Jeb Hensarling

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may consume. I think the audio system on the House floor is working quite well, and so I continue to be somewhat amazed by the number of speakers who get up and claim that broker-dealers can engage in conflicts of interest. Again, I will give the citation for the duty to disclose conflicts of interest, FINRA's Suitability Rule 2111. I would encourage those who haven't read it to actually read it so that we can actually have facts on the House floor. Mr. Speaker, what is truly radical here is the proponents of this amendment trying to upset 80 years of settled law, without any evidence that is compelling, to somehow believe that all of a sudden we are going to help a universe of people, who most of us believe, including half of the Democrats on the Financial Services Committee, instead will be hurt, including a number of prominent Democratic senators who believe they will be hurt, these working moms and pops trying to provide for their family, trying to manage their nest eggs, having a new standard forced upon people they rely on. So all of a sudden, that investment advice is either going to get more expensive, it is going to disappear. All of a sudden, IRAs for working moms at prices they can afford will disappear all because we hear rhetoric about Wall Street. Well, I don't think I have had any letters of endorsement from anybody on Wall Street. We can talk about something else that is not applicable. Perhaps we can talk about ObamaCare. I am always happy to have that discussion once again. Again, this is a bipartisan bill. All we are trying to do is ensure, if 80 years of settled law that has helped working families is about to be upset, then we better have proof it is going to help the people that it claims to help. The amendment from the gentleman from California would totally eviscerate that. I urge opposition, and I yield back the balance of my time.

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

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from Tennessee, Dr. Roe, a distinguished member of the Education and the Workforce Committee.

Mr. HENSARLING. I have no further speakers, Mr. Speaker, and I believe I have the right to close.

Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 391, I call up the bill (H.R. 2374) to amend the Securities Exchange Act of 1934 to provide protections for retail customers, and for other purposes, and ask for its immediate consideration.

Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may consume. Again, I urge opposition to this amendment which would absolutely eviscerate this bill that we are considering now from the gentlelady from Missouri. Number one, we have speaker after speaker who come up and seem to ignore the fact that broker-dealers already are subject to a suitability standard, including antifraud provisions that prohibit misstatements, misleading omissions of material facts, and fraudulent and manipulative acts and practices in connection with the purchase and sale of securities. They have a duty of fair dealing, which include the duty to execute orders promptly, disclose certain material information that the customer would consider important as an investor, charge prices reasonably related to the prevailing market, and fully disclose any conflict of interest. I could go on and on. The proponents of this amendment, as speakers before them, seemed to ignore this set of facts. And so again, it is interesting to me how the American people are demanding that their Congress work on a bipartisan basis; and so out of our committee, the Financial Services Committee, we have gone above and beyond the call of duty, and now we have a bill that has been supported by half of the Democratic members of the Financial Services Committee. And I just read a letter where 10 Democratic U.S. Senators are urging the exact same language as the Wagner bill and, thus, oppose the Miller amendment. So, again, Mr. Speaker, I urge the proponent of the amendment to first have the debate with his own Caucus, and then we can have a fuller, richer debate on the floor. What is really happening here is that all we are doing is saying to the Securities and Exchange Commission and the Department of Labor that this is an economy that is being crushed--crushed--by a red tape burden, that at least justify it. Make sure that the person you claimed you are going to protect, that you actually protect; and instead, we, quite honestly, fear they will not be protected, that instead they will be harmed, that all of a sudden, people who have access to $7 trades won't have access to them. Now, again, for the affluent, that is no big deal, but for working mothers struggling to make ends meet, it is a very big deal. To be denied the opportunity to open up an IRA with $2,000? No, I think now Congress has deigned that the Department of Labor can institute a fiduciary standard, and now you are going to need $25,000. Well, what the heck, let's make it $50,000. And so the very people they claim they want to protect very well could be harmed by this standard. We understand the talk, but where is the proof? Where is the proof? Because what is going to happen if this fiduciary standard is imposed? All of a sudden investment advice that working Americans count on is either going to disappear or become far more expensive. So, again, maybe it helps the trial lawyer; maybe it helps the labor union bosses; but it doesn't help the working mothers. It doesn't help the struggling fathers. It doesn't help low- and moderate-income people struggling in this economy where tens of millions remain underemployed and unemployed under this administration's economic policies, and so I urge that we reject this amendment. I reserve the balance of my time.

Mr. HENSARLING. Mr. Speaker, I am now pleased to yield 3 minutes to the gentlewoman from Missouri (Mrs. Wagner), the author of the Retail Investor Protection Act.

