Floor Statements

Mr. Speaker, I thank my friend from Texas, and I would say that people in my district, there are some people who are hurting right about now as there are around the country. There are some people, indeed, who are homeowners in very bad shape. Some, for example, were duped or lied to by people that loaned them money. Some, a few, have lost their jobs. Some bought homes at the high of the housing market, say $150,000, now to find that their house is more like $120,000 or $100,000. And we all feel very sympathetic for those people.

But I don't feel too terribly bad for speculators that went in search of ways to get higher returns and take higher risks as an exchange, and that's who is getting bailed out today. I also don't have complete sympathy when it comes to using taxpayer money to reimburse people that, for example, put zero money down. They didn't buy that home. They bought an option to buy the home. People that bought into a 3-percent teaser rate knowing that if the interest rate went to 7 percent, they would never be able to stay in that home. People that used no documentation to demonstrate that they ever had the chance to repay. They moved into a home with an option to continue buying it. They didn't make the type of commitment that most homeowners do

to put 10 or 20 or 30 percent down and to make sure that they have a mortgage and a loan that they can pay under virtually any circumstance except for a disaster.

Who does this bill help? Well, The Wall Street Journal made it very clear who this bill helps. This bill is a bailout from American taxpayers of speculators and imprudent borrowers. Less than 1 percent of borrowers whose homes, under this bill, would be eligible when all is said and done to be helped.

I come today to speak on behalf of the forgotten man. And that includes some 50 percent of Americans that either own their home or are renting. Every one of them watching today needs to know that they are bailing out irresponsible speculators and lenders and they will pay the price of this bill. I come here to speak for the 90-plus, 95 percent of homeowners that are making their payments on time, that took out responsible loans. They need to know that they are bailing out irresponsible speculators and people that went in search of higher profits.

Investors who take advantage of this program are basically getting a guaranteed gift from the government: 85 percent of a loan that they know is not likely to perform. We are bailing out people that will cherry-pick the very worst loans in their portfolio.

Who is here speaking on behalf of the forgotten man? Who is here speaking on behalf of 99 percent of Americans that did not behave irresponsibly, that did not behave foolishly, that ultimately will pay the price for this bill? Well, some of us in the minority are here speaking on behalf of the forgotten man, which is 99 percent of America.

And I would leave you with this: Chairman Frank and the CBO and others can estimate how much this bill will cost these forgotten men and women, 99 percent of Americans who were not irresponsible who will pay the price. The answer is we don't know. We don't have a crystal ball. If property prices around the country take off by another 50 percent and go up, there will be no cost. If they go down by 30 percent, the cost will be closer to $3 billion.

Mr. Speaker, I move I be able to claim Mr. Neugebauer's time in his temporary absence.

Mr. Speaker, I yield 6 minutes to a champion of the working family, Mr. Garrett from New Jersey.

I thank the gentlewoman.

I would say this bill tonight proves at least two maxims about Congress: One is that we have two speeds: zero and that we overreact; and the other is that the law of unintended consequences means that often the adverse or the harmful consequences of the things we do in Congress are much more meaningful than the positive things that we would like to accomplish.

Let me give one example. Back in the early sixties and seventies and eighties, and all the way through the nineties, Madam Chairman, there were lots of complaints that low- and middle-income people, especially minorities, didn't have access to loans, that they didn't get the same opportunity that other people of above-modest means had to own a home in America. And there were complaints, and there were all sorts of animosity, to use the Chairman's word from a few minutes ago, towards lenders for being discriminatory against low- and middle-income people again, especially minorities.

So the Community Redevelopment Act was enacted in 1977, and at that time one of the things that Congress had the power to do was to oversee and look at every single lender in America in order to determine that they were aggressively making loans in low and poor and minority neighborhoods so that we could measure those institutions so we could insist that there be more access to homeownership.

We got exactly what we asked for, and part of that was the subprime loan crisis. And part of that was zero-document loans where people could literally line up without any proof of income. Part of that was instead of making it a 70-percent loan or 75-percent loan, which almost never fails, making 100-percent, or 110-percent loans. Part of that was teaser interest rates to get people into a home at 3 percent, which they could afford to make an $800 or $900 a month payment, and when that teaser rate readjusted to 7 or 8 or 9 percent, all of a sudden what used to be an $800 payment became a $2,000-a-month payment, and they couldn't make it. They got exactly what we anticipated.

Countrywide is now bankrupt. Countrywide in 2005 got the Best in Minority Lending Award from the Lending Industry Diversity Conference. This Congress had great intentions. We wanted to make more money available so that everybody could have the American Dream. In fact, as of 2 years ago, America had an all-time high, approaching 69 percent of Americans that owned their own homes. That's great.

The truth of the matter is because of easy money from the Feds, because of investor imprudence, because of greedy Wall Street speculators, we have now got a crisis because of a bubble that is collapsing.

Who is being bailed out by this bill? The $15 billion will eventually end up, after it goes to the cities and counties, in the pockets of the investors and holders of these mortgages that went seeking higher profits that put people in homes that they couldn't afford. We are doing exactly what economists want us not to do: creating a moral hazard. It is going to make it more likely, rather than less, that foolish loans are made in the future.

Madam Chairman, will the gentleman yield?

Perhaps the chairman didn't take my point. The point is that it has been aggressive policies by Congress including evaluating everybody under the Community Reinvestment Act.

Will the gentleman yield?

I didn't say what the chairman said I said.

I didn't say what the chairman said I said. I said that it has been the policy of many in this Congress for about 40 years now to criticize lenders all over the spectrum for not pushing more money into low- and moderate-income areas. I think the chairman will agree with me.

Madam Speaker, I would like to call to the attention of my colleagues and other readers of the Record the article from Consumer Rights League, which is reprinted below.

Predatory Charity: The Self-Interested Self-Help of the Center for

Responsible Lending

Executive Summary

The term ``predatory lending'' seems to have appeared out

of thin air in recent years. In reality, the prevalence of

the term--and the accompanying public panic--owes much to a

sophisticated public relations campaign carried out by the

increasingly high-profile Center for Responsible Lending

(CRL).

As the most visible face of the half-billion dollar team of

``Self-Help'' non-profit organizations, CRL attacks competing

loan products. Under the guise of advocating in the interests

of its low-income customers, Self-Help makes loans at highly

profitable rates and uncharitably takes those low-income

customers to court over trivial monetary sums. Worse, CRL's

advocacy has worked to the disadvantage of low-income

borrowers.

