Committee on Financial Services

Jeb Hensarling

House Approves Bipartisan Financial Services Committee Bills to Grow the Economy and Create Jobs

2014/09/16

The House of Representatives today passed two bipartisan job creation and regulatory relief bills from the Financial Services Committee.

H.R. 5461, the Insurance Capital Standards Clarification Act of 2014, introduced by Rep. Andy Barr (R-KY), would amend the Dodd-Frank Act to give the Federal Reserve flexibility to set capital standards for insurance companies.  Also included in the bill are three bipartisan bills that were previously approved by the House, which can be found here.  

“By empowering FSOC to designate Systemically Important Financial Institutions (SIFIs), the Dodd-Frank Act allows the Federal Reserve to impose one-size-fits-all standards on banks and non-banks; in other words, to move more institutions from the non-bailout economy to the bailout economy. The bipartisan Insurance Capital Standards Clarification Act of 2014, including its other provisions that have already received overwhelming support from Democrats and Republicans -- is common sense legislation that holds Washington accountable, strengthens our economy and helps create jobs,"  said Financial Services Committee Chairman Jeb Hensarling (R-TX).

H.R. 5405, the Promoting Job Creation and Reducing Small Business Burdens Act, introduced by Rep. Mike Fitzpatrick (R-PA), would enhance the ability of small and emerging growth companies to access much-needed capital through public and private markets and reduce the regulatory, red-tape burden these companies face to help them create jobs.  Also included in H.R. 5405 are previously approved bipartisan bills, which can be found here.

“With millions of our fellow Americans unemployed and underemployed, job number one for our committee and House Republicans continues to be job creation and economic growth.  While it is sometimes difficult to find common ground in divided government, these are common sense, bipartisan bills that will help grow our economy and put Americans back to work.  Both bills fix problems with Washington regulations, so small businesses and companies throughout the nation will find it easier to create jobs that struggling American families desperately need,” said Hensarling.

“Several provisions in these bills have previously passed the House with overwhelming bipartisan support.  Yet Harry Reid has refused to allow them to come up for a vote in the Senate.  We’re passing them again to remind Harry Reid that House Republicans have produced positive solutions to grow the economy, and it’s time for the Senate to join us,” Hensarling added.

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FSC Majority | Week in Review

2014/09/12

Subcommittee Reviews the Credit Reporting System

On Wednesday the Financial Institutions and Consumer Credit Subcommittee held a hearing to review the roles and responsibilities of consumer reporting agencies.

"According to the FTC, nearly 20% of Americans have errors on their credit report. Furthermore, 5% of Americans have errors that could expose them to higher interest rates or lose access to consumer credit through no fault of their own," said Subcommittee Chair Shelley Moore Capito (R-WV). "Today we will learn more about the systems that credit bureaus have in place to resolve discrepancies on a consumer credit report. We must work together to ensure that consumers who have legitimate discrepancies on their credit report can have them removed as quickly as possible."


MEMBER SPOTLIGHT

Rep. Mick Mulvaney | Mulvaney on the CFPB

Rep. Mulvaney tells the Credit Union Times the CFPB is “a wonderful example of how a bureaucracy will function if it has no accountability to anybody.”

Weekend Must Reads


Investor's Business Daily | These 5 Facts Debunk U.S. Jobs Recovery Myth

The purpose of this exercise isn't to bash President Obama. But it's curious that someone whose policies have so clearly failed would double down on his mistakes, prolonging America's economic misery. Despite 0% interest rates, $7 trillion in added debt, more than $1.5 trillion in stimulus, and the Fed creating more than $4.5 trillion in new money out of thin air, our economy just stumbles along. Those hoping for a sudden burst of job-creating growth aren't likely to see it until there's a change in Washington. Until then, keep the champagne on ice.

Real Clear Markets
 
| How Long Can the Economy Absorb Excessive Government Spending?

Few people would continue borrowing to spend beyond their means. Even if so inclined, consequences quickly eliminate this as a viable option. People would be even more loathe to let an outside entity garnish their wages indiscriminately (which is what taxation is to the economy) to pay for it. Most would succumb to the consequences, and their senses, and align spending with income.

Investor's Business Daily | Dodd-Frank Now Coming For The Insurers

Onerous Dodd-Frank rules aimed at banks are now being imposed on insurance companies and other nonbanks that had virtually nothing to do with the financial crisis. And they're being foisted on them by a regulatory body made up of a bunch of political hacks who have no idea how insurance companies are even run.

