Jeff Merkley

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I ask unanimous consent to set aside the pending amendment and call up amendment No. 1185, which is at the desk.

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

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

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I commend my chairman, the distinguished Senator from Connecticut, for his work on the legislation before us today. This has been a complex issue. The chairman has worked very hard to bring people together on all sides. I commend also the senior Senator from Alabama for his vital engagement on these reforms that touch the wallet or the pocketbook of virtually every American. America needs credit card reform. Take the case of Maggie Bagon, a 59-year-old social worker from Salem, OR. As reported in the Oregonian, Maggie used her card conservatively. She paid her bills on time. So she was incensed when her credit card company charged her a late fee. So she called up the bank. They told her the terms of her contract permitted them to sit on her payment for 10 days before they posted it to her account, and that made it feasible--in fact, lawful--for them to charge her a late fee when she paid her bill early. That type of practice is a scam. Maggie and thousands of Oregonians, perhaps millions of Americans, have been charged late fees for paying their credit cards early. That kind of deception and trickery has to end. Late fees for early payments is not the only type of scam we have had in this industry. How about interest charges on balances that have been paid off? Well, you have paid it off, and you are very happy about that. You are now free of interest? No, you are not--not under the rules of the fine print in many credit card agreements. How about fees for going over the limit when you do not know you are over the limit? Well, it used to be you were simply turned down and that was fine because that was the deal you had and you understood the deal. But now suddenly you get your credit card statement, and you find out you were charged a $30 fee when you bought a newspaper with a credit card or you were charged a $30 fee when you bought a $5 meal with your credit card because the bank was not going to tell you about the fee because they wanted to collect those fees for going over the limit. Well, this act will fix that problem, that type of scam on the American worker. In fact, credit card companies have even charged fees for making your payments at all. Some charge fees for paying with a check. Some charge fees for paying over the Internet. Some charge fees for paying by telephone. That is simply crazy, and this act will address these types of tricks and traps that have become key and central to the industry. As a member of the Oregon House of Representatives and as speaker, I worked with my colleagues to reform lending practices in our home State. We tried to address credit card practices to establish fair rules of the road, and our legal counsel said: No, you can't do that here at the State level. You have to do that at the Federal level. It is federally preempted. So we were not able to help people such as Maggie, the citizens of our State, have fair practices. Only the Federal Government, under Federal law, can make these changes. But if we all have reserved to ourselves the power to set fair practices, then we have a moral obligation to set those fair practices. We have an obligation on behalf of the millions of American citizens such as Maggie. That is why this legislation is so important. It is strong, commonsense legislation which targets the most abusive practices. In particular, I am proud it prohibits ``universal default'' on existing balances--that bait-and-switch tactic when, under the deal you have signed up for, you are charged 7 percent, but after you make those charges, your interest rate is suddenly switched to 29 percent. I am proud this bill requires that payments beyond the minimum monthly payment be applied to the balances with the highest rate of interest. I am proud this bill limits the aggressive solicitation of young persons; that it prohibits fees based on the method of payment, be it telephone, mail, Internet or otherwise; that it prohibits over-the- limit fees unless a person opts in to that feature--it is a fair deal, you choose it--and that it prohibits late fees if the card issuer delayed posting the payment. These long-overdue, commonsense reforms are important steps to bring transparency and fairness to credit card contracts. These reforms will help Maggie and millions such as her from Connecticut to Oregon and everywhere in between. Friends, this legislation is also good for our banking system. There is one clear lesson we have learned this year; that is, fair lending results in families who are on a solid foundation, strong consumers, and it avoids the sort of securitization that results in poison pills being based on fraudulent, deceptive practices, poison pills that infect our banks and financial institutions around the world. Even the banks are aware this system is flawed, and some have tried to offer better, safer cards. But they found it hard to differentiate themselves. Why is that? Well, here is why. It is pretty straightforward. Consumers do not have the time or patience to read the dozens of pages of fine print that come in a credit card contract and then to compare its terms--and be able to evaluate its terms--to the dozens of pages that come with another credit card. But even if a person dedicated a week of their life to comparing two credit card contracts, it would not matter because, at the end of the contract, it says: These terms can be changed at the discretion of the credit card company at any time. And they are changed frequently. Therefore, the contract does not give you the ability to compare and contrast. Therefore, we have a dysfunctional market because consumers are not able to choose better cards with better practices. We need to create a functional market where there is competition-- competition not based on how many tricks and traps you can insert into the fine print but competition based on value, based on good interest rates, based on fair fees, and based on good, old-fashioned consumer service. Friends and colleagues, this legislation is fundamentally about fairness. It is long overdue. Our citizens deserve fair contracts on credit. It makes our families stronger. It makes our national financial system stronger. I certainly commend Senator Dodd for his 20 years of labor, day in and day out, to reform these practices. I commend President Obama for his leadership on this very important issue. Friends, it is time to adopt these reforms. President Obama is waiting. Maggie Bagon of Salem, OR, is waiting, along with millions of other Americans, for simple fairness. I yield the floor.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I ask unanimous consent to speak in morning business on the Democratic time and that the Republican time be reserved.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I rise today to encourage all to join me in recognizing the nurses of America and their commitment to addressing the needs of patients and their families. Today, on the birthday of Florence Nightingale, we celebrate National Nurses Day. This is appropriate since Florence Nightingale is known as the pioneer of modern nursing. National Nurses Week, which expands May 6 through May 12, focuses on recognizing the integral role nurses play in promoting public health and also highlights the work nurses are doing to improve health care for all Americans. I know firsthand the critical role that nurses play in providing safe, high quality, and preventive health care. My wife Mary is a bedside nurse, and I am delighted that she has been able to join me today to help put a spotlight on the critical role nurses play in health care. Whether they work in a hospital, community health center, physician practice, school, home health care, a skilled nursing facility, or other health care setting, nurses create better outcomes for patients. Nurses are the cornerstone of our country's health care system. Nearly 3 million registered nurses work today in the United States. But even so, our country is facing an 11-year nursing shortage, and that shortage is projected to extend for at least a decade longer. Nurse faculty shortages and a huge and growing burden of tuition debt for nurse training are contributing to the shortage, even as new vacancies for nurse positions open every single day. The nationwide nursing shortage has caused dedicated nurses to have to work longer hours and care for more patients at the same time. That does not contribute to quality nursing, and we need to address that shortage. Quality nursing education is critical to ensuring that we have a sufficient number of qualified professionals joining the field. We need to ensure we are training not only the best and brightest to help out our patients but also bringing those nurses to join the ranks of nurse educators. Providing adequate Federal funding for nursing workforce development programs authorized under title 8 of the Public Health Service Act is critical to ensure a sufficient nurse workforce to meet the growing demand. I am pleased to join a bipartisan group of colleagues in supporting an increased investment in title 8 which has been an effective solution with past nurse shortages. These programs support the education of registered nurses, advanced practice registered nurses, nurse faculty, and nurse researchers. Additionally, title 8 programs focus on recruitment and retention, two other distinct areas impacting this shortage. Over the last 3 years, flat title 8 funding, combined with rising educational and administrative costs, as well as inflation, has significantly decreased the programs' purchasing power. Subsequently, the number of grantees supported by the programs has decreased 43 percent over the past 4 years. As Congress works to improve our health care system and ensure that every American has access to quality, affordable health care, we must ensure that we have a stable and well-trained nursing force. We have an obligation to create a health care system that not only works for patients but also works for people at the heart of our patient care--our nurses. In closing, I want to note that I am soliciting my fellow Senators to join me to form a Senate nursing caucus. The caucus will provide a forum to address issues affecting the nursing community and recognize and advance the important role of nurses in delivering high quality health care. Mr. President, I yield the floor.