Committee on Financial Services

Jeb Hensarling

Chairman Hensarling Comments on Risk Retention Rule


Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement on the final risk retention rule adopted by federal regulators today – three years after the rule was first proposed.  As required by the Dodd-Frank Act, the rule defines “qualified residential mortgage” (QRM) and exempts securitizations of QRMs from risk retention.

“Dodd-Frank gave regulators 270 days to prescribe regulations on risk retention, and three and a half years later those regulators are still struggling to get their act together while the housing market limps along and private capital sits on the sidelines.  This rule is one more reason why Washington bureaucrats shouldn’t be picking winners and losers in the housing finance market.  If risk retention is a good idea, it should be something that the market establishes, not that the government mandates.

“More convoluted top-down regulations from Washington aren’t going to build the sustainable housing finance system that helps Americans buy homes they can actually afford to keep.  The better solution is to repeal the Dodd-Frank Act’s risk retention provision, end the federal government’s domination of the housing finance market, and put private capital at the center of the mortgage system.  That’s exactly what the PATH Act does,” said Chairman Jeb Hensarling.

The PATH Act (Protecting American Taxpayers and Homeowners) was approved by the House Financial Services Committee last year.  Included in the PATH Act are provisions that:

  • end the nearly $200 billion taxpayer-funded bailout of Fannie Mae and Freddie Mac and phase out their failed taxpayer-backed business model;
  • remove artificial barriers to private capital in order to attract investment and encourage innovation; and
  • give homebuyers more informed choices about their mortgage options.

For more information on the PATH Act, click here.

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ICYMI: The Wall Street Journal’s ‘Weekend Interview’ with Chairman Jeb Hensarling


Below are excerpts from the Wall Street Journal’s “Weekend Interview” with House Financial Services Committee Chairman Jeb Hensarling (R-TX).  The entire interview can be found here.

Hensarling on the Export-Import Bank
Mr. Hensarling views the Ex-Im battle “somewhat as a precursor to the tax reform fight because there are so many vested corporate interests” served by the current tax code: “If we can’t get rid of this agency and the corporate welfare it represents, how will House Republicans ever muster the intestinal fortitude to be able to do fundamental tax reform?” He adds, with some political poignancy, “I don’t know how we will ever have the moral authority to deal with social welfare if we can’t deal with corporate welfare.”
Hensarling on Dodd-Frank

Mr. Hensarling sees an opportunity to revisit the 2010 Dodd-Frank law, which was drafted in haste after the financial crisis and was falsely promoted as an end to too-big-to-fail banks. Mr. Hensarling says that “given the state of the economy, people are taking a second look” at both the law and the story they were sold by its authors. “We’ve all heard about Wall Street greed. I think people are now starting to be a little bit more sensitized to Washington greed—the greed for power and control over our lives and our economy.”  

He notes that consumers aren’t pleased with the results: Free checking and credit-card perks are disappearing, and more generally the economy is lagging. Mr. Obama’s approval ratings on economic policy are down, and Mr. Hensarling thinks one reason is the burden on lending and small community banks by Dodd-Frank’s “sheer weight, volume, complexity and number of regulations.”

Hensarling on the CFPB

He is particularly focused on the law’s Financial Stability Oversight Council… and on the Consumer Financial Protection Bureau (CFPB), which he calls “the single most unaccountable agency in the history of America.” Housed within the Federal Reserve, it draws funding from the Fed but doesn’t answer to any Fed officials, or to congressional appropriators, or to a bipartisan commission, as most independent agencies do. The bureau is run by a single director who cannot be removed unless the president can show cause. Mr. Hensarling also notes that the Bureau doesn’t even have true oversight by the courts because of the Supreme Court’s Chevron legal doctrine that compels judges to show deference to the bureau’s decisions. This lack of accountability may be why the bureau has been constructing what Mr. Hensarling calls “the Taj Mahal” to serve as its Beltway headquarters.

Mr. Hensarling believes the CFPB’s lack of accountability is also leading to “consumer protections” that Americans don’t want or need. Once the bureau’s rules are fully implemented, he says, “one third of all blacks and Hispanics” will “no longer be able to buy the homes that they have traditionally been able to buy. We are protecting them out of their homes! The qualified-mortgage rule should have been called ‘quitting mortgages’ because that’s what it’s all about. So I think I’ve got the argument that is very compelling and people feel it,” says Mr. Hensarling. “They’re less free and less prosperous.”

