Kay Hutchison

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I would also say that this shouldn't be a political bill. This should be a bill that is hammered out on the floor and that does have bipartisan amendments because it is complicated. It does have to fit together a lot of different needs, different regulatory standards, different types of banks and financial institutions and nonbank financial institutions. I hope it is going to be a product that--regardless of how big the vote is--will make the system better. I think this process has been the best I have seen this year in accommodating different concerns that have been raised by both sides. So I thank the chairman and the ranking member for that. I yield the floor.

Mrs. HUTCHISON. I also wish to read a couple excerpts from a letter by the Federal Reserve Bank of Kansas City to Senator Bennet. It goes into a lot of other things, but the relevant part says: Unfortunately, if the Senate divides the oversight of the [bank holding companies] between the banking regulators, it will multiply and complicate this oversight significantly. This is hardly an improvement. And, limiting the regional Reserve Banks' source of industry information gained through their contact with all institutions and bank regulators will greatly compromise its ability to understand industry trends and deal with future crises. This is a mistake and I hope you will consider it carefully in your deliberations. That is signed by Thomas Hoenig, president of the Federal Reserve Bank of Kansas City. In addition, the President of the Dallas Federal Reserve Bank, Richard Fisher, came to my office to make this point most affirmatively, that he wanted to make sure he still had the supervisory power and the ability to learn from the State banks, the community banks in the whole region where the Dallas Federal Reserve Bank sits. Last, I wish to read an excerpt from the alert of the American Bankers Association: As you know, S. 3217, the regulatory restructuring bill, contains language that would move oversight of state banks that are members of the Federal Reserve and their holding companies to the [FDIC]. [The American Bankers Association] is strongly opposed to this provision, as this would take away the Federal Reserve's ability to regulate state member banks and would undermine the Federal Reserve's ability to fully understand small and mid-size institutions and the communities they serve. As early as Wednesday, May 5, the Senate will consider an ABA-supported amendment . . . by Senators Kay Bailey Hutchison and Amy Klobuchar that would restore current law by returning oversight of state member banks and holding companies to the Federal Reserve. It is very important that our amendment be passed by the Senate. It will make a great improvement to this bill in that it will restore the law as it is today. It will not have the mixup of the varying regulatory bodies having control in one area, where a bank across the street does not have the ability to go to the Fed and one across the street does. We don't need that. What we want in this regulatory reform is to allow all the banks to be members of the Federal Reserve, to have the same discounts, the same backing of that supervisory authority so Federal Reserve banks all over our country will have the input of the community banks in our system rather than making monetary policy from New York and Washington, DC. The last thing we need is more people who are out of touch with mainstream America doing the regulation of our financial industry. Mr. President, I commend my colleague, Senator Klobuchar from Minnesota, and would like to ask her to speak at this time because I think this bipartisan amendment will improve this bill greatly, and I look forward to having the vote tomorrow.

Mrs. HUTCHISON. Mr. President, I call up the amendment Senator Klobuchar and I have just been discussing, and the amendment, as modified, is at the desk. It is No. 3759, as modified.

Mrs. HUTCHISON. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mrs. HUTCHISON

Mrs. HUTCHISON. Madam President, how much time is on our side?

Mrs. HUTCHISON. Madam President, would you notify me when I have consumed 5 minutes because there is another speaker.

Mrs. HUTCHISON. Thank you, Madam President. I rise to join my colleague, Senator Tester, and an increasing number of cosponsors, in support of our amendment which will ensure that banks of all sizes pay their fair share in deposit insurance for the risk they pose to the banking system. Our amendment is intended to level the playing field for our safe community banks that for far too long have paid assessments into the FDIC insurance fund above and beyond the risk they pose. The FDIC levies deposit insurance premiums on a bank's total domestic deposits, but domestic deposits are not the best means to analyze the safety of banks. Financial assets other than deposits create risk in the system. Nondeposit assets are held disproportionately by larger noncommunity banks and can be more complex and more risky. Community banks with less than $10 billion in assets rely heavily on customer deposits for funding. This penalizes safe institutions by forcing them to pay deposit insurance premiums above and beyond the risk they pose to the banking system. Despite making up just 20 percent of the Nation's assets, these community banks contribute 30 percent of the premiums to the deposit insurance fund. At the same time, large banks hold 80 percent of the banking industry's assets. Yet they just pay 70 percent of the premiums. We must fix this inequality. That is what the Tester-Hutchison measure does. It will do so by requiring the FDIC to change the assessment base to a more accurate measure: a bank's total assets, less tangible capital. This change will broaden the assessment base and will better measure the risk a bank poses. A bank's assets include its loans outstanding and securities held. One need only look back to the last 2 years to know those are the assets that are more likely to show a bank's exposure to risk than just plain deposits. It wasn't a bank's deposits that contributed to the financial meltdown. The meltdown was caused by bad mortgages which were packaged into risky mortgage-backed securities which were used to create derivatives. These risky financial instruments and the large institutions that created and held them are what led to our financial crisis. So our amendment is particularly timely because the FDIC has now said banks are going to have to prepay into the insurance fund for 3 years, and all that will be due this year, so a 3-year assessment will be due at the end of this year. It is so important to have a fair assessment ratio, and that is what the Tester-Hutchison amendment will do. It will have a ratio for what a bank owes into the deposit fund that is based on its risk, based on assets minus capital. I am very pleased to be the sponsor of this amendment. I worked on this amendment in committee. I did the research on it to try to make sure we were doing the right thing. I am pleased Senator Tester joined me in this effort, and we have a very bipartisan group of supporters of this amendment. It is my hope that we pass by an overwhelming vote this amendment which will put into the law that the FDIC deposit insurance will be based on a standard that levels the playing field for community banks so big banks don't have an advantage over community banks. It is our community banks that are giving the loans to businesses throughout our country. They are the ones that were there in the crisis as best they could to try to put liquidity into the market. They didn't cause the crisis and they certainly shouldn't pay the price for it. I urge all my colleagues to support the Tester-Hutchison amendment. Madam President, I was going to suggest we allocate the time being used against both sides. That would be my request.

