Bill Huizenga

Mr. HUIZENGA

Mr. HUIZENGA. Madam Speaker, I rise today to honor and celebrate the 100th Anniversary of the American Legion Auxiliary, the nation's largest wartime veterans service organization. The American Legion Auxiliary is a premier service organization that has been a vital asset to our community. By providing support for our veterans, our military, and their families, the American Legion Auxiliary shapes a positive future in an atmosphere of fellowship, patriotism, and peace. Founded in 1919, the American Legion Auxiliary boasts almost one million members from a range of different backgrounds. This past year, the organization oversaw more than 40 million volunteer hours and raised $37 million for charities across the US. Specifically, the American Legion Auxiliary's West Michigan chapter, Roger B. Chaffee Post 154, has been a pillar in our community through their support of veterans, sponsorship of local events, and youth development. Their tireless work has dramatically increased the quality of life for veterans and their families across West Michigan. The post gets their name from the late Roger B. Chaffee, an American naval officer, aeronautical engineer, and NASA astronaut in the Apollo program. Roger B. Chaffee grew up in West Michigan and graduated from Central High School in Grand Rapids, Michigan, where he excelled in academics and became an Eagle Scout. Sadly, Roger perished in the Apollo 1 fire on January 27, 1967, but his legacy continues to live on throughout our country and in West Michigan. Madam Speaker, please join me in congratulating the American Legion Auxiliary and the Roger B. Chaffee Post 154 for their 100 years of dedicated service to veterans throughout our country and in West Michigan.

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Speaker, I rise today to celebrate three west Michigan schools that have recently been recognized for their academic excellence and high student achievement. It is an honor to represent Lakewood Elementary School and Eagle Crest Charter Academy in Holland, Michigan, and Peach Plains Elementary School in Grand Haven, which were each awarded the prestigious Blue Ribbon Award by the Department of Education. Each year, this esteemed recognition is presented to K-12 schools across the Nation that show outstanding gains in student achievement or demonstrate academic excellence that goes above and beyond. In west Michigan, we have a legacy of offering our children excellent educational opportunities. These three schools in Ottawa County join a wonderful group of west Michigan schools that have already earned this distinction in the past. This award affirms the hard work of students, educators, families, and entire communities that have dedicated themselves to creating a learning environment where students can thrive and achieve academic success. Congratulations to the Eagle Crest Charter Academy, Lakewood Elementary School, and Peach Plains Elementary, and the students, parents, and staff for their hard work, dedication, and commitment to improving educational outcomes in our communities.

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Chairman, I appreciate the ranking member yielding me the time. As I was hearing my colleagues describe what this bill does and whom it is targeted at, it just struck me, there is an untethering from reality of what our economy is and how our economy functions. Certainly, along any of the border--and, yes, we have a northern border, while in Michigan it is actually to the east of us. When you look at what happens in the automotive industry, and when you look at what happens in the agricultural industry, that is the most porous border in the world because that is our largest trading partner in the world. In just the State of Michigan alone, Canada is the seventh or eighth largest trading partnership in the entire world. As we have been piling on regulation upon regulation over the last number of decades, Mr. Chairman, you saw companies leaving the United States. Sometimes, though, they were for different reasons. It is the supply chain. It didn't have anything to do with lower labor markets in Canada. The UAW strike also was the Canadian workers' strike. This is all linked together. In the bill itself, there is a disclosure requirement that we have to desegregate by State, the District of Columbia, Commonwealth, territory, and possession, and compare a percentage. So, Mr. Chairman, as you are shifting from Ohio to Detroit, Indiana, or Wisconsin, you are going to have to track all of those things as you are going through--by the way, not by numbers but by percentages of the total number of employees who physically work in and domicile in another country outside of the United States. Again, you are going to have to do that same thing as you are shifting automotive parts production between subsidiaries. That happens all the time, whether it is going from Troy, Michigan, or to Windsor, Ontario. That is a free flow that goes back and forth all the time. That has nothing to do with some nefarious shipping of jobs overseas. That is called supply chain. So this bill is flawed because it paints an incomplete company picture. Simply knowing one percentage of a company's workforce residing abroad--which obviously means everywhere and on anything--just really does not give you any kind of picture or flavor or test of what is happening within that. And, yes, it is duplicative. In fact, I will have an amendment on this bill a little bit later. We already have conflict mineral reporting. We have all kinds of other reporting that had happened because of Dodd-Frank.

