Richard Shelby

Mr. SHELBY

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. SHELBY. Mr. President, I ask unanimous consent that after the McCain amendment is disposed of, the next amendment in order be the Corker amendment--the next Republican amendment--dealing with underwriting.

Mr. SHELBY. Mr. President, I ask for the yeas and nays.

Mr. SHELBY

Mr. SHELBY. We have no objection to the Bennet amendment.

Mr. SHELBY

Mr. SHELBY. Mr. President, we are making progress. We might not be making progress as quickly as some people would like. Maybe we did spend a lot of time on this amendment, but it is very important. We have debated it. I guess it has been disposed of, at least that part of it, now. But there are a lot of other important amendments coming up. We can work together and work through some of them because a lot are duplications to some degree, and some of them we can take. Senator Dodd and I can help our staffs on that. Remember, this affects all of our economy--everything.

Mr. SHELBY. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. SHELBY. It is on GSE. It will take a while.

Mr. SHELBY. Mr. President, it is my understanding that Chairman Dodd has asserted that the Shelby consumer protection substitute would lead to additional assessments on community banks. I want to make it clear for the record that this is not true. But before doing so, I do want to highlight that the basic thrust of Chairman Dodd's assertion is based on the belief that placing the taxpayer on the hook for the costs of regulating Goldman Sachs, Citigroup, and J.P. Morgan is the preferential way of proceeding. Again, Chairman Dodd believes that taxpayers paying the freight for Goldman is the way to go. But I want to set the record straight about my amendment. First, my provision ensures that any nonbanks that are subject to regulation pay the full cost of that regulation themselves. They get no handouts from the taxpayer. Secondly, community banks are not presently assessed by the FDIC for the cost of regulation, and my amendment does not provide the FDIC with any new authority to make such assessments. Funding for the new division will be provided by assessments on nonbank mortgage originators, the other nonbank entities that are subject to regulation and large banking institutions. I would point out that the assessments on large banks will increase considerably following passage of the Tester amendment, which Chairman Dodd supported. Finally, in an effort to protect deposit insurance, my amendment creates a separate consumer financial protection fund which will ensure that funds for deposit insurance and consumer protection are never comingled. Mr. President, let's be clear about the differences in the funding sources in the two bills. The Dodd bill uses taxpayer funds to give a free ride to Goldman Sachs and the other big Wall Street Banks while my amendment makes big banks and bad actors cover their own costs.

