Bob Corker

Mr. CORKER

Mr. CORKER. Mr. President, I appreciate the opportunity to come back to the floor and speak on financial regulation. First of all, I wish to congratulate the Presiding Officer from Colorado for being very successful yesterday on passing an amendment that I think is going to be good for our country. I rise to speak about an amendment I had earlier today. It was a commonsense amendment that I think gets at the heart of this financial crisis. It didn't pass, but the amendment was to put in place underwriting standards to keep the kind of crisis we just saw happen in our country over the last couple of years from happening again. I think we all realize the base of this crisis, which the Dodd bill does not address, was the fact that we had large numbers of loans written around this country that people couldn't pay back. The underwriting standards were poor. Credit was extended to people who couldn't pay the mortgages back. Those mortgages were passed throughout the world, and then we had $600 trillion worth of notional value derivatives that were based on, again, these underlying bad mortgages. Then we had a systemic crisis not only in this country but around the world. So what I attempted to do with my amendment was to put some appropriate underwriting standards in place where everybody who purchased a home would need to have a 5-percent downpayment. If they borrowed more than 80 percent loan to value, there would have to be some credit enhancement, up to 100 percent, to ensure it, in fact, was a safe loan. They had to fully document their income. What a breakthrough. They would have to include their credit history and employment history. Then we would have to determine the borrower's ability to repay, including consideration of their debt-to-income ratio. This was just a basic underwriting guidelines amendment. Again, I think we know at the base of this problem we just went through was the fact that we had a lot of bad loans written. I had a number of Democratic colleagues come up to me after the vote--or actually during the vote--and they said: I support what you want to do, but the provision striking the 5-percent retention dealing with securitization, which we did have in this amendment, was what kept me from voting for this underwriting amendment. I put that in there because I think most people looked at the Dodd proposal and the 5-percent retention on securitization and realized that it created a problem, not a solution. So I actually did that to draw people to our amendment. But since I had a number of Democrats, my friends on the other side of the aisle, come up and say they would have supported it without striking the risk retention, I have now refiled that amendment. I am now saying, OK, let's have some standard underwriting procedures in this country. Now that I have refiled that amendment, if it was the issue of risk retention on the securitization piece that kept you from coming onto this amendment, I have refiled it, and now I am seeking on the other side of the aisle some cosponsors. We had some great cosponsors last time--Senators Gregg, LeMieux, Coburn, and Brown. Senator Shelby also supported this amendment. We had Johnny Isakson, from Atlanta, who probably knows more about real estate lending than anybody here, on behalf of this amendment. For my friends on the other side who said: I would have done this, but that risk retention piece you had in there regarding securitization kept me from it, now I have a clean amendment that does nothing in that regard. It leaves that in place. Again, it puts into place these underwriting standards. I had a number of Democrats who said: I agree that we ought to at least have 5 percent down. I think maybe we ought to have more. Well, because I want everyone in this body to have the opportunity to vote for a good, sound amendment, one that takes us away from the way we have been going in this country, which is we want to make sure everybody is entitled--it is no longer the American dream that someone owns a home; it is an American entitlement. Nobody saves. I should not have said that. We have moved away from requiring that people save and show discipline in order to own homes. We have made it now, according to an amendment that passed today, which the Presiding Officer put into place, and I respect what he tried to do, but in essence we said in that amendment that what you can do to have proper underwriting is you can borrow and pay, over time, the downpayment. We are not going to require a downpayment. We will let you put that into the cost of the loan--borrow it and pay it back over time. Mr. President, I thank the Chair for the opportunity to speak today. Again, I have so many friends on the other side of the aisle who said: Corker, I would have supported your amendment, but it had that one phrase in it about risk retention. I have taken that out and, hopefully, we will have the opportunity to vote on this again. I see my friends on the other side of the aisle smiling. I am looking for cosponsors on the other side of the aisle for a simple, commonsense amendment, which says that everybody in America who buys a home will at least put 5 percent down. We will be able to see their income. Let's document their income and see that they can pay the loan back. This will be a brandnew day in America. My sense is that, as the realtors come to the hill today--my friends--and as the home builders come to the hill today--and they are my friends--obviously, they don't want any underwriting requirements because they want to make sure loans go to everybody in America. I am thankful my friends on the other side of the aisle have come to me today and said: Corker, ``only if.'' Now I am offering the ``only if.'' I look for cosponsors to help me. I yield the floor.

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

Mr. CORKER. Mr. President, I ask for the yeas and nays.

Mr. CORKER. Mr. President, I think everybody in this body knows the core of this last financial crisis was because there were a lot of loans written in this country that people couldn't pay back. The Dodd bill does a lot, but it doesn't deal with that basic core issue of loan underwriting. This is an opportunity for people on both sides of the aisle to support a commonsense amendment that requires a 5-percent downpayment, with fully documented income, including an employment history and a credit history, which I think all of us would like to see, and a method for determining the borrower's ability to repay and that being part of loan underwriting put in place by bank regulators. This commonsense amendment should be supported by both sides of the aisle. It gives the ability for Habitat, for Enterprise, for those organizations that use sweat equity to be excluded. This is something we all know needs to be common practice. Let's put it in the law and ensure that another financial crisis doesn't come on the backs of homeowners who borrow money, by the way, irresponsibly, and we enable them to do it. Let's vote for something that ensures that common sense is in place in loan underwriting. This is a good amendment, and I hope my colleagues will support it.

