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.”


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
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.
Housing and Insurance Subcommittee Hearing

"The Future of Housing in America: Oversight of the Rural Housing Service"

May 19, 2015 1:00 p.m.
Financial Institutions and Consumer Credit Subcommittee Hearing

"Protecting Critical Infrastructure: How the Financial Sector Addresses Cyber Threats"

May 21, 2015 10:00 a.m.
Task Force to Investigate Terrorism Financing Hearing

"A Dangerous Nexus: Terrorism, Crime, and Corruption"

  In the News

Talk Business & Politics | A Real Opportunity to Save Our Community Banks

Bloomberg | Hensarling Subpoenas Treasury, Fed for Debt-Ceiling Documents

Reuters | Fed said to have emergency plan to intervene if U.S. defaulted on debt

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

Bloomberg | Industry Torn on How Far Congress Should Go with Financial Data Breach Legislation

The Hill | Pawlenty: Hackers pose almost 'existential' threat to US

The Blaze | Lawmakers look to stop multi-million salary for CEO of government mortgage giant

Daily Signal | Small business owner says bank denied service because she sells guns

Politico | Dodd-Frank’s misadventures in the Democratic Republic of Congo

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
Investor’s Business Daily – May 1, 2015

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

The Hill | The CFPB, not what it was hoped to be

Newsmax | Rep. Garrett Offers Proposals to Enhance Capital Formation

Augusta Free Press | Robert Hurt: The CFPB needs increased transparency, accountability

Wall Street Journal | The Slow-Growth Fed

Bloomberg | Duffy Insurance Bill Latest in Growing Scrutiny of International Insurance Talks

National Journal | The Recession Isn't Over For Many Families

Investor’s Business Daily | CFPB Launches 10 Joint Lending Bias Probes With Justice Dept.

Star-Tribune | Hurt introduces bill to reduce regulatory burden on small companies

Investor's Business Daily | Obama's Economy Stumbles Again With A 0.2% Quarter

Detroit News | Huizenga: Many reasons to be wary of the Ex-Im Bank

Wall Street Journal | House Lawmaker Presses SEC Chief on Bond-Market Liquidity

RepublicanAmerican | Low-down-payment mortgages are back

Posted by on April 24, 2015
Task Force Holds First Hearing on Terrorism Financing

The Task Force to Investigate Terrorism Financing held its first hearing on Wednesday to examine the global terrorist threat and the methods by which terror groups finance their operations. 

In its coverage of the hearing, The Hill quoted Task Force Chairman Michael Fitzpatrick (R-PA) as saying that members will make sure "the federal government is using every tool at its disposal to deprive groups like the Islamic State, Boko Haram and other terrorist organizations of the funds they rely on to advance their warped ideology."

Members and hearing witnesses expressed concern that lifting sanctions against Iran as part of President Obama’s nuclear deal “could ease the flow of funding to terrorist groups around the world,” the Boston Herald reported.

The U.S. is ceding $11.9 billion in cash transfers to Iran as the Obama administration looks to finalize a nuclear deal with Tehran.

Juan Zarate with the Center for Strategic and International Studies testified that effectively fighting terrorists requires choking off their money supply.  “Whether it is Al Qaeda, the Islamic State, or Hizballah, the reality is that terrorist groups need money to operate their networks, implement logistics, maintain territory or influence, and to plan strategically against the United States,” he said. "Money is their enabler, but it’s also their Achilles’ heel."

For more on the Task Force, be sure to watch this week’s Sunday Video Message with Task Force Co-Chairman Rep. Robert Pittenger (R-NC). 

Subcommittee Hears From Regulators on Regulatory Burdens

The Financial Institutions and Consumer Credit Subcommittee continued examining the detrimental effect the regulatory burden on community financial institutions has on consumers at its hearing on Thursday. 

As Bloomberg reported in its coverage of the hearing, “Smaller banks have been complaining for years of the compliance costs of post-crisis regulations, particularly those implementing the Dodd-Frank Act.”

Members shared their concerns about the shrinking number of local banks and credit unions due to burdensome and duplicative regulations.

