The hole at the corner of 15th and L streets, in downtown Washington, is deep -- and getting deeper.
Earth-movers there are laying the foundations of a shiny new headquarters for Fannie Mae, the bailed-out giant of American mortgages.
But the sleek design, replete with glass sky bridges, belies a sober reality: Fannie Mae and its cousin, Freddie Mac, are once again headed for trouble.
In fact, there’s almost no way around it. On Jan. 1, 2018, the two government-sponsored enterprises will officially run out of capital under the current terms of their bailout. After that, any losses would be shouldered by taxpayers.
Granted, few people are predicting a disaster like the one in 2008, when the GSEs had to be thrown a $187.5 billion federal lifeline. But eight years later, people still don’t agree on what to do with these wards of the state. In Washington and on Wall Street, the fight over Fannie and Freddie drags on.
“Everyone agreed that this was a broken business model that made no sense,’’ said Douglas Holtz-Eakin, president of the American Action Forum, a center-right advocacy group in Washington. “Now, inertia is driving the way.’’
The stakes are high. Earlier this month, the Federal Housing Finance Agency, which oversees the GSEs, said Fannie and Freddie might need a $126 billion rescue if the economy were to stumble hard again. In recent years the Treasury has collected more than enough money from the GSEs, in the form of dividends, to cover a bill of that size.
But to the GSEs’ critics, the real issue is that policy makers have yet to come up with a long-term plan. Republicans want to kill the quasi-governmental companies. Democrats have floated the idea of merging them. Hedge fund managers like Richard Perry have gone to court to claw back dividends swept up by the Treasury.
And so one of the thorniest financial questions of the early 2000s -- what role, if any, should the federal government play in America’s $10 trillion mortgage market -- will now fall to the next president. So far, neither Hillary Clinton nor Donald Trump have seized on the issue.
The good news is that taxpayers have recouped their bailout money, and then some. By September Fannie Mae and Freddie Mac will have routed to the U.S. Treasury some $251 billion in dividends on senior preferred stock that the government acquired in the rescue. The GSEs have paid those billions to the Treasury, rather retain any of the money as operating capital.
FHFA officials say this controversial arrangement -- instituted in 2012, the very year the GSEs returned to profitability -- make another rescue, however small, all but inevitable. The regulator has quietly examined whether it can suspend the payments unilaterally to build up the GSEs’ capital cushion, among other options.
“The most serious risk, and the one that has the most potential for escalating in the future, is the enterprises’ lack of capital,” Mel Watt, director of the FHFA, said in a speech in February.
Also at stake are Fannie and Freddie preferred shares, with a face value of $33 billion, along with common shares, potentially worth even more.
Investors including Perry and Bill Ackman, another prominent hedge fund manager, have sued over the bailout terms, so far with little success. A federal judge dismissedone suit in 2014; an appeals court is expected to decide soon whether the investors deserve damages or at least another shot at making their case.
“We only need to win one of those claims in any of the courts in order to ultimately be successful on the legal front,’’ Ryan Israel, a partner at Ackman’s firm, Pershing Square Capital Management, said on a conference call with investors in July.
The differences are equally stark in Washington. The 2016 Republican party platform has characterized Fannie Mae and Freddie Mac as a “corrupt business model” that has enabled executives and investors to reap the profits while sticking taxpayers with the losses.
In the Democratic camp, two Clinton advisers, Gene Sperling and Jim Parrott, have said they favor merging the GSEs into a single government-owned corporation. In a March report, the two men, former advisers with the National Economic Council, and other authors suggested that the new organization be required to sell mortgage credit risk to private investors, thereby taking taxpayers off the hook for most future losses.
“I’m concerned that we exit this situation without fixing the original problem,’’ said Representative Ed Royce, a California Republican who sponsored a bill last year that quashed pay hikes for the companies’ chief executives. “The status quo of a nationalized mortgage market is unsustainable for taxpayers.’’
None of this was supposed to go on for so long. When Fannie and Freddie were placed into a conservatorship under FHFA, most policy makers viewed the move as a short-term fix until Congress came up with a full solution.
Politically, the idea of preserving them was considered “patently absurd,’’ said Parrott, who helped lead housing-finance reform efforts for the White House from 2010 to 2013. “Eliminating Fannie and Freddie was a prerequisite for discussion.’’
Plenty of ideas have been floated. Former FHFA Director Edward DeMarco and ex-Senate Republican staffer Michael Bright have proposed turning the GSEs into lender-owned insurers. Others have suggested transforming them into what amount to mortgage utilities, with capped rates of return, essentially keeping them in place in a more regulated form.
Royce says he and other House Republicans plan to introduce a bill as early as September that would require Fannie and Freddie to transfer more risk to the private market and give private institutions access to a technology platform for securitizing loans.
