Jeb Hensarling

Mr. HENSARLING

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 submit extraneous material on H.R. 78, to improve the consideration by the Securities and Exchange Commission of the costs and benefits of its regulations and orders.

Mr. HENSARLING. Mr. Chairman, I yield myself such time as I may consume. I rise in support of H.R. 78, the SEC Regulatory Accountability Act. I thank the gentlewoman from Missouri (Mrs. Wagner) for leading this effort in the House. This bill is technically about something called economic analysis or cost-benefit analysis. That may sound like Ph.D. economics, but it is really about kitchen table economics because, Mr. Chairman, it is truly about whether we are going to have a stronger economy--one that creates good-paying jobs so that parents can afford to raise their children today and these same children can have a brighter future tomorrow. It is about making sure we have an accountable government that expands personal opportunity, not government bureaucracy. Mr. Chairman, I think we all know that small businesses are truly America's job engine. They create nearly two-thirds of all new jobs in our economy. Our economy works better for all when small businesses can focus on creating jobs and on serving their customers rather than navigating needless government red tape. Unfortunately, for America's small businesses, bureaucratic red tape has no better friend than the Obama administration. It has issued more than 4,400 final regulations, with an astronomical cost to all of us of $1 trillion. Just since the election on November 8, the Obama administration had cynically issued 145 midnight regulations with a cost of more than $21 billion. For anyone who believes that this doesn't hurt our small businesses, they need to listen to their constituents, because I certainly listen to mine. I heard from a small business owner named Chris, who is back in my district and who wrote me: We have seen wave after wave of Federal regulations affect our ability to grow. The costs associated with additional reporting, auditing, and compliance are massive. The money spent is significant and costs jobs and potential jobs. Mr. Chairman, he is exactly right. The true cost of Washington red tape cannot just be measured in dollars. The true cost includes the jobs not created, the small businesses not started, and the dreams of our children not fulfilled. Ill-advised laws like the Dodd-Frank Act empower unelected, unaccountable bureaucrats to callously hand down crushing regulations without adequately considering what impact those regulations have on jobs. As one former SEC Commissioner testified before the Financial Services Committee, which I have the honor of chairing, these Washington elites have forgotten the key to sensible regulation: The most appropriate regulatory solution should be the one that imposes the least burden on society while maximizing potential benefits even if that means choosing not to regulate at all. Although the Securities and Exchange Commission is one of the few Washington agencies that engages in at least some base level of economic analysis, putting this requirement into law is definitely preferable to current agency procedures. After all, the SEC's recent interest in economic analysis came only on the heels of numerous Federal courts throwing out some of its regulations because the Commission failed to adequately take into account, again, the true costs and benefits of its rules. Passing this bill will erase any doubt that the Securities and Exchange Commission must conduct sound economic analysis. It must consider the impact of their rules on our jobs and our family budgets. That is what cost-benefit analysis is all about. Mr. Chairman, we may hear today from the usual suspects--the opponents of this bill--that somehow this is meant to hinder the rulemaking process and encourage litigation against the SEC. You will hear these same people say, once again, that this is somehow dangerous. Mr. Chairman, what is dangerous is being ignorant of the impact the proposed regulations will have on our economy and on the American people's wallets before they get implemented. That is what is dangerous. What is interesting, Mr. Chairman, is that Presidents, frankly, of both parties seem to agree. Even Presidents Clinton and Obama directed independent agencies to engage in, essentially, exactly the same procedures that H.R. 78 would make into law. Such irony, Mr. Chairman, that some Democrats will come to the floor today and oppose codifying into law Clinton and Obama policy. Again, the irony of it all. I urge all Members to join me in supporting this bill because we must hold Washington accountable to the American people. We must build a stronger, healthier economy so struggling Americans can get back to work and achieve financial independence. Mr. Chairman, I reserve the balance of my time.

Mr. HENSARLING. Mr. Chairman, I am very pleased now to yield 4 minutes to the gentlewoman from Missouri (Mrs. Wagner), the author of the SEC Regulatory Accountability Act and the chairman of our Oversight and Investigations Subcommittee.

