Patrick McHenryChairman

WASHINGTON -- February may be the shortest month of the year, but the Financial Services Committee made every moment count – hosting 8 hearings, 1 markup, and passing bipartisan legislation to modernize federal housing programs, stop executive overreach and provide regulatory relief for Americans on Main Street.

7 photos from the Month of February:

The Debt // Federal Reserve Chair Janet Yellen makes her first public comments since the Fed’s decision to raise interest rates and since the national debt eclipsed $19 trillion.

The Markup // Chairman Jeb Hensarling (R-TX) leads a markup of the Committee’s Budget Views and Estimates for Fiscal Year 2017. 

The Consumer // Robert Sherill, a small business owner and former drug dealer, shares how his story of redemption wouldn’t have been possible without the help of a small dollar loan. 

Agreement // Housing and Insurance Subcommittee Chairman Blaine Luetkemeyer (R-MO) and Ranking Member Emanuel Clever (D-MO) share a moment of levity during a recent hearing. 

Ash Wednesday // Rep. Mick Mulvaney (R-SC) questions Federal Reserve Chair Janet Yellen on Ash Wednesday. 

Holding Them Accountable // Rep. Andy Barr (R-KY) poses tough questions to a CFPB witness about the Agency’s regulatory overreach. 

Working // Rep. French Hill (R-AK) listens as witnesses describe how Washington overregulation is “choking the U.S. economy and paralyzing American businesses.”  

Robert Sherill was a drug dealer. He was young and he made some serious mistakes. In his own words, “When I needed money, I sold drugs.” Eventually his crimes caught up with him and after several years in prison, he emerged resolved to build a better life for himself.

The only problem was that no one would take a risk on Robert. He couldn't get a job. He couldn't get a loan. He couldn't even get a bank account. The deck was stacked against him. It was against these odds that Robert decided that if he was going to turn his life around, he needed to start his own business.

Enter a local small dollar lender who understood Robert’s situation and designed a financial product to fit his needs.

“The payday loan I got...was a lifeline,” said Robert. “It enabled me to start a business.”

Robert understood the loan needed to be paid back. He understood how much it would cost. And he made a decision that was right for him.

Today, Robert’s business employs 20 people and is still growing. He is a member of his local chamber of commerce and of the Better Business Bureau. He is a productive member of his community, but it all may have been for naught if he couldn’t access a small dollar loan.

That’s why the CFPB’s attempt to shutdown small dollar lenders through regulatory fiat is so disturbing. It threatens to cut off the roughly 51 million American consumers who are unbanked or underbanked from accessing what may be the only type of credit available to them.

What the CFPB is attempting is nothing less than a Washington power grab. It is decreasing consumer choice, increasing the cost of credit, and reducing credit availability to the most vulnerable Americans.

Republicans know that the greatest consumer protection is competition and choice.

If we promote more choices, then we can create more opportunities for low and moderate income Americans like Robert to rise up and build better lives for themselves. And if we don't -- if Washington is allowed to limit Americans' financial freedoms and choke off access to small dollar lenders -- then stories like Robert's will become a lot less likely.

The consequences of this regulatory overreach are very real, as demonstrated by Robert’s response to a lawmaker who asked where he may be today if he hadn’t had access to the credit to start his small business:

House Committee: Treasury Played Politics in Debt Ceiling Debate

"The U.S. Treasury for political purposes tried to suppress the existence of backup plans that would allow the government to continue making some payments in the event of a partial government shutdown, according to a newly published report from the House Financial Services Committee."

Secret Fed Docs Show Obama Misled Congress, Public During Debt Limit Crises

"Federal Reserve Bank of New York officials secretly conducted real-time exercises during the 2011 and 2013 debt-limit crisis that demonstrated the federal government could function during a temporary shutdown by prioritizing spending, even as Treasury Secretary Jack Lew publicly claimed many times that such efforts were 'unworkable,' according to a new report by the House Financial Services Committee obtained by The Daily Caller News Foundation."

GOP investigation: Treasury misled Congress, public about the debt limit

"The Obama administration considered prioritizing debt payments if the nation hit its borrowing cap, despite public assurances from the Treasury Department that such a plan would be unworkable… One internal email from the Federal Reserve Bank of New York showed that 'Treasury wants to maximize pressure on Congress by limiting communications about contingency planning.'"

Obama Lied, and the Debt Ceiling Died

"What do you call it when an administration blatantly lies to the public to get its way in a debt ceiling fight, then covers it up for two years? For the Obama White House, it’s called 'par for the course.'"