John Taylor, who leads the National Community Reinvestment Coalition, says GSE reform proposals will fail. Taylor supports allowing the GSEs to build capital and releasing them from conservatorship in a more regulated form. Think-tank libraries “are filled with all these treatises with proposals from a year to 40 years ago that are simply gathering dust,’’ he said. In all likelihood, the latest proposals “are going to end up in the proverbial stockpile.’’Read More
Free Grant Seminar For Nonprofit Organizations
Hosted by the Office of Representative Ed Royce (CA-39)
in conjunction with CSUF’s Gianneschi Nonprofit Summer School
Date: Wednesday, August 17, 2016
Time: 1:00 PM to 4:00 PM
Location: California State University, Fullerton Mihaylo College of Business and Economics, SGMH 1406
2550 Nutwood Ave. Fullerton, CA 92831
Parking and Directions here.
R.S.V.P. required here.
Programs for Nonprofit Organizations
Grant Assistance from Representative Ed Royce
Republicans are slamming President Obama for sending 15 detainees out of the Guantánamo Bay prison camp, the administration's largest batch of transfers to date.
“In its race to close Gitmo, the Obama administration is doubling down on policies that put American lives at risk,” Rep. Ed Royce (R-Calif.), chairman of the House Foreign Affairs Committee, said in a written statement.Late Monday, the Pentagon announced that 15 detainees from Guantánamo had been sent to the United Arab Emirates. There are now 61 detainees left at the Cuban facility.
Bulk releases out of the detention facility were common under former President George W. Bush, but that changed under the Obama administration. The pace has slowed because of a new clearance process and because of restrictions imposed by Congress.
But the pace has picked up this year as Obama seeks to fulfill a promise from his first campaign to close the prison.
The president is unlikely to achieve his goal, as Congress dismissed his proposal for moving Gitmo detainees to the U.S. But the administration has been working to empty the facility as much as possible by transferring prisoners cleared for release to foreign countries.
With Monday’s transfer, 20 detainees who have been cleared remain at the facility. More review boards have been scheduled to determine whether to clear more detainees, as well.
Human rights groups hailed Monday’s transfer as evidence of Obama’s commitment to closing the facility.
“This is a powerful sign that President Obama is serious about closing Guantánamo before he leaves office,” Amnesty International USA’s Security and Human Rights Program Director Naureen Shah said in a written statement.
“It is vital he keep the momentum. If President Obama fails to close Guantánamo, the next administration could fill it with new detainees, and it could become permanent. It would be an extremely dangerous legacy of allowing people to be detained without charge, in an endless global war, practically until they die.”
Republicans called the transfers evidence of Obama’s “recklessness.”
“Once again, hardened terrorists are being released to foreign countries where they will be a threat,” Royce said. “Too many have already died at the hands of former detainees. I fear we will be dealing with the consequences of this recklessness for years to come.”
Sen. Richard Burr (R- N.C.), the chairman of the Senate Intelligence Committee, said the continue release of detainees is “unconscionable.”
“Several terrorists released by the Obama administration have returned to the battlefield and re-engaged in attacks against coalition forces and our allies,” Burr said. “The administration continues to put our national security at risk in misguided attempts to fulfill campaign pledges and to cement the President’s legacy.”
Sen. Cory Gardner (R-Colo.) called the transfers troubling and highlighted a 30 percent recidivism rate that represents detainees released by Bush and Obama that are confirmed or suspected of re-engaging in terrorism.
"President Obama’s latest release of 15 Guantanamo Bay prisoners is especially troubling at a time of heightened instability in the Middle East coupled with the rise of ISIS," Gardner said in a written statement, referring to the Islamic State in Iraq and Syria. “It’s clear President Obama is rushing to fulfill an old campaign promise during the final months of his presidency given that this transfer of detainees is the largest since he was sworn into office."
"The terrorists this administration just released include individuals who fought on the front lines against U.S. and other coalition forces, targeted U.S. personnel with explosives, served as bin Laden bodyguards and acted as al Qaeda IED experts," Ayotte said.
Here are the profiles of the 15 detainees, according to the Pentagon report:
- Abd al-Muhsin Abd al-Rab Salih al-Busi allegedly received training by al Qaeda and fought on the front lines in Afghanistan for five months.
- Abd al-Rahman Sulayman allegedly received weapons training from al Qaeda, fought on the front lines and spent time at an al Qaeda guest house.
- Mohammed Nasir Yahi Khussrof Kazaz allegedly received basic al Qaeda training and was in charge of a group of fighters in Tora Bora.
- Abdul Muhammad Ahmad Nassar al-Muhajari allegedly received training and associated with a terrorist who swore allegiance to Osama bin Laden.
- Muhammad Ahmad Said al-Adahi allegedly met with bin Laden several times, was associated with his bodyguards and attended al Qaeda training camp.
- Abdel Qadir al-Mudafari alleged trained at an al Qaeda training camp, became an instructor there and was briefly a bin Laden bodyguard.
- Mahmud Abd Al Aziz al-Mujahid allegedly was once a bodyguard for bin Laden.
