Promoting Job Creation and Reducing Small Business Burdens Actby Representative Keith Ellison
Posted on 2015-01-07
ELLISON. Mr. Speaker, I yield myself as much time as I may
What is before us today is a mini omnibus bill that contains, actually, 11 separate pieces of legislation, some of which may not be controversial but some of which are incredibly controversial and do not belong in this legislation. This is not an emergency. We have a new Congress. This bill should go through the regular order. Unlike the TRIA bill we just talked about, this bill is a bill which should and must go through the regular order, and it is absolutely inappropriate for the suspension calendar.
Our Republican friends would have us believe that this is just some benign piece of legislation, yet this bill contains not only procedural problems but substantive problems which have never seen the light of day in any committee. Some of the legislation has only been public for about 24 hours, and what is particularly frightening is that the text of the bill has changed at least three times since Tuesday. We just got started yesterday in talking about the importance of regular order, and we are already violating those claims and promises.
Mr. Speaker, the House of Representatives should return to regular order with this piece of legislation, and I urge my colleagues to reject it. Regular order, whereby legislation is debated at a hearing, marked up by a committee, and then finally considered by the whole House, is the process by which we vet legislation. That is not going on right here and right now, and there is no good reason for it. We do this to ensure that we fully understand the changing law. Nevertheless, Republicans have come here to suspend the rules and to consider a package of 11 bills which will ease the oversight of Wall Street firms, large banks, multinational corporations, and certain brokers.
It should be pointed out right now that the ranking member of the House Financial Services Committee, Maxine Waters, who is unable to be in Washington due to personal matters she has to address, has issued a call to reject this piece of legislation for many of the reasons I am articulating now.
I think it is also important to point out that there are 52 Members of Congress who were sworn in yesterday and who represent more than 30 million Americans who will have to vote on bills affecting a collateral firm's pledge, when they borrow money, affecting what information must be disclosed about certain brokers and financial statements of firms, without the opportunity to offer changes. This is the absolute antithesis of regular order, and this bill is not appropriate. We urge a ``no.'' I would like to talk a little bit about the specific reasons this bill is bad. Members should know that this is not the identical bill that came through in the fall. It has very important changes. If you voted for it last fall, that is no reason to vote for this bill now.
First, the Volcker rule. This bill undercuts an important part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Volcker rule was intended to prevent deposit-taking banks--banks that use money insured by the Federal Government, the people's money--from making bets [[Page H76]] and using taxpayer-insured funds. The Federal Reserve went out of its way to try to ease the transition to a safer system, but this bill would give megabanks an additional 2 years, totaling 5 years, to sell off certain securities in which they retain ownership rights--5 more years of risk, 5 more years of massive profit-taking. This provision, which almost certainly juices the profits of big, megabanks like Citigroup and JPMorgan, has never been vetted. The public has not even had a day to review the text. It is wrong that bills that help Wall Street and multinational corporations get fast-tracked on day 2 of this Congress while bills that help working families get slowed up for years, literally.
Just last month, Republicans successfully handed Citigroup and other megabanks a multibillion-dollar gift by repealing another reform measure, known as the ``swaps push-out,'' which was intended to prevent another Great Recession. The repeal of that provision allowed the megabanks to continue to borrow money from the Federal Reserve lending window, which is currently at about zero percent interest, to finance their risky derivatives. Experts have weighed in. Let me read for the Record the statement by the CEO of Better Markets: ``It's all about the bonus pool,'' said Dennis Kelleher, president and CEO of Better Markets, a financial reform nonprofit. ``The attack on the Volcker rule has been nonstop because proprietary trading is about big-time bets that result in big-time bonuses. Wall Street has been fighting it from day one, and they're not going to stop.'' If you believe that there are things in this mini omnibus, or this megabill, that might be worth your support, understand that this particular provision has not been vetted anywhere. For that reason alone they are literally trying to sneak it in, and you should vote against it.
Also, this particular bill includes three other provisions that weaken the Dodd-Frank Wall Street Reform and Consumer Protection Act. These provisions take away the authority of regulators who are charged with ensuring that everybody plays by the same rules so that, if at some point in the future, we find out that our financial system is threatened, our regulators will be unable to take decisive action to fix the problems that they can fix today.
After witnessing the effect that one type of derivative--the credit default swap--had in spreading losses from the subprime mortgage market around the world, I would like to know why our first order of business in this Congress is to roll back the financial reforms that this Congress deliberated on and passed over an 18-month period following the 2008 financial crisis.
This bill undermines investor protections. It includes three provisions that have the potential to leave investors worse off than they are today. As we proclaim small investors and workers and all of these things, why are we undermining investor protections? In one instance, the bill exempts individuals who would broker a merger of a privately owned company to be exempt from SEC regulations. Since this legislation passed in a previous Congress, the SEC has taken action to make this unnecessary. However, if we pass this bill today, we will undermine a few basic investor protections that the SEC has retained.
For example, the SEC determined that bad actors, such as convicted securities fraudsters, should not be able to take advantage of a carve- out. However, by voting ``yes,'' you are saying that it is okay for people convicted of fraud to sell other things, like franchises or the restaurant down the street. Another provision would allow 75 percent of all public companies to no longer report their financial statements in computer readable formats. When everything is online today and when investors rely on computers to crunch the financials of various companies, this bill comes across as a huge step backwards.
My colleagues want to address this bill, and I think it is important that they do. So, at this point, I am going to urge a ``no'' vote.