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Emergency Mortgage Relief Program Termination Act

Floor Speech

Location: Washington, DC


Mr. FRANK of Massachusetts. I yield myself such time as I may consume.

I hope Members will be careful walking on the floor right now, especially on the Republican side of the aisle, because I wouldn't want anyone to fall into the enormous gap that has just been created between the gentleman's comments and his voting record.

Mr. Chairman, we heard a great argument about the need to cut the budget deficit and stop spending. During the recent debate on the budget, an amendment was offered to limit entitlement spending to farmers to $250,000 per entity. The amendment said no agricultural entity, no individual, could get more than $250,000 per year. It was defeated by the Republican Party. The majority of Democrats voted for it. It will cost $1 billion over 10 years--at least.

We had the Brazilian cotton farmers, but my friends on the other side hate for me to mention that because unpleasant reality is always bothersome. You know, over a 4-year period, we're going to spend more money subsidizing American and Brazilian cotton farmers than we are on this program.

The gentleman from Alabama said yesterday that it was Obama who made him do it. Rather implausibly, he argued that he was compelled to follow this recommendation of the Obama administration to send $150 million a year to Brazilian cotton farmers for 4 years because the President told him to do it. Well, that's a very selective invocation of the President, I must say--no more persuasive than Flip Wilson having invoked the devil as having made him do it, and of course there are sometimes analogies in the way in which they refer to the President.

One hundred fifty million dollars. Now, the argument, by the way, was that we have to send $150 million to Brazilian cotton farmers. The gentleman voted for it because otherwise we would be in trouble with the World Trade Organization. But we could have saved that $150 million to the Brazilians by not sending $150 million to the American cotton farmers. By the way, that would include American cotton farmers who could get more than $250,000 a year.

So we're not debating whether or not we should reduce the deficit. It is how. Do you exempt agriculture, as many of my friends do, because they represent agricultural districts? As for conservatism and the free market, it has got no application to the growth of cotton or grain or of many of these other programs that receive so much money.

Beyond that, we have the military. Now, we're talking here about trying to stop a serious economic problem in American cities. Well, we can't afford that, but $400 million was voted to be spent on infrastructure in Afghanistan. I do not think that that $400 million will be very well spent. I understand there are some national security needs, but I think that that war has gone on too long. And the notion of sending $400 million to build up the cities in Afghanistan and to deny helping America makes no sense.

We are also being told that we can send $1.2 billion for Iraqi security forces over and above what we spend on the American military. We are sending $1.2 billion. I voted against that. Members on the other side voted for it. The whole war in Iraq has been an enormous waste, in my judgment, of American money at the cost of American lives. Brave, young Americans went to war when they were asked to by their country, but it was a mistake for them to be sent there. The war in Iraq has so dwarfed any domestic expenditures in this area that I do not understand how Members can, on the one hand, talk seriously about cutting the deficit and then have voted for more and more and hundreds and hundreds and hundreds of billions of dollars for that war in Iraq.

Now we have another point that should be made. It is true this $1 billion that we are asking for--and by the way, according to the CBO, it will cost $840 million, not 98 percent in total expenditure, but 84 percent. It's still a high number, but $140 million is still $140 million. So this will cost $840 million, according to the CBO, if it is fully run. It is going to come out of the Treasury right now, but let's be clear: The reason it will come out of the Treasury as we try to deal with this--by the way, here is what the program is:

It says to Americans who took out mortgages and became unemployed that we will help them pay their mortgages because you can't afford mortgage payments out of unemployment compensation.

That's the lavishness of this program. We're taking people who are in trouble and facing losing their homes and having more foreclosures, which have negative effects not just on the individual foreclosed, but on the neighborhood, on the city, on the whole economy. So this has a macroeconomic impact, but we are going to come to their assistance.

In the financial reform bill passed last summer, we, in the conference committee, voted to take this money from an assessment on the largest financial institutions. We voted that financial institutions with $50 billion or more in assets and hedge funds with $10 billion or more in assets would have to pay for this. And our logic was that it was the activity of these institutions that caused the crisis that led to the unemployment and led to the foreclosures. Many of them profited from it.

And we then had the TARP--and this is money that we voted in the TARP in another set of programs--and we said, you benefited from intervention. We didn't do it because we loved you. We did it because we had to save the economy from going upside down. I know Members like to rail about bailouts, but let's be very clear: every activity in the United States--known as a bailout recently--was at the initiative of the George Bush administration or Mr. Paulsen and Mr. Bernanke. And they were bipartisanly supported, and I agree that we had to do them. We had to do them because of failures in past regulatory policy.

