[Pages S4130-S4138]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

RESTORING AMERICAN FINANCIAL STABILITY ACT OF 2010

Motions To Instruct

Mr. BROWNBACK. Mr. President, under the previous agreement, I call up
a motion to instruct conferees that I have at the desk and ask for its
immediate consideration.
The PRESIDING OFFICER. Under the previous order, the Senate will
resume the motions with respect to H.R. 4173, which the clerk will
report.
The legislative clerk read as follows:

A bill (H.R. 4173) to provide for financial regulatory
reform, to protect consumers and investors, to enhance
Federal understanding of insurance issues, to regulate the
over-the-counter derivatives markets, and for other purposes.

The PRESIDING OFFICER. The clerk will report the motion to instruct.
The legislative clerk read as follows:

Motion to Instruct Conferees

The Senator from Kansas (Mr. Brownback) moves that the
managers on the part of the Senate at the conference on the
disagreeing votes of the two Houses on H.R. 4173 (the
Restoring American Financial Stability Act) be instructed to
insist that the final conference report include the House
position relating to the exclusion for motor vehicle dealers
from the rulemaking, supervisory, enforcement, or other
authority granted to the Director of the Consumer Financial
Protection Agency, as such exclusion is contained in section
4205 of H.R. 4173, as passed by the House, and that the final
conference report preserves the additional provisions,
definitions, and protections provided to such motor vehicle
dealers and servicemembers and their families in Senate
amendment 3789, as further modified, to S. 3217.

The PRESIDING OFFICER. The Senator is recognized for 10 minutes.
Mr. BROWNBACK. Mr. President, I wanted the clerk to read the full
motion to instruct conferees so my colleagues could understand the
simplicity and directness of this motion. It is a very simple motion to
instruct conferees to recede to the House position in regard to auto
dealers in the Consumer Financial Protection Bureau. The House
considered this in committee, and two-thirds of the committee members--
half the Democrats, all the Republicans--voted to exclude the retail
auto dealers from the Consumer Financial Protection Bureau. That is the
way they voted. It came up

[[Page S4131]]

on the House floor, and it was defeated as far as to put the auto
dealers in the regulatory process, so it was excluded in the House--
full consideration at the committee; at the full House level, excluded.
What we are asking, now that this bill has passed, is in the motion
to instruct our conferees, the Senate conferees, in going with the
financial regulatory reform bill, to recede to the House position
regarding the auto dealers.
I think this is a good motion to instruct conferees. I think it is
something we ought to do. I think it is something that will be very
helpful. I make this simple point to my colleagues: Under the Consumer
Financial Protection Bureau, 100 percent of all auto loans will still
be covered. If you vote for the Brownback instruction, if we recede to
the House position, 100 percent of the auto loans will still be
covered. We are saying in this, and the House position says: If you
actually loan the money--if you are GMAC, if you are some other
financiers up the street, you are under the CFPB. If you are simply the
retail storefront, which is what the auto dealers are, you are not
covered under the Consumer Financial Protection Bureau. You are not
covered if you are just the storefront arm of this, but 100 percent of
the loans are covered.
If you are an auto dealer and you make the actual loan yourself and
it is your money you are lending, you are covered under the Consumer
Financial Protection Bureau. If you are simply the storefront operation
out here doing this, you are not covered.
The auto dealers are asking for this. They do not want the additional
cost and burden of this regulation on them. They are the quintessential
Main Street business throughout the country. There is not a single auto
dealer on Wall Street--none of them, not one. You can go up there today
and try to buy a car and you cannot get one.
These are Main Street businesses, and they took it on the chin last
year. We lost, last year alone, 1,700 dealerships across America
resulting in the loss of approximately 88,000 jobs. Why would we want
to put a duplicative set of regulations on top of them that are already
covered upstream and they have already had these sorts of losses and
difficulties in a Main Street business?
We need people to create 88,000 jobs, not to eliminate or lose 88,000
jobs. Franchised auto dealers are the retail outlets. They are the
storefronts that process the paperwork for various well-known brands
with large financial arms. Under the House provision that my motion
instructs us to recede to, these financial arms would still be
regulated, but the dealers who process the paperwork would not.
Additionally, even if my motion is agreed to, auto dealers would
still be regulated by the FTC and various State laws, so consumers
would still have protections to ensure the truth in lending still
applies.
In fact, I have a couple of pages here of regs--excuse me, of
regulatory entities that auto dealers still apply to. I ask unanimous
consent this list be printed at the conclusion of my comments.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. BROWNBACK. I want to also point out what typically happens. This
is a letter I am going to read from the Dale Willey auto dealership in
Kansas. Dale Willey, the auto dealership in Kansas, said this about the
financing that happens. I am reading from this:

Each month we have 3 to 5 buyers who tell our financial
service members--

There are three to five people coming in, telling our financial
service managers:

if our dealership can match or beat their bank's or credit
union's interest rate, they will then finance through our
dealership. To match the buyer's offer of rate terms simply
provides a convenience to our buyers. To offer a better term
and/or at a better rate enhances the buyer's savings by doing
business with our dealership.

In other words, this is a competitive situation that typically people
go into.
I will read again from the letter:

We have buyers also who are unable to secure a loan through
their normal bank, credit union or lender, and yet we are
able to submit the buyer's application to several of our
lenders with which we have agreements, discovering that one
or more are willing to make these loans to this buyer. Not
only does this provide a convenience to the buyer, but it
truly allows the buyer to secure a better level and lower
operating cost vehicle than provided by their older current
vehicle.

This is a competitive situation. It also positions people so that
sometimes they are able to get loans they could not get on their own.
I want to address as well another situation that has come up in this
debate that people have raised: that this protection is needed for
military personnel in particular. A couple of weeks ago the Senate
adopted an amendment offered by Senator Reed of Rhode Island and Brown
of Massachusetts that creates the Office of Service Member Affairs at
the CFPB.
My motion that we are voting on today, instructs the current
regulatory authorities to work with this office when they detect abuses
by auto dealers. So we are saying, if you detect an abuse by auto
dealers, then this should be worked on particularly by the CFPB and
this office of servicemember affairs.
I recently received a letter from the Under Secretary of the Army for
Personnel and Readiness, Clifford Stanley. In it he writes this:

DOD would welcome and encourage CFPA protection for
servicemembers and their families with regard to unscrupulous
automobile sales and financing practices, provided such
protections would not limit access to legitimate products.

That is exactly what motion does. Military personnel would have
strong protections by the CFPB but without the adverse effect of
limiting their access to credit. If you want to protect the military
and maintain all their options for buying a car, you should vote in
favor of this motion.
I point out these matters because there has been a lot of discussion
and debate going on about the auto dealers amendment throughout the
proceedings of this entire bill, which has gone on for some period of
time. This makes sense to do this the way the House did it. It makes
sense for us to move forward with this motion to recede to the House
position.
The House has established this position. They have thought it
through, and 100 percent of auto loans will still be covered. It is
just the auto dealership will not be the one that is covered, the
upstream financer will, unless the auto dealership is loaning their own
money, and then they will be covered.
If you are concerned about military personnel, there is a particular
direction in here regarding military personnel. Again, any loans are
covered. It is the upstream position that is covered, and it is where
it should be. That is the actual person or group that is making the
loan. That is the one that should be covered.
Instead of putting an additional burden on dealerships that have
already lost lots of jobs, we are saying: No, let us recede to the
House position.
I reserve the remainder of my time. I urge my colleagues to vote yes
on the Brownback motion to recede to the House position.

