Recent revelations that Wells Fargo fired thousands of employees for opening more than 2 million unauthorized checking and credit card accounts is infuriating for two reasons.
First, it is hard to imagine a community banker or credit union in Wisconsin allowing even one of their employees to engage in this kind of fraudulent behavior without quick and decisive action. Yet it took the firing of more than 5,300 employees over four years for Wells Fargo to come clean. Second, in the wake of the Great Recession and the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the agencies meant to protect consumers appear to have been asleep at the wheel.
Fortunately, there is a better way to hold Wall Street accountable, protect consumers and grow our economy: it’s called the Financial CHOICE Act.
Following the global financial crisis, which caused millions of job losses and sucked tens of billions of dollars from workers’ retirement savings, President Obama used his supermajorities in Congress to remake our financial system. However, instead of addressing the root causes of the crisis, he took the advice of his then-chief of staff Rahm Emmanuel to “never let a good crisis go to waste.” He enacted everything on his progressive wish list under the guise of crisis management.
The product, known as Dodd-Frank, is more than 2,300 pages and is expected to cost our economy $895 billion. Even though small community lenders had nothing to do with the crisis, Dodd-Frank thrust a tidal wave of new rules and regulations on them, forcing them to either shrink their balance sheets, consolidate with big banks like Wells Fargo, or go out of business. The outcome is Dodd-Frank doubled down on “too big to fail” bailouts so that if banks, like Wells Fargo, get into trouble, taxpayers could be left holding the bag. Worst of all, it has stalled meaningful economic growth.
Dodd-Frank also propped up the Consumer Financial Protection Bureau, a new agency meant to “protect” customers from the very kind of fraud committed by Wells Fargo. The CFPB was given unique and unprecedented powers for a government agency. It’s nearly impossible for its all-powerful director to be fired and it receives all of its funds without Congressional appropriations or oversight. This stands in stark contrast to most other financial regulators, which are governed by a bipartisan commission that must seek funding from Congress.
This lack of accountability helps to explain the abusive behavior by the agency. The CFPB blacklists companies through an unverified public complaint database; it collects consumer’s private information without consent; and it has made it more difficult for Americans to get a mortgage or access to credit.
After the CFPB issued a $180 million fine for Wells Fargo’s fraudulent behavior, Democrats argued that this validated the good work of the CFPB in holding Wall Street accountable and protecting consumers. There is just one problem: As chairman of the Financial Services Subcommittee on Oversight and Investigations, I have seen no evidence that the CFPB even knew about issues at Wells Fargo until 2013, after the Los Angeles Times exposed what was happening at the bank and the L.A. city attorney filed a lawsuit. Even though the CFPB had agents at the bank, it did nothing until 2015 and that was only because Wells Fargo self-reported.
Ultimately, it was the bank that committed fraud and customer theft, which its CEO was forced to admit publicly to me during a recent hearing. Wells Fargo should be held accountable, which is why I have launched a full investigation. While there is still much that we do not know, we know that more than 8,900 Wisconsin accounts may have been opened without authorization and across the country, and more than 115,000 incurred fees, which may have impacted an individual’s credit scores. While the bank failed to live up to its own ethical standards, regulators appear to have done nothing to prevent or stop this egregious behavior from happening.
Last month, my committee passed the Financial CHOICE Act to address Dodd-Frank’s failures. Our bill will end taxpayer bailouts, impose the toughest penalties ever on Wall Street for fraud and theft and incentivize well-managed financial institutions to hold more capital by offering them relief from unnecessary regulatory burdens. Our bill also converts the Consumer Financial Protection Bureau into a bipartisan commission and makes it more accountable to the American people.
Nearly a decade after the Great Recession, we shouldn’t be fighting the same fights we did eight years ago. Dodd-Frank was supposed to make our financial system safer. However, as evidenced by the fact that consumers could still be on the hook if a bank, like Wells Fargo, fails and that it can get away with consumer theft right under the nose of our regulators, the law is an utter failure. The Financial CHOICE Act offers a better way to grow our economy, promote financial independence for families, and a safer, more accountable, financial sector.
U.S. Rep. Sean Duffy (R-Wausau) has represented the 7th Congressional District since 2011. He serves on the House Financial Services Committee as chairman of the Subcommittee on Oversight & Investigations.Read More
Wausau, WI – U.S. Representative Sean Duffy (WI-07) met with nearly 100 Veterans at a standing room only meeting in Rothschild on Wednesday. During the roundtable style discussion, Rep. Duffy offered an update on a number of issues facing Veterans today. Among them, his “Veterans Access to Healthy Hearing” bill which is on track to be signed into law. Rep. Duffy commented, “This is a simple fix, but very meaningful if you are having some hearing issues.”
