This week the House of Representatives passed seven bipartisan Financial Services Committee bills, including bills to make the Federal Reserve more transparent and accountable and to protect consumers from the Consumer Financial Protection Bureau's (CFPB) harmful regulatory actions.
The Fed Oversight Reform and Modernization (FORM) Act, H.R. 3189 sponsored by Monetary Policy and Trade Subcommittee Chairman Bill Huizenga (R-MI), requires the central bank’s monetary policy to be clear and credible, and its regulatory actions to be subject to the rule of law and public scrutiny. H.R. 3189 passed the House on Thursday by a vote of 241-185.
"Reform, accountability, and transparency on one hand; and independence and conduct of monetary policy on the other, are not mutually exclusive concepts," Chairman Jeb Hensarling (R-TX) stated on the House floor.
“By passing the FORM Act, the House has taken a strong step forward in restoring accountability and transparency at the Federal Reserve,” said Chairman Huizenga. “The FORM Act provides the Fed with the flexibility necessary to conduct monetary policy but holds the Fed accountable by requiring it to communicate its policy to Congress and the American people.”
The House on Wednesday passed the Reforming CFPB Indirect Auto Financing Guidance Act, H.R. 1737, sponsored by Rep. Frank Guinta (R-NJ), and the Portfolio Lending and Mortgage Access Act, H.R. 1210, sponsored by Rep. Andy Barr (R-KY).
H.R. 1737 passed the House with a veto-proof margin of 332-96. The bill rescinds the CFPB’s flawed guidance relating to indirect auto lending, which was done without public notice and comment and will result in higher costs for consumers buying cars and trucks.
H.R. 1210 reforms the CFPB’s Qualified Mortgage rule to help more credit-worthy homebuyers to get a mortgage. The bill allows banks and credit unions to hold mortgages in portfolio – retaining 100 percent of the risk – to satisfy the requirements of the QM rule. The bill passed 255-174.
The House also passed four bipartisan bills by voice vote: H.R. 1317 sponsored by Reps. Gwen Moore (D-WI) and Steve Stivers (R-OH); H.R. 3032 sponsored by Reps. Kyrsten Sinema (D-AZ) and Robert Hurt (R-VA); H.R. 1478 sponsored by Reps. Bill Posey (R-FL) and Brad Sherman (D-CA); and the Senate companion bill to H.R. 2243 sponsored by Rep. Ed Royce (R-CA).
To view more information about all of the financial services bills that passed the House this week, click here.
Subcommittee Examines Impact of Dodd-Frank's Conflict Minerals Reporting
On Tuesday, the Monetary Policy and Trade Subcommittee held a hearing to examine the Dodd-Frank Act's impact on conflict minerals reporting in the five years since Dodd-Frank became law. Conflict minerals reporting is under the purview of the Securities Exchange Commission (SEC) and mandates public companies to disclose whether they source “conflict minerals" from the Democratic Republic of Congo (DRC) and its nine neighboring countries.
The Wall Street Journal reported Subcommittee Chairman Huizenga's concern that Dodd-Frank's conflict mineral rule is harming the people it intended to help.
"As we all know, the SEC has little or no experience in crafting trade sanctions or articulating and enforcing human rights policy, two areas which have not traditionally been within the purview of securities regulation. SEC Chair Mary Jo White has also questioned the SEC’s ability to promulgate rules governing the African minerals trade and whether SEC disclosure powers are best used to meet address societal ills," he said.
Evode Imena, the Minister of Mines for the Republic of Rwanda, was quoted by Bloomberg as testifying that The 10 countries covered by the conflict minerals reporting have “divergent interests and different needs” but are “put in the same box under the current enforcement regime,” which is unfair and not good for foreign companies hoping to do business in Rwanda.
Committee Examines SEC's Operations and Budget Request
The Financial Services Committee held a hearing on Wednesday to review the Securities and Exchange Commission's (SEC) agenda, operations and budget request for fiscal year 2017.