Mr. SHELBY. Madam President, I rise today to discuss the amendment that Senate Republicans are offering to greatly improve consumer financial protection. This amendment recognizes that our existing financial regulatory system fails to adequately provide consumer protection. Our system is broke, and it needs fixing. The recent financial crisis has revealed that our financial regulators were asleep at the switch and had neglected to uphold their basic responsibilities for consumer protection. Far too often, our regulators were more concerned about pleasing the entities they regulated than looking out for consumers. It is clear that we need to refocus the priorities of our financial regulators and ensure that consumer protection gets the attention it deserves. Make no mistake. Republicans want to strengthen consumer protection. We need to make sure that consumers get clear and understandable disclosure so that they can make good decisions. We need to make sure that regulators have sufficient authority to combat fraudulent practices. We also need to make sure that our consumer protection laws and regulations keep up with changes in our dynamic and innovative marketplace. Any changes to consumer protection, however, need to reflect that consumer protection does not stand in isolation. It is inherently linked with safety and soundness regulation. This is most dramatically illustrated by the fact that an ill- conceived consumer protection law, such as allowing for no down payments, could cause banks to fail. Given that taxpayers are ultimately on the hook for bank failures, it would be irresponsible not to require regulators to consider the impact proposed consumer protections could have on the deposit insurance fund. After all, one of the most important consumer protections is a healthy financial system, where financial institutions are able to keep long-term commitments to consumers, like annuities, insurance, and retirement funds. The amendment we are proposing embodies this approach. It would put the FDIC in charge of writing consumer protection regulations. That responsibility currently rests with the Fed. As a prudential regulator, the FDIC has the experience necessary to ensure that the right balance is struck between consumer protection and safety and soundness. To raise the status of consumer protection, a new division will be established at the FDIC. The division will be led by a Presidentially appointed and Senate-confirmed director. The director will serve a term of 4 years and will be required to testify before Congress at least twice a year. This will help ensure that regulators are held accountable for their actions on consumer protection. In addition, this amendment does not disrupt the century and a half of precedent on preemption with respect to national banks. We should be very cautious about allowing national banks to be regulated by 50 different States and opening up the door to needless state litigation that only enriches trial lawyers and raises costs to consumers. The Republican amendment also grants the FDIC primary supervision and enforcement authority over large nonbank mortgage originators, and other financial services providers that have violated consumer protection statutes. This will give the FDIC broad authority to clamp down on the worst offenders of our consumer protection laws without needlessly subjecting law-abiding businesses to expensive regulation. The Republican approach to consumer protection sharply contrasts with the approach of the Dodd bill. Under the Dodd bill, the Consumer Financial Protection Bureau would issue rules without considering their impact on the safety and soundness of financial institutions. Need I remind my colleagues that this is the same regulatory model that produced the fiascos at Fannie and Freddie. In that case, HUD wrote rules on their housing goals and underwriting standards, while OFHEO regulated them for safety and soundness. Do we need a better example of the foolishness of divorcing consumer protection from safety and soundness? How did that regulatory model help consumers? It certainly left them with a huge tax bill to cover the government bailout. An examination of the powers and size of the bureau established by the Dodd bill shows further how the Republican approach differs from the approach advocated by the Obama administration and the Democrats. They start with the assumption that small busiesses are, in