Rep. Duffy also addressed the on-going need to ensure that Veterans are receiving the best possible care from the Veterans Administration (VA): “If Veterans cannot get the care that they’ve been promised - if we’re leaving even one man or one woman behind - that’s unacceptable. As in any organization, you get some bad actors, but we want to streamline the firing of anyone who are not serving our Veterans the way they should.
“It is important we get people in the VA who are mission driven to get in there and take care of you and make sure your needs are met.”
The Congressman closed his remarks encouraging those in attendance to not be shy about reaching-out to his office if they are in need of assistance:
If a Veteran is in need of assistance navigating the VA, or any Federal Agency, he or she are encouraged to call Rep. Duffy’s Wausau office, 715-298-9344.
Washington D.C. – House Financial Services Oversight & Investigations Subcommittee Chairman Sean Duffy (WI-07) offered the following comment after a federal appeals court ruled the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional:
“Today’s ruling that the CFPB’s structure is unconstitutional should come as a surprise only to those who put their faith blindly in government. Ironically, the court’s finding that the CFPB isn’t sufficiently answerable to the President completely ignores its unaccountability to the American people and their representatives in Congress, who have no say over the Bureau’s funding. Worse even than its unconstitutional and unaccountable structure is its failure to protect consumers, as we saw most recently with their mishandling of the Wells Fargo investigation.”
Rep. Duffy continued: “Congress should respond to today’s ruling by passing the Financial CHOICE Act to convert the CFPB into a bipartisan commission, subject to congressional appropriations, with a mission focused on protecting Americans while promoting financial opportunity for all.”
Previously, Rep. Duffy submitted, and the government accepted, an amicus brief in support of a similar filing, State National Bank of Big Spring vs. Jacob Lew, which also stated that the CFPB violates the separation of powers and should be run by a commission rather than a single director. A copy of that amicus brief may be found here:Read More
Washington D.C. – House Financial Services Oversight & Investigations Subcommittee Chairman Sean Duffy (WI-07) requests that the Departments of the Interior, Housing and Urban Development, Health and Human Services and Bureau of Indian Affairs conduct a forensic audit of all Tribal accounts and programs of the Lac Courte Oreilles (LCO) Band of Lake Superior Chippewas. He made the request on behalf of 113 members of the tribe who sent Rep. Duffy a petition over concerns about alleged mismanagement of Federal funds by the LCO Tribal Governing Board.
In his letter to the Secretaries, Rep. Duffy writes in part: “The allegedly misappropriated funds should have been used to pay for essential services for the tribal community such as education, healthcare and housing. Instead, health insurance premiums have gone unpaid, schools have fallen into disrepair, and mold contaminations in homes have been left untreated. Members of the Lac Courte Oreilles tribe deserve to know funds provided to their tribe by the U.S. federal government are being spent in an open, accountable and transparent manner. A timely and comprehensive forensic audit of the LCO’s tribal accounts will ensure that all funds are accounted for and being put to the best use possible.”
To read the full, signed, copy of the letter, click here.
Washington D.C. – House Financial Services Oversight & Investigations Subcommittee Chairman Sean Duffy (WI-07) applauded the implementation of the much anticipated “Tick-size pilot program” today. The program is the culmination of a bipartisan bill that Rep. Duffy introduced with Rep. John Carney (DE-AL) in 2013. The “Small Cap Liquidity Reform Act” tests the impact of allowing small, emerging growth companies to enter a pilot program that would give them the ability to quote and trade stocks in 5 and 10 cent increments instead of just pennies. The increased “tick size” maximizes their liquidity, giving them access to capital that the penny tick size does not foster. The bill passed the House of Representatives with near unanimous support. Recognizing the strong bipartisan support in Congress, the SEC took steps to implement a two-year version of the pilot program, which officially launched today.
Chairman Duffy commented: “Though it has taken a long time to get the Tick Size Pilot program up and running, this is a great opportunity for American small businesses to raise capital. Small companies that go public increase employment by 156% on average. The tick-size pilot program will help America's newest jobs creators to maximize their trading liquidity, grow their businesses and create much needed American jobs.”
Rep. Duffy continued, “It has been a long road to get to this point, but seeing the program come to fruition was well worth the journey. I look forward to monitoring the progress of the program.”