Mrs. HUTCHISON. Madam President, the Senator from Montana, I believe, is gesturing that the Senator from Massachusetts could have up to 3 minutes.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I rise to speak on the Hutchison- Tester amendment. This is an amendment that truly will help community banks. It will level the playing field for them. It is something I have been working on for several months, during all the consideration this bill has gone through in committee. This was one of the first things I wanted to attack. I am pleased we are going to get a vote very soon on this amendment, either a voice vote or a record vote. I know that with the bipartisan support we have, we will pass this amendment. I thank the cosponsors of the amendment: Senators Conrad, Murray, Burris, Brown of Massachusetts, Harkin, Shaheen, Cornyn, Johanns, Nelson of Florida, and Nelson of Nebraska, as well as, of course, Senator Tester and myself. We are trying to level the playing field for community banks. The underlying bill sets a way of assessing the banks by the FDIC. There has been flexibility in the past, but we are going to set in statute with this amendment that banks will be assessed based on assets minus capital. That should be the way to assess. Community banks, with less than $10 billion in assets, rely heavily on customer deposits for funding. But that penalizes these very safe institutions with these customer deposits by forcing them to pay deposit insurance premiums far beyond the risk they would pose to the bank system. Despite making up just 20 percent of the Nation's assets, these community banks contribute 30 percent of the premiums to the FDIC. At the same time, large banks hold 80 percent of the banking industry's assets but pay only 70 percent of the premiums. There is no reason for community banks to have to make up this gap. What we need is a level playing field. It is the community banks that are loaning to our businesses. It is community banks that are keeping our communities supported in so many ways, from the football programs, to the scoreboards in stadiums, to making sure small businesses have inventory loans. Community banks didn't cause the problems. To have them pay more proportionately in FDIC insurance than the big banks do is unfair. Senator Tester and I want to correct this inequity. That is exactly what the Hutchison-Tester amendment does. I appreciate very much Senator Dodd saying he agrees with us, that he will work with us to pass this amendment. I am pleased we have such bipartisan support. It will immensely improve the bill and give community banks one of the pieces they need to stay in business and hopefully free them to provide more liquidity to the businesses in communities all across America. I yield the floor.

Mrs. HUTCHISON. I thank the distinguished chairman of the committee. Of course, we could take over the world right now, since he and I are the only ones on the floor. Seriously, Mr. President, this is significant because I do believe this bill is going to pass. We are working very productively to try to make some changes in the bill that will make it much better for community banks. As the chairman knows, the FDIC has decided to prefund its deposit insurance fund for the next 3 years by the end of this year. If we change this formula and ensure community banks will not carry the heavier burden, that is going to have an impact this year in the liquidity of those banks and their capability to lend. I appreciate very much the chairman's support. I look forward to having our amendment either voice voted or a record vote. I think we will win overwhelmingly with the support of the chairman and ranking member.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I thank the Senator from Minnesota. I appreciate the bipartisan nature of the amendment. I think when people look at this amendment on both sides of the aisle, it will be clear that the community banks need this amendment to keep a level playing field and to assure that there is no concept left in this country of too big to fail. I thank my colleague from Minnesota, Senator Klobuchar, and I yield the floor.

