Financial Services Committee RSS Articles

The Economist: Dodd-Frank’s “Failures,” “Flaws” And “Muddle” Hurt Economy

Wed, 22 Feb 2012 05:00:00 GMT

The 2,300-page Dodd-Frank Act is a disastrous piece of legislation that is burdening the economy, increasing the size and scope of the Federal bureaucracy, and making the American financial system less transparent and less functional.

That is the conclusion of an in-depth article in The Economist titled “Too Big Not to Fail” that appears in the magazine’s Feb. 18 edition and is part of its cover story “Over-regulated America”.

Echoing the concerns Financial Services Committee Republicans have raised since Congress hastily debated and passed Dodd-Frank in 2010, The Economist article highlights the tragic consequences of the overly complex and burdensome piece of legislation.

At a time when Americans are still suffering under a sluggish economy, the last thing their government should be doing is increasing the costs of doing business in America and killing innovation. Unfortunately, The Economist says this is exactly what Dodd-Frank does.

Noting that “the scope and structure” of Dodd-Frank is “fundamentally different” from previous Federal law, the article goes on to explain how the Act expands Federal power in unpredictable ways:

“‘Laws classically provide people with rules. Dodd-Frank is not directed
at people. It is an outline directed at bureaucrats and it instructs them to
make still more regulations and to create more bureaucracies.’ Like the
Hydra of Greek myth, Dodd-Frank can grow new heads as needed.”

The Economist also highlights the impact these new regulatory burdens can have on the country as a whole:

“But the really big issue that Dodd-Frank raises isn’t about the institutions it
creates, how they operate, how much they cost or how they are funded. It is
the risk that they and other parts of the Dodd-Frank apparatus will
smother financial institutions in so much red tape that innovation is stifled
and America’s economy suffers…

Though The Economist has no objections to addressing the causes of the 2008 financial crisis through legislation, it can find little to praise in the new law:

“All of which leads to the question of what Dodd-Frank has actually achieved. More information on America’s derivatives markets will be available to regulators than was previously the case, though how much will be useful is debatable. A new (untested) insolvency procedure is now in place for firms like AIG, which lacked an alternative to bankruptcy or bail-out before the crisis. But the heavy lifting on higher capital requirements for banks is being done internationally via the Basel 3 process. And Dodd-Frank has hardly touched Fannie Mae and Freddie Mac, the two big government-sponsored lending entities that received the largest bail-outs in 2008, and which are more important in the housing markets than ever.”

The article also reminds us that the full extent of the damage is still impossible to determine as “only 93 of the 400 rule-making requirements mandated by Dodd-Frank have been finalized.” The Economist does not need to wait for the additional 307 pieces of red tape to lay judgment on the “Dodd-Frankenstein monster.”

“Ambition is often welcome; but in this case it is leaving the roots of the
financial crisis under-addressed—and more or less everything else in
finance overwhelmed.”

WSJ: U.S. House Panel Passes IPO Bill

Fri, 17 Feb 2012 05:00:00 GMT

A U.S. House panel Thursday advanced bipartisan legislation to make it easier for smaller companies to launch initial public offerings, the latest in a series of bills designed to spur job creation.

The House Financial Services Committee voted 54-1 to pass the measure, which aims to improve smaller companies' access to capital by easing certain securities regulations, ranging from audit requirements to analyst research restrictions.

"With passage of this bill, small companies considering going public will get the extra break they need to go forward," said Rep. Stephen Fincher (R., Tenn.), who helped draft the legislation. "Small businesses are the real job creators and this bill will help them move forward with their goals so they can expand, hire employees and put Americans back to work."

Similar legislation is pending in the Senate and President Barack Obama has called for its passage from Congress. The full House has approved a series of additional bills, now pending in the Senate, to make it easier for startups to raise money from investors.

The exemptions would apply only to a category of so-called emerging- growth companies that have less than $1 billion in annual revenue at the time they register with the SEC for an IPO and less than $700 million in publicly traded shares. An estimated 11% to 13% of companies would fit the bill's emerging-growth category today. The exemptions would phase out after five years or if the companies grow above certain thresholds.

