WASHINGTON – Rep. Randy Neugebauer (R-TX), Chairman of the Financial Institutions and Consumer Credit Subcommittee, delivered the following opening statement—as prepared for delivery—at today’s hearing to examine if the arbitration rule proposed by the Consumer Financial Protection Bureau (CFPB) is in the public interest of consumers:
“Good afternoon. Today’s hearing will examine the CFPB’s proposed rulemaking on arbitration.
“Arbitration has long been recognized as an important form of alternative dispute resolution for a consumer that encourages efficiency, expediency, and lower barriers to bring disputes. In 1925, Congress passed the Federal Arbitration Act, which states that agreements to arbitrate are ‘valid, irrevocable, and enforceable.’ Since that time, the Supreme Court, on numerous occasions, has upheld the broad use of arbitration agreements in contract law and highlighted the clear Federal policy favoring these agreements.
“In 2010, the Democrat-controlled Congress passed the Dodd-Frank Act, which mandated the Consumer Financial Protection Bureau study the use of arbitration agreements in consumer products and services. Section 1028 requires the Bureau to study these agreements and then – consistent with the findings of the report- the Bureau may limit or ban these agreements if the findings of the study satisfy two statutory legal standards.
“The Bureau’s rulemaking action must be:
1) ‘In the Public Interest’; AND
2) ‘For the protection of consumers’.
“Last March, the Bureau released its mandated study on arbitration. Unfortunately, rather than performing a thorough analysis of arbitration as required by the statute, the Bureau instead simply compared arbitration and class actions. The Bureau failed to adequately compare arbitration programs across the industry, or examine best practices that produced the greatest consumer outcome.
“However, even if Congressional intent was for the Bureau to compare arbitration and class actions, the study clearly demonstrates more favorable outcomes for consumers using arbitration as compared to class actions. For example, arbitration produces a significantly higher recovery for individual consumers and has a shorter resolution timeline for recovery.
“In testimony before this Committee, the agency has stated that banning the use of class action waivers in arbitration agreements, the main provision in the Bureau’s rule, would achieve a primary Bureau objective – ‘to give consumers their day in court’.
“Nothing could be further from the truth.
“Let’s take for example a 2013 U.S. Chamber of Commerce’s study on class actions. None of the class actions studied ever went to trial – before a judge or jury. Additionally, not a single class action ended in a final judgment on the merits for the consumers.
“Now let’s compare that to the CFPB’s arbitration study. Yet again we see the same thing – not a single class action was decided by a judge or jury. Remarkably though, class action attorneys recovered over $400 million in the Bureau’s study.
“After my own review of the material, I have serious doubts that the Bureau has met the statutory requirements set-forth in Section 1028. Further, I fear a single, unelected bureaucrat has directed agency action that is arbitrary and capricious. The Bureau has failed to articulate a rational connection between the facts found in its May 2015 study and the agency action before us today. In my view, the proposed rule is a clear error in judgement by the Bureau.
“It will perpetuate a justice gap by taking away a legal forum for low-income individuals and those with small and individualized claims. That outcome would certainly not be for the protection of consumers.
“Today, we have a distinguished panel of experts who have spent considerable time studying this issue. I hope our witnesses will walk our members through the Bureau’s report and provide their perspective on the proposed rulemaking, including whether the Bureau has satisfied its statutory requirements in Section 1028 of Dodd-Frank.”
Lesser Prairie Chicken Removed from “Threatened” Category
Last week, I was pleased to see the Justice Department withdraw its appeal of Judge Junell’s ruling to remove the lesser prairie chicken from the list of “threatened” animals under the Endangered Species Act. Having the lesser prairie chicken listed as “threatened” has had an adverse impact on oil and gas exploration, military bases, and farm improvements throughout the region, including Texas, Kansas, New Mexico, Oklahoma, and Colorado. In addition, the study conducted by the U.S. Fish and Wildlife Service (USFSW), which initially listed the lesser prairie chicken as “threatened”, was flawed. The study neglected to take into account the multi-state conservation efforts that had previously been enacted by states, as well as the natural life cycles of prairie chickens, which have a more abundant population during wet periods as opposed to droughts. Though the Justice Department has dropped its appeal, the USFWS refuses to give up the fight and has announced its intention to continue looking into this issue. I will continue to monitor the situation, and I hope that any further action taken on the lesser prairie chicken is guided by rigorous scientific studies and analysis of the full context of this issue.
