Scott Garrett

Mr. GARRETT

Mr. GARRETT. Madam Speaker, I rise today to discuss the future of our transportation system in this country. Back at home in Sussex, Bergen, and Warren Counties in the Fifth District of New Jersey, they are only asking the same thing that people across America are, and that is to have a safe and efficient transportation system of roads and bridges. The highway trust fund is bankrupt. Our past highway bills have been filled with excessive Federal regulation and pork-laden projects, meaning that the maintenance of our roads and bridges has not been getting done. So we are here today because we don't have the money now to fix them. Going forward, we have two clear choices. Either we can continue down the same path, the current path, passing a bill to bail out the trust fund to the tune of some $50 billion, or we can find a better way. Personally, I get tired every year going and speaking to the Secretary of Transportation--it doesn't matter which party--and asking him: Can you tell me what exactly the needs are on Route 17 in Bergen County or Route 519 in Sussex or Warren County? I ask that question, and again and again they will say: Where's Route 17? Where's Route 517? Where's Route 519? We are here saying we cannot continue to allow Washington, who doesn't know our needs and doesn't know our roads, to tell us how to run things. The solution to our current quagmire is to return the power back to the people who know better, back to the States. States, counties, and local officials are the ones that use these roads. They are in the best position to decide how to use these transportation dollars. There is not one single Federal official here in Washington, elected or otherwise, who knows the needs of my community or your community with specific detail as well as the people who actually live there, who actually drive on those roads, and who actually have to maintain those roads. So it is about time, after all these years, that we re-empower the States, re-empower the counties, re-empower the local officials, the people who live and use these roads, to make the transportation decisions, instead of people here in Washington who have no clue what the needs are, who have no idea what the problems are, who have no idea as to actually provide, what I said at the very beginning, what the people in my counties of the Fifth District want as a safe and efficient transportation system.

Mr. GARRETT

Mr. GARRETT. Mr. Chairman, I have an amendment at the desk.

Mr. GARRETT. Mr. Chairman, I rise today to offer an amendment to H.R. 4413, the Customer Protection and End User Relief Act. This amendment seeks to address duplicative and overburdensome regulatory and registration requirements being faced by pensioners, savers, retirees, endowments, municipalities, and many other investors. Registered investment companies, RICs, play a critical role in the U.S. financial savings and retirement landscape. Millions of retirees, pensioners, and other savers across the country seek access to RICs to invest their hard-earned money and savings to invest for retirement, college tuition, or a first home. Currently, all RICs are registered with and are primarily regulated by the SEC and have to comply with an extensive set of rules and requirements, including the oversight of their derivatives holdings. Back in 2012, the Commodity Futures Trading Commission, the CFTC, acting on its own initiative and without any direction from Congress, significantly narrowed a longstanding exclusion from the commodity pool operator, CPO, registration for ``otherwise regulated entities,'' but only for RICs, which are comprehensively regulated by SEC and typically do not resemble traditional commodity pools. Because all RICs are currently registered with and are regulated by the SEC, the CFTC's rules change needlessly forces fund companies that manage literally thousands of funds, representing literally millions of U.S. pensioners, savers, and retirees to do what? To pay for costly and duplicative registration requirements. You see, even without registration, the CFTC still has enforcement authority over all commodity contracts. This amendment would not, in any way, change the extent to which all commodity transactions are subject to the transaction level requirements of regulation, such as reporting, such as clearing, such as trading, and even margin. This amendment simply eliminates the duplicative regulatory and registration costs faced by these funds. Also, by more appropriately tailoring the CFTC's regulatory reach, this amendment has the added benefit of ensuring that the CFTC has actually even more funds and resources available to do what? To implement Dodd-Frank and enforce the new swaps regulatory regime. This will help the agency prioritize, even better, their current workload and even reduce the need for a significant increase in the agency's budget during these challenging fiscal times. Mr. Chairman, at a time when millions of American households are approaching retirement and their investment returns are significantly reduced because of the Federal Reserve's low interest rate policies, it is very important that government public policy minimize the regulatory costs of investment for our retirees, for our pensioners, and for our savers. We must strike the right balance between ensuring investors have the ability to earn adequate returns on their investments with the appropriate regulatory oversight of our financial markets. Please help restore this balance and protect investors by voting ``yes'' for the Garrett amendment to H.R. 4413. I reserve the balance of my time.

