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?”
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.
Asbury Park Press | FEMA: Government, insurers let down Sandy victimsRepublicans Order Records in New Attack on FSOC Transparency
Newnan Times-Herald | Westmoreland Takes Tour of InComm FacilityDaily Signal | House Moves to Stop Operation Choke Point
Posted by on June 03, 2015
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
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.”
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
Politico Pro | 13 SEC Bills Advance in House
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 YearMPBN News | Poliquin Expresses Concerns About Terrorism Financing
Associated Press | Lawmaker Subpoenas Fed, Seeking Evidence of a Leak
Posted by on May 19, 2015
FACT: 10 large corporations receive nearly two-thirds of Ex-Im’s financial assistance.
Posted by on May 18, 2015
FACT: Nearly 99% of U.S. exports are financed without Ex-Im.
Posted by Staff on May 15, 2015
False Narrative of Financial Crisis Led to Wrong Remedy: D0dd-Frank
The Oversight and Investigations Subcommittee, chaired by Rep. Sean Duffy (R-WI), heard from witnesses at a hearing on Wednesday that the 2008 financial crisis was caused by bad government policies and regulatory incompetence, not a “lack of regulations” or “market failure.” Washington’s inaccurate diagnosis of the causes led to the wrong response: the 2,300-page Dodd-Frank Act and its burdensome regulations.
As a consequence of hastily enacting Dodd-Frank, Washington has piled on more regulations that are smothering community financial institutions, other small businesses and consumers who are losing access to affordable credit and choice. Far from “lifting the economy,” as Dodd-Frank supporters claimed the Act would do, Americans remains stuck in the slowest and weakest recovery of their lifetimes.
"Those who supported Dodd-Frank have been more concerned with helping special interests in Washington than their constituents back home, and the proof is in the numbers. They don't lie," said Chairman Duffy in his opening statement. “Fewer people have returned to the workforce than any other modern recovery. Banks are closing every week, and the number one cause that I hear from people back in Wisconsin is the excessive, crushing regulatory burden imposed by this administration and Dodd-Frank is a major cause of that burden. The crushing regulatory regime created by Dodd-Frank continues to keep people out of work, to keep businesses from hiring. It makes it harder for my constituents to get the loans they need to finance the expansion of their business, or to buy their first home."
Subcommittee Continues Review of Jobs Bills
The Capital Markets and Government Sponsored Enterprises Subcommittee, chaired by Rep. Scott Garrett (R-NJ), held a hearing on Wednesday to continue its review of legislative ideas to help small and emerging companies access capital so they can grow and create jobs.
Small businesses are the primary source of job growth in America, yet the sheer weight, volume and complexity of Washington regulations hinders their ability to create jobs and spur economic growth.
“As multiple witnesses have testified to this Committee over the years, our current equity market structure in many ways disadvantages small issuers, who often times find their stocks trading in illiquid markets with little to no research coverage. This has the ultimate effect of raising the cost of capital for these companies, impacting their ability to grow and hire new workers,” said Chairman Garrett."In our district we have tens of thousands of small businesses,” said Rep. Bruce Poliquin (R-ME). “We're a district in the state of small business owners, and we know firsthand how costly overregulation is and how it causes people to shut down their business or pass on that cost,” he said.
Committee Hearing Focuses on Protecting Consumers’ Financial Data
The Financial Services Committee’s hearing on Thursday gave members an opportunity to hear from major participants in the payments system about efforts to protect consumers’ financial information from cybercriminals and hackers.
Chairman Jeb Hensarling (R-TX) said in his opening statement, " In the era of “big data,” large-scale security breaches are unfortunately all too common. Every breach leaves consumers exposed and vulnerable to identity theft, fraud and a host of other crimes.”