Mr. HUIZENGA. I can tell you that the lack of competitiveness in the United States and one of the challenges that we have on our committee that we constantly talk about is how do we make sure that the United States is an area for growth, innovation, entrepreneurship. Because these companies that are now public, none of them started out public. They became public companies. And we have seen a plunge in the number of publicly traded companies. That is why I supported regulatory reform. That is why I supported tax reform, because we had to make the United States more competitive. This bill does nothing to help the United States become more competitive. It becomes less competitive and more burdensome, and all with the goal of shaming companies, not actually getting aggregate information that helps anybody.

Mr. HUIZENGA. Mr. Chairman, I have an amendment at the desk.

Mr. HUIZENGA. Mr. Chair, what we just heard a little while ago from the other side of the aisle can be easily explained. They don't understand the power of the Federal Government fully on how it can deter growth in our economy. It is not one big, giant thing. It is death by a thousand cuts. It is creating the atmosphere or destroying the atmosphere that allows innovation, allows growth, and allows the entrepreneurial spirit that has set America apart from the rest of the world. It is putting it on the chopping block. That is why I oppose this bill. Once again, we are using the massive power of the Federal Government to bully companies around. I am kind of curious, if this is all about foreign jobs, why in the world, under section (A)(i), we are going to need all this information disaggregated by State--by State. This has nothing to do with whether a job is going to Mexico or China or Vietnam or Canada. It has to do with whether it is going from Michigan to Ohio or from Indiana to Iowa. Yet, you are going to force the companies to continue to do all of this work for zero benefit, no benefit--not a benefit to an investor, not a benefit to the employee, certainly, unless, apparently, you have something against Michigan or against Ohio. I have got something against their university, not the State. But why we continue to just pile this on is why I believe this is deeply flawed and it paints incomplete pictures of what is going on. So, today, my amendment is this: I am offering a simple amendment that would exempt issuers from making these disclosures if they are already required to make a CEO pay ratio disclosure and disclosures relating to conflict minerals. I cannot describe to you fully in these 5 minutes the damage that has been done with conflict minerals alone in a wide swath of industries, including the automotive industry. People would think: Why in the world would that have anything to do with it? It has been hundreds and hundreds of man-hours to try to track something down that is untrackable. We still have no idea where all this is. So, my amendment today--and, if this is really about foreign jobs and all those kinds of things, which we know it is really not because we need to disaggregate it by State; but, if it is about that, then it is time for the authors to step up and support this amendment. We need to stop mandating frivolous disclosures for public companies. Well, we already have two with the CEO pay ratio and the conflict minerals. I believe this is reasonable to say, that if you already are doing those, you no longer have to do these additional disclosures. We should be looking at ways to lower costs, reducing barriers on those seeking to become the next Ford, the next Amazon, the next Microsoft. Instead, we are just putting up speed bump after speed bump after speed bump. What happens, Mr. Chair, is those speed bumps eventually turn into a wall, and that stops all progress. So, I encourage my colleagues to vote ``yes'' on this amendment, and I reserve the balance of my time.

Mr. HUIZENGA. Mr. Chair, may I inquire how much time I have remaining.

Mr. HUIZENGA. Mr. Chair, I will make it quick, because this is pretty easy. What you just heard isn't true, Mr. Chairman, because if, truly, the other side cared about anytime there was a job getting shipped overseas, they would not have, under the (B)(2) disclosure requirement, an exemption with respect to an emerging growth company. If they actually put their money where their mouth is, they wouldn't have that exclusion in there because, apparently, an automotive job isn't as valuable as an emerging growth company job. So, I am confused. If that is really what it is all about, then we ought to make sure that the rules apply to everybody and that there should not be an exemption. And I am confused as to why the author of this bill would allow that to happen, would allow those technology companies to ship those jobs overseas, without any respect of having to report that. Obviously, Mr. Chairman, I am being a little sarcastic, but it just goes to show why this is a flawed bill, and I yield back the balance of my time.