Mrs. HUTCHISON. Mr. President, I appreciate hearing the Senator from Vermont describe his amendment. I haven't seen the text of the amendment, but I am a cosponsor of the bill that would do exactly what he says. I think transparency at the Fed is something we can agree on. So I look forward to seeing the rest of the amendment, and if it is just that, I will be very pleased to work with him for passage. I rise to speak today on the Hutchison-Klobuchar amendment. My colleague, Senator Klobuchar from Minnesota, is also on the floor. We wish to take a moment to talk about our amendment, which will assure that community banks have a more level playing field than could be the case if the bill that is before us, the Dodd bill, passes without our amendment. Our debate to reform our financial regulatory structure should focus first and foremost on filling the gaps in regulation that led to our financial crisis. I am encouraged by the good-faith efforts of Senators Dodd and Shelby to end too big to fail, and I certainly hope we will see language on that so it is put aside, because I think that is the most important area of this bill. We must end too big to fail. When Senator Dodd and Senator Shelby produce the language they have agreed on, I think that will open the rest of this bill for amendments such as the Hutchison-Klobuchar amendment we are discussing now that I think should be part of overall reform. We have to look at other areas of concern besides too big to fail such as the lax underwriting standards and the lack of transparency over our derivatives markets. Those are amendments that will also be coming to the floor to assure we address those key issues in financial reform. One area on which we can find agreement is that our Nation's community banks were not a cause of the financial collapse we have seen in the last 18 months. They didn't have risky loans and financing schemes that sent our economy into a downward spiral. Financial reform should not punish the financial institutions such as community banks for faults they did not commit. If anything, financial reform should reflect what we learned from the safe and sound practices that are used by community banks. We should learn from the example of Texas First Bank, Galveston County's largest locally owned family of community banks. On September 13, 2008, Hurricane Ike made landfall over Galveston, TX, packing strong winds and a high storm surge that ravaged much of Texas's gulf coast. Two days later, on Monday, September 15, 2008, Texas First Bank was open for business and many of its locations provided ``Hurricane Ike Relief Loans'' and other services to area families and small businesses reeling from Ike's damage. Senator Mary Landrieu and I visited Galveston several weeks later. I was there a day or so after the surge that came over Galveston in a helicopter, but I couldn't get on the ground at that point. So we came several weeks later, Senator Landrieu and I, because we wanted to look at the recovery, because Senator Landrieu of course has had so much experience with Hurricane Katrina. We wanted to do everything we could to get help to people. We had a press event at a small neighborhood restaurant. The community banker from Hometown Bank was there and was applauded by the owner of the little Italian restaurant. He said: The banker was in there helping us clean up the restaurant and made sure that we had the liquidity to open our doors, because there was no food to be had on Galveston Island at that time. They wanted to serve their customers, and their community banker was right there with them. President Obama himself has said that community banks are intimately woven into the fabric of the community. Banks such as Texas First Bank and Hometown Bank in Galveston County are examples of this. In uncertain financial times, community banks worked hard to steady the financial hands at the wheel. Community banks provide depository and lending services critical to America's families and small businesses. Despite holding just 23 percent of the banking assets in our Nation, they make two-thirds of the loans to small businesses. Small businesses must have support from community banks to invest, to expand, and to create jobs. Despite the widespread recognition of the importance of community banks, the current bill imposes on them a regulatory structure that punishes them. I am particularly concerned about a provision in the current bill under which the Federal Reserve will only retain supervisory authority over bank holding companies that have over $50 billion in assets. Republicans and Democrats agree that we don't want too big to fail anymore because too big to fail means taxpayer bailouts. So what does a bill say that says large banks over $50 billion will have the implicit backing of the government? It means they will be too big to fail. Creditors expecting to be made whole through this backing will offer cheaper credit to the large banks, putting community banks at a competitive disadvantage through no fault of their own. That is the first reason we need to pass the Hutchison-Klobuchar amendment. The second reason is that this provision arbitrarily shifts many community banks out of their current prudential regulator: the Federal Reserve. The Federal Reserve supervises more than 6,500 banks of all sizes in all parts of the country. These banks include large bank holding companies such as Bank of America, Chase, and J.P. Morgan. The Fed also supervises smaller community banks: Citizens National Bank of Nacogdoches my bank--in addition to Texas First Bank in Galveston County, First State Bank of Mineral Wells, and 32 other State-chartered banks that are members of the Federal Reserve in Dallas. I have heard from the president of the Federal Reserve Bank in Dallas, Richard Fisher, as well as the presidents of Federal Reserve Banks of Kansas City, Minneapolis, Philadelphia, and Richmond, all of whom are in town today and all agree stripping the Fed of its supervisory authority will drastically reduce the Fed's ability to achieve its objective of maintaining sound monetary policy for our country. Under the Federal Reserve Act, the Fed is mandated to effectively promote goals of maximum employment, stable prices, and moderate long-term interest rates. Implicit to this mandate is a goal of fostering stable, long-term economic growth, which requires stability in the banking and financial system. For the Fed to have proper insight into the banking system, it must maintain supervision over a wide breadth of banks located across the country. In curtailing the scope of the Federal Reserve's supervisory authority, Senator Dodd's bill does the opposite. The Fed will lose its 845 State member banks which are so vital in providing a good sense of underlying economic forces in their respective localities. This will leave the Fed to cull information about the state of our economy from-- where? From the banks with $50 billion and above in assets, meaning monetary policy going forward will be a reflection of our largest financial institutions. Well, monetary policy cannot and should not be geared toward the New York banks and the Washington policymakers. The Federal Reserve needs insight into the health of our banking system and economy as a whole. That is why we have regional Fed banks. It is important that they have the supervisory authority of banks of all sizes and in all parts of our Nation. I wish to ask my colleague Senator Klobuchar--who has stepped up to the plate to be a cosponsor of this amendment so we have bipartisan sponsors--to say a word. I wish to yield to the Senator from Minnesota for a few minutes to have the Minnesota perspective and to make sure the people know that the community banks of this country should not speak in a whisper to the ``on high'' in Washington and New York. No. They should be speaking in a loud voice to all of us through their Federal Reserve banks, which means the Hutchison-Klobuchar amendment should pass. I yield the remainder of my time to the Senator from Minnesota.

