Paul Wellstone

Mr. WELLSTONE

Mr. WELLSTONE. By the way, there was also a piece on this on National Public Radio this morning. There is another piece by Mr. Samuelson in the Washington Post this morning. His argument is that it is not so much that it is a bad bill--I think because I had to skim read it; I was in a rush--he was saying that at a time with an economic downturn, there may now be more people filing bankruptcy. Actually, it has fallen off over the last year and a half, but that may happen again, and we are going to make it really difficult for a whole lot of people in very difficult economic circumstances to rebuild their lives. Mr. Samuelson was saying he questioned the timing of this bill. The New York Times piece is: ``Lobbying On Debtor Bill Pays Dividend.'' That is a headline that should give ordinary citizens, the people of Minnesota and the country, a whole lot of faith in our political process. ``Lobbying On Debtor Bill Pays Dividend'': A lobbying campaign led by credit card companies and banks that gave millions of dollars in political donations to members of Congress and contributed generously to President Bush's 2000 campaign is close to its long-sought goal of overhauling the Nation's bankruptcy system. It goes on to talk about all of the breaks the credit card industry is going to get, that all of the money they put into politics is going to pay a huge dividend in terms of support. By the way--this is interesting as well--while I probably have been one of the strongest critics of President Clinton, it is interesting that this piece about the support from all of the financial contributions paying off--I think one reason my colleagues are in such a rush to pass this bill is to show now we have a President who is going to sign the bill as opposed to veto the bill because we could not override the veto. President Clinton, wherever you are, with whatever kind of tough stories you have had to deal, with whatever you have done by way of pardons that may not be right that I do not agree with, I want you to know that as a Senator I thank you for standing up to all of these big contributors, to all of these interests, to the financial services industry. It wasn't easy to do, and you did it. Thank you, President Clinton. I am not at all surprised President Bush cannot wait to sign this bill. This is his crowd, as my good friend Fritz Hollings from South Carolina would say. This is his crowd. I am sure he cannot wait to sign the bill. Let me go to this amendment which I do not think my colleagues want to vote on up or down. I thought when I modified it we had at least an implicit understanding we would have an up-or-down vote, but they do not want to vote on this amendment, and I do not blame them. I would not want to vote against this amendment either. This amendment is an amendment that deals with the predatory lending which targets low- and moderate-income families. This bankruptcy ``reform'' bill, does it have much that deals with predatory lending practices? No. Does it call on the credit card industry--broadly defined--to perhaps take some accountability for pumping credit cards on our children and all sorts of other people who then find themselves in trouble and have to file for bankruptcy? No. I will tell you what it does do. It makes it very difficult for a whole lot of people who find themselves in desperate financial straits to file for chapter 7, and, for that matter, it goes beyond the means test. There are provisions in this 50-page bill plus that make it really hard for ordinary people to get relief and rebuild their lives. That is absolutely outrageous. I believe somebody needs to challenge this rush to get this done. We may have a cloture vote. We are going to have a cloture vote this afternoon, I take it. Colleagues should vote against it. There are a number of Senators who want to have amendments and want to have a vote on amendments, and they are right. By the way, I did not file for cloture. That was the majority leader. My understanding is there is going to be a cloture vote, and my understanding is Senators would have a chance to have votes on their amendments. That was my understanding. That is what should happen. There are some substantive amendments that deal directly with alternatives to this harsh bill. I want to know why we are not going to have votes on those amendments--I mean major amendments. And this amendment I think is also a major amendment, but I know other colleagues, who have worked on this many more years than I have and have more expertise, probably have even more important amendments. What do you think about this one? This amendment will prevent claims in bankruptcy on high-cost transactions in which the annual interest rate--if you are ready for this--exceeds 100 percent. These are payday car title pawns. It is an extremely small amount. These are