Christopher Dodd

Mr. DODD

Mr. DODD. Mr. President, let me begin by saying that Sam Brownback and I are good friends. We have a different point of view in this matter. But that in no way at all should be reflected in our relationship with each other, as we have served together for many years. I fundamentally disagree with him about this. Instructing conferees is an interesting motion in many ways. As we will be going to conference with the other body, I will be delighted to listen to these various ideas. But this is a matter which does deserve to be protected. First of all, let me say that when it comes to automobile dealers, they are no different than community banks or other financial institutions; the overwhelming majority are good people and do a good job. But we do not pass laws in this country because a majority of the people commit crimes. We pass laws for the minority who can abuse their relationship with customers or with people. That is no different in this particular case at all. So this is not about whether you like automobile dealers or do not like them. The simple question is: The second largest purchase that most Americans make is the purchase of an automobile. We do not buy stocks. We do not buy fancy institutions and so forth. We buy a home and we buy an automobile, and they are expensive undertakings. So the question is very simply: We have established in our legislation, for the first time in the history of our country, a Consumer Financial Protection Bureau that will watch out for the average American citizen when it comes to financial practices. We have a Consumer Product Safety Commission. We have the Food and Drug Administration which protects you against products that you ingest, so you have some ability to respond if they do you harm. If you buy a lawn mower or you buy any other consumer product, we have a place you can go to get a recall when that product does injury or could do injury to you. Yet we have no place in this country, where you can be ruined by a financial product, to get you any redress. So this legislation, for the first time in our Nation's history, establishes a Consumer Financial Protection Bureau to watch out for bad mortgages, car loans, watch out for other financial activities in which the average individual may engage. As I said, one of the most principal activities that people engage in as consumers is the purchase of an automobile. So we are trying to protect people. If we are going to say to community banks and to credit unions and other financial institutions: You must comply with these rules, they will be enforced at the local level. But you have a community bank on one corner, a credit union on the other corner and a car dealer on the third corner and all three would like to compete for that business. To the credit union and the community bank we say: You have to comply with rules that protect consumers. But you, Mr. Auto Dealer over here, you do not have to do that. You can go off and do exactly as you want. That is a mistake and why we have insisted that these provisions include automobile dealers. So I rise in opposition to this proposal. A lot is said in this body about our men and women who serve in uniform. We all believe that, just as those heroes stand for us every single day, in bodies such as this we ought to stand for them. I wish to focus my remarks on what happens to men and women in uniform today because it is that constituency alone that ought to be reason to defeat this motion. As we considered financial reform, then, we strove to heed the words of groups such as the Military Coalition, a consortium of over 30 nationally prominent military and veterans organizations, representing more than 5.5 million current and former servicemembers and their families, including such groups as the Veterans of Foreign Wars, the National Guard Association, the Military Officers Association, the Military Order of the Purple Heart, and many others. All these groups have written a letter in which they say, in part: The most significant financial obligation for the majority of servicemembers is auto financing. It is also the place where servicemembers are most likely to be taken advantage of. Recently, the New York Times reported on one case, that of Matthew Garcia, a 25-year-old Army specialist who was recently subjected to a trick called yo-yo financing by an unscrupulous car dealer, just as he was preparing to deploy for Afghanistan. According to the story in the press, Specialist Garcia, stationed at Fort Hood, TX, bought an automobile at a used car lot, signed up for a loan at a 19.9 percent interest rate. That would be bad enough, but that is not the worst of it, the high rate of interest. The problem came when Specialist Garcia drove the car home. The dealer called Specialist Garcia several days later to say the financing contract had actually fallen through and demanded an additional $2,500 in cash from Specialist Garcia. To make sure he paid up, the dealer blocked the soldier's car so no one could leave. That is the way some--a few but some--auto dealers are treating our men and women in uniform. It is not enough that I tell you this story or one story in the press account. Under Secretary of Defense Stanley-- in fact, my good friend, Senator Brownback, quoted from the letter from Clifford Stanley. But listen to the operative sentence in the letter from Under