Statements on Introduced Bills and Joint Resolutions

Floor Speech

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Mr. MERKLEY. Mr. President, an American historian, James Truslow Adams, wrote a book in 1931 entitled ``The Epic of America,'' and in this book he coined the term the ``American dream.'' He went on to say this: ``Ever since we have become an independent nation, each generation has seen an uprising of the ordinary Americans to save that dream from the forces which appeared to be overwhelming and dispelling it.''

One of those forces that has been overwhelming the effort of middle- class, hard-working Americans to be successful is predatory lending. Today I am specifically rising to discuss the introduction of the SAFE Lending Act. SAFE stands for stopping abuse and fraud in electronic lending.

The focus of this is short-term, high-interest loans, often referred to as ``payday'' loans. These loans often have interest rates of 300 percent, 400 percent, 500 percent. The debt a family has with one of those loans just grows and grows and grows. Consider this: If you take out $1,000 today, a year from now, at 500 percent interest, you owe $5,000. In 2 years you owe $25,000--an impossible sum for a family of modest means. So these payday loans pull families into a vortex of debt from which they cannot escape, and this vortex destroys them financially. These are huge consequences for the parents, certainly, but huge consequences for the children. It does a tremendous amount of damage to American families. This is why many major religions in the world have come out over time--over thousands a year--and said high- interest lending destroys and shouldn't be done, but here we have it, right here in America.

Many States, including my State of Oregon, have worked to end this vortex of debt. They have put a cap on the interest rate. They have stopped the every-2-week rollovers, and so they have returned, if you will, small-dollar lending to being an affordable instrument that doesn't destroy families. These tough State laws are under assault by new tactics of the payday loan industry, and we need to address those new tactics.

Specifically, the industry is starting to use an instrument called remotely created checks. How does this work? Let's say you have your bank account and you take out a payday loan. The dollars are put into your bank account, and you think they are going to stay there, but now this online payday loan company--and who knows where in the world these people really are; they may be overseas in any remote location, extremely difficult to find, extremely difficult to enforce our laws-- has your bank account number, and that is all they need to write a check to themselves to withdraw the money from your account and put it in their account, an account that is likely to be so remotely located no one can enforce the State laws.

In other words--let me say this again--the payday lender, once they have your checking account number, can reach into your account without your permission and take your money out; thereby, having the ability to bypass the State laws. An Oregon law may say if you have interest rates over those established by Oregon law your loan is uncollectible; that it is illegal in our State. Well, these online predatory payday lenders do not care that it is illegal in Oregon. They have your account number, and they are going to reach in and take your money illegally.

That is not the only predatory practice that is evolving. These payday loan companies have also established a practice whereby instead of putting money into your bank account, they give you a prepaid card. This prepaid card looks very convenient. You use it like a credit card, a debit card, and we are familiar with that in America, but here is the ringer. They put fees on these cards that add to the 300-percent, 400- percent, or 500-percent interest rate that is already destroying families, particularly over balance fees.

You may not know whether your card has $20 or $30 or $50 left on it. Some of these prepaid cards, in other parts of the financial industry, charge for all kinds of things. They charge you to call and ask what your balance is. They charge if you call and ask a question about how the card works or even what the fees are. They charge a fee just for asking what the fees are. Some of them charge a fee every time you use the card. Some might charge an additional monthly fee, but particularly these prepaid payday loan cards are notorious for their overbalance fees.

Let us assume you have perhaps $50 left in your account, you buy something for $52, and maybe immediately you get charged a $35 fee, which they can reach into your account and take, but then that is an overdraft fee on the bank, so the bank is now charging you a fee. Then, because you don't know it is an overdraft because they didn't turn down the transaction, you buy a pack of gum for 50 cents, and there is another $35 fee. You buy a hamburger at Burger King for lunch, and there is another fee. So you can see how these predatory fees line up very quickly on top of the 300-percent, 400-percent, or 500-percent interest rates.
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So here is the thing. State after State has said these are destroying families and we are going to act. In fact, in the U.S. Senate years ago we acted to protect military families from these predatory loans. The admirals and generals came to Capitol Hill to testify. They said: At our military bases these predatory payday loans are destroying our military families, and it is not just their finances. When their finances are destroyed, relationships are frayed, children's opportunities are damaged. We cannot have this type of terrible impact on our military families. So we established a national cap of interest on these short-term loans.

It is good we did. It is good we protected our military families from these abusive, destructive practices, but if these practices are so damaging to families in the military, aren't they equally damaging to families who are not in the military? Shouldn't we apply the same protection to every American family we apply to a military family? Don't we value the success of every American family more than we value protection for legalized loan sharking? Certainly we should, in this Chamber, extend to all families in America the same protection we gave to military families. Until we do that, we should at least make sure the Federal framework requires honoring the tough laws passed by State after State after State to stop these practices. I think the total is about 19 States at this point.

