Marcy Kaptur

Ms. KAPTUR

Ms. KAPTUR. I thank the Speaker very much for that, and wish to say that I recently entered into the Congressional Record an account of some of the key legislative history and executive actions that have led our Nation into our current economic crisis, a meltdown of people's accumulated savings, a loss of value in their homes and pensions, a 26- year high in unemployment, and major damage to our financial institutions and their ability to lend. One of the individuals I talked about was the woman who headed the Commodity Futures Trading Commission back in 1998, in the late 1990s, and her name was Brooksley Born. She was an esteemed attorney, and she knew the field of regulation well. She said we had to regulate derivatives and, if we didn't, we would get in trouble. She was prescient and she was right. Three of the men that ultimately caused her resignation were pictured on the front of Time Magazine about a year later: Alan Greenspan who then headed the Federal Reserve, Robert Rubin who chaired Citigroup, and Larry Summers who was then Secretary of Treasury. You know, it is good to remember history so you are not doomed to repeat it. The unemployment figures just announced nationally and for my home State of Ohio reveal the grim situation: The State unemployment rate is marching toward double digits, the city of Toledo is facing a massive deficit that grows with each passing day, and around our district families, businesses, and local governments are struggling to make ends meet. Let me offer a seven-step restoration program to put our economy back on track. First of all, we ought to bring the ``too big to fail'' institutions back under control for the sake of the American people. They should never have been allowed to get so big that the failure of a Citigroup that this man used to head or an AIG insurance company, which is much more than an insurance company, or Lehman Brothers could threaten the entire global financial system. These raging beasts have got to be brought back under control; and, last week Federal Reserve Chairman Bernanke said, ``The `too big to fail' issue has emerged as an enormous problem both for policymakers and financial institutions generally.'' He is right. Job number one should be bringing the big institutions back under control and, in my opinion, breaking them up. Number two, we should restore the goal of financial security; that is, people should have more equity and less debt, and it needs to be restored at all levels, from our kitchen tables to the government of the United States. Read chapters 8 and 9 of Kevin Phillips' book, American Theocracy. Treat yourself to a real understanding of how we have gotten ourselves into the situation we face today. Form a book club. Think about it. Number three, we need to restore our national ethic that values savings over debt both in our households and in our government. Our government should set a national standard for prudent and responsible financial behavior for our citizenry and institutions. The fact that JP Morgan could take a dollar of home equity and leverage it 100 times beyond the value of the underlying asset goes well beyond the realm of reason. Number four, we need to restore the word ``banking,'' ``prudent banking'' to our vocabulary, and excise the word ``financial services.'' And we ought to start right here in the House of Representatives by renaming the committee of jurisdiction what it used to be called, the Banking Committee. This means deposits and prudent lending must be unwound, separated, and regulated differently from the securitization process for a major portion of economic activity. Number five, we ought to incentivize the accumulation of equity by ordinary citizens, and I was pleased to see that President Obama's budget includes savings proposals. And, we ought to restore an ethic of service to bank customers by those working in banks, not using them to empty out the limited savings of the American people. Number seven, we ought to restore the balance of power between Wall Street and the megabanks on the one end of the scale with community- based banks and credit unions at the other end of the scale. We ought to ask Chairman Bernanke for more on that score. And, finally, we ought to investigate, investigate, investigate. In an article last week titled, ``Then It's Securities Fraud,'' journalist Froma Harrop wrote that law professor William Black of the University of Missouri Kansas City, who is also renowned for his work in ethics, has mounted a campaign for a new Pecora-type investigation here in the Congress. That was a series of hearings held by the Senate Banking Committee into financial wrongdoing at the end of the Great Depression. Harrop writes, ``As the bottom was falling out of derivatives trading, AIG was reporting healthy profits. That's not allowed under the law. Meanwhile, the company created a short-term bonus system for its top executives.'' Professor Black's call for a Pecora Commission should not go unheeded by this Congress. The issue of securities fraud is not a small matter. The first order of business is to get the financial system righted so the ship doesn't sink. We owe that to the American people who are trying to hold on to their own dreams. Then the Congress must launch an investigation like no other into the causes of this crisis. And frankly, it is a conundrum to this Member why that set of investigations has not already begun. We need to learn every detail about what happened and why and bring the wrongdoers to justice so that this never, ever happens again. Next week, I'm going to offer greater detail about what America needs to do from this point forward. But certainly one of the actions that should be taken today is that the Federal Deposit Insurance Corporation and the Securities and Exchange Commission should immediately employ reforms in mark-to-market accounting so that we can actually help our banks begin to lend again, because we can never possibly replace the capital being destroyed every day by mark to market with the infusions from the taxpayers of the United States.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, as our economy continues to oscillate, and the world markets with it, it is good to remind ourselves of some economic fundamentals so we can fix what ails us. Let us return to the opening fact: The proximate cause of America's downturn is the subprime housing crisis. It is not abating. Until America addresses that, our economy will continue to bleed. Washington is obstinately refusing to address that head-on. Six thousand six hundred homes enter foreclosure across this country every day. That is one home, one family every 13 seconds. Instead, Washington seems to still be just picking at the edges of the glaring headlights facing us. The President today, in the wake of AIG's giving AIG executives hundreds and hundreds more millions of dollars, taxpayer dollars, in bonuses, has stated the need for overall financial regulatory reform. He is right. America needs more than executive bonus reform, however. That only represents a wart on a very large elephant, of hundreds of billions and, indeed, trillions of dollars irresponsibly managed and the burden of resolution being put on our taxpayers, on their children, on their grandchildren. The executive and legislative branches of our government must dive in and reform this out-of-control financial marketplace. The Republic and our citizens deserve no less. The question for history is whether this Congress will meet its constitutional obligations to protect and defend the Republic. It is time that Wall Street and the megabanks saw the writing on the wall. Yet they seem hell-bent at resistance. Wall Street's response of putting its head in the sand and their hands in our pockets should be over. AIG's bonuses are merely the latest sign, like a big canary in the mine shaft sign, of Wall Street's high arrogance and its real power, I repeat, its real power, over the American people and the institutions that govern us. The voices of the people are not being fully heard. Wall Street's latest racketeering and ransacking of our Republic trumps anything they have done in the past. Let us recall the savings and loan debacle back in the 1980s when financial institutions dumped $150 billion of their bad debts onto the American people, onto their children. It was a huge load. In fact, we're still paying it. It became the third largest share of our Nation's long-term debt. We're paying for it until today. It gets hidden in the overall debt but it's in there. But Wall Street and the megabanks had no remorse. They smelled blood. They got away with what they did. And they learned something from that fiasco. They were able to wash their hands of responsibility. They got away with it. They then worked like eager beavers to change the laws of this country so that they could do even more. So much more. The savings and loan bailout marks the point in time when the largest financial institutions in this country figured out that they could push this Congress around and the President around, and they were emboldened by what they did. And they not only have ever since, and royally, I might add, but they have done so at a magnitude that is unprecedented. Who knows how deep the hole is this time around? They've already dumped $700 billion of their bills already directly on the American people, six times more than the last time. And on top of that, who knows really what debt the Federal Reserve is racking up in its hidden transactions, furiously assembled at its own counting house. Those secret transactions merely tell us how far out of control our elected representatives have been distanced from the government they are sworn to defend against all enemies. After the big banks were rewarded 20 years ago by forcing the public to pick up their dirty laundry, they enlarged their thievery during the 1990s with a vengeance. Once most of America's thrift and home loan institutions were destroyed along with the savings ethic that had been embedded into the law, the megabanks set in place a massive racket to exploit and draw down the accumulated savings that were left, you can call it equity, of the American people represented in their homes, in the housing market. Wall Street and the megabanks accomplished their goal. They drew down huge sums of equity from homeowners through scheme after conceivable scheme. Yes, they sucked out the value of what homeowners actually owned, not owed but owned, in their homes. Their schemes were masterful and they were morally wrong. Look in neighborhood after neighborhood in this country. I bet your property values have come down. If you're not losing your home, you've been impacted by it. Your equity has been lessened. They got to you too. They got to almost every single household in this country. How did they do it? They had millions of schemes. Take widows' loans, widow, w-i-d-o-w. This was the rotten racket by which Wall Street's sharp-pencil boys preyed on grief-stricken women who had just lost their husbands, unethical moneymen at white-shoe Wall Street institutions like Citigroup, through its CitiFinancial, no less, drilled into that segment of the market for every penny they could exact. They promised widows--and they followed the obituaries to find them-- they promised widows that now that their husbands were gone, they needn't worry about their finances into the future. Just sign on the dotted line and an equity bonanza would be yielded to that widow. They failed to mention that in a few years the widow's mortgage payments would more than double. But who was to worry? Tragic, yes, but true. Did it happen, yes, over and over and over again. And those who worked for CitiFinancial across this Nation, and I am sure some are listening this evening, some refused to do that. They left their firms or they were terminated, but others did it. And every time they did it, they got a bonus on that widow's refinancing. I can't imagine how those people can sleep at night. That's how they made their money. Congress needs to hear from those widows. I know they are out there. What happened to them, in my opinion, was criminal. So the subprime housing implosion is the proximate cause of our downturn. But I have a question, why is our government not fully using the normal institutions that could resolve the crisis on the books of the financial institutions involved, the FDIC, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission. Why aren't we? Last week we heard from the former chair of the Federal Deposit Insurance Corporation who served both Republican and Democratic Presidents back in the 1980s, Mr. William Isaac, who is published in Investment Dealers' Digest this week, an article I am going to quote from. He essentially resolved and successfully resolved over 3,000 insolvent banks back in the 1980s. Every bank in Texas went down but one. Continental Bank of Illinois went down. He resolved those without a cost to the public. His answer to what we face is follows, a four-point alternative to the bailout bill. Implement a program that would ease the fears of depositors and other general creditors of banks. You do that through the FDIC and the Securities and Exchange Commission. No. 2, you reinstitute restrictions on short sellers. You do that through legislation or the SEC could do that. They haven't. No. 3, you could suspend or alter substantially mark-to-market accounting which has contributed to mightily to our current problems by marking assets to unrealistic fire-sale prices. We could authorize a net worth certificate program, that authority still exists. FDIC needs to use it. We could settle the financial markets, he says, without significant expense to taxpayers. This would leave $700 billion of dry powder we could put to work in targeted tax incentives, if needed, to get the economy moving again. But why hasn't Washington done what he suggests? Perhaps it's because the megabanks and their Wall Street patrons relish the world of greed in which they float. And, frankly, they have