Warren Davidson

Mr. DAVIDSON

Mr. DAVIDSON. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and submit extraneous material on the bill, H.R. 3564.

Mr. DAVIDSON. Mr. Chairman, I yield myself such time as I may consume. H.R. 3564, the Middle Class Borrower Protection Act, will undo a bad policy implemented at the worst time. Americans are struggling to afford housing. I am talking about the loan level price adjustments that the Federal Housing Finance Agency, FHFA, put into effect on May 1 of this year. This policy essentially implemented a cross-subsidy to individuals with lower down payments and lower credit scores. Loan level pricing adjustments are up-front fees which adjust the final interest rate charged on mortgage loans based on different risk characteristics associated with individual loans. The most notable characteristics would be the mortgage's underlying loan-to-value ratio and the buyer's credit score. While such fees may be necessary for Fannie and Freddie Mac, collectively known as the GSEs, to raise capital and adequately hedge against credit risk, the adjustments announced by FHFA would disproportionately hurt individuals with credit scores of 680 or greater. To put that into perspective, the average credit score is around 710, and nearly 19 out of 20 Americans have credit scores above 680. The other thing is credit scores alone aren't a proxy for wealth or income. Therefore, most Americans would likely be hurt by these fees. However, those with a credit score below 680 will benefit from lower rates than the prior LLPA assessments. This fee change violates the fundamental principle of risk-based pricing: Lower-risk borrowers should pay lower prices than higher-risk borrowers for access to the same credit. Despite the FHFA's opaque approach to assessing LLPAs, the result of their new policies speak for themselves. The Middle Class Borrower Protection Act would reinstate the old LLPA prices that were in effect prior to May 1, while also directing the Government Accounting Office to complete an independent study of the processes and data used by FHFA to change the prices, including the impact of those changes on the safety and soundness of the GSEs, which, I will add, have been in conservatorship under the Federal Government for 15 years. Then GAO would report to Congress within 1 year of the study. FHFA would be prohibited from changing the LLPAs until 90 days after the report, after which it would be required to: one, follow the basic agency notice-and-comment procedure for making any new changes to the LLPA fee; and two, ensure that future fee adjustments be made based on the actual risk posed by the mortgage. FHFA would also be prohibited from imposing any new fee on borrowers based on their debt-to-income ratio, which was an idea they considered implementing effective August 1. Finally, I will acknowledge that over the past weekend, the Congressional Budget Office scored this bill, and they assessed a cost of $1.8 billion for implementing this bill. I believe the fact that CBO says this bill costs a single penny is absurd and exposes a glaring flaw within our legislative process. Perhaps CBO has a rebuttal, but that would require them to show their work, which they have not. This is why I have long advocated for another bill of mine, the CBO Show Your Work Act. This past week exemplified just why we need transparent processes when legislating. The reality is these fees aren't even going directly to the Treasury. While the GSEs are in conservatorship, the money is supposed to go to the balance sheet of Freddie and Fannie so that they can accumulate capital. As this rule is announced, the explicit purpose was to grow capital on the balance sheets of Fannie and Freddie. These were taken over by the Federal Government in the wake of the 2008 financial crisis. They have remained in the conservatorship of the Federal Government. The revenue isn't coming in directly to the Treasury, it is meant to actually free the GSEs from control of the Federal Government. These revenues were not imposed by Congress, so there really isn't a need for us to replace the revenue that the administration imposed with a really misguided rule. There was no revenue coming in on April 30. On May 1, they implement this policy change, and somehow, we are supposed to come up with the revenue to offset it. Now, I argued against doing that. I asked the Rules Committee to ignore the misguided advice of the Congressional Budget Office and to not implement a pay-for because it is not our--we didn't cause this expense to occur. Frankly, it is not even a real expense. It is essentially a tax imposed by the administration. Because of the rules, we offered a manager's amendment which was ultimately incorporated into this bill. We add 1 year to a 10-basis point fee that is assessed on every Fannie and Freddie loan, regardless of your credit, just as a cover. That rule has been in place since the bill passed in 1992. It was set to expire in 2032. Now it will expire in 2033. I hope between now and then we can change that, and we can also liberate Fannie and Freddie from their ongoing conservatorship which, I will note, has lasted longer than Britney Spears' conservatorship. The only way that it would cost the Federal Government money is if the conservator is actually raking money out of it and funding their own operation, which is not what is supposed to happen. It is supposed to stay with Fannie and Freddie, so it shouldn't be costing the Federal Government a dime to implement the Middle Class Borrower Protection Act. Nevertheless, Fannie and Freddie will benefit from one extra year of money being collected under this manager's amendment that was adopted and incorporated in the bill. Let me return and focus on the bill at hand, the Middle Class Borrowers Protection Act. Let's think about this: A Federal agency acting under its own purview and not subject to the Administrative Procedure Act implemented a politically motivated cross-subsidy through a clear money grab on unsuspecting credit-worthy borrowers. This wasn't a decision by Congress. This was simply the FHFA using its position as conservator of the GSEs to increase the government's baseline. Now Congress is trying to undo the changes and re-implement a policy that was in place just 8 weeks ago. However, Congress, as I said, had to pay for this fake shortfall. Like we see time and again, only in Washington, D.C., would math like this make sense. It is imperative for this body to protect the cornerstone of the American Dream by promoting housing affordability, and H.R. 3564 does just that. Mr. Chair, I urge all of my colleagues to support this bill, and I reserve the balance of my time.