low-income folks who pay this price who are having a difficult time because someone was ill and had to go to the doctor and they do not have much margin month to month. Go for a loan and you are extended a small amount, $100 to $500, for an extremely short time, 1 or 2 weeks. The loans are marketed as giving the borrower a little extra until payday. The loan works like this, if you can believe these loan sharks, these vultures. The borrower writes a check for the loan amount, plus a fee. The lender agrees to hold on to the check until the agreed upon date and give the borrower the cash. On the due date, the lender either cashes the check or, as quite often it happens, allows the borrower to extend the loan by writing a new check for the loan amount, plus an additional fee. Calculated on an annual basis, these fees are exorbitant. For example, a $15 fee on a 2-week loan of $100 is an annual interest rate of 391 percent. Rates as high as 2,000 percent per year have been reported on these loans. Why in the world do we want to allow claims in bankruptcy for these kinds of credit transactions? Why are we in such a rush to support these sleazy loan sharks? Can somebody come out on the floor of the Senate and tell me what the goodness is in what they do? Can somebody give me one good argument why you don't want to vote up or down on this amendment? I am indignant. I have to be careful not to get too hot. I am really angry. Let me talk about the other area that is so egregious. Car title pawns are 1-month loans secured by the title to the vehicle by the borrower. Please remember, Senators, these are not our sons and daughters or brothers or sisters or our wives or husbands. I am talking about poor people. We, luckily by the grace of God, or by luck of another kind, are not in this position. We don't have to put our car up for collateral. We don't live month by month on meager incomes and desperate to get credit. That doesn't happen to us. A typical title pawn costs 300 percent interest, and consumers who miss the payments have their cars repossessed. In some States, consumers do not receive the proceeds from the sale of the repossessed vehicle even if the value of the car exceeds the amount of the loan. The Presiding Officer knows all about this because of his position in the State of Florida. For example, a borrower might put up their $2,000 car as collateral for a $100 car title loan and an outrageous interest rate, and if the borrower defaults, the lender can take the car, sell it, and keep the full $2,000 without returning the excess value to the borrower. And we want to protect these loan sharks? Members don't want to vote for this amendment? Members want to come second-degree this amendment? Why? These schemes actually are more lucrative if the borrower defaults. Often the borrower--are you ready for this?--is required to leave a set of keys to the car with the lender, and if the borrower is even 1 day late with the payment, he or she might look out the window and find the car is gone. This amendment would prohibit claims in bankruptcy for credit transactions such as these payday loans and car title pawns where they charge over 100 percent interest in a year. Could somebody explain to me why this is a bad amendment? Could somebody defend these sleazy loan sharks? So far, no one has. There is no question these high-interest-rate loans take advantage of working people. On the face of it, paying 300 percent or 500 percent or 800 percent for a $100 loan or $200 loan is unconscionable. No fully informed person with a choice would do it. But that is exactly the issue: These folks may not always have a choice. I am sorry I believe this has been happening over and over again in the last couple of weeks. This is similar to the ergonomics standard. This is a class issue. These are poor people we are talking about. None of us is ever put in this situation. President Bush, whatever happened to compassionate conservatism? My Republican colleagues, whatever happened to compassionate conservatism? Often these borrowers turn to payday lenders and car title pawns because they can't get enough credit through the normal channels. So these borrowers are a captive audience, unable to shop around to seek the best interest rates, uninformed about choices, unprotected from coercive collection practices. I thank the Chair for having the graciousness to face me while I speak. I always thought that was important. I thank the Chair. It is much harder to speak when the presiding Chair is reading or not paying attention. I thank the Chair for his graciousness. When I shout, I am not shouting at the Presiding Officer. There is no way the borrower can win. At best, they are robbed by high interest rates, and at worst their lives are ruined by the $100 loan which spirals out of control. These loans are patently abusive. They should not