Chairman Jeb Hensarling

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Posted by Staff on July 24, 2015
Committee Explores Appropriate Level of Capital and Liquidity

The full committee held a hearing to delve in to the issue of "too big to fail" and to hear from experts on the appropriate levels of capital and liquidity for U.S. banks to function properly and help foster economic growth.

"Since the crisis, U.S. banks have raised more than $400 billion in new capital and regulators have required institutions to maintain higher capital buffers -- again, under the authority they possessed pre-Dodd-FrankI for one believe that generally this to be a good thing. But the capital standards that were already complex have become even more complex with Basel III. I do not necessarily believe this to be a good thing," remarked Chairman Jeb Hensarling (R-TX) in his opening statement.

He continued, "There are a number of questions this committee must explore. One, again, although capital and liquidity standards have increased post-crisis, do we really know by how much? How opaque do balance sheets still appear? How many items that were once off balance sheet will find their way back onto balance sheets? What amount of capital is the proper amount? Too much, economic growth can stall. Too little and too many failures could yet ensue."

Rep. Sean Duffy (R-WI) noted lawmakers' acknowledgement of Dodd-Frank's clear failure to end "too big to fail." "It's fascinating listening to my friends across the aisle as they've grown over the last four and a half years. They started off telling us how Dodd-Frank was going to end 'too big to fail,' it was a sure fix to end 'too big to fail,' if you listen to the debates with former Chairman Frank. That was the reason why we have a 2,000-plus page bill, why we have 400 new rules. But the tone has changed. They're now admitting that Dodd-Frank in all of its sweeping reforms does not end 'too big to fail.'"


Subcommittee Reviews Proposals for Greater Accountability and Transparency at the Federal Reserve

On Wednesday the Monetary Policy and Trade Subcommittee held a hearing to review legislative proposals that would reform the Federal Reserve. These reforms would bring about a more transparent and accountable Federal Reserve in regard to its operations and decision-making in monetary policy.

"Last Congress, as we examined the Fed’s actions over the last 100 years through the Federal Reserve Centennial Oversight Project, it became clear that the Federal Reserve has gone above and beyond its original mission statement. In fact, since the enactment of Dodd-Frank, the Federal Reserve has gained unprecedented power, influence, and control over the financial system while remaining shrouded in mystery to the American people," said Subcommittee Chairman Bill Huizenga (R-MI). "The Fed must be accountable to the people’s representatives as well as to the hardworking taxpayers themselves."

Rep. Luke Messer (R-IN) spoke about the many Americans who are still suffering from the financial crisis and deserve to have an accountable and transparent Federal Reserve. "I think the American people look at all of what happened, and they understand. They don't know all the complexities but from their perspective, it looks something like this - there are a whole lot of rich people who are part of creating this crisis. The crisis happened and all those rich people are still rich, and the average working family is struggling. Their savings haven't improved. Their wages are flat, and they see a process that seems not very transparent, and they want to know who's accountable and responsible for it."


Task Force Considers Iran Nuclear Deal’s Implications on Financing Terrorists

The Task Force to Investigate Terrorism Financing held a hearing on Tuesday to examine the possible consequences of the Obama administration’s nuclear deal with Iran, part of which involves the lessening or removing of economic sanctions placed on Iran in the past.

“It appears this agreement fails to address the realities surrounding Iran’s sponsorship of terror, while further empowering its mullahs by infusing billions of dollars into its economy through lifting the sanctions that successfully brought Iran to the negotiating table in the first place,” said Task Force Chairman Mike Fitzpatrick (R-PA). “The Iranian regime has demonstrated a lack of concern about its own people, leaving little doubt the estimated $150 billion in funds currently held abroad will allow the Iranian economy to fully recover – not to the benefit of its oppressed citizens – but to the advantage of the next generation of terror syndicates.”

Rep. Ann Wagner (R-MO) also weighed in with her concerns about how the economic boost for Iran might lead to undesirable outcomes for the United States and its allies in the region. “The president has agreed to far-reaching concessions in nearly every area that was supposed to prevent Iran from acquiring a nuclear weapon. Under this deal, Iran would receive $100 billion to $150 billion in sanctions relief and regain access to conventional arms and ballistic missiles that has been denied for nearly a decade. Iran will be free to transfer these weapons, as has been stated, to Hezbollah, the Syrian government, Yemeni rebels, and other terrorist groups. These organizations threaten the security of the United States, our ally Israel, and the world, and will further destabilize a region already in crisis.”


Subcommittee Conducts Oversight of the National Credit Union Administration

The Financial Institutions and Consumer Credit Subcommittee held a hearing to examine the National Credit Union Administration's (NCUA) operations and budget. Credit unions have been shutting down in alarming numbers and unable to fully serve their customers' needs due to overwhelming federal regulations. In lights of these circumstances, Subcommittee Members questioned NCUA Chair Debbie Matz on how the agency allocates its budget and how their policies affect the fiscal health of credit unions.

“Credit unions in particular share a unique relationship with local communities. After all, they are cooperatives at their core. They help bring unserved and underserved customers into the financial mainstream. They provide that first credit card for young adults trying to build credit. They help the first-time homebuyer purchase the home they have been dreaming of," said Subcommittee Chairman Randy Neugebauer (R-TX) in his opening statement. “Unfortunately, credit unions, like community banks, are suffering from ‘one size fits all’ regulatory actions from federal regulators. For example, some credit unions now under go stress testing like their larger bank counterparts. Because of this increased regulatory burden and the related compliance costs, we have seen massive consolidation of credit unions and inflexible product standardization, which has limited consumer choice."

MEMBER SPOTLIGHT

Rep. Scott Tipton | Examining Dodd-Frank’s first five years
 
The regulatory burden under Dodd-Frank Act has imposed 61 million paperwork burden hours — at $24 billion in compliance costs — according to one calculation, with the hardest hit being small financial firms. During a visit to First Colorado National Bank, a locally-owned bank with a $50 million dollar portfolio in Delta, I heard first-hand how much of a toll this law has taken on banks that are the lifeblood of small communities’ economies. Instead of hiring tellers and loan officers, these banks are hiring compliance staff in order to keep up with new regulations. It is disappointing to hear that small bankers no longer feel like they run their bank, but that the federal government runs their bank for them.

To read other comments Committee Members issued this week on the harm caused by the Dodd-Frank Act, click here.

Weekend Must Reads


Wall Street Journal | Dodd-Frank’s Nasty Double Whammy

To limit abuse by the rulers, ancient Rome wrote down the law and permitted citizens to read it. Under Dodd-Frank, regulatory authority is now so broad and so vague that this practice is no longer followed in America. The rules are now whatever regulators say they are.

