Jeb Hensarling

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I yield myself 10 seconds just to request of the ranking member, on her time, if she will begin to name the community banks that were responsible for the 2008 financial crisis, ostensibly, that was supposed to be answered by Dodd-Frank. She will have some time to think about that. Mr. Speaker, I yield 1 minute to the gentleman from New York (Mr. Zeldin).

Mr. HENSARLING. Mr. Speaker, I yield 5 minutes to the gentlewoman from Utah (Mrs. Love), the sponsor of this legislation.

Mr. HENSARLING. Mr. Speaker, I yield myself 10 seconds to say that, as the ranking member appears to be vexed at where the $3 billion number came from, it is the product of bipartisan compromise, something I invite her to engage in more often, and this particular bill is supported by almost half the Democrats on the committee. Mr. Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. Luetkemeyer), the chairman of the Financial Institutions and Consumer Credit Subcommittee.

Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 725, I call up the bill (H.R. 4771) to raise the consolidated assets threshold under the small bank holding company policy statement, 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 within which to revise and extend their remarks and submit extraneous materials on the bill under consideration.

Mr. HENSARLING. Mr. Speaker, I yield myself as much time as I may consume. Mr. Speaker, I rise today in very strong support of H.R. 4771, the Small Bank Holding Company Relief Act of 2018. It is a bipartisan bill which passed our committee with a strong bipartisan vote of 41-14. Mr. Speaker, this exact same provision came out of the Senate Banking Committee also with a very strong bipartisan vote of 16-7. First, I want to thank the gentlewoman from Utah (Mrs. Love) who is a very hardworking member of the Financial Services Committee. I want to thank her for introducing this legislation and helping lead our congressional efforts to provide regulatory relief to our Nation's community banks. She is a great asset to our committee and widely respected. The Federal Reserve Small Bank Holding Company Policy Statement is a regulation that allows certain bank holding companies that have less than $1 billion in assets to hold more debt at the holding company level than would otherwise be permitted by current capital requirements. They do this as long as they meet a number of ongoing requirements and restrictions. H.R. 4771 would raise that threshold for qualifying institutions from $1 billion to $3 billion, thus allowing more community banks to raise more capital by the issuance of debt. By increasing this threshold, H.R. 4771 provides much needed relief for bank holding companies from overly burdensome capital and leverage requirements that were truly intended, Mr. Speaker, for the largest and most complex global financial institutions. It is a reoccurring problem, Mr. Speaker. Again, over and over, the regulatory burden on our community financial institutions is causing us to lose one approximately every other day in America. These are rules that have made it, again, more difficult for small banks to raise capital. And while the bank holding companies will no longer have to abide by these rules under this bill, again, there are plenty of safeguards that continue to be in place to protect the safety and soundness of the institution and its customers. But these institutions present no threat to the safety and soundness of our financial system. First and foremost, the Federal Reserve retains the right to impose capital standards on a holding company if they determine it is needed. In other words, this is a ``may'' bill and not a ``shall'' bill. The $3 billion threshold remains totally within the discretion of the Federal Reserve. It is permissive. Next, capital rules and regulations will continue to apply to the subsidiary banks of the holding company level. Again, let me repeat, the capital rules and regulations continue to apply to subsidiary banks. All institutions must continue to meet certain qualitative requirements, including those pertaining to non-banking activities, off-balance-sheet activities, and publicly registered debt and equity. These requirements ensure that the higher leverage the policy statement allows does not pose any undue burden on subsidiary depository institutions. So the Small Bank Holding Company Relief Act will indeed make it easier for small, hometown community banks to raise capital. And as they raise more capital, they can turn it into more Main Street jobs, more economic growth, and more home ownership opportunities for our constituents. In fact, passing this bill will immediately benefit community banks all across America. Not the big banks, not Wall Street banks, as I have no doubt the ranking member will say in her remarks, but again, it will be community banks that will benefit. If you don't believe me, ask them. Ask the Independent Community Bankers of America and its 5,700 community bank members. As a matter of fact, the passage of this bill, Mrs. Love's bill, has been an important, longstanding goal of the Independent Community Bankers of America because they have been suffering and suffocated by an avalanche of red tape with massive increases in regulatory burdens, which has caused consolidation with much, much larger competitors. Because of increased regulation and compliance costs, again, many of them have found it difficult to access and raise capital. This is the capital that is needed to capitalize our small businesses. Small businesses are struggling for access to credit, and the incredible regulatory burden placed on home buyers has simply complicated the buying process. These higher costs are being felt at the same time that paychecks are only now beginning to grow for working families thanks to the Tax Cuts and Jobs Act. Just don't take my word for it, Mr. Speaker. Let's listen to just one community banker who happens to be from West Virginia. They wrote in and said: What no one in a position of power seems to realize is that many customers in our country prefer to deal with a smaller, hometown institution, with people they know and trust. If a customer has a question about their loan or their deposit, they simply pick up the phone and call or drop by. If we don't know the answer, we find out and let them know as soon as possible. But it appears that Congress and the administration are attempting to get rid of smaller institutions, so there are a lot fewer institutions to deal with, and those are the large ones who are too big to fail. Mr. Speaker, that is exactly what happened under the Dodd-Frank Act. Continuing: Please just try to remember that small financial institutions and small businesses are the heart of America. The American Dream is to work hard, learn, and make a good life for yourself and your family. In the meantime, it includes working in your community or neighborhood to help others out. Even as a small institution as ours, we sponsor Little League Baseball teams, soccer teams, the county junior fair, and many other activities. We realize if we don't support local small businesses, they soon won't be here. Those words could have been written by almost any community financial institution in America, Mr. Speaker, and they ring so true. In order to keep our small communities alive, we have to keep their small businesses alive and we must keep their small banks alive. So, again, it is so important that we enact H.R. 4771 and that we reduce this red tape on our community financial institutions. Mr. Speaker, I thank the gentlewoman from Utah for introducing the legislation, and I reserve the balance of my time.

