Yesterday, Federal Reserve Vice Chairman of Supervision Randal Quarles was confirmed as a member of the Board of Governors of the Federal Reserve System, to serve a full 14-year term. Congressman Blaine Luetkemeyer (MO-03), Chairman of the House Subcommittee on Financial Institutions and Consumer Credit, issued the following statement following Vice Chair Quarles’ confirmation:
“It is critical to our economy to have a Federal Reserve Board of Governors that balances the vast responsibility of supervision with the financial needs of American families and businesses. I am confident in Vice Chairman Quarles’s ability to foster an economy that is both safe and advances the cause of economic freedom and prosperity for all Americans,” said Congressman Luetkemeyer. “I congratulate the Vice Chairman on his confirmation and look forward to continuing to work on the important issues he will confront during his tenure.”
Congressman Blaine Luetkemeyer (MO-03), Chairman of the Financial Institutions and Consumer Credit Subcommittee, released the following statement after House passage of the JOBS and Investor Confidence Act:
“Earlier this year, we passed the most significant pro-growth banking deregulation bill in decades, and that was just the beginning. Today, I was proud to join my colleagues, on both sides of the aisle, in support of the JOBS and Investor Confidence Act,” said Chairman Luetkemeyer. “In order to sustain America’s growing economy, we must ensure Main Street America has access to much-needed funding. This legislation will make it easier for Main Street job creators to access our capital markets, hire more workers and unleash our nation’s economic potential. Economic freedom is a nonpartisan issue, and today’s vote is proof that we all share a common goal: to ensure the coming years are even more prosperous for all Americans.”
Last April, this Subcommittee held a hearing to examine the state of federal financial regulation and the impact regulators and their respective regimes were having on institutions, their customers, and the U.S. economy.
Sitting on the front row of the dais were stacks of paper representing 20,000 to 30,000 pages the average bank submitted to the Federal Reserve for the annual CCAR review process. That’s 20,000 to 30,000 pages per bank, per year, just for CCAR.
Fast forward a little more than a year and I’m pleased to report that, for the first time in a very long time, progress has been made and some relief has been granted. Thanks in large part to the effort of the members of this Committee and our colleagues in the Senate, and a President who champions regulatory reform, CCAR doesn’t burden nearly as many institutions as it did one year ago.
While some relief has been seen, it’s widely recognized that there is more work to be done. In a January speech, the newly-minted Federal Reserve Vice Chairman for Supervision, Randy Quarles, outlined his vision by stating that “Simplicity of regulation is a principle that promotes public understanding of regulation, promotes meaningful compliance by the industry with regulation, and reduces unexpected negative synergies among regulations. Confusion that results from overly complex regulation does not advance the goal of a safe system.” Vice Chairman Quarles went on to indicate support for changes to the resolution planning process and stress test programs, acknowledging substantial progress made by financial institutions in the last few years.
His quasi-predecessor, Governor Dan Tarullo, said in his departure speech last year “…the time may be coming when the qualitative objection in CCAR should be phased out, and the supervisory examination work around stress testing and capital planning completely moved into the normal, year-round supervisory process, even for the GSIBs.”
While we didn’t agree on much during his tenure, Governor Tarullo and I had at least one thing in common: the idea that capital is a good thing. Capital protects institutions and, more importantly, consumers, against loss, and guards the financial system against threats of collapse. While I believe in robust capital requirements, I don’t think capital should be required to the point that it consolidates risk and eliminates choice in the marketplace for commercial and individual clients. The reality is that we still live in a world where the financial regulatory regime stifles growth and limits the availability of financial products.
The new crop of federal financial regulators, in an effort to right-size regulation, are considering additional measures, including tailoring, to provide relief to institutions of all sizes. As they do so, I would first urge them to implement the statutory changes included in S. 2155 without delay, and to do so while closely adhering to what is clear Congressional intent.
It’s time for the Federal Reserve to also conduct a holistic review and acknowledge that the world has changed since enactment of Dodd-Frank and finalization of the capital requirements on the books today. Such a review should include a consideration of equal and reasonable treatment for institutions with more than $250 billion dollars in assets, and for intermediate holding companies of international banks operating in the United States.
These institutions should be subjected to tailored regulation that reflects the risk they pose to the financial system. Such steps would not only reflect the intent of Congress but also the Administration, evidenced most clearly through the recommendations issued by the Treasury Department since President Trump took office.
