Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, I continue to be appalled by the spectacle of much of the conservative political movement in America attacking the man George Bush first appointed to head the Federal Reserve for his efforts to promote faster economic growth and a greater reduction in unemployment. Ben Bernanke's role in trying to cope with the economic disaster that the Obama Administration inherited from the Bush Administration has been productive and courageous. Consistently, he has refused to listen to conservatives, mostly although not entirely from the right, objecting to his efforts to provide the financial support needed for economic growth to go forward. Predictions that this would lead to ruinous inflation have proven baseless; the notion that this would lead to enormous losses in federal funds have also been refuted. Despite the record of success that the Fed has shown in these efforts, despite the fact that inflation is nowhere in prospect, despite the fact that when challenged by Republican Members of the Financial Services Committee in a series of hearings we held Mr. Bernanke was able to refute--easily--any suggestion that these measures could get out of control, documenting that he has thoughtful plans for containing them--despite all of this, leading conservatives have decided for reasons I cannot fathom, to join China, Germany, and other foreign nations in assailing Mr. Bernanke for efforts to improve our economic condition. The notion that a fear of inflation, given the current statistics, should prevail over efforts to stimulate economic activity and reduce unemployment is baffling, and if fully understood by the American people, will be certainly rejected. Yesterday, Madam Speaker, I inserted into the Record powerful arguments in defense of Mr. Bernanke from the New York Times Editorial Board and Martin Wolf of the Financial Times. I wish to add today to that list of thoughtful people who are defending the Federal Reserve Chairman against the China-German-right-wing Republican attack, an editorial from the Boston Globe, and a thoughtful article from one of our leading economists, Professor Alan Blinder of Princeton, himself a former Vice Chair of the Fed. A Global Chorus of Kvetchers The Federal Reserve's attempt to stimulate economic growth by purchasing $600 billion worth of long-term Treasury bonds over the coming eight months may not produe the hoped-for spurt in lending and investment. Cash-rich banks and other corporations seem worried more about anemic demand than the cost of money. But whatever the domestic effects of Fed Chairman Ben Bernanke's use of monetary policy to ward off deflation, the vehement criticism of the move from other countries is way off base. China, Germany, and Brazil have led the complainers' chorus. Tellingly, all three enjoy significant and growing trade surpluses. During the run-up to the G-20 summit in South Korea, they accused the Fed of a stealthy form of currency manipulation. In the case of China, the pot is calling the kettle black. China's propping up of the yuan in currency markets has been flagrant. The G-20 summit, which ended Friday, was justly panned for the failure of the world's leading economic powers to agree on measures to prevent each other from deliberately undervaluing their currencies to promote exports and discourage imports. Charges and countercharges abounded. Nonetheless, it was a positive sign that Chinese President Hu Jintao agreed to take specific actions to boost his country's domestic consumption of goods. This could herald a significant shift for an economy geared toward maximizing exports. And President Obama got the better of the argument about the Fed's effort to stimulate growth and create jobs in the United States. No one could refute Obama's contention that a ``strong recovery'' in America ``is the most important contribution the United States can make to global economic recovery.'' The disputes within the G-20 involve nettlesome matters and cannot be resolved quickly, The most positive sign to come out of the summit was a broad awareness of the need for continued consultation and cooperation to avoid a repeat of the protectionist policies that exacerbated the Great Depression. In those consultations, US officials are entitled to be unapologetic about defending the Fed's effort to promote growth in the US economy as an effort that serves the longterm interests of China, Germany, Brazil, and many other countries.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, Federal Reserve Chairman Ben Bernanke is playing an extremely valuable role in helping foster growth in our economy, and I am deeply disappointed at the extent to which many of our foreign allies--who have been such beneficiaries of America's goodwill--have attacked him not simply for the substance of what he was doing, but for even daring to take the interests of the American economy into account in his actions. Apparently there is a view in many parts of the world, including among our European allies, that it is America's destiny to be their protector and benefactor, and that for American officials taking important and constructive steps to help our own economy prosper must take second place. And while many of our allies have exhibited this attitude, I have seen nothing more blatantly hypocritical than for the Chinese Peoples Republic, the poster country for economic moves that completely ignore any sense of international obligation whether in currency, trade or in any other way, to criticize the United States for daring to take our own interests into account. I have also been surprised that a number of Americans, particularly on the conservative side, have failed to come to Mr. Bernanke's defense. This is a case where a man appointed to high economic positions by President Bush, and continued in that position by President Obama, and confirmed in that position by Senates under both Republican and Democratic control, is acting to promote economic activity in America. He is being criticized by a variety of foreign nations for this, and instead of coming to the defense of our right to act constructively on our own behalf, many conservatives have joined in the America-bashing that is going on. Madam Speaker, fortunately the understanding of the value of Mr. Bernanke's work--and its legitimacy--is clear in many places where thoughtful economic thinking prevails, and that is not only in the United States. Madam Speaker, I ask that the Record here reproduce an editorial from the New York Times, on November 9, 2010, entitled ``The Fed vs. the G- 20.'' Madam Speaker, the very fact that the title has to say that is a sad reflection on the failure of so many of those who have benefited from America's leadership and generosity to recognize our right to take responsible action to deal with our economy. In addition, I ask, Madam Speaker, that the Record also contain here an article from the Financial Times entitled ``The Fed is right to turn on the tap,'' by Martin Wolf, one of the most thoughtful and justifiably