tv U.S. Senate 10242017 CSPAN October 24, 2017 2:15pm-8:16pm EDT
[inaudible]. now, on state and local in many republican districts in the house and many of our republican colleagues states over 30%, certainly the percent, lowest number of 17 of taxpayers would get a tax and would use that deduction. the state of eliminating the state and local deduction is a dagger to the heart of the middle class, mr. president. you should tell your tax writers here in the house and senate to take it out of the bill. here is what price waterhouse coopers just found out. home values would go down 10% if we eliminate the state and local deductions. homes are the piece of the rock of the middle class.
>> you saw kentucky senator rand paul coming out and members of the senate republicans had their weekly conferences. democrats, to but on the republic inside their meeting with president trump for the first time up on capitol hill for one of these tuesday mornings. were expecting comments from leaders shortly and the senate gaveling in momentarily. can't bring those, live to you on c-span2 we are streaming them live online at c-span .org. we will take you back to the next senate floor. live coverage of c-span .org.
the presiding officer: the senator from kentucky. mr. paul: are we in a quorum call? the presiding officer: the senate not in a quorum call. mr. paul: okay. i'd seek recognition. the presiding officer: the senator from from kentucky. the senator recognized. mr. paul: we currently have a $20 trillion debt, and you might ask yourself whose fault is it? republicans or democrats? the easy answer is, both. both parties are equally spock, equally -- both parties are equally responsible, equally culpable, equally responsible of ignoring the problem and allowing our country to rot from the inside out. this year the debt will be $700 billion. the deficit will be $700 billion for just one year for our country.
$700 billion. we borrow about $1 million a minute. under george w. bush, the debt went from $5 trillion to $20 -- to $10 trillion. under president obama, it went from $10 trillion to $20 trillion. it's doubling under republicans and democrats. so right now we're in the midst of another spending frenzy. now, people will say, well, we're spending the money for something good. we're going to help those in puerto rico and those in texas and those in florida. my point is they'ring about to spend money to help someone in need. maybe we should take it from another area of spending that's less in need. i think that just simply borrowing it even for something that you can argue is compassionate is really fool hard hi did i and may make us weaker as a nation. admiral mullin put it this way. he sad the number-one threat to our national security is our
debt. in fact, most people who follow world politics, while we do have problems around the world, don't really see us being invaded anytime soon by an army or an armada. but people do see the burden of debt. so what we have before us is a bill, $36 billion. much of it's going to puerto rico and texas and florida. my request is very simple: we should pay for it. about a month ago we $15 billion for the same purposes. we are set in all likelihood to have over $100 billion spent on these hurricanes. i simply ask that we take it from some spending item that seems to be less pressing. i mean, we could go through a list of hundreds and hundreds of items, but one thing i would think that we could start with -- why don't we quit sending money to countries that burn our flag? so if you are a country and you are saying, death to america,
burning the american flag, maybe we shouldn't give you any money. we give money to pakistan, we trade and sell arms with most of the middle east that don't like us, and we do this with borrowed money. we don't even have the money we're sending. but week make the burden a little -- but we can make the burden a little bess if we said, you know what? let's don't give any known countries that:30, any country us that -- that hates us, any country that's burning our flag. a woman has been on death row for five years for being a christian. she went to the well to draw water and the women began chanting, death, death to the christian, as she was being beaten and pummeled on the ground and thought she was going to die, the police finally show up ax and they thought they were there to reserve could you her. they were there to imprison her. that was five years ago. not easy being christian in the middle east.
in pakistan, there was a doctor who helped us to get bin laden. his name is alfred. he helped us get information that helped us to target bin laden and finally get this great enemy of our country. the pakistanis put him in jail for helping us. the pakistanis help us one day and stab us in the back the next dame the taliban when they were defeated under president obama, when he put 100,000 troops in there they skoshried off to pakistan. they have a sanctuary and then come back. i think we ought to think twice about sending money to countries that burn our flag, sending money to countries that persecute christians, sending money to countries that frankly don't even like us. we spend about $30 billion helping other countries. with you know, if you were going to help your -- well, you know, if you were going to help your
neighbor, if your neighbor was without food, would you first feed your children if you had a little money left oh, help the children next -- left over, help the children next door? would you go to the bank and borrow the money to give to somebody? would that be compassionate or foolhard did i? is it compassion did compassiow known give to someone else? so people here will say they have great compassion and want to help the people of puerto rico and the people of texas and the people of florida. but notice they have great compassion with someone else's money. ask them if they're giving any known puerto rico. ask them if they're going give to tex texas. ask them what their doing to help their fellow man. you'll find that it's easy to be compassionate with someone else's money. it is not only compassion with someone sells' money, it is compassion with money that doesn't exist, money that's borrowed. of the $20 trillion we owe, china holds $1 trillion of that.
and all this might be said and you might say, we just have to help people. you're worrying too much and you have to talk about details. all the money is being well-spent. if you look back at money that's been spent before in disasters, guess what? people replace everything, including things that weren't broken. i remember in katrina a family that was hold up in a beachside resort for weeks, taxpayer money. they couldn't put them up across the street for about $60 or $50 a night. they were staying in a $400-a-night beachside resort with government money, with fema money. i think we have to low-income at how well -- i think we have to look at how well government spends money. you want an example of how well government spend money? last year we had some great signs -- there was a lot of great taxpayer-funded signs going on. they wanted to study whether or not neil armstrong when he set foot o on the money, when he sad
one small step for mankind or whether he said one small step for a man? so it was either one small step for man or one small step for a man. they want node if the preposition "a" was in there. they took some money to study autism and they studied neil armstrong's statement when he landed on the moon. $700,000. in the n.i.h. last year they spent $2 million study being whether or not -- studding whether or not if someone in front of you if swung knees on the nude food are you more or less likely to eat the food that's been sneezed on? i think we could have polled the audience on that. they spent $300,000 studying whether japanese quayle are more sexually promiscuous on cocaine. i think we could hassume yes. this kind of thing goes on here year after year. you think those are aberrations. that's new.
william proxmire was a senator, a conservative democrat back in the day, and he used to do something called the golden fleece award. he would put out these awards. they sound exactly the same as the stuff we're finding now. we spent money studying the gambling habits of ugandans. we've studied how to prepare the philippines for climate change. we're studying around the world with money we don't have. if you wanted to make the argument we're running a surplus, we're a great country, we are going to help all the other countries of the world, i would actually listen to you if we were running a slums but we're not. we're running a $700 billion debt. we borrow $1 million a minute and we got a lot of rich people here. we ought to ask these rich senators, what are you giving puerto rico? what are you giving texas? instead they're giving your money, really not even giving your money. they're giving money they borrowed. so what am i asking?
not that we don't do this. what i'm asking is that why don't we take it from something we shouldn't be doing. or why don't we fry to conserve? so if you decided you wanted to help the people next door, you might say you know i'm not going to the movie theater. i'm not going to go to the broadway play. i am not going to the nfl game. i am going to save money by cutting back on my expenses so i can help the people next door that are struggling. but you wouldn't go to the bank and ask for a loan to help people. that's not the way it works. unless you're a government and then common sense goes out the window and you just spend money right and left because you're compassionate. you have avenue got a big heart because you have the ability of the federal reserve to print up more money. but there are ultimately ramifications to profligate spending. we are approaching that day. so say that you -- some say that you get there when your debt is
at 100% of your g.d.p. we've now surpassed that. we have about a $17 trillion, $18 trillion economy and a $20 trillion debt. is it getting any better? have we planned on the one hand fixing it at all? there is floss fixing. is one party better than the other? no, they are equally bad. they are terrible. one sides is at least honest they don't care about the debt. the other side are just hypocrites because they say, oh, we're going to win the election by saying we're conservative, we care about the debt, but they too. the debt gets worse under both parties. voters need to scratch their head and say, maybe they're both equally bad with regard to the debt. most of the debt is driven by this. it's driven by mandatory spending. what is spanned $mandatory spending? these are the entitlements. medicare, medicaid,food stamps, social security. this is driving the debt. it's on autopilot so when we
talk about a budget, nobody is talking about doing anything about the spending on autopilot. why? it's risky to talk about reforming entitlements because everybody is getting one. if we don't, though, we're consigned to more and more debt, and ultimately i think we are consigned or resigned to a time in which the currency may well be destroyed and the country could be eaten from the inside out through this massive debt. last week, we voted on a budget, and from appearances, you would say, well, the republicans put forward a conservative budget, had $6 trillion worth of entitlement savings. in the first year, $96 billion worth of entitlement savings. but ask one republican, ask any republican in congress where is your $96 billion worth of entitlement spending coming, most of them didn't even know
it's in the budget, but it's in the budget to make it look good and make it look like it balances over ten years, and yet there is no plan to do anything to entitlement spending. there is no plan to do any entitlement savings. there is no bill in committee, and no bill will come forward. so i introduced an amendment to the budget, and i said, well, if you're going to cut or save or somehow transform the entitlements into responsible spending where we spend what comes in and we don't borrow, why don't we put rules or reconciliation instructions into the budget to tell people, yes, we're honest and we're sincere and we're actually going to cut spending. do you know how many people voted for it? there are 52 republicans. we had five. so they say they are for spending cuts, but they are not really because nobody will vote to give the instructions to actually do the spending cuts. if you were to eliminate all of the budget that we typically vote on, the budget that we typically vote on is called
discretionary spending. this is the military and the nonmilitary. if you were to eliminate all of that, you still don't balance the budget. that's a third of the budget. you can't even balance the budget by eliminating a third of it. you have to tackle the entitlements. and yet, nobody has the wherewithal, guts, or the intestinal fortitude to actually do it. now, we did have a big fix once upon a time in the social security. in 1983, president reagan and tip o'neill, republican and democrat, came together to say we were out of money and we gradually raised the age of social security to 67. is anybody happy to do that? is anybody jumping up and down and saying i want to wait longer to get social security? no, nobody is, but if we don't do it, there will be no social security because we're destroying the system. social security pays out more than it brings in. once upon a time, it was the other way. we used to have about 16 workers for every retiree. now we have about a little bit less than three workers for
every retiree. families got smaller. so when people ask me how come social security's running a deficit, how come medicare is? whose fault is it, republicans or democrats? really, a little bit of both, but it's also the fault of your grandparents for having too many kids. we had a whole bunch of baby boomers born, and they're all retiring, but the baby boomers had fewer kids, and the baby boomers' kids had even fewer kids, so it's a demographic shift. but if we put our head in the sand and do nothing, the debt will continue to accumulate. we're accumulating debt by the billions and billions of dollars every year. this year, $700 billion. and it's estimated that it will be close to or may exceed a trillion dollars next year. during president obama's tenure, we had deficits of over a trillion dollars in several years. over an eight-year period, we actually increased the debt over a trillion dollars a year. it was a $10 trillion increase in the debt in the eight years of president obama.
if we look at whose fault it is, republican or democrats, it's both, but i'll tell you the way it works around here. people say it is noble. you are enlightened to compromise. so here's the compromise you get. you heard that four of our brave young men died in niger the other day. most of the people didn't even know we were there, to the tune of a thousand soldiers. but the people once they heard about it, the hawks once they heard about it, they said oh, we need more. they didn't know a thousand were there, but they said we need more there. we need more people in niger. known has bothered to have a -- no one has bothered to have a debate about what the war is about in niger, whether we should send our brave elian there. our founding fathers said that was the first principle. the first principle of going to war, the initiation of war, the declaration of war is to be done by congress. they specifically took that
power away from the president. it's not just about funding, although that's another way we control war, but the primary way we control whether we enter into a war is the declaration of war. it's under article 1, section 8. this is where the congressional powers are laid out, and people say oh, that's an anachronism. we don't obey that anymore. they certainly don't, but it was never removed from the constitution. they just quit and began ignoring this. how important was this to our founding fathers? madison wrote this -- madison said that the executive is the branch of government most prone to war. therefore, the constitution with studied care granted the power of war to the legislature. this wasn't just madison who said this. it was jefferson, washington, adams. the whole panoply of founding fathers said that war was to be
initiated by congress. we've had no vote, no debate, and most of the members didn't know we were in this part of africa, and yet, here we are with the knee-jerk reaction by those on the right typically but some on the left, is we need more. we wouldn't have lost these four lives had we had 10,000 troops in a country that none of us knew we were going to be at war there. none of us fully have had debated who the parties are to the war, and yet we're going to be at war there now. and so the knee-jerk reaction is that we are to expand our role in this war in africa. i had my staff ask a question -- how many troops do we have in africa? nobody here knows. we looked it up. we found out it's 6,000. we have 6,000 troops in africa. you knew you were at war in iraq and syria and afghanistan and libya, but we didn't really know we had 6,000 troops in africa. that would include libya, but
6,000 troops are in africa. the point of it is when you get back to the debate that we're talking about, the budget, is that there is a great deal of expenditures to have troops in 100-some-odd countries. so we literally have troops in over 100 countries. we have 6,000 troops currently in africa. it's expensive. so how do you convince the other side of the aisle to pay for it? typically, the republican side of the aisle says katie bar the door, we'll spend whatever it takes and then some on the military. the democrats say well, what about welfare? we need more welfare. so then they tell you to compromise is noble, to be enlightened, to be pragmatic, to compromise is what we should shoot for. we should work with the other side. so that's what happens. there has been a bipartisan consensus for maybe 50, 60, 70 years now, and that is to fund everything. if the right wants warfare, the left says we must get more
welfare. if the left wants welfare, the right says we have to have more money for warfare. so it's guns and butter. it began in an aggressive way during the vietnam war, but it's proceeded apace. we continue to spend money like there's no tomorrow, but both parties are guilty. it's the right and the left. it's compromise that's killing this country. it's the compromise to spend money on everything for everyone whether you're from the right or the left. but, you know, there could be another form of compromise. we could say that we wish to compromise in the reverse direction. we wish to say that, look, maybe for the republicans, national defense is more important than welfare, and maybe for the democrats, welfare is more important than warfare, but maybe the compromise could be, you know what? we don't have enough money for
either one. maybe the compromise could be we'll spend a little bit less on each. you know what? we did that recently. when i first came up here, was elected in the sort of tea party tidal wave that was concerned about debt, something was passed that was called a sequester, and guess who hated it. all the big-spending republicans and all the big-spending democrats. they couldn't pass out their goodies and favors enough because there was some restraint. and you say well, i heard the sequester was terrible. i saw people at school, and i saw people in my town saying the sequester wasn't giving them enough money. the sequester was actually a slowdown in the rate of growth of spending. and this is why you have to understand newspeak. we talk about newspeak and how people change the meaning of words to make them meaningless or even to make them mean the opposite. you hear all the time, when we had this debate over reappealing obamacare, we were talking about
capping the rate of growth of medicaid. you heard all the squawking on the left saying, oh, we're going to cut medicaid. no. we were going to cut the rate of growth of medicaid. so we had a sequester, and it was evenly divided between military and nonmilitary, between republican interests and democrat interests. it did not cut, it slowed down the rate of growth of spending over ten years. it was actually working to a certain degree. we got it because people who were concerned about the debt fought and fought and fought and said we need to be concerned about the debt. we're hollowing the country out from the inside out. so who destroyed the sequester? really, the voices were louder on the republican side than the democrat, but both parties were complicit. the sequester has essentially been gutted and destroyed, and really the spending caps have become somewhat meaningless. so we have before us today $36 billion.
it will exceed the spending caps. so we have a sequester in place, but there is all these exemptions, so it's exempt. so any time you say it's an emergency, it's an exemption. within the $36 billion, though, there is $16 billion because we run a terrible government-run flood program that's $16 billion in the hole. so we're going to bail it out by letting it wipe all its debt out. that sort of sounds like long-term mismanagement in a bad program, badly run program rather than it sounds like an emergency. and yet it's going to be stuck in an emergency bill so it can exceed the caps. so what am i asking for today? i'm asking that we obey our own rules. we set these rules, we set these spending caps, we set the sequester. let's obey it. the other side will say oh, we're obeying the rules. we're just not counting this money. that's the problem. we have this dishonest accounting where people just say
oh, yeah, we're obeying the rules but we're not. so there are a couple ways you could pay for this. the first way i tried a couple of weeks ago. we had a $15 billion bill, and i said why don't we pay for it with the foreign aid, the welfare we give to other countries. why don't we say, you know what? it is time we looked at america first. it is time that we take care of our own. it is time that we spend money taking care of those in texas, florida, and puerto rico, but let's spend money that we're going to send in the form of welfare to other countries. maybe we should take care of our own. instead, though, the senate voted otherwise. i forced the issue. they weren't too happy with the amendment. i only got the vote because i was persistent, and i threatened to delay things, and i was able to get a vote. do you know how many senators voted for this? no democrats. no democrats wanted to offset any spending, and ten republicans did. so i think the vote was 87-10.