Secretary Stanley: The Department's position as stated in my letter to Assistant Secretary Barr remains unchanged. The Department of Defense would welcome and encourage the CFPA protections for Servicemembers and their families with regard to unscrupulous automobile sales and financing practices provided such protections would not limit access to legitimate products. Which they do not at all. So we are hearing from Under Secretary of Defense Stanley, in which he says: ``Bait and switch'' financing, falsification of loan applications, failure to pay off liens on trade- in vehicles, ``packing'' loans with items whose price bears little, if any, relationship to their real cost, and discriminatory lending are the kinds of problems members of our Armed Forces and their families face when dealing with financing their cars with car dealers. In fact, Secretary Stanley reports that 72 percent of military counselors and attorneys surveyed had cited problems with auto dealer abuses in just the past 6 months alone, 72 percent cited it as a major problem. The Department of Defense is telling us that our men and women in uniform are at risk of being ripped off, as they are every single day. That is why, of course, we adopted, 98 to 1, by the way, the amendment offered by Scott Brown, our colleague from Massachusetts, and Jack Reed, our colleague from Rhode Island. That amendment said we must have an office of servicemember affairs in the consumer bureau. Why did we establish that office there? What is the principal obligation that these service men and women get into that causes so much difficulty? It is automobiles sales. That is why we put it in. What an irony it would be that we vote 98 to 1 to say we ought to establish that office within the consumer financial bureau and then turn around and adopt the Brownback amendment or insist upon it in a conference report, which basically exempts every one of these auto dealers from having to comply with the consumer protection laws. That would be an irony beyond ironies in a way, to on one hand say: We want to help you and protect you and then, on the other hand, take away the major organizations out there that do the most damage to them. The Brownback motion would steal away this protection from our Armed Forces by creating a loophole for the exact sector of the financial services industry in which servicemembers are most vulnerable, and that is in auto sales. Let me be clear. All of us have relationships with auto dealers. I have a wonderful relationship with the people in my State of Connecticut whom I have worked closely with over the years. All of us support those businesses. As I said at the outset of these remarks, the overwhelming majority of them do a good job and do not engage in unscrupulous behavior. But the laws are not written for the many, they are written for the few out there who do take advantage of these young men and women. As we know from the evidence supplied by our military organizations and others who have written, rarely do they ever get involved in a matter such as a Banking Committee matter, to have the Under Secretary of Defense, the Secretary of the Air Force, the Secretary of the Army, the Veterans of Foreign Wars, the Order of the Purple Heart, and the Officers Association, all of them, 30 organizations saying: Do not do this. Yet we are about to turn around and undo the efforts we have made to see to it that these young men and women, whom we all talk about in Memorial Day speeches, and so forth--what a great job they do for our country, and then turn around, in the one area they get taken to the cleaners on day after day, which is in this one particular area, and to exempt them entirely from the consideration of the Consumer Financial Protection Bureau. The community bankers oppose this. The credit unions oppose this as well. They want a level playing field. They would like to compete for that business. They have to comply with the rules. How can you turn around and say to that community bank or that credit union: You have to live with these rules, but the guy on the other corner does not have to do so. How is that fair when it comes to financing, as I said have said, the second largest purchase that anyone would make, that most people make in their lives? So it is unfair, it seems to me, to have two sets of rules for the same product. That is what we would be doing if this amendment were adopted, and, of course, the conferees were required to insist upon supporting language in the House bill. Military leaders such as Michael Donley, the Secretary of the Air Force, support this approach because, in his words: Protection from unprincipled automobile lending enables our Airmen to concentrate on their primary mission--to fly, fight and win in air, space, and cyberspace. Advocates such as Holly Petraeus, wife of GEN David Petraeus, the director of the Better Business program for military families, at a press conference, strongly supports the protections we have in this bill. They know the hardships military families face and believe it should not be compounded by shady lenders. By the way, it is not just our servicemembers who suffer from lending abuse in this sector as well. There is a long and sad history of racial discrimination in auto lending. For example, African-American borrowers who are charged more than 2.5 times the amount in subjective rate----