This report utilizes documents in the public record to

demonstrate: CRL's advocacy agenda--built on pseudoscience

that relies on arbitrary and opaque definitions and

unreliable estimates and assumptions--has harmed consumers,

according to recent Federal Reserve research; CRL's troubling

alliances--a spokesman who pled guilty to felony larceny, an

employee who engaged in eavesdropping, and a multi-million-

dollar grant from a wealthy Wall Street investor with a stake

in the outcome of CRL's lobbying activities; the Self-Help

network attacks other lenders for allegedly using practices

that it employs--taking in charitable grants and low-interest

government loans while charging its customers uncharitably

high rates and prosecuting low-income customers for amounts

as low as $96; the Self-Help network has combined its

advantageous loan rates and aggressive legal attacks to build

a powerful organization with net assets of a quarter-billion

dollars and approximately $12 million in annual profit from

its largest loan-making body; the Self-Help network seems to

encourage its customers to assume high amounts of debt, Its

delinquency loan rate is almost 7 times the rate at

comparable credit unions. Its customers carry loan balances

over 3 times the rate of those institutions.

Many consumer advocates work with financial institutions to

meet community needs. Yet the public record shows CRL and its

financial web do more harm than good. This report examines

CRL's record and concludes that public officials,

policymakers, and the media should be skeptical about the

group's complaints, while non-profit donors and government

bodies need to re-examine the charitable loan rates they

provide to CRL's web of financial organizations.

An Introduction to Self-Interest

What do you call an organization that has made more than

$190 million in profit in the last ten years by targeting

poor Americans with high interest rate loans? If you were the

Center for Responsible Lending, you would call that

organization a ``predatory lender.'' However, this is a

description that fits ``Self-Help,'' CRL's network of non-

profits.

CRL is the research and advocacy arm of a large and

financially powerful web of organizations under the umbrella

of the Center for Community Self-Help. This matrix includes

the Self-Help Ventures Fund (the largest loan-making body),

the Self-Help Development Corporation, the Self-Help Services

Corporation (which pays salaries and many expenses for

network staff), and the Self Help Credit Union. According to

tax returns, the Self-Help network (except its credit union)

increased its assets by nearly 36 percent--from $181 million

to 245 million--between 2002 and 2004. According to the

National Credit Union Administration, the Self-Help Credit

Union reported $292,143,058 in assets as of November 2007.

Questions have arisen as to whether this largess has

benefited the working poor or if the group's leaders have

simply been helping themselves. Critics scoff at Self-Help's

2004 decision to spend a whopping $23 million to buy a high-

rise building in downtown Washington, D.C. for its

operations. Perhaps more troubling, one report examining tax

returns for the Self-Help Credit Union assets found: ``The

financial reports of the Self-Help Credit Union reveal that

throughout the 1990s Self-Help made loans to its officials

and senior executives averaging $30,000 to $40,000, a

practice permitted by Self-Help's conflict-of-interest

policy. In June 2002, one official received a loan for about

$1.2 million, and tax forms show that in March 2004 another

official received a large loan, bringing the total borrowed

by only two unnamed Self-Help officials to more than $2.7

million. Without explanation, those loans disappeared from

the Credit Union's financial report in December 2004.''

Self-Help's credit union provides ample conflicts of

interest with CRL's attacks on other lenders. In November

2007, researchers from the Federal Reserve examined the

effects of payday loan bans, including the North Carolina law

successfully pushed by CRL. The researchers concluded that

payday lending was actually preferable to the fees credit

unions--like those operated by Self-Help--charge its low-

income consumers: ``Payday loans are widely condemned as a

``predatory debt trap.'' We test that claim by researching

how households in Georgia and North Carolina have fared since

those states banned payday loans in May 2004 and December

2005. Compared with households in all other states,

households in Georgia have bounced more checks, complained

more to the Federal Trade Commission about lenders and debt

collectors, and filed for Chapter 7 bankruptcy protection at

a higher rate. North Carolina households have fared about the

same. This negative correlation--reduced payday credit

supply, increased credit problems--contradicts the debt trap

critique of payday lending, but is consistent with the

hypothesis that payday credit is preferable to substitutes

such as the bounced-check ``protection'' sold by credit

unions and banks or loans from pawnshops.''

These findings raise serious doubt as to the social value

of CRL's advocacy and the quality of its research.

Further questions have focused on the group's drive for

political influence. CRL has publicly signed a letter with

the radical group ACORN. It has received significant

financial support from George Soros's Open Society Instiute

and tens of millions from the left-leaning Ford Foundation.

Indeed, it will be the very low-income consumers extolled

in CRL's rhetoric that are most hurt by the group's power.

Self-Help and the CRL are redefining hypocrisy and creating a

new term: ``predatory charity.''

Redefining Predatory Lending: When you make assumptions

From elaborate assumptions to dubious omissions, the

``studies'' released by the Center for Responsible Lending

have all the indications of advocacy-driven research. CRL's

studies make frequent methodological assumptions that

artificially inflate their findings. It is clear that their

reports are written with a pre-determined conclusion in mind.

Federal Reserve Research Sinks ``Financial Quicksand''

CRL has raised its public profile by attacking the practice

of ``predatory lending.'' Its media presence is largely in

response to its 2006 report, ``Financial Quicksand.''

Unfortunately, CRL has built its argument on a foundation of

sand that erodes economic opportunity for the very low-income

consumers it purports to protect.

If anything, ``Financial Quicksand'' sinks from its own

assumptions. The report is best characterized as a series of

arbitrary definitions. It uses non-nationally representative

estimates, derived from a serious of unjustified assumptions,

to argue that payday lenders ``cost'' Americans $4.2 billion

dollars each year. Although the report claims to offer a

national perspective on the payday lending industry, it

samples data from only four states for its central findings.

Consider some of the report's problems: ``Financial

Quicksand'' makes 18 separate assumptions, many of which

would be charitably described as questionable, and rely on

another 53 ``estimates'' to reach their conclusions.

Crucially, the report hinges on the critical (and flawed)

assumption that anyone who takes out five or more loans in a

year is likely flipping their loans back-to-back-to-back.