But the fact is that in the bill we passed last summer, this money wouldn't have come from the Treasury. It wouldn't have added to the deficit. It would have been recouped from an assessment on large financial institutions. The Republican Party blocked it--not here, they didn't have the votes here, as we don't often have the votes today, but in the Senate.

So I will make this announcement: I plan to reintroduce next week the provision of the financial reform bill that would have taken the money for this program and other programs to alleviate the impact of foreclosure--the Neighborhood Stabilization Program that helps get foreclosed property back into productive use, aid to the homeowners who are unemployed--and pay for it, as we tried to do last July but Republican opposition stopped us, not from the taxpayer, but from the large institutions. And I don't mean to demonize, but I think Goldman Sachs and Wells Fargo and the Bank of America and Citicorp and Morgan Stanley and the large hedge funds, I think they can pay for this. That's what we would have done. So I agree, this should not come from the taxpayer.

By the way, with regard to the bill we debated yesterday--and I regret not pointing this out, but, you know, you can only correct so much error in a limited amount of time. I talk fast, but error outpaces me when we get into these debates.

We were talking yesterday about money that was going to be spent in another program, the FHA refi. And people talked about $8 billion. Yes, $8 billion--it won't cost $8 billion--but $8 billion that was set aside, if necessary, from the TARP. And people said that TARP money was promised to go back to the taxpayers. It was, and here's how--Members may have forgotten this, having voted for it; but in the TARP legislation we added a provision that said in 2013, when the TARP is concluded, the President at that time is mandated to send to the Congress a bill that would recoup the funds that had not been returned to the Treasury from those large financial institutions. And we reiterated that in the financial reform bill over the Republicans' objections.

So the point is this: the TARP money that will be spent--if it is on the refinancing--and the TARP money that will be spent on the HAMP program will not come out of the Treasury. It will be reimbursed to the Treasury--if my colleagues on the other side go along with what we voted for--from the large financial institutions. So let's be very clear, whether we are talking about the programs in the financial reform bill or the programs in the TARP, they are a package of programs to deal with the consequences of foreclosure.

I must say, I saw a draft of my Republican colleagues' budget views, and they said--astonishingly--that spending TARP money to deal with foreclosures was inappropriate because those were unrelated to the financial crisis. Foreclosures unrelated to the financial crisis? That is an illogic that I am surprised at. Ideology drives you to certain ridiculous conclusions, but that one goes further into that than I would have thought.

So let's again be very clear. Our proposals are that the large financial institutions--assets of $50 billion or more, hedge funds of $10 billion or more, most of which would direct beneficiaries of our activity in dealing with the financial crisis that many of them helped cause--that's how we will fund these programs.

So with regard to the HAMP, with regard to the FHA refinance, no, that will not come out of the Treasury. That will be reimbursed ultimately, yes. The TARP money goes back and the law calls for that to be assessed. And so, yes, I understand my Republican colleagues, they don't want Goldman Sachs or Citicorp or any of the large financial institutions or any of the large hedge funds to have to pay the cost. But that's what the debate is, not the Treasury and the average taxpayer versus alleviation of foreclosure, the large financial institutions.

And, yes, they did succeed, temporarily, I hope, in changing that. They knocked out of our bill a requirement that the large financial institutions would help us mitigate foreclosures and help us have cities buy up property that is rotting and causing trouble; and, unfortunately, temporarily, that's not the case.

But I will file the bill next week. And given their concern for the taxpayer and the deficit, they will have a choice: do you add the cost of these programs to the deficit, because they're not going to become law, these repealers. The President is going to veto them. The Senate won't pass them even for him to do that. Are you then going to say that it will come out of the deficit, or will you join us in taking it from Goldman Sachs and Morgan Stanley and the Bank of America and those unreasonable institutions that do a lot of good work, but they can afford this $1 billion. Their bonuses alone would pay for these programs.

So let's be clear what the choice is. First of all, we have people who are prepared to send money to Brazilian cotton farmers so they can send money to American cotton farmers. They will not limit entitlements to agricultural individuals to $250,000 a year. They'll send billions to Afghanistan and Iraq that will be wasted, not for our defense, but to build up their infrastructure and their security. And then, when it does come to the relatively small amount that we will be spending on some of these programs, like $840 million here--and that's small compared to what they spend elsewhere, for instance, in their wars--they would rather have it come out of the taxpayer. They would rather not spend it at all; but if they have a second choice, it comes out of the taxpayer and not out of the large financial institutions.