President Obama's words, ``bilking people'' and that heavyhanded regulations and an extensive bureaucracy are the only ways to ensure that small businesses do not take advantage of their consumers. I do not believe that the tens of thousands of small businesses--the florists, the retailers, the dentists, the auto dealers--that fall within the regulatory reach of their new bureaucracy are ``bilking'' people. I also know that these entities had nothing to do with the financial crisis. Unfortunately, the Dodd bill would create a massive new bureaucracy with unprecedented powers to regulate small businesses and consumers. The Consumer Financial Protection Bureau could dictate exactly what forms business must use, who they provide services to, and how they sell their products. Control over American businesses would shift further from entrepreneurs to bureaucrats in Washington. Perhaps the most troubling aspect of their approach is that it assumes that consumers need benevolent bureaucrats to make decisions for them. In order to make that happen, the Dodd bill authorizes the new consumer agency to collect any information it desires. Small businesses across this country fear the massive and potentially very intrusive new bureaucracy created under the rubric of consumer protection. They have every right to be afraid. This massive new government bureaucracy has the power to place individuals under oath and demand information about their personal financial affairs. The new bureaucracy is also required to report to the IRS any information it gets that it believes may be evidence of tax evasion. Why does their new bureaucracy need these incredible powers? Because their bill envisions the bureau analyzing and monitoring Americans' behavior and then issuing regulations to stop them from doing things the bureaucrats deem ``irrational'' or ``inappropriate.'' Just read the writings of the Assistant Secretary of Treasury for Financial Institutions, one of the chief architects of this expansive new bureaucracy. He has written how ``regulating . . . appropriately is difficult and requires substantial sophistication by regulators, including psychological insight.'' Let me translate this academic jargon. He is saying that all-knowing regulators should be empowered to make decisions for consumers because benevolent regulators are the only ones who possess the right ``psychological'' mind set to do things ``appropriately.'' Think about it a minute. Regulators are wise and should be heeded; consumers are foolish and should do as they are told. That is what we are talking about here. The architects of this massive new bureaucracy have long argued for a consumer bureaucracy with the right ``culture.'' Whether that ``culture'' focuses on consumer protection and a safe and sound banking system or it becomes a way for community organizers and groups like ACORN to grab Federal resources is left wide open. One of the strongest proponents for the new consumer bureaucracy has been Treasury's Assistant Secretary for Financial Institutions, as I said. Allow me to read into the Record a couple of quotes from a paper entitled ``Behaviorally Informed Financial Services Regulation'' coauthored by the Assistant Secretary Barr in October of 2008. The Secretary writes, ``Because people are fallible and easily misled, transparency does not always pay off. . . .'' He writes that: ``. . . regulatory choice ought to be analyzed according to the market's stance towards human fallibility.'' On regulation, he writes that: ``Product regulation would also reduce cognitive and emotional pressures related to potentially bad decisionmaking by reducing the number of choices. . . .'' He is talking about choices in the market place. Yes, the administration's chief advocate believes that benevolent regulators need to reduce choices for the consumer so that they can be protected from bad decision making and their own inherent fallibility. He also opines on the topic of disclosures where he states that: [D]isclosures are geared towards influencing the intention of the borrower to change his behavior; however, even if the disclosure succeeds in changing the borrower's intentions, we know that there is often a large gap between intention and action. I believe that regulators need to ensure that consumers have the information they need to make their own decisions based on their needs and circumstances. The proponents of behavioral economics