Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, I'm a great fan of the tradition of comedy in America, and I want to salute my Republican colleagues for this tribute to one of our great comedians who died tragically early, Gilda Radner, who in the early days of ``Saturday Night Live'' invented the character of Roseanne Roseannadanna, who would get on the news segment and say something outlandish. And then when she was corrected, her response was, ``Never mind.'' This is the ``never mind'' resolution that the Republicans have brought forward. People should understand what this says. It says that the bill that we passed that kept the government from shutting down-- and I didn't like the bill, but I liked the part of it that kept the government from shutting down. I was ready to vote just for an increase in the debt limit. Singling out the increase in the debt limit and canceling it, that's what this does. What this says is--and here's the problem. We have a majority that has a problem with reality. They have a problem with reality in the field of science. They have a problem with reality in the field of the economy. One of the manifestations of that is their objection to raising the debt limit that was in large part necessary because of debt they incurred. You know, when the debt limit came up, it struck me: It wasn't my debt limit; I didn't vote for the war in Iraq at a cost of a trillion dollars; I didn't vote to give millionaires a tax cut that they didn't need and that had no beneficial effect on the economy. But I did, out of a sense of responsibility, vote to raise the debt limit. Now, I voted against one of them, but I voted for several others. What this bill says is this: Yes, we had to, because we were getting a lot of pressure, vote to raise the debt limit, but now that that is safely behind us, we're going to pretend that we were really against it. So this is the ``never mind'' resolution. People should understand this. What this resolution would do would be to undo what just happened. So we have Members on the majority side who have trouble explaining to their primary voters why they had a temporary embrace of reality. Now they're not comfortable with that. Their primary voters aren't comfortable with that. So having done what they had to do, they now want to pretend that they're going to undo it. The Senate has already killed this. They don't want it to pass because, understand what it would do, it would put us right back in the debt limit situation crisis. And, by the way, these are people who are putting this resolution forward who purport to believe that a major concern with the economy today is the uncertainty that faces investors. So what do they do? They bring up a resolution today that would re-create--if anyone took it seriously, and I will give them the credit of saying that they don't. But if anyone took it seriously, it would re-create the greatest source of uncertainty we've seen in a long time, whether or not the Federal Government was going to shut down. So that's the phoniness of this. Now let's talk about the substance. My colleagues claim to be against spending. Apparently, in their world, the nearly $700 billion that is spent annually by the Pentagon isn't spending. I don't know what it is. We have a situation in which this year in the budget the Republicans brought forward a bill to increase military spending by $17 billion while funds for local police and funds for local street repair were cut. So that's the problem. Yes, I am for reducing spending. I am for reducing a swollen Pentagon budget. We had the President reduce by 10,000 the troops in Afghanistan. Many on the Republican side, including their leadership, criticized him for that. Do they think 10,000 troops in Afghanistan are paid for with ``funny'' money? The fact is that while on the one hand we hear these complaints about spending, we have people who are pushing for more and more spending. And I have to say here that I would include my administration in this. And I think if the President expects us to go along with certain restraints elsewhere, adding billions of dollars to what we have already wasted in Iraq by keeping thousands of troops in Iraq beyond this--and, by the way, why are we keeping troops in Iraq? One of the leading advocates for keeping troops in Iraq, a leading Republican Senator, Senator Graham, said we must keep our troops in Iraq because we have to police the border between the Arabs and the Kurds, that at a time when we are denying funds to our cities to police their own areas. So, let's be clear. First of all, this sham says, You know what? We had to vote to raise the debt limit. We're now going to engage in this mock exercise of taking back what we did. If anybody takes it seriously, it will send waves of uncertainty back into the economy. But, secondly, going forward, yes, join us. And that includes some on the Republican side--unfortunately, a small minority. Don't give more and more and more for the military not to defend America, not to fight terrorism. Those things are not in controversy, but to subsidize the wealthy European nations. Madam Speaker, the NATO nations outside the United States spend an average of 1.7 percent of their gross domestic product on the military. We spend 5.4 percent--more than three times as much. And my Republican colleagues have resisted reducing that. What they want to do is subsidize the social safety nets and the spending of Western Europe at the expense of spending here. And how do we do that? By allowing them to hold down the military. So people who want to keep troops in Iraq; people who objected when the President began a withdrawal that was too timid, in my judgment, from Afghanistan; people who want to continue to spend unnecessarily and unwisely not to defend America but to keep America the worldwide policemen have no credibility in complaining about spending.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, many of us in Southeastern Massachusetts--and indeed in Massachusetts as a whole--had very mixed emotions on learning of the decision by University of Massachusetts Dartmouth Chancellor Jean MacCormack to retire. She will be greatly missed, and we cannot help but express our deep regret that she will be moving on from the position from which she has shown such extraordinary leadership educationally, economically and culturally. But given how hard Jean MacCormack has worked, how dedicated she has been to her students, to the faculty, and to the region of which that institution is such an important part, no one can begrudge her the decision to take a pause and move to different work. I say different work, Mr. Speaker, because no one who knows the energy, passion for helping others and improving the world around her, and great gift for friendship that Jean MacCormack possesses doubts that she will soon be doing something else of great value. But this is an appropriate time to note the wide range of very important contributions she has made to our region. As the Member of the House proud to represent what has been for many years the leading fishing community in the United States, New Bedford, and its surrounding towns, I have derived enormous strength from the work that has been done at the University of Massachusetts Dartmouth to support the fishing industry with first-rate research, and Jean MacCormack has been an essential factor in that effort. Under her leadership, UMass Dartmouth has become a very important source of research and leadership for economic development in dealing with our ocean resources in general and UMass Dartmouth has played a very essential role in promoting the economic development of our region both with regard to some specific industries, including textiles and cranberries, in addition to fishing, and in general. Many people talk about the important synergies that come from making sure that first-rate academic work is coordinated with economic development. Jean MacCormack has done as much as anyone I know to make that a reality. And I was very proud to be one of those who worked under her leadership to create the first public law school in the history of Massachusetts, with the merger of Southern New England Law School into the University of Massachusetts system, headquartered at the Dartmouth branch. Mr. Speaker, Jean MacCormack was to me not just a great educational leader, but a great friend. No one could be in her presence without being made to feel valuable and to be entertained and instructed at the same time. I join with the population of Southeastern Massachusetts in thanking her for a job very well done and in wishing her well as we watch her move on to her next work. And Mr. Speaker, as an indication of the impact Jean MacCormack has had, I ask that the excellent article from the New Bedford Standard Times about her career be printed here. UMass Dartmouth Chancellor Stepping Down After This Year (By Steve Urbon) Dartmouth.