Jeb Hensarling

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Arkansas (Mr. Hill), a member of the Financial Services Committee.

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Oregon (Mr. Blumenauer), a senior Democrat and leader on environmental issues in the House.

Mr. HENSARLING. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Missouri (Mr. Luetkemeyer), chairman of the Financial Institutions and Consumer Credit Subcommittee and one of the coauthors of H.R. 2874.

Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from Florida (Mr. Ross), the vice chairman of the Housing and Insurance Subcommittee and the author of the pro-consumer competition title of the bill.

Mr. HENSARLING. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Wisconsin (Mr. Duffy), the chairman of the Housing and Insurance Subcommittee, and the sponsor of the legislation, the 21st Century Flood Reform Act.

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. Royce), the chairman of the Foreign Affairs Committee and respected member of the Financial Services Committee.

Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 616, I call up the bill (H.R. 2874) to achieve reforms to improve the financial stability of the National Flood Insurance Program, to enhance the development of more accurate estimates of flood risk through new technology and better maps, to increase the role of private markets in the management of flood insurance risks, and to provide for alternative methods to insure against flood peril, and for other purposes, and ask for its immediate consideration in the House.

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

Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may consume. Hurricanes Harvey, Irma, Maria: the images of the human misery and the economic devastation are still clearly imprinted on our minds. Unfortunately, we know that part of this is a result of a failed National Flood Insurance Program, which, Mr. Speaker, faced three important challenges. First, it is a bankrupt program. It is unsustainable. Taxpayers are on the hook for $1.2 trillion, running an annual actuarial deficit of $1.5 billion. It has already received two different bailouts, for a combined total of about $25 billion. Also, it incents and subsidizes people to actually live in harm's way. Finally, Mr. Speaker, it is a government monopoly that, notwithstanding subsidized rates, still, unfortunately, has unaffordable premiums for many. Today is a good day, Mr. Speaker, because today the House gets to vote on the 21st Century Flood Reform Act. I thank the gentleman from Missouri (Mr. Luetkemeyer) for his leadership on the mapping reforms and reinsurance. I want to thank the gentleman from Florida (Mr. Ross) for his reforms on opening up the market. I certainly want to thank the gentleman from Wisconsin (Mr. Duffy) for his tireless effort and leadership in bringing this bill to the floor. There are a lot of good reforms in this bill, Mr. Speaker, for both taxpayers and ratepayers. Let me just briefly touch upon two. It is an absolutely revolutionary reform, Mr. Speaker, that we can break open the government monopoly and bring in market competition, innovation competition, and more affordable rates for so many. Milliman, one of the actuarial experts within the marketplace, released a study a couple of months ago talking about the market competition, saying: ``Based on our estimates, this would hold for 77 percent of all single families in Florida, 69 percent in Louisiana, and 92 percent in Texas,'' who all would see cheaper premiums. We know that is not theory. It is actually happening in the market today. In the nascent part of the market that is open, people are getting hundreds, if not thousands, of dollars of savings. One of the great tragedies that I saw in my native State of Texas, in Houston, was how few people actually took up flood insurance. Think, Mr. Speaker, if we had competition, if we had advertising, if people could roll that into their homeowner rates, how many more people would have been protected by the ravages of these hurricanes. One more reform, briefly. We have these repetitive loss properties where people live in areas that flood over and over and over. I met a couple of families in Houston. They had three floods in 8 years. We have got to help them. This bill provides more money for relocation, for flood-proofing, and for mitigation, than any other flood reform bill, all by 25 percent. We would prioritize these areas. We also have to realize that if we are going to make this program sustainable, we cannot have 1 percent of the properties causing 25 percent of the losses. Ultimately, if all we do is rebuild the same properties in the same fashion in the same location, that is neither wise nor compassionate. We have an opportunity to enact historic reforms. We should do it today. Mr. Speaker, I reserve the balance of my time.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Indiana (Mr. Hollingsworth), another member of the Financial Services Committee.

Mr. HENSARLING. Mr. Speaker, I yield an additional 30 seconds to the gentleman from Wisconsin.

Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from Wisconsin (Mr. Duffy), the chairman of the Housing and Insurance Subcommittee.

Mr. HENSARLING. Mr. Speaker, number one, I was very pleased to hear one of the most compelling indictments of 8 years of the Obama administration I have ever heard on the House floor, and I thank the ranking member for it. Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania (Mr. Rothfus), who is the vice chairman of the Financial Institutions and Consumer Credit Subcommittee.

Mr. HENSARLING. Mr. Speaker, I yield myself 10 seconds just to say I heard the word ``protection'' often used by my friend, the ranking member, but she and her friends on the other side of the aisle had 10 years to protect paychecks, protect savings, and protect economic opportunity and the American Dream, and they failed miserably. Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Davidson), a member of the Financial Services Committee.

Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from Colorado (Mr. Tipton), who is the vice chairman of the Oversight and Investigations Subcommittee.