However, 22 states prohibit ``flipping'' loans and many more

limit rollovers--a fact ignored by the report.

The report also suggests that payday loans ``cost

Americans'' billions of dollars and argues that banning them

could ``save'' billions more. In economics, a ``cost''

typically occurs when capital is eliminated from the economy.

For instance, unnecessary inefficiency in a manufacturing

process could be seen as a ``cost to Americans.'' However,

financial services, including those offered by payday loans

operators, do just the opposite. They generate capital for

the economy and for each individual loan-taker.

Claiming that payday lending bans ``save'' money is equally

dubious. Not only does the industry itself generate capital

for a state's economy and tax revenue for the government, but

payday loans, like any other loan, allow individuals to

generate more capital for themselves on the aggregate. By

banning payday lending, states don't ``save.'' Instead, they

experience a cost through lost tax revenue and lost capital

opportunities.

Statistical research released from the Federal Reserve

suggests CRL's lobbying efforts against payday lending have

been misguided at best. In December 2007, the Associated

Press reported that, ``A ban on payday loans may be leading

to greater financial burdens for low-income residents of two

Southern states, according to a researcher at the Federal

Reserve Bank of New York.''

Indeed, the Federal Reserve report specifically cited CRL's

``research'' against payday lending and its estimate that a

ban would ``save'' Georgians $154 million. It concluded

that CRL's research was both flawed and costly to low-

income consumers: ``Georgians and North Carolinians do not

seem better off since their states outlawed payday credit:

they have bounced more checks, complained

more about lenders and debt collectors, and have filed for

Chapter 7 (`no asset') bankruptcy at a higher rate.''

``The increase in bounced checks represents a potentially

huge transfer from depositors to banks and credit unions.

Banning payday loans did not save Georgian households $154

million per year, as the CRL projected, it cost them millions

per year in returned check fees.''

The Race Card and CRL

In its report ``Race Matters,'' CRL strongly implies that

payday lending stores target minority neighborhoods in North

Carolina. The authors report that minority neighborhoods have

three times as many payday lending stores as non-minority

neighborhoods. But CRL fails to adequately account for other

important factors that predict the existence of payday

lending stores, such as a neighborhood's mean income. While

the authors recognize this significant shortcoming, they

still report the uncontrolled result.

The researchers also conducted a multivariate analysis to

control for income, home ownership, and other factors. Their

analysis found that ``the highest 20 percent of African-

American neighborhoods had 4.1 times as many storefronts per

capita compared to the lowest 20 percent.'' That said, an

examination of their methodology reveals an odd, and likely

highly significant statistical decision. Rather than look at

all census tracts and include racial and ethnic breakdown in

their regression, CRL's researchers created ``dummy

variables'' for neighborhoods based on the percentage of

minorities that lived in them. They then compared the

neighborhoods with the highest concentration of minorities to

those with the lowest.

This methodology is problematic because a neighborhood's

racial or ethnic breakdown is not a black and white issue. By

artificially pitting the few neighborhoods with the highest

minority concentrations against those with the lowest, they

were able to generate a dubious rhetorical point.

Indeed, these major flaws led Wesleyan University economics

professor Thomas Lehman to say CRL's report ``contains severe

weakness and presents conclusions that are overstated at

best, and misleading at worst.'' He added, ``It must also be

recognized that the overall tone of the study suggests a lack

of objectivity perhaps motivated by an ideological bias

against the payday lending industry, which may explain why

(the authors) appear to overstate their case given the

weakness of their research.''

Failure to Lose Ground

In ``Losing Ground,'' CRL's report on subprime mortgage

foreclosures, the organization again produced a report

warning of catastrophic consequences based on an arbitrary

definition.

In the report, CRL researchers claim that 25 percent of

subprime mortgages ``fail'' within five years. This is a

critical distinction because the entirety of the report is

based on the number of failed mortgages--not the number of

foreclosed mortgages.

While subprime mortgages have faced significant problems,

they have fallen predictably short of CRL's dire predictions.

That is understandable given how CRL defines a ``failed''

loan.

In fact, their own report admits that only 11 percent of

subprime mortgages will be foreclosed within five years. The

remaining 14 percent are loans prepaid during distress, such

as refinancing or selling a property. But the latter category

suggests a wide variety of equally beneficial or negative

outcomes. For instance, under CRL's definition, a loan

refinanced for a lower interest rate would qualify as a

failure. But this in no way indicates a ``failed'' attempt

at home ownership.

By lumping loan refinancing and home sales during

distressed periods into its ``failed'' mortgages category,

CRL more than doubles the supposed costs of the subprime

mortgage industry.

Defining Predatory Charity

The Center for Responsible Lending primarily attracts media

attention through its attacks on financial institutions that

serve low-income and high-risk consumers. CRL frequently

complains about interest rates and loan terms offered by

traditional and community financial service providers. The

group lobbies for laws that ban certain loan types and allow

borrowers to change the terms of active loans. The surprising

reality, though, is that CRL's family of financial

institutions appear more interested in helping themselves

than assisting the poor.

Buying Low, Selling High

As ostensible charities, Self-Help organizations receive

support in the form of grants from non-profit foundations and

subsidized government loans at preferential interest rates.

Self-Help pays typically between zero and four percent

interest on the loans it obtains, many of which come from

government-supported entities. The Ventures Fund took in more

than $2.5 million in loans from the Small Business

Administration's Microloan Program, with rates ranging from

2.5 percent to 4.5 percent. It also accepted more than $3.9

million from the U.S. Department of Agriculture's

Intermediary Relending Program, which carries a one percent

interest rate. On top of that, the Center for Community Self-

Help has carried a zero percent loan from the state of North

Carolina for years.

But Self-Help charges interest far above the charitable

rates at which it borrows.

In 1998, the last year it reported interest rates on its

publicly disclosed federal tax form, the Self Help Venture

Fund reported that their average interest rate was more than

10 percent. For reference, that is approximately three

percentage points higher than the average home mortgage rate

in 1998, according to HSH Associates Financial Publishers.

That adds up to a nearly 40 percent premium over the average

rate. The Ventures Fund made other loans at interest rates as

high as 13 percent.

Since 1997, the Venture Fund has made more than $190

million dollars in profit. It has made as much as $36

million--and no less than $13 million--annually since then.