Mr. DODD. I ask unanimous consent for 1 additional minute and provide 1 additional minute for my friend from Kansas as well.

Mr. DODD. Let me, if I can, because my friend from Kansas cited this, about separating out the financing from the lenders. There was a court case. Listen to what one of these witnesses, involved in that distinction, had to say. Some argue that auto dealer financing operations are not the lenders, they are merely processing the paperwork. According to court testimony of a former finance and insurance manager from a Tennessee auto dealer: The standard industry practice is to prepare the financing documents so that the customer is not alerted in any manner that the person with whom he is dealing has the ability to control the customer's price of credit. This allows the finance arranger to present himself as the ally of the customer, which further relaxes and disarms the customer. The nature of the transaction creates the perfect opportunity for a dealer to obtain a large kickback from an unsuspecting customer by subjectively inflating their interest rates. This is not a time to do so much damage, in my view, to these young men and women in uniform. I ask unanimous consent that several letters we have from the various military organizations in opposition to the Brownback amendment be printed in the Record.

Mr. DODD. Have the yeas and nays been ordered on both motions?

Mr. DODD. I don't see my colleague from Kansas but I know he wants the yeas and nays. I ask for the yeas and nays on the Brownback motion.

Mr. DODD. I ask for the yeas and nays on the Hutchison-Hagan motion.

Mr. DODD. Brownback would come first and then the Hutchison-Hagan motion. I suggest the absence of a quorum.

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

Mr. DODD. All time has expired on Brownback?

Mr. DODD. Mr. President, I commend both of my colleagues, Senator Hutchison and Senator Hagan, my good friends from Texas and North Carolina. They have done a great job and deserve our thanks for the work they have put into this proposal. I am supportive of the motion to instruct. As a conferee, I will have something to say about this, I presume, in the conference. I thank them for their efforts. They have laid this out pretty well. I don't need to take a lot of time. I have some further remarks that lay out why I think this is a good proposal. I appreciate very much their efforts in this regard. I am prepared to yield back time on this matter and urge colleagues to support the Hutchison-Hagan motion to the financial reform package. It is a good proposal, one that deserves all of our support.