- Saeed Ahmed Mohammed Abdullah Sarem Jarabh allegedly stayed at al Qaeda guesthouses, received at least basic weapons training and possibly fought on the front lines.
- Mohammed Kamin allegedly received specialized training in explosives and led a cell that procured, delivered and stored weapons for al Qaeda and the Taliban and cased targets along the Afghanistan-Pakistan border.
- Zahar Omar Hamis bin Hamdoun allegedly was a weapons and explosives trainer who possibly commanded foreign fighters. Phone numbers found in his documents have been linked to senior associates of al Qaeda, according to the report.
- Hamid al-Razak allegedly “probably” ordered and conducted attacks against Afghan and coalition personnel during the Afghanistan War.
- Majid Mahmud Abdu Ahmed allegedly fought on the front lines and became a bodyguard for bin Laden in August 2001.
- Ayub Murshid Ali Salih allegedly was low-ranking militant and “probably did not play a major role in terrorist operations.”
- Obaidullah was allegedly part of an al Qaeda-associated cell that targeted coalition forces with improvised explosive devices. He admitted to working to acquire and plant anti-tank mines to target U.S. and coalition forces, according to the report.
- Bashir Nasir Ali al-Marwalah allegedly was a low-level militant who was briefly on the frontlines in Afghanistan before moving through a series of safe houses and being captured in raids of safe houses in Karachi, Pakistan. “Although his role in al-Qa’ida operational plotting is unverified, his last will and testament found in the Karachi raids included a martyrdom statement,” the report says.Read More
Cal State Fullerton’s Talent Search program has been awarded two U.S. Department of Education grants that are expected to total $2.62 million over the five-year award period.
The program was established in 1991 to identify students from disadvantaged backgrounds who attended Anaheim, Katella, Magnolia and Savanna high schools — where 87 percent of the two student bodies are eligible for free or reduced-price lunches — and provide a wide range of services and support in order for these students to succeed in high school and enter a college or university.
The second grant will increase the reach of the program to students at Loara and Western high schools where a combined 78 percent of students are eligible for free/reduced fee lunches. At least two-thirds of participating students must be both first-generation students (the first in their families to graduate college) and low-income.
Through the two efforts, CSUF will be able to provide services to more than 1,100 students each year. The first grant will continue to support more than 600 students while the second grant allows for the addition of 510 new students.
For the 2014-15 school year, 97 percent of students (grades 9-11) moved to the next grade, 100 percent of the class of 2015 graduated from high school, and 90 percent of the class of 2015 graduates enrolled in college immediately following graduation.
“We are thrilled to be awarded two Talent Search grants,” said Melba Castro, director of educational partnerships. “We appreciate the support of Congressman Ed Royce in securing these funds, which will allow us to provide additional opportunities to enhance the lives of hundreds of students from Anaheim. This partnership with Anaheim Union High School District and the U.S. Department of Education will help foster the next generation of college graduates.”Read More
In January, a jet touched down in the Iranian capital of Tehran. Its mission was to pick up four American hostages. The Obama administration paid a heavy price for their freedom, releasing or closing cases against 21 Iranians convicted or accused of serious crimes from sanctions evasion to purchasing equipment for Iran’s illegal weapons programs. Unfortunately, the true cost to the United States is becoming clearer.
We now know that a second aircraft landed in Tehran that night. Its mission was to airlift $400 million worth of cash to Iran, the first installment of a $1.7 billion payment. One press report described “wooden pallets stacked with euros, Swiss francs and other currencies” being whisked across the tarmac. Foreign currency was used in order to side-step U.S. restrictions on Iran’s access to the dollar. While it sounds like a movie scene, no cameras rolled. The Obama administration hid this payment from Congress and the American people.
To hear the State Department tell it, this $1.7 billion is a settlement for an arms sale that was called off after the radicals that rule Iran seized power in 1979: Iran’s $400 million original payment plus $1.3 billion, a whole lot of interest. The dispute over this aborted sale had dragged on for over 35 years. That Iran received the initial payment – in cash – on the same day it released American hostages was a just coincidence, the White House would have us believe. I don’t think so.
We now know that senior Justice Department officials raised red flags, warning that Iran would see the payment as a ransom. After all, Iran had demanded cash during the negotiations over the four Americans. Giving in to this demand would only encourage this rogue regime to take more Americans hostage, they argued. That is why it has long been U.S. policy not to pay ransom.
The Obama administration’s decision to ignore this policy and the counsel of its own officials has put more American lives in jeopardy. Since that plane full of cash landed, Iran has detained at least two more Americans, as well as French, British and Canadian citizens. We certainly can expect demands of more cash for their release.
Putting hundreds of millions of dollars in the pockets of Iran, the world’s leading state sponsor of terrorism and top money launderer, means a more dangerous region. Crates of cash is the preferred payment method for Iran’s terrorist proxies, including Hezbollah, which has thousands of fighters on the front lines in Syria and tens of thousands of rockets pointed at Israel. Cash is also useful as Iran continues to buy parts for its illegal – and expanding – missile program on the black market.