Exhibit 1

Legal & Regulatory Group, National Automobile Dealers
Association, McLean, VA.

Federal Consumer Protection Regulations Applicable to Automobile
Dealers' Financial Operations

1. Anti-Discrimination
a. Equal Credit Opportunity Act--Federal Reserve Board
(FRB) Reg B
Prohibits creditors from engaging in discriminatory
practices against credit applicants; establishes guidelines
for gathering, evaluating, and retaining credit information;
and requires written notification when credit is denied.
b. Fair Credit Reporting Act (FCRA)--Medical Information
Rule (FRB Reg FF)
Generally prohibits creditors from obtaining and using
medical information when determining an applicant's
eligibility for credit; also restricts sharing medical
information with affiliates.
2. Unfair & Deceptive Acts or Practices
a. Federal Trade Commission (FTC) Act--FTC Credit Practices
Rule
Requires creditors to provide written disclosures to
cosigners before they sign a retail installment sales
contract; also prohibits unfair credit practices, deceptive
cosigner practices, and pyramiding late charges.
b. FTC Act--Unfair & Deceptive Acts & Practices
Generally prohibits businesses from engaging in unfair or
deceptive acts or practices.
3. Credit Disclosures
a. Truth In Lending Act (FRB Reg Z)
Imposes disclosure, advertising, and other requirements on
consumer credit sales.
b. Federal Consumer Leasing Act (FRB Reg M)

[[Page S4132]]

Imposes disclosure, advertising, and other requirements on
consumer leasing.
4. Financial Privacy
a. FCRA--Obtaining Credit Reports
Requires that businesses have and certify a permissible
purpose to obtain a consumer's credit report and imposes
restrictions on a creditor's ability to purchase prescreened
lists of customers from consumer reporting agencies for
credit solicitation purposes.
b. FCRA--FTC Prescreen Opt-Out Disclosure Rule
Requires that creditors provide prescreened customers to
whom they send credit solicitations with a long and short
form notice with instructions on how to opt-out of future
prescreened solicitations from creditors.
c. FCRA--Affiliate Information Sharing
Restricts the disclosure of credit report information.
d. FCRA--FTC Affiliate Marketing Rule
Restricts using credit report information to market to the
customers of an affiliate.
e. Gramm Leach Bliley Act (GLB)--FTC Privacy Rule
Requires financial institutions to provide finance and
lease customers with a notice that accurately describes the
institution's privacy policy and restricts the disclosure of
customers' personal information.
5. Accuracy of Credit Reports
a. FCRA--FTC Address Discrepancy Rule
Requires users of credit reports to develop procedures to
ensure that credit reports ordered from consumer reporting
agencies that contain a ``Notice of Address Discrepancy''
pertain to the correct customer.
b. FCRA--Adverse Action Notices
Requires users of credit reports to notify customers in
writing when adverse action is taken against them based in
whole or in part on information contained in a credit report.
c. FCRA--Risk-based Pricing Notices
Requires users or credit reports to notify customers in
writing when they obtain credit on unfavorable credit terms
(relative to the user's other credit customers).
6. Identity Theft
a. GLB Act--FTC Safeguards Rule
Requires financial institutions to develop a comprehensive
written program to protect their customer information.
b. FCRA--FTC Disposal Rule
Requires users of credit reports to develop procedures to
properly dispose of credit report information.
c. FCRA--FTC Red Flags Rule
Requires creditors and financial institutions to develop a
written program that contains procedures to identify, detect,
and respond to ``red flags'' indicating the possibility of
identity theft.
d. FCRA--Fraud & Active Duty Alerts
Requires users of credit reports who receive a fraud or
active duty alert on a credit report to develop procedures to
verify the customer's identity before extending credit to the
customer.
e. FCRA--Credit & Debit Card Truncation
Requires persons to truncate the expiration date and all
but the last 5 numbers on electronically printed credit and
debit card receipts given to cardholders at the point of
sale.

Ms. MIKULSKI. Mr. President, the Restoring American Financial
Stability Act is supposed to regulate Wall Street, not Main Street. It
is Wall Street whose greed brought us the economic crisis. That is why
I am voting for the Brownback motion to instruct conferees to support
the House provision regarding the regulation of auto dealers.
We need a tough financial reform bill that focuses on the abuses that
led to the economic crash. This bill is intended to primarily regulate
major institutions that deal nationally and globally and to improve
government coordination to ensure that there is an early warning and an
early response system in place to prevent a future crisis like the one
we were faced with in 2008. Automobile dealers were not part of the
problem that led us to where we are today and therefore should not be
subject to this legislation.
We must make sure that laws that are already on the books are being
implemented and enforced. Under current law, car dealers are subject to
extensive Federal regulation. Dealers' retail financing activity is
regulated by the Federal Reserve Board and the Federal Trade
Commission, and car dealers are subject to tough Federal laws,
including the Truth in Lending Act and the Fair Credit Reporting Act.
Those laws must be enforced. Predatory lending practices must be
stopped, and there are tools in place to do so.
I believe that auto dealers are best regulated by State and local
consumer protection agencies. Main Street should be regulated by people
who are closer to its daily activities. Governors and attorneys general
must make sure that consumers are protected from bad actors. The
Consumer Financial Protection Bureau should focus on Wall Street, not
Main Street, and should not be used to increase unnecessary regulations
on small businesses.
During debate on the Brownback amendment, it became clear that the
men and women of our military have been targeted by unscrupulous auto
dealers. This is an outrage. I never want to see our military personnel
being taken advantage of. Our service men and women have dedicated
their lives to this country, and we have a responsibility to make sure
they, and their families, are treated with respect and that we do
everything we can to reduce their increasing stress. That is why I
voted to create an Office of Service Member Affairs within the Consumer
Financial Protection Bureau to educate the men and women of our
military, and their families, to make better informed financial
decisions and to strengthen coordination of consumer protections for
members of our military. We must crack down on those who are taking
advantage of our military families and communities. However, I do not
think we need a new regulatory structure to do so. A Washington
regulatory agency is not the best suited to regulate outside of
military bases in Maryland or North Carolina.
As I said on the floor when we began debate of this bill, now is our
opportunity to pass real financial reform that puts in place the
strongest consumer financial protections and ensures the greed of Wall
Street doesn't trump the needs of Main Street. That is why I support
the House provision on the regulation of auto dealers.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, how much time remains for my friend from
Kansas?
The PRESIDING OFFICER. There is 1 minute 56 seconds.
Mr. DODD. Mr. President, let me begin by saying that Sam Brownback
and I are good friends. We have a different point of view in this
matter. But that in no way at all should be reflected in our
relationship with each other, as we have served together for many
years. I fundamentally disagree with him about this.
Instructing conferees is an interesting motion in many ways. As we
will be going to conference with the other body, I will be delighted to
listen to these various ideas. But this is a matter which does deserve
to be protected.
First of all, let me say that when it comes to automobile dealers,
they are no different than community banks or other financial
institutions; the overwhelming majority are good people and do a good
job. But we do not pass laws in this country because a majority of the
people commit crimes. We pass laws for the minority who can abuse their
relationship with customers or with people. That is no different in
this particular case at all.
So this is not about whether you like automobile dealers or do not
like them. The simple question is: The second largest purchase that
most Americans make is the purchase of an automobile. We do not buy
stocks. We do not buy fancy institutions and so forth. We buy a home
and we buy an automobile, and they are expensive undertakings.
So the question is very simply: We have established in our
legislation, for the first time in the history of our country, a
Consumer Financial Protection Bureau that will watch out for the
average American citizen when it comes to financial practices. We have
a Consumer Product Safety Commission. We have the Food and Drug
Administration which protects you against products that you ingest, so
you have some ability to respond if they do you harm.
If you buy a lawn mower or you buy any other consumer product, we
have a place you can go to get a recall when that product does injury
or could do injury to you. Yet we have no place in this country, where
you can be ruined by a financial product, to get you any redress.
So this legislation, for the first time in our Nation's history,
establishes a Consumer Financial Protection Bureau to watch out for bad
mortgages, car loans, watch out for other financial activities in which
the average individual may engage.
As I said, one of the most principal activities that people engage in
as consumers is the purchase of an automobile. So we are trying to
protect people. If we are going to say to community banks and to credit
unions and other financial institutions: You must comply with these
rules, they will be