Mrs. HUTCHISON

Mrs. HUTCHISON. Madam President, I rise to speak on my amendment with Senator Tester because we are trying to ensure that safe community banks and large financial institutions are treated equally. I heard Senator Tester's speech on the floor just a little while ago on our amendment, and I am very pleased we are able to put this amendment forward. I am also pleased the chairman has said he supports my amendment. I think that is a great first step for us, for the chairman to support an amendment, because we all know this bill came to the floor on good faith, the good faith that we would have amendments and we would try to address the legitimate concerns of many in our country, from small businesspeople such as dentists to food manufacturers, as well as community bankers. We don't want--and I know the chairman doesn't want and no one wants--to hurt our economy with financial reform. I also think I can say we all have a goal of good reform that eliminates some of the things that happened a couple years ago that American taxpayers are paying dearly for right now. We don't want bailouts. We don't want taxpayer-funded bailouts of financial institutions that have taken great risk, and we certainly don't want to hurt our economy, which is not all that great right now, we all must admit. I think that going forward we must address the issues that caused the financial meltdown and stop the misuse of derivatives and get our financial house in order while also protecting our financial house. So that is what the Hutchison-Tester amendment tries to do. We want to ensure that large banks pay their fair share in deposit insurance premiums and community banks are not over-assessed and, therefore, can continue to provide lending and depository services to creditworthy American families and small businesses. I am very pleased we have a group of cosponsors. Senator Tester and I are joined by Senator Burris, Senator Conrad, and Senator Harkin in this amendment. While much debate has centered on systemic risk and the $50 billion fund to unwind large financial firms, the Hutchison-Tester amendment focuses on bringing parity to the existing FDIC deposit insurance fund. Our amendment will reform the FDIC's assessment base to ensure that banks pay assessments into the deposit insurance fund based on the risk they pose to the banking system. Currently, the FDIC levies deposit insurance premiums on a bank's total domestic deposits. Unfortunately, domestic deposits are not the best measure to analyze the safety of banks. Financial assets, other than deposits, also create risk in the system but are not considered in determining FDIC assessments. Yet because the system does not charge assessments based on assets, it doesn't fairly assess all the risks in the system. Community banks with less than $10 billion in assets rely heavily on customer deposits for funding, which penalizes these safe institutions by forcing them to pay deposit insurance premiums above and beyond the risk they pose to the banking system. How? Despite making up just 20 percent of the Nation's assets, these community banks contribute 30 percent of the premiums to the deposit insurance fund. At the same time, large banks hold 80 percent of the banking industry's assets but pay 70 percent of the premiums. We must fix this inequity. This is a clear imbalance. We must ensure that banks of all sizes pay deposit insurance premiums based on the risk they pose to the system. The Hutchison-Tester amendment will do this by requiring the FDIC to change the assessment base to one which is a more accurate measure--a bank's total assets less tangible capital. This change will broaden the assessment base from $8.5 trillion to $11.5 trillion, and it will better measure the risk a bank poses. Throughout Senator Dodd's legislation, a bright line asset test is used to measure risk to the system. A bank's assets include its loans outstanding and securities held. One need only look back over the last 2 years to realize that assets show a bank's exposure to risk. It wasn't a bank's deposits that contributed to the financial meltdown. Instead, the meltdown was caused by bad mortgages that were packaged up into risky mortgage-backed securities and used to create derivatives. These risky financial instruments, and the large banks which created and held them, were what led to the financial crisis. Our amendment is especially timely because of the great strains placed on the deposit insurance fund because of the crisis. Numerous banks have failed over the past 2 years, forcing the FDIC to dip more and more into the fund to cover insured deposits of customers. In February 2009, with the fund already in a precarious state and more failures expected, the FDIC made an unprecedented move and levied a $5 billion special assessment on all insured institutions. Originally, the FDIC intended this assessment to be eight basis points of an institution's domestic deposits. This assessment stood to penalize community banks by forcing them to pay for the faults of others, despite having nothing to do with the risky practices that caused the crisis and ensuing bank failures. To add insult to injury, community banks would have paid a disproportionate amount based on domestic deposits in the assessment base. The FDIC had the regulatory authority to broaden its base to total assets. I raised this point with the FDIC following the announcement of their assessment. I was pleased the FDIC listened. They altered their special assessment to a base of total assets less tangible capital. As a result, the assessment was lowered to 5 percent of assets--a move which ensured that large banks with heavy assets paid an assessment which fairly accounted for the added risk they posed to the banking system. So I applaud Chairman Sheila Bair for making that decision. However, the broader base was only used one time and the FDIC has now reverted to the traditional annual premium based on domestic deposits assessments. The Dodd bill continues to give the FDIC the authority to continue using this narrow base of domestic deposits. The Hutchison-Tester amendment will put in place a statute which ensures that we will have the fair assessment. That will be the mandate. There will not be options to create this unlevel playing field between the big banks and the community banks. It just makes sure the community banks will never have to pay a higher portion of the deposit insurance when they have a lower amount of the assets. Our amendment levels the playing field. Since the beginning of 2008, 229 banks from across the United States have failed, and because of these failures, it has left the deposit insurance fund below the statutory minimum requirement, despite last spring's special assessment. The discouraging state of the fund has led the FDIC to make yet another unprecedented move. The FDIC is requiring its banks to prepay deposit insurance premiums, all due over the next 3 years, by the end of this fiscal year. We must act now to ensure that these prepaid deposit premiums and all premiums in the future are assessed proportionately so banks pay premiums based on the risk they pose. I ask my colleagues to support the Hutchison-Tester amendment, to bring additional parity between banks on Wall Street and those on Main Street. I thank my colleagues who have cosponsored the amendment. I thank the chairman for supporting the amendment. This is one step we can take. I would love for the first amendment taken up to be one that would have bipartisan support, and I hope it is overwhelming support, because our community banks did not participate in the financial meltdown and are not at fault. Yet they are paying a much heavier price. But if we ask the small businesspeople in Texas and probably in most parts of the country where are they getting the loans they need for their businesses to continue to operate, it is mostly from community banks. It is the community banks that have stepped forward in this crisis and have done the best they could to make sure that in every way possible we keep our economy growing with small businesses that are the economic engine of America. So I hope we can have a time agreement very shortly and be able to vote on the Hutchison-Tester amendment, and I look forward to working on this bill for the next few weeks. There are many amendments that I think are quite legitimate that will help this bill to be one that will fix what was bad in our economic system that caused the financial meltdown but at the same time will protect the legitimate uses of the derivatives, the legitimate banking concerns of our community banks, our Main Street banks, our small businesses needs, and certainly not create another new level of government bureaucracy piled on top of banks that are already regulated. I just hope we don't do overkill, as I would say the Sarbanes-Oxley bill did, which was passed in the aftermath of the Enron scandal. Back then I think there was overkill that hopefully we will be able to go back and address so we keep the bad things from happening, while assuring that our economy can go forward and compete not only in the communities across our Nation but globally.