    In the News

Politico Pro | Growing turmoil at CFPB union

Washington Examiner | 
Obama's chief ad agency lands $5.7 million CFPB contract that has produced no ads to date

Bloomberg | 
House Lawmakers Knock FSOC Decision To Label MetLife as SIFI; Oversight Possible

Washington Post |
Is the government making it harder for the middle class to buy homes?

American Banker | Small Institutions Could Be Hurt by Operation Choke Point: Lawmakers

Wall Street Journal | The SEC's New 'Thought Crime'

Wall Street Journal | The Feds Choke Off Native American Income

Washington Times | McAuliffe Cabinet official violated anti-lobbying rules: watchdog

Wall Street Journal | The Latest Twist in a Regulatory Sham

Wall Street Journal | MetLife's Too-Big-to-Fail Fight

The Times-Picayune | Louisiana community banks call for regulatory relief as numbers dwindle

Read More

Hearing entitled “Oversight of the Financial Stability Oversight Council”

2014/09/10


9/8/14 Weekly Rundown

2014/09/08

On Wednesday at 2:00 p.m. the Financial Institutions and Consumer Credit Subcommittee will hold a hearing to review the roles and responsibilities of consumer reporting agencies. Read More

Hearing entitled “An Overview of the Credit Reporting System”

2014/09/03


ICYMI: CFPB Bureaucrats Gone Wild

2014/08/28

Dozens of CFPB workers say “the bureau’s lack of accountability is enabling managers to create their own minifiefdoms, stock the ranks with inexperienced and unqualified friends and retaliate against anybody who disagrees”

 
Bureaucrats gone wild: Feds describe racial hostility,
discrimination inside new Obama agency

America's newest federal agency, charged with regulating financial institutions to prevent another hostile economic downturn, is having troubles regulating hostilities and discrimination among its own employees.

Evidence gathered by congressional investigators, internal agency documents and Washington Times interviews with workers discloses scores of cases of U.S. Consumer Financial Protection Bureau employees seeking protection from racially offensive, sexist or discriminatory behavior, including that:

A naturalized U.S. citizen, with more than a decade of service with the U.S. government, was called an "f'ing foreigner" by management.

A department was internally dubbed "the Plantation" because of the number of blacks working in it — all supervised by white managers — without any obvious promotional track or way to get transferred.

White employees were twice as likely to get the most favorable personnel ratings in employee reviews, as were minorities.

Managers intimidated and retaliated against employees for voicing complaints or offering an alternative point of view — from denying vacation requests to hiring unqualified friends to supervise jobs and then asking subordinates to train them.

Evidence of discriminatory pay practices in the agency's own statistics have even resulted in promises by management of emergency pay raises for minority workers to create more parity, the documents show.

It's not the storyline that America's newest federal agency wanted at its inception.

CFPB, the brainchild of Democratic Sen. Elizabeth Warren of Massachusetts, was created by then-Sen. Christopher J. Dodd of Connecticut and then-Rep. Barney Frank of Massachusetts.

The latter two Democrats pushed through legislation in Congress named after them that created the agency to protect consumers from predatory banks and lending institutions blamed for the 2007-2009 financial crisis. And Ms. Warren, now considered by some as a potential presidential candidate in 2016, became its first leader.

Since then, the agency has been a political football, roundly opposed by Republicans as an excessive regulatory power play and embraced by liberals who saw it as a necessary fix to a financial system gone awry.

Manager fiefdoms

Away from the political fray on Capitol Hill, dozens of workers at the CFPB say the bureau's lack of accountability is enabling managers to create their own minifiefdoms, stock the ranks with inexperienced and unqualified friends and retaliate against anybody who disagrees with their agenda.

The House Committee on Financial Services began airing some of the problems at hearings earlier this spring, bringing to light a situation that has simmered for months out of public view.

CFPB acknowledges its employees' complaints about a hostile working environment and says it is working with the National Treasury Employees Union — which represents CFPB employees — to settle worker protests and iron out new performance reviews, which are at the heart of many of the protests.

The agency's director, Richard Cordray, testified last month it has been challenging to create an agency from the ground up over the last three years, and working conditions for some have been "especially difficult."

"I am committed to ensuring that all Bureau employees are treated fairly and that they receive the respect and dignity they deserve," Mr. Cordray told the House Financial Services' Oversight and Investigations subcommittee on July 30.