[[Page S4133]]

enforced at the local level. But you have a community bank on one
corner, a credit union on the other corner and a car dealer on the
third corner and all three would like to compete for that business. To
the credit union and the community bank we say: You have to comply with
rules that protect consumers. But you, Mr. Auto Dealer over here, you
do not have to do that. You can go off and do exactly as you want.
That is a mistake and why we have insisted that these provisions
include automobile dealers. So I rise in opposition to this proposal.
A lot is said in this body about our men and women who serve in
uniform. We all believe that, just as those heroes stand for us every
single day, in bodies such as this we ought to stand for them. I wish
to focus my remarks on what happens to men and women in uniform today
because it is that constituency alone that ought to be reason to defeat
this motion.
As we considered financial reform, then, we strove to heed the words
of groups such as the Military Coalition, a consortium of over 30
nationally prominent military and veterans organizations, representing
more than 5.5 million current and former servicemembers and their
families, including such groups as the Veterans of Foreign Wars, the
National Guard Association, the Military Officers Association, the
Military Order of the Purple Heart, and many others.
All these groups have written a letter in which they say, in part:
The most significant financial obligation for the majority of
servicemembers is auto financing.
It is also the place where servicemembers are most likely to be taken
advantage of. Recently, the New York Times reported on one case, that
of Matthew Garcia, a 25-year-old Army specialist who was recently
subjected to a trick called yo-yo financing by an unscrupulous car
dealer, just as he was preparing to deploy for Afghanistan.
According to the story in the press, Specialist Garcia, stationed at
Fort Hood, TX, bought an automobile at a used car lot, signed up for a
loan at a 19.9 percent interest rate. That would be bad enough, but
that is not the worst of it, the high rate of interest. The problem
came when Specialist Garcia drove the car home.
The dealer called Specialist Garcia several days later to say the
financing contract had actually fallen through and demanded an
additional $2,500 in cash from Specialist Garcia. To make sure he paid
up, the dealer blocked the soldier's car so no one could leave.
That is the way some--a few but some--auto dealers are treating our
men and women in uniform. It is not enough that I tell you this story
or one story in the press account. Under Secretary of Defense Stanley--
in fact, my good friend, Senator Brownback, quoted from the letter from
Clifford Stanley. But listen to the operative sentence in the letter
from Under Secretary Stanley:

The Department's position as stated in my letter to
Assistant Secretary Barr remains unchanged. The Department of
Defense would welcome and encourage the CFPA protections for
Servicemembers and their families with regard to unscrupulous
automobile sales and financing practices provided such
protections would not limit access to legitimate products.

Which they do not at all. So we are hearing from Under Secretary of
Defense Stanley, in which he says: ``Bait and switch'' financing,
falsification of loan applications, failure to pay off liens on trade-
in vehicles, ``packing'' loans with items whose price bears little, if
any, relationship to their real cost, and discriminatory lending are
the kinds of problems members of our Armed Forces and their families
face when dealing with financing their cars with car dealers.
In fact, Secretary Stanley reports that 72 percent of military
counselors and attorneys surveyed had cited problems with auto dealer
abuses in just the past 6 months alone, 72 percent cited it as a major
problem. The Department of Defense is telling us that our men and women
in uniform are at risk of being ripped off, as they are every single
day.
That is why, of course, we adopted, 98 to 1, by the way, the
amendment offered by Scott Brown, our colleague from Massachusetts, and
Jack Reed, our colleague from Rhode Island. That amendment said we must
have an office of servicemember affairs in the consumer bureau. Why did
we establish that office there? What is the principal obligation that
these service men and women get into that causes so much difficulty? It
is automobiles sales. That is why we put it in.
What an irony it would be that we vote 98 to 1 to say we ought to
establish that office within the consumer financial bureau and then
turn around and adopt the Brownback amendment or insist upon it in a
conference report, which basically exempts every one of these auto
dealers from having to comply with the consumer protection laws. That
would be an irony beyond ironies in a way, to on one hand say: We want
to help you and protect you and then, on the other hand, take away the
major organizations out there that do the most damage to them.
The Brownback motion would steal away this protection from our Armed
Forces by creating a loophole for the exact sector of the financial
services industry in which servicemembers are most vulnerable, and that
is in auto sales. Let me be clear. All of us have relationships with
auto dealers. I have a wonderful relationship with the people in my
State of Connecticut whom I have worked closely with over the years.
All of us support those businesses. As I said at the outset of these
remarks, the overwhelming majority of them do a good job and do not
engage in unscrupulous behavior. But the laws are not written for the
many, they are written for the few out there who do take advantage of
these young men and women.