Mr. CORKER. Mr. President, I thank my friend from Illinois. I wish to speak for just a moment on the Corker amendment that will be coming up very shortly, and I thank the Presiding Officer for the time. First of all, I thank Senator Gregg, Senator LeMieux, Senator Coburn, and Senator Brown for being cosponsors. I thank Senator Shelby for all he has done to help support and make this amendment possible as well as Senator Isakson, who brings a wealth of experience to this body as it relates to real estate lending. I thank all of them for their support of this amendment. It is a basic, commonsense amendment. I think everybody in this body knows that we as a country are going down a pretty slippery slope and that we as politicians act as enablers. We don't tell people what they need to hear. Instead, we try to give them what they want without any degree of discipline. What this amendment does is restore within the housing market a focus on the core issue that took us into this crisis--something many people in this body do not want to discuss--and that is the fact that there were a lot of loans written to people who had no ability whatsoever to pay them back. So this amendment does some very simple things. No. 1, it requires a very modest 5-percent downpayment for new home mortgages. If someone borrows more than 80 percent loan to value, it requires a credit enhancement--something that has been part of the American psyche for a long time. Believe it or not, it asks that there be fully documented income, including credit history and employment history. Gosh, what a big issue that would be, just to know someone had the ability to pay back the loan. Then it requires a method for determining the borrower's ability to repay, including consideration of their debt-to-income ratio, which is very important. So this would be done by banking regulators. It does not apply to VA or rural housing administration mortgages. It does give an exemption for organizations such as Habitat and Enterprise and others that allow homeowners to use sweat equity to actually build up some equity in a home. This is a commonsense amendment. While I respect Senators on the other side of the aisle, Senators Merkley and Klobuchar, who have worked on a side-by-side, I want to say to people in this body that while that is a good-intentioned amendment, what it does is build on the construct of the Dodd bill where, in essence, we are giving to this new consumer protection agency the ability to do loan underwriting. I think that is a dangerous path for our country to go down. I thank my colleagues for letting me give an overview of this amendment, and I urge everybody in this body to support it.

Mr. CORKER

Mr. CORKER. I will be very brief.

Mr. CORKER. If we can move along on our side----

Mr. CORKER. It sounds like there was no objection, Mr. President.

Mr. CORKER. To restate, Senator Shelby, Senator Isakson, Senator Gregg, and then anybody else on our side.

Mr. CORKER. I yield a few minutes, if I could, to the Senator from Florida.

Mr. CORKER. Mr. President, how much time remains of our 30 minutes?

Mr. CORKER. Mr. President, the Dodd bill attempts to deal with quarterly liquidation. I know there have been discussions about the pros and cons. There have been attempts to deal with the derivatives title. My sense is, before it is all said and done, there is a chance that may work out well. I think we have overly dealt with consumer protection and hope that somehow in this body we will bring that back into balance. This bill glaringly does not deal with some of the core issues of this last crisis. We just voted on GSEs, an amendment that would have dealt with that over the next couple of years in a way that does not prescribe exactly a solution but makes sure we deal with it. We just voted it down. Even more glaring, the Dodd bill does not deal with the essence of what created this last crisis. At the base of this crisis--an inverted pyramid--was the fact that we had a lot of loans that were written that should never have been written. Those loans were done by companies that were leveraged 30, 40, 50 to 1, and then $600 trillion worth of notional value of these loans that should never have been written were spread across the world. That, in essence, brought down our financial system. It seems to me if we are going to do a financial regulation bill, we ought to at least deal with the core issue, which is very poor underwriting. I have offered an amendment. I know there is going to be a side-by-side. I might add, the side-by-side--and I want to make sure the people on my side know this--lets the consumer protection agency deal with underwriting, which is pretty incredible to me. It seems to me that what we want to ensure is that the underwriting we do does not undermine the safety and soundness of our financial institutions and, therefore, should be dealt with by those regulators. This amendment is very simple. It does some things that have been very basic to making our country strong as it relates to residential lending. Here is what it does: It establishes that there will be a minimum of a 5-percent downpayment. If I was left to my own accord, I might do something more stringent than that. It causes any loan that is written at above an 85 percent loan to value to have private mortgage insurance. It actually requests the persons's income; that this loan has to be fully documented, including credit history and employment history. It seems this is something at a minimum in this country we would like to see happen as it relates to residential lending. Then there has to be a method for determining the borrower's ability to repay--a no-brainer--considering their debt-to-income ratio. Those four simple requirements are put into law so we do not have the same type of underwriting problems we just had with this last episode. This does not apply to the VA. VA is an entitlement, something we have given to those who serve our country. It does not apply to rural housing. Regulators have to update the standards no less than every 5 years. For those people who may be concerned about organizations such as Habitat for Humanity and others that use sweat equity and do not use money down, this gives the regulators the ability to exempt nonprofits that meet certain criteria on a case-by-case basis. So if there is a nonprofit in your community that is involved in allowing people to create sweat equity for housing, they would not be hurt. This requires a review of exemptions every 2 years to make sure they are within that criteria and it prohibits an exemption going to organizations that are prohibited from receiving Federal funding. We know of some of those. This also requires a study of FHA to make sure their underwriting standards are intact. The way the Dodd bill addresses underwriting, it deals with something called risk retention on securitizations. I think most people realize that is a flawed model. It has nothing to do with the loans underneath those securities. I think Chairman Dodd is even trying to find a better solution. This bill also strikes the 5-percent retention that most people in this room think is going to actually shut down the securitization process and make less credit available, especially in the commercial areas. This, instead, puts in place a study so we can actually determine the best way to look at securitizations and know what type of risk retention should be in place. I urge all colleagues on both sides of the aisle to do something that is real, that is substantive, that gets at the heart of this issue, that actually causes us to put in law proper underwriting standards. I cannot imagine there are many people in America who do not think this, at a minimum, ought to be done as part of underwriting home mortgages. I yield time now to the Senator from Alabama, who may not be here. I divert and yield to Senator Isakson from Georgia.

