been the problem all along, the power of the bank lobby here, the power of Wall Street in the House of Representatives and the Senate, the bias so many have that, well, Wall Street did not really do that badly, we should water down this reform, we should carve out loopholes so Wall Street can continue doing business the way they did.

It is time, instead, to act on behalf of the people we serve, not Wall Street firms. Too many of my colleagues across the aisle, simply put, are putting Wall Street before Main Street.

The first step toward the financial recovery is protecting American families who rely on credit cards to meet their financial obligations or mortgages, to finance their dream of home ownership. Let's not forget that the kindling for this fire that became the global financial crisis was a pile of exploding mortgages. If we allow lenders of all types to continue preying upon hard-working Americans, then we are setting ourselves up for another disaster. This time it was securitized mortgages. Next time it can be student loans or it could be credit card debt, or it could be commercial real estate or it could be the junk bond market. Who can say for sure? That is why the independent consumer protection bureau in this legislation is essential.

It will create, for the first time, an entity dedicated to protecting the interests of middle-class Americans against the greed and the recklessness of Wall Street. We need a watchdog to make sure Wall Street gamblers and their lobbyists do not trample the American dream as a means of feeding their own greed.

Beyond establishing this agency, an agency tasked with protecting the interests of middle-class families, we have an opportunity to do much more to protect American families. We should adopt an amendment offered by Senator Whitehouse, cosponsored by my colleague sitting nearby on the floor, Senator Casey, and a number of us, a bipartisan amendment, that

would empower States to protect their citizens from unfair credit card interest rates.

Thirty-two years ago the Supreme Court decision, the Marquette decision, perhaps the most important Supreme Court decision Americans do not know about, overruled the consumer protections, so-called usury rates, interest rates, among the 50 States.

In other words, if the legislatures of the State of Pennsylvania, the State of North Carolina, the Presiding Officer's State, or my State of Ohio, enacted an 18-percent usury rate or a 16-percent usury rate, that is the top rate at which lenders can charge customers. Those rates were overturned by the Supreme Court decision because the Supreme Court decided it does not matter where the customer is, whether the customer is in Charlotte or Harrisburg or Cleveland or Columbus, it mattered where the bank was.

Basically what that meant was, bank after bank after bank located their operations in a State with very high usury rates or no usury rates at all. Therefore, a customer in Akron or a customer in Toledo or Mansfield or Springfield or Xenia, having a credit card with a bank in South Dakota paid much higher interest rates, even though Ohio set its interest rates much lower.

Usury rates--I quoted today in a presentation earlier--were established by the Bible. In Exodus 12, I believe, the Bible says clearly that usury rates--the usurious interest rates aimed at the poor, and aimed really at everybody, simply should not stand.

Yet, by this Supreme Court decision in 1978, the Court ruled we would basically outsource our interest rate, our consumer protections, to the lowest common denominator State. So if South Dakota has no usury rates or no limit or a very high limit on their interest rates, it means a credit card holder in Lima, OH or Troy, OH or Springboro, OH is paying those high interest rates, even though the Ohio legislature has acted against their doing that.

So the Whitehouse-Casey-Sanders-Brown amendment, a bipartisan amendment, is particularly important simply to give the power back to the States to make a determination of interest rates. For too long, as this Supreme Court decision indicates, and the lack of response from Congress indicates, Washington has been looking out for the megabanks.

Some of my colleagues are still saying these banks' interests are more important than protecting the American public. This bill would not even allow the consumer protection bureau to set rules regarding credit card interest rates. Meanwhile these rates are inexplicably going through the roof, at the same time the banks are again enjoying record low borrowing costs. It makes no sense. We report to the American public, not to high-risk business models.

The next element of financial collapse came when Wall Street bundled toxic mortgages into untested products such as mortgage-backed securities and collateralized debt obligations, and synthetic CDOs and credit default swaps. Many of these new products, products that almost nobody understands, were unregulated derivatives sold in over-the- counter markets with no oversight or transparency.

