Luis Gutiérrez

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, I was unavoidably absent from this chamber yesterday evening and today. I would like the record to show that, had I been present, I would have voted ``present'' on rollcall vote 1, ``nay'' on rollcall vote 2 and ``yea'' on rollcall votes 3, 4 and 5.

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Chair, I would like to take that time to enter into a colloquy with the chairman. Chairman Frank, while I continue to strongly support the amendment that I offered during the Financial Services Committee markup changing the assessment base for FDIC deposit insurance funds payments from domestic deposits to total assets less tangible equity, it has come to my attention that the change adopted by the committee may result in disproportionate impacts on certain types of specialized banks, including custodians and bankers' banks. A provision you included in the manager's amendment would address this issue and require the FDIC to make appropriate adjustments to the assessment base for custodians and bankers' banks. The FDIC has advised my staff that the revised version of this provision will give the agency sufficient flexibility. I appreciate your willingness to accept this change to address the legitimate issues raised by the specialized business models of custodians and bankers' banks.

Mr. GUTIERREZ. Thank you. I was hoping to bring up with you a very important subject that is vital to the health of our community banks. With the changes that this legislation makes to the DIF assessments, any funds from the Federal Home Loan Banks that banks have on their books would be doubly assessed by the FDIC. I understand the FDIC's reasoning behind the premiums on FHLB funds, but since these funds are now taken into account in the new assessment base, I believe these premiums to be duplicative. I am hoping that you will work with me and the FDIC to address my concerns about these premiums.

Mr. GUTIERREZ

Mr. GUTIERREZ. So let's be clear. This side of the aisle wants to make sure there are no longer situations of ``too big to fail.'' Now, if you believe that the men and women at Goldman Sachs tonight and tomorrow and into the future, when they make an economic decision, they say to themselves, well, this might harm homeowners and put them on the street, we shouldn't do that--I'm sure Goldman Sachs they're really worried about that. Let me see, these kids not be able to go to college if we make this economic decision. Oh, Goldman Sachs is really worried about whether our kids can go to college in America. Let me see. You mean, small businesses may suffer. Banks may go under if we make those decisions? I'm sure the men and women at Goldman Sachs, they think every day about the poor American public and the risk they put us to. If you believe that, then you can follow my friends on the other side of the aisle and do nothing. But if you believe, as I do, and many of us, that we should protect the American worker each and every day, make sure the kids go to college, make sure there's a pension for him, make sure his home is there for him, then I say support this bill.

Mr. GUTIERREZ. Mr. Chairman, in spite of the words of the other side of the aisle, I rise in strong support of H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009. This is legislation that is vital to making our financial institutions better capitalized, our consumers safe from predatory practices, and our economy stronger so that we can emerge from the recession that was caused by the very financial institutions that we are now fighting tooth and nail to defeat this legislation. I was proud to work with the chairman to include my amendment. And I understand that my parents came to this country and they didn't speak English, and so the first 5 years before they sent me to school I spoke another language other than English. But I've had the bill thoroughly examined by those who do speak the English language and have only spoken the English language all of their lives, and they cannot find the bailout fund in the bill. Now, I've worked with the chairman, I wrote the dissolution fund, I wrote the fund and I put it in the bill. It's my amendment. Now, the ex-ante fund means that firms that could ultimately be dissolved by this fund would have to pay at least. But what my friends on the other side said, they said, and they finally used it, Mr. Chairman, in all of the committee hearings, they didn't call us socialists. They waited to get to the House floor before they used the dreaded word of socialism. And what did they say? They said, the socialists, that means us, the Democrats, created a bill in which, and this is Mr. Bachus, and he can go and check his words, he said, they created a bill and they made all the institutions pay into it. And he said, that's socialism. And then when one of them fails and doesn't do something right, all of those people that paid into the funds have to pay for the wrongs of that person. Well, I guess Geico is socialist. State Farm is socialist. Allstate is socialist. Indeed, any insurance fund is socialist, because when I drive my car and never have an accident, I pay into the insurance fund so that maybe when some Member on the other side of the aisle gets into an accident, I pay with my funds for his mistakes. That's insurance. Now, what they won't tell you is that, unlike everybody in this room who has to go out and take out an insurance policy to drive a car, they want Wall Street and Goldman Sachs to be able to drive our economy into the ground without paying a cent of insurance in case they act recklessly. And all we're saying, as Democrats, is it's simple: if you want to do business in America, and you threaten the economic stability of our country, then you've got to pay into an insurance fund. But let me tell you, it's not the kind of insurance fund that you get into an accident and you take your car and they fix and they give it kind of back to you new. No, no. In our insurance fund, you know what happens? We chop up your car into pieces and sell it, and then we pay back the fund with the pieces. That's our fund. Read the bill. It's a funeral fund. You guys loved to talk about the death and death and death when it came to health care insurance. Why don't you talk about our death panels now? Oh, you don't want to talk about our death panels now, because you want to know why? Because yesterday they had 100 lobbyists out here in Washington, DC meeting with them. One hundred. How many of those lobbyists do you think met with the other side of the aisle and said, we're here to make sure that our small farm is protected against Goldman Sachs? How many of those lobbyists do you think came here and said to my friends on the other side of the aisle, tomorrow can you make sure that that bill protects my 401(k)? How many of those lobbyists do you think they met with yesterday said, make sure it protects my home, make sure it protects my small business. I don't think any of those lobbyists came to ask my friends on the other side-- --

