Committee on Financial Services

Jeb Hensarling

FSC Majority | Week in Review

2015/03/27

Committee Passes 11 Bipartisan Regulatory Relief Bills and Establishes Task Force to Investigate Terrorism Financing

The Committee marked up and passed 11 bipartisan regulatory relief bills this week.  The bills are designed to help strengthen the economy, preserve consumer choice and allow more Americans an opportunity to achieve financial independence.

As the Committee began debate on the bills, Chairman Jeb Hensarling (R-TX) said “it is difficult, perhaps even impossible, to be more bipartisan or less controversial than these 11 bills that we consider today -- which means because they are bipartisan, they are modest. Although they are modest, they are not insignificant to our fellow citizens back home or to the community banks and credits unions that our fellow citizens depend on," he said.

Financial Institutions and Consumer Credit Subcommittee Chairman Randy Neugebauer (R-TX) said, “Today, the Financial Services Committee has begun to move the pendulum closer to the direction of reasonable regulation by taking the first step to address much-needed regulatory relief for our Main Street financial institutions and the consumers they serve.”

This week the Committee also approved a resolution to create the bipartisan Task Force to Investigate Terrorism Financing.  The resolution passed unanimously by voice vote. Serving as the Chairman and Co-Chairman of the Task Force are Rep. Michael Fitzpatrick (R-PA) and Rep. Robert Pittenger (R-NC).  Rep. Stephen Lynch (R-CT) will serve as the Ranking Member on the Task Force.

“As the United States pushes back against the tide of terror and extremism that is the enemy of freedom and peace everywhere, it must do so with every tool available – including within the financial system,” said Rep. Fitzpatrick.

Rep. Pittenger said, “America remains the primary target of radical Islamist jihadists, who seek to destroy our way of life and the freedoms we cherish.  We must do all we can to mitigate that threat.”

Subcommittee Examines FDIC's Role in Operation Choke Point

 The Oversight and Investigations Subcommittee held a hearing to further examine the Federal Deposit Insurance Corporation's (FDIC) role in Operation Choke Point. Operation Choke Point is a program spearheaded by the Department of Justice (DOJ) that has unfairly forced several legal businesses to shut down by closing their bank accounts with certain financial institutions. These businesses have been deemed "high risk" by DOJ and financial regulators due to an alleged higher incidence of consumer fraud, regardless of whether the business has done anything illegal.

The sole witness, FDIC Chairman Martin Gruenberg, admitted that it was a mistake for government officials, including those at the FDIC, to cut off access to financial institutions for businesses deemed as “high risk” regardless of their individual merit.

"Using the term 'reputational risk,' they [FDIC examiners] are warning banks that if they do business with gun dealers, short-term lenders, payday lenders, ammunition manufacturers, smokes apps, and other legal businesses, they will meet the wrath of the FDIC.  And if you disagree, Mr. Chairman, we have emails and memos from the FDIC to prove it," said Oversight and Investigations Subcommittee Chairman Sean Duffy (R-WI). "Their purpose is to choke off the business they don't like from the banking system. I've asked Chairman Gruenberg to testify today because I want to know where he got the target list from several years ago and like the IRS, I fear that activists at the DOJ and the FDIC are abusing their power and authority and they're going out to legal businesses and in fact, they're weaponizing government to meet their ideological belief."

Rep. Mick Mulvaney (R-SC) shared the story of a constituent who owns a pawnshop.  The bank where she had a 25-year business relationship with told her it could not lend to her because of the nature of her business.

Despite the FDIC's efforts to retract the initial "high risk" list and guidance that prevented innocent business owners from accessing lines of credit, the FDIC has failed to hold accountable government officials who pressured banks to stop servicing businesses.


Committee Reviews SEC's Budget Request and Operations

The Committee held a hearing to review the Securities and Exchange Commission's (SEC) agenda, operations, and Fiscal Year 2016 budget request.

While many Democrats claim the SEC is “underfunded,” Chairman Hensarling pointed out in his opening statement that the SEC budget “has grown tremendously over the years.”

“In fact,” he said, “the SEC’s current budget of $1.5 billion represents an increase of almost 35% since the passage of the Dodd-Frank Act not yet five years ago. In fact, over a 20-year period since 1995, the SEC’s budget has increased by nearly 400%. That is three times greater than our national defense budget has grown at a time when we have to fight the international war on terror.”

The hearing also gave Committee members an opportunity to question the SEC’s rulemaking activities at a time when the SEC and the Department of Labor are crafting more regulations for financial advisers.

Rep. Bruce Poliquin (R-ME) expressed concerns that the proposed regulations will make it more difficult for low and moderate income Americans to save for retirement.

Rep. Ann Wagner (R-MO), who has proposed legislation that would give Americans more freedom to seek sound financial advice, urged SEC Chair Mary Jo White to consider the "potential for increased costs" for investors as a consequence of the Department of Labor's proposed fiduciary rules.

MEMBER SPOTLIGHT

Rep. Scott Tipton | Tipton seeks to aid small banks

Rep. Scott Tipton, R-Cortez, introduced legislation Tuesday aimed at reducing compliance burdens for highly rated community banks.

