Posted by Staff on March 06, 2015
Committee Pushes for Accountability and Transparency at the CFPB
Tuesday’s hearing with Consumer Financial Protection Bureau Director Richard Cordray was another opportunity for Republicans to promote reforms to make the Bureau accountable and transparent to hardworking taxpayers.
Republicans on the Committee are pushing for reforms to make the CFPB accountable and transparent because the Bureau is, by design, not accountable or transparent to Congress or taxpayers. Republican Members understand that real consumer protection puts power where it belongs: in the hands of consumers, not Washington bureaucrats.
“The CFPB undoubtedly remains the single most powerful and least accountable Federal agency in all of Washington,” said Chairman Jeb Hensarling (R-TX) in his opening remarks. “When it comes to the credit cards, auto loans and mortgages of hardworking taxpayers the CFPB has unbridled, discretionary power not only to make those less available and more expensive, but to absolutely take them away."
With its authority unchecked, the Bureau restricts, limits and infringes on the economic freedoms of the very consumers it is supposed to protect.
Financial Institutions and Consumer Credit Subcommittee Chairman Randy Neugebauer (R-TX), said, “I remain concerned that many Bureau actions demonstrate a regulatory paternalism that assumes the American consumer doesn’t know how to make choices for themselves. It is a dangerous scenario when government bureaucrats start making financial choices for people.
Committee Republicans also continued to seek answers about why the Bureau is spending more than $215 million in renovation costs for a building it rents.
"Because it's $215 million of taxpayers' money!" declared Rep. Wagner.
Watch this exchange between Rep. Wagner and Director Cordray here.
Rep. Robert Hurt | Robert Hurt: The Federal Reserve must be transparent and accountable
Until we can institute more transparent policies for the Federal Reserve, we must continue to provide rigorous congressional oversight. Last Wednesday, Federal Reserve Chair Janet Yellen testified before the House Financial Services Committee hearing entitled, “Monetary Policy and the State of the Economy.” I appreciate Chair Yellen’s testimony, particularly because I have serious concerns about Federal Reserve policies that make life more difficult for hardworking Americans and disproportionately diminish the ability of Main Street banks to provide vital capital in our rural communities.
Rep. Robert Pittenger | Pittenger renews push on advisory board for small businesses
In a statement Thursday, Pittenger said the board would “give small business owners, credit unions and community banks a seat at the table.” “Small businesses create jobs. Community banks and credit unions support small businesses. Too often, Washington regulators don’t pay attention to how their rules create unnecessary burdens for small business owners, killing job growth,” he said.
Weekend Must Reads
New York Post | White House looking to creep into 401(k)s
It’s all about control. It’s your money, America. The system functions quite well. Adding more pages of red tape will not improve performance, but it just may get your broker to drop your account, just as many credit lines were closed after Dodd-Frank passed.
American Action Forum | Re-inflating the Housing Bubble?
In this light, recent policy decisions are especially troubling. The Federal Housing Finance Agency recently announced that Fannie Mae and Freddie Mac would again purchase and guarantee mortgages with as little as 3 percent down. It also decided to fund the Housing Trust Fund and Capital Magnet Fund. And, as discussed in recent testimony, the FHA announced a wrong-headed cut in the premiums it charges for insuring mortgages against default. These are carbon copies of the kind of pro-cyclical housing policies that prevailed prior to the crash.
Wall Street Journal | A Recovery Waiting to Be Liberated
Hope flickered last year when the economy grew at more than a 4% clip in the second and third quarters. But then came last week’s news that fourth-quarter growth slowed to 2.2%, a gloomy revelation that the rebound was temporary. Economic growth for 2014 clocked in at about 2.3%—the same disappointing pace since the recession officially ended in 2009. What is the problem?
In the News
Holland Sentinel | Huizenga talks about Federal Reserve in weekly Republican address
Wall Street Journal | Hensarling Wants Quicker Responses From ‘Stonewalling’ Agencies
Credit Union Times | Cordray Defends CFPB Payday Lending Action
Housing Wire | House Committee grills Cordray on QM, mortgage regulations
Posted by Staff on February 27, 2015
Committee Pushes for Accountability and Transparency Reforms at the Federal Reserve
Republicans at this week’s hearing with Federal Reserve Chair Janet Yellen raised questions about how much influence the executive branch holds over the central bank and argued in favor of accountability reforms to both protect the Fed’s independence in its conduct of monetary policy and to help give the economy greater certainty.
