Carl Levin

Mr. LEVIN

Mr. LEVIN. Madam President, I ask unanimous consent to be yielded 3 minutes.

Mr. LEVIN. Madam President, I oppose the Feingold amendment. Section 1019 of the Feingold amendment specifically requires the President, by December 31, 2010, to submit a timetable for the completion of redeployment of our troops out of Afghanistan. The message our military presence in Afghanistan is not open-ended was delivered by President Obama at West Point last December when he set the date of July 2011 to begin a reduction of U.S. forces in Afghanistan. It was an important message of reassurance to the American people, and it was an important message for the Afghan leaders to hear: that while we intend to help Afghanistan succeed in its battle with the Taliban, our troop presence is not open-ended, and they must build up their own army and their police force to take responsibility for their own security. If we adopt the Feingold amendment, we will be sending a very different message to the government and to the people of Afghanistan. It would reinforce the fear if we adopt this amendment--an already deep-seated fear in Afghanistan--that the United States will abandon the region. That is a message we can ill-afford to send regarding the future stability of Afghanistan, and it is a particularly unwise message to send while our forces are still deploying to Afghanistan and while the Taliban is doing everything it can to convince the Afghan people that U.S., NATO, and Afghan forces are unable to protect them from the violence and the intimidation that is their hallmark. The President's decision to set the beginning point to begin the reduction of our forces in Afghanistan in July of 2011 was a wise decision. It was supported by our senior civilian and military leaders. They supported the decision, provided that the pace and the location of the reductions would be determined by the conditions on the ground at the time in Afghanistan. The Feingold amendment is totally different. It requires the setting of a timetable for completion of redeployment of our troops from Afghanistan, and it requires that timetable to be set by this December. It is an unwise move, and I hope we do not adopt it. I yield the floor.

Mr. LEVIN. Madam President, I yield myself 10 seconds to read the amendment: Not later than December 31, 2010, the President shall submit to Congress a report, together with a timetable for the completion of that redeployment. Completion of that redeployment, obviously, from Afghanistan. That is a ``shall;'' it is a report; it is a completion of the redeployment. I yield the floor.

Mr. LEVIN

Mr. LEVIN. Mr. President, earlier this month, the Senate Homeland Security and Governmental Affairs Committee held a hearing on the threat posed by the ability of terrorists to purchase firearms in America and legislative proposals to address that threat. Before purchasing a firearm, an individual currently must undergo a background check to search for disqualifying characteristics such as a felony conviction or a history of domestic violence. However, if the background check reveals that the prospective buyer is on the terrorist watch list, law enforcement legally cannot block the sale unless the individual falls into another disqualifying category. In other words, being on a terrorist watch list does not prevent someone from buying a gun. To close this dangerous loophole, I support S. 1317, the Denying Firearms and Explosives to Dangerous Terrorists Act, which was introduced by Senator Frank Lautenberg. I am a cosponsor of this legislation because it would authorize the Attorney General to deny the transfer of a firearm when an FBI background check reveals that the prospective purchaser is a known or suspected terrorist and the Attorney General has a reasonable belief that the purchaser may use the firearm in connection with terrorism. Law enforcement should have the authority to block the purchase of a firearm by a known or suspected terrorist. Giving them that authority is simply common sense and has support across the political spectrum. At the May 5 hearing, New York City Mayor Michael Bloomberg expressed his support, and that of the other 500 American mayors who are members of the bipartisan coalition Mayors Against Illegal Guns, for passing S. 1317. Mayor Bloomberg focused on data recently released by the U.S. Government Accountability Office showing that between 2004 and 2010, individuals on the terrorist watch list were able to purchase firearms and explosives from licensed dealers 1,119 times. I agree with Mayor Bloomberg's testimony that this data represents a serious threat to our national security and that Congress needs to act to address it. Representative Peter King, ranking member of the House Homeland Security Committee, also appeared at the hearing and spoke about legislation similar to S. 1317 that he introduced in the House. Congressman King mentioned that his bill has Republican and Democratic cosponsors and would have a positive impact on law enforcement agencies across the country, highlighting the support of the International Associations of Chiefs of Police. Closing the ``terror gap'' also is supported by an overwhelming majority of American gun owners. In December 2009, pollster Frank Luntz conducted a poll showing that 82 percent of NRA members and 86 percent of non-NRA gun owners favored a proposal to prevent individuals listed on a terrorist watch list from purchasing firearms. Closing the loophole in Federal law that prevents law enforcement from blocking the sale of firearms to terrorists is not a controversial proposal. To the contrary, legislative efforts to close the ``terror gap'' enjoy widespread, bipartisan support. In order to keep Americans safe, it is essential that law enforcement is provided with every legal tool to keep guns out of the hands of known or suspected terrorists. I urge my colleagues to take up and pass S. 1317, the Denying Firearms and Explosives to Dangerous Terrorists Act.