--Expressing deep concern for the future of public higher education in America, Jean F. MacCormack Tuesday announced she will retire at the end of this academic year as chancellor of the University of Massachusetts Dartmouth. MacCormack, 64, notified the campus at the annual faculty/ staff convocation breakfast and in a campus-wide email. Noting the shrinking financial support for state-run colleges and universities, MacCormack, both in her address and in an interview, lamented the dwindling public support and today's increasing hostility toward the public sector. ``They're angry at the government and it spills over,'' she said. But she did not say that was the reason for her retirement; rather, she cited the wish to pursue other interests after three decades of working ``24/7'' in college administration. And despite the fact she has come under criticism politically, she said politics had no bearing on her decision. Citing the 1862 Morrill Act signed by President Lincoln establishing land-grant colleges, MacCormack said: ``We simply cannot allow the debate to be dominated by negative voices and allow the spirit and intent of the Morrill Act to be hijacked. We cannot accept the new dogmas of the stormy present to prevail. Too much is at stake for our nation and our democracy.'' She said in her address that she sees no obvious strategy. ``I would love to tell you that I see a clear pathway for improvement on the national issues, but instead I think those possibilities are only slowly emerging from the name-calling and the rancor. What I am quite certain about is that we must find our voice in this national debate and become strong advocates for not abandoning our nation's longstanding commitment to the clear mission of public higher education.'' New Bedford Mayor Scott Lang, who has conducted hardball negotiations with MacCormack and the university over land at Fort Taber to expand SMAST, was effusive in his praise for the chancellor. ``She's left a very long-lasting, positive legacy for the university,'' Lang said. ``She's left a tremendous amount of momentum in key areas that the next chancellor will need to build on. ``I regard her as a friend. We don't agree on every issue and we never, never will. But I enjoyed working with her. It's in the interest of everyone in this region that our university be extremely successful, innovative and a true partner,'' Lang said. During her tenure, which began in 1999 when she arrived from UMass Boston, the campus expanded greatly, including a visual and performing arts campus in downtown New Bedford, the state's first public law school in Dartmouth, the Charlton College of Business, vastly increased on-campus housing, establishment of the School of Public Policy and Education, and the Advanced Technology Manufacturing Center, among others. In her letter of resignation to UMass President Robert L. Caret, MacCormack listed several pieces of unfinished business that she hopes to complete. They include expansion of the School of Marine Science and Technology in New Bedford, the Bio-Manufacturing Center in Fall River, securing American Bar Association accreditation for the law school, finishing the renovation of the Claire T. Carney Library, and ``re-engineering enrollment and retention strategies to address a changing marketplace.'' MacCormack expressed frustration at the difficulty in getting enrollment up to 10,000 from 6,000. That's important, she said, because the campus had a 10-1 student-teacher ratio when it could support 16-1. With growth, she said, comes fiscal stability because students pay fees and tuition, which supports programs and development. It also offsets steadily declining state support, down below 20 percent of the budget from as much as 78 percent two decades ago. And yet, she said, public higher education accounts for 80 percent of enrollment and does--in theory, at least--offer as good an education as private schools, although perhaps without the connections a student can make at Harvard, for example. MacCormack touted her efforts to connect UMass Dartmouth with the community, and said she will remain in SouthCoast to perhaps write a book and take up community-related interests. But she will retire, not return to teaching, to give herself a breather after 30 years in administrative jobs that required all of her time. ``UMass Dartmouth is already a model of a university whose teaching and discovery is fully engaged in the life of its community. I am sure that this campus will be attractive to higher education leaders who strive to be entrepreneurial and bold,'' she said in her address. Margaret ``MarDee'' Xifaras, a local attorney and former chairman of the Southern New England School of Law, which was absorbed by UMass, said she doubts MacCormack will slow down all that much. ``Neither one of us is constitutionally capable of doing that,'' she said. MacCormack's pending retirement did not strike her as much of as surprise, she said. ``She always had a sort of a long- term plan that obviously would include retiring, but she was anxious to get things done, and she'll make sure certain things are well under way.'' For merging the law school, Xifaras said, she will be ``eternally grateful'' to the chancellor. ``She was a critical moving force,'' she said. ``Now its time for her to step back from a lifetime of commitment to education. She will be missed.'' Fall River developer James Karam, chairman of the UMass Board of Trustees, said, ``Jean has always understood that educational opportunity was vital to our area and has worked tirelessly to make sure that education of the highest quality was available to all of our citizens.'' He added that MacCormack ``has worked to transform our lives and in the process has transformed our region. She has championed the SouthCoast and has our undying gratitude.''

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, yesterday, August 1, I spoke on the floor to renew a request that I made along with 38 of my colleagues that the President commute the long prison sentence of Jonathan Pollard. None of us condone Mr. Pollard's espionage, and we do not ask that he be pardoned for his crime. We do believe that he has already served a much longer sentence than is close to that served for any comparable offense, and we believe that both compassion for an individual and the interests of strengthening American-Israeli ties in a way that can contribute to important decisions being made that can advance the peace process call for his commutation. Mr. Speaker, I ask that the text of the letter and the list of signatories be included in today's Record. Congress of the United States, Washington, DC, November 18, 2010. President Barack Obama, The White House, 1600 Pennsylvania Avenue, Washington, DC. Dear Mr. President, We write to urge you to use your constitutional power to extend clemency to Jonathan Pollard, thereby releasing him from prison after the time he has already served. Mr. Pollard committed serious crimes and he has expressed remorse. Such an exercise of the clemency power would not in any way imply doubt about his guilt, nor cast any aspersions on the process by which he was convicted. Those who have such views are of course entitled to continue to have them, but the clemency grant has nothing to do with that. We believe that there has been a great disparity from the standpoint of justice between the amount of time Mr. Pollard has served and the time that has been served--or not served at all--by many others who were found guilty of similar activity on behalf of nations that, like Israel, are not adversarial to us. It is indisputable in our view that the nearly twenty-five years that Mr. Pollard has served stands as a sufficient time from the standpoint of either punishment or deterrence. In summary, we see clemency for Mr. Pollard as an act of compassion justified by the way others have been treated by our justice system. We urge you to use the clemency power in this case. Sincerely, Rep. Barney Frank; Rep. Bill Pascrell, Jr.; Rep. Edolphus Towns; Rep. Anthony Weiner; Rep. Henry A. Waxman; Rep. Gary L. Ackerman; Rep. Gregory W. Meeks; Rep. Maurice D. Hinchey; Rep. Michael E. McMahon; Rep. Janice D. Schakowsky; Rep. John W. Olver; Rep. Eliot L. Engel; Rep. Theodore E. Deutch; Rep. Robert A. Brady; Rep, Donald M. Payne; Rep. Shelley Berkley; Rep. Jerrold Nadler; Rep. Carolyn B. Maloney; Rep. Steven R. Rothman; Rep. Ron Klein; Rep. Raul M. Grijalva; Rep. Steve Kagen; Rep. Carolyn McCarthy; Rep. Chaka Fattah; Rep. John Lewis; Rep. Frank Pallone Jr.; Rep. Charles B. Rangel; Rep. Robert C. ``Bobby'' Scott; Rep. Laura Richardson; Rep. James A. Himes; Rep. Brad Sherman; Rep. Patrick J. Kennedy; Rep. Bennie G. Thompson; Rep. John J. Hall; Rep. Sheila Jackson Lee; Rep. Eleanor Holmes Norton; Rep. Robert E. Andrews; Rep. Danny K. Davis; Rep. Niki Tsongas.