The Hill | Five years after Dodd-Frank, time for a course correction at CFPB

Most Americans don’t know about the existence of the CFPB, but Dodd-Frank’s out of control law enforcement agency is turning out to be perhaps the most powerful agency nobody has ever heard of. According to a USCC-Zogby Analytics poll in June, 2015, less than one in five Americans know the CFPB exists. From all indications, the CFPB would like to keep it that way.

Forbes | Dodd-Frank At 5 Years Old: Making The Next Crash More Likely And Worse When It Happens
 

You don’t reduce risk by concentrating it. What you’ve done there is concentrate risk.

    On the Horizon 

July 28, 2015 10:00 a.m.
Full Committee Hearing

"The Dodd-Frank Act Five Years Later: Are We More Prosperous?"

July 28, 2015 2:00 p.m.
Full Committee Markup

"Markup of H.R. 766, H.R. 1210, H.R. 1317, H.R. 1553, H.R. 1737, H.R. 1839, H.R. 1941, H.R. 2091, H.R. 2243, H.R. 2643, H.R. 2912, H.R. 3032, H.R. 3189, and H.R. 3192"

  In the News

The Hill | Hensarling: No more birthdays for Dodd-Frank

Pittsburgh Tribune | Dodd-Frank Turns 5: What a Mess

Chicago Tribune | Five Years Later, Dodd-Frank Still Falls Short

Miami Herald | Fix the Dodd-Frank Law

The Hill | Hensarling: Dodd-Frank made country 'less financially stable'

Wall Street Journal | House Republican’s Proposal Takes Aim at Fed Powers

American Banker | House Panel Debates Bills to Rein In Fed's Authority

Bucks County Courier Times | Fitzpatrick Referees Hearing on Iran Nuclear Deal

Northwest Arkansas Democrat Gazette | Hill wants details on money flow to Iran

Credit Union Times | Credit Unions Don’t Represent Their Members: Matz

Wall Street Journal | Raising Ex-Im From the Dead

Politico | Democrats’ New Cause: Dodd-Frank

Washington Examiner | Dodd-Frank at 5: Helping Big Banks Get Bigger

LA Times | Key Regulatory Job Created at Federal Reserve Still Vacant After Five Years

Orange County Register | Time to revisit Dodd-Frank banking restrictions

Posted by on July 20, 2015


 


By Jeb Hensarling
Click here to read article

Tuesday will mark five years since President Obama’s signing of the Dodd-Frank law, the most sweeping rewrite of the country’s financial laws since the New Deal. Mr. Obama told the country that the legislation would “lift our economy.” The statute itself declared that it would “end too big to fail” and “promote financial stability.”

None of that has come to pass. Too-big-to-fail institutions have not disappeared. Big banks are bigger, small banks are fewer, and the financial system is less stable. Meanwhile, the economy remains in the doldrums.

Dodd-Frank was based on the premise that the financial crisis was the result of deregulation. Yet George Mason University’s Mercatus Center reports that regulatory restrictions on financial services grew every year between 1999-2008. It wasn’t deregulation that caused the crisis, it was dumb regulation.

Among the dumbest were Washington’s affordable-housing mandates, beginning in 1977, that led to a loosening of underwriting standards and put people into homes they couldn’t afford. The Federal Reserve played its part in the 2008 financial crisis by keeping interest rates too low for too long, inflating the housing bubble. Washington not only failed to prevent the crisis, it led us into it.

Dodd-Frank was supposedly aimed at Wall Street, but it hit Main Street hard. Community financial institutions, which make the bulk of small business loans, are overwhelmed by the law’s complexity. Government figures indicate that the country is losing on average one community bank or credit union a day.

Before Dodd-Frank, 75% of banks offered free checking. Two years after it passed, only 39% did so—a trend various scholars have attributed to Dodd-Frank’s “Durbin amendment,” which imposed price controls on the fee paid by retailers when consumers use a debit card. Bank fees have also increased due to Dodd-Frank, leading to a rise of the unbanked and underbanked among low- and moderate-income Americans.

Has Dodd-Frank nevertheless made the financial system more secure? Many of the threats to financial stability identified in the latest report of Dodd-Frank’s Financial Stability Oversight Council are primarily the result of the law itself, along with other government policies.

Dodd-Frank’s Volcker rule banning proprietary trading by banks, and other postcrisis regulatory mandates, has drastically reduced liquidity for making markets in fixed-income assets. The corporate bond market is one of the primary channels for capital formation in the economy. Reduced liquidity in this market amplifies volatility. Because of Dodd-Frank, financial markets will have less capacity to deal with shocks and are more likely to seize up in a panic. Many economists believe this could be the source of the next financial crisis.

Dodd-Frank’s scheme for regulating derivatives markets concentrates systemic risks into clearinghouses and then designates the clearinghouses as too big to fail. Dodd-Frank’s “orderly liquidation authority” enshrines taxpayer-funded bailouts into law. Meanwhile, the Fed, by keeping interest rates too low for too long, is introducing dangerous imbalances into financial markets and is likely inflating asset bubbles.

What is most disturbing about Dodd-Frank is the authority it gives bureaucrats to control huge swaths of the economy. The director of the Consumer Financial Protection Bureau, an agency created by Dodd-Frank, can declare any consumer-credit product “unfair” or “abusive” and outlaw it. Oversight? CFPB funding is not subject to congressional appropriations, and Dodd-Frank requires courts to grant the bureau deference regarding its interpretation of federal consumer-financial law.

Dodd-Frank requires that bank holding companies worth $50 billion or more must submit a “living will” to the Federal Deposit Insurance Corp. and the Fed. This “will” is a detailed plan for how the company will cope in case of severe financial problems. If the plan is not to the regulators’ liking, they can require the company to restructure, raise capital, divest or downsize.

The “heightened prudential supervision” Dodd-Frank allows the Fed to exercise over “systemically important” banks essentially places them under government control. Soon the Fed may exercise effective control over the largest insurance companies and asset managers as well. After AIG and GE Capital were designated “systemically important,” Fed officials, according to a Financial Times story last August, became de facto board members of the firms, involving themselves in decisions including whether employees should be fired or disciplined.

Before Dodd-Frank’s passage, former Sen. Chris Dodd said that “no one will know until this is actually in place how it works.” Today we know. The law he co-wrote with former Rep. Barney Frank is gradually turning America’s largest financial institutions into functional utilities and taking the power to allocate capital—the lifeblood of the U.S. economy—away from the free market and delivering it to political actors in Washington.

Five years ago, House Republicans offered the Consumer Protection and Regulatory Enhancement Act as an alternative to Dodd-Frank. It sought to restore market discipline, end taxpayer bailouts and protect consumers with innovative, competitive markets policed for fraud and deception. It’s time to revisit the ideas in that bill, offer new ones and replace Dodd-Frank.