believe, however, that regulators need to influence peoples' intentions and change their behavior so that they make decisions that the regulator deems appropriate for them. As I have said before, this is the nanny state at its worst. Finally, he writes of a proposal on late fees charged by financial service providers. He writes: Under [his] proposal, firms could deter consumers from paying late or going over their credit card limits with whatever fees they deemed appropriate, but the bulk of such fees would be placed in a public trust to be used for financial education and assistance to troubled borrowers. The translation is that behavioral economists not only believe that they are best positioned to make decisions for us, but they are also best positioned to decide how private companies spend their money. Needless to say, this is a disturbing perspective, but it does reveal just how much the Obama administration wants to empower bureaucrats. We should remember that the failure of our existing regulators, primarily the Federal Reserve, to properly enforce consumer protections helped cause the crisis. Yet the Dodd bill's response is to create a bigger bureaucracy and hire more bureaucrats at the Fed. In contrast, the Republican amendment would make the changes and improvements that we all can agree need to be done, but would do so in a more focused and prudent manner. The expansive reach of the Dodd bill means that the new bureau is going to be expensive. The budget for the bureau is approximately $650 million in new taxpayer costs, funded Argentina-style by tapping the central bank's money-printing powers. In comparison, the budget for the Office of the Comptroller of the Currency, our national bank regulator, is currently $750 million, and that agency does both consumer protection and prudential supervision. Under the Republican plan, industry, not taxpayers, would pay the costs of consumer protection. Despite giving the bureau a huge budget and vast powers, the Dodd bill fails to take any reasonable steps to hold the bureau accountable. The bureau receives all of its funding from the Federal Reserve, beyond both congressional and executive oversight. The bureau has complete discretion on how it spends its budget, allowing it to devise programs for backdoor funding of special interest groups like ACORN and other liberal activist groups. The more we learn about the Dodd bill's approach to consumer protection, the more I believe the Republican approach makes more sense and strikes the right balance. The Republican amendment wisely places consumer protection in a financial regulator, the FDIC, but enhances the status of consumer protection by creating a new division of consumer protection. It holds regulators accountable and ensures that repeat violators of consumer protection laws face stiffer penalties and regulation. The Republican amendment avoids creating costly new bureaucracies and imposing unnecessary costs on small businesses that had nothing to do with the crisis. We all agree that consumer protection needs to be modernized and given more attention by our regulators. I believe the Republican approach does this. And it does so without building the expansive and expensive bureaucracy contained in the Dodd bill. Most importantly, the Republican approach ensures that consumers are protected, but that they, not bureaucrats, are ultimately the ones making decisions for themselves. I have heard from productive American companies--from tractor manufacturers to beer brewers--from motorcycle manufacturers to public utilities that provide heating fuel to your home--and they strongly oppose this bill because it will increase their operational and risk management. I have heard small responsible business owners, who offer their customers the convenience of installment payments, express serious concerns about the potential for an out-of-control consumer bureaucracy that the Dodd bill creates. Although the bill's supporters have and will argue that the fears are unfounded because the bill says that merchants not engaged ``significantly'' in offering consumer financial services are excluded from the new consumer regulatory bureaucracy. The bill does not, however, define what the word ``significantly'' means--leaving that to the discretion of the benevolent bureaucrats. The supporters of this massive new government agency trust the bureaucrats. I trust American small business owners.