worked very hard and spent billions in lobbying fees and campaign contributions to set up the world just the way they like it, and they have been rewarded handsomely. They are still being rewarded very handsomely. They don't want to lose their grip. After all, they have figured it all out. From every angle, they know even that congressional elections are cheap. They are now the largest contributors, Wall Street, that is, to congressional elections and Presidential races. They figure about $3 million a seat in here and a few hundred million for a President. You add those all up, it doesn't even equal what we put in to the AIG bailout for the entire Congress of the United States. The castle that Wall Street built, and which it is defending now at all costs, was built at the price of great harm to this republic. I believe that the situation can right itself, but it will take the American people taking back their power through us, those that they elect. The situation we face did not happen overnight. As I stated, it grew out of the savings and loan crisis. And let's look back at the late 1980s and 1990s, in the 1990s, activities began and a plan was set in place by Wall Street and the largest money-center banks, and I will name them, JPMorgan Chase, Citigroup, Bank of America, HSBC, Wachovia and Wells Fargo--Wells Fargo and Bank of America down in Charlotte--to overleverage our U.S. housing market through such schemes as mortgage- backed securities and home-equity loans to make extraordinary profits and enrich executives, boards and their shareholders. We know some of their names, but it's amazing how they can avoid the public limelight. The net result of their combined actions has been to indebt our Nation on the private side with our families and ultimately shift the cost of what they have done, their excesses, to the public realm. The Wall Street and Wall Street-related institutions lobbied to change Federal laws, along with executive actions, that aided and abetted their plan. In 1994, the Riegle-Neal Interstate Banking and Branching Efficiency Act was passed into law with Congress hastening bank mergers, resulting in the further concentration of financial power in money center banks, most often leading to Wall Street. And in local communities across this country, what happened was banks that had been headquartered in towns and cities began to disappear, as they were gobbled up by money center banks far from home. And communities across this country became derivative money centers of a headquartered bank a very long way home. Think about where you live. Think about what happened in your community. With the passage of the Riegle-Neal bill, what changed was this, the traditional concept of community banking where residential lending took the form of a loan which was made on the time-tested standards of character, collateral and collectability, was transformed into a bond and then security, which was broken into pieces and then sold into, ultimately, the international market, where you can't even find it, largely through Wall Street dealers. Essentially, collateral was overvalued, the value of the house became overvalued. Risk was masked and proper underwriting and oversight of the loans was dispensed with. Thus began the silent eroding of our Nation's community banks. They are not all gone, but they are fewer, and they are burdened unfairly by the economy Wall Street-money centered banks have delivered to them and us. In addition, in the years of 1993 and 1994, there were changes made at the Department of Housing and Urban Development that removed normal underwriting standards. For example, HUD's mortgage letter, 93-2, ``Mandatory Direct Endorsement Processing,'' gave authority to home builder-owned lenders bye like KB Mortgage and affiliate lenders like Countrywide to independently approve their own loans. Then in 1994, HUD mortgage letter 94-54 allowed lenders to select their own appraisers. How do you like that? Secretary of HUD Henry Cisneros, upon departure from the Department of Housing and Urban Development, became a KB Home board member as well as a Countrywide board member. So as a public servant of the highest order, with the trust of the President and all those at HUD, Mr. Cisneros appears to have leveraged his position to his own benefit. Of course, appearances can be deceptive, and sometimes appearances are spot on. Continuing on, Mr. Speaker, in 1995 Congress passed, over my objection, the Private Securities Litigation Reform Act. This bill was the only bill ever passed by Congress over a Clinton veto, and it was part of Newt Gingrich's Contract with America. This law made securities class action lawsuits more difficult. In fact, Representative Ed Markey of Massachusetts offered an amendment to that bill that would have made those that sold derivatives still subject to class actions. But his amendment was not accepted, and it never passed. Back in those days, I can remember when the Securities and Exchange chair, Brooksley Born, made public statements talking about the necessity to regulate the derivatives market, what she saw happening. She was forced out of the SEC. I nominate her for a gold medal. In 1999 Gramm-Leach-Bliley Act passed Congress, and for the first time since the 1930s removed the regulatory barriers that existed between banks and insurance and real estate and commerce. It was like all the rules were thrown out. Insurance companies got into derivatives, securities houses got into housing and real estate, America's banking system was turned inside out. Over the next several years, the fury of an inflating housing market and mergers of financial institutions increased. To illustrate the general pattern of behavior, an interesting case to follow is that of investment bank Wasserstein Perella of New York and Chicago. It wasn't the largest, but one can follow and track it. In 2001, at the height of the mortgage bubble, it merged with Dresdner Bank of Germany, taking with it volumes of U.S. subprime paper. Today, Dresdner, which is the second largest bank in Germany, has been victimized by the subprime crisis and has been put up for sale. It is likely being acquired by Commerzbank in Germany, which is owned by their largest insurance group, Allianz Insurance Group of Germany. They have the same kinds of insurance problems as we do. The question is, on behalf of which institutions did Wasserstein Perella move the subprime paper? Equally interesting is, effective June 5, 2008, last year, Dresdner Kleinwort Wasserstein Securities was listed on Federal Reserve Bank of New York's private government securities dealers' list. They are right on the inside. They are more on the inside than my neighbors are back in Ohio where 10 percent of our homes have been foreclosed. This means a foreign institution with severe financial problems is brought under the umbrella of the U.S. Federal Reserve. In fact, if you review the list of troubled money center banks, most of them are now listed on the preferred primary dealers' list at the Federal Reserve. The Fed is starting to look like the encampment of the most culpable. This brings me back to AIG. This weekend, AIG grudgingly released the names of the banks that they had to pay related to the credit default swaps on securities that failed. So AIG had to pay on those failures. Who did they pay with taxpayer dollars that bailed them out and continued to bail them out over and over to a level of $176 billion and beyond? You know the No. 1 company? As of Monday this week, Goldman Sachs. Well, they got $12.9 billion, Goldman Sachs. That's where the last two Secretaries of the Treasury have come from, both in Democratic and Republican administrations. We have a new Secretary of Treasury now who came from the New York Federal Reserve. I will insert in the Record the The New York Times article by Mary Williams Walsh. [From the New York Times, Washington Edition] Firms to Which It Paid Taxpayer Money Tracking the bailout Foreign and U.S. Banks Were Given Billions Against Bad Debt (By Mary Williams Walsh) Amid rising pressure from Congress and taxpayers, the American International Group on Sunday released the names of dozens of financial institutions that benefited from the Federal Reserve's decision last fall to save the giant insurer from collapse with a huge rescue loan. Financial companies that received multibillion-dollar payments owed by A.I.G. include Goldman Sachs ($12.9 billion), Merrill Lynch ($6.8 billion), Bank of America ($5.2 billion), Citigroup ($2.3 billion) and Wachovia ($1.5 billion). Big foreign banks also received large, sums from the rescue, including Societe Generale of France and Deutsche Bank of Germany, which each received nearly $12 billion; Barclays of Britain ($8.5 billion); and UBS of Switzerland ($5 billion). A.I.G. also named the 20 largest states, starting with California, that stood to lose billions last fall because A.I.G. was holding money they had raised with bond sales. In total, A.I.G. named nearly 80 companies and municipalities that benefited most from the Fed rescue, though many more that received smaller payments were left out. The list, long sought by lawmakers, was released a day after the disclosure that A.I.G. was paying out hundreds of millions of dollars in bonuses to executives at the A.I.G. division where the company's crisis originated. That drew anger from Democratic and Republican lawmakers alike on Sunday and left the Obama administration scrambling to distance itself from A.I.G. ``There are a lot of terrible things that have happened in the last 18 months, but what's happened at A.I.G. is the most outrageous,'' Lawrence H. Summers, an economic adviser to President Obama who was Treasury secretary in the Clinton administration, said Sunday on ``This Week'' on ABC. He said the administration had determined that it could not stop the bonuses. But some members of Congress expressed outrage over the bonuses. Representative Elijah E. Cummings, a Democrat of Maryland who had demanded more information about the bonuses last December, accused the company's chief executive, Edward M. Liddy, of rewarding reckless business practices. ``A.I.G. has been trying to play the American people for fools by giving nearly $1 billion in bonuses by the name of retention payments,'' Mr. Cummings said on Sunday. ``These payments are nothing but a reward for obvious failure, and it is an egregious offense to have the American taxpayers foot the bill.'' An A.I.G. spokeswoman said Sunday that the company would not identify the recipients of these bonuses, citing privacy obligations. Ever since the insurer's rescue began, with the Fed's $85 billion emergency loan last fall, there have been demands for a full public accounting of how the money was used. The taxpayer assistance has now grown to $170 billion, and the government owns nearly 80 percent of the company. But the insurance giant has refused until now to disclose the names of its trading partners, or the amounts they received, citing business confidentiality. A.I.G. finally relented after consulting with the companies that received the government support. The company's chief executive, Edward M. Liddy, said in a statement on Sunday: ``Our decision to disclose these transactions was made following conversations with the counterparties and the recognition of the extraordinarily nature of these transactions.'' Still, the disclosure is not likely to calm the ire aimed at the company and its trading partners. The Fed chairman, Ben S. Bernanke, appearing on ``60 Minutes'' on CBS on Sunday night, said: ``Of all the events and all of the things we've done in the last 18 months, the single one that makes me the angriest, that gives me the most angst, is the intervention with A.I.G.'' He went on: ``Here was a company that made all kinds of unconscionable bets. Then, when those bets went wrong, they had a--we had a situation where the failure of that company would have brought down the financial system.'' In deciding to. rescue A.I.G., The government worried that if it did not bail out the company, its collapse could lead to a cascading chain reaction of losses, jeopardizing the stability of the worldwide financial system. The list released by A.I.G. on Sunday, detailing payments made between September and December of last year, could bolster that justification by illustrating the breadth of losses that might have occurred had A.I.G. been allowed to fail. Some of the companies, like Goldman Sachs and Societe Generale, had exposure mainly through A.I.G.'s derivatives program. Others, though, like Barclays and Citigroup, stood to lose mainly because they were customers of A.I.G.'s securities-lending program, which does not involve derivatives. But taxpayers may have a hard time accepting that so many marquee financial companies--including some American banks that received separate government help and others based overseas--benefiting from government money. The outrage that has been aimed at A.I.G. could complicate the Obama administration's ability to persuade Congress to authorize future bailouts. Patience with the company's silence began to run out this month after it disclosed the largest loss in United States history and had to get a new round of government support. Members of Congress demanded in two hearings to know who was benefiting from the bailout and threatened to vote against future bailouts for anybody if they did not get the information. ``A.I.G.'s trading partners were not innocent victims here,'' said Senator Christopher J. Dodd, the Connecticut Democrat who presided over one recent hearing. ``They were sophisticated investors who took enormous, irresponsible risks.'' The anger peaked over the weekend when correspondence surfaced showing that A.I.G. was on the brink of paying rich bonuses to executives who had dealt in the derivative contracts at the center of A.I.G's troubles. Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, implicitly questioned the Treasury Department's judgment about the whether the bonuses were binding. ``We need to find out whether these bonuses are legally recoverable,'' Mr. Frank said in an interview Sunday on Fox News. Many of the institutions that received the Fed payments were owed money by A.I.G. because they had bought its credit derivatives--in essence, a type of insurance intended to protect buyers should their investments turn sour. As it turned out, many of their investments did sour, because they were linked to subprime mortgages and other shaky loans. But A.I.G. was suddenly unable to honor its promises last fall, leaving its trading partners exposed to potentially big losses. When A.I.G. received its first rescue loan of $85 billion from the Fed, in September, it forwarded about $22 billion to the companies holding its shakiest derivatives contracts. Those contracts required large collateral payments if A.I.G.'s credit was downgraded, as it was that month. Among the beneficiaries of the government rescue were Wall Street firms, like Goldman Sachs, JPMorgan and Merrill Lynch that had argued in the past that derivatives were valuable risk-management tools that skilled investors could use wisely without any intervention from federal regulators. Initiatives to regulate financial derivatives were beaten back during the administrations of Presidents Bill Clinton and George W. Bush. Goldman Sachs had said in the past that its exposure to A.I.G.'s financial trouble was ``immaterial.'' A Goldman Sachs representative was not reachable on Sunday to address whether that characterization still held. When asked about its exposure to A.I.G. in the past, Goldman Sachs has said that it used hedging strategies with other investments to reduce its exposure. Until last fall's liquidity squeeze; A.I.G. officials also dismissed those who questioned its derivatives operation, saying losses were out of the question. Beneficiaries of a Rescue The American International Group on Sunday released the names of financial institutions that benefited last fall when the Federal Reserve saved it from collapse with an $85 billion rescue loan. The Fed paid A.I.G.'s obligations to the following companies, among others: ------------------------------------------------------------------------ Amount (in Institution billions) ------------------------------------------------------------------------ Goldman Sachs......................................... $12.9 Societe Generale...................................... 11.9 Deutsche Bank......................................... 11.8 Barclays.............................................. 8.5 Merrill Lynch......................................... 6.8 Bank of America....................................... 5.2 UBS................................................... 5.0 BNP Paribas........................................... 4.9 HSBC.................................................. 3.5 Citigroup............................................. 2.3 Calyon................................................ 2.3 Dresdner Kleinwort.................................... 2.2 Wachovia.............................................. 1.5 ING................................................... 1.5 Morgan Stanley........................................ 1.2 Bank of Montreal...................................... 1.1 ------------------------------------------------------------------------ But it's very interesting which firms get special treatment. Several of the AIG infusions of money that came from the U.S. taxpayers are foreign based. Societe Generale of France, $12 billion; Deutsche Bank of Germany, $12 billion; Barclays of Britain, $8.5 billion; UBS of Switzerland, $5 billion; Dresdner, $2.2 billion; foreign banks paid with U.S. taxpayer dollars? The American taxpayers are becoming the insurance company for Wall Street and global banks. Think about that one. There is simply no way for us to pay our way out of this, because without mark-to-market accounting being engaged, that is destroying more capital inside these banks than we can possibly make up for with the debt we are assuming as the risk is passed on to the American people. Besides Goldman Sachs in our country, Merrill Lynch got $6.8 billion through AIG; Bank of America, $5.2 billion; Citigroup, $2.3 billion; Wachovia, $12.5 billion. All banks are receiving TARP funds, too. So it's almost like double dipping into taxpayer dollars. Oh, my, is it time for major reform. Mr. Speaker, this past week Congress took some steps forward toward real reform, and I'd like to highlight a couple of them and thank those who made them possible. I'd like to begin by thanking House Financial Services Committee Chairman Barney Frank for not only permitting, but attending the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises hearing on mark-to-market accounting. This is the bullseye at the center of the target. In addition, I wish to extend my gratitude for his leadership to the chairman of that Committee, Representative Paul Kanjorski, and the ranking member, Representative Scott Garrett, whose opposition to the Wall Street bailout is as strong as mine, for allowing me to participate in that hearing although I am not on that subcommittee. I'd also like to congratulate the staff on the subcommittee for a job well done. This hearing was informative on many levels. It is clear that reform of the mark-to-market system is a bipartisan issue. Congress surely would prefer that the industry itself privately, through the Federal Accounting Standards Board, make the necessary changes to properly account for and subsequently protect institutions. But that appears to be log jammed. Though not an easy task, time and time again in the hearing the Federal Accounting Standards Board, the Securities and Exchange Commission, and the Office of the Comptroller of the Currency in the Department of the Treasury were told to take action or Congress would take action. I hope that they listen, too, because I know my colleagues can take action, and they surely must. Three weeks was given as the timeline for FASB and its collaborators to take action. Chairman Kanjorski already has a hearing date blocked out for the week we return from our April break to follow up as necessary. I thank him for that. Congress is, for now, expecting and hoping that those who are in charge of regulation will do so, so we do not have to. They, together, are the experts, and should see to the necessity for making these improvements. All in all, his hearing was a very good one. I commend it to those who are listening to look at that Record. We heard excellent testimony from not one, but two panels of experts and people in the field. Yet, for me, and some other Members, the day's work was not complete yet, even though the last votes of the week had been cast. This takes me to my second round of thank-you's. After Representative Kanjorski's hearing ended, multiple members attended an informational briefing in the Capitol with the two former Chairmen of the Federal Deposit Insurance Corporation who helped America dig out from that big hole of the 1980s and that last banking crisis so we could learn from their experience. These crises were far larger than what we faced at the beginning of this one, but this one has been mishandled, and every day it gets worse. So we have much to learn from them. Yet, lack of appropriate resolution to date in our current situation made their appearance even more important. I wish to thank Majority Leader Steny Hoyer for his interest in this discussion, and I wish to thank Mr. William Seidman and Mr. William Isaac for traveling here to the Capitol to share their experiences, these two amazing Americans who have so much to say, and we thank them for their records as senior statesmen and as successful regulators who actually did something right to stabilize our ship of State when it was so desperately needed. We need to hear their voices more. Tonight, however, I am moderated in my optimism because of those meetings last week and because of Treasury's actions toward AIG. And I want to place on the record some of the following. AIG was the largest insurance company in our country. It collapsed last September due to its mega involvement in insuring mortgage-backed securities. Prudent lending has been thrown out the window for a very long time, and basically the system that has been set up has taken the individual mortgage loan--let's say this is your mortgage that was arranged at your local lending institution--and what happened across our country in the past was that when you would go to a bank and you would get a mortgage locally, you might have deposits in that bank, and the bank could only loan 10 times more than the level of deposits in that institution. A system was set up in our country where, when you took the loan out, that loan was purchased. Usually it went to the Federal Housing Administration or the Federal National Mortgage Association here. But it had never really been taken into the international market. What they did under this new system was rather than having the 10 to 1 lending ratio to capital deposit, what Wall Street did is it had a ratio of 1 to 100. It took $1 and it turned it into $100--10 times more than ever had been done in history--terribly imprudent, terribly irresponsible, terribly high risk--and they leveraged the whole Republic. Mortgage firms will tell you that often the value of your mortgage, the underlying value of your home, was really too small for their tastes. If your house was only worth $50,000 or $100,000, or even $250,000 for them that is small potatoes. And what they wanted to do was figure out a system where they could take lots of mortgage loans. And what they did was they took them from all around the country, hundreds and hundreds and hundreds of loans, and then they figured out what they will do is they will take this mortgage loan, all these mortgage loans, and what they did was they sold them together. So what they did was they created these instruments where they literally put these loans together and then they sent them up the line of command, and what Wall Street did, they said, Well, let's see. What is that worth? Let's take the risk out of this. So what they did was they took all these loans and they cut them up into pieces. What they did was they broke the mortgage up into little pieces and then they took all of those pieces and they packaged them-- they mixed them all up and they packaged them into a security. Can you find your loan? All of a sudden, your loan lost its individual character. It's sort of like the walnut shell game. Where is your mortgage in here? Wall Street cannot unwind the securities that it has now even sold into the international market. That's why what's happening is so hard to unwind. They bundled some really bad loans where they had poor underwriting and poor appraisal practices with very good loans. But when they cut them all up, who knows where your loan really is, and the prudent oversight at the local level, since your local bank no longer really had that loan and you started sending your mortgage check to places far away from home, most of which ended up on Wall Street or in one of these money center banks. Well, you get the picture. Just to make it more interesting, what AIG did was took all those cut-up securities and they sold insurance that they called credit- default swaps on those mortgage-backed securities, and they had to pay out on that insurance that was sold as our housing market started to deteriorate and mortgages began to fail. But, you know what? They did it through an office in London. This just gets more interesting--where the meltdown of AIG actually began. You see, the insurance market is regulated, but what they did with it, with credit-default swaps, that isn't regulated. Nobody was really in charge of that. So they hid a lot of this. They hid a lot of what was going on and they created almost like a Ponzi scheme. And I have been saying to homeowners across the country, If you get a foreclosure notice, don't leave your property. Get a lawyer. Because until you actually get your own note back, until they piece it back together and you get your original loan, how do you know that you have signed a legal note? What if you have a widow's loan and they cheated you? What if you had a predatory loan? Make sure you can get your entire note back, and you need legal representation through your Fair Housing offices in order to do that. The castle that Wall Street built--and which it is defending now at all costs because it has made an enormous amount of money. Some people have made an enormous amount of money. Some of those houses that securitized these loans, half of their profit went to the executives in those companies. What they have done has been at great price to our Republic. The situation we face can right itself if the new President and if the leaders of this Congress listen to those Americans who have actually resolved serious banking crises before. To date, those voices have not been allowed to rise because, in my opinion, Wall Street has too much power and they can block, just like in football, there's somebody that is the quarterback. They can carry that ball right down the field. But not without the blockers being there. What is happening is some of these important voices are being blocked by those who have enormous power. Members of Congress must also remember that we represent our constituents and our communities. Their votes got us here and their votes can return us or not return us. Congress needs to get in and get dirty in solving this problem, just like our predecessors did, and find the truth, whatever it takes. We saw this begin last week at Representative Kanjorski's hearing. Congress needs to do what is right and not what is easy. Congress doesn't need to be cowardly. Our Nation and our citizens expect no less than what Daniel Webster's quote says right up on that wall, and that is ``to do something in our time and generation worthy to be remembered.'' It is far overdue for real banking reform in this country and the return of financial power back to the American people. Mr. Speaker, I yield back my remaining time.