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Posted by Staff on July 10, 2015
Committee Explores Dodd-Frank's Impact on Financial Stability

On Thursday, the Financial Services Committee held the first of a series of planned hearings on the impacts the Dodd-Frank Act has had in the five years since it was signed into law.

Thursday’s hearing focused on whether Dodd-Frank has made the financial system more or less stable, and it comes on the heels of a report from the Financial Stability Oversight Council (FSOC) that many of the systemic risks identified by FSOC are the direct result of government policies, including Dodd-Frank.  Dodd-Frank’s Volcker Rule, for example, has made capital markets less liquid and more fragile, undermining rather than enhancing financial stability.  The lack of liquidity means financial markets have less capacity to deal with shocks and will be more likely to seize up in a panic.  Rather than making markets more stable, the new regulations have made them more brittle.

Backing that up, a recent Federal Reserve survey of credit officers shows that “over four-fifths of respondents characterized current liquidity and market functioning…as having deteriorated over the past five years,” according to a Reuters report.

Chairman Jeb Hensarling (R-TX) in his opening statement emphasized the increased risk to stability that Dodd-Frank has created. "Dodd-Frank has codified 'Too Big to Fail' into law and provided a taxpayer-funded bailout system in Title I and Title II of the Act. This simply leads to even greater moral hazard and to greater instability. According to the Richmond Federal Reserve, the explicit federal guarantees of financial sector liabilities have increased to a whopping 60 percent post-Dodd-Frank. When private investors, depositors, and counterparties expect a bailout, their incentives to monitor risk clearly wane. Regulatory micromanagement is no substitute for market discipline. By this measure, Dodd-Frank has clearly made our financial system riskier."

Rep. Robert Hurt spoke on Dodd-Frank's unintended consequences that have harmed Main Street, our economy’s engine for job creation and growth. "This month marks the fifth anniversary of the Dodd-Frank Act, which was sold to the American people as a solution to the financial crisis of 2008. A recent Harvard study articulates how Dodd-Frank has actually given Wall Street an advantage over Main Street - the exact opposite of what its proponents said it would do. The consequences of this misguided law have been increased burdens on our Main Street banks and their customers through excessive regulations, contributing to a stagnant economy and unnecessarily high unemployment rates."

Mark Calabria, Director of Financial Regulation Studies at the Cato Institute, testified at Thursday’s hearing that “moral hazard has been increased by Dodd-Frank’s expansion of the financial safety net and increased concentration of risk into fewer entities, while the primary 18 causes of the crisis were largely left untouched.”

Dodd-Frank's SIFI Designation Process Comes Under Subcommittee’s Review

The Financial Institutions and Consumer Credit Subcommittee held a hearing on Wednesday to examine the designation process of “systemically important financial institutions” (SIFIs) and the impact it has on financial institutions. Committee members heard testimony about the process for determining whether bank holding companies (BHCs) are systemically important and the consequences these designations carry.

Many commentators – including members of Congress and banking regulators – have criticized the arbitrary manner in which the Dodd-Frank Act designates bank holding companies as systemically important.

Rep. Scott Tipton (R-CO) said, "I never thought I would be quoting Barney Frank but effectively he's come out and said we didn't intend for it to be able to go this far in terms of a regulatory regime.  And I think that it really speaks to an out of control regulatory process where a broad-based piece of legislation is being put forward and we're leaving the regulators to fill in the blanks."

Rep. Ed Royce (R-CA) voiced his concern about the "diminishing returns of increased regulation."

"When a regional bank is spending $200 million on compliance projects and hiring 500 additional non-loan officer staff, it really makes you question who's benefiting. Certainly not the customer looking for a loan, looking to build a home, start a business, or pay for a child's education," he said.

“This year, our Committee has held several hearings examining the regulatory burdens facing community financial institutions.  The issue before us today is no different. Money spent to comply with unnecessary regulations can be better allocated to loans for small businesses and consumers," said Subcommittee Chairman Randy Neugebauer (R-TX).


Subcommittee Conducts Oversight of HUD's Public and Indian Housing Programs

The Housing and Insurance Subcommittee held a hearing today to examine the Department of Housing and Urban Development's (HUD) Public and Indian Housing operation and programs.

"We’ve spent a lot of time discussing the need for reform in our nation’s housing programs," said Subcommittee Chairman Blaine Luetkemeyer (R-MO) in his opening statement. "As I’ve said in the past, the status quo isn’t good enough. The reality is that the funding situation isn’t going to get better. Despite even the best of attempts, asking for more federal dollars isn’t the solution. It’s time to roll up our sleeves and work together to build a stronger Office of Public and Indian Housing and a better HUD."

MEMBER SPOTLIGHT

Rep. Lynn Jenkins | Congresswoman Jenkins Marks 5 Year Anniversary of Dodd-Frank

This week we are pleased to feature a Member not on the Committee who is joining us in speaking out about the harm Dodd-Frank is having on Main Street: Rep. Lynn Jenkins (R-KS), Vice Chair of the House Republican Conference.

Weekend Must Reads


Financial Times | Free Lunch: Still too big to fail

That suggests perceptions of too-big-to-fail are alive and well. If so, and if those perceptions are right, it is bad for the rest of us who are not too big to fail but small enough to pay.

Wall Street Journal | MetLife Calls the Regulators’ Bluff

Now that we know the weakness of the FSOC’s data, Congress should consider whether the SIFI designation process makes sense. It should not leave the answer to an unaccountable organization of financial regulators.

    On the Horizon 

July 14, 2015 10:00 a.m.
Oversight and Investigations Subcommittee Hearing

"Fed Oversight: Lack of Transparency and Accountability"

July 15, 2015 10:00 a.m.
Full Committee Hearing

"Monetary Policy and the State of the Economy"

  In the News

American Banker | Dodd-Frank Battle Lines Intensify on Verge of Five-Year Mark

Bloomberg | Midsize Bank Challenges $50 Billion SIFI Threshold

Inquisitr | Reps. Luetkemeyer, Neugebauer Stand For Consumers By Reigning In And Reforming CFPB

DS News | Lawmakers Debate ‘Too Big to Fail’ and Criteria for ‘Systemically Important’ Tag

U.S. News | Five Years After Dodd-Frank, CFPB Still Under Fire

Credit Union Times | Dodd-Frank Debated in Congress

Time.com | Have the Dodd-Frank Financial Reforms Been a Success?