So let's frame the debate appropriately. The large financial institutions, because of inappropriate regulation and improper regulation during the Bush years--fairly, the Clinton years as well, but mostly the Bush years--provoked a financial crisis. We began to deal with it in 2008 in the last months of the Bush administration in a bipartisan way. We did it. We provided some funding in the first instance to those very financial institutions, not out of love for them, but because we thought that was needed to stabilize.

The requirement is that any money spent under the TARP will ultimately be recouped by an assessment on the large financial institutions. Apparently, the Republicans want to forget that one. They want to act as if it's the Treasury, apparently because they can't bear the thought of telling the large financial institutions, who were a large part of the cause of the financial crisis and benefited from our efforts to correct it, that they should have to pay.

And we do know that when we said this program and programs to give money to municipalities--which they very much want--to buy up property that would otherwise fester because there would be nobody to make them take care of it, that they prefer that to be paid for by the taxpayer than by the large financial institutions. We'll give them a chance to correct that mistake.

So I hope this bill is defeated. And next week we will have legislation that I hope our committee will be having hearings on and act on which will reinstate the provision that says all of the four programs we're dealing with this week and next week will be dealt with in one of two ways: it will be financed by the TARP, and that money will be recovered when the program is over by an assessment on the large financial institutions; and the smaller amounts that will go to this program, that money will also be recouped from the large financial institutions. And those institutions which received hundreds of billions--they have repaid it and it has been useful--but they were great beneficiaries of it. They caused some of the problem in general. They will be the ones that will bear the cost.

So that's the choice. We have a choice of doing nothing to alleviate the impact of foreclosures on the overall economy, on municipalities, and on families, or of doing something and recouping that money from the large financial institutions.

I hope that we will, in the end, decide that we were right to say that the large financial institutions can appropriately be asked to bear part of that burden.

I reserve the balance of my time.


Mr. FRANK of Massachusetts. I yield myself 15 seconds to note that I am not surprised at that, because there are people on the other side who think it's unfair to pay the unemployed anything, like unemployment compensation. So, no, I don't think it's unfair to say to people who are unemployed in this economy that they will get some economic help. And that's what this is about.

I yield 3 3/4 minutes to the gentlewoman from New York (Mrs. Maloney).


Mr. FRANK of Massachusetts. There were two ways we could have dealt with it, yes. The gentleman and the Obama administration on one side. I disagree with the President. We could have avoided that by reducing American cotton subsidies to the same amount as we did with Brazil. So we could have either saved 300 million or not.


Mr. FRANK of Massachusetts. I yield myself the balance of my time.

First of all, the last statement is, of course, totally contradictory from the gentleman from Texas. But when you just want to bash things, you will say anything.

You cannot simultaneously say this program is too generous because of its forgiveness and is a predatory loan. The fact is it has very generous forgiveness provisions, which is why it is scored at 84 percent, not 98 percent. So that argument the gentleman just made is, of course, entirely self-contradictory because it can't be both.

Secondly, as to agriculture, I did vote for an amendment that would change it, but the gentleman, the spectacle of my Republican colleagues hiding behind Obama is bizarre. You could have done what we have offered, which was to cut the $150 million from going to Brazil and then cut it out of America. But it's not the only item I mentioned.

I mentioned the $1.2 billion the gentleman wanted to send to Iraqi security forces, the 400 million to build infrastructure in Kandahar and Kabul, the $250,000 limit the Republicans rejected on individual entities. So, no, there are billions in agriculture and the military. I didn't just mention one item.

The gentlemen do understand that they are vulnerable, so they blame Obama. They and Obama are both wrong about sending money to Brazil. But the most important point is this, and I hope in his final time the gentleman from Alabama will address it.

In the first place, on two of these programs--the HAMP Program, which we will deal with next week on the floor, and the FHA refi--the money doesn't come from the Treasury. They keep saying it, but they are wrong, and ignoring a fact doesn't make it go away. Those are funds that come from TARP.

In the financial reform bill, we reinforced an earlier provision. It says, the FDIC ``is authorized to conduct risk-based assessments on financial companies'' to pay for this, the money that's left in the TARP. We have a mandate to the FDIC so that when the TARP is finished, large financial companies will have to pay this, not the Treasury.

