Sheldon Whitehouse

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Mr. Chairman, I share the sentiments of the senior Senator from Rhode Island, Mr. Reed. Rhode Islanders are strongly opposed to this project. Furthermore, the process for siting the LNG facility has afforded us too few opportunities to address the impacts it will have on our state's economy, safety, and environment. The Coast Guard is charged with the narrow task of determining whether LNG tankers can safely transit Rhode Island waters on their way to an offshore berthing station just on the other side of the state line in Massachusetts. However, the safe transit of these tankers is only one of the many important considerations that can, and should, be taken into account in determining the suitability of such a project. Narragansett Bay is the backbone of the Rhode Island economy, as it sustains our fishing, recreation, and tourism sectors. The proposed LNG facility in Fall River threatens to undermine these pillars of our economy. I am not opposed to LNG as a fuel source. However, I have serious concerns with the proposal under consideration. The LNG tankers transiting Rhode Island waters must pass through heavily populated communities, under the presence of heavy security. The Coast Guard admits that this will likely displace other users of the bay and disrupt traffic on the bridges the tankers must travel beneath. This is too high a burden for Rhode Island to carry for a facility that is located in a neighboring state--and I am not convinced this burden is worth the marginal benefits of the proposed LNG facility. I thank the Chairman of the Senate Commerce Committee, Senator Rockefeller, for his willingness to work with us on an issue critical to the State of Rhode Island.

Mr. WHITEHOUSE. I ask unanimous consent that the Cantwell substitute amendment, which is at the desk, be considered and agreed to; the bill, as amended, be read a third time and passed, the motion to reconsider be laid upon the table, and that any statements be printed in the Record without further intervening action or debate.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Mr. President, I can announce that there will be no rollcall votes during Monday's session of the Senate.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. I ask unanimous consent that the concurrent resolution be agreed to, the motion to reconsider be laid upon the table with no intervening action or debate, and any statements related to the measure be printed in the Record.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. I will be glad to yield to the chairman.

Mr. WHITEHOUSE. Just to recap it briefly, if you go around the country--

Mr. WHITEHOUSE. Thank you, Mr. President. I rise to speak for a moment again about my amendment No. 3746, of which I am delighted that the distinguished Presiding Officer is a cosponsor. I ask unanimous consent that Chairman Patrick Leahy, Senator Jim Webb, and Senator Bob Casey all be added as cosponsors to the amendment.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Mr. President, I was delighted to give the distinguished Senator from North Dakota a chance to clarify that. I will speak just for a minute about amendment No. 3746, which I will not be calling up right now but which I intend to work with Chairman Dodd on to call up later. I wanted to mention that this afternoon this amendment received the endorsement of Americans for Financial Reform, a coalition of dozens of national and State consumer groups that are working to help pass the critical legislation we are debating today. In addition to the coalition as a whole, the amendment has been endorsed by individual members as well, including the AARP, the Consumer Federation of America, Consumers Action, Consumers Union, and on behalf of its low-income clients, the National Consumer Law Center. These groups have sent a letter to each of my colleagues which reads in part: On behalf of consumers, AFR strongly urges you to support Whitehouse's Interstate Lending Amendment. By reinstating protections that existed prior to the U.S Supreme Court's decision in Marquette National Bank of Minneapolis v. First of Omaha Service Corp (1978), Congress will take a step in the right direction toward protecting consumers and leveling the playing field between national credit card companies and their local and community oriented counterparts. The Whitehouse Interstate Lending Amendment takes a strong step towards restoring to each state the ability to protect its citizens from lenders based in other states. We strongly urge you to vote in favor of this Amendment and in favor of the consumer protections this Amendment promotes. By leveling the playing field between national banks and local lenders, you will send a strong signal to Main Street that their interests count. We urge adoption of this modest, yet tremendously helpful amendment. Mr. President, I ask unanimous consent to have printed in the Record this letter dated today from Americans for Financial Reform.

Mr. WHITEHOUSE. Yes.

