February 4, 2015 10:00 a.m.
Oversight and Investigations Subcommittee Hearing
"Exploring Alleged Ethical and Legal Violations at the U.S. Department of Housing and Urban Development"
Wall Street Journal | Hensarling’s Housing History LessonBloomberg | Bipartisan Support for Dodd-Frank Changes: Neugebauer
Wall Street Journal | Fannie, Freddie Regulator Defends Actions
Wall Street Journal | FDIC: Examiners Must Give Banks Written Notice on Risky Accounts
American Banker | FSOC's Proposed SIFI Reforms Are 'Too Little, Too Late': CriticsRead More
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House Financial Services Committee Chairman Jeb Hensarling (R-TX) appeared on C-SPAN’s Newsmakers this past Sunday to discuss his thoughts on the President’s State of the Union speech, fundamental tax reform, the economy, and the need for Congress to pass sustainable housing finance reform.You can watch the entire interview by clicking below. Excerpts that may be of interest:
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January 27, 2015 10:00 a.m.
Full Committee Hearing
"Sustainable Housing Finance: An Update from the Director of the Federal Housing Finance Agency
Wall Street Journal | Obama’s Middle-Class Blind Spot
Daily Signal | Government Agency Under Scrutiny for $215 Million Building Renovation
Washington Times | The unvarnished state of the union
The Star Press | Messer: Washington does not need more money
The Intelligencer | Correcting the Dodd-Frank abomination
MPBN News | Poliquin Touts Importance of Committee Assignment
Wall Street Journal | The Gaslight Presidency
Investor's Business Daily | President Obama's Tax Hike Plan Is A Plan For Failure
Wall Street Journal | Tax Reform Should Go Right Down Main Street
Investor's Business Daily | The Real Obama Economy: A Subpar Recovery Drags On
House Financial Services Committee Chairman Jeb Hensarling (R-TX) will appear on CSPAN’s Newsmakers this Sunday, January 25th at 10:00 a.m. and 6:00 p.m. ET. The Chairman will offer his thoughts on the President’s State of the Union speech, fundamental tax reform, the economy, and the need for Congress to pass sustainable housing finance reform.
|CLICK HERE TO WATCH
Chairman Hensarling on President Obama’s proposed taxes:
“The president claims he doesn’t believe in trickle-down economics. Well, there is something called trickle-down taxation. So as he adds more taxes to banks, insurance companies, and investment managers, those taxes are going to trickle down to moms and pops who are trying to borrow money for a mortgage, for an auto loan, or small business loan. So that is the first point I would make.
“The second point I would make is the president claims this is all about ‘mitigation of risk;’ that he has to ensure that these particular financial institutions aren’t engaged in in unacceptable risk -- like he would know. My question is, what was Dodd-Frank all about? So is this a tacit admission that Dodd-Frank has failed?”
Chairman Hensarling on what’s needed instead:
“Most Americans don’t want to occupy Wall Street, they just want to quit bailing it out. And so the answer there is to end the Dodd-Frank taxpayer-funded bailouts system, to end this designation of ‘Too Big to Fail’ institutions, and improve our bankruptcy code to make sure these institutions can be resolved in bankruptcy.”
“But our big problem now is a regulatory burden that is crushing our community financial institutions and thus crushing their clients who are small businesses and entrepreneurs. It’s no surprise that under President Obama we have one of the lowest levels of entrepreneurship and small business startups in a generation.”
“That’s what House and Senate Republicans want to do, is lower the regulatory burden. And we know you have to grow the economy from Main Street up, not Washington down.”
Chairman Hensarling on President Obama’s rhetoric aimed at his liberal base:
“I’ll tell you what is fair is having equal opportunity to go out and have a meaningful career and provide financial security for your family. Again, this is all about not the politics of economy growth, it’s about income redistribution, it’s about the politics of division and envy.”
“As the president and his administration continues to vilify success, we have less success. Every time the president aims his rhetoric at Wall Street, his policies are hurting Main Street and hardworking taxpayers are becoming collateral damage.”
The rules of the House require each standing committee to adopt an oversight plan. The Financial Services Committee meets today to fulfill our obligation under this rule. And more importantly, we meet to assure America’s hardworking taxpayers that this committee takes this obligation seriously to them.
We will do everything within our power to make sure the agencies under our jurisdiction treat the funds they are appropriated, the funds they have at their disposal, taxpayer funds -- that they treat them with respect. It is not Washington’s money; it’s the taxpayers’ money. The taxpayers work hard to earn it. They work hard to pay their taxes and they rightfully demand efficiency. They rightfully demand accountability. They rightfully demand measurable results. No one in Washington – Republican or Democrat – should ever be allowed to carelessly spend the hard-eared taxpayers’ money. And that is why this committee will continually and vigilantly monitor every agency and every program under our jurisdiction. Hopefully we feel this is a bipartisan mission and a bipartisan commitment.
If a program isn’t working, if it does more harm than good, it is time to reform it or it is time to get rid of it. If policies or regulations don’t make common sense, let’s make them sensible. That will lead to a better economy.
Effective oversight is what makes it possible for us to craft responsible and effective solutions, and I look forward to working with members on both sides of the aisle to meet these challenges.
Although our committee bears the name of the Financial Services Committee, I’ve always considered that our committee probably should be named the Economic Growth, Upward Mobility and Financial Security Committee. And when the American financial system works properly, this is exactly what it helps foster. It fuels entrepreneurship and innovation. It allows workers to invest in their retirements so they will have a more secure future. It ensures consumers have access to affordable credit so they can make their lives better and take care of their families needs -- everything from a car, to a home, to braces for a kid’s teeth. I have recent and personal knowledge of the cost of the latter.