Mr. HENSARLING

Mr. HENSARLING. Mr. Chair, I yield an additional 30 seconds to the gentleman.

Mr. HENSARLING. Mr. Chairman, I yield myself 10 seconds just to say that hearings have been held in a markup in the last Congress on this bill and the 10 new Republican Members are anxious to vote on this. I am unaware of any new Democrat Members having been appointed to our committee as of yet. I am now very happy to yield 3 minutes to the gentleman from Ohio (Mr. Chabot), coauthor of the HALOS Act, a champion for small business because he is, indeed, the distinguished chairman of the Small Business Committee.

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 submit extraneous materials on the bill, H.R. 79, to clarify the definition of general solicitation under Federal securities laws, and for other purposes.

Mr. HENSARLING. Mr. Chairman, I yield 5 minutes to the gentleman from Michigan (Mr. Huizenga), the distinguished chairman of the Capital Markets and Government Sponsored Enterprises Subcommittee of the Financial Services Committee.

Mr. HENSARLING. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I rise in strong support of H.R. 79, the Helping Angels Lead Our Startups Act, also known as the HALOS Act. I remind all Members that the House passed this bill just a few months ago with overwhelming support from both Republicans and Democrats by a vote of 325-89, Mr. Chairman, almost 4 to 1. It is hard to get more bipartisan than that. It has received overwhelming bipartisan support because then and now the HALOS Act will help create needed jobs and grow our economy. I think we all know, Mr. Chairman, from listening to our constituents, jobs in the economy continue to be the number one issue of concern of the American people. I commend the bipartisan sponsors of this bill, Mr. Chabot, the chairman of the Small Business Committee, who we will hear from soon, and Ms. Sinema, who serves with me on the Financial Services Committee. I also thank the six Republicans and four Democrats who joined them as original cosponsors. These Members reached across the aisle and produced legislation that is especially important to America's small businesses. Let's remember, Mr. Chairman, that half--half--the people who work in this country earn or work at small businesses, which historically create two-thirds of all the new jobs in America. So small business--small business--is the job engine of America. Our economy clearly works better for working Americans when small businesses thrive and they can focus on creating jobs rather than navigating bureaucratic red tape, red tape that disproportionately hurts the small businesses and startup companies that we are counting on to create jobs for our constituents. Burdensome regulations make it harder for entrepreneurs to access startup capital, and they place credit out of reach for many who wish to start up a small business. Many of these harmful regulations arise from complicated laws, like the Dodd-Frank Act. Overall, small business loans are at a 25-year low, in large part due to regulatory burdens on our community banks and credit unions. Even the former Director of the Small Business Administration, appointed by President Obama, admitted as much when she said: ``Small banks have been laden with excessive costs and confusion from overlapping regulations, which are getting in the way of their ability to make small business loans.'' We simply must not allow our security laws to inhibit the free flow of investment capital to Main Street. The HALOS Act provides an important regulatory solution to make it easier for small businesses to attract investments and put both the ``open for business'' and ``we are hiring'' signs on their front doors. The bill provides a clear path for startups to connect with angel investors and allows investors to make their own informed decisions. Angel investors, Mr. Chairman, have a huge impact on economic growth. Famous companies like Amazon, Costco, Google, Facebook, and Starbucks were all first funded by angel investors. That is just how important this matter is. Today, approximately 600,000 employees earn their paychecks from working for these specific companies. Unfortunately, when Washington bureaucrats get involved, we often see the dreaded ``unintended consequences'' of red tape. Five years ago, Congress passed the bipartisan JOBS Act to make it easier for business startups to gain access to critical capital. But the Securities and Exchange Commission instead issued regulations on angel investors that have the complete opposite effect. This is a problem Congress can easily fix by passing a bipartisan HALOS Act, which will ensure that funding from angel investors remains available to small business startups. Mr. Chairman, you cannot have employees, unless you first have employers. You cannot have jobs without job creators. And that is what this bill is all about--jobs. It is about helping small businesses overcome misguided Washington red tape so they can create jobs. I urge all Members to support this commonsense bipartisan bill. I reserve the balance of my time.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. Luetkemeyer), the author of H.R. 5143 and the chairman of our Housing and Insurance Subcommittee.