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, I was unavoidably absent from this Chamber today. I would like the Record to show that, had I been present, I would have voted ``yea'' on rollcall votes 889 and, 890, and ``aye'' on rollcall vote 891.

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, I rise today to honor the life and memory of Dr. Harold Hild. I met Dr. Hild when he was my English professor at Northeastern Illinois University. Dr. Hild was well known for his special commitment to the Latino students at the University, and we were many. A large number were native English speakers who needed improvement in writing, and others were learning English as a second language. Dr. Hild stood by us and believed in our potential even after so many had written us off as ill-prepared. He worked tirelessly to develop an English-language program at the University that included tutoring and guidance for students who wanted to improve their language skills and succeed at the University. Long before the culture wars, we were fighting to learn English, and he was fighting beside us. He defended us like we were his own children. When Northeastern Illinois University refused to give Dr. Hild tenure and attempted to let him go, I organized a group of students to stage a sit-in to demand that he be reinstated. We were successful, and Dr. Hild was placed back on the faculty. Dr. Hild later became the Chairman of the Communication, Media and Theater Department. Dr. Hild defended us, and so it was our duty to defend him. In fact, Madam Speaker, I think that this probably represented my first steps as a community organizer. Dr. Hild and I worked together on the English-language program to ensure that Latino students at the University had every opportunity to succeed. That program still continues today, and is part of his significant legacy not only to the University but also to students everywhere. He saw the potential in me, and he saw the potential in all of us. Dr. Hild is and should always remain an inspiration to countless generations of Northeastern Illinois University students. I only hope that those of us who were touched by his life will continue to be inspired to make a difference in someone else's life.

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, I was unavoidably absent yesterday and today from this Chamber. Had I been present, I would have voted ``yea'' on rollcall votes 832 through 840.

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, I was unavoidably absent from this Chamber today. I would like the Record to show that, had I been present, I would have voted ``yea'' on rollcall votes 790, 791 and 792.

Mr. GUTIERREZ

Mr. GUTIERREZ. Today I told my staff, I have good news and bad news. The bad news is that I had to cancel their health insurance policy. It was just too expensive. But here's the good news. I'm taking out a huge life insurance policy on all of my employees. So if you get sick and die, I told them, Don't worry. I've got you covered. Now, I didn't tell them that I made the insurance policies payable to me--Luis Gutierrez. I didn't tell them that I'll use the benefits for myself and I'm just going to line my pockets. Sound ridiculous? Sound wrong? Sound unfair? You're right. It is. So today I'm introducing the Employer-Owned Life Insurance Limitation Act. All across America, companies take out life insurance policies on their employees. They spend $8 billion a year on these premiums, but the benefits go to the employers--big companies like Winn-Dixie, Wal- Mart, Dow Chemical, Procter & Gamble, and even Disney--and the employees don't even know about it. In a Nation where millions of full-time workers have no health insurance, corporate America is finding a way to line their pockets with life insurance, profiting from their deaths. Maybe if we prevent companies from betting on the death of their employees, they will invest in the health of their employees.