Weekend Must Reads


New York Times | End This Corporate Welfare
 
The Export-Import Bank does not weigh the jobs it supports against those it destroys. By providing loans to foreign companies that compete with domestic ones, Ex-Im is actively eliminating American jobs.

Washington Examiner | Washington Examiner: Wall St. attacked, Main St. wounded

Dodd-Frank's impact on the financial industry is massive and burdensome. Some might respond, "Good. They deserved it!" But who really bears these burdens? It's not Wall Street but Main Street.

    In the News

Bloomberg | House Panel Passes Banking Relief Bills; Legislation Is Repeat of Old Congress

The Hill | House panel advances Dodd-Frank tweaks

The Hill | House Republicans demand FDIC punish 'Operation Choke Point' operators

Washington Times | Small business owners victimized by Operation Choke Point decry government overreach

American Banker | House Banking Panel to Take Up Slate of Dodd-Frank Changes

The Hill | Republicans grill SEC chief over financial adviser regs

Washington Examiner | Operation Choke Point claims more victims, ignores due process

The Hill | House panel advances Dodd-Frank tweaks

Credit Union Times | Credit Union Reg Relief Bills Approved

American Banker | House Panel Passes Reg Tweaks

Daily Signal | Republicans to Government Official: Why Has No One Been Fired Over Choke Point?

Green Bay Gazette | Duffy pushes FDIC on 'Operation Chokepoint'

Credit Union Times | FDIC Chairman Grilled Over Operation Choke Point
Read More

Committee Passes 11 Bipartisan Regulatory Relief Bills

2015/03/26

The House Financial Services Committee today approved 11 bipartisan bills designed to help strengthen the economy and consumer choice by relieving community banks and credit unions from some of the harmful regulatory burden imposed by Washington.

The explosive growth of regulation following the enactment of the Dodd-Frank Act has made it significantly harder for community banks and credit unions to survive and serve customers.  New regulations and higher compliance costs have accelerated the pace of industry consolidation and forced many small banks and credit unions to close their doors.  Since the passage of Dodd-Frank nearly five years ago, big financial institutions have gotten bigger and small financial institutions have become fewer.

As a result, consumers are finding they have less access to affordable credit and that their local financial institution can no longer provide them with the products and services they want and need, such as free checking or affordable home mortgages.

This is why Chairman Jeb Hensarling (R-TX) has said the committee has no more “urgent priority” than passing regulatory relief legislation for hometown banks and credit unions.

“It is not an exaggeration to say that community banks and credit unions are withering on the vine. We are losing, on average, more than one a day and they are not perishing of natural causes,” said Chairman Hensarling.  “The sheer weight, volume, cost, complexity and uncertainty of federal regulation is a burden that is killing them off. And as they die, unfortunately, so do the dreams of millions of our fellow citizens who rely upon these community financial institutions to achieve their American dream of financial independence.”

The 11 bills passed by the committee have bipartisan support.  All 11 bills had also previously been approved by either the Financial Services Committee or the House of Representatives during the 113th Congress.  However, none of the bills came up for a vote in the Senate, which was then under Democratic control.

A list and summary of the bills passed today follows:

H.R. 299, the Capital Access for Small Community Financial Institutions Act
Sponsor:  Rep. Steve Stivers (R-OH)

Summary:  Allows privately insured state chartered credit unions to apply for membership in the Federal Home Loan Bank System, which would help them better serve the financial needs of consumers.  The bill passed the House by a vote of 395-0 during the 113th Congress.

The Financial Services Committee approved the bill today by a vote of 56-1.

H.R. 601, the Eliminate Privacy Notice Confusion Act
Sponsor:  Rep. Blaine Luetkemeyer (R-MO)

Summary:  Reduces confusion among consumers by clarifying that they will receive privacy notices after opening a new account when their financial institution’s privacy policies change rather than an annual notice.  The House passed a similar bill by voice vote during the 113th Congress.

The Financial Services Committee approved the bill today by a vote of 57-0.

H.R. 650, the Preserving Access to Manufactured Housing Act

Sponsor:  Rep. Stephen Fincher (R-TN)

Summary:  Amends the Truth in Lending Act, as modified by the Dodd-Frank Act, to ensure that consumers can continue to have access to manufactured housing by altering the definition of a “high-cost mortgage.”  The bill passed the committee by voice vote during the 113th Congress.

The Financial Services Committee approved the bill today by a vote of 43-15.

H.R. 685, the “the Mortgage Choice Act

Sponsor:  Rep. Bill Huizenga (R-MI)

Summary:  Provides clarity to the calculation of points and fees, allowing more loans to qualify as Qualified Mortgages and increasing options for borrowers.  The bill passed the House by voice vote during the 113th Congress. 

The Financial Services Committee approved the bill today by a vote of 43-12.

H.R. 1195, the Bureau of Consumer Financial Protection Advisory Boards Act
Sponsor:  Rep. Robert Pittenger (R-NC)

Summary:  Creates a small business advisory board to advise the Consumer Financial Protection Bureau (CFPB). This advisory board will provide small businesses the opportunity to weigh in on matters of concern, and for the CFPB to learn about market conditions affecting these businesses.  The bill also codifies two other advisory committees created by CFPB Director Cordray, the Credit Union Advisory Council and the Community Bank Advisory Council.  The committee passed the bill by voice vote during the 113th Congress.