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Obama Set to Visit CFPB Mired in Controversy


A spokesperson for the House Financial Services Committee made the following statement regarding President Obama’s decision to visit the temporary headquarters of the CFPB today:

“It’s pretty bold for President Obama to visit an agency mired in controversy over employee discrimination that’s also leasing office space in a building owned by an Obama bundler while its Washington headquarters undergoes a $216 million renovation – waterfall and all.  Millions of Americans are struggling in this economy, and the CFPB and Dodd-Frank make that struggle more difficult.  It’s now harder for low and moderate-income Americans to buy a home, services like free checking are being eliminated, credit card fees are going up and fewer low-income Americans can afford to access traditional banking services.  The intended beneficiaries of Dodd-Frank and the CFPB are worse off.  Dodd-Frank has proved to be the financial equivalent of Obamacare.”

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Hensarling Comments on White House Meeting of Financial Regulators


Financial Services Committee Chairman Jeb Hensarling (R-TX) today issued the following statement about President Obama’s meeting with financial regulators to discuss implementation of Dodd-Frank Act regulations:

“Dodd-Frank is every bit as far-reaching in its harmful consequences for struggling Americans as Obamacare.  Thanks to Dodd-Frank, it is harder for low and moderate income Americans to buy a home and there are fewer community banks serving the needs of families and small businesses.  Thanks to Dodd-Frank, farmers face higher costs in managing their risks, which leads to higher prices for every American trying to put food on the table.  Services that bank customers once took for granted like free checking are being eliminated due to the high costs of Dodd-Frank’s regulatory burden.  Another White House meeting between President Obama and an army of Washington regulators won’t do anything to help stressed families.  Instead, the President should get on the phone with Harry Reid and urge him to bring up the dozens of bipartisan jobs and regulatory relief bills passed by the House.”

During the 113th Congress, the House has passed 23 bipartisan, pro-jobs bills that originated in the House Financial Services Committee. 

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Question: What is the CFPB?


The CFPB and the game show Jeopardy! seem to have an interesting connection (see here and here).

Although this week’s Jeopardy! contestants couldn’t name the agency, the unaccountable CFPB is certainly making a name for itself in all the wrong ways.
Here are five more answers that probably ended up on the cutting room floor in the Jeopardy! Studio:




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'Endless Regulations'


President Obama recently voiced concerns about the negative impact of “endless regulations” in foreign countries.  Millions of unemployed and underemployed Americans must be wondering why he isn’t as concerned about the economic harm caused by the “endless regulations” of his own administration here in the U.S.A.

While the American people are repeatedly told that nothing is getting done in Washington, struggling small business owners and entrepreneurs across our nation can only wish that were true.  They know better than anyone that the Washington bureaucracy is busier than ever churning out red tape.

Washington set a new record in 2013 by issuing final rules consuming 26,417 pages in the Federal Register.  Another 3,305 regulations are moving through the pipeline at the historic rate of roughly one new regulation every two hours.

Job number one of the Financial Services Committee is job creation and economic growth.  That’s why the committee has passed dozens of bipartisan, pro-jobs bills during the 113th Congress.  Yet Harry Reid has killed them, refusing to even bring them up for votes.  Instead, he adds them to the pile of jobs bills collecting dust in the do-nothing Democrat-controlled Senate.

If President Obama truly cares about the harm caused by “endless regulations,” he should pick up the phone today, call Senator Reid and urge him to take action on these bipartisan jobs bills.

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House Financial Services Provides #RegRelief



Currently, there are millions of Americans unemployed and underemployed in this struggling economy. And right now, job number one for the Financial Services Committee is job creation and economic growth.  We have passed dozens of bipartisan, pro-jobs bills. OK, great. Now, they should pass through the Senate, right? Wrong. Senator Harry Reid has killed them off, refusing to even bring them up for votes and instead adds them to the pile of jobs bills collecting dust in the do-nothing Democrat-controlled Senate.

Your move, Senate.

During the 113th Congress, the House has passed 23 bipartisan, pro-jobs Financial Services Committee bills, including two that were approved by the House earlier this month with strong support from Republicans and Democrats.  A list of those House-approved bills follows:

H.R. 5405
H.R. 5461

Your move, Senate. Let's get America back on track. 

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ICYMI: Unaccountable CFPB Under Fire For Not Protecting Massive Amounts of Consumer Data



 GAO: CFPB Should Take Steps to Protect Consumer Data
Collected From Banks

“The data collection is the latest flash point between the three-year-old bureau and its critics, including Republican lawmakers, who say the agency is overstepping its authority. Republicans and business groups say the CFPB's demands for data on consumers' financial transactions are a burden for banks and a potential threat to consumers' privacy.”

