Bank Lawyer's Blog

An Infinite Number of Monkeys

The Nanny State of Ohio won't quit until loan sharks make a big comeback, the kind of comeback that might lead Tony Soprano to come out of retirement. Last month, we noted that the attempt of the Ohio legislature in 2008 to put payday lenders in that state out of business was being thwarted by very enterprising "check cashers" and other assorted lenders-at-the-fringes, who were finding ways around the restrictions. Not being inclined to give up and let the market be the market, the legislature is at it again. Not quickly enough for the editors of the main stream left-tarded press, but grinding along inexorably, nonetheless.

Representative Matt Lundy, a Democrat and chairman of the consumer affairs and economic protection committee in the Ohio House, has studied other states’ experiences, and he said he was preparing a bill aimed at “plugging the loopholes.” The bill would create a minimum six-month term for loans of $1,000 or less and eliminate all fees that would effectively push interest rates above 28 percent.

“We have a clear mandate from the voters to make sure that their will is enforced,” Mr. Lundy said. “They wanted the payday lenders reined in.”

Payday lenders see it differently.

Community Financial Services Association of America, a Washington group that represents lenders,  said ... lenders turned to alternative ways of doing business rather than closing their doors, as they would have been forced to do under the 28 percent rate cap.

“Bottom line is during the 2008 legislative debate over payday lending in Ohio, lenders were encouraged to operate under the Small Loan Act. Now they are doing just that but being accused of operating under a loophole,” said Lyndsey Medsker, a spokeswoman for the association.

"Loopholes." It's always amusing to hear legislators who don't understand the law accuse people of being crafty when all they are is conversant with the English language and possessing basic reading comprehension skills. I suppose that puts them far ahead of the average state legislator, a person fit only for government work. It's like sending Steven Hawking up against Dustin Hoffman as the Rain Man. Unless you're talking about matching historical dates with days of the week, Hawking's going to clean your intellectual clock every round. Sooner or later though, the old saw about putting an infinite number of monkeys at an infinite number of typewriters for an infinite number of hours plays out. Eventually, they'll compose War and Peace.

In a recent letter to the editor of The Wall Street Journal, University of Texas-Arlington Economics Professor Roger Meiners mocked a supporter of a federal payday lending bill, The Payday Loan Reform Act of 2009, and offered the logical result of these kinds of legislative prohibitions.

Michael Calhoun, the head of the Center for Responsible Lending, asserts (Letters, April 18) that payday loans should be capped at 36% APR and endorses H.R. 1214, The Payday Loan Reform Act of 2009, for imposing limits.

At that rate, a loan of $200 for one month would generate $6 in interest. If Mr. Calhoun and the bill's sponsors really think one can run a payday business by charging such a rate, they should set up shop. It is not hard to do. Clients will flock to their outlets instead of the "predatory" lenders they criticize.

The payday loan market is highly competitive and provides a needed service primarily for low-income people. Just let those folks try getting an instant loan from Citibank for $200 for one month. If H.R. 1214 is enacted, it will be back to thugs serving the low-income borrower market. That's a "reform"?

Perhaps the most amusing remark of the professor's is the suggestion that any consumer advocate or legislator should try to run an actual for-profit business. If they could perform profitable work, they wouldn't be doing what they do. People say that about teachers, as well, I suppose, but there are enough Prof. Meiners in the world who poke holes in gasbags to give their profession a pass.

Total Recall

I was going to post about something to do with banks and/or law and/or lawyers tonight, but following hard on the heels of President Obama's press conference this evening was the following brief announcement by the US Treasury Department that all US currency was toxic and was being recalled. The more I thought about it, it seemed to be the ultimate governmental clawback, a  logical final step in a course of increasingly intrusive steps taken by a federal government that seems bound to suck the marrow out of our bones, the grey matter out of our skulls, and the oxygen out of the atmosphere. I would also have said that it wants to suck the souls from our being, but whether or not a human person actually has a soul, and whether or not the metaphysical idea of "Being" is or is not a valid one, are questions that are above my pay grade.

Thus, instead of blogging, I decided to do something much more enjoyable and decidedly less dangerous than blogging: drinking a 12-pack of Shiner Bock and going quail hunting with Dick Cheney.