During the same period, the fund turned over $468 million in

revenue. If the Venture Fund were officially a for-profit

entity, its profit margin would be a staggering 40 percent--

far higher than the margins of the lenders Self-Help and CRL

attack.

Hauling Customers into Court (and Kicking Them Out on the Street)

Lien proceedings and foreclosures are not just the target

of CRL's rhetoric--they are the standard operating procedure

for CRL's ``Self-Help'' organizations. Despite their

denunciations of other lenders, the Self-Help network takes

action against its low-income consumers through lawsuits and

foreclosure proceedings.

Like the lenders it attacks, Self-Help seeks judicial

recourse when borrowers do not repay them. But in 2000, Self-

Help founder Martin Eakes told PBS that they were better able

to gauge how low-income individuals would repay loans: ``[W]e

went for ten years, we have had our first loss of a home loan

of $10,000 in a total of $120 million of lending directly and

indirectly we have made, to mostly minority, single moms. We

had our first $10,000 this past year. So, whatever people

believe, the truth is, if someone has a chance to get a

toehold and own a home, they will be far better borrowers

than most of the rest of us.''

That may not be the whole story. The data from the National

Credit Union Association, which oversees Self-Help Credit

Union, paints a startling picture. As of September 2007,

Self-Help's ratio of delinquent loans to loans issued was 598

percent higher than its peer credit unions. Ignoring CRL's

critique that payday lenders and subprime mortgage lenders

are too aggressive with amounts they offer customers, Self-

Help Credit Union's customers carry an average loan balance

of $40,733--more than 200 percent higher than at comparable

institutions.

When loans terms are not met, Self-Help gets aggressive.

Records show that Self-Help organizations have taken

foreclosure or eviction steps against its low-income

customers for as little as $62,332 in 2005 and $50,768

against another in 2002. And despite CRL's public advocacy on

behalf of small borrowers, Self-Help's record includes

lawsuits against countless small-dollar borrowers, including

suits for as little as $96.

The Self-Help organizations based in North Carolina have

taken legal action against local Southern favorites,

including: a fried chicken store in 2001; a BBQ joint in

1997; a NASCAR collectibles company in 2002.

Perhaps more troubling, Self-Help has hauled local

charitable organizations into court, including: the Appleton

Academy in 2000; the Creative Learning Center in 2003; the

Calvary Christian Church in 1993; Joyful Noise Daycare in

1998; an eviction of Oz Land Child Care Center in 2003; the

Non Profit Consulting & Training Center in 2004 for only

$956.

Strange (and Criminal) Bedfellows

In September 2007, the Center for Responsible Lending

arranged news events that sought to damage payday loan

companies by providing former industry employees who alleged

negative business practices by their former employers. The

gambit paid off: several news stories ran with headlines

potentially damaging to the industry. Yet the credibility of

CRL's witness Michael Donovan, a former employee of leading

payday loan company Check `N Go remains clouded in doubt.

A lawsuit filed by Check `N Go's parent company alleges

Donovan and CRL conspired to defraud the firm and that

Donovan lied about his criminal record. The suit alleges:

Donovan provided a fake Social Security number to gain

employment at Check `N Go; when asked about the problematic

Social Security number, Donovan provided a forged Social

Security Administration document to gain employment; Donovan

illegally provided confidential company information to

CRL; Donovan allowed CRL to eavesdrop on a trade

association conference call.

According to the suit, Donovan's criminal record includes

an April 2000 guilty plea in Arlington, Virginia to four

counts of forgery, three counts of larceny, and one count of

attempted larceny.

Donovan was sentenced to four years in jail but served only

eight months, according to the suit. Perhaps most shocking

was that at the time he applied for the job at Check 'N Go,

Donovan was again reportedly facing felony charges of grand

larceny.

Did CRL Sell Out to Private Equity?

Monetary acrobatics by high-flying, high-finance figures

can be complex and confusing. Yet CRL mortgaged its name for

a $15 million infusion from a billionaire hedge fund manager

who profited from the declining value of mortgage-backed

securities, caused by borrowers who have difficulty paying

their mortgages.

CRL has dubbed much of subprime lending--loans to high-risk

candidates with low credit ratings--as ``predatory'' despite

little evidence to support such claims. Yet the group is

lobbying to change existing laws to allow high-risk borrowers

to adjust the terms of their mortgages. This would benefit

those making a financial gamble on future trouble in subprime

mortgages.

On October 12, 2007 Business Week published an unusual

report on the apparent philanthropy of a billionaire hedge

fund investor who gave a multi-million-dollar grant to CRL.

But there was more to the story: ``A $20 billion hedge fund

may have hit on a unique investment strategy for playing the

subprime mortgage bust: fund a consumer-protection group.

Paulson & Co., which has seen its assets under management

soar this year through fortuitous bets in the subprime

market, has given $15 million to the Center for Responsible

Lending, a Washington nonprofit that has been lobbying on

Capitol Hill for passage of bankruptcy legislation.''

``Paulson, run by former Bear Stearns (BSC) investment

banker John Paulson, stands to rake in a windfall if the

measure passes. The key bill, introduced last month, would

allow federal judges to restructure mortgage terms and lower

payments on the primary homes of borrowers in bankruptcy, a

significant legal change. The process, known as a ``cram-

down'' in industry jargon, is opposed by investment banks

that trade in mortgage-backed securities.''

According to CRL and Paulson, the donation was not to be

used for lobbying, but the Washington, D.C.-based Politico

noted that CRL is ``a key supporter of pending legislation

that would allow homeowners to reduce mortgage payments on

their homes by declaring Chapter 13 bankruptcy.'' Enactment

of CRL-supported bankruptcy legislation would further erode

the value of mortgage-backed securities, which would increase

the value of Paulson's holdings.

The subprime gamble is a big business opportunity for

Paulson, whose firm, according to Bloomberg financial news:

``. . . made big bets predicting the edifice would soon come

crashing down. The wager paid off in the first nine months of

2007, when Paulson's Credit Opportunities funds rose an

average of 340 percent.''

``That gain earned Paulson an estimated $1.14 billion in

performance fees for the nine months ended on Sept. 28.''

A spokesman for traditional financial institutions added,

``When they start pushing for legislation to make more money,

they're lining their own pockets with people's homes,

that's a little sticky.''