The Obama Administration Misled Americans During the 2013 Debt-Ceiling Debate

"At the time, the White House and Treasury’s message was that there was no way to prioritize or sell anything. Well, as it turns out, documents subpoenaed by the House Financial Services Committee reveal that during the 2013 debt ceiling debate, 'the Obama Administration is not only capable of prioritizing payments in case the nation’s borrowing authority is not raised, it has run ‘tabletop exercises’ to prepare for such a contingency – contradicting earlier public statements from Treasury officials.'"

Subpoenaed Documents Reveal Obama Admin Deliberately Kept Congress in Dark Over Debt Ceiling Plans

"The Obama administration deliberately withheld information and kept Congress in the dark on how it was going to prioritize payments if the debt ceiling was not raised…”

House Report Says Treasury Secretary Misled Congress Over Debt Ceiling Risks

"Another internal email from the Federal Reserve Bank of New York complained, 'Treasury wants to maximize pressure on Congress by limiting communications about contingency planning,' according to the report."

1.      A greater percentage of Americans are working than when I took office. 

2.      Community banks and credit unions are thriving.  

3.      Too Big To Fail is a thing of the past.

4.      Our regulatory system has been streamlined. 

5.      Median household income has risen. 

6.      Taxpayers will never have to bailout Wall Street again. 

7.      New business startups have increased.

 
It’s been a rough start to the year for the Dodd-Frank Act, as yet another nonpartisan study finds evidence that the massive law harms Americans. 

Not surprisingly, the new report from the Government Accountability Office (GAO) indicates an “increased compliance burden” among community banks and credit unions, which has “begun to adversely affect some lending activities, such as mortgage lending to customers not typically served by larger financial institutions…”

Meaning that, once again, we see that this law supposedly intended to rein in Wall Street is hurting Americans on Main Street. 

And it’s not going to get better.  As the GAO reports, “the full impact of the law remains uncertain” because the “array of new regulations” spewing forth from Dodd-Frank have yet to be finalized and fully implemented. 

Small hometown banks and credit unions tell the GAO the “trickledown effects” from this future “one-size-fits-all regulation” will fall on them.

The GAO report comes on the heels of a similar study by the Dallas Federal Reserve, which concluded that in the onslaught of Dodd-Frank regulations “more banks may become too small to succeed.”  

The Financial Services Committee is working to change this.  In 2015, 28 of our Committee bills were signed into law, including 6 dealing with Dodd-Frank.  In 2016, we’ll be working to present visionary proposals laying out a better vision for financial reform – bold ideas that promote more opportunities for low and moderate-income Americans, protect taxpayers from future Wall Street bailouts, and empower families and individuals to achieve financial independence. 

You can join our efforts and track our progress by signing up for regular updates here.

Read on Medium

In a new report, the Dallas Federal Reserve acknowledged what we all know to be true: community banks are being crushed by the Dodd-Frank Act.

The report specifically warned of the consequences of the regulatory burden on small banks saying:

“…more than five years after [Dodd-Frank]… smaller community banks are finding it increasingly tough to survive...”

“Smaller community banks appear to have a valid concern that their compliance burden is rising and the playing field is becoming more uneven.”

The report went on to say:

“Regulatory oversight should match the level of risk an institution poses to the financial system and economy at large. Otherwise, more banks may become too small to succeed.”  

Translation? One-size-fits-all regulations do not work. And what’s worse is that it’s hurting community banks and credit unions and the hardworking Americans on Main Street who rely on them.

The report also cited the dwindling number of community banks—detailing the fact that since 2008, no new community banks have entered the marketplace. Supporters of Dodd-Frank said they were taking on the big banks.  Instead, with Dodd-Frank the big banks are getting bigger and the small banks are becoming fewer. 

The Financial Services Committee is working to change this.  In 2015, 28 of our Committee bills were signed into law, including 6 dealing with Dodd-Frank.  In 2016, we’ll be working to present visionary proposals laying out a better vision for financial reform – bold ideas that promote more opportunities for low and moderate-income Americans, protect taxpayers from future Wall Street bailouts, and empower families and individuals to achieve financial independence. 

You can join our efforts and track our progress by signing up for regular updates here. 

Chairman Jeb Hensarling (R-TX) responded to the Federal Reserve's interest rate hike with a continued call for more transparency at the Federal Reserve.