The administration has a lot of explaining to do. After this so-called settlement was announced in January, I asked a number of questions about its connection to the hostages and how the money was sent. The administration refused to answer with any substance.
Now that it’s clear that this settlement served as a ransom – paid in cash – questions abound. Will the next $1.3 billion be delivered in cash too? In recent weeks, Iran has attacked a U.S. Supreme Court ruling that paves the way for nearly $2 billion in Iranian funds locked up in the United States to be used to pay American victims of Iranian terrorist attacks. Is the White House trying to even the ledger for Iran?
This ransom was paid the very weekend the president’s flawed nuclear agreement was implemented. That deal enshrines Iran as a dangerous nuclear power. The damage of doing so is now compounded by this $400 million cash payment, which emboldens Iran to ramp up its hostage-taking, support for terrorism, and illegal missile tests.
This episode is yet another extraordinary step the Obama administration has taken to accommodate Iran, as its supreme leader pushes for more sanctions relief and threatens to walk away from the nuclear deal. With their secret delivery exposed, President Obama and Secretary Kerry hopefully will stop flying cash to Iran. My worry is they are looking for a bigger plane.
Rep. Ed Royce, R-Fullerton, is chairman of the House Foreign Affairs Committee.Read More
Today, U.S. Representative Ed Royce (R-Fullerton) voted in support of H.R. 5538, the Department of Interior, Environment, and Related Agencies Appropriations Act for FY 2017. The legislation includes substantial provisions for California drought relief.
"Delivering relief from water shortages to California's families and farms shouldn't be about politics. I've worked to advance constructive solutions to the challenges our state faces while balancing environmental standards with the water needs of local communities. The other side on the negotiating table needs to do the same," said Representative Royce.
Specifically, the legislation will:
-Require federal agencies to use current and reliable data when making regulatory decisions.
-Provide federal regulators with the direction and flexibility they need to capture water during periods of greater precipitation.
-Cut red tape holding back major water storage projects that have been authorized for over a decade.
Rep. Royce and the 13 other House Republicans from California wrote U.S. Senator Dianne Feinstein (D-Calif.) this week expressing their disappointment that the Senate is not advancing drought relief legislation.
Text of the letter can be viewed here or read below:
July 12, 2016
The Honorable Dianne Feinstein
United States Senate
331 Hart Senate Offfice Building
Washington, DC 20510
Dear Senator Feinstein,
It has come to our attention that the Senate Committee on Energy and Natural Resources plans to hold a business meeting tomorrow, July 13, to markup numerous pieces of legislation related to natural resources and western drought. Unfortunately, no legislation related to California drought relief – neither your legislation, S. 2533, nor the House passed H.R. 2898 – is included on the list to be considered by the committee.
We urge you, as our California senator, to work with your Senate counterparts to ensure that legislation related to California drought is included in this markup. As you stated earlier this year, “It’s vital that other Senators understand how harmful this historic drought has been for California.” To allow a western drought bill to move in the Senate, without the inclusion of language related to California, would be irresponsible.
As you know, our constituents across the state continue to suffer from this historic drought, made worse by federal and state regulations and unsound environmental laws that artificially reduce water availability. Our communities, cities, farms, and businesses need action now.
The House has acted to pass legislation to help our constituents that allows for more water to be captured for human use, while also protecting the environment. Furthermore, the House continues to take advantage of every legislative avenue available to ensure a solution is advanced and ultimately signed into law by the end of the year. It is time for the Senate to take action as well.
As we return to California for the August district work period, it is of vital importance to our constituents that you work to secure passage of legislation in the Senate so that we may go to Conference to reconcile the differences. We stand ready and eager to work with you to secure passage of California water legislation in the Senate and to reach an agreement that will deliver desperately needed water to our communities.
Darrell E. Issa
In recognition of his work on U.S.-Asia relations and advocacy for the Asian American community, House Foreign Affairs Committee Chairman Ed Royce (R-Calif.) has been awarded the "Lifetime Achievement Award" by the International Leadership Foundation (ILF).
“Our country is a rich tapestry of cultural backgrounds and Asian Americans make up a vibrant part of the American story. As Chairman of the House Foreign Affairs Committee, establishing strong ties between the United States and Asia has been my focus. This relationship will be the defining partnership of the 21st century. At home, I've lead the fight against alleged discrimination by elite universities towards qualified Asian Americans. I look forward to continuing to work with the ILF as a strong advocate for the Asian-American community," said Chairman Royce.
"Every year, ILF recognizes truly remarkable individuals and organizations at the annual ILF Awards Gala. They are selected not only because of their tremendous professional achievements, but also for their dedication to the improvement of the Asian American and Pacific Islander community," said Chiling Tong, Founder and CEO of the ILF.
As Chairman of the House Foreign Affairs Committee, Chairman Royce has made improving relations with Asia a priority for the United States Congress. He is a vocal proponent of U.S. economic engagement in Asia in our nation's capital.