Among the technical changes in the bill is an exemption from a section of the 2002 Sarbanes-Oxley Act requiring that companies pay an outside auditor to attest to the company's internal controls and procedures. Company executives would still have to certify that their controls are adequate, so that liability wouldn't be eliminated. The exemption is being sought as a way to control the cost of going public for smaller firms.

A current exemption from the audit provision applies to companies with market capitalizations of less than $75 million.

The bill also includes provisions to allow analyst research about emerging- growth companies before and immediately after their IPOs from analysts who work at banks underwriting the offering. Current regulations prohibit such research during a so-called quiet period. The bill wouldn't waive regulations addressing analyst conflicts of interest.

The committee also was poised to pass legislation requiring the Securities and Exchange Commission to conduct a more thorough assessment of how much regulations cost the financial industry, part of a push to curtail what Republicans contend are overly burdensome rules.

The bill, authored by Rep. Scott Garrett (R., N.J.), would require an evaluation of whether regulations are narrowly "tailored to impose the least burden on society." Garrett said the proposal was a "common sense" reform to eliminate overly burdensome regulations.

However, Rep. Barney Frank of Massachusetts and other Democrats opposed the bill, characterizing it as an attack on the SEC.

Under the Republican bill, the SEC would need to more carefully examine a problem to see if there is a need for a rule. After the agency proposes a rule, its chief economist would be required to conduct a cost-benefit analysis. Two years after implementation, the agency would have to perform another analysis to see if the rule met its intended goals.

In September, SEC Chairman Mary Schapiro warned that an earlier draft of the proposal would establish a significant number of unneeded, duplicative or inappropriate standards for cost-benefit analysis of SEC rules and orders. She noted economic and cost-benefit analyses already comprise "fundamental components" of its work.

Committee Advances Bills To Promote Jobs, Spur Creation Of New Businesses

Thu, 16 Feb 2012 05:00:00 GMT

The Financial Services Committee on Thursday approved four bills aimed at bolstering job creation, capital markets and the economy.

“For more than a year now the Committee has led efforts to get Americans back to work by removing government barriers to a recovery. Our jobs agenda continued today with four additional bills that empower job creators to invest, hire and expand,” said Chairman Spencer Bachus.

“Key to building a strong recovery is fixing outdated and costly regulations that make it harder for small companies and entrepreneurs to create jobs. The progress we made today can build a strong foundation that encourages economic growth and job creation,” concluded Chairman Bachus.

The Committee approved a bipartisan bill sponsored by Reps. Stephen Fincher and John Carney to revitalize the initial public offering (IPO) market in the United States. The number of IPOs in the United States has steadily declined over the past decade, contributing to the decline of the country’s position in the global economy.

Underscoring the important link between going public and job creation is a recent report by the President’s Council on Jobs and Competitiveness, which found that had the United States maintained the level of start-up activity that it saw in 2007, two million more Americans would be working today. Research indicates that 90 percent of job creation for public firms occurs after they go public.

The legislation, H.R. 3606, the Reopening American Capital Markets to Emerging Growth Companies Act, helps reduce the cost of going public for companies by phasing in certain Securities and Exchange Commission (SEC) regulations over a five-year period. This temporary reprieve from costly regulations will allow smaller companies to go public sooner, which directly leads to more job creation within the company. The legislation creates a new category of issuers, called an “Emerging Growth Company” (EGC), which would retain its status for five years or until it exceeds $1 billion in annual gross revenue or becomes a large accelerated filer. H.R. 3606 ensures investors are protected by requiring the EGCs to provide audited financial statements as well as establishing and maintaining internal controls over financial reporting.

“Small companies are our nation’s best job creators, but have been the hardest hit by burdensome regulations. On average, 92 percent of a company’s job growth occurs after an IPO. It is imperative we reduce regulations to help these small companies create jobs for Americans. With passage of this bill, small companies considering going public will get the extra break they need to go forward. Small businesses are the real job creators and this bill will help them move forward with their goals so they can expand, hire employees, and put Americans back to work,” said Rep. Fincher.

H.R. 3606 was approved by a vote of 54 to 1.