Ms. KAPTUR. Mr. Speaker, I ask unanimous consent to include extraneous material in the Record thereof as I proceed this evening.

Ms. KAPTUR

Ms. KAPTUR. I thank the gentleman for that time. And, to say, when the Senate saw what we did in the House, they hung a portrait of Hattie Carraway, the first woman elected to the Senate, over on the Senate side. So the road has been a very long road, even here inside the Capitol, which is supposed to reflect the history of the American people. We know as women, at the founding of our republic, as with slaves, we were considered three-quarters of a person, and it was not until 1920 with adoption of the 19th amendment to our Constitution were we considered full persons. And it was not until the Married Women Property Acts were passed in the State of New York in the late 1800s that in fact women began to emerge from the shackles that had held them in bondage for all of recorded history. I congratulate my dear friend from California, Congresswoman Woolsey. I thank the chairman of the Committee. Thank you for bringing us into the 21st century.

Ms. KAPTUR. I thank Chairman Clay for moving this bill forward. I thank him for yielding me time. I want to thank Congresswoman Woolsey for her great leadership in introducing House Resolution 211, honoring the contributions of women across history, and certainly here in our great country. I want to thank Congressman Issa for his support. I also want to say that we have a long way to go. As far as we have come, we have even further to go. The majority of women's contributions in history have never been recorded. So much of what women have lived has not even been put to pen and to page; and that is no more true than here in the House of Representatives itself. I was so pleased the other day to walk in the main corridor on the first floor of the Capitol, and to see for the first time in history the portrait of Shirley Chisholm hung in a place where most people who travel here will actually witness the first African American woman ever to be elected to the Congress of the United States, and who campaigned for me in my very first campaign. She left in 1983. For a very long time, indeed the first 200 years of our country, up until this last decade, the only portrait of a woman hung in this House was of Pocahontas over in the main dome of the Capitol as she saved the life of John Smith around the year 1623. But it wasn't until this last decade where we tried to get the portraits of women hung in this Capitol, and it has proved to be as hard as winning the Revolutionary War. Mary Norton, the child of Irish immigrants, has finally been hung in the Education and Labor Committee as the first woman to chair a committee in this House, the Education and Labor Committee. She wrote the National Labor Relations Act, No Child Labor, time-and-a-half overtime, minimum wage. And for all those years, from the Great Depression until this past year, her portrait was in a closet here in the Capitol. Imagine that. Jeannette Rankin, the first woman to ever serve from the State of Montana before suffrage was even adopted, never a portrait of her. Finally, it was commissioned. We worked so hard. She is hung up on the third floor as you come off to the visitor's gallery.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, the bill before us is far from perfect. Though it will help some homeowners who are facing foreclosure, this bill requires asking a few additional questions. Why would Congress want to pass a bill that uses bankruptcy as the first option to resolve only some loans, and not all loans, as opposed to invoking the full power of the FDIC and SEC to handle all loans? This legislation will ``protect mortgage services from legal liability.'' Why would we do this at the same time as we are sending individual homeowners to the bankruptcy gallows? Why would we pass a bill that eliminates the government's share of any appreciation in the home's value at sale? Madam Speaker, these are some of the questions for which this bill does not provide answers to those critical questions. Most of all, this bill continues to reinforce the seriously flawed mortgage securitization approach to the U.S. housing market. The overarching concentration and securitization of the housing mortgage market by Wall Street bond houses and money center banks are continued in the bill rather than replaced by an approach that restores prudent Main Street lending practices again. Our housing finance system is far too concentrated. Its system-wide imprudent practices centered in the securitization process, itself, have done enormous damage domestically and internationally and have ripped neighborhoods and communities apart across our Nation. Responsible lending requires that our financial system re-empower the local banking, local underwriting and local mortgage markets first. This bill merely rewards the wrongdoers by letting them fall in the government basket of FHA, FNMA, and Freddie Mac. A real reform plan should be the foundation stone that precedes any legislation that proposes to transfer hundreds of billions of dollars more to the very money center banks and servicing companies that have produced the chaos that ails our mortgage lending system today. Reform must come first, not last. No matter how well-intentioned any housing bill is, there must be a broader policy context in which it is advanced. In sum, this plan does not do enough to address the fundamental cause of the financial crisis--widespread and overuse of concentrated securitization practices, mortgage and appraisal fraud, and the seize up of credit markets due to improper use of federal instrumentalities in attempting to resolve the situation. This bill nips at the edges of a very troubled system, picks up some of the casualties, and lets the Titanic continue to chug toward some iceberg. Our citizens deserve full justice, not continuing reliance on the very institutions that brought us to this fork in the road.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, today I rise to commemorate the 10th anniversary of Hungary's accession to NATO. Hungary is the first former Soviet nation, followed soon thereafter by Poland and then the Czech Republic, to join NATO. I stand here today to express gratitude for that historical moment and being given the opportunity to witness it and to recognize Hungary's pioneering commitment to solidarity, freedom, and security. Despite years of Soviet rule, Hungary maintained a posture that looked both east and west. She became one of the first countries to institute meaningful political and economic reform after the fall of the Berlin Wall. And during the Cold War, Hungary struggled mightily not to let the door to her people close completely. The country's exceptional acumen also boasts an impressive mathematical and scientific legacy that includes 13 Nobel Prizes, inventing the BASIC programming language, and even creating Rubik's cube. This is a nation of major measure. When Hungary joined NATO on March 12, 1999, an enduring relationship was cemented between Hungary, Europe, and the United States. This partnership means more than a military alliance. It marked a rebirth of freedom with an end to oppression by the then Soviet Union. This historic achievement was celebrated from Budapest to Ohio, which boasts the largest Hungarian American population in our country according to the last census. This new era was marked importantly by our congressional district of Toledo that adopted two cities in Hungary, Szeged and its county, Csongrad County. Hundreds of citizens since 1999 have been involved in cultural, educational, and political exchanges of extraordinary impact. And through the lifelong efforts of major leaders in our community, including now deceased Monsignor Martin Hernady, Ohio Representative Peter Ujvagi, the Hungarian Club of Toledo and its leader Mr. Andy Raikay, Holy Rosary, Calvin United and St. Stephen's Churches, Dr. Elizabeth Balint and Mr. Al Baldwin of the Great Lakes Consortium for International Training and Development, along with the University of Toledo, Bowling Green State University and Lords College, all are working together to build freedom forward. Because of the new opportunities presented by NATO, the United States and Hungary were able to enrich our friendship. Our Ohio National Guard began an early partnership with the Republic of Hungary for the express purpose of demonstrating through the example of the citizen soldier the proper role of the military in a democratic society. Hungary's rich history, as well as its embrace of a new post-Soviet era governance, sets a strong example for other countries in the region that are still grappling with a meaningful identity as newly independent states. By working with our allies, America continues to nurture democracy and advance political freedoms in Eastern Europe and around the world. An independent film that I was able to view last year, called Torn From the Flag, which has won all kinds of international awards, traces the history of Hungary from World War II through its current independence. I commend this film to all of our citizenry. Tonight, I rise to pay tribute to Hungary, our great sister nation in liberty's cause. What a great joy it has been to get to know her people and her traditions in greater measure. And I thank the people of my community who truly have been, each and every one of them, ambassadors of freedom from the United States to our great sister state of Hungary.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, please let me share with you concerns regarding the bill, H.R. 1106, on housing and bankruptcy that were rolled together, four bills rolled together into one likely to come before the House for consideration tomorrow. First of all, the bill continues and reinforces the seriously flawed mortgage securitization approach to the U.S. housing market. The overarching concentration and securitization of the housing mortgage market by Wall Street bond houses and money center banks are continued in the bill rather than replaced by an approach that restores prudent Main Street lending practices again. Our housing finance system is far too concentrated. Its system-wide imprudent practices centered in the securitization process, itself, have done enormous damage domestically and internationally and have ripped neighborhoods and communities apart across our Nation. The bill and related administration actions adhere to and, indeed, expand Wall Street securitization as the fundamental architecture of our Nation's mortgage and loan financial system. The continuation of this risky and imprudent system has converted poorly underwritten, poorly appraised and poorly serviced mortgage loans, the majority a result of predatory lending practices to securitize bond instruments. Financial activity and equity have been drawn out of local regions and have been concentrated in a very few irresponsible and likely fraudulent, in many cases, Wall Street money center banks. The vast majority of troubled subprime mortgages are held by institutions whose names you know--JPMorgan, Bank of America, Citigroup, HSBC, Wachovia, Wells Fargo--and the proximate cause of the severe economic downturn our Nation is experiencing in the mortgage foreclosure crisis and its consequential seize-up of credit is due to the practices of those institutions. That seize-up is due to widespread uncertainty about valuing mortgages on the ledgers of those financial institutions and others across our country. Until that uncertainty is repaired by employing the skills of the Federal Deposit Insurance Corporation and by true value accounting at the Securities and Exchange Commission, any bill we might consider here merely bites at the edges of a systemic reform that will fall far short of what is needed. Any major housing bill may be evaluated by whether it contributes to reforming this fundamental financial architecture that has brought our economy to this point. Responsible lending requires that our financial system re-empower the local banking, local underwriting and local mortgage markets first. Such a reform plan should be a foundation stone that precedes any legislation that proposes to transfer hundreds of billions of dollars more to the very money center banks and servicing companies that have produced the chaos that ails our mortgage lending system. Reform must come first, not last. No matter how well-intentioned any housing bill is, there must be a broader policy context in which it is advanced. Number 2, the vast majority of people in foreclosure are not in bankruptcy. Different regions of our Nation are likely to be impacted differently, and this bill will not help them, and I place in the Record plenty of information about that. Number 3, the bill will not bring private-sector lenders back to the mortgage market. Thus, it will not restore confidence across the troubled credit markets. You could see that the President announced the program last month, and the market has already discounted it; the dollar has been further driven down, and our stock markets are even weaker. Number 4, the bill actually cherry-picks mortgage winners and losers while cramming down the bankruptcy option for others, denying equal justice under property law to all. The bill throws the far larger numbers of homeowners with non Fannie Mae and Freddie Mac troubled loans to the bankruptcy courts, almost like a cramdown, presuming their culpability, while doing nothing to ascertain lender and servicer performance or even guilt in the mortgage contract. In doing so, the bill denies millions of our citizens immediate, full legal rights and representation in legal proceedings. Number 5, irresponsible and likely fraudulent lenders and servicers should not be rewarded with any more taxpayer-funded money as the bill does. Again, we should be using the FDIC and the SEC as they were properly intended, and that is not being done. You know, one of the questions we can ask under this bill is: How will Treasury and HUD pick who gets principal awarded and who doesn't under this bill to try to work out a few of the loans that are out there? Number 6, this proposal creates a future private market incentive to dump troubled loans to Fannie Mae and Freddie Mac that does not restore the market discipline that is necessary. Number 7, there are no provisions in the bill to recoup funds to the U.S. taxpayer for the significant cost of this bill. The banks, actually, in one provision in the bill will get a little bit if a mortgage appreciates in value once it's sold, but the government will get nothing. Finally, the cost estimates of this bill are truly questionable. The administration says maybe it might cost $275 billion, but in truth, that is only a guess. If home values continue to plummet and the plan does not succeed in whole or in part, it is likely that the cost of the bill will be much higher. What about if Freddie and Fannie loans redefault? Already, the administration is asking for another $400 million of additional guarantee authority in those instrumentalities. In sum, our citizens deserve full justice, not a continuing reliance on the very institutions that brought us to this fork in the road. Mr. Speaker, tomorrow, the House is scheduled to vote on H.R. 1106 Please let me share with you 8 concerns I have regarding the 4 bills that have now been rolled into one to address the mortgage foreclosure crisis and its bankruptcy provisions. The first concern is the bill continues, and reinforces, the seriously flawed ``mortgage securitization'' approach to the U.S. housing market. The overarching concentration and ``Securitization of the housing mortgage market by Wall Street'' bond houses and money center banks are continued rather than replaced by an approach that restores ``Main Street Prudent Lending'' practices. Our housing finance system is far too concentrated. Its system-wide imprudent practices, centered in the securitization process, have done enormous damage domestically and internationally, and have ripped neighborhoods and communities apart across our nation. This bill, and related Administration actions (e.g., the SBA loan securitization provisions of the Recovery Act) adhere to and, indeed, expand ``Wall St. securitization'' as the fundamental architecture of our nation's mortgage and loan financial system. The continuation of this risky and imprudent