respected writers on economic affairs. [From the New York Times, Nov. 9, 2010] The Fed vs. The G-20 When President Obama arrives in Seoul, South Korea, on Thursday for the summit of the Group of 20 leading economies, he will be met by blistering criticism of the Federal Reserve's plan for ``quantitative easing''--pumping $600 billion into the weak American economy over the next eight months. Many nations are worried that a weaker American dollar would harm their export sectors and overheat their economies as more capital flows in, in search of better returns. Their fears are understandable but shortsighted. The Fed's move is a much-needed attempt to stimulate the American economy and head off deflation here. Prolonged stagnation, or worse, in the United States would turn off one of the main sources of global demand and global growth. By buying Treasury securities, the Fed aims to lower long- term interest rates and increase expectations of future inflation. This would spur households and businesses to spend and invest rather than hold on to money that will fall in value. The approach is not ideal. It would be better if fiscal policy were carrying some of the load of economic stimulus. Building new rail links and roads or other large job-creating projects would do more to promote growth than lowering the price of debt, as the Fed is doing. Republican Party leaders in Congress--for political and ideological reasons, rather than sound economics--have vowed to block all stimulus spending. China, eager for someone else to take the heat, is trying to equate the Fed's attempts at stimulus with its own long- term manipulation of its own currency. That may play well in some quarters, but it also makes no sense. Beijing has a policy to cheapen its currency to grow through exports, on the back of other countries' demand, while slowing its own domestic demand. The Fed's policy also weakens the dollar, but its objective is to boost demand at home. The pain caused by the falling dollar on the export sectors of many economies is real enough. Yet rather than criticize the Fed, the G-20 should focus on working out complementary policies. Washington should back plans by developing countries like Brazil to impose capital controls and slow the inflow of money fleeing low interest rates in rich countries. Europe and Japan, where growth is anemic and inflation virtually nonexistent, could try the same approach as the Fed. They need more stimulus than the United States. China should take this opportunity to shift course, allow its currency to rise against the dollar and rely more on consumption at home. That will be good for China and good for the global economy.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, attached is a Wall Street Journal article noting that the lack of credit was hurting many small businesses in our country. [From the Wall Street Journal] Loan Squeeze Thwarts Small-Business Revival (By Mark Whitehouse) Ypsilanti, MI.--Thomas Harrison, chief executive of Michigan Ladder Co., has a plan that would contribute to the U.S. economic recovery: Expand the 108-year-old company, adding at least 20 jobs in the process. His chances of getting the loan of $300,000 or more he needs to do so, though, depend in part on what happens to folks like home builder James Haeussler. Both are customers of the same community bank, the Bank of Ann Arbor. Mr. Haeussler is struggling to repay $8.3 million he and a partner borrowed to build a residential community in nearby Saline, Mich. In this economic environment, the bank doesn't want to take a chance on what it sees as a risky new loan to Mr. Harrison. ``In a world where Jim Haeussler makes it, Tom Harrison will make it,'' says Timothy Marshall, the bank's president. ``But it's not prudent to do both loans at this point in time. We're in a more risk-averse mode.'' Mr. Marshall's reluctance sheds light on a problem looming over the economy. A year and a half after the financial crisis hit, the U.S. credit machine is still malfunctioning. During the boom, credit was too abundant. Now the pendulum has swung. With an eye toward limiting such swings, Sen. Christopher Dodd is expected to unveil a bill Monday that would be especially tough on big banks while preserving the Fed's regulatory role, but the bill's prospects remain uncertain. For a recovery to take hold, hundreds of thousands of small businesses must find the confidence to expand and create jobs. But when they get to that point, the local banks they depend on--worried about borrowers' financial strength, scrutinized by regulators and slammed by souring real-estate loans--might not be willing or able to provide the credit they need. While big companies have been able to borrow in bond markets, smaller companies rely mainly on bank credit, which has been shrinking. In 2009, total lending by U.S. banks fell 7.4%, the steepest drop since 1942. In all, the credit pulled out of the economy by banks since the downfall of Lehman Brothers in September 2008 amounts to about $700 billion, more than double the amount so far distributed under President Barack Obama's $787 billion stimulus program. ``It's a dismal situation,'' says Diane Swonk, chief economist at Chicago-based financial-services firm Mesirow Financial. ``Banks won't lend to businesses because they're afraid they'll go bad, but that can become a self-fulfilling prophecy.'' The dearth of credit for small businesses could have a big effect on prospects for restoring the 8.4 million jobs lost since the recession began. From 1992 through the beginning of the latest recession, companies with fewer than 100 employees accounted for about 45% of net job growth, according to Labor Department data. Policy makers have been looking for ways to reopen the spigot. President Obama has proposed creating a $30 billion fund to support small-business lending. Last month, in an unusual show of solidarity, the Federal Reserve, the Federal Deposit Insurance Corp. and other state and federal regulators issued a joint statement urging banks to continue lending to credit-worthy small enterprises. Making sure small firms get access to credit ``is crucial to avoiding a Japan-type scenario of persistent stagnation,'' says Mark Gertler, a New York University economist who has done seminal research with Fed Chairman Ben Bernanke, then a Princeton University professor, on how troubles with bank lending can aggravate economic downturns. Getting banks to lend more won't be easy, given the rising tide of defaults on loans made to finance housing developments, office buildings, shopping malls and other commercial real estate. Deutsche Bank expects banks to suffer at least $250 billion in losses on such loans, with about half coming in the next few years. Together with an estimated $250 billion in further charge-offs on home mortgages, that's more than double banks' current reserves against losses on all types of loans. The stakes are particularly high for community banks, which tend to be much more active in commercial real estate than their larger counterparts. As