As a member of both the Banking and the Agriculture Committees, I want to commend the Chairs of each of those committees for the work in creating a derivatives title, a regulation of derivatives, that will provide much needed oversight to the $210 trillion--$210 trillion--that is the 210 thousand billion dollar U.S. derivatives market.

At the same time we balance the need in regulation of derivatives, we balance the needs of manufacturers in Dayton, Youngstown, and Toledo, who used these products appropriately, and that was not where the problem was, to limit their business risk.

This bill provides for financial stability by requiring banks to put capital behind their trades. It uses transparency and accountability to prevent Wall Street banks from taking advantage of their business customers. It reduces speculation that fuels bubbles in markets such as natural gas and mortgages.

I want to single out Chairman Lincoln's proposal to separate derivatives operations from commercial banks. It is the right thing to do, because the megabanks' speculation is detracting from their primary job, lending. Over the last six quarters, megabanks have decreased their consumer and small business lending. At the three biggest banks, lending under the SBA's 7(a) program, the primary SBA program to help startup and existing small businesses, lending under that program declined 86 percent from 2 years ago to last year, and it does not appear to be getting a lot better this year.

Over the same period, banks' securities holdings increased by 23 percent. What does that mean? That means rather than investing in a local manufacturing company, Elyria Foundry, or Alcoa in Cleveland, or smaller companies, a fastener company in Bedford, or companies, manufacturing companies, instead of investing in those, their security holdings increased. That is where their capital went.

That was not productive for our country. It may have been profitable for the banks, but it does not work to get our economy back in gear. Taxpayer-funded assistance from the FDIC and the Fed should not be going to support a bank's gambling, it should be supporting sound economic growth.

In an ideal world, we would treat derivative products like all other investment products and trade them on exchanges.

This is a strong bill, particularly now that we have adopted Senator Cantwell's antimanipulation amendment. We are finally going to impose some order and allow sunlight into what has been and is currently a completely dark and opaque market.

The final ingredient to the financial crisis came when massive, interconnected Wall Street banks and investment houses--such as AIG and Citigroup and others--gorged themselves on risky derivatives backed by predatory mortgages. When these bets went bad, the U.S. Government decided these banks were too big to fail, and the U.S. taxpayer was forced to settle their hundreds of billions of dollars in obligations. These too big to fail banks are getting even bigger. Right now the five biggest banks control 97 percent of all U.S. derivatives. For the first time, we are going to have a process to liquidate these large financial institutions if they fail. Such a system was lacking at the time the giant investment banks, such as Lehman Brothers, Bear Sterns, and Merrill Lynch, were in financial peril, due to overleveraging and investment in toxic investments.

I believe the bill should be strengthened to make absolutely certain there are no more meltdowns and no more bailouts. I would like to add stronger safeguards against behemoth banks that control so much of the Nations's wealth they could singlehandedly send our economy spiraling downward. Too big to fail means too big. While this is mostly about the risk these banks took and might take in the future, it is also about size. When 15 years ago the assets of the six largest banks combined were 17 percent of the GDP and today the six banks' total assets make up 63 percent of GDP, too big to fail is also simply too big. It is crucial we adopt an amendment offered by Senators Merkley and Levin to ban proprietary trading. Too many Wall Street banks got rich at the expense of clients they were supposed to be serving and American families whose homes have been taken from them.

It is equally important that we consider and adopt the amendment offered by Senators Cantwell and McCain to reimpose the Glass-Steagall wall between commercial and investment banking. We should pass the Dorgan amendment, giving the systemic risk council the authority to spin off parts of large, cross-border financial institutions. After 2 years, after millions of jobs lost, after millions of homes foreclosed upon, we are attempting to put in place rules that might prevent the next crisis. We should not dilute this critical piece of legislation with amendments that coddle Wall Street. Too many of my Republican colleagues are still trying to do that, introducing amendments that choose Wall Street over Main Street.