Still, current CFBP employees say more work needs to be done and that some thought Mr. Cordray's testimony to be both impenitent and out of touch with what's actually happening at the bureau.

"Anybody who asks questions or doesn't just take orders gets discriminated against," Ali Naraghi, a bank examiner in the CFPB's southeast region, told The Washington Times in an interview. "What CFPB does internally to its staff is contrary to all of their objectives and the mission of the agency."

The Naraghi case

Mr. Naraghi, a naturalized citizen of Persian descent, alleges he was called a "f'ing foreigner" by his superiors because he vocalized discrepancies in the way the CFPB was conducting its bank examinations compared with the way it was done at the Federal Reserve, where Mr. Naraghi served for 14 years.

As a bank examiner, Mr. Naraghi holds a top government position, drawing in a salary of more than $100,000. He and other examiners essentially audit private banks for compliance with federal law.

At the Federal Reserve, Mr. Naraghi earned top performance marks and promotions — winning an excellence award for mortgage servicing. At the CFPB he's been graded at the lowest level in his performance reviews and has remained stagnant in his position since he started at the agency in 2011.

Newly in his position, Mr. Naraghi raised concerns to management that the CFPB wasn't using a risk model — a uniform institutionalized measuring stick — to evaluate banks' performance against one another. Because of this, he felt many examinations were skewed either in favor of what the institution dictated or to the examiner's own preconceived notions.

What the examinations weren't — he pointed out both to his manager and later to Congress in testimony — were objective.

"The only thing consistent within the CFPB is that it's inconsistent," said Mr. Naraghi, who still holds his position as he works out his complaint with the agency. "They want us to be like a private that salutes the major and does whatever they say — but everybody has something to add."

He said he wasn't trying to criticize the way CFPB was conducting its investigations, only voicing ways to make them better. His manager didn't view it that way.

After being subpoenaed by the congressional committee to testify in June, the agency tried to silence Mr. Naraghi by demanding lawmakers strike or bar his opening statement. The effort failed.

In his opening testimony, Mr. Naraghi said the very employee relations office that is supposed to help aggrieved employees was "broken and is more harmful than helpful to employees who suffer discrimination or retaliation."

Satisfaction survey higher

In response, CFPB spokeswoman Jen Howard said, on average, CFPB employees are more satisfied with their management compared with other government agencies.

According to a survey taken by CFPB and released to The Times, 72 percent of CFPB employees say they have a "high level of respect for my organization's senior leaders," compared to 54 percent governmentwide.

Seventy-five percent of CFPB employees either agree or strongly agree that "My supervisor/team leader is committed to a workforce representative of all segments of society," compared with 64 percent governmentwide, the agency said.

Despite his discrimination complaint, Mr. Naraghi doesn't question CFPB's mission — he very much stands up for the agency and the work it is doing. He sought employment at the CFPB after listening to Ms. Warren, the agency's first head and now a U.S. senator, describe the agency's goals of protecting consumers when she was pushing for it as a university professor.

"My in-laws in Mississippi had been taken advantage of by a fly-by-night mortgage company," said Mr. Naraghi. "I believe in our mission. That's why I came. We can do a lot of good, but breaking the law to enforce the law isn't cool in my opinion."

Racial gaps

Part of the concern is CFPB's treatment of minorities, women and workers over the age of 40, Mr. Naraghi and other unnamed employees said. Also, the divide between management and the bargaining unit is vast, leaving those outside the higher ranks feeling helpless and without recourse.

Last year, within the CFPB, white employees were twice as likely to receive the highest rating at the bureau as compared to black or Hispanic employees, according to the CFPB's own performance management reviews, which were requested and made public by the union NTEU.

The odds were similarly stacked against workers over the age of 40, said Ben Konop, executive vice president at the NTEU in his May testimony to the committee.

"And ratings continued to be badly skewed in favor of management when compared with the ratings of the bargaining unit, who do the bulk of the work at the bureau," Mr. Konop said.

In 2013 CFPB employees filed 115 official grievances through the union — a particularly high amount for an agency with only 1,300 employees.

Complaints range from managers denying vacation requests in retaliation for comments they don't like to dismissing internal requests for promotions and hiring unqualified friends instead who then needed training and supervision from those in lesser positions, according to current employees.

Some of these complaints were addressed by management at CFPB's "All Hands" spring meeting — an agencywide conference that is used for training and team building.