In its coverage of the hearing, the Associated Press reported that Republicans on the committee “challenged the central bank’s lack of accountability”
Members “seized on Ms. Yellen’s official calendar records and an October speech on inequality, just before the midterm elections, as evidence she was leaning towards the Obama administration and Democrats,” reported the Wall Street Journal in its coverage of the hearing.
While Chair Yellen and Democrats argued reforms would open the Fed to political influence, “Republicans at the hearing countered that Ms. Yellen’s calendars show the executive branch has far more access, and potentially more influence, than Congress,” the Journal reported.
“Opponents argue any reforms threaten the Fed’s monetary policy independence, but the greatest threat to that independence comes from the executive branch, not the legislative branch,” said Chairman Jeb Hensarling (R-TX). “While the Federal Reserve Chair testifies publicly before this committee twice a year, she meets weekly with the Treasury Secretary in private. And for decades there has been a revolving door between Treasury officials and Fed officials which continues even today…Fed reforms are needed and I for one believe Fed reforms are coming.”
“The Federal Reserve has proven time and time again that its government knows best approach doesn't hold the cure for what ails the economy," said Monetary Policy and Trade Subcommittee Chairman Bill Huizenga (R-MI). "It's time we restore certainty as well as fiscal responsibility, and we must lift the veil of secrecy to ensure that the Fed is accountable to the people's representatives, the same people that created the Federal Reserve in the first place."
The Housing and Insurance Subcommittee held a hearing Thursday on the Federal Housing Administration (FHA), the second in a series that began earlier this month with the full committee’s hearing with HUD Secretary Julian Castro.
“House Republicans have argued that the FHA was wrong to make a cut to its annual mortgage insurance premium before its reserve fund reached a statutory minimum – and witnesses agreed,” reported the American Banker in its coverage of the hearing. Witnesses told the subcommittee that the FHA’s premium reduction “is undercutting the private sector and expanding the government’s role in the housing market.”Subcommittee Chairman Blaine Luetkemeyer (R-MO) said, "The underlying problems at FHA have existed for years and continue to pose a threat to all Americans. If a private business like the ones represented on our panel today operated in a fashion similar to FHA, it would be placed into receivership. Yet FHA continues unapologetically down a dangerous path that we’ve traveled before."
"It never ceases to amaze me that Washington doesn't seem to be able to learn the lessons of history and recent history. So here we have Fannie Mae and Freddie Mac jumping back in and offering 30-year loans for borrowers that can only afford a 3% down payment. These loans are exempt from the requirements that another federal agency says are required under the qualified mortgage rule, the Consumer Financial Protection Bureau that are supposed to prevent a recurrence of loose lending," remarked Rep. Andy Barr (R-KY). "This is a double-standard. The American people are tired of Washington living by one set of rules and the private sector and the American people living by another set of rules."
Rep. Ann Wagner | Wagner bill clashes with Obama proposal to regulate financial advisers
Wagner said Obama’s reforms could drive up the cost of financial advice for low- and middle-income holders of retirement accounts, thereby depriving them of that service. Wagner also said Obama was pushing the tougher rule without adequately studying its need and potential impact.
Rep. Randy Neugebauer | Overregulation Harmed America’s Financial Sector
In the midst of the financial crisis, the Democrat-controlled Congress did not do the responsible thing. Instead of comprehensively studying the crisis, Democrats in Washington threw a blanket over the financial sector in the form of the Dodd-Frank Act.
Weekend Must Reads
American Enterprise Institute | The Fed and inequality returns
The Fed chair shouldn’t sound like a left-leaning politician opining about hot-button political issues.
American Banker | An Open Letter to Elizabeth Warren on the Future of Community Banks
Facts should be the foundation for forming opinions. To suggest that community banks are doing just fine after Dodd-Frank is contrary to facts.
Bloomberg | CFPB Proves Its Critics Right
When Dodd-Frank was being debated in Congress, critics warned that the CFPB would have little accountability and would therefore be inclined to overreach. On this issue, the agency seems determined to prove that fear right.