Mr. WHITEHOUSE. Mr. President, I know the membership of this organization that supports the amendment includes AARP, as I mentioned, that also supported it individually, the Center for Responsible Lending, Common Cause, Consumers Union, the NAACP, the National Association of Investment Professionals, the National Council of La Raza, and the Veterans Chamber of Commerce, in addition to a great number of other organizations. This is an important amendment. It closes a loophole that was opened by the Supreme Court decision of 30 years ago, the decision to define the term ``located'' in the National Banking Act from way back in the Civil War era, 1863, as meaning the location where the bank is located, not the location where the consumer is located, so that when there is a bank in one State doing business with a consumer in another State, the laws of the bank's State govern. There is nothing particularly wrong with that decision. The problem is that the banks figured out that they could go to States that had the worst consumer protections or go to States that would be willing to chuck their consumer protections in return for the influx of business. From those States which have the worst consumer protection laws, they could then market their products around to other States and undercut and dodge around the laws of Rhode Island, the laws of Minnesota, the laws of Connecticut, the laws of Iowa, the laws of Virginia--the laws of all the States that for more than 200 years, in the history of our Republic, had this authority to regulate interest and to protect our consumers. This is an unintentional loophole. It has created grievous abuse of consumers who for the first time in the history of America are paying 30-plus interest rates under the law. When you and I were growing up, Mr. President, if a flier came in the mail that offered a credit card with a 30-percent interest rate, that would probably be a matter to bring to the attention of the authorities because it would be illegal. Now they market this stuff at will, and too many Americans, too many of our State residents, too many consumers are paying exorbitant and what would in that State be illegal interest rates because of that loophole. It is long past time to change it. This amendment would close it. I urge the support of my colleagues, and I look forward to the chance to call up this amendment. I yield the floor. I suggest the absence of a quorum.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Madam President, I had planned to offer an amendment this afternoon. I have been informed by the managers that the amendment slots are full at the moment. I wish to speak about my amendment and then return to the floor at the earliest opportunity to offer it for a vote. First, I say to the chairman of the Banking Committee that the bill we are currently debating would do great things to regulate an out-of- control Wall Street, to end the pernicious practice of too big to fail, and to provide for regular consumers an independent financial protection agency to look out for their interests against all the big sharks and lobbyists and lawyers who are ganged up against them on consumer debt. I appreciate the work Chairman Dodd and Chairman Lincoln have done, and I look forward to continuing to work with them on this important piece of legislation. My amendment is cosponsored by Senators Merkley, Durbin, Sanders, Levin, Burris, Franken, Brown of Ohio, and Menendez, and we are continuing to solicit cosponsorships. We are also receiving endorsements from outside of this body. The amendment would address an area that is not yet covered by the Wall Street reform bill; that is, runaway credit card interest rates. It would do so not by imposing new restrictions on lending but, rather, by restoring historic State powers--powers that were eliminated in the relatively recent past. Madam President, when you and I were growing up, a credit card offer with a 20-percent or 30-percent interest rate might have been a matter to bring to the attention of the authorities. Such interest rates were illegal under the laws of most, if not all, of the 50 States. Laws against charging excessive interest rates go much further back than our youth, however. The Code of Hammurabi in the third millennium B.C. limited interest rates. Hindu laws of the second century B.C. limited interest rates. Roman law limited interest rates. So when America was established, there was already a long tradition of protecting citizens against excessive interest rates, and that tradition carried to the founding of the United States of America. For the first 202 years of our Republic, each State had the sovereign power to enforce usury laws against any lender doing business with its citizens. During those two centuries, our economy grew and flourished, and lenders profited while complying with those laws. Then, in 1978 came an apparently uneventful Supreme Court case. It was little noticed at the time it was decided. The case was called Marquette National Bank of Minneapolis v. First of Omaha Service Corporation. The Supreme Court there had to determine what the word ``located'' meant in an old statute, the National Bank Act of 1863-- whether it meant that the transaction between a bank in one State and a consumer in another State was governed by the law of the bank State or of the consumer State. The resolution was that the term ``located'' referred to the location of the bank and not the location of the consumer. This meant that in a transaction between a bank in one State and a consumer in another, the transaction would be governed by the State in which the bank was domiciled. Well, it did not take long for the big banks to see the loophole this very narrow decision created. This loophole was never sanctioned by Congress, apparently never intended by the Supreme Court, but it was a significant loophole. It allowed banks to, for the first time in the Nation's history, avoid interest rate restrictions by the States of their consumers. It allowed them to get through that loophole by reorganizing as national banks and moving to States with comparatively weak consumer protection. Once the banks figured out that loophole, what is called ``a race to the bottom'' ensued. Bank credit card centers moved to States with the worst consumer protections, and in some cases States made their consumer protections even worse in order to attract that business to their State. The result of that is that today the credit card divisions of major banks are based in just a few States. That deal with the bank State causes consumers in all other States to be denied their traditional, historic, lawful protection against outrageous interest rates and fees. With millennia of interest rate protections behind us and hundreds of years of protection by the sovereign States of our Nation, the current system that has developed since that 1978 decision is the oddity in our history. My amendment would do nothing more than reinstate the historic, longstanding powers of our sovereign States to protect their citizens against excessive usurious interest rates. Let me be clear about what this amendment would not do. It would not mandate anything. It would not even recommend interest rate caps. It would not impose any other lending limitations. It would just restore to our sovereign States the power they enjoyed for over 200 years from the founding of the Republic--the power to say: Enough. Thirty percent or 50 percent or 100 percent is too much interest to be charged to its citizens. The current system is unfair to consumers, but it is also unfair to local banks--banks that continue to be bound by the laws of the State in which they are located. A small local bank has to play by the rules of fair interest rates. The gigantic national credit card companies can avoid having any rules at all. That is not fair. We need to level the playing field to eliminate this unfair and lucrative advantage for Wall Street banks against our local Main Street community banks. To make sure lenders cannot find another statute to use to once again avoid State law, my amendment would apply to all types of consumer lending institutions and not just national banks. So no more changing your charter or your means of business to avoid limitations on gouging your customers. My amendment gives State legislatures ample time to revise their usury statutes if they wish and gives lenders ample time to adjust. The amendment would not go into effect until 1 year after the President signs the bill into law. In the meantime, it is worth noting that most States' usury laws are around or above 18 percent. Presently, federally regulated credit unions do quite well under a Federal 18 percent interest rate cap. So there should not be a large shock when this amendment goes into effect as law. It is the 30-percent-and-over interest rates that are the recent anomaly, the historic peculiarity, the oddity, and cruelty to consumers that States have traditionally been able to defend against. We should go back to the historic norm, the way the Founding Fathers saw things under the doctrine of federalism, and close this modern bureaucratic loophole that allows big Wall Street banks to gouge local citizens and compete unfairly with local banks. I ask my colleagues for their consideration of this amendment and urge them to support it. I think it is a good amendment. I see the distinguished majority whip on the floor. I yield back my time so that he may speak.