Mr. DODD

Mr. DODD. Mr. President, I move to reconsider the vote and to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. DODD. Madam President, I wish to take a few minutes to express my views on the bill overall and also to express my appreciation to an awful lot of people who worked very hard on this legislation over the last year and a half, not just over the last 4 weeks this bill has been the subject of Senate debate. Last week, the Senate voted to pass this historic and comprehensive Wall Street reform legislation. Over the weekend, the New York Times wrote: With the Senate's passage of financial regulation, Congress and the White House have completed 16 months of activity that rival any other since the New Deal in scope or ambition. I argue that it is not the scope of our mission that we will remember when we look back on this period in our Nation's history. Instead, I believe we will remember the scope of the challenge with which we have been confronted, the weight of the burden we have been asked to lift off the backs of the American people, and the difficult work we had to do to get the job done. Our Nation was founded on principles of religious freedom and representative government, but our history reveals that one of the most truly American principles is that of self-determination. In America, if you work hard and play by the rules, there is no limit to what you can achieve. That idea is so central to our national character that it is tempting to take it for granted. We rarely think about the foundation upon which that promise rests, but that foundation is there. It is real. It is made up of laws and rules and regulations and institutions. It is the charge of human beings, and thus it can fail. We all know what was lost when that foundation did fail 2 years ago-- millions of jobs, millions of homes, trillions in household wealth and retirement savings. But what we very nearly lost was that principle of self-determination. Small business owners who turned a good idea into a real business that employs real people suddenly found that despite having done nothing wrong, they could no longer find the credit they needed to survive. Homeowners who had put their backs into earning enough to own a piece of this country suddenly found that, despite having done nothing wrong, they had been ripped off by an unscrupulous lender. And people across America who got up early every day to go do a job that barely put enough food on the table found that they were being let go, not because they had done something wrong but because of the mistakes of a banker they never met, a corporate hotshot who had never had any trouble feeding his family. Over the many months, we looked at the foundation closely, and the closer we looked, the more cracks we saw. And the American people, never quick to lose faith, began to doubt whether the promise of our free markets and abundant wealth would still hold for them and their children. Our task in this institution, in writing and passing this bill, was not just to restore stability to our financial system or save our economy from further turmoil. Our task was to restore power to the uniquely American principle of self-determination. I believe that, in the view of history, we will be judged to have succeeded. And that effort means more to me and I presume more to this body than any political consideration ever could. Of course, our work is not quite finished. We must now work with our colleagues in the other body in conference. In that conference, I will fight to make sure the strengths of the bill that came out of this institution are reflected in the legislation we will send to the President's desk. At the heart of what makes our bill effective is its focus on the small business owners, investors, and consumers who are, in turn, at the heart of our prosperity. There is no interest more special than the public interest, and that is reflected in our legislation. Our Consumer Financial Protection Bureau rejects the notion that individual lobbies should enjoy special protections. We took special precautions to ensure that small businesses are not unnecessarily pulled into the regulatory regime. And we listened carefully to concerns about creating an unfettered bureaucracy, ensuring that the powers it has are matched by strong oversight. But we rejected carve- outs and loopholes because the only special interests whose voice should be heard at this bureau is that of the American consumer. We took steps to ensure that the Consumer Financial Protection Bureau's funding will be independent and reliable so that its mission cannot be compromised by political maneuvering. In conference, I will do what I can to defend these important principles. I will also fight for our bill's approach to ending too- big-to-fail bailouts, an approach that is the result of hard work and good, bipartisan compromise on the part of many Senators. Further, our bill includes lasting and durable protections against more taxpayer bailouts and the possibility of yet another widespread economic crisis. We have said all along that there needs to be a way for big firms to fail without incurring taxpayer expense or threatening the foundation of our economy. We have found that way, and we have ensured it will last for a long time. We have also included the Volcker rule to help ensure that the biggest firms are as stable as possible. We also have found a way to bring into the sunlight an entire market sector that for too long has grown in the shadows. Our bill has very strong protections for the derivatives market, and, like the Consumer Financial Protection Bureau, we have rejected carve-outs for special interests because those carve-outs would weaken protections against economic instability. Our bill also takes on the issue of Federal Reserve governance, mandating a General Accounting Office audit of the Fed's response to the financial crisis, changing the president of the New York Fed to a Presidential appointment, and making other improvements--increasing transparency at the Fed without threatening its independence or its ability to do important work of conducting monetary policy. Our bill strengthens the Securities and Exchange Commission, improving whistleblower protections and empowering shareholders and investors. Our bill, finally, reforms the credit rating agencies, allowing greater access to information, including an agency's track record, methodology, and the limitations of its ratings. This is a very strong bill. If you want to call it ambitious, that is fine, but I think that is missing the point. Everything in this bill is a response to the pain we have seen in our Nation and to the worry Americans have that it could all happen again. If the bill is comprehensive--and I believe it is--that is because the challenge was also comprehensive. We can no more let the principle of economic self-determination crumble than we can the principles of religious freedom or representative government on which our Nation has been founded and built. That is why I have fought as hard as I have, along with my colleagues on the Banking Committee and so many others in this Chamber--Democrats and Republicans--over the last month the legislation was on the floor of this body. That is why we will continue to fight for this strong legislation until it is signed into law by the President of the United States. As I said at the outset of these remarks, obviously those who get to speak at these lecterns, to debate in this Hall, receive the notoriety for good or real as a piece of legislation such as this moves through the legislative process. There are literally dozens of people who work every day, over the weekends, long into the evening to make sure legislation is comprehensive, well thought out, balanced, and fair. I ask unanimous consent to have printed in the Record a list of the people on our committee staff, legislative counsels, the floor staff, and the Republican floor staff, and thank them for their tremendous work over this last month. They do a tremendous job on behalf of the American public every single day, seeing to it that which we conduct here is done in a fair, open process that reflects well on this institution. Along with Ed Silverman, Amy Friend, Jonathan Miller, Dean Shahinian, and Julie Chon--I hesitate to go down the whole list. I thank all of them for their tremendous work, and I want the record to reflect their names. It is the least we can do. I can literally cite paragraphs about every one of them, the work they conducted to bring us to this point in the legislative process. I am grateful to them and the floor staff, Republicans and Democrats, who make this place work all day. The American public owes them a great debt of gratitude for what they do.