Last year, Chairman Royce sent a letter to the U.S. Departments of Education and Justice in support of the Asian American Coalition for Education's (AACE) complaint against Harvard University alleging systemic discrimination by the admissions council towards Asian American applicants. Chairman Royce asked both Departments to thoroughly investigate the allegations. AACE, which is made up of over 100 civic groups representing the Asian American community, plans to file a similar joint complaint against Yale University, Brown University, and Dartmouth College with Chairman Royce's support.
The President of the United States also signed legislation first authored by U.S. Representative Grace Meng (D-N.Y.) and Chairman Royce to strike the offensive term "Oriental" from preexisting federal law and replace it with “Asian American.”
U.S. Representative Ed Royce (R-Calif.) questioned U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro on the Federal Housing Agency's (FHA) forthcoming Property-Assessed Clean Energy (PACE) loan guidelines and HUD's Distressed Asset Stabilization Program (DASP) during a House Financial Services Committee hearing entitled "HUD Accountability.”
“In August 2015, [FHA] Principal Deputy Assistant Secretary Ed Golding, who I see is with us today, announced anticipated guidance on FHA-insured financing for properties with these qualifying PACE loans. As you may know, the use of PACE ‘super liens’ has grown more in California than anywhere else. I think it does pose additional risks for homebuyers and lenders, who already face some significant hurdles. When is the Department’s actual guidance on PACE loans coming? Will implementation be made through a HUD Mortgagee Letter or via a public notice and comment rulemaking?” asked Rep. Royce.
“We anticipate very likely in the next several weeks we will offer that. I believe it’s a Mortgagee Letter, but Ed [Golding] can check me on that. That is something we are currently working on… that’s still being discussed, whether it’s a Mortgagee Letter or public notice and comment. With respect to California, there is a California approach. There are also states that take a different approach. Part of getting to this guidance has been looking at a way we can work with the states to empower them to pursue PACE and also, again, protect the integrity of the Mutual Mortgage Insurance Fund,” replied Secretary Castro.
“FHA Acting Commissioner Carol Galante said in 2012 that an important objective of DASP is to ‘save considerable money for the FHA’s insurance fund.’ I think you agree with that assertion. Twice in your written testimony you mention how the proposed changes to the program will ‘maximize returns or recoveries to the Federal government.’ I’m having a tough time understanding how this is possible. If the non-profit DASP buyers are able to purchase loans at reserve prices that are lower than what would be hit under the current open-bidding process, aren’t returns going to be lower, logically?" asked Rep. Royce.
“I don’t believe that’s necessarily true. That assumes that the notes that these non-profits are taking on would have been taken on by these private sector investors in a national pool. We believe, and OMB believes, it won’t have a detrimental impact on the Fund,” stated Secretary Castro.
“How are you going to gauge success? If the relative rate of return, as compared to the traditional REO process, dips below the current 16 percent… is that then a setback? Or if it dips below 10 percent? At that point, do you have quantitative goals? If the goal is to save considerable money for the FHA Insurance Fund, then we should go back to the old policy. Will you go back and look at the rate?” questioned Rep. Royce.
“I think you put your finger on something that is a factor that we will look at as we evaluate how we meet both of these goals, building up the Mutual Mortgage Insurance Fund and keeping more families in their homes. We will look at that,” said Secretary Castro.
“The relative rate of return is either going to go down, or stay the same, or it’s going to go up. Logically, if part of the mission is saving considerable money, that has to be put in the equation to balance the scale here,” asked Rep. Royce.
“I think you’d agree with me that if that rate of return were to go down, there could be several reasons for that. It may or may not be the fact that you have more non-profits bidding,” concluded Secretary Castro.
Watch Rep. Royce's questioning of Secretary Castro here or by clicking below.Read More
U.S. Representative Ed Royce (R-Calif.) questioned witnesses on impacts of the proposed Financial CHOICE Act versus those of the Dodd-Frank Act on capital formation, community financial institutions, and international financial regulation during today's House Financial Services Committee hearing entitled "Making a Financial Choice: More Capital or More Government Control?”
“I have been struck by a view that I think is rather myopic: The view of some critics of the Financial CHOICE Act who have suggested that the required higher capital levels will result in a sharp contraction in credit availability. Don’t we also have to factor in the sharp reduction in compliance costs that will result from [institutions] being freed from Basel III and Dodd-Frank’s endlessly complex mandates? Wouldn’t [the Financial CHOICE Act] free up these significant resources that would be redirected to lending and job-creating activities?" asked Rep. Royce.
"Absolutely. I think today banks are focused on the wrong thing. They are focused on making government bureaucrats happy instead of investing in their business and in their customer base. So technically, ok, we have to raise more capital. But if that capital can be used productively to grow the economy, that’s a good thing. It’s bad for banks to raise capital? That’s a pretty strange argument to me. Today, banks aren’t doing what their supposed to be doing because they are trying to make regulators happy rather than try to make good loans," replied Mr. John Allison, former President and CEO of the Cato Institute.
