Scott Garrett

Mr. GARRETT

Mr. GARRETT. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4855) to amend provisions in the securities laws relating to regulation crowdfunding to raise the dollar amount limit and to clarify certain requirements and exclusions for funding portals established by such Act, as amended.

Mr. GARRETT. Mr. Speaker, I appreciate the fact that the gentleman from North Carolina was able to bring about that hope and change to the gentlewoman. Mr. Speaker, I yield to the gentleman from California (Mr. McCarthy).

Mr. GARRETT. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and enter in extraneous material on this bill.

Mr. GARRETT. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of H.R. 4855. This is the Fix Crowdfunding Act. Once again, I thank the gentleman from North Carolina (Mr. McHenry), the sponsor of the bill, which also passed the Financial Services Committee in June with a vote of 57-2. Let's get into it, Mr. Speaker. Title III of the JOBS Act, known as the crowdfunding title, is one of the most promising provisions of that law, and so, by opening the door for equity crowdfunding to literally millions of Americans, people who want to invest in companies that they believe in, title III has the potential to further democratize our capital markets, and doing so will create opportunities for Main Street to generate wealth. Unfortunately, in part due to provisions added by the Senate during conference negotiations and in part due to problems with the SEC's implementation of title III, equity crowdfunding in the United States may never reach its full potential. As SEC Commissioner Mike Piwowar noted in his dissent to the SEC's rules that came out last year, he said: ``The rules will spin a complex web of provisions and requirements for compliance . . . Such burdens will spook many small businesses from pursuing crowdfunding as a viable path to raising capital.'' Fortunately, once again, the Financial Services Committee has stepped up to the plate to address these problems; and fortunately, we have Mr. McHenry here, who has put forward his Crowdfunding Act to fix it. The Fix Crowdfunding Act would address some of these issues, and it does so in two important ways. First, the bill would enable special purpose vehicles, as defined by the bill, to be considered an authorized investor in crowdfunding offerings. What does this mean? Well, this means a group of investors can basically come together and pool the resources and then invest alongside some more sophisticated investors in these new, growing startup businesses. As I tell you this, it is important to note that, under current regulations, unless you are, well, extremely wealthy, you are typically prohibited from investing in private businesses here in the United States. Secondly, Mr. McHenry's Fix Crowdfunding Act increases the amount that a company can raise through this mechanism of crowdfunding before it has to go and register with the SEC. So while these things may be just technical fixes to a complicated set of security laws, at the end of the day, what they will do is break down what we say is historical barriers that prevented startup companies and businesses from connecting with literally millions of Americans and investors across the country. So the Fix Crowdfunding Act that we are seeing here today will address many of the problems that currently exist with the crowdfunding regulations. Again, I want to thank the gentleman from North Carolina, and also my colleagues on the Financial Service Committee for their support. Mr. Speaker, I reserve the balance of my time.

Mr. GARRETT. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, before I yield to the gentleman from North Carolina, I will say that I agree with the gentlewoman that prior to 2008 and the crisis, the regulators were not doing their jobs. They were not monitoring as they were supposed to be. So true to form to the Washington way of dealing with things at that time, this administration was able to pass through a 2,000-page Democratic-inspired and -crafted piece of legislation called the Dodd-Frank legislation--2,000 pages and 400 regulations. It did as Washington normally does: give those failed regulators raises, more authority, and bigger and fancier buildings. What was the result of that? Well, some jobs were created since 2008. We have had one of the slowest recoveries on record. As I said before, the most recent jobs report showed that only 38,000 jobs out of 300-plus million people in this country--think about that--were created during the month of May. That was the worst jobs record since 2010. New business startups in this country are at a 20-year low. Think about that if you are waiting to get a new job from a new business--a 20-year low. So because of that, because Dodd-Frank did not fix the problem, because those 2,000 pages and those more highly paid bureaucrats in Washington didn't solve the problem, American families and small businesses are finding it extremely difficult to find credit to expand their businesses and to hire more people. So thank goodness we have this legislation here today and the work by the gentleman from North Carolina not only on this bill, but the previous bill that he was able to accomplish in a bipartisan manner. Mr. Speaker, I yield such time as he may consume to the gentleman from North Carolina (Mr. McHenry) to explain the bill in more detail.

Mr. GARRETT. Mr. Speaker, I encourage my colleagues to vote ``yes'' on this very important legislation. I yield back the balance of my time.

Mr. GARRETT. Mr. Speaker, on that I demand the yeas and nays.