In a presentation obtained from the conference by The Times, internal management laid bare the discrepancies in pay and performance between minorities and their white counterparts and committed to compensate employees for the difference.

"In the absence of a definitive root cause, we have decided to compensate employees to remediate statistical disparities caused by our prior performance management system and to bargain with NTEU to change it going forward," the presentation said.

Union involvement

The NTEU, for its part, will continue its effort to uncover and eliminate any unfair treatment at the bureau, NTEU National President Colleen M. Kelley said in a statement to The Times.

"Since NTEU began representing CFPB employees, we raised and pressed management on addressing employee concerns about disparate treatment and other workplace issues through collective bargaining and the grievance process," Ms. Kelley said.

Last month, improvements were made in the agency's telework policy, employee relocation policy and career ladder positions, Ms. Kelley said. The agency has also agreed to move away from its current performance system and form a task force that will focus on redesigning it, she said.

Agency employees say the pay increases are just restitution, but because almost everyone got bonuses and promotions, it just raised the playing field instead of equalizing it.

In addition, high-level employees — such as examiners with pay grades above a certain threshold — were exempt from the pay increases. In terms of the redesigned performance reviews, the true test will be in the coming months and years, employees said.

What angers them the most, however, is the fact that many managers who have a history of employee complaints and discrimination are still holding their jobs and, in some cases, intimidating others not to come forward, according to multiple employees, some of whom only spoke to The Times on condition of anonymity for fear of retaliation.

Authoritarian style

Angela Martin, a senior CFPB enforcement attorney, accused a supervisor of retaliating against her after she filed a workers complaint with human resources.

Mrs. Martin alleges her supervisor threatened to bring counterclaims against her if she went forward with her complaint, then isolated her, diminished her job duties and held her accountable for work while preventing her from being involved in the preparation of that work.

Mrs. Martin — who solidly believes in the agency's mission — was a former private practice attorney and Army veteran who specialized in representing military families in consumer fraud cases.

"Employees have told me of alarming stories of maltreatment that resulted when they opposed the mismanagement and when they asserted their individual rights," Mrs. Martin, a mother of five, told Congress in April. "Certain managers have adopted an authoritarian, untouchable, unaccountable and unanswerable management style."

An external audit done at the request of the bureau agreed with Mrs. Martin's claims, and the CFPB settled with her this summer. She currently holds a new position at the agency and no longer interacts with her former supervisor.

However, CFPB launched a new investigation into Mrs. Martin's claims — hiring yet another independent third-party examiner last month — to re-examine her case. The new probe has had a chilling effect on those thinking about coming forward with their own grievances, employees said.

'The Plantation'

It was Mrs. Martin who first made the claims of the department's so-called "Plantation" where black employees were sent with no clear course of promotions or career track. Formally, the department is called the Office of Consumer Response Intake Section.

"There is an entire section in Consumer Response Intake that is 100 percent African-American, even the contractors, and it is called 'The Plantation,'" Mrs. Martin testified. "And people tell me it's very hard to leave The Plantation. You must be extremely savvy, or you must [have] somebody else [help you] to get out. And I will note, you cannot say education is a factor, because there are licensed attorneys and [people with] advanced master's degrees working there."

Jen Howard, a spokeswoman at CFPB, says Mrs. Martin's claims contained inaccurate information.

"There have been over 50 promotions within the Intake Section, and over 90 percent of the employees in the section who have received at least one promotion are minorities," said Ms. Howard in a written response.

"Three employees in the section have been promoted to supervisory roles outside of the section but within Consumer Response, all of whom are African-American. Four employees in the section have been promoted from 'Intake Specialist' to 'Intake Team Lead,' all of whom are African-American," she said.

Nonetheless, the accusations are so serious and widespread that the Government Accountability Office announced this month that it will begin an investigation into CFPB's organizational culture and management practices.

The investigation was requested by Rep. Patrick T. McHenry, North Carolina Republican and chairman of the House Financial Services Oversight and Accountability Subcommittee, which held the hearings; by Financial Services Committee Chairman Jeb Hensarling, Texas Republican; and Consumer Subcommittee Chairwoman Shelley Moore Capito, West Virginia Republican.

Since hearings began in April, Mr. McHenry said his office has heard from more than 32 employees complaining about maltreatment at the agency.

"The treatment of women and minorities at the CFPB is deplorable," Mr. McHenry said in a statement to The Times. "Unfortunately, due to the unique structure of the bureau — leaving it free from both congressional and executive branch oversight — there is little that can be done to stop these rogue agency leaders.

