Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Chairman, I rise to claim the time in opposition.

Mr. FRANK of Massachusetts. I yield myself the balance of my time. Yes, that is exactly the issue. The gentleman says, surprisingly to me, we want to increase the availability of credit. Let's understand the problem. Too many loans were made to people who shouldn't have gotten them. In some cases it was the fault of the borrower; in some cases it was the fault of the lender; and in some cases the fault lies elsewhere. Yes, one of the important purposes of this bill is to reduce the pattern of people getting loans who shouldn't have gotten them because they couldn't repay them. So to say that the purpose of this bill is to increase the availability of credit, is it to have more subprime loans, more borrowers who can't pay back? Now you want to do it with balance and you want to do it in a reasonable way. I believe we deal with that. If there are questions do we go too far one way or the other, those are legitimate. We discussed a lot of those in committee. There were a lot of amendments that were adopted. But I accept my colleague from Georgia's definition as the heart of the matter: Does this bill, if it is enacted, mean that fewer mortgage loans will be granted going forward than were granted in that period from 2002 to 2006, as the gentleman from Texas' amendment shows, when subprime mortgages shot up? I hope so. I hope that we will have fewer mortgages granted to people who couldn't have paid them. Now other people, we hope things will go better. With the FHA piece, we hope to do even more in making credit available.

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

Mr. FRANK of Massachusetts. Mr. Chairman, in the absence of anyone else, I will claim this time in opposition.

Mr. FRANK of Massachusetts. Yes.

Mr. FRANK of Massachusetts. I yield 3 minutes to the gentleman from Florida (Mr. Wexler).

Mr. FRANK of Massachusetts. No, it says ``qualified mortgages.'' But part of the problem has been that people got mortgages with bad judgments by the people who made them.

Mr. FRANK of Massachusetts. Madam Speaker, on that I demand the yeas and nays.

Mr. FRANK of Massachusetts. There are some basic rules like the ones of debate. Also, the fact that I said that to empower any prosecutor anywhere, at any level. And this isn't about ACORN. We don't sit here to judge on this or that organization. The gentlewoman said we don't judge guilt or innocence. Well, the amendment tries to do that. The amendment says: a guilty finding by statute; in the absence of a guilty finding, in a court of law. Because if there's a guilty finding in a court of law, under my amendment, then this denies funding to people. There are a lot of prosecutors. And it's not just ACORN. There are a lot of organizations, including political parties in the State of New Hampshire, near me. The Republican Party operatives were convicted of election fraud. I don't think that means you go after everybody else. It certainly didn't mean pending indictment you do this. There ought to be a bright line between penalties for indictment and for conviction. Now if the amendment had said a pattern of indictments, that's a different story. It might have been a better argument. But this says a single indictment of any individual by any prosecutor for any organization anywhere in American has these negative consequences. I think we have seen enough of prosecutorial misconduct, whether it was Senator Stevens or whether it was Members on both sides of the aisle, whether it has been organizations that have been prosecuted. I don't think we want to set that principle. Remember, this is precedential. Once we set as a body the legal principle--apparently, it was in the earlier bill. It shouldn't have been. If I missed that, I apologize. I want to now repudiate the notion that the action of a single prosecutor who may be politically motivated to indict anybody anywhere for election fraud, disables that organization, forces the organization to fire an individual who may later be vindicated. Yes, the gentlewoman said one of the employees of the organization that has motivated her amendment was convicted. My amendment says: in that case, you either fire the person or you lose the money. Conviction ought to be the standard. But a single indictment by a single prosecutor anywhere, I do not think that is the rule of law under which Americans wants to live. I yield back the balance of my time.

Mr. FRANK of Massachusetts. Madam Speaker, I believe it was premature to ask for a recorded vote because I had not yet been given my time and maybe cooler heads will prevail.

Mr. FRANK of Massachusetts. Mr. Chair, I have told the gentlewoman I would not yield. Could she be instructed that that is the answer that she's going to get, and to stop interrupting?

Mr. FRANK of Massachusetts. Mr. Chairman, the gentleman from Alabama has very accurately stated this. He worked with us until we got an amendment that did some good, that avoided some problems we thought we would have. So I hope the amendment is agreed to.

Mr. FRANK of Massachusetts. I yield to the gentleman for 30 seconds.

Mr. FRANK of Massachusetts. The issue is this: the gentlewoman, I think, inaccurately says, Are you for ACORN or the American people? This bill says nothing about ACORN. This bill says that approved HUD counseling agencies and State financing agencies can make the choice. What I think the amendment says is this: Are you for the principle of American justice that says the mere institution of an indictment by any prosecutor anywhere, at any level?