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, earlier this year a group of Members sent a letter to President Obama urging him to grant clemency at this point and commute the sentence for Jonathan Pollard. Jonathan Pollard spied on the United States on behalf of Israel. He should not have done that, and he was punished. But the punishment for that espionage has gone on longer than anything comparable. I believe that there is a personal argument for the clemency, and there is also the fact that American-Israeli relations are always important, and are particularly important now. We are asking the Israelis to take some steps towards a negotiated peace that may or may not be possible for them to take. Knowing that America recognizes the strength of that friendship is a very important factor in our persuading them of that. And I believe that in addition to the arguments based on the excessive length of the sentence, I think, the fact that Mr. Pollard has served for so long, clearly the deterrent effect is there, we are not asking that he be pardoned, we are not condoning his crime, we are saying that in addition to the personal argument, it would be a sign of U.S.-Israeli relations that I think would help strengthen the climate for peace. I will be submitting a copy of the letter at a later time that we sent to the President for inclusion.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, we have a sad spectacle today of a substantive mess brought to us by a procedural bigger mess. But I can't entirely blame Speaker Boehner. We have seen him all week forced to retreat continually from an effort to be conservative but somewhat responsible to a position where today we have a bill that no one thinks will solve the problem because it makes as a prerequisite to raising the debt a constitutional amendment that no one thinks will pass. I remember Speaker O'Neill when I got here, and there's one thing he and Speaker Boehner seem to have in common, and that's a theme song. Speaker O'Neill's theme song was ``I'll Be With You in Apple Blossom Time.'' By now, Speaker Boehner is entitled to take as his theme song ``It's My Party and I'll Cry If I Want To'' because his party has forced him to retreat, first of all, from the position he tried to take to get this thing done; and, secondly, from a set of promises he made procedurally. As a result of where we are today, with martial law rules and amendments being sprung and amendments not being vetted, there is no procedural promise that the Republicans made that they have left unbroken. So we have a flawed bill, brought to us by a weakened Speaker, under an unfortunate and undemocratic process. Once it's out of the way, once whatever impulses have driven members of his own party so to undercut him are satisfied, maybe then in an adult way we can sit down and work this out. Now, I expect to vote for something I don't like because we have to compromise, but this bill doesn't even begin to meet any kind of serious test.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, Members often come to the floor to talk about inspector general reports about agencies. And they are almost always critical of reports--reports that document shortcomings. I'm very proud today to come to the floor to present excerpts from a joint report from the inspectors general of the Federal Reserve and the Treasury, in which they give a perfect set of marks to the new Consumer Financial Protection Bureau. Those two agencies looked into this agency. This is an agency that is being set up, under fire, unfortunately, in a somewhat unusual situation. And what the inspectors general reported is that they've done everything right; that ``they identified and documented mission-critical activities and legislative mandates''; that the CFPB has developed and is implementing appropriate plans. They found that they are implementing appropriate plans that support ongoing operations as well as the transfer of employees and functions. They created several agency-wide documents that identified and tracked priorities. ``We found that the agency has completed elements of its implementation plans and is making progress on others.'' It is a joint report from two inspectors general that says they've done everything right; so I want to put that forward. I want to put it forward, in part, because the individual most singularly responsible for its great success, as she was for the idea and the creation of this agency, is Elizabeth Warren. Elizabeth Warren is one of the most able and dedicated individuals that I've ever encountered, who has dedicated herself to public service. I regret very much that uninformed political opposition denied her the appointment to be the head of the agency, because she was not only the creator of this idea and a great partner for those of us on the Financial Services Committee--I see my colleague from Wisconsin (Ms. Moore) who was an important part of this on the floor as we set this up in the face of significant opposition from vested interests and from ideologues--but in having had the idea, she then presided as the appointee of the Secretary of the Treasury and of the President to set this agency up in an extraordinary way. It is now, on the date when it takes off, ready to function. So she was not simply the creator of the idea and a great advocate, but she has shown herself to be a great administrator; and I regret the fact that she is not getting the appointment. Although I have great confidence in the appointment of Mr. Cordray, whom the President appointed--he was an outstanding Attorney General, and he will be an outstanding Director--I want to reflect for just a minute on why we had such unwarranted opposition to a woman of great sense and of moderation, a woman who understands the market and was ready to help it function. Part of it, I have to say, was gender bias. Along with Sheila Bair, recently departed as head of the FDIC, Ms. Warren encountered from some people--maybe unconsciously on their part--the notion that a very strong-willed woman with strong opinions might have a place but not in the financial sector; and I regret the loss of both of them. Yet there was also on the part of my most conservative Republican colleagues a recognition that she was a threat. I disagree with the position not to appoint her, but I give credit to President Obama and Secretary Geithner because they helped us get this agency created, and they did put her in the position and gave her their full backing to get it this far. We would have ideologues here who would have people believe that government is always a bad thing, that less government is always better. We've seen it in this notion that we should cap government at X percent or Y percent--but I don't regard more firefighting as a bad thing; I don't think research into Alzheimer's and cancer is something we need to limit; I am not opposed to fixing bridges and highways. So this notion that government is always bad is mindless. There is a particular problem--and the private sector is a place that will create wealth, and I want us to do what we can to create the right conditions for the private sector, but there will be times when we need the government to protect people from the private sector. That was the rationale of the Consumer Bureau. The Consumer Bureau was set up--and it's a very popular entity--to protect individual citizens from abuses in the private sector. It's working well. It was well-designed, I must say. It was well set up, as the inspectors general have said. So I believe my most right-wing colleagues are terrified. It is their false notion that the government is always the source of the problem and the private sector is always the source of the good. Sometimes the government does create problems, and much of the time the private sector does create wealth, but there are times when the public sector has to protect people from the private sector. The Consumer Bureau was set up for that. Now, the chairman of the Committee on Financial Services, Mr. Bachus, said the other day, We don't worry about the Federal Deposit Insurance Corporation of the Federal Reserve. What we worry about is an agency that exists solely to protect consumers. He is also the one who said that he thought the bank regulators were there to protect the banks, but we want to have a regulator there to protect the consumers. So I salute Elizabeth Warren. I regret that she will not be able to continue the excellent work she has done, but it will live on as a tribute to both the idea she had, the political work she did with us to get it created, and the extraordinarily good administrative work she did in setting it up. I believe Mr. Cordray and the others will do a very good job and that we will soon have proof that the public sector can, in some cases, protect citizens from private sector abuses. Results of the Joint Review CFPB Identified and Documented Mission-Critical Activities and Legislative Mandates Based on CFPB planning documents and interviews of agency officials, we found that CFPB identified and documented implementation activities critical to standing up the agency's functions and necessary to address certain Dodd- Frank Act requirements. In addition to activities necessary