December 04, 2017

Brown Floor Speech Opposing Dodd Frank Roll Back Bill


WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – delivered the following speech on the Senate floor tonight in opposition to S.2155, The Economic Growth, Regulatory Relief and Consumer Protection Act. The Banking Committee is scheduled to consider the bill tomorrow.

Brown’s remarks, as prepared for delivery, follow.

Mr./Madame President,

Last week, the Senate gave tax handouts to millionaires and multinational corporations that ship American jobs overseas – and the middle class got almost nothing.

This week, it’s the banks’ turn. And just like last week, working people get ignored again.  

The bill the Senate Banking Committee will take up tomorrow, S.2155, puts taxpayers at risk of another bank bailout and puts homeowners at risk of the same traps that led to the foreclosure crisis – all while doing virtually nothing for hardworking Americans.

And while Congress has been preoccupied doing the bidding of special interest lobbyists, American families started getting notices in the mail that their children’s CHIP health insurance will be yanked away. Virginia was first. Other states will be next.

And the Senate is doing nothing to stop it. Instead this body is devoting its energy to helping banks of all sizes that are making record profits. 

In the third quarter of this year, the five largest U.S. banks raked in a combined $21 billion in profits. In fact, profits are even higher than they were before the crisis.

Meanwhile, working Americans haven’t gotten a raise in 16 years.

44 million Americans are saddled with student loan debt.

Many communities are littered with abandoned homes and hollowed out factories.

Yet, this bill has no help for Americans burdened with student loan debt.

No help for homeowners still underwater.

No help for workers who haven’t had a raise in years.  

Congress appears to have collective amnesia about the financial crisis, and the housing crisis, and the devastation it brought to families across the country.

Families in Ohio don’t have the luxury of forgetting, because so many of them are still digging out.

We passed Dodd-Frank Wall Street reform legislation to protect those families and make sure a crisis like we saw in 2008 doesn’t happen again.

Stress tests were put in place to ensure that banks can weather the next downturn without putting the economy at risk. Stress tests are one of the most effective tools we have to prevent taxpayers from being asked to bail out banks once again.  

This bill weakens stress tests for all large banks – banks that together took $239 billion in taxpayer bailouts last time around. Banks like JP Morgan Chase and other Wall Street megabanks that are designated as “global systemically important banks”– meaning their collapse could cause harm that ripples across the world.

Without rigorous, annual stress tests, taxpayers could once again be on the hook if those ‘too big to fail’ banks collapse and we don’t have the right tools in place to see it coming.

So I ask my fellow Senators, are you really willing to go home to your states and tell the taxpayers you work for that you’re going to gamble another $240 billion of their money on this bill?

For some other large banks, those stress tests could be even easier under this bill. Make no mistake, these are not small banks. Together, they hold $4 trillion in combined assets – that’s more than a quarter of all assets across the entire banking industry.

Would you trust your family’s health to a doctor who only passed a dumbed-down version of her board exams?

Why would we trust the health of our economy to banks that only passed weakened stress tests?

And the bill doesn’t stop at stress tests. It allows those same large banks to once again borrow more money than they can afford, by weakening capital requirements.

It exempts dozens of the largest banks from making plans called “living wills.” These are plans that make sure that if a bank fails, taxpayers won’t be paying the bill once again.   

And it weakens oversight of foreign megabanks operating in the U.S. – the same banks that have repeatedly violated U.S. laws. Let’s run through a few of their rap sheets:

  • Santander: illegally repossessed cars from members of the military that were serving our country overseas.
  • Deutsche Bank: manipulated the benchmark interest rates used to set borrowers' mortgages.
  • Barclays: manipulated electric energy prices in Western U.S. markets.
  • Credit Suisse: illegally did business with Iran.
  • UBS: sold toxic mortgage backed securities.

These are banks we want to help?

This bill also puts American homeowners at risk of the same sorts of mortgage abuses that brought us the foreclosure crisis.

It’s pretty hard for most of us here to imagine what it might be like to be kicked out of our homes. But I ask my colleagues to try for a minute to put yourselves in the shoes of one of these families.

First, you give up the family pet to try to save money.

When that’s not enough, you sit the kids down, and have to tell them they’re moving. They’ll have to change schools. Mom won’t be around as much, because she’s getting a second job.