Mr. SHELBY

Mr. SHELBY. Mr. President, I rise to bring up amendment No. 3826, the Republican consumer protection alternative. This amendment has been cosponsored by 14 of my colleagues. It is amendment No. 3826.

Mr. SHELBY. Mr. President, I yield back the time and ask for the yeas and nays.

Mr. SHELBY. Mr. President, I yield back my time. I think we have debated this quite a while this afternoon. Most people know about it.

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

Mr. SHELBY. Mr. President, I join my colleague from Connecticut. We have had a burst of activity this afternoon. I think we are off to a good start. We have to remember that this bill is about 1,500 pages. This doesn't only affect a little bit of our economy, it affects all of our economy in one way or the other. I have just laid down an amendment--the Republican alternative to the consumer products--and a lot of people are going to want to debate it on both sides. We are not here to delay this bill in any way. I think it is so important and it is so comprehensive that we are going to have a healthy debate. I appreciate the remarks of the Senator from Connecticut. I believe he understands that very well.

Mr. SHELBY. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendments Nos. 3755 and 3757, En Bloc

Mr. SHELBY. Mr. President, I call up my amendment, which is at the desk.

Mr. SHELBY. The Senator can call it up.

Mr. SHELBY. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. SHELBY

Mr. SHELBY. Mr. President, as drafted, the bill we are considering this week allows for bailouts. As a result, what my friends on the other side like to call Wall Street reform is actually a Wall Street dream and a Main Street nightmare for all of us. Over the last several weeks, I have clearly articulated what needs to be changed in the underlying bill because we must do everything we can to create a credible resolution regime that protects not only our financial system but, more importantly, the American taxpayer. Fortunately, the chairman of the Banking Committee, Senator Chris Dodd, and I have worked through a number of issues and resolved to my satisfaction the concerns that some of us have expressed about government bailouts. I believe it is simply unacceptable to expose innocent taxpaying American families to the excessively risky practices of Wall Street gamblers who are happy to enjoy the upside but want to socialize the downside. Mr. President, taxpayers should not incur losses from the bad outcome of private risks they did not undertake. In order to achieve this, the Dodd-Shelby amendment that we will offer eliminates the $50 billion bailout fund--some people have called it the ``honey pot.'' It would significantly tighten up language in the bill dealing with the Federal Reserve's ability to provide liquidity to the financial system in times of severe market distress. It requires the approval of the Treasury Secretary before the Federal Reserve can undertake any emergency lending. It also establishes strict solvency and collateral requirements for any emergency Fed lending. It establishes strict accountability standards for any emergency Federal lending. All of this is something we didn't have 18 months ago when the financial crisis came upon us. Together, we have tightened the resolution language to ensure that the creditors of failing firms will receive bankruptcy-like treatment. A resolution regime for large failing financial institutions is simply not credible unless we make clear in language that backdoor bailouts are impossible. In this amendment we will be offering, we have significantly tightened up language in the bill dealing with the provision of debt guarantees by the FDIC and the Treasury. Any such guarantee will now require prior congressional approval. We have also clarified and tightened the language in the bill regarding resolution and the powers of the Fed, Federal Deposit Insurance Corporation, the Treasury, and others to prevent bailouts. We have included provisions requiring postresolution reviews to determine whether regulators did all they were supposed to do to prevent the failure of a systemically significant institution. Such a review, I believe, is essential to hold regulators accountable for their actions, or inaction, as the case may be. I believe we must put an end to the ad hoc responses of the Federal Government, which only lead to fear and panic. I believe these changes will help us do that. I thank the committee chairman, Senator Chris Dodd, for working with me to tighten the language in this part of the bill. I also thank our respective staffs who have worked day and night and weekend after weekend to get us where we are this afternoon. All of these changes are important and necessary to make bailouts a thing of the past. With these changes, I believe we have done what Congress can do to prevent any future bailouts. It will now be up to the regulators to follow the law and do what we expect them to do. I strongly support these changes, and I urge my colleagues to support them as well. However, I don't want to leave the impression that I support the entire bill at this time because we are making these necessary changes. We are not there yet. Beyond resolution and government powers in a crisis, this over 1,500- page bill contains a broad reach into the global financial system and the American economy. Now that we are over this particular hurdle, we will be addressing many additional concerns we have in the coming days. For now, this afternoon, I am pleased to join with Chairman Dodd in supporting this amendment.