of December 2009, such loans comprised about 42% of all loans held by the 7,344 banks with less than $1 billion in assets, compared to about 17% for the hundred or so banks with more than $10 billion in assets. Some bankers say policy makers' desire to encourage lending isn't always reflected on the ground, where they say bank inspectors are getting tougher about lending standards. ``For the first time in my 37 years in banking, we're having to say to our clients that we're not sure this will pass muster with the regulators,'' says Larry Barbour, president and chief executive of North State Bank in Raleigh, N.C. ``That's not healthy.'' Washtenaw County, Mich., which includes Ann Arbor, Ypsilanti and Saline, offers a glimpse of how the cycle of economic malaise and shrinking credit is playing out across the country. The county includes the Willow Run plant, where Ford Motor Co. once produced the B-24 Liberator bombers that helped win World War II, the University of Michigan football stadium, and hospital complexes and high-tech start-ups in Ann Arbor. As of December, Washtenaw's unemployment rate stood at 9%, close to the national average. Michigan Ladder's Mr. Harrison, 44 years old, remembers vividly the day in September 2008 when the recession hit home. The company, which manufactures wooden ladders and distributes imported aluminum and fiberglass models, had been doing well despite the financial crisis. Sales were up 6% over the previous year, and Mr. Harrison had expanded the company's staff to about 28, from 20 at the beginning of the year. But during the week of Sept. 15, the company's largest supplier of aluminum and fiberglass ladders suddenly refused to deliver ladders unless it was paid in advance. Within days, says Mr. Harrison, Michigan Ladder lost as much as $1 million of the supplier credit on which it relied to pay for raw materials and maintain its inventory of ladders. At the same time, its customers started failing to pay for ladders it had already delivered. ``Literally overnight, the whole world changed for us,'' says Mr. Harrison. ``It was simply too much of a shock--too much of a change, too quickly.'' He laid off eight workers in December 2008 and another eight in 2009 as sales fell 40%. Mr. Harrison has since lined up new credit from suppliers, and he says sales are on track to rise 15% this year. He thinks the time has come to implement the expansion project he shelved when the crisis hit. The plan: Produce in Michigan the aluminum and fiberglass ladders he currently imports from places such as Mexico and China. He already has the customers, and he calculates that manufacturing in Michigan will actually boost his profit margins, in part because the savings on shipping will offset the higher cost of U.S. labor. ``We can do this,'' he says. ``We can be a low-cost producer, and we will have a made-in-USA product, which we think will have some appeal to people.'' The Bank of Ann Arbor is Mr. Harrison's best bet to finance his project. Larger banks typically don't deal with companies the size of Michigan Ladder. Also, Bank of Ann Arbor, which has $543 million in assets, has weathered the crisis much better than most of its peers. It turned profits every year, expanded overall lending and declined the support of the government Troubled Asset Relief Program. The bank has made loans to finance expansions for some of its stronger customers, such as Solohill Engineering, which makes products used in the manufacture of vaccines and more than doubled sales in 2009. Nonetheless, says its president, Mr. Marshall, fears about a weak recovery are prompting even healthy banks to be careful, a trend he recognizes could help make those fears a reality. ``It's kind of a vicious cycle,'' he says. ``Anytime you're in an economic environment like we are, bankers are going to be more conservative.'' One of bankers' main concerns is the damage the recession has done to many companies' finances. Values of real estate and other things small business owners can put up as collateral for loans have fallen so far, so fast, that many businesses have little to offer. Also, a year or more of losses have eroded the value of owners' stakes in companies, leaving less of a cushion against bankruptcy. Mr. Marshall says such financial concerns are a big reason he's not ready to lend to Mr. Harrison, who says his company took heavy losses in 2008 before returning to profitability in 2009. Mr. Harrison says he's exploring ways to raise new money from investors, but so far to no avail. ``It's not reasonable to expect that [the Bank of Ann Arbor] can make up for all the credit companies like ours have lost,'' he says. Mr. Harrison's credit difficulties also are linked to the travails of other borrowers such as Mr. Haeussler, the 51- year-old president of Peters Building. In 2005, he and a partner began developing a 625-acre piece of land known as Saline Valley Farms, the site of a cooperative farm in the mid-1900s. The downturn hit Mr. Haeussler hard in 2007, when home builder Toll Brothers called with bad news: It wouldn't exercise its option to purchase 93 luxury-home lots, the entire first phase of the Saline Valley Farms project. When the $8.3 million loan he and a partner had taken out to grade the lots and build infrastructure came due in late 2008, they still owed $6.7 million and had 76 empty lots, the estimated value of which had fallen to about $1.4 million. ``It was perfectly wrong timing,'' says Mr. Haeussler. Losses on loans to developers such as Mr. Haeussler have taken a toll on community banks, eroding their capital and limiting their capacity to make new loans. Bank of Ann Arbor has moved more quickly than other banks to recognize losses, charging off nearly one-quarter of its construction and development loans in 2009. That compares to about 5% for all banks. In its remaining portfolio of such loans, about 6% are delinquent, compared to about 16% for all banks. Many community banks are renegotiating troubled real-estate loans. In Mr. Haeussler's case, the Bank of Ann Arbor cut a deal: In return for a four-year extension, Mr. Haeussler and his partner more than quadrupled the amount of collateral backing the loan, putting up the entire Saline Valley Farms project and more. Even with the added collateral, the bank charged off $2.1 million of the loan, effectively recognizing that it may never get the money back. The bank figures that giving Mr. Haeussler more time increases the odds he will pay off his loan. But such deals tie up cash on what essentially are bets that existing borrowers will make it through. That leaves banks, including Bank of Ann Arbor, with less appetite to make new loans to customers like Mr. Harrison, who doesn't have the resources Mr. Haeussler and his partner used to secure their loan. Mr. Haeussler, for his part, says he's trying not to think too much about all that's hanging in the balance, which could include his entire business. ``It's a little unnerving at times,'' he says. ``But you just have to put your head down and work through it.''