to establish the primary mission areas identified by the Dodd-Frank Act, such as supervision and enforcement, CFPB designed its organizational structure to account for other mandated functional units as well, including offices for financial education, fair lending, and service member affairs, among others. Moreover, CFPB identified the activities necessary to complete the transfer of employees and data from the transferring agencies in a timely manner. CFPB identified in its plans the need to establish a pay and classification system, information security processes, and financial management capabilities--areas required by the Dodd-Frank Act. In addition, CFPB prepared documentation addressing critical activities vital to establishing a new agency. For example, CFPB's plans identified core business activities-- such as securing office space, establishing procurement capabilities, building payroll and benefits functions, and designing an information technology infrastructure, among others. CFPB Developed and Is Implementing Appropriate Plans We found that CFPB developed and is implementing appropriate plans that support ongoing operations as well as the transfer of employees and functions that will occur on July 21, 2011. CFPB planned for mission-critical standup activities and certain Dodd-Frank Act requirements. In July 2010, Treasury officials created a document that, according to a CFPB official, served as a roadmap for implementation. Overall, CFPB's approach was to create detailed planning documents at the division level to provide input for the agency-wide strategic plan. Most CFPB divisions maintained a draft strategic plan, organizational chart, and ``dashboards'' that tracked implementation progress and potential risks. The division-level strategic plans generally included division-level missions, goals, deliverables, and coordination activities. We also noted that these plans included multiple phases that span beyond the designated transfer date. CFPB also created several agency-wide documents that identified and tracked priorities and milestones for implementation. For example, one priority for CFPB was the transfer of employees from other agencies. To implement this priority, CFPB maintained a detailed recruitment schedule, developed coordination agreements with other agencies, and allocated resources from the various divisions to timely complete the employee transfer process. In reviewing the agency's planning documents and discussing the standup status with CFPB officials, we found that the agency has completed elements of its implementation plans and is making progress on others, including its overall strategic plan. Nevertheless, CFPB's operational success will depend, in part, on its ability to effectively execute its plans.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, last month, I met in my office with Joseph Petrowski, who is the Chief Executive Officer of the Cumberland Gulf Group of Companies, headquartered in the district of my friend and colleague, the gentleman from Massachusetts (Mr. Markey). I was interested in meeting with Mr. Petrowski to get his view of the current debate that is going on as to whether or not we should be taking action at the Federal level to curb speculation in the energy industry. As Mr. Petrowski notes in the accompanying letter, the Cumberland Gulf Group includes ``Gulf Oil, which distributes motor fuels through a network of more than 3,500 gasoline stations in over 27 States, 12 proprietary oil terminals, and more than 70 other supply terminals.'' As he notes, ``Gulf Oil supplies gasoline, heating oil, diesel fuel, jet fuel and kerosense through its terminal network.'' Mr. Speaker, the central point is that Mr. Petrowski, as someone who is in the business of selling various forms of fuel, for the ultimate purchase by individual consumers, rebuts those who argue that speculation is irrelevant to the price that is paid at the pump and elsewhere by consumers, as Mr. Petrowski notes in the accompanying letter, ``Today with price levels more volatile than ever, prices higher than ever, and open interest larger than ever, and both exchange and off exchange volume of trade a double digit multiple to physical usage, there is little doubt that speculation is a key determinant of prices and may very well be the determining factor in setting prices.'' Mr. Speaker, this point deserves great emphasis--to repeat, because of the centrality of this to our policy debate, the CEO of one of the leading distributors of gasoline, oil and diesel fuel affirms, based on the experience he has had in this industry for many years and the current economics, ``there is little doubt that speculation is the key determinant of prices and may very well be the determining factor in setting prices.'' Mr. Speaker, there has been a totally misguided effort here in this House to slash funds for the Commodity Futures Trading Commission and the Securities and Exchange Commission, and to suspend until late next year the authority given by the Financial Reform bill to Federal regulators to limit speculation. Mr. Petrowski makes very clear that the effect of this is to add to higher prices through unchecked speculation, and given the authority that he brings to this issue, I ask that his very thoughtful letter on this subject be printed here. I know, Mr. Speaker, that in addition to affirming the importance of speculation, Mr. Petrowski makes some other thoughtful suggestions about legislative changes and it is my intention to study these carefully and after that talk with my colleagues on the Financial Services Committee about acting on Mr. Petrowski's suggestions in some respects. But the key point is to affirm here what one of the leading voices in the fuel business thinks about speculation and the impact it has on the prices ultimately paid by retailers. Cumberland Gulf Group of Companies, Framingham, MA, July 7, 2011. Hon. Barney Frank, U.S. House of Representatives, Rayburn House Office Building, Washington, DC. Dear Representative Frank: While I understand some of the criticism of the Dodd-Frank legislation, no legislation and no reform effort is ever going to be perfect. All administrative oversight and legislative response is a continuous process as markets and technologies evolve. Dodd- Frank was not the end point of financial reform but a good first step in addressing market structure in a way that would improve performance. Having worked in the commodities and energy business for over 35 years, I am well aware of how the commodity markets operate and what factors determine the price of energy, food stuffs, and other essential commodities. I am a strong advocate of free markets but only the most naive would claim that free markets can exist and flourish without parameters and a framework of rules and procedures that render the process fair. This has always been so but never more so than today. Globalization, technology, and securitization among other factors have amplified the need for effective legislative and administrative oversight. In my current capacity, I serve as CEO of the Cumberland Gulf Group. Under that umbrella sits Gulf Oil, which distributes motor fuels through a network of more than 3,500 gasoline stations in over 27 states, 12 proprietary oil terminals, and more than 70 other supply terminals. Gulf Oil supplies gasoline, heating oil, diesel fuel, jet fuel and kerosene through its terminal network. Before coming to Gulf Oil, I served as the Chief Executive Officer and President of Louis Dreyfus Energy Corp., one of the largest commodities traders in the world. In both capacities, as a trader and now a fuel purchaser and supplier, I am intimately familiar with the inner workings of the derivatives market. As in any market, supply and demand play a critical role for energy prices. The perception of the future pace of both supply and demand are often more of a determinant of prices than actual supply and demand. This can be frustrating to members of the general public who sometimes see a price rise or fall without any tangible change in current supply or demand. Yet today with price levels more volatile than ever, prices higher than ever, and open interest larger than ever, and both exchange and off exchange volume of trade a double digit multiple to physical usage, there is little doubt that speculation is a key determinant of prices and may very well be the determining factor in setting prices. And even if the disproportionate increase in trade volume to physical usage were not disturbing and one believed that in the end the average price was still set by supply and demand forces rather than financial speculation (an assertion with which I would disagree), volatility induced by excess speculation is not in the best interests of efficient markets, the general public and industrial activity. Simply put, an oil market that goes from $40/barrel to $147 per barrel and back to $32 per barrel in less than a year is destructive to society and beneficial to