Directing Committees to Review Regulations from Federal Agencies

Floor Speech

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Mr. GARY G. MILLER of California. This side hasn't forgotten what went on. We haven't forgotten about Madoff. But the problem is that some people have forgotten that, in 1998, a whistleblower first went to the SEC on Madoff and they did nothing--nothing. Repeatedly, individuals went to the SEC on Madoff and they did nothing.

Now, we can pass all the new regulations through Dodd-Frank we want to pass. Madoff went to jail because he was a criminal. He violated the law. And you don't need 20 laws in place to punish a person for one act. We did it. Dodd-Frank goes far beyond that. It is 243 new regulations in the pipeline; 243 is scary.

Now, the SEC has failed in many ways. I know many of my friends on this side of the aisle heard me talk about mark to market principles for 4 years with the SEC. Now, mark to market means when the lender makes a loan, they have to mark the value on their books of what the product is worth at current market value.

For example, if 5 years ago a piece of property is worth $20 million, they lent $15 million, today it's worth only $12 million, well, the SEC says we should lend no more than $8 million. Now the loan comes up for renewal and the loan is performing, meaning the individual who owns the property is current on his payments. What the lender is required to do based on SEC requirements, because Federal regulators have no control over that because SEC sets the requirements, they can either set a $7 million set-aside because the loan is overvalued based on the books, or they can say to the individual, You owe us $7 million to reinstate the loan. In this economy, most people don't have the $7 million.

Had we modified mark to market standards and looked at loans on realistic fortune principles in the future, most of these lenders today would be in business and many people would not have lost their loans and their product that they had under that loan.

We have done nothing through the SEC. In fact, the first time I asked the SEC Chairwoman in the hearing, and the question was 4 minutes long regarding mark to market principles, she looked at me and she said, I'll get back to you on that, Congressman.

Nothing to date has happened.

So to look at the SEC and say they are saints, they are doing their job and they are protecting the citizenry and the individuals out there, I can't say that. I would like to see these individuals held accountable for what they did not do. In 1998, had they moved with Madoff and done what they should have done, or in 2000 or 2002, a lot of investors would have more money than they have today, but they did not.

Just as our Nation is trying to recover, it seems like the Obama administration is doing nothing but making it harder for American businesses.

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