Chairman Hensarling said he viewed the hearing as a venue for a “thoughtful and constructive dialogue on a bipartisan basis,” about the issue, and he commended Reps. Randy Neugebauer (R-TX) and John Carney (D-DE) for introducing bipartisan data security legislation.Rep. Neugebauer, chairman of the Financial Institutions and Consumer Credit Subcommittee, said, “Today, I am looking forward to learning about new payments technologies that can continue to facilitate payment efficiency, speed and security. Additionally, I am hopeful we can have a robust policy discussion about what new data security standards are needed to level the playing field. However, I hope all parties involved today understand that technology mandates and innovation must be driven by the private sector."
The Financial Institutions and Consumer Credit Subcommittee will continue the committee's work on protecting consumers’ financial data during its hearing next week.
Subcommittee Weights Costs and Benefits of Proposed Mortgage Closing Rule
The Housing and Insurance Subcommittee, chaired by Rep. Blaine Luetkemeyer (R-MO), held a hearing on Thursday to examine the impact that the Consumer Financial Protection Bureau's (CFPB) proposed rule will have on the mortgage closing process.
"For the majority of American consumers, the purchase of a home is the most important and expensive financial transaction they’ll ever make, and the process in place today is confusing and burdensome. 23 percent of respondents in an October 2013 poll by the USA Today said they would rather gain 10 pounds than go through the mortgage process. 7 percent said they would rather spend a night in prison. The system needs to be fixed, and we owe it to consumers to make sure this process works and is as straightforward as possible," Chairman Luetkemeyer said. "No one disagrees that there is need for improvement, but we need to go about this in an appropriate manner and take the time to ensure that consumers aren’t negatively impacted by something designed to help them."
Members and witnesses at the hearing expressed concerns that CFPB is rolling out a very significant without testing the roll-out – similar to the mistake the Administration made with the launch of the Obamacare website.
Witnesses called for a delayed enforcement period so that those impacted by the CFPB's new rule can have sufficient time to work out any difficulties without the threat of enforcement actions.
Rep. Randy Hultgren | Moving Your Nest Egg to a Bed of Red Tape
Members of one firm in my district, with dozens of offices that serve more than 30,000 customers, told me that they fear the Labor Department’s proposal will make it impossible to offer quality services to low- and middle-income customers. Tens of thousands of small investors I represent will have a harder time saving for their futures and those of their children.
Weekend Must Reads
AEI | Does bank supervision impact bank loan growth?
After controlling for the impact of monetary policy, bank capital and liquidity conditions, and any voluntary reduction in lending triggered by weak legacy loan portfolio performance or other bank losses, estimates show that supervisory restrictions have a large negative impact on bank loan growth.
Wall Street Journal | The Federal Reserve Asset Bubble Machine
The Fed now leads a culture of central bankers who see their job as reducing unemployment and stabilizing prices for consumer goods only, come what may in the markets. This needs to change. In a world in which high trade and money flows tend to restrain consumer prices but magnify asset prices, central banks need to take responsibility for both. After all, asset price inflation is as dangerous as consumer price inflation.
Heritage Foundation | Red Tape Rising: Six Years of Escalating Regulation Under Obama
The number and cost of government regulations continued to climb in 2014, intensifying Washington’s control over the economy and Americans’ lives. The addition of 27 new major rules pushed the tally for the Obama Administration’s first six years to 184, with scores of other rules in the pipeline.
On the Horizon
May 19, 2015 10:00 a.m.
Talk Business & Politics | A Real Opportunity to Save Our Community Banks
American Banker | Hensarling Subpoenas Treasury, Justice Over 'Stonewalled' Investigations
Politico Pro | Banking Industry Sounds Alarm On Data Breaches
American Banker | Lawmakers Stumped by Challenges of Cybersecurity
Posted by on May 14, 2015
FACT: While Ex-Im claims it is needed to fight subsidies from foreign competitors, just a third of Ex-Im transactions are used for this purpose – according to Ex-Im.
Posted by on May 13, 2015
FACT: 85 indictments were issued in connection with the Export-Import Bank from October 2009 to September 2014. That’s more than 1 indictment per month.
And expect more, says the Bank’s Inspector General.
