McHenry Delivers Opening Remarks at Markup of Regulatory Oversight, Capital Formation Legislation
Washington,
May 24, 2023 -
Today, the House Financial Services Committee is holding a markup of various measures including legislation to promote capital formation and strengthen accountability for our federal bank regulators. The Committee will also consider a measure that addresses the Federal Housing Finance Agency’s (FHFA) socialist loan-level pricing adjustment proposal.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as prepared for delivery:
“This markup is a continuation of the Committee’s important work over the last several months. This includes efforts to address recent bank failures, capital formation, and the FHFA’s politicization of our housing finance system.
“As we know, this Committee can walk and chew gum at the same time.
“Since the onset of the recent turmoil in our banking system, the Committee has received reports from state regulators in New York and California, as well as the Federal Reserve and the FDIC.
“As part of our comprehensive examination into recent bank failures, regulators testified before this Committee on their reports and provided any additional information they might have gleaned since their respective reports were released.
“We also heard from former executives of the failed banks and experts in the banking industry. Our work to understand the events that transpired in March and April continues in full force.
“Throughout our examination into recent bank failures, one thing has become abundantly clear: both the days before and after these failures have highlighted flaws in the bank regulators’ authorities and duties.
“There is also a woeful lack of transparency and accountability with respect to the federal regulators’ decision making.
“The bill introduced by Mr. Barr, which we are considering today, would address the opacity and lack of accountability that has been readily apparent.
“A compilation of 5 bills, H.R. 3556 would place Congress on equal footing with the Administration – respecting it as a coequal branch of government. The bills would ensure that Congress is informed as decisions are made and not provided with self-serving information after the fact.
“H.R. 3556 is a strong first step to ensure the banking regulators are acting within the authorities provided by Congress.
“We will also finish up our work from last month to enhance capital formation opportunities by considering four additional bills. These bills contain commonsense policies that will encourage everyday investors and small entrepreneurs to access our capital markets.
“H.R. 1553 will expand angel investing, providing greater access to capital for entrepreneurs and small businesses.
“H.R. 3063 brings much needed parity for the retirement plans of employees of non-profit charities and public educational institutions, giving them access to the same low-cost investments available to employees of for-profit companies and other employers.
“We’ll also consider HR. 2627, introduced by Mrs. Wagner. H.R. 2627 removes an SEC staff-level position that places an arbitrary limit on the amount of assets a closed-end fund may invest in private funds. Raising this threshold will open up additional opportunities for everyday investors saving for their retirement, to buy a house, or just to build a better life.
“Finally, we will consider H.R. 3564, the Middle Class Borrower Protection Act. In January of this year, FHFA announced a set of mandated changes to the GSEs’ LLPA pricing structure, impacting the vast majority of single-family purchase and rate-term refinance loans sold to the GSEs.
“The Committee heard testimony last week that these new LLPA grids are flawed and there remains much confusion over the process FHFA uses to price credit risk. What we do know is the LLPA changes penalize borrowers who have worked to pay their bills and establish good credit. H.R. 3564 brings fairness and accountability back to the process.
“As I said at the outset, this Committee can multitask. I would just close with the same request I’ve made at each of the markups. If you have an idea, bring it to me. Find me on the floor, text me, call me. Our committee is at its strongest when we work together.”
###