Before Congress adjourned to start our District work period, several noteworthy events took place, specifically in the House Financial Services Committee, which, as you likely know, I am a member, let’s take a closer look:
Oops, he did it again: It was another rough go around for the embattled CEO of Wells Fargo. On the heels of a tumultuous appearance in the Senate the week before, John Stump, the Chairman and CEO of Wells Fargo testified before the Financial Services Committee about recent revelations that from 2011-2015 his bank fired some 5,300 employees for opening more than 2 million unauthorized accounts. During my questioning of Mr. Stumpf, he was forced to admit that his employees stole money from their customers. Click on the image below to watch my full exchange with Mr. Stumpf:
Revelations: The Financial Services Committee also hosted Federal Reserve Chair Janet Yellen for a hearing on the Semi-Annual Testimony on the Federal Reserve’s Supervision and Regulation of the Financial System. One of the more notable moments of her testimony came during my exchange with her: I asked her whether the Dodd-Frank Act has ended the so-called, “Too Big to Fail” taxpayer funded bailouts of financial institutions. Despite countless new regulations intended to make financial institutions safer and reduce the likelihood of another bailout, Chair Yellen conceded that ending taxpayer bailouts was a mere goal of the law, but as of yet the law has failed to end “Too Big to Fail”.
Under the committee-passed Financial CHOICE Act, a financial institution, a community bank for example, can elect to be relieved of a slew of Dodd-Frank regulations if it is well-managed and highly capitalized, an approach that I believe would be better at reducing the risk of future taxpayer bailouts. Click below to watch my full exchange with Chair Yellen:
A bit of legislative business: I introduced a bipartisan bill, H.R. 6186, the Follow the Rules Act, that will extend whistleblower protections to government employees who refuse to violate Federal rules and regulations. As the chairman of the Oversight and Investigations Subcommittee, whistleblowers who expose government mismanagement are a major component of our investigations; this legislation became necessary after a recent Federal court decision found that whistleblowers are only protected for refusing to violate Federal statutes, but not rules or regulations (which are supposed to be derived of law).
An example of the kind of rules and regulations Federal employees should follow: Consider sanctions against North Korea or Iran, which Congress directed the President to implement in the form of Federal rules and regulations. Under current law, Federal employees who are told by their supervisor to violate North Korean or Iran sanctions have no whistleblower protections. The Follow the Rules Act would fix this and it is my hope that it will be considered by Congress.
One other issue: I am keeping my eye on recent concerns that have been raised regarding the St. Croix Chippewa’s use of grant money from the Department of Housing and Urban Development (HUD). A recent audit found that the money may not be reaching those in need. I requested further information from HUD Secretary Julián Castro, which you can read here. I will keep you posted on any further information I receive on this issue.
On the home front: To assist with those in our community who are still recovering from this summer’s devastating floods, I am happy to announce a great opportunity thanks in large part to the Federal Home Loan Bank of Chicago: The group, which consists of local banks, credit unions, community development financial institutions, and insurance companies, is offering $500,000 is assistance to those in our area who were impacted by July’s storms and subsequent flooding. This is a great example of community businesses coming together to help our neighbors. Read more about the program and how to apply for the help here.
One more for the road: It was great to catch-up with two great representatives from our Agriculture community, Renee Zenner of Medford and Chris Fuchs of Marshfield, at the Capitol building recently. Thanks for all you do!
I look forward to catching-up with many of you during my travels around our great 7th District this week. If there is a particular meeting or event that you would like me to know about, please contact one of my offices that is closest to you. Until next week…
Have a great week,
Washington D.C. – The findings of 2014 and 2015 audits of the St. Croix Chippewa Housing Authority raise concerns over how the money may have been allocated. Out of concern that the money is not reaching those in need, House Financial Services Oversight & Investigations Subcommittee Chairman Sean Duffy (WI-07) requests U.S. Secretary of Housing and Urban Development Julián Castro to offer further explanation. The full text of Rep. Duffy’s letter is pasted below and may be found here.
September 28, 2016
The Honorable Julián Castro
Department of Housing and Urban Development
451 7th Street, NW
Washington, D.C. 20410
Dear Secretary Castro,
On behalf of tribal members in my district, I am troubled by recent reports that millions of dollars in grants given by the Department of Housing and Urban Development (HUD) to tribes in Wisconsin may not be reaching those in need.
As part of an investigation into the finances of the St. Croix Chippewa Indians of Wisconsin, the Wisconsin Policy Research Institute examined audits conducted in 2014 and 2015 of the St. Croix Chippewa Housing Authority, which received $2.3 million in federal housing grants. The 2015 audit identified more than $776,000 that will be “doubtfully collected” from Housing Authority tenants out of more than $924,000 owed. Additionally, of amounts received from HUD’s Indian Housing Block Grant (IHBG) Program, the audit found that the Housing Authority “lack[ed] documentation to support the procurement process was carried out pursuant to IHBG rules and regulations” for more than $308,000 disbursed by the Housing Authority. This was a repeat finding from the 2014 audit, which found similar improprieties totaling more than $444,000. Another $23,000 was disbursed to individuals who lacked documentation to determine whether they were eligible for assistance.