Mr. GARRETT

Mr. GARRETT. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4538) to provide immunity from suit for certain individuals who disclose potential examples of financial exploitation of senior citizens, and for other purposes, as amended.

Mr. GARRETT. Mr. Speaker, I thank the gentlewoman for her work and her bipartisan effort on this legislation. I very, very much, as I said, thank the gentleman from Maine for all of his contributions to the Financial Services Committee. Mr. Speaker, today I urge unanimous support in the House like we had in committee. I yield back the balance of my time.

Mr. GARRETT. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and add extraneous material to the bill therein.

Mr. GARRETT. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of H.R. 4538. It is the Senior Safe Act of 2016, and I would like to thank the sponsors, principally the gentleman from Maine (Mr. Poliquin), also the gentleman from South Carolina (Mr. Mulvaney), for all of their hard work in bringing this bill to the floor of the House today. Mr. Speaker, we spend a lot of time in our committee and this Congress debating ways in which we can help Americans achieve a secure and dignified retirement. And while there are often disagreements about how to achieve that goal, one issue that is not debatable is that we must do everything in our power to stop fraudsters and scam artists from preying on the vulnerable senior citizen. Currently, Americans over the age of 50 account for roughly 75 percent, over three-quarters of the financial assets of the U.S.; and unfortunately, one in five of those seniors, that is 20 percent, over the age of 65, have been the victim of fraud--one in five. Think of that. This costs senior citizens almost $2.9 billion every year, not to mention the stress and the pain that comes along with it for a person who has been victimized, trying to rebuild their financial security. Oftentimes, employees of banks or financial advisers are on the front lines against such fraud when they see that one of their clients may be a potential target. Unfortunately, current laws make it very difficult for employees of such institutions to report the occurrences of those frauds. So what do we do? We come to the floor tonight for something called the Senior Safe Act. What does it do? It provides a very simple fix that would allow a supervisor or a compliance officer of a bank or investment adviser to report instances of fraud to a Federal or State regulator so long as they reported the matter in good faith and, of course, with reasonable care. Employees at these institutions want to protect their clients just as much as any regulator does, and so this bill would allow them to speak up when they see fraud that is being unreported. This bill passed the Financial Services Committee last month unanimously, so I encourage all my colleagues in the House to support it today. Mr. Speaker, I reserve the balance of my time.

Mr. GARRETT. Mr. Speaker, I yield such time as he may consume to the gentleman from Maine (Mr. Poliquin) who has brought so much to this committee, and I very much appreciate all of his hard work on that and especially on the legislation that is here before us today.

Mr. GARRETT. Mr. Speaker, I reserve the balance of my time.

Mr. GARRETT

Mr. GARRETT. Mr. Chairman, I come before the House today to support an important piece of legislation that will allow the people of Puerto Rico a path towards economic stability, growth, and prosperity. Beholden to out-of-control tax-and-spend policies, the Puerto Rican people are experiencing the harsh realities of fiscal irresponsibility and unaccountable government. That is why I strongly support this bill. We have a moral and constitutional responsibility to address this fiscal crisis which will only get worse if we don't act. That is why I support this bill and what we must learn from this experience. Congress and Presidents of both parties have let our national debt reach an unsustainable $19 trillion. That is only because the U.S. Government has something that Puerto Rico doesn't have: the ability to print money and borrow endlessly. So that is why I support the fiscal reforms in this bill which do not spend a single dollar in U.S. taxpayer money to relieve Puerto Rico of its debt. I have long opposed taxpayer bailouts. Fortunately, this bill prevents the taxpayers from bailing out a government that spent recklessly and provides a conservative solution to force Puerto Rico to spend now responsibly. The bill also avoids setting a horrible precedent that could tempt free-spending States to walk away from their obligations by behaving irresponsibly.

Mr. GARRETT. Most importantly, the bill creates a seven-member oversight board to oversee their debt restructuring and to conduct financial audits. What would this board do? It would require commonsense actions like sustainable government programs to establish fiscal plans to achieve needed reform and so on. This bipartisan bill is the first step to return Puerto Rico to solvency and stability. Americans, each and every day, balance their own checkbooks and live within their own means. Politicians and government bureaucrats should behave no differently. I therefore support the underlying legislation.