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, earlier today while the House was voting, I was presiding at a meeting with the Secretary of Commerce, Mr. Locke, and several people from the fishing industry, as well as some of our colleagues from the Senate and later from the House. It was a very important meeting affecting the future of our fisheries, and it was impossible to get another time when we could all get together with Secretary Locke, and there were people from the fishing industry and the mayor of New Bedford who had come up. For that reason I missed five votes. I missed the votes on H.R. 5307, 5756, 3199, 1745, and 5710. I would have voted ``yes'' on all of them, and fortunately, I wasn't needed because they all passed handily without me. But I did want to explain that I missed those votes because of my need to be at this very important fisheries meeting.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, I yield myself 1 minute to say that this is a bill that passed the House in May; it was over in the Senate; it was subject to a filibuster; that filibuster was broken; and the Senate has sent us back the bill. It is not everything we wanted, but it is a significant improvement and will, I think, be helpful. No one has alleged any possible negative consequences. Some have said it might not be as helpful as we believe, but we think it will enhance the lending capacity of small banks for small businesses. I reserve the balance of my time.

Mr. FRANK of Massachusetts. Madam Speaker, I further ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and include extraneous material on this piece of legislation.

Mr. FRANK of Massachusetts. Madam Speaker, I ask unanimous consent that I substitute for the gentlewoman from Illinois on managing our 10 minutes.