The Committee also approved the following bills today:

H.R. 1838, the Swaps Bailout Prevention Act, introduced by Rep. Nan Hayworth. The bipartisan legislation fixes a provision in the Dodd-Frank Wall Street reform and Consumer Protection Act (Section 716) that increases systemic risk to the financial system by forcing derivatives trading units from regulated financial institutions into new entities that may be outside the purview of financial regulators. H.R. 1838 ensures derivatives trading units can be overseen by financial regulators and increases the capital available to finance job creation and economic activity.

When Congress was crafting the Dodd-Frank Act, financial regulators raised concerns about the risk involved with Section 716. Then-FDIC Chairman Sheila Bair said that “if all derivatives market making activities were moved outside of bank holding companies, most of the activity would no doubt continue, but in less-regulated and more highly leveraged venues.”

Rep. Hayworth said, “During the debate over the Dodd-Frank Act, many experts, including Federal Reserve Chairman Ben Bernanke, Former FDIC Chairwoman Sheila Bair, and Former Federal Reserve Chairman Paul Volcker, expressed concerns regarding Section 716, which requires banks to conduct swaps activities in a subsidiary or affiliate. These experts warned that this Dodd-Frank provision actually increases risk by pushing swaps activities into entities that are not directly regulated by the FDIC and the Office of the Comptroller of the Currency. In addition to risk, significant additional costs are incurred capitalizing unnecessary new subsidiaries and affiliates; this money would be better spent on investment and job creation. HR 1838 will repeal the most onerous aspects of this provision, while still prohibiting taxpayer bail-outs.”

H.R. 1838 was approved by a voice vote.

H.R. 2308, the SEC Regulatory Accountability Act, introduced by Rep. Scott Garrett. H.R. 2308 directs the SEC to conduct cost-benefit analyses of its regulations and proposed rules. H.R. 2308 also ensures that the benefits of the SEC regulations outweigh the costs.

In a testament to how much H.R. 2308 is needed, a federal appeals court unanimously overturned one of the SEC’s Dodd-Frank rules last year because the court found the agency failed to properly conduct a cost-benefit analysis. In January, David Kotz, the outgoing inspector general of the SEC, criticized how the agency analyzes the economic impact of some of its Dodd-Frank rules.

“I was pleased to see the House Financial Services Committee take this important step in rethinking how Washington regulates private businesses by passing the SEC Regulatory Accountability Act. This straight-forward bill simply requires the SEC to determine whether a proposed rule would place an undue burden on the U.S. economy. With 36 straight months of unemployment over 8 percent, we should be doing all we can to promote job creation, not stand in the way. I look forward to this bill receiving prompt consideration by the full House,” said Rep. Garrett.

The legislation was approved by a vote of 30 to 26.

H.R. 4014, introduced by Rep. Bill Huizenga. The legislation fixes an omission in the Dodd-Frank Act that opens the door for third parties to obtain privileged information provided by financial institutions to the Consumer Financial Protection Bureau (CFPB). The bill requires the CFPB to preserve the confidentiality of privileged information it receives from financial institutions, as other banking regulators do.

“This is an important step in ensuring we actually protect consumers and close the loopholes in the massive CFPB legislation. I am happy my colleagues on the Committee joined me today to pass this, and I look forward to swift passage by the House,” said Congressman Huizenga.

The Committee approved H.R. 4014 by voice vote.

Committee to Examine CFPB’s Spending

Tue, 14 Feb 2012 05:00:00 GMT

A Financial Services subcommittee hearing on Wednesday will mark the first time Congress examines spending by the Consumer Financial Protection Bureau (CFPB).

The CFPB, which was created by the Dodd-Frank Act, is specifically designed to evade congressional oversight. The congressional appropriations process is the most time-tested method for monitoring the effectiveness of government agencies and holding them accountable to the American taxpayer. Yet the CFPB receives its funding outside the appropriations process through a mandatory transfer of funds from the Federal Reserve.

By law, the Federal Reserve must transfer to the CFPB whatever funds its director requests up to a certain percentage of the Fed’s yearly operating expenses. For fiscal year 2013, that amount equals $597 million. If the CFPB director deems this amount to be insufficient, the director can ask Congress for an additional $200 million. In the last 18 months, the CFPB has requested more than $338 million from the Federal Reserve.