Mr. CORKER. I know Senator Isakson, Senator Gregg, and Senator Shelby wish to speak on our side.

Mr. CORKER. Mr. President, my understanding is we have about 30 minutes on each side--is that correct--on this amendment--30 minutes on this amendment and 30 minutes on Merkley; is that correct?

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

Mr. CORKER. Mr. President, I call up amendment No. 3955.

Mr. CORKER. Mr. President, not seeing other Senators at this time wishing to speak, I want to recap, if I could. We spend a year and a half working on financial regulation in this body, and there are a lot of fancy things we are looking at that certainly need to be looked at, no question. We are looking at clearing trades with derivatives. We are looking at all kinds of section 106 issues and other kinds of things, many of which I have issues with. But it is amazing that after all this time, we are still not dealing with the core issue. It is hard for me to imagine that anybody in this body would think that a 5-percent downpayment on a loan would be something that is extraordinary. This puts in place, as the other Senators have mentioned--and I certainly appreciate those who have joined me in cosponsoring. I have had a couple of folks on the other side of the aisle today come up and say: Look, this makes common sense. I am going to support this. It is amazing to me that we are not focusing on those very things that we think are the core issues. We had a chance a minute ago to deal with Fannie Mae and Freddie Mac, and, of course, we didn't. I know it is a complex issue, but I felt the McCain amendment gave us a timeframe within which we could deal with Fannie Mae and Freddie Mac. We didn't. We decided to have another study. But I would say to my friends on the other side of the aisle, while there is an unwillingness to deal with the issues over Fannie Mae and Freddie Mac and some of the problems that exist right now within FHFA, what this amendment would do is to put in place underwriting standards that would at least ensure the mortgages Fannie Mae and Freddie Mac are purchasing themselves would have proper underwriting standards. I think that is very important. It is amazing that sometimes we will spend a year and a half in this body--a year, 6 months, whatever--on different types of issues, and we focus on lots of things that industry brings us, that other people bring us, but we don't get down to just the commonsense core issues that Americans know work. I thank the Senator from Florida and others who have joined in this effort to ensure we have appropriate underwriting standards. Again, let me just recap. These are not Draconian steps. Basically, Federal banking regulators themselves--the regulators of our financial institutions--would set criteria for underwriting. There would be a minimum of a 5-percent downpayment. Any loan that is above 80 percent loan to value would have a credit enhancement--such as has been done for years in the past--of private mortgage insurance. There would be fully documented income--I can't imagine anybody in this body not thinking that wouldn't be a good idea for people taking out a loan that many people expect to pay off over a 30-year period--including a credit history and employment history. There would be a method for determining the borrower's ability to repay. This is something the regulators themselves would get together and lay out. It would also include consideration--imagine this--of the debt-to-income ratio--again, just a basic element of lending. This does not apply to VA, where we have made guarantees to veterans. It does not apply to rural housing. For those people who may hear from some of the nonprofit organizations that I have worked with and some others in this body have worked with--I helped create one in Chattanooga in 1986 that helped over 10,000 families have decent housing--those types of organizations have the ability to be exempted if they are the types that allow people, through sweat equity and other kinds of things, to have sort of skin in the game in other ways. We applaud those efforts and applaud people who go out and volunteer and take care of their fellow citizens by helping them have homes, helping people who are less fortunate. I know all of us support that. We go to events where we thank people who volunteer in that way. This amendment does nothing other than allow them to operate as they do through exemptions through our regulators. I know the other side of the aisle, as I mentioned earlier, has tried to deal with this issue, and they haven't figured out a way to deal with it yet. I know we have a side-by-side amendment that is coming up, and I thank those on the other side of the aisle who have put some effort into trying to do this same thing. But this, again, is a commonsense effort. And my guess is that if you laid this out in front of most citizens back home in every State we come from, they would say: You know, this is just basic. If you are going to loan money to someone, these basic underwriting standards ought to be in place. Mr. President, I urge everyone in this body to please at least look at this seriously. This is one thing we can do that is tangible, that is not a study, that is not putting something off and hoping regulators might do something down the road. This is something tangible that we can do to ensure that the core issue that created this financial crisis over the last 24 months is dealt with and that the individual loan that is made from a lender to somebody who is borrowing money is done with proper underwriting standards in place. Mr. President, I see the Senator from Connecticut is ready to move on to the next issue, so I yield the rest of my time, and I thank the Chair for his patience.