The Devil's Advocates and a Leap of Faith

In what may be great examples of Supreme Court Justices playing head games with advocates, in today's oral arguments over the OCC preemption case we discussed yeasterday, Justice Ginsburg seemed to question the OCC's position and Chief Justice Roberts seemed to support the OCC. If they each continue down those respective paths, they'll end up 180 degrees from where they were two years ago in Watters v. Wachovia, when Ginsburg wrote the majority opinion upholding federal preemption and Roberts led the dissent.

The lawyer representing Cuomo, New York Solicitor General Barbara Underwood, argued that states must be able to enforce their fair-lending and other consumer-protection laws. The OCC's position "detaches the state's power to make laws from its power to enforce them," Underwood said.

Justice Ruth Bader Ginsburg returned several times to that idea, challenging the lawyers representing the US and the banks to come up with other instances where states had the right to "prescribe, but not enforce" laws.

"The state law, as this picture is drawn for us, is applicable," Ginsburg said. "It's substantive law applicable to these banks, but only the federal authority can enforce it. That seems passing strange."

[...]

The current case bears some resemblance to a dispute resolved by the Supreme Court in 2007 in favor of the banking industry. The court ruled 5-3 that states can't regulate the mortgage-lending subsidiaries of banks supervised by the OCC.

While the 2007 case involved traditional banking regulation, including licensing and so-called visitorial powers, the latest fight concerns more general state rules, such as anti-discrimination and consumer-protection laws.

The lawyer for the Clearing House, Seth Waxman, cited the case in arguing against state enforcement.

Ginsburg, who wrote for the majority in that case, said Waxman was offering "an inaccurate description" of the decision and cautioned him against relying on it to make his point today because the issues were different. "I do not think that excerpts of that opinion should be taken out of that context," she told Waxman.

Several justices questioned Congress's intent in drafting the laws that govern banks and federal regulation. Chief Justice John Roberts, who dissented in the 2007 case, said there was a reason for Congress's concern about states targeting national banks because it had happened in the past.

"Why isn't it a complete answer, to what I agree is a somewhat unusual situation of preempting enforcement but not the substance of law, that it's enforcement that raises the concerns?" Roberts asked. "Why doesn't that make perfect sense?"

Personally, I wouldn't get too excited about this banter. Often, it merely masks what the ultimate decision of each jurist will be. For most of us, hitting the blackjack tables in Las Vegas gives us better odds. Still, it gives us something to do in our down time.

As usual, Antonin Scalia got in the biggest zinger.

"What incentive does the federal government have to enforce state law?" asked Justice Antonin Scalia. "It has so much spare time after enforcing federal law that it's going to be worrying about state law?"

Now, that's one "Supreme" whose vote, along with his quota of snark,  you can always count on.

Elsewhere, Big Bucks investor Wilbur Ross announced that private funds he controls and money manager Invesco Ltd. would be participating in the PPIP.

"At this stage, you don't know where the most attractive opportunities will be. We just know they're going to be big," Ross told Reuters.

Recently, Henry Kravis stated publicly that he'll pass on particpating, due to fear of the government changing the deal after the investment has been made, as it's done already. Ross, on the other hand, is willing to take that risk.

Ross played down fears that big investment gains could be clawed back later by the U.S. Congress for political reasons.

"If that's the case, I'll be the victim and not our investors. It's a risk we've decided to take. We're relying on the good faith of the Treasury," he said.

"Relying on the good faith of the Treasury." It's hard to believe a billionaire said that, isn't it? He definitely either knows something we don't (which is extremely likely) or he's a true believer. No guts, no glory, I suppose. On the other hand, what a leap of faith!

National Bank Preemption: The Never-Ending Battle

As the contestants gear up for tomorrow's Supreme Court arguments in the latest round of the OCC versus the states on the federal preemption of state law as it applies to national banks, the trade press is abuzz with speculation (paid subscription required). Certainly, the unprecedented economic meltdown, which popular perception often lays at the feet of lax regulation, as well as a changing of the guard in Washington, D.C. to one with a decidedly leftward tilt, give many states rights supporters hope that here, at last, the OCC monolith will be halted in its quest for world domination, that the lower courts' consistent support of the OCC's position will be reversed, and that the lion will lay down with lamb.

"Fat chance," sez I.