Mr. FRANK of Massachusetts. The gentlewoman is correct.

Mr. FRANK of Massachusetts. Madam Speaker, let me inform my colleague that I intend to close with my remaining 4 minutes, and I'm my last speaker. I will close; so I reserve the last 4 minutes to close.

Mr. FRANK of Massachusetts. I yield the gentleman 30 additional seconds.

Mr. FRANK of Massachusetts. I thank the gentlewoman for yielding.

Mr. FRANK of Massachusetts. I yield the gentlewoman 1 additional minute. Yes, the gentlewoman is exactly correct. It is intended that this be treated as tier 1 capital in a way that is consistent with other capital securities issued to Treasury.

Mr. FRANK of Massachusetts. Madam Speaker, I yield myself the balance of my time. First, this bill deals with the particular needs of minority women and veteran-owned small businesses. I want to point out that we have had hearings documenting the barriers and the discrimination that face small businesses that are owned by minority women or service-disabled veterans. There were hearings on this. There is evidence that they have a harder time and get less value for their loans. I want to make clear that we have looked at that, and our inclusion of provisions for that is based on our evidence. Secondly, I have to say that my colleague from Texas is to be congratulated on his selectivity. He manages to do more partial quoting of people's positions than I get on my cell phone in a bad reception area. For example, he talked about the Independent Community Bankers. You might have had a hard time, listening to the gentleman from Texas, figuring out that they wrote us a letter dated September 22. Maybe they changed their mind overnight and talked to the gentleman from Texas, but I am skeptical. In the letter they say this bill: ``. . . is a bold, fresh proposal that would provide another option for community banks to leverage capital and expand small business credit.'' The Independent Community Bankers, whom he sought to quote denigrating this bill, are very much in favor of this bill. The National Association of Home Builders likes the concept, although they were upset with one of the things that the Senate left out. The Financial Services Roundtable--and here is the problem when taking a partisan stance: You have to over-argue your case. If you listen to the gentleman from Texas, there are no small businesses anywhere that would like to get a loan but can't find it from their bank. Now no one, including the gentleman from Texas, believes that is true. I have to say that my advice to my colleagues is, even in the heat of a political debate, try to refrain from saying something that no one will believe because it is not helpful to your argument. Yes, there are cases where there are banks that have enough capital. There are cases where there are companies that are afraid to lend. But what the gentleman has said goes far beyond that: There are no significant number of small businesses in America that are encountering problems because there are banks that don't have enough capital. No one believes that. Now here is the problem. We have people who do not want to see anything get better. The gentleman from Texas (Mr. Hensarling), I will credit him because he didn't talk much about this bill. He complained about a lot of other bills. I understand that. He, I think, quite honestly realized there was not a lot of bad things to say about this bill. The worst they can say about this bill is it might not be used as much as we think. I disagree. In this vast economy, $30 billion is not a huge amount of money from the standpoint of the small business borrowers. Now, this bill is not what I would like it to be. The gentlewoman from New York (Ms. Velazquez), the chair of the Small Business Committee, improved this bill significantly in the House. And this is not as good a bill as it came back from the Senate as it was before. I am going to be working with her. I intend to vote for this bill to give the Senate another chance. I don't like to give up on people or institutions. I believe in redemption, and we will give the Senate a chance to get it right. But let's be clear. The Independent Community Bankers are for this. Other small businesses are for this. The argument that no small business anywhere in America has capital that they need and can put to use and can't find a bank, that simply isn't valid. On uncertainty, I understand the problem of uncertainty in taxation. You know what the uncertainty is? What's going to happen to the Bush tax cuts. And whose fault is that uncertainty? President Bush and his Republican allies, who passed a manipulative, book-cooking tax cut that they said would last 10 years. I didn't say that it should last for 10 years and then expire. I didn't say that the estate tax should be a dipsy-doodle that went up and down and up and around. That is what the Republicans did because they were trying to hide from the American people the full budgetary impact of their taxes. Let's pass this bill, do what we can for small businesses, and go on to other work. Independent Community Bankers of America', Washington, DC, September 22, 2010. Hon. Nancy Pelosi, Speaker of the House, House of Representatives, Washington,

Mr. FRANK of Massachusetts. I yield 3 minutes to one of the leading advocates and architects of this bill, the gentlewoman from Illinois (Ms. Bean).