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, I rise today to announce the introduction of my bill, the ``Employer-Owned Life Insurance Limitation Act.'' Every employee makes a commitment to his employer. He commits time, energy and creativity to the advancement of the company. However, instead of making a commitment to their employees--their health, education and wellbeing--many companies are gambling on their lives by taking out employer-owned life insurance policies in which the company is the only beneficiary. The family and loved ones of a deceased individual should be the only beneficiaries of a life insurance policy, not a speculating company. As highlighted in Michael Moore's new film, ``Capitalism: A Love Story,'' a corporation is allowed to take out life insurance on its employees--often without their knowledge or consent--and cash in, in the event of their death. These policies are being taken out on everyone from the CEO to the janitor, and the only beneficiary of these countless policies is the company itself. Every day, 14,000 people in this country lose their health insurance; but instead of investing in the health, life and longevity of its employees, much of Corporate America has adopted the practice of investing its resources in the demise of its employees. My legislation would prohibit the practice of taking out employer-owned life insurance except in the case where the death of an individual would incur a significant cost to the company--that is individuals making $1 million or more in salary. In addition, this legislation would require that the company disclose the policy to the covered individual within 30 days of taking out the policy. Also, should the employee move on to another job, the employer would have 30 days to cancel the policy. This will stop the practice of taking out policies without an employee's knowledge and maintaining the policy long after the employee has left the company. Employees who find that their employer has taken out a policy in violation of this legislation would have the right to bring civil action against their employer to stop the company from holding the contract. Additionally, the employee could be awarded damages amounting to either $500,000 or, in the case of a deceased employee, three times the amount of the benefit paid to the employer. In the case of a living employee, the employee would be awarded three times the benefit as it exists on the date of action, whichever is greater. I believe that taking out employer-owned life insurance policies on non-executive level employees is criminal, and my legislation would punish it accordingly by establishing such a violation as a misdemeanor punishable by a $500,000 fine and imprisonment for up to one year. This legislation would also commission a GAO study to examine the prevalence of these policies and the number of violations under this bill to ensure that we have the most accurate information on this practice. Madam Speaker, each year companies spend $8 billion in premiums on these policies. That is $8 billion that could be directed toward employee healthcare, pensions and educational opportunities. Instead, it goes to what is essentially a game of Craps, where an employer is betting and banking against the employee's life. I ask my colleagues to join me in eliminating this unjust practice.

Mr. GUTIERREZ

Mr. GUTIERREZ. Mr. Speaker, I was unavoidably absent from this Chamber today. Had I been present, I would have voted ``yea'' on rollcall votes 720, 721 and 722.

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, I was unavoidably absent from this Chamber today. Had I been present, I would have voted ``yea'' on rollcall votes 687, 688 and 689.

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, I was unavoidably absent from this Chamber today. Had I been present, I would have voted ``yea'' on rollcall votes 593, 594 and 595.

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, due to a meeting at the White House, a Financial Services Committee Hearing and other commitments, I was unavoidably absent for certain votes this week. I would like the record to show that, had I been present, I would have voted ``yea'' on rollcall votes 419, 420, 421, 422, 423, 453, 454, 457, 458 and 460 and voted ``nay'' on rollcall votes 427, 455, 456, and 459.

