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House Passes Bipartisan Bills to Help Consumers

Washington, Dec 11 -

The House today passed two bipartisan bills designed to help protect consumers and add much needed transparency for investors.

H.R. 2706, the Financial Institution Customer Protection Act of 2017 sponsored by Rep. Blaine Luetkemeyer (R-MO), requires federal banking agencies to provide banks or credit unions written justification of any request to terminate or restrict a customer’s account, except in instances of national security. 

The bill was introduced in response to an Obama Justice Department and Federal Deposit Insurance Corporation initiative called “Operation Choke Point.”

The bill also requires the federal banking agencies to issue an annual report to Congress that describes the number of customer accounts the agency requested or caused to be closed and the legal authority on which the agency relied.

“Over the past several years, I have led the effort to combat Operation Choke Point, the Department of Justice and Federal Deposit Insurance Corporation-led initiative that sought to cut off legal businesses from the financial services they need to survive,” said Rep. Luetkemeyer, who serves as Chairman of the Financial Institutions and Consumer Credit Subcommittee. “It is simple: the federal government should not be able to intimidate financial institutions into dropping entire sectors of the economy as customers, based not on risk or evidence of wrongdoing, but purely on personal and political motivations. I thank Chairman Hensarling for ensuring this legislation was brought to the House floor and my colleagues for putting an end to this dangerous precedent.”

The bill passed 395-2.

H.R. 3093, the Investor Clarity and Bank Parity Act sponsored by Rep. Mike Capuano (D-MA), amends the Dodd-Frank Act’s Volcker rule so that a hedge fund or private equity fund could share a name with a bank-affiliated investment adviser that manages the fund.

“When the regulators issued the final rule to implement the Volcker rule, they imposed severe limitations on the ability of bank holding companies and their affiliates – including investment advisers – to sponsor hedge funds and private equity funds, also known as covered funds.  As a result, a covered fund cannot use the name of a sponsor,” said Rep. Luetkemeyer. “Not only is such a restriction at odds with industry practice, it reduces transparency and confuses investors about who is managing a covered fund.”

The bill passed the House by voice vote.