Mr. GARRETT. Will the gentleman yield?

Mr. GARRETT. Your last sentence was that you do not wish to rely on just one entity--presumably the SEC--in the enforcement of these contracts and so on and so forth.

Mr. GARRETT. Right, but we do nothing in this amendment to take away from the CFTC their enforcement authority. They retain that. All that has changed is the registration requirement. The CFTC and the SEC retain both their mutual and harmonious, if you will, enforcement authorities under all of the contracts that are respective to these provisions. That is not taken away. We just say: Why duplicate the effort as far as registration requirements? I just wanted to clarify that point.

Mr. GARRETT. No.

Mr. GARRETT. Actually, yes, they would.

Mr. GARRETT. Great. I would like to hear from our chairman. Before that, Mr. Chairman, I yield 1 minute to the gentleman from Georgia (Mr. David Scott).

Mr. GARRETT. I thank the gentleman from Georgia for his support for this legislation and for the amendment. I yield now the remainder of my time to the chairman of the committee, and congratulate him for his great work on the underlying legislation before us today.

Mr. GARRETT. Mr. Chairman, I yield back the balance of my time.

Mr. GARRETT

Mr. GARRETT. I thank the gentleman. Mr. Speaker, it is with great sadness and a heavy heart that I rise today to honor the life and legacy of one of New Jersey's sons, Staff Sergeant Joseph D'Augustine of Waldwick, New Jersey. Staff Sergeant D'Augustine was killed more than 2 years ago on March 27, 2012, while conducting combat operations in Afghanistan. In the greatest act of sacrifice possible, Staff Sergeant D'Augustine gave his life while protecting his fellow men and women in uniform. He was just 29 years old. Today, this House will honor Staff Sergeant D'Augustine's ultimate sacrifice by passing H.R. 1458. This legislation will designate the United States Postal Service located at 1 Walter Hammond Place in Waldwick, New Jersey, as the Staff Sergeant Joseph D'Augustine Post Office Building. While no action by this Congress could ever repay his sacrifice, this bill will create a permanent and visible memory of his heroism. It was just 1 day after graduating from Waldwick High School back in 2001 that Staff Sergeant D'Augustine enlisted in the United States Marine Corps. He was assigned to the 8th Engineer Support Battalion, 2nd Marine Logistics Group, 2nd Marine Expeditionary Force. Staff Sergeant D'Augustine had served two tours of duty in Iraq, and as was stated, he was just 2 weeks away from completing his second tour of duty in Afghanistan. While there, he worked as an Explosive Ordnance Disposal tech, and he was going ahead of his fellow marines, soldiers, sailors, and airmen and was clearing the way for them. We will never know how many lives Staff Sergeant D'Augustine saved, but his numerous awards, including the Bronze Star with valor, the Purple Heart, the Navy and Marine Corps Commendation Medal, the Navy and Marine Corps Achievement Medal, the Combat Action Ribbon, the Good Conduct Medal, the National Defense Service Medal, the Afghanistan Campaign Medal, the Iraq Campaign Medal, the Global War on Terrorism Medal, the Global War on Terrorism Service Medal, the Korea Defense Service Medal, the Humanitarian Service Medal, and the NATO-ISAF Medal, all speak of his selfless heroism. Even after his passing, Staff Sergeant D'Augustine's legacy continues to this day in his community. The Staff Sergeant Joseph D'Augustine Memorial Fund offers a scholarship to one male graduating senior and one female graduating senior who exemplify the highest standards of citizenship through strong character and dedication to community service. Since October 2012, the fund has donated more than $48,000 to numerous charities as well as making direct donations to veterans in need. The tremendous outpouring of love and support for his family since his death has provided a glimpse into the number of lives he has touched and also into the number of lives his legacy continues to touch. To those who knew him best--his parents, Anthony and Patricia; his three sisters, Nicole, Jennifer, and Michele; and his brother-in-law, Len--he will always be remembered as a loving son and a loving brother. To his fellow marines, he will be remembered as a faithful brother in arms. To this Nation, he will be remembered as a patriot who loved his country, who loved the Marine Corps, and who gave his life in defense of freedom. The Marine Corps motto is ``Semper Fidelis''--``always faithful.'' Staff Sergeant D'Augustine lived this motto, and his legacy embodies it. He was faithful to his country, and he was faithful to his mission. He was faithful to the Corps, and he was faithful to his fellow marines. In times such as this, words fail to provide adequate comfort to his family and friends, and it is my sincere hope that they know that the prayers and gratitude of this Nation are always with them.