Mr. DAVIDSON. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, the gentlewoman points out things that just aren't so. The idea that a loan that has less equity in it isn't riskier than a loan with more equity in it is completely false. Every business school in the country will teach it, but most people don't need to go to business school to understand that a loan with a lot of equity in it is at much less risk of default. It is rational to price risk, and that is what the market should be doing. Plus, people who have low income and have high credit scores are punished by this foolish policy. This simply will undo it. The last thing I will say is, right now, there is money that is being taken away from consumers in the marketplace--$1.8 billion over the next 2 years. Once this bill passes, that stops getting taken away. The 10-basis point pay-for that is in this bill is still in effect right now. In fact, it is scheduled to go out in 2032. In the near term, nothing changes in this bill. It is in 2033 that the pay-for comes in, again, only with the false accounting at the Congressional Budget Office would that even be necessary. Mr. Chairman, I yield 3 minutes to the gentleman from North Carolina (Mr. McHenry), the chairman of the full committee.

Mr. DAVIDSON. Mr. Chairman, the gentleman from Missouri is accurate. This does cost money. It costs the 19 out of 20 Americans with 680 credit scores or better who choose to get a Fannie or Freddie mortgage, it costs them money. It takes it out of their hard-earned dollars and transfers it to the GSEs. Mr. Chairman, I yield 2 minutes to the gentlewoman from Oklahoma (Mrs. Bice).

Mr. DAVIDSON. Mr. Chair, I yield myself such time as I may consume. Mr. Chair, I thank the ranking member for recognizing that low-income people do have high credit scores. That is why it is unjust to implement this rule and charge them a higher fee than maybe wealthy people who have low credit scores. This is an interesting observation. The ranking member on the Subcommittee on Housing and Insurance, Mr. Cleaver, just pointed out that it would be dangerous to require the FHFA to use the Administrative Procedure Act, i.e., to give notice and get comment, before they implement policies that impose costs on the American public. In July 2020, Ms. Waters and the majority at the time sent a letter to Director Calabria--at the time the Director of FHFA--saying: ``Moreover, we urge you to use your powers under title 5 U.S.C. 551- 559, the Administrative Procedure Act, to engage meaningfully with all stakeholders.'' It seems they are not opposed to FHFA using the Administrative Procedure Act. In fact, they asked them to do it, so I wonder why it is selectively. Mr. Chair, I yield 2 minutes to the gentlewoman from Arizona (Mrs. Lesko).

Mr. DAVIDSON. Mr. Chair, I yield 2 minutes to the gentleman from Virginia (Mr. Good).