Mr. HENSARLING. Mr. Speaker, I yield myself 10 seconds just to say that I am shocked that anybody would come here and say that they want to support community banks and they supported Dodd-Frank--the very reason these community banks are being gobbled up. The whole idea of this legislation is to allow them to come together and protect themselves and not be gobbled up by the big banks they vilify in the first place. Mr. Speaker, I am now pleased to yield 3 minutes to the gentleman from Michigan (Mr. Huizenga), the chairman of the Subcommittee on Capital Markets, Securities, and Investments.

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

Mr. HENSARLING. Mr. Speaker, I yield an additional 30 seconds to the gentlewoman from Utah.

Mr. HENSARLING. Mr. Speaker, I yield myself 10 seconds to simply use a term popularized on the other side of the aisle. These are crumbs, deregulatory crumbs, offered by the ranking member when, in fact, she and others on the other side of the aisle have their handprints all over Dodd-Frank, which 90 percent of community bankers will tell you is the number one reason they are going out of business, which is why we have to enact this bill. Mr. Speaker, I am now pleased to yield 2 minutes to the gentleman from Pennsylvania (Mr. Rothfus), the vice chairman of our Subcommittee on Financial Institutions and Consumer Credit.

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

Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, our community financial institutions play a vital role in our local communities, particularly in rural areas like the Fifth District of Texas, our east Texas counties, and yet they are being crushed, crushed by the sheer weight, volume, complexity, and expense of regulation brought about by Dodd-Frank. I hear so much from the ranking member about how much her side of the aisle cares about community banks, but their words are belied by their actions in supporting Dodd-Frank, supposedly meant for Wall Street, but it is hurting Main Street. We have a bill before us today, Mr. Speaker, H.R. 4771, that will give a little bit of ability for community banks to protect themselves from the onslaught of this regulatory burden. The whole idea, again, Mr. Speaker, is to ensure that community banks can at least gather and merge amongst themselves so they are not gobbled up by the big banks that are vilified by the other side of the aisle in the first place. Again, Mr. Speaker, this is actually--you wouldn't know it from the ranking member--a bipartisan proposal, supported by almost half--half-- of the Democrats on the Financial Services Committee. And again, there is great bipartisan work on our committee. Almost three-quarters of our bills are bipartisan; it is just few of them that are supported by our ranking member. Let's do one small thing today. Let's have the House do one small thing today, Mr. Speaker, that will help them survive a day more so that they can lend money to a hardworking family to buy that first home, so that they can lend money to somebody to realize their American Dream of perhaps starting their own small business. After having to get that paycheck at the local factory for so many years, now they can finally go out and start their own small business. Maybe it is a matter of sending the first kid to college. But all of this, all of this disappears. These hopes and dreams disappear with our community banks who are still failing, unfortunately, at the rate of one approximately every other day. This is unacceptable. This is totally unacceptable. So we have one deregulatory measure here--one--to help our community banks survive. And we hear from so many of them, Mr. Speaker. Here is one from Indiana that says: Regulations have significantly reduced our ability to make judgment calls on credit decisions. When I first came to First Savings Bank, I had a number of people tell me that the First Savings Bank gave them their first loan, probably when they didn't deserve it. Today, they are business and civic leaders. And I guess we made the right call then. However, today we cannot make that call. Washington has made that call, and the answer is no. One reason, one voice of one banker telling us why we need the bill from the gentlewoman from Utah. Here is