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Senate Proceeding 05-20-10 on May 20th, 2010 :: 3:18:20 to 3:39:05
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Bob Corker

3:18:18 to 3:18:39( Edit History Discussion )

Bob Corker: quorum call: mr. corker: madam president? the presiding officer: the senator from tennessee. mr. cor rise to speak on the pending legislation. the presiding officer: the senator should note we're in a quorum call. mr. corker: i move unanimous consent to dispense with the quorum call. the presiding officer: without objection. mr. corker: thank you so much.

Bob Corker

3:18:20 to 3:39:05( Edit History Discussion )
Speech By: Bob Corker

Bob Corker

3:18:40 to 3:19:00( Edit History Discussion )

Bob Corker: i want to talk for just a few minutes about the piece of legislation that's pending. my guess is we'll have final passage after reaching cloture h a few minutes ago. i'd like to go back and say that we began the process of looking at financial regulation after the crisis that occurred a

Bob Corker

3:19:01 to 3:19:21( Edit History Discussion )

Bob Corker: couple years ago where institutions all across this country had madeoans, very poor loans, to people who used that money to buy homes. that was the genesis of this crisis, the enact that institutions across this -- the fact that institutions across this country had made those bad loans and made them to people

Bob Corker

3:19:22 to 3:19:44( Edit History Discussion )

Bob Corker: who couldn't pay them back. certainly that was exacerbated by i fact that with all the easy credit that occurred, there was a housing bubble that no doubt was going to into its normal state at some point, but the combination of those two factors created a tremendous crisis in our country. when the banks that were

Bob Corker

3:19:45 to 3:20:06( Edit History Discussion )

Bob Corker: involved in all of these loans t in trouble, there really wasn't a good mechanism to deal with so many of them being troubled at the same time. and so we understanded up with a moral hazard that this legislation -- and so we ended up with a moral hazard that this institution is trying to deal with, institutions that had capital injected into them

Bob Corker

3:20:07 to 3:20:28( Edit History Discussion )

Bob Corker: because many people at that time felt that the bankruptcy code or other mechanisms just weren't there to deal with these institutions. and so a process began where we in this body and people on the other side of the capitol tried to pass legislation to deal with this. madam president, i want to say that i know there's been a good attempt to deal with t i've been

Bob Corker

3:20:29 to 3:20:50( Edit History Discussion )

Bob Corker: involved in some of those negotiations and as you can tell by my vote i'm disappointed with the outme of that involvement. but still it's be an issue that's been important to this country. despite nigh disappointment in the outcome, i will say on the outcome that the process we've had on the snroor good one.

Bob Corker

3:20:51 to 3:21:12( Edit History Discussion )

Bob Corker: we've had a lot of amendments that have been voted on and i think this speaks well of this body. but, madam president, the one thing we didn't deal with in this 1,400-page bill that i'm sure will be lengthened by managers' amendments and other types of things -- the other thing we didn't deal with is the

Bob Corker

3:21:13 to 3:21:34( Edit History Discussion )

Bob Corker: writing was so terrible -- that underwriting was so terrible. i offered an amendment to try to deal with that where americans would at least, when they applied for a loan, there had to be a verification of their income. people would look at their debt-to-equity ratios or had the ability to pay back everything they had before they were able

Bob Corker

3:21:35 to 3:21:57( Edit History Discussion )

Bob Corker: to take out a home mortgage and the fact that they would have a 5% down payment. i think all ofs know that in other countries -- canada just to the north of us didn't have this crisis because most people mortgages. but we didn't want to deal with that. so this bill -- i think there's no one -- no one in this body

Bob Corker

3:21:58 to 3:22:19( Edit History Discussion )

Bob Corker: that would say the genesis of this crisis was not the fact that a lot of loans were written to people who couldn't pay them back. so we difnlts deal with that in this bill. and so we didn't deal with that in this bill. and so that is one of the reasons i'm disappointed in the outcome. i do think that by the way, much

Bob Corker

3:22:20 to 3:22:40( Edit History Discussion )

Bob Corker: of that has been dealt with appropriately. i appreciate the chairman allowing me to work on that title with the senator from -- asay "allowing" i think we were working on it the anyway. but allowing me to work on this in a way that helped impve this resolution. but one of the things that didn't deal with there is really strengthen our bankruptcy code.