Subcommittee Chairman Randy Neugebauer (R-TX) shared that "In the 19th District of Texas, we need relationship banking. My constituents want to know their banker. The local banker wants to be flexible and find ways to help his neighbor realize their dream and reach financial independence."

Members also discussed how their constituents struggle when one-size-fits-all Washington regulations impact their hometown banks and credit unions.  Rep. Andy Barr (R-KY) said consumers in his area are not able to have their needs met by their local financial institutions because they are no longer in the “business of lending,” he said, but rather the “business of paperwork and compliance.”

Overregulation has limited choices for consumers, increased costs and made it harder for Americans, especially those with low and middle incomes, to achieve financial independence, said Rep. Frank Guinta (R-NJ).

Rep. Scott Tipton (R-CO) said in his rural district community financial institutions are "about to give up" due to the unmanageable amount of regulations.


Rep. Mike Fitzpatrick | Experts: Terrorists financing with fish, statues and sugar

In March, the U.S. House Financial Services Committee created a task force specifically to study the flow of money for terrorists. Chaired by Bucks County Congressman Mike Fitzpatrick, the task force has six months to issue a set of recommendations on bankrupting groups such as the Islamic State group, or ISIS. “It’s estimated that the terror attacks of Sept. 11, 2001, cost al-Qaida $500,000 to plan and execute,” said Fitzpatrick, R-8, of Middletown. “In 2015, the United States once again faces the specter of terrorism. The Islamic State has a reported net worth over $2 billion.”

Weekend Must Reads

Wall Street Journal | What’s Wrong With the Golden Goose?

How bad is the Obama recovery? Compared with the average postwar recovery, the economy in the past six years has created 12.1 million fewer jobs and $6,175 less income on average for every man, woman and child in the country. Had this recovery been as strong as previous postwar recoveries, some 1.6 million more Americans would have been lifted out of poverty and middle-income families would have a stunning $11,629 more annual income. At the present rate of growth in per capita GDP, it will take another 31 years for this recovery to match the per capita income growth already achieved at this point in previous postwar recoveries.

Wall Street Journal | Mel Watt’s Taxpayer Guarantee

The decision is a reminder of how little has changed in mortgage finance and at Fannie and Freddie despite their central role in the financial meltdown.

Economics One | A Monetary Policy for the Future

But much of the progress in medicine over the years has been due to doctors using checklists. Experience shows that checklists are invaluable for preventing mistakes, getting good diagnoses and appropriate treatments. Of course doctors need to exercise judgement in implementing checklists, but if they start winging it or skipping steps the patients usually suffer. Checklist-free medicine is as bad as rules-free monetary policy.

    On the Horizon 

April 29, 2015 10:00 a.m.
Housing and Insurance Subcommittee Hearing

"The Impact of International Regulatory Standards on the Competitiveness of U.S. Insurers"

April 29, 2015 2:00 p.m.
Capital Markets and Government Sponsored Enterprise Subcommittee Hearing

"Legislative Proposals to Enhance Capital Formation and Reduce Regulatory Burdens"

April 30, 2015 1:00 p.m.
Committee on Financial Service's Monetary Policy and Trade Subcommittee and Committee on Oversight and Government Reform's Subcommittee on Health Care, Benefits and Administrative Rules Joint Hearing

"Examining the Export-Import Bank’s Mandates"

  In the News

Al-Monitor | Congressional terror finance task force targets Iran

The Hill | Ex-Treasury official warns Iran funds going to terror groups

Bloomberg | Technology Brings Challenge in Fight Against Terror Financing, Expert Tells House Panel

Associated Press | Republican House Bill Modestly Curbs Bank Watchdog's Budget

The Hill | Hensarling slams Boeing CEO for refusing to testify

Financial Times | America’s Main Street banks struggle at the core

CNN Money | U.S. economy isn't growing fast enough

Wall Street Journal | Lawmaker Wants Fed to Name Possible Sources of Internal Secrets

The Hill | Half of Americans have money worries

Washington Examiner | The incredible shrinking deficit is no more

Wall Street Journal | Regional Banks Sweat Through Low-Rate ‘Torture’