Anything's possible, and maybe Altio will re-think his support of the OCC in Watters v. Wachovia, or decide that this case presents distinguishable facts. Thomas is certainly free from the Wachovia recusal problem, and he's likely to follow his mentor Scalia, a dissenter in Watters, along with Chief Justice Roberts. It's fun to speculate, and to do so is a parlor game of banking legal nerds who've got nothing better to do when a hard 28-hour billing day is done than to pontificate about which way the wind will blow in the hallowed chambers of the SCOTUS. Well, I've also got a Shiner Bock or three to consume, but I always have a few spare minutes to bloviate.

I've read the briefs (and I give a hat tip to the states rights folks for keeping me well-informed of their arguments). I think the states have given the Court sufficient ammunition, if it wants to halt the OCC for whatever public policy reasons the majority wants to use, to rationalize its way to a state-friendly decision. If the Court strictly follows precedent, however, I don't see how they get there. Perhaps I'll find out, along with a truckload of other surprised bank lawyers. Until then, I agree with Morrison & Forester partner L. Richard Fisher: "You expect the Supreme Court to decide the case on the law, and not on social policy."

I also agree with Arnold & Porter partner Howard Cayne, that the brief filed by Barney Frank and a few of his cohorts, which attempted to inform the court about the intent of Congress regarding the extent of OCC preemption, will play little, if any, role in the Court's decision.

"The brief filed by individual members of Congress does not represent the views of Congress as a whole and therefore deserves little weight in conveying anything about what Congress meant to do in the National Bank Act in 1864 or any later enactments," he said.

I get a charge out of Barney telling anyone what the intent of Congress might be, since the National Bank Act was adopted over 140 years ago. I mean he's old, but not THAT old. In fact, I would think any filing by Barney Frank might have a negative impact on the states' case. That's just a personal prejudice showing through, however. I've always had an unreasonably hostile reaction to circus clowns.

As I told a reporter for the National Law Journal a few weeks ago, I feel the states' pain, in an almost Bill Clintonian manner. Nevertheless, a decision against the OCC will be a major surprise. On the other hand (as I've previously speculated), I also think that a decision for the OCC will not stop, and may well increase pressure on, Democratic legislators, in league with a more libertarian and pro-state rights crowd, to push for a federal legislative solution. In fact, I think Barney and the Boyz will definitely push that wagon down the road a way if the SCOTUS again goes against the states.

Social Media Marketing Legal Risk: The Bark Is Worse Than The Bite

I spent a good portion of last Thursday in Las Vegas among bank marketing professionals and, as hard as it might be for some readers to believe, I found the experience refreshing. Perhaps because of what they do, but more likely because of the type of people who are drawn to the marketing field, many marketing professionals are pleasant and interesting conversationalists. At least, they're nice to your face, which in a world filled with snarky cranks like the author of this blog, is the best you can hope for.

The specific topic of the day's presentations was the use of social media to market a bank's products and services. All of the other presenters were impressive. I was able to speak at length with Jim Craig of 1st Advantage Federal Credit Union in Yorktown, Virginia and Shari Storm of Verity Credit Union in Seattle, and they were both engaging human beings, as well as knowledgeable and impressive speakers. Ms. Storm's also a published author, and I wondered, after hearing her speak and realizing what an active career she has, when she had time to have three children. Effective time management, I suppose.

I, on the other hand, was the wet blanket who told the attendees how many ways I, and my fellow demons from Legal Hell, could "what-if" their imaginative use of social media into a limbo of paralysis and eventual abject failure. Sure, it's a nasty, brutal job, but somebody's got to do it.

Actually, I find the legal risks of the use of social media to be overblown. It's true that, unlike the one-way communication of traditional marketing, where the bank "talks" to the customer or potential customer, in social media, the customer (or potential customer) "talks back" to the bank and, depending on how "social" the media might be, talks to other customers and potential customers. As I said to the audience, you're inviting strangers into your home, and you don't know whether you're getting a witty Oscar Wilde type or a Charles Manson who'll stick the cat in the microwave, pee in the punch bowl, and puke on the Persian rug. The apparent lack of control makes lawyers jerk and twitch like they've got a bad case of Tourette syndrome.