There is little evidence to suggest that Paulson's donation

represents merely a one-time payment to CRL. It seems likely

that the original $15 million donation was part of a multi-

year campaign to profit off of American consumers' mortgage

woes.

The press release announcing the first donation disclosed

that Paulson ``said he hopes that his firm's donation is just

the beginning . . .'' Indeed, as of July 2007, Paulson

specifically stated that his investment horizon was two to

three years, saying of his subprime bet: ``The performance of

these pools will not be decided over one month or two months.

They will be decided over the next three years. Our

investment (commitment is not based on) looking at what these

bonds trade at today or tomorrow, but what the losses in

these pools will be two or three years from now.''

Conclusion

America's working poor and low-income individuals often

benefit from well-intentioned advocates. But when those who

claim to speak on behalf of the vulnerable use their position

to benefit themselves, it is an act of betrayal. The public

record demonstrates clearly that the Center for Responsible

Lending and its Self-Help network fit this profile.

CRL's research is agenda-driven. Its advocacy has cost

consumers more than it has ``saved'' them, according to

Federal Reserve research. It relies on race-based claims to

generate media interest. And it takes money from self-

interested Wall Street billionaires who profit from the

mortgage crisis so astutely hyped by CRL.

Self-Help takes in money at low rates and charges generous

mark-ups to its low-income consumers. Federal records show

Self-Help's credit union allows its borrowers a much higher

average loan rate compared to similar organizations, a

critique at odds with CRL's attacks on lenders who extend too

much money to those who may have trouble repaying their loan.

Finally, Self-Help loses its charitable image when it takes

legal action against its low-income customers.

There is a name for such groups: predatory charity.

Mr. Speaker, there couldn't be a more critical discussion to have this morning before we cast this critical vote. The chairman of the Intelligence Committee, I must say, I respectfully disagree with in terms of the devastating consequences his proposal would have. The Attorney General of the United States and the Director of National Intelligence have looked at this proposal, and here is what they have said about the majority's proposal: ``Requiring prior court approval to gather foreign intelligence from foreign targets located overseas: the reason Congress did not include such a requirement when it passed the original FISA statute and with good reason, these foreign targets have no right to any court review of such surveillance under our Constitution. We know from experience requiring prior court approval is a formula for delay. Thus, this framework would impede vital foreign intelligence collection and put the Nation at unnecessary and greater risk.''

Ladies and gentlemen, assume that you are the head of a corporation or a business in America after America is attacked, thousands of lives and several cities attacked; assuming that there is imminent threats to dozens of other cities and millions of others; assuming the Attorney General or the President contacts you and say that you have access to information that will save millions of Americans. What would you do? I hope you would cooperate.

That is what many companies did, and now they are subject, in San Francisco, to over 50 lawsuits for tens of billions of dollars. The question is whether we ought to protect patriotic companies that for several hundred years have had a privilege to cooperate with government. It's true that technically they may have immunity. But here is what you haven't acknowledged: the immunity is useless to them because they cannot assert it. It would be a violation of Federal law.

Mr. Speaker, I will submit for the Record a letter from the general counsel of AT&T, the victim of one of these trial lawyer suits to the tune of tens of billions of dollars as he talks about the state secrets doctrine that prevents them from protecting themselves in a court of law, as he talks about the dilemma that they face in the future going forward if they want to help Americans defend themselves.

Madam Speaker, the Central Florida Ballet's ``Children Series,'' has created a performance in tribute to all who suffered in the 9/11 tragedy. This moving performance of ``9/11--An American Moment'' not only pays tribute to the men and women who tragically lost their lives that fateful September day, but also stirs our patriotism.

Performed by children, the performance captures the poignancy of tested and proven American courage, resolve and pride in response to the World Trade Center attack.

Central Florida Ballet is the only company in the Nation to have choreographed a ballet based on this fateful day in American history. They chose to approach this complex subject motivated by two strong reasons: first to educate; and second to pay tribute to the thousands of victims.

The performance is emotionally stirring. Some scenes contain live recordings of the events that unfolded that fateful morning. The end, however, is both patriotic and uplifting. Our national anthem is played and the audience rises and sings in unison with the performers.

I could not be prouder of our Orange County students and professionals for their dedication and respect in putting together this production. Together we honor part of our heritage as an American people.

Madam Speaker, I regret that on January 29, 2008, due to the Florida primary I was unable to be in Washington for votes.

Madam Speaker, I regret that on January 28, 2008, due to travel complications, I was unable to vote on H.R. 4140 and S. 2110. Had I been present, I would have voted ``yea.''

Mr. Speaker, I yield myself such time as I may consume. I'm honored to speak today in support of H. Res. 942, recognizing the significance of Black History Month, sponsored by my distinguished colleague from Texas (Mr. Al Green).

Just a few weeks ago, we celebrated the life and accomplishments of one great man, Rev. Martin Luther King, Jr., and today we pay tribute to the contributions all African Americans have made to this great country.

Each February we express our appreciation of the struggles, determination, and perseverance of the African American community of the past and present. Nothing serves as a better example of this than the civil rights movement itself.

Rev. King would tell you that it was not the sole efforts of one man but the collective work of many that achieved so much. Without the civil rights movement, our Nation would not have the strong diversity of which it is so proud.

Beyond this, February is also a time to recognize the contributions of African Americans that have enriched our culture and our heritage. We must continue to learn the historical struggles of African American citizens in order to better understand the experiences that have shaped this Nation.

There have been great activists, politicians, artists, writers, poets, scientists, economists, athletes, entertainers, and musicians that have all bettered our way of life. The achievements of so many have encouraged today's youth to strive for a more equal and free country.

It is impossible to celebrate Black History Month without mentioning such noted leaders as Frederick Douglass, Harriet Tubman, Rosa Parks, Thurgood Marshall, and, once again, Dr. King himself. Their historic efforts inspired a Nation and brought past injustices to light, bringing forth beginning to an end of racial inequality.

When Harvard scholar Dr. Carter G. Woodson had the idea to create a week-long celebration of black history back in 1926, his goal was to ``make the world see the Negro as a participant, rather than as a lay figure in history.''

Over time, it has become the month-long commemoration that it is today, and it is with great pleasure that I speak today in support of H. Res. 942.

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

I have no further speakers, Mr. Speaker, and I yield myself 1 minute.

