Rep Cmte Financial Services
House Overwhelmingly Approves Terror Insurance Reauthorization
Washington, Dec 10 -
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The House on Wednesday approved 417-7 a bipartisan, six-year reauthorization of the Terrorism Risk Insurance Act (TRIA) with reforms to protect taxpayers and a clarification of the Dodd-Frank Act to protect jobs at Main Street businesses that had nothing to do with the 2008 financial crisis.
During floor debate on the bill, Chairman Hensarling delivered the following statement:
We have an incredible opportunity before us in the House today and that is to move significant bipartisan legislation that can accomplish number of purposes; that will bring greater stability and certainty to construction markets and insurance companies in dealing with the Terror Risk Insurance Act.
We can also bring greater certainty and stability to our small factories, our farmers, our ranchers, those who are still suffering in this economy. We can bring them certainty and stability by taking care of an unintended consequence of the Dodd-Frank Act -- something called the end-user exception in derivatives title, which may just be one of the most, as interpreted, one of the most damaging regulations that many in this body perhaps have not heard of.
Again, Mr. Speaker, this is legislation that has been worked on in a bipartisan manner. Sometimes a little contentious, but we’ve ended up in a place where I believe that both Republican and Democrat, and House and Senate, should be able to come together.
I think it’s important to remember, Mr. Speaker, that particularly as we go into the holiday season, as we go into Christmas, how many working men and women are still lying awake at night wondering how are they going to be able to fund Christmas for the children. Although we’ve seen some modest improvements in the economy, there are still over 9 million of our fellow countrymen who are unemployed. The number of underemployed, those who wish to have full time work but cannot find it -- that is almost twice the number at 18 million. We have 46 million of our fellow countrymen still on food stamps; 45 million in poverty.
One of most important things we can do here is be able to make a positive contribution for financial stability on our household economies; to give greater economic opportunity, particularly at this time. And that is one of the aspects of S. 2244. We’ve had a debate about the Terrorism Risk Insurance Act in this body. I was authorized on behalf of this body to negotiate a particular part of this bill along with Senator Schumer, the gentleman from New York on the Senate side. And over the course of several weeks and several meetings, we have negotiated language on this. Certainly, it doesn’t get everything the House wants; it doesn’t get everything the Senate wants. Such is the nature of negotiations in a free society with divided government.
But for those who care passionately about the reauthorization, this is a long-term reauthorization bill, which most members asked for. It is a six-year reauthorization. For those who care about taxpayer protections -- as I do -- there are improvements for taxpayer protections. The trigger level has doubled before TRIA kicks in, meaning there is greater coverage by the insurance companies and a little less by the taxpayers. An artificial ceiling on what the industry will contribute -- that artificial ceiling now ceases to be in S. 2244. For the first time, the taxpayers will get some modest rate of return should they be called upon under TRIA to backstop. And so these are important improvements and I think both conservative and liberal and Republican and Democrat hopefully will see something worthy here.
But I will point out it is disconcerting and it is disturbing that those who backed provisions in this bill now want to say “no” to being able to have a long-term TRIA reauthorization passed. This bill before us includes this end-user exemption which is so important. This isn’t for Wall Street. This is for Main Street. It’s for a cattle producer in Kansas named Tracy Brunner who said this mistaken language in Dodd-Frank “might very well force me out of the markets and subject to even greater risk. My operation is family run and we’re not responsible for the failures that led to the passage of Dodd-Frank.” Yet, his family-owned farm in Kansas – which is more than 1,500 miles away from Wall Street – suffers.
And so even the Ranking Member has acknowledged there have been some unintended consequences of Dodd-Frank, and recently she was one of 411 members of this House to vote in favor of the end-user exception, which she herself said was a “clarification.” Not an amendment, not a change, but a clarification. And even Mr. Dodd and Mr. Frank of Dodd-Frank, over four years ago in a colloquy on the House floor and Senate floor, said that these provisions were never meant to harm Main Street America, never meant to apply to end-users, never meant to apply to the farmers, the ranchers, the small factory workers. And so we have an opportunity to do something very positive, but now all of the sudden, some on the other side of the aisle say, “Well we can’t do this. We believe this is unrelated to TRIA.”
Well, why did the United States Senate put in a provision that makes a radical change in a requirement to serve on the Board of Governors of the Federal Reserve? What does that have to do with TRIA? The Senate put that in. NARAB, the National Association of Registered Agents and Brokers -- the Senate put that in. Two-thirds of bill is about NARAB. The Senate put that in. Now, I’m not debating the underlying policy issues. But it is, at best, a little disconcerting if not disingenuous to say, “Well my Lord, the House shouldn’t put in unrelated provisions” when Senate just did it twice.
And then we hear that the Senate will not open up Dodd-Frank. Well, what is the Collins Amendment? The Collins Amendment was sent over by the Senate. They opened up Dodd-Frank. And then again, to quote the Ranking Member, this is a clarification. And so we have an opportunity to pass a bipartisan bill, not only to bring some stability and certainty to our insurance markets, our builders, but our farmers and ranchers and small businesses and hurting families at this holiday season. Without any further delay, we should enact S. 2244 as amended.