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I rise today in strong support of the bankruptcy lifeline being offered by the senior Senator from Illinois. This bankruptcy lifeline is at the core of the housing bill passed by the House of Representatives and now under debate today in the Senate. In the last few years, millions of families were led into unsustainable home mortgages that pushed our country into an unprecedented economic crisis. With the collapse of the housing market, many are trapped in mortgages with unbearable interest rates and principal significantly higher than market values. No one wants to walk away from the home they purchased, with neighbors they like, a school their children are doing well in, a town they feel comfortable in, but many cannot afford to pay under the terms of the mortgage they currently hold. I have already spoken on this floor about the need to ban deceptive practices in mortgage brokering, practices that steer unknowing customers into complicated and expensive mortgages. A ban on steering payments and prepayment penalties would go a long way toward ensuring that we do not get into this situation again. But right now we are confronted with what to do about those who already put their life savings on the line to attain a slice of the American dream and who are on the verge of seeing that dream shattered. Unfortunately, we are now in the midst of a recession--there is little prospect of housing prices returning to their bubble levels for many years, and almost 50,000 Americans are losing their homes every week to foreclosure. This is a sad and destructive phenomenon. Foreclosure tears apart neighborhoods and destroys family savings. It also has proven to have a devastating effect on our financial system. In fact, subprime foreclosures are, as we all know, the primary reason our banks have been hemorrhaging money. The billions in write- downs our banks have taken and the billions of taxpayer monies our government has placed into them is due to the collapse of the housing market and the decline in the value of subprime--and now prime-- residential mortgage-backed securities. All the TARP money in the world will do little for the banks unless and until we stabilize housing. Fortunately, we have begun to get on the right path with housing. The Obama administration's Making Home Affordable plan takes a commonsense approach of lower a borrower's monthly payments. Similarly, the Hope for Homeowners Act, with a few fixes, has great potential to help. But neither plan has the ability to take on the major problem still outstanding in the housing market--underwater mortgages. Senator Durbin's amendment before us today tackles the problem head-on. What does this amendment do? In practice, its main use will be to force loan servicers to sit down and genuinely negotiate a reasonable mortgage adjustment. My office gets calls every day from constituents in Oregon who can't get a response from their lender or loan servicer. One constituent called her bank 13 times and never was able to talk to the right person. Sadly, she, like so many others, ultimately lost her home. The Obama plan will improve the situation by offering a number of carrots to lenders and servicers. But we also need to hold out the possibility, when servicers don't respond, of providing a lifeline opportunity. My colleagues are all familiar with the program ``Who Wants to be a Millionaire?'' When there is no ability to answer the question, there is a lifeline. In this case, when there is no ability to connect with the servicer to have a conversation about a win-win solution--a solution that is right for the homeowner because they are able to stay in their home, a solution that is right for the mortgage owner because the mortgage continues to be paid, albeit at somewhat lower rates--it is still right because the mortgage owner doesn't benefit from foreclosure if they only get 50 cents on the dollar. This is a win-win win because investors affected by the Federal financial circumstances find an improved situation when fewer homes go into foreclosure. It is a win for the community because we don't have an empty house on the block driving prices down further. We have an opportunity that is right for the community and for the mortgage owner and for the homeowner and for the economy. That opportunity is before us today in this amendment. Certainly, even with adoption of this amendment, some families will need to enter bankruptcy, which is not an outcome we desire for any family but one that some may have to consider. Remember that this bankruptcy power is not extraordinary. A Federal bankruptcy judge already has the power to modify debt on a vacation home, an investment property, a credit card, a car loan, even a yacht. Why can't the court make any modification to a family's primary assets, the important piece of the American dream known as home ownership? I can think of no good reason. Some have argued that allowing judicial modification to mortgages on a primary residence could increase interest rates on future home loans, perhaps by as much as 2 percent. But does this stand up to examination? After the current bankruptcy court system was set up in the 1970s, some courts interpreted the Bankruptcy Code to give them authority over mortgages on primary residences. This divergence of practice went on until the early 1990s. Thus, we have a living test case. Studies have been done examining the interest rates in both types of districts--those that allowed bankruptcy modification and those that did not--and found no difference in the interest rates. Even if they had, the amendment before us today would not present this problem because, in the course of conversation, in the course of working out an agreement, only loans originated before January 1, 2009, are eligible for bankruptcy modification, only existing loans, not loans going forward. This primary concern that has been raised has no merit. Let me emphasize, again, that reductions in principal negotiated in bankruptcy court will be good for the banking system. Credit Suisse estimates that 9 million families may lose their homes in the next 4 years. Foreclosure is a disaster for the family. Large numbers of foreclosures destroy home values across neighborhoods. But from the lender's standpoint, foreclosure means they are likely to net only 50 or so cents on the dollar. In the case of any homeowner with a reliable income--and chapter 13 bankruptcy is only for people with a continuing source of income--it is much better for the lender if the homeowner remains in their home and makes a monthly payment, even if it is at a somewhat reduced rate, rather than turning the keys and putting the property into foreclosure. A couple of additional points: This proposal will not cost the taxpayer one dollar, nor will it overwhelm the Federal bankruptcy courts. The same claims were made in 2005 prior to passage of the Bankruptcy Reform Act. But in fact, the courts have handled the increase in caseload quite successfully. My office has talked with bankruptcy judges, attorneys, academics across the country. All are confident that the court system can handle any increase in caseload that would result from this legislation. This legislation is important to Oregon. It is important to the citizens in my State. According to data compiled by Moody's Economy and the Center for Responsible Lending, without this bankruptcy lifeline, over 15,000 families will lose their homes to foreclosure. I imagine the situation is quite similar in every State. The cost of these foreclosures has been magnified several times over, costing those citizens whose homes neighbor the foreclosed sites nearly $1.5 billion in equity. That is in Oregon alone. Will those neighbors then be underwater with their homes worth less than what they owe on their house, and how long will this cycle continue? The bankruptcy lifeline amendment offers us a win-win solution. Forcing real mortgage modifications will keep Americans in their home, arrest the decline in property prices, and stabilize the balance sheets of banks. I urge colleagues, in the strongest possible terms, to provide this win-win opportunity. We have done so much to help Wall Street. It is time to help working families across America, keeping them in their homes and stabilizing the financial system. I yield the floor.