Mr. FRANK of Massachusetts. Madam Speaker, I yield 1 minute to the gentleman from Missouri (Mr. Cleaver).

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, I move to suspend the rules and pass the bill (S. 3717) to amend the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940 to provide for certain disclosures under section 552 of title 5, United States Code, (commonly referred to as the Freedom of Information Act), and for other purposes.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. I think on that you will get cover from the gentleman from California (Mr. Issa).

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

Mr. FRANK of Massachusetts. Madam Speaker, this is a bill that reflects cooperation not just between the parties but, sometimes even harder to achieve, between committees. This is a joint product of deliberations among the gentleman from Alabama, the ranking member of the Financial Services Committee; myself; and other members--Mr. Campbell of California, for example, and the chairman and ranking member of the Committee on Government Reform and Oversight, Mr. Towns and Mr. Issa. This goes back to 2006. In that year, Christopher Cox, then the chair of the Securities and Exchange Commission and our former colleague, sent to the Congress a request that we give an amendment to the SEC law dealing with freedom of information. And it was an entirely reasonable request. What they said was, the SEC from time to time obviously gets information from private entities that they are investigating. What they were afraid of was the company saying, But, you know what, if you take our data, it will then be a matter of public record, and we may have proprietary information; we may have information that we have every legal right to keep confidential, competitive reasons to keep confidential; and, therefore, unless you can assure us that this will not be made public, we're going to fight you. And that made it harder for the SEC to get this. So it was particularly the enforcement arm of the SEC that asked for it. When Mr. Cox asked for it in 2006, no action was immediately taken. But in 2008, the House did unanimously pass the bill on a voice vote in a suspension granting that power. It never got acted on in the Senate. Last year, 2009, both the House and the Senate included that provision in our versions of the financial reform bill. Although the financial reform bill was obviously heavily debated between the parties, no one on either side raised any objection to that provision, which had been out there in plain sight, because it was seen as enabling enforcement. Subsequently, a lawsuit was brought by Fox Business News against the SEC involving information as to how they handled the Madoff case. Of course, the answer, as we all know, is the way they handled the Madoff case is they didn't until far too late. What happened then was Fox News brought a lawsuit. And someone at the SEC inappropriately cited this provision, which had been enacted in the financial reform bill, as a reason why they couldn't go along with the lawsuit. As I noted, this had been in both Houses' versions. It was in the conference report. It sat there. So I want to be very clear nothing about the adoption of this exemption from FOIA was underhanded or secretive. It was out there and publicly debated. None of us knew, perhaps could have known, what the implications were. Once that became clear, a consensus developed that this was an exemption that was far too broad. We then talked about what to do about it. But as Members know, we are in a short session now, with only another week after this to go. Doing this right is somewhat complex because there are some subtleties. Here is the point we want to make clear: we don't want the SEC at any point to be able to shelter information about what it's doing. On the other hand, we don't want a situation where if company A is suing company B because company B's data had been requested by the SEC for some unrelated purpose, we don't think company A should be able to get easy access to that data when they otherwise could not have gotten it under our law. We all talked about this, but we also thought it was very important to set the principle that there were no exemptions from the SEC. In defense of Chairman Schapiro, she promulgated rules that made it very clear that the SEC would never invoke it. And when she testified before our committee, she made a point of saying that it would never be used in the Fox lawsuit. But it was not enough for us. Even those who agreed with the guidance subsequently pointed out it could be changed in a further period. So we all agreed it was important to act. While we were deliberating, something which we are not used to, frankly, happened. The Senate moved quickly. Let me repeat that: the Senate moved quickly. Last night, the Senate adopted a version of a fix for this, an amendment substantially narrowing it, sponsored by the gentleman from Vermont (Mr. Leahy), the chairman of the Judiciary Committee. Over there the Judiciary Committee did it. The bill he got the Senate to pass is substantially similar to a bill that was drafted by, or introduced by, our colleague, the gentleman from New York (Mr. Towns), the chairman of the Government Reform Committee. The gentleman from California (Mr. Issa) had another very vigorous approach to this. We had a useful hearing in which it became clear to us that the exemption went much too far, but there was this issue that we talked about of not allowing this to be a way around legitimate protections for business A and for business B. Making it very clear that the SEC would never be protected by it, that whistleblowers would not be harmed by it, but we had that narrow fix. What we decided to do, and I know the gentleman from California (Mr. Issa), the gentleman from Alabama (Mr. Bachus) are here, Mr. Towns has agreed with us, the four of us agreed, of the two committees of jurisdiction, that the best thing to do in this climate was to accept the Senate bill. Yes, we would make some changes if we could, but this is a very important issue for public confidence. We did not want to risk this bill dying in a House-Senate disagreement. So what we are proposing to do here today is to accept the bill that Senator Leahy put forward, send that to the President, which we hope he will sign. We will then begin, among the two committees, and in a totally bipartisan way and involving both committees, come up with language that will do the one thing that we think needs to be done to prevent this from being a pawn in an intercompany lawsuit, and at the same time that will, we think, serve the SEC's legitimate purpose of not engendering resistance to their request. I note we have been joined by the gentleman from New York (Mr. Towns). I reserve the balance of my time.