87 senators voted to keep spending money without any offsets, to basically just borrow the money. and now we're having the same debate again. i have an amendment to offset the $36 billion. now, in all likelihood, i'm not going to get an amendment vote because they don't have time. it would take 15 minutes, and god forbid that we spend 15 minutes talking about how we're being eaten alive by a $20 trillion debt. god forbid we talk about how a $20 trillion debt is an anchor around the neck of a country, god forbid. god forbid that we offer an amendment and at least take 15 minutes to have an offset, to say we should pay for this money we're going to send to puerto rico and texas and florida, pay for it by taking it from some other element in the budget. so last time i offered foreign welfare. this time what i have put on the table is something that is very
similar to a bill that's been put forward and offered for several years called the penny plan. the penny plan is this -- there's a great illustration of this if you want to look at this on youtube with a bunch -- of a guy with a bunch of pennies and showing in a visual way what it would be like to cut one penny out of every dollar. that's what we're talking about. 1% cut across the board would pay for this $36 billion bill. we have a -- it's actually a little bit less than 1%. 1% of $4 trillion budget would be about -- would be $40 billion. so we need $36 billion. so it's less than 1%. just cut the budget less than 1%. do you think there might be 1% waste in every department, including even departments of government you might like? do you think any american family has ever had to deal with a 1% cut? government is so wasteful at
every level that we could probably cut several percentage points of every division and department of government, and you wouldn't know it was gone. i mean, the waste is astounding. when we look at where money is spent, we looked at some of the money that was being shipped overseas not too long ago, and one of the programs we found was a televised cricket league for afghanistan. all right. self-esteem is real important and you're paying for it. so we're going to pay for television so the afghanis can feel better about themselves watching cricket on tv. the first problem is we don't have any money. we have to borrow it. the second problem is they don't have televisions in afghanistan. some do but about one in a thousand of people have a television. i guess they're going to feel better about the americans paying so they can watch cricket on tv. it's one thing after another. we paid $1 million for a variety program to put skits on their
televisions. once again most of them don't have a tv to watch. in the war effort on afghanist afghanistan, we spent trillions and trillions of dollars in the war effort. we defeated the taliban many times, and i'm sure we can defeat them again. that just means they go across the border, hide in caves and come back when we're tired. we spent $45 million on a gas station in afghanistan. this gas station, it's an interesting gas station. it serves up natural gas. that's great, we're lessening the carbon footprint in afghanistan. except for it's completely absurd because they don't have any cars that run on natural gas in afghanistan. so they build a $45 million plant. the original estimates that were that it was going to cost about half a ilin. so it was -- a million. so it was 46 times cost overruns.
ends up costing $45 million. and it serves up natural gas that nobody has a car that runs on natural gas. we said, whoops. so we immediately bought them 24 cars that run on natural gas so they can go to the $45 million gas station and get their natural gas. but that wasn't enough because we had natural gas cars for them but they had no money to buy the natural gas so we bought them all credit cards. we bought them natural gas-burning cars. we gave them a natural gas gas station and bought them credit cards to reduce the carbon footprint of those living in afghanistan. this is absurd. when we look at the budget and we look at accounting, a lot of the money that's been spent overseas in the iraq war, the afghan war, the syrian war, the niger war, the libyan war, the somalia war, the chad war, a lot of this money isn't really budgeted. a lot of this money is actually
done as an offbudget thing. it's called the overseas contingency operation. it's really a way of cheating, a way of being dishonest in your accounting. it's a way of evading spending caps, but it's also gone a long way towards making it easier just to keep spending money without restraint. so we tried to put restraints on military and nonmilitary and they're exceeded by this slush fund. they call it oco funding, overseas contingency operation. we had the budget vote recently. i put forward an amendment. it simply said we shouldn't spend above our caps. if we put these caps in place, this is what we should spend. i think we got maybe 15 or 20 votes on that. but this is the problem. ultimately we have to decide as a country are we going to obey the constitution or are we only going to war when we declare war when congress does its job, declares war? are we going to go to war any time, anywhere?
that's sort of what we do now. we go to war any time anywhere on the face of the planet and it's not for free. not only is it expensive in dollars but it's expensive in lives. the young men and women that are sent to these wars and yet no one's ever voted on them. we lost a soldier in yemen three or four months ago. and for his family it was devastating but america pays little attention because america basically isn't fighting the war. a very small percentage of america, brave young men and women, often from rural parts of our country are fighting our wars. but the massive america isn't fighting. you could say they're volunteers and that is great. i think that's the best kind of army to have. but i hate it that we don't show the responsibility and care of actually doing our job of taking the time to debate it. should we be at war in yemen or not? should we be at war in niger?
should we be at war in libya? should we be at war in chad? should we be at war in som mall la, pakistan, afghanistan? we have troops in probably 20, 30 nations where there's conflict going on, and we're actively involved in the midst of conflict in at least six or seven. very expensive in human lives and dollars. we need to ask ourselves will we do this forever? sunnies have been fighting the shiite for about a thousand years. people say, we're going after isis in africa. well, isis is basically a name for radical jihadist islam and they're all over the planet. we going to go everywhere and kill every one of them? is there a possibility that when we kill one, ten more pop up? you know, is whack-a-mole strategy for killing every radical on the planet a way we're going to win? we went into yemen on a manned
raid in january or february of this year and we last one brave navy seal. they say we got information. they won't exactly tell me what information they got. they claim is was this great information that's going to make the war on terror so much easier. i have my doubts. in the raid, though, which was a manned raid in the middle of yemen, women and children died. and i don't blame our soldiers. i've got members of my family are active duty. they do what they're told. they take orders and it's tough being put in a situation like that. you're dropped in the middle of nowhere in the village. maybe women and children are shooting at you as well. you have to defend yourself and complete your mission. and yet i wonder whether or not the policymakers should be more involved with making a decision whether we should be in yemen and whether or not the people that live in the surrounding area to that village will for a hundred years or more recite through oral tradition the day
the americans came, whether or not we actually killed more terrorists than will be created by the oral tradition of when the americans came. we are also aiding and abetting saudi arabia in this horrific war in yemen. there's 17 million people who live on the edge of starvation in yemen and the war is exacerbating that. yemen is a very poor country to begin with. they import about 80% of their food. currently the saudis have a blockade and so no food is getting in. they say it's to prevent arms, and i'm sure it is, but one of the consequences is no food. there's a half a million people with cholera right now. it's sort of a bad form of dysentery and in poor countries you die from cholera. half a million people with cholera. it goes along with no food, no clean water. the saudis are blockading yemen.
the saudis are bombing yemen. we are giving the saudis or selling the saudis the weapons. we're refueling the planes and helping the saudis pick the targets. one of the saudi targets about a year ago was a funeral procession. this was a funeral procession of a houthi leader or rebel. there were 500 people, civilians, who were wounded in that procession and 150 killed by a saudi bomb on civilians. do you think they're going to soon forget that? do you think that by killing 150 people in a funeral procession and wounding 500 that you killed more terrorists that day than you created? i would say that that day will live on in oral history for a thousand years, the day the saudis came with american bombs and bombed an unarmed funeral procession will live on for a
thousand years and hundreds if not thousands of people will be motivated to become suicide bombers because of the day the saudis bombed a funeral procession. it's incredibly expensive in lives, their lives, our lives. when you look at the cause of famine around the globe and you look at it extensively and study the causes of famine, probably six, seven times out of ten it's war. war is a terrible thing. and if we don't acknowledge that and try to think how are ways we can make war the last resort instead of the first resort, for goodness sake, the people on television this sunday didn't know how many troops were in niger, and yet their immediate response is, well, we should have more. we need more troops over there in africa. in a place most americans had not heard of, have no idea who's
fighting whom, and whether or not it's an achievable goal. they say a thousand isn't enough. if we had 10,000 and air support and all of this, we would have prevented these deaths. that's one lesson you could learn. the other lesson you could learn is maybe we shouldn't have been there at all. you see, people have to stand up for themselves. there's this idea of sort of self-rule and independence, and the people are coddled and not sort of forced into the position of defending themselves, they won't. so we've been in afghanistan 16 years. in the 16 years we were there, what have we found? well, about 60,000, 80,000 afghans came over here. they were translators. oh, we have to help these translators. well, they spoke english and are pro-west, they needed to stay in afghanistan and create a country. the same in iraq. we won the war in iraq. all the good people came over here. i have nothing personally against those who came other
than i'm disappointed that there weren't enough people who were her heroic -- heroic enough to stay? their country to build a new country. who fights over there? some of the afghans fight. some of the people join their army to shoot us. whether it's green on green, where their soldiers are shooting our soldiers because they come in intentionally are there to kill our soldiers. the question is, how come after 15, 16 years the afghans can't fight to preserve their nation? everybody now says oh, if america comes home, the taliban takes over. well, the taliban's not quite isis. they're also not quite the same international sort of jihadist. they did harbor osama bin laden once upon a time. most of those people are dead although not all being dead. when you look at -- when the i.r.a. ended in england and ireland, it actually ended up being a negotiation. some say we'll never negotiate with the enemy. if you never negotiate with the
taliban, they are unfortunately pretty popular in afghanistan. they're going to be there forever. can we kill them all? no, just like the radicals throughout the islamic countries, i think there's too many to kill. and the question is do you create more than you kill? but if you put this in context and you say, well, we have to be able to defend ourselves, our country needs to be strong to defend ourselves, i couldn't agree more. but you know what? we become weaker every day as we run up this debt. $20 trillion in debt, $700 billion this year. we borrow $1 million a minute. realize that predicament, and then realize that the powers that be don't want to allow amendments to offset spending. so i'm proposing that if we spend money on puerto rico and texas and florida, that we offset it by taking it for something that's less of a priority, something else in the budget. if we were to cut 1% of the rest
of the budget, we'd have more than enough to pay for this. would anybody notice 1%? sure. she'd have to push things around a little bit but they'd all survive. we looked at spending and to show you how bad spending in the federal government is, it gets faster each month as you get towards the end of the year. so there's only one month left. these bureaucrat, go, oh, my goodness, we might not be able to spend the money fast enough. so spending in the last month of the year is actually five times faster than any other month of the year. in fact, in the last month of the fiscal year, not only is it five times faster, each progressive day it gets faster. so the last month of the fiscal year september, september 1, they spend the money like this. september 2 like this. september 3 like this. september 4 -- it goes up every day because they're trying to shovel the money out as fast as they can. they don't spend it, they won't get it next year. the common parlance for this is
use it or lose it. you get all the way to the last day of the fiscal year, spending actually increases and goes with the rising and setting sun. so it's 8:00 earlier here than it is in california. as the sun rises, we begin spending money in the east. we're shoveling out as fast as we can. as the sun progresses toward sunset, the spending shifts to the west coast. they're shoveling it out at 5:00 pacific time trying to get rid of the money. if you look when most conferences are, when most government employees go to a conference in las vegas, the last month of the year. they found they have some money. what's a million bucks? you don't mind spending a million bucks, right? you want these government employees to have a good time. there was a group -- i think it was a general service -- it was general services a couple of years ago. you saw the pictures of the head of the g.s.a. and his wife and a big owe in a big las vegas hot tub drinking champagne. i think it was a million-dollar
mr. flake: i rise to address a matter that has been very much on my mind at a moment when it seems that our democracy is more defined by our discord and dysfunction than our own values and principles. let me begin by noting a somewhat obvious point that these offices we hold are not ours indefinitely. we're not here to simply mark time. sustained incumbency is certainly not the point of seeking office and there are times when we must risk our careers in favor of our principles. now is such a time. it must also be said that i rise today with no small measure of regret, regret because of the state of our disunion, regret because of the disrepair and destructiveness of our politics, regret because of indecency of
our discourse, regret because of the leadership, regret because of the compromise of our morale authority and by all, i mean all of our compli city in this -- complicity in this state of our affairs. it is time for that to end. in this century a new phrase has entered the language to describe the accommodation of a new and undesirable order, that phrase being the new normal. that we must never adjust to the present courseness of our -- coarseness of our present dialogue, we must never regard as normal the casual undermining of our democratic ideals. the personal attacks, the threats against principles, freedoms and institution, the
flagrant disregard for truth andes enzi, the -- and decency, the provocation for the most petty reasons, reasons having nothing to do with the fortunes of the people we have been elected to serve. none-these appalling features of our current politics should ever be regarded as normal. we must never allow ourselves to lapse into thinking that is just the way things are now. if we simply become used to condition, thinking that it is just politics as usual, then heaven help us. without fear of the consequences and without consideration of the rules of what is politically safe, we must stop pretending that the conduct of some in our executive branch are normal. they are not normal.