“The Basel III accord was intended to apply only to large, complex and internationally-active institutions. However, the rules released by U.S. regulators would apply certain new capital rules to community banks and to large institutions alike. The NCUA has followed suit with its new risk-based rule. Is one size fits all the right approach here?" continued Rep. Royce.
“It never has been the right approach in that we make up a different part of the economy. We want to serve our communities. It isn't just the regulations, it's everything that our customers have to go through being treated like criminals to apply for a loan," said Mr. Jim Purcell, Chairman of the Texas Bankers Association.
"As we just heard, community financial institutions are concerned about Basel III, but [Mr. Newell] raised something in [his] testimony that caught my eye. Europe is moving ahead with Basel IV discussions, contemplating yet another change to the regulation of bank capital. From what you know of the proposal so far, what would the impact be on U.S. institutions? Do we have a seat at the table? Should we have a seat at this table?” concluded Rep. Royce, Chairman of the House Foreign Affairs Committee.
"I think the impact is very likely to be negative. These are actually a series of 11 separate proposals that are all being hashed out in piecemeal fashion by the Basel committee. We’re still waiting to see the final details, but they seem very likely to raise the amount of capital that has to be held against trading activities. They seem very likely to raise the amount of capital that has to be held against credit card lines, home equity lines, and financing lines to businesses. These are all impactful and important proposals and they are frankly getting no airtime here in the U.S. We don’t really have a clear sense of what position the U.S. regulators are going to take there, notwithstanding the fact that they would have very serious consequences here in the U.S.," replied Mr. Jeremy Newell, Executive Managing Director and General Counsel of The Clearing House Association.
Watch Chairman Royce's questioning here or by clicking the image below.Read More
Legislation authored by U.S. Representative Ed Royce (R-Calif.), the National Securities Exchange Regulatory Parity Act (H.R. 5421), was passed unanimously by the House of Representatives today. The bill amends the Securities Act to clarify that the exemption from state registration should apply to national exchanges.
“If you go back to 1996 as part of the National Securities Market Improvement Act, Congress acted to exempt three specific stock exchanges from state-by-state registration.
"Why was that exemption so important? You could ask anyone from Massachusetts who tried to invest in a little company called Apple during its December 1980 IPO. State regulators banned Apple stock for sale to the public for... being 'too risky.'
"Congress passed a good bill in ’96, but we got one thing wrong… we couldn’t predict the future. Today, only two of the original three exchanges exist, and many more exchanges have joined the fray. The SEC’s interpretation of the law has in fact created a two-tiered legal structure by giving this 'blue sky' exemption to the original three named exchanges.
The bill before us today simply gives all national exchanges equal treatment. We give an immediate exemption to securities listed on a national securities exchange registered with the SEC, and whose listing standards have already been approved by the Commission. And we ask the SEC to engage in a rulemaking to establish minimum core quantitative standards for any new exchanges that register with the Commission after the bill's enactment.
"With so many regulatory impediments to capital formation, it is important we encourage new exchanges to become listing venues and a source of capital for companies looking to go public, or looking to expand, or looking to hire more workers," said Rep. Royce on the House floor during debate over the legislation.
Enactment of the National Securities Exchange Regulatory Parity Act would strike references to particular stock exchanges in the Securities Act. The bill would make it clear that the "blue sky" exemption from state-based registration is extended to all national securities exchanges registered with the SEC with listing standards approved by the Commission.
Watch Rep. Royce's remarks here or by clicking the image below:
U.S. Representative Ed Royce (R-Calif.), Chairman of the House Foreign Affairs Committee, questioned witnesses on Iran's use of commercial aircraft to support terrorism during a Monetary Policy and Trade Subcommittee hearing entitled “The Implications of U.S. Aircraft Sales to Iran.”
“I’m going to the June 2011 Treasury designation of Iran Air, that it was ‘used by the Iranian Revolutionary Guard Corps and Iran’s Ministry of Defense… to transport military related equipment…Iran Air has shipped military-related equipment on behalf of the IRGC since 2006, and in 2008, Iran Air shipped aircraft-related raw materials to a Ministry of Defense-associated company, including titanium sheets, which have dual-use military applications and can be used in support of advanced weapons programs.’ It further stated that ‘rockets or missiles have been transported via Iran Air passenger aircraft.’ Mr. Dubowitz, from what you know, has Iran Air continued in its process of engagement here in prohibited activities related to Iran’s support for terrorism to include the transport of conventional weapons and ballistic missiles within the last two years?” asked Chairman Royce.
“Chairman Royce, just last month, three Iran Air flights went from the IRGC’s resupply base in Iran to Damascus. That illicit activity continues,” replied Mr. Mark Dubowitz, Executive Director of the Foundation for Defense of Democracies.
“In terms of the question has Iran provided weapons to the Syrian Government using Iran Air, I take it the answer is probably…," asked Chairman Royce.