The Dodd-Frank Act also prohibits the House and Senate appropriations committees from reviewing how the CFPB spends its money.

“No one in government should be allowed to spend hundreds of millions of dollars with no questions asked,” said Chairman Spencer Bachus. “This hearing will allow us to focus a little bit of sunshine on CFPB spending, but until there are structural reforms to the bureau there can be no real oversight of it.”

Rep. Randy Neugebauer, the Chairman of the Oversight and Investigations Subcommittee, said, “The decision to fund the CFPB outside of the appropriations process deprived Congress of a major tool for overseeing its operations. Despite the obstacles created by Dodd Frank, the Committee is still hoping to get some idea of how CFPB programs are being run and at what cost. This hearing is important to preserve some semblance of checks and balances on the CFPB until we can subject it to annual appropriations.”

Rep. Neugebauer has introduced a bill to subject the CFPB to the congressional authorization, budget and appropriations process. The legislation, H.R. 1355, was reviewed by the Financial Institutions and Consumer Credit Subcommittee during a hearing on February 8 along with other proposals to make the CFPB more accountable.

The Oversight and Investigations Subcommittee hearing on CFPB spending will take place on Wednesday, February 15 at 10 a.m. in room 2128 Rayburn. The Subcommittee will receive testimony from Richard Cordray of the CFPB.

Hensarling: Dodd-Frank a confidence killer

Mon, 13 Feb 2012 05:00:00 GMT

By: Rep. Jeb Hensarling
Politico
February 12, 2012 09:11 PM EST

As President Barack Obama continues his campaign for a second term, Americans must keep in mind that his major policy visions have already been legislated into reality — and reality has regrettably not lived up to his promises.

One of the boldest of broken promises came when the president and the Democrats who controlled Congress then sought to “rein in Wall Street” by enacting legislation that codified too big to fail, made the financial institution bailouts permanent and ignored Fannie Mae and Freddie Mac, the housing giants at the core of the financial crisis.

Before Sen. Chris Dodd and Rep. Barney Frank passed their legacy legislation, their fellow Democrats insisted that Dodd-Frank financial reforms would “increase investment and entrepreneurship” and “foster competitiveness, confidence in our financial sector and robust growth in our economy.”

Last year, the Democratic chairman of the Senate Banking Committee, Tim Johnson, claimed “the effective and timely implementation of the Dodd-Frank Act will help strengthen the economy by creating certainty for the business community, consumers and investors.”

Shamelessly, this 2,300-page regulatory bill was sold to the American people as an economic growth bill. Instead, the new law came with unintended consequences on every page, resulting in a slowed economy and stalled job creation.

Despite all of its touted benefits for the financial sector, Dodd-Frank ended up only killing confidence and sidelining capital. After the largest monetary and fiscal stimulus in history, companies are currently sitting on roughly $2.1 trillion of excess liquidity while banks are sitting on $1.5 trillion in excess reserves. This is money that is not being used for investment and job creation because of — not in spite of — Dodd-Frank.

With more than a million more Americans out of work since he took office, the president’s policies have ushered in the longest period of sustained high unemployment since the Great Depression. With entrepreneurship in a coma, the number of new business startups is at a 17-year low, while the number of Americans having to rely on food stamps is at an all-time high.

The lack of economic recovery and jobs for millions of Americans stems from the severe lack of certainty in the private sector. This deficit of confidence did not appear out of thin air but has been fostered by the actions of an administration obsessed with red tape and bureaucracy creation — not job creation.

At the heart of Dodd-Frank is the ironically named Consumer Financial Protection Bureau, which has the power to strip from citizens their consumer freedom and restrict their credit opportunities — all in the name of “consumer protection.” Orwell would be impressed.

Last month, the president made former Ohio Attorney General Richard Cordray the CFPB’s first director via a recess appointment, albeit without the Senate being in recess. While the constitutionally dubious move remains troubling enough, the vast regulatory power now ready to be exerted by the new director stands as a direct threat to the prosperity of American families and businesses it claims to protect.

The emergence of this authoritative new agency marks a disturbing transfer of power from elected members of the legislative branch to a handpicked, unelected bureaucrat in the executive branch. As written in Dodd-Frank, this single credit czar now has the power to decide whether a family can obtain a mortgage, receive a car loan or even get a credit card to buy groceries. Any “consumer financial product” the director personally deems “unfair” or “abusive” can be banned or modified according to his whim.

