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Congressman Robert Hurt introduced two of the bills we considered in today's markup: H.R. 1564, the Audit Integrity and Job Protection Act and H.R. 1105, the Small Business Capital Access and Job Preservation Act. Both were reported favorably by the committee with bipartisan support. The first bill, H.R. 1564, prohibits the Public Company Accounting and Oversight Board from forcing public companies to automatically change or rotate their independent auditing firms. Selecting a company’s auditor is a decision that should be made by a company’s board of directors and ratified by its shareholder... Read More »

Two subcommittee hearings and a full committee markup make for a slightly lighter week than last. Be sure to check back here on the Bottom Line Blog -- and subscribe to our email lists -- for updates throughout the week. Here’s what’s happening: On Tuesday -- as Rep. Capito previewed in our Sunday Video Message -- the Financial Institutions & Consumer Credit Subcommittee will examine how Dodd-Frank hampers home ownership. That hearing will take place at 10 a.m. Later, at 2 p.m., the Oversight & Investigations Subcommittee will review the budget for the CFPB. Finishing up committee activity fo... Read More »

Financial Institutions & Consumer Credit Subcommittee Chairman Shelley Moore Capito delivers this week's Sunday Video Message, the first in our new series. In the video, Rep. Capito previews next week's hearing on the Dodd-Frank Act's negative impact on homeownership. Read More »

Fortune: The Fed's other trillion dollar problem The amount of money banks have at the Fed recently reached 13 digits, for the first time ever. Bloomberg: New Home Prices Say What’s Different This Time Although no two business cycles are alike, most share some common characteristics. The interest-rate-sensitive sectors of the economy -- housing and manufacturing -- tend to lead on the way up and the way down, for obvious reasons. Inflation ebbs during the recession and in the early stages of the recovery. Credit creation drives the upswing. CNBC: Are Markets Facing a Crisis of Confidence? The ... Read More »

A survey of housing finance in other countries sheds light on the distortion that government subsidies for housing can cause in national economies. Professors at New York University’s Stern School of Business have pointed out that one thing that Spain and the United States have in common is a “massive misallocation of their economy’s resources to construction. The oversupply is contributing to the substantial unemployment rate in Spain and the U.S.” They further point out that the government’s programs to subsidize housing—which includes support through the GSEs—come with a significant price: ... Read More »

Contrary to the Fannie & Freddie defenders’ assertions that America’s unique GSE-model of housing finance is the “envy of the world,” yesterday’s full committee hearing found that the U.S. ranks only 17th in the world in terms of the rate of homeownership. Our 65% homeownership rate puts us behind Australia, Ireland, Spain, and the United Kingdom, all of which provide far less government support for home ownership than does the United States. Here’s what they’re saying: POLITICO: Fannie Mae, Freddie Mac move up on Congress’s to-do list House Financial Services Committee Republicans have spent... Read More »

Proponents of the GSE model of housing finance often assert that the costs of that model are justified because it provides benefits that no other countries enjoy. In fact, before the collapse of the GSEs in 2008, their supporters often argued that “American housing finance is the envy of the world.” But the reality is that for all of the resources and subsidies that the GSEs directed (we would say “mis-directed”) towards housing finance, compared to the rest of the world, the U.S. ranks in the middle of the pack on any number of criteria. Home Ownership GSE proponents often argue that the GSE... Read More »

On Wednesday the House will consider H.R. 1256, the Swap Jurisdiction Certainty Act. The Problem: Swaps are uniquely tailored financial products traded globally (cross-border) by a variety of industries to manage risk. Under the Dodd-Frank Act, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are responsible for regulating swaps trades in which a U.S. person is a party to the transaction. But while Dodd-Frank’s plain language makes clear that Congress intended new swaps regulations to apply outside the U.S. only in certain limited circumstances,... Read More »

We’ll hold four hearings -- including full committee action on sustainable housing finance reform -- this week in addition to our three (and a half) bills on the House Floor. Be sure to check back here on the Bottom Line Blog -- and subscribe to our email lists -- for updates throughout the week. Here’s what’s happening: We’re told on Tuesday the Rules Committee will meet at 5 p.m. to consider a rule for H.R. 1256, the Swap Jurisdiction Certainty Act. On Wednesday at 10 a.m. the full committee meets to examine examples of successful housing finance models without explicit government guarantee... Read More »

Wall Street Journal: The Hidden Jobless Disaster At the present slow pace of job growth, it will require more than a decade to get back to full employment defined by pre-recession standards. Bloomberg: Can the Fed Make Up Its Mind on QE? When the Federal Reserve first introduced its either/or stance on quantitative easing, I wasn’t sure if it was a PR ploy or a serious plan. Heritage: Will FHA Require the Next Round of Housing Bailouts from the Taxpayer? The FHA has deviated from its mission of providing support to low- and moderate income and first-time homebuyers with sound underwriting stan... Read More »