As all of us know, consumers remain very concerned about the economy. Still too many live paycheck to paycheck. Too many have seen their paychecks shrink. Americans deserve an economy that meets its full potential. That is something I hope members on both sides of the aisle will be committed to -- that we will have a healthier, more robust economy.
By no means is the oversight plan that we are submitting today, in no way is it exhaustive. There is no way a good, realistic plan could be. But as noted in the plan’s preamble, that does not preclude us from investigating other programs or issues that are not specifically mentioned in the plan, if warranted by circumstances.
This plan was designed and written in a bipartisan spirit. It was designed and written to try to address many, perhaps even most member concerns, not necessarily all. But again it was written, although I’m not a golfer, down the middle of the fairway. It is how it was designed. We listened carefully to try to incorporate a number of member concerns. Again, I believe that this can be a bipartisan plan. I believe its implementation can be bipartisan. I urge its adoption.
January 20, 2015
By The Washington Post Editorial Board
Contrary to many confident predictions by its leadership, the Federal Housing Administration needed a $1.7 billion federal bailout in September 2013, the first time in its history that the agency, which insures mortgages for low-income homebuyers, had to seek taxpayer help covering losses in its book of business. In the months after that embarrassing disaster, which was brought on by the FHA’s overly aggressive policies prior to the “Great Recession,” FHA officials assured Congress and the public that it would focus on rebuilding its capital cushion to at least the legal minimum of 2 percent of its portfolio.
Housing lobbies howled about the damage a more cautious policy would do to home sales and mortgage originations — which is to say, their profits. Still, as recently as Nov. 18, the FHA’s acting director, Biniam Gebre, seemed to be resisting the pressure, boasting that the agency’s capital ratio had rebounded to 0.41 percent and saying that “it will continue to build the necessary capital so that it is well-positioned for the future.” Mr. Gebre noted, accurately, that a key factor in the FHA’s return to a semblance of solvency was its having significantly increased the premiums it charged borrowers, “in recognition that the long term viability of the FHA program requires appropriately pricing for expected losses.”
Well, that was then. Now, the Obama administration is back in populist help-the-homebuyer mode, and the president himself last week announced a significant cut in FHA premiums — large enough, Mr. Obama said, to save a typical homebuyer $900 per year. Mortgage bankers and real estate agents welcomed the news, and Housing and Urban Development Secretary Julian Castro answered concerns that the move might be premature by asserting that it will delay an eventual return to the statutory minimum capital ratio only by a few months. “So now is the right time,” he declared.
No doubt the relatively small slice of the homebuying public — HUD estimates 800,000 borrowers annually, including 100,000 to 200,000 refinancings — that benefits would agree, as would the bankers and real estate agents who profit from FHA-backed business. The policy change certainly addresses the competitive disadvantage for the FHA that was created last year when the administration allowed Fannie Mae and Freddie Mac to back more of the very same low-money-down mortgages the FHA specializes in.
Taxpayers might legitimately wonder, however, why it’s necessary to take on this additional risk so soon after the FHA’s bailout, before the capital cushion is even halfway rebuilt — and at a time when homebuyers are already enjoying record-low interest rates, plus a windfall from cheaper gasoline. The president’s own estimate of the cash savings from the premium cut implies that it would pump less than $1 billion a year of consumer cash into an economy that is already recovering well without it. The premium reduction takes effect Jan. 26, so the administration can still reconsider, which is what it will do if it has really learned a key lesson of the Great Recession: Finance in general, and mortgage finance in particular, is riskier than it sometimes seems, and the best protection against those risks is a solid core of capital.
“Hardworking taxpayers deserve a path forward to financial independence, one that gives them more control over their finances. Unfortunately, if President Obama has his way, hundreds of billions of dollars in new taxes will undeniably trickle down on to consumers. They’ll face fewer choices, higher costs and less economic freedom. No amount of White House spin can hide the fact that President Obama’s plan is nothing more than a tax on mortgage loans, car loans and small business loans. Consumers will find it harder and more expensive to buy cars, homes, major appliances, save for college or start a small business.
“Americans don't want two sets of rules -- one for the wealthy who'll never need a loan from a bank to buy a car, a new refrigerator or a home, and one for everyone else. But Obama's plan to put a tax on consumer loans will do exactly that.
“Raising taxes just gives Washington bureaucrats more control to inefficiently spend money without accountability. Instead, we need to hold Wall Street and Washington accountable. Dodd-Frank lets Washington designate an entire category of Wall Street firms as ‘Too Big to Fail’ and then creates a taxpayer-financed bailout fund for their use. Let’s start by ending ‘Too Big to Fail’ and Washington bailouts. Let’s make sure the bankruptcy code is ready to resolve a large financial institution that gets into trouble so that its shareholders and creditors suffer the consequences of its failure – not U.S. taxpayers. Instead of hurting consumers, let’s implement prudent and sensible capital and liquidity standards on big banks so our economy is no longer exposed to the risk of systemic failure.
“If the president is really concerned there is too much risk in the financial system, then clearly Dodd-Frank isn’t working as he intended and is thus yet another administration failure. Its 400 regulations are stifling the Main Street economy. So let’s cooperate on reforms that will work to make our financial system more stable without hurting those on Main Street who had absolutely nothing to do with causing the financial crisis.”Read More
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