Mr. HENSARLING. I yield myself such time as I may consume. Mr. Speaker, today I rise in support of H.R. 5143, the Transparent Insurance Standards Act of 2016. Introduced by my good friend and colleague, the chairman of the Housing and Insurance Subcommittee of our committee, Blaine Luetkemeyer, H.R. 5143 enhances Congress' constitutional oversight of international deliberations relating to insurance standards. Mr. Speaker, again, this is legislation which is about accountability, transparency, and oversight. More specifically, the legislation establishes a series of requirements to be met before the Federal Insurance Office or the Federal Reserve may agree to accept, establish, enter into, or consent to the adoption of a final international insurance standard. Permit me to go into greater detail. First, the Federal Insurance Office and the Fed must publish any proposed final standard and allow for public comment. A public comment is critical to our negotiating posture, Mr. Speaker. In so doing, the involved agencies must provide a joint analysis of the impact the standard will have on consumers and the U.S. insurance markets. Before agreeing to any international standard relating to capital, the Fed is required to first promulgate its domestic capital standard rule. The bill makes similar requirements for negotiations concerning insurance covered agreements. It sets negotiating objectives for U.S. parties and also mandates that the Federal Insurance Office and the Fed report and testify before Congress twice annually. Finally, H.R. 5143 ensures that the independent member with insurance expertise who sits on the Financial Stability Oversight Council, known as FSOC, is permitted to assist the FSOC in international discussions and attend meetings of international bodies where insurance standards are discussed. Mr. Speaker, for almost 150 years, U.S. insurance companies of every type--including property-casualty, life, reinsurance, health, and auto--have been primarily regulated by our States. Congress and the States have occasionally reviewed the effectiveness of the State-based regulation of insurance and coordinated efforts to achieve greater regulatory uniformity. In 1949, Congress passed the McCarran-Ferguson Act, which confirmed the States' regulatory authority over insurance, except where Federal law expressly provides otherwise. Mr. Speaker, this changed with the passage of the Dodd-Frank Act in 2010. Dodd-Frank changed the insurance landscape and further enlarged the Federal Government's role in the insurance industry by creating a Federal office specifically tasked with insurance matters. Dodd-Frank established the Federal Insurance Office at Treasury and charged its director with representing the interest of U.S. insurers during negotiations of international agreements. Among other things, H.R. 5143 seeks to prevent any Federal overreach and establishes essential guardrails for the Federal Government when discussing international insurance issues abroad. The bill is not intended to bring international negotiations to any type of halt. Team USA has experienced victories at the International Association of Insurance Supervisors, and has kept Congress informed of its intent to negotiate the first of what could be many covered agreements. However, we should not underestimate the importance of these conversations or the implications they can have on insurers and the American consumers because they need to be heard and they need to be represented. As the leader of a Missouri-based midsized insurance company has told our committee, Mr. Speaker: We worry about the potential negative impacts any international agreement could have on the domestic marketplace or the State-based regulatory system that has served consumer and insurance needs for more than a century. He added: Congress should conduct strong oversight in this area in order to protect domestic insurance markets, companies, and especially their policy holders. Strong oversight and transparency are, indeed, absolutely essential, and that is what we get with this bill. It is simply imperative that our States, the executive branch, and Congress work cooperatively to signify to the International Association of Insurance Supervisors, the Financial Stability Board, and to foreign governments that we will only lend our name to standards and agreements that benefit U.S. consumers. The bill we are considering today will assuredly lead us to this goal. Again, H.R. 5143 provides greater transparency, allows for a stronger Team USA in negotiations, and sends a signal to foreign governments and international organizations that the United States will lead and not be led into bad agreements. With the greater congressional oversight the bill provides, we can ensure that any deal that is reached will be a fair deal, and a good deal, for the American people. Again, I thank my colleague, the gentleman from Missouri (Mr. Luetkemeyer), for his leadership, yet again, on bringing an excellent bill to the House floor. I urge my colleagues to support this important piece of legislation. Mr. Speaker, I reserve the balance of my time.