"The real question isn’t whether the Fed should be raising interest rates or lowering interest rates; it’s whether the Fed is giving our economy sustainable interest rates. Getting back to sustainable, market-based interest rates is better for consumers, investors and our economy overall. Unsustainably low interest rates clearly didn’t solve the problem or else Americans today wouldn’t be stuck in the slowest, worst-performing economic recovery of our lifetimes," remarked Chairman Hensarling.

The House of Representatives passed the Fed Oversight Reform and Modernization Act (FORM Act), sponsored by Rep. Bill Huizenga (R-MI) on November 19. The FORM Act would require the Federal Reserve to choose a monetary policy and communicate it to the American people. The FORM Act does not infringe on the Federal Reserve's independence to choose its monetary policy, but simply sheds light on its decision-making.

"The FORM Act will help expand economic opportunity because consumers, job creators and investors will all have more confidence in making financial plans. The more Americans can understand how the Fed will act, the better they can plan for the future," added Chairman Hensarling.

For more infomation on H.R. 3189, the FORM Act, click here.

  On the Horizon 

Stay tuned!

  In the News

American Banker | Republicans Hammer CFPB Over Data Collection Efforts

Washington Examiner | Gingrich goes after consumer data collection

The Hill | Gingrich slams consumer protection panel's data collection

Morning Consult | Newt Gingrich Brings Fireworks and Intrigue to CFPB Hearing

Wall Street Journal | Republicans Push Proposal to Let Banks Get Back Money From Fed

Politico Pro | Republicans gather support for Fed dividend change in omnibus

DSNews | Do the CFPB’s Massive Data Collection Efforts Pose a Threat to Americans?

New York Times | Fed Raises Key Interest Rate for First Time in Almost a Decade

HousingWire | Moody’s: TRID Violations Found in 90% of Recently Reviewed Mortgages

Unsustainably low rates didn’t solve the problem.   

If they had, Americans wouldn’t be stuck in the slowest, worst-performing economic recovery of our lifetimes.  Too many people are trapped in part-time work and more Americans than ever before have left the workforce all together. We can and must do better. 

We need economically sustainable rates.

The real question isn’t whether the Fed should be raising interest rates or lowering interest rates; it’s whether the rates are economically sustainable. Market-based interest rates are better for consumers, investors and our economy overall.

A more predictable Fed would mean a stronger economy. 

When the American market is whipped into a frenzy over whether or not the Fed will act, it hurts real Americans on Main Street. Fortunately, the House has passed a bipartisan measure to make the Fed more transparent and accountable than ever before. The Fed Oversight Reform and Modernization Act would expand opportunity by providing consumers, job creators and investors more confidence in making financial plans.  

In its coverage of the hearing, Reuters reported that Republicans on the Committee criticized FSOC for being “secretive and unwilling to share information.”  The American Banker reported that FSOC members “found themselves on the defensive that they were keeping lawmakers and the public in the dark about their activities.”

"You need to become more like us -- more transparent, more open to the American public," Rep. Scott Garrett (R-NJ) advised the witnesses.

"'Do you know that this body gets intelligence briefings from the FBI in regards to ISIS and terrorist attacks?” asked Rep. Sean Duffy (R-WI). “I would argue that American lives are in danger by these radical extremists. So we can get FBI briefings, but you won't give us briefings on the analysis that has gone into designation of certain companies in America?"

December 16, 2015 10:30 a.m.
Oversight and Investigations Subcommittee Hearing
"Examining the Consumer Financial Protection Bureau’s Mass Data Collection Program"

Washington Examiner | GOP Will Offer Banking Reform Plan to Counter Obama’s

Reuters | Republicans slam U.S. financial stability council as secretive

Wall Street Journal | Hearing Brings New Test for the Financial Stability Oversight Council

American Banker | FSOC Dangerously Secretive, Lawmakers Charge

The Hill | GOP airs gripes to financial oversight panel

Politico Pro | FSOC's insurance member wants Dodd-Frank changes

Politico Pro | Woodall in hot seat at FSOC hearing

The Hill | GOP airs gripes to financial oversight panel

Morning Consult | Republicans Say Financial Regulators Are Unresponsive

Politico Pro | Financial Services Committee approves data security, public housing, investment reform bills

Morning Consult | Top Finance Regulators Brace for Financial Services Showdown

Bloomberg | House Panel Approves Measure Easing Small Bank Debt Issuance

American Banker | House Panel Approves Data Security and Condo Bills