It is important this legislation move forward. It is important that all of us fight to choose Main Street over Wall Street so this works for Findlay, Warren, Bolero, and Tipp City, OH, communities that have been hit hard by the

greed and recklessness of Wall Street banks.

That is clear.

I yield the floor.

Mr. President, I am here today to express my unqualified support for the confirmation of Judge Timothy Black to be U.S. district judge for the Southern District of Ohio.

I am proud to say that I worked closely with my fellow Ohioan, Senator Voinovich, to establish a bipartisan selection process that resulted in the selection of Judge Black as a candidate for submission to the President.

I would like to thank the members of the Southern District Judicial Advisory Commission, particularly Mr. Paul Harris, Chair, for all their efforts in vetting numerous candidates for the nomination.

Of all the candidates reviewed for this vacancy, the commission was most impressed with Judge Black. The commission recognized his leadership, his commitment to legal excellence, and temperament as qualities that make Judge Black well-suited to serve in this capacity.

Judge Black has served the Southern District of Ohio with excellence for 6 years as a Federal magistrate judge. Before that, he spent a decade as a municipal court judge, and he also had a long career as a civil litigator.

In addition to his commitment to the legal profession, Judge Black has exemplified a commitment to service through his work as a coconvener of the Round Table, a partnership between the Black Lawyers Association of Cincinnati and the Cincinnati Bar Association to improve diversity and inclusion in the legal profession.

Additionally, his valiant efforts as vice president and member of the board of ProKids, an organization that represents abused and neglected children--Judge Black's service extends beyond the judges chamber and into neighborhoods and communities in which he lives and works.

President Obama nominated Judge Black last year, stating that he has the ``evenhandedness, intellect, and spirit of service that Americans expect and deserve from their federal judges.''

Judge Black is more than ready to serve and should be confirmed without delay.

If the Senator would yield, I thank the Senator for bringing out that there is such broad support, as we are seeing, from economists as conservative as Alan Greenspan and as progressive as Bob Reich, and others, who say too big to fail means simply too big. Our amendment will only affect the six largest banks--affect their size--and it will affect smaller banks in helping them be more competitive.

You said something on the Senate floor yesterday that, in effect, the size of these banks gives them a subsidy, a roughly 75 basis point or three-quarters of 1 percent advantage in the capital markets. This amendment we have, which is gaining increasing support--we have now 10 or 11 cosponsors to it, and we are working with people on both sides-- simply to say too big to fail is too big.

Talk to us for a moment about how these banks get the subsidies. Somebody in my office said in a sense we are giving welfare to the Wall Street banks. Because of their size, they are getting advantage on the capital markets because investors, with their dollars, understand these banks are never going to be able to fail unless we really keep them from getting too big.

Explain that Wall Street welfare that we see with these 50 literally trillion-dollar-plus banks, which they extract from the system.

So that means when one of the huge Wall Street banks--these six banks--is getting a three-quarters percent, roughly, interest rate differential--a bonus, perhaps--that means that banks in Delaware and Ohio that aren't so big are at a competitive disadvantage. I assume that also means those big banks have opportunities to get larger. If the playing field is not level, those toward whom it tilts get other advantages and grow larger and larger, making the point of our amendment that much stronger.

Madam President, will the Senator yield? I appreciate this analysis. I hear, as we talk about the Brown-Kaufman amendment--and it has gotten increasing attention because an increasing number of people said too big to fail is too big and that if we allow these six banks--that chart the Senator showed originally--the largest six banks in the United States 15 years ago were 17 percent of our GDP and today they are 63 percent and growing, as Senator Kaufman mentioned.

Look at the rate of growth. They did not grow a whole lot until the last 10 years, and look what happened. They are going to continue to grow since the Glass-Steagall repeal.

The argument opponents of our amendment use most frequently is: We do not have the largest banks in the world anymore. There are larger banks other places. And how are our banks going to compete with these huge banks?