Court Rules in Favor of the Constitution
On Thursday of last week, a federal district court judge ruled in favor of the House of Representatives in a major court case involving the President’s unilateral decision to fund a section of Obamacare without a Congressional appropriation. In the ruling of House v. Burwell, the judge said that the Administration’s unilateral actions on Obamacare were an improper use of tax dollars. The Obama Administration tried to argue that an authorization through a law implied an appropriation of money. However, the judge rightly pointed out that Congress must specifically appropriate funds and that presidents, since George Washington, have understood this. This court ruling affirms our case that President Obama illegally transferred billions of dollars to insurance companies in an attempt to prop up his disastrous health care law. Though the ruling will not affect coverage of individuals enrolled in the plans, it also will not immediately shut off the unconstitutional reimbursement of insurers under the unappropriated Section 1402 of the Obamacare law – those payments will continue to be made while an appeal takes place. If the Appeals Court reaches a different conclusion, this case may very well be headed for the Supreme Court, yet again reinforcing how key late Justice Scalia’s replacement will be.
Flags for Fallen Heroes
This week is National Police Week, which began with Peace Officer Memorial Day on May 15. In tribute to our fallen officers, the House passed S. 2755, the Fallen Heroes Flag Act of 2016, which was sent to the President’s desk on May 13, 2016. Once this bill is signed into law, it will authorize Members of Congress to give an American flag that has been flown over the United States Capitol at the request of the immediate family of a first responder or public safety officer who has died in the line of duty to that family at no cost. This is the least we can do to pay tribute to our fallen heroes. The flag is one of the most powerful symbols of our nation, and our law enforcement officers and first responders are among the reasons our country is the best place in the world to live.
If you wish to have a flag flown over the United States Capitol in honor of a loved one or for any special occasion, there is a request form available on my website.
WASHINGTON – Rep. Randy Neugebauer (R-Texas) released the following statement in response to the U.S. Justice Department dropping its appeal of a federal court ruling in Texas that removed the bird from the federal protections of the Endangered Species Act:
“I am pleased the Justice Department and the Fish and Wildlife Service have finally dropped this appeal. It has been clear for a long time now that the evaluation that took place prior to listing the lesser prairie chicken as threatened was flawed. Although these departments made the correct decision in this instance, I remain concerned that they may continue to try to reach into our state and harm our ability to both create jobs and protect our natural world through mandates and other means. Therefore, I will continue to monitor this situation and take action as warranted.”
WASHINGTON – Rep. Randy Neugebauer (R-Texas) released the following statement in response to the Treasury Department’s study on online marketplace lending:
“The Treasury Department’s recommendation to treat small businesses like consumers for loan purposes follows a very disheartening trend in reducing access to the capital that small businesses rely upon to grow and function. The difficulty in accessing capital, especially for small businesses, in the wake of the financial crisis has only recently begun to be alleviated. One of the main sources of renewed growth is financial innovation and new technologies like online lending marketplaces. To treat small businesses - which have completely different capital needs and borrower profiles - the same as individuals is to stifle the prospective for growth and innovation within the country. Small businesses cannot live up to their potential to be a major source of job creation without the ability to expand that goes hand in hand with greater access to capital.”