In other words, if the mortgage that would allow you to be a homeowner is ever considered “unfair,” you’d better find another one. If the credit card you choose for your family is at some point ever thought to be “abusive,” you might find yourself paying cash.

Evidently, Obama does not believe that well-informed consumers are capable of judging which financial products are appropriate for their needs, and that we’re all better served by a nanny-state government bureaucrat at the Consumer Bureau.

Americans should rightly be protected from fraud, but not by surrendering their freedom and centralizing even more power in even fewer hands in Washington. Consumers should be empowered with effective and factual disclosure, not potentially barred from enjoying the benefits of product innovations like automated teller machines and online banking.

How will banning the types of credit small businesses use to make ends meet create jobs? Rationing consumer credit certainly won’t grow the economy. Sadly, Dodd-Frank has commissioned yet another unaccountable bureaucrat to do exactly this.

Through its numerous provisions to ban and ration credit products, make credit more costly and less available and reduce consumer choices as discussed above, Dodd-Frank has indeed already become a private-sector job preventer, if not outright job killer. At a time when government policy ought to create an environment where private lenders — especially small community financial institutions — can lend responsibly to creditworthy consumers and small businesses, Dodd-Frank guarantees that doing so will remain harder than ever. In fact, the only professions that may benefit from this bill are trial lawyers and government bureaucrats (even arguably illegitimate ones) like Cordray.

Instead of addressing the real flaws that led to the very real financial crisis that began in 2008, Dodd-Frank is turning out to be a ruthless cocktail of political favoritism, regulatory overreach and radical, unprecedented power consolidation. It is not bringing confidence to our financial sector or helping our economy create jobs.

Like the president’s other major policy “victories,” it is only succeeding in making things worse.

Texas Rep. Jeb Hensarling is chairman of the House Republican Conference and vice chairman of the House Financial Services Committee.

Committee To Vote On Bills Spurring Job Creation, Economic Activity

Mon, 13 Feb 2012 05:00:00 GMT

The Financial Services Committee will meet on Thursday to consider a package of bills aimed at removing government barriers to job creation and economic growth.

Under Chairman Spencer Bachus’ leadership, the Committee has led efforts to reduce regulatory barriers that hinder small businesses’ access to the capital markets. Since the beginning of 2011, the Committee has approved 21 jobs bills.

“Outdated and burdensome regulations serve as a roadblock to our economic recovery and a barrier to new jobs. These bills provide job creators with greater economic certainty and increase access to capital, which is a necessary ingredient to the creation of jobs,” said Chairman Bachus.

The Committee’s markup of four bills is scheduled to begin at 10 a.m. on Thursday in room 2128 Rayburn. During the mark up, the Committee will consider the following:

H.R. 2308, the SEC Regulatory Accountability Act, introduced by Rep. Scott Garrett. H.R. 2308 directs the Securities and Exchange Commission (SEC) to conduct thorough cost-benefit analyses of its regulations and proposed rules. Under the legislation, the SEC must ensure the benefits of its regulations outweigh the costs. In a testament to how much H.R. 2308 is needed, a federal appeals court unanimously overturned one of the SEC’s Dodd-Frank rules last year because the court found the agency failed to properly conduct a cost-benefit analysis. In January, David Kotz, the outgoing inspector general of the SEC, criticized how the agency analyzes the economic impact of some of its Dodd-Frank rules.

While President Obama issued an executive order last year directing Federal agencies to conduct cost-benefit analyses of their regulations and future rulemaking, he exempted independent agencies such as the SEC as well rules implementing Obama’s government take-over of health care.

H.R. 1838, the Swaps Bailout Prevention Act, introduced by Rep. Nan Hayworth. This legislation repeals a provision in the Dodd-Frank Act that increases systemic risk to the financial system by forcing derivatives trading units from regulated financial institutions into new entities that may be outside the purview of financial regulators. When Congress was crafting the Dodd-Frank Act, financial regulators raised concerns about the risk involved with this provision. Then-FDIC Chairman Sheila Bair said that “if all derivatives market making activities were moved outside of bank holding companies, most of the activity would no doubt continue, but in less-regulated and more highly leveraged venues.”