system has converted poorly underwritten, poorly appraised, poorly serviced mortgage ``loans''--the majority a result of predatory lending practices--to securitized ``bond'' instruments. Financial activity and equity have been drawn out of local regions and concentrated in a few very irresponsible, and likely fraudulent, Wall Street and money center banks. A handful of these investments houses, which have brought our nation to the financial edge, have converted very recently to bank holding companies to come under the cover of federal insurance protection. The vast majority of troubled subprime mortgages are held by the following irresponsible, money center institutions or subsidiaries they created--JP Morgan Chase, Bank of America, Citigroup, HSBC, and Wachovia, Wells Fargo. The proximate cause of the severe economic downturn our nation is experiencing is the mortgage foreclosure crisis and consequential seize up of credit across our nation's financial system. This is due to widespread uncertainty about valuing mortgages on the ledgers of financial institutions. Until that uncertainty is repaired, any bill that merely bites at the edges of systemic reform will fall short of what is required. Any major ``housing'' bill must be evaluated by whether it contributes to reforming this fundamental financial architecture that has brought our economy to this point. If not, it will not restore a rigorous and prudent lending model for home loan origination and servicing, with disciplined secondary markets. If reform does not occur, financial power will continue to be concentrated on Wall Street and money center institutions, and equity drawn away from to local communities. Responsible lending requires that our financial system re- empower the local banking, underwriting, and mortgage markets. Such a reform plan should be the foundation stone that precedes any legislation that proposes to transfer hundreds of billions of dollars more to the money center banks and servicing companies that produced the chaos that ails our mortgage lending system. Reform must come first, no last. No matter how well intentioned any housing bill, there must be a broader policy context in which it is advanced. The 2nd concern is the vast majority of people in foreclosure are not in bankruptcy. Different regions of our nation are likely to be impacted differently. This bill will not help them. The bill's partial and confusing approach to who will be helped, and who will not be helped in their housing situation, will exacerbate the economic crisis, not ease it. Far from being a systemic solution to the housing credit and foreclosure crisis, this bill cherry picks some ``winners'' who will achieve mortgage workouts. The anticipated Obama plan will address only some mortgage holders whose mortgages happen to be held by Fannie Mae and Freddie Mac. The majority of mortgages not held by Fannie Mae and Freddie Mac will not be addressed by the Obama plan. This omission represents the vast majority of subprime, troubled mortgages in our nation. Federal taxpayer-funded subsidies, thus, will flow to help workout only those loans held by federally guaranteed secondary market instrumentalities. Furthermore, the complexity of this bill means as well as the Obama plan any benefits are likely to be uneven rather than systemic. Some loans owned by Freddie and Fannie will be targeted; the vaster number of subprime loans will not be considered. In regions like Ohio, where the recession has worn on and deepened over this decade, it is unclear who may benefit. At best there are rough estimates available now, state by state, as to how many loans may be eligible or affected. Most of the borrowers who aren't in either FNMA/Freddie will be out of luck in the Obama plan. States like Ohio and Michigan could be absent workout assistance again, or with minimal impact, as they have been under the Hope for Homeowners Bill, rushed through Congress last July, wherein only 25 homeowners have been assisted. It is conceivable that many greedy consumers, whose loans happen to be owned by Fannie and Freddie, could be helped, while the majority of families in states like Ohio, where foreclosures are rising, will not get help as their loans are largely subprime. What is fair about this? The 3rd concern is the bill will not bring private sector lenders back into the mortgage market. Thus, it will not restore confidence across the troubled credit markets. Why? This bill is uneven, lacks clarity, and is even confusing in picking who might be assisted, and who might not be assisted. Thus, the bill will cause more market disruption. As in the Obama plan's announcement last month, it was discounted by the market and already has further driven down the value of the dollar and our stock markets. The market knows this bill will not address the fundamental problems of seized credit markets and lack of interbank confidence plaguing our banking system. The 4th concern is the Obama plan cherry picks mortgage winners and losers, while this bill crams down the bankruptcy option for others, denying equal justice in property law to all. As a last resort this bill throws homeowners to the bankruptcy courts--almost like a cramdown presuming their culpability--while doing nothing to ascertain lender and servicer performance, and even guilt, in the mortgage contract. In so doing, the bill denies millions of our citizens full legal rights and representation in legal proceedings about their Mortgage contract-- as well as a complete mortgage audit. The courts should weigh the interests of all parties in the mortgage contract. Normal judicial proceedings could yield that. The bankruptcy option relegates normal judicial proceedings to second place to determine lender culpability. Mortgagors need primary attention not secondary and equal legal representation when confronting Wall Street megabanks and servicers, as mortgage fraud and predatory practices pervaded the sick housing system America faces today. This bill throws citizens into bankruptcy court before real justice and transparency of the mortgage instrument as a contract is unwound in a court of law. Are borrowers the only party to the mortgage contract? The bill does not provide equal justice as lenders, banks, and servicers responsible are held harmless legally, and some even provided funding. What unequal justice is this? The 5th concern is irresponsible and likely fraudulent lenders and servicers should not be rewarded with more taxpayer-funded money, as the Obama plan does. The normal federal institutions skilled in mortgage workouts, and bank insolvencies, should be engaged--the Federal Deposit Insurance Corporation and the Securities and Exchange Commission. Lenders and servicers should be required by legislation to participate in mortgage workouts. Our government shouldn't be paying lenders or servicers anything to get them to participate. It is likely mortgage and accounting fraud were endemic across several institutions, as well as lack of proper reporting back to mortgagors under the Truth in Lending and Real Estate Practices Act. Frankly, workouts systemwide should have been occurring in the time-proven way--by engaging FDIC's full powers along with updating the SEC's approach to true value accounting for real estate loans held on the books of lenders. As this still is not being done, the economic harm gets worse daily. The TARP Bailout gave power to the wrong federal department to handle real estate workouts. Treasury had had no experience in real estate lending. Treasury has never been the appropriate federal agency to do bank and mortgage workouts. Its focus has always been Wall Street. Their record since TARP has demonstrated they have done nothing to get the banks and servicers to the table to do workouts as a result of the billions the banks have received from TARP. Now, under the Obama plan, how will Treasury and HUD pick who gets principal funds and who doesn't? The 6th concern in the Obama plan creates a future private market incentive to dump troubled loans to FNMA and Freddie. In the way this legislation favors loans held by FNMA and Freddie Mac, it does not restore prudent lending rigor to the marketplace, but signals that the government will become the dumpster for troubled loans. Again, this bill's architecture sends the wrong message to the market. The 7th concern is there no provisions in the Obama plan to recoup funds to the U.S. taxpayer for the significant cost of the bill. Any federal assistance to homeowners should include provisions to recoup to the government some portion of the appreciation of any housing assets that may be available on sale of affected units. The Obama plan does provide such recoupment to the bank, in the case of reworked FNMA/Freddie loans, but not to the government which is assuming a huge additional guarantee risk. The Administration plan is silent on such recoupment to the U.S. government. The 8th concern is the cost estimates for the Obama plan are questionable. Cost estimates provided by the Administration total at least $275 billion. But, in truth, they represent only a guess. If home values continue to plummet, and the plan does not succeed in whole or part, it is highly likely the cost of the plan will rise much higher. Further, it is highly uncertain whether many Freddie and FNMA loans will not redefault, increasing long term costs. Already, the Administration is requesting increased guarantee authority on both be raised a total of $400 billion more. An overriding concern remains that most subprime loans at the heart of the foreclosure crisis are not held by FNMA/ FreddieMac. Lack of resolution in that segment of the market will further pull down home values and exacerbate the situation. To add some perspective, there is a real question as to whether the $75 billion dedicated to loan modifications will be significant enough to right the market. Ohio alone needs $20 billion to fill its housing finance gap. This plan might help places like California where the housing bubble burst but its impact in Ohio is unclear, where the recession has dragged on for 8 years. People need adjusted home mortgage, and even rent-to-own rental schedules. These must be negotiated one by one. The Administration plan will not help the vast majority of underwater homeowners because their plan is not systemic in its approach. In sum, this bill and the Obama plan do little to nothing to address the fundamental cause of crisis--widespread and overuse of concentrated securitization practices, mortgage and appraisal fraud, and the seize up of credit markets due to improper use of federal instrumentalities in attempting to resolve the situation. Our citizens deserve full justice, not continuing reliance on the very institutions that brought us to this fork in the road.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I rise to express the opinion that in the recent vote on H.R. 1106, which had to do with mortgage foreclosures and so-called enhancement of mortgage credit availability, it would be incumbent upon leadership of the institution to follow normal process and to allow the membership, if they wish to offer amendments before the Rules Committee, to be afforded that opportunity. The challenges we face in the mortgage market are enormous, and regular order should be the rule of the day here. You know, we wouldn't have all these difficulties in our country if we would be properly using the normal institutions to resolve loans, loan difficulties, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission. When you don't use those, and you begin to try to tinker at the edges of a really large problem that the country faces, and the implosion of the mortgage market itself, you can make a lot of mistakes. Members deserve respect. We deserve due diligence by the respective subcommittee and committees, including the opportunity to amend and include ideas in the manager's amendment. If that does not happen, we don't serve the American people well. I think every Member here deserves that respect. And I would hope that, as next week begins, we will have the opportunity to perfect this legislation, if it can be perfected or, more properly, to meet with the Secretary of the Treasury and the economic leaders of the new administration to perhaps shape a different path forward. Well, here's another Housing bill, claiming to be a nostrum for what ails us with housing foreclosures. Last August, the same committee, with no hearings and no opportunity for amendment pushed through a landmark bill called Hope for Homeowners. It was supposed to help workouts, to bring assistance to counselors, to prevent foreclosures. To this date this program has worked out on 25 mortgages only. Twenty-Five--not 250, 2500, 25,000; just 25. We have seen more foreclosures, not enough workouts, no Wall Street firms or their hired gun servicers coming to the table. The money for the communities engaged in counseling arrived late, and people lost their homes. The next batch of money did not arrive to allow cities to buy homes, and now out of state individuals or companies own the homes and these new owners have no vested interest in the properties. They are looking at the profit they will receive. The communities lose. The people lose. Even those homeowners who are paying their mortgages, keeping up with their bills and being overall good economic citizens are paying because their neighbors fell on dire straits, property values are plummeting. The money that did reach communities sometimes only reached certain communities--others suffered. In northern Ohio, Cleveland got the majority of the money and Toledo suffers with little or no money available to help people. I myself attended an auction run by a company in Dallas, TX, that sold away my constituent's homes to far away people and the communities are struggling and some neighborhoods are even dying. Then, the last Administration shoved TARP at us. Crisis was coming or at hand and it was the only way to stop it. Those that voted for it thought that they were going to prevent more foreclosures--they wanted to help the people. They found out Hank Paulson took all the money for Wall Street banks that didn't do workouts, and are not doing workouts. But the last Congress held them up, saved them, and paid them taxpayer dollars. To what end? It's a new Congress and a new President. Foreclosures are still rampant. The economy is oscillating and the recession is deepening rather than stabilizing. Now we are told: we've got another idea we want to sell you. Let's go the bankruptcy route. Of course, this won't deal with the millions of pending subprime foreclosures and achieve workouts. It will only address people filing for bankruptcy and about 20% of them might have a home involved in that process. These people could be helped, but we are not helping all the other people who are not turning to the last, absolute last resort of bankruptcy. Do I understand this--no Wall Street big bank has been asked to go bankrupt and its assets distributed to more responsible community banks. But instead of bringing discipline to the banks, now we're going to ask the American people to file bankruptcy first. And, we're going to provide money to pay the fraudulent servicers. If you're not sure how to vote on this, think what happened before. Think about the solutions we were told would work. Look around your community. Are they working? I can tell you in my district they are not. Here are some questions that ought to be answered before we move forward: 1. Does a family have to declare bankruptcy before qualifying for a ``workout/refinancing''? Why do families have to do this but not the banks? 2. What % of troubled loans would this plan rescue--less than 10%, . . . up to 90%? 3. Are eligible loans only ``subprime'' ones, or any loan? 4. In Title 1, why do lenders need financial incentives to modify loans? They've got TARP $. 5. What % of appropriated funds for this program will go to lenders? Why? How @ servicers? They're not licensed or certified. Why let them qualify for anything? They've been awful. 6. How will the government recoup its money? Is there a shared appreciation provision that reimburses government for its investment? 7. What happens to credit union financed mortgages? They did no subprimes. Are their loans eligible for workouts? What happens when a reduction in principal wipes out their annual profits?