Mr. LEVIN

Mr. LEVIN. Mr. President, a year and a half ago, the Permanent Subcommittee on Investigations began a review of the causes of the financial crisis. The subcommittee, which I chair, sought to answer a fundamental question about a crisis that was, at that moment, threatening to bring on a second Great Depression, and that has cost millions of Americans their jobs, their homes, their businesses and their savings. The question we sought to answer: How did this happen? And we asked that question so that we could inform our colleagues and the public on steps we might take to protect ourselves from the danger of future crises. The subcommittee examined millions of pages of documents, interviewed hundreds of witnesses, and conducted four hearings with more than 30 hours of testimony. What we learned was sobering: We learned that mortgage lenders such as Washington Mutual Bank sought to boost their short-term profits by making increasingly risky mortgage loans to borrowers increasingly unlikely to be able to repay them. WaMu, as it was known, made hundreds of billions of dollars of loans, many of which were laced with fraudulent borrower information, and then packaged and sold these loans, dumping toxic assets into the financial system like a polluter dumping poison into a river. We learned that regulators such as the Office of Thrift Supervision identified problems at WaMu on many occasions but failed to act against them, and in fact hindered other Federal regulators like the Federal Deposit Insurance Corporation from taking action. We learned that credit rating agencies, institutions that investors depended upon to make accurate, impartial assessments of the risks that assets carried, failed completely in this task. This failure was caused by faulty risk models and inadequate data, and by competitive pressures as the credit rating agencies sought to obtain or enlarge their market share and please the investment banks that were paying them for their credit ratings. Because credit rating agencies were paid by the financial institutions selling the financial products being rated, conflicts of interest undermined the ratings process and led to a slew of inflated AAA ratings for high-risk products whose ratings were later downgraded, many to junk status. We also learned that investment banks such as Goldman Sachs helped feed the conveyor belt of toxic assets that nearly brought economic ruin. Goldman Sachs repeatedly put its own interests and profits ahead of the interests of its clients and our communities. Its misuse of exotic and complex financial structures helped spread toxic mortgages throughout the financial system. And when the system finally collapsed under the weight of those toxic mortgages, Goldman profited from the collapse. The lesson of our findings is that this disaster was manmade. And yet perhaps the most stunning finding came from our hearings themselves, when top executives from institutions that collectively destroyed millions of jobs and billions of dollars' of wealth repeatedly dodged responsibility, saying the mistakes were someone else's, that they had done nothing wrong, that those who questioned their actions simply failed to understand how the financial system worked. Mr. President, if Wall Street refuses to take responsibility for its actions, it is incumbent on us to take responsibility for putting a cop back on the beat on Wall Street. The bill we approved last week contains many important provisions that directly address the problems revealed in our investigation. Begin with the lenders. The Consumer Financial Protection Bureau this legislation will create is an important tool to protect borrowers and the financial system from the abusive lending at banks such as WaMu that helped bring about the crisis. Thanks to an amendment offered by Senator Merkley, which I was proud to cosponsor, lenders will no longer be able to pocket a quick profit by selling a ``liar loan,'' requiring no documentation of wages or the ability to repay. Under Senator Merkley's amendment, borrowers will be required to provide reliable evidence of their income, either through a W-2, tax return, or other such record. The amendment would also require lenders to verify borrower income. Together, those provisions essentially impose a ban on so-called stated-income loans, which is exactly what is needed. Negative amortization loans, in which borrowers can spend years making payments so small that they end up owing thousands of dollars more than the original loan amount, should also become rare. Putting a cop on the beat means protecting all of us from the consequences of reckless behavior by those who seek short-term gain at the expense of financial stability. It is also significant that lenders will be required to retain some of the risk they create by keeping a portion of the mortgages they securitize on their own books, ending the current situation in which lenders can make risky loans and then dump all that risk into the financial system. Under the Senate bill, securitizers of high-risk mortgages will have to retain at least a 5 percent interest in any mortgage-backed securities they issue. Mortgages that are very safe-- such as 30-year, fixed-rate mortgages with a historical default rate of 1 to 2 percent--will be exempted from this credit risk retention requirement. Securitizers using mortgages with a credit risk that is above the 1- to 2-percent default rate for traditional mortgages, but below the 5-percent or more default rate associated with high-risk mortgages, will have some risk retention requirement but one that is less than the 5-percent requirement for high-risk mortgages. These risk retention requirements are essential to rebuild investor confidence in our mortgage-backed securities markets. This bill also addresses many of the regulatory failures our investigation identified. The Office of Thrift Supervision, which failed so badly in its oversight responsibilities, is dissolved under this bill. The Federal Reserve would be given important authority to oversee the largest financial institutions, regardless of their legal status as bank holding companies, investment banks or other entities, offering powerful protection against risks to the stability of the financial system that went unrecognized through the web of Federal regulation during this crisis. The Consumer Financial Protection Bureau would be charged with ending high-risk mortgages that not only hurt consumers, but undermined the safety and soundness of U.S. banks and mortgage lenders. This legislation includes substantial reform of credit rating agencies. These agencies will now be liable to civil suits by private parties for the quality of their analytical process, and required to institute internal controls, devote sufficient resources, and improve training and competence to improve the accuracy of their ratings. The Securities and Exchange Commission will establish a new office to oversee the agencies, another example of how we would put a cop back on the beat. And thanks to the amendment offered by Senator Franken, which I cosponsored, the bill has addressed the dangerous conflict of interest under which the supposedly impartial analysis of financial instruments is paid for by the issuers of those financial instruments. While it would have been cleaner also to strike the existing statutory ban on SEC oversight of the substance of ratings and the procedures and methodologies used to produce those ratings, the Senate bill as written essentially overrides that ban and enables the SEC to exercise the oversight needed to ensure credit ratings are derived in a reasonable and impartial manner. We had an opportunity as well to address the issues identified in our investigation with the actions of investment banks such as Goldman Sachs. This legislation makes some progress there. Importantly, the legislation will bring the shadowy derivatives market into the light, requiring virtually all derivatives to be disclosed to regulators, that most undergo a standardized clearing process, and that derivatives dealers meet capital requirements that ensure, if their risky bets fail, they can cover the losses from their own accounts, and not--as, for instance, AIG did--come to taxpayers for a bailout. One major failing during the debate on the bill was the Senate's failure to approve Senator Dorgan's amendment to ban ``naked'' credit default swaps, the ultimate gamble in the casino that Wall Street has constructed in recent years. That amendment included a provision I had sought to ban synthetic asset backed securities that magnify risk without providing any economic benefit. The Dorgan amendment would have reduced the high-risk, conflicts-ridden practices that too often are a part of Wall Street today and would have rebuilt investor confidence in our markets. I regret that the Senate did not see fit to add that provision to the bill. Of course, I wish the Senate had been allowed to consider the amendment that Senator Merkley and I offered to rein in proprietary trading and address the conflicts of interest that have become business as usual on Wall Street. We had offered our amendment to a Brownback amendment that was already pending on the floor. I am very disappointed that Senator Brownback decided to withdraw his amendment, which meant the Merkley-Levin amendment could not get a vote. The Dodd bill includes a provision requiring regulators to study and implement restrictions on proprietary trading, which is a step in the right direction. But we have missed an opportunity to strengthen that provision by putting in a statute, without the ability of agencies to modify, prohibitions on risky trading by banks, and strict limits on such trading by nonbanks. Of prime importance, our amendment would have ended the conflicts of interest that now allow financial institutions to assemble and sell complex financial instruments--even instruments with a significant possibility of failure--and then bet that those instruments will fail, profiting from bets against the very instruments they constructed and from the clients they convinced to purchase those products. Mr. President, I do not understand how Senators can be shown the damaging conflicts of interest identified by our investigation and not see the need to address those conflicts. If we do not address them, we will have poorly served our constituents and missed a chance to make a future financial crisis less likely. I have some additional regrets about the legislation. Amendments I had drafted to impose a 1-year cooling off period before financial regulators can take jobs at the financial institutions they regulated, and to repair damage from a Supreme Court decision known as Gustafson had been included in a planned managers' amendment, but that amendment never received a vote. Important amendments to strengthen the authority of the FDIC, close the London loophole that allows foreign trading terminals to be established in the United States to trade U.S. commodities without complying with U.S. trading rules, require registration of private equity and venture capital funds, reverse the Stoneridge decision barring shareholder suits against those who aid and abet financial fraud, and other important issues were also not acted upon or given a vote. I hope these issues will be addressed in conference. Still, taken as a whole, the legislation we approved is an important step toward policing Wall Street and rebuilding Main Street's defenses from Wall Street's excesses. The millions of pages of documents and long hours of testimony gathered by the Permanent Subcommittee on Investigations present a detailed history of the financial crisis. But all that complexity tells a pretty simple story, really, one of unbridled greed that created unheeded risk, risk that exploded into the worst recession in decades. Wall Street may not have learned the lessons of that story, but the rest of the country has. We must act. We must put the cop back on the Wall Street beat, or once again suffer the consequences of Wall Street's greed. Hopefully, the Senate-House conference will get us closer to that goal.