Supporting the Military and our Veterans in the 114th Congress
A recent Reuters article highlights the lack of clarity that many of our troops are experiencing as they fight against terrorism. While the article focuses on Afghanistan, the problem extends to the fight against ISIS in Syria and Iraq. President Obama, in his role as Commander in Chief, has not articulated a strategy with clear goals that our troops need in order to carry out their missions with the efficiency and finesse that are the hallmarks of the U.S. military. In the 114th Congress, the House has passed 16 bills that would help support our military’s efforts to defeat ISIS. Two of those have been signed into law, while the rest wait on action either by the Senate or the President. Most recently, I supported H.R. 1493, the Protect and Preserve International Cultural Property Act, which would cut off black market trade of antiquities by ISIS, one of their main revenue sources. Not only do we need to support our military in their active roles, but we must also take care of our veterans as they transition back to civilian life. To that end, the House has passed 33 bills supporting our veterans over the course of the 114th Congress so far, notably including several bills to further reform and increase accountability at the troubled Department of Veterans Affairs. I encourage the Senate to take up more of these House-passed bills so we can follow through on improving the VA and services for veterans.
Texas Tech’s Museum Welcomes Traveling Smithsonian Exhibition
The Museum of Texas Tech University will be hosting the traveling Smithsonian Institution exhibition “Mail Call” which tells the story of military mail and communication from the American Revolution to the current engagements in Iraq and Afghanistan. Described as a “moment when the front line and the home front connect,” the Smithsonian says this exhibition of objects, correspondence, and audio recordings focuses on how the military and the postal service have worked together to deliver mail all over the world. The exhibition opened at the Museum of Texas Tech University on May 7, 2016 and will be available for viewing until July 17, 2016. This is yet another example of the resources a world class institution like Texas Tech can draw to our region.
National Day of Prayer
Every year, Dana and I appreciate the opportunity to participate in the National Day of Prayer on May 5th. Last week was certainly no exception. God has abundantly blessed the United States of America and those of us lucky enough to live here. I joined people all across the country in thanking God for this great nation and asking for His continued blessings. While there are times when prayer is deeply personal, there are also times where there is great joy in the unity of prayer with others. The National Day of Prayer is just such a time, when the ability of those across this country to pause and reflect should be celebrated as one of our great freedoms.
WASHINGTON – Rep. Randy Neugebauer (R-Texas) issued the following statement after the Consumer Financial Protection Bureau (CFPB) released its proposed arbitration rule:
“In proposing to limit consumer access to arbitration as recourse after harm, the CFPB has ignored its own study and the overwhelming data demonstrating greater consumer benefit using this form of alternative dispute resolution. Unfortunately, we have yet another example of an unelected, politically-motivated, single director choosing what he thinks is best for the American consumer. Today’s proposal is a clear win for class action trial lawyers who reap unseemly recoveries, while consumers recover pennies on the dollar. This is a clear endorsement by the Bureau of one form of dispute resolution over another. One that results in no benefits for class members in sixty percent of the cases, and where the consumer receives on average 168 times less in recovery amounts compared to arbitration recoveries. I hope the Bureau takes seriously the public input that is expected during the notice and comment period, and conducts a robust analysis that measures the costs and benefits to consumers, as well as the costs and benefits to businesses of all sizes. On that point, I have been disappointed with the Bureau’s efforts to date.”
Honoring a Four Legged Hero
On Wednesday, May 4, 2016, my office will take part in saluting one of our military working dogs, Jonny N414 at a memorial ceremony that is part of the National Police Week and Peace Officer Memorial Day. Jonny had a resume to be proud of, including four deployments overseas. Canines have a long and decorated military history. They have served for centuries and today’s War on Terror is no exception. Military working dogs like Jonny have remarkable skills, senses, and intelligence which have enabled them to be used as sentries, trackers, scouts, and to discover mines, improvised explosive devices (IEDs), and weapons caches, not to mention performing search and rescue operations. These dogs have saved tens of thousands of lives and their tireless devotion is neither replaceable nor repayable. Like all of our military warriors, we honor the hard work and sacrifice of our military working dogs.
Texas Voter ID Law
Last week, the United States Supreme Court issued an order allowing Texas to continue enforcement of the Voter ID law known as SB 14. Though this was not a full review, the court denied a request to halt the implementation of the law. While the court may choose to revisit this issue in the future, requiring voters to show certain forms of government-issued photo identification will surely lead to a reduction of voter fraud in the upcoming November election.