Mr. DODD. Madam President, I yield the floor and suggest the absence of a quorum.

Mr. DODD

Mr. DODD. Mr. President, I move to reconsider the vote and to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. DODD. Madam President, I wish to take a few minutes to express my views on the bill overall and also to express my appreciation to an awful lot of people who worked very hard on this legislation over the last year and a half, not just over the last 4 weeks this bill has been the subject of Senate debate. Last week, the Senate voted to pass this historic and comprehensive Wall Street reform legislation. Over the weekend, the New York Times wrote: With the Senate's passage of financial regulation, Congress and the White House have completed 16 months of activity that rival any other since the New Deal in scope or ambition. I argue that it is not the scope of our mission that we will remember when we look back on this period in our Nation's history. Instead, I believe we will remember the scope of the challenge with which we have been confronted, the weight of the burden we have been asked to lift off the backs of the American people, and the difficult work we had to do to get the job done. Our Nation was founded on principles of religious freedom and representative government, but our history reveals that one of the most truly American principles is that of self-determination. In America, if you work hard and play by the rules, there is no limit to what you can achieve. That idea is so central to our national character that it is tempting to take it for granted. We rarely think about the foundation upon which that promise rests, but that foundation is there. It is real. It is made up of laws and rules and regulations and institutions. It is the charge of human beings, and thus it can fail. We all know what was lost when that foundation did fail 2 years ago-- millions of jobs, millions of homes, trillions in household wealth and retirement savings. But what we very nearly lost was that principle of self-determination. Small business owners who turned a good idea into a real business that employs real people suddenly found that despite having done nothing wrong, they could no longer find the credit they needed to survive. Homeowners who had put their backs into earning enough to own a piece of this country suddenly found that, despite having done nothing wrong, they had been ripped off by an unscrupulous lender. And people across America who got up early every day to go do a job that barely put enough food on the table found that they were being let go, not because they had done something wrong but because of the mistakes of a banker they never met, a corporate hotshot who had never had any trouble feeding his family. Over the many months, we looked at the foundation closely, and the closer we looked, the more cracks we saw. And the American people, never quick to lose faith, began to doubt whether the promise of our free markets and abundant wealth would still hold for them and their children. Our task in this institution, in writing and passing this bill, was not just to restore stability to our financial system or save our economy from further turmoil. Our task was to restore power to the uniquely American principle of self-determination. I believe that, in the view of history, we will be judged to have succeeded. And that effort means more to me and I presume more to this body than any political consideration ever could. Of course, our work is not quite finished. We must now work with our colleagues in the other body in conference. In that conference, I will fight to make sure the strengths of the bill that came out of this institution are reflected in the legislation we will send to the President's desk. At the heart of what makes our bill effective is its focus on the small business owners, investors, and consumers who are, in turn, at the heart of our prosperity. There is no interest more special than the public interest, and that is reflected in our legislation. Our Consumer Financial Protection Bureau rejects the notion that individual lobbies should enjoy special protections. We took special precautions to ensure that small businesses are not unnecessarily pulled into the regulatory regime. And we listened carefully to concerns about creating an unfettered bureaucracy, ensuring that the powers it has are matched by strong oversight. But we rejected carve- outs and loopholes because the only special interests whose voice should be heard at this bureau is that of the American consumer. We took steps to ensure that the Consumer Financial Protection Bureau's funding will be independent and reliable so that its mission cannot be compromised by political maneuvering. In conference, I will do what I can to defend these important principles. I will also fight for our bill's approach to ending too- big-to-fail bailouts, an approach that is the result of hard work and good, bipartisan compromise on the part of many Senators. Further, our bill includes lasting and durable protections against more taxpayer bailouts and the possibility of yet another widespread economic crisis. We have said all along that there needs to be a way for big firms to fail without incurring taxpayer expense or threatening the foundation of our economy. We have found that way, and we have ensured it will last for a long time. We have also included the Volcker rule to help ensure that the biggest firms are as stable as possible. We also have found a way to bring into the sunlight an entire market sector that for too long has grown in the shadows. Our bill has very strong protections for the derivatives market, and, like the Consumer Financial Protection Bureau, we have rejected carve-outs for special interests because those carve-outs would weaken protections against economic instability. Our bill also takes on the issue of Federal Reserve governance, mandating a General Accounting Office audit of the Fed's response to the financial crisis, changing the president of the New York Fed to a Presidential appointment, and making other improvements--increasing transparency at the Fed without threatening its independence or its ability to do important work of conducting monetary policy. Our bill strengthens the Securities and Exchange Commission, improving whistleblower protections and empowering shareholders and investors. Our bill, finally, reforms the credit rating agencies, allowing greater access to information, including an agency's track record, methodology, and the limitations of its ratings. This is a very strong bill. If you want to call it ambitious, that is fine, but I think that is missing the point. Everything in this bill is a response to the pain we have seen in our Nation and to the worry Americans have that it could all happen again. If the bill is comprehensive--and I believe it is--that is because the challenge was also comprehensive. We can no more let the principle of economic self-determination crumble than we can the principles of religious freedom or representative government on which our Nation has been founded and built. That is why I have fought as hard as I have, along with my colleagues on the Banking Committee and so many others in this Chamber--Democrats and Republicans--over the last month the legislation was on the floor of this body. That is why we will continue to fight for this strong legislation until it is signed into law by the President of the United States. As I said at the outset of these remarks, obviously those who get to speak at these lecterns, to debate in this Hall, receive the notoriety for good or real as a piece of legislation such as this moves through the legislative process. There are literally dozens of people who work every day, over the weekends, long into the evening to make sure legislation is comprehensive, well thought out, balanced, and fair. I ask unanimous consent to have printed in the Record a list of the people on our committee staff, legislative counsels, the floor staff, and the Republican floor staff, and thank them for their tremendous work over this last month. They do a tremendous job on behalf of the American public every single day, seeing to it that which we conduct here is done in a fair, open process that reflects well on this institution. Along with Ed Silverman, Amy Friend, Jonathan Miller, Dean Shahinian, and Julie Chon--I hesitate to go down the whole list. I thank all of them for their tremendous work, and I want the record to reflect their names. It is the least we can do. I can literally cite paragraphs about every one of them, the work they conducted to bring us to this point in the legislative process. I am grateful to them and the floor staff, Republicans and Democrats, who make this place work all day. The American public owes them a great debt of gratitude for what they do.