Chairman Hensarling remarked in his opening statement, "This Committee is committed to conducting vigorous oversight of the SEC because the SEC’s three-part mission is an important one as Americans continue to struggle through an economy that is under-performing. It is on their behalf that this Committee acts to ensure the SEC protects investors, maintains fair, orderly and efficient markets, and promotes capital formation – key ingredients in growing a healthy economy with more opportunity for all."
Rep. Robert Hurt (R-VA) expressed the need for effective use of funding by the agency in fulfilling its mission.
"At a time when our national debt is $18 trillion and rising by the second, federal agencies must learn to work smarter and more efficiently, just as hardworking American families have learned to do," said Rep.Hurt.
Subcommittee Calls for Due Process and Transparency at FSOC
The Oversight and Investigations Subcommittee held a hearing on Thursday calling for due process and transparency in the SIFI designations of non-bank financial companies by the Financial Stability Oversight Council (FSOC).
"Dodd-Frank rewarded the very regulators that missed the warning signs leading up to the 2008 financial crisis with additional power and responsibility with the creation of the FSOC. By design, the FSOC was intended to facilitate dialogue amongst federal financial regulators," said Subcommittee Chairman Sean Duffy (R-WI) in his opening statement. "Moreover, the FSOC and its actions are riddled with opacity and unaccountability, despite continued requests for information from Congress."
MEMBER SPOTLIGHT
Rep. Andy Barr | Barr's Portfolio Lending and Mortgage Access Act passed by the House
The House of Representatives Wednesday passed H.R. 1210, the Portfolio Lending and Mortgage Access Act introduced by Congressman Andy Barr (KY-6) in a bipartisan vote of 255 to 174, according to a release.
Weekend Must Reads
Wall Street Journal | Reining in a Sprawling Federal Reserve
Since the 2008 financial crisis, the Federal Reserve has morphed into a government institution whose unconventional activities and vastly expanded powers would scarcely be recognized by drafters of the original legislation that created it. Regrettably, commensurate transparency and accountability have not followed.
The Hill | H.R. 1737 will create transparency at the CFPB and maintain affordable auto credit
Discrimination is wrong, period. And fair credit is critical for consumers everywhere. But so is their ability to get the most competitive rates out there for their cars and trucks. H.R. 1737 and the automobile compliance program would ensure fair access to credit for everyone, while preserving a consumer’s ability to get discounted interest rates and competitive credit.
American Banker | Why That Orwellian Anti-CFPB Ad Worked
Enter "Denied," our provocative TV ad about the CFPB. CFPB sounds like alphabet soup to most consumers. Yet the Consumer Financial Protection Bureau is one of the most powerful and unaccountable government agencies in Washington. This is a fact we believe voters deserve to know.
Wall Street Journal | Democrats vs. Bureaucrats
On Wednesday the House is expected to vote down the Consumer Financial Protection Bureau’s extralegal campaign against the nation’s auto dealers. This is an important moment. Even Democrats are beginning to push back against the regulatory agenda crafted by President Obama and Massachusetts Senator Elizabeth Warren. Let’s hope the dissident donkeys survive the experience.
On the Horizon
Stay tuned!
In the News
Associated Press | House Approves GOP-led Bill to Boost Fed Oversight
Detroit News | House passes Huizenga bill to increase Fed oversight
The Hill | House passes bill to overhaul the Fed
Sunshine State News | House Passes Bill Posey's Bill Ensuring Insurance Policies Aren't Used on Bailouts
OC Register | Bill on Obama's desk overrides pay hike for CEOs of mortgage giants Fannie Mae and Freddie Mac
Wall Street Journal | House Subcommittee Testimony Calls Conflict Minerals Rule a Failure
Bloomberg | SEC Conflict Minerals Rule Unfair, Rwanda Minister Says
Reuters | White House threatens veto of rule-based monetary policy bill
Politico Pro | Shareholder activism ‘holy war’ arrives on Capitol Hill
Morning Consult | SEC Chair Tamps Down Expectations on Investment Advice Rule
The Hill | House votes to roll back mortgage rules
HousingWire | House votes to revamp Qualified Mortgage rules