"While my subcommittee will continue its oversight efforts, ultimately it is Director Cordray's responsibility to realize the depth of these issues and finally address the suffering of so many CFPB employees," he said.

For now, Mr. Naraghi, and the many more like him who came forward anonymously, are both negotiating their cases with the Equal Employment Opportunity Commission and trying to navigate the tricky management system to steer clear of retaliation.

Some employees interviewed by The Times have since left the agency, giving up hope of any major institutional change in the near future.

CFPB management "tried to sully my record — they wanted me to sign a settlement with them and clear them of any wrongdoing. I'm not going to do that," said Mr. Naraghi, who is waiting on a hearing date for his grievance case. "What's right is right. I don't want to bring down the CFPB, but I do have a serious problem with its management."

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Chairman Hensarling: Ex-Im Doesn’t Level the Playing Field; Ex-Im Rigs It in Favor of Powerful Corporations

2014/08/23

Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement today regarding President Obama’s comments about the Export-Import Bank:

“President Obama was right in 2008 when he called the Export-Import Bank ‘little more than a fund for corporate welfare’ and wrong today when he cheerleads for its renewal.

“We need to level the playing field so American manufacturers and small businesses can compete. But Ex-Im doesn’t level the playing field; Ex-Im rigs it in favor of few powerful Fortune 500 corporations that are the overwhelming beneficiaries of Ex-Im. Washington shouldn’t pick winners and losers, and hardworking American taxpayers – who are already under tremendous stress – shouldn’t be forced to pay for foreign corporate welfare that advantages a handful of powerful, politically-connected corporations.

“Because over 98 percent of all U.S. exports are funded without Ex-Im, no one can make a credible case that Ex-Im’s continuation is critical to our economy. What would really help American manufacturers and small businesses compete on a level playing field are pro-growth tax, energy, regulatory and liability policies that the House has already passed but are being blocked by Democrats in the Senate. These policies are also embodied in legislation introduced by my colleague Congressman Mick Mulvaney. I’ve co-sponsored his bill, the American Renaissance in Manufacturing Act (the ARM Act) to begin addressing the competitive disadvantages our American manufacturers face. The pro-growth policies in the ARM Act, not the crony-connected political privileges of Ex-Im, will really level the playing field and help America compete.

“I urge President Obama to join us in helping to make American exporters more competitive through greater opportunity, not more foreign corporate welfare.”

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ICYMI: How Much of a Terrorist Attack Should Insurance Companies Cover?

2014/08/21

 
CLICK HERE TO READ 

August 21, 2014

Editorial

Should the government help pay for Americans to rebuild after big terrorist attacks? If so, how much? Congress is in the process of answering these questions.

Since 2002, the federal government has provided a financial backstop for private terrorism insurance policies, promising public money to offset losses after large, expensive attacks. After $100 million in losses, the federal cost-sharing program is designed to kick in. Thankfully, the backstop hasn’t been necessary so far. But the policy is about to expire, and lawmakers must decide what to do with it before the end of the year.
  
The Senate passed a bill last month that would extend the current system for seven years with a few tweaks but no major changes. The vote in that chamber was 93 to 4. In the House, however, the debate is roiling, with Republicans deeply split about what to do. Some don’t want to see federal money put on the line to help developers in major terrorism targets — read, cities — obtain affordable insurance for big building projects, which has been a primary effect of the policy to date. Others — particularly those who represent districts that contain possible terrorist targets — would take the Senate’s status quo approach. The man at the center of this fight, Financial Services Committee Chairman Jeb Hensarling (R-Tex.), has proposed a bill that would keep the system in place for five years but, among other things, raise the point at which the federal government would step in to $500 million in losses.
  
It certainly makes sense for the government to provide some guarantee of help following a catastrophic attack. Congress would no doubt approve assistance after a big terrorist strike, anyway. It’s better to have a system with certain boundaries and rules in place before that happens. This makes even more sense when one considers that the government has a lot of control over — and responsibility for — protecting the homeland from catastrophic attacks. It has more influence in that realm of national tragedy than it has on the timing, location or severity of other disasters that elicit federal funds — hurricanes, tornadoes, floods or earthquakes, say.
  