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, last night, President Obama said that in this time of economic insecurity, America must avoid the possibility of protectionism. My friends, where are the fearsome red-herring protectionists? We all believe in free trade so long as it is fair trade, and I believe most of all in free trade among free people. Our Nation boasts the most open markets in the world, but one must recognize that America hasn't had a balanced trade account since 1975, yes, 1975. That's 34 years of regression on the jobs and trade front, 34 years of wandering in the wilderness, 34 years of deluges of imports dwarfing our exports, 34 years of outsourcing our good jobs by the millions. Thousands of America's best companies have been sacrificed, Maytag, Trico, Playtex, Levis, Zenith, Georgia-Pacific, Champion Spark Plug. The list is endless. Now we are watching major segments of our banking system disintegrate while we buy foreign televisions, foreign clothing, foreign automobiles, foreign food, all while our beautiful Nation begs China, undemocratic China, for money. It's pretty clear we need to focus on our trade deficits as a causal factor in our other deficits. The human and economic tragedies continue to mount. The massive hemorrhage of U.S. wealth instructs us in its raw truth. So-called free trade agreements began in 1975. Back then we had a surplus of $12.4 billion in goods with the world. We have now sunk in 2008 to $677 billion in trade deficit, three-quarters of a trillion dollars, and all the lost jobs that go with it just disappear. The evidence is all around us. Americans are working harder each year, increasing their productivity but then seeing no increased wages. More lost purchasing power, the dollar isn't worth as much. Their health and pension benefits, disappearing. This is not a recipe for a healthy economy, a strong nation or a middle class. The challenge is trade is not a zero sum game. Other nations don't play by the same rules. Other nations manage their markets. Other nations manipulate their currency. Other nations aren't democratic and they have no rule of law. Let's look at the raw facts, as ignoring our trade deficits won't help our Nation crawl out of our deep economic hole. Let's stop digging and start crawling out. When you focus over a quarter of a century on more outsourcing of jobs and importing goods than on exporting goods and creating jobs here, our country ends up indebted and we are indebted to China, indebted to Mexico, indebted to Japan and all the other creditors who will be knocking on our grandchildren's doors. When you conduct two wars and don't pay for them, you make it even worse. But not to recognize those two deficits, the trade deficit as well as the budget deficit, is to live in a world of delusion. In 2008, our largest trade deficit was in oil with countries in the Middle East, and the bottom line is that that trade advantages them, not us. If you look at overall trade between the United States, Canada and Mexico, that's governed by NAFTA, the North American Free Trade Agreement. We are now at record imports from both countries, not exports, record imports, $74.2 billion in the red with Canada last year and $63.5 billion in the red with Mexico. The same is true with Communist China, where we are in a $266 billion deficit, a record high. Japan is no different, $72.6 billion there. The top trade gap we continue to face is imported oil. Overall, the U.S. imported 3.6 billion barrels of crude oil in 2008 worth $342 billion, our chief strategic vulnerability. Unemployment continues to rise nationally, over 7.2 percent, and in districts like mine and many counties over 12.5 percent. Dr. Peter Morici of the University of Maryland has written, ``Lost growth is cumulative. Thanks to the record trade deficits accumulated over the last 10 years, the U.S. economy is about $1.5 trillion smaller. This comes out to about $10,000 per worker,'' and every American middle class family feels it. How are we going to change this, Mr. President? America needs balanced trade accounts, not delusion. We need open markets, not closed markets. We need a rule of law, not undemocratic practices. We need realism, not delusion.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, Congressman Poe raises some very good points. One of the major reasons we should be renegotiating NAFTA is to deal with many of the consequences of that trade agreement which was sold as a nirvana for the continent, and there are so many consequences that are harmful to people in this country and to the other two trading partners. So I was very interested in his remarks. I came down to the floor tonight to talk about liberty. When our Republic was founded, Patrick Henry courageously implored, ``Give me liberty or give me death.'' He put his priority on sacrifice for liberty as the fundamental building block of our Republic, a moral calling of the highest order. Similarly, as immigrants from far off lands flock to America's shores, they still journey through New York Harbor and read the timeless words at the base of the Statue of Liberty, penned by poet Emma Lazarus, that recall our primary founding moral value: ``Give me your tired, your poor, your huddled masses yearning to breathe free.'' Freedom is not only what this Nation offers to all who come here legally, but it is the cornerstone upon which our founders built this Nation. America today is navigating a slippery slope that is a departure from our birthright, our Nation's very reason for being. When freedom becomes subjugated to financial dependence on undemocratic regimes or marketplace conveniences, surely we risk losing our way. Those around the world can become disillusioned with our Nation's very reason for being. Thomas Jefferson stated, ``Can liberties of a nation be sure, when we remove their only firm basis, a conviction in the minds of the people, that these liberties are a gift from God?'' He clearly means we should not take the abundance of our Nation in whatever form and squander it or take it for granted. I become concerned myself when pecuniary interests trump human rights. With China's now becoming the chief holder of U.S. Treasury debt, one must ask, ``What comes first, liberty or bondage?'' Whether it is human freedom in China or repressive theocracies across the Middle East or dictatorships in Africa, Asia or Latin America, at what point does our growing financial dependence sully America's birthright, which is liberty first, last and always? I stand here, amazed, that yet again the wise Thomas Jefferson issued, for posterity, a warning as follows: ``If the American people ever allow private banks to control the issue of currency first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.'' Imagine how many years ago he said that. My friends, my dear colleagues and my fellow citizens, we must take a strong and devout look at where we are and how we got here. Our financial dependence on foreign regimes has compromised our very birthright. It was with sadness that I watched our able Secretary of State dance on eggshells on her recent trip to Beijing. It is Lady Liberty that must inspire us to recapture our freedom for our own posterity. Surely, Thomas Jefferson would like that.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I rise in support of S 352, the DTV Delay Act. America is unready and as always, the poor and elderly are the most at risk. In my district alone, 4,569 people have requested vouchers for their analog televisions and have not yet received the coupons. Unless Congress acts, these televisions will flicker black. These constituents will not be able to hear news alerts, be notified of national emergencies and continue to be connected to the outside world through their televisions because the Government didn't follow through with a promise to provide DTV vouchers. It is the Federal Government that for years, has been assuring these constituents that their televisions will not turn black as long as they follow through with the instructions and submit requests for digital television vouchers. It is imperative that we delay implementation of the digital transmission and fulfill the commitment we have made to our constituents that have followed the rules. The legislation being considered today has important provisions which allow the FCC with flexibility in implementing these requirements. The bill permits the FCC to approve full DTV conversion in markets where the consumers are prepared for the transition before the hard date in June. Where the transition does occur before the June 12th date, this legislation allows first responders to take over the airwaves immediately once the analog signal space is open. While this delay is unfortunate, it is a necessary step to assure that the millions of Americans televisions will not go dark because of a bureaucratic snafu. In the multiple media markets in Ohio, 6.88 percent of the Dayton market is unready for the digital transition, 5.91 percent of the Cleveland market, 4.4 percent of the Detroit market and 4.29 percent of the Columbus market. I urge a Yes vote on this legislation because I cannot simply turn my back on this many constituents.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, today the White House apparently made an announcement that they're considering a proposal to head off potentially millions of more home foreclosures by using Federal funds to buy up at-risk loans and apparently refinance them. It's one of several proposals that the White House is looking at. I would urge the new President of the United States not to allow the Federal Government to purchase toxic assets, and I'm placing in the Record an article from late last fall by William Isaac, the former head of the Federal Deposit Insurance Corporation during the 1980s, the early part of the eighties, late seventies, when over 3,000 banks in our country were resolved without going to the taxpayers to bail out the problem loans. Primary Dealer List--Memorandum to all Primary Dealers and Recipients of the Weekly Press Release on Dealer Positions and Transactions The latest list reflects the following changes: Effective February 11, 2009, Merrill Lynch Government Securities Inc. was deleted from the list of primary dealers as a result of the acquisition of Merrill Lynch & Co., Inc. by Bank of America Corporation. List of the Primary Government Securities Dealers Reporting to the Government Securities Dealers Statistics Unit of the Federal Reserve Bank of New York: BNP Paribas Securities Corp. Banc of America Securities LLC Barclays Capital Inc. Cantor Fitzgerald & Co. Citigroup Global Markets Inc. Credit Suisse Securities (USA) LLC Daiwa Securities America Inc. Deutsche Bank Securities Inc. Dresdner Kleinwort Securities LLC Goldman, Sachs & Co. Greenwich Capital Markets, Inc. HSBC Securities (USA) Inc. J.P. Morgan Securities Inc. Mizuho Securities USA Inc. Morgan Stanley & Co. Incorporated UBS Securities LLC. Note: This list has been compiled and made available for statistical purposes only and has no significance with respect to other relationships between dealers and the Federal Reserve Bank of New York. Qualification for the reporting list is based on the achievement and maintenance of the standards outlined in the Federal Reserve Bank of New York's memorandum of January 22, 1992. Government Securities Dealers Statistics Unit Federal Reserve Bank of New York, February 11, 2009.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, I rise to commend the exemplary efforts of the United States Coast Guard, along with many State and local agencies, for their rapid response and flawless execution in rescuing 134 ice fishermen from an ice floe off the coast of Lake Erie on Saturday. The call for help came in to the Coast Guard at approximately 10:45 a.m. By early afternoon, everyone was rescued. One man, sadly, who had fallen into the water, later suffered a fatal heart attack, and our sympathy goes out to his family. Saturday's heroic rescue is a testament to the cooperation of various units: The Coast Guard stations in Toledo and Marblehead, Ohio; Detroit, Traverse City, Belle Isle, and St. Clair Shores, Michigan; and even Elizabeth City, North Carolina. The Coast Guard cutter Mackinaw; the Ottawa, Ohio Sheriff's Department; the Ohio State Highway Patrol; Monroe County, Michigan Sheriff's Department; Jervis, Carol, and Washington townships; Toledo Life Flight; the Canadian Coast Guard; and, yes, countless local citizens. I wanted to take this opportunity to call attention to their heroism and outstanding deeds. Hundreds of families, thousands of people, are grateful to them for their actions that prevented a real catastrophe. My constituents rely on the tireless efforts of the Coast Guard and law enforcement to protect America's fourth sea coast along our Great Lakes. The partnership between all levels of law enforcement and seamless communication between these agencies are critical for my constituents who know that, in difficult times like this, there's a team of agencies that they can rely upon. Each year, hundreds of thousands of Americans and Canadians venture into Lake Erie to participate in the region's rich sports fishing industry. Estimates show each year, the sports fishing industry on Lake Erie alone contributes up to $700 million toward our local economy. This backbone to the local economy would not exist without the capable support of first responders. I would like to commend in particular Ottawa County Sheriff Robert Bratton, Lucas County Sheriff James Telb, the Coast Guard, and other local law enforcement officials, for their vigilance in protecting our fishermen from this danger. In addition, I would like to commend local officials on efforts to develop a system in quantifying the dangers related to ice floes and educate fishermen on the dangers of ice fishing. As our country faces the challenges of updating law enforcement to confront the challenges of the 21st century, we should look inward at the expertise of these local officials. For generations, it has been the Coast Guard and local law enforcement that has protected sailors, fishermen, and boaters from our region from these dangers. I will submit for the Record the activities of a number of Coast Guard employees for their work in coordinating rescue operations. Their expertise and heroism must be properly commended. And it is a tribute at the highest order to read into the Record the names of those who participated in this rescue effort: Petty Officer Jason Rice, Sector Detroit; Petty Officer Chad Pietszak, Station Marblehead, coxswain; Petty Officer Jason Venema, Station Marblehead, crewman; Petty Officer Aaron Pitney, Station Toledo, rescue swimmer; Coleman Selm, Air Station Detroit; and Public Affairs Chief Robert Lanier. It is a tribute of the highest order to recognize these exceptional servicemembers whose devotion to duty exemplifies America's real homeland security. Thank you. 1. OS1 Jason Rice, Sector Detroit, Command Center: As the lead Operational Controller, Petty Officer Rice initiated a Safety Broadcast prior to the event to warn fishermen. He received notification of the event, dispatched initial resources, and provided accurate and quick notifications up the chain of command including detailed log entries throughout the event. His recommendations, calm demeanor and professional knowledge ensured the CG dispatched the correct resources and relayed critical information to other first responder agencies. Petty Officer Rice ensured the CG helo was immediately tasked to assist with Person In Water (PIW) & coordinated information flow on medical evacuation to the Fireland Hospital. 2. BM2 Chad Pietszak, Station Marblehead: coxswain on airboat that provided organization, communication and safe transportation during ferry operations. Petty Officer Pietszak's skilled operation of the airboat ensured 94 fishermen were safely transferred from the ice floe to the staging area with no injuries during the evolution. 3. BM2 Jason Venema, Station Marblehead: crewman on airboat that provided organization, communication and safe transportation during ferry operations. Petty Officer Venema ensured 94 passengers were safely embarked, comfortable and delivered from the ice floe to the staging area. 4. BM1 Aaron Pitney, Station Toledo: Station Executive Petty Officer and ice rescue team leader from STA Toledo. Petty Officer Pitney dispatched to scene and liaison with other first responders and law enforcement agencies. He assisted with dragging fire department's 21 feet boat hundreds of yards offshore, assisted with directing and receiving fishermen being ferried off the ice. Assisted MSU Toledo with tracking down details of sunken four-wheeler and air boat. 5. AST3 Coleman Selm, Air Station Detroit: rescue swimmer onboard Coast Guard helicopter CG6553 that participated in the medical evacuation. He performed a direct deployment double lift recovery of the PIW, and then performed CPR with the flight mechanic assisting until PIW was delivered to awaiting medical personnel at Firelands Hospital helipad. He also participated in the extensive aerial search effort, locating several stranded fishermen. 6. PAC Robert Lanier, D9 Public Affairs Chief. Within minutes of the initial report, Chief Lanier recognized the gravity of the situation and mobilized the entire external affairs division. He sent a team to the Incident Cmd Post at the scene, and personally supervised a team at the D9 office. His group aggressively released info and imagery to the media in a timely manner, and conducted numerous national media interviews, garnering extensive coverage. It is a tribute of the highest order to recognize these exceptional service members whose devotion to duty exemplifies America's real homeland security.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, when is the group in charge of the U.S. economy here in Washington going to wake up and take notice our trade accounts are as out of balance as our mortgage market? Congress can't keep tweaking consumer purchasing with stimulus checks and then crossing its fingers in hopes that by some miracle it will actually lift our economy. More borrowed money simply means more short- term palliatives. Hardworking families in our country do not need a consolation prize. They demand a real solution. What they need is a workable path by which they can become part of a growing economy. When recovery dollars are spent on goods largely imported from somewhere else, the promised bang to rescue our economy is received but as a mere whimper. Congress must address the greater trade and tax structure problems pulling on our purse strings. Take, for example, trade deficits growing between our Nation and industrialized economies from other parts of the world. Those are just getting worse. Like the outsourcing of U.S. jobs. What are we going to do about that? Like global closed markets. Who's going to open those up? And, like the value added tax, which creates such a damper on U.S. production. A trillion dollars more in spending by Congress will miss the real mark of healing our economy by adding the important legs of tax reform and trade reform. While trade laws and tax laws remain as critical components of real long-term recovery, we cannot subsidize or borrow our way to growth. We are already paying over $200 billion on borrowed money to foreign interests, and those numbers are going to grow. And they are more than willing to put America in hock. Wake up and take notice. If we want to see the benefits of growth, America must produce, not placate its way to prosperity. As we approach NAFTA's 15-year anniversary, let's take a look at a textbook example of failed promises of prosperity. When NAFTA passed Congress by a tiny margin in 1993, proponents like President Clinton said that this new trade agreement would bring unprecedented prosperity and create millions of jobs across America. It was said the agreement would lock in trade surpluses, expand trade gains, and solve many of the social and economic ills facing North America, like illegal immigration. Let's take a look at the record. On its 10th anniversary, the U.S.- Mexico trade surplus wallowed into an estimated $40 billion deficit. And U.S. jobs reported lost? 879,000. And workers' wages? They failed to keep pace with productivity gains. We have not seen a single year of trade balance with Mexico since 1994, much less a surplus as was promised. The growing trade deficit with Mexico is just one staggering figure in our trade deficit accounts. Wages in Mexico have fallen dramatically, and the drug trade has snuggled up against our border and yielded murder as well as violent crime that has surged over into our country in places like Phoenix. And there is an upheaval churning on both sides of the border. Fifteen years ago, NAFTA was sold by the Clinton administration as a development strategy for Mexico, promising alleviation of poverty and inequity, while simultaneously halting illegal border crossings because it promised so much opportunity at home for Mexicans. Sound familiar? It is no surprise that many of the Wall Street proponents of the bailout were the same ones who wrote NAFTA 15 years ago and fought on the side of big business, just like today. Take Citigroup, for example, or Goldman Sachs. They were in there with both fists.