H.R. 1838 ensures derivatives trading units can be overseen by financial regulators and increases the capital available to finance job creation and economic activity.

H.R. 3606, the Reopening American Capital Markets to Emerging Growth Companies Act of 2011, introduced by Reps. Stephen Fincher and John Carney. The legislation seeks to promote American job creation and further economic growth by making it easier for more companies to access capital markets and by reducing the cost of going public for small and medium size companies. H.R. 3606 creates a new category of issuers, called an “Emerging Growth Company” (EGC). SEC regulations for an Emerging Growth Company will be phased in over a period of five years or until the company becomes large enough to afford the regulatory costs traditionally associated with going public. This temporary reprieve from costly regulations will allow smaller companies to go public sooner in their life cycle, which directly leads to job creation within the company. Importantly, the bill applies scaled regulations for EGCs without compromising core investor protections or disclosures.

H.R. 3871, the Proprietary Information Protection Act, introduced by Rep. Bill Huizenga. The legislation fixes an omission in the Dodd-Frank Act that opens the door for third parties to obtain privileged information provided by financial institutions to the Consumer Financial Protection Bureau (CFPB). The bill requires the CFPB to preserve the confidentiality of privileged information it receives from financial institutions, as other banking regulators do.

ICYMI: Despite Calls for Action, White House Has No Plans To Send Housing Bill to Hill

Fri, 10 Feb 2012 05:00:00 GMT

By Stacy Kaper

National Journal

President Obama took a jab at lawmakers this week, saying “Congress still needs to send me the bill I've proposed" on housing. But the White House has not sent any legislative language to Capitol Hill for lawmakers to consider, and does not intend to, according to sources briefed on the administration’s plans.

Although the White House says it often does not send legislation to Congress, it certainly has for priority initiatives, such as the Dodd-Frank financial reform act, which was much more complicated than Obama’s latest set of housing proposals.

Officials from the Treasury and Housing and Urban Development departments this week briefed staffers for both Republican and Democratic members of the Senate Banking and House Financial Services committees. During those meetings, the administration officials said they would not send Congress any language.

Instead, a 10-page fact sheet the White House issued earlier this month that explains its proposal to enable underwater borrowers to refinance into lower interest rates is all the administration intends to give to Congress, officials told the staffers.

"They said the 10-page fact-sheet was their 'highly detailed' proposal and they will not be sending Congress any additional language," said a House staffer who attended the briefing but would only speak on condition of anonymity.

Obama’s latest housing initiative, proposed in January, always appeared more of a campaign-year platform than a viable policy proposal. That’s largely because of the plan’s proposed funding mechanism, a tax on big banks – something Republicans overwhelmingly oppose and which even a Democratic-controlled House and Senate rejected in 2010. There is nearly no chance a bank tax could move through the current, deeply polarized Congress, especially in an election year.

At best, the plan was seen as giving Obama more ammunition to cast Republicans who oppose the idea as defenders of Wall Street and to shift some of the blame for the housing sector's frailty onto a do-nothing Congress.

In addition, the proposal tacks on more controversy, which could seal its fate, by calling for conducting loan refinancings through the Federal Housing Administration. Expanding the FHA is a source of worry for many lawmakers who fear that already low reserves plus any additional risk might threaten the agency's solvency.

Of course even without those issues, the likelihood of action in this Congress, which cannot even muster the consensus to enact must-pass spending bills without a near shutdown, is low.

Now, without legislation from the White House, the housing proposal might go not even get a hearing, much less a mark-up or vote. That means it cannot be shot down -- something some congressional staffers quietly speculated could be part of the administration's motivation for not sending language. Why would the administration subject itself to more criticism and failure by submitting a plan that Republicans will pick apart and has no chance of becoming law?

Still, Obama is publicly calling on Congress to deliver.

When Obama announced details about the refinancing plan in a major housing speech Feb. 1, he said it was a "make-or-break moment for the middle class," adding "we're going to need Congress to act."