Mr. MERKLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. MERKLEY

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

Mr. MERKLEY. I thank the Senator from Connecticut.

Mr. MERKLEY. Mr. President, I deeply respect and appreciate the fact that the chairman has done so much to bring public attention to these important issues over the past several years. I would be delighted and honored to have the opportunity to assist with hearings as described on predatory lending and to refresh this conversation about how we, as a Congress, can reach out and assist working Americans to make sure that in the future they will not find that the dream of home ownership is turned into a nightmare, as it has been through steering payments, through prepayment penalties for so many in the near past. I would be deeply honored.

Mr. MERKLEY. Mr. President, tonight I rise to speak on the Dodd- Shelby legislation and specifically on my amendment, No. 1015, which is at the desk. First, I commend my chairman, the distinguished Senator from Connecticut, for his work on this legislation. This legislation will take important steps in addressing the very heart of our economic crisis, the housing market. But we can do more. Tonight I rise to offer an amendment that will put an end to the deceptive and unfair mortgage practices that played a pivotal role in steering American families into accepting risky and unsustainable mortgages. As I have discussed before, two key factors drew families into unsustainable mortgages and paved the way for this recession. First, steering payments were paid to brokers who enticed unsuspecting borrowers into deceptive and expensive mortgages. These secret bonus payments, called yield spread premiums, turned home mortgages into a scam. A family would go to a mortgage broker for advice in getting the best possible loan. The family would trust the broker to give good advice because, quite frankly, they were paying the broker for that advice. But what the borrower did not realize was that the broker would earn thousands of bonus dollars from the lender if the broker could convince the homeowner to take out a high-priced mortgage such as one with an exploding interest rate rather than a plain vanilla 30-year fixed-rate mortgage. Prepayment penalties added insult to injury. After the homeowner realized he or she had been steered into an unsustainable mortgage, the homeowner soon discovered that a large prepayment penalty made it too costly for them to refinance into a lower cost loan. The homeowner was locked into a destructive mortgage. This scam had tremendous impact. A study for the Wall Street Journal found that 61 percent of the subprime loans originated in 2006 went to families who qualified for prime loans, meaning that millions of American families were placed at risk. This is simply wrong--a publicly regulated process designed to create a relationship of trust between families and brokers but that leaves borrowers unaware of payments that place them in expensive and destructive mortgages. I call my colleagues' attention to a New York Times editorial published on April 10 entitled ``Predatory Brokers,'' which highlighted this problem. The editorial pointed out a study by the Center for Responsible Lending that found that subprime borrowers who used a broker actually fared worse than those who went directly to lenders. Those borrowers paid $17,000 to $43,000 more for every $100,000 they borrowed. That is outrageous. The Times concluded: The first step must be to outlaw the kickbacks that lenders pay brokers for steering clients into costlier loans. The editorial went on: The most clearly unethical form of payment is the so-called yield-spread premium. It is difficult to overestimate the damage that has been done by these expensive loans and secret steering payments. An estimated 20,000 Oregon families will lose their homes to foreclosure in 2009. Nationwide, an estimated 2 million families will lose their homes this year, and the total of foreclosed families is predicted to reach 9 million by 2012. These practices didn't only hurt families on Main Street, they were also the prime enablers for the propagation of destructive subprime collateralized debt obligations, or CDOs, that have now brought Wall Street to its knees. Had these procedures been banned--steering payments, prepayment penalties--Wall Street would not have been able to engineer the tremendous bubble on the backs of unsuspecting homeowners and, accordingly, would not have had the billions in write-downs that caused this credit crisis and sent our economy into a terrible recession. The problem is simple and the solution is simple. The costs of doing nothing are tremendous both for homeowners and for the financial system. By banning steering payments and prepayment penalties, this amendment will restore transparency to the mortgage lending process and help make home ownership a stable investment for families once again. The time has come for us to make sure that secret steering payments and paralyzing prepayment penalties never again haunt American families. I yield the floor.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I rise today in remembrance of one of Oregon's finest young men, PFC Richard Dewater. A former resident of Grants Pass, OR, PFC Richard Dewater tragically lost his life on April 15 while on patrol in Afghanistan. PFC Richard Dewater will be flown back to Oregon and laid to rest in Roseberg National Cemetery. Private First Class Dewater was assigned to the 1st Battalion, 26th Infantry Regiment, 3rd Brigade Combat Team, 1st Infantry Division based out of Fort Hood, TX. Private First Class Dewater was deployed to Afghanistan in July in support of Operation Enduring Freedom in Afghanistan. Just days before his death, Private First Class Dewater's brigade ambushed a Taliban unit near Korengal Valley. Joining the U.S. Army was something Private First Class Dewater was extremely passionate about. Ever since Private First Class Dewater was a young child he wanted to become a soldier. Private First Class Dewater loved the work he was doing and was very proud of his service in the military. He also enjoyed fishing and camping and considered Grants Pass, OR, to be his home. Private First Class Dewater was a devoted husband to his wife Valerie, whom he married in Topeka, KS, back in June 2008. I offer my heartfelt prayers and condolences to Private First Class Dewater's wife Valerie, his family and friends. I am forever grateful for Private First Class Dewater's service and his dedication to our country. Private First Class Dewater was a courageous and selfless man and deserves to be remembered for his valiant service. I ask that my fellow Oregonians and all Americans join me in honoring PFC Richard Dewater and the sacrifice he and his family have made for our country. Sergeant LeRoy O. Webster

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I am introducing two pieces of legislation to address the very heart of our economic crisis--the housing market and the deceptive lending practices that have placed millions of homes at risk of foreclosure. In the last few years, millions of families were led into unsustainable home mortgages that pushed our country into an economic crisis unprecedented in our lifetimes. Instead of fulfilling a dream and contributing to a secure financial future, home mortgages have too often become a check for stripping wealth from working Americans. These two bills, the Transparency for Homeowners Act, S. 911, and the Promoting Mortgage Responsibility Act, S. 912, will put an end to deceptive and unfair mortgage practices that played a pivotal role in tricking American families to accept risky and unsustainable mortgages. Two key factors drew families into these mortgages that paved the way for this recession. First, steering payments. Steering payments were paid to brokers who enticed unsuspecting homeowners into deceptive and expensive mortgages. These secret bonus payments, often called yield spread premiums, turned home mortgages into a scam. A family would go to a mortgage broker to get advice in getting the best possible loan. The family would trust the broker to give advice because, quite frankly, they were paying the broker for that service. But what the borrower did not realize is that the broker would earn thousands of bonus dollars from the lender if the broker could convince the homeowner to take out a high-priced mortgage, such