Mr. GUTIERREZ

Mr. GUTIERREZ. Madam Speaker, I rise in support of the ``Bank Accountability and Risk Assessment Act of 2009.'' This legislation, which I introduced today, will change the way that the FDIC charges premiums to federally insured banks in order to capitalize the Deposit Insurance Fund (DIF). Specifically, my bill will do two things: First, it will create a risk-based assessment process for all insured banks. Second, it will establish a special annual risk premium for the ``too-big-to fail'' banks that represent a systemic threat to our financial system. I am recommending these changes because I believe that our current system disproportionately advantages the largest institutions at the expense of small banks. For example, under the current system, the FDIC determines the regular quarterly premiums for each bank based only on the domestic deposits held by the bank, rather than on the bank's total assets. As a result, banks with assets of $1 billion or fewer pay assessments on nearly 80 percent of their liabilities because domestic deposits are their primary source of funding. Meanwhile, banks with more than $10 billion in assets pay premiums on only 47 percent of their liabilities. So, under the current system, while small banks pay insurance premiums on nearly their entire balance sheets, large banks pay on only half. I think we have it backwards. I think the largest banks with the riskiest investments should be responsible for paying more into the Deposit Insurance Funds than our Main Street banks that generally stay away from subprime mortgages and don't invest in mortgage backed securities or credit derivative swaps. The absurd result of the current system is that banks with fewer than $10 billion in assets pay approximately 30 percent of the total assessment base, although they hold only about 20 percent of total bank assets. This discrepancy is exacerbated by the fact that the largest institutions are ``too-big-to-fail,'' and it can be argued that their depositors and other creditors enjoy superior protection than do the depositors and creditors of ``too-small-to save'' banks. I believe that each institution should pay an insurance fee based on risk. And where does risk come from? It does not come from deposits, but from the assets and investments of banks. We've seen how assets-- like mortgage backed securities--can turn from assets to liabilities overnight. It's just common sense that banks with risky investments should pay more in deposit insurance premiums. In addition, small banks all across the nation, those under $10 billion in total assets, will almost universally see their premiums go down under my proposal. For example, of the 655 federally insured banks in Illinois, 651 of them would see their premiums reduced. Only four banks would see an increase--the four largest banks. I like to compare this bill to the risk-based pricing that the banks have forced on consumers. For years, the banks have argued that risk- based pricing for their products, such as credit cards and home mortgages, is not only logical but fair because they only raise rates on those customers they feel are the greatest risk to the overall health of their institution. Well, many of the same banks that utilize ``risk-based'' pricing for consumers required hundreds of billions of taxpayer dollars to survive. Their irresponsible actions not only created a huge risk for our nation's overall financial health, but also placed hundreds of billions of taxpayer dollars at risk. Through the ``Bank Accountability and Risk Assessment Act of 2009,'' I propose that the American people impose the same risk-based assessment on the banks that the banks have been imposing on our constituents for years. The FDIC has already taken a step forward in recognizing the greater risk that large, money center banks represent to the DIF. Last month, the FDIC's Board of Directors voted 4-1. to base their emergency premium assessment off a bank's assets and not their deposits. By basing the assessment off the institutions assets and not the deposits, the FDIC has recognized that any threat to the fund through a bank failure is dependent upon the liabilities that exist in a bank's assets, not their deposits. This was a good first step toward requiring systemically significant banks to pay their fair share into the DIF, but Congress must take action to codify this assessment base for all quarterly payments into the DIF and create system risk premiums for those banks deemed ``too- big-to-fail.'' I am introducing this bill today, because I think this issue should be on the table as we consider legislation to overhaul our financial regulatory system. Deciding who will bear the financial burden for the systemically important institutions is, I believe, a fundamental aspect of the regulatory restructuring debate. Above all, the ``Bank Accountability and Risk Assessment Act of 2009'' will return fairness to the deposit insurance assessment process. I urge my colleagues to support this important regulatory reform bill.

Mr. GUTIERREZ

Mr. GUTIERREZ. Mr. Speaker, I was unavoidably absent from this Chamber today. Had I been present, I would have voted ``yea'' on rollcall votes 267, 268 and 269.

Mr. GUTIERREZ

Mr. GUTIERREZ. Mr. Chairman, I yield myself 3 minutes. Mr. Chairman, this amendment, which includes language that was requested by the White House, addresses how credit card companies allocate payments when a consumer is carrying balances on their credit cards at several different interest rates. Under existing law, when different portions of a consumer's credit card balance have different interest rates, the credit card insurer may allocate payments in excess of the minimum payment in any manner they choose. Many insurers allocate these excess payments to the portion of the balance with the lowest interest rate, ensuring that the highest interest portions remain on the debtor's account longer. H.R. 627, as reported, requires payments in excess of the minimum payment to be allocated either, one, to the portion with the highest interest rate first and then other portions based on descending order of APR, or, two, on a pro rata basis. The Gutierrez-Peters-Edwards amendment would eliminate the pro rata option in H.R. 627 and require credit card insurers to allocate payments in excess of the minimum payment to the portion of the consumer's remaining balance with the highest interest rate first, and then by any remaining balances in descending order. This amendment would prevent the credit card insurers from abusing the introductory rates they offer by allocating payments to the lowest rate balance first, while the industry makes their profits from keeping the highest interest rates balance on the consumer's account, which is common practice today. Our consumers need every tool we can give them to pay down their existing credit card debt and avoid getting caught in the cycle of debt. This amendment would dramatically shift the balance of power from credit card companies to our consumers. I thank the two wonderful freshmen Members who cosponsored this amendment, Mr. Peters from Michigan and Ms. Edwards from Maryland. I strongly urge my colleagues to support this amendment. Mr. Chairman, I reserve the balance of my time.

Mr. GUTIERREZ. Mr. Chairman, I yield myself the remaining time.

Mr. GUTIERREZ. I have an amendment at the desk.

Mr. GUTIERREZ. I yield back the balance of my time.

Mr. GUTIERREZ. I have an amendment at the desk made in order under the rule.

Mr. GUTIERREZ. Madam Chair, I yield 1\1/2\ minutes to the author and architect of the bill, the gentlewoman from New York, Carolyn Maloney.

Mr. GUTIERREZ. Mr. Chairman, on behalf of the gentlewoman from California (Mrs. Davis) I offer the amendment at the desk.

Mr. GUTIERREZ. I yield 2 minutes to the gentlewoman from New York (Mrs. Maloney).