Madam President, when we passed the Wall Street Reform and Consumer Protection Act, we did so in response to a financial crisis that shook the foundations of our economy and devastated so many of our hardworking constituents. For example, the Dow Jones dropped from an average of 13,677.89 in July of 2007 to an average of 7,235.47 in March of 2009, resulting in a 47.1 percent loss. Nationally, the unemployment rate increased from 5 percent in January 2008 to 10 percent in October 2009, and in Rhode Island, the unemployment rate was even higher, increasing from 6.2 percent in January 2008 to 11.9 percent in December 2009. In short, we had to do something to respond and avoid another financial crisis because behind each of these harrowing numbers were our constituents and their families, who saw their life savings, their jobs, and their homes evaporate in a flash. That something was the Wall Street Reform and Consumer Protection Act, also known as the Dodd-Frank Act. I am proud to have drafted and supported several of its provisions, such as the creation of a consumer watchdog— the Consumer Financial Protection Bureau, the CFPB—whose primary focus has been on protecting consumers from unscrupulous financial activities; my bipartisan language calling for a dedicated Office of Servicemember Affairs at the CFPB, which helps ensure that our servicemembers and their families are protected in the consumer finance space in the same way these service men and women protect us. That is now a part of the CFPB, and it has done remarkable work protecting the men and women of our armed services, who do remarkable work protecting us. Also , I was able to provide an additional $1 billion in funding through the Neighborhood Stabilization Program, which provided targeted emergency assistance to help local communities acquire, redevelop, or demolish foreclosed properties. Frankly, in the wake of the crisis, every city and many rural areas were seeing foreclosed properties sitting there, reminding us all of the devastation. With these resources, they could be repurposed for families to live in, or if they were decrepit, they could be demolished for urban development and economic development in rural areas. These are just a handful of the many good and worthwhile provisions in the Wall Street Reform and Consumer Protection Act, but, like any other major piece of legislation, it was not perfect.

Years ago, the custom here was that we would come together and agree on technical fixes to comprehensive legislation. It was almost predictable that after we had a complex piece of legislation, we would discover unintended consequences, and we would come together on a bipartisan basis to fix those technical issues without having to relitigate the entire bill. Unfortunately, that moment to make needed fixes never happened, and while the legislation before us today makes changes to the Wall Street Reform and Consumer Protection Act, I am concerned that this legislation may actually go too far and go beyond the needed technical fixes. For example, I worry that this legislation may actually make it tougher for community banks and credit unions to compete against the larger financial institutions despite the regulatory relief provisions in this bill for smaller financial institutions. This is because the legislation encourages large financial institutions to grow even larger—from $50 billion up to $250 billion. It does so, in part, by removing some of the extra oversight provisions we put in place with the Wall Street Reform and Consumer Protection Act, such as making sure large banks undergo strong and robust stress tests to ensure that they have their own sufficient rainy day fund and that any type of problem is not funded by taxpayer bailouts.

In addition, this legislation may further encourage larger financial institutions to grow by increasing their competitive edge for the kinds of businesses and customers currently served by community banks and credit unions, which should be concerning to all who support our smaller local financial institutions. Larger institutions can absorb more costs than smaller institutions. They can have programs that cost them a lot in the short run but drive out the competition in the medium and long run. Because they can stretch costs over bigger institutions, they can provide services that might be better provided or more personally provided by smaller institutions, but these will be pushed out of the marketplace. So the potential net result of this bill, ironically, may make it more difficult for regulators to spot a threat to financial stability from a larger bank while increasing competitive pressures on community banks and credit unions. To address some of these concerns, I have filed several amendments to improve the bill and add needed protections for consumers.