Mr. LEVIN

Mr. LEVIN. Mr. President, among the most difficult issues we dealt with in the debate over the Wall Street reform bill we approved last week is that of proprietary trading and conflicts of interest in the financial system. This trading, often involving risky investments with large amounts of borrowed money, was a significant contributor to the financial crisis of 2008--a crisis from which we have yet to fully recover. The bill the Senate has approved includes important language dealing with proprietary trading and with conflicts of interest. In the hope of strengthening that language, Senator Merkley and I introduced an amendment which would have made Congress's intent clear: to end risky proprietary trading at commercial banks, to demand that the largest nonbank financial institutions maintain sufficient capital for their trades to prevent taxpayer bailouts, and to end the outrageous and destructive conflicts of interest which marked so much of Wall Street's behavior leading up to the crisis. It is this last issue on which I have focused much of my attention. As we move toward negotiations between the House and Senate and final passage of a Wall Street reform bill, hopefully the final product will deal with these conflicts of interest. Failure to do so would accept the status quo under which Wall Street firms can assemble complex financial instruments, instruments they have financial incentives to see fail, sell those instruments to clients, and then profit by betting against the products they built and sold. The hearings I chaired in the Permanent Subcommittee on Investigations probing the causes of the financial crisis exposed recklessness and greed up and down the financial system. In our last hearing, examining the role of investment bank Goldman Sachs in the crisis, we demonstrated how Goldman profited by betting against financial instruments it had assembled. In late 2006, Goldman Sachs made a strategic decision to begin unloading mortgage-related holdings and to short the mortgage market; that is, to bet against the market and to profit from its fall. To do so, Goldman assembled a series of financial instruments it would profit from if there were a collapse of the mortgage market. One e-mail chain from May 2007, for instance, shows how Goldman bet against certain mortgage-backed securities that it had assembled and sold to investors. In the e-mails, Goldman employees discussed how certain securities that Goldman had underwritten and were tied to mortgages issued by Washington Mutual Bank's subprime lender, Long Beach, were losing value. Reporting the wipeout of one security, a Goldman Sachs employee then reported the ``good news''--that the failure would bring the firm $5 million from a bet that it had placed against the very securities it had assembled and sold. In addition to shorting existing mortgage-backed securities, Goldman constructed a series of even more complicated financial instruments to bet against the mortgage market. These were known as collateralized debt obligations or CDOs. One example is a synthetic CDO put together in late 2006 known as Hudson Mezzanine. A synthetic CDO is a financial instrument whose value is based on a collection of referenced assets, but it does not contain the assets themselves. It is essentially a bet on whether referred-to assets will rise or fall in value. Goldman constructed this $2 billion CDO to reflect the value of subprime mortgage securities similar to those that Goldman held in its own inventory. Goldman's sales force was told that Hudson Mezzanine was a top priority and it worked aggressively to sell Hudson securities to clients around the world. Internal e-mails released by our Permanent Subcommittee on Investigations showed that one Goldman client was unhappy that the firm was spending so much time on Hudson and not on a deal the client wanted to make. In the documents Goldman used to sell Hudson Mezzanine to clients, the firm even suggested to investors that Goldman stood to benefit if the investment performed well, telling those customers: ``Goldman Sachs has aligned incentives with the Hudson project by investing in a portion of the equity.'' In fact, that was not true. Goldman Sachs' interests were not aligned with its customers. They were in conflict. Goldman was the sole counterparty in the Hudson CDO and made a $2 billion bet; that is, a $2 billion bet, that the assets referenced in the CDO would fall in value. Goldman won that bet big time. The CDO, filled with toxic subprime assets that Goldman had selected, assembled, and sold, began losing value. When Goldman first sold the securities to its clients, more than 70 percent of Hudson Mezzanine had AAA ratings, but within 9 months those AAA ratings were downgraded, and within 18 months Hudson was downgraded to junk status, and Goldman cashed in at the expense of its clients. To sum up, in late 2006, Goldman decided to bet against the housing market it had helped to create. It shorted mortgage-backed securities it had sold to investors, and designed and built CDOs that enabled it to make billions of dollars in bets against the housing market and its own CDOs, collecting money when the products it had peddled to its clients failed. That kind of proprietary trading is not ``market making.'' It is not matching buyers and sellers. It is one firm acting as a principal looking out for its own self-interest and making bets that were collected at the expense of its clients. Goldman served its own interests, and if clients got burned in the process, so be it. But Goldman's actions did more than hurt its clients. It helped undermine an entire financial market which, in turn, damaged numerous financial institutions that ended up requiring a $700 billion taxpayer bailout to stop the bleeding. Hudson Mezzanine and other synthetic vehicles Goldman used to bet against mortgages were particularly damaging because they were not constrained by the number of mortgages in the market. They contained no real assets but were strictly bets on whether referenced assets would fall in value. The creation and sale of those synthetic instruments presented money-making opportunities for Goldman but magnified the risk in the financial system and made the crisis more severe when it hit. It is time for Congress to put an end to the conflicts of interest that undermine our financial markets and pit investment banks against their clients. The Merkley-Levin amendment contained a provision targeted at cleaning up this mess and preventing it from happening again. It would have barred any financial institution that underwrote an asset-backed security from placing bets against the securities it created. The amendment would have also imposed new limitations on proprietary trading, limitations which are also critical to repairing financial markets and which are contained in more limited form in the Dodd bill. The Senate Parliamentarian ruled that the Merkley-Levin proprietary trading and conflicts of interest provisions were germane to the Dodd bill. That is because the Merkley-Levin conflicts provision targets the same problem as the Dodd proprietary trading section--stopping financial firms from putting their own interests ahead of their clients. Our proprietary trading provision and our ban on conflicts of interest are essential to restoring client confidence in U.S. markets. They are within the scope of the conference and ought to be included in the conference report. The financial landscape today is littered with the damage done by financial firms which pursued short-term profit at the expense of their clients, U.S. taxpayers, and the economy as a whole. Those financial firms cannot be allowed to continue to sell securities to clients and then bet against them. It is essential to remove these schemes that have undermined U.S. financial markets. I urge my colleagues in both Chambers, as they discuss final Wall Street reform legislation, to keep in mind how damaging these schemes have been, to strengthen the Dodd proprietary trading provisions, and to include a ban on conflicts of interest. I thank the Presiding Officer. I yield the floor, and I suggest the absence of a quorum.