“It appears to be so, unless they’re ferrying civilians on sightseeing tours from a resupply base for the IRGC," replied Dubowitz.
“So has Iran Air engaged in activities within the last 2 years in support of the Iranian Revolutionary Guard Corps?” continued Chairman Royce.
“Yes,” stated Dubowitz.
"Despite these clearly terrorism-related designations, the Administration removed sanctions on Iran as part of the nuclear deal as we all know. In addition, Iran Air has not been designated as being owned or controlled by the Government of Iran, despite the fact that we have seen little evidence that Iran Air has either been privatized or changed its ownership structure. Mr. Lorber or Mr. Dubowitz, what is Iran Air’s ownership structure? Is it still owned or controlled by the Government of Iran? Are any members of the IRGC, Specially Designated Nationals, “shadow” SDNs, or other politically exposed persons in any of the senior management positions?” questioned Chairman Royce.
“Iran Air is still used by the Revolutionary Guards. Iran Air was designated in 2011 because it was being used by the Revolutionary Guards. There is every evidence that it continues to be used by the Revolutionary Guards. There is no reason it was delisted since that was not part of a nuclear agreement. And there is no reason why it should remain unlisted. There are four other airlines being used by the Revolutionary Guards that remain sanctioned. We have no ability to stop Iran Air from transferring, leasing, or reselling those aircraft to four other Revolutionary Guard airlines,” said Dubowitz.
“There is a provision of secondary sanctions regulations which are still in force that prohibit foreign companies from doing business not just with Iran Air but also with agents and affiliates of the IRGC. So if Iran Air is transporting goods on behalf of the IRGC, it is an agent or affiliate and therefore entities doing business with it are also subject to U.S. secondary sanctions,” added Mr. Eric Lorber, Senior Associate at the Financial Integrity Network.
“Mr. Dubowitz, when was that last flight you referenced… into Damascus,” asked Chairman Royce.
“June the 9th, one month ago,” concluded Dubowitz.
Watch Chairman Royce's questioning here or by clicking the image below.Read More
U.S. Representative Ed Royce (CA-39) invites you to attend the:
Congressional App Challenge STEM Competition
2016 Exhibit and Awards Ceremony
Date: Wednesday, February 17, 2016
Time: 7 PM PST
Location: Richard Nixon Presidential Library and Museum
Address: 18001 Yorba Linda Blvd., Yorba Linda, CA 92886
- Discover the winners of the 2016 STEM Competition
- View innovative mobile apps created by CA-39's brightest minds
Featured speakers include:
Marc Fischer, CEO and Co-Founder of Dogtown Media
LTC Dennis Sugrue, L.A. Deputy Commander of the U.S. Army Corps of Engineers
Tom Ward, CTO of MEDL Mobile
Competition judges include:
Nanxi Liu, CEO and co-founder of Enplug, Inc.
Simon Evans, professional civil engineer and certified floodplain manager
Dr. Keun-Hang Susan Yang, Ph.D, Director of International Science Programs and Professor of Computational Biology/Neuroscience and Bioscience at Chapman University
Laurie Smith, Program Manager at Science@OC
Chi Ni, Founder of Straight A, Inc.
RSVP to Stephanie Hu at Stephanie.Hu@mail.house.gov or (626) 964-5123. More event details can be found here.
Webinar participants will learn how MIT App Inventor can help you design, build, and submit an Android app just in time for the April 30th STEM Competition deadline!Students entering the competition must submit their app’s source code online during the Competition Submission Period between 12 PM Eastern Standard Time on FEBRUARY 1ST, 2014, and 11:59 PM Eastern Daylight Time on APRIL 30TH, 2014, as well as provide a YouTube or VIMEO video demo explaining their app and what they learned through this competition process. Learn more about Rep. Royce's 2014 STEM Competition here or by following #2014RoyceSTEM on Facebook and Twitter. You can also download the Rep. Royce STEM Competition mobile app, available for free in the iTunes store (Android version coming soon).
On Monday, November 4th, Rep. Ed Royce, Chairman of the House Foreign Affairs Committee, will hold the Committee’s first field hearing to examine international human trafficking and to assess efforts to combat trafficking at the international, Federal, State and local levels. The hearing, entitled “Regional Perspectives in the Global Fight Against Human Trafficking,” will begin at 10:00 a.m. PT will be held in the Titan Student Union building on the campus of California State University, Fullerton.
Note: Earlier this year, Chairman Royce launched a Human Trafficking Congressional Advisory Committee (HTCAC), which is comprised of victims’ rights groups, local and federal law enforcement agencies, and community advocates. HTCAC meets on a monthly basis to address human trafficking concerns, as well as offer policy recommendations. In May, Chairman Royce convened a Committee hearing to examine local and private sector initiatives to combat international human trafficking.
Hearing: “Regional Perspectives in the Global Fight Against Human Trafficking”
California State University, Fullerton
Titan Student Union
800 N. State College Blvd.
Fullerton, CA 92834
For a campus map and parking information click HERE.