These findings raise serious questions about the use of federal taxpayer dollars and whether such funds are getting to the tribal members who deserve and need assistance. Accordingly, I request answers to the following questions:
1) Is HUD aware of the 2014 and 2015 audits and in contact with the tribe about their findings and recommendations? If so, what actions has HUD taken?
2) How does HUD monitor the disbursement of IHBG and other federal dollars to ensure that resources are properly administered, allocated and accounted for by tribes?
3) What impact, if any, do the audit’s findings have on current and future HUD financial support to the tribe?
Thank you for your attention for this matter. I respectfully request a response by not later than October 10, 2016.
Member of Congress
The Federal Home Loan Bank of Chicago and U.S. Rep. Sean Duffy (WI-07) today announced that $500,000 in financial assistance will be available through local financial institutions to individuals and business owners in Wisconsin communities impacted by the severe storms and subsequent flooding that occurred on July 11-12, 2016. The assistance is being provided by banks, credit unions, community development financial institutions, and insurance companies that are members of the Federal Home Loan Bank of Chicago (FHLBC). Grants of $5,000 will be available through the FHLBC’s Community First® Disaster Relief Program to eligible households and small businesses located in the areas declared a disaster by the Federal Emergency Management Agency (FEMA disaster declaration DR-4276), which include Ashland, Bayfield, Burnett, Douglas, Florence, Iron, Sawyer, and Washburn counties, and the Bad River Band of the Lake Superior Chippewa Tribe.
U.S. Representative Sean Duffy’s (WI-07) congressional district includes all of the counties that were impacted by the flooding. The funding will be available from September 29, 2016, through March 24, 2017, on a first-come, first-served basis to eligible households or small businesses that apply for a disaster assistance grant through any FHLBC member financial institution. A list of members can be found by visiting www.fhlbc.com. Potential applicants should contact the member institution directly to see if they qualify for assistance.
“Following the severe storms and massive flooding that damaged homes, businesses, roads, and bridges in my district this July, I’ve been working with federal, state, and local officials to ensure that these communities have the resources they need to get back on track,” said Rep. Duffy. “That’s why I want to make sure area homeowners and businesses know about the FHLBC’s Community First Disaster Relief Program – it’s one more resource to fund their recovery.”
“We are here to support the communities served by our member institutions throughout our district of Wisconsin and Illinois, and this is particularly so in times of need,” said FHLBC President and CEO Matt Feldman. “We’re grateful to Congressman Duffy for helping us get the word out so that we can help those most impacted by the storms.”
About the Community First Disaster Relief Program For more information about the Federal Home Loan Bank of Chicago and the Community First Disaster Relief Program, please visit www.fhlbc.com or @FHLBC. “Community First” is a registered trademark of the Federal Home Loan Bank of Chicago. To learn more about Rep. Duffy and his work in Wisconsin’s 7th Congressional District, visit https://duffy.house.gov or @RepSeanDuffy.
Washington D.C. – Representatives Sean Duffy (WI-07) and Gerry Connolly (VA-11) introduced a bill to extend whistleblower protections for Federal employees who refuse to violate rules and regulations. This bill comes on the heels of a landmark Federal court decision that found that the Whistleblower Protection Act safeguards Federal workers against employment retaliation for refusing orders to violate Federal law, but those same safeguards do not apply to employees who refuse to violate rules and regulations, despite the fact that rules and regulations are supposed to be derived of law. The Follow the Rules Act will address this glaring inconsistency.
Upon introduction of the bill, Rep. Duffy offered: “Whistleblowers play a key role in rooting out the bad actors who stand in the way of good government. However, a gap in whistleblower protections is threatening their ability to stand-up for what is right.”
Rep. Duffy continued: “The Whistleblower Protection Act provides Federal workers with certain legal safeguards to disclose if they are being asked to break a law, but the same protections do not apply to those who are ordered to violate rules and regulations. The Follow the Rules Act fixes the law to fill this wide gap. I thank Representative Connolly for joining me in this effort, and am glad to see that it has already drawn strong bipartisan support from several of our colleagues.”