Mr. SHELBY

Mr. SHELBY. Mr. President, before proceeding to my remarks on the bill, I want to thank Senator McConnell, the Republican leader, for his leadership, and also the members of the Banking Committee on both sides of the aisle for their hard work and dedication which has brought us this far. Also, I want to thank my colleague and the committee's chairman, my friend, Senator Chris Dodd. Over the years, as he has said, we have worked together on a number of bills and quite often found a way to compromise, to work forward on some very difficult and complex issues. Unfortunately, thus far, compromise has alluded us on this particular piece of legislation, at least some of it. Throughout our discussions, we shared roughly, I believe, the same goals. Where we have differed, however, is how to achieve those goals. My goal during consideration of this legislation here will be to reshape this bill so that it actually ends bailouts, protects consumers without jeopardizing our small community banks, and brings transparency, as Senator Dodd mentioned, to the world of derivatives, without sacrificing economic growth and job creation, which we desperately need in this country. I, along with many of my colleagues on both sides of the aisle-- Democrats and Republicans--will seek to remove dozens of provisions that unnecessarily expand the reach of the Federal Government into the private affairs of Americans and potentially endanger our civil liberties. As always, I will try to focus on policy and not politics. Unfortunately, over the last several days, debate has become tainted by accusations and misrepresentations. This is nothing new here. The process has already become overly political with allegations that Republicans are blindly following the advice of a pollster's political memo. I wish to say for the record here that I voted against the Chrysler bailout in 1979, I believe it was, when this particular pollster they are talking about was still in high school. So I have a long record of fighting against bailouts and trying to protect the taxpayer. Also, I advanced the toughest piece of legislation that would have reined in Fannie Mae and Freddie Mac years ago. But that was opposed unanimously by the Democrats in the Banking Committee. I was the only Senator criticizing the SEC's lack of supervision of the Nation's largest investment banks while some of my Democratic colleagues, including then-Senator Obama, were endorsing it. I also opposed the imposition of the Basel II capital accords that would have left our banks in far worse shape than they were when the crisis hit. I was questioning regulators about the growing housing bubble and the stability of our housing market years before the collapse. As chairman of the Banking Committee before Senator Dodd, I authored and passed, with the help of the Senator, the only attempt to address the lack of competition in the credit rating industry, once again over a lot of opposition. Finally, when Congress repealed the restrictions put in place by Glass-Steagall, I was the only Republican on the Banking Committee to vote no. So if any of my colleagues wish to discuss my motivation and my record, I am standing here on the floor right now. As I have stated, there are a number of changes I believe need to be made to this bill before I can consider supporting it. I think we should begin by listening to the people who will be negatively affected by this bill if it were to become law. If a small business owner from my hometown in Tuscaloosa, AL, tells me that he fears an out-of-control consumer regulator, I listen. If an orthodontist from Mobile, AL, fears regulatory burdens because she offers installment payments, I listen. If the makers of Mars candy bars fear massive cost increases from this legislation that will threaten American jobs and prices, I listen. There are others we should be listening to as well. For example, large financial firms such as Goldman Sachs and Citigroup are in favor of this bill. Why is that? The answer is, as now written, they know that the bill will bring them and Wall Street firms like them under the Federal safety net where they will get preferential treatment, just as Goldman Sachs got in the AIG bailout. Yes, the bill, as written, will guarantee that Goldman Sachs could again be paid 100 cents on the dollar if its bets go bad. That is a huge benefit for Wall Street firms at the expense of others--mainly the taxpayers. The resolution authority established by this bill at the moment will ensure that the politically influential investors in these firms, such as foreign governments and sovereign wealth funds, will get special taxpayer bailouts not available to creditors of small financial companies. This will give these firms a permanent funding advantage over smaller competitors on Main Street. Make no mistake, this bill will help the big banks get bigger, as it is written today, and further tilt the competitive playing field against small and less politically connected firms. The legislation that we are about to consider will help the likes of Goldman Sachs but harm the American people. It will lead to job losses, lost opportunities for businesses to productively invest in the future, and it will ensure future bailouts, which Senator Dodd and I both want to prevent. Chairman Dodd has assured me that he will address a number of concerns I have expressed with respect to bailouts. We have talked about this at length. I appreciate his assurances and take him at his word, but I am concerned that there appear to be no substantive changes in the relevant sections of the bill that would reflect such assurances yet. Therefore, at the conclusion of my remarks, and picking up on what we talked about earlier, I wish to hear how the chairman intends to address the following: the removal of the $50 million bailout fund, which some people call the honey pot; not allowing the government to pay creditors and shareholders of a failed firm more than they would be entitled to in bankruptcy; not allowing the FDIC to prop up failing firms with government and debt guarantees--meaning the taxpayer; not allowing the Federal Reserve to lend broadly on bad collateral; holding the FDIC accountable if it fails to properly conduct resolutions