Mr. GARRETT

Mr. GARRETT. Mr. Chair, I have an amendment at the desk.

Mr. GARRETT. Mr. Chairman, I rise today to offer an amendment that stops the Justice Department from using one of the most dangerous and illogical legal theories of all times: the theory of disparate impact. In short, disparate impact liability allows the government to allege discrimination on the basis of race or other factors based solely on the statistical analysis that finds disproportionate results among different groups of people. In recent years, the Justice Department has increasingly used this dubious theory in lawsuits against mortgage lenders, insurers, and landlords, and forced these companies to pay multimillion dollar settlements. What is wrong with this, one might ask? Well, under disparate impact, one could never intentionally discriminate in any way, and even then have strong antidiscriminatory policies in place, and still be found to have discriminated. If, for example, a mortgage lender uses a completely objective standard to assess the credit risk, such as the debt-to-income ratio, they can still be found to have discriminated if the data show different loan approval rates for different groups of consumers. Some of these statistical differences and outcomes may actually be due to discrimination, but others may not be. It is impossible to tell which is which from the statistics alone. Under disparate impact it doesn't matter though. All statistical differences are considered by themselves discrimination. To be clear, none of us have a tolerance for intentional discrimination. If there is intentional discrimination, we must prosecute it to the fullest extent of the law. The Justice Department's use of disparate impact, however, tries to fight one injustice with another. On a more practical level, disparate impact will make it difficult, if not impossible, for lenders to make rational economic decisions about risk. Lenders will feel the pressure to weaken their current standards to keep their lending statistics in line with whatever the Justice Department bureaucrats consider nondiscriminatory. We have seen what this discriminatory and damaging risky lending can do to our economy. It is truly reckless for our government to be encouraging those dangerous and short-sighted practices to continue. Ironically, disparate impact forces lenders, insurers, and landlords to constantly take race, ethnicity, gender, and other factors into account or risk running afoul of the Justice Department. You and I both know, Mr. Chairman, that even an accusation of discrimination could have a devastating impact on a small business. I quote Roger Clegg, who is the president and general counsel for the Center for Equal Opportunity. He said: The disparate impact standard for antidiscrimination law pushes people to do one of two things: Get rid of legitimate selection criteria, or use a racial double standard to ensure that the numbers come out right. On balance, Mr. Chairman, disparate impact will make it more difficult and expensive for families to buy a home, and will result in more discrimination not less. For these reasons, both philosophical and practical, I ask my colleagues to reject this misguided theory by supporting my amendment. I reserve the balance of my time. Parliamentary Inquiry

Mr. GARRETT. Will the gentleman yield?

Mr. GARRETT. You just said something. You said that the Justice Department will not go after them if a whole set of policies result in discriminations.