As we know from the evidence supplied by our military organizations
and others who have written, rarely do they ever get involved in a
matter such as a Banking Committee matter, to have the Under Secretary
of Defense, the Secretary of the Air Force, the Secretary of the Army,
the Veterans of Foreign Wars, the Order of the Purple Heart, and the
Officers Association, all of them, 30 organizations saying: Do not do
this.
Yet we are about to turn around and undo the efforts we have made to
see to it that these young men and women, whom we all talk about in
Memorial Day speeches, and so forth--what a great job they do for our
country, and then turn around, in the one area they get taken to the
cleaners on day after day, which is in this one particular area, and to
exempt them entirely from the consideration of the Consumer Financial
Protection Bureau.
The community bankers oppose this. The credit unions oppose this as
well. They want a level playing field. They would like to compete for
that business. They have to comply with the rules. How can you turn
around and say to that community bank or that credit union: You have to
live with these rules, but the guy on the other corner does not have to
do so. How is that fair when it comes to financing, as I said have
said, the second largest purchase that anyone would make, that most
people make in their lives?
So it is unfair, it seems to me, to have two sets of rules for the
same product. That is what we would be doing if this amendment were
adopted, and, of course, the conferees were required to insist upon
supporting language in the House bill. Military leaders such as Michael
Donley, the Secretary of the Air Force, support this approach because,
in his words:

Protection from unprincipled automobile lending enables our
Airmen to concentrate on their primary mission--to fly, fight
and win in air, space, and cyberspace.

Advocates such as Holly Petraeus, wife of GEN David Petraeus, the
director of the Better Business program for military families, at a
press conference, strongly supports the protections we have in this
bill. They know the hardships military families face and believe it
should not be compounded by shady lenders.
By the way, it is not just our servicemembers who suffer from lending
abuse in this sector as well. There is a long and sad history of racial
discrimination in auto lending. For example, African-American borrowers
who are charged more than 2.5 times the amount in subjective rate----
The PRESIDING OFFICER. The Senator's time on the motion has expired.
Mr. DODD. I ask unanimous consent for 1 additional minute and provide
1 additional minute for my friend from Kansas as well.
The PRESIDING OFFICER. Without objection, it is so ordered.

[[Page S4134]]

Mr. DODD. Let me, if I can, because my friend from Kansas cited this,
about separating out the financing from the lenders. There was a court
case. Listen to what one of these witnesses, involved in that
distinction, had to say. Some argue that auto dealer financing
operations are not the lenders, they are merely processing the
paperwork.
According to court testimony of a former finance and insurance
manager from a Tennessee auto dealer:

The standard industry practice is to prepare the financing
documents so that the customer is not alerted in any manner
that the person with whom he is dealing has the ability to
control the customer's price of credit. This allows the
finance arranger to present himself as the ally of the
customer, which further relaxes and disarms the customer. The
nature of the transaction creates the perfect opportunity for
a dealer to obtain a large kickback from an unsuspecting
customer by subjectively inflating their interest rates.

This is not a time to do so much damage, in my view, to these young
men and women in uniform.
I ask unanimous consent that several letters we have from the various
military organizations in opposition to the Brownback amendment be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Independent Community

Bankers of America<sup>'</sup>,

Washington, DC, May 11, 2010.
Hon. Christopher Dodd,
Chairman, Committee on Banking, Housing and Urban Affairs,
Washington, DC.
Hon. Richard C. Shelby,
Ranking Member, Committee on Banking, Housing and Urban
Affairs, Washington, DC.
Dear Chairman Dodd and Senator Shelby: On behalf of the
Independent Community Bankers of America and its nearly 5,000
member banks, I write to oppose Sen. Brownback's amendments
SA 3789 and SA 3790 to the Restoring American Financial
Stability Act of 2010 to exempt most automobile dealers from
the jurisdiction of the proposed Consumer Financial
Protection Bureau (CFPB).
ICBA believes the CFPB should be focused on the under-
regulated financial services providers rather than highly-
regulated community banks. When automobile dealers offer
financing to customers--generally as a conduit for
manufacturers' captive finance arms--the dealers provide
consumers loans and leases that are second only to home
mortgages in importance to most families. Yet, their
financing activities are not subjected to the same level of
regulatory scrutiny as the auto lending activities of
community banks. Exempting automobile dealers would create a
gaping loophole in the CFPB and would give automobile
dealers--as well as the manufacturers' captive finance arms
that provide financing through them--a competitive advantage
over community banks and reduce consumer choice in auto
loans.
I urge you to oppose exemptions to the CFPB for non-
depository lenders, including automobile dealers.
Thank you for your consideration.
Sincerely,
Camden R. Fine,
President & CEO.
____

The Military Coalition,

Alexandria, VA, April 15, 2010.
Hon. Christopher J. Dodd,
Chairman, Banking, Housing & Urban Affairs, Washington, DC.
Hon. Richard C. Shelby,
Ranking Member, Banking, Housing & Urban Affairs, Washington,
DC.
Dear Chairman Dodd and Ranking Member Shelby: The Military
Coalition, a consortium of nationally prominent military and
veterans organizations, representing more than 5.5 million
current and former servicemembers and their families and
survivors, would like to express our opposition to Senator
Brownback's amendment to the Restoring American Financial
Stability Act of 2010. Senator Brownback's amendment would
exclude auto dealers and their lending practices from the
financial reform bill.
The most significant financial obligation for the majority
of servicemembers is auto financing. Including the auto
dealers financing and sales in the financial reform bill will
provide greater protections for our servicemembers and their
families.
Providing a ``carve-out'' for auto dealers does just the
opposite--it will allow unscrupulous dealers to continue to
take advantage of servicemembers and their families.
In a recent letter from the Under Secretary of Defense for
Personnel and Readiness (USD P&R) to the Department of the
Treasury's Assistant Secretary for Financial Institutions
(attached), Dr. Clifford Stanley states that the Department
of Defense would welcome protections provided to
servicemembers and their families with regard to unscrupulous
automobile sales and financing practices.
Additionally, Dr. Stanley highlights the extent of the
problem in a recent informal polling of installation
attorneys and personal financial managers/counselors. Of the
659 counselors and attorneys who responded, 72% stated that
they counseled servicemembers in the past six months on one
or more unscrupulous practices (e.g., ``bait and switch''
financing, falsification of loan documents, failure to pay-
off liens, and ``packing loans'') when covering auto
financing with their client.
Again, the Coalition wishes to reiterate our collective
opposition to any ``carve-out'' of auto dealership financing
from the financial reform bill and we thank you for your
attention to this important issue impacting military members
and their families.
Sincerely,
Air Force Association, Air Force Sergeants Association,
Air Force Women Officers Associated, American Logistics
Association, AMVETS (American Veterans), Army Aviation
Association of America, Association of Military
Surgeons of the United States, Association of the
United States Army, Association of the United States
Navy, Chief Warrant Officer and Warrant Officer
Association, U.S. Coast Guard, Commissioned Officers
Association of the U.S. Public Health Service, Inc.,
Enlisted Association of the National Guard of the
United States, Fleet Reserve Association, Gold Star
Wives of America, Inc., Iraq & Afghanistan Veterans of
America, Jewish War Veterans of the United States of
America, Marine Corps League, Military Chaplains
Association of the United States of America, Military
Officers Association of America, Military Order of the
Purple Heart, National Guard Association of the United
States, National Military Family Association, National
Order of Battlefield Commissions, Naval Enlisted
Reserve Association, Non Commissioned Officers
Association, Reserve Enlisted Association of the United
States, Society of Medical Consultants to the Armed
Forces, The Retired Enlisted Association, United States
Army Warrant Officers Association, United States Coast
Guard Chief Petty Officers Association, Veterans of
Foreign Wars of the United States.