MarketWatch | Five Years After Dodd-Frank, Here Come the Reviews

DSNews | House Committee Schedules Hearings Marking Anniversary of Dodd-Frank

American Banker | 'Take Your Lawmaker to Work' Puts New Twist on Lobbying for Reg Relief

Washington Times | Low unemployment rate obscures decline in Americans seeking work

Bloomberg | Brainard Says Rules Probably Have a Role in Liquidity Volatility

MarketWatch | Lew Unwilling to Declare Too-Big-To-Fail is Over
Posted by Staff on June 26, 2015
Committee Seeks Accountability for Discrimination and Retaliation at the CFPB

On Thursday the Oversight and Investigations Subcommittee held a hearing to examine new evidence that discrimination and retaliation against employees at the Consumer Financial Protection Bureau (CFPB) continue. The Committee began its investigation into these allegations in April 2014. Since then, several whistleblowers have come forward to allege CFPB managers have created a toxic workplace. Despite promises last year from CFPB Director Richard Cordray that this unacceptable and offensive behavior at the CFPB would stop, two whistleblowers testified on Thursday that discrimination and retaliation have gotten worse during the past year.

Subcommittee Chairman Sean Duffy (R-WI) said in his opening statement, "This Committee has spent two years and more than five Congressional hearings giving a voice to the victims of abusive, unfair and unlawful discriminatory behavior of CFPB managers. We are here again today because their messages have clearly not been heard. There is mounting evidence that not only does the agency still have a huge problem with managers discriminating against employees based on race, age, gender, and sexual orientation, but CFPB leadership refuses to take meaningful action to prevent this behavior and protect its employees."

Both witnesses testified that they believed CFPB Director Richard Cordray did not take these issues seriously.

Committee members emphasized discrimination and retaliation must end, and there must be accountability at the CFPB.

Rep. Scott Tipton (R-CO) remarked, "In the private sector, when there are issues that are coming up on discrimination, there will be fines, there will be penalties, and there will be prescriptive measures to be able to address it. Yet apparently from what you are testifying here today, the government is not applying the same rules to itself that it expects, may not achieve, but expects out of the private sector."

Rep. Mia Love (R-UT) said change is needed at the CFPB.

"How can an agency that is unable and unwilling to govern itself be entrusted to protect the American people and, frankly, make sound decisions about how it pursues its own mission?” she asked. “Perhaps most disturbing to me is that despite all the publicity this issue has received and all the previous congressional hearings, overwhelming evidence indicates this culture of discrimination and intimidation within the CFPB has only been growing worse. It’s clear to me that reform of the CFPB is badly needed," she said.

Task Force Examines Security of U.S. Financial Sector

The Task Force to Investigate Terrorism Financing held its third hearing on Wednesday where it evaluated the security of the U.S. financial sector. At the hearing, the Task Force discussed the financial sector’s vulnerabilities to cyber-attacks as well as how terrorist organizations and criminal groups are using shell companies to launder money and fund their activities.

In his opening statement, Chairman Michael Fitzpatrick (R-PA) voiced concerns about the increasing number, size and damaging effects of recent cyber-attacks. “In the past several years, there has been a noticeable rise in the number of cyber-related attacks on U.S. businesses and government agencies launched by state and non-state actors alike. This is attributed to the fact that such attacks cost very little to carry out, but have potential to cause severe problems and inflict great cost on the victim attempting to carry out the defense. The U.S. financial sector is too important for this task force to overlook when seeking to address the nexus of terrorism and finance. The continued innovation and evolution by our enemies highlights the importance of this body’s role in the fight against terror. The United States must do better when defending our financial system and addressing the threats operating within it. The risk is too great to ignore. “

Vice Chairman Robert Pittenger (R-NC) echoed these sentiments. “Recent reports from the State Department and the Treasury Department have further highlighted the priority we must place on our counter-terrorist financing efforts. The 2014 State Department country reports on terrorism make it clear that terrorism is becoming more prevalent. The number of attacks increased by 35%. There were 3,000 more attacks in 2014 than in 2013. The fatalities increased 81%, to 32,727 deaths in 2014. The National Terrorism Financing Risk Assessment shows that while we have made progress in undermining terrorist financing, there’s still vulnerabilities in our system and more can be done.”

John W. Carlson, the Chief of Staff at the Financial Services Information Sharing and Analysis Center, shared his view on the current threat faced by the United States today. “The current cyber threat environment continues to evolve and intensify. Each day, cyber risk grows as attacks increase in number, pace, and complexity. Our members constantly adapt to this changing threat environment. We are no longer in the days wherein the threat was confined to individual hacktivists and fraudsters. We are now in an era of attacks by not only organized crime syndicates, but also nation-states and entities affiliated with terrorist operations.”

MEMBER SPOTLIGHT

Rep. Sean Duffy | Accountability at the CFPB

The Chairman of the Oversight and Investigations Subcommittee is Sean Duffy (R-Wisconsin), who has been at the forefront of legislative efforts to reform the CFPB. In March, Duffy introduced a comprehensive package to reform the Bureau, which included proposals to replace the Bureau's director, Richard Cordray, with a bipartisan five-member board; and a proposal to make the Bureau subject to the regular Congressional appropriations process.

Weekend Must Reads


Forbes | Congress Should Reign In Rogue CFPB

That’s not to say that all regulations are bad and consumers tend to support reasonable regulations, ones that make sense, such as regulations that protect people from food that will make them sick or protect them from a dangerous product. They tend to draw the line when regulations that are purported to help them in the name of consumer protection, make things more challenging if not out right difficult for them by prohibiting access to services or in this case capital.

Investor's Business Daily | The New American Dream Under Obama: Renting

The heavy federal hand in the housing market has been a disaster. Despite spending more than $13,000 for every household, Washington has record low homeownership to show for it, even among the middle class.

Hoover Daily Report | How the U.S. Can Return to 4% Growth

Economic growth in real terms is averaging a meager 2.2% annual rate in the 23 quarters since the recession’s trough in June 2009. The consensus forecast of about 1% growth for the first half of this year offers little solace. Americans need not be resigned to such a dim fate.

    In the News

American Banker | CFPB Civil Rights Officer Says Agency Makes 'Mockery' of Process

Housing Wire | CFPB employees: Workplace discrimination getting worse, leadership absent

Politico Pro | Racial tension erupts at House hearing on discrimination at CFPB

American Banker | Dems' Defense of CFPB: Let's Talk About Something Else

The Hill | Dems accuse GOP of playing race card in contentious hearing

Housing Wire | Whistleblowers to testify on alleged discrimination at CFPB

American Banker | CFPB 'Whistleblowers' to Air Bias Claims Before Lawmakers

The Hill | Yellen pushes back on GOP 'obstruction' claims
Posted by Staff on June 19, 2015
Washington Policies Like Dodd-Frank Threaten U.S. Financial Stability


Members of the Committee on Thursday questioned Treasury Secretary Jacob Lew on the threats posed to America’s financial stability by misguided government policies, including the Dodd-Frank Act.

