Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Chairman, I first yield myself 30 seconds to correct the gentleman from New Jersey. The gentleman from New Jersey said that President Obama was requesting these funds. In fact, President Bush requested the funds. He did it after President-elect Obama asked him to, but I think it ought to be clear on the record, this is a continuation of the Bush policy and it was President Bush who in fact requested the funds. President Obama could not request them until next week. The President did it at the request of the President-elect, but it was President Bush who did it. I now yield 2 minutes to the gentleman from Rhode Island (Mr. Kennedy). (Mr. KENNEDY asked and was given permission to revise and extend his remarks.)

Mr. FRANK of Massachusetts. I rise to offer that amendment, Mr. Chairman.

Mr. FRANK of Massachusetts. I just want to congratulate him and his fellow Kansans and others who brought this to our attention. And let's make one thing clear; we recently read--I did--in the New York Times about smaller communities that have lost commercial air service. To tell a business which is located in a community that has lost commercial air service that it can never charter or buy a plane is really to invite them to leave those communities. So it is not simply the airline industry that's involved here, but it is economic fairness for small communities where businesses located there would have no other option if they aren't allowed to go to private aircraft.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. Mr. Chairman, I first yield myself 1 minute to say that I appreciate the intellectual honesty of the gentleman from Texas (Mr. Hensarling). He opposes one of the major thrusts of this bill and one of the major criticisms many of us had of the Bush administration, namely, the foreclosure relief. And the gentleman opposed these efforts. I must say that I am encouraged by the Bush appointee, Secretary of HUD, Mr. Preston, the Bush appointee as head of the FDIC, Ms. Bair, both of whom believe that we can do foreclosure protection with the tools in this bill, and that it can be done effectively. But I appreciate this is a genuine difference between us and I appreciate the gentleman articulating it. In 2007, this House passed a bill to restrict subprime lending of an inappropriate sort aimed at both borrowers and lenders. It would have made it impossible for people to borrow inappropriately, as well as to lend. The gentleman, I believe, opposed that. Many others, the gentleman from New Jersey did. There were some important philosophical differences. The Wall Street Journal, which today denounces us for trying to do foreclosure relief, denounced us at the time. They said when we passed the bill to restrict subprime lending, it was an undue interference in the market, and we're going to keep people from owning homes.

Mr. FRANK of Massachusetts. How much time did the gentleman consume?

Mr. FRANK of Massachusetts. I thank my colleague. And we've had several hearings on this subject. Again, the timetable here has been forced by the bill we adopted last fall with the support of the Republican leadership and the President as well as the Democratic leadership. And as a concession to Members, we put in there that once the President asked for the second $350 billion it would trigger a 15-day period in which we had to act. And we believe it's important for the House to make clear what it wants to do here during that period. But we've been having hearings on this since the fall. We put into the bill last fall some good oversight. The Government Accountability Office put out a report last year very critical of the failure to demand that the financial institutions that received funds make clear what they were doing with them, and particularly to show to what extent they were re-lending. That was because we put into the bill that the GAO would be there from the first day in their offices. We had a hearing with Mr. Kashkari, the Bush appointee to run the program, and the GAO to deal with it. We had a further hearing on this subject in the fall. We then had the long hearing that the gentleman from Massachusetts talked about earlier this week to go into this in great detail on Monday. We have invited all Members as of Friday to submit amendments. A number of Members did so. In fact, I thank the Rules Committee; they have put 10 amendments in order--one was a duplicate, so 10 are in order, five from Republicans, five from Democrats. Of the Republican amendments, I intend to vote for two; I intend to vote against three. There were also amendments that we received from some Republicans that we agreed to put in the manager's amendment. The question is simply this, and it's two-fold: First, on the broader question that's not before us today, do we deny to President Obama a set of tools that this Congress voted for last fall because a great majority of Members on both sides think that the Bush administration used them poorly? If someone drives a car badly, do you sequester the car and deny it to someone else who wants to drive it? The TARP is not some living organism with a mind of its own. It is a set of policy tools. A newly elected President has asked that he be allowed to implement those tools. We say yes, but--and we are asking for some serious commitments about how it's done. So that's the first point. The second point is that this money, whether or not it is spent, will be in a separate vote. And the ranking Republican said yesterday, well, let's wait for them to tell us how they plan to spend it. No, I don't think we should do that. I think we should tell them how we want them to spend it and see if they agree. And we have been having conversations, and they do agree. We are talking about subjects that have been very familiar to Members. We are here trying to remedy defects in the Bush administration's execution of this program--nothing for foreclosures, not enough for community banks, no restrictions on what the banks that receive the money use, tougher restrictions on compensation--though I know not everybody agrees with that. The Wall Street Journal Editorial Board--which I know represents the viewpoint of many on the Republican side--was very critical today because we are asking that money be used to reduce foreclosures; they say that's a waste of money. They were scoffing, the Wall Street Journal--and again, I think that editorial reflects some of the opposition we have here--they scoffed at the notion that we want community banks to get some of the money. And they said, how can you possibly want the money to go to nonfinancial institutions? I guess the Wall Street Journal wants to be the ``Wall- Street-Only Journal,'' and any effort to deal with small businesses or automobiles, that's somehow a profanation of the temple as far as they're concerned. We have had serious discussions with the Obama administration. I believe it is important that we do two things: First of all, give the new President the right to spend the money; and, two, give him restrictions on how he spends it.