Mr. GARRETT

Mr. GARRETT. Mr. Speaker, I rise today to honor Mr. Norman Beatty who is retiring after 32 years of service at First Hope Bank in Hope, NJ. During his tenure at First Hope Bank, Mr. Beatty served as Chairman of the Board, Chief Executive Officer, and President. He graduated Blair Academy in 1958, the United States Military Academy in 1963 (BS), and the University of Alabama Graduate School of Business in 1971, where he received an MBA and an MS in Human Resources. Additionally, he served 20 years in the Army from 1963-1983. Retiring as a Lieutenant Colonel in 1983, he joined First Hope Bank and worked with his father, Lewis C. Beatty. Mr. Beatty played an essential role in the New Jersey Bankers Association, where he served as Chairman of the Agricultural Committee, Treasurer, Secretary, Vice Chairman, Chair, and on the Executive Committee. During Mr. Beatty's tenure, New Jersey's two banking organizations, the Savings League and Bankers Association, merged in 2009. Mr. Beatty was then named the Co-Chairman of the NJ Bankers Association. Within the American Bankers Association he represented New Jersey on the Community Bankers Council and the Membership Council. From 2010 to 2014 he served as a member of the American Bankers Association's Board of Directors and Chairman of its Audit Committee. Mr. Beatty is a charter member of the Hope Area Chamber of Commerce Board of Directors where he held the positions of President, Vice President, and Secretary/Treasurer. The Township of Hope recognized Mr. Beatty as its Outstanding Citizen in 1998 and recognized him with the Founding Father award in 2009. The Warren County Chamber of Commerce selected Mr. Beatty as its Business Person of the Year in 2002. In 2011 Warren County Community College inducted Mr. Beatty into its Hall of Fame. I am proud to have Mr. Beatty as a member of our community and want to recognize his decades of service to Northern New Jersey, to the banking industry, and to our nation.

Mr. GARRETT

Mr. GARRETT. Mr. Speaker, I want to thank the sponsor of the underlying legislation for the underlying bill. I rise in support of H.R. 4498, the Helping Angels Lead Our Startups Act. I urge all of my colleagues on both sides of the aisle to support this very important piece of legislation. Mr. Speaker, it was 2 weeks ago at the Capital Markets and Government Sponsored Enterprises Subcommittee that we held a hearing that examined the positive impact the 2012 JOBS Act is having on our economy. By reducing burdens on startup companies and modernizing our security laws, the consensus was very clear. The JOBS Act was a big win for entrepreneurs, innovation, and, ultimately, economic growth and opportunity and job creation in this country. But that doesn't mean that we shouldn't be doing more besides the JOBS Act, and it certainly doesn't mean that the Securities and Exchange Commission, the SEC, has done a perfect job, by any means, when it comes to implementing the important provisions of the JOBS Act. At times, the SEC has taken liberties, if you will, with their rulemaking that run contrary to the wishes and purposes of Congress, which ultimately could limit the impact this great, new revolutionary legislation has for our economy. One example of this was the way in which the SEC implemented title II of the JOBS Act, which made it easier for companies to use general solicitation in order to attract investors for private offering of stocks. You see, what happened here was, in their final rule, the SEC classified events such as demo days held by angel investors as being general solicitation. This means that angel groups would have to then comply with all the rules and regulations that are designed for issuers who are actually engaged in the offering of securities, which this is not. So events such as demo days are an important economic development tool, if you will, used by small startup companies to help educate people, educate a pool of potential investors. They are not security offerings, and they should really, really not be treated as such. Why is this important? Well, in 2014, angel investors put some $24 billion to work in over 73,000 startups. So, clearly, this is a preferred source of capital throughout the economy. Any kind of regulation that would hamper the ability of angel investors to communicate with startup companies would jeopardize the ability of angel investors to fund the next Apple or Google or startup. So here we are with H.R. 4498. It would simply make a small technical fix to the JOBS Act and would allow such events to continue without that heavy hand of government getting in the way. So I want to thank the sponsors. I urge bipartisan support of this underlying bill.

Mr. GARRETT

Mr. GARRETT. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include any other extraneous material on this bill.