The Financial Services Committee approved the bill today by a vote of 53-5.

H.R. 1259, the Helping Expand Lending Practices in Rural Communities Act

Sponsor:  Rep. Andy Barr (R-KY)

Summary:  Provides an appeals process for areas to be designated as rural for the purpose of exempting certain loans from the CFPB’s Qualified Mortgage rule.  The bill passed the House by voice vote during the 113th Congress.

The Financial Services Committee approved the bill today by a vote of 56-2.

H.R. 1265, the Bureau Advisory Commission Transparency Act
Sponsor:  Rep. Sean Duffy (R-WI)

Summary:  Brings greater transparency and accountability to the CFPB by subjecting it to the Federal Advisory Committee Act.  Only three agencies are exempted from the Federal Advisory Committee Act – the CIA, the Directorate of National Intelligence and the Federal Reserve.  The CFPB is not involved in intelligence collection, covert operations, or the formation of monetary policy, so there is no reason that it cannot hold its committee and subcommittee meetings in public.  This bill passed the committee by voice vote during the 113th Congress.

The Financial Services Committee approved the bill today by a vote of 56-2.

H.R. 1367, clarifying the Expedited Funds Availability Act’s application to U.S. territories

Sponsor:  Rep. Amata Radewagen (R-American Samoa)

Summary:  Improves check-clearing wait times in American Samoa and the Northern Mariana Islands by extending the application of the Expedited Funds Availability Act.  The bill passed the House by voice vote during the 113th Congress.

The Financial Services Committee approved the bill today by a vote of 58-0.

H.R. 1408 the Mortgage Servicing Asset Capital Requirements Act

Sponsor:  Rep. Ed Perlmutter (D-CO)

Summary:  Directs federal banking agencies to conduct a study to determine the appropriate capital requirements for mortgage servicing assets for community financial institutions.  The bill passed the committee 44-9 during the 113th Congress.

The Financial Services Committee approved the bill today by a vote of 49-9.

H.R. 1480, the SAFE Act Confidentiality and Privilege Enhancement Act

Sponsor:  Rep. Robert Dold (R-IL)

Summary:  Provides assurance for financial institutions that privileged information shared between federal banking regulators and state regulatory agencies will be protected and remain confidential.  The bill passed the House by voice vote during the 113th Congress.

The Financial Services Committee approved the bill today by a vote of 58-0.

H.R. 1529, the Community Institution Mortgage Relief Act

Sponsor:  Rep. Brad Sherman (D-CA)

Summary:  Ensures that consumers continue to have various credit choices by allowing smaller community financial institutions to enter the mortgage market without being deterred by the high cost of regulatory compliance.  The bill amends the Real Estate Settlement Procedures Act to direct the CFPB to provide exemptions from the mortgage escrow account requirements of Dodd-Frank and for small servicers that annually service 20,000 or fewer mortgage loans.  The bill passed the committee 43-16 during the 113th Congress. 

The Financial Services Committee approved the bill today by a vote of 48-10. Read More

Continuation of Markup of H.R. 299, H.R. 601, H.R. 650, H.R. 685, H.R. 1195, H.R. 1259, H.R. 1265, H.R. 1367, H.R. 1408, H.R. 1480, and H.R. 1529

2015/03/25


Hensarling on the House Republican Budget

2015/03/25

House Financial Services Committee Chairman Jeb Hensarling (R-TX) released the following statement after the House passed the Fiscal Year 2016 budget resolution (H. Con. Res. 27):

“Budgets are about priorities, and the House Republican budget resolution passed today by the House of Representatives advances several important priorities. To give hardworking, middle income families the opportunity to achieve economic success, our budget calls for comprehensive, pro-growth tax reform that lowers tax rates on American families and businesses, and broadens the tax base by getting rid of loopholes and special interest provisions. To keep our promise to current and future seniors, we save, strengthen, and secure Medicare and Social Security by getting these important programs off the path to certain bankruptcy. To get our nation’s fiscal house in order and off the path to national bankruptcy, our budget stops spending money we don’t have, will balance in less than 10 years, and will allow us to begin paying down our nation’s debt. To empower patients and doctors to make their own health care decisions, our budget fully repeals Obamacare. To stop future bailouts enshrined into law by the Dodd-Frank Act, our budget ends Washington’s regime for officially designating certain financial firms as ‘too big to fail’ and envisions the eventual elimination of Fannie Mae and Freddie Mac, the government-controlled mortgage giants that received the largest taxpayer-funded bailout in history. Our budget also brings needed accountability to the Consumer Financial Protection Bureau to make sure it doesn’t engage in wasteful spending but instead uses its resources to actually help protect American consumers.

“At a time when the threats to our national security are on the rise, this budget ensures that our nation’s military has the resources needed to defend our nation and allow our men and women in uniform to carry out the mission we’ve tasked them with. In a perfect world, it would have been my preference to provide increased spending for our nation’s defense without using the ‘off-budget’ Overseas Contingency Operations (OCO) account. But this would have opened the door for the President to enter this process seeking dramatic increases for his priorities, ultimately threatening to undo the spending caps established by the Budget Control Act.