Mr. LEVIN

Mr. LEVIN. Mr. President, among the most difficult issues we dealt with in the debate over the Wall Street reform bill we approved last week is that of proprietary trading and conflicts of interest in the financial system. This trading, often involving risky investments with large amounts of borrowed money, was a significant contributor to the financial crisis of 2008--a crisis from which we have yet to fully recover. The bill the Senate has approved includes important language dealing with proprietary trading and with conflicts of interest. In the hope of strengthening that language, Senator Merkley and I introduced an amendment which would have made Congress's intent clear: to end risky proprietary trading at commercial banks, to demand that the largest nonbank financial institutions maintain sufficient capital for their trades to prevent taxpayer bailouts, and to end the outrageous and destructive conflicts of interest which marked so much of Wall Street's behavior leading up to the crisis. It is this last issue on which I have focused much of my attention. As we move toward negotiations between the House and Senate and final passage of a Wall Street reform bill, hopefully the final product will deal with these conflicts of interest. Failure to do so would accept the status quo under which Wall Street firms can assemble complex financial instruments, instruments they have financial incentives to see fail, sell those instruments to clients, and then profit by betting against the products they built and sold. The hearings I chaired in the Permanent Subcommittee on Investigations probing the causes of the financial crisis exposed recklessness and greed up and down the financial system. In our last hearing, examining the role of investment bank Goldman Sachs in the crisis, we demonstrated how Goldman profited by betting against financial instruments it had assembled. In late 2006, Goldman Sachs made a strategic decision to begin unloading mortgage-related holdings and to short the mortgage market; that is, to bet against the market and to profit from its fall. To do so, Goldman assembled a series of financial instruments it would profit from if there were a collapse of the mortgage market. One e-mail chain from May 2007, for instance, shows how Goldman bet against certain mortgage-backed securities that it had assembled and sold to investors. In the e-mails, Goldman employees discussed how certain securities that Goldman had underwritten and were tied to mortgages issued by Washington Mutual Bank's subprime lender, Long Beach, were losing value. Reporting the wipeout of one security, a Goldman Sachs employee then reported the ``good news''--that the failure would bring the firm $5 million from a bet that it had placed against the very securities it had assembled and sold. In addition to shorting existing mortgage-backed securities, Goldman constructed a series of even more complicated financial instruments to bet against the mortgage market. These were known as collateralized debt obligations or CDOs. One example is a synthetic CDO put together in late 2006 known as Hudson Mezzanine. A synthetic CDO is a financial instrument whose value is based on a collection of referenced assets, but it does not contain the assets themselves. It is essentially a bet on whether referred-to assets will rise or fall in value. Goldman constructed this $2 billion CDO to reflect the value of subprime mortgage securities similar to those that Goldman held in its own inventory. Goldman's sales force was told that Hudson Mezzanine was a top priority and it worked aggressively to sell Hudson securities to clients around the world. Internal e-mails released by our Permanent Subcommittee on Investigations showed that one Goldman client was unhappy that the firm was spending so much time on Hudson and not on a deal the client wanted to make. In the documents Goldman used to sell Hudson Mezzanine to clients, the firm even suggested to investors that Goldman stood to benefit if the investment performed well, telling those customers: ``Goldman Sachs has aligned incentives with the Hudson project by investing in a portion of the equity.'' In fact, that was not true. Goldman Sachs' interests were not aligned with its customers. They were in conflict. Goldman was the sole counterparty in the Hudson CDO and made a $2 billion bet; that is, a $2 billion bet, that the assets referenced in the CDO would fall in value. Goldman won that bet big time. The CDO, filled with toxic subprime assets that Goldman had selected, assembled, and sold, began losing value. When Goldman first sold the securities to its clients, more than 70 percent of Hudson Mezzanine had AAA ratings, but within 9 months those AAA ratings were downgraded, and within 18 months Hudson was downgraded to junk status, and Goldman cashed in at the expense of its clients. To sum up, in late 2006, Goldman decided to bet against the housing market it had helped to create. It shorted mortgage-backed securities it had sold to investors, and designed and built CDOs that enabled it to make billions of dollars in bets against the housing market and its own CDOs, collecting money when the products it had peddled to its clients failed. That kind of proprietary trading is not ``market making.'' It is not matching buyers and sellers. It is one firm acting as a principal looking out for its own self-interest and making bets that were collected at the expense of its clients. Goldman served its own interests, and if clients got burned in the process, so be it. But Goldman's actions did more than hurt its clients. It helped undermine an entire financial market which, in turn, damaged numerous financial institutions that ended up requiring a $700 billion taxpayer bailout to stop the bleeding. Hudson Mezzanine and other synthetic vehicles Goldman used to bet against mortgages were particularly damaging because they were not constrained by the number of mortgages in the market. They contained no real assets but were strictly bets on whether referenced assets would fall in value. The creation and sale of those synthetic instruments presented money-making opportunities for Goldman but magnified the risk in the financial system and made the crisis more severe when it hit. It is time for Congress to put an end to the conflicts of interest that undermine our financial markets and pit investment banks against their clients. The Merkley-Levin amendment contained a provision targeted at cleaning up this mess and preventing it from happening again. It would have barred any financial institution that underwrote an asset-backed security from placing bets against the securities it created. The amendment would have also imposed new limitations on proprietary trading, limitations which are also critical to repairing financial markets and which are contained in more limited form in the Dodd bill. The Senate Parliamentarian ruled that the Merkley-Levin proprietary trading and conflicts of interest provisions were germane to the Dodd bill. That is because the Merkley-Levin conflicts provision targets the same problem as the Dodd proprietary trading section--stopping financial firms from putting their own interests ahead of their clients. Our proprietary trading provision and our ban on conflicts of interest are essential to restoring client confidence in U.S. markets. They are within the scope of the conference and ought to be included in the conference report. The financial landscape today is littered with the damage done by financial firms which pursued short-term profit at the expense of their clients, U.S. taxpayers, and the economy as a whole. Those financial firms cannot be allowed to continue to sell securities to clients and then bet against them. It is essential to remove these schemes that have undermined U.S. financial markets. I urge my colleagues in both Chambers, as they discuss final Wall Street reform legislation, to keep in mind how damaging these schemes have been, to strengthen the Dodd proprietary trading provisions, and to include a ban on conflicts of interest. I thank the Presiding Officer. I yield the floor, and I suggest the absence of a quorum.