Mr. DAVIDSON. Mr. Chair, I have no additional speakers, and I reserve the balance of my time.

Mr. DAVIDSON. Mr. Chair, the American people should be angry. They should be upset because the Biden administration did impose a socialist redistribution scheme. The most egregious and obvious part is that they withdrew as we uncovered this and exposed what they were trying to do. On August 1, their plan was to say that if you have a lot of income and very little debt, then you should pay more, even more than this scheme that took effect on May 1, and you should subsidize the people that have little income and more debt. Now, to be sure, they still would qualify for a mortgage, or they wouldn't get the loan, but that is patently obvious redistribution of wealth. The component that took effect on May 1 isn't really a redistribution of wealth per se, but it does hit the average credit score of 710. Everyone with a credit score of 680 or above, 19 out of 20 Americans is being hit by a higher fee since May 1 for their mortgages. It is a redistribution of credit scores, and that is even worse than an idea of redistribution of wealth, in a sense. Because you have responsible people who live within their means, might live just a little bit above paycheck to paycheck, save, scrape together, build up a downpayment, have a mortgage in place, and they are going to pay more now since May 1. We have to fix this injustice. That is what this bill does. It is time to just move forward in a commonsense way. First, you study the problem before you implement it. This bill requires the GAO to complete the study, and then it requires FHFA to look at the study, to take 90 days of notice before they implement something else. The part that it bans after the study is over is the real redistribution of wealth, the debt-to-income scheme. Mr. Chair, I urge all of my colleagues on both sides of the aisle to support this commonsense Middle Class Borrower Protection Act, and I yield back the balance of my time.

Mr. DAVIDSON. Mr. Chair, I urge all of our colleagues to support this amendment, and I yield back the balance of my time.

Mr. DAVIDSON. Mr. Chairman, I claim the time in opposition, though I am not opposed to the amendment.

Mr. DAVIDSON. Mr. Chair, while there has been broad discussion about the fundamental unfairness associated with the Biden administration's new tax on creditworthy borrowers, Congress' oversight role also extends to the process and impact these changes will have on home buyers and the housing market. Members on both sides share policy concerns regarding this new tax, and it is equally imperative that we promote transparency to the American people on this flawed effort. The GAO study does just that as the amendment Mrs. Boebert proposed would simply make the GAO study public. Sunlight is the best disinfectant, and in no area is this more relevant than the opaque process with which the FHFA has enacted these and other changes. This amendment would add to the GAO study included in H.R. 3564 which will play a critical factor toward furthering both Congress' and the public's understanding of this issue that impacts millions of home buyers. Americans deserve a thorough accounting of the process and deserve to know the significant impact of FHFA'S actions. An agency that virtually controls U.S. housing markets should not operate without appropriate congressional oversight. Mr. Chair, I urge my colleagues to support this amendment to restore fairness, transparency, and accountability to this process and policy that impacts millions of Americans. Amidst economic uncertainty and a housing affordability crisis, the American people deserve nothing less. Mr. Chair, I reserve the balance of my time.

Mr. DAVIDSON. Mr. Chair, I claim time in opposition to this amendment, although I am not opposed to it.

Mr. DAVIDSON. Mr. Chair, this is a commonsense amendment to the GAO study, and I applaud the gentlewoman from Nevada for including this comprehensive view on the impact of housing affordability. It furthers the work of the Housing and Insurance Subcommittee, and I think it is an important addition. Mr. Chair, I encourage all of our colleagues to support it, and I reserve the balance of my time.

Mr. DAVIDSON. Mr. Chair, I urge all of our colleagues to support the amendment. I support it, and I yield back the balance of my time.

Mr. DAVIDSON. Mr. Chair, I claim the time in opposition, and I am opposed to this amendment.