I am intrigued by that because our banks are trillion dollar banks. I know there are studies that banks with assets of $300 billion and $400 billion and $500 billion have all the economies of scale. Economies of scale do not work forever.

A bank that is $300 billion, $400 billion, $500 billion has all the economies of scale as a trillion dollar bank.

The point they make about European--we cannot compete internationally--it is clear from what the Senator from Delaware said, all of our banks, when they were smaller--smaller than the largest banks in the world--could compete internationally 10 years ago, and there is no reason they cannot compete like that today.

I found the huge lumbering bureaucracies, whether they are a bank or whether they are the Center for Medicare and Medicaid Services, are not as flexible and nimble and cannot keep up with the market nearly as well if they are that big.

The Brown-Kaufman amendment, again, does not apply to very many institutions. No more than five or six will be even unwound a little bit. We are not going to split them all up so they are small, little community banks. They are still clearly going to be able to compete. There is no question about it under the Brown-Kaufman amendment. We give 3 years to banks to sell off some of the assets, to spin off a line of business, to sell regional operations they may have in one area of the country to comply with this amendment.

It is clear that as increasing numbers of people say, ``Too big to fail is too big,'' that if we allow these banks to keep getting bigger and bigger--and we see this chart where the six largest banks in total assets end up being 70 percent, 80 percent, 90 percent of GDP--it is hard for me to think that if one stumbles and is about to fail that we are going to let it fail, that government will let it fail because it will have huge repercussions because of the economic power these institutions have.

Mr. President, I call up amendment No. 3733.

Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. President, the Kaufman-Brown amendment, with 14 cosponsors, would scale back the six largest banks in the Nation, requiring them to spin off into smaller more manageable banks and maintain sufficient capital to cover their debts.

These six banks' assets total $9 trillion. Our amendment ends bailouts by ensuring that no Wall Street firm is so big or so reckless that it fails, and then so does our economy. The bill we are considering today is strong, but it needs to be stronger. It focuses on monitoring risk--risk is the biggest problem--and takes action once there are signs of trouble.

But size is also a huge problem. Everyone, from consumer groups, to small business owners, to former directors, Governors of the Fed, Chairmen of the Federal Reserve--two of them--understand what is at stake if we do not pass this amendment.

They have understood because we see it for ourselves that when a few megabanks dominate our financial system, the downfall of any of them can mark the downfall of our entire economy. We have seen millions of jobs lost. We have seen millions of homes lost. We have seen trillions of dollars in savings and wealth drained.

Just 15 years ago--just 15 years ago--the six largest U.S. banks had assets equal to 17 percent of our GDP. Today, the six largest banks have total assets estimated to be in excess of 63 percent. From 17 percent of GDP to 63 percent of GDP--these six largest banks.

Alan Greenspan said too big to fail is too big. Too big to fail is too big. These six banks, in addition to the fact they already have such dominance in our economy, when borrowing money when going into the capital markets, enjoy an 80-basis point advantage over banks in Denver and Cleveland, regional banks in our States, and community banks that are even smaller. They have an 80-basis points advantage ensuring that if we don't pass the Brown-Kaufman amendment, their advantage will only grow because these banks will grow larger, because the playing field is tilted toward them, because they have this interest rate advantage when they borrow money--another reason to understand that too big to fail is too big.

I yield the last 2 or 3 minutes to Senator Kaufman.

Mr. President, I would only say that Alan Greenspan, not someone who has been on a crusade to break up America's businesses, talking about these banks, said too big to fail is too big. I think that sums it up pretty well.

I yield the remainder of my time, and I ask for the yeas and nays on the Brown amendment.

I ask unanimous consent that the order for the quorum call be rescinded.

Madam President, I ask unanimous consent that Senator Kaufman, the cosponsor of our Wall Street reform amendment, and I be permitted to speak for up to 20 minutes.

