Posted by on May 17, 2013
Posted by on May 16, 2013
At today's oversight hearing with SEC Chairman Mary Jo White, Chairman Hensarling said the IRS scandal causes Americans to wonder “just how pervasive the IRS’s tactics of harassment” are within the administration and whether a proposal before the SEC raises similar concerns that political opponents of the administration could be targeted. Click here for his full opening statement.
Here's what they're saying;
Bloomberg Businessweek: SEC’s White Rebuffs Call to Forswear Political Spending Rule
Representative Jeb Hensarling, the Texas Republican who leads the Financial Services Committee, sought to tie the issue to the furor surrounding the Internal Revenue Service’s selective screening of nonprofit groups with ties to the Tea Party movement, which caused the resignation yesterday of the IRS’s acting commissioner.
Market Watch: Republicans alarmed over political spending plan
Republican lawmakers on Thursday cited the recent Internal Revenue Service scandal as they urged the chief of the nation’s securities watchdog not to require publicly-traded corporations disclose how all their money is spent on politics.
The Hill: Hensarling links IRS scandal to corporate disclosure proposal at SEC
Financial Services Committee chairman Jeb Hensarling said the IRS’ apparent targeting of conservative groups raises questions about how pervasive “tactics of harassment” have become within the Obama administration, saying the scandal is “right out of the Watergate playbook.”
WSJ: In Wake of IRS Scandal, a Push to Nix Disclosure of Corporate Political Cash
The burgeoning IRS scandal also provided lawmakers with ammunition to question the agency's independence and agenda-setting. Chairman Rep. Jeb Hensarling (R., Texas) said it is "disturbing" that the SEC might propose a "discretionary" measure like political-spending disclosures when it has missed deadlines for other mandatory rules and asked Ms. White if the White House's Office of Management and Budget had contacted the agency about its rule-setting agenda.
Posted by on May 14, 2013
Yesterday, Capital Markets & GSE Subcommittee Chairman Scott Garrett held a roundtable discussion on stock market structure in New York. Before the event, Rep. Garrett took a few minutes to speak to CNBC’s Bob Pisani about the roundtable as well as his broader thoughts on the Securities and Exchange Commission in light of this week’s hearing with SEC Chairman Mary Jo White.
Posted by on May 13, 2013
As an independent agency, the Securities and Exchange Commission (SEC) is not currently subject to President Obama’s Executive Order No. 13563. The order directs non-independent executive branch agencies to perform a cost-benefit analysis on proposed regulations, tailor those regulations to impose the least burden on society, and retrospectively analyze old rules to identify those ripe for repeal.
Last year, the U.S. Court of Appeals for the DC Circuit unanimously concluded that in promulgating a rule related to corporate board elections, the SEC “inconsistently and opportunistically framed the costs and benefits of the rule; failed to adequately quantify the certain costs or to explain why those costs could not be quantified; neglected to support its predictive judgments; contradicted itself; and failed to respond to substantial problems raised by commenters.”
H.R. 1062 would essentially codify President Obama’s E.O. No. 13563 with regard to the SEC. It would require the SEC to:
Posted by on May 13, 2013
Three hearings, two suspensions and one rule bill on the floor makes for a busy week at the Financial Services Committee. Be sure to check back here on the Bottom Line Blog -- and subscribe to our email lists -- for updates throughout the week.
Here’s what’s happening:
On Wednesday the House will vote on two bipartisan bills under suspension of the rules. Bills under suspension require a two-thirds majority for passage.
The first, H.R. 384, the Homes for Heroes Act of 2013 helps ensure veterans have fair access to HUD housing and homeless assistance programs by establishing a Special Assistant for Veterans Affairs within the Department of Housing and Urban Development. The second, H.R. 701, requires the SEC to finalize rules to implement Title IV of the JOBS Act by October 31, 2013.
Also on Wednesday, at 10 a.m. the Oversight & Investigations Subcommittee asks “Who is Too Big to Fail?” as they explore Title II of the Dodd-Frank Act.