Mr. HUIZENGA. Mr. Chair, I demand a recorded vote.

Mr. HUIZENGA

Mr. HUIZENGA. Mr. Chair, I yield myself such time as I may consume. Mr. Chair, I rise in opposition to H.R. 1815, the SEC Disclosure Effectiveness Testing Act of 2019. Mr. Chair, Democrats claim that this bill would ``build on efforts to engage in investor testing by requiring the SEC to conduct usability testing of any new disclosure.'' If my friends on the other side really wanted to build on efforts to engage in investor testing, I believe they would have worked with Republicans on the committee and the Securities and Exchange Commission to craft a bill that would actually be signed into law. Unfortunately, this bill is a deliberate effort to not only delay the SEC's rulemaking on Regulation Best Interest and Form CRS, but it is also an effort to tie the SEC's hands with regard to future disclosure rulemakings and may have an effect even on past rulemakings. In fact, what the bill's author won't tell you is that the SEC already conducted investor testing on the very disclosure regulation Democrats are targeting with this particular bill. With Reg BI, 1,800 Main Street investors nationwide were surveyed about the regulation. There were 31 one-on-one, in-depth interviews with retail investors. Seven roundtables were held that the SEC gained input from. Finally, more than 6,000 comment letters were received by the SEC before they actually put together the Reg BI. The Securities and Exchange Commission collected all this, analyzed the information from all of those sources, and very carefully crafted what had been very contentious and, frankly, outside the bounds of what had normally been accepted with Regulation Best Interest by having the Department of Labor try to drive this rather than the Securities and Exchange Commission. I believe that they have a good product. The SEC used this information to adopt a workable regulation all without the help--or the so-called help--of H.R. 1815. So what does the final rulemaking package on Reg BI and Form CRS accomplish? It raises the standard of care owed by broker-dealers to retail investors, and that, at the end of the day, is what this is all about. It is a standard that we agree needed to be addressed. But why make the SEC do it again and further delay a rulemaking that makes significant improvements for Main Street investors? It is a rule that is in place. I can only surmise it is because my friends on the other side didn't like the outcome and didn't like what they heard in that investor testing. Not only did they not like the current outcome for Reg BI and Form CRS, but my friends on the other side of the aisle want to tie the SEC's hands in future disclosure rulemaking. They accomplish this by requiring investor testing for documents and information that are relied on or ``substantially likely to be materially relied upon by retail investors.'' Now, I don't know what that phrase means. Here is why I don't know what that phrase means: It is because it wasn't in the version of the bill reported out of the committee. That is a phrase thrown in at the last minute by my friends on the other side of the aisle. If that weren't enough, the bill targets the SEC's previous disclosure rulemaking. H.R. 1815 requires the SEC to retroactively conduct investor testing on similar disclosure rulemakings that were finalized before enactment of this bill. This means disclosure rules finalized 5, 10, 15, maybe even 20 years ago could be captured and will be captured by this bill. Finally, if subjecting past and future disclosure rulemakings to investor testing weren't enough, the bill captures present rulemaking. H.R. 1815 creates a bureaucratic loop by requiring the SEC to conduct investor testing if substantive changes are made to a proposed rulemaking, and those changes are untested before the rules are finalized. What does this bill mean for everyday investors? It means more bureaucracy. It means less certainty. Certainly, it does not speed up what all agree is an issue that needs to be addressed. There is no doubt that investor testing is an effective tool for designing smart, workable regulatory frameworks to benefit the Main Street investor. It can help craft disclosures and information that everyday investors can actually understand and use. It does not have to come in the form of a mandate. This bill is not only a delay tactic, but it will drastically undermine the ability of the SEC to do its primary job of protecting investors. Under the last administration, that is all we heard about on the committee. I have been on the subcommittee that handles this, and all we heard was how Congress was undercutting the Securities and Exchange Commission, that it wasn't supporting it enough and wasn't allowing it to do its job. What are my friends now doing? The exact thing that they were complaining about. By delaying it or in some cases preventing the SEC from finalizing rules intended to protect investors and diverting resources from cybersecurity and enforcement actions, Main Street investors that this bill claims to serve will only be harmed. I am confident the SEC can and will devote the utmost attention and consideration to help everyday American investors without this particular bill. Mr. Chair, I reserve the balance of my time.