“When you compare this budget with the President’s budget, his hurts the economic and job opportunities of current and future generations of Americans by continuing to spend money we don’t have. By completely blowing up the bipartisan spending caps that Republicans and Democrats agreed to just over three years ago in the Budget Control Act, increasing taxes on hard working Americans, and failing to reform Social Security and Medicare – all the president has really done is step on the accelerator, hurdling us that much faster towards financial oblivion and leaving American families with a downsized American Dream.

“Simply put, President Obama’s budget prioritizes big government and even bigger taxes. The House Republican Budget prioritizes economic growth and opportunity for all Americans and gives them the opportunity to pursue their version of the American dream.”

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Hensarling Opening Statement at Bipartisan Regulatory Relief Markup

2015/03/25


 
CLICK HERE TO WATCH
 
Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at today’s full committee markup of 11 bipartisan regulatory relief bills to help preserve consumer choice and provide financial independence for Americans across the country:

The committee meets this morning to consider 11 bipartisan bills that are designed to promote a healthier economy, preserve consumer choice and help our fellow Americans achieve the American dream of financial independence.

These bills – all of them, again, sponsored and co-sponsored by Republicans and Democrats alike – either passed the House or this committee during the previous Congress.  In fact, 9 of these 11 bills we will consider today passed the House or this committee without any opposing vote at all.  In other words, no Member voted against them.  So it is difficult, perhaps even impossible, to be more bipartisan or less controversial than these 11 bills that we consider today.

Which means because they are bipartisan, they are modest. Although they are modest, they are not insignificant to our fellow citizens back home or to the community banks and credits unions that our fellow citizens depend on.

Witness after witness has come before our committee over the last several years to speak about the weight, the volume, the complexity, the cost and uncertainty of Washington regulations.  One community banker who appeared before our committee last week called this “an avalanche of new rules.”  It is not an exaggeration to say that America’s community financial institutions are withering on the vine.  Our nation is now losing, regrettably, on average more than one community financial institution a day and they are not perishing from a natural death.

We certainly care about the financial institutions that are being harmed but why we are engaged in this activity --our real concern is because we care about the customers of these financial institutions even more.     

Every time a community bank or credit union dies, so, too, do the dreams of many of our fellow citizens – hardworking taxpayers – who rely upon their hometown banks and credit unions to perhaps buy a pickup truck in order to go to work. Maybe they’re helping fund their very first child in their family’s history to go to college or to start a small business that they have labored so many years to finally begin.

So I want to thank my colleagues on both sides of the aisle today who have worked hard and worked together on needed and sensible bills that are before us.

Again, I want to reinstitute my invitation to all Members to engage in this bipartisan effort to provide regulatory relief for the financial institutions funding the American dreams of our citizens. Any member who brings forward a legitimate, bipartisan piece of regulatory relief legislation for our community financial institutions will find me ready to work with them to markup the bill and to send it to the House floor.   

Again, I hope we can continue to work together and find common ground as we’ve done with these 11 bipartisan bills today.

And this is exactly what we’ll be doing as well with our bipartisan Task Force to Investigate Terrorism Financing.  Republicans and Democrats alike on this committee are committed to making sure that our nation is doing everything possible to stop terrorists from using the global financial system to finance their acts of evil.  Fighting the financial war against terror demands constant innovation and vigilance. I’m very pleased that so many members on both sides of the aisle have expressed a serious interest in working together to examine what, if any, changes are needed to upgrade, amend, or improve our nation’s ability to starve the terrorists of the money they need to carry out their attacks.

I thank our colleagues Mr. Fitzpatrick and Mr. Pittenger for agreeing to serve as Chairman and Co-Chairman of the Task Force, and I thank Mr. Lynch for agreeing to serve as the Ranking Member of the Task Force.
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Hensarling Opening Statement at SEC Oversight and Budget Hearing

2015/03/24


 
CLICK HERE TO WATCH

Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at today’s full committee hearing to examine the Securities and Exchange Commission’s FY2016 budget request and agenda:

This morning we welcome Securities and Exchange Commission Chair Mary Jo White back to the Committee.  

This Committee is indeed committed to conducting vigorous oversight to make certain the SEC is accountable in fulfilling its three-part mission of protecting investors, maintaining fair, orderly and efficient markets, and promoting capital formation.

By holding today’s hearing, we hope to better understand the progress the Commission is making and its priorities for the remainder of the year.

I have no doubt the hearing will serve as déjà vu all over again for Members who argue that the SEC has inadequate resources within with which to carry on its mission. However, the facts are that the SEC’s budget has grown tremendously over the years.  In fact, the SEC’s current budget of $1.5 billion represents an increase of almost 35% since the passage of the Dodd-Frank Act not yet five years ago. In fact, over a twenty year period since 1995, the SEC’s budget has increased by nearly 400%. That is three times greater than our national defense budget has grown at a time when we have to fight the international war on terror. This growth in the SEC’s budget considerably outstrips most other government agencies over the similar time period.

Furthermore, as I look to the monitors on my left and right which shows the rapidly rising and unsustainable red  ink of our national debt; a debt that threatens to bankrupt our nation, I am reminded that hard-working Texans of the Fifth  District that represent, they have not had the privilege of seeing their family budgets increase four-fold. They are the ones who ultimately will have to pay for this unsustainable debt.

Which again underscores that in Washington, it is not always how much money you spend that counts; it’s how you spend money.  And that leads to the SEC’s priorities and agenda for 2015.