Madam President, we all agree our financial system should never again be on the brink of total collapse. We all agree we must never again allow Americans to fall victim to the unconscionable recklessness and unbridled greed we have seen over the last decade. No longer should a no-show regulatory attitude rob Americans of their jobs, of their homes, of their retirement savings, of their credit ratings, and the list goes on and on. We all agree American taxpayers should never again have to foot the bill for bailouts to the very firms whose cowboy attitudes got us into this mess in the first place.

So how do we put a stop to the madness that left our economy in a shambles? We stop it in its tracks. That means hard decisions. It means decisive action. It means doing more than taking action when we recognize the symptoms of collapse. It doesn't mean waiting until it is too late and too many people suffer. It means eliminating the ingredients of collapse.

Chairman Dodd's bill is strong. It sets the stage for recognizing trouble, and it helps use regulatory tools to reverse it.

Senator Kaufman and I think we owe it to the American people to take one more significant step. We need to take action now so trouble never has the chance to brew. That means taking on the financial institutions that are too big to fail and doing that now and doing that in this bill.

Former FDIC Chair William Isaac said these institutions are ``too big to manage and too big to regulate.'' Senator Kaufman and I want to do more than monitor banks that must be bailed out if they gamble themselves into a corner. We want to put a hard limit on the size of these behemoth banks so they don't control so much of our economy that, come crisis time, we have to save them; we have to bail them out to save the economy. We want to limit their size so they can't back taxpayers into a corner, where it is either help them or hurt ourselves. We don't want that obsequent choice. We think that should be a concern whether it comes through acquisition or organic growth. Certainly, risk is the biggest problem, but size is almost as big a problem, and together they can spell disaster. Our measure only affects the six largest megabanks.

As this chart shows--and I have cited it often in recent weeks--the assets of these six banks, the assets of the largest six banks in the United States 15 years ago was 17 percent of gross domestic product. The total assets of the six largest banks today are 63 percent of gross domestic product. Seventeen percent of gross domestic product 15 years ago, six largest banks, 63 percent of gross domestic product today. These banks have $9 trillion--that is $9,000 billion--in assets.

Research shows that a bank's size stops providing benefits to its customers once it reaches approximately $100 billion. So we can get all the economies of scale in a bank with $100 billion--$100,000 million. Those are large banks, $100 billion banks. You can get the economies of scale with $100 billion banks. You don't need a $1\1/2\ trillion bank.

I have heard some argue that smaller banks are actually less stable than larger banks. Evidence shows, though, that larger banks actually exhibit greater risk due to the higher volatility of their assets and their activities. Look what happened in the last 2 years. The simplest, most effective way to manage this risk is to spread it out, to have several modestly sized institutions instead of a few giant ones. But the risk in the financial system is clearly collecting in a few gigantic banks.

This chart shows the industry concentration in top bank holding companies. When Gramm-Leach-Bliley passed in 1999, the five biggest banks had 38 percent of the assets of the financial industry. Today they hold 52 percent. So we can add up all the community banks in my State--and there are dozens and dozens of them and they serve the communities well--you can add up all the regional banks in my State; you can add up KeyBank and Fifth Third and Huntington and 1st Mariner-- all the regional banks--and when we do that all over the country, these five banks still have most of the assets. Five banks have 52 percent of the assets.

I know some people think it is too late--the horses are out of the barn--and we can't go back to a time when we had a group of 15 modestly sized banks, as opposed to 6 gargantuan banks. We allowed big financial firms to merge into giant ones, and that led to a $4 trillion bailout. In the last few decades, the banking industry has become so concentrated it no longer functions as a competitive market. Since 1990, the 20 largest financial firms have increased their control of banking assets. They once controlled 35 percent. They now control 70 percent. Some firms are now 30 percent, 40 percent, in some cases, larger than they had been before the crisis.

So what does it mean? We are twiddling our thumbs as Wall Street, once again, places our Nation at risk.

Former Fed Chairman Alan Greenspan said:

In 1911, we broke up Standard Oil. So what happened? The

individual parts became more valuable than the whole. Maybe

that's what we need to do.

This is Alan Greenspan, who clearly has never come down on this side on issues such as this.