Mr. CORKER

Mr. CORKER. I have an inquiry.

Mr. CORKER. Mr. President, as far as other amendments, I have an inquiry. As far as other amendments, I have a number of what I would call surgical amendments, some of which may be--I just have an inquiry as to other types of amendments. I know we are going in order, Republican and Democrat. I just thought we might talk for a second. I have a number of surgical amendments that improve the bill. None of them are messaging amendments. I actually think some of them are going to be taken in a managers' amendment. But I would just inquire of the manager of the bill what his thinking is as it relates to sort of time limits and how we might move through some of these other amendments that are here strictly to try to improve the bill and may have strong bipartisan support. The PRESIDING Officer. The Senator from Connecticut.

Mr. CORKER

Mr. CORKER. Mr. President, I rise to speak on the bill before us. I know John McCain from Arizona has filed an amendment on Fannie and Freddie, or GSEs, as we call them. I wish to speak on that amendment. I know I have worked with our Presiding Officer on big pieces of this bill. I very much appreciate the spirit with which we have worked on this bill. All of us know there are pieces of this legislation that are very appropriate. Certainly, the orderly liquidation title that the Presiding Officer, myself, Senator Dodd, Senator Shelby, and so many others have been involved in is an important piece of this legislation. All of us realize secondarily that the derivatives title, once it gets corrected and is in the right form, is a very important piece of trying to deal with what we as a country have dealt with over these last couple of years. Certainly, some elements of consumer protection are very important. I hope we are able to get that back in balance. I believe, as with any piece of legislation we pass here, sometimes we take a crisis and use it to cause things to happen that don't necessarily have to do with the crisis itself. I certainly believe that is the case with some of the expanse as it relates to consumer protection. But the fact is, I think the orderly liquidation title is something that is a useful tool. Hopefully, we will get the derivatives title right, and we will no longer have a situation where people are hugely money bad and don't settle up on a daily basis and end up with the kind of situation we are all so familiar with as it relates to AIG. There are still three areas we have not dealt with that are very important. One of them is underwriting. I hope the Presiding Officer and others will be able to work together and come up with an appropriate underwriting title. At the base and the core of this whole crisis, the fact is, what generated this worldwide crisis was the fact that a bunch of bad loans were written that should have never been written. This bill does nothing whatsoever--zero--to deal with loan underwriting. To me, that is a huge oversight. I am hoping that the Senator from Connecticut, the Senator from Virginia, and the Senator from Alabama--many of us will figure out a way to deal with it in an appropriate way. I have an amendment. It is an approach. I am hoping, over the course of the next week and a half, we will figure out a way to deal with the core issue of this last crisis, which is, no doubt, we wrote a bunch of loans--our country did--mortgages were extended to people who could not pay them back. Second, credit ratings. The fact is, the credit rating agencies were at the core of this. I know the bill attempts to deal with credit rating agencies by virtue of a pleading standard, making it so they are more liable for some of the recommendations they put forth. It is my sense what is going to happen, by addressing it that way, is the smaller firms that are just entering the market--that would like to be constructive as it relates to credit ratings--basically are going to be pushed out of the market, and the larger firms will be more consolidated or have a bigger piece of the business because they will be able to withstand some of the litigation that will take place, hopefully, if they make bad recommendations. But I think there are probably some other ways of looking at this. I know there are people in this body on both sides of the aisle who constructively are trying to figure out a way to deal with that. But the one glaring, glaring, glaring piece is Fannie and Freddie. I think one of the reasons we, as a body, have not dealt with Fannie and Freddie is they are huge, they are a big part of the market, the housing industry is very dependent upon them, and there has not been a consolidation around what most works to move them away from being such a big piece of the market and such a huge liability for our country. That is why I so much like the amendment John McCain from Arizona has put forth. I