be protected by a bankruptcy system. Because they are so extensive, they should be completely dischargeable in bankruptcy so the debtors can get a true fresh start and so that more responsible lenders' claims are not crowded out by the shifty operators. Colleagues, vote for this amendment because you are for responsible lenders. Vote for this amendment. I call this the responsible lender's amendment. Why should unscrupulous lenders who have equal standing in bankruptcy court with a community bank or a credit union that tries to do right by their customers? Why do we give equal value to these sleazy loan sharks with community banks or credit unions? By the way, I don't think these lenders should be able to take advantage of customers' vulnerability through harassment or coercion, but that was considered to be a terrible provision. That challenged jurisdiction in another committee, so I even dropped the language on the coercive practices. My amendment simply says if you charge interest over 100 percent on a loan, and if the borrower goes bankrupt, you cannot make a claim on that loan or the fees from the loan. In other words, the borrower's slate is wiped clean of your usurious loan and he gets a fresh start. Additionally, such lenders will be penalized if they try to collect-- well, no. See, there you go; there was my prepared statement. I shouldn't use a prepared statement. I was going to say, additionally such lenders will be penalized if they try to collect on their loan using coercive tactics, but I have taken that out. That was the modification my colleagues asked for, as if that would be such a terrible thing. And now I don't even get an up-or-down vote on the amendment. That is my understanding. This amendment is a commonsense solution to the problem I have described. It allows the Senate to send a message to those loan sharks. If you charge an outrageous interest rate, if you profit from the misery and misfortune of others, if you stack the deck against the customers so they become virtual slaves to their indebtedness, you will get no protection in bankruptcy court for your claims. As I say that, it sounds good to me. It really does. What is wrong with this proposition? If a lender wants to make these kinds of loans under this amendment, he or she can. But if he wants to be able to file claims in bankruptcy, he can't charge more than 100 percent interest. I don't believe any one of my colleagues will come to the floor to claim that a 100-percent interest rate is an unreasonable ceiling. This amendment is in the spirit of reducing bankruptcies. I think if it was adopted it would significantly improve the bill, and I urge its adoption. I will deal with a few more questions that have been raised. I assume we will have a debate on this. This whole bankruptcy bill and debate make me uncomfortable because one of the Senators for whom I have the greatest respect is Senator Grassley from Iowa--and he or another Senator may come out here. He is a great Senator, in my opinion. But I have to say one of two things is going to happen. Senators are going to come out here and say: Senator Wellstone, your amendment is all wrong. These loan sharks need the protection. We are for the loan sharks. We are for the 100 percent interest-plus. Or they are going to come out with a second-degree amendment which I fear will have the same effect because it will gut this amendment, in which case we will have a debate about that. But, so far, the silence has been deafening. I assume we will have that debate or maybe it will be accepted; I don't know. We will have a vote one way or the other. This amendment is necessary. For those who say some States are starting to institute regulation of payday lenders--that is true, and I am glad; if States do more than we do, I am all for it--more and more payday loans are being made over the Internet, and they cannot be effectively regulated by the States. In addition, payday lenders have explored using national bank charters to avoid State regulation. So both tactics require a Federal response. These payday lenders, if you are ready for this, are generating 35 percent to 50 percent. The fees are grossly disproportionate to the risk or the profit margins would not be so high. We are talking about loan sharks who feed off misery and illness, all too often, and desperation, and low- and moderate-income people, many of them families headed by single parents, many of them families headed by women, many of them people of color, many of them urban, many of them rural--and we ought to be willing to stand up for these people. This amendment challenges Senators: Are you on the side of these sleazy loan sharks? Or are you willing to defend poor people in the United States of America? I am not holding the Senate up. I am waiting for the debate. I yield the floor. I suggest the absence of a quorum.