Bob Corker

3:22:41 to 3:23:03( Edit History Discussion )

Bob Corker: resolution, as we all discussed over this last year, was to be the last resource. orderly liquidation, i guess, is what we've called it. and one of the things that we had hoped to do is work with the judiciary committee to actually strengthen our bankruptcy laws

Bob Corker

3:23:04 to 3:23:29( Edit History Discussion )

Bob Corker: lawsso that bankruptcy could work. we not only didn't do that we didn't deal with some of the were important as it related to ensuring that as we paid creditors back through this mechanism, we did it in a way that was appropriate. i am also disappointed that we have not ended up with what i

Bob Corker

3:23:30 to 3:23:51( Edit History Discussion )

Bob Corker: orderly liquidation. we're giving the fdic five years to deal with a firm. if a large firm fails, we have the possibility of the fdic running a large financial holding company for five years. i just think that's inappropriate. and i don't think many americans would view a government taking over an entity and running it

Bob Corker

3:23:52 to 3:24:12( Edit History Discussion )

Bob Corker: for five years as actually resolving it out of business. i'm disappointed with that but i do think that the chairman, i think others have tried to deal resolution in a responsible marine. it just didn't get where it needed to go. on derivatives, i agree with the

Bob Corker

3:24:13 to 3:24:35( Edit History Discussion )

Bob Corker: thrust of trying to make sure that on the derivatives -- in the derivatives activity that takes place in this country, that major participants actually have to clear. i think the plumbing of ensuring that people are bad on that day, that that occurs is very appropriate. i'm very concerned on the other

Bob Corker

3:24:36 to 3:24:57( Edit History Discussion )

Bob Corker: hand that end users still feel -- and i think there's still a lot of concern about end users being caught up in this legislation. i've handed something to the chairman. i hope there's some clarifications that can occur before this bill actually becomes law. but at present -- i mean, here's what's happened. we have people on wall street obviously that are dealing with

Bob Corker

3:24:58 to 3:25:18( Edit History Discussion )

Bob Corker: these on a daily basis. they need to obviously clear. we have, on the other hand, people all across this country that are part of our heartland that manufacture things, that process things, that use derivatives, for instance, to make sure that metal prices down the road -- if they're trying make heavy equipment, that tho metal prices don't fluctuate in

Bob Corker

3:25:19 to 3:25:39( Edit History Discussion )

Bob Corker: such a way that that they end up losing money. or maybe they're selling their goods to anher company in another country and they wnts to make s they are being paid in are paid that are u.s. dollars. so they might buy swap. so the way in legislation is now crafted, there's great question

Bob Corker

3:25:40 to 3:26:03( Edit History Discussion )

Bob Corker: as to whether these people that are spread across this country that create great manufacturing, other kinds of jobs, are going to be without capital. they're going to have to unnecessarily tie capital with takes away from thr ability to create jobs. then for some reason out of the ag committee we came up -- the ag committee sent over something

Bob Corker

3:26:04 to 3:26:24( Edit History Discussion )

Bob Corker: called 106 or 716 in this particular bill which basically moves the swap desk out of a commercial bank into an affiliate, which means that a whole new realm of capitalization has to take place. again, money that's taken out of the markets right now at a time when we would hope these institutions would be creating loans. and so what happens, madam

Bob Corker

3:26:25 to 3:26:45( Edit History Discussion )

Bob Corker: president, when a company is trying to formulate capital, they go to an institution, a commercial bank, they may borrow or have a line o credit and make accounts receivables. while they're doing that, they also deal with these other tivities.

Bob Corker

3:26:46 to 3:27:07( Edit History Discussion )

Bob Corker: they deal with currency swaps, they deal with making sure that metal prices are hedged or other commodity prices, and so what this would do is alleviate the ability for an institution to use capital that they already have to do that -- i'm talking about the actual financial institution -- will you also makes it far less convenient and far more difficult, i might add,

Bob Corker

3:27:08 to 3:27:28( Edit History Discussion )

Bob Corker: for those people across our country that create these great jobs from being able to do soavment there's absolutely no reason for it. and i think that people on both sides of the aisle understand it is a problem. i think that my sense is that the chairman possibly believes this to be a problem. and yet we still have not d

Bob Corker

3:27:29 to 3:27:49( Edit History Discussion )

Bob Corker: -- and yet we still he not dealt with that issue. and if it bill passes in three or four hours, we end up doing something that accomplishes nothing as it relates to the financial stability in our country, and yet creates a situation which there's less capital available for lending and it's far more difficult for those institutions that are trying to formulate capitalo do so.

Bob Corker

3:27:50 to 3:28:10( Edit History Discussion )

Bob Corker: madam president, the thing that is really difficult for me to understand is why we didn't take the time to deal with fannie and freddie. i know that there are a lot of people in this body that have concerns. i think people on both sides of the aisle have concerns about these two g.s.e.'s that we all know we have incredible liabilities against.