as one with an exploding interest rate, rather than a plain vanilla 30- year fixed rate mortgage. The second factor is prepayment penalties. Prepayment penalties added insult to injury. After the homeowners realized they had been steered into an unsustainable mortgage, they soon discovered that a large prepayment penalty made it too costly for them to refinance to a more affordable loan. They were locked into that first destructive loan they did not fully understand when it was presented. This scam has had a tremendous impact. A study for the Wall Street Journal found that 61 percent of the subprime loans that originated in 2006--that is 61 percent that originated in 2006--went to families who qualified for prime loans. More than half the borrowers who qualified for a prime loan ended up with a subprime loan because of these steering payments, putting millions of American families at risk. This is simply wrong--a publicly regulated process designed to create a relationship of trust between families and brokers but that leaves borrowers unaware of payments that take place, putting them into expensive and destructive mortgages. I call your attention to a New York Times editorial published on April 9 entitled ``Predatory Brokers.'' This editorial highlighted the problem. The Times concluded that: The first step must be to outlaw the kickbacks that lenders pay brokers for steering clients into costlier loans. The editorial went on to say that: The most clearly unethical form of payment is the so-called yield-spread premium. My friends, it is difficult to overstate the damage that has been done by these practices. An estimated 20,000 Oregon families will lose their homes to foreclosure in 2009. Nationwide, an estimated 2 million families will lose their homes this year. And the total of foreclosed families is predicted to reach 9 million by 2012. The legislative solutions I propose are very simple. The bills I am introducing today will ensure these practices do not again haunt the mortgage business in America. First, the Transparency For Homeowners Act ends the secret steering payments to lenders who lead homeowners into deceptive mortgages they cannot afford over the long term. Second, the Promoting Mortgage Responsibility Act prohibits lenders from issuing costly financial penalties that prevent homeowners from refinancing into a more affordable loan. It is simple: an end to steering payments and an end to prepayment penalties. We should recognize that not only have these practices damaged the financial foundations for our families and millions of families at the retail level--turning the American dream of home ownership into an American nightmare--but these practices, which resulted in a huge surge in subprime lending, set the stage for the disaster that would come and is still unfolding on Wall Street and crippling economies around the world. My legislation will restore transparency to the mortgage lending process and help make home ownership a stable investment for families once again. The time has come for us to make sure that secret steering payments and paralyzing prepayment penalties never again haunt American families. Let us restore the American dream of home ownership.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I yield the floor, and I suggest the absence of a quorum.

Mr. MERKLEY. I thank the Chair. (The remarks of Mr. Merkley pertaining to the introduction of S. 911 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. MERKLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I am introducing two pieces of legislation to address the very heart of our economic crisis--the housing market and the deceptive lending practices that have placed millions of homes at risk of foreclosure. In the last few years, millions of families were led into unsustainable home mortgages that pushed our country into an economic crisis unprecedented in our lifetimes. Instead of fulfilling a dream and contributing to a secure financial future, home mortgages have too often become a check for stripping wealth from working Americans. These two bills, the Transparency for Homeowners Act, S. 911, and the Promoting Mortgage Responsibility Act, S. 912, will put an end to deceptive and unfair mortgage practices that played a pivotal role in tricking American families to accept risky and unsustainable mortgages. Two key factors drew families into these mortgages that paved the way for this recession. First, steering payments. Steering payments were paid to brokers who enticed unsuspecting homeowners into deceptive and expensive mortgages. These secret bonus payments, often called yield spread premiums, turned home mortgages into a scam. A family would go to a mortgage broker to get advice in getting the best possible loan. The family would trust the broker to give advice because, quite frankly, they were paying the broker for that service. But what the borrower did not realize is that the broker would earn thousands of bonus dollars from the lender if the broker could convince the homeowner to take out a high-priced mortgage, such as one with an exploding interest rate, rather than a plain vanilla 30- year fixed rate mortgage. The second factor is prepayment penalties. Prepayment penalties added insult to injury. After the homeowners realized they had been steered into an unsustainable mortgage, they soon discovered that a large prepayment penalty made it too costly for them to refinance to a more affordable loan. They were locked into that first destructive loan they did not fully understand when it was presented. This scam has had a tremendous impact. A study for the Wall Street Journal found that 61 percent of the subprime loans that originated in 2006--that is 61 percent that originated in 2006--went to families who qualified for prime loans. More than half the borrowers who qualified for a prime loan ended up with a subprime loan because of these steering payments, putting millions of American families at risk. This is simply wrong--a publicly regulated process designed to create a relationship of trust between families and brokers but that leaves borrowers unaware of payments that take place, putting them into expensive and destructive mortgages. I call your attention to a New York Times editorial published on April 9 entitled ``Predatory Brokers.'' This editorial highlighted the problem. The Times concluded that: The first step must be to outlaw the kickbacks that lenders pay brokers for steering clients into costlier loans. The editorial went on to say that: The most clearly unethical form of payment is the so-called yield-spread premium. My friends, it is difficult to overstate the damage that has been done by these practices. An estimated 20,000 Oregon families will lose their homes to foreclosure in 2009. Nationwide, an estimated 2 million families will lose their homes this year. And the total of foreclosed families is predicted to reach 9 million by 2012. The legislative solutions I propose are very simple. The bills I am introducing today will ensure these practices do not again haunt the mortgage business in America. First, the Transparency For Homeowners Act ends the secret steering payments to lenders who lead homeowners into deceptive mortgages they cannot afford over the long term. Second, the Promoting Mortgage Responsibility Act prohibits lenders from issuing costly financial penalties that prevent homeowners from refinancing into a more affordable loan. It is simple: an end to steering payments and an end to prepayment penalties. We should recognize that not only have these practices damaged the financial foundations for our families and millions of families at the retail level--turning the American dream of home ownership into an American nightmare--but these practices, which resulted in a huge surge in subprime lending, set the stage for the disaster that would come and is still unfolding on Wall Street and crippling economies around the world. My legislation will restore transparency to the mortgage lending process and help make home ownership a stable investment for families once again. The time has come for us to make sure that secret steering payments and paralyzing prepayment penalties never again haunt American families. Let us restore the American dream of home ownership.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on Monday, April 27, 2009, at 5:30 p.m. THE PRESIDING OFFICER. Without objection, it is so ordered.