But there is a legitimate debate to be had about what qualifies as a disaster big enough that the whole nation should bear some or most of the private rebuilding costs. It is neither unreasonable nor heartless for the House to wonder whether the Senate is promising too much assistance, when the private insurance market may be able to handle losses beyond its $100 million threshold on its own. Raising the bar might have negative consequences for the cost of constructing and operating large buildings in various places around the country, insurance on which would probably become more expensive or difficult to obtain. But it is only fair to ask those who use and benefit from those facilities to help pay something closer to their true cost.
  
The House should renew the policy, but it is right to explore more ambitious changes than those the Senate approved.

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ICYMI: Ex-Im Busts Its Travel Budget While Undertaking “Barnstorming” Pro-Subsidy Tour

2014/08/13

Officials with the Export-Import Bank have embarked on a 10-state promotional tour this month.

And according to The Hill, “Officials with the Export-Import Bank have exceeded their travel budget over the last three years by $3 million.” (“Ex-Im Busts Travel Budget by $3M” the headline reads).  “Much of the recent travel appears designed to build public support for the bank,” The Hill reports.

Being the chief export subsidizer in the country carries lots of responsibilities including, apparently, barnstorming the country to try and rally the businesses you subsidize to push lawmakers to keep the subsidies flowing. This ain't cheap,” notes the Washington Examiner.

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Egregious Ex-Im Bank Deal of the Day

2014/08/08

e•gre•gious -- outstandingly bad; shocking.

“While You’re Away on Vacation…”

Before President Obama leaves tomorrow for his Martha’s Vineyard vacation, we have a suggested day-trip he could make when he gets bored after his umpteenth round of golf and the inevitable campaign fundraiser: he could visit the millions of taxpayer dollars “invested” by the Export-Import Bank into Evergreen Solar between 2009-2010.

It’s just a 3-hour drive from Martha’s Vineyard (even quicker with Air Force One!).

Oh, wait.  Nope.  Never mind.  He CAN’T visit Evergreen Solar.

  • In 2011, the company filed for bankruptcy, packed up and moved production to China – laying off 800 workers.

Note to White House advance staff:  Please don’t confuse Evergreen Solar with Solyndra, another failed “green energy” company that received Ex-Im’s corporate welfare.  That’s in one of the other 57 states.

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FSC Majority | Week in Review

2014/08/01

Committee Passes Federal Reserve Accountability and Bipartisan Regulatory Relief Bills

On Wednesday the Full Committee passed 6 bills to provide transparency and accountability at the Federal Reserve, regulatory relief for the economy, and re-authorize the Native American Housing Assistance and Self-Determination Act.

The Federal Reserve Accountability and Transparency Act (H.R. 5018) is legislation developed as part of the Committee’s Federal Reserve Centennial Oversight Project launched at the end of last year. Under the bill, the Fed would adopt a more predictable rules-based policy -- of the Fed’s own choosing -- that leads to a healthier and stronger economy. The bill also requires the Fed to share with the public whatever rules-based approach it chooses to adopt. Additionally, H.R. 5018 requires the Fed to conduct a cost-benefit analysis in order to ensure that the benefits of proposed regulations outweigh the costs to the economy.

“The overwhelming weight of evidence is that monetary policy is at its best in maintaining stable prices and maximum employment when it follows a clear, predictable monetary policy rule,” said Financial Services Committee Chairman Jeb Hensarling (R-TX). “This legislation is about accountability and about transparency. It’s not about theory because history shows that when the Fed lets job creators, entrepreneurs, small business people and everyone else know how monetary policy will be conducted, the economy performs better and more people get to go to work.”

Capital Markets and Government Sponsored Enterprises Subcommittee Chairman Scott Garrett (R-NJ), a co-author of the bill, said H.R. 5018 takes “important steps toward establishing a more appropriate level of transparency at the Fed. As things stand now, the Fed’s regulatory activities take place behind a fraternity-like veil of secrecy, obstructing openness, and preventing proper accountability. And when it comes to monetary policy, like the Wizard of Oz, it’s time we bring the Fed out from behind the curtain.”

Rep. Bill Huizenga (R-MI), also a co-author of the bill, said H.R. 5018 will lift “the veil of secrecy surrounding the Fed by making it more open and transparent.”

In addition to H.R. 5018, the Committee also marked up four more pro-jobs bills that are designed to provide the economy with relief from Washington red tape.
                                                         
"So far the committee has passed 38 different regulatory relief bills that will hopefully lead to smarter regulation and greater economic growth. Twenty of them have passed the House, many with bipartisan support. We hope to add at least five more to that list today. We look forward to the Senate actually doing anything, but we would particularly look forward to the Senate taking up some of this legislation,"
said​ Chairman Hensarling.