Mr. LEVIN

Mr. LEVIN. I ask unanimous consent that the speakers on this side be in the following order: Senator Cardin be recognized for 5 minutes; then the Senator from Oregon, Mr. Merkley, be recognized for 10 minutes; then that I be recognize for 10 minutes on this side.

Mr. LEVIN. I thank the Leader. I intended that when I said ``on this side'' there would be alternates.

Mr. LEVIN. I ask unanimous consent that the order for the quorum call be rescinded.

Mr. LEVIN. Mr. President, under the current unanimous consent agreement, there will be 10 minutes now for Senator Merkley, then to be alternated to the Republican side. Actually, it would go first to the Republican side, then back to Senator Merkley. Then, if there is a Republican, it would go back to the Republican and then back to me. That is the current agreement. Senator Enzi wishes to speak for up to 30 minutes. He has been gracious enough to agree that both Senator Merkley and I go with our 10-minute remarks before him. I modify the unanimous consent agreement and ask unanimous consent that Senator Merkley be recognized for 10 minutes and then I be recognized for up to 10 minutes and then Senator Enzi be recognized for up to 30 minutes.

Mr. LEVIN. Mr. President, first of all, I thank Senator Merkley for his extraordinary work on this amendment of ours. We are very hopeful we are going to be able to get to a vote. As it stands right now, we are going to get to a vote because we are the pending amendment. That is where it stands. We are in order. We are germane. It is postcloture but we are germane. The only way we know of where we could be thwarted from getting to a vote is if there were a decision made on the other side to withdraw the underlying amendment. We hope that decision will not be made. These issues are too important not to be voted on. A parliamentary trick should not be used now to avoid a vote on this critically important amendment, which will strengthen in very significant ways the underlying Dodd bill. We saw, weeks ago, that the Republican leadership was going to try to deny us the opportunity to even get to this bill, and there was such a public outrage at the Republican filibuster that they had to back off from that. Well, if we do not get to a vote tonight on Merkley-Levin, there is going to be similar outrage from people because they understand what the stakes are. The stakes are whether we are going to take the steps to avoid a repeat of the deep recession we are now in--a recession that was brought about in large measure by the excesses, the extreme greed of Wall Street, taking high-risk mortgages, dubious mortgages, securitizing them, dicing them, slicing them in different ways, enlarging the risk dramatically, selling them to clients and customers, and then, to add insult to injury, betting against them--in the case of Goldman Sachs, making a fortune on those bets; in the case of the banks that bet the other way, ending up being bailed out by the taxpayers on the losing bets. That is what has happened. While our constituents may not be able to define what a collateralized debt obligation is or what a naked default swap is--and there are very few people in the country who can--they do know they have been had. They know how many houses in their neighborhoods have been vacated, have been foreclosed upon. They know because they themselves or their neighbors have been unable to keep up with mortgage payments because the value of housing has gone down, and they sense that the Wall Street greed was a big part of this. It is more than the greed. It is the conflicts of interest which accompanied that greed. Our bill addresses some of the major problems that got us here, and some of that is proprietary trading where the Wall Street banks put their own interests ahead of their clients' interests and gambled--gambled, as it ended up--with our taxpayers' money. So our constituents understand this. What I want to do is spend the few minutes I have left talking about the conflict of interest that existed on Wall Street: betting against themselves. I think yesterday's New York Times perhaps quoted someone who put it best--a man named Cornelius Hurley, director of the Morin Center for Banking and Financial Law at Boston University and former counsel to the Federal Reserve Board. This is what he said: Their business model-- The business model that now exists at banks such as Goldman-- has completely blurred the difference between executing trades on behalf of customers versus executing trades for themselves. It's a huge problem. That shift in the business model has to be addressed by us. We have to act to put an end to the conflict of interest which exists when a Goldman Sachs--as we showed at our hearing--is able to sell securities to customers, packaging these mortgage-based debts, these asset-backed securities or these securities which referred to assets--these are the synthetic ones where there is nothing there but a reference to some other security, a bet--and then betting against their own customers. This was one of the most dramatic findings of our subcommittee. Our subcommittee investigated this matter for about a year and a half. We had four hearings. We had millions of pages of documents. We started with a bank in the State of Washington which took dubious mortgages-- fraudulent mortgages, in many cases, in a large percentage of the cases--based on liar loans, where the mortgage companies would fill in the amount of people's income and then securitize them. Because they saw--and we had the evidence in their e-mails, where the mortgage companies saw--there was a high default rate in these mortgages, they decided they better get them off their books quick because there were high defaults coming down the river. So what happened? They securitized them, shipped these to a very welcoming Wall Street that would then resecuritize them, slice them in a different way, sell them to their customers, and then bet against them. The added insult was when, inside the same bank, the salespeople knew they were selling junk and said so in e-mails in words that are even worse than ``junk''--treating customers that way, putting their own interests at Goldman Sachs ahead of the interests of their customers. That is what happened. We have to end this conflict, and we have to give the Securities and Exchange Commission the running orders to end the conflict. That is what our amendment does. We do it in a very thoughtful way, a very careful way. We set forth the requirement that the conflict of interest be ended, but we assign the Securities and Exchange Commission the responsibility to end it, to implement the conflict of interest prohibition we have in our bill. As Senator Merkley said, we have heard there is a possibility that the Republicans are going to withdraw the underlying amendment. That would be an incredible signal of the power of Wall Street that the underlying amendment, which has the support of so many people on both sides of the aisle--and probably majority support in this body relative to the treatment of car loans--that that amendment might be withdrawn in order to kill Merkley-Levin. That is the rumor we keep hearing this afternoon. It is the only way they can stop this amendment from coming to a vote that we know of. We believe, as Senator Merkley said, there should be a vote on both amendments; that these two matters should be split. The only way we could get a vote on Merkley-Levin--this incredibly important strengthening amendment to the underlying Dodd bill--was by offering it as a second-degree amendment to the Brownback amendment. We are perfectly happy to have separate votes. That is the best way to do it. We cannot do that without unanimous consent. But rather than agreeing to separate votes, so both matters could be voted on and disposed of by the Senate, what we keep hearing is they may withdraw the underlying amendment and bring down the pending Merkley-Levin amendment with it. If you needed any additional evidence of the power of Wall Street around this body, that would be it. If that happened--to withdraw an amendment which is so important to a majority, probably, of the body-- to make it impossible for us to vote on Merkley-Levin would be some of the most powerful evidence--and there has been plenty of it--of the power of Wall Street, the long arm of Wall Street reaching into this body. I hope it is not true. But being honest with our colleagues, this is what we hear is possibly in the wings. It would be a disservice to the people of the United States not to have a vote on Merkley-Levin. I yield the floor.