Mr. MERKLEY

Mr. MERKLEY. Madam President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. MERKLEY. Madam President, I suggest the absence of a quorum.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, today I am introducing the Sustainable Revenue for Oregon Counties Act, a bill aimed at finding a sustainable long-term solution to the revenue problems faced by Oregon's timber- dependent counties and other timber-dependent counties across our Nation. This bill, which is cosponsored by Senator Ron Wyden, will establish a task force to determine the best way to provide counties with a dependable source of revenue after the current county payments program expires. Last year I promised that county payments would be the subject of my first bill as a Senator because addressing this issue is essential to the long-term success of Oregon's rural counties. Thanks to the hard work of Senator Wyden and our congressional delegation, payments are in place for the next 2 years. But we need to start preparing for what happens next. Let me give some background on this critical issue. Like many Western States, the Federal Government owns much of Oregon's land base. More than half of Oregon's land is federally owned. One class of the Federal lands is the O&C lands. These lands were granted to Oregon & California Railroad in 1866 and later reverted to the Federal Government when the railroad failed to live up to terms of the grant. They also included a class of lands that originated from a similar situation, the Coos Bay Wagon Road lands. These O&C lands make up 2.2 million acres in western and southern Oregon. Then there are Forest Service lands--timbered lands owned by the Forest Service, managed--that make up 14 million additional acres across our State. In both cases, the Federal Government has allocated a share of the revenue generated by cutting timber to compensate local counties for their services. Since 1908, in fact, the Federal Government has compensated counties for the revenue lost due to Forest Service lands with a simple formula: 25 percent of the revenue earned by harvesting timber. Since 1937 the Federal Government has sustained a similar commitment on our O&C lands. The O&C Act provided that counties receive 75 percent of the timber harvest revenues, and since 1957 that was reasserted with 50 percent going directly to the counties and 25 percent put into management. Then along came the 1990s and something happened. What happened is, the Federal Government started saying for other reasons--environmental reasons, stewardship reasons--we were going to change the harvest practices on these lands. That has had a direct impact, a deep, profound impact on our timber counties. A deal was struck. In fact, in 1993, President Clinton proposed and Congress enacted a program to augment timber payments with Federal payments based on the historic harvest levels so the people of Oregon's timber counties will not be paying the price for the environmental goals and other goals that were put forward. This is a deal, this is a core foundation agreement between the Federal Government and our timber counties. This program was modified in 2000 under the leadership of our senior Senator from Oregon, and the program became the Secure Rural Schools and Community Self-Determination Act. That program, though, had a sunset in 2006 when the program disappeared that started to wreak havoc on our timber-dependent counties. In Josephine County two-thirds of the county's general fund came from county payments. Loss of county payments meant cutting public safety programs. Overnight, patrols were down to one 10-hour shift split among six deputies covering an area the size of the State of Rhode Island. In Harney County--where 78 percent of the landmass, an area the size of New Jersey, is federally controlled--70 percent of the road funds come from Federal payments. In Lake County, Federal land, making up 61 percent of the county, is in anticipation of losing Federal funding, so the county had to cut its Federal Road Department from 42 individuals to 14--14 for a road department for a county the size of Connecticut and Delaware combined. In Jackson County, where one-third of the general fund comes from Federal payments, Jackson County eliminated 117 jobs in parks, human services, roads, public safety, and closed all of their libraries. This issue was so substantial that the Oregon Legislature, when I served as speaker, redirected more than $50 million in transportation funds away from counties under the normal formula to a formula based on the loss of the Federal timber dollars. The good news is that due to the tireless work of the senior Senator from my State, Mr. Wyden, and our colleagues in the other Chamber, counties received a 1-year reprieve in 2007 and just last fall a 4-year extension. But now we are faced again with expiration of these critical resources in 2011. So today I am here to propose a strategy to develop a coherent plan, a plan for restoring fiscal security and sustainable revenue to our counties so that, despite the crushing economic situation our counties are facing today--and unemployment is second highest in the Nation in Oregon, and in the timber-dependent counties far higher than the average, many with 14, 16, 18 percent unemployment--despite that, we need to provide a foundation for transition in 2011. There are many elements that can go into this coherent strategy. Our forests, millions of acres of second growth forests are overgrown and need to be thinned to restore forest health and prevent forest fires. Increasing the harvest could generate revenue. The material cleared from the forest could be used to generate biomass energy and cellulosic biofuels, and harvesting that material, that biomass, could generate revenue. Our forests can be used to sequester carbon, and the forests of the Northwest are potentially the largest carbon sink we have, so management to increase carbon sequestration could be a source of revenue. Increased use of public lands by visitors brings economic benefit to our counties and these recreational and tourism activities could be a source of revenues. Certainly, we need to look at the historic deal struck between the Federal Government and the counties and find a way to sustain it into the future--that deal saying, if we are going to put restrictions on the timber harvest under these traditional timberlands that we are going to compensate counties for the lost revenue. This bill creates a task force with 15 members. Four members come from timber counties. They get their firsthand reports from the front line. One member each represents timber, conservation, recreation, and labor organizations--as well as a member from the Governor's office and a member from Oregon's tribes. Then the task force will be expanded to include members who are experts on sustainable forestry, on natural resource economics, on biomass energy, on carbon sequestration, and on habitat conservation. This task force is charged with developing a long-term plan to raise sustainable revenue for Oregon's counties, and it will consider all of the concepts that I have mentioned, as well as others that are proposed or that come up in the course of the task force's work. They are going to report back two strategies for consideration within 9 months of this bill being enacted. Timberlands are an important part of the national economy and an extremely important part of the Oregon economy. Timber products can be used to help us address next generation biofuels. Timber can be used to sequester carbon. It is a creative, adaptable building material, and our timber counties have been hit particularly hard by the downturn in the national housing market. So we need to sustain the traditional deal with Oregon's timber counties and with timber counties across this country. That is what this bill is intended to do. I am very proud to introduce it as my first bill as a Senator. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, today I am introducing the Sustainable Revenue for Oregon Counties Act, a bill aimed at finding a sustainable long-term solution to the revenue problems faced by Oregon's timber- dependent counties and other timber-dependent counties across our Nation. This bill, which is cosponsored by Senator Ron Wyden, will establish a task force to determine the best way to provide counties with a dependable source of revenue after the current county payments program expires. Last year I promised that county payments would be the subject of my first bill as a Senator because addressing this issue is essential to the long-term success of Oregon's rural counties. Thanks to the hard work of Senator Wyden and our congressional delegation, payments are in place for the next 2 years. But we need to start preparing for what happens next. Let me give some background on this critical issue. Like many Western States, the Federal Government owns much of Oregon's land base. More than half of Oregon's land is federally owned. One class of the Federal lands is the O&C lands. These lands were granted to Oregon & California Railroad in 1866 and later reverted to the Federal Government when the railroad failed to live up to terms of the grant. They also included a class of lands that originated from a similar situation, the Coos Bay Wagon Road lands. These O&C lands make up 2.2 million acres in western and southern Oregon. Then there are Forest Service lands--timbered lands owned by the Forest Service, managed--that make up 14 million additional acres across our State. In both cases, the Federal Government has allocated a share of the revenue generated by cutting timber to compensate local counties for their services. Since 1908, in fact, the Federal Government has compensated counties for the revenue lost due to Forest Service lands with a simple formula: 25 percent of the revenue earned by harvesting timber. Since 1937 the Federal Government has sustained a similar commitment on our O&C lands. The O&C Act provided that counties receive 75 percent of the timber harvest revenues, and since 1957 that was reasserted with 50 percent going directly to the counties and 25 percent put into management. Then along came the 1990s and something happened. What happened is, the Federal Government started saying for other reasons--environmental reasons, stewardship reasons--we were going to change the harvest practices on these lands. That has had a direct impact, a deep, profound impact on our timber counties. A deal was struck. In fact, in 1993, President Clinton proposed and Congress enacted a program to augment timber payments with Federal payments based on the historic harvest levels so the people of Oregon's timber counties will not be paying the price for the environmental goals and other goals that were put forward. This is a deal, this is a core foundation agreement between the Federal Government and our timber counties. This program was modified in 2000 under the leadership of our senior Senator from Oregon, and the program became the Secure Rural Schools and Community Self-Determination Act. That program, though, had a sunset in 2006 when the program disappeared that started to wreak havoc on our timber-dependent counties. In Josephine County two-thirds of the county's general fund came from county payments. Loss of county payments meant cutting public safety programs. Overnight, patrols were down to one 10-hour shift split among six deputies covering an area the size of the State of Rhode Island. In Harney County--where 78 percent of the landmass, an area the size of New Jersey, is federally controlled--70 percent of the road funds come from Federal payments. In Lake County, Federal land, making up 61 percent of the county, is in anticipation of losing Federal funding, so the county had to cut its Federal Road Department from 42 individuals to 14--14 for a road department for a county the size of Connecticut and Delaware combined. In Jackson County, where one-third of the general fund comes from Federal payments, Jackson County eliminated 117 jobs in parks, human services, roads, public safety, and closed all of their libraries. This issue was so substantial that the Oregon Legislature, when I served as speaker, redirected more than $50 million in transportation funds away from counties under the normal formula to a formula based on the loss of the Federal timber dollars. The good news is that due to the tireless work of the senior Senator from my State, Mr. Wyden, and our colleagues in the other Chamber, counties received a 1-year reprieve in 2007 and just last fall a 4-year extension. But now we are faced again with expiration of these critical resources in 2011. So today I am here to propose a strategy to develop a coherent plan, a plan for restoring fiscal security and sustainable revenue to our counties so that, despite the crushing economic situation our counties are facing today--and unemployment is second highest in the Nation in Oregon, and in the timber-dependent counties far higher than the average, many with 14, 16, 18 percent unemployment--despite that, we need to provide a foundation for transition in 2011. There are many elements that can go into this coherent strategy. Our forests, millions of acres of second growth forests are overgrown and need to be thinned to restore forest health and prevent forest fires. Increasing the harvest could generate revenue. The material cleared from the forest could be used to generate biomass energy and cellulosic biofuels, and harvesting that material, that biomass, could generate revenue. Our forests can be used to sequester carbon, and the forests of the Northwest are potentially the largest carbon sink we have, so management to increase carbon sequestration could be a source of revenue. Increased use of public lands by visitors brings economic benefit to our counties and these recreational and tourism activities could be a source of revenues. Certainly, we need to look at the historic deal struck between the Federal Government and the counties and find a way to sustain it into the future--that deal saying, if we are going to put restrictions on the timber harvest under these traditional timberlands that we are going to compensate counties for the lost revenue. This bill creates a task force with 15 members. Four members come from timber counties. They get their firsthand reports from the front line. One member each represents timber, conservation, recreation, and labor organizations--as well as a member from the Governor's office and a member from Oregon's tribes. Then the task force will be expanded to include members who are experts on sustainable forestry, on natural resource economics, on biomass energy, on carbon sequestration, and on habitat conservation. This task force is charged with developing a long-term plan to raise sustainable revenue for Oregon's counties, and it will consider all of the concepts that I have mentioned, as well as others that are proposed or that come up in the course of the task force's work. They are going to report back two strategies for consideration within 9 months of this bill being enacted. Timberlands are an important part of the national economy and an extremely important part of the Oregon economy. Timber products can be used to help us address next generation biofuels. Timber can be used to sequester carbon. It is a creative, adaptable building material, and our timber counties have been hit particularly hard by the downturn in the national housing market. So we need to sustain the traditional deal with Oregon's timber counties and with timber counties across this country. That is what this bill is intended to do. I am very proud to introduce it as my first bill as a Senator. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I rise to speak in strong support of the underlying bill, the Fraud Enforcement and Recovery Act of 2009, and in particular about its impact on detecting fraud in the housing industry. First, however, let me offer my appreciation to the senior Senator from Vermont for bringing forward this important piece of legislation for our consideration. We all know the grave nature of the economic crisis we are in. Oregon has been hit particularly hard. The unemployment rate in Oregon is 12.1 percent. It has nearly doubled in just over 6 months, the second highest unemployment rate in the Nation. Oregonians are going into foreclosure at record rates. This legislation, by giving law enforcement additional tools, will help stop the bleeding and begin the process of addressing an underlying problem that caused this crisis, deceptive practices in the mortgage industry. The bill before us today is straightforward but important. It gives the Government the extra tools and resources it needs to combat, identify, and prosecute financial fraud. As the Federal Government spends billions to bring stability to the economy, the modest amount of money authorized in this bill will go a long way to protect our investments and return money to the taxpayer. Let me highlight just how important this effort is in the area of housing. A lot of attention has been paid to the rising number of foreclosures and the havoc these foreclosures are wreaking on the housing market. But not so much attention has been paid to the role fraud has played in causing these foreclosures. Just last month, HUD's interim report on the root causes of the foreclosure crisis found that 1 in 10 delinquencies in this crisis has been associated with some form of fraud. That means this week alone 5,000 families will lose their homes to foreclosure as a result of fraud. That is 5,000 families too many. Mortgage fraud is at an all-time high. The Mortgage Asset Research Institute has found that mortgage fraud increased by 26 percent from 2007 to 2008. Sadly, this number is only growing as new schemes come forward seeking to defraud Americans of the financial foundation of their future. Let me give a couple of examples. In one widespread fraud, buyers with stolen identities bought homes. If the value of the homes went up, they sold the homes and cashed