only a very few. I should note that speculation is not necessarily a bad thing--it brings liquidity to the market and allows commercial entities to hedge their risk on future contracts for the trade of physical goods. However, there has been a rapid increase of the participation in the market by non- commercial entities such as hedge funds and financial institutions. Those entities, depending on their behavior, have the ability not only to speculate in the market but manipulate the market. It is the regulation of these entities that is most necessary and the Dodd-Frank Act brings regulation to this market through a requirement of mandatory clearing of swaps and the placement of position limits on certain futures contracts, including energy. Financial markets in certain aspects do resemble a casino and I am not making a moral judgment on casinos but even a casino has rules of engagement and enforcement that ensure a level playing field. A rigged casino is certainly not good for most participants and in the long run is not good for the casino itself. Instruments of risk sharing and markets of financial intermediation perform a vital function but they do not grow spontaneously nor do they exist for long in a state of nature absent oversight and rule making. I have set forth some preliminary thoughts below on reforms we need to improve market performance set forth below and would welcome the opportunity to discuss these issues in more detail with you, your staff and others on the Financial Services Committee. 1. Make the exchange requirements of what it means to be a ``Hedger'' much more stringent. Today, almost anyone with a small and insignificant physical position can qualify as a ``hedger''. Also large entities with massive financial strength can qualify as a hedger, exceed the speculative limits in a given index or exchange instrument, manipulate that index and then trade multiple volume contracts off that index in non-exchange business. We see a proliferation of financial and bank entities entering the physical market for no other reason but to qualify for the more generous liberties afforded a ``hedger''. 2. Raise the margin requirements for non-hedgers significantly to minimize speculator-driven volatility and still allow enough liquidity in the market so that entities with real business purposes can transact. This will drive weaker speculators out of the market. It will also dramatically reduce volatility because the Variance Margin buffer could be increased dramatically which would stop the phenomenon of leverage that has often been at the foundation of many financial train wrecks (see mortgage market). Assume you are a $10/bbl balance sheet company. You buy 1 barrel of oil costing $100 and you only have to post $6, the market goes from $100 to $96, you are poised to sell quickly because you know if it goes to $90, you are out of business, so you start selling to make sure you can pull back your initial margin to cover your variance margin and live to fight another day (and likely lose as 90% of spec traders do). Now imagine the same scenario with $30 margin requirements. The market would never move enough for the trader to be concerned about not having enough initial margin to pull back to cover the variance. The fundamental/technical influence would shift hard back towards the fundamental. I am not certain exactly what the right margin increase should be (though 500% is not out of the question from my perspective), but it is clear that today the margin requirements are too low. The phenomenon of sharp spikes in the absence of attributing ``events'' is evidence of a highly leveraged market. 3. The government should create a government-backed exchange that helps long term consumers and producers hedge. If a small land owner owns a 3,000 bbl/day well in middle Kansas and wants to lock in his price at $95 a barrel for 5 years, how does he do it? Is he going to sell 5.5 million barrels of futures on Nymex and post $32,000,000 in initial margin? What happens if the price goes up $40 per barrel? Mr. Small Producer is going to pay the exchange $220,000,000 in margin and claw it back 3,000 bbls a day at a time? I think not. Right now some of the banks will do that business but they are enjoying ``healthy'' margins. If the government came in and provided the credit umbrella (through a government sponsored exchange) they would bring a lot of production to the hedging market and would also incentivize both producers and consumers to think long term. Users should have the opportunity to lock in costs for longer durations and sellers should be able to hedge out their revenue streams but credit, financing costs, and other structural factors remain impediments to development. While some might criticize this proposal based upon the recent issues in the mortgage markets, this would be an important reform to allow small businesses to participate in the commodities markets. Such liquidity was not the problem with mortgages, it was leverage, lack of transparency, complexity, and very simply in many cases dishonesty, that brought down the housing market. In general, all markets operate best when they are transparent, liquid and not over leveraged. I am hopeful that Congress will allow the Commodities Futures Trading Commission to proceed with the implementation of the Dodd- Frank Act. I strongly believe we will see positive effects from this regulation on not only the price of oil but many other commodities upon which our country relies. Sincerely, Joseph H. Petrowski,

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, last week, one of Massachusetts' leading citizens succumbed to a long illness, which she had courageously fought. Myra Kraft was the partner and wife of Robert Kraft, and co-owner of the New England Patriots. Under the leadership of the Kraft family, the Patriots became one of the great sports franchises in America, not simply because of their extremely impressive record of Super Bowl championships, but because of the honorable way in which they conducted their business, and because of the great contributions they made to their community. I have the honor of representing the Town of Foxboro, in which the Patriots play, and in which the Kraft family created a wonderful commercial complex that adds a great deal to the economic and cultural life not just of the town but of the entire region. Mr. Speaker, I've had the pleasure of walking through the complex with members of the Kraft family and I can report to you that the residents of New England--not just Massachusetts--are understandably great enthusiasts of the work the family has done. Myra Kraft was an extraordinary contributor to the society around her, not just through the work of the Patriots, but through her great charitable efforts. She was a leading member of the organized work of the Jewish community of Greater Boston, but her good works were not confined. All of Massachusetts will miss her, even those who did not know of the work she did, because she was not one to seek publicity for her efforts. And those of us who did have the privilege of knowing her are particularly saddened by her loss. Mr. Speaker, the Boston Globe for Friday, July 22, in its lead editorial expressed what our community feels about Myra Kraft and I ask that because she presented such a wonderful example of good citizenship in a democracy, that this editorial be printed. [From the Boston Globe, July 22, 2011] Myra Kraft Was a Role Model for Family Loyalty and Giving Bob Kraft, the developer turned football impresario, made the once-derided New England Patriots a symbol of local pride. Myra, his wife of 48 years, made the Kraft family a symbol of civic responsibility. Her numerous charitable works, including chairing the local boards of the Combined Jewish Philanthropies and the Boys & Girls Clubs, paralleled Bob's rise in the statewide business community The Krafts were an unbreakable unit. Bob and Myra's four sons shared in all their parents' endeavors. On May 3, the Greater Boston Chamber of Commerce honored the family for their work on behalf of the community, fueled by Myra's tireless exertions. She was too ill to attend the banquet, but her husband, sons, daughters-in-law, and grandchildren all stood proudly together on the dais--an honor guard of which any mother would be eternally proud, ``I got it right the first time,'' quipped Bob, referring to Myra, whom he married when she was just 20. Myra Kraft, who died Wednesday and for whom services will be held today made many contributions to the Boston area. Foremost among them is the example she set for family loyalty and shared commitment. It will live on not only through her offspring, but through others who tightened their own family bonds, even if in a small way, in response to her inspiration.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I could be persuaded as I would like to be, but I am the only speaker, and since I am defending the committee's position, I will reserve the balance of my time.