Mr. HENSARLING. Mr. Speaker, I rise in opposition to this amendment.

Mr. HENSARLING. Mr. Speaker, may I inquire as to how much time each side has remaining?

Mr. HENSARLING. Mr. Speaker, I now yield 2 minutes to the gentleman from Virginia (Mr. Hurt), the vice chairman of the Financial Services Subcommittee on Capital Markets and GSEs.

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

Mr. HENSARLING. We have one more speaker, and then we would allow the gentlelady to close. Then I believe I have the right to close, Mr. Speaker. Is that correct?

Mr. HENSARLING. I yield myself such time as I may consume. Mr. Speaker, I must admit in the time that I have served as a Member of Congress, I have noticed the more shrill the debate the less defensible the position. As I have listened closely to what appears to be a very shrill debate, it certainly buttresses that position. I hear my friends talk about us on the other side of the aisle. I have heard the phrase ``my friends on the other side of the aisle'' consistently. But I would say perhaps the debate has to be between my friends on that side of the aisle, since the ranking member well knows that half--half--of her caucus on the Financial Services Committee supported this bill by the gentlelady of Missouri. As was pointed out earlier, it is not only bipartisan; it is also bicameral. I am sitting here, Mr. Speaker, with a letter signed by no fewer than 10--10 Democratic Senators imploring that the very same provisions of the Wagner bill be enforced: Jon Tester, Mark Warner, Claire McCaskill, Kay Hagan, and the list goes on and on. I would say to my friends on that side of the aisle, perhaps they ought to finish the debate amongst themselves before they carry it on over here. Then, again, we all know that people are entitled to their own opinions; they are not entitled to their own facts. There have been a number of misstatements of facts from my friends on that side of the aisle, particularly that broker-dealers have no standard whatsoever in disclosing conflicts of interest; but that is not true. Within the antifraud provisions, sections 9, 10, 15(c)(1) and (2), it prohibits misstatements, misleading omissions of material facts; and, indeed, broker-dealers must fully disclose any conflicts of interest, yet another huge section of debate that was totally misleading and false by friends on that side of the aisle. And I must admit, it is a very disappointing debate; but, it is in some respects illuminating to see the cynical position of those who simply believe that everyone appears to be a crook unless you are a government worker. The phrase ``cancer of self-interest'' is working mothers have a self-interest to invest in their children's education. If the guy at the Pepsi bottling plant that I represent is trying to invest so he can buy a home and put a roof over his family's head, that is the cancer of self-interest? All we are trying to do here is preserve investment advice and investment opportunities for working Americans, and I would encourage all Members, all Members of this body, to vote for the Wagner bill. I yield back the balance of my time.

Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from New Jersey (Mr. Garrett).