Wall Street Journal | Obama vs. Savers
Ignoring existing regulation, Mr. Obama is making his usual argument that consumers are helpless against the predations of businesspeople. The solution naturally involves lawyers making lots of money. And in order to avoid industrywide chaos, the Washington bureaucracy will issue a flood of exemptions. At least Mr. Obama hasn’t promised that if you like your broker you can keep your broker.
On the Horizon
March 3, 2015 2:30 p.m.
CNBC Video | Chairman Hensarling Reacts to Fed Chair’s Testimony
CNBC | Are community banks doomed to fail?
The Hill | Ex-Im critics pounce after bank yanks data
Wall Street Journal | Fannie, Freddie Weak Earnings Raise Possibility of Future Bailouts
The Hill | GOP bill aims to block financial adviser regs
Washington Examiner | Fed's already political, GOP argues in oversight pushThe Hill | Ex-Im worker accused in bilking scheme
Posted by on February 26, 2015
“If independence is an issue, than we really ought to examine the independence of the Fed
House Financial Services Committee Chairman Jeb Hensarling (R-TX) was interviewed on CNBC’s “Closing Bell” Wednesday following the committee’s hearing with Federal Reserve Chair Janet Yellen.
You can watch the entire interview by clicking on the image, and below are excerpts that may be of particular interest.
On his reaction to Chair Yellen’s testimony:
“Well, I was disappointed because what we have seen now is that middle income families are still struggling in the slowest, weakest recovery in the postwar era, and yet it seems that we will continue on extraordinary measures that were employed back in 2008 and here we are in 2015. And yet they are not more transparent, they are not more accountable, and the real issue is, economists I know believe that we are best served when the Federal Reserve will communicate to the public what their monetary policy will be, and yet we didn't hear it in this particular testimony.”
On the Federal Reserve’s independence:
“[M]any of us believe that if independence is an issue, than we really ought to examine the independence of the Fed from the executive branch of government. That’s where the real threat is, not from the legislative branch that merely has asked the Fed -- you make up monetary policy, you can waive it, you can change it, but you ought to have an obligation to communicate it to the rest of us, and when you don't, you hinder economic growth, you hinder a healthy economy, you hinder middle income America that now has smaller paychecks and a smaller bank account.”
On making the Fed more transparent and accountable:
“The House Financial Services Committee moved a bill that, again, would simply ask the Fed to reveal its policy -- it's really about transparency and accountability -- just as long as they reported it to the rest of us and to ensure that the Fed, as you know, just doesn't have to do with monetary policy, it has to do with being a prudential banking regulator. And yet they are exempt from any of the provisions like cost-benefit analysis that other prudential regulators are required to do. We moved that bill in the last Congress. I intend to move a similar bill in this Congress.”
Posted by Staff on February 25, 2015
1). The Ex-Im Bank may harm as many jobs as it claims to support.
Government export finance assistance programs like Ex-Im “largely shift production among sectors within the economy rather than raise the overall level of employment in the economy.” - Government Accountability Office, “Export-Import Bank: Key Factors in Considering Ex-Im Bank Reauthorization”
“[A]t best the Ex-Im Bank creates jobs in export industries by destroying jobs in non-export industries.” – Donald Boudreaux, Ph.D, Professor of Economics at George Mason University
“By some estimates, the [Ex-Im] Bank’s loan guarantees have resulted in up to 7,500 lost U.S. carrier jobs, and up to $684 million of lost income for U.S. airline employees annually.” – Delta Airlines
2). The Ex-Im Bank doesn’t necessarily return money to the taxpayers.
The non-partisan Congressional Budget Office reports that if Ex-Im followed more accurate accounting rules – Fair-Value Accounting – its ledger would show a cost to taxpayers of $200 million/year, or $2 billion over 10 years. -- CBO Fair-Value Estimate
3). Only 1% of 1% of America’s Small Businesses Benefit from Ex-Im.
Congress requires that 20% of Ex-Im’s authorizations go to small businesses, but Ex-Im consistently fails to meet this statutory requirement. In reality, only .01% of America’s small businesses receive any help at all from Ex-Im.
Instead, Ex-Im’s subsidies overwhelmingly benefit very large corporations.
4). The Ex-Im Bank uses American taxpayers’ money to help foreign corporations, including businesses that are owned by the governments of China, Russia, Saudi Arabia, and the United Arab Emirates.
Of the 50 largest loans or guarantees approved by the Ex-Im Bank between FY2007-mid FY2014, 46% went to state-owned foreign companies or to a joint-venture that includes a state-owned company.