The most recent annual report issued by the Dodd-Frank-created Financial Stability Oversight Council (FSOC) identifies several threats to financial stability that are the direct result of these policies.  However, “it conspicuously omits any references to specific government policies or agencies as helping cause the systemic risks it identifies,” said Chairman Jeb Hensarling (R-TX).

“FSOC simply refuses to look in the mirror,” he said.  “Mr. Secretary, your council and the rest of Washington needs to awaken to this obvious truth:  when it comes to systemic risk, Washington is a large part of the problem.”

Not only does FSOC fail to identify the Washington sources of these threats, it ignores other key threats to our financial stability, such as the nation’s $18 trillion – and growing – national debt.

CBO points out the debt is a problem for our economy, and yet your report does nothing, says nothing about it.  And you are supposed to be an agency that points out these problems," Rep. Blaine Luetkemeyer (R-MO) said.

"The Federal Reserve Bank of Richmond recently reported that 60 percent of the financial system’s liabilities are backed by taxpayers. This report directly contradicts claims by Secretary Lew and the Administration that the Dodd-Frank Act ended ‘too big to fail’ – a stated objective of the Dodd-Frank Act - and that American taxpayers will never again have to foot the bill for bailouts," said Rep. Robert Hurt (R-VA).

Rep. Ann Wagner (R-MO) pointed out that FSOC’s deeply flawed process for designating so-called “non-bank SIFIs” further entrenches another threat to our financial stability:  Too Big to Fail.

To date, FSOC has designated four non-bank financial companies as systemically important financial institutions, or SIFIs, essentially signaling to market participants that the government considers them Too Big to Fail. As a result, Richmond Fed President Jeffrey Lacker stated that shareholders and creditors of those firms can expect the government to shield them from losses during periods of distress, ultimately putting the taxpayer on the hook for a future potential bailout,” she said.

A Cyber Attack Every 34 Seconds

The Oversight and Investigations Subcommittee held a hearing on Tuesday to continue the Committee’s ongoing efforts to combat cyber threats to consumers and the financial sector.

Subcommittee Chairman Sean Duffy (R-WI) said that while the motivations behind cyber attacks may vary, “there remains one constant. They intend to hurt America and our interests. Not only are they targeting the critical infrastructure of our country, like banks, power grids, food supplies, but they also pose a much graver threat directly to the citizens of the United States."

Witnesses called by the Subcommittee shed light on the prevalence of cyber threats to the financial sector.  Frank Cilluffo, Associate Vice President of the George Washington University and the Director for the Center for Cyber and Homeland Security, said one major U.S. bank faced 30,000 cyber attacks just last week.  “This amounts to an attack every 34 seconds each and every day.  And these are just the attacks that the bank actually knows about,” he told the Subcommittee.

Michael Madon of RedOwl Analytics and an advisor to the Center on Sanctions and Illicit Finance, called for a more pro-active stance by the federal government in fighting cyber attacks. "It is clear from watching these attacks dramatically increase in both frequency and damage, our nation's current defensive posture is simply not sufficient to address the threat. We need to have a more pro-active approach, one that shifts the paradigm away from defense to offense."

Subcommittee Reviews Economic Growth Proposals

Building on the success of the bipartisan Jumpstart Our Business Startups (JOBS) Act, the Capital Markets and Government Sponsored Enterprises Subcommittee chaired by Rep. Scott Garrett (R-NJ) has been identifying legal, regulatory and market impediments to capital formation, particularly for small and medium-capitalized companies.  On Tuesday, the Subcommittee continued its work with a hearing on the Small Business Credit Availability Act and the Fair Investment Opportunities for Professional Experts Act.

The Small Business Credit Availabiltiy Act, sponsored by Rep. Mick Mulvaney (R-SC), is geared toward updating regulation of Business Development Companies.  “We've heard that in other hearings BDCs have played an increasingly important role in our economy," said Chairman Garrett.


The Fair Investment Opportunities for Professional Experts Act, sponsored by Rep. David Schweikert (R-AZ), would allow more Americans to have the opportunities to secure their financial future," said Chairman Garrett.

Witnesses
at the hearing spoke about the importance of modernizing the regulation of BDCs and expanding the pool of investment opportunities.

Vincent D. Foster of Main Street Capital
said, "Modernizing BDC regulations will help support American jobs and foster economic growth by improving access to the public capital markets for BDCs. It will also free up significant resources at the SEC, which can be utilized more effectively to protect investors."

"With the JOBS Act, Congress helped to modernize existing regulations and establish new systems to provide the opportunities to allow Emerging Growth Companies (EGCs) to grow into public companies," said Tom Quaadman with the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness. "The proposals before us today continue that tradition and are important as they help small and mid-size businesses continue on the path to becoming EGCs."

For further information on these legislative proposals, click here.

Impact of the IMF:  Economic Stability or Moral Hazard?

Members of the Monetary Policy and Trade Subcommittee on Thursday expressed concerns that the IMF, in providing public funds to ease current financial problems in Europe is, in effect, transferring the cost of Europe’s past risky lending practices to the American public at large and to commercial banks that were more conservative in selecting their loan portfolios.
 

“The use of the IMF as a backstop for advanced European countries calls into question, in my mind, whether this institution has become an enabling crutch instead of a helping hand,” Subcommittee Chairman Bill Huizenga (R-MI) said.

MEMBER SPOTLIGHT

Rep. Randy Neugebauer | Lawmaker Calls Round Table on Bond Trading Challenges

A top lawmaker is inviting a bevy of Wall Street regulators and large financial institutions to a round table next month to discuss how regulations may be contributing to challenges in bond trading, the latest sign that officials are paying increased attention to the issue in Washington.

Weekend Must Reads


Washington Post | Obama wants to reengineer your neighborhood

This is what you get when you put a community organize in the White House – he tries to reorganize your community from Washington. The answer is not to force local governments to build affordable housing in affluent communities. The answer is to restore upward mobility in the United States so that more people can afford housing in affluent communities.

Real Clear Markets | The U.S. Is Defined By Expanding Government, Retreating Economy

Where once there was a limited government and unlimited economy, today there is a comparatively unlimited government and a limited economy. Following this progression, at what point do we begin to seriously measure, regulate and mitigate the impact of government's increasingly destructive impact upon the economy?

Wall Street Journal | Washington’s Illegal Bailout
 

Fed officials are upset that Congress wants to rein in their emergency and regulatory powers. Congress might have less cause to act if the Fed showed more respect for the law.