Mr. HENSARLING. Mr. Speaker, I yield myself as much time as I may consume. Mr. Speaker, at a time that the American people demand and deserve that Democrats and Republicans work together to fix real problems in our Nation, today this body has the opportunity to do just that. Today the House will consider H.R. 2374, the Retail Investor Protection Act. The bill has strong support from both Democrats and Republicans. In fact, it passed the Financial Services Committee earlier this year on a strong bipartisan recorded vote, including half--half--of our committee's Democrats. H.R. 2374 will ensure that hardworking families and individuals throughout our country who are trying to save for their retirements, save for their children's college education, saving for their first home are not harmed by confusing, costly regulations coming out of Washington. Mr. Speaker, all Americans know that a flood of Washington red tape has hurt our economy. That is why tens of millions of our fellow countrymen remain either unemployed or underemployed. Unfortunately, even more regulations are on the way. Specifically, today, Mr. Speaker, we are here speaking about the Securities Exchange Commission and the Department of Labor, which are headed toward proposing two massive and inconsistent rulemakings that are going to hurt the ability of retail investors to get financial advice that they need for their portion of the American Dream. Mr. Speaker, retail investors are not big-time professionals on Wall Street. Retail investors had no role in causing the financial crisis, and they should not be punished for it which, regrettably, this rulemaking could do. Rather, retail investors are ordinary, hardworking citizens from all of our congressional districts who buy and sell securities for themselves, their families and their futures, not for a company. And in this struggling economy, when people who need help most, what are the SEC and the Department of Labor planning to do? They are planning to make it harder and more expensive for these Americans to get the financial advice that they both want and need. Perhaps even more incredibly, the SEC, the Securities and Exchange Commission, is moving forward with this new regulation even though the agency has failed to provide any evidence that it would better protect investors. So the Securities and Exchange Commission apparently is going to regulate first, ask questions later. This makes no sense for millions of struggling Americans trying to save for the future. Mr. Speaker, again, we know that millions of middle class families are sitting around their kitchen tables struggling to save and invest in order to make ends meet. Every day, millions of them turn to financial professionals for advice. Yet here comes from Washington regulations that will make that advice either unavailable or unaffordable, so fewer Americans will get the advice they need. That is unfair. Let me provide you just a couple of examples, Mr. Speaker. Under the current suitability standard, an investor can have an account with a low-cost, online broker with whom he or she can both make trades and get investment advice. Due to technological advances and the relatively low costs associated with operating an online platform, these brokers can offer trades and investment advice for as little as $7. But should a fiduciary standard be applied to these online brokers, the impact on investors could be one or all of the following: higher fees per trade, higher fees for investment advice, or brokers may simply stop providing this investment advice to less affluent customers altogether. That is not fair. Take the example of the single mother who supports her mother and wants to save for her daughter's college education. She has finally saved enough money to open up an IRA with $2,000 in savings. But we know that should these rules continue to be promulgated, with these new Washington regulations, well, this lady may just be told she now needs $25,000 in order to open up the very same account. Again, Mr. Speaker, patently unfair. How about a middle-aged father who works with a financial professional. He wants the professional to get him access to products and ideas, instead of managing his investment portfolio for him. He wants to trade individual bonds, but potential regulations might not allow the financial professional to offer him bonds on a principal basis. So the result? The father either gets worse execution prices or ends up paying a whole lot more for his investments. Fortunately, one of our colleagues has stepped up to the table. The gentlelady from Missouri (Mrs. Wagner) has introduced a commonsense bill, the Retail Investor Protection Act, and I and the rest of the committee who have voted for it congratulate her for her great work. This bill would require the SEC to first consider the potential impacts its proposed regulation will have on investors, especially those with low and moderate incomes who would lose access to personalized investment advice that they need. Second, the bill would require coordination between the SEC and the Department of Labor. These Washington agencies will have to sequence their rulemakings, with the SEC going first, so there will be no inconsistent rules that end up confusing and costing investors. The Retail Investor Protection Act that we are debating today will avoid regulatory conflict between the SEC and the Department of Labor. It is as simple as that. Mr. Speaker, even the SEC itself acknowledges that the cost of its regulation could ultimately be passed on to retail investors in the form of higher fees or lost access to services and products--yet, again, unfair. It is not what Americans need. It is not what they deserve, especially as our economy remains in the throes of the weakest, slowest nonrecovery of the last 70 years. Mr. Speaker, I urge my colleagues to pass this bipartisan bill, again, a bipartisan bill that passed with half of the Democrats on the Financial Service Committee choosing to support this commonsense legislation. H.R. 2374 will help struggling American families get the financial assistance they want and deserve. 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 within which to revise and extend their remarks and include extraneous material in the Record on H.R. 2374, currently under consideration.

Mr. HENSARLING. Mr. Speaker, I am pleased now to yield 2 minutes to the gentleman from North Carolina (Mr. McHenry), the chairman of the Financial Services Subcommittee on Oversight and Investigations.

Mr. HENSARLING. Mr. Speaker, how much time do I have remaining?

Mr. HENSARLING. At this time, Mr. Speaker, I yield 2 minutes to the gentleman from South Carolina (Mr. Mulvaney).

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, I rise in opposition to the motion.