reckless, outrage rageus and -- outrageous and undignified behavior has been excused as telling it like it is when it is actually reckless, outrageous, and undignified. when such behavior emanates from the top of our government, it is something else. it is dangerous to a democracy. such behavior does not project strength because our strength comes from our values. it, instead, projects a corruption of the spirit and weakness. it is often said that children are watching. well, they are. and what are we going to do about that? when the next generation asks us, why didn't you do something? why didn't you speak up? what are we going to say? mr. president, i rise today to say, enough. we must dedicate ourselves to
making had sure that the -- that this does not become the normal. we have fooled ourselves long enough that a pivot to governing is right around the corner. a return to civility and stability right behind it. we know better than that. by now we all know better than that. here today i stand to say that we would be better served -- we would better serve the country by better fulfilling our obligations under the constitution by adhering to our article 1 old normal, mr. madison's doctrine of separation of powers. this genius for which madison argued in federalist 51 held that the equal branches of government would balance and counteract with each other if necessary. ambition counteracts ambition,
he wrote. what happens if ambition fails to counteract ambition, what happens if ambition fails to assert itself in the face of chaos and instability, if indecency fails to call out indecency. were the shoe on the other foot, would we republicans meekly accept such behavior on display from dominant democrats? of course we wouldn't and we would be wrong if we did. when we remain silent and fail to act, when we know that silence and inaction is the wrong thing to do because of political considerations, because we might make enemies, because we might alienate the base, because we might provoke a primary challenge, because add that's in yum -- add that's in emwhen we succumb to those to that in defense of our
institutions and liberty we forsake our obligations. those things are far more important than politics. now, i'm aware more politically savvy people than i will caution against such talk. i'm aware there's a segment of my party that anything short of complete and unquestionable loyalty to a president who belongs to my party is unacceptable and suspect. if i have been critical it is not because i relish criticizing the behavior of the president of the united states. if i have been critical, it is because i believe it is my obligation to do so, and as a matter and duty of conscience. the notion that one should stay silent as the norms and values that keep america strong are undermined and the alliance are
routinely threatened by the level of thought that goes into 140 characters. the notion that we should say or do nothing in the face of such mer is -- is misguided. a republican president named roosevelt had this to say about the president and a citizens' relationship to the office. quote, the president is merely the most important among a large number of public servants. he should be supported or opposed exactly to the degree warranted by his good or bad conduct, his efficiency or inefficiency in rendering loyal and able service to the nation as a whole. he continued, therefore, it is absolutely necessary that there -- that there should be a full liberty to tell the truth about his acts and this means that it is exactly as necessary to blame him when he does wrong
as to praise him when he does right. any other attitude in an american citizen is base. president roosevelt continued, to announce that there must be no criticism of the president or that we are to stand by a president, right or wrong, is not only unpatriotic but is morally treasonable to the american public. unquote. acting on conscience and principle in the manner in which we express our moral selves and as such loyalty should supersede loyalty to any man or party. we can all be forgiven for failing in that measure from time to time. i certainly put myself to the top of the list of those who fall short in this regard. i am hollier than none. too often we forgive and excuse
our failures so we might accommodate them and go right on failing until the accommodation itself becomes our principle. in that way and over time we can justify almost any behavior and sacrifice any principle. i'm afraid that this is where we now find ourselves. when a leader correctly identifies real hurt and insecurity in our country and instead of addressing it goes to look for someone to blame, there is perhaps nothing more devastating to a pluralistic society. leadership knows that most often a good place to start in assigning blame is to look somewhat closer to home. leadership knows where the buck stops. humility helps. character counts. leadership does not knowingly encourage or feed ugly or debased appetites in us. leadership lives by the american creed: e pluribus unum: from
many one. american leadership looks to the world, and just as lincoln did, sees the family of man. humanity is not a zero-sum game. when we have been at our most prosperous, we have been at our most principled. and when we do well, the rest of the world does well. these articles of civic faith have been critical to the american identity for as long as we have been alive. they are our birthright and our obligation. we must guard them jealously and pass them on for as long as the calendar has days. to betray them or to be unserious in their defense is a betrayal of the fundamental ongoingses of american -- of the fundamental obligations of american leadership and to behave as if they don't matter is not who we are. now the efficacy of american leadership around the globe has come into question. when the united states emerged
from world war ii, we contributed about half of the world's economic activity. it would have been easy to secure our dominance, keeping those countries who had been defeated or greatly weakened during the war in their place. we didn't do that. it would have been easy to focus inward. we resisted those impulses. instead we financed reconstruction of shattered countries and created international organizations and institutions that have helped provide security and foster prosperity around the world for more than 70 years. now it seems that we, the architects of this visionary rules-based world order that has brought so much freedom and prosperity are the ones most eager to abandon it. the implications of this abandonment are profound and the beneficiaries of this rather radical departure in the american approach to the world
are the ideological enemies of our values. despotism loves a vacuum and our allies are now looking elsewhere for leadership. why are they doing this? none of this is normal. and what do we as united states senators have to say about it? the principles that underlie our politics, the values of our founding are too vital to our identity and to our survival to allow them to be compromised by the requirements of politics because politics can make us silent when we should speak. and silence can equal complicity. i have children and grandchildren to answer to. and so, mr. president, i will not be complicit or silent. i decided that i would be better able to represent the people of arizona and to better serve my country and my conscience by freeing myself of the political consideration that consumed far too much bandwidth and cause me
to compromise far too many principles. to that end i'm announcing today that my service in the senate will conclude at the end of my term in early january, 2019. it is clear at this moment that a traditional conservative who believes in limited government and free markets, who is devoted to free trade, who is proimmigration has a narrower and narrow path to nomination in the republican party, the party that has so long defined itself by its belief in those things. it is also clear to me for the moment that we have given in or given up on the core principles in favor of a more viscerally satisfying anger and resentment. to be clear to the anger and resentment that the people feel at the royal mess that we've created are justified. but anger and resentment are not the governing philosophy.
there is an undeniable potency to a populist appeal by mischaracterizing or misunderstanding our problems and giving in to the impulse to scapegoat and belittle -- the impulse to scape coat and belittle threatens to turn us into a fearful backward looking people. in the case of the republican party, those things also threaten to turn us into a fearful, backward-looking minority party. we were not made great as a country by indulging in or even exalting our worst impulses, turning against ourselves, glorifying in the things that divide us and calling fake things true and true things fake. and we did not become the beacon of freedom in the darkest corners of the world by flouting our institutions and failing to understand just how hard won and vulnerable they are.
this spell will eventually break. that is my belief. we will return to ourselves once more, and i say the sooner the better. because we have a healthy government, we must also have healthy and functioning parties. we must respect each other again in an atmosphere of shared facts and shared values, comity, and good faith. we must argue our positions fervently and never be afraid to compromise. we must assume the best of our fellow man and always look for the good. until that day comes, we must be unafraid to stand up and speak out as if our country depends on it, because it does. i plan to spend the remaining 14 months of my senate term doing just that. mr. president, the graveyard is full of indispensable men and women. none of us here is indispensable.
nor were even the great figures of history who toiled at these very desks in this very chamber to shape the country that we have inherited. what is indispensable are the values that they consecrated in philadelphia and in this place. values which have endured and will endure for so long as men and women wish to remain free. what is indies indispensable ise do here in defense of those values. a political career does not mean much if we are complicit in undermining these values. i thank my colleagues for indulging me here today. i will close by borrowing the words of president lincoln, who knew more about healthy enmity and preserving our founding values than any other american who has ever lived. his words from his first inaugural were a prayer in his time and are now no less in ours. we are not enemies but friends.
we must not be enemies. though passion may have strained, it must not break the bonds of our affection. the mystic cords of memory will swell when again touched as surely as they will be by the better angels of our nature. thank you, mr. president. i yield the floor. the presiding officer: the majority leader. mr. mcconnell: mr. president, colleagues, we regret to hear that our friend from arizona will conclude his senate service at the end of his six-year term. and i'd like to say, mr. president, on behalf of myself and i think many of my colleagues, we've just witnessed a speech from a very
fine man, a man who clearly brings high principles to the office every day. and does what he believes is in the best interest of arizona and the country. i'm grateful that the senator from arizona will be here for another year and a half. we have big things to try to accomplish for the american people. from my perspective, the senator from arizona has been a great team player, always triek to get a constructive -- always trying to get a constructive outcome no matter what the issue before us. so i thank the senator from arizona for his service which will continue, thankfully, another year and a half, and for the opportunity to listen to his remarks today. mr. mccain: mr. president. the presiding officer: the senior senator from arizona. mr. mccain: mr. president, it's very hard for me to add to the
eloquence of my friend, from my dear friend from arizona. but i do want to say that it's been one of the great honors of my life to have the opportunity to serve with a man of integrity and honor and decency and commitment to not only arizona, but the united states of america. i have seen jeff flake stand up for what he believes in knowing full well that there would be a political price to pay. i have seen him stand up for his family. i've seen him stand up for his forebearers who were the early set he he -- early settlers of e state of arizona. there is a place called snowflake, arizona. obviously the flake part comes from his direct predecessor. it is the flake families and
families like them that came and worked and slaved and raised families and made arizona what it is. and it has never had a more deserving son than jeff flake and his beautiful wife cheryl and children. so i would just like to say, jeff, i've known you now for a number of years. i know you have served arizona and the country, and there's one thing that i'm absolutely sure of and that you will continue that service which is part of your family, it's part of your view of america, it's part of your willingness and desire to serve arizona, and one of the great privileges of my life has been to have the opportunity to know you and to serve with you. so as we look, all of us, at some point at our time that we have spent here, whether they
be short or whether it be long, we look back and we think about what we could have done, what we should have done, what we might have done and the mistakes we made and the things we're proud of. well, in the flake service to this country -- when the flake service to this country is reviewed it will be one of honor, brilliance, patriotism and love of country. and i thank you and god bless you and your family. mr. mcconnell: mr. president. the presiding officer: the majority leader. mr. mcconnell: i ask unanimous consent that not withstanding rule 22 all postcloture time now be considered expired. all pending motions and amendments be withdrawn except for the motion to concur and that senator paul be recognized
to speak for up to five minutes, and then make a budget point of order that myself or my designee be recognized to make a motion to waive and that following disposition of the motion to waive the senate vote on the motion to concur on the house amendment to the senate amendment to h.r. 2266 and that if the motion is agreed to, the motion to reconsider be considered made and then laid upon the table. the presiding officer: is there objection? without objection. under the previous order, all postcloture time is expired. under the previous order, the motion to concur with the amendment is withdrawn. a senator: mr. president. the presiding officer: the senator from kentucky. mr. paul: there have been many who have said, including admiral mullen, among others, that the greatest threat to our national security is our debt. we have a $20 trillion debt this
year. the debt for one year will be about $700 billion. we borrow $1 million a minute. what we have before us is a bill that will exceed our spending caps. we will be told that this is an emergency and we must do it. and yet, i think the true compassion comes from helping those but also making sure that we don't add to our debt. i think that the truly compassionate person helps their neighbor by giving part of their surplus to their neighbor but not going to the bank and borrowing money to give it to their neighbor. we're $700 billion short in the budget, and we're simply going to print more money and send it to puerto rico and texas and florida. what i've asked is if you want to help people, why don't we set our priorities. why don't we take money from other areas of the budget where it's not needed. what i've proposed is that we cut 1% or a little bit less than that across the board. i think there's not a department of government that couldn't deal with 1% less. and we would take that money and
we could spend it on the emergency in puerto rico and texas. but i think if we think somehow that it's compassionate to go ahead and just borrow more money and continue doing this, i think we're fooling ourselves. i think our one becomes weeker with each -- i think our country becomes weaker each day we add to the debt. there is enough blame to go around frankly. the debt doubled under george w. bush from $5 trillion to $10 trillion. the debt then doubled again from $10 trillion to $20 trillion under president obama. we are on course to add some estimate another $10 billion, $15 billion over the next eight years. this is a real problem for our country. and so i think as we look towards helping those who suffered from the hurricane, we should look towards taking it away from less pressing priorities. there is also $16 billion in here for the flood program that
continues to pay people to build in flood zones. we don't it year after year after year and we continue to rebuild in flood zones and then the taxpayer is left on the hook. so we're wiping out $16 billion in debt for the flood program and we're also then spending money that we don't have. so what i would like to do at this point is to raise a point of order that has to do with us exceeding the spending caps. i think if we're going to be hon west ourselves, we're in the midst of talking about a large tax cut, which i favor, but how can we be the party or the people who cut taxes at the same time we continue to borrow more? so what i'm asking through this budget point of order is that we actually adhere to our rules, not exceed our spending caps, and try to slow down the accumulation of debt. with that, mr. president, i raise section 314-e point of order pursuant to the congressional budget act of 1974
against sections 304, 306, 308, and 309 of the additional supplemental appropriations for disaster relief requirements act of 2017. mr. roberts: mr. president, pursuant to section 904 of the congressional budget act of 1974, and the waiver provisions of applicable budget resolutions, i move to waive all applicable sections of that act and applicable budget resolution for the purpose of h.r. 266 and i ask for the -- for the purpose of h.r. 2266 and ask for the yeas and nays. the presiding officer: is there a sufficient second? there appears to be. the clerk will call the roll. vote:
the presiding officer: the motion to concur in the house amendment is agreed to. the yeas are 82, the nays are 17. mr. crapo: mr. president. the presiding officer: the senator from idaho. mr. crapo: i move to proceed to h.j. res. 111. the presiding officer: would the senator suspend? under the previous order, the motion to reconsider is considered made and laid upon the table with respect to the prior vote. the clerk will report the motion to proceed. the clerk: motion to proceed to h.j. res. 111, joint resolution providing for congressional disapproval under chapter 8 of title 5, united states code, and so forth. the presiding officer: the question is on the motion. all in favor, say aye.
