21st Century Cures Bill

Floor Speech

BREAK IN TRANSCRIPT

Mr. MERKLEY. Madam President, colleagues, we are now 4 weeks out from a Presidential election in which millions of American voters indicated they wanted a change.

Donald Trump, our President-elect, campaigned and was elected on a platform he called draining the swamp. Getting rid of entrenched special interests sounds good. Fighting on behalf of middle-class Americans sounds good. Taking on Wall Street's powerful special interests sounds good.
In fact, month after month, our President-elect attacked Secretary Clinton, saying she was too close to the Wall Street banks. He said things such as ``Hillary will never reform Wall Street.'' He said, ``I know the guys at Goldman Sachs. They have total control'' over his opponent.

These are pretty harsh words. With months of hammering Wall Street and hammering his opponent, it came as a big surprise to many last week, when President-Elect Trump announced that he would be naming Steve Mnuchin, a darling of Wall Street, a 17-year veteran of Goldman Sachs, a career in the financial industry, to run the Treasury Department--the single most important post in our economy to be run by Wall Street.
Instead of draining the swamp in Washington, it looks as if our President-elect is turning our government intended to be of, by, and for the people into a government of, by, and for Wall Street.

Appointing a 17-year Goldman Sachs executive to oversee financial regulation is the definition of the fox guarding the hen house. It has the potential to undo all the progress and recovery we have made since shutting down the Wall Street casino, which dragged our country into the Great Recession. Furthermore, wouldn't it be great to have someone at the helm of our economy who fought to put people into homes, instead of fighting to kick people out of their homes and onto the street, as he has done.

One of the great things about America is the resiliency of the American people. They come upon a challenge, sometimes a catastrophe, and they work to put the pieces back together again. We have made our way through the Great Depression. We made it through two world wars, we made it through the September 11 terrorist attacks, and we have worked to recover from the Great Recession.

That crisis saw 8.7 million jobs lost, trillions of dollars of lost family wealth, and more than 2 million businesses shuttered. It was a financial crisis that cost about 4 million Americans their homes. It wiped out the hard-earned retirement savings of millions more families.

The American people are working to rebuild, but they haven't forgotten. They haven't forgotten foreclosed homes. They haven't forgotten the lost jobs. They haven't forgotten the retirement savings.

They haven't forgotten the shuttered businesses across our great land, and they definitely haven't forgotten the recklessness of Wall Street that made it all happen.

It seems that perhaps President-Elect Donald Trump has already forgotten not just the driving force behind the Great Recession of 2008 that caused these calamities for millions of American families and businesses, but he has also forgotten his campaign vow to take on Wall Street. Instead, Mr. Trump is planning to put Wall Street in charge of the Treasury Department--again, the most powerful economic position in the United States of America.

Where does Wall Street stand on these issues? Wall Street hates the provisions that Congress adopted to end predatory lending practices in mortgages and consumer laws. They hate those provisions, and they want to get rid of them. They want to get rid of the watchdog that makes sure those provisions don't return. Wall Street hates the provisions that we adopted to shut down the Wall Street casino, where Wall Street firms made huge bets with the deposits of American savers to terrible consequences.

Bloomberg News reported that Trump's nominee, Steve Mnuchin, was front and center during these operations of the Wall Street casino.

Have no doubt that he plans to do what he can to restore that casino.

While being interviewed right after his nomination, he promised to ``strip back parts of Dodd-Frank'' and went on to suggest that the Volcker rule, which is the provision that shut down the Wall Street casino, should be weakened or eliminated. It is not speculation; it is straight from his own testimony to the American public, after he was nominated, that he wants to restore the Wall Street casino.

The Consumer Financial Protection Bureau is another target. That protection bureau is a watchdog on the beat against predatory financial practices. It is a pretty good thing when you have an organization that has returned nearly $12 billion to 27 million American citizens harmed by illegal and predatory practices in the lending business.