____
May 19, 2010.
U.S. Senate,
Washington, DC.
Dear Senator: We are writing to voice our opposition to the
modified version of Senator Brownback's Amendment #3789,
which would exempt auto dealers from the Consumer Financial
Protection Bureau. The changes made to the amendment do
nothing to stop automobile dealers from engaging in
fraudulent or abusive practices. Instead, the revised
amendment provides financial education for military families
who are targeted by unscrupulous dealers with these tactics.
While good financial counseling can help consumers make
smart purchasing decisions, it is no substitute for
vigorously enforcing the law to prevent unfair and deceptive
practices. In fact, the modified Brownback Amendment #3789
would shift the burden onto the military and individual
Service members to avoid being defrauded by car dealers,
rather than protecting our troops and all Americans with a
new consumer agency that polices auto dealer financing and
enforces already existing consumer protection laws.
Senator Brownback's modification requires the Federal
Reserve and the Federal Trade Commission--two agencies that
to date have failed to adequately protect consumers from
abusive auto lending practices--to work with the Office of
Service Member Affairs to ensure that ``Service members and
their families are educated and empowered to make better
informed decisions regarding consumer financial products and
services offered by motor vehicle dealers.'' However, many of
the scams perpetrated on our troops cannot be eliminated
through education, since fraud by its very nature is designed
to deceive and is often perpetrated without the consumer's
knowledge or awareness. For example, some car dealers engage
in ``powerbooking,'' a scam in which the victim does not have
access to the documents the dealer submits to the finance
company and therefore has no knowledge of the phantom add-ons
the auto dealer claims are part of the vehicle. Some dealers
falsify loan applications, in which case the victim does not
have access to the loan documents that falsifies pay stubs
and statements of income. In another scam, the auto dealer
promises to pay off the lien on the victim's trade-in at the
time of sale, but does not, so the consumer is unknowingly
left with the responsibility to pay off the new car as well
as the car that was traded in. There is no way for the victim
to know in advance that the dealer doesn't intend to pay off
the lien. Senator Brownback's modified amendment would do
nothing to stop these abuses.
The modified Brownback Amendment maintains the status quo
that has failed to adequately protect U.S. troops and the
American consumer from auto scams up until now. The Office of
Service Member Affairs would in no way have the authority to
actually require the Federal Reserve to issue meaningful new
rules and/or require the FTC to enforce the already existing
rules.
We urge the Senate to vote no on the Brownback auto dealer
exemption.
Sincerely,
Fleet Reserve Association.
Military Officers Association of America.

[[Page S4135]]

Navy Marine Corps Relief Society.
Center for Responsible Lending.
Consumer Federation of America.
National Association of Consumer Advocates.
National Consumer Law Center (on behalf of its low-income
clients).
____

Credit Union

National Association,

Washington, DC, May 10, 2010.
Hon. Christopher Dodd,
Chairman, Committee on Banking, Housing and Urban Affairs,
U.S. Senate, Washington, DC.
Hon. Richard Shelby,
Ranking Member, Committee on Banking, Housing and Urban
Affairs, U.S. Senate, Washington, DC.
Dear Chairman Dodd and Ranking Member Shelby: On behalf of
the Credit Union National Association (CUNA), I am writing in
opposition to the Brownback amendments (SA 3789 and SA 3790)
to S. 3217, the Restoring American Financial Stability Act,
which would exempt auto dealers from the bill. CUNA is the
largest credit union advocacy organization in the United
States, representing nearly 90 percent of America's 7,800
state and federally chartered credit unions and their 92
million members.
As we have said from the beginning of this debate,
consumers of financial products provided by unregulated
entities need greater protections. One of the ways that the
legislation seeks to provide these greater protections is
through the creation of the Bureau of Consumer Financial
Protection (BCFP), which is intended to be the exclusive
federal rulemaking entity for laws designed to protect
consumers of financial products. Excluding any non-depository
institution provider of financial products, including auto
dealers, from the rules promulgated by the BCFP would defeat
the purpose of creating the new consumer regulator, would put
credit unions at a competitive disadvantage in the new
regulatory regime, and could cause confusion for consumers of
financial products.
We encourage the Senate to reject amendments, including the
Brownback amendments, which would upset the balance of the
consumer protection title by exempting any currently
unregulated providers of financial services from the Bureau's
rules.
On behalf of America's credit unions, thank you very much
for your consideration.
Sincerely,
Daniel A. Mica,
President & CEO.
____

Secretary of the Army,

Washington, DC, May 12, 2010.
Hon. Christopher Dodd,
Chairman, Committee on Banking, Housing and Urban Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: I am writing regarding the legislation
before the Senate which would establish the Consumer
Financial Protection Agency (CFPA) and delineate the limits
of its authority.
I understand that an amendment may soon be introduced that
would exempt automobile dealerships from any financial
oversight under the CFPA. The Army would have strong concerns
with any such amendments.
Over the years, many of our Soldiers have fallen victim to
predatory lending practices and have entered into contracts
for prohibitively expensive financial products promoted by
some unscrupulous car dealerships and lenders. Though the
Army does educate our Soldiers about buying cars in our
normal financial education curriculum, the fact remains that
junior enlisted Soldiers--many of whom are drawing a regular
paycheck for the first time in their lives and are
inexperienced in financial matters--remain an easy target for
dishonest brokers. We owe them the protection and oversight
that would be afforded by the CFPA.
In an era of persistent conflict and multiple deployments,
our Soldiers and their Families are under increasing stress.
In surveys conducted by the Department of Defense, finances
rank among the primary causes of stress for most military
Families. As auto loans are often the most significant
financial obligations of our Soldiers--particularly within
the junior enlisted grades--we believe that greater
government oversight of auto financing and sales for our
Soldiers will help protect them and reduce unnecessary
financial strain on our already overburdened Army Families.
Soldiers who are distracted by financial issues at home are
not fully focused on fighting the enemy, thereby decreasing
mission readiness. Protection from unprincipled auto lending
enables our Soldiers to concentrate on their primary
mission--protecting our great Nation.
Thank you for your continued support of our Soldiers and
their Families.
Sincerely,
John M. McHugh.
____