Mrs. HUTCHISON. Madam President, there is certainly one thing we can all agree on, and that is our assessment of the media and what they really like to write about. I hope we can make progress on this bill and do something good for our country and the economy. I think we have the same goals, and if we really work for the next 3 weeks or so trying to get amendments through, that would be great.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I rise today to speak on the financial regulatory reform, and particularly the effect of the Dodd proposal that came out of the Banking Committee on which I sit, that we have been voting on cloture on for this whole week. I heard Senators from the other side talk about delay; the Republicans are delaying this bill. I have heard them for the last week say it is because we are siding with Wall Street, Republicans are siding with Wall Street. That is odd to me because it is the Wall Street big banks that are for this bill. It is Citigroup, it is Goldman Sachs that are in support of this bill. They are publicly supporting the bill. It is the community banks that are flooding my office and the offices of my colleagues. It is the community banks that had nothing to do with the financial meltdown that are hugely concerned with this bill. That is the issue. The groups that are opposing Dodd's bill are the National Federation of Independent Businesses, the small businesses of our country; the U.S. Chamber of Commerce; Americans for Tax Reform; the Americans for Limited Government; Freedom Works; the National Taxpayer Union; the United States Automobile Association. We have had auto dealers in our offices all week who are very concerned about not being able to get credit from the little banks and the ability to finance the buying of automobiles. It is the Military Officers Association that has concerns with this bill; the National Council of Farmer Cooperatives; the Farm Credit Council; the National Association of Home Builders; the Fertilizer Institute. This is a bill that is going to affect our economy. So many of the groups I have named are the groups that are providing jobs in our country that we want to encourage to create more jobs, not discourage in a time such as this. So, yes, Republicans have been trying to have input on this bill. There has not been any Republican input at all. If we have learned one thing as Republicans, it is that we know what it is like to be completely shut out. We were completely shut out of the health care debate. We had amendments offered day after day after day. Oh, the process worked. Not one Republican amendment was passed. Not one. Neither was there one Republican vote in the House or Senate on the health care bill. So we have had that experience. So this time, because we see the dangers in the Dodd bill to our economy and the small businesses and the small banks, we are saying we are not going to let this bill go to the floor if we have the power to stop it until there is Republican input. The biggest failure in the bill is that it still allows taxpayer bailouts. That is wrong. That is why Republicans are voting not to bring it up yet, because we are trying to change the language in the bill before it comes to the floor to assure that the taxpayers will not have the responsibility to bail out big financial institutions that took gambles with other peoples' money. That is the holdup. This bill is not a bill that is favored by community and little banks. It is favored by the big banks. It is favored by Goldman Sachs and Citigroup. So let's be clear about that. As we consider the bill before us, the Dodd bill, it should focus on the gaps and holes in regulations that led to our nation's financial crisis from which we have not yet recovered, because there are still millions of people who are unemployed because of the financial crisis. We must end too big to fail. We must end taxpayer bailouts. That is not done in this bill, and that is why Republicans are saying: Stop this bill from coming to the floor until it does at least that one major thing; that is, to be clear, that we stop too big to fail in this country. Putting the big banks in one level of operation and scrutiny and one level of access to the Fed, which this bill does, the Fed keeps its scrutiny of every bank company holding company of $50 billion or more in assets. That is it. All of the other banks in our system throughout our country are not allowed access to the Federal Reserve. They cannot be members of the Federal Reserve under the Dodd bill. That is the major reason I am not supporting this bill. In fact, I have an amendment, if this bill comes to the floor, I am going to offer that says the law today will prevail, that is, that community banks may join the Fed, the State-chartered banks may join the Fed, because if you do not do that, you are going to give the impression that the $50-billion-and-above banks are in one category, that they are going to be taxpayer protected. That means they are going to be able to give lower rates in competition with the community banks because it will be perceived that the risk is less. That is not what we ought to be doing. So I am going to offer an amendment to the Dodd bill which would eliminate that part of the Dodd bill that takes away Fed access to the community banks. The other reason it is important is that we have regional Fed banks. The reason it was set up that way is so that throughout the country the Federal Reserve would be able to make monetary policy with input, with input from Kansas City, and Dallas, and Houston, and San Antonio, and Los Angeles, and San Francisco, and San Diego, and Minnesota, and Wisconsin. That was the concept of the regional Fed bank. Let me give you an example. The Federal Reserve Bank of Dallas is headed by Richard Fisher, who came to see me last week. He said: I would go from regulating about $70 billion in bank assets, with all the community bank members that we have in the Dallas Regional Fed, to 3. If the Fed is going to listen in Washington, when they are making the monetary policy, to the Kansas City Fed chief who completely agrees that we need to keep access for State and community banks to the Fed, for their information, as well as the level playing field. So that will be my amendment. Community banks did not cause the financial meltdown. In fact, they provided lending and depository services to families and small businesses across Texas and across our country. Even in the hard times they were mostly the ones that helped small business get their inventory loans and the help they needed for liquidity. A lot of people I talked to in my home State, when I visit the small businesses and the community, felt as though nobody was lending. The big banks certainly were not. So the community banks are continuing to make credit available, much more than the big banks, so businesses and consumers can invest and create jobs that will lift our Nation into a recovery. Do not talk to me about recovery when it is still a jobless--that is an oxymoron--a jobless recovery. There are millions of people out there unemployed. Is that a recovery? No. ``Jobless recovery'' should be out of our lexicon. That is wrong. If we are going to build jobs in this country, it is going to be through small businesses. The big businesses are not hiring. Do you know why the stock market is up right now? It is because the big businesses are not hiring. They have lowered their costs. Yes, they are more profitable because they are working with fewer people. I do not considering that a success. I think we have to save our community banks. This bill before us is going to hurt them. That is why we are holding it up. I wish I could say that is the only part of the bill that hurts community banks, but there is another part. It is the Consumer Financial Protection Bureau that is created in the Dodd bill that will add a new layer of regulations and a new agency issuing new regulations that will affect those same community banks that are already fully regulated. We have seen the effect of poor and predatory lending standards in this financial meltdown. We need reform in that area. Americans should understand all the terms of a transaction, and they need to be creditworthy. Subprime loans to people who are not creditworthy are not healthy for our economy. We have learned that for sure. We do not need a new bureaucracy housed in the Fed but without Fed oversight, which is sort of a non sequitur. But that is the way it is in this bill, which I hope we can change. Community banks are already regulated. They have all of the regulations, either State bank regulation or by the FDIC insuring them, requiring reserves. They are doing their job. The new agency would remove safety and soundness from consumer protection and have unlimited and unchecked rule-writing authority. The legislation does include an exemption which would allow a community bank with less than $10 billion in assets to retain examination from its prudential regulators, or the regulators they have now. But the exemption is false because community banks will still be subject to the new agency's new rules, pricing, and prohibitions, all of which will only serve to curtail consumer credit options. Enhancing consumer protections should instead focus on leveraging