opposed, nay. the ayes appear to have it. the ayes do have it. the motion is agreed to. the clerk will report the joint resolution. the clerk: h.j. res. 111, joint resolution providing for congressional disapproval under chapter 8 of title 5, united states code, and so forth. mr. crapo: mr. president, i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
brown mr. president? the presiding officer: the senator from ohio. mr. brown: i ask unanimous consent to dispense with the quorum call. the presiding officer: without objection. mr. brown: mr. president, what congress is trying to do today, this evening, as long as it takes, as long as the arms are twisted is frankly outrageous. our job is to look out for the people whom we serve, not to look out for wells fargo, not to look oat for equifax, not to look out for wall street banks, not to look out for corporations who scam consumers. forced arbitration pure and simple takes power away from ordinary people. it gives it to the big banks. it gives it to equifax. it gives it to wells fargo. it gives it to wall street companies that already have an unfair advantage. we know, mr. president, that the white house increasingly looks like a retreat for wall street executives. i would hope the senate wouldn't
follow suit. look at equifax. in early september we learned it compromised the personal data of more than 145 million americans, five million in my state, probably twice that in the presiding officer's state. names, dates of birth, addresses, social security numbers, driver's licenses, more than half the adult population of the united states of america. so how did equifax respond? by immediately trying to trick customers, their consumers, their customers into signing away their rights to access the court system in exchange for credit monitoring. here's what equifax did in simple terms. equifax said oh, we'll give you a free year of credit monitoring. sign right here. oh, yeah, when you sign right here, the fine print says, but you can't ever sue us. you have to go through this forced arbitration which of course almost nobody does. almost nobody understands and
almost no consumer ever wins. only after senators and consumer groups led a public outcry, then they backed down. we sat on the banking committee and listened to the just retired c.e.o. of equifax and then the next week listened to the trade association where -- you know, the c.e.o. of the trade association wasn't paid the tens of millions of dollars, i assume, that the retired c.e.o. of equifax was, the recently retired because he didn't do his job, even though he was getting all kinds of compensation. more on that later. but they backed down from this idea of forced arbitration because the public said you basically got to be kidding. you're going to defraud 145 million and then you're going to -- then they're going to sign something and the fine print says sorry, nah, nah, nal, you can't sue us. then he said he was going to give up his bonus. he made in 2016 and 2016 as senator crapo and i on the banking committee talked about today, he made about $140
million in those two years. it's not very difficult math. 145 million people were scammed and the c.e.o. not doing his job made $140 million so that's about a dollar per scamee. i know it's not a word but it sort of fits. you think after public shaming equifax would have learned its lesson. so last week equifax again just abusing the public trust -- you wonder why people are cynical, people are skeptical, people are so frustrated about wall street and about financial services in this country because you have these multiga dill theirs -- ga zillionaires, again he made $140 million. you have these very wealthy executives who think they're doing us a favor because they're giving back their bonus. they already have a hundred million in their pocket and that's just the last two years. would knows how far it goes back. so they sent a representative to testify in front of the banking committee. you know what he said when i asked him and others asked him, he still thinks it's appropriate for equifax and the other credit bureaus to use forced
arbitration krauses that prevent -- clauses that prevent americans from having their day in court. he seemed to have learned nothing from this. even after the huge harm that equifax has caused 145 million americans -- excuse me -- a million americans, five million ohioans, they still defend their use of forced arbitration clauses. why do they like it so much? why are they willing to stand strong and hold on to their right to forced ash straition? because -- arbitration? because they make so much money from forced arbitration, because it keeps that power relationship when wall street has all the power and 145 million consumers have almost no power, that's why they like this -- that's why they like forced arbitration. that's why they're turning the heat up when all of my colleagues here to stand strong for the banks, for wall street, for equifax, for wells fargo, for forced arbitration. that's equifax. let's take a look at wells fargo. in 2013 they used a forced
arbitration clause to silence a customer who accused the company of opening face accounts in his name. okay. say that again. they used a forced arbitration clause to silence a customer who accused the company of opening fake accounts in his name. turns out this customer is not just right but we find out wells fargo opened three and a half million of these fake accounts. think about that you've got a relationship with a bank. it happens to be wells fargo which used to have a really good reputation as one of america's largest wall street banks. neighborhood bank, too. there are six million -- if i'm right, six million community banks as they like to say, six million little branch offices in everybody's neighborhood. so they owe they opened -- this bank took relationships they had with their customers and opened accounts pretty much for three and a half million of their customers, accounts that they never approved. say you had a checking account with them. they went and opened another checking account in your name and didn't tell you.
that's what they did. they subjected those employee -- then they subjected their employees who opened those accounts to -- that's what they did. harsh sales goals. they threatened to fire anyone who didn't keep up. but because -- here's the forced arbitration. because with wells fargo had the power of the forced arbitration clause, they were able to sweep this 2013 lawsuit under the rug allowing the scandal to continue. go back to that. in 2013, if that customer didn't have that forced arbitration which that customer didn't even know he or she signed when they -- when they wanted to sue, they found out they couldn't sue because they had signed in the really small print that almost nobody reads -- i'm not a lawyer. i don't know if i can understand that small print. i know many americans can't. so that person couldn't sue. imagine if that person had been able to sue in an open court and then in discovery they had found out oh, my gosh, wells fargo opened three and a half million of these. maybe we ought to do something about t. but instead -- about
it. but instead because of forced arbitration the public didn't find out about what wells fargo had done til three -- until three years later. maybe they didn't open three and a half million in 2013. maybe it was only a million a year but every month they opened more and more fake account, false accounts because nobody could sue because they were forced into arbitration and arbitration always happens in a back room somewhere. nobody really knows what's going o. mr. president, think how much damage could have been prevented if that customer is allowed to take wells fargo to open court four years ago. when the scandal was finally brought to light, customers found out that forced arbitration was such a powerful tool for wells fargo and others that -- it was all without their consent. the economic policy institute studied people who went into arbitration with wells fargo. they found out on average -- most people don't even try with arbitration. they just give up because it's only a few dollars but those
courageous souls, those angry customers or whatever that actually went into arbitration, they ended up -- they did not -- they did not just lose and not win any money from wells fargo. they on the average had to pay -- they had to pay wells fargo -- maybe we could call it in layman's terms countersuit in some sense, they had to pay wells fargo an average of $11,000. so the few people that -- they can't sue under federal law. they've lost their day in court under federal law because of this forced arbitration law. so they went to arbitration and wells fargo with their very smart, very well paid lawyer -- keep in mind their c.e.o. made about $20 million so they're -- their really well paid legal team does very well. that well-paid legal team went to work and the average customer who had no legal time on her side or his side, they ended up paying wells fargo on the afternoon $11,000.
-- average $11,000. no wonder they love this forced arbitration law. the customer ends up paying the bank. the same bank that cheated customers into opening false accounts, they deceived customers into opening false accounts. that didn't even talk -- they didn't talk about the car insurance they had to buy. the same bank that cheated customers into opening false accounts ended up paying wells fargo for getting scam. no wonder people don't trust wall street. no wonder people are mad at wells fargo and equifax and the banks -- i live in clean r cleve -- in cleveland, ohio. my zip code had more foreclosures in 2007 than any zip code in the united states of america. and i see what these banks did to my neighborhood and i see what they do to wells fargo, account holders. and i see what they are doing to the 145 million that equifax has scammed. studies show that wall street
and other big companies win 93% of the time in arbitration. 93% of the time in arbitration the companies win. no wonder they're fighting like hell. no wonder they lobbied this place like we've never seen. no wonder every wall street firm is down here begging their senators to stand strong with wall street in de-- and defeat -- and pass this c.r.a., pass this rule to undo the rule stopping forced arbitration. so when wells fargo's multimillion -- not multimillion, excuse me -- multidecamillion and their c.e.o. came and testified in front of the banking committee early this month on an entirely new scandal -- this is another wells fargo scandal -- a scandal that the last c.e.o. in front of us didn't disclose. there was a new scandal he knew about and didn't tell us about. he said that wells fargo plans to keep using forced aroun arbitration. it's amazing a bank that has hurt so many americans would continue a crew side against
consumer's rights to a day in court. this vote is all about a consumer's right to a day in court, pure and simple. these forced arbitration clauses are powerful. they're everywhere. they're in student loans, in credit card agreements, nursing home agreements, and even in employment contracts. gretchen karlson was prevented from suing her employer by a forced arbitration clause. she asked that we vote against it. she has said that forced arbitration has silenced millions of women who may have otherwise come forward. think about what she said. she says forced arbitration, quote, has silenced millions of women who otherwise may have come forward. forced arbitration is about the biggest companies in the country, the biggest wall street firms silencing customers, silencing victims. it's about giving more power to
corporations that -- do you think that corporations have too much power? resoundingly they say yes. this gives more powerror corporations. -- power to corporations. let me tell you about george from ohio. he lives in a community east of cleveland. george's wife suffered physical and mental abuse in a nursing home. but the nursing home had an arbitration clause. this nursing home could physically and mentally abuse his wife, who couldn't fight back and do much herself to stop it. they couldn't go to court because they had signed a force arbitration clause. george p didn't really know -- george didn't really know what a forced arbitration clause was, i assume, until that happened. forced arbitration clause is so powerful that when george went
to a lawyer, he said you don't stand a chance fighting against it. veterans and service members have a lot of experience on this issue. big wall street bank called santander was illegally repossessing dars from service members -- cars from service members. when he this spoke about their rights an special protections they earned, santander used forced arbitration to he keep them out of court. we talk a good game about veterans. we always say that we're on the side of veterans. i served on the veterans committee more than any other ohio senator. i hear all of my colleagues talk about how we love and will take care of veterans to the point that the national convention supported a bureau rule in an attempt to repeal it.
the assistant director of the american legion center said that we will not accept a future where military future -- so the -- they go -- these arbitration rules go after the families of people in nursing home, they go after customers, they get -- sign fup for things they didn't even know they were signing up for. they go after people whose credit has been hacked and whose credit rating has been din ged and they go after soldiers, airmen and sailors and coast guard members. how this body looks those members in the eye and go with wall street. this hurts those who had bank accounts fraudulently opened he wells fargo -- opened by wells
fargo. it hurts employees who have been hurt by their employers. it hurts students cheated by for-profit colleges. it hurts family members enternursing homes . it hurts america's veterans. forced arbitration hurts millions of americans with student loan debt and credit cards. that's near everybody in the country is poa toningsly -- potentially vulnerable to forced arbitration. who does it help? wall street banks and huge corporations. those c.e.o.'s that make $20 million and give up their bonuses. they won't give up forced arbitration because they know that will help their bottom line and that will help their dividends and their compensations. i urge my friends on the other side to ask, who's side are you on, those who get hurt by forced arbitration or c.e.o.'s who cash? i ask my colleagues to vote against the repeal consumer
bureau's rule and give power back to regular americans. the presiding officer: the senator from idaho. mr. crapo: we are having an intense debate about arbitration clauses in financial contracts. those who oppose the resolution that's on the floor tonight would have you think that the battle is over whether to stop what they call forced arbitration clauses in contracts. the real issue is whether we will try to force the resolution of disputes in financial resolution into class action lawsuits. this is a question about whether we should force resolution -- dispute resolution mechanisms into class actions.
let me read the actual language of the rule that we are debating. it doesn't say anything about forced arbitration clauses. in fact, the rule doesn't stop arbitration clauses in contracts. it stops protections in arbitration clauses against class action litigation. let's read what the rule says. the cfpb rule prohibits a company from relying on a predispute arbitration agreement with respect to any aspect of a class action that concerns any consumer financial product or service. in other words, the purpose of this rule is to promote class action litigation and stop arbitration resolution when there is a dispute. specifically, the rule requires any predispute arbitration agreement to include this
specific language. in other words, people and companies are required to put this language into their agreements. this tells you what the dispute is about. the language mandated by this rule is, we agree that we nor anyone else will rely on this agreement to stop you from being part of a class action case in a court. you may file a class action in court or a member of a class action filed by someone else. it's about as clear as it could be. the issue here is, do we force the disagreements of disputes in financial transactions into class action litigation? is this a rule -- this is a rule to benefit the plaintiff's bar. the rule also requires that companies that go through arbitration must submit records of arbitration cases to the cfpb within 60 days on those records.
some raise the argument that arbitration agreements gag consumers, saying were it not for arbitration agreements, the wells fargo fake account scandal would have been found earlier. the only thing is what is brought as specific evidence in that arbitration proceeding. the clauses and law permit people to discuss the claims they are bringing and the companies and individuals. nothing stopped anyone from talking publicly about what was going on at wells fargo. arbitration keeps evidence confidential for the protection of consumers but does not keep them from speaking out about it. further, if judges believe that clauses do do that, they often find them unconscionable as they stop consumers from speaking out. in fact, if you think about it, what generated the public understanding of the wells fargo circumstance, if i recall
correctly, was a los angeles times news article. it was the cfpb that failed apparently to read the news and understand what was going on at wells fargo. that was the reason that we saw it take so long for any action to take place, not an arbitration agreement. in addition, those attacking arbitration agreements seem to make the case that arbitration agreements stop consumers from having options. the cfpb's own study said that the clear majority of arbitration clauses within our review recognize and allow access to small claims court as an alternative to arbitration. so let's just be clear. arbitration clauses don't gag consumers, they don't stop them from speaking about what they see going wrong, they don't force them out of the courts if
they want to go into a small claims court. the only thing they do that is being objected to here is they try to force them to not agree to go into a class action lawsuit, and it is literally that question that is the biggest issue that we are dealing with here. i haven't finished yet. i'm looking for more pages. mr. merkley: would you perhaps yield for a question? mr. crapo: yes. mr. merkley: the thing that confused me about your commentary is that you referred to people being forced with this through court, they would have a chance for arbitration as opposed to being locked into arbitration. under this rule, people would have the option of arbitration?
mr. crapo: yes. that's why those who criticized our effort to reject this rule said that we are trying to stop forced arbitration, the rule itself would allow arbitration agreements. it stops the company from allowing the company to reach an agreement with the consumer to avoid class action litigation. mr. merkley: my understanding is when you have an arbitration clause you have one option, to go into arbitration. under the rule, you have two options, you have the ability to go to court or the ability to go to arbitration. mr. crapo: let me reclaim my time and you can respond on my time. let me clarify, as i indicated, even the cfpb in its own study said that most of the contract -- not all companies use the same contract, but the cfpb indicated that most contracts already allow two options, one to go to small
claims court or, two, to go to arbitration. what the agreements don't allow is class action litigation. and the specific and only restriction of the rule we are debating tonight is whether class action litigation should be incentivized by taking out the ability of companies to insist that not be an alternative. so there is one restriction that we are debating here and that's whether it's appropriate to allow companies to negotiate a way -- away class action litigation. when the cfpb finalized its rule, it prohibited the use of predispute arbitration agreements that prevent consumers from participating in class action lawsuits. dodd-frank, the statute under which the cfpb was created, also set forth when the cfpb was authorized to prohibit imposed
conditions upon or limit the use of such agreements, namely if the cfpb finds, and this is what they are required by law to find, any such action was in the public interest and for the protection of consumers and, number two, consistent with the cfpb's study and findings. it's clear that the cfpb failed the legal requirements on both accounts. in 2015, the cfpb released its final study and report on predispute arbitration to congress. to say that the study was flawed is an understatement. it was panned for its questionable analysis, data, and conclusions by the public, by academics, by consumers, byeses, by federal regulators, and by members of congress who noted that it could make consumers worse off by removing access to an important dispute resolution tool. i'll spend a few minutes delinquent naturing some -- delynn naturing some of the
valid criticism since the study was the basis and legal requirement for the final rule. first, the study only compared class action settlements with arbitration awards. by only looking at arbitration awards and not consumer recovery in arbitration settlements that occur before awards, the cfpb ignored substantial evidence of arbitration agreements benefiting consumers. the analogy is looking at how much money is in your account by looking at your checking account and ignoring the savings account. it is difficult to make apples to apples comparison. but the "wall street journal" editorial board made a helpful observation. of the 562 class actions the cfpb studied, none went to trial. let me read that again.