So I know that troubles people on the other side. They are solicitous of these large financial companies. But when they talk about it adding to the deficit, they are wrong. It is statutorily required that this will come, over their objection, from the large financial institutions.

As to the other two programs, including the one today, we had similar language in our bill to do that. It was rejected by the Republicans because we needed to get 60 votes in the Senate. So, yes, for now, that 840 million will come out of the taxpayer. If we had our way and the Republicans had not been successful in frustrating us, it would have also come from Goldman Sachs and from Morgan Stanley and the other large institutions, and I will give them another chance.

So the fact is that the bulk of this money does not come from the Treasury. It is mandated that it will be repaid back to the TARP, and I hope the gentleman from Alabama will address that in his final remarks.

Is he for repealing that? Does he believe we should not as we have said we would twice legislatively, including on one bill he voted for, assess the large financial institutions and hedge funds? Does he want to take it off? But of course if he doesn't, it doesn't come from the Treasury. It doesn't add to the deficit. It may reduce the bonuses at some of the large financial firms, it may reduce the dividends at some of the large financial firms, but that's not adding to the deficit in a way that we care about.

And as to the other money, the money for the Neighborhood Stabilization Program and for this program, if they will come back with us and join, that also will come from the large financial institutions.

So let's drop the phony arguments about the deficit. If you want to protect the large financial institutions, be honest about saying so.



(a) SPECIAL ASSESSMENT.--The Council shall impose, and the Corporation shall collect on behalf of the Council, one or more special assessments on the financial companies identified in subsections (e) and (f) to collect, in the aggregate, the lesser of--

(1) $19,000,000,000; and

(2) the product of 1 1/3 and the amount necessary to fully offset the net deficit effects of the provisions of this Act (excluding the effects of sections 1601 and 1602) for the period starting on the date of enactment of this Act and through September 30, 2020, which amount shall be determined by the Director of the Office of Management and Budget--

(A) by reference to the latest statement submitted for printing in the Congressional Record by the Chairmen of the House and Senate Budget Committees titled ``Budgetary Effects of PAYGO Legislation'' for this Act, excluding the net deficit effects of the special assessments imposed under sections 1601 and 1602, provided that such statement has been submitted prior to the vote on passage in the House acting first on the conference report for that Act; or

(b) TIMING OF PAYMENTS.--The special assessments described under subsection (a) shall be collected on an annual basis, with the first payment due no later than September 30, 2012, and subsequent payments due no later than September 30, 2013, no later than September 30, 2014, and no later than September 30, 2015, respectively.

(c) ASSESSMENTS PLACED IN THE FINANCIAL CRISIS SPECIAL ASSESSMENT FUND.--Special assessments collected pursuant to this section shall be deposited by the Corporation as follows:

(1) The first $15,000,000 in special assessments collected pursuant to this section shall be deposited in an account to be maintained by the Corporation for the payment of reasonable implementation and administrative expenses of the Corporation associated with the collection of assessments for the Financial Crisis Special Assessment Fund established under section 1602; and

(2) the remainder of the special assessments shall be deposited into the Financial Crisis Special Assessment Fund established under section 1602.

(e) COMPANIES SUBJECT TO ASSESSMENT.--The Council shall impose risk-based assessments on and the Corporation shall collect such assessments from financial companies in such amount and manner and subject to such terms and conditions that the Council determines are necessary in order to satisfy the requirements of subsections (a), (f), (g) and (h).


(1) IN GENERAL.--The Council shall not assess financial companies with less than $50,000,000,000, adjusted for inflation, in assets on a consolidated basis and shall assess financial companies with $50,000,000,000, adjusted for inflation, or more in assets in accordance with subsections (g) and (h).

(2) HEDGE FUNDS.--The Council shall not assess financial companies that manage hedge funds (as defined by the Council, in consultation with the Securities and Exchange Commission, for purposes of this section) with less than $10,000,000,000, adjusted for inflation, of assets under management on a consolidated basis, and shall assess any financial companies that manage hedge funds with $10,000,000,000 or more of assets under management in accordance with subsections (g) and (h).

(h) REQUIREMENT FOR EQUITABLE TREATMENT IN ASSESSMENTS.--In establishing the special assessment system under this section, the Council shall consider differences among financial companies based on complexity of operations or organization, interconnectedness, size, direct or indirect activities, and any other risk-related factors the Council may deem appropriate to ensure that the assessments charged take into account the risk posed to the financial system by particular classes of financial companies.

