FSC Majority | Week in Review
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
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