know he has worked with Judd Gregg and others. But what is outstanding about his amendment is--there are two things. No. 1, the fact is, we actually have to be honest with the American people about the cost, the liabilities we are picking up as it relates to the GSEs. Each year, for budgetary reasons, we will have to allocate moneys for the actual liabilities that exist. I think that is a good thing. I think that is a very important step. There will be some transparency into what those organizations are actually costing our country. I think all of us realize Fannie and Freddie are a huge problem and we need to deal with it. The second piece of the McCain amendment I like so much is it puts in place a date certain, a certain time by which we, as a body, have to have dealt with them. One of the things I worry about--again, it is pretty hard to believe we have not thoughtfully figured out a way to deal with the GSEs at the time of passage right now. What I worry about is this bill passes and we move on to other topics and still have these huge issues that our country needs to deal with that we know are out of control, that have done incredibly terrible jobs in underwriting and basically have missions that counter each other. The fact is, it has a social mission, it has a business mission. We have tried to put those together, and it has not worked. We all know we have to deal with that in a different way. What the McCain amendment would do is ensure that we deal with it. Sometimes, again, we move beyond a crisis, we start thinking about other things, and then we have these festering problems that have not been dealt with. So let me say this. I am being pretty honest right here on the floor. I realize none of us yet have come up with a silver bullet answer on what to do exactly with the GSEs. How do we move them into the private market without totally disrupting what is happening right now, with them being such a huge part of what is happening? The McCain amendment would just make sure, by a date certain, we deal with it, and we can do so incrementally. I know some people on the other side of the aisle might take the McCain amendment as a major criticism. I do not. I just look at it as a way for us to move ahead. So I hope my friends on the other side of the aisle will actually look at the substance. I think it is thoughtful. I truly do. I think it is something that allows us to start accounting for it. But then, within a certain period of time, within the next couple of years, we will have had to deal with Fannie and Freddie or some draconian things will occur, no doubt. I hope the Senator from Virginia, the Senators from Connecticut, Missouri, and New Mexico, who are in this body today--I hope we can move beyond any partisan thinking. I will say, I think this body has done very well over the last week and a half. It is a complex piece of legislation. I think the Senator from Connecticut has tried to deal with this in a very good way on the floor. As a matter of fact, we had a vote last night that I think a lot of us were concerned about, and instead of somebody raising an objection and trying to get us to a 60-vote threshold, we had a 51-vote threshold. I thought that was the best of this body last night, and I wish to thank those in charge of escorting this bill through the process for keeping it that way. There could have been a motion to table. Somebody could have asked for a 60-vote threshold. I know the Senator from Missouri is going to speak next. She has been concerned about the process this year, and I join her in many of those concerns. But so far this process has been about the best I have seen in some time. So as I move back to the McCain amendment, I know it is being offered by a Republican. I do not offer criticisms toward either side of the aisle for what has happened with the GSEs. Let's face it, in fairness, both sides of the aisle have had a hand in these things being where they are. Administrations on both sides of the aisle have used these GSEs toward ends. There is no question. I am not trying to weigh which side is most responsible. But the McCain amendment allows us to move ahead in a thoughtful way with these organizations. So I will stop. I do urge my friends to please read the legislation. Maybe there is a second degree that is in order to make it even better. But I do believe it is a way for us to responsibly move ahead and deal with Fannie and Freddie. They cannot continue to exist as they are. Everybody in this body knows that. The American people know that. Let's deal with it. Let's pass the McCain amendment. Let's pass the McCain amendment with a tweak or two, if that is necessary. But let's show the American people we know it is a problem and we have the ability to work across party lines to be able to do so. I yield the floor, and I thank all of you for listening.