Ms. KAPTUR. I thank the gentleman for his comments, and just say I just wish that the main product that was being sent here wasn't illegal narcotics.

Ms. KAPTUR. I will be pleased to yield to the gentleman when I am finished. A healthy economy will require policy changes, not cough drops. We need products on our shelves that are produced by Americans. We need real wealth creation here at home. We need trade that is prosperous and balanced, in the black, not in the red. And, we must infuse the power of our marketplace here at home to produce long term, to spur the necessary social and physical infrastructures to restore economic strength to our Nation rather than growing weakness. We need free trade among free people. America needs balanced trade accounts, not more trade deficits and one-sided trade agreements. And America needs production, not subsidy. Most of all, we need changes in our trade policies and our tax policies that create real investment and long-term growth in our Nation so we don't have to continue borrowing our way forward and making our children and grandchildren debtors into the vast part of this new century and millennium. Now, the gentleman, who was a chief opponent to my views on NAFTA, what does he have to report as he asks for some of this time?

Ms. KAPTUR

Ms. KAPTUR. Thank you, Mr. Speaker.

Ms. KAPTUR. Mr. Speaker, the House of Representatives voted last week, disapproving of the release of the second tranche of Wall Street bailout--called TARP moneys--to the U.S. Treasury. I disapproved, along with a majority of our colleagues here, on sending more money over there. Of course our vote made no difference. It is really amazing how this unusual procedure was adopted in the original bill passed last year that basically took away our rights as Members of this House. So the money was released to Treasury, and what happens over there becomes more troubling every day. Now, the Senate basically gave the newly named Secretary of Treasury a pass, even though Mr. Geithner failed to pay his taxes. He didn't fail to pay $100 or $200 or $10,000 or $20,000--I think it was well over $34,000, and he's the person now responsible for overseeing the Internal Revenue Service and the entire bailout. In addition, as the administration seeks to reduce the influence of lobbyists, as the Secretary issues statements on reducing the influence of lobbyists on Treasury policy and directing TARP funds, how could he then, as Secretary of Treasury, hire a lobbyist--a lobbyist who had been hired by Goldman Sachs--and put that lobbyist as his Chief of Staff? In case you really didn't know it, Goldman Sachs used to be one of those Wall Street gambling houses that lost all of their investors' money. And then, when they got in trouble, they did something very clever; overnight they became a bank holding company, which means they came under the protections of the insurance fund that other banks that had been responsibly managed had paid into for decades. But they were powerful enough to ride right over them and to land themselves there, and then put their hand out for $10 billion of bailout money. Now that's a real clever score. Now, we can be pretty certain that Treasury's Chief of Staff will welcome his old friends and colleagues to the Treasury as the bailout funds and other banking issues come up. Wouldn't surprise me at all. But isn't that what President Obama is really trying to prevent? On top of this, Secretary Geithner received nearly a half a million dollars--half a million dollars--in severance from the Federal Reserve Bank of New York when he left. Now, we know that the New York Fed and the Treasury are very connected--it's like an umbilical cord tying the two together--and they just circulate their people up and down between New York and Washington, and then the people of the other States have to pay for the wrongdoing they get into about every 10, 15 years or so. USA Today reports the Government Accountability Office has questioned Treasury's policies in a December report, saying the Department didn't have a plan to monitor conflicts of interest. Of course they say they will work to address this, but can we be sure that conflicts of interest have been scrubbed clean? No, of course not.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, our economy is far from healing. Economists believe that the proximate cause of our economic crisis is the housing foreclosure crisis. I agree. Thus, I want to help explain how the very banks the Executive Branch is bailing out have and continue to make money off our constituents through deceptive practices in the housing industry, specifically through the sale of those mortgages. I have a constituent in Sandusky, Ohio, who refinanced his home due to a divorce to an adjustable rate mortgage through an Ohio bank. But then, J.P. Morgan Chase Bank in New York bought the bank and closed the deal on the refinancing of the mortgage. Chase did not properly disclose to this gentleman that the rates were higher than what was in the original loan documents, which violates the Real Estate Settlement Procedures Act and the Truth in Lending Act. My constituent has paid and, to the best of my knowledge, is making regular payments on his mortgage to an escrow account; however, around last October, with the help of a lawyer, he served J.P. Morgan Chase a notice of rescission on his loan due to the aforementioned violations. His lawyer requested that Chase inform him of any interested parties and holders of his mortgage to properly notify them of his rescission. Chase has not properly answered his query, so the case is going to court. It is the belief of my constituent's lawyer that Chase cannot name the holder of the mortgage. His loan was sold to a bank which placed his mortgage in a loan serving pool. Then his loan was chopped up into parts, bundled, and sold as mortgage-backed securities to hundreds of large institutional investors. Involved are trust oversight managers, depositors, underwriters, trust administrators, investors, trust fund issuing entities, trustees. But who really knows who all are involved? But we know this: They all got a piece of the pie on the transaction. This loan pooling process, some would say a Ponzi scheme, for securitization of loans make one's head spin. But at its core is one thing: Lots of profit on the upside, and now lots of loss on the downside. I do not know if my constituent can rescind his loan, avoid foreclosure, save his credit rating and, therefore, his financial future, because he cannot properly notify the holder of the mortgage. No one knows who it is. My constituent's situation is not unique, and in fact the story reverberates from sea to shining sea. We bailed out the banks because of these very practices which created certain toxic assets; yet, the practices continue: People lose their homes, the economy is tanking, and the bailed out banks are filling their coffers, paying dividends, making acquisitions, giving bonuses, holding auctions of these properties. Furthermore, I would like to call your attention and include in the Record today's Wall Street Journal article titled, ``Lending Drops At Big US Banks.'' According to the article, 10 of the 13 biggest beneficiaries of bailout monies who received $148 billion of our taxpayer money saw their outstanding loan balances decline by a total of $46 billion between the third and fourth quarters of 2008. That means they weren't making loans with the money they got. The intent of bailing out Wall Street by those who voted for it was to free up credit. They didn't do it. And, Federal regulators are aiding and abetting them. Rather than using the Federal Deposit Insurance Corporation and the Securities and Exchange Commission as the proper agency for mortgage resolution, what we continue to see is Treasury in charge, which is a revolving door between Wall Street and the highest levels of our government. Paul Volcker put out a report last week on behalf of the Group of 13, calling for nations to reform their pro-cyclical regulatory and accounting rules. Unless this is done, why would our government allocate one more penny of taxpayer funds to cleaning up the mess that Wall Street and Washington leaders have gotten us into? [From the Wall Street Journal, Jan. 26, 2009] Lending Drops at Big U.S. Banks--Top Beneficiaries of Federal Cash Saw Outstanding Loans Decline 1.4% Last Quarter (By David Enrich) Lending at many of the nation's largest banks fell in recent months, even after they received $148 billion in taxpayer capital that was intended to help the economy by making loans more readily available. Ten of the 13 big beneficiaries of the Treasury Department's Troubled Asset Relief Program, or TARP, saw their outstanding loan balances decline by a total of about $46 billion, or 1.4%, between the third and fourth quarters of 2008, according to a Wall Street Journal analysis of banks that recently announced their quarterly results. Those 13 banks have collected the lion's share of the roughly $200 billion the government has doled out since TARP was launched last October to stabilize financial institutions. Banks reporting declines in outstanding loans range from giants Bank of America Corp. and Citigroup Inc., each of which got $45 billion from the government; to smaller, regional institutions. Just three of the banks reported growth in their loan portfolios: U.S. Bancorp, SunTrust Banks Inc. and BB&T Corp. The loan figures analyzed by the Journal exclude some big TARP recipients that haven't reported fourth-quarter results yet, such as Wells Fargo & Co. The overall decline in loans on the 13 banks' books--from about $3.36 trillion as of Sept. 30 to $3.31 trillion at year's end--raises fresh questions about TARP's effectiveness at coaxing banks to reopen their lending spigots. ``It has failed,'' said Campbell Harvey, a finance professor at Duke University's business school. ``Basically we have dropped a huge amount of money . . . and we have nothing to show for what we actually wanted to happen.'' Credit Constraints In a survey last month of 569 U.S. companies, Mr. Harvey and researchers at Duke and the University of Illinois found that 59% felt constrained by a lack of credit. Many of those firms are shelving expansion plans and cutting jobs as a result of funding shortages, according to the survey, which is expected to be released this week. Bankers say it is unfair to expect them to funnel a large portion of their government capital into loans so soon after receiving it. They say it takes time to make prudent loans and to attract new deposits that will allow them to lend out their new capital efficiently. Demand for low-risk loans is also ebbing as consumers and businesses rein in their spending and try to conserve cash, according to bank executives. Even though mortgage rates are down, for example, applications in the week ended Jan. 16 declined about 10% from the previous week, according to the latest data from the Mortgage Bankers Association. Meanwhile, federal regulators have been pushing many banks to set aside extra capital to cushion against losses. Bankers say that is at odds with the government's encouragement to make more loans. The fact that loan portfolios are shrinking at many of the largest TARP recipients underscores how few strings Treasury Department officials attached to the infusions. That has made it hard to prevent banks from using the money to pay dividends, make acquisitions and fund bonuses for top executives. Federal officials argue that the downturn in lending would have been much more acute without the TARP funding, and that attaching additional strings to the money could have led banks to make risky loans or to refuse to accept the government capital. Obama administration officials acknowledge that TARP hasn't managed to jump start lending as intended, and say they plan to overhaul the program to address the shortcomings. TARP recipients must submit lending data to the Treasury Department by the end of January, though industry officials don't expect the disclosures to divulge much more than what banks already include in routine regulatory filings. Around the world, bankers are under pressure from regulators and lawmakers struggling to prop up the financial system. Politicians in the U.S. and overseas are ratcheting up their rhetoric about banks needing to do their part. On Sunday, Franz Muntefering, chairman of Germany's Social Democrats, said in an interview with a German newspaper that ``most of the bankers are competent and responsible, but there are also some beatniks, pyromaniacs and gangsters.'' New Student Loans In a sign that banks are feeling political heat, Citigroup is expected to announce Tuesday a plan to use some of its TARP money to finance tens of billions of dollars in new loans this year, according to people familiar with the situation. The push will include credit cards, student loans and mortgages aimed at specific segments of the population, one person said. Of the $45 billion it got from the government, Citigroup last fall invested $10 billion in Fannie Mae's short-term commercial paper, which the company views as relatively low risk, according to the person familiar with the matter. The remaining $35 billion hasn't been put to use yet. Even critics of TARP's capital injections say that they steadied financial institutions and soothed investors, averting possible catastrophe. The first capital infusions were announced about a month after Lehman Brothers Holdings Inc. filed for bankruptcy protection, igniting fears that other shaky financial companies could collapse. The fourth-quarter decline in overall loan volume at the 13 banks coincides with an industry-wide retreat from broad swaths of consumer lending. Banks have scaled back on mortgage lending, canceled or substantially reduced many home-equity and credit-card lines and, in some cases, simply stopped making certain types of loans unless they're guaranteed by the U.S. government. Recession Woes Despite dismal economic conditions, many bankers insist they are making every good loan that they can. Bank of America and J.P. Morgan Chase & Co., which got a combined $70 billion in government capital, said they originated a total of $215 billion in loans in the fourth quarter. Their combined loan portfolios shrank by about $28 billion in the same period. Scott Silvestri, a Bank of America spokesman, said the Charlotte, N.C., bank's loan balances declined in part because more borrowers have been paying off their debts. In addition, ``there were fewer opportunities to make high- quality loans because of the recession,'' he said. A spokesman for J.P. Morgan declined to comment. The loan volumes that banks disclose publicly only reflect outstanding loans on their books, many originated years ago, not the actual amount of new loans made in a given quarter. While several banks reported the amount of new loans they made in the fourth quarter, they didn't disclose comparable figures from prior periods. ``What you can't tell is how low they would have sunk in the recession we're in were it not for the TARP money,'' said Walter Moeling, a partner in the banking practice at law firm Bryan Cave LLP. The overall decline in loan balances during the fourth quarter reflects the huge hurdles and conflicting agendas that need to be overcome before credit can start flowing smoothly again. For instance, many banks have said they are using TARP funds to cover current or anticipated defaults on a wide variety of loans. At the same time, shareholders at many institutions have demanded that they slim down their balance sheets to reflect the new risk-averse environment. At BB&T, a Winston-Salem, N.C., bank that got $3.13 billion from TARP, fourth-quarter lending volume rose about 2%, or $2 billion. While BB&T is making new loans, Chief Executive Kelly King said the bank invested much of its taxpayer capital as a way to earn a decent return while shunning risk. ``We parked it there, and will redeploy it as quickly as we can, not in a panic,'' Mr. King said last week on a conference call with analysts. ``We're not going to make a bunch of bad loans.'' The overall loan decline likely understates the magnitude of the industry's retrenchment. In normal times, banks would make loans and then sell many off to investors or financial institutions. But that practice has ground to a halt, so more loans today are staying on banks' books. As a result, some banks' loan portfolios could appear larger than they would have in the past, even though they aren't actually making more loans. Bank balance sheets also have been inflated as more companies draw on credit lines that banks committed to before the financial crisis erupted. Last fall, an increasing number of borrowers started tapping those lines, banks say, either because other types of credit were evaporating or out of an abundance of caution. For example, KeyCorp, where total loan balances declined by about $200 million in the fourth quarter, saw a $1.3 billion leap in its commercial, financial and agricultural loans. Chief Financial Officer Jeffrey Weeden said that was primarily the result of clients dipping into their revolving lines. KeyCorp, which is based in Cleveland and received $2.5 billion in federal capital, made or renewed $5.7 billion of loans in the fourth quarter. But KeyCorp has stopped making student loans unless they're backed by the U.S. government.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, I rise today to pay tribute to William J. Syring of Toledo, Ohio who practiced law in Toledo for a half-century, eventually running for City Council and the Ohio Court of Appeals. Mr. Syring had a general law practice, handling small business, probate, real estate, and personal injury cases. His son, Paul, first practiced law with his father, and state it left ``an indelible mark on my career. It was a wonderful experience. He was calm, a constant student of the law'', as he reported to the Toledo Blade. William retired about 10 years ago from his practice, which he began in 1948 after serving two years as counsel for the Federal Power Commission in Washington. ``He was always a great one for wanting to help others, especially those who couldn't afford it or didn't know the right channels to go through,'' his wife Pat observed. Mr. Syring believed that to build a case, a lawyer must get out and talk to people and investigate, much as a detective would do. ``He taught me you don't practice law sitting behind your desk and answering the phone,'' said his son, a senior attorney with the City of Toledo Law Department, where he has been since 1999. ``I learned more from him probably than I did in law school. ``He was a representative of the golden age of the practice of law in Toledo. He showed me it's priceless to prepare, and he was always prepared.'' Mr. Syring ran in 1982 for the Ohio Sixth District Court of Appeals, and he campaigned at diners and fairs through the eight counties of the district. ``He was a great communicator, a great trial lawyer, [and] thrived in the courtroom,'' his son said. Mr. Syring was defeated by Judge Peter Handwork, who remains on the bench. Early in his career, he ran unsuccessfully for City Council twice, in 1953 and 1956. He was long active in civic causes. Mr. Syring was a member of the Board of Community Relations in the 1950s and he was a trustee of the Model Cities Agency in the 1960s. He was a member of the Interfaith Conference on Religion and Race and of the NAACP. He was a past president of the Toledo Trial Lawyers Association and was a member of the Toledo Legal Aid Society. He formerly was on the executive committee of the Lucas County Democratic Party. Mr. Syring was on the Ohio Board of Bar Examiners for two terms. He was also a member of Gesu Church. Mr. Syring was a graduate of St. John's High School when it was in North Toledo. He received bachelor's and law degrees from the University of Notre Dame. He later received a master of laws degree from Catholic University of America in Washington and attended University of Toledo and Ohio State University law schools. An Army veteran of World War II, he was an agent in the Counter Intelligence Corps in Europe. Surviving are his wife, Patricia Syring, whom he married Oct. 6, 1956; daughters, Julia Syring and Mary Drumm; sons, Patrick, Joseph, John, and Paul Syring, and seven grandchildren. It is with the deepest appreciation that I pay tribute, on behalf of our entire community, to the long life of a good, patient, kind and dedicated barrister, William J. Syring who passed from this life on July 4, 2008. He lived his years in service to his family, friends, Toledo community and the cause of justice. I valued him for decades as a friend and advisor. May God welcome William home and bring peace to his dear wife and family.

