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FSC Majority | Week in Review
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.

MEMBER SPOTLIGHT

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

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