Mr. WHITEHOUSE. Mr. President, I thank the Senate majority whip for cosponsoring our legislation. I appreciate his support immensely. He has a wonderful way of making things clear and helping people understand how basic and simple and historic this amendment is. It takes us back to the way the country was through the vast majority of its history. The ``greatest generation'' served in World War II, came home, and went to college and built the society we now live in under these rules. George Washington and his men at Valley Forge served under these rules. The Civil War took place and the Korean war took place under these rules. There are 202 years of solid history behind this issue. I will close with an appeal to my colleagues to continue to show interest in this legislation, in particular my colleagues on the other side of the aisle. If you believe in States rights, this is a good piece of legislation. If you believe in States as laboratories of democracy, as centers of innovation, as places where you multiply times 50 the chance of getting the right answer when you allow a little bit of innovation to take place, you should support this legislation. If you take comfort in more than 200 years of solid American history proving that this is the right way to go, you should support this amendment. If you want to protect consumers in your State from out-of-State banks that are out of control and have no restrictions on interest rates they can charge your consumers, you should support this amendment. If you think the Federal Government has too much power and you want the States to have more say about what can take place with its own citizens, you should support this amendment. I look forward to continuing to push for a vote on this amendment. I think it is an important one. I yield the floor. I suggest the absence of a quorum.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Madam President, if I may conclude, I thank the Senator for indulging me in these questions and allowing me to ask them and for her energetic and principled leadership on this issue.

Mr. WHITEHOUSE. They can still do that even after the secret holds.