Mr. DODD. Madam President, I yield the floor and suggest the absence of a quorum.

Mr. DODD

Mr. DODD. I ask for the yeas and nays on the Hutchison-Hagan motion.

Mr. DODD. Brownback would come first and then the Hutchison-Hagan motion. I suggest the absence of a quorum.

Mr. DODD. All time has expired on Brownback?

Mr. DODD. Have the yeas and nays been ordered on both motions?

Mr. DODD. I don't see my colleague from Kansas but I know he wants the yeas and nays. I ask for the yeas and nays on the Brownback motion.

Mr. DODD. Mr. President, I commend both of my colleagues, Senator Hutchison and Senator Hagan, my good friends from Texas and North Carolina. They have done a great job and deserve our thanks for the work they have put into this proposal. I am supportive of the motion to instruct. As a conferee, I will have something to say about this, I presume, in the conference. I thank them for their efforts. They have laid this out pretty well. I don't need to take a lot of time. I have some further remarks that lay out why I think this is a good proposal. I appreciate very much their efforts in this regard. I am prepared to yield back time on this matter and urge colleagues to support the Hutchison-Hagan motion to the financial reform package. It is a good proposal, one that deserves all of our support.

Mr. DODD

Mr. DODD. Madam President, will my colleague and friend yield for 1 minute so I may make a couple of unanimous-consent requests?

Mr. DODD. Madam President, I ask unanimous consent that notwithstanding the adoption of the Vitter-Pryor amendment No. 4003, as modified, it be further modified with the changes that are at the desk.

Mr. DODD. Madam President, I ask unanimous consent that the President of the Senate be authorized to appoint a committee on the part of the Senate to join with a like committee on the part of the House of Representatives to escort His Excellency Felipe Calderon Hinojosa, the President of Mexico, into the House Chamber for a joint meeting.