Posted by Staff on May 04, 2015
As America celebrates Small Business Week, here’s an important editorial on President Obama’s threat to veto H.R. 1195, a bipartisan bill designed to give small businesses the opportunity to have their voices heard at the Consumer Financial Protection Bureau (CFPB).
The bill passed the Financial Services Committee by a vote of 53-5 and the House last month by a vote of 235-183.
As Rep. Robert Pittenger (R-NC) said, “Too often, CFPB regulations designed for massive, ‘systemic risk’ financial institutions end up hurting small businesses, credit unions and community banks. This bipartisan legislation will restore balance, continuing strong protections for consumers while allowing small businesses the freedom to grow and create good paying jobs.”
Chairman Jeb Hensarling (R-TX) praised the legislation: “An agency as powerful as the CFPB will benefit from the advice of small businesses, community banks and credit unions. The CFPB should listen to them so it can issue smart regulations rather than dumb regulations that harm Main Street America.”
Editorial: Obama Threatens To Veto Bill Giving Small Biz Greater Voice In CFPB Rulemaking
President Obama claims to champion small business, yet he's threatening to veto a bipartisan bill to give small businesses and banks a voice in regulation so that new rules won't overburden them and kill jobs.
The White House warned Congress last week that it opposes a bill to make the powerful Consumer Financial Protection Bureau more accountable to small businesses.
HR 1195, which passed by a 235-183 vote margin, would force the CFPB to pay attention to the concerns of small businesses, community banks and credit unions when developing new rules and regulations.
Small business owners, along with the public and press, have been barred from CFPB meetings with radical activist advisors.
CFPB Director Richard Cordray and other top officials met behind closed doors with his hand-picked Consumer Advisory Board, which has undue influence over financial regulatory policy. Secret talks have covered issues ranging from new mortgage regulations to onerous new rules for auto lenders and payday lenders.
It's critical that the financial community knows how these powerful officials are scheming with the radical nonprofit sector to control it. CFPB has the power to regulate virtually every consumer financial transaction in the U.S.
Its 25-member Consumer Advisory Board includes former Acorn activists, trial lawyers who make a living suing banks, and even a member of the Democratic National Committee. Some have taken hundreds of thousands of dollars in federal grant money to gin up housing and lending discrimination complaints.
These radicals not only advise the government on new bank rules but also influence their enforcement actions against creditors.
Right now, CFPB is not consulting with small businesses and lenders before making rules that harm them, even though they make up the backbone of the economy. In 2013, for instance, a small-business man drove to Jackson, Miss., to attend a meeting of the Consumer Advisory Board but was turned away. "We just don't allow anybody from the public into these meetings," Bobby Riggs said he was gruffly told by a CFPB official.
But the new House bill, introduced by Rep. Robert Pittenger, R-N.C., would establish a new Small Business Advisory Board to give such owners a voice in CFPB affairs and create some balance in an agency that has shown a strong anti-business bias.
It would also create a permanent Community Bank Advisory Council and a Credit Union Advisory Council. The business advisory boards will be paid for by making a tiny reduction — 0.1% — in the amount of funds that the CFPB is allowed to draw from the Federal Reserve over the next 10 years.
Hillary Clinton recently said that she was "surprised" to learn that small businesses were struggling. For an explanation, she can look at all the red tape with which CFPB is strangling them, in addition to ObamaCare mandates.
Obama argues that he opposes Pittenger's sensible bill because it would slightly reduce CFPB spending to offset the cost of the new boards. But the real reason is: he doesn't want business owners to loosen the death grip that radical anti-business activists have on the agency.
A pressure group that Sen. Elizabeth Warren set up to create CFPB — Americans for Financial Reform — is blitzing Congress to defeat the bill. In letters to Democrats, it warns them that the legislation is "a Trojan Horse designed to limit the Consumer Bureau's work" and strongly urges them to help kill it in the Senate before it gets to Obama's desk.
Some of the most radical lobbyists in Washington — including La Raza, National Community Reinvestment Coalition, Greenlining Institute, National People's Action and SEIU — have signed the letters.
What they're really worried about is losing their radical hold over CFPB and the financial sector.