CFPB collecting data on 600 million credit accounts
despite privacy, security risks

The CFPB is “collecting financial data on up to 600 million consumer credit card accounts, without sufficient security and privacy protections to ensure there is no risk of improper collection, use, or release of consumer financial data.”

The GAO report “confirms the existence of personal identifiers in CFPB’s data collections, and raises the concern that CFPB lacks written policies and procedures for data privacy and protection.”

CFPB Must Improve Financial Data Security: GAO

“It literally took an act of Congress to obtain this information because the unaccountable CFPB would not answer our questions,” Financial Services Committee Chairman Jeb Hensarling (R-Texas) said following Monday’s release of the GAO report.


 Report: The Federal Consumer Watchdog Has Data on Up to 600 Million Credit-Card Accounts

CFPB “is collecting sensitive financial data on millions of Americans but lacks a plan to adequately protect it”

“agency has access to credit-card information for nearly 600 million accounts, and has collected data on student loans and mortgages as well. But the CFPB lacks a consistent plan to keep that sensitive information safe”


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Hensarling: GAO Report Reveals Security, Privacy Weaknesses with CFPB’s Collection of Consumer Data


Financial Services Committee Chairman Jeb Hensarling (R-TX) today released the following statement on the Government Accountability Office (GAO) report showing the CFPB is not taking adequate steps to protect the private financial data it is collecting on millions of Americans:

“It literally took an act of Congress to obtain this information because the unaccountable CFPB would not answer our questions,” said Chairman Hensarling.  “The American people are rightfully worried about the massive amounts of private information government collects on their personal lives, especially in this age of criminal hackers, data breaches and identity theft.  This report reveals troubling deficiencies in the CFPB’s data security procedures and privacy controls, as well as an apparent effort by the CFPB to skirt the consumer privacy protections required by Congress in both the Dodd-Frank Act and the Paperwork Reduction Act.

“As the GAO report notes, the CFPB is collecting information on hundreds of millions of credit card accounts.  But the credit card database is just the tip of the iceberg.  It is merely one of 13 massive data collection programs the CFPB has undertaken, and the numbers are staggering. These programs include the collection of 11 million credit reports monthly, 195 million mortgages monthly, 700,000 monthly auto sales transactions linked with consumer credit data, plus the National Mortgage Database, which was not fully examined by the GAO as part of this report.
“It seems the CFPB is trying to out-NSA the NSA when it comes to accumulating information on Americans.  This is, without a doubt, an unwarranted and shocking intrusion into the privacy of American citizens.  How exactly does the CFPB’s effort protect consumers?” Chairman Hensarling added.

Congress passed legislation in January requiring the GAO to examine the CFPB’s data collection efforts after the CFPB refused to disclose information to Congress about the scope of its program.  The GAO study also satisfies requests made by Senator Mike Crapo (R-ID) and Reps. Shelley Moore Capito (R-WV) and Carolyn Maloney (D-NY).

Click here to read the GAO report.


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FSC Majority | Week in Review


Subcommittee Examines the Financial Stability Oversight Council ("FSOC")

The Oversight and Investigations Subcommittee held a hearing on Wednesday to examine FSOC's operations, policies, and procedures. The subcommittee discussed the FSOC's failure to address recommendations from the Government Accountability Office (GAO) and highlighted the need for greater transparency and accountability.
"The FSOC may well be the least transparent federal entity in the government. Of the 42 meetings held, no substantive description of discussions or members' perspective have been provided in the meeting minutes. In fact, two-thirds of the meetings were held in executive session, completely closed off to the public," said Subcommittee Chair Patrick McHenry (R-NC). "Even Congress, which created the FSOC and its unprecedented authority under Dodd-Frank, has been denied access to their process."

"Therefore, it is not shocking that the GAO concluded that almost two years after its 2012 report, that the FSOC has not made satisfactory progress in terms of complying with many of its recommendations, including those intended to ensure that the FSOC has a comprehensive set of systemic risk indicators, whether or not it's coordinating and clarifying rules with OFR and other regulators, and whether or not it has the ability to assess adequately the effect of SIFI designations on the market and on the designated companies," added Chairman McHenry.

"We all want to see the process opened up; we want to see what's happening," said Rep. Sean Duffy (R-WI). "I would look at the bipartisan effort and message that's been sent from this committee and go back and have a solid conversation and review the policies at FSOC."


Rep. Michael Fitzpatrick | House Approves Fitzpatrick Jobs Bill

“This is a jobs bill – by repealing and reforming burdensome regulations, we can set businesses and working capital free to invest in the economy and to create jobs,” Fitzpatrick said in a speech on the House floor.