Mr. DAVIDSON. Mr. Chair, I claim the time in opposition to the amendment introduced by Ms. Pettersen which would make it impossible to repeal the Federal Housing Finance Agency's damaging price increases on creditworthy home buyers. In fact, it will undo the entire point of the bill. The legislation before us, the Middle Class Borrower Protection Act, would repeal these increases and would require the Government Accountability Office to assess the FHFA's fee structure. That is the point of the GAO's study. It would also require that any future loan-level fees implemented by the agency adopt a risk-based price framework. Ms. Pettersen's amendment would set up a sham test so that FHFA would have to keep those unfair fees in place even at the expense of the majority of middle-class borrowers. So while the gentlewoman's amendment is designed to sound fair, the reality is that it would actually have the opposite effect of what it advertises. Instead of lowering fees for middle-income families, it would doom many of them to higher fees. In other words, a vote for Ms. Pettersen's amendment is a vote against the Middle Class Borrower Protection Act. I also find it interesting that our friends on the other side of the aisle would support an amendment that essentially says: Don't do this if it makes fees go up, which is exactly what our bill does. It stops the fees from going up or staying up, as the case is on part of the plan that they implemented. We should be united in saying that deliberately making mortgages more expensive for creditworthy borrowers is a foolish policy. The sting of inflation and higher interest rates are already hurting middle-income families, and this adjustment by FHFA is not fair. While I cannot support this amendment, I am glad to see the recognition that we need to protect middle-income families looking to purchase a home from unfair pricing. It makes it harder for some borrowers to afford because they pay more just because they have high credit scores. Ms. Pettersen's amendment would, unfortunately, lock in that unfair system. Mr. Chair, I reserve the balance of my time.

Mr. DAVIDSON. Mr. Chair, I reserve the balance of my time.

Mr. DAVIDSON. Mr. Chairman, I oppose this amendment. I urge all of our colleagues to oppose this amendment, and I yield back the balance of my time.

Mr. DAVIDSON

Mr. DAVIDSON. Mr. Speaker, Joe Biden's border crisis has become a nationwide crime scene. Cartels not only control the illegal drug market, they control our border. They are poisoning our country and exploiting every migrant who crosses our southern border. This sad crisis must end. In my district, we had the tragic story of Lizzy Murphy who died from fentanyl poisoning at the age of 21. As in many cases, Lizzy was poisoned by just one pill, a Xanax laced with deadly fentanyl. Though overdoses are also on the rise, many of these fatalities occur from just one lethal dose of fentanyl. Just this week, we recognized National Fentanyl Awareness Day. The CDC has reported that two-thirds of drug-related deaths involve fentanyl. Drug fatalities are now the leading cause of death for 18- to 45-year-olds. Today, the House will vote to pass H.R. 2. Next, Joe Biden and Senate Democrats must change course from their deadly policies. They must pass this bill, sign it into law, and implement it. We need to secure our border, stop the cartels, and keep our communities safe. That is why I am supporting H.R. 2. However, this legislation should have gone a little further to stop the evil work of cartels. As an amendment, I offered the Lizzy Murphy Act to stop the cartels, a bill that I have previously introduced. This bill designates certain cartels as special transnational criminal organizations and implements sanctions on them and anyone who provides material support to cartels. We must recognize that cartels are enemies of our country and treat them that way. To disrupt their trafficking operations, we must detain or turn away all who enter our country illegally. By forcing the Biden administration to resume construction of the wall, increase Border Patrol agents, protect unaccompanied children who are at risk of trafficking, and end their foolish catch-and-release practices, the Secure the Border Act of 2023 will begin to fix this crisis. Mr. Speaker, I urge everyone to support it.

Mr. DAVIDSON

Mr. DAVIDSON. Mr. Speaker, I rise today to recognize the talented and diligent students in our Eighth District who participated in our annual Congressional Art Competition. This year, we received 230 submissions from eight schools. The artwork from these dedicated students is on display at the Pyramid Hill Sculpture Park and Museum until April 30, and it is available online, as well. One standout student received the grand prize victory for her art submission. I congratulate Paige Harris, who was our grand prize winner of the 2023 Eighth District Congressional Art Competition. Paige is an 11th-grader and attends Badin High School, and her Urban Renewal work will be placed on display in the United States Capitol for the next year. Last week, I had the honor to meet Paige and her fellow art competition participants, and her family, as well. We celebrate their hard work, their skills, and their creativity. I thank them all for their participation.