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 submit extraneous materials on the bill under consideration.

Mr. HENSARLING. Mr. Speaker, I yield the balance of my time to the gentleman from Missouri (Mr. Luetkemeyer), and I ask unanimous consent that the gentleman be able to control the remainder of such time.

Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 944, I call up the bill (H.R. 5143) to provide greater transparency and congressional oversight of international insurance standards setting processes, and for other purposes, and ask for its immediate consideration in the House.

Mr. HENSARLING. Mr. Speaker, it is with great pride and a heavy heart that I yield to the next gentleman. I have a heavy heart because I fear this will be the last time I yield time to the gentleman from Texas (Mr. Neugebauer); but it is with great pride that, for 14 years, I have called him friend and colleague. He is retiring from this institution. He has been tireless in his service to our committee, his constituents, and this country. He has been a tireless advocate for the cause of freedom, free enterprise, and the lot of the common man and the common woman; and this will be a lesser institution upon his departure. I yield 2 minutes to the gentleman from Texas (Mr. Neugebauer), my friend.

Mr. HENSARLING. I yield the gentleman an additional 1 minute.

Mr. HENSARLING

Mr. HENSARLING. I yield the gentleman an additional 30 seconds.

Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 934, I call up the bill (H.R. 6392) to amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to specify when bank holding companies may be subject to certain enhanced supervision, and for other purposes, and ask for its immediate consideration.

Mr. HENSARLING. Mr. Speaker, I yield myself 5 seconds just to say, if the ranking member believes this is the first act in getting rid of Dodd-Frank, she ain't seen nothing yet. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Sessions), the distinguished chairman of the House Rules Committee, and I thank him for his leadership in helping bring this bill to the floor.

Mr. HENSARLING. Mr. Speaker, I yield myself 10 seconds to say I appreciate the passion of my colleagues on the other side of the aisle and their concern for taxpayers and systemic risk. So I certainly look forward to their cosponsorship of our legislation to get rid of Dodd- Frank's taxpayer-funded bailout fund. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Missouri (Mr. Luetkemeyer), a real leader on our committee and the author of H.R. 6392, the Systemic Risk Designation Improvement Act.

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 submit extraneous materials on the bill under consideration.

Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of H.R. 6392, the Systemic Risk Designation Improvement Act, which is a very important bill cosponsored by a bipartisan group of Members of the House, the text of which was approved by our committee with a strong bipartisan support of 39-16. I thank Chairman Luetkemeyer, chairman of our Subcommittee on Housing and Insurance, one of the key leaders on our Committee on Financial Services, for his leadership and for introducing this legislation. He has led these efforts valiantly to reform a flawed and arbitrary framework used by regulators to designate so-called systemically important financial institutions, also known as SIFIs. Designation, Mr. Speaker, anoints these institutions as too big to fail, meaning that today's SIFI designations are tomorrow's tax-funded bailouts. It is clear that this issue has found, again, a fair amount of consensus on both sides of the aisle, and this legislation represents a very good-faith effort by the gentleman from Missouri to forge a bipartisan piece of legislation that, at the very least, at the minimum, would get rid of a totally arbitrary and static threshold currently used to designate institutions as systemically important. Mr. Speaker, I speak for many on this floor when I say I do not believe in the SIFI architecture at all. I think it is harmful. I think it is dangerous, and clearly it should be replaced by high levels of loss-absorbing private capital. But that is not what we are debating today. Today in the 114th Congress, we continue to try to find a bipartisan consensus to support needed reforms; and, again, that is what this bill is: bipartisan. It recognizes that regulations should consider different components of risk and not simply a Washington one-size-fits- all definition. The current approach--and this is very important, Mr. Speaker, as the coauthor of the Dodd-Frank Act, himself, admits--is a mistake. It is a mistake because it fails to take into account differences in the various business models or systemic risk institutions pose to our financial system. In fact, it is indisputable that the asset threshold used in Dodd-Frank is not based on a logical formula, on research, or on any evidence at all. Instead, it is simply a random number picked out of thin air. Concerns with this arbitrary number have been recognized, as I just mentioned, by none other than former Committee on Financial Services Chairman Barney Frank, himself. As I recall, he is the Frank of Dodd- Frank. In testimony before our committee, Mr. Speaker, former Chairman Frank agreed that the threshold he wrote into law was ``arbitrary.'' He expressed support for adjusting it. Then just last week, he stated the asset threshold was a ``mistake.'' I hope all Members on the other side of the aisle take careful note. Federal Reserve Board member Dan Tarullo has also expressed skepticism, as has the Comptroller of the Currency Thomas Curry. Even the ranking member, the Democrat ranking member of the Senate Banking Committee, Senator Sherrod Brown, has stated: ``I do agree that some banks above $50 billion should not''--not--``be regulated like Wall Street megabanks.'' So what we are trying to do here today with this bipartisan bill is trying to provide a solution to try to fix a generally recognized mistake in Dodd-Frank, and what those who oppose the bill are trying to do is to preserve that mistake in the law. Perhaps again, Mr. Speaker, some of my colleagues need to be reminded that small banks on Main Street and even our regional banks did not cause the financial crisis, and arbitrarily painting big banks and small and midsized banks with exactly the same broad brush is wrong. It is bad policy, and it is bad for our economy. So the discussion today, Mr. Speaker, should instead focus on the appropriate measure of systemic importance and the regulatory burden imposed by the so-called enhanced prudential standards once an institution has been designated. By focusing exclusively on asset size, you ignore other factors that may be more relevant in determining whether a financial institution should be subject to, again, so-called enhanced prudential standards. Furthermore, an asset-based approach does not capture the types of risk that enhanced prudential standards are designed to mitigate in the first place. By determining risk using activity-based standards, no matter how flawed these standards may be, our regulators would be better equipped to differentiate between stable activities and those that may pose a threat to financial stability. It would allow more precision in identifying systemic importance, while also providing flexibility for institutions engaging in more prudent lending activities. Mr. Speaker, it is just so important that we note the effect these regulations are having today on the U.S. economy. They are harming our economy. Instead of helping to capitalize small businesses, leading to more jobs and opportunity for people who still lack both, financial institutions are, instead, having to expend capital on compliance, compliance that even the coauthor of Dodd-Frank admits is a mistake. Mr. Speaker, regrettably, I need not remind us that we remain stuck in the slowest and weakest economic recovery since the end of World War II. The economy simply is not working for working Americans. They can't get ahead, and they fear for the future of their families. Their paychecks have remained stagnant. Their savings have declined. The American people deserve better. I urge adoption of this measure. I thank Chairman Luetkemeyer for his leadership in forging this bipartisan consensus solution. I urge us to correct this Dodd-Frank mistake. Mr. Speaker, I reserve the balance of my time. Committee on Ways and Means, House of Representatives, Washington, DC, November 29, 2016. Hon. Jeb Hensarling, Chairman, Committee on Financial Services. Dear Chairman Hensarling: I am writing concerning H.R. 6392, the ``Systemic Risk Designation Improvement Act of 2016.'' This legislation contains provisions that fall within the Ways and Means Committee's Rule X jurisdiction over revenue. I appreciate your willingness to work with me on the provisions in my Committee's jurisdiction. In order to allow H.R. 6392 to move expeditiously to the House floor, I agree not to seek a sequential referral on this bill. The Committee on Ways and Means takes this action with our mutual understanding that by foregoing formal action on H.R. 6392, we do not waive any jurisdiction over subject matter contained in this or similar legislation, and that our Committee will be appropriately consulted and involved as this bill or similar legislation moves forward. Our Committee also reserves the right to seek appointment of an appropriate number of conferees to any House-Senate conference involving this or similar legislation, and asks that you support any such request. I would appreciate your response to this letter confirming this understanding, and would request that you include a copy of this letter and your response in the Congressional Record during the floor consideration of this bill. Thank you in advance for your cooperation. Sincerely, Kevin Brady, Chairman.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that the question of adopting a motion to recommit on H.R. 6392 may be subject to postponement as though under clause 8 of rule XX.