Weekend Must Reads

Daily Caller | CFPB Is No ‘Start-Up’ Agency, It’s The Same Old Bureaucracy And Should Be Repealed

No one at the CFPB, for instance, can tell the Inspector General’s office who actually made the decision to renovate the building. So a board given the responsibility to protect the financial welfare of American consumers can’t even account for who authorized their own $215 million office space. Congress certainly didn’t. That’s because the CFPB, unlike a typical government agency, does not have to return to Congress every year for budgetary and spending approval. When Democrats forced the Dodd-Frank bill into law with the support of just a few Republicans, they made sure the CFPB was funded out of a fixed percentage of the Federal Reserve’s budget. This essentially placed the agency beyond the reach of one of Congress’s core constitutional powers as well as the oversight the annual appropriations process provides.

Investor's Business Daily | Fed Prepares To Raise Rates, End Failed QE Policy

As rates rise, big questions remain: Will the higher rates the Fed is engineering sink the economy? Will we see unemployment return to recession levels? It doesn't seem likely. And yet, in 2008, if someone had told you that the Census Bureau would report in September 2014 that median income had shrunk 8.2% over the preceding five years, and only those with the highest incomes would see any gains at all, you might have thought that person was crazy. Well, it happened. Thanks to President Obama's misbegotten economic policies and "stimulus," and the Fed's own radical experiment in money printing, the U.S. has had its worst recovery ever from a recession. To its credit, perhaps, the Fed is now quietly trying to undo its failed experiment, by letting markets set interest rates and shutting down the QE program. If so, it's a minor victory for common sense and policy prudence.

  In the News

CNBC | Rep. Hensarling's economic outlook

American Banker | House Lawmakers Press FSOC for More Transparency

Reuters | Watchdog says U.S. risk council lacks tools to spot market threats

The Hill | GAO: Dodd-Frank's stability council falling short

Wall Street Journal | Yellen's Discretion

Wall Street Journal | Dodd-Frank's Collateral Damage in Africa

Wall Street Journal | The Outlook: Fed Sizes Up Alternate Rate-Hike Paths

Pittsburgh Tribune-Review | Risk and Compliance Specialists in Demand

The Hill | Greenspan: Congress Should Kill Ex-Im Bank

Business Insurance | Insurance Groups Hail House Approval of Capital Standards Bill

Daily Caller | Dodd-Frank Agency Flopping

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Hearing entitled “Oversight of the Financial Stability Oversight Council”


Hearing entitled “An Overview of the Credit Reporting System”


Continuation of Markup of H.R. 5018, H.R. 4329, H.R. 3240, H.R. 3913, H.R. 4042, and H.R. 5148


Hearing entitled “Allegations of Discrimination and Retaliation and the CFPB Management Culture”


Markup of H.R. 5018, the Federal Reserve Accountability and Transparency Act of 2014; H.R. 4329, the Native American Housing Assistance and Self-Determination Reauthorization Act of 2014; H.R. 3240, the Regulation D Study Act; H.R. 3913, to amend the Bank Holding Company Act of 1956 to require agencies to make considerations relating to the promotion of efficiency, competition, and capital formation before issuing or modifying certain regulations; H.R. 4042, the Community Bank Mortgage Service Asset Capital Requirements Study Act of 2014; and H.R. 5148, the Access to Affordable Mortgages Act of 2014


Hearing entitled “Oversight of the SEC’s Division of Corporation Finance”


Hearing entitled “Assessing the Impact of the Dodd-Frank Act Four Years Later”


Hearing entitled “A Legislative Proposal Entitled the ‘Bank Account Seizure of Terrorist Assets (BASTA) Act’”


Hearing entitled “Monetary Policy and the State of the Economy”


Hearing entitled “Examining Regulatory Relief Proposals for Community Financial Institutions, Part II”


There is no media available for this committee.

Contact Information

2129 Rayburn HOB
Washington, DC 20515
Phone 202-225-7502
Fax 202-226-0471


Michele Bachmann


Spencer Bachus


Andy Barr


John Campbell


Shelley Capito


Tom Cotton


Sean Duffy


Stephen Fincher


Mike Fitzpatrick


Scott Garrett


Michael Grimm


Jeb Hensarling


Bill Huizenga


Randy Hultgren


Robert Hurt


Peter King


Frank Lucas


Blaine Luetkemeyer


Kevin McCarthy


Patrick McHenry


Gary Miller


Mick Mulvaney


Randy Neugebauer


Steve Pearce


Robert Pittenger


Bill Posey


Dennis Ross


Keith Rothfus


Ed Royce


Steve Stivers


Marlin Stutzman


Ann Wagner


Lynn Westmoreland