in. If the value of the homes went down, they walked away, leaving not only a vacant home but leaving the unsuspecting victim of identity theft in a very difficult situation. In another case identified by HUD, defrauders inflated home values through bogus appraisals, fabricated borrowed deposit amounts, falsified loan documents to obtain FHA-insured mortgages, and HUD lost $2.3 million on just 30 mortgages. Over 9,000 FHA loans have entered into default after no or only one payment, a particular sign of fraud. HUD's inspector general has done much to address this. The office captured $2 billion in questionable expenses, obtained $80 million in restitution money, and closed over 1,000 cases. That is a significant effort. But it is only the tip of the iceberg. That is why this fraud act we are considering today is so important. It takes a significant step in restoring an investigative unit that was largely dismantled in 2003 under the Bush administration. It expands the inspector general's staff. It takes an important step to restore investigative capabilities which are so important to protecting the vital nature of the American housing market. In these extraordinary economic times, we need to be especially vigilant against new forms of fraud. I am thinking now of the predatory foreclosure scams that so many of my Oregon constituents have been talking about. These scams engage in deeply deceptive practices and sometimes outright fraud. The worst of these schemes falsely promised homeowners a way out of foreclosure if they put up a small fee of several thousand dollars. In one such scam-- I will call the couple John and Mary who were affected. They are 70 years old and 66 years old, respectively, hard-working Oregonians. John is a self-employed trucker. Most of his business is generated from hauling debris from the demolition of houses. His business has declined with the fall-off of new construction. In the course of things, John and Mary struggled to keep up their mortgage payments. They reached out to their servicer--at the time it was Countrywide--to explore their options but couldn't connect and get anyone to work with them on their mortgage. But telemarketers started calling with offers to help them modify their mortgage for $2,000 or $3,000. It is fortunate that John and Mary didn't sign any of these contracts but instead contacted my office. We connected them with a HUD-approved housing counselor who was able to help them modify their loan and get back on a straight path. Let me tell my colleagues what might have happened; that is, a scam in which not only is the family facing foreclosure asked to put up a fee, but they are asked to sign over their house to the firm, and then they are converted into being a renter. When they miss a rent payment, they are evicted from their house. So not only do they lose their investment, they lose a place to live. They can go from a homeowner in slight trouble to homeless in short order. These scams are unacceptable. It is our job to step forward and protect the American people. We must fireproof our mortgage lending business and ban deceptive and risky practices. In the coming days, I and others will be offering and working on legislation to reestablish sound practices in the mortgage finance markets. But today we consider a significant act that empowers our officials to lay down a firebreak against the most blatant forms of fraud. I encourage colleagues to support it. It is an important step. Let's work together to protect American homeowners. I yield the floor and suggest the absence of a quorum.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I rise today to call on my colleagues, and indeed upon all Americans, to rally to the defense of the American home. Sometime soon, within the next few weeks, this esteemed Chamber will be taking up this issue. So this seems to be an appropriate time to reflect on how to improve our policies for promoting homeownership. There is nothing that characterizes the American dream better than owning your own home. The homeowner is the king--or queen--of his or her castle. You decorate and remodel it to suit your own taste and style. You are your own landlord; no one can tell you what you can or can't do. You fence the yard so you can finally have a dog. You put in a skylight because you want more light. You plant tiger lilies and hyacinth in the yard because they are the most beautiful flowers in the world. You create a stable and nurturing environment for raising your children. In your own home you control your own destiny. Moreover, it is through home ownership that you secure your financial destiny. By and large, everything you buy in life loses value quickly-- your car, your furniture, your clothing. But not so with your home. The family home is, for most families, the biggest nest egg they will build in their lifetime. At a minimum, owning a home--with a fair mortgage--locks in and caps your monthly housing expenses. That is a great deal compared to renting, where rents go up and up over the years. In addition, your monthly payments steadily pay off your mortgage, you own an increasing share of your home, and the bank owns less. You can look down the road and see the possibility of owning your home free and clear before you retire, making it possible to get by decently in your golden years. To make the deal even better, your home appreciates in value. The home you bought for $80,000 in 1980 might be worth $250,000 in 2010. In many cases, it might be that appreciation, that growing home equity, that enables you to travel a bit during retirement, or that enables your son or daughter to afford to go to college. So homeownership really is a magical part of the American dream-- opening the door to our aspirations and building our financial fortunes. Thus, you would expect that our leaders would do all they could to protect and advance homeownership. Unfortunately, however, I am here today to say that we really haven't done such a good job. In fact, all too often this past decade, we have allowed the great American dream of homeownership, to turn into the great American nightmare. We can and must do better. What has gone wrong? In short, almost everything. Most fundamentally, we have abused one of the most amazing inventions, one of the most powerful wealth building tools, we have ever seen: The fully amortizing mortgage. Let's turn the clock back 77 years to the Great Depression. Before 1932, house loans were normally 50 percent loan to value with 3- to 5- year balloon payments. This worked fine as long as a family could get a new loan at the end of 3 to 5 years to replace the old loan. With the crash of our banking system in 1929, however, replacement loans were no longer available. Thus, as balloon payments came due, millions of families lost their homes. The solution was the fully amortized mortgage, which eliminated the challenge of replacing one's mortgage every 3 to 5 years, thereby insulating families from frozen lending markets. Indeed, the Roosevelt administration's decision to help millions of families replace their balloon loans with fully amortized loans was a major factor in ending the Great Depression and putting our national economy back on track. This system of amortized mortgages worked very well for over half a century. But in recent years, we have allowed two developments that have deeply damaged the stabilizing power of the amortizing mortgage and helped produce our current economic crisis. Those two factors are tricky mortgages and steering payments. One tricky mortgage, for example, was the teaser loan--sometimes called the ``2-28'' loan. In this loan, a low introductory rate exploded to a much higher rate after 2 years. In many cases, the broker knew that the family could never afford the higher rate, but the broker would persuade the family that the mortgage presented little risk since the family could easily refinance out of the loan at a later date. This argument was misleading, of course, since the family was locked into the loan by a sizable prepayment penalty. Another tricky mortgage was the triple-option loan, in which a family could make a month-to-month choice between a low payment, a medium payment, or a high payment. What many families didn't understand, however, was that the low payment could only be used for a limited period before the family was required to make the high payment, which the family couldn't afford. These tricky loans, however, would probably not have done much damage, because their use would have been rare--except for a second major mistake; namely, we allowed brokers to earn huge bonus payments-- unbeknownst to the homeowner--to steer unsuspecting homeowners into these tricky and expensive mortgages. These secret steering payments turned home mortgages into a scam. A family would go to a mortgage broker for advice in getting the best loan. The family would trust the broker to give good advice because, quite frankly, they were paying the broker for that advice. The payment to the broker was right there, fully