Furthermore, the Consumer Financial Protection Bureau has saved far more by preventing these practices in the first place on current lending--$12 billion returned, but who knows how much they saved consumers on the front end. Maybe it is $50 billion, maybe it is $100 billion, maybe it is more. But the fact is, our citizens are getting a better foundation for our financial success.

If you believe in the success of American families, you want to block predatory practices designed to undermine them. That is what we did in Congress, and that is what is at risk.

We did a lot of powerful things to rectify the excesses that led to the disaster of 2008 under the Bush administration. We created stress tests to ensure the strength and security of our largest banks--that they had sufficient reserves to withstand periods of economic challenge. That makes sense. We put procedures in place to unwind megacorporations when they fail so they can be unwound and not take the rest of the economy, the financial system, down with them. That makes sense.

We established a cop on the beat to make sure people aren't scammed by credit card companies. It makes sense. We made sure we had an organization to which people could appeal when they thought there was a predatory practice, to have it rectified and have the funds returned to them if they were right. That makes sense. All of this makes sense. It makes what type of sense? It makes common sense.

Isn't it just common understanding that when a predator damages a family, our entire community suffers and when a family loses its home, our entire community suffers? Don't we understand that when people are thrown out into the street--as Steve Mnuchin's banks specialized in-- the families are hurt, the children are deeply hurt? But now we have a nominee who specialized in Wall Street and specialized in foreclosures.
I say again, wouldn't it be great to have a nominee to head our economy who worked to put people into homes, who worked to make families successful, not someone who specialized in throwing them out of their homes and onto the street?

In 2009, in the depths of the financial crisis, Steve Mnuchin purchased the fourth largest failed bank, IndyMac, when it collapsed in July of 2008.

After buying IndyMac, he renamed it OneWest and took over as the CEO.

Under Mnuchin's leadership, OneWest became what housing advocates in California called a foreclosure machine. Why did they call it a foreclosure machine? Because in the midst of the Great Recession, it pushed forward 36,000 homeowners into foreclosure, using tactics that were certainly off limits, such as robo-signing, fake signing--let me put it directly, fake signing of documents. His bank was responsible for more than one-third of all reverse mortgage foreclosures, which disproportionately were targeted at America's seniors.

Let me tell you the story of Ossie Lofton. Ossie Lofton, a 90-year- old woman from Lakeland, FL, took out a reverse mortgage on her home.

This is a type of loan that allows an elderly individual to draw up the equity of their home to help them meet their basic monthly expenses.

The beauty of this is that once you have that have reverse mortgage, assuming it is not designed with predatory features, it can supply to a senior some steady supply, and they don't have to write a steady mortgage check to anyone. Instead, they get income to help meet those basic expenses, so it is hard to imagine how you would end in default in this situation. But individuals are still responsible for paying property taxes and homeowners insurance.

In Ossie Lofton's case, there was confusion over her homeowners insurance coverage. The bank sent her a bill for $423.30. Ossie looked at that. She thought she had it right, and so she sent the insurance company a check for $423, overlooking the 30-cent payment.

Well, they sent her back another bill for 30 cents. Again, she misread it. She thought they were asking for 3 cents, and she mailed them 3 cents--27 cents shy.

What did OneWest do under Steve Mnuchin's leadership? They foreclosed on Ossie for 27 cents.

In my hand I have 30 cents, a dime and four nickels. Why would a bank foreclose on a woman who owed them a few cents? Why would they do that? Well, if you followed these predatory practices, some banks looked at it this way. They said if we can find a technicality to grab someone's home, we can resell it for far more than we are owed. That is a huge profit.

So for that 27 cents, she lost her home. She and thousands of others lost their homes so this bank could profit rather than work out a mortgage modification. That is really a crime against an American citizen, a specialty of this bank, a specialty through which Steve Mnuchin profited millions and millions of dollars. Millions of dollars of income was accumulated based on the suffering inflicted on thousands and thousands of American homeowners.