Nevertheless, the legal risks can be mitigated and managed, and it shouldn't be that difficult to do so if the bank makes an upfront commitment to do what's required. Mitigation involves having the right attitude, the right people, and the right infrastructure (policies and procedures, training and monitoring) in place to govern the bank's social media marketing activities. Those speakers and audience members with whom I spoke whose institutions have been in front of the curve in using social media marketing for a "long time" (in social media time, a "long time" is five years) haven't experienced any serious legal setbacks. Of course, the stories they told me indicated that when they confronted situations where things could have turned very ugly, they were able to deftly manage the situation and, in some cases, not merely lessen the potential risk but turn it to their advantage. In other words, they understand how to treat other human beings in a decent and transparent manner, as shocking as that may seem in an age when it's all about the "spin."

I think that much, perhaps most, of the concern about the legal risks of social media marketing by banks arises from the understandable fear of the unknown. The media is relatively new, banks are traditionally conservative, and lawyers are risk mitigators, not risk takers. Thus far, banks are experimenting with the media, and "the jury is still out." In other words, many banks don't yet "get it." Nevertheless, social media is the way through which much of the world is relating to one another, especially among Gen Y, and banks are going to have to learn to embrace the media if they want to effectively reach those who use it. Shari Storm displayed a picture of her three daughters, ages 5, 3 and 1, and told the assembled bankers that the challenge was how to make them and their older brothers and sisters their future customers. It's a huge group of human beings (larger than the Boomers) who are coming of age using social media as second nature.

Legal risks or no legal risks, banks will have to come to terms with it. Perhaps you don't have to be a hare to be in this race, but you sure won't be able to win it as a tortoise.

A Short Break

I'm on a combined business/vacation trip for the rest of the week. I'm speaking in Las Vegas on Thursday morning to a group of bank marketing professionals about the legal risks of banks using social media to market their wares. I'm sure that I'll recognize the employees of banks who've taken TARP money. They'll be the ones with paper bags over their heads. I'm headed out early and staying late in order to take advantage of some much needed downtime. As a result, no blogging until next week, because I promised both my wife and my professional liability carrier: no more blogging while drinking.

If You Couldn't Laugh, You'd Have To Cry

Elizabeth Warren, a Harvard law professor, bankruptcy expert, and blogger, is someone I've previously criticized for being a bit "breathless" when it comes to criticizing big, bad banks and their nefarious, consumer-hating ways. On the other hand, as head of the Congressional Oversight Panel that's looking over the Treasury Department's shoulder and crying "foul" whenever it seems appropriate to do so, I get a kick out of her. I may not agree with her positions on some issues, but I admire her sense of humor and brainpower.

Recently, she gave an interview to The Boston Globe, in which she expressed her frustrations trying to command an oversight body with plenty of jaws, but no teeth. Gum-flapping only carries you so far when hundreds of billions of dollars are being spent and the program you're supposed to be overseeing is being run by people that you suspect haven't got a clue or, if they've got a clue, are keeping that clue well hidden.

Q: You've been quite critical of the Treasury. What troubles you most about what you're getting and what you're not getting?

A: There's no discussion of the overall policy. Instead, there are specific programs that are announced, and from that, it's necessary to reason backwards to figure out what the goal must have been. It's like a "Jeopardy!" game. If this is the answer, what was the question? It's frustrating because without a clearly articulated goal and identified metrics to determine whether the goal is being accomplished, it's almost impossible to tell if a program is successful.

Q: Do you have a clear sense of what the overall TARP plan at this point is supposed to do? Are you capable of summarizing what it's supposed to be doing?

A: No. And neither is Treasury. Treasury has given us multiple contradictory explanations for what it's trying to accomplish.

There's a major problem and a minor problem. The minor problem is documentation. I've spent four weeks now looking for someone who can give me the details of the stress test so that we can do an independent evaluation of whether the stress test is any good.

We get: "someone will call [you] right back." Only the call doesn't come.

There's more, and it's illuminating. I especially love her response to the question of what will she consider a success at the end of the bailout program: "We will have wasted comparatively less money, and spent more on comparatively more successful programs." When you're dealing with a government bailout that's being concocted on the fly, I suppose that result would be considered a win.

In the following segment from an  episode from last Wednesday's "The Daily Show," her deadpan comments play well off of John Stewart's feigned befuddlement. At first, I thought she was a typical absent-minded professor type, but decided she's actually quite funny, in a good sense. In D.C., a strong sense of irony has got to be a great survival skill. The rest of her dialogue with Stewart can be found here (it's the third segment). Her left-leaning, pro-government regulation views are sure to drive conservatives and free marketers to fits of derision, especially since Stewart agrees with her. Nevertheless, she's a kick in the keister.