Rep. Connolly added: “I’m proud to join with Rep. Sean Duffy to support federal whistleblowers and improve management practices across the federal government. The Follow the Rules Act will close a loophole that undermines whistleblower protections for federal employees. Federal employees who defy a supervisor’s direction to violate rules and regulations should not be subject to retaliation. This bill continues the bipartisan effort to fight whistleblower retaliation in the federal government and strengthen federal employee protections.”
An example of the kind of rules and regulations Federal employees should follow: Consider sanctions against North Korea, which Congress directed the President to promulgate in the form of Federal rules and regulations. Under current law, Federal employees who are told by their supervisor(s) to violate North Korean sanctions have no whistleblower protections. The Follow the Rules Act would fix this and should be considered by Congress.
Many of you may remember when the Administration admitted that, in addition to the $400 million payment to Iran, they also paid the leading state sponsor of terror an additional $1.3 billion in taxpayer dollars, claiming it was the interest owed. As if that was not troubling enough, they made the entire payment in the preferred currency of terrorism: cash. I questioned Treasury Secretary Jack Lew about the cash payment during a Financial Services hearing last week. Later that day, my amendment to prohibit future cash payments to any state sponsor of terror, and North Korea, was accepted in the Prohibiting Future Ransom Payments to Iran Act, which passed the House.
It should not take an act of Congress to prevent this Administration, or any other, from paying a state sponsor of terror in the currency of terrorism: cash. Click below to watch my comments from debate on the bill:
Closer to home: Extreme weather made this summer very difficult for many in our district, including some of our farmers. I urged U.S. Secretary of Agriculture, Tom Vilsack, to heed Governor Scott Walker’s request to assist farmers who suffered crop losses as a result of heavy rains and flooding in July in Ashland, Bayfield and Iron counties, all of which reside in the 7th Congressional District. To read the full text of my letter to the Secretary, click here.
Lending their voice: September is National Ovarian Cancer Awareness Month and this past week also marked one year since we launched the Congressional Ovarian Cancer Caucus. To mark the occasion, we held a briefing on a new report and were joined by Broadway star Marin Mazzie, who is currently undergoing treatment for Ovarian Cancer, and her husband, fellow Broadway star, Jason Danieley who shared his story as a caregiver. I witnessed the fear my sister felt when the doctor told her she had Ovarian Cancer. She fought this horrible disease and eventually won, but for far too many, this diagnosis does not end in remission. The Ovarian Cancer Caucus gives us an opportunity to give this cause a unified voice in Congress. Here’s a picture from my meeting with Marin, Jason (far right) and representatives from the Cancer Network.
On Deck: It’s a big week in the House Financial Services Committee. We will hear Federal Reserve Chair Janet Yellen deliver her Semi-Annual testimony to the committee on Wednesday. On Thursday, we will hold a full committee hearing continuing our investigation into Wells Fargo’s opening of unauthorized customer accounts. I spoke about that on “Varney & Co.” on Fox Business. Click on the image below to watch a clip from that interview:
Please continue to share your thoughts and concerns with me on these issues - and any others that you are hearing about at home. Until next week…
Have a great week,
1208 Longworth HOB
Washington, DC 20515
Congressman Sean Duffy was born and raised in Hayward, Wisconsin. His great, great grandfather was one of the state’s early pioneers and a laborer for the Northwestern Lumber Company. His great grandfather, one of Hayward’s founding settlers, was a sawyer for 27 years.
Congressman Duffy has never strayed far from his roots, becoming a nationally recognized professional lumberjack athlete. He is a two-time world champion in the 90-foot speed climb, three-time champion in the 60-foot and an accomplished log-roller. Sean has been a color commentator for ESPN’s Great Outdoor Games, as well as a Badger State Games Honorary Athlete and takes pride in bringing national attention to a sport with vital roots in Wisconsin’s proud history.
The tenth of eleven siblings, Congressman Duffy worked his way through law school by performing in lumberjack shows and exhibitions across the state of Wisconsin and around the country. After graduating from law school he practiced law for two years in Hayward before becoming a special prosecutor in Ashland, Wisconsin. Shortly thereafter, he became the acting assistant D.A, and later the District Attorney of Ashland County. He is most proud of his dedication to prosecuting child sex crimes. Working together with law enforcement, Congressman Duffy helped make Ashland County one of the first counties in the state to investigate and prosecute child Internet sex crimes.
Congressman Duffy met his wife Rachel Campos-Duffy, an Arizona native, through the MTV show, “The Real World,” Together, they are the proud parents of six children: Evita, Jack, Lucia-Belen, John-Paul, Paloma, and MariaVictoria.
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"There is a #betterway to hold Wall Street accountable, protect consumers and grow our economy: it’s called the Financial CHOICE Act." CLICK