The bipartisan JOBS Act should be a priority but, regrettably, it does not appear the SEC treats it as such. At a time when the American people continue to struggle with the slowest, weakest recovery of the post-war era, the SEC’s neglect of this makes no sense.  Even President Obama, with whom I rarely agree, has called the JOBS Act “a big deal” and a “potential game changer” that will help smaller companies take “a major step towards expanding and hiring more workers.”  Surely, we want companies on Main Street to hire more workers.  So if the SEC will not finish the work on the JOBS Act, it is incumbent that Congress do it for them.

Likewise, the SEC’s delay in completing its Dodd-Frank mandates, particularly in the derivatives area, has caused unnecessary uncertainty and allowed the CFTC to dictate outcomes that I believe most Members of Congress did not intend.

So as we discuss the SEC’s budget request today, our goal as always is accountability.  It is this committee’s duty to ensure SEC resources are used wisely and efficiently and for the benefit of the American people.

Read More

Markup of H.R. 299, the Capital Access for Small Community Financial Institutions Act of 2015; H.R. 601, the Eliminate Privacy Notice Confusion Act; H.R. 650, the Preserving Access to Manufactured Housing Act of 2015; H.R. 685, the Mortgage Choice Act of 2015; H.R. 1195, the Bureau of Consumer Financial Protection Advisory Boards Act; H.R. 1259, the Helping Expand Lending Practices in Rural Communities Act; H.R. 1265, the Bureau Advisory Commission Transparency Act; H.R. 1367, to amend the Expedited Funds Availability Act to clarify the application of that Act to American Samoa and the Northern Mariana Islands; H.R. 1408, the Mortgage Servicing Asset Capital Requirements Act of 2015; H.R. 1480, the SAFE Act Confidentiality and Privilege Enhancement Act; H.R. 1529, the Community Institution Mortgage Relief Act of 2015; and a Resolution to establish the Task Force to Investigate Terrorism Financing

2015/03/22


MEDIA ADVISORY: Committee Schedule for the Week of March 23

2015/03/20

Financial Services Committee Chairman Jeb Hensarling (R-TX) today announced the committee’s hearing schedule for the week of March 23rd.

Tuesday, March 24 at 10:00 A.M.- A full committee hearing to review the Securities and Exchange Commission’s (SEC) agenda, operations, and Fiscal Year 2016 budget request.  SEC Chair Mary Jo White will testify.

The hearing will take place in room HVC-210 of the Capitol Visitor Center.

Tuesday, March 24 at 2:00 P.M.- An Oversight and Investigations Subcommittee hearing to examine the Federal Deposit Insurance Corporation’s (FDIC) role in Operation Choke Point. FDIC Chairman Martin Gruenberg will testify.

The hearing will take place in room HVC-210 of the Capitol Visitor Center.

Wednesday, March 25 at 9:00 A.M.- A full committee markup of bipartisan legislation to preserve consumer choice and financial independence.  A list of the legislation to be considered during the markup can be found here. The committee will also formally approve the creation of the bipartisan Task Force to Investigate Terrorist Financing.

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Terrorism Financing Task Force Roster Announcement

2015/03/20

Financial Service Committee Chairman Jeb Hensarling (R-TX) today released the full roster of members who will be appointed to the committee’s Bipartisan Task Force to Investigate Terrorism Financing.

“We are committed to making sure our government is doing everything possible to stop the Islamic State and other terrorists from using the global financial system to finance their acts of evil,” said Chairman Hensarling. “Fighting the financial war against terror demands constant innovation and vigilance.”

The committee is scheduled to consider a resolution creating the task force on Wednesday. 

Task Force Membership

Rep. Mike Fitzpatrick (R-PA) (Chairman)

Rep. Robert Pittenger (R-NC) (Vice Chairman)

Rep. Peter King (R-NY)

Rep. Steve Stivers (R-OH)

Rep. Dennis Ross (R-FL)

Rep. Ann Wagner (R-MO)

Rep. Andy Barr (R-KY)

Rep. Keith Rothfus (R-PA)

Rep. David Schweikert (R-AZ)

Rep. Robert Dold (R-IL)

Rep. Bruce Poliquin (R-ME)  

Rep. French Hill (R-AR)

Rep. Stephen Lynch (D-MA) (Ranking Member)  

Rep. Brad Sherman (D-CA)

Rep. Gregory Meeks (D-NY)

Rep. Al Green (D-TX)

Rep. Keith Ellison (D-MN)

Rep. James Himes (D-CT)

Rep. Bill Foster (D-IL)

Rep. Daniel Kildee (D-MI)

Rep. Kyrsten Sinema (D-AZ)

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FSC Majority | Week in Review

2015/03/20

Washington’s Regulatory Burden Harming Consumer Choice and Financial Independence

Witnesses told the Committee on Wednesday that Washington’s growing regulatory burden doesn’t just affect a bank or credit union’s bottom line, it also restricts consumers’ choices and access to affordable credit.

This is especially true for Americans with low and moderate incomes.