May is Skin Cancer Prevention Month
As the most commonly diagnosed form of cancer in the United States today, it is imperative to be aware of the dangers of skin cancer. Melanoma, the most deadly form of skin cancer, is diagnosed more than breast, prostate, lung, and colon cancer combined. The National Council on Skin Cancer Prevention suggests using SPF 30 sunscreen with both UVA and UVB protection even on cloudy days and to reapply every two hours while outside to help prevent sunburns, one of the top risk factors for developing skin cancer. As with all forms of cancer, and as I know first-hand, early detection is a key to obtaining lifesaving treatment. Skin should be examined once a month, especially any moles.
Congressional Art Competition Winner
I am extremely pleased to present the winning piece of artwork for the Texas 19th District Congressional Art Competition, Texas Sun by Zoe Fuqua of Sweetwater High School. We had a wonderful selection of submissions that demonstrated once again that the students of the 19th District are amazingly talented.
EPA Funds Anti-Farmer Billboards
Last week, I signed on to a letter to Environmental Protection Agency (EPA) Administrator Gina McCarthy demanding answers on how taxpayer dollars could go to fund an anti-farmer campaign. This letter came in response to reports that the EPA gave out grant money to a group in Washington State to fund billboards, a website, radio advertisements, and electronic communications that were blatantly anti-agriculture. There is a strict prohibition in federal law of any funds being used by a federal agency for publicity or propaganda. The EPA Inspector General had already notified the Agency that there were problems with how those grants were being monitored after awards were distributed. Furthermore, this comes in the wake of similar EPA violations regarding their use of social media to advocate for the flawed Waters of the United States (WOTUS) rule. Even beyond the violation of these publicity and propaganda prohibitions, it is unacceptable that a campaign funded by the EPA would target farmers, who are some of the most careful stewards of the land. I consider this behavior outrageous and irresponsible and I look forward to Administrator McCarthy’s response on how this was allowed to happen.
Introducing a Bill to Strengthen Our Economy
Last Thursday, I introduced H.R. 5027, which is a bill to help re-balance the interaction between banks, consumers, and the Federal Reserve (Fed). Over 100 years ago, the Federal Reserve System was created and at that time, banks agreed to own stock in the Fed two different ways. Half of the stock would be paid into an account and half of the stock would be held ready in case the Fed called it in due to a national need. Never in the history of the Fed has that money been called in. In return for not having access to the half of the stock money paid into that account, the Fed would pay a six percent return to the banks. This was not ideal, but it was a situation both institutions could accommodate. However, in December of 2015, Congress passed the FAST Act, or Highway bill, which fundamentally changed how financial institutions interact with the Fed by taking away that six percent fixed return. I opposed this change which caused the rate of return to float according to how U.S. Treasury bills do over a ten year span. The result is an artificial reduction in returns – in essence, a bank tax. It forced one sector of the economy to pay for spending in a completely unrelated sector of the economy. To help re-balance this relationship, my bill allows most of the money that is currently sitting “dead” in the Fed’s account – unable to be used by anyone except the Fed, and then only in times of need – to re-enter the economy and be used efficiently. It can go to consumers and small businesses as loans, make infrastructure payments, or strengthen the financial system by being held by the bank in reserve. The Fed, meanwhile, will continue to have access to the exact same tools it has now because the money being taken out of that account can still be called by the Fed in a time of need, just like the half the banks have held all along.
The Flooding in Houston
Dana and I continue to pray for those affected by the flooding in the Houston area. I have joined a bipartisan group of Texas Congressional leaders in lending our support to Governor Abbott’s request for a major disaster declaration on behalf of the counties impacted by these severe storms. Hopefully President Obama will move quickly to approve this request, and any subsequent requests we must make when more thorough damage assessments can be completed in the coming days.
WASHINGTON – Rep. Randy Neugebauer (R-TX) released the following statement today following the introduction of his bill to free capital currently held in limbo in the Federal Reserve System:
“Today, I introduced legislation to ensure capital in our financial system is allowed to be put to its most efficient use. Currently, financial institutions are required by the Federal Reserve Act to subscribe to stock in the Federal Reserve System. One half of their total stock subscription is required to be held at the Federal Reserve in a “paid-in” account. This account currently holds roughly $30 billion in idle capital. Historically, banks were paid a dividend of six percent on their paid-in capital. This ownership structure, giving banks a vested interest in the Federal Reserve System while also maintaining a stable return, is a remnant of legislation passed over 100 years ago.