We could look at another story. Leslie Parks took out a subprime adjustable rate mortgage to pay for repairs. She faced some hard times and was falling behind, but under very constructive negotiations with One West to stay in the home, you will recall we had this program called the Home Affordable Mortgage Program--the HAMP program--wherein a bank could rework it. They were saying to her that we are reworking it, all is good, but, meanwhile, they were pursuing foreclosure. The result was, thinking she was working out a modification, she came back to her home in the middle of a blizzard and found herself locked out.

This is an example of the widely publicized two-track policy in which banks would pretend to work out a modification while aggressively pursuing foreclosure. That is not a good practice. It is not fair to the homeowner.

Let's look at another story. Gregg and Diane Horoski. They refinanced in 2004. They paid off their original mortgage with a loan from Deutsche Bank and used the rest of the money to cover health care costs, but it is one of those loans with an exploding interest rate, and the loan interest soared to 12.375 percent. Then Gregg Horoski started having health problems so they were having trouble keeping up with those high interest payments. So they asked the bank to work with them. What bank? One West. They asked One West to work with them to modify the loan, but the bank turned them down, misled them about how much they owed, lied to them about how much was at stake.

The Horoskis felt betrayed by the misrepresentations and they took One West to court and Judge Jeffrey Spinner said the following about the bank's behavior. Which bank? One West, the bank that Steve Mnuchin was heading. He called the bank's behavior ``harsh, repugnant, shocking and repulsive.'' He also added, ``unequitable, unconscionable, vexatious and opprobrious.'' He pretty much summoned every word in the English dictionary to say how wrong the bank's action was as they dealt with this couple.

Now, the bank lost that case, but they were aggressively pursuing everything so they took it to appeal. They spent a lot of money and had a lot of lawyers take on this couple and eventually the bank won. They won no grace period, no compromise, no home for this couple. The bank won and the Horoskis lost, as did thousands and thousands and thousands of individuals and couples who owned homes who lost them to these very aggressive foreclosure strategies.

That is not all. Mr. Mnuchin and his bank didn't just prey on hard- working Americans, they also had an operation that has a record of discriminating against minority home buyers and minority neighborhoods.
Fair housing applicants have filed legal complaint after legal complaint against their practices.

Here is an example. According to the California Reinvestment Coalition and Fair Housing Advocates of Northern California, the bank's Southern California branches made a total of only two mortgage loans to African-American home buyers during 2014 and 2015. That is one per year; two loans over 24 months in one of the country's most diverse communities--a community that includes Los Angeles, where African Americans make up more than 9 percent of the population. This practice is known as redlining. It is an egregious practice. What is more, of the 35,877 homes that One West foreclosed on just in California between April 2009 and April 2015, 68 percent were majority non-White areas.

Looking at this record, it is pretty clear that Mnuchin has not used his skills in life to put people into homes; he has used his skills to kick people out of their homes and into the street.

Instead of fighting for homeowners, he has made a living--the life of a mega-multimillionaire--off the suffering of low-income and middle- income Americans.

Our President-elect bashed his opponent for being too cozy with Wall Street banks. He told Iowans: ``I am not going to let Wall Street get away with murder,'' but then he nominates an individual with this record of predatory practices, of private profit over the suffering of thousands of families, to lead our economy in the years ahead. This is just 4 weeks after his election, just 4 weeks after we heard the cries that he would stand up to Wall Street, and now he is putting Wall Street in charge.

There is more. He is not appointing just one but two former Goldman Sachs executives to key positions of power and influence. One is Steve Bannon, assigned to be his Chief Strategist. That is right--Goldman Sachs--Chief Strategist for our President-Elect. Now we have an economist in chief, the Treasury Secretary, also coming from the same direction. It sounds like instead of ``draining the swamp,'' our President-elect is helping Wall Street restore the predatory practices that destroyed the living and the lives of millions of American homeowners. This is wrong. I call on President-Elect Trump to reverse course, to fight for government of, by, and for the people--not government of, by, and for Wall Street.

I yield the floor.

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