It’s time to take the guessing out of capital planning and regulation. I’ve pressed leadership at each of the federal financial regulatory agencies to recommit to greater transparency and adherence to the requirements in the Administrative Procedures Act.
We need smarter, streamlined regulatory regimes that promote not just transparency, but also effective taxpayer and systemic protections.
We have a very distinguished panel of witnesses with us today. Each of these gentlemen has a notable background and we appreciate their testimony.
In the wake of Justice Anthony Kennedy’s retirement from the United States Supreme Court, President Trump has been afforded the opportunity to nominate someone to fill the vacancy. On Tuesday, he announced the nomination of Judge Brett Kavanaugh who currently sits on the D.C. circuit.
Speaking of his selection progress, President Trump said, “In keeping with President Reagan’s legacy, I do not ask about a nominee’s personal opinions. What matters is not a judge’s political views, but whether they can set aside those views to do what the law and the Constitution require. I am pleased to say that I have found, without doubt, such a person.”
Judge Kavanaugh graduated from Yale Law School and clerked for Justice Kennedy years ago. Even more impressive than his legal background is his work in the community. He stays involved in his community through extensive charity work, regularly volunteering at area food banks, and coaching his daughters’ basketball teams. For twenty-five years, he has served the American people in a variety of roles.
His track record truly speaks for itself, with more than three hundred published opinions he has proved himself as a judge who applies the law as written. In our country, regulatory overreach has consistently plagued the government, particularly in the financial services sector. Judge Kavanaugh has consistently advocated for the American people to reject attempts by the federal government to impose onerous regulations.
Confirmed by the Senate in 2006 to serve on the D.C. Circuit, Judge Kavanaugh has called his judicial philosophy “straightforward” and assures the American people that, if confirmed, he will “keep an open mind in every case, and I will always strive to preserve the Constitution of the United States and the American Rule of Law.”
I am hopeful our Senators can escape the partisan hyperbole that has already plagued the nomination process. With decades of experience, praise from judges across the nation, and a high regard for the United States Constitution, Brett Kavanaugh will ensure our American values are upheld for years to come. I urge my colleagues in the Senate will put political theater aside and swiftly confirm this qualified nominee.
Congressman Blaine Luetkemeyer (MO-03) released the following statement in support of President Donald Trump’s nomination of Brett Kavanaugh as the next Supreme Court Justice:
“Just as he did with the selection of Neil Gorsuch, President Trump has made an excellent decision in nominating Brett Kavanaugh,” said Congressman Luetkemeyer. “With decades of experience and a high regard for the United States Constitution, Brett Kavanaugh will ensure our American values are upheld for years to come. I am hopeful that my colleagues in the Senate will put political theater aside and swiftly confirm this qualified nominee.”
After a week filled with patriotic displays of flags and fireworks, countless local parades, and days filled with families and friends firing up the grill, I hope everyone had a safe and happy Fourth of July. It is a truly special time of the year. Not only are we celebrating the birth of our great nation, but we are honoring and remembering those who fight to ensure we continue to enjoy unparalleled freedom.
The brave men and women who serve our nation ensure the safety and liberty of all Americans, and we owe them our utmost support both when they come home from service and while they’re fighting for our nation. That’s why the U.S. House of Representatives recently passed the Fiscal Year 2019 Defense Appropriations Bill to provide critical funds that our armed forces need to rebuild our military, improve and maintain readiness, and support our soldiers by giving them a 2.6% pay raise – the largest in 9 years.
The appropriations bill boosts base funding for the military by $17.1 billion over the Fiscal Year 2018 funding. It also ensures our military can continue to fight the global war on terrorism and continue overseas contingency operations by providing for personnel requirements, equipment upgrades, and additional support.
I also voted to replenish our military by providing funds for additional equipment including navy ships, helicopters, and F-18 aircraft which are built right here in Missouri. The production of F-18 aircraft will create an estimated 13,000 jobs, support 91 supplier companies in Missouri, and bring more than $600 million to our state’s economy each year.
As we celebrate the birth of our nation, let us remember the sacrifices of our military and their families. I will continue to ensure our soldiers and veterans are a priority, and I hope you will join me in thanking them for their service.