Bob Corker

3:28:11 to 3:28:31( Edit History Discussion )

Bob Corker: we had an amendment that actually i thought was really thoughtful and that was the mccain amendment. it didn't proscribe what we did with fannie and freddie, ?tt it made sure that we as a body dealt with them over the next couple years. i think we know they've been enablers. these two institutions, because of their mixed messages with two

Bob Corker

3:28:32 to 3:28:53( Edit History Discussion )

Bob Corker: divergent missions, they have created lots of problems for this country. they have enabled some really bad things to happen in this country as it relates to home mortgages. i also know they are a of the market and we have too-to-deal with them over time. and so the mccain amendment gave us the ability?t to dohat. this body chose not just not to

Bob Corker

3:28:54 to 3:29:14( Edit History Discussion )

Bob Corker: deal with underwriting -- court issue -- not to deal with creang a bankruptcy code that would work in most cases -- and i'm one of those that believes even with that, we ought to have some ability to resolve in the event there is a systemic risk -- but we also didn't deal wh fannie and freddie. the credit rating amendment that we added on, i think, is a good

Bob Corker

3:29:15 to 3:29:35( Edit History Discussion )

Bob Corker: step in the right direction. i voted for it. but again we didn't take the time, we didn't take the time within our committee to really even understand what we ought to do in credit rating agencies. so we had an amendment, it was drafted up a day before a vote. we voatsd on it. it's pretty draconian. but what it does mean, i will

Bob Corker

3:29:36 to 3:29:56( Edit History Discussion )

Bob Corker: say -- and i thank my friend from florida for offering it -- it does mean that we actually will deal with credit rating agencies down the road. right as this bill was in committee, something was sort of airdropped out of the sky, and that was the volcker language. certainly chairman volcker, used

Bob Corker

3:29:57 to 3:30:17( Edit History Discussion )

Bob Corker: to be head of the federal reserve, somebody i respect, came up with some language out of the blue that is a part of this bill. we had one hearing on it, and the person who was the author of the volcker language couldn't even describe to us he meant when he said that. you know, you know it when you

Bob Corker

3:30:18 to 3:30:38( Edit History Discussion )

Bob Corker: see it. so here we are having this bill, the volcker language, and we may need to do something on volcker. i would hope that we would have a neutral study first before we decide. in essence, we now are doing something. we're sort of sending it off in a direction. i realize there is still a degree of study language.

Bob Corker

3:30:39 to 3:31:00( Edit History Discussion )

Bob Corker: but we send it off in a direction when in fact prompt trading and private equity and hedge funds have absolutely nothing to do with this last cris. nothing. zero. not a single institution in this country were negatively affected by those activities -- not one -- as it relates to creating

Bob Corker

3:31:01 to 3:31:21( Edit History Discussion )

Bob Corker: a systemic crisis. yet, again, it's a part of this bill. i think that these types of things go under the adage we've heard from the white house for the last year and a half, and that is never let a good crisis go to another one -- proxy access. i know the senator from new york has been a proponent of proxy

Bob Corker

3:31:22 to 3:31:43( Edit History Discussion )

Bob Corker: access. for those of you who are not paying much attention to this, what this means is if you own a very small portion of a publicly traded company, you have access to their proxy documents. and, therefore, you have the ability to yourself call some people to be voted on for up to 25% of the board. to me, all this does is put

Bob Corker

3:31:44 to 3:32:04( Edit History Discussion )

Bob Corker: board members of these companies in the same place that we in the senate and those in the house are in, and that is very subject to political whims. you can imagine a special interest group whr-rbgs it be labor -- whether it be labor or an environmentalist group basically targeting a company in order to make a statement and

Bob Corker

3:32:05 to 3:32:25( Edit History Discussion )

Bob Corker: basically taking those board members away from dealing with the long-term interests of the company. i have no idea -- proxy access has absolutely nothing, zero to do with financial regulation. but this has become a christmas tree for those kind of things because people realize it's something that's going to pass.

Bob Corker

3:32:26 to 3:32:46( Edit History Discussion )

Bob Corker: but i think the mother -- the mother -- the example, the best example that i can possibly imagine of using a piece of legislation or using a crisis to create something through legislation that is, in my opion, way overreaching, and that is this consumer protection agency. i really am still, i'm still

Bob Corker

3:32:47 to 3:33:08( Edit History Discussion )

Bob Corker: sort of shocked at where we've gone with this. i agree with people in this body that mortgage brokers in many cases took advantage of people who were borrowing money. i agree with that. and i think that we ought to have regulation to deal with that. but instead of dealing surgically -- dealing surgically -- with that

Bob Corker

3:33:09 to 3:33:29( Edit History Discussion )

Bob Corker: particular issue, which is something that wasn't part -- that was a part, a small part but a part this have crisis; instead of that, what we've done is create another czar, a czar that has no board. this czar is appointed for five years. it has absolutely no board, no governance. it has the ability to create

Bob Corker

3:33:30 to 3:33:51( Edit History Discussion )

Bob Corker: rules with no real veto authority. then it has the ability to enforce those rules. it has a very generous budget. and it has the ability, i think one of the worst issues is it has the ability to deal with underwriting loans. we have a consumer organization, not a banking regulator but a

Bob Corker

3:33:52 to 3:34:12( Edit History Discussion )

Bob Corker: consumer organization that's going to be dealing with underwriting of loans. i know, madam president, this may sound a little far-fetched, but you can have the wrong person in this position -- again, there's no board. there's really no check and balance. that you can imagine can use this organization to create

Bob Corker

3:34:13 to 3:34:34( Edit History Discussion )

Bob Corker: social justice, if you will, in the financial system. on top of that, we've turned back from where we were in where now we are allowing 50 state a.g.'s across this country to take the rules that are created by this consumer czar without a vo.