These are the impossible decisions and painful conversations millions of families were forced to have in 2007, 2008 and 2009.

Trillions of dollars of housing wealth was destroyed. African American and Hispanic families lost more than half of their accumulated wealth – wealth that they still have not recovered. 

We can’t go back there. The stakes are too high.

That’s why some of the provisions in this bill are so troubling.

This bill permits mortgages for homes up to $400,000 in some areas to be offered without an appraisal, to verify that the home is worth what you’re paying. Without an appraisal, you could end up in an underwater mortgage on day one.

It no longer requires banks to set up accounts that help you budget for your property taxes and homeowners’ insurance.  Instead of manageable payments built into your monthly mortgage, you could end up with an unexpected tax bill at the end of the year. 

It allows some banks to sell you an Adjustable Rate Mortgage, without assuming any responsibility for whether you can afford your payments once the initial rate expires.

Say you’re a customer in Youngstown, Ohio. You could take out a mortgage at 4 percent interest – let’s say you payment is about $400 a month. After three years, your rate jumps to 9 percent. So your monthly payment is all of the sudden almost $700.

Your bank knows you can’t afford that. The bank knew it when it sold you the mortgage.

Or it should have known. That’s the bank’s job. That’s the law today. Not under this bill.

Under this bill, when your mortgage suddenly spikes -when you have to start having those tough conversations around the dinner table - the bank that sold you the mortgage is protected—it gets off scot free.

Today you could go to a judge and fight to stay in your home. Maybe not under this bill.

Because this bill blocks some homeowners from going to court to stop banks that foreclosed on them.

Sound familiar?

Not that long ago, Vice President Pence came here to the Senate floor late at night to stop customers - like those who were cheated by Wells Fargo - from having their day in court. 

Now this bill blocks some homeowners from having theirs.

So that’s the context under which we will consider this bill.

American families and taxpayers, who stand to lose the most, get almost nothing – no help with student loan debt, no help with underwater mortgages. But they are being told, “don’t worry, trust us. The Trump Administration regulators will make sure everything is just fine.”

Trust people like Vice President Pence, who cast that tie-breaking vote to block consumers from having their day in court.

Trust Treasury Secretary Mnuchin, whose former bank made a fortune kicking families, military servicemembers, and seniors out of their homes, and has now has merged into a new bank that gets relief under this bill.

Trust Secretary Mnuchin’s colleague at that same “foreclosure machine,” Joseph Otting, who is now leading the Office of the Comptroller of the Currency - the financial watchdog in charge of overseeing the largest national banks.

Trust Mick Mulvaney, installed as the new part-time head of the Consumer Financial Protection Bureau despite the law - whose first action on the job was to stop payments to people who had been cheated by banks.

Trust Randy Quarles, the new head of bank supervision at the Federal Reserve Board, who was a Treasury official in the years leading up to the crisis, and who said on the eve of the financial crisis, “Fundamentally, the economy is strong, the financial sector is healthy, and our future looks bright.”

This track record is what taxpayers and homeowners are supposed to trust?

This is the track record that gives Senators the confidence to take a gamble with taxpayer dollars? Because these guys are going to protect us from another crisis or prevent a bailout?

I don’t know about my colleagues, but I will tell you that when I’m home in Ohio, I meet a lot of people who feel invisible. Entire communities feel invisible.

They feel used and abused and some other words I can’t say on the Senate floor – by banks, by mega-corporations, by Wall Street, and, yes, by Washington. Too often they are right.

We have a chance to show those people we see them. We hear them. We work for them. And we will do our jobs and fight for them.

We do that by blocking this bill.

Regional and community banks provide critical services to customers, homeowners and small businesses. I respect my colleagues’ desire to support them. I too support efforts to help community and regional banks fill important needs. I do not support efforts to roll back accountability measures on the largest banks with nothing to help hardworking Americans who have the most to lose.

It’s this simple: if we want to help the middle class, let’s help the middle class. Whether it is the tax code or our banking laws – we don’t grow our economy by giving handouts to corporations and banks and hoping some of it will trickle down to working people.

We grow our economy by putting money directly in the pockets of middle class families. So let’s cut out the corporate middle man. Let’s throw out the Wall Street lobbyists.

Let’s provide relief for student loan debt and mortgages. Let’s help workers who haven’t see a raise in over a decade.

And let’s show the people that we work for them.