Procrastination Is Costly

I was out of town on Good Friday, when New Frontier Bank in Greeley, Colorado was taken down (paid subscription required) by the FDIC (at the request of the Colorado Banking Commissioner). I'll spare you the quips about "good" being "not-so-good" and any blasphemous allusions to crucifixion.  A few days earlier, I'd posted about the complaints of the former president of that bank that the FDIC had sabotaged a private recapitalization of the bank by allowing potential bidders access to the bank to perform due diligence at the same time the private investors were doing their due diligence.

It turned out that none of the potential bidders thought the bank was worth bidding for, which might tell some cynics that the FDIC screwed up the private deal to no purpose. It tells me that the bank had little or no franchise value at the time it failed and, therefore, that the private equity deal might not have been consummated in any event. Whether it might have had some value prior to the end game is a question to which we'll never have a definitive answer, because once word leaked out that the bank's application for a TARP capital injection was denied and that the private investors had pulled out, depositors began withdrawing whatever core deposits might have been worth acquiring. I assume that those of the bank's competitors in the local market that might have been interested in acquiring New Frontier's core deposits from the FDIC were getting their share of the same from frightened depositors, and figured that they couldn't be certain that by the time the FDIC took the institution over, there would be enough core deposits left to make a a bid worthwhile. There's no question that the bank had a heavy reliance on "non-core" deposits.

One of the bank's competitors confirmed that it picked up 100 new deposits on the day after the bank failed, as opposed to the customary two or three deposits it picks up on a normal Saturday. The best part, of course, is that it didn't have to pay the FDIC a premium for those new deposits. In addition, that bank said that it would have taken too much capital to acquire all the insured deposits from the FDIC.

The FDIC couldn't even find a bank to act as paying agent for the deposits. Therefore, it decided to form a deposit bank to assume the deposits and give depositors 30 days to find a new bank. That's a rare form of resolution, and one that the article states has not been used in 25 years.

Sandy Brown, the managing partner of Bracewell & Giuliani's Dallas office, correctly asserted that the FDIC had obviously made a determination that the bank wasn't worth a plug nickel to anyone, at any price.

"If they believed there was some level of value there, they would have run it for a little while and sold it."

If that's the case, why was so much time and effort spent by the bank, its holding company, private equity investors, and what was sure to have been a phalanx of attorneys and consultants, running around for months trying to recapitalize the bank? When did the FDIC make an internal determination that the bank wasn't worth saving, and wasn't going to generate sufficient franchise value to attract a buyer and/or to justify a TARP capital investment? From a purely selfish standpoint of petty personal gain, bank lawyers have to be thankful that regulators allow banks to waste their (and, eventually, the FDIC's) money tilting at windmills, including putting together capital plans, filing applications for TARP CPP funds, filing change of control and holding company applications, responding to enforcement actions, etc. As long as you're being paid on a daily basis, that is. In such situations, bank lawyers and consultants end up performing like oncologists who get paid for trying the latest experimental chemotherapy on a cancer patient, who (as the overwhelming odds would predict) dies anyway.

From the standpoint of someone with no skin in the game, however, who represents other banks whose increased FDIC assessments will have to cover the losses from failures such as this one, I have to wonder in cases like this why the FDIC doesn't simply tell the state banking commissioner to pull the plug much earlier. While the FDIC may try to hide behind the technical requirement that the state commissioner must act first, no one with even as little as a week's experience in this area could fail to understand that the FDIC has all the money and, therefore, calls the shots. If they wanted the bank closed down earlier, they should have been able to accomplish it much sooner than they did.

If a government agency wants to pick the winners and losers, and predetermines that the New Frontiers of the world are doomed, then it ought to close the losers soon enough that the survivors aren't paying through the nose for months of wheel-spinning, months in which a questionable franchise value isn't going to do anything to increase and in which the ultimate hole is being dug much deeper. If it hasn't got the manpower to do it any sooner than it did in this case, then it better get the staff onboard and/or under contract to handle the failures more expeditiously.

Dipping Into The Mailbag

It's time to answer a couple of e-mails, publicly, if semi-anonymously.