Mr. Speaker, there are many reasons to celebrate Black History Month, and one is that it would take more than a month for even the best student of history to appreciate all of the great things that African Americans have contributed to America. I would note that later this afternoon the House will be considering House Resolution 943, which is the 22nd anniversary of the Challenger disaster. And among the American heroes that perished that day was astronaut Ronald McNair, who, in fact, was an African American.

I yield back the balance of my time.

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

Mr. Speaker, I rise today to urge support for this resolution designating February 17, 2008, as ``Race Day in America.''

Next Sunday over 200,000 people from all 50 States and around the world will convene at Daytona International Speedway in Daytona Beach, Florida, for the 50th running of ``The Great American Race,'' the Daytona 500.

The most prestigious stock car race in the United States, the Daytona 500 is a 200-lap, 500-mile grand opening to the NASCAR Sprint Cup Series. Boasting the largest purse and stock car racing's most coveted trophy, the Harley J. Earl Trophy, the Daytona 500 has become the ``Super Bowl of Stock Car Racing.''

Each year millions of fans, both at home as well as those serving overseas, tune in to the race by television and radio. Since 1995, the television ratings for the Daytona 500 have been higher than any auto race, and in 2006 the race drew the sixth largest television audience of any sporting event that year.

For 50 years, the popularity of Daytona, and car racing in general, has grown throughout American society. I believe it is fitting that we celebrate this rising American tradition by passing this resolution in honor of the golden anniversary of its most prestigious event. I invite anybody who's free this Sunday to come to Daytona Beach and enjoy this great tradition with us.

Mr. Speaker, I have no further speakers, and I reserve the balance of my time.

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

I want to thank my colleague Mr. Melancon for shepherding this memorial to the floor today. With this resolution, the House of Representatives joins with all Americans to solemnly remember the loss of the space shuttle Challenger 22 years ago on January 28, 1986.

Many Americans remember where they were on that cold January morning when the shuttle Challenger leapt from its launch pad. After receiving the call ``Challenger go at throttle up,'' Challenger disintegrated in clear blue skies just 73 seconds into its flight.

We were stunned. One moment Challenger was flawlessly flying on a beautiful winter morning. Then, without warning, it was gone.

America turned to mourn its seven astronauts who gave the ultimate sacrifice for the advancement of exploration and discovery: Michael Smith; Dick Scobee; Judith Resnik; Ronald McNair; Ellison Onizuka; Gregory Jarvis; and Christa McAuliffe, a schoolteacher from Concord, New Hampshire, selected to be the first member of the teaching profession in a space project.

That evening, President Reagan spoke from the Oval Office to comfort a grieving Nation. Millions of children had watched the launch because Christa McAuliffe was to later teach science lessons from space. Instead, we were reminded of a deeper lesson. Reagan said:

``I want to say something to the schoolchildren of America who were watching the live coverage of the shuttle's takeoff. I know it is hard to understand, but sometimes painful things like this happen. It's all part of the process of exploration and discovery. It's all part of taking a chance and expanding man's horizons. The future doesn't belong to the fainthearted; it belongs to the brave. The Challenger crew was pulling us into the future, and we'll continue to follow them.''

Reagan concluded his address by saying this:

``The crew of the space shuttle Challenger honored us by the manner in which they lived their lives. We will never forget them nor the last time we saw them, this morning, as they prepared for their journey and waved good-bye and slipped the surly bonds of Earth to ``touch the face of God.' ''

Twenty-two years have passed. America has kept its word. We haven't forgotten the Challenger crew. Human space flight is mankind's most difficult endeavor. America has achieved so many successes, space flight seems routine; yet every generation unexpectedly bears witness to space flight's inherent dangers.

Before the Challenger disaster, the Apollo I crew was lost on Pad 34 on January 27, 1967, in an accident known simply as ``The Fire.'' After Challenger, we waited on February 1, 2003, at the Kennedy Space Center's landing strip for the voyagers of Columbia who never returned home. January and February are NASA's cruelest months.

On each occasion the people of NASA grieved terribly, but they learned from adversity, and then they rededicated themselves to their mission. America landed on the Moon after The Fire. After Challenger, the shuttle flew again to pursue scientific discovery and begin constructing the international space station. After Columbia, we returned to flight, and we will complete and use the international space station. Then we will turn our dreams to exploring beyond Earth's orbit by establishing outposts on the Moon and then going further beyond.

Exploration, journey, and bravery define the American people. Each of us comes from a heritage where someone with great courage took a passage to a new beginning, many times with disastrous endings. But the living stubbornly persevered, pushed back vast frontiers, and built a great and glorious Nation. Adversity, including the loss of the Challenger crew, can never extinguish this American spirit.

Mr. Speaker, I am proud to support this resolution honoring the brave and dedicated crew of Challenger. I urge my colleagues to support House Resolution 943.

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

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I would yield myself such time as I may consume.

I rise in support of House Concurrent Resolution 287, offered by my friend and Space Subcommittee chairman, Mark Udall, as well as Mr. Melancon, Ralph Hall and myself, commemorating the 50th anniversary of the launch of Explorer I, America's first satellite. With this launch, America became a spacefaring Nation.

Unlike the Soviets, who 4 months earlier had launched Sputnik I in secrecy, America's space program was carried on in full public view. Our first attempt to launch a satellite, Vanguard I, ended in failure. As a consequence, some suggested that our preeminence as a world power was jeopardized.

Explorer I proved otherwise. The successful launch came through a collaboration of brilliant and dedicated scientists and engineers led by Wernher von Braun, who designed the launch vehicle known as the Jupiter C; Dr. Charles Pickering, director of the Jet Propulsion Laboratory, who designed the satellite; and Dr. James Van Allen, who designed the main instrument carried aboard Explorer I.

On the night of January 31, 1958, Explorer I lifted off from Pad 26A at Cape Canaveral, Florida. Almost 2 hours passed before a ground station in California confirmed the satellite's successful orbit. America was now on a path to achieve space preeminence.

Unlike Sputnik I, Explorer I did more than demonstrate the ability to place an object into orbit. It had a valuable scientific purpose. Explorer I consisted of a Geiger counter that detected cosmic rays, temperature sensors, and a micrometeorite impact microphone. These instruments discovered radiation belts, now named after Dr. James Van Allen, that encircle the Earth.