“Last fall, Congress passed the long-term highway bill known as the FAST Act, which unfortunately decreased the dividend the Federal Reserve paid to stock subscribing banks. I opposed this dividend reduction, which forced one sector of the economy to pay for spending in a completely unrelated sector of the economy.
“As a result of this dividend reduction, banks experienced an artificial reduction in their return on investment – in essence, a bank tax. At a time when our economy continues to see tepid growth, it only makes sense to free up capital and allow it to be put to its most efficient use. Banks can use this newly free capital to lend to consumers and small businesses, make infrastructure investments, or hold it in reserve, which strengthens the financial system – the ultimate purpose of the Federal Reserve.
“Throughout the process of developing this legislation, I strived to ensure that the Federal Reserve retained the tools it has today with respect to regulation of banks and the safety of the financial system. Though they have never had to use it in the over 100 years the Federal Reserve has existed, the ability it has to call in capital in a time of economic stress and the level of capital it is able to call upon remains unchanged. My legislation in no way challenges the Federal Reserve’s authority to fulfill its responsibilities.
“At its essence, my legislation is a response to an action that fundamentally changed the way financial institutions interact with the Federal Reserve. Over 100 years ago, banks agreed to a system where they paid into an account and held ready to be called a portion of their holdings, and in return received a six percent dividend. Congress took that away. My bill helps rebalance the interaction between banks and the Federal Reserve by releasing capital from these accounts where it is ‘dead’ – unable to be used by anyone except the Federal Reserve in a time of need – and freeing it to improve our economy and overall stability.”
Congress to Vote on Bills Protecting Taxpayers
This week, Congress is going to vote on four bills aimed at stopping unacceptable behaviors by the Internal Revenue Service (IRS) over the last few years. These bills are intended to protect the hard-working taxpayers from poor customer service and bad behavior by the IRS. This agency has handed out bonuses to their own tax delinquent employees and been notoriously difficult to reach for answers to important questions during tax season. To address these problems, we are going to vote on legislation which will ensure that every IRS employee pays their taxes, prohibit the IRS from re-hiring someone that was fired with cause, ban IRS bonuses until the agency can demonstrate improved customer service, and require fees collected by the IRS to be subject to Congressional appropriations. Each of these seems like a common sense idea, yet the IRS has managed to have problems in each area. I am especially concerned with the lack of oversight of how the money collected through fees is used by the IRS – this is the taxpayer’s money and it needs to be spent in accordance with American priorities through a transparent budget process.
Protecting Community Banks and Increasing Regulatory Accountability
Last week, I was proud to speak on the House floor in support of two bills that were voted out of the Subcommittee I chair, the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee. I spoke out and voted to protect the ability of community banks to continue to exist in the harsh regulatory environment created by the Dodd-Frank Act, which has caused the closing of over 1,000 community banks since its passage. H.R. 3791 seeks to support community banks by allowing bank holding companies to finance the transfer of ownership of a small bank to a small bank holding company through debt financing, something that the Federal Reserve generally discourages, but which is necessary to complete these transactions. I also voted to hold accountable some of these regulatory bodies that cause the environment of regulation that is so hostile to small banks. The Financial Stability Oversight Council (FSOC) and the Office of Financial Research (OFR) are both currently outside of the normal budget and appropriations process. This means that while heads of these bodies have appeared before Congress, it was not to make the case for what a good job they’ve been doing and to lay out the reasons why they ought to get the funding they request. Instead, they have been able to set their own budget without this Congressional oversight. H.R. 3340 would bring both FSOC and the OFR under the normal appropriations process, thereby improving their transparency and accountability.
Texas Tech Visits DC
This week, I look forward to seeing Chancellor Duncan, interim President Opperman, and other administrators from Texas Tech as they travel to Washington, DC. They are coming on their annual trip to update Texas lawmakers about the great things happening in Lubbock and to talk about the university’s federal priorities moving forward. I am constantly reminded what a wonderful institution Texas Tech University is and Dana and I are honored to be alumni. Of course, a favorite part of their visit to DC will be a taste of home – Red Raider Meats and COWamongus ice cream.