National Council of La Raza,

Washington, DC, May 12, 2010.
U.S. Senate,
Washington, DC.
Dear Senator: On behalf of the National Council of La Raza
(NCLR)--the largest national Latino civil rights and advocacy
organization in the United States--I urge you to oppose
Senator Carper's (D-DE) Amendment #3949 to the ``Restoring
American Financial Security Act of 2010'' (S. 3217).
Amendment #3949 undermines sustainable and meaningful
consumer protection. We call on the Senate to vote for
ordinary families who benefit from having extra cops on the
beat, rather than for banks seeking to avoid enforcement for
violations of consumer protection, equal credit, and fair
lending laws.
Communities of color have been hit hard by predatory
lending in all forms. Now our families are struggling with
rising household debt, record-high foreclosure rates, and the
erosion of their financial safety net. They need a strong
Consumer Financial Protection Bureau (CFPB) to level the
playing field by enforcing our nation's consumer protection
laws. Moreover, since individuals will not have a right to
enforce the CFPB rules themselves, they will need law
enforcement, including their state attorneys general, to
enforce the rules.
The Carper amendment raises two serious concerns:
1. Attorney General Enforcement--The amendment takes state
cops off the predatory lending beat, weakening the already
compromised enforcement provisions in the bill. It would
prevent state attorneys general from enforcing CFPB rules
against national banks and federal thrifts and could weaken
their ability to enforce other laws. Under another provision
of the bill, the CFPB will have no enforcement authority
against 98% of banks, making it that much more critical that
attorneys general be able to enforce the federal rules on
behalf of the state's residents. This amendment would leave
enforcement for most banks entirely up to bank regulators,
whose lax enforcement led to this crisis in the first place.
2. State Law Preemption--The amendment would prevent states
from addressing new bank abuses not yet covered by federal
protection before they spread nationally. It would remove a
critical provision that requires the Office of the
Comptroller of the Currency (OCC) to consider whether a state
law addresses problems not covered by federal law before it
gives banks a free pass to ignore that law. The Senate
compromise provision in the bill already gives the OCC, an
agency with a history of open hostility to consumer
protection, far too much power to wipe out state consumer
protection laws. The provision should not be weakened
further.
States are first responders that can stop local abuses from
spreading to become a national problem. Their laws are most
important when there is a gap in federal law. Moreover,
before bringing an enforcement action, attorneys general
already must consult with the CFPB and bank regulators, and
the CFPB may intervene or clarify its rules, ensuring
consistency in enforcement standards.
Anyone who violates the law should be held accountable. Do
not give banks that violate specific CFPB rules a special
pass against vigilant enforcement. Should you have any
questions, please contact Graciela Aponte, Wealth-Building
Legislative Analyst.
Sincerely,
Janet Murguia,
President and CEO.

The PRESIDING OFFICER. The Senator from Kansas.
Mr. BROWNBACK. Mr. President, well, if this motion to instruct did
what Senator Dodd had suggested, I would probably vote against it as
well. It does not.
I appreciate my colleague from Connecticut, who is obviously a great
persuader, does a great job, and whom I share a great friendship with
and great admiration for and who has served this body very well.
The problem is, if we have three places sitting here--we have a
community banker, we have a credit union, and we have an auto dealer--
all three are still covered. They are all three still covered if they
make the loan. If they originate, if they make the loan, they put the
money out there, all three are covered.
What we are saying in this motion is, if it is your money that you
are loaning, you are covered. But if you are simply writing paper or
trying to help someone upstream and options for the person who is
coming in and you are saying: We have option A, B or C, from this
credit union, from that bank or from GMAC, whichever it may be, they
are not covered.
The authors of the bill want to put belts and suspenders on auto
financing. Why would we double regulate in this particular area when we
are already going to have the cost and the burden of doing it? And on
top of all that, we already have a set of regulations in this field.
My colleague talked about yo-yo and bait-and-switch financing. They
are illegal at the State level now. State attorneys general are going
after these people now, and they should, particularly if it targets
military personnel. That person who walks into a dealership in my State
or some other State

[[Page S4136]]

will be covered by the Consumer Financial Protection Bureau. It is
going to be at an upstream location, but it is covered. One hundred
percent of them are covered. Why would we put this extra cost and
expense on the retail operation that is not loaning the money? They are
not doing this.
If my colleagues are concerned about this area, do this. If they are
concerned about having overregulation and overreach by Washington,
support my motion. The loan is still covered, and we are not having
this double coverage of belts and suspenders on auto loans that is
going to hurt the ability of people to get loans, and it is going to
drive up the cost of auto financing. It is going to hurt Main Street
businesses that we lost 1,700 of last year and that lost us 88,000
jobs. I thought this bill was targeted at Wall Street, not at Main
Street where we didn't have this problem going on. We haven't had this
problem within auto loans as far as causing the financial meltdown. The
regulation is already there. The regulation will be there. This extra
regulation is not needed.
I ask my colleagues to support Main Street on this one. Support the
local auto dealers out there, those who are working with the community,
trying to help the community thrive and survive, instead of putting a
double dose of regulation on top of them that is going to hurt the
business, hurt auto sales, hurt financing opportunities.
I urge support for the Brownback motion.
The PRESIDING OFFICER. The Senator from Texas.
Mr. DODD. All time has expired on Brownback?
The PRESIDING OFFICER. All time has expired.

Motion to Instruct Conferees

Mrs. HUTCHISON. I call up the Hutchison-Hagan motion to instruct
conferees.
The PRESIDING OFFICER. The clerk will report the motion.
The assistant legislative clerk read as follows:

Motion to instruct conferees

The Senator from Texas (Mrs. Hutchison) moves that the
managers on the part of the Senate at the conference on the
disagreeing votes of the two Houses on H.R. 4173 (the
Restoring American Financial Stability Act) be instructed to
insist that the final conference report ensure that
proprietary trading restrictions do not prevent insurance
company affiliates of depository institutions from engaging
in such trading as part of the ordinary business of
insurance, especially insurance company affiliates serving
military service members and their families, as such
restrictions would result in higher costs and significant
inconveniences to those sacrificing in service to our
country.