Mr. WHITEHOUSE. Therefore, tomorrow is the day when one of three things has to take place. We can come to the floor and clear these folks by unanimous consent because there will no longer be a secret hold is option 1. Option 2 is a Senator would have stood up, filed the papers that the rules of the Senate require and admit to the secret hold, making this process transparent and open. The third is they will have done what Senator McCaskill and I have both called the switcheroo, and they will have gone quietly to some other Senator and said: I only have 4 days left; I don't want to hold it till 6. If you pick up my hold now for me, then you are after the unanimous consent request, and we think we can dodge the rules this way. Is it the understanding of the Senator from Missouri that those are the three options we will discover tomorrow as to all of these 80 nominees, which category they are in?

Mr. WHITEHOUSE. With respect to the observation that the distinguished Senator from Arizona made that they had just, after this process, allowed four U.S. attorneys to be cleared, in the light of the fact that at this time in the Bush administration there were eight Bush administration officials who were the subject of Democratic holds, but it is more than 80 Obama officials who are now still the subject of almost exclusively Republican holds, notwithstanding what is clear under the pressure of this initiative, we are actually down from over 100, but we are still holding at over 80 officials who are tangled up in secret holds. Is it a fair statement of mine to put, ``Gosh, we released four'' into the context of, ``Yeah, but we are holding 84''? That is the way the ratio works right now; does it not?

Mr. WHITEHOUSE. Indeed, votes in favor by the Republicans on the committee.

Mr. WHITEHOUSE. Of those, if I may ask another question, who have been cleared, some have been allowed to come forward for votes on the Senate floor. The last was Judge Chin who had been held for a considerable period of time. We actually, if I recall correctly, had to file cloture and take more time. There is a process built around cloture so it burns up Senate floor time. We were forced to do that. When the nomination was finally voted on in the Senate, is my recollection correct that he cleared the Senate 98 to 0?

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Madam President, I ask unanimous consent that my statement be followed by a colloquy among the cosponsors of the amendment I will be discussing.