Posted by Staff on May 01, 2015
Subcommittee Examines Impact of International Standards on U.S. Insurance Competitiveness
The Housing and Insurance Subcommittee held a hearing on Wednesday to review the impact that international regulatory standards could have on the competitiveness of insurers in America.
Subcommittee Chairman Blaine Luetkemeyer (R-MO) said in his opening statement, "The United States finds itself with the opportunity to lead, and not be led. We must seize the opportunity. It's vital that the gentlemen appearing today work in concert and in the interest of the United States to ensure that no ground is ceded to foreign regulators and that the necessary time is taken to produce common-sense rules."
Rep. Lynn Westmoreland (R-GA) spoke about the unintended consequences caused by ineffective and misguided regulations on small businesses and the economy.
"What Dodd-Frank did specifically with insurance companies in putting them under the SIFI rule and other things is you cast a net so broad that you caught all the little fishes that you were not intending to catch. So as a result, we've got what we've got. And there's going to be all types of unintended consequences as there is with anything as complex as Dodd-Frank and all the many rules that it put on different businesses. Then we wonder why we only had a growth of .02 percent in our economy. It's a direct result of the overregulation that we have today," said Rep. Westmoreland.
For nearly 150 years, U.S. insurance companies have been regulated primarily by the states. The Dodd-Frank Act passed in 2010 enlarged the federal government’s role in the insurance industry.
Today, international regulatory efforts threaten the U.S. model of insurance supervision that keeps our insurance market financially strong and competitive. There is a shared goal to better coordinate international insurance supervision, however, but not if it means deferring to international authorities that seem intent on moving toward a consolidated, bank-like model.
Subcommittee Focuses on Legislation to Help the Economy Grow
The Capital Markets and Government Sponsored Enterprises Subcommittee, chaired by Rep. Scott Garrett (R-NJ), held a hearing on Wednesday to focus on solutions that will help build a healthier economy by reducing regulatory burdens on Main Street businesses.
The Committee reviewed a dozen legislative proposals that will help small businesses -- the primary innovators and job creators of our economy -- gain access to capital so they can hire more workers, rather than having to spend their time and money toward complying with overly burdensome regulations.
“Although these bills are modest, they are not insignificant to our fellow citizens back home or to the entrepreneur or the small company that our fellow citizens depend on for a job,” said Chairman Garrett. “So, in all this, it is important to remember that capital formation and investor protection is not an either/or proposition. When investors have additional investment options to earn a return, and invest their money, that additional choice is significant protection.”
The bills would build upon the success of the bipartisan Jumpstart Our Business Startups (JOBS) Act of 2012. While those provisions of the JOBS Act that have been implemented are helping small businesses access capital at lower costs and have made it easier for companies to go public, more needs to be done.
A list of bills the Subcommittee discussed at the hearing can be found here.
Export-Import Bank’s Mandates Receive Scrutiny at Joint Subcommittee Hearing
The Financial Services Monetary Policy and Trade Subcommittee and the Oversight and Government Reform Health Care, Benefits and Administrative Rules Subcommittee held the second in a series of joint hearings on Thursday to review the Export-Import Bank. This week’s hearing gave members a chance to question Ex-Im Chairman Fred Hochberg about the Bank’s mandates.
“The Export-Import Bank’s stated goal is to support American jobs through exports. However in my opinion, judging by the Bank’s prior financing deals, it appears to be doing quite the opposite, oftentimes," said Subcommittee Chairman Bill Huizenga (R-MI). "American taxpayers have been unwittingly propping up foreign state-owned companies in Saudi Arabia, Russia, China, Venezuela, Pakistan, India, Colombia, Mexico, Ethiopia, South Africa and others who have done nothing but, frankly, work against the best interests of American citizens.”
Ex-Im’s mandates are politically-driven with no economic rationale, subcommittee members said at the hearing. This not only increases the likelihood of default and puts taxpayers at greater risk, it also invites waste, fraud and abuse.