listed and disclosed by law, on the estimated settlement sheet. But what the borrower didn't realize was that the broker would earn thousands of bonus dollars from the lender--so called ``yield-spread premiums''--if the broker could convince the homeowner to take out a tricky expensive mortgage rather than a plain vanilla 30-year mortgage. This scam has had a tremendous impact. A study for the Wall Street Journal found that 61 percent of the subprime loans originated in 2006 went to families who qualified for prime loans. This is simply wrong--a publicly regulated process designed to create a relationship of trust between families and brokers, but that allows payments borrowers are not aware of that stick families with expensive and destructive mortgages. It is difficult to overstate the damage that has been done by these tricky loans and secret steering payments. An estimated 20,000 Oregon families will lose their homes to foreclosure this year. Nationwide, an estimated 2 million families will lose their homes this year and up to 10 million over the next 4 years. In every single case, the foreclosure is a catastrophe for the family. Each foreclosure is a shattered dream. The family has lost its financial nest egg. It has lost the nurturing environment the parents created for the children. The family has lost its dream of building a foundation for retirement. And don't doubt for a second the stress that this catastrophe places on the parents' marriage, or on the children, multiplying the damage. The foreclosure is also a catastrophe for the neighborhood, because an empty foreclosed home can lower the value of other homes on the street by $5,000 to $10,000. The foreclosure is, in addition, a catastrophe for our financial system. A lender often loses half the value of the property by the time it has been publicly auctioned. And as we now know all too well, foreclosures undermine the value of mortgage securities and mortgage derivatives, damaging the balance sheets of financial institutions in America and throughout the world and throwing our banking system and global economy into chaos. That frozen lending and economic chaos, of course, further hurts our families. Oregon's unemployment rate has gone from 6 percent to 11 percent in just 5 months, nearly doubling the number of Oregon families out of work, and unemployment, in turn, drives additional foreclosures. How did we let this happen? This fiasco is, first and foremost, the consequence of colossal regulatory failure. Let me count the ways. First, in 1994, Congress required the Federal Reserve Board to prohibit mortgage lending practices that are abusive, unfair or deceptive. That was a very good law. But for 14 years, the Fed sat on its hands, failing to regulate abusive and deceptive practices such as teaser loans, prepayment penalties, and steering payments. Second, in 2002, after the State of Georgia adopted comprehensive mortgage reform legislation, the Comptroller of the Currency, John Hawke, overturned the Georgia reforms and banned all States from making such reforms affecting federally chartered institutions. This action made it difficult for States to pass reforms covering State-chartered lenders as well, since such action generated the powerful argument that it would create an unfair disadvantage for State-chartered banks. I can testify to this firsthand because that is exactly what happened when last year, as Speaker of the Oregon House, I worked to pass such mortgage reforms in Oregon. As a former attorney of North Carolina summarized it, the Office of the Comptroller of the Currency ``took 50 sheriffs off the job during the time the mortgage lending industry was becoming the Wild West.'' The third failure was in 2004. The Securities and Exchange Commission exempted the five largest investment banks from its leverage requirements. This dramatically amplified the funds available to the banks to purchase mortgage-backed securities, funding a tsunami of subprime loans. Let's take a look at a chart. We see that impact in 2004, when subprime loans, which had been at a relatively stable level, grew dramatically and suddenly. To make it worse, the Securities and Exchange Commission failed to regulate credit default swaps, which became a $50 trillion industry, that contributed to the appeal of mortgage-backed securities by insuring those securities against failure. The fourth failure was in the Office of Thrift Supervision. That office was asleep at the switch. The office failed to halt risky lending practices that doomed numerous thrifts. An inspector general's report after the failure of NetBank in September of 2007 concluded that the Office of Thrift Supervision ignored warning signs about the bank's risky lending. OTS continued to snooze, however, while numerous thrifts failed, including IndyMac, Washington Mutual, and Countrywide. The fifth failure. While Fannie Mae and Freddie Mac set standards limiting their purchase of subprime mortgages, they nevertheless poured fuel on the subprime fire by investing in subprime securities, thereby driving the financing of the subprime market. Taken together, these five circumstances composed a colossal failure of regulation. Even Alan Greenspan, former Chair of the Fed who prominently advocated that banking practices should not be regulated because Wall Street, in its own long-term interest, would regulate itself, now renounces that philosophy. I say to my friends and colleagues, what a mess. Congress got it right in 1994, when it asked the Fed to prohibit mortgage lending practices that were abusive, unfair, and deceptive. But Congress shares the responsibility for not following up aggressively when the Fed failed to act on this requirement. The result is that home ownership has suffered and our national economy is in deep trouble. So now is the time for us to honestly assess the damage and to repair the damage as best we can. It is time to end the deception and abuse in Main Street mortgages and in Wall Street mortgage securitization. The American dream of home ownership, with all that it means for the quality of life of our families, depends on our effective action. To repair the damage, we need to support aggressive efforts to enable families trapped in subprime mortgages to negotiate modifications to those mortgages. President Obama and his team have taken many steps in the right direction on this issue, but we need to monitor the progress and help pave the way for success. If mortgage modifications fail due to the extraordinary difficulty of connecting borrowers to lenders in a market where the loan has been sliced and diced into 100 pieces, we need to support the ability of bankruptcy judges to operate as an arbitrator to adjust the terms of the loan. We grant this power to judges for loans for yachts, loans for vacation homes for our more privileged citizens. Certainly, ordinary citizens should have the same recourse for a far more important possession--the family home. Consider the experience of Lisa Williams, who spoke at a mortgage foreclosure summit I hosted in Oregon last month. Lisa spoke about the lengths to which she went to get in touch with someone to help her renegotiate her loan. She would call and call her bank and never get through or she would be put on hold for more than an hour at a time or, on the rare occasion that she did get through, she could not reach anyone in a position of authority to talk with her. Five months ago, despite her innumerable and consistent efforts, she lost her home. An aggressive loan modification program or a last resort--and I stress ``last resort''--bankruptcy arbitration would have saved Lisa's home and, looking forward, would save the homes of millions of other American families. We also need to restore the same guidelines to Wall Street--cap excessive leverage, regulate credit default swaps, prevent the creation of firms too big to fail, end regulator shopping, and evaluate and control systemic risks. Finally, we need to end deceptive and abusive mortgage practices. The regulations adopted by the Federal Reserve last year are a decent start. It is time for us to make sure teaser loans, triple option loans, and secret steering payments never again haunt American families. I say to my friends and colleagues, I end this appeal as I started it. Let us rally to the defense of the American home. We will have that chance when we consider legislation in the near future addressing mortgage practices. As we prepare to do our thoughtful best to craft mortgage and housing policy that will strengthen our American families, we might do well to consider the advice of President Franklin Roosevelt, since it was, indeed, Roosevelt who steered us out of the Nation's last enormous housing crisis. Roosevelt, speaking in his April 2, 1932, radio address entitled ``The Forgotten Man,'' declared: Here should be the objective of Government itself, to provide at least as much assistance to the little fellow as it is now giving to large banks and corporations. Mr. President, I suggest the absence of a quorum.