5). The Ex-Im Bank is not critical to our economy. It financed only about 1% of total U.S. exports in 2014.
Posted by Staff on February 13, 2015
Committee Examines Risky Practices at FHA
The committee held a hearing on Wednesday to examine the fiscal health of the Federal Housing Administration (FHA) and heard testimony from Housing and Urban Development Secretary Julian Castro.
In its coverage of the hearing, the Wall Street Journal noted that since 2009 the FHA has been in violation of the law which requires the agency to have a capital buffer equal to at least two percent of the loans it guarantees. While Secretary Castro told the committee the premium cuts would push back the FHA’s return to the two percent threshold by only “a few months,” the Journal reported that Moody’s Analytics Chief Economist Mark Zandi and others have said “the fund might not return to the two percent level until 2018, two years later than an estimate made by the FHA’s independent actuary in November.”
After questioning from Rep. Sean Duffy (R-WI), “Castro acknowledged that the 50-basis-point reduction in fees would slow full restoration of the fund," noted the American Banker. "Duffy said it was proof of Republican arguments."“Republicans cite the FHA’s need for a $1.7 billion draw from the Treasury in 2013 to shore up its reserve fund as reason to be concerned about the agency’s failure to move faster toward the two percent level,” The Hill reported in its coverage of the hearing.
Coming to your inbox on Sunday afternoon in this week’s Video Message: Rep. Andy Barr (R-KY) will discuss why hardworking taxpayers should be concerned the FHA is putting them and homebuyers at risk.Committee Holds Markup of Views and Estimates
At Thursday’s full committee markup, Chairman Hensarling said “[The] debt….represents roughly $160,000 of debt for every American household.”
"That particular debt you see on the clock today represents roughly $160,000 of debt for every American household. That comes out of their American dream. That is funds that cannot be used to send kids to college. Those are funds that can no longer be used to pay for health care premiums that have risen. They are funds that cannot be used to capitalize a new small business so that again they can achieve their American dream," said Chairman Hensarling.
"The Budget Views and Estimates that have been put together today will help this committee and help the Budget Committee guide our proceedings to ensure that we can help low and middle-income Americans in their pursuit of happiness and that we can ensure that we do not leave a legacy of debt for our children and our grandchildren and betray the American dream; which is not the fancy new car, it is not the new home with the kitchen and the granite countertops. The American dream is ensuring that our children and grandchildren have greater opportunities, greater freedom and a higher standard of living than we have enjoyed," added Chairman Hensarling.
Rep. Andy Barr | Congressman holds roundtable with bankers
A reintroduced bill could allow for more homeowners in Scott County, as well the creation of new jobs, said U.S. Rep. Andy Barr of Kentucky at a roundtable discussion with Scott County bankers. The Portfolio Lending and Mortgage Act would “expand the access of mortgage credit to the citizens of Scott County and all across the country,” he said.
Weekend Must Reads
American Action Forum | Dodd-Frank Rulemaking Excluded From Regulatory Review
An effort to reduce red tape by financial regulators excludes one of the most burdensome financial laws in recent memory, the Dodd-Frank Act.
Fiscal Times | The Spectacular Too Big Failure of Dodd-Frank
If the point of Dodd-Frank was to eliminate TBTF, it’s clearly failed. Instead, what it has done is prove the point of conservatives, who have consistently argued that regulatory expansion disproportionately impacts smaller players in any market. If the point of Dodd-Frank was to help consumers, that too has been a failure. Consolidation reduces both choice and proximity for most consumers, and the data from Harvard amply demonstrates that in the wake of Dodd-Frank. Rather than provide more competition for service and price, consolidation has left borrowers more and more at the whims of fewer and fewer providers. About the only success we see from Dodd-Frank is the strengthening of lobbyists on Capitol Hill, particularly from Wall Street.
The Hill | Overregulation is endangering our credit unions
The mounting costs and growing complexity of credit unions’ compliance burden are driven by two key components of overregulation: regulators’ overestimation of risk and the need to regulate it, and their underestimation of the time it takes to comply with a rule that, in the end, confers little benefit. Unfortunately, the result has become abundantly apparent as more and more credit unions, not-for-profit, member-owned financial institutions, have ceased doing business. Since 2007, the number of credit unions has declined by 1,600. That’s a whopping 21 percent drop. Under these circumstances, it is no surprise credit unions and NAFCU believe “enough is enough” when it comes to overregulation.