Mr. WHITEHOUSE. Madam President, I had actually planned to offer an amendment to the Wall Street reform bill this afternoon, but I have been informed that the open-amendment process does not begin until next week. I will describe my amendment this afternoon and then return to the floor at the earliest opportunity to actually call it up. Before I describe it, I wish to commend Chairman Dodd and Chairman Lincoln for their hard work in crafting a strong Wall Street reform bill. The collapse of the housing market in 2008 and the resulting recession, near depression, was painful evidence that our financial institutions were underregulated and that we were ill-prepared for the invention of complex, new financial products. The legislation we are currently debating will strengthen and modernize our Nation's financial regulation and substantially reduce the chances for future market bubbles and collapses, with all the economywide collateral damage we have seen from this collapse. My amendment is cosponsored by Senator Merkley, who is on the Senate floor--I am delighted he is here with me--Senator Durbin, Senator Sanders, and Senator Levin. It would address an area that is not yet covered by the Wall Street reform bill, and that is runaway credit card interest rates. This amendment would address that issue not by imposing any new restrictions on lending but, rather, by restoring to our States historic powers that they held for hundreds of years and that were eliminated only in the relatively recent past. Madam President, when you and I were growing up, a credit card offer with a 20-percent or 30-percent interest rate might well have been a matter to bring to the police. Such interest rates were illegal under the laws of most, if not all, of the 50 States. Today, in contrast, credit cards routinely charge rates of 30 percent or even more, usually after they have trapped people into a late payment or some trick of some kind to get them away from the teaser rate with which they sold them the credit card. They end up with 30 percent interest or higher. These interest rates have spiraled out of control, and for reasons I will explain, the States, at least recently, have been powerless to do anything about it despite the historic power they had in this area. Prior to 1978--indeed, for the first 202 years of our Republic--each State had the ability to enforce usury laws against any lenders doing business with its citizens. Our economy grew and flourished during these two centuries. These were not hard periods for the financial services industries, and lenders profited while complying with the laws in effect where they operated. Then in 1978 came an apparently uneventful Supreme Court case. It was little noticed at the time it was decided. In Marquette National Bank of Minneapolis v. First of Omaha Service Corporation, the Supreme Court interpreted one word--the word ``located''--in the National Bank Act of 1863. That word sat quietly in that statute for 102 years, but in 1978 they interpreted it as meaning the location of the business rather than the location of the customer-- where the bank was headquartered or domiciled rather than where their customer lived. Well, it did not take long before big banks cottoned on to the opportunity this created--an opportunity never sanctioned by Congress nor apparently even intended by the Supreme Court. It was an inadvertent loophole, but they found it, and they realized they could avoid the interest rate restrictions by reorganizing as national banks and moving to States that had the weakest consumer protections. So what happened? A race to the bottom. The proverbial race to the bottom took place as a small handful of States eliminated consumer protections, eliminated interest rate caps in order to attract into their States lucrative credit card business and their related tax revenue. Today, there is a reason the credit card divisions of major banks are based in just a few States, and it causes consumers in all of our other States to be denied the historic protection they enjoyed from outrageous interest rates and fees. My amendment would reinstate the historic longstanding powers of our sovereign States to decide which interest rate limits, if any, should be set to protect their own citizens. Let me be clear about what this amendment would not do. It would not prescribe or even recommend any interest rate caps and it would not impose any other lending limitations. It would restore to the States the power they enjoyed for over 200 years, from the very founding of the Republic--the power to say ``enough,'' the power to say 30 percent interest or 50 percent interest or 100 percent interest is too much and we won't allow you to charge it to our citizens. The current system is not just unfair to consumers who can't be protected by their own State's government and are vulnerable to predatory lending in States far from their home, it is unfair to local lenders and retailers that continue to be bound by the laws of the home State. They are still bound. So the home State bank is under the State law. It is the huge, gigantic out-of-State national bank that can come in and compete against those small banks with that disadvantage. The small local bank has to play by the rules of fair interest rates, but the gigantic national credit card companies can avoid having any rules at all. So we need to level the playing field to eliminate this unfair and lucrative advantage that Wall Street banks enjoy against our local Main Street community banks. To make sure lenders can't find another statute to use to once again avoid State law, my amendment would apply to all types of consumer lending institutions, not just national banks, and that is for the purpose of forbidding them and preventing them from changing their charters to avoid limitations on gouging consumers. One of the other factors in this bill is that you can't choose your regulator by changing your charter, and we have reached broadly with this to protect against exactly that. My amendment would give State legislatures ample time to revise their usury statutes, if they feel they need revision, and would allow lenders the time to adjust. The amendment would not go into effect until 1 year after the President signs the bill into law. In the meantime, it is worth noting that most States' usury laws are around or above 18 percent, and that federally regulated credit unions do quite well under a Federal 18-percent interest rate cap. So the underlying interest rates that States tend to apply, when this power has not been stripped from them, really inadvertently, tend to be quite reasonable, as proven by the fact that our credit union industry operates under a Federal 18-percent interest rate cap and does quite well. It is the 30-percent and over interest rates that are the recent anomaly, the peculiarity in our country's history. We should go back to the historic norm--the way the Founding Fathers saw things under the doctrine of federalism--and close this modern bureaucratic loophole; probably an inadvertent loophole, but one that the big Wall Street banks found to gouge local citizens and compete unfairly with local banks. I ask my colleagues for their consideration on this, and I turn to the distinguished Senator from Oregon, Senator Merkley.

Mr. WHITEHOUSE. Madam President, I am grateful for my colleague's support. I see Senator Sanders of Vermont has joined us on the floor, and I am delighted to welcome him to our colloquy. Senator Sanders.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Mr. President, I ask unanimous consent that amendment No. 3739 be printed.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and any statements related to the measure be printed in the Record.

Mr. WHITEHOUSE. Mr. President, I ask unanimous consent that the Homeland Security and Governmental Affairs Committee be discharged from further consideration of S. Res. 481, and the Senate proceed to its immediate consideration.

Mr. WHITEHOUSE

Mr. WHITEHOUSE. I ask unanimous consent that the Senate proceed to executive session to consider en bloc the following nominations on the Executive Calendar: Nos. 820, 821, 822, and 823; that the nominations be confirmed en bloc, the motions to reconsider be considered made and laid upon the table en bloc; any statements relating to the nominations be printed in the Record; the President be immediately notified of the Senate's action; and the Senate then resume legislative session.