One reader, responding to my use of the phrase "TARP's a tar baby," asked me if I'd ever thought of calling it a "TARP baby." No, but Jamie Dimon beat me to the punch in any event. It figures that a guy with the golden touch of Dimon would be first to apply such a clever turn of phrase to a program that deserves all the insults bank executives can muster.

Another reader, who's a lawyer for a bank trade association, wrote to inquire about important banking issues related to a post of mine of a week ago. In that post, I'd mentioned in passing the charms of two professional female dancers, Edyta Sliwinska and Cheryl Burke. I'd also posted a picture of one of the young women, but failed to indicate which of the two was pictured. The picture was of Ms. Sliwinska.

My correspondent also made the following request:

Request that you to find some relevance that would allow you to post a picture of the other contestant into your next blog on TARP.

"Relevance"? We don't need no stinkin' "relevance" at Bank Lawyer's Blog to post a picture of Cheryl Burke. Consider the request granted on the grounds of sheer whimsy.

The same correspondent also noted that Ms. Sliwinska's costume bore a striking resemblance to costume worn many years ago by actress Barbara Eden when she portrayed a genie named Jeannie on the television show "I Dream of Jeannie" (a show co-starring the Texas fruitloop, Larry Hagman, who would later go on to fame as the dastardly J.R. Ewing in "Dallas"). He wasn't as much concerned with any of the dancers actually plagiarizing Ms. Eden's outfits as he was in having the opportunity to paste Ms. Eden's picture into an e-mail

message to me, thereby reliving an adolescent fascination of his with Ms. Eden's bare midriff.

 Always happy to oblige a fan.

Who says bank lawyers aren't a load of laughs?

Foreclosure Freezes Failure

Housing Wire's Paul Jackson has been adamant for some time about the utter uselessness of foreclosure moratorium laws in doing anything other than delaying the inevitable for borrowers and in increasing ultimate losses to servicers and lenders. Last December, we noted that, based upon Paul's most recent reporting, we expected a "tsunami of foreclosures" to hit in 2009.

Well, the "tsunami's" coming, and Paul is anything but shocked. In an editorial piece in today's Housing Wire, Paul could no longer restrain his ire.

So we’re seeing a borrower backlog in the default pipeline. Are these borrowers exiting the pipeline via other means, since foreclosure hasn’t been a viable option recently? The data again suggests the answer is a resounding ‘no.’ While cure rates have been increasing in comparative terms over the course of the moratoria duration (essentially Dec. 2008 to Mar. 2009), in real terms cures remain tough to come by.

[...]

What we are seeing, however, is servicers quickly moving to clear bad assets as soon as the GSEs and government pressure points will allow foreclosures to proceed. Analyst Mark Hanson of The Field Check Group circulated data to subscribers last week showing that for California, among the state’s top five servicers, the volume of notices of sale surged more than 170 percent between February and March 2009 alone, from 4,410 NTS filings in February to 11,981 in March. (Notices of sale indicate an imminent foreclosure, usually within a 30 to 60 day timeframe, depending on locale.)

Which means that the financial press, consumer groups, and Capitol Hill are quickly coming to realize something that most of us from the mortgage space have long known to be true: the problem here isn’t entirely the mortgage instrument, and moratoria ultimately can do nothing more for most troubled borrowers than postpone the inevitable.

Paul cites  a recent article in The Wall Street Journal article that demonstrates what Paul's been ranting about for quite a long time: borrowers who can't pay their loan today are going to be even less able to repay another 90 days' interest that accrues during the moratorium period.

This should not be considered news to anyone inside the mortgage banking space, or anyone that reads HousingWire. As we’ve written about numerous times in this space, no amount of modification can replace a lost job, or a long-term loss of income. And with 15.6% of the nation’s workforce now either unemployed or underemployed, the problems in the nation’s mortgage markets are as much a broad economic problem as they’re a problem tied to blow-and-go underwriting standards and creative loan products.

“The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium,” Field Check’s Hanson wrote in a note to clients last week. Here’s to hoping that we’ve already learned our lesson the first time around on this.

"Already learned our lesson." What are the odds?

Expect to see a push from certain quarters for a federal foreclosure moratorium law. When it comes to the current Congress, no law is too useless to be enacted if it plays well to a core constituency.