At the end of the previous administration, our economic outlook was bleak. We had stagnant economic growth and were told that was the best we could hope for. The economy wasn’t working for consumers, workers, or small business owners because business, no matter the size, was seen as a necessary evil that only existed to pay taxes. Thankfully, America is enjoying a new economic reality as we celebrate the six-month “tax-iversary” of historic tax reform being signed into law.
Our economy has seen vast changes since the adoption of the new law, and it’s exciting to see the positive effects on families across Missouri and the nation. Just this year, 1 million jobs have been created and our unemployment rate has hit the lowest level since 1969. Small business optimism hit the highest level in 45 years and small businesses nationwide have reported higher wages, increased profits, and plans for expansion. Wages are growing at the fastest pace since 2008 and we are now expecting economic growth to exceed 4%. After years of sustained 2% growth – this is something to be excited about.
I’ve heard from business owners here in the Third Congressional district that the new tax law has allowed them to grow and hire more people. During a women-owned small business roundtable last year, one of the attendees told me that tax reform would drastically change the future of her business. She will be able to expand her business and hire additional workers. Our communities needed this additional boost, and thanks to President Trump and Congressional Republicans, it has been delivered.
Not only are small businesses expanding, but 4 million Americans workers have received bonuses since tax reform was signed into law. In Missouri, many businesses have announced bonuses and wage increases, including Hawthorn Bank in Jefferson City. They announced $1,000 employee bonuses, due to tax reform. As their CEO David Turner said, “We felt it only right that our people should share in that success. We also want to express our appreciation for their hard work, helping our customers and building the solid relationships that we have in our communities.” That is just one of the many examples we have in the Third District.
One thing we were promised during the tax reform debate was that tax season would become much easier and, more importantly, much cheaper for American families. The Treasury Department’s new tax reform postcard is delivering on that promise. The new 1040 form will be only a half-page, simplifying the process for millions of Americans who will utilize the doubled standard deduction and allowing them to spend just minutes – not hours or days – filing their taxes without the assistance of a paid professional.
Looking to the future, while tax season has become much less painful, our work is far from done. We will continue working hard to ensure future generations are able to take advantage of a robust U.S. economy and live their American Dream.
This Subcommittee has spent significant time analyzing the impact of de-risking on consumers, businesses, and entire communities.
As we’ve discussed, the overly-punitive supervisory and examination tactics employed by federal financial regulators, that came in the wake of the financial crisis, have had dramatic implications on the availability of financial products and services in all of our communities. What we’ve not discussed are the global implications of these regulations.
Today, we will not only explore de-risking’s impact on U.S. financial institutions and their customers, but also its impact on people and businesses around the world, as well as our fight to combat illicit financial activity.
Banking relationships with so-called “high risk” clients have become cost-prohibitive for financial institutions, due in large part to heightened compliance expectations. As a result, many institutions have opted to terminate relationships. This decision has resulted in the elimination of consumer and small business access to financial products and services, a decrease in the availability of money remittances, and reduced flow of humanitarian aid globally.
To be clear, there are valid reasons for account terminations, and the fight against illicit finance is one of the most important fights we wage. However, we would be better equipped to wage that fight if we had a modernized regulatory system. That’s particularly true in the case of compliance with the Bank Secrecy Act and anti-money laundering laws. The truth of the matter is that compliance with BSA/AML is so costly, and the penalties so steep, financial institutions would soon rather end customer relationships than run the risk of running afoul of their regulators and law enforcement.
The status quo doesn’t foster a safer system, and it doesn’t necessarily help catch more bad actors. In fact, it’s quite the opposite. Instead of fostering collaborative relationships between institutions and government, the modern BSA/AML framework, along with the other regulatory drivers of de-risking, push more people and more money into the shadows.
So where do some of those de-banked customers go? According to data published last year by payment and compliance technology company Accuity, correspondent banking relationships with Chinese banks surged more than 3,300 percent – from 65 in 2009 to 2,246 in 2016. There was a 25 percent drop in the number of correspondent banking relationships globally during the same time period.
It is in the best interest of our financial services firms, our communities, law enforcement, and the federal government to monitor and maintain these global banking relationships.
This hearing isn’t only important to the people testifying today, or to the financial institutions that do business internationally. It’s important to any small nation that relies heavily on the U.S. dollar, and the trading partners who sell U.S. goods there. It’s important to border communities that are losing banks and credit unions because of the BSA/AML regime. It’s important to a worker in Florida who can no longer send the money he earns to help his family in Haiti.