In the News
Wall Street Journal | HUD Secretary Defends Decision to Lower FHA Fees
Financial Times | Regulations hit smaller US banks hardest
El Paso Inc. | Community banks lobby for relief
Investor's Business Daily | Economic Optimism Index Dives Among Middle Class: Poll
Posted by Staff on February 10, 2015
Several months ago this blog noted that Australia’s richest citizen secured a nearly $700 million loan for a new mining project from American taxpayers thanks to the U.S. Export-Import. Now the Australian Business Review is reporting that the project “is set for very large losses.”
Now we know why banks & investors wouldn’t take the risk – but, American taxpayers did. #ThanksExIm
Posted by Staff on February 06, 2015
Subcommittee Examines Legal and Ethical Violations at HUD
The Oversight and Investigations Subcommittee heard testimony at its hearing on Wednesday that senior officials at the Department of Housing and Urban Development broke federal law and faced minor consequences for various ethical and legal violations.
In its coverage of the hearing testimony, the Washington Post reported the alleged violations include financial fraud, sexual harassment, nepotism and conflicts of interest.
"I want to make clear to committee members that these are different allegations against different employees in different departments and divisions responsible for very different tasks, but they seem to display the same cavalier attitude that shows these employees do not believe in following the rules and they do not care about getting caught. And when they do get caught, they do not care that they are obstructing an investigation or Congress," said Subcommittee Chairman Sean Duffy (R-WI). "It’s an attitude I think Americans are learning is prevalent throughout this Administration. And it’s an attitude I think we’re quickly getting tired of."
The Washington Times noted in its coverage of the hearing that, among various violations, HUD officials violated federal law by using taxpayer money to lobby Congress for increased HUD funding.
A witness from the Government Accountability Office told the Subcommittee that her agency concluded HUD officials violated federal law by engaging in “indirect or grassroots lobbying” when they urged individuals at organizations that receive HUD funding to contact members of Congress regarding HUD’s pending appropriations bill.
A report issued last year from HUD’s Inspector General into this same matter also revealed that HUD officials attempted to cover up their illegal lobbying activity by obstructing the investigation.NOTE: Coming to your e-mail inbox on Sunday afternoon -- this week’s Video Message will include some highlights of the Subcommittee’s hearing, with appearances by Chairman Sean Duffy and Reps. Michael Fitzpatrick (R-PA) and Bruce Poliquin (R-ME).
Rep. Michael Fitzpatrick | Fitzpatrick bill protects small businesses, families, taxpayers
No matter how well intentioned the more than 2,000 pages of Dodd-Frank regulations — and tens of thousands of other federal rules — there is always room to be made more effective and responsible. This is what the CLO provisions in Fitzpatrick’s bill (as well as the 10 other bipartisan measures) do: They work to protect consumers while letting small banks and businesses do their job. Why then a sudden uproar when Congress considered Fitzpatrick’s bill? Rep. Fitzpatrick’s colleague from across the aisle, and the Delaware River, Rep. John Carney (Del.) even offered this about the bill: “The provisions in this bill have passed Congress overwhelmingly in years past. Only now has it become distorted and mischaracterized for political purposes.”
Weekend Must Reads
Gallup | The Big Lie: 5.6% Unemployment
I hear all the time that "unemployment is greatly reduced, but the people aren't feeling it." When the media, talking heads, the White House and Wall Street start reporting the truth -- the percent of Americans in good jobs; jobs that are full time and real -- then we will quit wondering why Americans aren't "feeling" something that doesn't remotely reflect the reality in their lives. And we will also quit wondering what hollowed out the middle class.
Palm Beach Post | 3 Ways to Level the Economic Playing Field
Many longstanding federal and state policies privilege some businesses and not others. This tilted playing field isn’t just unfair; it’s grossly inefficient. It undermines competition, discourages innovation, and prompts businesses to expend billions of dollars in socially wasteful efforts to win the favor of politicians. But it need not be this way. A serious agenda to level the economic playing field appeals to both the progressive impulse to stick up for the powerless and the conservative urge to check government’s scope and power.
