Patrick McHenryChairman

Washington, June 27, 2014 - Committee Seeks Openness and Transparency at FSOC

On Tuesday, the full committee held an oversight hearing with Treasury Secretary Lew on the activities of the Financial Stability Oversight Council (FSOC).

Under questioning from Chairman Jeb Hensarling (R-TX), Secretary Lew admitted that he could not say the Dodd-Frank Act ended "Too Big to Fail" as Democrats promised.

"Can you tell this committee today with an honest, straight face that we have ended 'Too Big to Fail'?" Chairman Hensarling asked.

"I'm not sure we'll know the answer to that question until we have the next financial crisis," Secretary Lew responded.

At the hearing, Chairman Hensarling and other members of the committee also called for greater openness and transparency at FSOC.

"The reason transparency and accountability are so important is because FSOC can designate practically any large financial firm in our nation as a Systemically Important Financial Institution, a SIFI, and thus render effective control over it. Thus, it has the ability to render great damage to our economy and set back the dreams of tens of millions of unemployed and underemployed Americans who are counting on their capital markets to work for them," Chairman Hensarling said.

Earlier this month, the committee passed bills to make FSOC more accountable and transparent and to place a one-year "timeout" on its designations of non-bank institutions as "systemically important."

Export-Import Bank: Corporate Necessity or Corporate Welfare?

On Wednesday, the committee held a hearing to examine the role of the Export-Import Bank.

"If you’re a politically-connected bank or company that benefits from Ex-Im, no doubt you would like it to continue. After all, it’s a sweetheart deal for you. Taxpayers shoulder the risk and you get the reward. But if you work at a small business or other American company competing in the global marketplace, it’s unfair. Ex-Im effectively taxes you while subsidizing your foreign competitors," said Chairman Hensarling.

Captain Lee Moak, President of the Air Line Pilots Association, noted throughout his testimony "we have lost jobs" because of "our own government policy" at Ex-Im. "It's one thing competing in the free marketplace. It's another when our government subsidizes our competitor," Captain Moak said.

In his questioning of Ex-Im Chairman Fred Hochberg, Rep. Andy Barr (R-KY) said Eastern Kentucky has lost 7,000 coal jobs as a "direct result of the regulatory assault" of the Obama Administration. "My question to you is why on earth - if you're about creating jobs - why are you aligning yourself with a job-killing agenda?"

Subcommittee Examines the SEC's Division of Trading and Markets 

On Thursday, the Capital Markets and Government Sponsored Enterprises Subcommittee held a hearing to examine the SEC's Division of Trading and Markets.

"Let me provide perhaps just two specific areas that I would like to see more attention from the commission," Subcommittee Chairman Scott Garrett (R-NJ) said. "First, the world is vastly different, we all agree, from 1975, when Congress amended the Exchange Act in response to one dominant equities exchange at the time. We live in a world of demutualized exchanges, where all market centers are for-profit, providing similar functions, yet they're competing under very different regulatory umbrellas. The SEC should take the time, therefore, to thoroughly analyze the situation and eventually make changes that put their varying market participants on, as they always say, a more level playing field. Secondly, Reg NMS, as the order protection rule is a very heavy-handed rule dictating explicitly how venues and orders are supposed to interact with each other in the marketplace. Now, this has been highlighted by a number of the commentators, including some of our previous panelists here, as one of the significant factors underlying market practices and also behavior."