Chairman Jeb Hensarling


Posted by on November 03, 2013


Congressman Mick Mulvaney (Twitter | Facebook) delivers this week's Sunday Video Message on the $1.7 billion taxpayer-funded bailout of the Federal Housing Administration. 

Posted by on October 31, 2013

The Protecting American Taxpayers and Homeowners Act – the PATH Act – expressly preserves the 30-year fixed rate mortgage. In fact, it's the only housing reform bill that specifically does so. But those who defend the status quo are trying to trick you into believing otherwise.

Don't believe those scare tactics. Just read it for yourself. On page 39 of the bill, it's spelled out clearly in Section 213: “the FHA… shall provide, among other mortgage insurance products, for the availability of a 30-year fixed rate mortgage.” Not can provide, may provide, or could provide – but SHALL provide. 

If it becomes law, the PATH Act would mark the first time that the FHA is specifically required to offer a 30-year fixed rate insurance product. Moreover, many have said the very existence of the 30-year fixed rate mortgage is due to the creation of the FHA. If that's the case, the PATH Act goes to great lengths to strengthen the 30-year fixed rate mortgage by taking FHA out of HUD and making it its own autonomous, stand-alone agency. This new FHA would have the tools and flexibility it needs to fulfill its mission in a financially sound manner. 

Still spooked? Consider this: The 30-year fixed rate mortgages existed before the financial crisis and they are being made today without a government guarantee.

As the Washington Post recently stated in an editorial:  “Opponents of the PATH Act argue that the lack of permanent government backing will deprive the market of liquidity and consequently end the 30-year fixed rate mortgage…One answer to that is that some 30-year fixed rate loans already exist without government help…”

Homebuyers should have the opportunity to acquire a 30-year fixed rate mortgage. They do today. And the PATH Act will not change that. 

Don’t get tricked; get the facts. The PATH Act creates a sustainable housing finance system for the American people... 

  • It ends the biggest taxpayer-funded bailout in American history – the nearly $200 billion bailout of Fannie Mae and Freddie Mac.
  • It strengthens and protects the FHA by giving it tools to tackle its solvency crisis and by giving it a specific mission to serve first-time homebuyers and those with low-to-moderate incomes. The FHA is in such a scary mess it just took a $1.7 billion bailout from the taxpayers!
  • It reduces government control of the mortgage market by removing artificial barriers to private investment capital.
  • It repeals Dodd-Frank Act regulations that are harming community banks and credit unions and making it more difficult for middle income Americans to buy homes they can afford to keep.
  • And it preserves the 30-year fixed rate mortgage.
Posted by on October 29, 2013

Today, the House Financial Services Committee held a hearing on the Federal Housing Administration’s (FHA) first-ever taxpayer-funded bailout  approximately $1.7 billion.

Despite long-standing concerns about its solvency, the FHA has not taken the necessary steps to mitigate its losses. FHA currently has several means at its disposal to minimize losses to its insurance fund, yet the FHA has not fully utilized these tools. As a result, American taxpayers are now on the hook for a $1.7 billion bailout.

In light of FHA’s fiscal mismanagement and first-ever taxpayer-funded bailout, Committee Chairman Jeb Hensarling (R-TX) asked FHA Commissioner Carol Galante whether anyone at the agency she heads has been held accountable.

seen in the video below, unfortunately, Commissioner Galante could not tell Chairman Hensarling who has been held accountable. In fact, she had no answer at all.

Posted by on October 28, 2013
The House is in session Monday through Wednesday this week and will consider two Financial Services bills. Additionally, the committee will hold two hearings. Be sure to check back here on the Bottom Line Blog -- and sign up for our email updates -- for more information throughout the week. 

Here's what's happening: 

On Tuesday at 10 a.m. the Full Committee will hear from Federal Housing Administration (FHA) Commissioner Carol Galante on the FHA's first-ever, $1.7 billion taxpayer-funded bailout. In the afternoon, at 3 p.m. the Financial Institutions and Consumer Credit Subcommittee will discuss legislative proposals addressing much needed reforms at the Consumer Financial Protection Bureau (CFPB). 

Also on Tuesday afternoon, H.R. 2374, the Retail Investor Protection Act will be considered on the House floor. Rep. Ann Wagner, the author of H.R. 2374, discussed her legislation in yesterday's Sunday Video Message. 

Rounding out the week on Wednesday the House is expected to consider H.R. 992, the Swaps Regulatory Improvement Act. Rep. Randy Hultgren explained H.R. 992 in a Sunday Video Message last month. 

Posted by on October 28, 2013
Chairman Hensarling appeared on Fox Business Network earlier today to discuss tomorrow's Full Committee hearing on the $1.7 billion taxpayer-funded bailout the Federal Housing Administration (FHA) received at the end of September. 


Hensarling on FHA's current condition: 

"Well as you probably know, FHA is about to receive their first bailout ever: $1.7 billion basically for a government agency that for years told us they would never need a bailout." 

"Regrettably, Congress has been misled for years as to the true fiscal health of the FHA. And so we're going to have the director of the FHA, Carol Galante, before our committee tomorrow [to] try to get to the bottom of this and find out why aren't they using the tools available to them to make FHA more fiscally sound. Because a broke FHA does no one any good." 

"For years FHA has been making predictions about their fiscal sustainability and they have been consistently wrong and hugely wrong." 

"The bottom line is at a time when our nation has taken on more debt in the previous four years than in the first 200, I can visualize the national debt clock, which I keep going in our committee hearing room, it's just turning faster and faster, and now part of the problem is the FHA." 