Mr. HENSARLING. Mr. Speaker, I rise again in opposition. I don't even find how this is relevant to the underlying bill, the Retail Investor Protection Act. It simply says that it shouldn't prohibit something that apparently the Secretary of Labor already has the right to do. And given that the Obama administration has had a Secretary of Labor for 5 years, I suppose, if they already wanted to do what was the subject of the gentleman's MTR, they would have already done it. I suppose the gentleman certainly has a right, if he hasn't already done it, to introduce legislation. Again, Mr. Speaker, it is simply irrelevant. There are lots of things that the Retail Investor Protection Act does not prohibit. It does not prohibit the Secretary of State from holding somebody accountable for the tragedy in Benghazi, when there were 29 systemic failures and four dead. There is nothing in the underlying bill that prohibits the Secretary of the Treasury from holding somebody accountable at the Internal Revenue Service for targeting Americans for exercising their First Amendment rights. There is nothing in the bill that prohibits the Secretary of HHS from holding somebody accountable for the ObamaCare Web site, which was 3\1/ 2\ years in the making for a half a billion dollars and still crashed. There is nothing in the bill that prohibits the Secretary of Housing and Urban Development from holding somebody responsible at the Federal Housing Administration for receiving its first-ever taxpayer bailout and being in violation of the law for almost 5 straight years for failing to adhere to its statutory minimum capital standards. No, there are a lot of things that this bill doesn't prohibit, but let me tell you what the bill does, Mr. Speaker. The Retail Investor Protection Act, sponsored by the gentlelady from Missouri (Mrs. Wagner), requires the Department of Labor and the Securities and Exchange Commission to coordinate a rulemaking. I know that is a radical departure for many, but, yes, they should coordinate a rulemaking. Then we actually require justification. If you are going to pass a rule that you claim is going to help retail investors, then actually help them. On a more fundamental level--and it is why we should oppose the motion to recommit--the bill preserves that $7 online trade for the working mom who is trying to send a child to college. It preserves the $2,000 startup IRA for somebody who has worked 20 years at Walmart and is trying to have a retirement savings. It allows low-cost access to ideas and products to people who want to manage their own investments so they can finally buy their own homes. Mr. Speaker, it does it all on a bipartisan basis because half of the Democrats on the Financial Services Committee supported this commonsense legislation. I would urge all of them now and the entirety of the House to vote down the motion to recommit and to vote in favor of retail investors and to vote ``aye'' on the Retail Investor Protection Act. I yield back the balance of my time.

Mr. HENSARLING

Mr. HENSARLING. I thank the gentlelady for yielding. I especially thank her for her leadership on this Special Order, and her leadership on behalf of all of our men and women who serve in uniform, many in her district. And she is well respected within this institution for what she has done for our military. Madam Speaker, I know the American people occasionally get somewhat confused by what is going on in Congress. Here's what's easy to understand: House Republicans have put not one offer on the table, not two, not three, but four; four different offers to negotiate with the President and the Democrats. What do we hear from the President? What do we hear from Harry Reid, no negotiations. You know, I still recall vividly my mother-in-law who has a saying, the least you can do in life is show up. President Barack Obama and Harry Reid have not shown up. Now I know that the President says at one time in his life he taught congressional law. Some of us find that somewhat ironic because if the President actually knew the Constitution, then he would know that it is the Congress that has the power of the purse. It is Congress that appropriates funds. Nowhere will you find in the Constitution that Congress is relegated to the power of the rubber stamp. So we know that the President and Harry Reid want us to rubber-stamp the health care policies of this administration that we hear about every single day. Every single day I'm hearing from one of my constituents, Congressman Hensarling, they just cut me back to 29 hours because of ObamaCare. Congressman Hensarling, my health care premiums are going up $1,500 because of ObamaCare. And yet we're told by the President, it's the law, don't touch it. Well, it's a law that he has already changed seven times, and it is a law that's hurting our constituents. And, no, Republicans are never, never, never going to give up on our quest to have patient-centered health care that's right for our families and doesn't harm our economy and is not an affront to our freedom. So we'll never give up on that. Madam Speaker, we know that the President is not going to sign away his signature item, and we know since so much of this spending is what we call mandatory spending, automatic spending, we know that the President is not going to cooperate to repeal it or defund it, and we'll never give up our quest. But, Madam Speaker, all we're asking for now is if ObamaCare is going to be imposed on the American people, then it ought to be imposed equally--none of these special interest deals, none of these sweetheart deals. You know what, if it's good enough for the American people, it ought to be good enough for the President. Why wasn't he the first one, the very first one signing up for this? Why wasn't there a line at the White House? Well, I can tell you why, Madam Speaker, because, guess what, they exempted themselves. The American people are tired of Washington elites passing laws that the rest of us are supposed to live under. That's not what the American people expect, and so Republicans are asking one thing: if ObamaCare is going to be imposed on America, no special deals for big business, no special deals for big labor. If they are going to get a 1-year reprieve, then working Americans ought to get a 1-year working reprieve. And if it's good enough for working Americans, it ought to be applied to the President, his Cabinet, and everyone in the White House and the Congress. Listen, I don't want to put my family in the exchanges. I don't want to lose the employer contribution that the taxpayers have so generously given us, but we're not going to have the President act like he can make the law. No Member of Congress, no one in the White House is above the law. So that's what we're trying to do. We want negotiations. If we're going to get stuck with ObamaCare while the President is the President, then let it be applied equally; but this is bigger than this. Millions and millions of our fellow countrymen are either unemployed or underemployed. They need our help. This is a spending bill. The President's economic policies have failed. We want fundamental tax reform. We want to get rid of the red tape burden. We want to take our Nation off the road to bankruptcy. I say this not just as a Member of Congress, but as the father of a 10-year-old son and an 11-year-old daughter. So somehow when the President says you can't mess with this spending bill and we want you to rubber-stamp the debt ceiling, the Republicans say, no, no, no, Mr. President. We will negotiate with you in good faith and maybe the electorate gave you the White House and the Senate, but the American people gave the House to the Republican Party, and we will not sit idly by while men and women are unemployed and underemployed, wondering how they're going to feed their families. We're not going to sit idly by while he bankrupts this Nation for future generations. No, no, no, we will not sit idly by. We are ready to negotiate, but we are through negotiating with ourselves, and the American people will demand ultimately that the President and Harry Reid negotiate and we work together to get this economy back and put us on a road to fiscal solvency so that our best days will once again be ahead of us.