    On the Horizon 

June 24, 2015 2:00 p.m.
Task Force to Investigate Terrorism Financing Hearing

"Evaluating the Security of the U.S. Financial Sector"

June 25, 2015 10:00 a.m.
Oversight and Investigations Subcommittee Hearing

"Examining Continuing Allegations of Discrimination and Retaliation at the Consumer Financial Protection Bureau"

  In the News

Wall Street Journal | House Committee Rejects Yellen’s Reason for Not Complying With Subpoena

Bloomberg | Hensarling Accuses Fed of Willful Obstruction of Leak Probe

American Banker | CFPB Grapples with Spike in Employee Bias Complaints

The Hill | Hensarling accuses Fed of 'willful obstruction' in leak probe

Politico | HUD aid for its own workers includes $100k move

HousingWire | TRID, Discrimination and Accountability: The Appalling CFPB Double Standard

Wall Street Journal | Small Firms Aim to Raise Capital More Easily Under New Rules

MarketWatch | Lew, Hensarling Spar Over Bond Market Liquidity

Bloomberg | Risk Panel Will Divulge Why AIG, MetLife Are Too Big to Fail

Washington Times | Obama-Elizabeth Warren payday lender rules slammed by Florida Democrats

Posted by Staff on June 12, 2015
Committee Questions HUD Secretary on Ineffectiveness of Agency After 50 Years

The Department of Housing and Urban Development (HUD) was created 50 years ago to serve as a main weapon in the “War on Poverty” and the agency has received more than $1.6 trillion in annual appropriations over its lifetime.  On Thursday, members of the Financial Services Committee questioned HUD Secretary Julian Castro on his agency’s failure to achieve measurable results.

“By nearly every official measure, poverty and its consequences are as bad as they were 50 years ago.  The poverty rate today is essentially unchanged from when HUD was founded,” said Chairman Jeb Hensarling (R-TX).  "If we truly care about the least of these among us, we can no longer measure success by the number of dollars appropriated to HUD. That should be obvious. Instead, success must be measured in the number of our fellow citizens who rise from lives of poverty and dependency to lives of hope, self-sufficiency, and pride. That’s true success."

Throughout the hearing, members expressed concerns that HUD has created a bureaucratic, complex tangle of programs that foster dependency rather than promote economic freedom and provide a roadmap out of poverty.

"Our aspirations need to be much higher. Our expectations are far too low. The expectation should be that success is measured not just by how many people we're moving into dependency on the department but how many people we are moving out of dependency," said Rep. Andy Barr (R-KY).

Rep. Mia Love (R-UT) told Secretary Castro, “Every program that we have aimed at poverty should be aimed at making poverty temporary, not tolerable.”

Subcommittee Reviews More Proposals to Promote Financial Independence and Consumer Choice

The Financial Institutions and Consumer Credit Subcommittee continued its review of legislative proposals aimed at helping Americans achieve financial independence and preserving consumer choice.

Subcommittee Chairman Randy Neugebauer (R-TX) said the hearing was another “opportunity for members to continue the discussion of regulatory relief for community financial institutions and the protection of consumer financial choice. Many members here today have put in a tremendous amount of work to build bipartisan coalitions for their legislation."

The hearing covered 12 bills designed to reduce regulatory burdens and streamline regulatory compliance, ensuring consumers have greater access to the financial services they want and need.

Witness Hester Peirce from the Mercatus Center at George Mason University testified how financial regulation needs to be revisited and updated to allow for well-functioning markets. "A well-functioning market enables people who need financing to obtain it efficiently and at a competitive price,” she said.  “Market forces reward financial companies that serve consumers well and discipline firms that fail to provide products and services in a form and at a price that consumers want."

MEMBER SPOTLIGHT

Rep. Mia Love | VIDEO: Affordable Housing Coming To a Neighborhood Near You?

The Fox Business Network featured Rep. Love’s questioning of HUD Secretary Castro from Thursday’s hearing before the House Financial Services Committee.

Weekend Must Reads


The Hill | Ex-Im acting inspector general: Deal could cost taxpayers $150 million

The Export-Import Bank’s acting inspector general testified to Congress on Thursday that the bank could lose $150 million off a deal it financed with an Australian company that went bankrupt in April.

American Banker | Basel III Pulls the Rug Out from Community Banks

Similarities between Volcker and Basel are striking: Both rules weren't intended for community banks, but have had a disproportionate impact on hometown institutions.

Investor's Business Daily | Regulations Could Top Taxes As Enemy Of Small Business

For a large business, complying with regulations is often just a minor cost of doing business. For a small business, regulatory compliance can be an enterprise-killer.

    On the Horizon 

June 16, 2015 10:00 a.m.
Oversight & Investigations Subcommittee Hearing
"A Global Perspective on Cyber Threats"

June 17, 2015 10:00 a.m.
Full Committee Hearing "The Annual Report of the Financial Stability Oversight Council"

June 17, 2015 2:00 p.m.
Monetary Policy and Trade Subcommittee Hearing
“The Impact of the International Monetary Fund: Economic Stability or Moral Hazard?”

June 16, 2015 2:00 p.m.
Capital Markets and Government Sponsored Enterprises Subcommittee Hearing

"Legislative Proposals to Modernize Business Development Companies and Expand Investment Opportunities"

  In the News

Washington Free Beacon | HUD Has Spent $1.6 Trillion Since Its Creation

National Mortgage Professional Magazine | Rep. Royce Calls Out Castro on GSE Reform 

Wall Street Journal | Dodd-Frank Turns Five

American Banker | Lawmakers Spar Over TRID 'Grace Period'

Wall Street Journal | Yellen: Fed Was Advised Against Fully Complying With Subpoena on Leak Probe

Bloomberg | Bill to Change CFPB Governance Structure Draws Support, Criticism at House Hearing

Wall Street Journal | Kill the Export-Import Bank 

CNBC | Chart: What’s the real unemployment rate?

American Banker | Mortgage Lenders Continue Push for TRID 'Grace Period'

Wall Street Journal | SF Fed Sees Involuntary Part-Time Workers Remaining Elevated

New York Times | Mergers Might Not Signal Optimism

The Maine Wire | Poliquin: The Export-Import Bank Must Be Held Accountable

CNBC | How the Fed screwed up the bond market

Posted by on June 09, 2015
FACT: Two Russian firms targeted with U.S. sanctions due to Russia’s invasion of Ukraine were approved for more than $1 billion in U.S. taxpayer-subsidized financing from the Export-Import Bank.

According to articles in the Wall Street Journal and Investor’s Business Daily, one of these Russian state-owned firms, Vnesheconombank, maintains a close business relationship with a major Russian arms dealer responsible for more than 80% of Russia’s weapon exports, including shipments to Syria.


