Date: 2015-04-14
Speaker: MAXINE WATERS (democrat)
Chamber: H
State: California

Mr. Speaker. with all due respect to my chairman. Mr. HENSARLING. this debate is not about McDonalds. it is not about Burger King. and it is not about the National Tire and Battery Company. This is about our constituents who want to be homeowners. who are gouged. who are misled. and who are steered into companies that are going to provide kickbacks for their loan originators. We need to get rid of some of these myths. The myth that we have heard today is we need H.R. 685 to ensure access to credit for lowincome households. Well. lets talk about the facts. The cost of title insurance is opaque. Borrowers are responsible for paying for title insurance. but title insurance pricing is basically negotiated between the lender and the title insurance company. The pricing and sales system is completely nontransparent. making it impossible for borrowers to shop for better prices on title insurance. In addition. when borrowers spend money on inflated title insurance premiums. it makes homeownership less sustainable. High title insurance prices mean borrowers have less money to put toward a down payment or to put toward improvements to their home. Even The Wall Street Journal agrees. Here is a quote from an article from March 28. 2014: "Title insurance can cost hundreds of dollars for modest houses and thousands for multimilliondollar properties. Yet many home buyers dont focus on the product. or the price. until they sit down at the closing." The article went on to describe that "upstart insurers and agencies are challenging the status quo." Two insurers are "marketing directly to consumers on the Internet. offering online quotes to home buyers who plug in basic information about the property. such as location. purchase price and loan amount. And they are offering savings of up to 35 percent off what established firms charge." But these upstart companies have had a hard time in securing market share because they dont have the profits to afford to offer kickbacklike arrangements. The CFPB has taken reasonable steps on the affiliated title insurance issue. carefully considering the industry comments in their proposed rule and deciding that the harm to consumers was too great to exclude affiliated title. The inclusion of title insurance. qualified mortgage points. and fee caps serves to limit title insurance pricing from even greater excesses. As Professor Adam Levitin of Georgetown University. a Democratic witness at the hearing on H.R. 685. concluded: "To the extent that we are concerned about ensuring greater availability of credit to consumers. exempting title insurance from the HOEPA and QM point and fee caps is a terrible idea as it virtually guarantees that consumers will be gouged with increased title insurance costs which make homeownership more expensive." Make no mistake. Wall Street always argues that consumer protection will hurt access to credit when they want to stop those efforts dead in their tracks. In fact. we heard these same arguments in the early 2000s as the industry lobbied against consumer protection. In 2007. Representatives Brad Miller and Mel Watt introduced. or reintroduced from 2004. a bill supported by consumer groups to curb predatory lending practices which also would have held financial companies that securitize mortgages liable for certain violations. That bill eventually was included in DoddFrank as title XIV of the bill. But remember that Bear Stearns spent $500.000 lobbying against Millers bill and another piece of proposed mortgage legislation right up until the investment bank cratered in March of 2008. Simply. in wrapping up this debate. it is clear that there should be a cap on fees. It is clear that when consumers try and sit down at a closing and try to do the best job that they can to protect their dollars so that they can have money left to fix up the house that they are trying to buy or they can have enough money to ensure that they are able to make the mortgages. they dont want to be steered in ways that some of these loan originators have done and continue to do. They dont want to be steered to affiliated businesses who will simply kick back some of those profits to the lender who sent them to them in the first place. So. Mr. Speaker. I would ask my colleagues on the opposite side of the aisle to just consider what you are spending your time on. Consider whom you are advocating for. Consider that you are advocating for people who are making lots of money. They dont really need your advocacy. They do very well because they have got highpaid lobbyists walking the halls of Washington. D.C.. following us around from our offices to the toilets. Consider that if this time were better spent really supporting the reforms in DoddFrank and supporting the Consumer Financial Protection Bureau. we would be doing a better job for our constituents than coming in here trying to protect the biggest and the richest firms who are doing very well out there. Dont forget. prior to DoddFrank. there was no real protection for consumers. That is why we have the Consumer Financial Protection Bureau. They are doing a great job. and they are providing us with the research. they are providing us with the investigations. and they are providing us with the information that we should be using to protect consumers rather than coming on this floor and in our committees trying to denounce them. trying to make sure that they are not able to do business. trying to defund them. trying to discredit them. and trying to do everything that they can to keep them from being effective. The Consumer Financial Protection Bureau is just about that: protecting our consumers in ways that they were not protected before we had the great subprime meltdown and the great crisis that was created in this country. We should all be trying to do our very best not to return to 2008. not to return to a time where we were destroying communities. where boardedup homes for blocks and blocks and blocks in communities were driving down the value of other homes in those communities. We should be trying to do everything that we can to make sure that we care about homeownership. I hear from the other side of the aisle that somehow we dont care about people owning homes. But what I really hear when I listen to that is that they dont care what price they have to pay in order to get in a home. they dont care if they are gouged with high fees. they dont care if they are extended credit that they cant afford. they dont care that they are going to lose these homes. and finally. they dont really care whether or not they are going to get modifications so that they can stay in the homes. As a matter of fact. many of our consumers who have tried their very best to save their homes