Mr. GARRETT. Mr. Chairman, I think what America wants is to only be able to bring lawsuits against discrimination when there was, in fact, intentional discrimination, not just because, at the end result from some statistics, some may believe that there was discrimination. If there was intentional discrimination, this amendment does not do anything that would prevent the Justice Department from proceeding. I would like to enter into the Record support for legislation from a number of organizations, including the Consumer Mortgage Coalition, Credit Union National Association, National Association of Federal Credit Unions, and also NAMIC, PCI, and American Insurance Association, which in part states: All 50 States have a strong and comprehensive antidiscrimination regulatory regime, including definitions of unacceptable conduct and full panoply of enforcement tools that includes rate approval, license revocation, and fines. There is no evidence that these regimes are insufficient. Furthermore, they state: Under the disparate impact theory, even when a lender takes every step to prevent discrimination and treats all consumers fairly and equally, a neutral policy can serve as a basis for very serious and harmful results. And ``could increase the cost and undermine the availability of credit throughout the economy.'' American Bankers Association, American Financial Services Association, Consumer Mortgage Coalition, Credit Union National Association, Independent Community Bankers of America, Mortgage Bankers Association, National Association of Federal Credit Unions May 29, 2014. Dear Members of the U.S. House of Representatives: The undersigned organizations support Representative Garrett's amendment to H.R. 4660, the Commerce, Justice, Science, and Related Agencies Appropriations Act for Fiscal Year 2015. The amendment would prohibit any funds made available by the Act from being used for litigation in which the Department of Justice (DOJ) seeks to prove illegal discrimination based on the ``disparate impact'' theory. All of our organizations and their member companies view illegal discrimination in housing and lending as morally, ethically, and legally abhorrent and do not tolerate it in any size, shape or form. They are committed to providing financial services to American consumers in full compliance with all lending laws. Recently, the Department of Justice, along with the Consumer Financial Protection Bureau (CFPB), entered into a $98 million settlement with Ally Financial and Ally Bank over allegations that it discriminated against minority borrowers in its indirect auto lending program. The order represents the federal government's largest auto loan discrimination settlement in history. The CFPB and DOJ based their allegations solely on a disparate impact theory of discrimination. They do not allege that Ally intentionally discriminated against any consumers. This settlement was only a part of a larger joint effort between the CFPB and DOJ to address disparate impact in the auto lending market. Disparate impact claims also have been brought under the Fair Housing Act pursuant to rules issued by the Department of Housing and Urban Development. This is notwithstanding that the basis for such claims under the Act is in considerable dispute. Under the disparate impact theory, even when a lender takes every step to prevent discrimination and treats all consumers fairly and equally, a neutral policy can serve as a basis for very serious and harmful claims in the absence of intentional discrimination. Smaller lenders, in particular, will find it difficult to manage this type of litigation risk. Left unchecked, disparate impact enforcement could increase the cost and undermine the availability of credit throughout the economy. We ask the Members of the House of Representatives to vote in favor of Representative Garrett's amendment. National Association of Mutual Insurance Companies, Property Casualty Insurers Association of America, American Insurance Association May 29, 2014. Hon. John Boehner, Speaker of the House of Representatives, Washington, DC. Hon. Nancy Pelosi, Minority Leader, Washington, DC. Dear Speaker Boehner and Minority Leader Pelosi: The undersigned insurance trade organizations strongly support Rep. Scott Garrett's amendment to H.R. 4660 to prevent the Department of Justice (DOJ) from using funds to litigate in order to prove illegal discrimination based on the ``disparate impact'' theory. In particular, we are concerned about the use of the ``disparate impact'' theory in relation to a Housing and Urban Development (HUD) rule (24 C.F.R. 100.500) issued on February 15, 2013. The new rule would allow HUD and DOJ to hold insurers liable for discrimination when a housing-related practice has a discriminatory effect based on ``disparate impact'' theory. We individually and collectively abhor any unfair discrimination in any aspect of insurance. However, application of the rule to the provision and pricing of homeowners insurance as HUD intends is impractical and contrary to existing State and Federal law. All 50 States have a strong and comprehensive anti-discrimination regulatory regime, including definitions of unacceptable conduct and a full panoply of enforcement tools that includes rate approval, license revocation, and fines. There is no evidence that these regimes have been insufficient. The rule could be used to challenge common and regulator- approved factors used for risk-based pricing--including an applicant's claims history, construction materials, the presence or absence of a security system, and distance from a firehouse--if they were found to result in a statistical disparity for a class defined by race, ethnicity, or gender. However, accurate risk classification is essential to the business of insurance and treating similar risk profiles in a similar manner is a form of reasonable and fair underwriting that is at the very heart of the business of insurance. The rule ignores this and under it, an insurance company acting in full compliance with a State rating law standard could see itself challenged under the ``disparate impact'' theory. Accordingly, the rule is impractical and contrary to existing law. Therefore, we support passage of Mr. Garrett's amendment to H.R. 4660 to prevent DOJ from funding litigation to prove illegal discrimination based on the ``disparate impact'' theory. Sincerely, American Insurance Association, National Association of Mutual Insurance Companies, Property Casualty Insurers Association of America.