the experience of agencies that are already in place, such as the Federal Trade Commission. I am the ranking Republican on the Commerce Committee. I see the work the FTC is doing on a daily basis to stop unfair and deceptive practices that prey on consumers of financial products and services offered by nonbank entities such as mortgage loan services. As an example, in 2009 alone, the FTC and the States, working together closely, brought more than 200 cases against firms that peddled phony mortgage modification and foreclosure rescue scams. Rather than focusing on too big to fail or the practices of large banks, the Dodd bill overreaches and threatens the authority of the FTC to protect consumers of nonbank financial products, as it has for many years. The FTC wrote a letter to me as ranking member of Commerce, and our chairman, Jay Rockefeller, and asked for assistance with preserving their consumer protection and enforcement authority. I am working now with Chairman Rockefeller. He is very focused on this. I can tell you he is very focused, because I talked to him on the telephone yesterday several times, including at 8 o'clock last night, because he is so concerned that we are not going to fix this bill to make sure the FTC is not shut off from what it already does, what it already has in place, with a new overlay of a new agency that does not have the experience, that does not now exist, and would need startup time and more taxpayer dollars. Instead, Senator Rockefeller will have an amendment, and I will cosponsor it, that will keep the FTC exactly where it is now with the enforcement actions against companies that offer nonbank financial products. I hope Senator Dodd will work with us on that amendment. In fact, I am going to expand it even beyond that and say: We should put all of the nonbank regulation into the FTC instead of this new agency that will be another bureaucracy that will be confusing in many instances to the banks which are already regulated. I hope we can do something in this bill that is right in the regulatory area, and particularly the area that contributed to the financial meltdown, such as the nonbank financial institutions, not the banks. The community banks did not have a part in this financial meltdown. I hope we can fix this bill when it comes to the floor. It appears that the chairman of the Banking Committee and the ranking Republican, Senator Dodd and Senator Shelby, have come to an agreement on the language that will tighten and close the loophole in too big to fail. We are going to hear exactly what that language is in a few minutes in our Republican caucus. That will be very good for us to be able to then come to the floor, if the Democrats will allow Republicans to have some input into this bill on the other issues, such as Federal Trade Commission jurisdiction, the new consumer agency that I think is overreach and overkill, and most certainly to keep community banks without a competitive disadvantage against the big banks. I want a level playing field because I don't want the community banks to suffer in this country. They are the lifeblood of the heartland, and they are in peril with this bill. I am somewhat frustrated at hearing some of the speeches in the last week that have railed against Republicans for holding up this bill. Sometimes ``no'' is the right answer because if we bring a bill to the floor with no ability to amend it and we don't fix too big to fail, then once again, like the health care reform bill that was jammed through the Senate and the House with no Republican support and no input, we will be doing it to our economy and our financial institutions. I hope we will not do that again. I hope that we will have a bill we can all agree closes the loopholes on too big to fail so that taxpayers will not be on the hook again for big financial institutions that bet with other people's money on fancy derivatives and all of the hedges that don't make sense; that we protect the hedges that do make sense, that are used by the end user to keep a budget in place rather than passing big price hikes on to consumers in oil and commodities. That is what derivatives are supposed to be for, and we don't need to stop that. We just need to know what is in those big derivatives so that people will have the information and so will the regulators. We can do this job right. This should not be political. Democrats and Republicans aren't going to get an advantage for passing a financial regulation bill because most people are not going to know how it will affect them until it is passed and in place. Why don't we do it right? Let's bring the bill to the floor with some key parts that are agreed to, and then let's start having amendments. I am not saying every Republican amendment should pass, but I think it should have a fair hearing. And I think some of them should pass if this bill is going to pass the test of a true bipartisan bill that will have more than just a partisan vote out of the Senate. I thank the Chair for listening--not that it was his choice, but I appreciate it anyway. I hope we will do the right thing on this bill. It will affect our financial communities, every community in Texas, and especially small businesses and community banks that are going to be the reason we recover, if we do this right. I suggest the absence of a quorum.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I rise today to introduce a bill to designate the Buffalo Bayou as a National Heritage Area. This legislation will designate the 25-mile stretch of the Houston Ship Channel as the first National Heritage Area in Texas. This distinction will allow up to $1 million annually for 10 years to the area and provide the tourism benefits of Federal recognition without restriction on land or commerce. In 2002, Congressman Gene Green and I introduced the Buffalo Bayou National Heritage Study Act, which directed the U.S. Department of the Interior to conduct a study to determine if the Buffalo Bayou was eligible to receive National Heritage Area distinction. The Department of the Interior has concluded that the Buffalo Bayou has met the criteria needed for National Heritage Area distinction, and I support this distinction. I wish to recognize Congressman Green for spearheading the efforts to designate the Buffalo Bayou as a National Heritage Area. The Buffalo Bayou has played an important role in the development of Texas and our nation's commerce. The Buffalo Bayou has helped the City of Houston become the fourth largest city in the United States by supporting oil refining, petrochemical production and commercial trade. The history of the Buffalo Bayou begins on August 30, 1836, when Augustus Chapman Allen and his brother, John Kirby Allen, founded the City of Houston near the banks of the Buffalo Bayou. The city was incorporated on June 5, 1837, and named after the former General and President of the Republic of Texas, Sam Houston. One of the most significant battles in the history of Texas, the Battle of San Jacinto, was fought at the mouth of Buffalo Bayou and the San Jacinto River. It paved the way for the Republic of Texas to become an independent country. If approved by Congress, the Buffalo Bayou's National Heritage Area status would enhance as well as promote the national significance of this historic waterway.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I rise today to introduce a bill to designate the Buffalo Bayou as a National Heritage Area. This legislation will designate the 25-mile stretch of the Houston Ship Channel as the first National Heritage Area in Texas. This distinction will allow up to $1 million annually for 10 years to the area and provide the tourism benefits of Federal recognition without restriction on land or commerce. In 2002, Congressman Gene Green and I introduced the Buffalo Bayou National Heritage Study Act, which directed the U.S. Department of the Interior to conduct a study to determine if the Buffalo Bayou was eligible to receive National Heritage Area distinction. The Department of the Interior has concluded that the Buffalo Bayou has met the criteria needed for National Heritage Area distinction, and I support this distinction. I wish to recognize Congressman Green for spearheading the efforts to designate the Buffalo Bayou as a National Heritage Area. The Buffalo Bayou has played an important role in the development of Texas and our nation's commerce. The Buffalo Bayou has helped the City of Houston become the fourth largest city in the United States by supporting oil refining, petrochemical production and commercial trade. The history of the Buffalo Bayou begins on August 30, 1836, when Augustus Chapman Allen and his brother, John Kirby Allen, founded the City of Houston near the banks of the Buffalo Bayou. The city was incorporated on June 5, 1837, and named after the former General and President of the Republic of Texas, Sam Houston. One of the most significant battles in the history of Texas, the Battle of San Jacinto, was fought at the mouth of Buffalo Bayou and the San Jacinto River. It paved the way for the Republic of Texas to become an independent country. If approved by Congress, the Buffalo Bayou's National Heritage Area status would enhance as well as promote the national significance of this historic waterway.