American Banker | 'Warren Phenomenon' Causing Reg Relief Delay: House Republican

The Hill | GOP: Probe of Fed leak 'inadequate'

Real Clear Markets | Regulation In the Form of Big Bank Coercion

American Banker | Banks Overreact to Risk, and Pawnbrokers Pay the Price

Politico Pro | Former Ex-Im Bank Loan Officer Pleads Guilty To Taking Bribes

Washington Examiner | House passes bill to rein in consumer bureau

The Hill | House passes Wall Street reform tweak

Bloomberg | Fed Fails to Meet House Deadline for Names of Possible Leakers

The Hill | Rep. Hensarling’s invite to Ex-Im conference ‘lost in the mail’

Bloomberg | Regulator Seeks Community Bank Definition; Calls on Congress to Create ID Process

Wall Street Journal | Fed Fails to Comply With Lawmakers’ Request For Names in Probe

Posted by Staff on April 17, 2015
House Passes Bipartisan Regulatory Relief Bills for Consumers

As the House marked "Financial Independence Week,” lawmakers passed eight bipartisan regulatory relief bills to promote a healthier economy, preserve consumer choice, and help more Americans achieve the dream of financial independence.

The American dream for so many low and moderate income Americans is that one day they can achieve financial independence,” said Chairman Jeb Hensarling (R-TX).  “But, regrettably, over the last six years, middle income paychecks have remained flat or have actually been slightly lower; we know that middle income bank accounts are a lot lower.  Part of the problem, frankly, has been the Dodd-Frank Act.  After its passage the big banks have gotten bigger, the small banks have gotten fewer, the taxpayer has become poorer.” 

Six of the eight bills were passed on the suspension calendar: 

H.R. 299, the Capital Access for Small Community Financial Institutions Act, sponsored by Rep. Steve Stivers (R-OH):

H.R. 601, the Eliminate Privacy Notice Confusion Act, sponsored by Rep. Blaine Luetkemeyer (R-MO): 

H.R. 1259, the Helping Expand Lending Practices in Rural Communities Act, sponsored by Rep. Andy Barr (R-KY); 

H.R. 1265, the Bureau Advisory Commission Transparency Act, sponsored by Rep. Sean Duffy (R-WI);

H.R. 1367, sponsored by  Rep. Amata Radewagen (R-American Samoa); and

H.R. 1480, the SAFE Act Confidentiality and Privilege Enhancement Act, sponsored by Rep. Robert Dold (R-IL).

The other two bipartisan bills both deal with making sure lower and middle income Americans have affordable housing choices.

H.R. 685, the Mortgage Choice Act, sponsored by Rep. Bill Huizenga (R-MI), was approved 286-140.  The bill provides clarity to the calculation of points and fees in mortgage transactions, allowing more loans to be classified as Qualified Mortgages and increasing affordable options for borrowers.

"Hardworking families should not be denied access to a qualified mortgage because of technicalities that are largely out of their control," said Rep. Huizenga, Chairman of the Monetary Policy and Trade Subcommittee.

The other bill, H.R. 650, the Preserving Access to Manufactured Housing Act, will ensure consumers – especially low and moderate-income consumers – can continue to have access to affordable manufactured housing.  This bipartisan legislation continues existing consumer protections, including protections that prohibit steering consumers to predatory loans.

The bill’s sponsor, Rep. Stephen Fincher (R-TN), said the bipartisan bill will protects "financing options for the millions of Americans who rely on manufactured housing. New regulations that fail to recognize the uniqueness of the manufactured housing industry are taking options off the table for low-income families.”

H.R. 650 passed the House 263-162.

More Indictments of Export-Import Bank Employees Possible, Members Learn at Joint Hearing

Members attending a joint hearing of the Financial Services Monetary Policy and Trade Subcommittee and Oversight and Government Reform Health Care, Benefits and Administrative Rules Subcommittee heard the Export-Import Bank’s acting Inspector General reveal that future indictments surrounding the Bank’s activities are possible.

Earlier in the week, the Justice Department charged a former Ex-Im loan officer with bribery, alleging 19 occasions when the former employee accepted cash and other things of value in return for “being influence in the performance of his official act,” the Wall Street Journal, The Hill and other media outlets reported.