Mr. LEVIN. Mr. President, I would support the Feinstein amendment No. 4113 to close the London loophole. Senator Feinstein and I and other colleagues have been working together for years to put a cop back on the beat in U.S. commodity markets, and it is a pleasure to be here today at the verge of Senate approval of a bill that has so many strong disclosure and regulatory provisions for commodity markets. The prices paid for energy commodities like oil, natural gas, jet fuel, diesel fuel, not to mention food commodities like wheat, corn and soybeans have a profound impact on our economy, our markets, and our way of life. They matter to consumers, business, and governments. For too long, our commodity markets have been out of control, with undisclosed trades in unregulated markets, wildly gyrating prices unconnected to market forces, and unconscionable profits for commodity traders operating outside the real economy. This bill will go a long way toward rectifying those problems, and I commend Senators Dodd, Reed, Lincoln, and so many others for their hard work. The amendment introduced by Senator Feinstein focuses on an area that has long concerned me and other observers of the commodity markets--the way that commodity traders living right here in the United States are using terminals located here to trade U.S. produced goods on foreign markets outside of U.S. regulatory control. I am talking, for example, about U.S. West Texas Intermediate crude oil traded on the ICE exchange in London. That oil is produced and used right here--it never leaves our shores--but U.S. traders are trading its oil futures in London--in part to duck U.S. position limits and other regulatory controls. Other countries are trying to set up similar exchanges and win permission for U.S. traders to trade on their foreign exchanges, affecting U.S. commodity prices, without those commodity traders ever leaving our soil. The bill as currently drafted takes a number of steps to get foreign boards of trade to enforce the same rules for U.S. commodities that we have here at home. But the bill fails to take one critical step that is essential to U.S. enforcement authority--it doesn't require foreign boards of trade to formally register with the Commodity Futures Trading Commission or CFTC, our watchdog agency for commodity markets, in order to obtain approval for their trading terminals to be physically located here in the United States. Most of the CFTC's enforcement authority applies only to entities that are registered with the Commission. Right now, foreign boards of trade don't have to register here before installing trading terminals here. That constituted regulatory evasion and defies common sense. I know my colleagues want a cop on the beat in all commodity markets where U.S. commodities are traded. And they want a cop that can enforce the law to prevent excessive speculation and market manipulation. That means we need to require foreign boards of trade seeking to locate trading terminals here in the United States to register with the CFTC. It is straightforward, it is simple, and it is essential. The CFTC has asked for this registration requirement, and I commend Senator Feinstein for her determination to get this done. I urge my colleagues to vote for this amendment to ensure U.S commodities are traded on fair and open commodity markets free of excessive speculation, manipulation, and deception.

Mr. LEVIN

Mr. LEVIN. I object and suggest the absence of a quorum.

Mr. LEVIN

Mr. LEVIN. Mr. President, I thank the Senator from North Dakota. He has been dogged in his determination to get this nomination before the Senate. It is unconscionable that a military officer in the uniform of the United States, who has put his life on the line for this country, month after month after month, has had his promotion held up by one Senator. It is only one Senator. All the Senators of the Armed Services Committee on both sides wanted to confirm this general. But the rules of the Senate permit one Senator to threaten a filibuster or a so- called hold. In this case, it was an open hold, not a secret hold. He was able to thwart the Senate because we cannot take 2 or 3 or 4 days to take up every nomination of every soldier or civilian because we would get even less done than we do now. Those are the rules of the Senate. They should not be used this way. We expressed that to Senator Vitter. That hold has been lifted. So a well-qualified soldier is going to be promoted 6 months late by the Senate. We can thank him for his service, but the best way we could have thanked him would have been to have promptly promoted him. Short of that, he knows he has, on a bipartisan basis, the support of the Senate. It is very important to us as an institution that he knows that. He also knows full well the power of one Senator. He should also understand that when it comes to the defense of this country, Republicans and Democrats are going to stand together. I, again, thank the Senator from North Dakota for his determination. He is kind of the 27th member of the Armed Services Committee, if my memory is correct. I thank the Senator.

Mr. LEVIN

Mr. LEVIN. Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of H.R. 5014, which was received from the House and is at the desk.

Mr. LEVIN. I ask unanimous consent that the bill be read three times and passed, the motion to reconsider be laid on the table, without any intervening action or debate, and that any statements be printed in the Record.

Mr. LEVIN

Mr. LEVIN. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 373, S. 736.

Mr. LEVIN. I ask unanimous consent that the committee-reported substitute amendment be agreed to, the bill, as amended, be read a third time and passed, the motions to reconsider be laid upon the table, with no intervening action or debate, and any statements be printed in the Record.

Mr. LEVIN

Mr. LEVIN. Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 9:30 a.m. on Wednesday, May 19; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and the Senate proceed to a period of morning business for 1 hour, with Senators permitted to speak therein for up to 10 minutes each, with the time equally divided and controlled between the two leaders or their designees, with the Republicans controlling the first half and the majority controlling the final half; that following morning business, the Senate resume consideration of S. 3217, Wall Street reform, as provided for under the previous order.

Mr. LEVIN

Mr. LEVIN. Mr. President, under the previous order, the cloture vote on the substitute amendment will occur at 2 p.m. As a reminder, the filing deadline for second-degree amendments is 1 p.m. tomorrow.

Mr. LEVIN

Mr. LEVIN. If there is no further business to come before the Senate, I ask unanimous consent that it adjourn under the previous order.

Mr. LEVIN

Mr. LEVIN. Mr. President, as in executive session, I ask unanimous consent that the Senate now proceed to the nomination of John S. Pistole, to be Assistant Secretary of Department of Homeland Security, Transportation Security Administration, received by the Senate on Monday, May 17, and referred to the Committee on Commerce; that upon the reporting out of or discharge of the nomination the nomination then be referred to the Committee on Homeland Security and Governmental Affairs for a period not to exceed 30 calendars days; after which the nomination, if still in committee, be discharged and placed on the Executive Calendar.