The PRESIDING OFFICER. The Senator is recognized for 10 minutes.
Mrs. HUTCHISON. I ask to be notified at the end of 5 minutes so I may
yield the floor to Senator Hagan for the rest of the time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. HUTCHISON. Mr. President, the Hutchison-Hagan motion to instruct
is trying to narrow the definition that falls under the Volcker rule
and the underlying bill. I believe our amendment would have passed
overwhelmingly if we had been able to get it up before cloture was
invoked. I appreciate there was a lot going on last week, but this is
the way we hope to be able to assure that our amendment is a part of
the final bill. The Volcker rule contained in the measure before us
seeks to restrict or ban risky proprietary trading at depository
institutions. As currently written, the rule brings about some
unintended consequences that could be disastrous for our financial
system and to a special class of customers--American service men and
women. The major problem with the current language is that its reach
extends beyond the bounds of the depository institution to a bank's
affiliates and subsidiaries, including insurance companies. For
diversified financial institutions that serve as one-stop shops of
banking and insurance products, especially those serving our military
service men and women and their families, the extension of the Volcker
rule's proprietary trading restrictions to a depository institution's
insurance company affiliates threatens their ability to address the
special financial needs of the U.S. military community. The Hutchison-
Hagan motion to instruct conferees seeks to ensure that the Volcker
rule's proprietary trading restrictions do not extend to the normal
operations of insurance affiliates of insured depository institutions
so that we can preserve convenient access to the full spectrum of
financial services for the U.S. military community.
It is important to note that the proprietary trading that insurance
entities engage in is significantly different from the proprietary
trading that is the target of the Volcker rule.
First, insurance companies use premiums to fund trades, not customer
deposits. Thus, insurers are trading their own funds, not those of
depositors. Insurance company trades are generally low risk, focus on
long-term payment of claims and profitability, and are already heavily
regulated by State insurance regulators. Simply put: Proprietary
trading is essential to the life insurance and property and casualty
insurance business. Proprietary trading is what allows insurers to
offer annuities and other insurance products that can protect consumers
in the long term.
The motion to instruct is narrowly drafted. We have worked with the
majority staff as well as the minority staff of the Banking Committee
to assure that the drafting is in line with what we all intend to do.
It doesn't speak to the Volcker rule's impact on depository
institutions at all. It merely seeks to allow regulated insurance
entities to continue to operate as they currently do in a manner that
ensures payment of claims and annuities for years to come.
I urge my colleagues to support the Hutchison-Hagan motion. We have
worked on this for several weeks together. I believe this bipartisan
motion to instruct will be overwhelmingly approved because so many
people have heard from their constituents.
I ask unanimous consent to have printed in the Record a letter from
the Non Commissioned Officers Association of the United States of
America, the Air Force Sergeants Association, the Naval Enlisted
Reserve Association, and the TIAA CREF, a national financial services
organization dedicated to serving the financial needs of those who work
in the academic, medical, and cultural fields, all in support of our
amendment and our motion to instruct.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Non Commissioned Officers Association of the United
States of America,
Selma, TX, May 3, 2010.
Hon. Christopher Dodd,
Chairman, Committee on Banking, Housing and Urban Affairs,
U.S. Senate, Washington, DC.
Hon. Richard C. Shelby,
Ranking Member, Committee on Banking, Housing and Urban
Affairs, U.S. Senate, Washington, DC.
Dear Chairman Dodd and Ranking Member Shelby: I write on
behalf of the Non Commissioned Officers Association of the
United States of America (NCOA), representing active duty,
enlisted service members of all military services, the United
States Coast Guard, associated Guard and Reserve Forces,
retirees and veterans of all components. NCOA has strong
concerns regarding the impact of the Restoring American
Financial Stability Act of 2010's (S. 3217) ``Volcker Rule''
provisions on NCOA members and for that matter, the entire
U.S. military community.
NCOA is dedicated to providing for service members and
their families through every stage of their military career
from enlistment to eventual separation, retirement and
continuing to provide services to veterans' surviving family
members. We understand and respect the achievements and
sacrifices made by all service members and their families and
are committed to ensuring that the military community has
access to the ``one stop shop'' providers of financial
services necessary to address their unique banking and
insurance needs. This ease of access to essential financial
resources is crucial to minimize the financial stresses and
other burdens accompanying military life.
S. 3217's Volcker Rule, as currently proposed, threatens
this essential access to one stop shop providers of financial
services for NCOA members and their families. Limiting thc
provision's proprietary trading restrictions by excluding the
insurance affiliates of insured depository institutions is
necessary to maintain access to financial products and
services that meet the unique needs of the military
community. Making this small change to the Volcker Rule
language will ensure that the financial stability of enlisted
service members and their families is not put in jeopardy.
Thank you for your thoughtful consideration of this issue and
its

[[Page S4137]]

impact on NCOA members and the entire U.S. military
community.
Sincerely,

H. Gene Overstreet,

12th Sergeant Major of the
United States Marine Corps (Ret.), President.
____

Air Force

Sergeants Association,

Temple Hills, MD, April 29, 2010.
Hon. Christopher Dodd,
Chairman, Committee on Banking, Housing, and Urban Affairs,
U.S. Senate, Washington, DC.
Hon. Richard C. Shelby,
Ranking Member, Committee on Banking, Housing and Urban
Affairs, U.S. Senate, Washington, DC.
Dear Chairman Dodd and Ranking Member Shelby: I am writing
on behalf of the Air Force Sergeants Association (AFSA), the
global, 120,000 member strong organization dedicated to all
enlisted grades of Air Force Active Duty, Air National Guard,
and Air Force Reserve Command, retired, veteran and family
members. AFSA has strong concerns regarding the impact of the
so called ``Volcker Rule'' provisions in the American
Financial Stability Act of 2010, S. 3217, on AFSA members and
the entire enlisted military community.
AFSA members and their families have made many sacrifices
in order to invest their lives in the cause of freedom. They
require access to ``one stop shop'' providers of financial
services to address their unique banking and insurance needs.
Ease of access to essential financial resources is
particularly crucial today as our American military community
faces the financial stresses and other burdens accompanying
multiple deployments and frequent and costly relocations
during times of active conflict. S. 3217's Volcker Rule
provisions, as currently drafted, will prevent financial
services providers from offering both banking and insurance
products to AFSA members and their families tailored to their
specific financial needs.
Making a small change to the bill's current language to
ensure the Volcker Rule's proprietary trading restrictions
are not extended to the insurance affiliates of insured
depository institutions would allow one stop shop providers
of financial products and services to continue meeting the
unique needs of the military community. If the language is
not corrected, this ease of access to important financial
resources by American servicemen, women and their families
will be in jeopardy. Thank you for your thoughtful
consideration of this issue and its impact on AFSA's
membership and the entire U.S. military community.
Sincerely,

John R. ``Doc'' McCauslin,

CMSgt, USAF, Retired, Chief Executive Officer.
____

Naval Enlisted Reserve Association,

Falls Church, VA, May 5, 2010.
Hon. Christopher Dodd,
Chairman, Committee on Banking, Housing and Urban Affairs,
U.S. Senate, Washington, DC.
Hon. Richard C. Shelby,
Ranking Member, Committee on Banking, Housing and Urban
Affairs, U.S. Senate, Washington, DC.
Dear Chairman Dodd and Ranking Member Shelby: I am writing
on behalf of the Naval Enlisted Reserve Association (NERA), a
voluntary, nonprofit organization of active duty and retired
enlisted reservists and other dedicated persons committed to
promoting and maintaining the Navy Reserve, United States
Marine Corps Reserve, and United States Coast Guard Reserve.
NERA has strong concerns regarding the impact of the
Restoring American Financial Stability Act of 2010's (S.
3217) ``Volcker Rule'' provisions on NERA members and the
entire U.S. military community.
NERA is dedicated to protecting the individual rights,
benefits, and privileges our American servicemen and women
have earned through their commitment to military service and
their access to ``one stop shop'' providers of financial
services that understand their unique banking and insurance
needs. Ease of access to essential financial resources for
active duty and retired enlisted reservists and their
families is crucial to minimizing the financial stresses and
other burdens accompanying military life.
S. 3217's Volcker Rule provisions, as currently drafted,
threaten this essential access to comprehensive financial
services for NERA members and the entire enlisted community.
Making a small change to the Volcker Rule language to ensure
that the proprietary trading restrictions are not extended to
the insurance affiliates of insured depository, institutions
would allow one stop shop providers of financial products and
services to continue meeting the financial needs of NERA
members and their families.
If the Volcker Rule language is not corrected, the entire
military community's access to essential financial resources
will be in jeopardy. Thank you for your thoughtful
consideration of this issue.
Sincerely,

Senior Chief Nick Marine,

U.S. Navy (Ret.)
National President.
____

TIAA-CREF,

Washington, DC, May 24, 2010.
Hon. Kay Bailey Hutchison,
U.S. Senate,
Washington DC.
Dear Senator Hutchison: On behalf of TIAA-CREF, a national
financial services organization dedicated to serving the
financial needs of those who work in the academic, medical,
and cultural fields, I write to express our support for your
amendment (SA 4055) to the financial services regulatory
reform legislation, which is likely to be offered as a motion
to instruct conferees on Monday, May 24th.
TIAA-CREF is pleased to serve 3.7 million individual
participants, and we endeavor to assist them to and through
retirement. Passage of your amendment will send a strong
message that insurers should continue to be able to make
appropriate investments on behalf of their participants to
adequately provide for their retirement savings.
Thank you for proposing this significant improvement to the
legislation. If our company can be of additional assistance
to you or your staff in this endeavor, please do not hesitate
to contact me or Langston Emerson, Director of Federal
Government Relations.
Sincerely,
Daniel J. Keniry,
Senior Vice President, Government Relations.