Mr. FRANK of Massachusetts. I yield myself such time as I may consume. Mr. Chairman, I appreciate the amendment. I've had a chance to think about it, and I am persuaded by its merits. I think this is a genuinely helpful amendment. But I do want to take this opportunity in this 5 minutes to talk about broader issues, and I do so, I will say--I would not extraordinarily have done this, to take this 5 minutes in this way, but the rule was so outrageously stingy in refusing adequate debate time on some central issues that we have no option but to use this perfectly reasonable amendment as an opportunity to say what we were prevented by the rule from saying. By the way, there's one part of the rule that should be mentioned that I didn't have time to talk about earlier. The regular order that my Republican colleagues promised has been beat up pretty good recently, and certainly by this rule. The Congressional Budget Office says that their effort to expand the head of the consumer agency to a five-member commission will cost $71 million over the 5-year period. Now, that violates their CutGo rule, but they don't care that much about violating their rules when it suits their ideology. But they found an offset. What's the offset? The offset is a bill that the House already passed to save money from the Federal Housing Administration, the FHA. So here's what they're doing. They're reaching back, and the rule retroactively merges the two bills. How's that for the regular order? It's a rule that retroactively takes a bill that already passed, saves money within the FHA, and instead of using that either for deficit reduction entirely or for easing people's ability to get housing, they use it to offset their extra bureaucracy here in this bill. Beyond that, I want to talk again about the fundamental issues. Some on the Republican side have apparently undergone a conversion. I don't want to not take ``yes'' for an answer. Apparently they are now in favor of an agency that they vigorously opposed last year and the year before. We had a special markup. The gentleman from Alabama incorrectly said he never voted against this. Well, someone claiming to be the gentleman from Alabama attended a markup when we voted on this in committee and voted against it, as did the gentlewoman from West Virginia, as did virtually everyone on the Republican side. Instead, they supported a substitute from the gentlewoman from Illinois which did nothing--well, I take it back. It said that all the regulators could get together, plus the Secretary of Defense, the Secretary of the Treasury--I don't know who else--and they could set up a hotline for consumers and have a Web site, but any information taken in would go back to those same regulators. So they have consistently opposed it, and that's why they're so wounded. How dare we say that they're not in favor of this agency? Because we were there when they tried to kill it, we there when they voted against it, and we understand that they don't want to see it go forward. They are prudent, however. They understand that it would not be a good idea to attack it head-on, so they're trying a sideways attack, most importantly by saying that the bank regulators--they wanted to leave consumer protection with the bank regulators. That was the Biggert substitute. The FDIC, the Federal Reserve more than anybody else, because they're the key bank regulator of consumer affairs--I don't know who came up with that--they would put the bank regulators back in charge of this agency by letting them overturn by majority vote anything the agency does. They say, Well, we're just going back to where you were. No, we were never for that. In fact, we're totally reversing. And now we have the amendment of the gentlewoman from New York, and the gentlewoman from West Virginia--you know, there's a children's book where somebody says, I can believe 10 impossible things before breakfast. Well, I'll give the gentlewoman credit for moderation. She only said one impossible thing before dinner. She said we must have a confirmation. Confirmation is important. She should tell that to her Senate colleagues. Forty-four Republican Senators, not the Senator from Massachusetts (Mr. Brown) or the Senators from Maine, Ms. Collins and Ms. Snowe, 44 of them, enough to filibuster, have said, We wouldn't confirm anybody. So I hope someone will explain to me: How can the manager of the bill get up and say confirmation is important, we can't allow this to go forward unless there's confirmation, we won't allow the powers to go forward unless there's conformation, knowing that there can't be confirmation, not because the President was late, as he was--and I was critical of him for doing that--but because the Republican majority says they won't confirm? And then they complain there might be a recess appointment.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 3 minutes to one of the leaders on this committee, the gentlewoman from California (Ms. Waters).

Mr. FRANK of Massachusetts. Mr. Chairman, I demand a recorded vote.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. My friend is unfair to the Republicans, because they do create more jobs in this bill. The CBO says this bill will cost $71 million because instead of the single administrator, they want to create four more bureaucrats, with more staff. CBO says this will cost $71 million. So, in fact, there are some jobs they're going to create. They will be for bureaucrats who can dilute the activity of the consumer bureau.

Mr. FRANK of Massachusetts. A point of order, Mr. Speaker.

Mr. FRANK of Massachusetts. I won't quite ask for them to take my words down, but the gentleman just simply misstated, blatantly, what I said. He said I want a single accountable czar. He was not quoting me. I said I wanted a single person.

Mr. FRANK of Massachusetts. It is that the gentleman misstated my words quite clearly, and I believe they should be taken down if he is not ready to rescind them.