Ms. KAPTUR

Ms. KAPTUR. Madam Speaker, I rise today to recognize the passing from this life of Barbara E. Herring, who served as the first female law director for the city of Toledo. Mayor Carleton Finkbeiner appointed Mrs. Herring law director in August 1999, after 4 months as acting law director. She retired as law director in December 2005, as the administration of Mayor Jack Ford was drawing to a close. As Mayor Finkbeiner said to the Blade, ``If you're going to be a first-rate city in this country, you have to have leaders that come from every sector of the community.'' Mr. Finkbeiner said at her appointment, ``Barb is going to be a very strong law director and a strong component to the leadership of the city.'' Most of her tenure was in the succeeding administration, and ``I was honored to serve with her,'' Mayor Ford said to the Blade. ``She was the best director I had. [She] helped draft the ethics statement we all lived under during the 4 years I was mayor. She helped set the tone.'' One issue in which she played a big part was the city's smoking ban, which preceded the statewide ban by several years. On other issues as well, ``in those days, Toledo was setting the tone for the State as far as home-rule rights,'' Mayor Ford said. ``She wrestled through a big case in the [Ohio] Court of Appeals with respect to [off-campus] student housing. I had full confidence in her. She was ethically driven. Early on, we had an understanding that we would do things by the book and do it right and not try to be politically cute.'' While she was honored to be chosen as the first woman to serve as law director, her husband, David, said, ``she was more concerned about being considered the best law director. She built that department up and was so aggressively fighting for them and trying to do things to get new talent in there,'' he said to the Blade. She had a calming effect, even in demanding circumstances, said Kelly Bejaige, who was her secretary. ``She was very dignified and caring, and that carried her through,'' Ms. Bejaige said. ``She had great respect from many people. She saw the best in everybody, and she tried to bring that out in people. She was no nonsense. She expected a lot, but nothing less than she was willing to give herself.'' Mrs. Herring was a partner in the law firm of Cooper, Straub, Walinski & Cramer in 1991 when then-law director for the city of Toledo Keith Wilkowski hired her as a staff attorney. She later became the city's general counsel. She joined the law firm after graduating cum laude in 1984 from the University of Toledo law school. Mrs. Herring taught English and psychology about 8 years at Springfield High School near Toledo, Ohio. Before that, she taught about 6 years at Springfield Junior High. ``She was really the consummate teacher, and education lost what a real teacher should do,'' her husband said. ``She cared not just for the mental and scholastic side of the students, but she cared about their personal welfare.'' Born in Denver, Colorado, Mrs. Herring was a teenager when she moved with her family to Sylvania Township, near Toledo, Ohio. She was a 1963 graduate of Sylvania High School and received a bachelor's degree from Ohio State University. She was a trustee of the Toledo Legal Aid Society and was a former president of Ohio Municipal Attorneys. In retirement, she was on the board of St. Paul's Community Center. She took part in the Lucas County Juvenile Court's Court Appointed Special Advocate program. She was a lector at Blessed Sacrament Church. Surviving are her husband, David, whom she married May 21, 1966; sons, David and Nathan; brother, John White; sister, Carole Gildemeister, and five grandchildren. It is with the deepest admiration that I pay tribute to the exemplary life of a pioneering woman. She dedicated her life in service to her family, friends, her students and the city of Toledo. May her family be comforted by the memories they hold and may Barbara Herring be blessed with a loving peace.

Ms. KAPTUR

Ms. KAPTUR. Mr. Speaker, the House of Representatives has spoken. We just disapproved sending out the next $350 billion through the President to Wall Street. Of course, since the Senate does not agree, the taxpayer money will go out the door again, to the U.S. Treasury, to be used however the U.S. Treasury Secretary sees fit. Too bad. Indeed, tragic for our people. They say the definition of insanity is doing the same thing over and over again, expecting a different result. Yet, that is exactly what is being done as we ship out the next $350 billion of taxpayer money to Treasury to cover Wall Street's paper losses. When will we have wise leaders who rise and understand that unless the mortgage foreclosure crisis tide is turned back, Wall Street will not heal. We must heal Main Street's mortgage real estate markets first. Congress is looking out of the wrong end of the telescope. In the fall, some in Congress sent out the first $350 of taxpayer money, hastily crafted, for a completely opaque bailout ``plan'' that proponents argued would stabilize our economy. Has that happened? Yesterday, the Dow dipped below 8,000. Last month's foreclosure filings were up 40 percent from the previous year. And nearly 700,000 more jobs were lost last month alone. Our economy is still suffering, with more jobs lost every day, while the promise of the bailout has been broken. The bailout money was given through a hasty process, without enough thought, without any guidelines, and the proper Federal regulators to do the job. The Federal Deposit Insurance Company, the Securities and Exchange Commission, and HUD, were sidelined as Treasury was moved into the driver's seat. Taking advantage of Treasury's boon, Wall Street's gambling casinos used the money to buy up other banks to build up their reserves and get bigger, rather than unfreezing credit so that local markets could work, or engaging in foreclosure workouts, which is the real congressional intent of the original bill. U.S. Treasury nominee, Tim Geithner--he is the gentleman who didn't pay his taxes--noted in his confirmation hearing that there were serious concerns about transparency, accountability, and the goals of the bailout program. But he didn't say how he was going to fix it. How does the administration even know that it needs $350 billion more if it hasn't audited and doesn't know what happened to the first $350? Where did that money go? Congress is taking the lazy man's way out, shirking the immense responsibility to appropriately and thoughtfully guide how the money is spent, ensuring our taxpayers' money is being used prudently. When Secretary Paulson pushed for this additional bank bailout, he said, Well, the government might recoup some of its money. But now the truth becomes clearer. The Congressional Budget Office estimates that of the first $247 billion in bailout payments made just through last December, they are saying taxpayers already will end up footing over $64 billion, or 26 percent, of the bill. That is just where we are today. So if we are on the hook for paying 26 percent of the first tranche, should the people paying the bill not be the beneficiaries of a comparable share of the total funds to do mortgage workouts at the local level? That would be about $180 billion. But the bill that passed the House last night commits as little as $40 billion to foreclosure workouts. In other words, the bottom line really doesn't add up. The Treasury has been inappropriately charged with restoring the health of our markets. But their job is to sell U.S. debt on Wall Street and to collect our taxes. They really aren't designed to do bank regulation or examination or real estate lending or housing workouts or real estate accounting. That is the job of the FDIC, with its bank examiners; and the SEC, with its accountants; and the Department of Housing and Urban Development. America cannot really afford to pay this next $350 billion, just as we didn't pay for the first tranche. We borrowed it all. And we don't know if the Senate will take up the bill that the House passed last night to give some guidance on how those original dollars are to be spent. So we know one fact is certain: Wall Street sure has a lot of power down here in Washington to put at the foot of the taxpayers the bill for all of their wrongdoing. Congress should not have sent out another $350 billion. But what the gambling houses on Wall Street did was create money recklessly by leveraging mortgages way beyond what the underlying asset could return. And those banks are so powerful and arrogant and they breed such special relationships inside our Federal Government, they are not only spared the discipline rules of the market we must all live by, they are spared prosecution so far. They are so powerful, they repeatedly abuse their power, and then run to us, the taxpayers, about every 10 years, to bail them out of their excesses. Wall Street banks do have special pull here in Washington through the Treasury and the Federal Reserve, their campaign contributions, and the revolving door between Washington and New York which, unless you have lived here, you really can't understand. They consistently enrich themselves by indebting the American people for their excesses. They have committed crimes much larger than the last excesses this time from the old savings and loan crisis of the 1980s and 1990s, and they put those losses on the American people too, and it became the third largest component of our long-term debt. The Wall Street bankers, meanwhile, make plenty of money enriching themselves. You know what? They win on both ends because they end up selling the U.S. Government debt through bonds that they issue. It's a win-win for them and it's a loss-loss for us. I just want to say, Mr. Speaker, in closing, that we should use the proper agencies to restore rigor to our market--the FDIC and the SEC, with their examination powers and their accounting powers--and we shouldn't just put the money down the blind hole at the U.S. Treasury that leads directly through a tunnel to Wall Street.

Ms. KAPTUR

Ms. KAPTUR. Thank you, Chairman Frank, very much for the time and for your generous comments, and effort you have made to fix a tragic economic meltdown in our country. I rise today to urge my colleagues to vote for no more money for Wall Street. Today, the House will vote on whether to disagree with the $350 billion in additional funding for Wall Street banks. Those of us who are here on the floor today say ``no more money.'' I urge my colleagues to withhold further taxpayer funding to Wall Street. The housing foreclosure crisis is at the crux of our economic meltdown. And until we fix that, more money to Wall Street is but a massive diversion and a ruse. Treasury took our taxpayers' money in the last-minute raid before last November's election as it stamped Congress into hasty, misguided and wrong action. The argument was, we better do something because we don't want to be blamed for whatever might go wrong. There was little thought, there was a lot of fear. Well, plenty continues to go wrong. The Dow has dipped below 8,000. Homeowners are losing their homes at an accelerating rate. The latest foreclosure numbers underscore the need. Nationally, foreclosure filings surged to 303,000 last month, 303,000 families--that's probably close to a million people, an increase of 17 percent over the prior month and 41 percent from the same month the prior year. These are staggering numbers. All that Wall Street has done with our money is try to cover its tracks, allowing big wrongdoers to benefit by coming under the protection of the Bank Holding Company Act--they think we don't notice--by giving those gambling houses deposit insurance which they never paid for. Worst of all, our homeowners weren't helped. They're still being bilked and losing their homes. How has Wall Street bilked the public? Let me count the ways. First, predatory loan practices have squeezed out equity from homeowners across our country by over-leveraging the market, earning Wall Street hundreds of billions of dollars while the good times lasted. And then, second, when the bubble burst, they placed the trillion dollar burden of their schemes and massive losses onto the U.S. taxpayer that our children and grandchildren are being asked to pay. Third, Wall Street banks further enriched themselves by refusing to do loan workouts, which was the original purpose of TARP. And fourth, instead, banks are using the money to buy banks and further concentrate financial power in the hands of very few who you can track right back to Wall Street. Meanwhile, at the Main Street level, the suffering continues. Fifth, as Wall Street contracts with absentee auction houses to auction foreclosed properties at fire sale prices in Toledo and Sandusky and Cleveland, indeed all across this country, while booking any tax losses on those properties due to declining property values on their Federal taxes for 2008. Another bonanza to them. Banks are ensuring they will benefit on the upside too as the mortgage market recovers as the taxpayer-insured Federal Housing Administration's capabilities are enlarged to buy up those very mortgages. And they're hoping that as families might fall into bankruptcy, that maybe the courts will take care of this too. All the burden is on the homeowner, nothing to hold accountable those who have done the real wrong. Believe it or not, Wall Street is now luring cash-strapped local governments into schemes to avoid loan workouts to earn money at the local level from high fees through quick recovery of tax leans owed while Wall Street fails to inform homeowners of taxes owed. And those Wall Street firms are earning huge profits--are you ready for this? Eighteen percent on this scheme alone. You know, a bank's power, unlike any other organization in our country, is to create money. They don't print it. Instead, through loans, they create money through transactions that earn money and then reloan that.

Ms. KAPTUR. I thank the gentlelady and I thank the gentleman. It is an awesome power, the power to create money. None of us have that power unless one considers fraud or forgery. But the gambling houses on Wall Street did exactly that, they created money recklessly, using mortgages way beyond what the underlying asset could return. They don't deserve any reward. Vote ``no'' on the second Wall Street bailout. It's just more of the same. Treasury and Wall Street broke their promise the first time, why reward them again? Let's use the appropriate agencies--the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and HUD--to do the workouts that are necessary. Stop the suffering that I see every week when I return home to my district and places across this country where the American people have had the door slammed in their face. What a difficult time is being experienced by millions and millions of our families. How can we possibly reward Wall Street again when they've turned their backs on the very people they're asking to pay the bill? But what the gambling houses on Wall Street did was create money recklessly, leveraging mortgages way beyond what the underlying asset could return. Wall Streets bankers are so powerful--and arrogant--and breed such special relationships inside our federal government, that they are not only spared the disciplined rules of the market we must live by, they are spared prosecution, so far. They are so powerful, they repeatedly abuse their power--and then run to our taxpayers about every ten years to bail them out. Wall Street banks have special pull up here in Washington through the Treasury and Federal Reserve, their campaign contributions, and the revolving door between Washington and Wall Street. They consistently enrich themselves by indebting the American people for their excess. They've committed crimes much larger than the last excesses of the savings and loan crisis of the 1980's and 1990's. The cost of those massive excesses too was thrown onto the public and became the third largest component of America's long term debt. Then, Wall Street bankers make plenty of money selling those U.S. debt bonds too. It's a win-win for them. Some would say they make money coming and going! So we have another fraudulent meltdown with another Congress and now another President. We run the risk of being cowed again by their power, rather than holding them accountable for their abusive behavior. They are rewarded again in this bill . . . transferring $350 billion more in taxpayer bailout today to paper over the losses. Yet nothing has been done to turn a face to the taxpayers and mortgage holders who are bearing the personal cost of Wall Street's chicanery. Who will pay Wall Street's bills? Without our imposing rigor, before more $ is showered on them, a culture of excess will flourish and become the norm. America cannot afford more excess and more greed. The latest group of victims-- homeowners--got shunted aside in the first $350 billion Wall Street bailout. Nothing, nothing was done to help them, even though it was promised, promised, promised as the key reason for passage of the bailout last year. The first objective should be expedited workouts as the mortgage foreclosure crisis is driving our economy into ruins. You fix that by doing those mortgage loan workouts, one by one, using the tried and true FDIC, its bank examiners along with the SEC accounting authorities. That isn't being done. I'm saying families being foreclosed not leave their houses--to squat--unless Wall St. bailout services can produce a full mortgage audit. Who holds your loan? Let them disclose they have followed truth in lending and RESPA laws. Treasury--Wall Street's biggest advocate--has been charged with mortgage workouts. It has failed our people miserably. Why? It is not capable of being the mortgage workout instrumentality of our government. The appropriate agencies are the FDIC, SEC, and HUD. Vote ``no'' on the second Wall St. bailout. It's just more of the same. Treasury and Wall Street broke their promise the first time. Why trust them again? Let the new President use the agencies that have the rigor to solve the home foreclosure crisis, not the one that is Wall St. biggest advocate to cover up Wall Street's abuses and greed.