On Thursday at 10 a.m., the full committee convenes to hear from SEC Chairman Mary Jo White. This is Ms. White’s first appearance before our committee as chairman.
Later on Thursday, at 2 p.m., the Housing and Insurance Subcommittee continues our work on sustainable housing finance reform, this week exploring the government’s role in multifamily and health care facilities mortgage insurance and reverse mortgages.
Wrapping up the week this Friday, the House is scheduled to vote on H.R. 1062, the SEC Regulatory Accountability Act introduced by Capital Markets & GSE Subcommittee Chairman Scott Garrett.
Posted by on May 10, 2013
On Feb. 19, 2009, CNBC editor Rick Santelli let loose on the floor of the Chicago Mercantile Exchange in response to President Barack Obama’s proposal to subsidize underwater mortgages.
Santelli’s famous rant gave birth to the Tea Party. Obama’s proposal gave way to numerous initiatives, known by the catchy acronyms HAMP and HARP (but not HARM), all of which fell short of the administration’s initial goals.
UK Telegraph: China may not overtake America this century after all
Doubts are growing about whether China can pass the US to become the world's biggest economy this century amid warnings that the country’s 30-year miracle is nearing exhaustion.
Real Clear Markets: The SEC's Cross Border Regulatory Creep
Last week, the Securities and Exchange Commission proposed its cross-border security-based swaps rule under Dodd-Frank with great fanfare and a unanimous commission vote. Many outside the SEC have deemed the proposal a success, presumably because it is not as bad as the approach taken by the Commodity Futures Trading Commission that has angered regulators the world over. Exceeding the CFTC's low bar is a pretty poor metric for assessing regulatory success.
New York Post: No happy ending for the Fed’s stock party
Friends don’t let friends invest drunk.
I think that’s an apt warning, considering what’s been going on in the stock markets, which reached all-time highs this week even though the economy is — at best — limping along and may even be deteriorating.
During the financial crisis of 2008, the financial markets would have been better served if the credit rating agency industry had been more competitive.
Posted by on May 08, 2013
In a recent interview on CNBC, AIG Chairman Bob Benmosche, said he expects his company to receive “systemically important financial institution” (SIFI) status — regulator speak for “too big to fail” (TBTF) — when the Fed and FDIC belatedly determine what firms constitute such “grave threats” to our economy.
Under Dodd-Frank, a company determined to be a “grave threat” could face restrictions on its business activities or requirements that it divest assets or operations. Some have even suggested the law allows regulators to “break up” such firms to reduce systemic risk.
Supporters of Dodd-Frank contend those restrictions and requirements end TBTF. But Mr. Benmosche is far from concerned about Dodd-Frank impeding his business. In fact, in the video below he praises the ongoing examination of AIG by federal regulators, indicating a positive review confers a “good housekeeping” seal of approval on the insurance giant.
Why would a Wall Street giant like AIG welcome more regulations and greater scrutiny?
As the American Enterprise Institute’s Peter Wallison notes, Mr. Benmosche is no fool. “With the government behind it, reassuring the markets as to AIG’s strength and taking every step to make sure this SIFI doesn’t fail,” he writes, “AIG will be a powerhouse in selling insurance.”
Posted by on May 07, 2013
Congressman Bill Huizenga joined us during the markup of H.R. 742 to discuss swap derivatives and why they're important to a range of industries and businesses.
Posted by on May 04, 2013
George Will: Courts and Congress give Obama adult supervision
Rep. Jeb Hensarling (R-Tex.), chairman of the Financial Services Committee, has told Richard Cordray not to bother. This is part of the recent evidence that government is getting some adult supervision.
Barack Obama used a recess appointment to make Cordray director of the Consumer Financial Protection Bureau. But a federal circuit court has declared unconstitutional three other recess appointments made the same day because the Senate was not in recess. So Hensarling has told Cordray not to testify before his committee: “Absent contrary guidance from the United States Supreme Court, you do not meet the statutory requirements of a validly serving director of the CFPB, and cannot be recognized as such.”