Mr. FRANK of Massachusetts. Yes, in the absence of any other Member, I will seek the time in opposition.

Mr. FRANK of Massachusetts. No.

Mr. FRANK of Massachusetts. The gentleman is correct. This does resolve the PAYGO issue. It makes it clear that this is not mandating, it's encouraging and that solves the problem.

Mr. FRANK of Massachusetts. If the gentleman would yield, he said he is sorry the other body didn't move. There's a lot of that going around

Mr. FRANK of Massachusetts. No. The conviction triggers it. No question. That's what is in the amendment. My amendment says if you are convicted, it's triggered. But to say that any individual who works for any organization who's indicted, shuts it down. The gentlewoman said, Are you on the side of ACORN?

Mr. FRANK of Massachusetts. I yield myself such time as I may consume. The gentlewoman from Minnesota said, ``Do we want to allow funding for people who employ people who are under investigation?'' Yes. I don't want to live in a society where the mere instituting of an investigation by any prosecutor anywhere shuts down lawful activities. Now, she said an organization that's under indictment, but the amendment goes far beyond that. Any individual member of an organization, no matter how far flung, apparently, according to the gentlewoman from Minnesota, if an investigation begins of anybody, you shut them down. The gentlewoman from Minnesota mentioned someone who has been convicted. Under the amendment I offered, that would end it. We would either have to fire that person or lose the funding.

Mr. FRANK of Massachusetts. I appreciate the gentleman accommodating my objection. I support the recommit, and I hope it is adopted.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I ask unanimous consent that in the engrossment of H.R. 1728, the Clerk be authorized to correct section numbers, punctuation, and cross-references, and to make such other technical and conforming changes as may be necessary to accurately reflect the actions of the House.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, as I was saying, the notion that the differences between the parties is irrelevant, I understand why, given the Republican's record, they want to argue this. The fact is, yes, the gentleman from Alabama had a good idea. He was chairman of the subcommittee during the 12-year period and could have brought it to the floor. But because of the Republican position that no regulation was appropriate, he couldn't do that. The gentleman from Texas said this was a very good idea. I agreed; that's why I supported it. By the way, the gentleman from Texas voted against the bill, along with two-thirds of the Republicans that embodied it. So we wouldn't have had it if he had carried his way. But the fact is that for 12 years after the subprime crisis broke, the Republican Party wouldn't allow the gentleman from Alabama, who was then chairman of the subcommittee, to bring his bill up. We did bring the bill up, yes, in a bipartisan way. Unfortunately, the gentleman from Alabama was then criticized by Members of his party on the conservative side and has been forced to withdraw it a little bit.