"It’s not an exaggeration to say that every single week we hear from another financial institution that is having trouble meeting the needs of their customers,” said Chairman Jeb Hensarling (R-TX). I have one message here from a bank in Arkansas that says due to the Qualified Mortgage rule that they have had to cease funding mobile homes 'which have long been a source of homeownership for low to moderate income consumers in our markets.' Here is one from a credit union in California who says due to federal regulation that one of their members can no longer wire funds to a family member in Ukraine. Here is one from a bank in Massachusetts -- 'we have experienced a spike in loan declines to women,' for their investigation identified that women attempting to buy the family home to settle their divorce and stabilize their family were being declined at a high rate due to the Dodd-Frank Qualified Mortgage rules and the ability to pay rules."

In its coverage of the hearing, the Mobile Press-Register quoted witness Tyrone Fenderson.  "This job has been made much more difficult by the avalanche of new rules, guidance and seemingly ever-changing expectation of regulators,' Fenderson said. 'It is this regulatory burden and the fear of even more regulation that often pushes small banks to sell to banks many times their size.'"

Witness Peggy Bosma-LaMascus urged Congress to require “realistic and robust cost-benefit analyses of proposed regulations,” the American Banker reported, “so the result would be smarter regulation.”

Committee Examines Impact of the International Financial System on U.S. Banks

The Committee’s hearing on Tuesday gave Members the opportunity to question Treasury Secretary Jacob Lew on a variety of important issues ranging from the international financial system to the growing regulatory burden to the ongoing transparency controversy surrounding former Secretary of State Hillary Clinton.

Monetary Policy and Trade Subcommittee Chairman Bill Huizenga (R-MI) questioned the Obama Administration’s plans for the IMF, asking “why should hardworking, middle-income American taxpayer dollars be used to bail out other countries, especially after suffering from bailout fatigue in our own backyard dealing with Fannie Mae, Freddie Mac, FHA and a number of others?”

Others voiced concerns that the Financial Stability Oversight Council (FSOC) has ignored the harmful consequences the Dodd-Frank Act has had on community financial institutions and their customers. "The administration's insistence on defending the Dodd-Frank brand at all costs is made all the more mystifying by the fact that the primary author of the law, our former colleague Barney Frank, has identified a number of provisions that he believes should be revisited. What's more, then-Fed Chairman Bernanke, in his last hearing with us, listed multiple bipartisan legislative reforms that policy makers could unite around to improve our financial regulatory system,” said Rep. Randy Hultgren (R-IL). "They both recognized that a law that runs to 2,300 pages and imposes at least 400 mandates cannot possibly be perfect, and that changes are, therefore, warranted.”

The Durango Herald reported that Rep. Scott Tipton (R-CO) questioned why FSOC “has not reviewed the effects of these regulations on the local banks in the over 40 FSOC meetings since 2010, despite being legally required to do” under Dodd-Frank.

Committee Members also sought answers from Secretary Lew regarding former Secretary Clinton's use of a personal email address for official business.  For much of the first two years of the Obama Administration, Secretary Lew served as Deputy Secretary of State for Management and Resources, making him the department’s chief operating officer.

However, Secretary Lew failed to shed any light on the issue, saying he had “no recollection” if he ever had any conversations with anyone about the State Department’s email policy and the he “didn’t pay a lot of attention to what e-mail” Secretary Clinton was using.

Subcommittee Calls for Fairness and Protection of Shareholders in the SEC's Use of Enforcement

On Thursday, the Capital Markets and Government Sponsored Enterprises Subcommittee held an oversight hearing on the Securities and Exchange Commission’s (SEC) Division of Enforcement.

Subcommittee Chairman Scott Garrett (R-NJ) questioned the SEC’s increased use of Administrative Proceedings rather than federal courts. “I strongly support the proper and stringent enforcing of our nation’s securities laws. However, the enforcement of those laws, like any other, should be done in an even-handed manner, removed from politics, with appropriate due process protections for defendants. The current SEC enforcement policies and procedures do not meet this standard and need to be improved. The SEC should be less concerned about the press releases it sends out and the headlines it receives, and more concerned about having a clear and consistent approach to enforcing the law.”

MEMBER SPOTLIGHT

Rep. Randy Hultgren | Congressman's Interest in Munis Comes from Experience

And that's not all Hultgren has done on the muni bond front since joining Congress in 2011. The 49-year-old has been one of the most vocal supporters of municipal bonds in the House and a leading co-sponsor of legislation on bank-qualified bonds. He serves on the House Financial Services Committee, which has jurisdiction over munis and other securities.

Rep. Ann Wagner |
Financial crisis: Americans deserve freedom to grow, save

The president and Sen. Warren claim their new rule will have no impact on investors. They claim, falsely, that if you like your broker, you can keep your broker. But we have seen this Washington double speak before when the president famously said about Obamacare, "if you like your plan, you can keep your plan." In reality, this rule will restrict options and choice and will limit your freedom to keep your broker and invest in your future.

Weekend Must Reads

American Banker | Dangers of Housing Policy 'Hidden in Plain Sight' No More

Necessary reform of the U.S. housing finance system will only be possible when we understand how government policy shaped the financial crisis.