This is an incredibly important topic. We have an excellent panel today, and I want to thank each of them for taking the time to testify. We look forward to your statements.
Congressman Blaine Luetkemeyer, Chairman of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit released the following statement on yesterday’s federal court ruling that the structure of the Bureau of Consumer Financial Protection is unconstitutional:
“The decision by the U.S. District Court for the Southern District of New York validates what I have said all along: the Bureau is not only poorly designed and unaccountable but also unconstitutional. Its structure must be changed. This decision calls into question all enforcement actions and litigation the Bureau has brought to date or could bring in the future. An agency accountable to no one with unlimited resources and powers goes against the very principles on which this nation was founded.”
Opioid overdoses are now the leading cause of death for Americans under the age of 50, with 115 people dying each day. Here in Missouri 908 people lost their lives to opioids in 2016. Chances are, whether we know it or not, we are all connected to a person who is struggling with addiction, and it is tearing families apart.
With a renewed focus on this crippling epidemic, my colleagues and I are fighting back. My colleagues on the House Energy and Commerce Committee have advanced 57 bills to be voted on by the full House of Representatives. Over the past two weeks, the House has passed dozens of bipartisan bills to tackle the opioid crisis through treatment and recovery, prevention, protecting communities, and fighting fentanyl.
One bill is the Transitional Housing for Recovery in Viable Environments (THRIVE) Act, sponsored by my House Financial Services Committee colleague, Congressman Andy Barr (KY). The THRIVE Act was inspired by successful non-profit organizations in Congressman Barr’s district that provide transitional housing to help those in recovery. By providing transitional housing, recovering addicts will receive assistance to maintain their sobriety while also gaining valuable skills. These Americans would then be on the right track to obtain employment and transition back into society.
Congressman Barr’s bill creates a pilot program which would allocate vouchers to transitional housing non-profits with a track record of success in recovery and life skills training. Vouchers will not be administered through public housing authorities, but will be given directly to qualified non-profits in areas of our nation that have been hardest hit by the opioid crisis.
I was proud to support the THRIVE Act and provide critical help to Americans in recovery, but our work is not yet done. We have passed numerous bills that address everything from prevention education to alternative treatments to better tools for law enforcement.
We have a responsibility to get the opioid crisis under control, and I will continue to fight until we have a solution. I urge my colleagues in the Senate to quickly act on these bills, and I hope patients, doctors, first responders, and concerned citizens will keep sharing your stories and solutions with us. Thousands of lives are at risk, so we absolutely must get this right.
2440 Rayburn HOB
Washington, DC 20515
As the Congressman from the 3rd Congressional District of Missouri, Blaine is committed to representing the interests of the hard-working people by being a strong voice for them in Washington, D.C.
Blaine, 61, represents the 13 counties that make up the 3rd Congressional District of Missouri. Blaine, a native of St. Elizabeth, Mo., has lived in the district with his family for four generations and he operates a 160-acre farm there.
Along with his strong agriculture background, he was also a small businessman, having been in the banking and insurance business. Blaine has also served as a bank regulator for the state of Missouri earlier in his career. He was elected in November, 2008, succeeding fellow Republican Kenny Hulshof.
From 1999 to 2005, Blaine was a Missouri State Representative and served as Chairman of the Financial Services Committee and was elected by his colleagues to serve as the House Republican Caucus Chairman. After leaving office, Blaine was appointed by Gov. Matt Blunt to serve as the Director of the Missouri Division of Tourism.
Building on his experience as a bank examiner, small businessman and community banker, Blaine serves as vice chairman of the House Small Business Committee where he also serves on the House Small Business Subcommittees on Health and Technology and Agriculture, Energy and Trade. Blaine also serves on the House Financial Services Committee where he also serves on the panel’s Subcommittee on Financial Institutions and Consumer Credit Committee and is vice chairman of the Housing and Insurance Subcommittee.
Blaine is a member of the Knights of Columbus, Eldon Chamber of Commerce, Missouri Farm Bureau, National Rifle Association and a lifelong member of St. Lawrence Catholic Church. Blaine is a graduate of Lincoln University in Jefferson City, Mo., where he earned a degree with distinction in political science and a minor in business administration.
Blaine and his wife, Jackie, have three children, Trevor, Brandy and Nikki, and four grandchildren.