Mr. FRANK of Massachusetts. First, I want to express my objection to the rule. The chairman of the Rules Committee said maybe I can get a unanimous consent agreement to modify it. All amendments are not created equal. This rule gives a total of 10 minutes for each amendment, five and five. That is simply inadequate-- grossly inadequate--for discussing some of these important issues. There are two amendments in particular where I will be approaching my colleagues in the majority to see if we can get an extension of time. If that is not the case, I will be very, very disappointed that major issues here on this important subject of consumer protection would be given only 5 minutes on each side. Now let's get to the substance. My Republican colleagues have had a little bit of a change of heart since last year. When we debated this bill in committee--actually, we debated it in 2009 in committee, this particular section--they wanted to kill the whole bureau. They were opposed to the notion of an independent consumer bureau. Understand where we are. Consumer protection has always, until last year, been consigned to the financial regulators. Indeed, the largest single share of consumer protection was given, of all entities, to the Federal Reserve--and it's been, at best, a second thought for them and for some a non-thought. And the Republican position during the debate on this was: Do not set up a separate agency. Now they say, well, we're not opposing a separate agency, we just want to dismantle it, in effect. So we will get into the specifics, but let's be clear: This is as close as they dare come now because of public opinion to abolishing the whole agency. They want to weaken it, and then they will want to undercut it altogether. Of course, this is the third major assault they've made on the financial reform bill. Yesterday in committee, incredibly the Financial Services Committee voted to reduce the liability that rating agencies will face if they put an inaccurate statement into a prospectus. And if you buy that security based on inaccuracies in the rating agencies, they want to lessen what we try to give people in the bill as a right to sue. And of course consistently the Republicans have voted specifically to deny to the Commodity Futures Trading Commission the funds that they would need to deal with speculation in energy. And Mr. Kingston, on behalf of the majority, said speculation's got nothing to do with the oil prices. No one believes that except apparently him and maybe those Republicans who voted with him. Today there is an assault on the most important thing that's ever been done to protect consumers in the financial area. Now the Republicans have been saying, we're not trying to kill it, we just want to make it work a little better. But last year--and I will put in the Record statements from about a dozen of the Republicans--Mr. Garrett, Mr. Hensarling, Mr. Price, Mrs. Biggert, Mr. Manzullo, Mr. Bachus, many others--making very clear they didn't want the whole agency. So this notion that they're just trying to improve it is belied by the fact that they tried to kill it. But even then, Mr. Bachus sometimes has trouble sticking to his own line. Here's what he said this morning on CNBC: ``We're not trying to kill it. That has been totally misrepresented. Republicans stand strongly behind consumer protection. We, however, think that safety and soundness has to be considered. So we don't worry about a Federal Reserve or an FDIC, but we do worry about a consumer protection agency whose sole goal is to benefit consumers without considering how that benefit affects the stability of our financial institutions.'' Well, it doesn't go the other way. They don't worry about what the financial institutions do to the consumers. But let me read again what he says, We do worry about a consumer protection agency whose sole goal is to benefit consumers without worrying about the poor banks. What the bill will do will be to put the bank regulators back in charge of consumer protection--and these are the bank regulators of whom Mr. Bachus, the chairman of the committee, earlier said the regulator's job is to serve the banks. So in roundabout ways they are trying to accomplish here what they admitted they want to accomplish before. The consumer agency does not have an aggressive role. It doesn't go out there and do things in a positive way; it is a protection agency. Now we passed a credit card regulation bill--and many on the Republican side were very opposed to that a couple of years ago; it has worked very well. One of the main authors, the gentlewoman from New York (Mrs. Maloney), is here. That has helped people, it hasn't hurt them. One of the things the consumer agency gets under our bill is the power to cover currently nonregulated entities--payday lenders, mortgage lenders--who aren't covered. Frankly, that's in the interest of the consumer. The Credit Union Federation likes much of the Republican bill, but they don't like the part that would slow down the takeover of regulation over their competitors. Bad mortgages were not just a problem for individuals, they were a problem for the whole economy. We want to strengthen the ability to go after bad mortgages. They don't want that to happen. So let's be very clear: This is a party, the Republican Party, that tried to kill this-- --

Mr. FRANK of Massachusetts. Madam Speaker, what we have is, as the statements that I am submitting show, the Republicans wanted last year to maintain the status quo in which the regulators of the banks--whose job it is, according to the Republican chairman of the committee, to serve the banks--would maintain this. And they worry about an institution whose sole goal is to protect consumers. He says, We don't worry about the Federal Reserve, we don't worry about the FDIC, we worry about an institution whose sole goal is to protect the consumers. They do understand that politically it's not a good idea to be fully straightforward about their intention--when they would really like to repeal it--but what they are trying to do instead today is substantially weaken it. And the most important thing they will do will be to put back in charge of the independent consumer regulator the very bank regulators who historically have not protected the consumer-- because some of them agreed with the chairman of the committee, the Republican chairman, that their job was to serve the banks--and it would substantially weaken consumer protection. I do not think that is the right way to go. Excerpts From the Financial Services Committee October 2009 Markup of H.R. 3126, the Consumer Financial Protection Agency Act Rep. Price ``I think more appropriately, this bill would be called `The Restricting the American Dream and Jobs Destruction Act.' And I say that with all sincerity, pointing out that there are multiple, multiple entities that cover literally millions of jobs out there, that have gone on record and said: This is absolutely the wrong direction in which to head at this time, especially this time, a time of remarkable economic challenge.'' Rep. Royce ``I'm afraid this legislation and the establishment of a product approval agency will create more problems than it's going to resolve, especially with respect to this safety and soundness.'' Rep. Manzullo ``This is not the time to have additional rules and regulations on products which are already regulated. And then, to take 400 million dollars away from the Federal Reserve, which could have outlawed 327s and 228s and the so- called teaser mortgages, it doesn't make sense. This is like cutting the police force by 20 or 30 percent. That's why I have a big problem with why we're even considering this bill when no agency wants it.'' Rep. Biggert ``What's the answer to the financial meltdown? How do we prevent it from happening again? What's not the answer is to create another federal agency. Allegedly, to protect consumers. We already have the OCC, the OTS, the NCUA, the FDIC and the Fed. The underlying bill would pile 50 state regulators on top of that. Why not address the real problem with these agencies instead of creating another one? Are we creating another agency or a problem? Are we creating a guarantee for consumers that they will certainly never be, or less likely to be, caught up in a bad financial situation? Or a product that they really shouldn't have signed the dotted line for? ``No, there is no guarantee.'' Rep. Bachus ``Mr. Chairman, I want to reiterate that I believe this underlying legislation creates a new large and expensive government bureaucracy with broad and ambiguous powers that will ration credit and limit consumer choice. The legislation gives this new agency and its czar-like chairman or director the power to impose both fees and taxes on all financial products, which are broadly defined. It is not about consumer protection. It is about creating a financial product approval agency with the powers to review and approve financial products. Real consumer protection must include consumer choice, competitive markets, vigorous enforcement of anti- fraud law, effective disclosure, and product innovation. Regrettably, that is not what the Democratic proposal does. Placing broad rule-making authorities in the hands of an untested agency will limit innovation and restrict credit . . . Congress should not create another layer of federal bureaucracy whose mission includes rationing credit and limiting choice.'' Rep. Bachus ``What we are creating here is a new Financial Products Approval Agency that has the power to review and approve all financial products. That means they have a right basically to fix prices because they may not approve them unless a certain price is agreed to. They could actually set a price. They can ration credit, whatever else the credit card legislation did last year and any benefit it had, it has already resulted in people's credit limits being lowered, it has resulted in interest rates going up on account, it has resulted in annual fees being imposed. Consumers today have a broader array of choices, and choice is good. Innovation is good. In fact, I think the greatest form of consumer protection is giving individuals a choice, if they have a credit card and they want to choose a different credit card or drop that credit card. This bill is going to limit competition. It is not about enforcing anti-fraud laws. It is not about effective disclosure. It is not about protecting people from unethical behavior. It is placing broad rulemaking authority in the hands of an untested agency, one that is going to be created from scratch, one that has no appreciation for safety and soundness, that has no history of financial regulation. Now is not the time to restrict choice and credit. It is not the time to start rationing these things. We have seen in health care proposals to ration health care. We have seen instances where the Government wants to come in and begin to regulate the energy and how we create energy and said no to nuclear energy. Now we see it in financial services. We are witnessing a broad expansion of Government interference and involvement. None of those things, it was not choice that created the financial crisis that we faced last year.'' Rep. Biggert ``You know, there is no question that our financial service regulatory structure is broken, and for both consumers and the health of our financial services industry and the economy, we need to clean it up. However, I fear that we are moving in the wrong direction when we strip from the banking regulators their mission to protect consumers; instead, we place the responsibility with a new government bureaucracy.'' Rep. McHenry ``What we have here is an agency that will restrict credit, will restrict new products from being offered, innovation in the private sector and in the financial marketplace, and in the end, it will hurt consumers, not help them. This is a credit constriction agency, not a consumer protection agency.'' Rep. Bachmann ``I would also like to add to the conversation that I too support the Biggert amendment, because the CFPA, in my estimation, it would ultimately increase the costs on American consumers and reduce the customized type of products that are available to them, increase costs, reduce the type of products.'' Rep. Hensarling ``Ultimately, we do not view this as a bill that promotes consumer protection. Ultimately, what we have is a brand new large draconian Federal agency with new sweeping powers that is going to have the ability to declare financial products and services unlawful based on subjective opinions about ``unfairness'' and subjective opinions about what is 'abusive.'' Rep. Neugebauer ``When you look at this bill, we're going to give unprecedented authority to one individual, who's not elected, to really, basically determine whatever kind of consumer protection rule or regulation that they want to put on the books. And they get to do that. You know, the American people send their Members of Congress up here to make those decisions. To look after their interests. And now, we're going to relegate that decision, that empower this one individual to do that. Somehow, I don't think that's in the best interest of the American people.''