President Franklin Roosevelt investigated and imposed structural regulations on utilities through the Public Utility Holding Company of 1935. That worked for the prosperity of business, and it worked for the prosperity of the country as a whole.

In 1984, the court split AT&T into a group of regional Bells. That worked for business. That worked for the country as a whole.

In all these cases, size was detrimental to the marketplace. Now these megabanks have grown so large they control the fate of our economy.

The large banks have effectively become huge securities and derivatives trading operations grafted on top of commercial banks. Right now they are using their trading businesses, and they are neglecting their lending businesses. Ask people in Hanover. Ask people in Mansfield. Ask people in Toledo or Shelby, OH. Ask small businesses, and they will tell you they simply can't get the credit they need for manufacturing and other kinds of small businesses.

These large banks have too often put a virtual freeze on lending to small businesses, despite receiving a taxpayer bailout. Three of the largest banks slashed their SBA lending by 86 percent from 2008 to 2009. In Ohio, SBA-backed loans went from 4,200 in 2007 to 2,100--cut in half--in 2009.

I have heard from manufacturers and entrepreneurs, from energy startups and mom-and-pop operations, from small business owners to the local corner store operator, all part of the middle class who are struggling to get the credit they need to hire their workers.

Our amendment simply says too big to fail is too big.

We are going to call up the amendment sometime this week. Senator Kaufman is one of many cosponsors who played a major role in crafting this legislation.

I yield to Senator Kaufman.

Madam President, I thank the Senator from Delaware.

It is so clear, first of all, that the Dodd bill is a huge step, a good step, a solid bill in reforming Wall Street.

It is what we ought to do. There will be three or four major chances. One of them is the amendment Senator Kaufman and I are working on. There will be three or four major votes coming up to strengthen the bill. There will be efforts--particularly from my colleagues on the other side of the aisle--to weaken the bill. There are clearly many people in this institution who want to do the work of Wall Street, and Wall Street has always been their benefactor. The big banks are their allies. They may do their bidding on the Senate floor. There will be efforts to strengthen the bill, such as Merkley-Levin, and some of the work we do with derivatives.

Let me close and put a bit of a human face on this. This is technical stuff. When you look at these charts that we put up and what happened with the size of these banks--again, I cite this number that astounds me every time I think about it: Only 15 years ago, the largest 6 banks in the country had assets of 17 percent of GDP. Today, it is 63 percent of GDP--some $9 trillion. Those are astounding numbers.

Let me shift and put a bit of a human face on what this means. I want to share two quick letters, one from someone in Columbus, and one in Lorain. Joann, from Franklin County, says this:

As a small family-owned business owner, I'm trying to find

help to keep our business open. Our 20 employees and their

families count on us to continue operating. They will end up

unemployed and looking for work if we can't keep money

flowing.

They cannot get the kind of credit they need from these banks.

My neighbor had to close her business; she cut prices,

selling everything she could. Now she works two part-time

jobs. The building her store was in sits empty. Banks didn't

help her either.

The banking industry is responsible for the economic crash.

They should be assisting businessowners. Keeping us in

business means jobs. Shutting us down is not helping the

economy recover.

Senator Kaufman and I don't want retribution from the banks. We want the banks to pull their load and start treating small businesses and consumers more fairly. They should be assisting businesses.

Barbara, from Lorain County, west of Cleveland, says this:

Please stand up for the working folk of the middle class.

As a law-abiding taxpayer, I believe that it is time for

fiscal integrity of the U.S. bankers.

We are holding on to our jobs and homes by a thread. There

are also many people in Lorain County out of work and

businesses continue to close their doors.

I'm sure that there is no one single, simple solution, but

holding the bankers responsible for what happened in our

financial [industry and our country], but it is necessary to

help remedy the financial crisis that most of us are in.

Please support law-abiding people by demanding integrity of

the banking industry. We are depending on you.