or uses the resolution authority to provide bailouts; and not allowing the government to deem any nonbank financial company as systemically important and worthy of taxpayer funds at the Fed's discount window. As many of my colleagues are beginning to realize, it doesn't matter what we say. What matters is what is in the bill's language. And the language in this bill right now would allow for bailouts. I urge my colleagues to read the language carefully. I have been assured that the bailout provisions will be addressed. However, they have not been addressed yet in the chairman's substitute language. We need to see language from the majority that clearly addresses the issues I have set forth. My hope is that by Tuesday this can be resolved quickly, with both of us offering a joint amendment. Nevertheless, we are still left with a bill this afternoon that will create massive and intrusive new government bureaucracies, damage job creation, reduce private investment in productive projects, make risk management more difficult, and threaten our economy. The bill before us now establishes overarching bureaucracies without any meaningful protections for our financial privacy rights. Also, the bureaucracies have been designed to address many issues that have little or no bearing on the recent crisis or any financial crisis. It is a power grab that can reach into virtually every aspect of our economy, and it needs to be restrained. I wonder how any crisis will be prevented through data collection from banks about deposit accounts of their customers to identify community development opportunities as found in section 1071 of this bill. Small businesses across this country fear the massive and potentially very intrusive new bureaucracy created under the rubric of consumer protection. And they have every right to be afraid. The massive new government bureaucracy called for in this bill has authorities and powers to call you forward and ask you, under oath, about your personal financial affairs. The fact so many are looking the other way on this serious threat to our civil liberties is troubling. But as this debate goes on, I think America is going to start focusing on the deep aspects of this bill. The architects of this massive new bureaucracy have long argued for a consumer bureau with the right culture, they call it. Whether that culture focuses on consumer protection and a safe and sound banking system or it becomes a way for community organizers and groups such as ACORN to grab Federal resources is left wide open here. This massive new bureaucracy will be funded by over $600 million taken directly from the Federal Reserve, outside of the congressional oversight or appropriations process. Tapping the central bank to pay for political initiatives is a very disturbing and dangerous precedent. They did that in Argentina to the utter dismay of the global community and to Argentina itself. It shows a complete lack of understanding of the importance of an independent central bank. For us to follow Argentina's lead and tap the Fed for new government programs is not only shortsighted but signals to the rest of the world the failure of this country to act in a fiscally responsible manner. In addition to the new Fed consumer protection bureaucracy, this bill envisions a massive new potentially $\1/2\ billion per year Federal bureaucracy called the Office of Financial Research, designed to collect granular financial data and to construct complex financial models. Did you hear that? This new bureaucracy is given unprecedented authority, including abilities to obtain virtually any type of data it wants from financial companies, to the level of detail of what you buy on your credit card. This new bureaucracy is also designed to gather data, process it, and then is required to make it available to Wall Street firms so they can cut their costs. So who is for Wall Street now? This bill also threatens our economy, as Senator Dodd mentioned, by its treatment of derivatives. Greater transparency in all derivative markets is a good thing. But this bill, at this juncture, under the guise of promoting transparency, I believe, threatens Main Street companies and their customers for no good reason. The end-user exemptions put Main Street companies through almost endless and unworkable hoops that will ensure higher costs, lower growth, fewer jobs, and diminished economic opportunity. In addition, by seeking to concentrate all manner of risky products into clearinghouses, the bill threatens to concentrate risk to the point of becoming systemically large, which, as we all know, leads to government or taxpayer bailouts. This bill could actually increase risk in our financial system, as it is written, and decrease economic output at a time when we need it the most. Finally, while concentrating risks in America, this bill will shift derivative trades offshore to places where we have no oversight or regulatory abilities to act. Proponents of this bill also argue that regulatory gaps are being closed and that the bill somehow simplifies and rationalizes the regulatory framework. Yet the Kansas City Fed President has said: This bill actually increases the complexity of the regulatory structure . . . as well as creating unnecessary costs. As is often the case with this bill, claims about what it does do not match the language itself. They claim it is regulatory simplicity; the language means that there will be increased complexity. I have highlighted here this afternoon some of the major problems in this bill. It will not end taxpayer-funded bailouts as it is written; it provides for a drastic expansion and overreach of government into the economy and every aspect of our personal financial lives; it also raises the cost of risk management and threatens the abilities of companies to manage risk using derivatives while potentially accumulating risk to systemic proportions; and it makes an already complex regulatory maze even more complex. I welcome the opportunity to debate the bill before us and to offer amendments and work with Senator Dodd, the chairman, to improve the deficiencies and strengthen this bill's shortcomings. I hope we are going to be able to do this in a spirit of cooperation in the days ahead.

