Jack Reed

I think, again, is absolutely essential.

I think it is important to point out that the cap is 36 percent.

We passed legislation, for example, that tried to cap lending at 36 percent for active-duty personnel.

We all understand that our soldiers, sailors, marines, airmen, and Coast Guard are all making a huge sacrifice for the country, and we have to respond by protecting their best interests and the interests of their families.

We have to contemplate, particularly after 2008, things that seem so far removed from the day-to-day practice.

I think that has to be acknowledged.

But here is the situation. You have a prominent fund that miscalculated, in the case of the experience in 2008...

A final question. I am concerned about the impact on municipal participants.

So you could have essentially a system in which some are regulated and some are not.

That is a possibility, and specifically it is addressed by Congress in Dodd-Frank.

I want to commend you and Ranking Member Shelby for holding this hearing because, looking back over the last several years, there were many, many issues that had potential dire consequences to the financial system which were not examined…

We have to assess a probability. And then we also have to, I think, probe, as I have tried to do...

But that essentially--I mean, we are getting to sort of what this all might ultimately rest upon--is the Federal Reserve stepping in.

One of the issues that was also raised by Senator Shelby is that your testimony about 300 essentially situations where the sponsor of the fund stepped in and provided capital...

But here, again, I think Senator Shelby's comments go right to the heart of what our job is.

I do believe the people doing it thought that they were maintaining a short against high-yield credit that would benefit the company in a crisis.

And the irony to me is that if there was a good Volcker Rule in place, they might not have been able to do this because it clearly does not seem to be hedging customer risk or even the overall exposure of the bank's portfolio.

But that leaves us in a situation of how do we build in, because our responsibility--build in rules and regulations that prevent, as you would say, well-intentioned, extremely bright people from doing things that are very detrimental?

I think it also is a strong case, in my view, for a very clear but very strong Volcker Rule.

I think this is a very important hearing because the issues that have been raised go right to the capability of large, complex international financial institutions to manage risk.

So there is a possibility, in fact, if it is done correctly and proposed, which I hope it is, that it could have avoided this situation?

It seems that their model, their VaR model, was loosened up considerably, giving them the opportunity to engage in more risky activities.

The Servicemember Housing Protection Act of 2012 would amend the Servicemembers Civil Relief Act (SCRA) to enhance the protections accorded to servicemembers and their spouses with respect to mortgages, and for other purposes.

Our Nation's growing reliance on the National Guard and Reserves for operational duties here and overseas means that our warrior-citizens must have airtight reemployment rights and financial protections when they are called to the colors.

I think they should be able to move without a termination fee on post when that housing becomes available.