There are many people in my State of Ohio, and also in Dover and Wilmington, DE, in the banking industry. When institutions get this large--when six institutions have this kind of economic power in our system, we know that even someone as conservative as Alan Greenspan says that is a problem for our economy, risk is a big problem, size is a problem. This amendment will affect only the six largest banks in the country. They will operate better and more efficiently, and probably more profitably, if they are a little bit smaller. This addresses that issue.

We yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, Wall Street's crisis became the Nation's crisis. Lost jobs in Toledo, foreclosed homes in Bedford Heights, frozen credit for small businesses in Lebanon, State budget shortfalls, and the list goes on and on. It can't happen again. We must not let it happen again.

One of the most disturbing aspects of the Wall Street reform process is, some policymakers started with the premise that, first of all, Wall Street wealth must be protected. Sure, they have their lobbyists. Sure, they have their PR people spinning. But it amazes me to think that is where some people started this whole debate. They focused their energies on minimizing the safeguards put in place to protect our Nation from another financial meltdown.

In this morning's Washington Post, E.J. Dionne quotes an e-mail from an arrogant banker, who happens to work at Goldman Sachs, who wrote:

What if we created a ``thing,'' which has no purpose, which

is absolutely conceptual and highly theoretical and which

nobody knows how to price?

At some point, we have to ask in this body: Whom do we report to, the megabanks that raked in millions by gambling with the livelihoods, the homes, the retirement security of middle-class Americans, or do we report to middle-class Americans themselves? Is our job to protect Wall Street or is our job to protect against more taxpayer-funded bailouts?

In my view, we must take the steps necessary to eliminate bailouts and establish foolproof financial protections for the Americans we represent, and we do it even if the behemoth banks don't like it, even if Wall Street lobbyists don't like it, and even if most of my Republican colleagues don't like it. That is what the amendment I will offer on Tuesday is all about.

In the last few decades, the banking industry has become so concentrated it no longer functions as a competitive market. Yesterday I met with Kansas City Fed President Dr. Tom Hoenig. He observed that since 1990, the 20 largest financial firms have increased their control of banking assets. They once controlled 35 percent of those assets. Today they control 70 percent. Some firms are 30 to 40 percent larger than they had been just before the crisis.

What does that mean? We are twiddling our thumbs as Wall Street once again places our Nation at risk.

Think about this: 15 years ago the 6 largest U.S. banks had assets equal to 17 percent of GDP. Today, the 6 largest megabanks in this country have combined assets of 63 percent of GDP; from 17 percent 15 years ago, percent of GDP, assets as a percent of GDP, to 63 percent today. Three of these megabanks have close to $2 trillion--that is two thousand billion--$2 trillion of assets on their balance sheets and over $1 trillion in liabilities. Because our economy rides on a few megabanks, taxpayer-funded bailouts are far more likely than if these banks were not so dominant.

As we have seen, that is not the only downside of banking concentration. It also jeopardizes our small businesses which generate over 60 percent of new jobs. The current distortion in the market gives privileged large banks clear funding advantages, up to $34 billion annually over smaller community banks. These large banks could game the system far too often at the expense

of the smaller banks, at the expense of the community banks. These large banks have put a virtual freeze on spending on small businesses-- despite receiving this taxpayer bailout.

Three of these largest banks slashed their SBA lending by 86 percent from 2008 to 2009. In Ohio, SBA-backed loans--those are government- guaranteed loans to help small business. I know the Presiding Officer has fought for small business in Duluth and Rochester and St. Paul, as I have for small business in Toldedo and Dayton and Cincinnati. In 2007, SBA-backed loans in my State went from 4,200 to only 2,100 in 2009. They basically were cut in half.

I have heard from manufacturers and entrepreneurs, energy startups and mom-and-pop corner stores--all small business owners who strive to be in the middle class and bring their employees up to the middle class, who are struggling to get the credit they need to hire workers and expand businesses. They have the capacity, they have the customers, they simply cannot get the credit they need to expand. It is clearly not the small banks who are cutting their lending. In fact, according to the Kansas City Fed, 45 percent of banks with assets under $1 billion actually increased their business lending in 2009.