Mr. FRANK of Massachusetts. Madam Speaker, I yield such time as he may consume to my colleague and coworker on this, the chairman of the Oversight and Government Reform Committee, the gentleman from New York (Mr. Towns).

Mr. FRANK of Massachusetts. Madam Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks on this matter and to insert therein extraneous material.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, the Financial Services Committee continues to work hard throughout the 111th Congress; fulfilling the pledge our New Direction Congress has taken, with your leadership, to restore fiscal discipline and accountability in the stewardship of the Federal budget. I am pleased to provide an update since my letter on May 26, 2010, on what our Committee has specifically done to promote efficiency and prudent government reforms while reducing waste, fraud, abuse and mismanagement with respect to government programs and agencies within our jurisdiction. As of this week, we will have held over 65 oversight hearings that achieve these objectives. A list of recent oversight hearings that fully comply with the Rules of the House, as required by H. Res. 40 sponsored by Representative John Tanner, is attached. These hearings have directly resulted in stronger transparency and protections for U.S. taxpayers, including increased returns from the TARP warrants program, vigorous oversight of the conservatorship of Fannie Mae and Freddie Mac and the future of housing finance, and other key areas where taxpayer dollars are at stake. As you know, this Committee played a key role in fully protecting taxpayers and rooting out waste, fraud and abuse with our work producing the Dodd-Frank Wall Street Reform and Consumer Protection Act, which the President signed into law on July 21, 2010, P.L. 111- 203. This historic new law overhauls and strengthens the financial regulatory system, ending the need for taxpayer-funded bailouts while better protecting consumers, investors, and taxpayers. For example, with the new Consumer Financial Protection Bureau, the law consolidates and strengthens consumer protection duties by streamlining powers previously scattered across too many agencies. From an oversight perspective, the Wall Street Reform Act will help curb waste, fraud, and abuse by creating a new Council of Inspectors General on Financial Oversight, which will improve coordination of financial agency Inspector's General and help them identify any gaps or weaknesses in financial regulation. Additionally, with the inclusion of a version of Representative Steve Driehaus' legislation--H.R. 3330, the Improved Oversight by Financial Inspectors General Act--the law provides Inspectors General with more flexible and reasonable reporting requirements so that vital financial agency programs, such as foreclosure mitigation and anti-terrorist finance efforts, will be properly monitored to fully protect taxpayers. The law also grants these Inspectors General with more independence and accountability, ensuring taxpayers have the best watchdogs monitoring financial regulatory activities. Finally, over 40 mandatory Government Accountability Office reports and studies were included in the law so that the implementation is closely monitored and will maximize efforts to eliminate waste, fraud and abuse throughout the reformed financial regulatory apparatus. A full list of those GAO reports is attached. In addition, in July the House initiated and the President signed into law, P.L. 111-229, statutory authority for the Federal Housing Administration (FHA) to raise loan fees to help shore up the FHA Fund. The Office of Management and Budget estimates that this could save taxpayers at least $250 million a month. The House has also adopted the ``FHA Reform Act of 2010'', H.R. 5072, which gives the Department of Housing and Urban Development increased powers to impose sanctions and terminate FHA lenders which are not following program rules or otherwise increasing risk to taxpayers on FHA loans they originate. This bill is pending in the Senate. We look forward to continue working with you and the rest of our colleagues in the 111th Congress to strengthen accountability, transparency and taxpayer protections through future oversight efforts. Attachments. [GRAPHIC] [TIFF OMITTED] TH15SE10.001 [GRAPHIC] [TIFF OMITTED] TH15SE10.002 [GRAPHIC] [TIFF OMITTED] TH15SE10.003