Investor's Business Daily | Collapsing Homeownership Proves Folly Of Federal Housing Policies
The government's homeownership scheme, like so much of what the meddling do-gooders inside the Beltway do, was viewed as grand and noble — until it all came crashing down on everyone. They turned the American Dream into a nightmare. But the social engineers never learned their lesson. In fact, they're doubling down on their mistakes.
On the Horizon
February 11, 2015 10:00 a.m.
Washington Examiner | Housing projects use tax dollars to lobby for more tax dollars
Washington Times | Millions in HUD money went to lobbying, not housing
Business Wire | CAGW Announces 2014 Porker of the Year Nominees
Washington Post | The diminishing returns of today’s homeownership policies
Investor's Business Daily | Watt Moves To Take Fannie, Freddie Off Sound Credit Standard
Posted by Staff on January 30, 2015
Washington ‘Rolling the Dice’ Again on Risky Housing Schemes
At a hearing on Tuesday, members of the committee voiced their strong concerns to the Director of the Federal Housing Finance Agency regarding recent FHFA actions that could repeat the same mistakes that led to the financial crisis.
"Contrary to the fable told by the left, the root cause of the financial crisis was not deregulation but dumb regulation. Regulations and statutes that either incented or mandated financial institutions to loan money to people to buy homes they ultimately could not afford to keep. Exhibit one, Fannie and Freddie’s affordable housing goals. 70 percent of all troubled mortgages were backstopped by Fannie, Freddie and other federal agencies," said Chairman Jeb Hensarling (R-TX).
"Regrettably, Washington appears to be rolling the dice yet again. Within the last 12 months FHFA has announced three different policies that are harmful to transitioning us to a sustainable housing finance system that protects both homeowners and taxpayers," added Chairman Hensarling.
Housing and Insurance Subcommittee Chairman Blaine Luetkemeyer (R-MO) noted, "At today’s hearing, FHFA Director Mel Watt agreed that there are certain tenants of responsible lending; Fannie Mae and Freddie Mac do not adhere to those tenants, and that could ultimately leave taxpayers in the position of once again footing a massive bailout. Director Watt confirmed today that taxpayers are backing Fannie Mae and Freddie Mac and will continue to be on the hook until housing finance reform is enacted. It is unfathomable that Director Watt thinks it is acceptable to take no action to protect taxpayers, particularly given that our nation is just a few years removed from a financial crisis that saw record numbers of foreclosures and the largest taxpayer funded bailout in history."
Rep. Mia Love (R-UT) said, "As I witnessed as a mayor, I have actually seen how these heavily involved government policies have actually hurt many cities in their ability to thrive and to grow. We have watched homes being built and actually seen those homes a year later completely empty, and hardworking families lose their credit and their ability to get into a home.”
Rep. Blaine Luetkemeyer | Luetkemeyer leads effort to end Operation Choke Point
“We’re very pleased they’ve acknowledged their wrongdoing and they’ve accepted our suggestions to put in place measures to stop this activity,” Rep. Blaine Luetkemeyer, R-Mo., told The Daily Signal in a phone call this morning. Luetkemeyer, a member of the House Financial Services Committee and leader in the fight to end Operation Choke Point, met with FDIC Chairman Martin Gruenbery and Vice Chairman Thomas Hoenig earlier today as a follow-up to concerns voiced last November.
Weekend Must Reads
Investor's Business Daily | Free Spending In Washington In A Time Of Frugality
Given half-trillion-dollar deficits, this is supposed to be an era of belt-tightening for governmental agencies. But you wouldn't know it from the fat-and-happy spending by some of them. Fannie Mae and the Consumer Financial Protection Bureau, for example, have both announced they're moving on up into glitzy new downtown Washington, D.C., office buildings costing taxpayers hundreds of millions.
McClatchy | Federal debt will explode over next 10 years, CBO says
The improving deficit numbers are temporary. Budget deficits are projected to begin going up again in 2018, and to nearly double by 2024 as retiring baby boomers strain the health and retirement systems, the economy grows more slowly and interest on the nation’s outstanding debt rises.
Real Clear Policy | The Crushing Burden of Government Regulation
Three years ago, Democrats and Republicans joined together to enact the Jumpstart Our Business Startups (JOBS) Act to reform U.S. securities law and make it easier for small businesses to raise capital. That law was a good start, but more needs to be done. So, Rep. Patrick McHenry (R., N.C.) is building support for a JOBS Act II, whose passage should be a no brainer for legislators of both parties.