none went to trial. most were dismissed by a judge or withdrawn by the plaintiffs or settle out of class. the punitive class victims received benefits in fewer than 20% of the cases. and the average cash recovery was -- wait for it -- $32. lawyers took an average 24% cut of the cash payments, about $424 million in cases that settled. meanwhile, consumers were awarded relief in 32 of the 158 arbitration disputes the bureau examined and rewards -- these are arbitration results now. the rewards in arbitration averaged $5,389. or about 57% of every dollar claimed. consumers who used arbitration
received relief on average in two months after filing their claim. class action members had to wait two years. clearly the cfpb cherry-picked the information it liked and omitted what it did not like. the cfpb and its advocates of the rule also argue that the rule restores a consumers' day in court. but again, the cfpb study explicitly states that no class actions filed during the time period that the cfpb studied, 2010-2012, even went to trial. the study added that most arbitration agreements and consumer financial contracts contain a small claims carveout that provides the parties with a contractual right to pursue a claim in small claims court. the cfpb claims that the rule will deter companies from bad behavior in the face of an increase in class action lawsuits. yet, there is no evidence to
that effect. a report released by the treasury department this week notes that after years of study, the bureau has identified no evidence indicating that firms do not use arbitration -- that do not use arbitration clauses treat their customers better or have higher levels of compliance with the law. the truth is that rather than deterring companies from bad behavior, this rule will encourage frivolous lawsuits that companies feel compelled to settle, shifting hundreds of millions of dollars from businesses to plaintiffs' attorneys. many members of congress have weighed in on both of the cfpb -- both the cfpb's arbitration study and how the final rule was developed. in 2015, 86 members of the house and senate wrote to director cordray asking that he reopen the arbitration study due to concerns about the bureau's process. in 2016, 140 members of the
house and senate again wrote to director cordray raising concerns about the cfpb's proposed rule and asking the bureau to reexamine their approach to arbitration. unfortunately the final rule was still issued without addressing any of the concerns identified. financial regulators have raised a number of concerns with the assumptions used in the development of the rule and the lack of consideration for alternative approaches. recently the treasury department issued an analysis that concluded the cfpb did not sufficiently substantiate with any quantative assessment, its assumption that the current level of compliance in consumer financial markets is generally suboptimal. meaning the cfpb has not adequately demonstrated the rule will solve the assumed problem it set out to fix. treasury also noted the cfpb could have considered less costly alternatives, including
more effectively informing consumers, clearer disclosure or more targeted regulation. however, it failed to do so, opting instead for an all-or-nothing approach which again specifically designed to generate a phenomenal increase in class action litigation. the acting comptroller of the concurrence has also raised serious concerns with the rule and asked for the opportunity to review the cfpb's data and analysis to determine the potential impact of the rule. according to a recent letter by the acting comptroller of the currency, eliminating the use of this tool could result in less effective consumer protection and remedies while simply enriching class action lawyers. at the same time the proposal may potentially decrease the products and services offered to their consumers while increasing their costs. the cfpb attempted to estimate the increase in costs, albeit
incompletely, that are associated with this final rule and that could be passed on to consumers. the cfpb estimates in its final rule that the companies will incur $2.6 billion of additional fees and settlements over the next five years, $330 million of which will go directly to plaintiff lawyers. as astounding as these numbers are, the estimate only includes federal court cases and fails to include state court cases. treasury's analysis also notes that the cfpb appears to understate the share of class actions dismissed by the courts, thus failing to adequately consider the cost of meritless cases. according to treasury, assuming that just 10% of class action cases are meritless, the rule would have to reduce harm to consumers by $500 million per year to demonstrate any net benefit to society. the rule does not come close to
making that showing. the o.c.c. recently shed more light on how the cfpb's final rule could impact the cost of consumer credit. while the cfpb said that it could not identify any evidence to that effect, it did concede that this does not mean that no pass-through to consumers occurred. it only means that the analysis did not provide evidence of it and that most providers will pass through at least portions of some of the cost. using the same data the o.c.c. conducted its own analysis and found a strong probability of a significant increase in the cost of credit cards as a result of eliminating arbitration clauses. in fact, the o.c.c. found an 88% chance that the total cost of credit will increase and a 56% chance that costs will increase by at least 3%. as acting comptroller noraka
noted, that means that a consumer living week to week could see credit card rates jump from an average of 12.5% to nearly 16%. he correctly added that to the extent the cfpb's arbitration rule is being undermined, it is undermined by the cfpb's own data and the working paper on which the cfpb relied. community banks and credit unions across this nation are raising concerns with the rule. the independent community bankers association opposes the arbitration rule because, quote, community banks are relationship lenders, many of which have served their communities for multiple generations, a reputation for fair dealing is essential for their scwes and abusive -- scwes and abuseive practices have no places in their business models. in addition, the credit union
national administration or cuna opposes the arbitration rule because among the many consumer protections associated with the mission of credit unions is the high-quality service they provide to their members which has prompted a successful system for quickly and amicably resolving disputes in the limited instances where they arise. while the cfpb claims that many community banks and credit unions do not even have these clauses, i've heard from many small financial institutions that this rule would have a significant impact on their operations. on july 25, the house by a vote of 231-190 voted to overturn this rule. the administration weighed in on the house's efforts, saying this legislation would protect consumer choices by eliminating a costly and burdensome regulation and reining in the bureaucracy and inadvisable regulatory actions of the cfpb. it is alarming that the cfpb
moved forward with a final rule on this matter especially in light of the numerous concerns expressed. the cfpb could have made recommendations to improve the arbitration process or the arbitration clauses if it identified concern. aside from the substantive concerns about the specific rule, it brings the cfpb's own structure and accountability into focus. the cfpb is unlike any other federal agency. since its creation, we have argued that far too much power is invested in the cfpb director without any effective checks and balances. last year the d.c. circuit court of appeals ruled that the cfpb as it is currently structured is unconstitutional. the ruling stated that congress erred in creating a far-reaching agency that is led by a single director. in particular, the ruling noted that the cfpb's concentration of enormous executive power in a
single, unaccountable, unchecked director not only departs from subtle historical practice but also poses a far greater risk to arbitrary decision making and abuse of power. the director is further insulated by being able to automatically withdraw funds from the federal reserve rather than being required to justify the cfpb's annual funding needs to congress. the court's decision mirrored arguments from members of congress that the director has wide-ranging power with little oversight and is a gross departure from subtle historical practice of having multimember commissions at agencies to keep them in check. in fact, the senate repeatedly urged the prior administration to impose checks on the cfpb. in 2011, 44 senators wrote to the administration expressing concern about the lack of accountability and the structure of the cfpb. and in 2013, 43 senators wrote to the administration once again. in each instance we advocated
for the establishment of proper checks and balances for the agency, which had they been imposed almost certainly would have avoided this crisis rule that we see coming out. some of the specific checks and balances for which we advocated included replacing the single director with a bipartisan commission to run the cfpb, subjecting the cfpb to congressional appropriations, and establishing a safety and soundness check for prudential regulators. nevertheless, despite our efforts, this agency remains just as powerful and unaccountable today. and this rule is just the most recent demonstration of its continued lack of accountability. now the senate has the opportunity to take another step toward holding this agency accountable. the cfpb failed to demonstrate that consumers will fare better in light of its arbitration rule. in fact, they may be worse off. i urge my colleagues to help
ensure that consumers maintain access to quick, inexpensive and efficient mechanisms of dispute resolution by overturning this rule. thank you, mr. president. a senator: mr. president. the presiding officer: the senator from oregon. mr. merkley: mr. president, i couldn't disagree more with my colleague from idaho. he gave a very studious presentation that missed all the key facts. he made a big point out of the fact that we would lose a dispute resolution tool but in fact will access small plains, access to arbitration remain in place. so it's simply wrong. he noted that small claims is a great option. but of course what we're talking about are provisions in which credit card companies and cell phone companies and broadband companies put charges on your bill that are unjustified, but they're small amounts. they're little amounts.
it's $5 here, slammed there. it's $10 there jammed on your bill there. you discover it and you go and you call them up, and they say, well, you can come to arbitration. of course arbitration means they choose the decision-maker. they pay the decision-maker. and that decision-maker comes to them for future business. and so it's completely rigged. if anyone wants to see an example of the swamp at work here in d.c., we have it on the floor tonight. this is big business taking justice and ripping it out of the hands of consumers across our nation. it costs fees to go to small claims. you can't go to small claims for $10 or $5 or $20. this is well understood. my colleague made a big point about the fact that a lot of companies settle. you have know what? these companies have the best lawyers that money can buy. they only settle when they've cheated the consumer and they
know they're going to get a chance of a worse verdict if it goes to trial. so it's smart for them and it saves money for them not to continue to adjudicate a case in which clearly they're wrong. so of course they're settling. this is not an argument against consumer rights. it's an argument for consumer rights. my colleague made the argument that, oh, 25% of the fees go to the lawyers. but he didn't point out that means 75% goes to the consumers. and why is that a fair deal? because consumers can't afford to go to court for $10 or $20 or $15. so they're awfully happy to be able to get 75% of what they're owed. and he didn't begin to mention the fact that the whole point is deterrence. these companies are given a right to cheat because there's no way for a customer to get a fair adjudication. an arbitration, the company chooses the judge. the company pays the judge, and these judges come back time and time again for case after case
after case fighting for the companies time after time after time. so if you want a rigged system, if you want an example of the swamp flooding this room right here, this is it right here, right now. deterring companies from cheating individuals makes a lot of sense. it's a lot of value to our society. credit card customers, nursing home residents, students with loans, veterans that weighed in heavily against this abusive, abusive practice of a rigged system. customers certainly of cell phone companies and broadband. i have had the experience myself. i looked at a bill, and i said wait, what is this charge on here that i have never seen before? i called up the company. of course you go through a phone tree and you spend an hour trying to talk to some real person who is way overseas somewhere, and they say well, we just added it to your bill six
months ago, and you should have protested it the first month it was on your bill. well, i don't look at the details every single month to see that a company proceeded to try to cheat me. they did it to me, they did it to thousands and thousands of others. and they were willing to reimburse one month of this but not the first five months. but $10 a month, that's $50. you can't go to small claims for $50. you can't go to court for $50. the only fair thing is to have the full range of options, and that is taken away by arbitration. i would bet none of my colleagues here, not a one, and if any colleague would like to stand up and say they disagree, i'd like to hear it. not a one would agree to have a dispute settled, a serious dispute settled in which the opponent chooses a judge, pays the judge, and that judge gets business from them all the time. that is rigged, and that is wrong. and that's why i encourage my colleagues to vote against this
resolution tonight. ms. warren: mr. president. the presiding officer: the senator from massachusetts. ms. warren: thank you, mr. president. wells fargo creates 3.5 million fake accounts charging customers fees and ruining credit reports. equifax lets hackers steal personal information for 145 million americans, putting nearly 60% of american adults at risk of identity theft, and somehow we are about to vote on a republican proposal that makes it harder for consumers to hold companies like wells fargo and equifax accountable. i know it sounds nuts, but it's true. here's the issue. if you have a checking account or credit card or private student loan or any number of financial products, there is a good chance that you have given up your right to go to court if
that financial firm cheats you. and that's because tens of millions of consumer financial contracts include a forced arbitration clause that says that if this financial company cheated you, you can't join with other consumers in court. you have to go to arbitration by yourself. tens of millions of consumers, including around 80 million credit card customers, can't go to court if their banks cheat them. now, think about what that means in the real world. you wake up one morning, you find a mysterious $3 fee on your account statement. you call the bank, and you say hey, i didn't agree to this. the bank tells you pound sand. so what are your options? well, if there is no forced arbitration clause in your contract, you have a choice. you can go to court, or if your bank offers it, you can pursue arbitration. now, here's what you want to
think about. chances are pretty good that if the bank cheated you with a $30 unauthorized fee, that there are other customers in the same boat, and that means, if you want, you can join a class action lawsuit against the bank for free. a class action gives you a chance to get some money back, and it doesn't cost you anything. a class action also means the bank might have to cough up some real money and think twice before hitting you and their other customers with hidden fees the next time around. now, think about what happens if there is a forced arbitration clause. you can't join with the other customers in court. your only option is to file a solo arbitration claim, which will cost you $200 or more just to get started. who's going to pay $200 up front
to try to get back a $30 fee? no one. and that's exactly what the banks are counting on. they can get away with nickel and diming you forever. but say the bank steals a bigger amount and you just can't stand it anymore, so you decide to be one of the roughly 400 consumers a year to go before an arbitrator. if you don't like the result, there's no appeal. even worse, the banks are allowed to swipe your wall street -- wallet in secret. the records of these proceedings are not public, so the regulators and the american people don't get to know what the banks are up to. does that sound like justice in america? earlier this year, the consumer financial protection bureau put a stop to that. they issued a new rule that prohibits financial companies from forcing you to give up your right to join other customers in court and hold your bank
accountable. house republicans already voted to reverse that rule. the senate will soon decide whether to follow suit and take away american families' freedom to choose to go to court if they are cheated by their banks. now, make no mistake. anyone who votes to reverse this rule is saying loud and clear that they stand with the banks instead of their constituents because bank lobbyists are the only people asking to reverse this rule. every other organization, all the ones that represent actual human beings, not banks, every one of them want this rule to be saved. let me just tell you about some of them. the military coalition, which represents more than 5.5 million veterans and service members, supports the cfpb rule because, quote, our nation's veterans should not be deprived of the
constitutional rights and freedoms that they put their lives on the line to protect, including the right to have their claims heard in a trial. the coalition says that, quote, forced arbitration is an un-american system wherein service members' claims against a corporation are fund into -- funneled into a rigged, secretive system in which all the rules, including the choice of arbitrator, are picked by the corporation. they warn that the catastrophic consequences of these forced arbitration clauses pose for our all-voluntary military fighting forces' morale and our national security are vital reasons to preserve the rule. that's from the military coalition. the aarp, which represents nearly 40 million seniors, says the cfpb rule should be
preserved because, quote, it is a critical step in restoring consumers' access to legal remedies that have been undermined by the widespread use of forced arbitration for many years. older consumers are often at increased risk of financial scams, so the aarp supports the availability of a full range of enforcement tools, including the right to class action litigation to be prevent harm to the financial security of older people posed by unfair and illegal practices. so that's the aarp, representing seniors across this country. and the main street alliance, which represents thousands of small businesses, says the cfpb rule will help small businesses fight against big financial firms that try to drive up their
fees. since almost, quote, 20% of small business owners rely on credit cards as a source of investment capital, many of which contain arbitration clauses, forced arbitration makes it nearly impossible for small businesses and consumers to protect hidden -- to protect -- let me do it again. forced arbitration makes it nearly impossible for small businesses and consumers alike to protest hidden fees, illegal debt collection, and other deceptive practices. that's from the small business alliance. so there it is. veterans, service members, seniors, small businesses, consumers all lining up to support the cfpb rule. that's not all. let freedom ring. an organization that proudly touts itself as, quote,