another from a banker in Texas, who said: When I started banking, the community bank business model was built around bankers helping their communities to thrive. Today, customers are confused when they have to sign so many papers to open a deposit account or borrow money. I can only think of one explanation, and that is our government thinks our customers are too stupid to come into the bank and negotiate a private transaction with their banker, the community banker that they go to church with, the community banker whose kids go to school with the customers' kids, and the community banker whose wife is in the local charity with the wives of the banker's customers' wives. Here is another one from Nevada: I have been a banker for over 30 years, and I have never been more discouraged than I am now. Good bankers are fleeing the industry. The days of making a commonsense decision for the benefit of a customer are gone. For me, retirement can't come soon enough. I have got binders and binders full of these testimonies, Mr. Speaker. As the local community banks leave, so leave the credit opportunities of so many low-and moderate-income Americans. It has got to stop. Mr. Speaker, it is time for the House to enact H.R. 4771. Let's stop the carnage, let's encourage community bank living, and I yield back the balance of my time.

Mr. HENSARLING. Mr. Speaker, may I inquire how much time is remaining.

Mr. HENSARLING

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

Mr. HENSARLING

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

Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, we could not be more highly honored that the minority leader would take such an interest in H.R. 1533, the Mortgage Choice Act. I am reminded that there are Members who come to this great Chamber to make speeches, and there are those who come to make laws. When it comes to speeches, I would note that the Gettysburg Address came in at 2 minutes, and Americans may think it had greater eloquence. I would note that as the minority leader quoted the Bible frequently throughout her speech, it reminds me of Isaiah 1:18, ``Come now, let us reason together, says the Lord.'' Yet President Trump stood right there in the State of the Union Address with his hand out with an olive branch extending an open hand to work with Members of both parties on an immigration reform package. He offered a fair compromise. He offered a fair compromise, and, instead, the minority leader slapped his hand and called it insulting, Mr. Speaker. She called it lame. She called it dangerous. This is not someone who has come to this Chamber, the people's House, in order to make law. The President didn't offer legalization. He offered a pathway to citizenship. He didn't offer this for 700,000. He offered it for 1.8 million. He said: Let's secure our borders, and let's make sure that immigrants who come to this country come legally and come with their sleeves rolled up coming to work and build America. There are those who want to solve a problem, and there are those who want to exacerbate a problem for the election. Meanwhile, Mr. Speaker, hardworking Americans need the opportunity to get mortgages to buy their part of the American Dream. Everything that the ranking member said, she ought to share it with her own Democrats because half of them on our committee support H.R. 1533 which is good for America and good for prospective home buyers. Mr. Speaker, I encourage all House Members to adopt it, and I yield back the balance of my time.

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

Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from Ohio (Mr. Davidson), a hardworking member of the Financial Services Committee.

Mr. HENSARLING. Mr. Speaker, I am very pleased now to yield 3 minutes to the gentleman from South Carolina (Mr. Norman), a cosponsor of the legislation and a great friend of the Financial Services Committee.

Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. Luetkemeyer), chairman of the Financial Services Subcommittee on Financial Institutions and Consumer Credit.

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentlewoman from Missouri (Mrs. Wagner), the chair of the Committee on Armed Services Subcommittee on Oversight and Investigations.