On Thursday, Obama touted the landmark $25 billion mortgage servicing settlement as part of the administration's "we can't wait" for Congress to act initiatives and underscored the importance that lawmakers pass his bill.

"To build on this settlement, Congress still needs to send me the bill I've proposed that gives every responsible homeowner in America the chance to refinance their mortgage" the president said. "It's only going to happen if Congress musters the will to act."

Might the White House benefit from some of the president's own advice?

Financial Services Committee Announces Schedule

Wed, 08 Feb 2012 05:00:00 GMT

Financial Services Committee Chairman Spencer Bachus announced the Committee’s schedule for the second half of February.

All hearings and mark ups will take place in the Committee’s main hearing room, 2128 Rayburn. Witnesses for the hearings will be announced at later dates.

Wednesday, February 15:
The Oversight and Investigations Subcommittee will examine the budget of the Consumer Financial Protection Bureau. The hearing will begin at 10 a.m.

Thursday, February 16:
Beginning at 10 a.m., the Financial Services Committee will mark up several bills, including:

H.R. 3606, introduced by Reps. Stephen Fincher and John Carney. The legislation promotes job creation and economic growth by making it easier for more companies to access capital markets.
H.R. 2308, introduced by Rep. Scott Garrett. The legislation requires the Securities and Exchange Commission to conduct cost-benefit analyses of its proposed rules to ensure that the benefits of any rulemaking outweigh the costs.
H.R. 1838, introduced by Rep. Nan Hayworth. The legislation strikes a provision in the Dodd-Frank Act that disadvantages U.S. financial institutions by forcing them to move their swap desks to a separately registered and capitalized entity.
H.R. 3871, introduced by Rep. Bill Huizenga. The legislation requires the CFPB to preserve the confidentiality of privileged information it receives from financial institutions.

Tuesday, February 28:
The Financial Services Committee will meet at 10 a.m. to mark up legislation that strengthens the financial health of the FHA, reforms the nation’s largest housing voucher program, and harmonizes the definition of “homeless person” in Federal law so the Department of Housing and Urban Development can better estimate the number who need housing assistance and services.

Wednesday, February 29:
The Financial Services Committee will receive the semi-annual monetary policy report from Federal Reserve Chairman Ben Bernanke. The hearing will begin at 10 a.m.

Financial Services Committee to Receive Monetary Policy Report From Federal Reserve Chairman Bernanke

Tue, 07 Feb 2012 05:00:00 GMT

Chairman Spencer Bachus announced that Federal Reserve Chairman Ben Bernanke will appear before the House Financial Services Committee to deliver the semi-annual monetary policy report to Congress on Wednesday, February 29 at 10 a.m.

The Federal Reserve reports to the House Financial Services Committee and the Senate Banking Committee twice a year on the conduct of monetary policy and the state of the U.S. economy. This will be Chairman Bernanke’s first appearance before either committee this year.

“This hearing is one of the Committee’s most important oversight responsibilities. While there have been a few encouraging signs of recovery lately, the truth is job growth should be much stronger so long after the official end of a recession. Chairman Bernanke has warned Congress that if we want a lasting, robust recovery for our nation we must first get our fiscal house in order. That means we must tame Washington’s appetite for spending and tackle the difficult, but necessary, long-term restructuring of entitlements,” said Chairman Bachus. “I expect Chairman Bernanke will deliver a similar message to our Committee.”

NOTE: For this hearing, media seats will be reserved based only on requests received from news organizations credentialed by the House media galleries. Each credentialed news organization is limited to one seat. To request a seat click here.

Subcommittee Approves Bills Improving Fiscal Health of FHA, Affordable Housing Programs

Tue, 07 Feb 2012 05:00:00 GMT

The Insurance, Housing and Community Opportunity Subcommittee approved a bill today providing the Federal Housing Administration (FHA) with the tools it needs to shore up the health of the FHA mortgage insurance fund.

The FHA currently insures more than $1 trillion worth of mortgages on more than 7 million loans. An independent auditor’s report released last year found that FHA’s finances have deteriorated to the point where the agency will need a bailout in 2012 if the housing market worsens.

The Financial Services Committee has held three hearings in the past year focused on ways to shore up the financial health of the FHA.