supporting the conservative agenda. it likes the cfpb rule, too, saying it is in keeping with our framers' concerns that without appropriate protections, civil proceedings can be used as a means to oppress the powerless. you know, that's the thing you have to understand here. the effort to reverse the cfpb rule isn't about promoting a conservative agenda, and it sure as heck is not about promoting a working people's agenda or a small business agenda. it's about advancing a bank's agenda, period. the banks and their lobbyists have actually got the gall to claim they want to kill the rule because it's bad for their customers. that claim is just plain laughable. according to a rigorous three-year-long cfpb study,
consumers recovered an average of about $540 million annually from class-action settlements, while they received less than a million dollars annually in the arbitration cases that the agency reviewed. it is not even close. and even if there are instances in which arbitration is a better response for consumers than a class action lawsuit, the cfpb rule doesn't stop consumers from choosing arbitration. the rule simply says consumers, consumers should have the freedom to go to court if that's what they prefer. i'll tell you one thing. when it comes to what's right for consumers, i have listened to service members, veterans, seniors, consumers, small businesses. i don't listen to bank lobbyists. when a bunch of bank lobbyists tell you that they know what's
best for consumers, hang onto your wallet. millions of americans of all political parties think the game in washington is rigged against them, and this vote is exhibit a. companies like equifax and wells fargo have hurt millions of consumers, and then turn around and try to escape accountability using forced arbitration clauses. the republican congress hasn't done a thing to help the people hurt by wells fargo. the republican congress hasn't done a thing to help the people hurt by equifax. nope. instead, tonight they are actually taking away one of your few legal tools to hold companies like wells fargo and equifax accountable. this is shameful, and i mean that. any senator who votes against our service members and our
veterans in order to shield big banks from accountability should be ashamed. we should vote down this proposal. thank you, mr. president. i yield. a senator: mr. president. the presiding officer: the senator from hawaii. ms. hirono: mr. president, the resolution we are debating today demonstrates the lengths donald trump and the republican party will go to to protect the special interests that contribute billions of dollars to their political campaigns. earlier this year, the consumer financial protection bureau, the cfpb, issued a rule to prevent certain financial services companies from forcing consumers
to sign predispute arbitration clauses that block class action lawsuits. this might souped like a boring technical change, but it's not. at stake is nothing less than the right of millions of americans to be heard in a court of law. contracts mandating forced arbitration can be found in virtually every contract someone signs these days. every time you agree to an update to the itunes terms of service, purchase a fitbit, open a credit card, you are signing away your right to join together with others to sue in a court of law if something goes wrong. in 2010, president obama and democrats in congress created the cfpb to protect the american people from predatory business practices from consumer finance companies, and while the cfpb can't do anything about the itunes terms of service, it can
protect you through the rule we are debating today. from companies who sell products and services related to consumer credit, automobile leasing, debt management, credit scores, payment processing, check cashing and debt collection. industries that serve some of our most vulnerable commune dis. the resolution we're debating today would eliminate these protections and expose millions to the tyranny of forced arbitration. this is particularly relevant in light of two news of course in which fraud and malfeasance of major financial institutions harmed consumers across the country. this rule, for example, would protect the 805 hawaii residents who had fake bank accounts opened in their names by wells fargo. these people suffered real and material harm, but the fine
print in their agreements explicitly prevents them from banding together in a class action lawsuit. this rule would prevent banks like wells fargo there doing this now and in the future. in the wake of the massive equifax data breach, the company initially forced consumers who registered for credit monitoring to for go their right to join a class action and instead forced them into private arbitration. these are high profile examples of the problem but aren't the only ones. hundreds of hawaii residents have filed complaints with the cfpb about problems with credit reporting agencies and credit report errors that can increase the cost of a loan or result in a denial of credit. under a recent class action settlement, hawaii customers falsely matched with someone on the terrorist watch list can receive over $6,000 from --
$7,000 from transunion. is it really any wonder why transunion and other credit bureaus have fought so hard to block class action lawsuits with forced arbitration? this rule would also protect consumers from predatory payday lenders who are extorting over $3 million in fees a year from hawaii consumers alone. over 98% of store front payday lenders use forced arbitration clauses in their contracts. hawaii's home to -- is home to more than tens of thousands of active duty service members, reservists, and veterans. this rule protects them, too. in 2016 the office of the comptroller of the currency fined wells fargo millions of dollars after they illegally foreclosed on homes or repossessed cars in violation of the service member's civil relief act. without the cfpb rule, similarly affected service members would
be restricted from banning together to sue. it's why the american legion in announcing their support for the cfpb's rule and opposition to this resolution said it would be, and i quote, extremely unfair to bar service members, veterans, and other consumers from joining together to enforce statutory and constitutional protections in court. it isn't difficult to understand why big banks and mega corporations want to force their customers to adjudicate disputes through arbitration. according to the cfpb, companies who claim -- with claims in arbitration -- win claims in arbitration 19% of the time. so the deck -- 91% of the time. so the deck is stacked against the consumer in forced arbitration situations. after these judgment, consumers were forced to pay an average of over $7,000 to companies to even
engage in the proceedings. talk about a major imbalance of power. the entire cfpb spent years, years developing this essential consumer protection regulation, but i'm not at all surprised that the president and his allies in congress desperately want to eliminate this consumer protection rule. i urge my colleagues to vote no on this resolution. i yield the floor. a senator: mr. president? the presiding officer: the senator from illinois. mr. durbin: mr. president, this vote really gives the united states senate a choice. on one side we have the biggest banks in america and financial institutions, which are arguing that you as a consumer, as someone who uses their banks, should be basically signing an arbitration clause that denies to you the freedom to go to court. on the other side the consumer
financial protection bureau has argued these financial institutions are misusing this power, denied people access to court, and it should come to an end. that's the choice. i think i know who's going to win. i'm not sure the party on the other side of the aisle would have called this issue if they didn't already have it lined up for the financial institutions. i know that many on the other side, maybe most, hate the consumer financial protection bureau like the devil hates holy water. the notion that this agency is going to stand up for consumers across america is something they find repugnant, something they'd like to end tomorrow. i say thank goodness they're there. there ought to be one agency in the federal government, at least just one that speaks up for the little guy when it comes to these transactions. think about the three and a half million people defrauded by wells fargo. these were people who had their identity stolen, had their
social security numbers pe prolonged for opening credit card accounts they never asked for. three and a half million of them. let me tell you the story of one of them. it's a pretty interesting story. it's -- her name is tracy kilgore from new mexico. she wasn't even a customer of wells fargo bank but she went in because she was a treasure of the local chapter of the daughters of the american revolution. she went to the wells fargo branch one day in 2011 to have the names on the organization's existing account changed. a few weeks later she received a rejection letter for a wells fargo credit card that she'd never applied for. it turns out the bank teller at wells fargo had taken the information she'd given and submitted a credit card application on her behalf without her knowing it. the application was rejected and hurt miss kilgore's credit score for a credit card she never asked for.
miss kilgore is fighting for her right to hold wells fargo accountable in court and to join with millions like her who have been victims of wells fargo's misconduct. the republicans tonight are saying they feel sorry for wells fargo. they really do. to think that this company manufactured and created three and a half million phony credit card accounts at the expense of customers like tracy kilgore doesn't seem to move them at all. instead, they want to stand by wells fargo which put in that credit card application an arbitration clause which said trace kilgore, you can't go to court. you can't have your day in court. you've given it up. you signed it away to wells fargo. well, would trisy go to -- tracy go to courtneyway? is she likely to file a lawsuit against wells fargo? possibly not. but multiply that times three and a half million people who were defrauded by this bank and
you understand how a class action suit could finally hold wells fargo's feet to the fire, hold them accountable for literally cheating this woman and millions just like her. the republicans are arguing tonight we ought to feel sorry for wells fargo. i don't. i don't feel sorry for them. i feel sorry for tracy kilgore who because the arbitration clause lost her opportunity to go to court and ask for simple justice from a judge or a jury. how about equifax? if you think three and a half million people defrauded by wells fargo is a pretty awful situation, here's one dramatically worse. 145 million -- let me see. right off the top of my head, that's about half of the people in this country. 145 million americans, five and a half million who live in my state, that's almost half of our state population, had their personal data exposed in a massive equifax data breach.
in other words, if you had filed in a distance past and there was a credit card -- a credit report on you, equifax had all the information about you and your family, your banks, your social security numbers and all the rest of it. equifax ended up with a massive breach somebody stole into your computer and stole your personal identity information to the tune of 145 million americans. so here's -- equifax really felt badly about this. here's what they said. equifax in response to this data breach initially offered a free credit monitoring service for any customer who signed up out of the 145 million. in other words, we'll monitor, see if somebody stole your identity and they're misusing it and hurting your credit status. but they added something. as long as the customer signed a forced arbitration clause in fine print that prohibited them
from joining a class action. equifax wants to help you even though they initially hurt you as long as you will guarantee that you'll never hold them accountable in court. how about that for a deal? that's what the republicans are defending tonight. exactly what i just described. they feel sorry for equifax. they feel sorry for wells fargo. they want to make sure that these banks and these credit companies really have a friend in the united states senate. we don't know if equifax which now claims it will no longer impose this forced arbitration on victims will stand by that if they're ever challenged in court. but we ought to ask ourselves why major groups across the united states standing up for just ordinary americans find this republican strategy on the floor tonight so reprehensible. listen to the groups who oppose this effort. the american legion, the consumer federation of america, the naacp, united auto workers,
and many other consumer groups. they're saying why won't somebody in washington speak out for the average american who is being defrauded by these bank, defrauded by these credit agencies? why won't somebody in the senate stand up for the agency that finally said enough? finally said that these financial institutions have had their way long enough. many of these financial institutions are hiding behind your local hometown banks. you know the ones i'm talking about. i've got them in my hometown of springfield, illinois and they say this is all about your local community banks and your credit unions. we don't want to hurt them. here are the facts. 90% of your community banks and credit unions do not have these arbitration clauses in their agreements. you know who does? the big banks. 60% of the big wall street banks have these clauses and they're the ones who are really behind this fight. the wells fargo and the other ones who want to maintain this right to stop consumers from going to court to protect themselves when they've been defrauded by banks and credit
and financial institutions. this is a classic illustration of power in washington. is there any wow we are in the hands on he he power in the hands of consumers and ordinary americans? we'll find out on the vote tonight. i'm afraid it wouldn't be called on the other side of the aisle unless they figured the banks are going to win again. it's unfortunate. we ought to live in a society where consumers have a fighting chance and the system is not rigged against them. arbitration clause is a way to rig a contract so that a consumer is going to lose twice, lose when the bank takes advantage of them and lose when they try to go to court and they're stopped by the ash taition clause. -- arbitration clause. consumers in this country have a battle on every single day, to make a living and to get by. this is an effort to take away one of your freedoms, to go to court with a group of people who have been aggrieved just like you, have your day in court win or lose. the republicans want to take that away and so do the banks. i hope they don't preville. -- prevail.
a senator: mr. president? the presiding officer: the senator from idaho. a senator: mr. president, while we have a little bit of open time in between speakers, i thought i would just respond -- the presiding officer: the senate is in a quorum call vr. a senator: i ask unanimous consent that the quorum call be lifted. the presiding officer: without objection. a senator: while we're waiting for other speakers, i thought i might respond to some of the things that have been said. mr. crapo: because those who are opposing this resolution tonight continue to put it as though this were a case of trying to stop consumers from having an adequate way to access dispute resolution and make it look like it's a big guys against the little guys. the reality is, if you want to -- first of all, this rule that we're talking about only applies to financial institutions.
it doesn't apply in all other kinds of cases that have been thrown out here tonight. if you want to look at the financial institutions that are the most concerned about this rule, it is the little guys. it's the credit unions. it's the local community banks who are pleading with us to stop this abusive rule. i just think that part of the record needs to be set straight. again, i'm going to lay out what this debate is really about. this debate isn't to stop facilitate banks and credit card companies and others from cramming down some solution on consumers. what it's about is trying to facilitate pushing dispute resolution into class action litigation. this is a very clear move to drive our dispute resolution in this country into class action litigation. i'm going to give a little bit
of history, but before i do that, i want to again read to the folks listening in on this debate what this rule exactly does. you would think from all the debate that it stops consumers from going to court or that it stops consumers or forces consumers to use an abusive arbitration process. it's very clear. this rule prohibits a company from relying in any way on a predispute arbitration agreement wp respect to any aspect of a -- with respect to any aspect of a class action that concerns any financial product. the rule goes further. it says any agreement that the financial institutions -- and remember the ones most worried about the credit unions and small banks -- every agreement they enter into this has to contain this language. this tells you what the fight is
about. we agree that neither we, nor anyone else, will rely on this agreement to stop you from being part of a class action case in court. that's the rule we're talking about. you may file a class action in court or you may be a millimeter of a class action filed -- may be a member of a class action filed by somebody else. are we -- is this about decisions and dispute resolutions into class action litigation? yes, we are. we're fighting to protect the current system which is one that has worked for years and years. now, i'm going to get into that system. in fact, i'll get into it right now. let's compare class action litigation with arbitration as one of the alternatives. in fact, before i do that comparison, let me point out, the cfpb's own study shows that the clear majority of arbitration clauses that they
studied allow access to small claims court as an alternative to arbitration. there's no effort to say to the consumer, if you want to, you can go into small claims court. the limit in the united states for small claims, it is different in each state, it ranges from $3,000 to 15,000. the most common level is about $10,000 level of a claim. a consumer who has a claim up to $10,000 can go into a small claim court. but let's compare arbitration with class action litigation. how much does the consumer recover? in class action the average is $ 32 per person. in arbitration the average is $5,389 per person. how long does it take to get the
recovery? in a class action, it's 23 months on average, in arbitration it's five months on average. how many of them actually go to trial? this is interesting because you think of class actions as your day in court. remember those who argued earlier tonight were telling consumers they aren't going to get their day in court. the number of class action lawsuits that went to court, zero. class action litigation is a mechanism to drive settlements. the number of arbitration suits that went to court, 32% reached a decision on the merits. now that was not an actual court case, but it was a resolution by a digs maker. settlements -- decision maker. settlements, 12% class wide settlements are made,
settlements in arbitration, 57% achieve settlement. here's one of the striking ones. how much attorney fees are paid? in class action, according to the can be's study -- cfpb's study. there were some arbitration fees, and i will get to that in a minute. but they were nowhere close. this, by the way, this number, $424 million that went into attorney fees is the reason we're having our debate tonight. this rule seeks to drive this decision making model into this zone. estimated additional class action costs for recovering companies, $2.6 billion for class actions and none for arbitration. now, some have said that this -- you know, this is just an example of the republicans trying to help wells fargo out. well, first of all, i'm the
chairman of the banking committee. we held hearings on the wells fargo situation and continue to look at it very closely and senators from both parties are taking it very seriously and trying to find resolution. when it comes to the question of whether wells fargo used arbitration agreements to avoid liability, these are the facts. wells fargo, which was found to have opened millions of unauthorized accounts in the names of its customers agreed to settle this for $142 million, twice as much as the projected consumer loss, and they made that agreement because arbitrating them in individual disputes would cost much more. so wells fargo did not utilize, and the argument that wells fargo is the example that we are working to try to facilitate here is just not true.