Mr. HENSARLING

Mr. HENSARLING. I thank the gentleman for yielding, and I thank the distinguished chairman of the Rules Committee for bringing us to this point with his leadership in trying to get America back to work to take us off the road to bankruptcy and to ensure that there is fairness for all Americans. Mr. Speaker, as I listened to this debate--I'm sure the Americans perhaps on a little bit more Western time zone hopefully are still following this. If they are, I understand how they could get confused. But, Mr. Speaker, we're down to only debating two different matters here. Should the bosses in America get a better deal than their employees in ObamaCare? That's what we're debating here. More importantly, Mr. Speaker, we are debating should Members of Congress get a better deal than every other American in ObamaCare? House Republicans say, No, that's not fair. That's not equal protection under the law. Yet, our friends on the other side of the aisle are now saying, No, no, no. They're going to protect this sweetheart deal. It's not in the law, ladies and gentlemen, yet they want to protect this sweetheart deal. And people wonder why there's cynicism about Congress, about why Washington elites get to have a better deal than everybody else because they know more. Now Members of Congress, thanks to the Obama administration, are going to be the only people in America to get subsidies in the ObamaCare exchanges. Is this fair, Mr. Speaker? I think not. Clearly, the other side of the aisle wants to preserve this special deal for Members of Congress granted by the President of the United States. Where is the fairness in that, Mr. Speaker? Again, where is the fairness in letting employers--no, no, we're going to give you a year delay, but no fairness for the people who do the work, pay the taxes, and pull the wagon to make America great. That's what this debate is about. Here we have one party who, because they won't treat employees as well as their employers because they're preserving a congressional sweetheart deal, are prepared to shut down the government. That's what we're debating. We've got two matters. Mr. Speaker, we've come time after time after time in the spirit of negotiation, but, no, the President will negotiate with Iranians, he'll negotiate with Syrians, he'll negotiate with Russians, but he will not negotiate with Americans if they happen to be Republicans. No negotiation. Again, is it any surprise that America gets cynical? Why is this, Mr. Speaker? Is it arrogance? Is it hubris? Is it pride? We know that this law apparently is not perfect already. The President has signed several changes into ObamaCare. Now we've had delay after delay after delay. Income verification, delayed; high-risk pools, delayed; out-of-pocket cost limitations, delayed; small business health options--just 3 or 4 days ago, as the President was extolling the virtues of the great rollout of ObamaCare, 20 minutes later his own administration announced yet another delay; small business health option.

Mr. HENSARLING. It seems to me, Mr. Speaker, that the President of the United States has perhaps realized that his signature law is not perfect. All House Republicans are saying in a spending bill--and ladies and gentlemen, this does spend money. This isn't some little sideshow. This is what we do in the Constitution. The Congress has the power of the purse. It's not the power of the rubber stamp. It is the power of the purse. ObamaCare is about the purse. We're saying two things, Mr. President. In a law that you have already delayed time after time after time, if you're going to delay it for the employers, delay it for the employees. And, Mr. President, how can you decide that Members of Congress, to placate them, are going to get a sweetheart deal? This has to end, and yet our friends on the other side of the aisle are sitting here defending it, refusing to support a conference. We need fairness for the American people. We need to go to conference. End the sweetheart deals.

Mr. HENSARLING

Mr. HENSARLING. I thank the chairman, and I yield back the balance of my time.