That is why I introduced the SAFE Lending Act today. The SAFE Lending Act--stop the abuse and fraud in electronic lending. This act does a couple of key things. First of all, it says these remotely created checks in which a company reaches in and takes your money without your permission--those are banned. You regain control of your checking account. Second, the legislation bans the overdraft fees on these prepaid payday loan cards and other predatory fees established through the Commission. Third, it says that all small-dollar lenders have to register in order to be monitored by their States so they are not in an unregulated world out there without people even knowing they exist. Furthermore, it says that every lender of every type has to abide by the State laws. It doesn't matter whom they are regulated by. Finally, it bans lead generators.

Now, what is a lead generator? A lead generator is a fake Web site that pretends it is a payday loan company, offers you a product, and their whole goal is to get your bank account number. Again, once they have that bank account number, they can reach in and take funds out of your account. It is incredible that this is true; that you don't have to sign the check. They basically just use your number and ask to take away the money from John Consumer or Jane Consumer and give it to us, and the bank complies and does it. As amazing as that sounds, that is the way the banking system works. That is what these remotely created checks do.

So we to make sure that regardless of what your financial regulator is, you have to abide by the State rules, and we ban these lead generators that are fishing for these bank account numbers. Once they have them, they sell them to the lending industry, to the payday loan industry, and who knows what other hands these numbers end up in.

I was surprised a couple of years ago when I noticed a charge on my bank account that wasn't something that either my wife Mary or I had purchased from a store we don't go to. I looked at it carefully and discovered the number of the check was out of the order of my checkbook. So I pulled up the copy of the check on the computer, looking through my account on the computer, and I could see the number matched my account, but the name on the check didn't match my account, the address didn't match my account, and the signature didn't match my signature. None of it matched. The only thing on this check was the number of the bank account that matched my bank account, and that is all that is required for someone to reach in and take money out of your account.

That type of fraud is surprising as well, but it reinforces the point that once an online electronic payday loan company has your number, they can reach in. That is all they need to take the money out of your account. So we are going to ban these lead generators as another piece of this predatory profile of the electronic payday loan industry. It is why I am introducing the act.

I greatly appreciate my cosponsors on this act, and I would like to thank them all. They are Senator Tom Udall, Senator Bernie Sanders, Senator Patty Murray, Senator Dick Durbin, Senator Dick Blumenthal, Senator Elizabeth Warren, Senator Tammy Baldwin, Senator Ed Markey, Senator Ron Wyden, and Senator Cory Booker. Thank you to all of my colleagues who care a lot about ending predatory financial transactions that strip billions of dollars out of hard-working Americans' accounts.

We have a lot of work to do on this. We have accomplished some. There is much more to be done. Certainly, when James Truslow Adams said that individuals of each generation will have to stand and fight against practices designed to destroy the American dream, he was talking about things such as this--practices that proceed to undermine the success of America's working families. Let us stop those predatory practices in their tracks and pass the SAFE Lending Act. ______

By Mr. CORNYN (for himself, Mr. Cruz, Mr. Schumer, and Mr. Blumenthal):

S. 2763. A bill to provide the victims of Holocaust-era persecution and their heirs a fair opportunity to recover works of art confiscated or misappropriated by the Nazis; to the Committee on the Judiciary.

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Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``Holocaust Expropriated Art Recovery Act of 2016''. SEC. 2. FINDINGS.

Congress finds the following:

(1) It is estimated that the Nazis confiscated or otherwise misappropriated as many as 650,000 works of art throughout Europe as part of their genocidal campaign against the Jewish people and other persecuted groups. This has been described as the ``greatest displacement of art in human history''.

(2) Following World War II, the United States and its allies attempted to return the stolen artworks to their countries of origin. Despite these efforts, many works of art were never reunited with their owners. Some of the art has since been discovered in the United States.

(3) In 1998, the United States convened a conference with 44 nations in Washington, D.C., known as the Washington Conference, which produced Principles on Nazi-Confiscated Art. One of these principles is that ``steps should be taken expeditiously to achieve a just and fair solution'' to claims involving such art that has not been restituted if the owners or their heirs can be identified.

(4) The same year, Congress enacted the Holocaust Victims Redress Act (Public Law 105-158, 112 Stat. 15), which expressed the sense of Congress that ``all governments should undertake good faith efforts to facilitate the return of private and public property, such as works of art, to the rightful owners in cases where assets were confiscated from the claimant during the period of Nazi rule and there is reasonable proof that the claimant is the rightful owner.''.