Mrs. HUTCHISON

Mrs. HUTCHISON. Mr. President, I rise today to speak on financial regulatory reform. During the current economic downturn, we have seen far too many Americans lose their jobs, homes, and their savings. Today, 15 million of our citizens are still out of work, and national unemployment continues to hover near 10 percent. It is this uncertain climate in which we consider financial reform legislation. The crisis is going to remain in the forefront of our national consciousness for years to come, mainly due to the immense government intervention that was pushed through over the past year and a half, attempting to stabilize our frozen credit markets but instead accumulating massive debt that threatens to harm our economy much worse than the original problems. The current legislation continues the government's failed ``too big to fail'' policy. Too big to fail perverts free market capitalism and suggests that entities can privatize their profits, yet socialize their risks, and taxpayers foot the bill. The American taxpayer should not be forced to pay the gambling debts of risky bets made by large financial institutions. Republicans and Democrats alike agree that we must end too big to fail, but the bill that is being proposed does not do that. Chairman Dodd's bill provides both the FDIC and the Treasury Department emergency authority to provide broad debt guarantees in times of ``economic distress'' to ``struggling firms.'' As written, it is foreseeable that the FDIC or Treasury could step in to prop up a firm under any circumstance, all without seeking to resolve and unwind the firm. The chairman's bill authorizes continued emergency lending authority for the Federal Reserve, but conceivably only for large banks. Under the Dodd bill, the Federal Reserve would retain supervisory authority over bank holding companies with assets over $50 billion. The Federal Reserve supervision essentially predesignates the firms that are too big to fail. These banks would have the implicit backing of the government and the taxpayers and, with it, the competitive advantage, giving it access to cheaper credit from lenders expecting to be made whole. This puts our Nation's community and independent banks at a severe competitive disadvantage. I will offer an amendment, if this bill comes to the floor, to permit community banks to remain under the supervision of the Federal Reserve. If the Fed supervises only the largest firms, it will gear monetary policy toward these large financial institutions, effectively leaving out the voice and real-time experience of community bankers in my State and across the country. While the large financial institutions were making bad bets on subprime mortgage markets, community banks were making home and business loans to local customers. Local community banks provide the lending and deposit services for our Nation's small businesses so they can operate, invest, create jobs, and drive our economy. It is this business lending that will help create jobs and grow our economy. Tom Hoenig, President of the Federal Reserve Bank of Kansas City, said recently that our Nation's largest banks would be well served to take lessons from our community banks. Why? Because community banks have been committed to providing the credit and services needed for small business. They know their customers, and they can make good, solid loans that are supportable. In Texas, Richard Fisher, President of the Dallas Federal Reserve Bank, said the provision in the bill would leave the Dallas Federal Reserve jurisdiction with only one or two bank holding companies, down from 36 member banks, for $74 billion in assets that he now has supervisory authority over. The Fed should know the needs and the economic conditions throughout the country, not just New York and Washington, DC. It is precisely the ability to foster bottom-up growth through small businesses that sets community banks apart from other financial institutions. Unlike the big financial institutions we see in the headlines for bailouts and bonuses, community banks don't have a systemic risk to our financial system and they are not identified as primary contributors to our latest crisis. However, community banks would soon be subjected to a considerable amount of new costs and regulatory burdens as a result of this legislation. Community banks are already regulated. They are well regulated. Adding additional layers of Federal bureaucracy with limitless authority would be a burden that would only serve to hamper the ability of community banks to effectively provide depository and lending services to America's consumers and small businesses. Community banks should not be punished as a result of this legislation. We should preserve and enhance our dual banking system, not impose additional Federal regulations that stifle their ability to serve their communities. I am also concerned about the direction of the regulation of over- the-counter derivatives. In the wake of the collapse of the mortgage market where the use of derivatives and even derivatives of derivatives helped cause great losses to banks and nearly brought our economy to its knees, it is important that Federal regulators have a greater understanding of this derivatives market. We have Members on both sides of the aisle who are negotiating these terms. Republicans and Democrats have the same goal. We want to end too big to fail. We want to end bailouts. We want to assure that our community banks still have the capability to serve Main Street customers. The bill before us that is not being brought to the floor because it did not have any input from the Republican side does not achieve those goals. So we are now meeting in small groups. We are meeting with the Secretary of the Treasury and others within the administration to try to come to terms that would do the right thing and meet the goal that we all agree is the goal. That is what is going on right now in the Senate. It is my great hope--and I see my colleague from Tennessee who is also on the Banking Committee with me, and he too is a part of the negotiations and wants to bring this bill to the floor--we can do something good for our economy. Passing the bill or letting it come to the floor and roll out of here in its present form would not achieve that objective. So I welcome my colleague from Tennessee, who has been a major player in this debate. He has been a major reason that we are coming to a point at which I think we can have a successful bipartisan bill. I will say that our chairman and ranking member, Chairman Dodd and Senator Shelby, have been meeting for weeks to try to come to terms. So I think everyone is sincere at this point that we want a bipartisan bill. Financial regulation is not political. The consequences of passing a bad bill are huge for our country, for every American. We can do this. I welcome the comments of my colleague from Tennessee and I look forward to his continuing leadership so we can have a bill that will help the consumers in our country, stabilize our economy and, most of all, will bring the unemployment rate down from 10 percent so that more Americans can go to work. Thank you, Mr. President, and I yield the floor.