Mr. HENSARLING

Mr. HENSARLING. Mr. Chairman, I yield the gentleman an additional 30 seconds.

Mr. HENSARLING. Mr. Chairman, may I inquire how much time remains?

Mr. HENSARLING. Mr. Chairman, I yield myself the balance of my time. I cannot imagine what the American people who are tuning in to C-SPAN must think. They must think that when they hear our friends on the other side of the aisle, that they have tuned in not to the United States Congress, but to the Iranian Parliament. Rarely have I heard so many come to the House floor to defend this regime. Oh, oh, we might hurt their feelings if we make them disclose their personal finances. Mr. Chairman, every Member of Congress has to disclose their personal finances. So what is wrong with the foremost state sponsor of terrorism exposing their assets, their funding, where they control one-third of the Iranian economy? No. We hear: Oh, we might hurt their feelings, we may hurt their sensibilities. Now, many have come to quote the administration. Well, Mr. Chairman, let me quote the administration--the State Department's Country Reports on Terrorism. The last one noted that: ``Iran continued to sponsor terrorist groups around the world, principally through its Islamic Revolutionary Guard Corps. . . . These groups included Lebanese Hizballah, several Iraqi Shia militant groups, Hamas, and Palestine Islamic Jihad. Iran, Hizballah, and other Shia militia continued to provide support to the Asad regime, dramatically bolstering its capabilities, prolonging the civil war in Syria, and worsening the human rights and refugee crisis there.'' Mr. Chairman, those aren't my words. Those are the words of the President's State Department. Now, this is their country report. Maybe, maybe my colleagues on the other side of the aisle would like to offer an amendment so that no longer can the State Department publish such reports on terrorism because it might offend the sensibilities of the Iranians. The truth is, Mr. Chairman, this is a total red herring. There is nothing, nothing in this bill that violates the JCPOA. I think it is a terrible agreement. This is well known. In fact, a strong majority of this body opposed it, but we understand the President entered into it. How can they object? How can my friends on the other side of the aisle object to transparency and accountability for the leadership of the world's foremost state sponsor of terrorism--again, that is the Obama administration saying that, Mr. Chairman--how can they object to a little transparency there and yet allow this report to come out from the State Department? It makes no sense at all. We heard some say: Oh, my Lord, this might take up resources at the State Department. Well, according to the Congressional Budget Office, this comes in in thousands. Not millions, not billions, not trillions, but thousands. And given that the most important thing we do as Members of Congress is to provide for the common defense, including the common defense against the world's foremost state sponsor of terrorism, I think that it would be wise that we put the resources towards this report. It may be a first because I have never heard, in the years I have been here, any of my Democratic colleagues ever be concerned about the resources of the United States of America, as they have worked to give us the worst debt and deficit in the history of our Republic, an unsustainable debt that undermines our common defense. Again, Mr. Chairman, this is a regime involved in cyberterrorism. This is a regime trying to develop ballistic missile technology. This is a regime that funds Hezbollah as it rains missiles down on Israel. The gentleman from Maine (Mr. Poliquin) has come up with a very commonsense piece of legislation. I applaud his leadership in bringing forth H.R. 5461. Let's have some transparency, let's have some accountability. We know--we know that to combat terrorist financing. We must follow the money. We must expose the money. And that is what the gentleman from Maine does with his bill. I do not understand why such a commonsense piece of legislation is being so vigorously opposed by my friends on the other side of the aisle. Again, Americans must be in a tizzy trying to figure out if they have tuned in to the United States Congress or the Iranian Parliament. Let's make sure they understand this is the United States Congress. We will stand for the common defense, we will expose this terrorist financing, and we will stand with the gentleman from Maine (Mr. Poliquin) and stand for all Americans, and we will vote for H.R. 5461. I yield back the balance of my time.