Let me describe some of these amendments in greater detail. One amendment seeks to prioritize regulatory relief for institutions with a strong history of doing right by their customers. In the legislation before us, Federal financial regulators are given the discretion to provide regulatory relief to certain financial institutions, and in so doing, to consider factors they deem appropriate. My amendment simply directs the regulators, when exercising this discretion, to also consider whether the financial institution, in the preceding 24-month period, paid any Federal fines or penalties and to consider whether there was any violation or settlement related to an alleged violation of the Servicemembers Civil Relief Act—the SCRA—or the Military Lending Act and if these violations could have been avoided. Again, that is a strong emphasis on protecting the men and women who protect us—our servicemembers. These two pieces of legislation, the SCRA—the Servicemembers Civil Relief Act—and the Military Lending Act, are the strongest protections our servicemen and women have against financial abuse by institutions. In short, how well an institution serves its customers, including our servicemembers, should help determine whether certain financial institutions deserve the regulatory relief provided under the bill. On a very strong bipartisan basis, I hope we can adopt this amendment. It just seems so clear to me that when we are giving relief, we should give it to those who have earned it—those institutions that have treated our service men and women well and have treated their customers well. Another amendment I filed would empower the CFPB and its Office of Servicemember Affairs to enforce existing SCRA safeguards—the Servicemembers Civil Relief Act safeguards— such as those that protect our servicemembers from being overcharged. This amendment is needed because, despite the importance of the SCRA’s protections to our servicemembers, enforcement of this critical law has been inconsistent and subject to the discretion of our financial regulators, which can change with each Administration. According to a July 2012 report from the Government Accountability Office, the estimated percentage of depository institutions that serviced mortgages that were examined for SCRA compliance varied widely, ranging from rates of 4 percent in 2007, 17 percent in 2008, 18 percent in 2009, 26 percent in 2010, and then dropping down to 15 percent in 2011. You can see that sort of tracked with the financial crisis, where at a point after 2007 and 2008, the regulators understood the threats that were being posed to service men and women in terms of their mortgage obligations. But that seems to be fading. We can’t lose focus on protecting the men and women who serve us. As someone who has had the experience and privilege of leading soldiers as an executive officer of a paratrooper company, I spent a lot of time trying to explain to people who were trying to collect from men and women in uniform that they couldn’t because the law had set certain interest rates that they exceeded and that they couldn’t because they were violating—back then it was called the Soldiers’ and Sailors’ Civil Relief Act. We need an agency of the government, not individual members of the Armed Forces, to protect these men and women. I think that is what we are trying to do with this legislation. Simply put, prioritizing the consumer protection of our service men and women should not be discretionary; it should be mandatory. This amendment ensures that the SCRA enforcement will be permanently a priority of the CFPB and the Office of Servicemember Affairs. It is supported by more than 30 organizations, including the National Military Family Association, Military Officers Association of America, Veterans Education Success, Student Veterans of America, and the Veterans of Foreign Wars of the United States.

We also need to do more to protect student loan borrowers. There is a growing private market to refinance student loans, including Federal student loans. I filed an amendment to require lenders to disclose the benefits that borrowers might forfeit, such as income-driven repayment plans, loan forgiveness, and deferment options, when they refinance a Federal loan into a private loan. I have also filed an amendment to clarify that the Education Loan Ombudsman at the CFPB should monitor and report student loan complaints for all education loans, including Federal student loans. Additionally, I support Senator Durbin’s amendment to strengthen student loan servicing and protections for private student loan borrowers and to provide greater transparency and accountability for campus-based banking products beyond just credit cards. We have all read about the many abuses that have taken place, and we owe it to consumers everywhere to ensure that these abuses are detected and prevented. Continuing this focus on consumer protections, another of my amendments responds to the difficulties that Rhode Islanders face when trying to secure a loan modification by taking greater advantage of bank branches. If you are able to walk into a bank branch and get a mortgage, then you should also be able to walk into the same branch and get help to avoid preventable foreclosures. What we found in the crisis was that often this was not the case. They could get a loan at the branch, but if they needed any type of assistance, they had to call a servicer or go someplace else. My amendment, which is supported by the National Consumer Law Center and the National Association of Realtors, establishes a pilot program to see whether this would be feasible—whether we could get bank branches not only to make loans but also to help borrowers when they come into difficult circumstances.

I have also filed an amendment that would direct GAO to conduct a retrospective study of the impact of the provisions of this legislation on economic growth and consumer protection. Specifically, my amendment asks GAO to evaluate the bill’s impact on non-managerial wages, senior executive pay, stock buybacks, the interest paid on savings or money market accounts, jobs being moved abroad, foreclosure rates, and enforcement actions. In so doing, we will be able to determine whether the legislation actually delivers on the claims by its sponsors of economic growth and consumer protection. I think we always have to go back and check our work, and this provision would allow us, in a formal and systematic way, to check our work. I hope we can do that.

Finally, I have filed an amendment supported by the former Federal Reserve Chairman, Paul Volcker, to retain and strengthen the Federal Reserve’s emergency safety and soundness powers. To quote Chairman Volcker: ‘‘It’s clear that circumstances can arise where the activities of some banks with less than $250 billion in assets would pose a grave threat to financial stability. To address such a threat, regulators have certain tools in their arsenal that we wish they will never have to use. Senator Reed’s amendment wisely restores and strengthens one such tool, allowing it to be deployed under limited circumstances and only upon approval of a supermajority of the [Financial Stability Oversight] Council.’’ Surely, at the very least, we should agree to preserve and strengthen the ability of our financial regulators to avoid grave threats and another financial crisis.

Before I conclude, I would like to make one further observation. Ten years ago today, few of us knew ahead of time that we would see an economy that would collapse into depths that we did not anticipate, that our Nation would literally recoil due to the recklessness and unchecked greed of too many on Wall Street. We should not forget that, nationally, over 8.6 million jobs were lost between January 2008 and January 2010, with over 33,000 jobs lost in Rhode Island alone. If anything, the Wall Street Reform and Consumer Protection Act was a sensible and long overdue response to the reality that people are nowhere near perfect and cannot always be trusted to do the right thing. We learned in the hardest and most painful ways that certain safeguards are necessary. Unfortunately, the bill before us today removes some of those safeguards. Absent any serious changes made to the bill during this week’s debate and for all the reasons I have stated, I cannot support it. I yield the floor.