Committee leaders called the news “alarming.”

“While this is disturbing enough, the fact that we learned of this only at the end of nearly three hours of testimony, is further evidence of the Bank’s continued and brazen efforts to avoid transparency and accountability. With the Bank’s charter expiring this summer, this adds to the already long list of significant concerns we have over its future viability,” said Chairmen Hensarling, Jason Chaffetz, Huizenga and Jim Jordan.

Earlier in the hearing, Subcommittee Chairman Huizenga noted that "since its creation, Ex-Im's taxpayer subsidy has grown exponentially to a whopping $140 billion cap. As the national debt continues to climb over $18 trillion, many fear that these taxpayer-backed loan guarantees put taxpayers dollars at significant risk and raise concern that the Ex-Im is looming towards yet another bailout that the American people simply cannot afford. It has been claimed that while the Export-Import Bank is a self-sustaining agency that receives a net appropriation of $0 from Congress, because these bank loans are backed by the full faith and credit of the U.S. government, I believe and many others believe that American taxpayers are at risk if these banks' projects fail. It's important to note that the bank has already received a congressional bailout previously,” Chairman Huizenga said, noting that “from 1992 to 1996, Ex-Im received $9.92 billion in direct appropriations from Congress and the American taxpayers."

Ex-Im is “beyond repair,” said Health Care, Benefits and Administrative Rules Subcommittee Chairman Jordan (R-OH).  “The reality is that 99.9% of small businesses across America get no assistance from the Ex-Im Bank. The bank is a beneficiary to some of the largest companies in America. I don't fault large companies. They're great, we're glad they're here, we're glad they do the great things in the economy, but they don't need middle-class taxpayers' help to succeed."

For additional information about this hearing, click here.

Witnesses Speak Up for Regulatory Relief

The Financial Institutions and Consumer Credit Subcommittee held a hearing on Wednesday to hear from community-based lenders and service providers about how the regulatory burden of the Dodd-Frank Act is harming their customers by restricting access to affordable credit.

“This Committee has already heard testimony and explored the significant regulatory onslaught and resulting market consolidation facing depository institutions - our nation’s community banks and credit unions. Today, I am pleased to welcome our witnesses who represent many small businesses and community-based financial institutions to hear their perspective on ever-increasing regulatory burdens,” said Subcommittee Chairman Randy Neugebauer (R-TX). “We must push forward in our bipartisan efforts to provide regulatory relief for our Main Street financial institutions and protect the financial independence of the individuals and families they serve.”

Dennis Shaul, who served as a senior advisor to former Chairman Barney Frank (D-MA) and is now CEO of the Community Financial Services Association of America, told the subcommittee, “federal legislation that was intended to reform Wall Street has instead been interpreted by the Bureau in ways never intended by Congress ─ to the detriment of consumers.”

"A law that was meant to improve accountability and transparency in the financial system and protect consumers is now being implemented in ways that are anything but transparent. Instead, the CFPB is using suspect and biased data and unpublished research products to support presumptive claims against disfavored nonbank financial products,” added Mr. Shaul.

"The average guy in the oil field that I represent, they come and tell me, 'What business is it of yours, the government, if I want to borrow a $100 today and pay back a $120 at the end of the week,'" said Rep. Steve Pearce (R-NM).  “So what you're going to do is you're going to force these people out of business by putting these caps on here and, at the end of the day, the guy borrowing the money says, ‘What business is it of the government if I want to borrow a $100 to get me through the next payday, but you would choke that opportunity off.’"

Committee Seeks Increased Private Sector Participation in Affordable Housing

The Housing and Insurance Subcommittee held a hearing on Thursday to find ways to increase the role of the private sector in affordable housing.

Subcommittee Chairman Blaine Luetkemeyer (R-MO) said, “We need to look at innovative ways to do more with less, including increased private sector participation in public and affordable housing. And while private capital may not work in every instance, it’s essential that we examine the track record of demonstration programs like Moving-to-Work and the Rental Demonstration Assistance program and public-private partnerships so we can serve more people in need with the limited resources at our disposal. In today’s hearing we will hear from witnesses who have first-hand experience in forging partnerships that benefit communities in need. These are some of the many people and organizations striving to make a difference; we need to provide them with greater flexibility to meet the growing demand they face."


