Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. I will take back my time to say that this is the bill that came out of the Financial Services Committee, and this was not out for 72 hours. It was out for much more than 72 hours. We, in fact, marked up the bill, with amendments, in an open markup last Wednesday. We voted on it on Thursday.

Mr. FRANK of Massachusetts. Stock of that sort would not count. If it is stock that goes up in time, that is not a problem. Stock that is going to simply be regular stock, and it goes up, that's not covered.

Mr. FRANK of Massachusetts. How much time is remaining that has been yielded to me?

Mr. FRANK of Massachusetts. Yes, because AIG did get a TARP capital infusion.

Mr. FRANK of Massachusetts. If the gentleman would yield, I never used that language. That's not my language

Mr. FRANK of Massachusetts. Mr. Chairman, this is an amendment that reflects the debate that we had to some extent in the committee. Some Members on both sides raised questions about ambiguity. That is why you have markups. For example, we want to make it very clear that this applies only to institutions that have received and voluntarily retained capital infusions. So, as a later amendment offered by one of our Republican colleagues does, that I hope is adopted, it reinforces that you don't become subject to these limitations on compensation just because you do business with an institution that gets the investment. One Republican Member said, well, what about people who buy or sell mortgages from Fannie Mae and Freddie Mac? We make it very clear that they would not be covered. We did make it clear that where people have earned severance pay and their salary was $250,000 or less, that the severance pay is not greater than $250,000, or the annual salary, that earned severance pay could be paid under previous contracts. We always intended that. We wanted to make sure. And it does create a commission on executive compensation to study a system, because some people thought, well, we haven't done it well enough. Now, I have one other point, Mr. Chairman. Would it be in order for me to make a unanimous consent request for a modification of the amendment?

Mr. FRANK of Massachusetts. If it's going to reduce their lending, then they probably shouldn't return it. But there are other things that people do with it. And I understand. But if the gentleman is asking me do I understand that I'm disagreeing to some extent with the President and the Secretary of the Treasury, yes, sometimes that happens. If the gentleman would yield, the Secretary of the Treasury apparently sponsored the restriction against retroactivity. He is on the side of the gentleman from New Jersey (Mr. Garrett) against retroactivity. I am here with a bill that undoes something the Secretary of the Treasury did.

Mr. FRANK of Massachusetts. I ask the gentlewoman to yield me back the time.

Mr. FRANK of Massachusetts. Yes. This bill deals only with compensation, not with travel. The gentlewoman referred to incentive travel. Any incentives that were performance-based would be fully allowed. If by selling a certain number of things you earned a trip, that would be allowed. So it specifically does not deal with travel for the business. It would allow performance-based incentives for this or for any other purpose.

Mr. FRANK of Massachusetts. No. I'm sorry. The gentleman wants to debate a bill that was passed in February. He can have all of the Special Orders he wants in order to beat that dead horse, because it is a dead horse, Mr. Chairman. This bill that he does not want to debate the merits of, that he is probably prepared to vote against and is looking for some reason to, undoes what was done back then for the recipients of TARP funds. So that is the issue. This bill was marked up in committee. It was fully debated in committee.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. Mr. Chairman, I am going to yield myself 30 seconds to say: Apparently, there are two alternative strategies that the minority has in discussing this bill: one, discuss a bill that was passed 6 weeks ago; two, ignore the rules of the House and just talk whenever they feel like it. Neither one seems, to me, to advance debate. I now yield 2 minutes for serious conversation to the gentleman from Connecticut (Mr. Himes).

Mr. FRANK of Massachusetts. Regular order.

Mr. FRANK of Massachusetts. Mr. Chairman, I will yield myself as much time as I may consume. This is really extraordinary. What you have just heard is a denunciation of something that was done by the Congress a few weeks ago and a refusal to undo it. I have never seen people, Mr. Chairman, so attached to something they hate. This is presumably a psychological disorder which I am not equipped to diagnose. The objection of the gentleman from Texas was that, when the recovery bill was passed, it was passed too quickly. We signed it that night. It included a provision that should not have been in there. This bill takes it out. It takes it out in a way that makes sure it will have had no effect, because it dealt with something in the past, and it is undone by this. Speaking about being undone, my Republican colleagues were being undone by the loss of their whipping boy.