Mr. GARRETT. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of H.R. 5019, the Fair Access to Investment Research Act of 2016. I want to thank the gentleman from Arkansas (Mr. Hill), who will be speaking in a little bit, for his diligent work on this piece of legislation, as well as for his valued work and his input that he has brought all year long to the Subcommittee on Capital Markets and Government Sponsored Enterprises. Mr. Speaker, one of the most positive developments in our economy over the last several decades is what has been dubbed the ``democratization'' of our capital markets. Because of the advances in technology and market competition, more Americans than ever have the ability to take control of their own investments and have access to products that used to be reserved for the rich and the professionals. The $200 trade has now become the $7 trade, and many investment funds have become more cost-effective over the years as well. One of these products is the exchange-traded fund or the ETF. What are ETFs? Well, ETFs are securities made up of a basket of stocks or bonds and which trade over an exchange like an individual stock. Because of their diversity and cost-effectiveness, they have become increasingly popular with investors. In fact, ETFs now hold roughly $2 trillion in assets, and some 5.7 million households hold ETFs as part of their investment portfolio. That being said, unfortunately, due to a longstanding technicality in securities law, there is a dearth of research on ETFs' availability to investors, depriving them of valuable information they need to make their informed decisions. The SEC, in the past, has provided safe harbors under securities law for brokers that provide research reports for listed stocks or corporate debt. Despite this and despite broad public support, the SEC has not provided a similar safe harbor for ETF research reports. Because of this, brokers are hesitant to publish reports out of fear for legal action either from the SEC or another private party. So we have this today, the Fair Access to Investment Research Act, which would correct this anomaly by providing a safe harbor for ETFs similar to the ones that currently exist for equities or corporate debt. This is a simple, yet much-needed, piece of legislation to help investors, particularly your mom-and-pop type investors, to understand more about the products that they are putting their hard-earned money into. Again, I thank Mr. Hill not only for his work on this legislation but, truly, for all the expertise and advice that he has brought to the committee this session. Mr. Speaker, I reserve the balance of my time.

Mr. GARRETT. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5019) to direct the Securities and Exchange Commission to provide a safe harbor related to certain investment fund research reports, and for other purposes.

Mr. GARRETT

Mr. GARRETT. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4096) to amend the Volcker Rule to permit certain investment advisers to share a similar name with a private equity fund, subject to certain restrictions, and for other purposes.

Mr. GARRETT. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on this bill.

Mr. GARRETT. I yield myself such time as I may consume. Mr. Speaker, I rise today in support of H.R. 4096, the Investor Clarity and Bank Parity Act. I want to thank the primary sponsors of the legislation--the gentleman from Massachusetts (Mr. Capuano) and the gentleman from Ohio (Mr. Stivers)--for their work in bringing this very technical, yet needed, legislation to the floor of the House today. Mr. Speaker, during this time of divided government, it may come as a surprise to some that the Committee on Financial Services has generated a significant amount of bipartisan legislation since the beginning of 2015. In fact, this Congress our committee has approved over 70 bills, with the vast majority of these receiving bipartisan support, and in many cases unanimous support. I am pleased that we are able to bring to the floor today a number of bills that received the backing of both Republicans and Democrats out of our committee. One of these bills is the Investor Clarity and Bank Parity Act, which passed out of the committee by a voice vote. What does that bill do? Well, this bill corrects a statutory error made in section 619 of Dodd-Frank, more commonly known as the Volcker Rule. The Volcker Rule limited the ability of bank holding companies or their affiliates to invest in hedge funds or private equity funds, collectively known as covered funds. Now, we had a number of debates in our committee as to the general wisdom of the Volcker Rule and whether it actually reduces systemic risk and protects taxpayers or not. I think one thing we can all agree on is that so long as section 619 is the law of the land, Congress should do what it can to limit any negative and unintended consequences of the Volcker Rule. Because of the way that Dodd-Frank was drafted, a bank or one of its affiliates was prohibited from sharing its name with a covered fund that it was invested in. By disallowing a covered fund to share a name with the sponsoring entity, this provision of the Volcker Rule could actually lead to more and widespread investor confusion about who is actually managing the assets of that particular fund. As Jeffrey Plunkett of Natixis Global Asset Management told our subcommittee at a hearing back in February, he said: ``We believe that compliance with the name-sharing prohibition of the Volcker Rule . . . risks confusion among investors and burdens firms that are affiliated with banks, leading to a lack of transparency for clients.'' So the fix envisioned here today in H.R. 4096 is really a simple one. It allows a covered fund to share its name with a sponsoring entity in order to provide clarity and transparency to the investor. I urge all my colleagues to vote ``yes'' on H.R. 4096. Mr. Speaker, I reserve the balance of my time.

Mr. GARRETT. Mr. Speaker, inasmuch as the gentleman has yielded back, has no other speakers, I don't believe that we have any other speakers on this side of the aisle. I will close by saying thank you to the gentleman for working with us on this and a bunch of other legislation I also hope to bring to the floor sooner rather than later. I encourage Members on both sides of the aisle to support this bipartisan piece of legislation. Mr. Speaker, I yield back the balance of my time.

Mr. GARRETT. Mr. Speaker, on that I demand the yeas and nays.