(5) In 2009, the United States participated in a Holocaust Era Assets Conference in Prague, Czech Republic, with 45 other nations. At the conclusion of this conference, the participating nations issued the Terezin Declaration, which reaffirmed the 1998 Washington Conference Principles on Nazi- Confiscated Art and urged all participants ``to ensure that their legal systems or alternative processes, while taking into account the different legal traditions, facilitate just and fair solutions with regard to Nazi-confiscated and looted art, and to make certain that claims to recover such art are resolved expeditiously and based on the facts and merits of the claims and all the relevant documents submitted by all parties.''. The Declaration also urged participants to ``consider all relevant issues when applying various legal provisions that may impede the restitution of art and cultural property, in order to achieve just and fair solutions, as well as alternative dispute resolution, where appropriate under law.''.

(6) Numerous victims of Nazi persecution and their heirs have taken legal action to recover Nazi-confiscated art. These lawsuits face significant procedural obstacles partly due to State statutes of limitations, which typically bar claims within some limited number of years from either the date of the loss or the date that the claim should have been discovered. In some cases, this means that the claims expired before World War II even ended. (See, e.g., The Detroit Institute of Arts v. Ullin, No. 06-10333, 2007 WL 1016996 (E53352.D. Mich. Mar. 31, 2007)). The unique and horrific circumstances of World War II and the Holocaust make statutes of limitations and other time-based procedural defenses especially burdensome to the victims and their heirs. Those seeking recovery of Nazi-confiscated art must painstakingly piece together their cases from a fragmentary historical record ravaged by persecution, war, and genocide. This costly process often cannot be done within the time constraints imposed by existing law.

(7) Federal legislation is needed because the only court that has considered the question held that the Constitution prohibits States from making exceptions to their statutes of limitations to accommodate claims involving the recovery of Nazi-confiscated art. In Von Saher v. Norton Simon Museum of Art, 592 F.3d 954 (9th Cir. 2009), the United States Court of Appeals for the Ninth Circuit invalidated a California law that extended the State statute of limitations for claims seeking recovery of Holocaust-era artwork. The Court held that the law was an unconstitutional infringement of the Federal Government's exclusive authority over foreign affairs, which includes the resolution of war-related disputes. In light of this precedent, the enactment of a Federal law is the best way to ensure that claims to Nazi- confiscated art are adjudicated on their merits. SEC. 3. PURPOSES.

The purposes of this Act are the following:

(1) To ensure that laws governing claims to Nazi- confiscated art further United States policy as set forth in the Washington Conference Principles on Nazi-Confiscated Art, the Holocaust Victims Redress Act, and the Terezin Declaration.

(2) To ensure that claims to artwork stolen or misappropriated by the Nazis are not barred by statutes of limitations and other similar legal doctrines but are resolved in a just and fair manner on the merits. SEC. 4. DEFINITIONS.

In this Act--

(1) the term ``actual discovery'' does not include any constructive knowledge imputed by law;

(2) the term ``artwork or other cultural property'' includes any painting, sculpture, drawing, work of graphic art, print, multiples, book, manuscript, archive, or sacred or ceremonial object;

(3) the term ``persecution during the Nazi era'' means any persecution by the Nazis or their allies during the period from January 1, 1933, to December 31, 1945, that was based on race, ethnicity, or religion; and

(4) the term ``unlawfully lost'' includes any theft, seizure, forced sale, sale under duress, or any other loss of an artwork or cultural property that would not have occurred absent persecution during the Nazi era. SEC. 5. STATUTE OF LIMITATIONS.

(a) In General.--Notwithstanding any other provision of Federal law, any provision of State law, or any defense at law or equity relating to the passage of time (including the doctrine of laches), a civil claim or cause of action against a defendant to recover any artwork or other cultural property unlawfully lost because of persecution during the Nazi era or for damages for the taking or detaining of any artwork or other cultural property unlawfully lost because of persecution during the Nazi era may be commenced not later than 6 years after the actual discovery by the claimant or the agent of the claimant of--

(1) the identity and location of the artwork or cultural property; and

(2) information or facts sufficient to indicate that the claimant has a claim for a possessory interest in the artwork or cultural property that was unlawfully lost.

(b) Possible Misidentification.--For purposes of subsection (a)(1), in a case in which there is a possibility of misidentification of the artwork or cultural property, the identification of the artwork or cultural property shall occur on the date on which there are facts sufficient to determine that the artwork or cultural property is likely to be the artwork or cultural property that was unlawfully lost.

(c) Applicability.--

(1) In general.--Subsection (a) shall apply to any civil claim or cause of action (including a civil claim or cause of action described in paragraph (2)) that is--

(A) pending on the date of enactment of this Act; or

(B) filed during the period beginning on the date of enactment of this Act and ending on December 31, 2026.

(2) Inclusion of previously dismissed claims.--A civil claim or cause of action described in this paragraph is a civil claim or cause of action--

(A) that was dismissed before the date of enactment of this Act based on the expiration of a Federal or State statute of limitations or any other defense at law or equity relating to the passage of time (including the doctrine of laches); and

(B) in which final judgment has not been entered.

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