 

Posted by Staff on June 05, 2015
Subcommittee Conducts Oversight on Hurricane Sandy Claims

The need to reform the National Flood Insurance Program and allegations that Hurricane Sandy victims were cheated out of flood insurance claims due to bogus home inspection reports were the focus of a hearing on Tuesday held by the Housing and Insurance Subcommittee.

The subcommittee, chaired by Rep. Blaine Luetkemeyer (R-MO), heard testimony from the FEMA official in charge of the nation’s flood insurance program. He testified that more than 2,000 court cases have been filed by Sandy victims, many of which allege insurance companies and inspectors conspired to deny or underpay flood insurance claims.

“FEMA acted, but only after public prodding, and today is in the midst of a significant legal battle,” said Chairman Luetkemeyer. “Still, no one has been able to tell Congress or the public why these engineering firms operated in the fraudulent manner in which they are believed to have done. One question we must examine is whether or not perverse incentives exist within the National Flood Insurance Program.”

Rep. Scott Garrett (R-NJ) said during the hearing that he personally helped his constituents dig out of the rubble of Hurricane Sandy. “But after enduring the storm and the cleanup, the people of New Jersey had to face yet another challenge – doctored flood insurance claims that threatened their ability to rebuild. This is simply unacceptable. Frankly, it is maddening and I hope that we can all work together to ensure that victims are not cheated from what they are rightfully due,” he said.

Witnesses Testify That Ex-Im Harms American Jobs

Witnesses appearing before the committee at a hearing on the Export-Import Bank on Wednesday testified that Ex-Im harms some American jobs, tilts the playing field against some U.S. companies and has problems with corruption.

“We still believe that the Bank’s policy of subsidizing our foreign competitors tilts that playing field, harming U.S. companies and their workers,” said Richard Hirst, Executive Vice President and Chief Legal Officer for Delta Air Lines.

A $694 million direct loan from Ex-Im for an iron ore project in Australia is one reason why more than 1,200 American workers at domestic iron ore operations “are currently on layoff or have been notified of a coming layoff,” said Clifford Smith, Executive Vice President of Cliffs Natural Resources. The company is America’s largest producer of iron ore pellets for steelmaking and has five major mines in Minnesota and Michigan.

Ex-Im’s Deputy Inspector General Michael McCarthy testified that since the Office of Inspector General’s latest semiannual report was filed in March, one former Bank employee pleaded guilty to accepting $78,000 in bribes and another individual was sentenced to 41 months in prison for defrauding the Bank. At an earlier hearing this year, McCarthy said future indictments surrounding Ex-Im’s activities are possible.

This week, McCarthy also testified that Ex-Im has not fully complied with the Improper Payments Elimination and Recovery Act of 2010.

"We found Ex-Im Bank’s risk assessment for FY 2014 reporting provided limited insight into the actual risk of significant improper payments. As a result, the Bank’s improper payment reporting is incomplete and the true risk of significant improper payments is unknown," he testified.

Speaking to Ex-Im Chairman and President Fred Hochberg at the hearing, Rep. Bruice Poliquin (R-ME) wondered “how I can go back to the people I represent with this trail of mismanagement – ongoing mismanagement – and vote to reauthorize your bank?”

MEMBER SPOTLIGHT

Rep. French Hill | Banker Returns to D.C. to Take on CFPB, Regulatory Red Tape

His career has "always had at its core finance, it's always had at its core the private sector, and then I've always just been pretty passionate about public policy," the freshman congressman told American Banker in a recent interview. Hill, a member of the House Financial Services Committee, said he's now focused on removing duplicative and unnecessary regulation for the financial industry, calling the Consumer Financial Protection Bureau "a redundant regulatory initiative."

Weekend Must Reads


Wall Street Journal | An Open Letter to Republicans on the Ex-Im Bank

If Republicans can’t stand up to corporate interests in this skirmish, how will we ever stand up to the myriad special interests warring against adoption of a simplified, pro-growth tax code? How will we earn the moral authority to reform the social welfare state unless we first reform the corporate welfare state? Let the Democrats own corporate welfare by themselves.

Investor's Business Daily | As Obama's Economy Falls, White House Excuses Boom

It's true that in recent years, growth in Q1 has tended to be subpar. But the problem isn't a lack of proper seasonal adjustment; it's that growth under Obama has been so tepid that even the slightest bump can knock it off stride. Just look at the numbers.

CNBC | Why the Fed is wrong. Again
 

The Federal Reserve has fueled financial bubbles and exacerbated economic problems before, and it is doing it now. In the past 15 years, we have seen what can happen when the Fed underestimates the risks of rising asset prices and maintains "accommodative" monetary conditions for too long. Investors should proceed with caution.

    On the Horizon 

June 11, 2015 10:00 a.m.
Full Committee Hearing

"The Future of Housing in America: Oversight of the Department of Housing and Urban Development"

June 11, 2015 2:00 p.m.
Financial Institutions and Consumer Credit Subcommittee Hearing

"Examining Legislative Proposals to Preserve Consumer Choice and Financial Independence"

  In the News

Asbury Park Press | FEMA: Government, insurers let down Sandy victims

NJ.com | FEMA official: Government let Hurricane Sandy victims down

NY Newsday | Outgoing Flood Insurance Chief Says Program ‘Lacks Adequate Governance

Bloomberg | Republicans Order Records in New Attack on FSOC Transparency

Daily Caller | EXCLUSIVE: Obama Consumer Official Leaves Amid Charges He Helped Create ‘Toxic Workplace'

Newnan Times-Herald | Westmoreland Takes Tour of InComm Facility

Daily Signal | House Moves to Stop Operation Choke Point

 

Posted by on June 03, 2015
 
CLICK HERE TO WATCH

This morning the House Financial Services Committee released its latest video:  Ex-Im By the Numbers.  The 50-second video includes information about the $112 billion in taxpayer money Ex-Im puts at risk, that 99 percent of U.S. exports are successful without Ex-Im, and figures on the investigations, charges, arrests and amount of prison time associated with corruption at Ex-Im.  The video is being released shortly before the committee’s third hearing of the year on the Export-Import Bank, which starts at 10 a.m. Eastern time. 
Posted by Staff on May 22, 2015
Committee Passes 13 Jobs Bills

The committee passed 13 bills on Wednesday to help Main Street businesses gain access to the capital they need to grow and create jobs. 

"We still have millions and millions of our fellow countrymen, hardworking moderate-income taxpayers, who find themselves with stagnant to lower paychecks; bank accounts that are less than before the great economic crisis -- and they need more jobs, better jobs, and you can’t have more and better jobs without more and better capital formation,” said Chairman Jeb Hensarling (R-TX).