Mr. CORKER

Mr. CORKER. Madam President, I am here to speak about the consumer protection title in the Dodd bill. I do want to say that while I disagree with my friends from Delaware and Ohio in their approach, I appreciate the way they have conducted themselves. I think the debate we have had on the floor on this bill, I say to the Senator from Connecticut, has been of the highest level that I can remember in a long time. I thank him for setting that tone. I thank my caucus for offering nothing but constructive amendments. People on both sides of the aisle have tried to do that. It took a while to get here, but we are on the floor. Obviously, there are a lot of improvements people would like to make to this bill, and I think people are focused on doing that. I thank the Senator for setting that tone. At the same time, I do want to talk about the consumer protection title on which I wish to see vast improvement. I wish to see consumer protection take place. I think everybody in this body wishes to see that happen. But I believe that the consumer protection title that exists in this bill is one that gets back to the essence of what the White House has said many times, and that is: Never let a good crisis go to waste. I think the consumer protection title in this bill is a vast overreach. It is my hope--I know we will have a vote later today on a different title. If that is not successful, maybe there will be surgical attempts to deal with some of the problems in this title. For the first time in our country's history, we will be giving vast powers to an individual to be involved in almost every aspect of any type of financial transaction. Without a board, without any kind of check and balance, the Dodd bill creates someone heading consumer protection who has no one as a check and balance. This person is going to be able to write rules, and this person is going to be able to enforce those rules over our entire economy as they relate to financial transactions. I know there is a process by which if a rule is felt to be problematic after it is put in place--not before--after a rule is put in place, there is the ability of a board to actually look at those rules. The fact is, if a standard is set so high, it would be very difficult to ever overturn the rules that would be put in by this consumer protection agency. It has a vast budget. It sets its own budget, I might add. Again, Congress has nothing whatsoever to do with that. Some of the biggest problems with the consumer protection agency are not just that it has no checks and balance, it writes rules and enforces rules, it sets its own budget. On top of that, it overturns the way our national banking system has worked for years. Congress years ago decided we wanted to have a national banking system, that we wanted the ability of banks to operate across our country in a way that they had consistency, they knew under what rules they would be operating. The Dodd bill overturns that. It says there is no Federal preemption anymore. If States want to change laws, write laws--we could have a bank that operates in 50 States that has 50 different sets of regulations if this bill passes. That is highly problematic with banks that operate across our country serving companies that operate across our country. One can imagine a bank that tries to adhere to all of those States laws that might come up as a result of this bill. In addition, this bill then unleashes 50 attorneys general on these banks. That is something, again, that is not the case today. This is a huge overreach, and it is going to be highly disruptive to our banking system. What it is going to do, because there is no Federal preemption, is actually encourage general assemblies, State legislators across this country to become hyperactive. One of the things that State banks--not Federal banks, not national banks--one of the things State banks like about our existing laws--by the way, State banks are not these huge megabanks about which my friends from Delaware and Ohio were talking. I think State banks across the country have enjoyed--again, these are the smaller institutions--the fact there is something called Federal preemption. That has discouraged hyperactivity on behalf of State legislators to create laws that might be populist in nature, that might be done to, in essence, use our financial system for other ends. One of the things I think is most disruptive about this legislation is that--if you can imagine this--I think all of us realize what led to this last crisis is the fact that we had very poor underwriting of loans. That is the essence of this last crisis. It got spread around the world, the fact we had incredibly poor underwriting. I hope to fix that, by the way, with an amendment in a few days. I hope it comes up, and I hope it is adopted. What the Dodd bill does is give to a consumer protection agency loan underwriting standards. If you can imagine that. I would like for people in this body to think about that. A consumer protection agency being involved in setting underwriting standards for loans has to undermine the safety and soundness of our financial institutions. To me, that is a huge problem. All of us would like to see consumer protection take place. All of us would like to see it, I hope, take place in a way that is balanced, so the consumer protection laws that are put in place are put in place in a way that is balanced against ensuring that our financial institutions across this country are safe and sound; that people know they can go to those institutions and they are going to operate. I believe the Dodd bill, as it relates to consumer protection, is a vast overreach. I know people on the other side of the aisle have come up to me and said: Look, this is problematic, and if you guys can help us figure out a way to peel this back, we would like to be able to do that. We are going to have a chance, later today, to vote on a consumer protection amendment that has certainly brought this more in balance. There may be other ways of getting at it. I would urge the chairman to consider looking at ways to peel this back because I do believe that, again, we are going to awake in this country--if the Dodd bill passes in its present form--in 10 or 15 years and realize consumer protection has gotten out of hand; that consumer protection has been used, in many ways, to create social justice, if you will, in our financial system. To me, that is something that is very dangerous. Let me just add one other thing. There is a new word in this title that is undefined. It is a word that says they will also be looking to see if practices were abusive. But nobody knows what that means. Nobody knows what that means. Under this bill, by the way, if someone were to come in after the fact and find that something was ``abusive,'' it would negate the financial transaction that was entered into. So you could have a zealous consumer advocate come in and say: I am sorry, this loan that was made between two parties was abusive, and it would negate that transaction. This bill is a huge overreach. It obviously goes right along the lines of the White House saying you should never let a good crisis go to waste. This bill is going to be around for a long time, if it passes. So I hope what we can do, over the course of the next several days, during this time when we are having one of the most civil debates I think we have had in the Senate since we have been here--a high level of civil debate--I hope we will be able to put this back in balance. I know the Presiding Officer is from a State where people care a great deal about their financial institutions. So I hope to work with her and my friend from Minnesota and others to try to achieve that balance. I yield the floor.

Mr. CORKER

Mr. CORKER. Mr. President, I thank the Senator from Connecticut. I will be brief. My friend from Virginia, Mark Warner, is here. Senator Dodd and Senator Shelby allowed us to work on this portion of the bill. I thank Senator Warner for being such a great partner. One of the things you learn around this body very quickly is you certainly do not end up getting everything the way you would like. I thank both Senator Shelby and Senator Dodd for the way they have worked together over the last week or so to improve this bill. Look, I think Senator Warner and I--I will speak for myself. Obviously, there are pieces I wish were a little different. I wish the length of receivership was not 5 years but that it was a much shorter period to wind these companies down more quickly. I wish we had judicial review so if a company is placed into this type of resolution, they actually have the opportunity to have that reviewed in a much better way. We have a bankruptcy court title. I know Senator Shelby, Senator Warner, and others would like to see that happen. I am hoping over the course of the amendment process that will happen. Judicial review of claims--I wish that were occurring. I know that is not part of this title. I also wish there was judicial review of the valuation process. There are a number of provisions I wish were better, but I will say that I think the work Senator Dodd and Senator Shelby have done to date is good. I plan to support this. I say to my colleagues on this side of the aisle who want the bankruptcy process to be the process, I think they should still support what Senator Dodd and Senator Shelby have done because they have tightened this resolution title to make it much better. I defer to my friend from Virginia because I know he is going to talk about aspects of this bill that are not talked about much. They are preventive measures--at least of this title--to keep us from being in a situation where resolution is even necessary because of precautionary issues that are put in place. I thank Senator Dodd and Senator Shelby. I thank them for their involvement. I thank them for the way they have worked together to make this bill better with the process that has taken place over the last week.