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

Mr. WELLSTONE. Mr. President, I ask unanimous consent that I be allowed to bring up my amendment No. 37, and I then be allowed to withdraw the amendment No. 37 which relates to trade adjustment assistance.

Mr. WELLSTONE. No one has come to the floor to defend the payday loans and the loan sharks. I have had this amendment on the floor for 3 or 4 days.

Mr. WELLSTONE. I say to my colleague from Illinois, I think this may be the first amendment I have introduced that is going to get 100 votes.

Mr. WELLSTONE. Mr. President, I would not object, although I would like to have, and ask unanimous consent for, 1 additional minute to respond.

Mr. WELLSTONE. Mr. President, we really do need order.

Mr. WELLSTONE. I thank the Chair and thank my colleagues for their courtesy. Mr. President, we just had a vote that dealt with payday loans, whether or not we were going to provide some protections to the most vulnerable consumers. That amendment failed. My colleague, Senator Durbin, and other colleagues, have come out on the floor with amendments that have gone after predatory practices. They have said: Look, let's give consumers some protection. Those amendments--or most of those amendments--have failed. I had an amendment earlier which said, look, if you want to go after those people who are gaming this system, fine, but for goodness' sake, for the 50 percent of the people who are going under because of medical bills and who find themselves in these difficult circumstances, carve out an exemption. Do not make it so difficult for them to file for chapter 7. Do not make it so difficult for them to go through this procedure, this procedure, and this procedure. Do not put so many hurdles in their way. Bankruptcy is a safety net not just for low-income people but for middle-income people. There was a front page story the other day in the New York Times. The headline was: ``Lobbying On Debtor Bill Pays Dividend.'' I do not want to get myself in trouble with people in whom I believe. I do not make a one-to-one correlation such as, for example, the Senator from Utah and the Senator from Iowa; they have a different viewpoint. That is why they have argued for this bill, period. Let's just make that argument and stop there. But I will tell you, at an institutional level, there is a serious problem with this bill. And it is this: When it comes to the financial services industry, the credit card industry, broadly defined, big givers, heavy hitters, a huge and powerful lobbying coalition, they have way too much access, and they have way too much say. It is an institutional problem because the people filing for chapter 7, trying to rebuild their lives because of a major medical bill or because they have lost their job on the Iron Range or because there has been a divorce, they do not have the same clout. They do not have the same economic resources. Quite frankly, I think this bill is too harsh, it is not balanced, it is not just, it is not fair, and there are a whole lot of families in this country who are going to pay the price. I call on my colleagues to vote against cloture. I know the vast majority of Senators will not do so, but I will tell you, I do not believe by voting for cloture and then going forward and passing this bankruptcy bill we have done the right thing. I think this is good for the credit card industry. It is good for the financial services industry. But I think we have left out consumers. We have left out a lot of low- and moderate- and middle-income people. We have left out a lot of women who are single and the heads of their households. We have left out a whole lot of people of color and a whole lot of people who are disproportionately among the ranks of working-income and low-income people. So I say to Senators, I hope you will vote against cloture. This bill does not deserve to go forward. This bill represents the power of the financial services industry that has marched on Washington every single day for the last 3 years. And it leaves out ordinary citizens in a very profound and very harsh way. Senators, please vote against cloture.

Mr. WELLSTONE. Mr. President, I also ask unanimous consent that a New York Times piece--all of these articles are dated Tuesday, March 13, 2001--be printed in the Record.