Mr. FRANK of Massachusetts. Would the gentleman yield?

Mr. FRANK of Massachusetts. I think there is a lot to be said, but it is, of course, entirely outside the jurisdiction of the Financial Services Committee.

Mr. FRANK of Massachusetts. I thank the gentleman. And I agree with that. And housing has been at the center. I would note--and it's not directly relevant, and may, in fact, support this other proposal--but I would note that the homebuilders and the realtors strongly support the bill we are talking about today because they think it helps in other ways. It does not preempt what the gentleman from California is talking about, but those people who are most concerned with the housing industry support the bill and think it will be helpful.

Mr. FRANK of Massachusetts. Do I have any time remaining?

Mr. FRANK of Massachusetts. Mr. Chairman, I did that, but I did that because I had asked--as I think the transcript would show--how much time he had consumed. We apparently had a miscommunication. So I would ask unanimous consent that any remaining time be allowed.

Mr. FRANK of Massachusetts. I was told that the gentleman's time had expired. I have a right to close. I waived that because I was told that the gentleman had consumed 5 minutes when I asked. I thought that was all there was on the amendment.

Mr. FRANK of Massachusetts. I'll tell you what it's written to say. We believe that it is entirely a sense of Congress but understand the terrible harm that would come if it wasn't. Of course, the gentleman says it's not going to become law, so why he's so concerned about it, I don't know. But if it did, here is what it would do: This terrible section, here's what it does. It says that the borrower can't destroy the property. We are in danger of being too strong in insisting on protecting the lender. The language to which he objects--which he quite understandably didn't read--says ``the homeowner may not, with respect to any property, destroy, damage, or impair such property, allow it to deteriorate or commit waste.'' So it may be that we have unduly argued that the borrower pending this who's got a foreclosure shouldn't trash the property. I will plead guilty to perhaps erring on the side of ambiguity in imposing on the borrower an obligation not to trash the property.

Mr. FRANK of Massachusetts. Parliamentary inquiry, Mr. Chairman.

Mr. FRANK of Massachusetts. I will use the 10 seconds to say that the gentleman from Texas said ``may'' may become ``shall.'' ``May'' does not become ``shall'' without our voting.

Mr. FRANK of Massachusetts. Would the gentleman yield?

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I claim the time in opposition.

Mr. FRANK of Massachusetts. How much time on the other side?

Mr. FRANK of Massachusetts. Then I would yield my remaining time to the gentlewoman from California, who has been the House leader in fighting foreclosures.

Mr. FRANK of Massachusetts. Yes. It is to say that the gentleman has a very good idea. I regret that what I believe to be obstruction kept us from incorporating it, but I will be strongly urging the administration to work with us to see that this is made a part of the overall proposal.

Mr. FRANK of Massachusetts. Point of order, Mr. Chairman.

Mr. FRANK of Massachusetts. The gentlewoman is referring to amendment No. 6. She offered amendment No. 5.

Mr. FRANK of Massachusetts. I just want to express my disappointment at this lack of comity. I had the explanation. There was an error that was not the gentleman from New Jersey's fault. The gentleman from New Jersey (Mr. Garrett) on the other side asked him a question to which he could not have had the answer because he was not in control of the process. I was willing to give the answer. I don't know why the gentleman from New Jersey would refuse to allow it since he suggested things that were not accurate as to this. The gentleman has already objected, and that will stand as a precedent that we will all follow in certain cases, but the refusal to allow an explanation really dismays me. The gentleman from New Jersey (Mr. Holt) submitted this amendment on Tuesday. We had some questions about the form of it. He and I had conversations yesterday in which we came to an agreement that this part of the amendment would be easily accepted, that other parts would not be. So he modified it, and he modified it yesterday, and the formal modification was what we then came to. So he submitted it in a timely fashion on Tuesday in a bigger version. We agreed yesterday to remove part of it and leave this part of it. The gentleman has in every case acted in a timely fashion. He exceeded the conversations we had. My error and misunderstanding of my instructions led to the wrong amendment being put in order at the Rules Committee rather than this revised version.

Mr. FRANK of Massachusetts. But amendment No. 6 as printed now, as we understand it, is the one that would strike aid to the automobile industry. So we understand that will not be offered?