Mrs. HUTCHISON. Mr. President, I appreciate the remarks of the Senator from Tennessee and, of course, I welcome his cosponsorship of the amendment. It is essential. I couldn't support this bill if we shut the Fed off from Tennessee and Texas and California. Then we might as well all move to New York. New York doesn't want any more people, I am sure. They are well populated. But most of all, I want to make sure that the Main Street bankers and the small businesses of all of our States are known to the Fed, and the way they are known to the Fed, of course, as the Senator knows, is that their local Federal Reserve bank knows their issues and problems and needs, because they have the ability to serve those banks, which is not allowed in the bill before us. I thank the Senator from Tennessee for his leadership. I look forward to coming up with something we can all support.

Mrs. HUTCHISON

Mrs. HUTCHISON. Then I will split the remaining time, unless--is there any further time? What is the order of business after the 8 minutes?

Mrs. HUTCHISON. Mr. President, I ask unanimous consent to extend morning business for 10 minutes, and that the added time be split between Senator Corker and myself; and if a Member of the majority comes forward, we will certainly agree to allow the equal time.

Mrs. HUTCHISON. Mr. President, if there were 4 minutes and we added 10, I would have 9 minutes and Senator Corker would have 9 minutes?

Mrs. HUTCHISON. Mr. President, I thank the Senator from Tennessee.

Mrs. HUTCHISON

Mrs. HUTCHISON. I ask unanimous consent that the order for the quorum call be rescinded.

Mrs. HUTCHISON

Mrs. HUTCHISON. Madam President, later today, President Obama will travel to the Kennedy Space Center in Florida. He will visit with employees and officials there and deliver a speech on his vision for NASA. We have begun to learn the details about some of what the President may be announcing, but so far nothing has been suggested that alleviates the concerns I expressed earlier this week. In fact, I am growing more concerned. I have serious questions about the administration's proposed vision. For example, the President is proposing to rely on a commercial space launch industry that is still in its infancy. Once the space shuttle is retired, a commercial vehicle would be the only American human spaceflight capability for the foreseeable future. Further, we are about to complete the International Space Station and begin the period of scientific research we have been waiting for. For the past 10 years, we have waited for the space station to be up and running and operable. At the same time that it is now becoming operable, we are beginning to phase out the space shuttle program. That is the only means we have to deliver crew and cargo to the space station. We are nowhere close to having an alternative to the shuttle, whether government operated or commercial operation. Congress and the President agree we should extend the life of the space station to at least 2020. That only makes sense because we have invested $100 billion in this space station. Our partners are international. We have contractual commitments to our partners who have also made huge investments in the space station. Yet now we are looking at stopping our shuttle at the end of this year so the alternatives will be limited. We must be certain the space station can be supplied and maintained with the spare parts and equipment it needs to operate for the next 10 years. It may well be that equipment needed to ensure the sustainability of the space station can only be delivered by the space shuttle. I introduced legislation last month to require NASA to conduct a review of station components and identify anything that might be needed to be delivered to equip it for its research mission. Of course, NASA could do that review right now without legislation. I urge General Bolden, the NASA Administrator, to undertake such a review, particularly in light of the space shuttle not being extended under the President's proposal. It is still possible we could extend the time between the shuttle flights to deliver the necessary materials to the station. That is an option I believe we need to preserve. It would prolong the time we could put our own astronauts into space with our own vehicle that we know is reliable. That is the key. We don't have to add more into the budget. The budget already provides for two more space shuttles this year, plus one that would be a contingency. We have this paid for in the budget. If we will only extend these out, it will give us so many more national options that would be in America's best interest. Without a NASA-managed alternative for human access to space, we will be dependent on the Russian Soyuz rockets to take American, European, Japanese, and Canadian crew members to the space station. Today it is a cost of $56 million per passenger. That price could go up, if we end the space shuttles this year. We don't know what the next contract might have, especially when it is realized that we will have no capability and are shutting down our own capabilities at the time that we would be asking for help from the Russians. Of even more concern is the possibility that without a shuttle or other alternative, any failure of the Soyuz for any period of time could leave the space station abandoned to become an orbiting example of space debris. What if something happened to the Russian program? What if the commercial industry that is fledgling doesn't come up with an alternative or, worse yet, what if they go out of business? These are the concerns the President is not addressing in his budget for NASA. I hope he will become more willing to look at the long-term consequences of what he is proposing to do, if we are going to retain our leadership position in space, in economics, and in security. These and other concerns have been expressed by a number of other individuals, editorial boards, and organizations over the past days. I ask unanimous consent to have printed in the Record letters and editorials expressing serious reservations about the President's plan and its adverse impact to our Nation's future leadership in space.