(6) PENALTY FOR FAILURE TO TIMELY PAY ASSESSMENTS.--Any financial company that fails or refuses to pay any assessment under this section shall be subject to a penalty under section 18(h) of the Federal Deposit Insurance Act, as if that financial company were an insured depository institution.


Mr. FRANK of Massachusetts. Would the gentleman tell us from what party the Governors of Pennsylvania have come during this period?


Mr. FRANK of Massachusetts. First, let me address the wholly contradictory argument of the gentleman from Texas (Mr. Neugebauer).

We have heard on the other side, through the eagerness to just say negative things, two entirely contradictory things: one, that this is too lavish a subsidy to the homeowner and, two, that it will further indebt the homeowner.

Members do understand that they cannot possibly both be true. In fact, there is a significant element of subsidy here, and those who take this money and who pay off their mortgages will get a subsidy so they will not be further in debt.

The argument just made by the gentleman from Texas (Mr. Neugebauer) is wholly without basis. The argument that it is a more generous subsidy is a more accurate one. By the way, even if they were to pay it back, avoiding late fees and interest helps them out.


Mr. FRANK of Massachusetts. Reclaiming my time, no, that's not what the gentleman is saying. The gentleman is completely contradicting himself.

He says it's a grant program. First, he was contradicting the other gentleman from Texas. Now he's contradicting himself. He said it's a grant program. Well, if it's a grant program, why did the gentleman say it was getting people further in debt?

The gentleman has been caught in a totally contradictory argument. He did not say it was a grant program. He said it was getting people further in debt.


Mr. FRANK of Massachusetts. I'm sorry, I reclaim my time. I will yield if you want to clarify what you said. You had your 5 minutes. I'm not going to yield for general philosophy. I'm sorry, but it's my time. I was yielding if the gentleman thought I was misinterpreting him. For him to simply repeat what he already said takes time that I don't want to give him.

He did contradict himself completely. First, it was a program that was going to put people further in debt. Now it's a grant program. He can decide which it is.

I now want to go back and make my central point, which is that the only reason this has any impact on the taxpayer is that the Republicans insisted on protecting the large institutions. The gentleman from Alabama said all this money is going to the large institutions. Well, that's not true, because it does go to pay off loans to keep people from being foreclosed. Some will go to smaller institutions. Some will go to credit unions. Some will go to community banks.

But here is the point: under our proposal, which the Republicans temporarily blocked--and I hope they'll repent--all of the funding would have come from the large institutions, but the Members don't want to address that. Under our proposal in the bill that passed--and we had to amend it, and we're going to try and come back and change it again--every single penny that will be expended here will come from institutions of more than $50 billion in assets and hedge funds of more than $10 billion in assets.

So, if you do it our way, not a penny will come from the taxpayer. It will come from the large financial institutions. And, yes, it will be a help to these individuals. Some of them will pay some of it back, but they won't have late fees. And, yes, the gentleman was correct when he said the second time around that it could become a grant program.

I will now yield to the gentleman from Texas if he can explain to me how it can both be a grant program and something that gets people further in debt.


Mr. FRANK of Massachusetts. I'm sorry. It's my time. You asked me a question. I'm going to answer it. I will note you don't want to answer the question.

I am being consistent. Yes, I think it will work out for most people as primarily a grant program, 84 percent. I am pointing out that the gentleman is trying to cover his own embarrassment because he made the argument without any basis that it was going to put people further in debt. He then acknowledges that it's a grant program. People do not become further indebted when they receive grants.

So, yes, it will work out for people who are responsible, to a great extent, as a grant program. That's why the CBO says 84 percent will be spent. That 84 percent in our bill, as we did it, would come from the large financial institutions. I don't want it to come from the taxpayers. While temporarily it now does, we will be offering a bill--I hope the committee of which the gentleman is an active member will give us consideration--so we can amend the law under which this program is authorized so that every penny, whether it's loans or grants or some combination--it will be primarily grants--will

come from the large financial institutions and not a penny from the taxpayer.


Mr. FRANK of Massachusetts. It will work out as a grant.

Again, I am struck by the gentleman from Texas. He is the one who said it was an excessive loan program and a grant program. He has made two entirely inconsistent statements in a very short period of time. Even for a politician, that's a record for self-contradiction.

The point is that it is both a grant and a loan. It will be primarily a grant.


Mr. FRANK of Massachusetts. The gentleman from Texas who consecutively denounced this program for putting people in debt and for being a giveaway grant asked me whether it was designated as a loan or a grant. The answer is neither. The program is called the Emergency Mortgage Relief Program, meaning it leaves open what kind it would be. So that's the answer to his question, and that's why some of us were less confused than others of us.