Mr. DAVIDSON

Mr. DAVIDSON. Madam Chair, I have an amendment at the desk.

Mr. DAVIDSON. Madam Chair, I yield myself such time as I may consume. Madam Chair, this amendment requires any public school receiving Federal funds under Title I and Title II of the Elementary and Secondary Education Act to hold an open enrollment period both for students living inside and outside the school district. Parents have a right to decide where their child goes to school, and this amendment grants parents this important right to choose the best education for their child, no matter the ZIP Code. It is important to note this applies only to Federal funds. Some might argue, well, local schools have different tax jurisdictions. This is only for the Federal funds. School choice is critical to not only the parent, but also to the student who deserves a safe, high-quality education, not indoctrination. We must provide families with freedom to choose. It is the parents' duty to make the best choice for their children, and choice is the ultimate enforcement mechanism for this Parents Bill of Rights Act. My amendment also requires that these schools post an announcement on their website with details about the open enrollment period to ensure parents have all the information needed to make an informed decision, such as an application deadline, the approval rate of applications, and how long the enrollment period will be valid. Again, this gives parents the power and ability to make the most informed decision. Under this amendment, schools must give every student that applies via the open enrollment process, ``a full and fair consideration,'' an important detail to ensure that every student receives the opportunity to succeed. Open enrollment and the increase in educational freedom is imperative to the success of our youth. It is a parental right and it is in the best interests of every student to be granted this opportunity. This amendment provides every single parent with the power to choose. Madam Chair, I urge support for my amendment, and I yield back the balance of my time.

Mr. DAVIDSON

Mr. DAVIDSON. Mr. Speaker, I enlisted in the United States Army after high school and arrived in West Germany in the spring of 1989. The Cold War was at fever pitch, and at the Brandenburg Gate, President Reagan famously said, ``Mr. Gorbachev, tear down this wall.'' On 9 November 1989, the East German people finally tore down their own wall; not Gorbachev, not America, not the West, but the people trapped on the other side of that wall. I was there that Thanksgiving in the heart of Berlin when I met with people experiencing their first hours of freedom. One man asked me, ``Is it like this everywhere?'' I thought he meant like Berlin, a big city. I am from western Ohio and a small town. He corrected me. He said, No, the stores are open at night, and there is fresh milk and everyone can go in? He had been told a lie that we were poorer in the West than they were, that only the elites could buy things, like the Communist Party officials. He was not alone. The wall had separated their Communists from our freedom and free markets. The flood of people was to the land of opportunity, not to the failed ideas of Marx and Lenin. The United States of America is worth saving. To do that, we must defend freedom and defeat socialism.