Washington Times | Sunshine Week should turn up the heat

The company is also raising separation of powers arguments because of the multiple roles FSOC members play, serving as rule-maker, investigator, prosecutor, judge and jury. The company brief states: "FSOC members perform a legislative function by adopting rules that purport to set the standards used to determine whether to designate companies (as SIFIs); an executive and prosecutorial function by proposing companies to be subject to the standards they have promulgated, investigating those companies, and building the case for designation; and an adjudicative function by issuing final decisions adopting their own proposed rationales. Not only is each of these functions performed by the same body, they are also performed by the same individuals, without even a separation into offices or divisions."

Investor's Business Daily | Amid Renewed Bailout Fear, Watt Turns Fannie, Freddie Into Welfare Agencies

Recent moves by Federal Finance Housing Agency chief Mel Watt to ease mortgage terms for delinquent and underwater borrowers could further hurt Fannie's and Freddie's profitability — and even put taxpayers on the hook for more losses.

    On the Horizon 

March 24, 2015 10:00 a.m.
Full Committee Hearing

"Examining the SEC’s Agenda, Operations, and FY 2016 Budget Request"

 March 24, 2015 2:00 p.m.
Oversight and Investigations Subcommittee Hearing

"The Federal Deposit Insurance Corporation’s Role in Operation Choke Point"

  In the News

Wall Street Journal | Treasury Secretary Lew: No Recollection of Clinton Email System

Durango Herald | Tipton questions impact of rules on local banks

Mobile Press-Register | Mobile community banker calls for relief from 'avalanche of new rules' created by Dodd-Frank

Wall Street Journal | How Foreigners Became America’s Financial Regulators

Wall Street Journal | Ending Federal Loan Fraud

American Banker | 'Time Is of the Essence' to Save Small Institutions, Lawmakers Warn

Lubbock Avalanche-Journal | Local banker to speak on behalf of community banks at Congressional hearing

Bloomberg | Lew Says He Didn’t Pay Attention to Clinton’s E-Mail Account

Reuters | U.S. Treasury Secretary Jack Lew dodges Clinton email questions

Weekly Standard | Former State Department Official Refuses to Testify About Hillary's Emails

American Banker | Treasury's Lew on Volcker, Systemic Threshold and the State of Regulation

CNN | GOP hits Fed on leaks

Bloomberg | House Financial Services Chairman Says Criminal Probe Opened Into 2012 Fed Leak

Read More

Committee to Create Bipartisan Task Force to Investigate Terrorist Financing

2015/03/19

House Financial Services Committee Chairman Jeb Hensarling (R-TX) today announced the committee will create a bipartisan task force to work on improving U.S. efforts to choke off terrorist financing.

“We are committed to making sure our government is doing everything possible to stop the Islamic State and other terrorists from using the global financial system to finance their acts of evil,” said Chairman Hensarling. “Fighting the financial war against terror demands constant innovation and vigilance. The Task Force to Investigate Terrorist Financing will examine what, if any, changes are needed to upgrade and improve our nation’s ability to starve terrorists of the money they need to carry out their attacks.”

The committee is expected to adopt a resolution that formally creates the task force next week.

“As the United States pushes back against the tide of terror and extremism that is the enemy of freedom and peace everywhere, it must do so with every tool available – including within the financial system," said Rep. Mike Fitzpatrick (R-PA) who will serve as Chairman of the task force. “It is my hope that this new task force will encourage and produce true bipartisan measures to devastate and disrupt the ability of terror groups to finance and fund their warped ideologies. I thank Chairman Hensarling and Ranking Member Waters for their leadership in taking the first step toward addressing this important issue, and look forward to working with Rep. Lynch on efforts to expand this committee’s role in the fight against terrorism,” Fitzpatrick added.

“Deterring terrorist activity is not a Democratic or Republican issue, it’s an American issue,” said Maxine Waters (D-CA), the Committee’s Ranking Member. “I hope that this task force is able to embrace our common goal of making America more secure by working together in a non-partisan manner to prevent banks and other financial institutions from supporting terrorist groups.”

"Detecting and disrupting the flow of funding to terrorist groups is critical in our fight against terrorism. While it has proven to be difficult work, it is also worthwhile. I am honored by Ranking Member Maxine Waters' recommendation to serve as the Democratic lead on this new bipartisan Task Force as we join with Chairman Hensarling and Rep. Mike Fitzpatrick to improve our efforts to halt terrorist financing. The rise of ISIS, and the organization’s ability to finance an extensive enterprise requires us to continually meet new challenges in this critical counterterrorism area,” said Congressman Lynch.

Under House rules, committee task forces can exist for no longer than six months, so the Task Force to Investigate Terrorist Financing will complete its work by the end of September.

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Read More

Hensarling Calls for Urgent Regulatory Relief to Help Consumers

2015/03/18


 
CLICK HERE TO WATCH

Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at today’s full committee hearing to examine the regulatory burden facing community banks and credit unions and the detrimental effect this burden has on consumers:

I would say of all the priorities of our committee I know of not one that is more urgent than providing some regulatory relief for our community financial institutions. It is not an exaggeration to say that they are literally withering on the vine. We are losing more than one a day and they are not perishing of natural causes. The sheer weight, volume, cost, complexity and uncertainty of federal regulation is a burden that is killing them off. And as they die, unfortunately, so do the dreams of millions and millions of our fellow citizens, hardworking taxpayers, who rely upon these community financial institutions to help buy a pickup truck to to drive to work, maybe help fund the first kid in their family to ever to go to college, to start a small business and achieve their American dream of financial independence.