The PRESIDING OFFICER. The Senator from North Carolina.
Mrs. HAGAN. Mr. President, I rise in support of the motion to
instruct offered by my colleague from Texas, Senator Hutchison. I thank
the Senator from Texas for her leadership on this issue of importance
to members of the military in our States and across the country.
Section 619 of the Restoring American Financial Stability Act of 2010
bans certain activities not only at depository institutions but also at
bank affiliates, including insurance affiliates. In doing so, section
619 inadvertently jeopardizes access to the important financial
resources offered by diversified financial institutions to service men
and women and their families. Section 619 bans proprietary trading, but
proprietary trading by insurance entities is significantly different
than the risk that comes with banks' proprietary trading. Insurance
companies use premiums to trade funds, not the consumer deposits that
this provision targets. Insurance trades are generally low risk and
focus on long-term payment of claims and are already heavily regulated
by State insurance regulators.
Servicemembers and their families rely on the ability of diversified
financial service firms to provide both insurance and banking services
under one roof. I am concerned that section 619 may force military
members to change their current financial service providers and
possibly subject the service men and women to unnecessary cost and
burdens. That is why Senator Hutchison and I have worked for several
weeks to correct this oversight, and why I introduced amendment 3799
with Senators Hutchison, Carper, Cornyn, Begich, Webb, Burr, and
Isakson. Amendment 3799 was a narrow change that addressed the issue.
To my knowledge, it was not opposed by anyone. While amendment 3799 was
not voted on, Senator Hutchison's motion to instruct provides clear
guidance to the conferees to ensure that proprietary trading
restrictions do not prevent insurance company affiliates of depository
institutions from engaging in such trading as part of the ordinary
business of insurance.
It is critical that we adopt this motion so that diversified
financial institutions may continue to provide low-cost and convenient
access to diversified financial services for those sacrificing in
service to our country. I urge my colleagues to vote yes on this
motion.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. DODD. Mr. President, I commend both of my colleagues, Senator
Hutchison and Senator Hagan, my good friends from Texas and North
Carolina. They have done a great job and deserve our thanks for the
work they have put into this proposal. I am supportive of the motion to
instruct. As a conferee, I will have something to say about this, I
presume, in the conference. I thank them for their efforts. They have
laid this out pretty well. I don't need to take a lot of time. I have
some further remarks that lay out why I think this is a good proposal.
I appreciate very much their efforts in this regard.
I am prepared to yield back time on this matter and urge colleagues
to support the Hutchison-Hagan motion to the financial reform package.
It is a good proposal, one that deserves all of our support.
The PRESIDING OFFICER. The Senator from Texas.

[[Page S4138]]

Mrs. HUTCHISON. Mr. President, I thank the distinguished chairman of
the committee. He has been supportive of this amendment from the
beginning. Senator Hagan and I can say that we have regularly
communicated with the chairman, and maybe he would even consider that
we have hounded him to death. But nevertheless, I know he was helping
us all along. We worked on the drafting to assure that the language met
both the minority and majority requirements. I am pleased he has worked
with us on this amendment. I thank Senator Hagan as well for being such
a staunch cosponsor of this amendment.
I yield back my time and ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
Mr. DODD. Have the yeas and nays been ordered on both motions?
The PRESIDING OFFICER. They have not.
Mr. DODD. I don't see my colleague from Kansas but I know he wants
the yeas and nays.
I ask for the yeas and nays on the Brownback motion.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Mr. DODD. I ask for the yeas and nays on the Hutchison-Hagan motion.
The PRESIDING OFFICER. Is there a sufficient second? There appears to
be a sufficient second.
The yeas and nays were ordered.
Mrs. HUTCHISON. Mr. President, I ask the distinguished chairman, when
we start the vote at 5:30, it will be the Brownback motion first and
then Hutchison-Hagan.
Mr. DODD. Brownback would come first and then the Hutchison-Hagan
motion.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
The question is on agreeing to the Brownback motion to instruct
conferees.
The yeas and nays have been ordered.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from West Virginia (Mr.
Byrd), the Senator from Arkansas (Mrs. Lincoln), the Senator from
Missouri (Mrs. McCaskill), the Senator from Oregon (Mr. Merkley), the
Senator from New York (Mr. Schumer), and the Senator from Virginia (Mr.
Warner) are necessarily absent.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Georgia (Mr. Chambliss), the Senator from Oklahoma (Mr. Coburn),
the Senator from Georgia (Mr. Isakson) and the Senator from Mississippi
(Mr. Wicker).
The PRESIDING OFFICER (Mrs. Shaheen). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 60, nays 30, as follows:

[Rollcall Vote No. 163 Leg.]

YEAS--60

Alexander
Barrasso
Bayh
Begich
Bennett
Bond
Boxer
Brown (MA)
Brownback
Bunning
Burr
Cardin
Cochran
Collins
Conrad
Corker
Cornyn
Crapo
DeMint
Ensign
Enzi
Graham
Grassley
Gregg
Hagan
Hatch
Hutchison
Inhofe
Johanns
Kerry
Klobuchar
Kohl
Kyl
Landrieu
Lautenberg
LeMieux
Lieberman
Lugar
McCain
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (NE)
Nelson (FL)
Pryor
Reid
Risch
Roberts
Rockefeller
Sessions
Shaheen
Shelby
Snowe
Specter
Thune
Vitter
Voinovich
Wyden

NAYS--30

Akaka
Baucus
Bennet
Bingaman
Brown (OH)
Burris
Cantwell
Carper
Casey
Dodd
Dorgan
Durbin
Feingold
Feinstein
Franken
Gillibrand
Harkin
Inouye
Johnson
Kaufman
Leahy
Levin
Reed
Sanders
Stabenow
Tester
Udall (CO)
Udall (NM)
Webb
Whitehouse

NOT VOTING--10

Byrd
Chambliss
Coburn
Isakson
Lincoln
McCaskill
Merkley
Schumer
Warner
Wicker
The motion was agreed to.
Mr. BROWNBACK. Madam President, I move to reconsider the vote, and I
move to lay that motion on the table.
The motion to lay on the table was agreed to.

____________________