now, as i said, let's talk a little bit about arbitration. on the floor tonight arbitration has been character iced -- characterized as this terrible, devilish idea that has been designed by big business in america to try to push the little guy out of a fair chance at recovery in a dispute. well, the acting krom troller of the -- comptroller of the currency that is in charge of this has serious concerns and in his recent letter he indicates that arbitration can be an effective alternative mechanism that can provide better outcomes for consumers and financial service providers without the high costs associated with litigation. that is key. in fact, if you look at history, nearly a century ago congress
made private agreements to resolve disputes through arbitration valid, irrevocable under the federal law, called the federal arbitration act. this was a decision by this congress nearly 100 years ago that said we've got to find a way that's fair to resolve disputes that is not so expensive as the current resolution dispute models that we have, namely litigation. this longstanding federal policy serves the twin purposes of economic efficiency and freedom of contract. and some have said, well, this let's banks get away with cheating their customers, but the opposite is true. eliminating the use of this tool could result in less effective consumer protection and remedies while simply enriching class
action lawyers. at the same time the proposal may potentially decrease the products and services offered to consumers while increasing their costs. "the wall street journal" editorial board noted that arbitration allows consumers to settle disputes on the phone or online without an attorney. as i said, virtually every consumer who doesn't like this has the alternative to go to small claims court. the question here is whether we will facilitate pushing consumers out of the choice of arbitration. if the law is -- to rely on arbitration will be seriously injured and the worry that we have is that -- and the intent of this rule is that we worry about is that it will drive dispute resolution into class action litigation.
and that's what this whole dispute is about. one of my colleagues tried to characterize arbitration into a system where the company hires these decision makers, these arbitration judges and that the judges are going to be biased because the judges are bought by the companies that use them for the arbitration. well, that's not an accurate description of what arbitration is. there's actually a federal law, which i already referenced, which sets up the part. -- parameters and there's an association that administers it. when a person chooses to go into arbitration, what happens is that whole system takes over that is administered not by the company but by the a.a.a. and under the american arbitration association procedures they
appoint an arbitrator. the implication is that the arbitrator rules for the company because the company is the one that hires them. here's the truth, the appointments of 8,100 disputes that were studied, arbitrators were appointed in 975 involving 477 different arbitrators. in 704 of thinks disputes, the a.a.a. appointed arbitrators that had also been in another financial dispute. so there's some of these arbitrators get picked a couple of times but they are not picked by the company and they are not beholding to the company. that's one of the reasons we set up the federal arbitration system the way it is. my point is the effort to try to characterize this as some devious system that has been created to try to stop consumers from having an access to
fairness is simply false. we have a very fair system that has been working for over 100 years in this country. it's been litigated and litigated because those who want litigation to be the norm hate it. they don't want arbitration to work. but the reality is it worked wonderfully and survived the litigation assualts. those who want to drive decision making had more into courts and class action litigation have been willing to -- able to get a willing ear in the cfpb who doesn't have accountability to congress, who doesn't look to the congress for budget and is obviously on the side of the litigation bar who wants to once again drive our decision making system into a litigation mode. that's the debate we're having. that's the argument tonight. anyone who tries to say that this is an effort by your local
credit union, your local community bank, or your large credit card company to try to stop consumers from having adequate access to resolution is mischaracterizing this debate tonight. i urge all of my colleagues to reject this expensive and dangerous rule. the presiding officer: the senator from rhode island. mr. whitehouse: mr. president, i'd like to say a few words about the battle here between the jury system and a system in which regular americans are force haded into arbitration -- forced into arbitration which has a terrible record. i can remember years ago when i was attorney general, the attorney general shut down one of the arbitration systems because it was so corrupted and
was throwing decisions to big corporate interests. you can't really understand that unless you understand the importance of the role of the jury in our country. for centuries the jury has served as a last sanctuary within our constitutional structure for people who seek justice and fair treatment under the law. it was designed for a specific purpose. when big interest control our executive officials, as the founding fathers knew they could, when lobbyists have the legislators tied in knots, as our founding fathers knew they could, and when media outlet steer public opinion against individuals, as our founding fathers saw that they could, the hard, square corners of the jury box stand firm against that tide of influence and money.
there is a lot of history here. it was the earliest american settlers that brought the jury to our country as precious cargo from england. the virginia colony established the jury in 1624, roughly a year before the dutch even settled the island of manhattan. early americans created juries in 1628 in the massachusetts bay colony and in 1682 in pennsylvania. indeed, in our declaration of independence, our colonists put forward a list of grievances and admonished king george iii for -- and i quote them in the declaration of independence -- depriving us in many cases of the benefits of trial by jury. when the original constitution was silent on the civil jury, americans sounded the alarm, and the seventh amendment was sent to the states in the bill of rights.
alexander hamilton is a famous revolutionary founder, he stated in federalist number 83, and i quote, the friends and adversaries of the plan of the convention, if they agree on nothing else concur at least in the value they set upon the trial by jury. or if there is any difference between them, it consists in this, the former regard it as a valuable safeguard to liberty. the latter represent it as the very palladium of free government. going on to the mid 19th century when alexis de tocqueville wrote his famous democracy in america, he observed the jury should be understood in america as a, quote, political institution. and, quote, one form of the sovereignty of the people. what did he mean? how does the jury protect the sovereignty of the people? well, in two ways. as sir william blackstone explained.
sir william blackstone was probably the most cited source in those early days of the founding of our republic and in the early days of the development of our law. sir william blackstone explained that trial by jury preserves in the hands of the people that share which they ought to have in the administration of public justice and prevents the encroachments of the more powerful and wealthy citizens. those are two separate thoughts. first, the civil jury devolves a share of government power, power which they ought to have directly to the people. but second, and uniquely in a constitution otherwise devoted to protecting the individual against the power of the state, the civil jury is designed to protect the individual against other individuals. more specifically, against other more powerful and wealthy
individuals. even former chief justice william rehnquist observed about this era -- and i quote him here -- the founders of our nation consider the right of trial by jury in civil cases an important bulwark against tyranny and corruption, a safeguard too precious to be left to the whim of the sovereign. that is at heart what this fight is about. remember blackstone's words, the jury prevents the encroachments of the more powerful and wealthy citizens. well, that means the jury is intended to be a thorn in the side of the powerful and wealthy. it is intended to make the powerful and wealthy stand equal, annoyingly equal to them before the law with everyone else. the jury is intended to be the little branch of government the wealthy and powerful can't get
to, can't fix, can't control. that's why jury panels are new every time. if you had a permanent panel of the same jurors over and over, the powerful and wealthy would tend to influence the institution. the jury stands against all that tide of influence. that's what it's there for. that's how it was designed. who is more powerful and wealthy today than mighty corporations and big special interests? and guess what? big corporations and special interests hate the jury. the small institution has big enemies. it would astound the founding fathers to see how far we have fallen from the popular affection and loyalty for the jury trial in 1776. juries are indeed about dispute resolution and about making sure
that everybody can get a fair shake and that powerful and wealthy interests can't put the fix in. but more than that, the civil jury helps check power. the american system of government is built on the premise that divided government and separated powers, checks and balances, will best protect individual liberty. the civil jury distributes authority of the state directly to citizens, giving them direct power to resolve disputes, sometimes very important disputes. and it gives them this power in a way that makes it very hard for special interests to control. well, if we look around, today the influence of wealth and power sufuses the legislative and executive branches, corporate lobbying and corporate and billionaire election spending are at unprecedented levels. in our political debate, dark
money dollars drown out the voices of average citizens in what has been called a tsunami of slime. and all that money is not spent for nothing. powerful interests love a game that is rigged in their favor. always have, always will. it's a tale as old as time. well, rigging the game doesn't go over well in the jury box. special interests may seek special influence with legislators and regulators all of the time. it is their constant activity. licensed and regulated by lobbying and campaign finance laws. their every waking moment is devoted to tampering with the legislative and executive branches. but tampering with a jury is a crime, and it's a crime for a reason. in a world where so many feel
powerless, juries give regular citizens real authority. in a world of fractious partisanship, juries make citizens work together and decide together. and in a world in which injustices pile up against barricades of well-kept indifference, a jury can blow the status quo to smithereens. this is the vital constitutional role of the civil jury. this is what mandatory arbitration is designed to attack, to remove the access of regular citizens to this institution of our government which was so important to our founding fathers because it is an institution that the wealthy and powerful cannot control. they can control mandatory arbitration over and over again. it has been shown to be subject to corporate favoritism and control. there is a reason that the big
and powerful special interests want to get rid of access to the jury and want to force people to mandatory arbitration. they're not doing it for the sake of having their adversaries and opponents get better access to justice. they're doing it to shut off access to the civil jury. they want everybody forced into rigged games. we ought to be fighting to preserve and enhance civil jury as an element of our uniquely american system of self-government. our forefathers fought and bled and died to create and preserve this system of government in which the civil jury has a vital role from alexander hamilton to alexis de tocqueville to william blackstone to william rehnquist. you can go on and on through our history with people who have pointed out the vital role of the jury.
squelching it is the task of the wealthy and mighty powerful corporations that seek to squelch it and force everybody into mandatory arbitration. we should think on this question in the long view, not who gets the immediate benefit of not having to face trained lawyers, not having to face people in an open forum, not having to be before a free and independent jury. we should think of the message of our founding fathers who put the need for a civil jury right into the declaration of independence, who demanded it as part of our bill of rights, and who saw it as an essential element of our liberty. with that, i yield. i see my distinguished colleague from maryland. the presiding officer: the senator from maryland. mr. van hollen: thank you, mr. president. i want to start by thanking my friend and colleague from rhode island for pointing out why we
have a jury system, a system of our peers who can listen to all sides of an argument in a fair way and render justice. and what this resolution does is prohibits many consumers around the country from having the choice of going before a jury as part of a group of people who have been wronged. so, mr. president, for months the american people had been hearing stories of how big banks, big financial institutions have engaged in various schemes that harm consumers and cheated consumers out of millions and millions of dollars. the most notorious recently, of course, was the case of wells fargo which opened up a lot of fake accounts, meaning they opened accounts without consumers asking them to open
accounts, and then charge those consumers for those accounts. and it's a fact that wells fargo in many cases tried to use forced arbitration to prevent those people who have been wronged from getting access to justice, from being compensated for their harm. we also heard about the equifax case. equifax is a credit reporting agency. they collect gobs of information on all of us, on over 170 million americans without our permission. we don't say equifax, go out and dig up as much information about us as you can and put it on your computer system. they go out and do it. and then we all know that they subject, were subjected to a hack, a massive hack. and that very confidential,
highly personal information on over 100 million americans has now been compromised. and one of the things equifax did after that is they said to consumers, you know what? we know that your information may have been compromised because of this hack on our system. and we want to help protect you. but if you want our protection, you've got to sign away your rights to be part of a class action lawsuit against us. that was their original plan and their original instinct. well, there was a big public outcry about that, and they backed off. but the former c.e.o. of equifax in the banking committee hearing just a few weeks ago said they backed off in response to the public outcry, but if they had done business as usual, they
would have prevented those consumers from getting compensation for wrongs through the court system. and even after we hear about equifax and that scandal and the wells fargo banking scandal, we are here on the floor of the united states senate not to help even the playing field for consumers, but to take away a right that consumers now have to help even the playing field against these big banks and financial institutions. it's entirely backwards. mr. president, i just want to read from the statement that was issued by the consumer financial protection bureau, the cfpb. on july 10 of this year, when they issued their new rule,
here was the headline: cfpb issues rule to ban companies from using arbitration clauses to deny groups of people their day in court. as simple as that. it went on to say financial companies can no longer block consumers from joining together to sue over wrongdoing. and it pointed out that companies use mandatory arbitration clauses to deny groups of people their day in court. they went on to say many consumer financial products, like credit cards and bank accounts, have arbitration clauses in their contracts that prevent consumers from joining together to sue their bank or financial company for wrongdoing and that's right. we all know that, in the fine print of a lot of credit card applications, in the fine print
that consumers get from a lot of big financial institutions, fine print of auto loans, there are buried these provisions that compel those consumers to give up their rights. this is not a question -- i have heard conversation on the floor. this is not a question about whether arbitration in and of itself is a good or bad way to resolve disputes. if i have been wronged or you have been wronged and you agree voluntarily to enter into an arbitration dispute mechanism, fine, do it voluntarily. that's not what this is about. it's not what it's about at all. this is about forcing arbitration. we listened to the c.e.o. of wells fargo, we listened to the former c.e.o. of equifax. they all say they value their consumers. they want to make sure that they do right by their consumers. but it turns out they don't
trust their consumers at all, because they want to take away from those same consumers the right to seek justice through the court system if that's what those consumers choose to do. and that's exactly why the consumer financial protection bureau took the action it did. to protect consumers, to make sure that they could not be compelled into arbitration. if they chose it after they had been wronged, that's their decision. but this is about mandatory arbitration and forcing consumers to give up their rights. mr. president, we have heard a lot about the washington swamp. this resolution to overturn this consumer protection division is the washington swamp at its muckiest and at its smelliest. now, i have here a letter i received today from the american
legion, people who represented men and women who have served our country. here's what it says. this is from the legislative director at the american legion. dear friends and colleagues, i write to reiterate the american legion's strong support for the consumer financial protection bureau arbitration rule in light of reports the senate could vote on the matter as early as this evening. the alarm bells went up in the american legion and other places. you may recall that i e-mailed you about this on october 2. that e-mail is below, but today i want to share a couple of additional points. point number one, in bold. a vote to overturn the consumer financial protection bureau arbitration rule is a vote against our military and veterans. that's from the american legion.
mr. president, i want to read some of the other veterans organizations that are against this action the president -- that the senate is headed toward tonight. blue star families, military order of the purple heart, the national guard association of the united states, national military families association, reserve officers association, and the list goes on and on, and they are joined by consumer protection groups. here's what the american legion said in their october letter to every member of the united states senate. it says that the consumer financial protection bureau's rule on arbitration agreements addresses the widespread harm of forced arbitration by restoring
the ability of service members, veterans, and other consumers to join together and seek release in class action lawsuits when financial institutions break the law. the american legion summed it up just perfectly here. they pointed out that the consumer financial protection bureau put forward a rule that said that veterans who have been wronged or cheated can join together to seek justice in the court system and that other consumer groups can as well. i have heard a lot of talk today with people saying you know what? we actually passed this law a little while ago that will protect service members, that will allow service members to band together to seek justice. i have got two points. one, the american legion and all these vet groups, they don't think that was good enough.