Mr. FRANK of Massachusetts. Differences between the parties are relevant. For 12 years, the Republicans wouldn't allow the gentleman from Alabama to bring his bill to the floor. In our first year, we did and I was glad to work with him, but it was a minority position opposed by the great majority of the Republicans, including the gentleman from Texas.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Chairman, I would say this: I note my Republican friends tell me they are opposed to predatory lending. At no point, however, have they taken any initiative in bringing any legislation to the floor to deal with it or to urge that it be done in a regulatory way. For 12 years they were in control, not a single bill came forward. My friend from Alabama did have a sincere interest here, and he had a good proposal. It wasn't until the Democrats were in the majority and we brought a bill to the floor that he was able to offer his bill, which we embraced. And even then, while he voted for the final bill, two- thirds of his colleagues voted ``no.'' Now, some have said this is going to do terrible damage to the mortgage market. I think Members would agree that no organization is more interested in having that well functioning than the National Association of Realtors. Mr. Chairman, I submit for the Record a letter from the National Association of Realtors dated May 5, 2009. National Association of Realtors, Washington, DC, May 5, 2009. House of Representatives, Washington, DC. Dear Representative: On behalf of the 1.2 million members of the National Association of REALTORS (NAR), their affiliates, and property owners, I strongly urge Congress to vote ``yes'' on H.R. 1728, the ``Mortgage Reform and Anti- Predatory Lending Act of 2009''. REALTORS are acutely aware that there is a need for mortgage reform, and NAR believes that H.R. 1728 strikes an appropriate balance between safeguarding the consumer and making sure consumers have access to mortgages at a reasonable cost. NAR is a strong advocate of protections for consumers in the mortgage transaction, and REALTORS support the general principle that all mortgage originators should act in good faith and with fair dealings in a transaction, as well as treat all parties honestly. REALTORS have a strong stake in preventing abusive lending because it erodes confidence in the Nation's housing system, and citizens of communities, including real estate professionals, are harmed whenever abusive lending strips equity from homeowners. As consumer abuse in mortgage lending increased, REALTORS sought to protect consumers and the housing market by establishing a set of ``Responsible Lending Principles'' that form the basis for our advocacy with Congress. Since their creation in 2005, REALTORS have shared these principles with Congress during discussions of current and past anti-predatory lending legislation. NAR is extremely pleased that H.R. 1728 embodies the REALTORS ``Responsible Lending Principles''. Therefore, NAR strongly supports H.R. 1728, and asks that you indicate to consumers and the housing market your support for them by voting ``yes'' for this legislation. I thank you for the opportunity to voice our support for H.R. 1728. And as always, NAR remains at the call of Congress, and our industry partners, to help in the recovery of the housing market and the overall economy. Sincerely, Charles McMillan, CIPS, GRI, 2009 President, National Association of REALTORS. The National Association of Realtors strongly urges people to vote for this. The National Association of Realtors--knowledgeable and committed to homeownership--strongly supports this. My friend from Alabama alluded to some consumer groups, labor groups that had some problems. They have since largely been alleviated. I must say, if we would alleviate them further, he would hate the bill more. But the fact is that the groups he alluded to are, on the whole, pleased with the bill now. But, finally, I want to address the question of Fannie Mae and Freddie Mac. My colleagues have said, well, how can you do this without Fannie Mae and Freddie Mac legislation? Again, during the 12 years of the Republican rule, no bill passed for Fannie Mae and Freddie Mac and became law. In our 2 years, one did. Yes, I think further action is needed there. Where is their bill, Mr. Chairman? No Republican has offered, in the 2 years that I am aware of, as an amendment to this--or in any way--that bill. So they say you can't do predatory until you do Fannie Mae and Freddie Mac. They offered no such amendment. So it simply becomes as an excuse not to do things. Now let's talk about Fannie Mae and Freddie Mac and who is responsible for what. There have been some quotes. Let me quote from here. ``In 2004,'' Bush administration, Republicans in Congress, ``the Department of Housing and Urban Development revised these goals, increasing them to 56 percent of their overall mortgage purchases by 2008, and additionally mandated that 12 percent of all mortgage purchases by Fannie Mae and Freddie Mac be `special affordable' loans made to borrowers with incomes less than 60 percent of an area's median income.'' In 2004, the Bush administration mandates this. This is under Republican control. Then, let me go to line 20 on page 183. ``After this authorization to purchase subprime securities,'' which had come from the Clinton administration in 1995, ``subprime and near-prime loans increased from 9 percent of securitized mortgages in 2001 to 40 percent in 2006,'' during the Bush administration. Yes, there was a great explosion in subprime mortgages brought by Fannie Mae and Freddie Mac and, in general, under the Bush administration. Earlier in that decade, I said I didn't think Fannie Mae and Freddie Mac were in crisis. By 2004, I agreed that they were pushed, in part, by the Bush administration. And in 2004, I criticized the decision that is mentioned here on lines 6 through 14 to increase what Fannie Mae and Freddie Mac did. Let me say, Mr. Chairman, if people think I am quoting selectively, I want to pay tribute sincerely, because it works out good for me in this case, to the illogical integrity of the gentleman from Texas. Because I am quoting from the amendment put in this bill by the gentleman from Texas, I urge people to read page 183 of the bill. It is language that was offered by the gentleman from Texas, Mr. Hensarling-- not Mr. Green, not Mr. Hinojosa, Mr. Hensarling--and we accepted it. It clearly documents that the explosion in subprime loans came under Republican control. The increase in Fannie Mae and Freddie Mac subprime loans came then. Yes, I was wrong to say earlier in the decade there wasn't a problem, because I didn't anticipate the extent to which the Republicans were going to push Fannie Mae and Freddie Mac into the hole. I then did join with Mr. Oxley in trying to get legislation through. In 2005, I voted for a bill in committee that Mr. Oxley had. My colleague, Mr. Hensarling, voted against it in committee. Then we flipped on the floor because we had a disagreement about housing. And I got my way on housing in the committee, he got his way on housing in the floor, and we flipped. But the fact is that the bill then failed in 2005. Not until 2007, when we had the majority, was any legislation dealt with, in an effective way, on Fannie Mae and Freddie Mac and was any bill even considered on subprime lending.