Explorer I stopped transmitting data on May 23, 1958 when its batteries died. But it stayed in orbit until March 31, 1970 and completed about 58,000 orbits around the Earth.

Explorer I's legacy was far greater than anticipated. Few imagined how satellites could maintain our Nation's security and economy and extend man's reach to the far corners of the solar system.

Government and private enterprise, scientists and engineers, worked together to exploit and expand the capacities of space. Today, a vibrant and critical commercial industry builds and launches sophisticated satellites.

In Earth orbit, satellites forecast weather and measure surface winds and other climate variables. They monitor land-use patterns and remote sensing. They help farmers gauge the health of their crops; transmit data, radio and television signals into our homes and to businesses around the world; and they provide the infrastructure for the global positioning system, enabling the capability to accurately navigate to virtually any point on Earth.

Beyond Earth orbit, satellites have visited every planet in the solar system except for Pluto, although a mission is under way to visit this far-away planet in 2015. Satellites have carried rovers to the surface of Mars, they have captured samples of interstellar dust and returned them to Earth, photographed the heavens with exceptional clarity, measured background temperatures and radiation to high precision, and landed on a moon of Saturn.

Explorer I also led to our human spaceflight program under which America learned to orbit the Earth, explore the Moon, and live for extended periods aboard the international space station.

H. Con. Res. 287 commemorates the achievements of the Explorer I team, and acknowledges its role as the impetus for what has become a critical part of America's greatness. I am pleased to be an original cosponsor of this bill, along with my good friend and ranking Republican member of the Science and Technology Committee, Ralph Hall, and I urge all Members to support it.

I reserve the balance of my time.

Mr. Speaker, earlier I shamelessly invited people to come and experience the Daytona 500. While they are there, they may want to come visit a museum not far from the Daytona 500. Launch Complex 26, where Explorer I was launched, now houses the U.S. Air Force Space and Missile Museum.

If you visit, you can tour the blockhouse from which the Explorer I was launched, see launch control equipment from that era and walk on the launch pad. Just a few hundred yards away is Launch Pad 5 where America's first astronaut, Alan Shepherd, was launched into space. Emily Perry serves as the museum's curator. Sixty volunteers, led by Gary Harris, guide these tours. Most of these volunteers are veterans of America's space program, including some from the Explorer I era. Their stories provide a window into this fascinating past. Tours begin from the Kennedy Space Center's Visitors Complex and operate 7 days a week.

We have talked about how Explorer I began America's journey as a spacefaring people. If you visit the Space and Missile Museum, you can see and touch where that journey began.

I yield back the balance of my time.

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

I rise in support of H. Res. 907, as amended, which recognizes and congratulates the forward-thinking X PRIZE Foundation on one of its latest contest endeavors, the Automotive X PRIZE.

There is a rich history in this country of prizes sponsored by private entities leading to innovations in science and technology. Starting with the Ansari X PRIZE, the privately funded X PRIZE Foundation has successfully been able to build on the concept of the 1927 Orteig Prize, which awarded $25,000 to the first person to be able to make a nonstop transatlantic flight. While the actual Orteig Prize name may not be well known, the recipient of this prize, Charles Lindbergh, certainly is. The benefits of the $400,000 of investment teams made in an effort to win this prize certainly have been realized, and the $250 billion aviation industry that took off shortly thereafter certainly continues to prosper. Likewise, the 2004 Ansari X PRIZE leveraged over $100 million in research by teams vying for a $10 million price for private spaceflight. Won by Mojave Aerospace Ventures, the Ansari X PRIZE changed the public's perception of personal spaceflight.

Now the Automotive X PRIZE is poised to produce similar results for the next generation of automobiles, viable, super-efficient vehicles. As the resolution states, our ``national security and economic prosperity demand that we move toward a sustainable future.'' This prize certainly helps us move in that direction. It will be awarded to the team that can design, build and sell super-efficient cars that achieve 100 miles per gallon and are not concept cars, but cars that people will want to buy. If successful, the end result in and of itself will be impressive, but the overall benefits to the Nation will be too numerable to measure. This prize, like those before it, will generate millions of privately funded research dollars producing research that may not in the end win the prize, but could spur additional technologies. Likewise, this prize will stimulate the entrepreneurial spirit of inventors and investors alike, both known entities and brilliant minds working in backyard garages.

I congratulate the X PRIZE Foundation's leadership in creating a private, independent competition designed to help move us closer to a sustainable energy future. I wish them much success, look forward to seeing the results it produces, and encourage my colleagues to support this resolution.

With that, I would reserve the balance of my time.

Mr. Speaker, I am honored to yield 1 minute to Dr. Bartlett, my friend from Maryland.

Mr. Speaker, I am pleased to yield 2 minutes to my colleague and friend from Nebraska (Mr. Smith).

Mr. Speaker, I have no further speakers, and yield back the balance of my time.

Madam Speaker, I ask unanimous consent that my cosponsorship of the bill, H.R. 3120, be withdrawn.

I am grateful to my friend the ranking member and to the chairman, and I do oppose the manager's amendment and the bill. And I don't think there is any difference of

opinion about the crisis in the mortgage markets in America today. I think the difference is on the impact that this bill will have.

The problem in mortgage markets in America today is that for years we had lenders that were giving teaser rate loans, that were taking no paperwork requirements to prove that borrowers had the ability to buy the home and pay for it. And we had lenders making 100 percent, 110 percent, 120 percent loan-to-value loans. And, obviously, that worked fine when property values were increasing. When property values declined, you have got a crisis.

In essence, what has happened is that we have had this wild galloping horse in the credit markets of mortgages that has gotten loose. Now that horse has gotten very sick. There are none of these loans being made. As a matter of fact, credible buyers with paperwork, with 20 or 30 percent equity, can't get access to mortgage loans today in many instances.

What we are doing for this sick horse is to feed it strychnine. The markets having overreacted, we as Congress are going to pile on and kill the horse with poison. And the difference we have about this bill and this manager's amendment is on the impact it will have.

Does it help poor people, middle-income people that want to get access to homeownership? No.

And I would submit for the Record an article by Star Parker, who entitles this bill, ``How to Limit Homeownership for the Poor.''

Does this bill help existing homeowners? No, because it will decrease credit availability, which means fewer people will get access to loans. There will be fewer buyers for your home. And the law of supply and demand means that all of our homes will decrease in value because there will be fewer people available to buy.