Mr. WELLSTONE. Mr. President, I want to be clear with my colleagues and the majority leader that I came to the floor very early on with several amendments to move this process forward. Last week, when I initially objected to a motion to proceed, the majority leader said we would have substantive debate on amendments. This amendment has been ``hanging out there'' for several days. I have wanted a vote on this amendment. I modified this amendment because there was concern on the part of one of my colleagues on the other side that there was a jurisdictional problem with a committee. I had assumed we would have an up-or-down vote on this amendment. My understanding is that it might not happen and there might be a second-degree amendment. I don't know what that amendment is, but it will probably be an amendment that will gut this amendment. It makes me start to wonder, even more, about what we have been doing out on the floor of the Senate with this bankruptcy bill. My colleague called this a reform bill, but I wish to mention a couple of articles that have been published recently. I will soon ask to have them printed in the Record. There was a piece that appeared on Tuesday, March 13, in the Wall Street Journal entitled, ``Auto Firms See Profit In Bankruptcy-Reform Bill Provision.'' The first paragraph: The nation's three major auto makers are always interested in making deals, and they hope to close one in the U.S. Senate this week that is worth millions of dollars to each of them. The deal lies in the bankruptcy-reform bill expected to clear the Senate this week. Buried in the bill's 42 pages is a section that changes the way auto loans are treated when an individual declares bankruptcy, making it more likely the car loans will have to be paid back in full--even while other creditors collect only part of what they are owed. That might include child support payments as well. There also is in here a chart that deals with the soft money, PAC, and individual contributions by members of the Coalition for Responsible Bankruptcy Laws. I actually think the bitter irony is that the debate we have been having on this bill--for the 2\1/2\ or 3 years I have been working on this--is probably, unfortunately, a perfect bridge to the debate we are going to have on campaign finance reform. Again, I want to be real clear with my colleagues. I don't like to come to the floor and do a one-to-one correlation that money has been given, so that is why you are voting this way. I don't believe in that for several reasons. One, it would be arrogant on my part to believe that if somebody has a different point of view, that means, ipso facto, they are receiving all this money from, for instance, the financial services industry and that is why they are voting the way they are. That is not my argument. Rather, my argument is institutional, which is more serious. The problem with this political process is not that there is ``corruption,'' as in the wrongdoing of individual officeholders, as in one-to-one quid pro quo--here is the money, here is how you should vote. The problem is institutional, and that is a more serious problem. It is the imbalance of power, the imbalance of access, the imbalance of influence, not affluence, between the people I have tried to represent as a Senator--low- and moderate-income people, people of color, poor people, consumers--and the heavy hitters, the investors, the players, the lobbying coalition. There has been article after article about the full-court press of the financial services industry over this bill. The auto firms get a good deal. That is worked into this bill. Buried in the bill's 42 pages is a special deal for them. By the way, it is not a special deal for you if you are going under because of major medical expenses, which is 50 percent of the cases. It is not a special deal for you if you have lost your job in the Iron Range of Minnesota, 1,400 taconite workers out of work. It is not a special deal for you if you have gone through a divorce and there is a sudden loss of income. But it is a special deal for these folks. This is a piece by Tom Hamburger of the Wall Street Journal. There is another piece in the Wall Street Journal by Tom Hamburger, Laurie McKinley, and David S. Cloud: For the businesses that invested more money than ever before in George W. Bush's costly campaign for the presidency, the returns have already begun. MBNA America Bank was one of the largest corporate donors to the Bush campaign and other GOP electoral efforts last year. The bank and its employees gave a total of $1.3 million, according to the Center for Responsive Politics, a nonpartisan clearinghouse here. Charles Cawley, MBNA's president, was a member of the Bush ``pioneers,'' wealthy fund-raisers who each personally gathered at least $100,000 for the presidential campaign. I guess I am not going to get any support from the pioneers in my Senate race. Mr. Cawley hosted Bush fund-raising events at his home in Wilmington, Del., last year and, in 1999, at his summer home in Maine, north of the Bush family retreat in Kennebunkport. This whole piece--you get the point--is all about huge amounts of money, lobbying coalitions, access, and influence. I ask unanimous consent that both of these articles by Mr. Hamburger in the Wall Street Journal be printed in the Record.

Mr. WELLSTONE. Mr. President and my good friend from Montana, the reason that I offered this amendment previously is because the crisis that we are facing in the steel industry in general is having a particularly devastating effect on workers in my state--and also, quite frankly in the state of Michigan as well. In the northeastern part of Minnesota--an area we call the Iron Range--a material called taconite is mined and then becomes an input into the steel production process. Taconite is basically iron ore; it's crushed, melted in blast furnaces, and then cast to be used to produce finished steel products. As you know, the steel industry is highly integrated. To make finished steel products, producers can purchase semi-finished steel or they can make their own semi-finished steel with taconite or iron ore. Due to the recent surge in dumped semi-finished steel slab imports it has become cheaper for steel mills to import this steel and finish it rather than make their own. This, coupled with the general decline in the U.S. steel industry, has had a devastating effect on taconite workers in my state and in Michigan. Just one example of many that I'm sure you're familiar with is LTV Corp's announcement in December that it was filing for bankruptcy. I ask unanimous consent to have this document, which sets forth the chronology of the major layoffs, shutdowns, etc. that have been devastating working families in the Iron Range of my state, printed in the Record.