"Again, job number one will continue to be the creation of jobs and economic growth in this committee. These bills are designed to ensure just that," added Chairman Hensarling.

Subcommittee Investigates Discrimination and Retaliation at the CFPB

The Oversight and Investigations Subcommittee on Wednesday held a hearing to question CFPB Director Richard Cordray about allegations of discrimination and retaliation at the CFPB. Over the past several months, the Subcommittee has heard shocking testimony from whistleblowers, Bureau officials and an independent investigator on what has been described as a "hostile working environment" and "culture of intimidation and retaliation" at the CFPB.

"People are suffering and feel unprotected at their place of work and we've heard from them. [CFPB] managers have been given unequivocal free reign resulting in a toxic management culture that lacks accountability and trust. Employees fear speaking out and fear asserting their rights lest they suffer reprisals and retaliations. This must change," said Subcommittee Chairman Patrick McHenry (R-NC).

"The problems are much larger than some modifications to a performance management system. The problem is a CFPB management culture that condones intimidation, discrimination, and retaliation. And if the director has failed to reprimand and remove bad managers, then the problem is also his leadership or lack thereof," said Chairman McHenry.

Chairman McHenry also announced at the hearing that the Government Accountability Office (GAO) has agreed to probe the CFPB’s management practices and organizational culture. The GAO review was requested by Chairman Hensarling, Chairman McHenry and Chairman Shelley Moore Capito (R-WV) of the Financial Institutions and Consumer Credit Subcommittee.


MEMBER SPOTLIGHT

Rep. Bill Huizenga | Santelli Exchange: Fed reform

Rep. Huizenga and CNBC's Rick Santelli discuss the Federal Reserve Accountability and Transparency Act.

Weekend Must Reads

Washington Examiner | The Export-Import Bank socializes risk for private benefit

You might wonder why lawmakers would refuse to acknowledge this reality. For one, politicians are pressured by an army of lobbyists representing powerful companies who are committed to protect their perks even if it hurts everyone else. But politicians are not exactly shrinking violets, here. They like being able to point to the small businesses and American jobs that they “support” through the Ex-Im Bank. What is much harder is to point to the millions of victims of the Ex-Im Bank. Taxpayers, for instance, bear a massive $140 billion exposure so that giant corporations like Boeing and General Electric can make a little more profit each year. Should the bank’s portfolio go south, normal people like you and I will be on the hook.

The Hill
 
| Dodd-Frank doesn’t end ‘too big to fail’

Dodd-Frank's Orderly Resolution plans do not end "too big to fail." The recent House Financial Services Committee Republican report discusses the flaws in these plans. Orderly Resolution plans have been compared to pre-packaged bankruptcies, or blueprints for speedy reorganizations using bankruptcy that will keep financial institutions open and operating and thereby remove the risk of financial instability. On close examination, this analogy breaks down because these plans lack creditor participation. The key to a successful prepackaged bankruptcy is creditor acceptance of a debt restructuring plan before entering bankruptcy. But creditors do not approve Orderly Resolution plans. The plans are kept secret from creditors, and the institutions filing the plans are not even obligated to follow them in bankruptcy.

Wall Street Journal | Liberals Love the 'One Percent'

Federal Reserve Chair Janet Yellen has said the central bank's goal is "to help Main Street not Wall Street," and many liberal commentators seem convinced that she is advancing that goal. But talk to anyone on Wall Street. If they are being frank, they'll admit that the Fed's loose monetary policy has been one of the biggest contributors to their returns over the past five years. Unwittingly, it seems, liberals who support the Fed are defending policies that boost the wealth of the wealthy but do nothing to reduce inequality.

Wall Street Journal The Danger of Too Loose, Too Long

The Fed has been running a hyper-accommodative monetary policy to lift the economy out of the doldrums and counteract a possible deflationary spiral. Much of what we have paid out to purchase Treasurys and mortgage-backed securities has been put back to the Fed in the form of excess reserves deposited at the Federal Reserve banks. As of July 9, $2.517 trillion of excess reserves were parked on the 12 Fed banks' balance sheets, while depository institutions wait to find eager and worthy borrowers to lend to.