The Subcommittee today approved the FHA Emergency Fiscal Solvency Act. The bill strengthens the Mutual Mortgage Insurance Fund by:

Establishing minimum annual premiums for mortgage insurance;
Barring unscrupulous lenders from participating in the program;
Requiring repayment of losses to FHA by lenders who committed fraud; and
Improving the FHA’s internal financial controls, transparency, and disclosure requirements.

“The FHA’s cash reserves are down to dangerous levels, and taxpayers cannot afford another Fannie- and Freddie-style bailout,” said Rep. Biggert. “This Administration needs to enforce stronger standards and create room for the private sector to replace taxpayers as the primary source of funding. The FHA is facing an urgent fiscal crisis, and this proposal gives HUD Secretary Donovan emergency tools to wind down the risk before it’s too late.”

The bill was approved by a voice vote.

The Subcommittee approved two additional bills on Tuesday -- the Affordable Housing and Self-Sufficiency Improvement Act, which improves the efficiency and operations of the Section 8 housing voucher program; and the Homeless Children and Youth Act, which harmonizes conflicting definitions of “homeless person” so homeless children and youth can receive needed housing assistance.

The Affordable Housing and Self-Sufficiency Improvement Act expands opportunities for low-income families that receive housing assistance to achieve self-sufficiency and reduces the costs of HUD’s affordable housing programs. Specifically the Act streamlines duplicative or onerous regulations and helps foster self-sufficiency among recipients of housing assistance.

“Our legislation will modernize and reform the Section 8 program to help local housing authorities put more low income tenants on a path to self-sufficiency,” said Rep. Biggert. “The bill more effectively links rental assistance with new opportunities for job training, employment, financial literacy, and education, and it gives housing authorities the flexibility they need to focus on providing housing, not complying with outdated requirements. I’m grateful to all those who have been working with us for months to develop this blueprint and help more struggling families find secure, affordable housing.”

The bill was approved by a voice vote.

The Homeless Children and Youth Act harmonizes HUD’s definition of homeless children to that of other government agencies like the Department of Education, allowing HUD to more accurately estimate the number of homeless persons in the United States.

“Every child should have a safe place to sleep at night and a chance at a brighter future,” said Rep. Biggert. “This bipartisan legislation cuts through the red tape at HUD that currently bars some of our most vulnerable kids from accessing the help they need. For example, a child working with the homeless liaison at a local school district would be eligible for transitional housing and services from HUD without having to fight through a new layer of federal bureaucracy. Today’s vote is an important victory for homeless kids, and the sooner we send this bill to the President, the better.”

The bill was approved by a voice vote.

Assessing the Madoff Ponzi and the Need for Regulatory Reform

Mon, 05 Jan 2009 19:00:00 GMT

FHA Oversight of Loan Originators

Fri, 09 Jan 2009 15:00:00 GMT

Priorities for the Next Administration: Use of TARP Funds under EESA

Tue, 13 Jan 2009 19:00:00 GMT

Financial Services Committee to Meet to Organize Committee Membership for the 111th Congress

Tue, 27 Jan 2009 15:00:00 GMT

Resolution Adopting the Rules of the Committee on Financial Services and Subcommittee Assignments

Tue, 27 Jan 2009 15:00:00 GMT

Promoting Bank Liquidity and Lending Through Deposit Insurance, Hope for Homeowners, and other Enhancements, 111-1

Tue, 03 Feb 2009 07:00:00 GMT

Assessing the Madoff Ponzi Scheme and Regulatory Failures, 111-2

Wed, 04 Feb 2009 14:00:00 GMT

H.R. 786, to make permanent the temporary increase in deposit insurance coverage, H.R. 787, to make improvements in the Hope for Homeowners Program, H.R. 788, to provide a safe harbor for mortgage servicers who engage in specified mortgage loan modifications, and for other purposes

Wed, 04 Feb 2009 19:00:00 GMT

An Examination of the Extraordinary Efforts by the Federal Reserve Bank to Provide Liquidity in the Current Financial Crisis, 111-3

Tue, 10 Feb 2009 18:00:00 GMT

TARP Accountability: Use of Federal Assistance by the First TARP Recipients, 111-4

Wed, 11 Feb 2009 15:00:00 GMT