Promoting Job Creation and Reducing Small Business Burdens Actby Representative Janice D. Schakowsky
Posted on 2015-01-07
SCHAKOWSKY. Mr. Speaker, I thank the gentleman for yielding.
Mr. Speaker, at the end of last year, over my strenuous objections, we wrapped up a big present for Wall Street. We put taxpayers back on the hook for losses that are connected to certain derivatives trading, among the riskiest bets that banks make.
Well, Christmas is over, and Hanukkah is over, but the gifts keep on coming for Wall Street. Within this bill is another provision that cuts at the heart of the Dodd-Frank Wall Street reform legislation. It delays a portion of the Volcker rule, which bans federally insured banks from making those risky bets or investing in risky funds, including packages known as collateralized loan obligations, or CLOs.
Mortgage-backed securities brought our economy almost crumbling to the ground in 2008, and we are still recovering. Taxpayers bailed out the big banks; yet for millions of homeowners who were forced from their homes and millions of others who are still under water, there hasn't been any assistance. People are right to be angry about this, and they are right to object to this new giveaway to Wall Street interests.
CLOs are similar to toxic mortgage-backed securities. The only difference is that instead of bad mortgages, these packages involve junk-rated corporate loans and a mix of other risky assets.
The Office of the Comptroller of the Currency said last month that the corporate debt market is overheating and becoming increasingly dangerous, and CLOs are the big reason why. This has all the markings of another economy-crushing disaster.
Who gets the upside if Wall Street is able to continue packaging and selling CLOs with taxpayer backing? Wall Street. Who loses if and when those bets go wrong? The rest of us. It is heads, Wall Street wins; tails, everybody else loses.
Mr. Speaker, as Dennis Kelleher of Better Markets said, ``The attack on the Volcker rule has been nonstop.'' The SPEAKER pro tempore. The time of the gentlewoman has expired.