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FSC Majority | Week in Review

Washington, November 21, 2014 - Hensarling Announces Subcommittee Chairs and Welcomes Republican Members to the Financial Services Committee

"I look forward to working alongside my colleagues to pass laws that help grow the economy from Main Street up, not Washington down,” said Chairman Hensarling. “Our committee will continue to focus on promoting sensible solutions that help create jobs and hold both Washington and Wall Street accountable to the American people."

The subcommittee chairmen for the 114th Congress:

Rep. Scott Garrett (R-NJ) will serve as Chairman of the Capital Markets and Government-Sponsored Enterprises Subcommittee.

Rep. Randy Neugebauer (R-TX) will serve as Chairman of the Financial Institutions and Consumer Credit Subcommittee.

Rep. Blaine Luetkemeyer (R-MO) will serve as Chairman of the Housing and Insurance Subcommittee.

Rep. Bill Huizenga (R-MI) will serve as Chairman of the Monetary Policy and Trade Subcommittee.

Rep. Sean Duffy (R-WI) will serve as Chairman of the Oversight and Investigations Subcommittee.

This list includes new Republican members as well as Republicans who previously served on the committee and will be returning:

Rep.-Elect Bob Dold (R-IL)
Rep.-Elect Frank Guinta (R-NH)
Rep.-Elect French Hill (R-AR)
Rep.-Elect Mia Love (R-UT)
Rep.-Elect Bruce Poliquin (R-ME)
Rep. David Schweikert (R-AZ)
Rep. Scott Tipton (R-CO)
Rep. Roger Williams (R-TX)

Subcommittee Examines the Impact of International Regulatory Standards on the Competitiveness of U.S. Insurers

On Tuesday the Housing and Insurance Subcommittee held a hearing to continue its examination of how international regulatory standards being proposed by the International Association of Insurance Supervisors (IAIS) could impact U.S. consumers and insurers.

Subcommittee Chairman Randy Neugebauer (R-TX) said, "I am concerned that IAIS's role has evolved from being an international coordinator to one of a international promulgator. The IAIS's most recent proposal to harmonize the insurance regulations called 'ComFrame' -- would create a kind of one- size-fits-all regime for global insurers, including some burdensome group-wide capital assessments and prescriptive prudential standards. Members of this committee have expressed concerns with the prescriptive nature of the ComFrame proposal. Many are equally concerned that it seems to be a mechanism for the E.U. to export its consolidated bank-like approach to regulating insurance here in the United States. While this system might work well for our allies across the Atlantic, it is inconsistent with our system of insurance regulation and I don't believe is in the best interest of our consumers and insurers."

Rep. Sean Duffy (R-WI) added, "Many of you may not know, but Wisconsin is the fourth-largest home to insurance in the United States. And those insurers, and our state regulators and policyholders, have been contacting me, concerned over some of the proposals coming out of the International Association of Insurance Supervisors. These proposals could force European-style regulation on our state-regulated system that, as we all know, has developed over the past 200 years. The fact is, unlike Europe, our insurance regulators seek to protect the policyholder: the family with a homeowner, or the life insurance policy, not the insurance company providing the policy. The Treasury and Federal Reserve are supposed to represent that philosophy on the IAIS. But I, like many others, don't necessarily think that they are. They're not listening to the insurers, policyholders, state regulators and lawmakers that are voicing their concerns and offering expertise because a conduit for these stakeholders doesn't exist."

Subcommittee Reviews Opportunities for a Private and Competitive Sustainable Flood Insurance Market

On Wednesday the Housing and Insurance Subcommittee held a hearing to review opportunities for a private and competitive sustainable flood insurance market and discussed H.R. 4558 the Flood Insurance Market Parity and Modernization Act of 2014. The bill is sponsored by subcommittee member Rep. Dennis Ross (R-FL).

"I think one of the reasons that this hearing is so important is that if we're going to move toward a private participation in the market place, we have to get the government out of the way and we need to facilitate the ability for the private sector to be a part of this," said Subcommittee Chairman Randy Neugebauer (R-TX). "Choice brings competitive pricing and if you have the government dominating an area, it doesn't really allow for a lot of private participation."

Rep. Ross agreed, saying “homeowners are trapped in a system that forces them to purchase a taxpayer-backed federal insurance product that was already $24 billion in debt at the end of 2013…Allowing more consumer choice in the government-dominated flood insurance market creates competition and results in better policies and pricing that will benefit homeowners.”


Rep. Sean Duffy | Gun dealer shuts down, lawmaker vows more oversight of Operation Choke Point

Choke Point was originally aimed at preventing criminal enterprises from accessing banks and other parts of the financial system. But many have said the program has expanded dramatically, and is being used to prevent many legal businesses from using the financial intermediaries they need to operate, just because they are opposed by Obama administration officials.

Weekend Must Reads

Real Clear Markets | A New Congress Must Perform Major Surgery On Dodd-Frank

Regulators are not looking forward to heightened congressional oversight of their activities, but the new Congress offers them something to offset the pain. Unencumbered by having voted for Dodd-Frank, the incoming Congress can jettison unnecessary statutory mandates so that agencies can get back to their core missions.

Washington Times | Government bailouts in recession do more harm than good

Mr. Grant's history lesson is one that all lawmakers could take to heart. The economy recovers much more quickly, with much less cost to taxpayers, if economic downturns are allowed to run their course. When the government arrives to "help," trouble begins. This is history President Obama and Congress should have read, and heeded, before blowing $3 trillion on stimulus programs and bailouts that probably hurt more than helped.

Wall Street Journal | Now Federal Job-Killers Are Coming After Derivatives

With 10 million fewer Americans working full-time today than six years ago, it is not in the nation’s economic interest for Washington regulators to cause good-paying, full-time jobs to be eliminated. This overreach is just one of many in a regulatory environment that has become a major drag on the U.S. economy. Federal regulations now cost the U.S. more than 12% of gross domestic product, or $2 trillion annually, according to the National Association of Manufacturers. The average manufacturing firm spends almost $20,000 per employee per year on complying with federal regulations. For manufacturers with fewer than 50 employees, the per-employee cost rises to almost $35,000.  

  In the News

CNBC | Republicans looking to turn up heat on Fed in 2015

Wall Street Journal | U.S. to Probe Abuse-of-Power Claims in Financial Fraud Crackdown

Bloomberg | Private Insurers Tell House They Are Still Left Out of National Flood Insurance Program

Bloomberg | McHenry Says Insurance Capital Standards, FSOC Changes Can Get Democrats' Backing

Washington Examiner | GAO says CFPB's spending accounting flaws are serious, require prompt fixes

American Banker | GAO Report Finds Flaws in FSOC Designation Process

Bloomberg | House Lawmakers See Problems With IAIS Despite Assurances of Federal Regulators

American Banker | Streamlined Regulation Should Be the Next Frontier of Financial Reform

Washington Business Journal | Dodd: 'I didn't write the Ten Commandments with this bill' (Video)

American Banker | FHA Fund Improves, But Lower Premiums Still Unlikely

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