Mr. LEVIN

Mr. LEVIN. Mr. President, I want to briefly come to the floor to talk about what happened here today. We saw the long arm of Wall Street come to the Senate and reach right into this Chamber. It should not have happened. We all should have learned the lesson as to what Wall Street plunged us into. And the idea that Wall Street could do this, through a number of Republican Senators who objected to our even coming to a vote on the so-called Merkley-Levin amendment, is nothing less than shameful. But that is what happened. We have been going back and forth, a Democrat and a Republican amendment, and it came time for Senator Dodd, who is a cosponsor of Merkley-Levin, to offer this amendment, to bring this up to the floor, and it was rejected. It was rejected by the Republican leadership acting through the manager of the bill. This amendment has been worked for many days. We have attempted very hard, and succeeded in addressing a number of concerns which were raised, but what we insisted upon and will continue to insist upon and will not yield on is our determination that banks not engage in risky bets. Our commercial banks have access to the Fed window. That is taxpayer money. Our commercial banks have access to the Federal Deposit Insurance Corporation. It guarantees that the accounts will be paid. We cannot permit--we cannot allow--banks to engage in risky bets and then expect to be bailed out by taxpayers. That happened to us. It got us into big trouble. We are in a deep recession as a result of what the Wall Street banks did. There were a lot of other contributors. They were not alone. Our subcommittee hearings were prepared over many months. In fact, the investigation lasted about a year and a half, with millions of documents that were subpoenaed and brought into the subcommittee's offices. What our hearings showed is that upstream we had a number of banks and mortgage companies that were willing to package bad loans, in many cases loans that they knew were fraudulent, and in some very serious cases loans that they knew were likely to go into default. Nonetheless--and the e-mails show this--those upstream banks decided they were going to bundle these mortgages--these dubious risky mortgages, many of which were likely to default--they were going to securitize these mortgages and ship them downstream, where Wall Street was panting for these bundled securitized mortgages because then they were going to slice them and dice them and cut them up into these collateralized deals, which were so complicated and very difficult to explain to the public. Nonetheless, what happened is the public took a bath, and a number of firms on Wall Street did very well, including Goldman Sachs. It did extremely well through their dealings. Some of the e-mails from Goldman Sachs show how well they did, while everybody else was losing their homes, losing their jobs, and most banks were losing money. In one of their e-mails Goldman Sachs said: Much of the plan began working by February as the market dropped by 25 points and our very profitable year was underway. So the market dropped 25 points and the profitable year at Goldman Sachs was underway. Why? Because they bet against their own clients. As Senator Merkley pointed out--and he has been a real pleasure to work with as a partner--we had a situation here where Goldman Sachs was selling billions of dollars of securities--many of which they knew contained bad assets, and their own e-mails show it--selling to their clients with their right hand and with their left hand betting heavily against those same securities. The way they bet against them is a complicated story--going short, betting short, the big short, using those default swaps, which were described earlier on the floor of the Senate. But they were making a lot of money out of the losses of their clients. What added insult to injury--the injury was the conflict of interest and betting against something they were selling, and not even disclosing that fact, by the way, to their clients and customers. But the insult that was added was when their own e-mails, over and over again, show that their own salespeople were describing these securities that they were selling to our pension funds and our educational institutions as junk and worse. That is the insult. The underlying injury is the conflict of interest. Our amendment, as the Senator from Oregon described, goes after the proprietary trading, which is highly risky, in one part of the amendment. Another part of the amendment goes directly at the conflicts of interest which were exemplified by what Goldman Sachs did. Then they tell us in the Permanent Subcommittee on Investigations: Well, that is the way Wall Street does business. You just don't understand. Well, Main Street understands. We understand the values that Wall Street exemplified in these last years by selling junk to clients and then betting against them. We understand very well what went on, because we, the people of the United States, ended up paying for those bets. When they won the bets, they made out like bandits. Wall Street-- Goldman Sachs--won many of those bets because they bet against the very securities that they thought were dubious. But there were also a lot of banks that lost bets, that didn't do what Goldman Sachs did, but nonetheless got stuck with these bad securities. And what happened then? Because of the proprietary trading of those banks and risky securities, they ended up losing a lot of money and the taxpayers had to bail them out. So the taxpayers of this country lose either way. Our pension funds, our educational institutions lose out to a Goldman Sachs, with their conflicts of interest against their own clients--essentially dealing with themselves as a client against the interest of the person they were selling securities to. You have the Goldman Sachs on the one hand making a lot of money that way. You have the banks, which lost money because of those risky bets on the other side of the bet, ending up being at the public trough and having to be bailed out because they were too big to fail and would have plunged us even more deeply into a deeper recession or a depression had they not been bailed out. We are trying to prevent that from happening again. The Merkley-Levin amendment is trying to go right to the heart of that problem, and that problem is a very deep one, involving the examples which the Senator from Oregon I believe cited but, if not, let me very briefly summarize. Wall Street has attempted to argue that proprietary trading, which our amendment would seek to end in a very thoughtful way, without hitting the kind of activities that are client oriented, that should be allowed--Wall Street has attempted to argue that proprietary trading was not a significant factor in the downfall of our financial system. The numbers here tell a very different story. By April of 2008, the Nation's largest financial firms had suffered $230 billion in losses based on their proprietary trading. So by the end of 2008, taxpayers put up hundreds of billions of dollars in so- called TARP funds to avoid the collapse of our economy. One example of the damage here: In 1998, Lehman Brothers had $28 billion in proprietary holdings. Less than 10 years later--2007--its proprietary holdings had soared more than 10 times to $313 billion in those kind of high-risk bets. When the values of the holdings declined in 2007 and 2008, Lehman Brothers then lost $32 billion. Those losses exceeded Lehman Brothers' net worth. By September of 2008, the firm collapsed in the largest bankruptcy in our history. That is what we are trying to prevent a recurrence of in our amendment. And what happened? Because the Republican leadership decided they would use a parliamentary approach here to stop Merkley-Levin from even being offered, we have been unable to get the remedy for that kind of a catastrophe happening again to the floor of the Senate for a vote. That is a tragedy which is lying in wait, if we allow it to exist. So Senator Merkley and I--the Presiding Officer now and I--are going to do everything we possibly can in the few hours that remain before the cloture vote to prevent the Republican obstruction from succeeding. We are going to continue to try tomorrow morning to see if we can't get our amendment considered by the Senate. We simply cannot stand by and do nothing. We have seen too many massive costs to the taxpayers. Another example was with Bear Stearns. Bear Stearns lost more than $3 billion, thanks to an investment of about $30 million in two hedge funds. So the losses at Bear Stearns, because of the leverage they used and were allowed to use under existing law, which we would not allow them to use--their losses were 100 times greater than the original investment that crippled the bank and led to an emergency sale to JPMorgan Chase. We have to protect depositors and taxpayers from the risk of this high-risk proprietary trading at the commercial banks. We have to protect taxpayers from the dilemma of having to pay for Wall Street's risky bets or watch our financial system disintegrate. We have to protect investors and the financial system at large from the conflicts of interest that too often represent business as usual on Wall Street. We worked with Senator Dodd. As Senator Merkley pointed out, Senator Dodd and his staff worked very closely with us. Senator Dodd supports our amendment. So the chairman of the Banking Committee wants our amendment to be considered, and even he cannot persuade the Republican leadership to not use a parliamentary gimmick to stop us, to thwart us, to stymie us from bringing this remedy to the floor of the Senate. I thank Senator Dodd, Senator Merkley, and his staff for working so closely with us. We have worked with the Treasury Department very closely, with the Securities and Exchange Commission closely, to make sure we would fix the problems we target without endangering legitimate market activity or activity that is on behalf of clients instead of on behalf of the banks. A number of our colleagues worked with us to make sure there would not inadvertently be restriction of activities that did not cause and would not cause this kind of financial crisis again. Federal Reserve Chairman Paul Volcker endorsed our amendment, as did business leaders such as John Reed, former chairman and CEO of Citibank, and major organizations for Wall Street reform. But as we stand here and sit here at 9:30, we are stymied. Unless we can unlock this tomorrow morning, there is going to be a cloture vote later on that day which, unless we can figure out a way to make our amendment germane postcloture, will prevent us from getting a vote on this amendment. Are we serious about reforming the worst excesses of Wall Street? On this side of the aisle, we are. On the Republican side of the aisle, what we have seen now is obstruction, a decision that has been made that they are going to protect Wall Street instead of Main Street. Wall Street has a long arm and hundreds of lobbyists swarming around this Senate. They are determined to stop us from taking up the Merkley-Levin amendment. There is going to be a dramatic opportunity tomorrow. There is going to be another effort made to have our amendment considered. At least one effort will be made tomorrow, and maybe more, because it is absolutely essential that the average American out there, the average family, that average business on Main Street that we are trying to make sure has funds available to it for its needs--they are going to be looking, hopefully, at this body tomorrow when a decision is going to be made as to whether the reforms that are so critically important to preventing a reoccurrence of this disaster, this economic disaster, will prevail. Again, I thank Senator Merkley for all he has done, for the huge energy he has put in, he and his staff working so closely with us, with the Treasury Department. I am proud to have the name ``Levin'' come after the name ``Merkley'' in Merkley-Levin. Someday--hopefully it will be tomorrow--we are going to get Merkley-Levin considered by the Senate. It is a sad day when the power of Wall Street can overwhelm and overcome the determination of the American people to reform it, to get that cop back on the beat on Wall Street. We will know tomorrow morning or tomorrow afternoon very early as to whether Wall Street's effort to thwart this Chamber's majority view that the Merkley-Levin reform be voted on--and a majority that would clearly adopt it--whether Wall Street succeeds or not we will know, at least short term, by about noon or 1 o'clock tomorrow afternoon. I yield the floor.