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from South Carolina (Mr. Norman), he is not a member of the Financial Services Committee, but we would be proud if he were.

Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, as always, I listen very carefully to my friend, the ranking member. I know that she started off her closing remarks by saying: We don't need this bill, H.R. 2201, because the big banks can loan to the small businesses. Well, that is fascinating to me, Mr. Speaker, because of the Dodd- Frank Act, which she so jealously supports, all of a sudden, the risk- based capital standards say that the banks have to reserve more for small business loans than they do for sovereign debt and municipal debt. So all of a sudden, it is because of Dodd-Frank. In addition, we know that the ranking member supports the Federal Reserve policy of paying interest on excess reserves where the Federal Reserve takes taxpayer money to pay the big banks not to loan money. So if the ranking member was curious why the big banks aren't loaning to the small businesses, which they aren't--and prior to the Trump administration, we know that small business lending by banks was at a 25-year low--it is the very reason, Mr. Speaker, that we need the bill, the legislation of the gentleman from Minnesota (Mr. Emmer) so that we can unlock this. Again, there is no surprise why, after 8 years of Obamanomics and the thinking from my friends on the other side of the aisle, small businesses have languished and why the economy has dropped down to a 1\1/2\ to 2 percent GDP growth. In fact, I think President Obama is one of the few Presidents in American history never to enjoy a year of 3 percent economic growth. Now, he may personally have enjoyed it, but the American people didn't, Mr. Speaker. But the good news is that there is a change in administration and a change of attitude. That is why it is so important that we be able to get capital to our entrepreneurs, to our small businesses. Let them thrive again on Main Street. We hear so often the ranking member decry Wall Street. We are talking about offerings of a half a million dollars. No on in Wall Street would touch that with a 10-foot pole. This is about Main Street, not Wall Street, Mr. Speaker. It is interesting, as I listen to my friend, the ranking member, decry the fact that someone might be able to raise capital under this particular set of circumstances. Well, I have a news flash for all my colleagues. Already the SEC can grant a private offering for exactly the set of circumstances that my friend, the gentleman from Minnesota, puts into his bill. All the gentleman is doing is creating a bright line, safe harbor, so that the next Nike or the next Amazon isn't stopped from launching their enterprise by having to spend a million dollars on lawyers and accountants trying to navigate this uncertain murky labyrinth of SEC waters trying to determine what is a private offering and what is a public offering. That is all he is doing. Again, this is already legal. It simply is discretionary to decide what is a private offering and what is a public offering by the Securities and Exchange Commission. We now, Mr. Speaker, have had two quarters of 3-plus percent economic growth. We are seeing working Americans. We are seeing their paychecks increase yet again. We are seeing hope and resilience in the American Dream yet again, but we have so much more work to do, and that is why H.R. 2201 is so critical. It takes small businesses today to be the big businesses of tomorrow. They are the creators. They are the job engine of America. They are the drivers of increased paychecks, greater economic opportunity, and a bigger, bolder American Dream. I thank the gentleman from Minnesota for this great legislation. I encourage all of my colleagues to adopt it. Mr. Speaker, I yield back the balance of my time.

Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, we know that, unfortunately, after 8 years of bad economic policies from the Obama administration, working people did not receive a pay increase. We know that we had one of the lowest labor participation rates in modern history. We know that the economy was limping along at 1\1/2\ to 2 percent economic growth. But, fortunately, Mr. Speaker, a new day has dawned and now, all of a sudden, we see that, with the policies of Republicans in Congress, with the policies of the Trump administration, we are seeing promising signs. What we are seeing all of a sudden now is 2 quarters, Mr. Speaker, of 3-plus percent economic growth. This means a difference to working families. They are finally seeing increases in their paychecks, increases in their take-home pay. That is why one of the most exciting policies that are being worked upon today that we hope to see soon is fundamental, pro-growth tax reform for the entire American economy; one that would grow our economy and that makes a Tax Code fairer, flatter, simpler, more competitive; one that would lower rates for families and allow 90 percent of Americans to fill out their forms on something akin to a postcard; something that would help our small businesses and entrepreneurs. I look forward, Mr. Speaker, to having that legislation on the floor soon. But we have legislation today that is also important to our small businesses and our entrepreneurs, H.R. 2201, by the gentleman from Minnesota. What is so important about this legislation, Mr. Speaker, is that it would allow our entrepreneurs and our small businesses to more effectively be able to reach out to family and friends to get the needed capital to start their businesses. A 2014 survey by the Kauffman Foundation found out that over 28 percent of startups raise their funding from their personal network. Mr. Speaker, we have a challenge, and that is the Securities Act does not clearly define what is a public offering or, conversely, a nonpublic offering. So this makes it very difficult for our early-stage entrepreneurial growth companies to go out and do any kind of private placement to raise funds from friends and family. Now, we know that a private placement is already something that is established in law. But what isn't established is a bright line, safe harbor for these business enterprises to go out and raise these funds. So what we also know, unfortunately, from our Securities and Exchange Commission is that a registered offering is simply not economically feasible for a small business, an entrepreneur, an issuer who is seeking to raise less than $1 million. So too often, Mr. Speaker, we have a number of these enterprises that, frankly, just never get jump-started because they don't have the opportunity for a private offering. That is why it is so important. I want to thank the gentleman from Minnesota (Mr. Emmer) for his leadership in bringing this legislation to the House floor today. So it is a simple piece of legislation. Again, it simply allows a bright line, safe harbor for very small offerings. It requires that each purchaser has a substantive preexisting relationship with an officer, director, or shareholder of the issuer. The issuer must reasonably believe that there are no more than 35 purchasers of the securities, and the aggregate amount of all securities sold by the issuer cannot exceed $500,000 in a 12-month period. So, Mr. Speaker, we are talking about a very small portion of startups, but a very vitally important section of our startups that need capital. Mr. Speaker, a few decades ago there was a company where a gentleman borrowed money from his father to import Japanese sports shoes, and he purchased 200 pairs of these Japanese sports shoes. He started a business called Blue Ribbon Sports, and today we know it as Nike. A few decades ago there was an investor out in Omaha, Nebraska, who borrowed money from seven friends and family members, including his sister Doris and Aunt Alice. Over the next 9 years, this initial investment grew, and this gentleman purchased something called Berkshire Hathaway, the textile company that has now led to the Berkshire Hathaway empire. In 1994, there was a gentleman who took a loan from his parents, moved to a two-bedroom, small apartment, and launched a company called Amazon. We want to make sure that the next Berkshire Hathaway, the next Amazon get launched, and that is why it is so critical we enact H.R. 2201. Mr. Speaker, I reserve the balance of my time.