Mr. FRANK of Massachusetts. Reclaiming my time, the gentleman gets himself further and further in the hole when trying to explain his contradictory statements.

The facts are very clear. He began by saying it was going to put them further and further in debt. That, of course, contradicted his colleagues who had said it was going to be too much of a subsidy. In fact, it does not say ``loan'' or ``grant'' in the title. It says ``emergency relief,'' and it does provide for a loan and forgiveness.

So I am sorry the gentleman got himself tongue-tied, but don't blame the bill.


Mr. FRANK of Massachusetts. Madam Chair, I have to respond to what I just heard because it simply isn't true. The notion that the government directed people to make these loans is not true. I don't understand what directive the gentleman is referring to. I would be glad to yield to him.

What policy of the Federal Government, what law directed people to make loans of 120 percent loan-to-value?

I yield to the gentleman.

I yield back the balance of my time.


Mr. FRANK of Massachusetts. I reclaim my time.

Understand the difference, ``directed'' and ``allowed.'' Fannie Mae and Freddie Mac never originated a loan. They could not have directed anybody to do anything. They were the secondary market. Fannie Mae and Freddie Mac could only get into action if some private entity made the loan in the first place. Beyond that, during the period when we had the increased subprime loans, which some of us were trying to ban, Fannie and Freddie were in a declining percentage.

But I will yield again to the gentleman to tell me who directed the private sector to make these loans.


Mr. FRANK of Massachusetts. I reclaim my time.

I want to say to the gentleman, we are here in the House of Representatives making policy. You have got to be precise. I would say to Members about what you say, ``directing'' and ``allowed'' are two very different things. It is one thing to allow it.

By the way, when you were talking from the perspective of the private sector, it's a very big difference. And there are many things that the government allows that I wouldn't direct. There are things it allows that I wish people wouldn't do. But the gentleman didn't say ``allowed''; he said ``directed.'' That's simply wrong. I asked because--and he didn't say this, and I acknowledge that, but there were some who tried to blame the Community Reinvestment Act.

I should note that in the Financial Crisis Inquiry Commission, three of the four Republican appointees, including Bill Thomas, our former colleague here, chair of the Ways and Means Committee, and Douglas Holtz-Eakin, who was the chief economic adviser to Mr. McCain, specifically repudiated the notion that the CRA had caused this. So we ought to be very clear.


Mr. FRANK of Massachusetts. I was not talking about Republicans making mistakes. I have no idea what that's supposed to contribute to the debate. I was citing two responsible and thoughtful Republicans, the former chair of the Ways and Means Committee and Mr. McCain's chief budget adviser, plus all of the financial regulators under both Bush administrations who said CRA wasn't the problem.

Now, the gentleman didn't say that it was. Some people have said that, because CRA did have some kind of more mandatory position, but it wasn't for those subprime loans. In fact, with regard to the loans the gentleman is legitimately complaining about, it was those of us on the Democratic side who tried to ban them. Beginning in 2004, the gentleman from North Carolina (Mr. Miller), the gentleman from North Carolina (Mr. Watt), I joined them a little bit later, tried to outlaw those loans. And we were blocked by people who said, No, that's a mistake.

In fact, in 2007, when this House, when we became the majority, finally did make illegal many of those loans in a bill, The Wall Street Journal denounced us and said we had created a Sarbanes-Oxley restriction for housing.

So I just want to make it clear that there was no direction by any entity of the Federal Government. The gentleman appears to acknowledge that when he said, well, Fannie and Freddie allowed it. That's a long way from saying that it was directed.

I yield to the gentleman from Michigan.


Mr. FRANK of Massachusetts. I am reclaiming my time. The gentleman is using it up with the papers.

Here's the deal: 1975 is when it happened in Pennsylvania, not in America, if he had been listening carefully. Secondly, in 1995 we didn't have this foreclosure crisis. Third, as to was this just a new program, in fact, this program for the 32 States where it will operate is based on the program which operated in 18 other States, so we have had experience with it.

By the way, the gentleman from Alabama's Governor praised this program in his State where it operated. The Governor of New Jersey, Mr. Christie, praised this program.

So this is a new program for these 32 States, but it is modeled on a program that has worked successfully in these other 18 States. In 1975, it was Pennsylvania, not the United States.

I yield back the balance of my time.


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