Mr. HUIZENGA. Mr. Chair, I yield 2 minutes to the gentleman from Indiana (Mr. Hollingsworth), who is the vice ranking member of the subcommittee.

Mr. HUIZENGA. Mr. Chairman, I yield 2 minutes to the gentlewoman from Missouri (Mrs. Wagner), who has had extensive history and experience with this particular issue at the Securities and Exchange Commission.

Mr. HUIZENGA. Mr. Chairman, I include in the Record the following letters: An October 16, 2019, letter from the SIFMA expressing support for both of my amendments that exempt Regulation Best Interest and Form CRS from the bill's requirements, and the gentlewoman from Missouri, Mrs. Wagner's amendment, which would make the bill effective beginning on January 21, 2021, and apply only to future rulemaking; an October 16, 2019, letter from SIFMA opposing H.R. 1815; and also, an October 16, 2019, letter to the Speaker of the House and Leader McCarthy from ACLI, FSI, IPA, IRI, ICI, NAIFA, SIFMA, and the Chamber of Commerce expressing concern with H.R. 1815 and the negative impact it would have on retail investors. As we are starting to have discussion on these particular amendments, I look forward to my friends across the aisle who are saying that the bill does not change any of the current situation, I look forward to them potentially supporting these amendments.

Mr. HUIZENGA. Mr. Chair, I reserve the balance of my time.

Mr. HUIZENGA. Mr. Chair, may I inquire how much time is remaining on each side and whether the gentlewoman is prepared to close at this time.

Mr. HUIZENGA. Mr. Chair, I yield myself the balance of my time. Mr. Chair, I do want to point out that as the gentlewoman from Missouri and I were chatting a little bit about this, it is amazing, when this issue came to a head at the end of the Obama administration, there was a massive move away from the Securities and Exchange Commission where this Reg Best Interest traditionally has been the domain of such regulation and was moved over to the Department of Labor. Why? Because the administration believed they needed to move so quickly and they couldn't get the Securities and Exchange Commission to act and agree--parenthetically, agree--with them as to what it should look like, they kicked it over to the Department of Labor, which has a small little silver of oversight of this area because of pensions. But, nonetheless, they came up with a wholly unsatisfactory rule that caused a tremendous amount of confusion. The Securities and Exchange Commission put itself forward and said: No, we need to get this done. That is what kicked off all of the roundtables and the interviews and the 1,800 surveys and the 6,000 comment letters. We are now at this point where we can deliver on much-needed reform, and my colleagues across the aisle want to kick it backwards. Now, Mr. Chairman, you heard the author say that they are not interested in relitigating current rulemaking, so I look forward to them all supporting my amendment that we are going to be talking about. And let's exempt Form CRS and the Reg BI. But I am afraid, Mr. Chair, that is not their goal and intent. I am afraid that they don't like the policy; therefore, they want to go back in and delay. When the gentleman was talking about how there was no changes because of this, that is simply not true. The Form CRS went from four pages down to two pages, with significant, simplified changes that were inserted into that. And so that is the goal and objective at the end of the day, Mr. Chairman: to protect investors, to give them certainty and clarity; to give those who provide the advice to them certainty and clarity; and, frankly, to move forward. I am afraid that H.R. 1815 here does the exact opposite. It is going to delay it. It is going to make it even more murky than what it had been previously. I just want to urge my colleagues to think this through, what they are proposing to do to the Securities and Exchange Commission, the power of the Securities and Exchange Commission. And again, my first term was spent listening to how the Republicans ``were trying to destroy the Securities Exchange Commission'' by not funding them enough, by not allowing them to do their job, by not having the appointees do what their backgrounds and expertise would allow them to do. I never bought that charge, Mr. Chairman, because it simply wasn't true. But we can see clearly, right now, this is a delaying tactic by the opposition; and how we would put not just current rulemaking, not just future rulemaking, but even past rulemaking back into this system would simply be a huge mistake. Mr. Chairman, I urge my colleagues to oppose this bill, and I yield back the balance of my time.