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, I am from time to time asked to write to help explain why a particular organization is giving an award to a particular individual. In this case, the reverse would be in order: that is, if an organization dedicated to providing first-rate housing for older people was not to honor Ellen Feingold that would demand an explanation. After a distinguished career as an advocate and administrator, Ellen took on the job of running Jewish Community Housing for the Elderly. And I can think of no better career move--not for Ellen, but for the thousands of people who are the beneficiaries of her enormous talent, great compassion, and inexhaustible supply of common sense. At a time when the whole notion of an important public sector role in improving the quality of our lives, especially in cooperation with private sector activity is under attack, the great work Ellen did at JCHE becomes even more important than the work itself. That is because it stands as an example of what can be done when talented people use the resources of both the private and public sectors to achieve great results. Ellen is entitled to take great comfort in the fact that so many thousands of people live better lives than they otherwise would have had she not done her work.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, I rise to acknowledge the achievements of Mr. Robert L. Cammarata on the occasion of his retirement as Director of the City of Taunton Department of Human Services. A tireless and dedicated community leader, Robert Cammarata's career epitomizes public service. He has distinguished himself with his hard work for the people of Massachusetts, and I congratulate him on his accomplishments. Mr. Robert L. Cammarata was born in 1948 in the village of Ossining, New York. His family moved to the City of Taunton in 1955. Mr. Cammarata served his country as an Army Reservist. He received his Bachelor's Degree in Human Services from New Hampshire College. He is the proud father of Robyn Cammarata Bryant and Thomas Cammarata. Mr. Cammarata began employment with the City of Taunton in 1974 as the Director of the Taunton Council on Aging. Following a merger of City Departments in 1982, he became the Director of the Department of Human Services. During his tenure, Mr. Cammarata has developed and instituted a variety of programs and services for the citizens of Taunton. He was instrumental in expanding services for seniors of Taunton, including but not limited to, transportation, health programming, nutrition programming including both home delivered meals and site meals, in-home mental health services, bilingual services, nursing services and social and recreational programs. Notable programs that Mr. Cammarata instituted or facilitated include the Elder Outreach Program, Dial-A-Ride, Home Delivered Meals Program, the Elder Mobile Outreach Team for mental health services, Computer & Internet Center for Elders and the UMass Community Nursing Program. As Human Services Director, Mr. Cammarata also helped conceive, provide and expand many programs for all citizens of Taunton. Noteworthy programs include: the Taunton Safe Neighborhood Initiative, which includes the Community Policing Program, Crime Watch Program, Graffiti Removal Program and was instrumental in assuring communication between policing entities, probation departments, school departments, human services and clergy; Jobs for Youth Program; provision of Basic Needs that included food pantries, emergency utility assistance, emergency rental/mortgage assistance and the establishment of the first homeless shelter in Taunton. Robert Cammarata was a member of many local, regional and statewide organizations and committees. Locally and regionally, he served as Board Member, Chairman, coordinator and/or as a general member of the Taunton Safe Neighborhood Initiative, Taunton Emergency Task Force, Greater Attleboro/ Taunton Regional Transit Authority, Bristol Elder Services, Inc., Advisory Council, Greater Taunton Health and Human Services Coalition, St. Francis Samaritan House, Bristol Plymouth Regional High School Council, Italian Social Club and the Kiwanis. Statewide, Mr. Cammarata was a Chairman/Board Member of the Massachusetts Councils on Aging, Cape and the Islands Regional Councils on Aging, Local Officials of Human Services Council and a member of many committees through the Executive Office of Elder Affairs. In 2006, Mr. Cammarata received the Council on Aging Director of the Year from the Massachusetts Councils on Aging. Over his thirty-four years of public service, Robert L. Cammarata has assisted many elders, individuals and families in accessing needed services to assure that they live safe, healthy, happy and productive lives. He has mentored many human service professionals during his life and we honor Mr. Cammarata for who he is and what he has accomplished.