Mr. CORKER

Mr. CORKER. Mr. President, before my time to speak today, there were some comments made by the junior Senator from Delaware, but before getting to that, I did want to mention that I hope very soon the administration will work closely--and I am sure they will because I know they are very understanding of what has happened in Tennessee-- with those who are dealing with the obvious disaster underway in our State. We have people who have lost their lives, people who have lost their homes, and people who have lost their life's work. I appreciate so much the work our Governor has underway, and the many mayors, especially the mayor of Nashville but also mayors across our State. I appreciate the response all of them have given in coming to the aid of our citizens there. Again, I know this administration will begin to work very closely with them in that same regard, and I thank them in advance. But I came to speak specifically today about the comments of my friend from Delaware regarding the fact that because large institutions in this country have a funding advantage over some of the smaller institutions, we ought to break them up. I certainly have concerns about some of the situations we get ourselves into when a large institution gets into trouble. I don't think that having 100 Senators here on the floor arbitrarily deciding what size a financial institution ought to be or when it should be broken up is necessarily the right approach. What I do think is a better approach--and I think this bill attempts to do this but doesn't quite get it right--is to ensure that if an institution fails, it actually fails; the shareholders of the company know they are going to be out of their entire investment; the creditors know what is going to happen. The bill attempts to do that, and my sense is that Senator Shelby and Senator Dodd are working together--and I think may actually have come to an agreement--on a way to close some of the loopholes that exist in this bill. What I would suggest to my friend from Delaware is just to support those efforts because I think if that occurs--and my sense is it will, based on the conversations I have had--what will happen very quickly is the credit rating agencies in this country--and they have already indicated this to be the case, not that they have been stellar, certainly in these last couple of years or the last 4 years--many of them are beginning to look at these large institutions in a different way because they believe we may pass legislation here on the floor that says that if they fail, they actually go out of business. That creates a situation where that moral hazard doesn't exist; where people, in essence, loan money or give credit or invest in these larger institutions at rates that are less than what might be the case for smaller institutions. The best way we can sort of level the playing field is to ensure that if a big company fails, it fails. Again, I think we are on the verge of getting that solved. There will be many people on my side of the aisle--and by the way, I respect this position very much--who think the only way to do that is through bankruptcy, and they are talking about either an 11(f) section of the code or a section 14 of the Bankruptcy Code, where highly complex financial holding companies would go into bankruptcy if they fail. By the way, I think we should do everything we can to strengthen that. At the same time, I think--certainly in the interim, anyway--we need a resolution mechanism so that we know that if a large company fails, we have a mechanism to liquidate it. It may be that you need both tools. Maybe you let the resolution provision sunset after the bankruptcy laws are completed and fixed in such a way that it works for a large, highly complex bank holding company. But, again, what I would say to my friend, the Senator from Delaware, is--and I certainly love his passion on this issue--the best way we can get that level playing field is to ensure these large institutions fail when they fail, and that will change that funding level he is talking about. As a matter of fact, we are given regulators in this bill, if it passes in its form right now. I sure hope we make lots of changes because I cannot support the bill as it is today. But the bill actually addresses capital levels. As institutions become larger and more risky, additional capital requirements are required, which automatically drives up the cost of funding. There is a section Senator Warner and I worked on called contingent capital, where the regulators can actually cause these institutions to have contingent capital, where if a creditor has loaned money to an institution and this institution gets in trouble, that turns to equity, so it is a buffer. Again, I think the cost of that is going to be more expensive than most credit that would be given to an institution such as this. So, again, I think the best way to deal with organizations that are large in this country is to deal with the many tools that exist in this bill that need to be improved, no doubt, and hopefully, over the course of the next 2 weeks, will be improved. But that is a much better solution than just arbitrarily having 100 Senators saying: Well, if you are X part of our GDP, you have to be taken down to size. I wish to reiterate, as I did last week on the floor, that our country has by far the largest gross domestic product in the world. We dwarf everybody. Yet we have no banks in the top 5 in the world; we have 2 banks in the top 15. So I am not sure that as we work on globalization and as we hope to ship goods and deal with people around the world, that our best solution is to handicap the ability of our companies that work in that way and create great jobs in this country shipping goods across the world. I am not sure it is in our best interest to look at arbitrarily deciding what size a financial holding company should be. Mr. President, I appreciate being able to speak to this issue. I do hope over the course of the next couple of weeks that we can make significant changes in the consumer title. I am hearing from people all across the State of Tennessee--ordinary citizens who wake up daily and who do things that are outside the financial sphere, at least they believe they are--who are very concerned about the reach of our consumer protection agency as it is outlined in this bill; the fact that it is unfettered, that there is no board in any way to control it, the fact that there is no Federal preemption, the fact that there will be 50 State attorneys general now dealing with our national banks, the fact that this consumer entity has the ability to be involved in underwriting loans. You can imagine some of the problems that have occurred through CRA recently. Think about this: It would be CRA on steroids. So those are some issues I do think we need to address in this bill and I hope we will address in this bill. And I hope we will realize that this country has an overexpansive government that reaches out unnecessarily into their lives. In closing, again, I applaud the efforts the Senator from Connecticut and the Senator from Alabama have underway to fix this resolution title in such a way that we all know that if a firm fails, it is going to go out of business. I think that will adequately address the concerns the junior Senator from Delaware brought up earlier about these big firms, in some cases, having funding advantages. I think once the public understands these firms can go out of business, just like any other entity, that will change. I think we are already seeing that through early indications with credit rating agencies and others that are looking at these entities. Mr. President, I yield the floor.