Hensarling on FHA reform: 

"We have to have a sustainable housing policy in America. One that is sustainable for homeowners, so we don't put people in homes they can't afford to keep. One that is sustainable for taxpayers, so they never again have to engage in bailouts of Fannie and Freddie and FHA. And then finally [one that is] sustainable for our economy. We've got to get off this boom, bust, bailout cycle." 
Posted by on October 27, 2013
Congresswoman Ann Wagner (Twitter | Facebook) delivers this week's Sunday Video Message on her legislation -- H.R. 2374, the Retail Investor Protection Act. H.R. 2374 will be considered on the House floor this week.
Posted by on October 24, 2013
Update 11/18/13: The full committee will consider six bills to reform the CFPB on Wednesday. 

Next week the Financial Institutions and Consumer Credit Subcommittee will hold a hearing to discuss legislative proposals to bring more accountability, reform and transparency to the Consumer Financial Protection Bureau (CFPB). As Chairman Hensarling has pointed out, the CFPB is arguably the single most powerful and least accountable federal agency in American history.

Established by the Dodd-Frank Act, the CFPB's radical design is unique among financial and consumer regulators, including those responsible for consumer and investor protection. Not only does it evade the traditional system of checks and balances championed by James Madison in Federalist #51, it also lacks the internal controls Congress built into other regulatory agencies.  

As the chart above illustrates, the CFPB escapes congressional budgetary oversight, obtaining its funding directly from the Federal Reserve instead of through the regular appropriations process. This end-run around Congress leaves no check to ensure the CFPB director is spending the people’s money effectively to promote consumer protection, much less efficiently in this time of runaway debt and deficits. In fact, we've already begun to see the result of this lack of oversight in the CFPB's egregious headquarters renovation costs. 

Unaccountable to Congress, we see that the CFPB eludes even the power of the president. The bureau's director, once appointed and confirmed, can only be removed by the nation's chief executive for cause. And don't count on the president to enforce spending discipline or regulatory restraint at the CFPB; the bureau is neither subject to the Office of Management and Budget nor the Office of Information and Regulatory Affairs

The most glaring difference between the CFPB and other regulators in the chart above, however, is the bureau's shocking lack of judicial oversight. Section 1022 of the Dodd-Frank Act provides that where the bureau disagrees with any other agency about the meaning of a provision of a federal consumer financial law, a reviewing court must give deference to the bureau’s view under the Chevron Doctrine.

Unfortunately, the absence of external checks and balances is only half the story at the CFPB. 

As the chart below shows, the CFPB is unaccountable even to itself since there is fundamentally no ‘it,’ no ‘they’ – only a he. Be he our credit czar, national nanny or benevolent financial product dictator, the CFPB director's authority is unilateral, unbridled and unparalleled. Without the check of a bipartisan commission, the director can declare virtually any financial product or service as ‘unfair’ or ‘abusive,’ at which point Americans will be denied that product or service even if they need it, understand it and want it. 

Finally, the CFPB lacks a dedicated inspector general (IG) to root out waste, fraud and abuse at the bureau. Given the findings by the Housing and Urban Development IG we highlighted last month, taxpayers should be outraged by this complete lack of accountability, oversight and transparency in the way the CFPB spends the people's money. 

Defenders of this structure claim it's necessary to guarantee the CFPB's freedom to protect consumers without the influence or interference of politics. Agency independence, however, cannot come at the expense of public accountability. 

The bottom line is this: consumer protection is not having powerful government agencies 'nudge' consumers to make 'correct' choices in the belief they are incapable of making rational decisions for themselves. True consumer protection empowers consumers and respects their economic freedoms to make informed choices free from government interference and fiat. 
Posted by on October 19, 2013

Forbes | Dodd-Frank’s Costs Will Be Paid For By Low-Income Bank Customers

A whole segment of society is losing access to mainstream banking that allows them to safely save and invest for the future.  They are being pushed into nontraditional financial arrangements not by choice, but because of Dodd-Frank.

NRO | 10 Questions for Janet Yellen

With Janet Yellen now seemingly on course to be the next Fed chairman, it’s time to find out what she thinks about some very important questions of monetary and regulatory policy.

Housing Wire | Industry veteran challenges CFPB’s support of disparate impact

If the CFPB intends to pursue discrimination caused by policies that have a discriminatory effect, it may want to start by looking at its own policies.

Washington Examiner | GM got bailout, now ships jobs to China

President Obama quietly released GM from a bailout requirement that it increase its U.S. production.  Now, GM is spending billions of dollars building up its production capacity in China.

Posted by on September 29, 2013

Congressman Randy Hultgren (Twitter | Facebook) delivers this week's Sunday Video Message on his legislation -- H.R. 992, the Swaps Regulatory Improvement Act. H.R. 992 will be considered on the House floor this week. 
Posted by on September 28, 2013

Mercatus | The Myth of Deregulation and the Financial Crisis

Did “deregulation” cause the financial crisis? Our conclusion was that there was no measurable, net deregulation leading up to the financial crisis.

Omaha World-Herald Mortgage lending at risk if rules not delayed, banker says

Without a delay of onerous Dodd-Frank mortgage regulations, some banks will stop or cut back on mortgage lending.

Reuters Fed official blasts White House handling of Bernanke succession

The White House has handled the process of picking the next chair of the Federal Reserve "terribly," a top official at the U.S. central bank said on Monday in an unusual public critique of the delicate, and traditionally discreet, selection process.

Daily Caller | CFPB accused of violating transparency law

A Mississippi man is threatening to sue the Consumer Financial Protection Bureau for denying him entry to the proceedings of one of its advisory committees, a move he claims is a breach of federal transparency law.