Monday, November 4, 2013
10:00 a.m. PT
The Honorable Luis CdeBaca
Office to Monitor and Combat Trafficking in Persons
U.S. Department of State
The Honorable Tony Rackauckas
Office of the Orange County District Attorney
Ms. Kay Buck
Executive Director and Chief Executive Officer
Coalition to Abolish Slavery and Trafficking
*Witnesses may be added.
***Important planning note for press covering hearing:
The hearing will be webcast at www.foreignaffairs.house.gov.
Members of the media must RSVP by Friday, November 1 at 12 p.m. to Audra McGeorge at email@example.com to receive credentials to cover the hearing from the press viewing area.
Following the hearing, there will be a media availability to discuss human trafficking.Read More
The event will feature Keynote speaker Rebekah Bell whose opinion piece in the Wall Street Journal on how she graduated from college debt-free offered important advice to students on avoiding crushing student loan debt. Additionally, the seminar will provide information about the Free Application for Federal Student Aid (FAFSA) program as well as other federal and private student loans, grants, and other financing options.
A member of Rep. Ed Royce's staff will be available for mobile office hours on Thursday, October 3rd in the Red Tailed Hawk Room in the City Clerk’s Office at Chino Hills City Hall (14000 City Center Dr.). Mobile office hours provide an opportunity for constituents to meet with Rep. Royce and his staff members for assistance with a variety of services and issues. Office hours on Thursday, October 3rd will be held from 9:00am - 4:00pm. Please call (909) 420-0010 with any questions.Read More
2185 Rayburn HOB
Washington, DC 20515
U.S. Representative Ed Royce (R) is serving his eleventh term in Congress representing Southern California’s 39th District, based in Orange, Los Angeles, and San Bernardino Counties. He and his wife, Marie, are longtime residents of Fullerton, CA.
Royce’s priorities in Congress are: addressing our national debt, protecting our homeland, eliminating pork-barrel spending, fighting crime and supporting victims of crime, strengthening education for all students, spurring job creation and strengthening Social Security and Medicare.
Royce has a strong history of public service. In 1982, he was elected to the California State Senate where he began his fight for victims’ rights. He authored the nation’s first anti-stalker law and versions of his bill have been adopted in all 50 states. He was also the legislative author and campaign co-chairman of California’s Proposition 115, the Crime Victims/Speedy Trial Initiative, approved by the voters in 1990. In Congress, Royce continues his fight for victims’ rights. He wrote and passed the Interstate Stalking Punishment and Prevention Act in 1996. This law makes it a federal crime to pursue a victim across state lines and enables law enforcement to intervene before violence occurs. Royce was active in passing AMBER Alert legislation in 2003, and legislation in 2004 to enhance rights for victims of crime. He currently is a member of the Victim’s Rights Caucus.
For the 113th Congress, Royce was selected to be Chairman of the House Foreign Affairs Committee. Royce has served on the Committee since entering Congress in 1993. Immediately prior to becoming Chairman of the Committee, Royce served as Chairman of the Subcommittee on Terrorism, Nonproliferation, and Trade and a member of the Subcommittee on Asia and the Pacific.
As a senior member of the House Financial Services Committee, Royce sits on two Subcommittees: Capital Markets and Government Sponsored Enterprises, and Insurance and Housing. Royce has served on the conference committees for some of the most significant legislation in the financial services arena. For more than a decade Royce has called for a stronger federal regulator to limit Fannie Mae and Freddie Mac’s excessive risk taking at the expense of taxpayers. In 2003, he was the first member of Congress to write legislation calling for a single regulator under the Treasury Department for the three housing government sponsored enterprises: Fannie Mae, Freddie Mac, and the twelve Federal Home Loan Banks.
Royce has consistently earned honors and awards from the National Taxpayers Union, Citizens Against Government Waste, National Federation of Independent Businesses, Watchdogs of the Treasury, Americans for Tax Reform, U.S. Chamber of Commerce, United Seniors Association, 60 Plus, American Share Holders Association, Citizens for a Sound Economy and the Small Business Survival Committee.
A California native, Royce is a graduate of California State University, Fullerton, School of Business Administration. Prior to entering public service, his professional background includes experience as a small business owner, a controller, a capital projects manager, and a corporate tax manager for a Southern California company. Royce and his wife, Marie, have been married for 28 years.
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Here is Jessica, Policy Coordinator and Counsel for the House Foreign Affairs Committee, speaking at the Annual Women's Conference about Global
Hello from the House Foreign Affairs Committeein Washington, D.C. Our staff is doing a #socialmediatakeover today to give you a behind-the-scenes
Have you ever been to the National Statuary Hall inside the #uscapitol building? Each state displays two statues. One of #california's is Father
Time for a #throwbackthursday and #shoutout to our favorite office dog #Archie! Archie, who is a West Highland WhiteTerrier, spends his days
One of the DC Office’s main responsibilities is fulfilling flag requests for #CA39 constituents! Each week we send dozens of flags to the Architect