Mr. SHELBY

Mr. SHELBY. I will be brief. First, I thank the Republican leader Senator McConnell for his kind words. Also I thank my friend, the majority leader, Senator Reid, for helping bring us where we are today. But more than that, I commend Senator Dodd, the chairman of the Banking Committee, with whom I have worked for years and years. We have worked exceedingly closely on many issues dealing with the Banking Committee. What we are bringing to the floor now is something very complex, very far reaching. The idea that something should be too big to fail is very important to me. Nothing should be too big to fail, in my judgment, in this country. I commend Senator Dodd. In our negotiations, they haven't been all loss--we have reached some assurances in that. He and his staff have made some recommendations that we like. We made some they liked. I think we have made real progress. I know we have to seal it all, but I think Senator Dodd is working in good faith on that. But we have the derivatives title and we have the consumer products deal. We have not been able to resolve those yet. I hope we will on the floor of the Senate. We have moved to a new forum and it is going to be a very important debate in the weeks ahead here because this is very important to the American people.

Mr. SHELBY

Mr. SHELBY. Mr. President, first, I thank Senator Dodd for his leadership on the Banking Committee. I worked with him, as he said, day-in and day-out, and this is the fourth year of his chairmanship. We have achieved a lot together in a bipartisan way. Both sides of the aisle are working together for a common goal. We share a lot of these goals. What are some of the goals? Ending bailouts. Senator Dodd and I both believe that nothing should be too big to fail--financial institutions and, I believe, manufacturing and anything else. Nothing should be too big to fail. We are working toward that end. Protecting consumers. We are very interested in a consumer agency. We want to balance that, while protecting the deposit insurance fund and so forth. Regulating derivatives. Let's be honest, they played a big role--a lot of them in the closet, unknown, and so forth--in our financial debacle. Derivatives are used every day legitimately by so many of our businesses, not only in America but all over the world. So we need to regulate derivatives while protecting jobs and our economic growth. It is a common desire. Details matter here. The Presiding Officer understands that. Senator Dodd understands it very well. As we are moving down the road in the process, we are continuing to negotiate and to do it in good faith, trying to reach a common goal. Who knows what will happen between now and Monday or next Tuesday or Wednesday or Thursday. I hope it is a bipartisan bill and that we can gather a lot of people on both sides of the aisle to support it. I think that is one of our goals. What is the main goal? To do it right. Don't just do it, but do it right. Will it be perfect? Nothing is perfect, as Senator Dodd talks about. But if we work in good faith, as we are trying to while the process is going forward, I think we can make some real progress toward the common goal--to have a strong financial system that is well regulated, to have derivatives that are brought out of the closet to work, and to have a consumer agency that will work for all of us. There are many other things, but that is my goal, and I share that with Senator Dodd. I yield the floor.

Mr. SHELBY

Mr. SHELBY. I object.

Mr. SHELBY

Mr. SHELBY. Mr. President, I know we are getting close to the end of the debate, and we will soon be voting on cloture. I wish to take a few moments to read a few excerpts from editorials that ran in, of all publications, the Wall Street Journal, dealing with Chairman Bernanke, his tenure in office, his misdeeds, and so forth. I also ask unanimous consent at this time that the full text of the editorials, dated January 25, 2010, December 3, 2009, and June 23, 2009, be printed in the Record.

Mr. SHELBY. Mr. President, the first point the Wall Street Journal editorial highlights dealing with Chairman Bernanke's overt political activities states: Whether or not Mr. Bernanke is confirmed, the lesson we draw-- This is the Journal editorial staff-- is that overly political Central bankers will eventually be undone by politics. They always are. The Wall Street Journal goes on to conclude: Our own view is that Mr. Bernanke is already far too susceptible to political pressure. As a Fed governor, he was Alan Greenspan's intellectual copilot last decade when their easy money policies created the housing mania. On Mr. Bernanke's loose money record, the Journal noted in these editorials: Mr. Bernanke was the intellectual architect of the decision to keep monetary policy exceptionally easy for far too long . . . He imagined a deflation that never occurred, ignored the asset bubbles in commodities and housing, dismissed concerns about dollar weakness and in the process, stoked the credit mania that led us to where we are today in the financial panic. Finally, the Wall Street Journal points out in regard to Chairman Bernanke: The Fed Chairman has shown he knows how to ease money . . . But, that is the easy part of his job. The hard part, the time when Central bankers earn their fame, is when they have to take the money away. We see little at this point in the Chairman's policy history or guideposts to suggest he will be willing to endure the criticism that will come with tightening money amid a lackluster recovery, if that is what is required to protect the dollar or prevent an inflation outbreak. For these and other reasons, the Wall Street Journal, one of the most widely recognized business publications in the world, opposes the nomination, as I do, of Chairman Bernanke. I yield the floor.