Who does this bill help? Well, this bill does help landlords. Very few people will be able to buy homes in the future. Very few people will qualify for the credit. So if you are a landlord, you should be thankful. It helps lawyers. As the Wall Street Journal said, this is the 1-800 Sue Your Banker Act. This is the lawyers and landlords relief act.

[From Scripps Howard News Service, Nov. 9, 2007]

How To Limit Home Ownership for the Poor

(By Star Parker)

The Mortgage Reform and Anti-Predatory Lending Act of 2007

has passed out of Chairman Barney Frank's House Financial

Services Committee. It's now headed to the full House for a

vote. In the name of protecting the poor from market

predators it will in actuality protect the poor from wealth.

This is yet a new chapter in the grand liberal tradition

that advances the illusion that government micromanagement of

private lives and markets will make us better off. We already

have laws against fraud and theft. But for liberals,

government isn't there to enforce the law. It's there to run

our lives.

The legislation assumes that when private individuals make

mistakes they can't figure out what they did wrong and make

adjustments and that even if they could they wouldn't.

We're going to wind up with new and onerous regulations in

the business of making loans to consumers for purchasing

homes, and as a result, fewer loans will be made and we'll

all be worse off. Those who will be penalized the most will

be the low-income families who the new regulations will

supposedly protect.

Should fraud be permitted in our society? No. Should

government interfere with private individuals' latitude to

determine on their own what risks they wish to take and the

willingness of others to finance those risks? Absolutely not.

Frank's bill crosses far over the line into regulating

private lives and behavior where he and government have no

business.

Why will this hurt the very low-income families it purports

to protect?

We already have plenty of experience with the costs of so-

called consumer protection laws in general and those designed

to regulate mortgage lending in particular.

In a recently published article in the Cato Supreme Court

Review, Professor Marcus Cole of the Stanford University Law

School discusses the fallout of lending laws in Illinois.

The Illinois Fairness in Lending Act passed in 2005 gives

the state oversight authority on loans made in nine

designated zip codes in the state. These zip codes are, of

course, areas in which residents are mostly lower-income

households.

The law places authority in a state bureaucracy to review

all applications for mortgages in these designated zip codes.

The bureaucrats who review these applications determine if

the borrower needs credit counseling and requires the lender

to pay for it if required.

The costs of the counseling are estimated to be as high as

$700 and can delay the processing of the loan up to a month.

The borrower has no option to forego this counseling, whose

objective is ``to protect homebuyers from predatory lending

in Cook County's at-risk communities and reduce the incidence

of foreclosures.''

What's the result?

Cole reports the following: ``Instead of protecting

hardworking would-be homeowners from predatory lending, the

new law protected them from credit. Within just a few months

more than 30 mortgage lenders refused to lend on homes

purchased in the targeted zip codes. Those lenders determined

to service these communities saw a rise in their costs, which

translated into higher interest rates on their loans.''

The purported cure was worse than the disease. Cole goes on

to note that, ``home sales in the designated zip codes

dropped an average of 45 percent in just one month after the

bill took effect. Home prices plummeted, draining relatively

poor but hardworking people of what little equity they had in

their homes.''

The experience is similar in other states where governments

have authorized bureaucrats to insert themselves between

lenders and borrowers. Yes, the number of defaults have

declined. They have declined because the number of loans have

declined.

The Wall Street Journal reports that currently ``80 percent

of subprime loans are being repaid on time and another 10

percent are only 30 days behind.''

These are overwhelmingly loans to low-income families.

Probably, under Barney Frank's new regulatory regime, many of

these loans would not have been made and the families in

these homes would be renting and considerably less wealthy

than they are today.

To quote former Texas Rep. Dick Armey, ``freedom works.''

But it can only work if we let it.

Many have paid and are paying a great price for the errors

and excesses of recent years. We now should allow private

individuals and private markets the opportunity to self

correct, which is what will happen.

If government steps in to pre-empt the market and Barney

Frank is the one to decide who gets loans, the rich will stay

rich, the poor will stay poor, and we'll have one more reason

for already skeptical Americans to question the American

dream.

Madam Chairman, I claim the time in opposition.

I appreciate the gentlelady's amendment. And I suppose I can't argue that it does a great deal of harm under the bill, because what the bill essentially does is it takes millions of potential homebuyers and makes them ineligible, as a practical matter, for loans. And so all we're doing is taking those million people that can't get loans and saying one more type of loan they can't get is a loan with a prepayment penalty that lasts longer than 3 years built in.

Having said that, assuming some potential homebuyers escape the penalties under this bill and they actually do qualify to get a loan that puts them in a house that they like and that's affordable, what the gentlelady's amendment does is to make the marginal interest rate they may have to pay higher.

As the gentlelady said, lenders have demonstrated, I think conclusively, that there are lower interest rates available at times if you have a prepayment penalty built in because they know that that loan is going to be out there for 15, 20 or 30 years putting a stream of money into the pocket of the lender. That's why they do the more attractive long-term interest rate.

Now, I happen to not like prepayment penalties. Most Americans move a lot. But there are Americans, for example, on a fixed income that are retired and have a pension and they know they're going to be in a house for a long period of time and they don't mind a prepayment penalty.

What the gentlelady does is to take choices away from homeowners. By the way, I agree with the notion that we ought to have informed consent. There is nobody here arguing that we shouldn't inform consumers what the prepayment penalty is, what the consequences can be. What we are suggesting is that when you limit for 3 years the amount of the prepayment penalty, there are some homebuyers that otherwise would be able to get an attractive interest rate, buy the home of their dreams, stay in that home for 15 or 20 years and never pay the penalty that will never, ever get to move into that home because the gentlelady thought, in general, prepayment penalties are a bad idea for everybody. They are a bad idea for some people. If you move a lot, if you're going to have your circumstances changed, they can be a very bad idea. I negotiated a slightly higher interest rate because I do not have a prepayment penalty on my mortgage, but I think that individual free men and women, after they are informed, ought to be making these choices and not the Congress of the United States.

Again, I don't think this is a horrendous amendment because what the bill does is to say to millions of potential borrowers, as a practical matter, they will be ineligible going forward to get access to credit. But this makes a really bad bill marginally worse.

With that, Mr. Chairman, I yield back the balance of my time.