Mr. GARRETT. In the end, Mr. Speaker, what we are intending to do here is to allow for the Justice Department to proceed when there is evidence of intentional discrimination. But when there is no evidence whatsoever, when it is purely on statistics, then it should not proceed under that theory of law. With that, I yield back the balance of my time.

Mr. GARRETT

Mr. GARRETT. Mr. Speaker, I submit a clarification of my vote during consideration of H.R. 4435, the Howard P. ``Buck'' McKeon National Defense Authorization Act for Fiscal Year 2015. I mistakenly voted ``no'' on rollcall Vote 231, the McKinley of West Virginia Amendment No. 1. I intended to vote ``aye.''

Mr. GARRETT

Mr. GARRETT. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4488) to make technical corrections to two bills enabling the presentation of congressional gold medals, and for other purposes.

Mr. GARRETT. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and submit extraneous material for the Record on H.R. 4488, which is currently under consideration.

Mr. GARRETT. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in support of H.R. 4488, the Gold Medal Technical Corrections Act of 2014, introduced by the gentleman from Georgia (Mr. Lewis) and Ms. Brown of Florida. Mr. Speaker, this legislation seeks to make minor technical corrections to allow the actual awarding of two Congressional Gold Medals authorized in previous Congresses. The first medal was awarded to Martin Luther King, Jr., and Coretta Scott King. The other medal was awarded to the pioneering Montford Point Marines of World War II. For different reasons, there are now no statutorily designated recipients of the medals. As has often happened in the past with such medals, they will be given to the Smithsonian Institution, where they will be available for display, research, or loan, as appropriate, to sites significant to their honorees. Importantly, in the case of both these medals, the sense of Congress is expressed that one place that would be very appropriate to display either or both of these medals is at the new National Museum of African American History and Culture, now under construction literally just down the street. So, Mr. Speaker, this is a good bill. It is a bipartisan bill. I ask for its immediate passage. I reserve the balance of my time.

Mr. GARRETT. Mr. Speaker, I yield myself such time as I may consume. At this point, we have no other speakers. I, again, would just like to thank my colleagues on the other side of the aisle for joining us with the sponsoring of this legislation; Mr. Lewis, not only for legislation that is on the floor today, but for your historic work on behalf of civil rights prior to coming to Congress as well. Mr. Speaker, I yield back the balance of my time.

Mr. GARRETT

Mr. GARRETT. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 627) to provide for the issuance of coins to commemorate the 100th anniversary of the establishment of the National Park Service, and for other purposes, as amended.

Mr. GARRETT. Mr. Speaker, again, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks, and also to submit extraneous materials for the Record on this bill, H.R. 627, as amended, and currently under consideration.