Congressional Art Competition
I’d like to invite all high school artists to participate in this year’s Congressional Art Competition. The competition is open to all high school students in Texas’ 19th District, and the lucky winner will have an original artwork on display in the Capitol Building for a full year. I walk through the hallway that displays each district’s winners almost every day that I’m in Washington on my way to vote. Visitors from across the country who come to tour the Capitol will see your work too. It’s a beautiful display of America’s young artists. You can learn more about how to submit your work here, and you can contact Joel Riedel at email@example.com or at (806) 763-1611 with any questions. Remember, the deadline for submissions is April 22nd.
1424 Longworth HOB
Washington, DC 20515
Congressman Randy Neugebauer proudly represents the 19th Congressional District of Texas, which stretches across 29 counties. He has offices in the cities of Abilene, Big Spring and Lubbock.
As one of the most conservative Members of Congress, Randy works to keep Washington accountable to hardworking American taxpayers by requiring commonsense spending and borrowing limits.
Randy was raised in West Texas, and he is a voice for traditional Texan values in Washington. Randy graduated from Texas Tech in 1972 with a degree in accounting. He went on to work in real estate management, eventually starting his own land development company.
As a small business owner, Randy knows first-hand the dedication and commitment it takes to own and manage a successful company. He also knows how government regulations can quickly deplete the resources of a small business, causing hard times for families and communities. Randy brings this businessman’s perspective to Congress where he advocates for reduced spending, fiscal discipline, free markets, and limited government.
Randy serves on three committees in the House of Representatives, where he can work on legislation that directly benefits his constituents. He is a senior member of the House Agriculture Committee and the House Science, Space, and Technology Committee. Additionally, he serves as the Chairman of the House Financial Services Subcommittee on Housing and Insurance.
As Housing and Insurance Subcommittee Chairman, he’s working to reform the housing market, cut regulatory burdens, and shift risk away from American taxpayers and back into the private sector.
Randy’s legislative initiatives include eliminating wasteful federal spending, improving crop insurance, and supporting diverse domestic energy sources. He continues to work on legislation that will empower the constituents of the 19th Congressional District.
Randy’s support of conservative principles has been recognized by many groups and organizations. He has received the U.S. Chamber of Commerce Spirit of Enterprise Award, the Club for Growth Defender of Economic Freedom Award, and the Taxpayer’s Friend Award from the National Taxpayers Union. He has earned a 100% lifetime rating by National Right to Life. He has been recognized by National Journal as one of the six most conservative members of the U.S. House of Representatives. In addition, Randy serves as an Assistant Republican Whip to House Republican Whip Kevin McCarthy.
Randy is married to his high school sweetheart, Dana, who is a Ropesville native. Together they have two sons, two daughters-in-law, and are the proud grandparents of three boys and one girl.
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Retweeted by randyneugebauer
CFPB has ignored its own study & overwhelming data- pushing class action suits, perpetuating the justice gap #ArbitrationHearing
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My friends on the other side of the aisle asked a trial lawyer to come speak in favor of CFPB’s Arbitration Rule. I rest my case.
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CFPB Arbitration Rule = win for class action trial lawyers who reap unseemly recoveries, while consumers recover pennies on the dollar
I’ve convened a hearing to examine whether the CFPB’s proposed arbitration rule is actually good for consumers. You can watch the hearing
In a big win for religious liberty, and a second blow in as many weeks to President Obama’s disastrous healthcare law, the Supreme Court today
Today marks the 46th anniversary of the 1970 tornado that devastated Lubbock. While I was lucky enough to escape unharmed, my apartment was destroyed
#Prayer unites us across our great nation. Join me on the 65th annual #NationalDayofPrayer in asking God to continue to bless the United States
I am pleased to announce the winner of the 2016 Congressional Art Competition for the 19th District: Texas Sun by Zoe Fuqua of Sweetwater High