It’s not an exaggeration to say that every single week we hear from another financial institution that is having trouble meeting the needs of their customers. I have one message here from a bank in Arkansas that says due to the Qualified Mortgage rule that they have had to cease funding mobile homes “which have long been a source of homeownership for low to moderate income consumers in our markets.” Here is one from a credit union in California who says due to federal regulation that one of their members can no longer wire funds to a family member in Ukraine. Here is one from a bank in Massachusetts -- “we have experienced a spike in loan declines to women” for their investigation identified that women attempting to buy the family home to settle their divorce and stabilize their family were being declined at a high rate due to the Dodd-Frank Qualified Mortgage rules and the ability to pay rules.

Regrettably, these are not exceptions. We hear from these banks and credit unions every day and we understand how federal regulation can adversely impact low and moderate income Americans.

Now some, particularly those on the other side of the Capitol, have said community financial institutions are doing just fine. In fact they have said“regulators have done a pretty good job protecting community banks.” I suspect many of our witnesses will disagree with their statement. I believe that assertion is just wrong, dangerously wrong and out of touch with low and moderate income Americans.

Much, but certainly not all, of this regulatory burden has emanated from Dodd-Frank. I am not a fan of Dodd-Frank but even I can find some good in it. What Dodd-Frank attempted to do on 13(3) of the Fed, what it’s done to help eliminate the credit rating agencies’ monopoly, what it’s done to make balance sheets less opaque. So if I can find some good in it I hope my friends on the other side of the aisle can admit it has done some harm. I know Barney Frank has found at least half a dozen different areas where we he would amend his own law. He said it right before us back in July.

And so I would ask all of my Democratic colleagues to have an open mind as we enter into this and I invite all Members to engage in in the bipartisan effort of regulatory relief for our community financial institutions and find some common ground. I will reserve the right to have an exception to the rule but the rule is going to be any Member who brings a legitimate, bipartisan piece of legislation to provide needed regulatory relief to community financial institutions, we will mark it up. Time is of the essence; let’s get started.

Read More

Hearing entitled “The Federal Deposit Insurance Corporation’s Role in Operation Choke Point”

2015/03/17


Hearing entitled “Examining the SEC’s Agenda, Operations, and FY 2016 Budget Request”

2015/03/17


Hearing entitled “Oversight of the SEC’s Division of Enforcement”

2015/03/12


Hearing entitled “Preserving Consumer Choice and Financial Independence”

2015/03/11


Hearing entitled “The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System”

2015/03/11


Hearing entitled “The Semi-Annual Report of the Bureau of Consumer Financial Protection”

2015/02/24


Hearing entitled “The Future of Housing in America: Oversight of the Federal Housing Administration - Part II”

2015/02/19


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

2015/02/19


There is no media available for this committee.

Contact Information

2129 Rayburn HOB
Washington, DC 20515
Phone 202-225-7502
Fax 202-226-0471
financialservices.house.gov


Membership

Andy Barr

KENTUCKY's 6th DISTRICT

Robert Dold

ILLINOIS' 10th DISTRICT

Sean Duffy

WISCONSIN's 7th DISTRICT

Stephen Fincher

TENNESSEE's 8th DISTRICT

Mike Fitzpatrick

PENNSYLVANIA's 8th DISTRICT

Scott Garrett

NEW JERSEY's 5th DISTRICT

Frank Guinta

NEW HAMPSHIRE's 1st DISTRICT

Jeb Hensarling

TEXAS' 5th DISTRICT

French Hill

ARKANSAS' 2nd DISTRICT

Bill Huizenga

MICHIGAN's 2nd DISTRICT

Randy Hultgren

ILLINOIS' 14th DISTRICT

Robert Hurt

VIRGINIA's 5th DISTRICT

Peter King

NEW YORK's 2nd DISTRICT

Mia Love

UTAH's 4th DISTRICT

Frank Lucas

OKLAHOMA's 3rd DISTRICT

Blaine Luetkemeyer

MISSOURI's 3rd DISTRICT

Patrick McHenry

NORTH CAROLINA's 10th DISTRICT

Luke Messer

INDIANA's 6th DISTRICT

Mick Mulvaney

SOUTH CAROLINA's 5th DISTRICT

Randy Neugebauer

TEXAS' 19th DISTRICT

Steve Pearce

NEW MEXICO's 2nd DISTRICT

Robert Pittenger

NORTH CAROLINA's 9th DISTRICT

Bruce Poliquin

MAINE's 2nd DISTRICT

Bill Posey

FLORIDA's 8th DISTRICT

Dennis Ross

FLORIDA's 15th DISTRICT

Keith Rothfus

PENNSYLVANIA's 12th DISTRICT

Ed Royce

CALIFORNIA's 39th DISTRICT

David Schweikert

ARIZONA's 6th DISTRICT

Steve Stivers

OHIO's 15th DISTRICT

Marlin Stutzman

INDIANA's 3rd DISTRICT

Scott Tipton

COLORADO's 3rd DISTRICT

Ann Wagner

MISSOURI's 2nd DISTRICT

Lynn Westmoreland

GEORGIA's 3rd DISTRICT

Roger Williams

TEXAS' 25th DISTRICT