Mr. FRANK of Massachusetts. Madam Speaker, if I had to stand up here and defend weakening consumer protection in the area of financial activity, I wouldn't be too eager to do it either. So I understand the absence of discussion here. Let me make one general point. When we legislate, you have to take history into account and what the balance is. The argument essentially of the Republican Party here is--and I wish it weren't partisan, but it is. They have made it partisan, not us. The position of the Republican Party is that there is a serious danger that we will overprotect the consumer. That the Federal regulators will do too much for the consumer. That's an extraordinary fear indeed to have. That's not a fear. It's a phobia. It is based on unreality. The fact is, as we've seen this now, we were able to get that legislation enacted with the brilliant work of Elizabeth Warren, whose nomination did not come as it should have, although I very much admire the man who was nominated, Mr. Cordray, but what we had was an unusual moment because the irresponsible practices of many, not all, in the financial community--and by the way, let me repeat: Much of the problem came from the unregulated, not from the financial institutions. And one of the things we do in this bill, which is supported by the Credit Union National Association, is to cover the unregulated so that community banks and credit unions which did not cause this problem are protected from the pressures of unfair competition by the unregulated. But what we had was an unusual moment in which there was a great deal of public awareness of the need to deal with this. So we were able to get an independent consumer agency through, over the unanimous opposition of the Republican Party. But as things go forward, the average citizen has got other things to worry about. So what we'll see is the bank lobbyists and the nonbank lobbyists and all the people who represent these mortgage lenders already trying to erode things. Apparently, my colleagues would like people to believe that they seriously think that the danger is we will protect the consumer too much. I defy anyone to show me a moment in American history when we did too much to protect consumers in the financial area. What we try to do here is to put something in place that will go against that overriding tendency to underprotect the consumer. And the Republicans say, Oh, no, we're for consumer protection. We're not trying to abolish this agency. Yes, they are. Let me cite the bill they sponsored last year. The gentlewoman from Illinois (Mrs. Biggert) supported the bill. What it did was, it would take the Federal Financial Institutions Examination Council, extend it to 14 members. It would put on there for consumer protection a whole range of Cabinet officers and others. And it would give them the power to study this issue. But it is very, very clear that this council would have no power. Here's what it says. This is the Biggert bill that was submitted instead of an independent consumer agency with enforcement powers. Page 5: No provision of this subsection shall be construed as conferring any enforcement authority to the Council. Here's what it does to come to the aid of the beleaguered consumer. It sets up a hotline. I don't know what movies they've seen, but I can't remember one where a hotline rode to the rescue of the imperiled. So they establish a toll-free hotline and Web site to contact regarding inquiries or complaints related to consumer protection. And what does this powerful council do with this important hotline? It refers the inquiries of complaints to the appropriate council member. You know who your council members are? The bank regulators, the Federal Reserve, the Comptroller of the Currency. So instead of having an independent agency--and yes, the chairman of the committee, Mr. Bachus, said, We think that safety and soundness has to be considered; so we don't worry about a Federal Reserve and FDIC. They had no interest in the fact that they underprotected consumers and allowed consumers to be abused, historically. We do worry, Mr. Bachus says, about a consumer protection agency whose sole goal is to benefit consumers without considering how that benefit affects the banks, because he believes the regulators are there to serve the banks. So here's the Republican plan. It takes the bank regulators, you throw in a few other Cabinet officers, you get it to an unwieldy size. You let them do studies, and you let them set up a hotline. You let them set up a hotline. What a powerful tool. And when things come in over the hotline, they then refer them back to the very same bank regulators who failed to do this. Now, that's what they really wanted. We were able to get this passed. And they know it's popular. They understand what the public thinks. The public does not think that the poor banks need to be protected against these rapacious consumers. So they come up with--instead of repealing it outright--with ways to weaken it. We ought to reject this because this particular bill is a proxy for what they really want to do--abolishing the whole agency.

Mr. FRANK of Massachusetts. First, Madam Speaker, I want to reassure the gentleman from Texas I don't think he's sinister. I think he is opposed to effective consumer protection. I think he and the other Republicans, some of them believe--the chairman of the committee--that the regulators are there to serve the banks. I do believe that they were opposed to it last year. And I appreciate his honesty, his approach towards openness when he said perhaps they're against it. Perhaps they're against it. They understood it would be a bad idea to go all out to try to weaken it. But let me respond to his point about confirmation. It's bogus, Madam Speaker. He said we're just trying to hold this up until there's a confirmation. But 44 Republican senators have announced that they will not allow any confirmation to go forward--they will filibuster it, and they have more than the 40 they need to do that--until the agency is weakened. They have said they will not allow it to go forward until we allow the bank regulators, who Republicans think are there to serve the banks, can overrule this. And they weren't just saying that about Elizabeth Warren. Forty-four Republican senators contradicted the gentleman from Texas. He talked about this wonderful confirmation process. It can't happen because 44 Republicans have said until we give in and weaken the agency, they won't confirm anybody.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. First, I would say the Comptroller of the Currency, which is in the Treasury for administrative purposes, is legally independent, and the Secretary of the Treasury has no right to interfere. The Comptroller of the Currency is not subject to appropriation; so the Comptroller of the Currency is even more independent.

Mr. FRANK of Massachusetts. The gentleman made a statement. I am ready to get to it. Do you want me to answer?

Mr. FRANK of Massachusetts. You made a statement about the Comptroller of the Currency, a statement which I thought was inaccurate, and I wanted to correct it. Now, as to Elizabeth Warren, yes, that's what she originally proposed, and I decided and others on our side decided that this would be more effective. We thought, after listening, that the five-member commission wouldn't work as well, particularly with the Senate refusing to confirm with the 44 Senators.

Mr. FRANK of Massachusetts. So, yes. We listened, and we decided it would be a stronger agency.