Mr. LEVIN

Mr. LEVIN. Mr. President, I am pleased to cosponsor amendment No. 4016, introduced by Senator Mark Udall and Senator Lugar, to help provide Americans access to their credit score, an essential piece of personal financial information. The way things stand now, the three primary credit bureaus charge people to gain access to their credit scores. Seven years ago, the 2003 Fair and Accurate Credit Transactions Act took a big step in the right direction by giving Americans access to their credit report once a year, on a no-cost, no-strings-attached basis, at each of the big three credit bureaus. But a credit report only goes so far. It is the credit score itself, not the report, that is so critical to the consumer when navigating our financial system, and free access to credit scores was not included in the 2003 act. Credit score is often the single most important factor in obtaining a loan to buy a car or a house or in securing a credit card with a reasonable rate of interest. Credit scores can also play a key role in finding an apartment or purchasing a major household appliance. More and more, credit scores are also used by employers in the hiring process. With so much riding on this number, it is essential that Americans be able to readily obtain their credit score, so they can evaluate whether it accurately reflects their credit risk. If the score is low, a consumer can evaluate the underlying credit information to see if there is an error in the data and what, if anything, they should do to correct an error. Consumers can also evaluate what steps they can take to improve their credit score by, for example, paying off debt or tearing up a credit card. To make those types of informed decisions, however, it is only fair for the consumer to know what all their creditors know--the credit score that has been electronically assigned to them by an impersonal, computer-driven credit bureau. A credit score is calculated from a person's personal financial history as that history is captured in specific data points included in a credit report. We already know that the data in a credit report is often incomplete, out of date, or incorrect. We also know that the formulas used to produce credit scores from that data are complex, unpublished, and of uncertain predictive value. The credit bureaus chum out profits by running people's personal financial information through their formulas. Then they sell the information to financial institutions, marketing companies, landlords, and others. The companies then turn around and sell the credit scores back to the consumers who otherwise can't find out what is being sent to multiple third parties about their credit status, without their ever having been informed about the score. This whole setup is unfair. While credit scores serve a useful function in our financial system, fundamental fairness requires that people have ready access to this basic information about themselves-- information that is already being sold to their bank, their landlord, their employer, their government, and any other creditor willing to pay for it. One more point. Right now, despite the efforts of Congress and the Federal Trade Commission, some credit bureaus continue to engage in deceptive advertising of ostensibly ``free'' credit reports and scores that, in fact, require enrollment in a subscription credit monitoring service that charges a monthly fee, often $15. It is astonishing to me that some bureaus fight tooth and nail to avoid straightforward disclosures about the cost of their products and instead try to slip them in with deceptive offers of ``free'' credit scores or reports that are anything but. This is an issue we addressed in the credit card reform bill with new provisions to stop the deceptive advertising, and which the FTC is now working to implement. The credit bureaus have got to clean up their act. What we can do today is pass the Udall-Lugar amendment, which would require that every time a consumer suffers an adverse event--such as a rejected loan--or receives materially less favorable terms--such as a high interest rate on a credit card--due to the consumer's credit score, the lender or potential lender would have to provide that credit score to the consumer. This requirement would enable people to find out what the credit bureaus are telling their creditors about their credit risk, whenever that information is used against them. This amendment would help Americans take control of their credit histories, help restore fairness in the credit industry, and begin to close a gaping loophole that the credit bureaus have been exploiting for years. I commend Senator Udall for his leadership on this issue and encourage my colleagues to vote for it.