   In the News

The Hill Ex-Im Bank Suspends Deals with Russia

Bloomberg |
House Passes Financial Regulatory Bills; Measures Would Protect Data Confidentiality

Washington Examiner | CFPB opens new investigation in bid to exonerate bureau managers on discrimination

Times Record News | Neugebauer wants to get government out of terror insurance

Wall Street Journal | House Panel Passes Bill to Ease Capital Requirements on MSRs

Real Clear Markets | Dodd-Frank's Birthday Marred By Its Many Inadequacies

American Banker | House Panel Passes Bill to Ease Capital Requirements on MSRs

Wall Street Journal | Regional Banks Push Congress to Amend 'Systemically Important' Tag

Washington Examiner | GAO opens new probe of CFPB 'toxic workplace' charges

Wall Street Journal | Republicans Demand Consumer Regulator’s Documents in Wake of Supreme Court Case

Washington Times | ‘Operation Choke Point’: A noose for business

Bloomberg | Ex-Im Bank Watchdog Pursuing 40 Fraud Cases: Lawmaker

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Egregious Ex-Im Bank Deal of the Day

2014/08/01

e·gre·gious -- outstandingly bad; shocking.

 

“A Wealth of Political Connections” Connects Troubled Foreign Company to U.S. Taxpayers

 

What do U.S. taxpayers, former Vice President Al Gore and former Gov. Bill Richardson have in common?


Not long ago, Ex-Im’s taxpayer-backed loans for Abengoa were featured as an Egregious Ex-Im Deal of the Day.  Today, the company (and Ex-Im’s ties to it) are back in the news…and not in a good way.

We’ll let the Washington Free Beacon take it from here in its report:  “Former Employees Allege Widespread Illegality at Taxpayer-Backed Solar Company”.


  • “A solar company backed by billions in stimulus funds routinely violated U.S. immigration law, workplace safety codes, and environmental regulations, replaced American workers with foreigners, and may be on the verge of bankruptcy…

  • “In addition to its two DOE loan guarantees, Abengoa is the beneficiary of significant support from the U.S. Export-Import Bank (Ex-Im), which finances the purchases of U.S. exports by foreign governments and corporations.”
 
  • “Ex-Im approved two loans totaling more than $33 million for the company last year. The financing supported the use of American-made goods by Abengoa subsidiaries in Spain and South Africa.  The year before, Ex-Im awarded the company an additional $152 million in taxpayer-backed loans.”
 
  • “Observers noted that Abengoa and Ex-Im shared a board member at the time: New Mexico’s former Gov. Bill Richardson (D.). It was one of a litany of political connections that Alhalabi says have paid dividends for the company.”
 
  • “Behind the scenes, what brought Abengoa to the United States, based on my research, [was] Al Gore,” Alhalabi said. “He promised to bring U.S. dollars to the company.”
 
  • “The former vice president, whose anti-fossil fuel activism frequently dovetails with his green energy investments, bought a stake in the company in 2007 through his firm, Generation Investment Management (GIM).”

 

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

2014/07/29


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

2014/07/25


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

2014/07/25


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

2014/07/17


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

2014/07/16


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

2014/07/10


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

2014/07/09


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

2014/07/08


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

Michele Bachmann

MINNESOTA's 6th DISTRICT

Spencer Bachus

ALABAMA's 6th DISTRICT

Andy Barr

KENTUCKY's 6th DISTRICT

John Campbell

CALIFORNIA's 45th DISTRICT

Shelley Capito

WEST VIRGINIA's 2nd DISTRICT

Tom Cotton

ARKANSAS' 4th 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

Michael Grimm

NEW YORK's 11th DISTRICT

Jeb Hensarling

TEXAS' 5th 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

Frank Lucas

OKLAHOMA's 3rd DISTRICT

Blaine Luetkemeyer

MISSOURI's 3rd DISTRICT

Kevin McCarthy

CALIFORNIA's 23rd DISTRICT

Patrick McHenry

NORTH CAROLINA's 10th DISTRICT

Gary Miller

CALIFORNIA's 31st 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

Bill Posey

FLORIDA's 8th DISTRICT

Dennis Ross

FLORIDA's 15th DISTRICT

Keith Rothfus

PENNSYLVANIA's 12th DISTRICT

Ed Royce

CALIFORNIA's 39th DISTRICT

Steve Stivers

OHIO's 15th DISTRICT

Marlin Stutzman

INDIANA's 3rd DISTRICT

Ann Wagner

MISSOURI's 2nd DISTRICT

Lynn Westmoreland

GEORGIA's 3rd DISTRICT