have been turned down by the very financial institutions that put them in the position that they happen to be in. Many of those financial institutions we bailed out. and we have gotten nothing in return for much of those bailouts that we have done. So we have an opportunity to respect not only our constituents and our consumers. but to respect the fact that we have finally evolved to the point where we have reforms. I know and I hear from time to time that somehow we on this side of the aisle believe that the DoddFrank reforms are cast in concrete. that there can be no modifications. no changes. Well. you heard the chairman say that we passed out 11 bills. We passed out. in a bipartisan way. bills that some of us kind of held our nose and passed out because we wanted to show that maybe these particular bills were not that harmful and maybe werent harmful and that we could work in a bipartisan way even though some of them questioned some of the work that had been done in DoddFrank. I have said and many other members of the committee on my side of the aisle have said that we are willing to make technical corrections. we are willing to make some modifications that make good sense. but we are not willing to destroy the reform that we did. that we worked so hard for. DoddFrank is extremely important. and we should be about this business of implementing these reforms so that we can protect our consumers. I am taken aback and I am surprised that many of our Members who are here advocating for the rich lenders. for the people who caused the problem in the first place. can go back home and look their consumers in the eye and tell them they are really working for them. they are really working to make sure that they can own a home. They dont really know. and I dont think that many of those are going back and saying: Well. let me tell you what I did today. I made sure that there was no cap on fees and that the lenders can charge whatever they want working with the affiliated companies. and this cap at 3 percent that they have come up with in DoddFrank reforms doesnt make good sense. and they should be able to charge you whatever they want to charge you. I dont think that we have Members who are here on this floor today that are advocating that we get rid of these caps and that we allow these lenders to have these relationships with the affiliated companies where they keep steering the business into them. steering the business into them. How many of those who are advocating have asked the lenders: How much money are you making back on these loans. on these fees that you are allowing the affiliateds to charge them? Do you really get a share in those profits? Do you really get a kickback? If so. lets have some transparency. Lets shine some light on how much money you are making. I bet you one thing. I bet you none of them will tell you: We are not making any money. We are just doing this because. well. we are just doing it because. oh. we think that this is a better way to do it. So I am asking my colleagues in this House to reject this legislation. We have been on this floor today on two important bills. one on manufactured housing where. again. we have advocates on the opposite side of the aisle who would like to see the manufactured housing industry make more money on the poorest of people. on the most vulnerable in our society. They would like to charge interest rates above prime interest. 10 percent above prime interest. As we have stated. when the interest rates begin to rise. this means that it can go beyond 14 percent to 15. 16. 17. and 18 percent. We dont know how high it could go. yet the time that we have spent advocating for the richest of the rich who are in this business to be able to gouge these poor people and the time that we are spending again on another bill that would allow the richest of the rich to gouge poor homeowners who dont know and dont understand all these fees that they are being charged and the fact that we have a cap that they want to remove. why are they spending their time representing those who really dont need their representation? I would ask my colleagues to reject both of these bills. I would ask my colleagues to stand up for the least of these. I would ask my colleagues to make sure they remember the lessons of 2008. and they are reminded of the fact that not only are families destroyed. but whole communities have been destroyed by what took place with this subprime meltdown and this crisis that took us into a recession. almost a depression. We cant forget these lessons. we cant afford to forget these lessons. We are Representatives of the people. Representatives of the people dont act that way. Representatives of the people dont forget. They do everything in their power to make sure that they provide a safety net. that they provide some protection. that they look out for them. that they are their voice inside this place where we are making public policy. that the public policy includes them. that the public policy does not forget them. that the public policy is not the public policy that is designed and supported by the richest 1 percent in this country. but really. the public policy comes out of the voices of all of those who have been sent here from all over this Nation from some of the richest communities to some of the poorest communities. We talk about jobs and the need for the creation of jobs. but I dont hear the opposite side of the aisle talking about that. I dont hear them talking about how we can create really more housing opportunities for those who want to buy and for those who have to rent. I dont hear any talk about what we can do to provide economic development in this country. how we can repair the infrastructure. make sure that our bridges are working. that our water systems are working. that our roads are in good shape. I dont hear that. I hear time being spent on how we can help the richest of those who dont need our voice. who dont need our help. It is time to stop this madness. It is time to call it what it is. It is time to ask: Why is it that the richest of the folks in the businesses in this country who have so many paid lobbyists. who are up and down these halls every day. get so much representation? Why is it they have so much influence? Why is it they have been able to direct the public policy in ways that the average citizen cannot do? I want to tell youyou talk about the middle class. Yes. there is an erosion of the middle class because of the way that the middle class is not really represented. We allude to the representation. but it is really not here. I ask my colleagues to reject this legislation. to not allow anybody on this floor to tell them that this is in the best interest of consumers because it is not. Mr. Speaker. I yield back the balance of my time.