Mr. FRANK of Massachusetts. Capital infusions from TARP. There are other forms of TARP money, but accept capital infusions of TARP money.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. I will take back my time. The bill under consideration is 5\1/2\ pages. I believe even the gentleman from Texas could have read it by now, and if the gentleman from Texas has not been able to read this 5\1/2\-page bill, I will talk long. Even if you read slow, you'll get it done. The point is that this bill undoes what he is complaining about. Note the refusal to address the subject. The complaint was that the amendment in the recovery package said that bonuses in the past given by AIG or by anybody else would not be covered by the restrictions in that bill. This undoes it. This takes it away. My colleagues on the other side are kind of like kids who have had a toy bear or a blanket, and this security blanket means a lot to them. Their security blanket is being able to complain about something that happened before the break. This bill undoes what happened before the break and makes it a nullity. They at some point, Mr. Chairman, have to outgrow the security blanket. Now, of course, here is the real problem. They do not want to vote for a bill that restricts excessive pay and unreasonable bonuses. The gentleman from Texas has now had a chance to read the bill and has a question for me about this bill.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to the gentlewoman from Nevada (Ms. Berkley).

Mr. FRANK of Massachusetts. I thank the gentleman because this is important not just for what it does but for what it says. Community banks have not been the source of this problem. They didn't make bad subprime loans. They didn't get into CDOs. They have been unfairly blamed and to some extent burdened. And it should be our commitment, and we are, we are trying to do this in other ways, with the FDIC assessment. The gentleman from California has been a leader in this. This is a chance for us, in effect, to apologize to community banks for criticism that was undeserved and to assure them that we will try to insulate them from actions that should not occur that would penalize them for things that they didn't do wrong. I thank the gentleman for his leadership.

Mr. FRANK of Massachusetts. I will be the closing speaker so the gentleman may proceed.

Mr. FRANK of Massachusetts. If the gentleman would yield further, I would note that I'm going to introduce a letter from Camden Fine, the president and CEO of the Independent Community Bank Association. March 31, 2009. Re Support Cardoza Amendment to H.R. 1664. Dear Representative: On behalf of the Independent Community Bankers of America, and its 5,000 members, I strongly urge you to support the Cardoza Amendment to H.R. 1664, the executive compensation legislation applicable to TARP recipients. The Cardoza Amendment recognizes that community banks do not engage in the unreasonable and excessive compensation practices that are at the heart of the TARP bonus scandals. As a result of prudent lending practices and common-sense compensation policies, the majority of community banks remain strongly capitalized and ready to do their part to aid economic recovery through lending to households and small businesses. Recognizing the important role community banks play in our recovery, both the Obama and Bush Administrations have encouraged community banks to participate in the TARP Capital Purchase Program. The Program provides additional resources to participating community banks to enhance their role as catalysts for economic recovery in their local communities. Unfortunately, efforts to rein in excessive and unreasonable compensation practices of MG and others have also reached the community banks. The broad-brush approach to addressing compensation abuses needlessly and unfairly adds to the regulatory burden of community banks participating in the Capital Purchase Program. It would be a shame if well- intended, but misdirected, regulation of bank employee compensation forces community banks to withdraw from the program or not sign up in the first place. The Cardoza Amendment takes a targeted approach to the regulation of executive and employee compensation by allowing the Secretary of the Treasury to concentrate his efforts where the problems existed in the first place--the largest financial institutions. The amendment allows the Secretary to exempt community financial institutions from the compensation standards established under H.R. 1664, if the Secretary finds that an exemption is consistent with the purposes of the new legislation. For purposes of the exemption, a community financial institution is an institution that receives or has received not more than $250 million under the Capital Purchase Program. The Cardoza amendment will encourage the participation of community banks in the Capital Purchase Program and enhance the community bank industry's role as leaders in our economic recovery. Thank you for considering our views. Sincerely, Camden R. Fine, President and CEO.

Mr. FRANK of Massachusetts. I will yield.

Mr. FRANK of Massachusetts. Only the capital infusions, the gentleman from Alabama's idea, as I give him credit for.

Mr. FRANK of Massachusetts. I yield myself 2\1/2\ minutes to comment on the most extraordinary display of illogic ever inflicted on this Chamber. The gentleman complains that the restriction was adopted, but now complains that we are going to undo it. And the gentleman is leaving the Chamber. Let me say to him, I understand differences of opinion, but I do resent the suggestion that I am trying to cover anything up. As chairman of the committee, I----