What do the megabusinesses do instead of lending? In the last year Wall Street megafirms have increased their trading by 23 percent. They are trading with each other on Wall Street so they can make money. They are not making loans to Main Street because it simply is not as profitable for them.

Last year, we let 100 community banks fail across the Nation. Meanwhile, we spent $165 billion of taxpayers' money to keep the big six banks afloat. But the cost of having these six megabanks is even greater. The Bank of England estimates that the true social cost to our economy of the financial crisis has exceeded $4 trillion, four thousand billion dollars. If we don't want another economic crisis, if we don't want more small business failures, if we don't want more bailouts, we need to do something about the unprecedented concentration of wealth among a few large banks.

That is why Senator Kaufman of Delaware, Senator Casey of Pennsylvania, Senator Merkley of Oregon, Senator Whitehouse of Rhode Island, Senator Harkin of Iowa, Senator Sanders of Vermont, Senator Burris of Illinois, and I have introduced this amendment modeled after the Safe Banking Act of 2010. These Senators come from the East and the South and the Midwest and all over our country. They will rise with me in support of the Brown-Kaufman amendment.

It would prevent any financial institution from becoming so large that it could jeopardize the entire economy. Too big to fail means too big to exist. The amendment would scale back the six largest banks of the Nation--just six banks but six megabanks. Those six banks' total assets, as I said, are 63 percent of gross domestic product in this country. This amendment would require them to liquidate some of their bank before it is too late.

That would mean they could spin off one of their lines of work, they could reduce one of their lines of work, they could do less business in one region--whatever--so they are not megabanks with this kind of power over our economy.

Our amendment would place statutory limits on the leverage of these banks. Our amendment imposes sensible size constraints on these banks. The leverage ratio would be set in the vicinity of 6 percent--about 16 to 1.

We saw on Wall Street one of the things that brought on this crisis was there were ratios of 25 and 30 and sometimes even 35 or 40 to 1. This amendment would cap concentration of deposits held by any one bank at 10 percent of the Nation's deposits, about $750 billion--not small but not so humongous as they are now.

The bill we will be considering beginning next week is strong, but it needs to be stronger. It focuses on monitoring risk--that is the right thing--and taking action should regulators believe the risk has grown too big. But we know the regulators didn't exactly do it right during the Bush years, and that is why it is so important that we write legislation in a way to keep these large banks from getting too big. We should not just monitor risk until we are once again on the brink of trouble. We should learn from recent history and correct our regulatory mistakes by nipping risk in the bud. That means preventing the anticompetitive concentration of banks that become too big to fail and bank on that to engage in high-risk behavior. Not only would our amendment help prevent bailouts and protect us against economic collapse, it would help boost lending to small businesses.

I am joined in the Chamber by the Senator from Louisiana who has specialized in finding ways to help small businesses. She knows, as I do, these small businesses have not gotten the kind of credit they need to expand; that they have the capacity to grow; that they have the employees, they have the customers, but they too often have not been able to get credit.

The Brown-Kaufman amendment would take action now to prevent economic collapse and taxpayer-funded bailouts in the future. We believe the American public does not want regulators to wait and see whether another crisis develops. We should prevent it before it starts.

Too big to fail is too big. The American people saw the arrogance of Goldman bankers who seem, with little regret, without second thought, to completely disregard the public interest. They want us to teach Wall Street megabanks a lesson that they will never again monopolize America's wealth or gamble away America's dreams.

This is not about retribution. This is about protecting the American public from banks too big to fail, banks that are too big to exist. It will affect a relatively small number of banks, but these banks, frankly, have too much power over our economy. These banks, coupled with their risk and their size, present a real threat to the future prosperity of our great country.

I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent that any time spent in quorum calls on the motion to proceed to S. 3217 during today's session be divided equally between both sides.

I thank the Chair.