Mr. WELLSTONE. Mr. President, the difficulty, and the reason I offered my amendment, is that the previous Administration had an inconsistent record with respect to recognizing U.S. iron ore workers' eligibility to receive Trade Adjustment Assistance, despite the fact that they are clearly being injured by unfairly traded steel imports. In its most recent decision, involving a different taconite producer, a determination was made that low grade iron ore is not ``like or directly competitive with'' semi-finished steel slabs. I remain hopeful that a new Administration, taking a fresh look at this issue, will resolve the issue differently. Meanwhile, however, I was offering this amendment to make it explicit that taconite workers will be eligible to receive the trade adjustment assistance they so clearly need.

Mr. WELLSTONE. I thank the Chair.

Mr. WELLSTONE. If I could say to my colleague, with his indulgence, I certainly will not object, but I want to make it clear, because we are also in the middle of something else, that I have an amendment out here. I have been debating it. I am ready to hear somebody else debate it. I am ready to have a vote. I am not holding anything up. Democrats have a number of amendments to this bill that should be offered, debated, and voted on. I question what is going on here.

Mr. WELLSTONE. Mr. President, I want to accommodate two colleagues who are on the floor, Senator Levin and Senator Biden, but I want to just be clear about what is going on here. It is 2:30. I have been asking for a vote on the amendment. Eight other Democrats have amendments on which they would like to have votes. The strategy on the other side is to not have votes and basically shut this down with a cloture vote. I want to be clear about this. I ask unanimous consent that my amendment be voted on within the next 30 minutes--first of all, voted on within the next 30 minutes, with no second-degree amendments.

Mr. WELLSTONE. If I may go on, I was going to go on and ask unanimous consent that the managers' package be dealt with--I would not think that would require a rollcall vote--and that the pending Durbin amendment No. 93 be dealt with. But I would like to say to Democrats-- and this is not aimed at my colleague from Utah--this is a violation of an agreement that we had. Last week, the majority leader came out here on a motion to proceed. I blocked it. We talked about it and said we would have substantive debate. We were given the assurance that before any cloture vote, we would have the opportunity to have our amendments down here and voted on. I have come out here with an amendment. I have not delayed at all. I still can't get a vote on this amendment after 3 days. You have someone such as Senator Durbin, who has been working as hard on bankruptcy as anybody, who can't get a vote on his amendment. This cloture motion should not have been filed. It is in violation of the agreement that was made. Any number of us are not having the opportunity to have up-or-down votes. Frankly, I would not want a vote on behalf of these payday lenders, these sleazeball shark lenders, myself. We ought to have a vote.

Mr. WELLSTONE. I am sorry, I did not hear.

Mr. WELLSTONE. Reserving the right to object, I ask my colleague from Utah whether I may amend his unanimous consent request to assure that the managers' package be accepted or voted on and that the Durbin amendment be out here. If I may--I have the floor, if I may finish for a moment. I want to let my colleagues speak. It is an outrageous proposition here. I am not just speaking about my own amendment. I want a vote on my own amendment.

Mr. WELLSTONE. If I may finish, and then I will take a question. I want to know why, No. 1--maybe there is something I do not know--I want to know whether or not there is a commitment that the managers' amendment will be accepted before we get a cloture vote and it gets clotured out, and I want to know why Senator Durbin, who has worked on this bill long before I understood the issue, cannot bring it out. I want a vote. I have been trying to have a vote on it for days. I am ready to have Senator Biden and Senator Levin speak and have a vote on my amendment right away. I want to know why. I ask unanimous consent that my amendment be disposed of at 3:40 p.m. and also Senator Durbin be allowed to come to the floor and debate his amendment and have a vote on the Durbin amendment as well after 3:40 p.m. and that we either have a voice vote or recorded vote on the managers' package before the cloture vote.

Mr. WELLSTONE. I am not going to yield the floor, but I----

Paul Wellstone

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