Waiving Requirement of Clause 6(a) of Rule XIII with Respect to Consideration of Certain Resolutions
Floor Speech
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Mr. FRANK of Massachusetts. I thank the gentleman, and I commend him for paying attention to a very specific but very important point.
He is absolutely right. We have no intention here of disturbing the well-run State insurance regime. We respect and honor that form of the mutual insurance holding company. The gentleman's interpretation is entirely correct. They will remain subject to resolution under their existing State insurance liquidity and insolvency regimes.
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Mr. FRANK of Massachusetts. If the gentleman would yield to me, I agree.
As the gentleman knows, our bill does give the SEC the power we expect them to use to impose greater fiduciary responsibilities on these people. The consumer protection bureau will be a very powerful one. It will be dealing with financial products in the lending area and elsewhere. It was not intended to duplicate existing regulation. So, in fact, as the gentleman knows, we enhance the regulatory authority of those entities he mentioned,
and there is no intention whatsoever, nor is there language, I believe, that would lead to duplicate supervision by the consumer protection bureau.
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Mr. FRANK of Massachusetts. If the gentleman would yield to me, he has been a leader in this important area, and he is a careful lawyer and understands that just saving a principle isn't enough. You've got to make sure it is carried out. Dealing with a conflict of interest that he has been a leader in identifying is essential if this is going to work. So I completely agree with him. Yes, we mean both of those subsections, and it is a mandatory rulemaking.
I will say to my neighbor from Massachusetts that we will be monitoring this carefully. They can expect oversight hearings because, yes, this is definitely a mandate to them to adopt rules to deal with what would be a blatant conflict of interest in the efficacy rules, and we intend to follow that closely.
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Mr. FRANK of Massachusetts. I just want to correct the wholly-inaccurate-because-of-being-incomplete history of the gentleman from California. He blames the Senate Democrats for not passing a bill. I didn't hear him infer, maybe I missed it, that the House was then in control of the Republicans, and the House didn't pass that bill either.
The gentleman from California had an amendment that he liked. He was repudiated by his own party, overwhelmingly. Now, I am sorry he wasn't more persuasive with the Republicans. I am sorry that the chairman of the committee and the current leadership of the House and the then leadership of the House voted against him, but you can't blame that on the Democrats. And, in fact, what the Senate Republicans offered was the House Republican bill.
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Mr. FRANK of Massachusetts. If the gentleman will yield to me, yes, I absolutely can. Let me say this is consistent with the leadership the gentleman from Illinois has shown in dealing with risk factors. Up until now, and until this bill passes, we have been automatically assessing institutions solely on the basis of their assets or their amounts. We want to discourage excessive risk and make those who take the risk bear a fair share.
Here the gentleman is clearly correct that to the extent you have got a tax exemption because you engage in charitable activity, in effect you shouldn't get assessed on that basis.
The gentleman has gone further. Smaller banks in this country will be the beneficiaries of an important piece of this legislation, thanks to his leadership. The riskier the bank's activity, the higher their FDI assessment will be in general. That is an important piece of it, and this particular application of it for these charitable institutions is essential.
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Mr. FRANK of Massachusetts. Madam Speaker, the gentleman from California still won't be forthright about this.
The Republican-controlled House, chaired by Mr. Oxley in the committee, passed the bill that he objected to. He said I was successful in defeating it. No, I played a fairly minor role under Mr. DeLay and the Republican leadership. Mr. DeLay did not take advice from me. If Mr. DeLay took advice from me, he wouldn't have gone on the dance show. I would have advised him against it.
The fact is that it was a Republican House that passed the bill the gentleman is denouncing, and I don't know why he keeps mentioning history and leaving that out until he has to be reminded.
He did offer an amendment. He was overwhelmingly defeated. More than two-thirds of the Republicans voted against him.
By the way, as to my own view, yes, in 2003 I said there was no problem. In 2004, after President Bush, while the Republicans controlled Congress and didn't hinder him, ordered Fannie Mae and Freddie Mac to increase their purchase of loans from people below the median, I changed my position. So I joined the Republican leadership of the House as a fairly minor player in supporting legislation.
He was against it, and I would just make that point again.
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Mr. FRANK of Massachusetts. I don't understand the purpose of giving such a partial history. He neglects to mention in 2007 when the Democrats took the majority and I became chairman, we passed the bill that he couldn't get passed in 2005, because we worked with Secretary Paulson, who acknowledges this in his book.
So, yes, in 2003 I was not concerned, but by 2005 I was.
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