Bob Corker

3:34:35 to 3:34:55( Edit History Discussion )

Bob Corker: these rules now, we placed on banks and other financial institutions across the country. and now 50 a.g.'s for the first time in a long time will have the ability to sue those firms over the rules that this organization creates without any check and balance from kwopbg and certainly no -- from congress and certainly no check

Bob Corker

3:34:56 to 3:35:18( Edit History Discussion )

Bob Corker: and balance, no real check and balance, in my opinion, from the prudential regulators that oversee the safety and soundness of these institutions. so, madam president, i'm obviously disappointed. i've spent, i think, as much time as any senator on this floor. maybe slightly less than the chairman.

Bob Corker

3:35:19 to 3:35:39( Edit History Discussion )

Bob Corker: but on policy regarding our financial system and trying to make sure that we create stability for the future. i think any bill, this bill, had good things in it; there's no question. i appreciate the thrust. but i think there's a lot of overreaching and i think not enough time spent on some of the core issues that i think are important. i think, to add insult to

Bob Corker

3:35:40 to 3:36:02( Edit History Discussion )

Bob Corker: injury, madam president, this bill's not paid for. this bill's going to add $17 billion to $23 billion in debt to our country. we haven't even addressed that in this bill. so, madam president, i know there's been some discussions of bipartisanship, and i do think that certainly the chairman put

Bob Corker

3:36:03 to 3:36:23( Edit History Discussion )

Bob Corker: out some effort towards bipartisanship. i will say that, you know, it really has begun to feel that in many ways are not necessarily as it relates to this bill, but bipartisanship means everybody on the other side of the aisle with maybe one or two exceptions being sportive of -- supportive

Bob Corker

3:36:24 to 3:36:45( Edit History Discussion )

Bob Corker: of something and a few people, less than a handful on our side being supportive and that being bipartisanship. i think that's not the kind of bipartisanship that i thought at we were all pushing for when this bil began. i think the process on this floor has been good on the floor. i do wish that we had spentore

Bob Corker

3:36:46 to 3:37:09( Edit History Discussion )

Bob Corker: time developing a bipartisan template. i think there are plenty of missed opportunities there. i'm proud of the role i was able to play in this bill and feel like i've had some input in its shaping, but i really wish the policy was far different than it is. it's my hope that in the next six months or so there will be a little different balance in this

Bob Corker

3:37:10 to 3:37:31( Edit History Discussion )

Bob Corker: body where we take each other a little more seriously than we do and we actually end up with centrist policies that are middle-of-the-road policies. but i'll close, madam president. i know the president has to be very happy. it seems to me this bill, as it's turned out, has turned out to be exactly, exactly the bill

Bob Corker

3:37:32 to 3:37:53( Edit History Discussion )

Bob Corker: that he talked about some time ago. i know it has to be a major victory for him. in my opinion, it's an overreach. i feel like we could have done better. i'm regretful of the fact that we did not do better in the process. but i do think, i do think some steps were made

Bob Corker

3:37:54 to 3:38:15( Edit History Discussion )

Bob Corker: month, in particular, that i hope will cause this body to function better. and with that, i yield the floor. obviously i don't support this legislation and wish it could have been better. and i think we've had opportunities. we could have made it better. we didn't. i think over the course, madam president, of the next

Bob Corker

3:38:16 to 3:38:37( Edit History Discussion )

Bob Corker: decade we're going to be unwinding much that we've done here. it's my hope that in conference -- and i think there's actually a possibility of this." it's possible to say during conference many of the issues that are problematic will be unwound. threupbg's a desire to do -- i think there's a desire to do that.

Bob Corker

3:38:38 to 3:39:00( Edit History Discussion )

Bob Corker: i hope that's the case. i came here to this body because i wanted to see good policies put in place for this country. i want to see us become a stronger country than we already were, the greatest nation on earth. i hope as this piece of legislation moves through to conference and comes back to this body that it is strengthened and i did support

Bob Corker

3:39:01 to 3:39:05( Edit History Discussion )

Bob Corker: amendments on this floor that made me feel better. i think improvements were made. i think we also stepped

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