Rep. Blaine Luetkemeyer | A lot can be accomplished in 50 years

So, what will the future of housing look like? If the objective is to build a system that protects taxpayers and homeowners and allows for a smarter housing safety net, the answer is reform. To ensure efficiency, we need organizational reform at HUD and leadership at the FHA and the Federal Housing Finance Agency that understands the importance of risk management. To protect taxpayers, the FHA must return to its mission and allow for more private market participation. To create a stable housing economy, we need to continue to press for responsible housing finance reform that encourages a culture of sustainability among homeowners. To help those most in need, we must push for innovation at HUD, the U.S. Department of Agriculture and other federal agencies that need to reduce the regulatory burdens that those who work tirelessly to serve their communities face.

Weekend Must Reads

Wall Street Journal | How to Revive The Private Mortgage Market

The economic logic is clear. Everybody wants more private capital operating in the secondary-mortgage market. But Fannie’s and Freddie’s huge government advantages make it impossible for any private entities to compete. Congress instructed that mortgage-guarantee fees be raised to the level where private financial institutions—using these institutions’ actual capital requirements and cost of capital—can fairly compete. The goal is a more robust, more private, and economically more efficient mortgage market. Taxpayers’ exposure to losses by Fannie and Freddie will also be reduced.

Forbes | How 'Progressive' Policy Weakens African-American Banks

Democrats (along with bureaucrats at the Consumer Financial Protection Bureau) have tried to go after car dealers and other lenders for “disparate impact” against minorities. Perhaps they should have turned that lens on themselves prior to passing Dodd-Frank. However well-intentioned Democratic lawmakers were in creating Dodd-Frank, its impact is another example of the negative consequences of over-regulation. That’s quite the opposite of “progressive.”

American Banker | No Denying Dodd-Frank’s Role in Bank M&A

“Any regulatory requirement is likely to be disproportionately costly for community banks, since the fixed costs associated with compliance must be spread over a smaller base of assets,” said Federal Reserve Governor Daniel Tarullo.

The Hill | ​It’s Time to End the Choke Hold on Consumers and Businesses

American consumers are facing a new threat to the availability, diversity and affordability of goods. Its name is Operation Choke Point and it works just like it sounds. Operation Choke Point is a program run by the federal government that, without written regulation or legislation, encourages banks to discriminate against what the government considers unsavory businesses.

    On the Horizon 

April 22, 2015 10:00 a.m.
Task Force to Investigate Terrorism Financing Hearing

"A Survey of Global Terrorism and Terrorist Financing"

April 23, 2015 9:15 a.m.
Financial Institutions and Consumer Credit Subcommittee Hearing

"Examining Regulatory Burdens – Regulator Perspective"

  In the News

Housing Wire | Huge Mortgage Choice Act critic was supporter in August

Detroit News | House approves bill to change mortgage rules

Housing Wire | Mortgage lending and finance industry get boost in housing regulatory reform bills

Associated Press | House approves legislation to ease rules on home loans

The Hill | House passes lending reform bills

The Hill | House passes Wall Street reform revisions

Arkansas Online | House OKs easing of lending rules

Housing Wire | Houses passes Mortgage Choice Act of 2015 by 286-140

Jackson Sun | Affordable housing bill passes House

Bloomberg | Lawmakers Step Up Fed Leak Scrutiny With Interview Requests

The Hill | GOP grills Export-Import Bank president at hearing

Daily Signal | Future Indictments Related to Export-Import Bank Likely, Agency Watchdog Says

Washington Examiner | Export-Import Bank loan officer indicted for bribery, more indictments may be coming

Daily Caller | House GOP Gets Tough with Ex-Im Chairman

Credit Union Times | Credit Union Bills Head for House Vote

Arkansas News | Dodd-Frank Hurting Manufactured Home Loans

Wall Street Journal | Justice Department Charges Former Export-Import Bank Official With Bribery