Competitive Enterprise Institute: Did Hensarling Force Obama’s Hand on “Recess” Appointments?
Chairman Hensarling’s action to block Richard Cordray from testifying on the CFPB’s semi-annual report may have forced the Obama administration’s hand in submitting a brief later in the week urging the Supreme Court to resolve the issue. What Chairman Hensarling was doing, in the words of columnist George Will, is give an out-of-control government some needed “adult supervision.” Judging by the White House’s reaction, Hensarling is succeeding.
Financial regulation dominated rulemaking in 2012, a direct result of the Dodd–Frank Act. Financial services regulators were responsible for 13 of the 25 new major rules issued. Far too often, the quality of cost analyses by regulatory agencies is substandard—particularly with respect to Dodd–Frank rulemaking. For example, some regulations issued by the SEC under the Act have been invalidated by the courts because of faulty cost-benefit analyses.
Las Vegas would seem a highly unlikely locale for a new housing bubble since the area’s jobless rate hovers near 10% and a healthy housing market depends on people having jobs. But the area is one of many mini-bubbles spawned by the Federal Reserve’s campaign to buttress growth with "quantitative easing," a wave of asset purchases that's pumping cheap money into the still-weak US economy.
Daily Caller: Dodd-Frank a total failure, bipartisan panel agrees
A mix of conservative and liberal speakers at an American Enterprise Institute discussion all agreed the 2010 law has utterly failed in its purpose of reducing the systemic risk posed by “Too Big to Fail” financial institutions.
New York Post: Sink QE! (the money-printing plan, that is)
The Federal Reserve made it official yesterday, saying it’s full steam ahead for the money-printing operation that is creating all sorts of financial dislocations without helping the economy grow very much.
Posted by on April 27, 2013
Wall Street Journal’s Mary Kissel: Disdain for the Courts
The House Financial Services Committee disinvited Consumer Financial Protection Bureau chief Richard Cordray from testifying Tuesday, noting President Obama's non-recess, recess appointment of Mr. Cordray and a January D.C. Circuit Court of Appeals decision, Noel Canning v. NLRB, that invalidated other appointments made under the same pretense. In a letter to Mr. Cordray, Texas Republican Jeb Hensarling said his committee stands "ready to accept the testimony of the Director of the CFPB" when "an individual validly holds this position."
National Review Online: Jeb Hensarling on Richard Cordray
President Obama’s attempt to circumvent the Senate by unilaterally appointing Ohio politician Richard Cordray to the Consumer Financial Protection Bureau may have been premised on his expectation that he would get away with it. If so, he seems to have miscalculated, because the other two branches of government are providing him with a Sesame Street demonstration of the concept of “checks and balances.”
Amazingly, CFPB spokesmen continue to insist that Noel Canning does not apply to Cordray’s improper recess appointment although they have provided no explanation as to why it does not.
New York Times: Possible Fed Successor Has Admirers and Foes
In July 1996, the Federal Reserve broke the metronomic routine of its closed-door policy-making meetings to hold an unusual debate. The Fed’s powerful chairman, Alan Greenspan, saw a chance for the first time in decades to drive annual inflation all the way down to zero, achieving the price stability he had long regarded as the central bank’s primary mission.
The evolution of market news — from messages on homing pigeons to newspaper articles to round-the-clock wire reports — has taken yet another disruptive step with the arrival of Twitter on trading desks throughout the world.
Bloomberg: Central Banks Load Up on Equities
Central banks, guardians of the world’s $11 trillion in foreign-exchange reserves, are buying stocks in record amounts as falling bond yields push even risk- averse investors toward equities.
The FHA exists to help first-time and low-income homebuyers achieve responsible homeownership. Sadly, the federal agency has strayed far from its historic mission and instead is setting families up to fail and saddling thousands of neighborhoods across America with high rates of home foreclosures.