Mr. DAVIDSON

Mr. DAVIDSON. Mr. Speaker, today, I am here with a very heavy heart to honor Master Sergeant Joseph Kapacziewski, a member of the 3rd Battalion, 75th Ranger Regiment. Army Rangers are some of the most elite soldiers in the world, and Master Sergeant Kapacziewski, nicknamed Kap, was no exception. In April 2010, while serving in eastern Afghanistan, his team of Army Rangers was locked in combat with a group of armed insurgents. When one of his comrades was hit, Kap sprinted through the fire to provide aid. With the help of a fellow Ranger, they dragged the wounded soldier to safety, actions which earned Kap an Army Commendation Medal with valor. Kap's actions would be remarkable under any conditions, but considering his experiences from a few years earlier, they were inconceivable. A native of Connecticut, Kap enlisted in the United States Army following his senior year of high school in September 2001, just days before the 9/11 attacks. In 2002, he was deployed to Afghanistan, and the following year, he parachuted into Iraq for the initial invasion. With only 2 days left in his fifth deployment to Iraq in 2005, Kap's convoy was ambushed by heavy fire. A grenade exploded inches away from Kap after falling through the hatch of his vehicle. Shrapnel ripped through his body, shattering his right leg and severing an artery in his right arm. Severely wounded, Kap collected himself, directed his vehicle to cover, and alerted the rest of the convoy to the attack. It wasn't until then that he allowed his wounds to be treated. Kap was evacuated to Walter Reed Hospital, and while his arm recovered, his leg did not. Despite numerous surgeries, his leg was barely functional. Ultimately, there was only one choice--to amputate it. With the pain gone, Kap was fitted with a prosthetic, and he completed hundreds of hours of physical therapy. He had one sole objective during his difficult and lengthy recovery: He wanted to return to combat with his unit. Everyone thought it would be impossible for Kap to achieve that goal. No one under his circumstances had ever returned to combat, and they agreed Kap had completed his service to our Nation. Kap didn't care. He completed the 12-mile ruck march test, parachuted with a combat load, and not only regained his squad leader title but was promoted to platoon sergeant. Kap became the first Ranger in United States Army history to return to combat action with a prosthetic limb. He was awarded the Bronze Star with valor and a Purple Heart, among numerous other decorations. Kap was deployed to combat 11 times to fight the global war on terrorism, five of which were while he had a prosthetic leg. He wrote a book about it called ``Back in the Fight.'' There is more to any of our soldiers or warriors than what they do in uniform. I have had multiple friends reach out to me who talked about the impact that Kap had on them as a leader and as a friend, whether it was riding motorcycles together or just hanging out after a tough day at work, in training, or any other way. He never lost sight of how he came to be where he was. Unfortunately, Kap's life ended far too soon last week at the age of 40 due to a significant enemy our veterans face right here at home: suicide. Our Nation has a moral obligation to not only prepare and equip the servicemembers we send into harm's way but to support and care for them when their duty is done. Yet, we have drastically failed countless numbers of our veterans who have sacrificed everything, including their lives, to protect us. President Lincoln's promise to care for the men and women who have ``borne the battle'' is one of the most important functions of our government, and we must do better. Kap's wife, Kimberly, and his sons, Wyatt and Cody, as well as the rest of his family and friends, are in my prayers through this difficult time. Kap will always be remembered by many for his warrior spirit and his extraordinary story of resiliency that made him an inspiration and a military legend. Mr. Speaker, I am reminded of lyrics to a song one of my friends, Darryl Worley, sings called ``The 22.'' Let me share a few of the lyrics: You can't unsee what I saw You can't get back what I lost I've lost a wife Five brothers My kids and the man I was I thought that I left the front lines But the fight for my life rages on We've lost 21 soldiers in only a day And that's the unthinkable truth So I'll lay down my gun And I'll soldier on, and I will not be 22 I'll lay down my gun I'll soldier on, and I will not be 22. At the end of his journey, the Apostle Paul said: I fought the good fight; I have kept the faith; and I have finished the race. I pray that everyone would live a full and natural life, fight that battle, and never surrender to it. I thank you, Kap.

Mr. DAVIDSON

Mr. DAVIDSON. Mr. Speaker, I proposed H.R. 8331 to amend the Internal Revenue Code of 1986 to temporarily suspend required minimum distribution rules for certain retirement plans and accounts. I would like to briefly discuss these. These distributions are generally minimum amounts that retirement plan account owners must withdraw annually or else they pay a penalty. The amount to be distributed is calculated based on the account balance as of December 31 of the previous year. Since the market was nearly at an all-time high at the end of 2021, and it has dropped more than 20 percent, the distributions from 2022 are disproportionately high. While this administration pushes more terrible inflationary policies that hurt our market, it is our retirees who are suffering the consequences most from this downturn. I have introduced this bill to waive the required minimum distributions for 2022, much like this body did in 2020 in the CARES Act when the government shut down our economy. My office has received countless phone calls, not just from my constituents, but from American retirees all over the country who are demanding that Congress address this issue. I hope we can get something done by the end of the year.