Mr. HENSARLING. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, I rise today in support of H.R. 1153, the Mortgage Choice Act of 2017. I would like to start out thanking my colleague, the gentleman from Michigan (Mr. Huizenga) for his tireless leadership on this issue, having ushered this very same legislation through our committee in three different Congresses. The purpose of H.R. 1153 is simple: to provide much-needed regulatory red tape relief to our community financial institutions so they can serve their customers; so they can provide them more mortgages. This is a straightforward piece of legislation. It is practical, it is necessary, and, Madam Speaker, it is bipartisan. Now, you may hear today, Madam Speaker, from some of our Democratic colleagues that ``we oppose the bill.'' We heard that claim in the Rules Committee earlier this week. But I do find it interesting that no amendments were offered during committee markup, nor were any amendments offered at the Rules Committee. I remind all on the House floor, Madam Speaker, that the Financial Services Committee favorably reported this bill to the House with a strong bipartisan vote of 46-13, which means almost half of the Democrats on our committee supported this bill; and in the 113th Congress, Madam Speaker, this bill passed by voice vote--not a single objection. Madam Speaker, this bill would help make homeownership more affordable for working Americans and would promote access to affordable mortgage credit for low- and moderate-income families and first-time home buyers. It does this while continuing to protect consumers. The Mortgage Choice Act is needed because the CFPB wrote a flawed and problematic definition that grossly miscalculates points and fees. The result is that many mortgage loans, particularly those for low- and moderate-income borrowers, would not meet the standards of a qualified mortgage and thus not get made. Currently, CFPB rules include affiliated title charges under a 3 percent cap when determining whether a mortgage is a qualified mortgage, but it doesn't include unaffiliated. This does not make sense. The CFPB rules are detrimental, again, to low- and moderate- income borrowers and first-time home buyers since they are more likely to have smaller loan amounts and, therefore, more easily trigger the 3 percent cap. That means under the current definition, many mortgage applicants will be denied homeownership opportunities simply because they do not fit into the government box; or the only mortgages in the alternative available to them might be at far higher interest rates, making them unaffordable for many. In other words, the CFPB's defective definition has ended up protecting many consumers right out of their opportunity to buy a home. H.R. 1153, from the gentleman from Michigan (Mr. Huizenga), would change the way points and fees are calculated by excluding fees paid for affiliated title charges and escrow charges for insurance and taxes. That would, therefore, Madam Speaker, increase homeownership opportunities for borrowers by allowing more loans to meet the QM standard. Let's not just listen to me, Madam Speaker. Let's listen to our community financial institutions that we expect to help our constituents. A credit union from Washington explained how this was affecting everyday Americans. They wrote: ``A member at our credit union wanted to buy down his rate on his mortgage with cash out of pocket at closing in order to lower the payments for his retirement. However, doing so would have made his total points and fees higher than allowed under ATR/QM, and there was no allowable way around the problem.'' From my native Texas, a community banker wrote in and said: ``The greatest frustration our customers have is our bank's inability to now make home loans. For years we made loans to people for the purchase of their homes. We would do about one every other week. So it was not a large volume. It was a good service. We always made these loans to keep in our loan portfolio. We never sold any home loans, but with the new requirements for home loans, it has driven us out of this kind of business. It has also taken us out of the construction lending on homes because we cannot risk the risk of a takeout commitment failing. The consumer is the loser.'' Indeed, that is true, Madam Speaker. As I mentioned earlier, Mr. Huizenga has worked on this bill for the past two Congresses again. In the 113th Congress, it passed by voice vote. It passed by an overwhelming majority of 286-140 in the 114th Congress. I trust the third time will be the charm. I urge all of my colleagues to do what is right for our constituents and to pass H.R. 1153 to provide open access for Americans to purchase a home. Madam Speaker, I reserve the balance of my time.

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

Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania (Mr. Rothfus), the vice chairman of the Financial Services Subcommittee on Financial Institutions and Consumer Credit.

Mr. HENSARLING. Madam Speaker, I yield myself 10 seconds to say that, if the ranking member would read section 8(a) of RESPA, she would realize everything she said was false because it prevents any fee, kickback, or thing of value. Second of all, what she describes as a harmful and fraudulent policy was supported by half of her Democrats, including her vice ranking member, Mr. Kildee from Michigan. Madam Speaker, I yield 6 minutes to the gentleman from Michigan (Mr. Huizenga), who is the sponsor of the legislation and the chairman of the Financial Services Subcommittee on Capital Markets, Securities, and Investments.