Financial Regulatory Reform

Floor Speech

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Mr. WHITEHOUSE. Mr. President, I wanted to share with my colleagues an update on where we are with the bipartisan amendment on which I have been working so hard. I see Senator Sanders of Vermont is here, and he is one of my cosponsors, as is the Presiding Officer, Senator Udall of New Mexico.

The amendment, as you know, would allow States to protect their citizens from exorbitant interest rates that are charged by out-of-State banks. There is a trick to this. Years ago, the Supreme Court made a decision saying when a bank is in one State and a consumer in another, the transaction between them is governed by the laws--and here they had to pick one State or the other--the bank's State. It didn't seem like a big deal at the time, but it opened a loophole that crafty bank lawyers figured out, and that is that you could move and redomicile a bank's headquarters in the State with the worst consumer protection laws in the country. Then, from that State, you could market back to other States which have consumer protections, which have interest rate limits honoring the tradition of usury restriction that was at the founding of this country and that lasted for hundreds of years but goes back to all our ancient religions and which is a constant in human civilized legal codes. This overruled all of that, allowing them to sneak right by it because they have either gone to or perhaps even cut a deal with their home State to have the worst consumer protection and be able to take advantage of people in other States.

It is the proverbial race to the bottom. I am confident if you called up on the Senate floor as the government's policy proposal the way it is right now, you would not get a single vote. Who would vote for the notion that the consumer protection policy of the country is going to be set by the worst State and have that be a situation in which the worst State is usually getting rewarded by the industry for being the worst State?

It is a bad situation. This amendment has gotten a lot of attention. It has gotten a lot of support--it has bipartisan support. It is a very practical thing we can do for American consumers.

This is a pretty esoteric piece of legislation in a lot of ways, this Wall Street reform bill. This does things like trying to rebuild the Glass-Steagall firewall. Until I got in the middle of this debate, I couldn't tell what that was. This changes the leverage limits and puts restrictions on what banks can do. That is pretty esoteric stuff. This deals with the regulation of derivatives and collateralized debt obligations and credit default swaps and things that nobody ever heard of until we were drilled into this legislation--esoteric, preventive stuff. But this piece of the bill, this amendment would enable all of us to go home and tell our constituents: You know those 30 percent penalty rates that your out-of-State credit card company drops you into if you make a mistake, if you are late in a payment, for no reason at all? We have done something to protect you against that--consistent with the traditions of our country, our laws, consistent with the doctrine of federalism and States rights, consistent with the Founding Fathers' delegation to the States, the ability to protect consumers in this way. We have restored the States rights. They are no longer trumped by an out-of-State corporation. Now they have the sovereign right they should to protect consumers.

I think it is a meritorious piece of legislation. I think it is an amendment that deserves consideration on the floor. It is beginning to appear that it may not actually even get a vote, notwithstanding that it is pending. We may be edged right out.

I want to explain why. People who have been watching this debate have seen long hours of nothing happening on this floor. There has been a lot of delay. There has been a lot of delay allowing us to get to amendments. Why is that? We are up against a time restriction on this bill. It is a practical time restriction. The leader needs to make sure we pass the supplemental Defense appropriations bill that funds our troops. What could be more important than, when we have troops in the field, overseas, serving our country, putting themselves in harm's way, that we provide them the resources they need to be successful? We have to do that.

We have to do something to increase the strength of our economy. In Rhode Island we are at 12.6 percent unemployment. We have been in the top three States for unemployment every single month of the Obama administration.

I think we are in the 28th month of severe recession. So we know how bad this economy is and how much more we need to do to try to bolster it. So we need to get to the next jobs bill, the jobs and tax extenders bill, to make sure we are providing the necessary support to our economy.

We have to get to those things. Because of all the delay that our friends on the other side have built into the process we are now getting into the end point where we are starting to be squeezed for time.

Now that we are squeezed for time, they are refusing to give time agreements to amendments like mine that would actually make a difference. They do not want to vote in favor of out-of-State corporations and against their home State's ability to protect their home State's fellow citizens. But they do want the out-of-State corporations to win. They don't want to vote in their favor, but they want them to win.

If that is your position, the perfect thing is to delay and delay until it gets to be here at the end, crunch time, then take the amendments that worry you, the amendments that will get after the big banks, the amendments that will be fair to consumers, and refuse to give time agreements and vote agreements on those and basically run out the clock.

That is the position we are in right now. It appears there is no willingness on the other side of the aisle to give this a vote--not just at a 50-vote margin, even at a 60-vote margin. They don't want to be on record supporting these out-of-State credit card companies that are gouging their own citizens. They just want them to win, and they figured out this way to do it.

The only alternative is to call up the bill, what is called postcloture, which means I have to be technically something called germane. Right now we are working with the Parliamentarian to argue as strongly as we can that we are indeed germane. It is an open question whether we are indeed germane, and I hope it gets resolved in our favor before the bill comes up in its regular order postcloture.

That is the situation. If people are wondering why this amendment does not appear to be on any list, is not going anywhere, it is because there is a blockade of it on the other side. They are taking advantage of the time crunch that they created with all the delays that led us to this time crunch to squeeze out the amendments where they do not want to vote for the big banks, they don't want to vote for the big credit card companies, but they do want the big banks and the big credit card companies to win. So it is the squeeze play at the end to try to drive these impactful amendments that will make a tangible, immediate difference in the lives of Rhode Islanders and the lives of their home State citizens, the ones paying that 30-plus percent interest rate that until very recently would be a matter to bring to the authorities of this country, not a matter that the Senate tried to defend. So that is where we are.

I will continue to work with the Parliamentarian to make sure we are germane postcloture, and I will continue to argue to try to get a vote. But forces are arrayed against us at this point, and I want to be perfectly candid about it.

I yield the floor.

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