On the Horizon
February 4, 2015 10:00 a.m.
Wall Street Journal | Hensarling’s Housing History LessonBloomberg | Bipartisan Support for Dodd-Frank Changes: Neugebauer
Wall Street Journal | Fannie, Freddie Regulator Defends Actions
Wall Street Journal | FDIC: Examiners Must Give Banks Written Notice on Risky Accounts
American Banker | FSOC's Proposed SIFI Reforms Are 'Too Little, Too Late': Critics
Posted by Staff on January 26, 2015
In this week's FSC Video Message, members give their thoughts on the president’s State of the Union speech.
Posted by Staff on January 23, 2015
Committee Adopts Oversight Plan
On Wednesday the Committee voted unanimously to adopt the Committee's oversight plan for the 114th Congress.
"No one in Washington – Republican or Democrat – should ever be allowed to carelessly spend the hard-eared taxpayers’ money. And that is why this committee will continually and vigilantly monitor every agency and every program under our jurisdiction. Hopefully we feel this is a bipartisan mission and a bipartisan commitment," said Chairman Jeb Hensarling (R-TX).
"If a program isn’t working, if it does more harm than good, it is time to reform it or it is time to get rid of it. If policies or regulations don’t make common sense, let’s make them sensible. That will lead to a better economy," added Chairman Hensarling. "As all of us know, consumers remain very concerned about the economy. Still too many live paycheck to paycheck. Too many have seen their paychecks shrink. Americans deserve an economy that meets its full potential. That is something I hope members on both sides of the aisle will be committed to -- that we will have a healthier, more robust economy."
Rep. Patrick McHenry | McHenry: "Get Lending Moving Again"
“The number one priority is to ensure that we get lending moving again,” McHenry said, during a phone interview. “Small community banks and credit unions have been harmed by the regulatory agenda in Washington that makes it more costly to get credit and less available in a time where families and small businesses need access to capital. In addition to that, it’s important that we ensure that the government is no longer on the hook for bailouts of banks, or any other institution, for that matter, in the United States. We’re working through changes to Dodd-Frank to ensure that the government is not on the hook for bailouts going forward.”
Weekend Must Reads
Washington Post | The Federal Housing Administration’s risky move to lower premiums
Taxpayers might legitimately wonder, however, why it’s necessary to take on this additional risk so soon after the FHA’s bailout, before the capital cushion is even halfway rebuilt — and at a time when homebuyers are already enjoying record-low interest rates, plus a windfall from cheaper gasoline. The president’s own estimate of the cash savings from the premium cut implies that it would pump less than $1 billion a year of consumer cash into an economy that is already recovering well without it. The premium reduction takes effect Jan. 26, so the administration can still reconsider, which is what it will do if it has really learned a key lesson of the Great Recession: Finance in general, and mortgage finance in particular, is riskier than it sometimes seems, and the best protection against those risks is a solid core of capital.
CNBC | Kiss that 'shrinking' budget deficit goodbye
"However, mandatory federal spending, especially for public retirement and health-care benefits, continued to expand unabated in the first three months of the fiscal year. Such rising mandatory expenditures foreshadow spiraling federal deficits and debt ahead."
Investor's Business Daily | Next Housing Bubble Will Be Caused By Gov't, Not 'Greed'
Fannie and Freddie are now purchasing the large majority of mortgages and announced last month that they would buy mortgages with only 3% down payments. The qualified mortgage standards that HUD and other regulators laid down in October allowed for mortgages with zero down payments. That sounds like a recipe for another housing bubble — and for mass foreclosures, which hurt the policies' intended beneficiaries — and perhaps for another financial crisis as well.
CNN Money | Obama says wages are growing. They're not
Wages basically didn't grow at all in 2014, according to the Labor Department. The median weekly wage at the end of 2014 was $796 (seasonally adjusted). That's barely changed from the same time in 2013, when the weekly wage was $794.
On the Horizon
January 27, 2015 10:00 a.m.
Wall Street Journal | Obama’s Middle-Class Blind Spot
Washington Times | The unvarnished state of the union
Wall Street Journal | The Gaslight Presidency
Investor's Business Daily | President Obama's Tax Hike Plan Is A Plan For Failure
Wall Street Journal | Tax Reform Should Go Right Down Main Street