and they are appalled at what the senate is thinking about doing tonight. the second question is yes, we should protect our veterans, but why should we also be protecting all the other consumers around the united states of america? why shouldn't they be able to seek justice? why should they be compelled to go to arbitration when they would rather choose to go through the court system? we have heard fellow members talk about why the deck is stacked against individuals. just think about it. you get cheated by your bank. maybe it's a hundred bucks, maybe it's $500. you get on the phone, and you know you're put on there forever. you're put on hold, you're put on hold, you finally get through, you get somebody, they maybe pass you to somebody else,
you maybe get dropped in the process. but at the end of the day, in order for you to get your money back when they have been wronged , under this provision, the old provision, you would have to go to arbitration and you would have to shell out a lot of money. and the big banks know that. so what they fear is that all of us as consumers who have been cheated that we have a chance to get together. it's class action. it's when everyone who has been wronged can get together and actually have a little bit of power and leverage against a big bank, whether it's wells fargo or equifax, whatever it may be. that's the whole idea of a class action. people get to band together. and that's what the american legion is asking the senate to do, to let veterans band together, and also to let american consumers band together to seek justice.
mr. president, i just want to share with the senate a story about one of my maryland constituents and what happened to one of my maryland constituents, because i think a lot of people can relate. this is a pretty extraordinary story, but they can relate to how one individual feels like they are fighting against a big orption, and this was a story that was reported in -- on npr, and the maryland constituent's name is michael feifer, and here is what happened. one morning in february, michael feifer was heading off to his job in maryland at a company that builds guitars. he walked to the spot where he had parked his car. his car wasn't there. and so he called the police. called the police. he said i was lived. i thought someone stole my car. well, somebody had made off with feifer's car, but it wasn't a
car they have. it was -- it wasn't a car thief. it was wells fargo bank. the police informed him of this when he called them up. and michael feifer says that's when i found out my car was repossessed. now, he had no idea why wells fargo wanted to repossess his car. he says his payments were automatically taken out of his checking account, his car payments. so he calls wells fargo and he finds out that the bank had put another insurance policy on his car. lenders sometimes do this when a borrower doesn't have insurance. wells fargo calls it collateral protection insurance, c.p.i. now, sometimes there is nothing wrong with that, but wells fargo imposed this insurance on nearly half a million people who already had bought insurance. they were already covered. wells fargo just decided to put
another insurance plan on them. and guess what? started charging them for it. so that's why right after feifer's car got repossessed, wells fargo tells him he had been marked delinquent for not paying his insurance. this, again, was insurance he didn't want and he didn't need. they said too bad. you owe us $1,500. now, mike feifer then showed up at the bank with his bank statements. he showed all the payments he had made for the vehicle. he showed proof of insurance, showing he had never had a lapse in his insurance. he says the people at the bank said, well, you shouldn't owe anything. this is not your fault. he says they were just as confused as i was. well, then he said the branch employees tried to be helpful. they called up the wells fargo department that dealt with the
details of car repossessions to find out what was going on, and they kept putting them on hold. this is the wells fargo department putting their own wells fargo branch folks on hold. i was there two and a half hours. then it turns out they told him to call back a couple of days later. well, he called back a couple days later, said there was no prior record of his calls to the bank. he says they were very rude to him. then while he is arguing with the bank, they say we have repossessed your car. if you don't pay us $600, we're going to sell it off, so he pays them 600 bucks. then he finds out that he wasn't alone and that wells fargo had also engaged in this scheme to sell people car insurance on their car loans when they already had insurance. so, mr. president, this is a very simple issue. the issue is whether or not
consumers who had been wronged by big banks or other financial institutions, whether they can choose to band together with others to seek justice, and what the consumer financial protection bureau did was say consumers had that right. they have the right to choose how to go about getting justice. and what this senate resolution does is take that right away from consumers and say huh-uh, you want to seek justice, you can only go through forced arbitration where we know the deck is stacked against the lonely consumer and stacked in favor of the big banks and the big financial institutions. let's not do that, mr. president. let's vote down this resolution. let's protect the consumer protections that are in place today.
a senator: mr. president. the presiding officer: the senator from new mexico. mr. udall: thank you, mr. president, for the recognition this evening. mr. president, i rise to support the consumer financial protection bureau's arbitration rule that has been spoken about this evening very eloquently by my colleagues here on the democratic side. the new rule protects consumers from predatory financial practices. these consumers are our everyday constituents, service members and veterans, moms and dads, the elderly, students, working people. it protects these folks by limiting binding arbitration clauses. what is a binding arbitration clause? these clauses take away consumers' rights to seek relief in court when they are wronged.
this rule puts money in the pockets of consumers who have been taken advantage of. the consumer financial protection board estimates the rule would mean $342 million per year in compensation to consumers. repealing the rule would take that money which should go to consumers and give it to some of the wealthiest corporations in this nation. when millions of consumers are scammed, what is the most logical remedy? millions of consumers scammed. what's the logical remedy? millions of separate cases before arbiters selected by the corporation or a class action case before an impartial judge and jury. the right to go to court before a jury of your peers is enshrined in the constitution. the seventh amendment states --
and i quote here -- in suits at common law where the value and controversy shall exceed $20, the right of trial by jury shall be preserved. now, let's talk about the seventh amendment and what one of our founders said. james madison wrote, and i quote here, trial by jury in civil cases is as essential to secure the liberty of the people as any one of the preexistent rights of nature. this rule guarantees access to our importion courts. it's always good to have the spirit of the constitution and the founders on your side, and i stand with the supporters of this rule. who are they? and there are many. for example, the american legion just today its legislative director wrote in no uncertain
terms a vote to overturn the cfpb arbitration rule is a vote against the military and our veterans. the military coalition representing 5.5 million service members also supports this rule. in july they wrote, and i quote, forced arbitration is an un-american system where in service members claims against a corporation are funneled into a rigged secretive system in which all the rules, including the choice of the arbitrator, are picked by the corporation. these are incredibly strong statements of opposition from military and veterans groups. also in july over 300 consumers, civil rights, labor, and madam president groups wrote -- and small business groups wrote that the rule is a significant step
forward in the ongoing fight to curb predatory practices in consumer products and services. signers of this letter include the afl-cio, the american federation of teachers, consumer union, naacp, and dozens of other organizations. conservatives also support this rule. one of the early tea party activists wrote an op-ed in the washington times and said, this time the cfpb is right and republicans should stand on the side of american citizens and protect the constitution and the seventh amendment. where are our republican friends? they are not here on the floor talking about this rule. finally, the american people
broadly support this rule. a recent poll showed 67% supported the rule, only 13% opposed it. so who opposes this rule and who is behind this resolution to repeal it? corporations that want to avoid penalties in court when they abuse their customers and big financial industry trade associations and lobbyists. credit card, student loan, and pay day lending firms, which would see big benefits if this resolution passes. it will allow them to keep forcing consumers to sign contracts that take away their right to go to court. wells fargo, one of the largest banks in america, spent years creating millions of fake accounts just to build their own -- bill their customers more fees. they eventually admitted a
complete and total fraud of epic proportions. equifax, one of the largest credit bureaus in america, allowed more than half of all american consumers' personal information to be hacked. these companies should not be able to use binding arbitration to avoid the legal consequences of their actions. today's debate is a perfect example of how policy making in washington is broken. a federal agency did what is required, it undertook an exhaustive study, it created a rule to protect consumers from abusive contracts. now the affected industry is spending millions on lobbying and public relations to repeal the consumer protection rule to protect their bottom line at all costs. this will decide the fate of
$332 million per year. should it go to consumers who were wronged? of course. or should it go to the corporations who committed those wrongs? of course it should not. americans overwhelmingly believe special interests and lobbyists have too much power compared to the regular people. today we can take a step to repair our reputation. we should side with our constituents on this important vote and reject this resolution. i urge a no vote and i yield back. the presiding officer: the senator from illinois. ms. duckworth: mr. president, i come today to speak out in opposition of this misguided effort to overturn the cfpb protection rule. which protects our brave service members and veterans being
taken -- it was a couple of week ago that we had the c.e.o. of equifax testifying about how his company failed to protect the financial information and put more than 140 million consumers at risk of fraud or worse. that wasn't too long after the c.e.o. of wells fargo testified about how his company defrauded millions of consumers by forcing them into accounts and fees they did not sign up for and did not agree. it the american people were outraged by these scandals and with good reason. both of these companies committed serious wrongdoings and they admitted it. but that still didn't stop either from trying to shield themselves from the legal liability their own actions have risked. both of these companies tried to prevent the people they tried to take advantage of from holding them accountable in court by using forced arbitration clauses. they thought, and it seems they were right, if they could stop
people from suing them for their wrongdoing and instead force people that private arbitration that heavily favors mega businesses at the expense of consumers they would have a better shot at saving their company. they didn't care about consumer rights or justice. they just wanted to make as much money has they could legally or illegally and then get out of dodge as cleanly as possible. but because the american people were so outraged by these scandals, we noticed what they were trying to do. the actions of both companies caused an uproar that ultimately led them to back down and assure american consumers didn't have to give up their day to a -- that i r their right -- their right to a day in court. those forced arbitration clauses was exactly what the cfpb was trying to stop when it implemented the rule my colleagues other side of the aisle are trying to repeal
tonight. to force them into mandatory arbitration clauses should have been a lesson, but gis those working to reverse the rules here tonight didn't learn it. it's common to hear stories throughout my state of illinois and throughout the military community of service members being taken advantage of through predatory loans, scams, abuses and fraud. that's because active duty service members are particularly vulnerable consumers, especially when they are deployed. they get a guaranteed paycheck, but they also have limited time to read their credit card statements and keep up with security breaches. they are too busy carrying out the mission. service members are also frequently on the move between deployments and base relocations, often separated from their spouses and families for long periods of time. despite that, they still need to wire money when emergencies happen, they still need to pay bills, and their focus isn't
always on whether a loan they took out has hidden fees or if a company is charging them a higher rate than they are supposed to. they are focused on carrying out their mission. the cfpb's forced arbitration rule could help protect our service members from this sort of abuse. but it seems that a few of my colleagues want to make it harder for military families to get by and that's a shame. abusive corporate practices left uncheck not only causes incredible financial difficulty for service members and their families, but also has national security implications directly impacting military readiness. in the military bad credit can affect your security clearance and advancement. when the d.o.d. loses qualified service members because of financial instability, they also lose mission capability and
significant investments made in that person's training. this is an expensive loss. d.o.d. estimates that each separation from service costs taxpayers more than $57,000. corporate abuse also causes personal difficulties. when someone is deployed, the last thing they should have to worry about is whether their house is going to be foreclosed on or their car is going to be repossessed because they were the victim of a scam. when they are going into battle or heading out on a mission, the last thing our troops should be thinking about is how a company took advantage of the fact that they were out of the country and how they are so very little they can do about it. unfortunately, this isn't a hypothetical issue. service members get taken advantage of all the time and we have seen countless times how their ability to file lawsuits holds bad actors accountable. not too long ago the bank sanand iter -- sa tader were illegally
repossessing americans' cars. jp morgan chase settled a lawsuit from service members being overcharged for mortgages. and another mortgage company paid service members $60 million after overcharging them on their student loans. in each of these instances service members, sometimes with the help of government, filed a lawsuit to get relief and hold these financial actors accountable. but when companies force our service members, or any consumer, into arbitration, military families lose the right to hold wrongdoers accountable. that's what happened to archie hutchison, a father of two and husband from waynesboro. he received a wells fargo credit card along with sky-high interest rates and a forced
arbitration clause hidden in fine print. he didn't realize it at the time like the millions of others that wells fargo scammed but it ultimately helped to ruin his credit. when he tried to get his day in court, he was force haded into an -- forced into an arbitration proceeding that favors lenders over consumers. he's not alone. the vast majority of people forced into arbitration can tell you that the system is rigged. when the cfpb first looked into this issue, they found that when consumers filed an arbitration claim against a company that takes advantage of them, they have to pay an average of $161 in filing fees and they almost always lose. companies, on the other hand, won a whopping 91% of the time they go into arbitration against consumers. on average the consumer had to then pay $7,725 in damages to further pad corporate profits.
banks sometimes try to defend these clauses by saying the reduced legal liability helps them reduce costs for consumers, but there's absolutely no evidence that is true. in fact, when companies have added these forced arbitration clauses in the past, the evidence suggests that they never reduced costs for consumers. these costs simply mean bigger profit margins for those banks that break the law. there's a reason so many military veterans organizations like the american legion, marine corps league, the national guard association, the vietnam veterans of america, and groups like the aarp oppose this. arbitration is not about saving lawyers fees or decreasing costs to consumers. it's there to protect the interest of banks over consumers. i get that companies, especially banks, are in the business of making money. it makes sense they would want to force all of their customers
into arbitration because that saves them money. but why on earth would my colleagues here in the senate go along and help them rob service members an consumers of their rights to go to court? why would we allow bad actors to get off scot-free? if thee believe our service members are unfairly getting rich off suing companies that wrong them, they should say that. if they believe companies that break the law should be shielded from having to answer for their actions in court, they should say that. we shouldn't let them hide behind regulations. the arbitration resume is an example of a regulation that actually helps americans. it helps our service members and military families. a vote to overturn the arbitration rule is a vote against our military and against those who wake up every single day to serve and protect the greatest nation on the face of the earth. thank you, and i yield back. the presiding officer: the senator from ohio.
mr. brown: mr. president, first i'd like to make a unanimous consent request that following my remarks of no more than two minutes, senator franken follows my remarks and then-senator blumenthal. the presiding officer: is there objection? without objection. mr. brown: i wanted to make an observation after listening to the words of my friend, senator duckworth, who speaks about the importance of this rule to veterans in this country. it is not just consumers, it's not just women who have been abused in the workplace, it's not just people who sign up for credit cards, veterans in this country are the losers. this -- this -- if this vote passes tonight. what i would like to point out real quick is i'd first like to read the number of democrats that have been on the floor in opposition to this motion in support of the rule. i started, senator merkley, senator warren, senator hirono,
senator van hal hollen, senator duckworth and senator udall. senator crapo is a good friend of mine. he's doing his duty and defending his position well, but no other republican senator, no supporter of this resolution. nobody wants to come down here and speak. why? because they don't want to be seen at home as defenders of wall street and they don't want to be defenders of the most powerful people in this country. so they stay in their offices quietly, come meekly on the floor, then they'll vote yes and go home and hope nobody really knows about it. they're not willing to give. senator crapo, whom i admire and respect greatly, he knows that. he means it. he's doing his duty as chairman of the banking committee. none of the rest of them want to join him. i think that tells you a whole lot. i yield the floor. a senator: mr. president. the presiding officer: the senator from minnesota. mr. franken: thank you, mr. president. i rise today to discuss the consumer financial protection