By passing the JOBS Act in 2012, Congress took an important bipartisan step toward easing the regulatory burden on small businesses and startups seeking access to capital markets.  However, more needs to be done to eliminate and streamline the regulations that make it difficult for them to open their doors and create jobs.

For more information about the 13 bills approved by the committee, click here.

Subcommittee Examines How the Financial Sector Addresses Cyber Threats

The Financial Institutions and Consumer Credit Subcommittee, chaired by Rep. Randy Neugebauer (R-TX), held a hearing on Tuesday to focus on how to protect financial institutions and consumers’ financial data from cyberattacks

"We should all remember that no single institution or system is 100 percent protected from cyberattacks. The sector faces threats posed by a growing array of cyber criminals, nation-state actors, and terrorist organizations," said Chairman Neugebauer.

The U.S. financial sector is a critical asset and part of the nation’s infrastructure.  A broad-scale cyberattack that disrupts financial markets or payment system could bring enormous harm to our economy.

Because cyber threats against the financial sector are constantly evolving, subcommittee members discussed the importance of information sharing – both within the financial sector and between the financial sector and the federal government.  Sharing information about threats and vulnerabilities would contribute to  the early warning of threats and likely attacks.

Subcommittee Conducts Oversight of Rural Housing Service

The Housing and Insurance Subcommittee, chaired by Rep. Blaine Luetkemeyer (R-MO), convened a hearing on Tuesday to review the Rural Housing Service's (RHS) budget, operations and overall performance.

"Like many of my colleagues, I represent a rural area. My hometown has 336 residents. It’s a place where it takes two jobs to make a living, and where the incredible benefits of living in rural America far outweigh the challenges," said Chairman Luetkemeyer. "The status quo simply isn’t acceptable. Rural Americans deserve more. RHS should heed suggestions made by GAO [Government Accountability Office] and increase interagency collaboration, and consider consolidation where appropriate."

Subcommittee Members expressed their concerns regarding the effectiveness of RHS programs and their impact on American families living in rural communities.

"If we're moving people from dependency on the government to independence, self-sufficiency, that to me is success. That would be a program I would be interested in supporting," said Rep. Andy Barr (R-KY).


Task Forces Dives into Links Between Terrorism, Crime and Corruption

The Task Force to Investigate Terrorism Financing, chaired by Rep. Mike Fitzpatrick (R-PA), held a hearing on Thursday to listen to testimony from experts on the links between terrorism, crime, and corruption.

Although terrorist organizations and criminal actors have different motives in their quest for finances, these groups may cooperate with each other in order to achieve their own objective. Beyond individual anecdotes and case studies, a 2014 network analysis by the Combating Terrorism Center at West Point suggests that criminal and terrorist groups may be highly interconnected.

"Terrorist groups have become entwined with trans-national criminal syndicates or, in some cases, evolving into the role themselves - engaging in criminal activities which yield greater profits than simply relying on state sponsorship or big pocket donors. These activities range from, but are not limited to, corruption, drug trafficking, human smuggling and extortion," said Chairman Fitzpatrick. "It is this type of connection - the intersection between terrorism, crime and corruption – that today’s hearing will focus on, including current techniques being used by these groups, effectiveness of the current U.S. policy in combatting them, and where these tactics can be improved upon."

One of the hearing’s witnesses, Professor Celina Realuyo, testified that “financial intelligence and investigative tools like ‘following the money trail’ are instrumental to better understand, detect, disrupt and dismantle these illicit networks of terrorism, crime and corruption. Tracking how terrorists and criminals raise, move, store and use money has been instrumental in degrading and defeating groups such as Al Qaeda Core, the Tamil Tigers in Sri Lanka and the FARC in Colombia.”


MEMBER SPOTLIGHT

Rep. Dennis Ross | Operation Targets Legal Businesses

Whether you utilize any of the targeted businesses or not, think about how future administrations could implement similar programs that "choke off" other forms of business. Where does it stop? Legitimate businesses rely on their banks to grow, hire more employees, pay taxes and provide basic services and products vital to our communities. Moving forward, as a member of the House Financial Services Committee, I will continue to fight to end Operation Choke Point.

Weekend Must Reads


Wall Street Journal | Government Warns of Systemic Risks It Created

Taxpayers, you’ve been getting a bargain from the regulators who sit on the U.S. Financial Stability Oversight Council. You might have thought you were paying them simply to identify risks in the financial system. But it turns out they’ve been creating them too. And you’re getting this additional service at no extra charge—at least until the next financial crisis and bailout.

The Weekly Standard | Mortgage Mess

The answer to the financial crisis may have been hidden in plain sight, but the failure to see it was willful. A powerful coalition of interest groups dominated housing policy for a generation, and they still do—despite the damage that policy caused in the Great Recession.

Fortune | Jeb Hensarling takes a swing at corporate welfare

People feel constrained. The regulatory burden, as you know, can fall disproportionately on small businesses. Financial regulators have gone from under-reacting to over-reacting. I have an 11-year-old and sometimes when every teacher gives you homework on the same night, you just feel overwhelmed. And that’s what we’re seeing now, particularly with our community institutions. The sheer volume, complexity, and weight of regulatory costs just drags them down.

Forbes | If You Like Your Financial Adviser, You Should Be Able To Keep Your Financial Adviser

The substantive flaws go on, but it is important to acknowledge that there are politics in play here. The administration withdrew this rule because it was too politically sensitive prior to the 2012 election. Now, they are rolling it out with a progressive senator known for bashing Wall Street.

The Hill | Reform regulation to let more banks serve Main Street

But there has been one area of bipartisan agreement: financial regulation should not stifle banks’ ability to deliver credit to small and medium-sized business located on Main Streets in communities all across the U.S. These are the firms that are critical to economic growth and the source of the most of the new job creation in the U.S.


 
  In the News

Bloomberg | Committee Clears Package of 13 Bills, Most to Ease Parts of JOBS Act, Dodd-Frank

Politico Pro | 13 SEC Bills Advance in House

Augusta Free Press | Financial Services Committee approves two Robert Hurt bills

MinnPost | Emmer named to House Financial Services Committee

Bucks County Courier Times | Terrorists Buying Our Used Cars, Analyst Tells Congress

Wall Street Journal | Republicans Ask Fed’s Yellen to Testify Four Times More a Year

Washington Post | Small businesses in Washington and around the country are rushing to go public. Here’s why.

MPBN News | Poliquin Expresses Concerns About Terrorism Financing

Associated Press | Lawmaker Subpoenas Fed, Seeking Evidence of a Leak