Mr. CORKER

Mr. CORKER. I enjoyed listening to the comments of the Senator from Connecticut. I can certainly share with him some of the ideas he suggested. My other colleagues and I, to be candid, could change this bill and it would have numerous names on it. I hope we have the ability to talk about some of those over the course of the next several days. Apparently, it is not quite time for that. I want to mention the issue of Wall Street and talk about public relations. There is no question that after what occurred, many of the folks on Wall Street could have used a public relations firm to help them. No question, the bonuses and things we saw, after getting taxpayer money to make sure they survived, no doubt that created a backlash. As a matter of fact, the Senator from Virginia and I are working on an amendment that would say, if this ever happens again and we have to take one of these firms through resolution, which is part of the Dodd bill right now, the bonuses and other types of things in recent years would all be clawed back. You cannot make huge sums of money, take your company down the tubes, and do things to America in that way without paying a price. We are working on something I think is balanced and appropriate, hopefully not populace but something that is thoughtful. If somebody takes their company down and wreaks havoc on our country, that will make us use this resolution mechanism. I think that is appropriate to look at. Also, back in the fall of 2008, had the resolution mechanism we have talked about that still has some imperfections been in place--and I realize Senator Dodd and Senator Shelby are going to fix it this weekend--had that been in place, that meeting might not have occurred-- right?--because we would have had a way to deal with some of the contagion that exists when a company goes down. I want to go back. The Senator from Connecticut talked about the groups, when he was in Connecticut, who were upset with him. I say to the Senator, it is not those issues that he alluded to that made them so angry and made me angry. It is the huge expansion of government they are seeing take place. It is this huge role that Washington is beginning to play in their lives. As we look at this consumer protection title Senator Dodd addressed a minute ago, the big guys on Wall Street do not care about that. This is not something that is going to affect the big guys on Wall Street. They have staffs and they have reams of people who have the ability to deal with these consumer laws. Those are not the people who are coming into our office. It is the small, the medium-sized folks who do not have the ability to deal with these in the same way. If the Senator from Connecticut would be willing to sit down and talk about ways of ensuring that Americans should not fear this organization because this organization over time will become way involved in their lives--which I think is stoking most of the anger we are seeing across the country today, and I think rightfully so--if there is a way of achieving a balance where, in essence, consumers are protected--I know the Senator from Connecticut knows well I am all for working on streamlining, pulling these agencies together, making sure we have a voice that is out there dealing with that issue--if there is a way of doing that, I think the Senator from Connecticut would find that this body would come together, and very quickly. There are a few issues--106. Maybe the Volcker language ought to be modified a little bit. Sometimes we do best around here when we study things before we take action. I know Americans might be shocked if we actually did that. If we can moderate just a couple of things--I am talking about just a few sentences--and then look at consumer protection in a way that is balanced and does not stoke that anger, that rightful anger that exists across our country with the government taking a bigger and bigger role in people's lives unnecessarily, if we could fix that--and I think we can. That is what frustrates me. I think we can do that--then we will have appropriately dealt with the resolution. We will have appropriately dealt with derivatives. There are a few changes that need to take place, and both sides know what they are. If we can do that, then we will have a bill that I think will stand the test of time, and we will have a bill I think Americans will embrace and will do the things we set out to do. I know we have had a long colloquy. I thank the Senator from Connecticut for indulging me and the Senator from Virginia, with whom I talked prior to coming to the floor. I hope in some form or fashion, we are able to deal with some of these concerns to ensure consumers are protected, to ensure that derivatives are clear and we do not end up with an AIG situation with huge amounts of money and having to settle up on a daily basis and we deal with the issue that when a company in this country fails, they fail. I have to tell my colleagues, that is what Tennesseans care about. They do not understand because when a business in Bradley County or a business in Shelby County--maybe a mom or pop--fails, they are out of business. In this country, they see these large institutions on Wall Street fail and they do not go out of business. They consider that to be morally wrong. I know we will get that right in this bill before it passes. I hope we can deal with these other issues appropriately.

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