I rise in strong opposition to this conference report.

To paraphrase the words Charles Dickens penned in 1859, this is the best of bills; this is the worst of bills. It is an act of wisdom; it is an act of foolishness. It wisely recognizes the technological and regulatory changes that have blurred the lines between industries and products, and builds a new regulatory structure to house and foster competition and innovation. However, it unwisely fails to recognize that, for all that has changed dramatically, human nature has not. Prodigious failures and frauds are no less possible, indeed, perhaps are even more likely today. Yet S. 900 provides inadequate protections for taxpayers, depositors, investors, and consumers.

Now, I can tell that some of my colleagues are bracing themselves for a speech about the Crash of 1929 and the Great Depression that followed it. I am not giving that speech today. I am not opposing S. 900 because I am stuck in the past. I am opposing S. 900 because it’s a bad bill today and for the future. About the past, I will only observe that he who does not learn from it, is doomed to repeat it. This bill bears dangerous seeds.

First, S.900 facilitates affiliations between banks, brokerages, and insurance companies, creating institutions that are "too big to fail." However, it does not reform deposit insurance or antitrust implementation and enforcement. The bill’s supporters tout all the benefits to consumers, but woe to the American people when they have to pick up the tab for one of these failures or when competition disappears and prices shoot up.

It also authorizes banks’ direct operating subsidiaries to engage in risky new principal activities like securities underwriting and, in five years, merchant banking with Treasury and Federal Reserve approval. The flimsy limitations and firewalls will not hold back contagion and underscore the foolishness in not reforming deposit insurance, and thus the threat to taxpayers and depositors.

Second, the privacy provisions in S. 900 are a sham. The bill gives financial institutions new access to our personal financial and other information for purposes of cross-marketing and profiteering. Under S. 900, a customer cannot opt out of information sharing if his financial institution enters a "joint marketing agreement" with unaffiliated third parties. This loophole makes the privacy protections about as effective as a lace doily would be in holding back a flood.

Third, this bill undermines the Community Reinvestment Act. Many of my colleagues will speak to this point more eloquently than I, and I associate myself with their remarks.  At the appropriate point, I will include the National Community Reinvestment Coalition’s letter in the Record.

Fourth, it undermines the separation of banking and commerce. Title IV closes the unitary thrift loophole by barring future ownership of thrifts by commercial concerns. But about 800 firms that are grandfathered can engage in any commercial activity, even if they were not so engaged on the grandfather date. Moreover, title I allows the new financial holding companies (which incorporate commercial banks) to engage in any "complementary" activities to financial activities determined by the Federal Reserve. And in a piece of circular mischief, any S&L holding company, whether or not grandfathered, can engage in any activities determined to be "complementary" for financial holding companies. Title I of S. 900 also waters down the prudential limitations that the House had imposed on merchant banking. S. 900 clearly ignores the warning of then Treasury Secretary Rubin to Congress in May of this year: "We have serious concerns about mixing banking and commercial activities under any circumstances, and these concerns are heightened as we reflect on the financial crisis that has affected so many countries around the world over the past two years."

Fifth, the conference agreement would let banks evaluate and process health and other insurance claims without having to comply with state consumer protections. This means that banks, of all people, will make important medical benefit decisions that patients and doctors should make. According to the National Association of Insurance Commissioners, S. 900 could prevent up to 1,781 state insurance consumer protection laws and regulations from being applied to banks that conduct insurance activities. State laws could be preempted that require consumers to be paid claims they are due and that protect consumers against predatory practices of banks that sell credit insurance. S. 900 also preempts state consumer privacy laws restricting the dissemination of medical and other personal information by a bank engaged in insurance activities. The conference committee rejected an amendment that I offered to address these serious shortcomings.

Sixth, S. 900 contains provisions (subtitle B of title III) on the redomestication of mutual insurers that are opposed by the National Conference of State Legislatures and the National Conference of Insurance Legislators. They contend that this legislation is anti-consumer and not in the public interest in that it would preempt the anti-mutualization laws in 30 states and place as many as 35 million policyholders, many of our constituents, at risk of losing $94.7 billion in equity. Their letter also follows my statement.

Finally, our capital markets are the envy of the world and their success rests on the high level of public confidence in their integrity, fairness, transparency, and liquidity. While S. 900 pays lip service to the functional regulation of securities by the SEC, it, in fact, creates too many loopholes in securities regulation -- too many products are carved out, and too many activities are exempted -- thus preventing the SEC from effectively monitoring and protecting U.S. markets and investors. In a final indignity, the effective date of the securities title was extended mysteriously to 18 months from the one year approved by the conference committee. So, the title I Glass-Steagall repeal is effective 120 days after date of enactment, the insurance provisions are effective on date of enactment, the pitiful privacy provisions are effective six months after the date of enactment, but the banks do not have to comply with the federal securities laws until 18 months or a year and a half after the date of enactment. This makes absolutely no sense whatsoever, but, considering all the other problems with this bill, is par for the course.

I support modernization of our financial laws. I support competition and innovation. I do not believe either should be accomplished at the expense of taxpayers, depositors, investors, consumers, and our communities.