Just last week, a former Ex-Im employee admitted he accepted bribes in return for recommending the approval of unqualified loan applications. At an earlier joint subcommittee hearing, members learned from Ex-Im’s acting inspector general that there are at least 31 active fraud investigations involving Ex-Im and the possibility of further indictments.
Committee Conducts Oversight of the Financial Industry Regulatory Authority
At Friday’s hearing of the Capital Markets and Government Sponsored Enterprises Subcommittee, members examined the activities and policies of the Financial Industry Regulatory Authority (FINRA), an independent, not-for-profit organization authorized by Congress to act as a self-regulatory organization (SRO) over the U.S. securities industry.
The Subcommittee examined concerns that FINRA is transforming itself from a traditional SRO into a quasi-governmental regulator with expansive authorities similar to those of the Securities and Exchange Commission and the need for FINRA to improve operations so it can better serve broker-dealers and their customers.
"Its recent actions are closer to that of the ever-expanding federal bureaucracies that we have become accustomed to in Washington that seek to burrow further into the lives of each and every citizen," said Subcommittee Chairman Garrett.
Additionally, the Subcommittee compared FINRA’s regulation of broker-dealers against rules recently proposed by the Department of Labor that expand the definition of “fiduciary” to include broker-dealers providing investment advice on 401(k) and IRA retirement accounts. Although the Obama Administration has called for broker-dealers to be subject to a fiduciary standard of care, FINRA already subjects broker-dealers to comprehensive oversight and actively protects investors.
Subcommittee Vice Chairman Robert Hurt (R-VA) said, "Investors in Virginia’s Fifth District, my district, and across the country rely on FINRA to regulate broker-dealers in a responsible way. I believe that FINRA has a responsibility to operate in a fair, consistent, and transparent manner given the authority it exercises. FINRA must be mindful of the potential economic impacts its rules may have, particularly at a time when economic growth remains vitally important."
Rep. Mia Love | Mia Love: My first 100 days in Congress
I am serving on the Financial Services committee, which is actively working to examine banking laws and unnecessary regulations. We are currently looking at a multitude of ways to dismantle Dodd-Frank and remove the unfair burden it imposes on financial institutions, particularly the many Industrial Banks based in Utah.
Weekend Must Reads
Wall Street Journal | The Peculiar Uses of a Taxpayer Bank
The Export-Import Bank is anything but a “critical element” of America’s national security. Congress should refuse to reauthorize the bank when its charter expires. Washington shouldn’t be spending taxpayer money on corporate welfare—especially when it goes to companies and countries that are either corrupt or are actively working to undermine America.
Investor's Business Daily | Dodd-Frank Takes Banking Back To Horse-And-Buggy Days
Dodd-Frank's compliance burden is heavier on small banks than larger ones, which are better financed and staffed to handle the costs and complexities. Given this difficult environment, why would anyone open a small bank — which is to say, why would anyone open a bank at all, since no one starts out opening a large bank?
American Banker | Warren's Wall Street Reforms Would Just Make Banks Riskier
Sen. Elizabeth Warren has received a lot of attention for her new plan to complete the work of the Dodd-Frank Act. This plan would sow the financial services ground with salt as Rome did to Carthage, ensuring that nothing will grow in the future.
CNBC | Hey, Fed —What was that?!
The Federal Reserve has muddied – significantly – the outlook for monetary policy.
Wall Street Journal | The Messes Obama Will Leave Behind
Mr. Obama will also leave behind a difficult economic climate in which to start a business. According to a recent Brookings Institution study, every year of his presidency more American businesses have died—closed, merged or gone bankrupt—than have been created.
In the News
Central Maine | Poliquin introduces child support bill, his first in Congress
Augusta Free Press | Robert Hurt: The CFPB needs increased transparency, accountability
Wall Street Journal | The Slow-Growth Fed
National Journal | The Recession Isn't Over For Many Families
Detroit News | Huizenga: Many reasons to be wary of the Ex-Im BankWall Street Journal | House Lawmaker Presses SEC Chief on Bond-Market Liquidity
RepublicanAmerican | Low-down-payment mortgages are back