Mr. HENSARLING. Mr. Speaker, I yield myself 30 seconds, just to say, as I listen to the gentleman from Rhode Island and the ranking member, their comments are very interesting, but everything they described is already illegal. Their remarks acknowledge that the SEC can and does bring actions to enforce the securities laws and shut down fraud when they discover the fraud. Nothing in H.R. 2201 eliminates the DOJ's ability to pursue criminal prosecutions or fraud. Nothing in it impacts the SEC's ability to pursue civil actions against issuers who engage in fraud under section 17(a) of the Securities Act of 1933. It is just a red herring. It is one of the reasons we have had such poor economic growth under the Democratic regime. Mr. Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. Luetkemeyer), chairman of the Financial Institutions and Consumer Credit Subcommittee of our committee.

Mr. HENSARLING. 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 on the bill under consideration.

Mr. HENSARLING. Mr. Speaker, I yield 5 minutes to the gentleman from Minnesota (Mr. Emmer), the sponsor of the legislation and an outstanding member of the Financial Services Committee.

Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 609, I call up the bill (H.R. 2201) to amend the Securities Act of 1933 to exempt certain micro-offerings from the registration requirements of such Act, and for other purposes, and ask for its immediate consideration in the House.

Mr. HENSARLING. Mr. Speaker, I yield an additional 30 seconds to the gentleman from Minnesota.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, it is my true honor to introduce and recognize our guest chaplain today, Father Chris Girata. I am honored because he is my rector, the rector of Saint Michael and All Angels Episcopal Church in Dallas, Texas, where my family and I have worshipped for over 20 years. Although he has been our rector for only a little over a year, Father Girata has brought a renewed spirituality and passion to our parish. His enthusiasm for God's Word and will is infectious to us all. His sense of humor always brightens our day, and he leads by example. As one parishioner put it, Mr. Speaker: ``He is a true voice for the powerless and poor and is constantly challenging us to even better walk as Christ did.'' And whether it is through our service at the Jubilee Park and Community Center in South Dallas, the millions in charity provided through the St. Michael's Woman's Exchange, or any of the other ministries or outreach projects of our parish, under Father Chris Girata, Saint Michael is more humbly and effectively serving God's children. And as we do, Father Girata leads us not to just serve our neighbors' physical needs, but to serve their spiritual needs as well. I am grateful that his prayer and his example could be shared with the House today.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I thank the gentleman from Kentucky. This did pass our committee on a unanimous basis. I want to thank the gentlewoman from New York (Mrs. Carolyn B. Maloney) for her leadership and for her other areas of leadership on our committee. As a very senior Democrat, her counsel is always important; her leadership is always important. This is indeed, as was described, Mr. Speaker, in many respects, a technical correction that needed to take place. We need to ensure that our family offices, that those investment funds can be put to their highest and best use to help grow the economy. I was happy that the ranking member used the phrase ``unintended consequences'' because, indeed, Mr. Speaker, from time to time, there are unintended consequences of regulation. We do wish to ensure that these family offices that otherwise meet the definition of accredited investors have the full range of investment opportunities before them. This bill will do this. Again, it came out on a strong bipartisan, indeed, a unanimous basis from the Financial Services Committee, and so I would urge all Members of the House to adopt it.