Mr. HUIZENGA. Mr. Chairman, I have an amendment at the desk.

Mr. HUIZENGA. Mr. Chairman, my amendment is very simple. It would add Form CRS to the list of exempted disclosures that would not require SEC investor testing. They have gone through it. Now, you just heard one of my colleagues talk about why somebody would oppose this. I can tell you why somebody would oppose this: Because we have been doing it for 7 years. For 7 years Reg BI has been debated. It has been litigated. It has been confusing. And it is time to move forward. The Securities and Exchange Commission has done that. So, again, the author of the bill earlier had said, Mr. Chair, that he was not interested in relitigating current rulemaking. Now is the time to show that. Now is the time to prove that. Support my amendment. So, Form CRS was part of the Regulation Best Interest rulemaking package. The form is a short, plain-language description of an investor-adviser or a broker-dealer's relationship summary. It is designed to help retail investors select or determine to remain with an advisory or brokerage firm. They are trying to figure it out. Importantly, Form CRS was the result of an extensive deliberative process at the SEC. Beyond the typical comment process--and the SEC did consider 6,000 comments for the Reg BI rulemaking package--the SEC also engaged in substantial investor outreach, including in-person meetings across the country; surveys--1,800 of those surveys--and, importantly, engaged the RAND Corporation to perform one-on-one, in-depth investor testing of the proposed Form CRS. Now, earlier it was claimed, Mr. Chair, that the initial form was unchanged. That is not true. The SEC did figure out that four pages was too long, too confusing. They streamlined that down to two. So, that is, the SEC did its work--again, for the last 7 years. And we are now at a critical juncture. We can choose to take this road, or we can choose to turn around and head backward. I, for one, do not want to turn around and head backward. I want to provide that protection to my Main Street investors and my constituents back in my district. So, the SEC did its job. It did testing that was substantially similar to what was proposed by this bill on Form CRS already. It has been 7 years that we have been going through this process. We could not get, under the last administration and in the beginning of this administration, the Department of Labor and the Securities and Exchange Commission to agree on how to move forward. And when in the Trump administration, this current administration, the Department of Labor was trying to assert itself, the Securities and Exchange Commission did its job and stepped in, which it didn't do under the last administration, and said: Nope. We got it. We are the lead agency. We will take this, and we will come up with a final product. And the reason why I oppose this bill, certainly without my amendment, is all this does is it reverts back to what we had before this rulemaking was done by the Securities and Exchange Commission. Confusion, muddiness, and uncertainty will be the rule of law, and we are trying to clear that up. The Securities and Exchange Commission is trying to clear that up. Mr. Chair, I reserve the balance of my time.

Mr. HUIZENGA. Mr. Chairman, just to address a couple of things: This bill clearly says it will add Form CRS to the list of exempted disclosures that would not require SEC investor testing. It has nothing to do with cryptocurrencies unless, somehow, magically, a crypto broker appears. There is no such thing. It has no application. This amendment is only going to be narrow. It is going to exempt Form CRS from having to go through this again. The author of the bill had said that he had no interest in relitigating current rulemaking. Here is the opportunity to prove it because, I would hope, Mr. Chairman, that we would all agree that Form CRS does not need to be subject to further testing. It has been 7 years. I don't want it to be another 7 years. As my colleague from Indiana earlier was saying, 600 rules at 6 months per rule is 300 years. We don't have that time. Mr. Chair, I hope that my colleagues would support my amendment, and I yield back the balance of my time.

Mr. HUIZENGA. Mr. Chairman, I demand a recorded vote.

Mr. HUIZENGA. Mr. Chairman, I rise in opposition to the proposed amendment.

Mr. HUIZENGA. Mr. Chairman, I share my colleague's concerns about the challenges that senior investors face. I have had that with my own parents, who, unfortunately, are no longer with us. But I was a part of those investment discussions and decisions, and I had a brother who was very, very involved in that and a sister who also. We all worked together as a family, trying to figure this all out. This is a concern that all of us had. The author of the amendment was also the author of the Senior Security Act, which I supported, and massive bipartisan support came out of this House. Many people would be surprised about that, I would bet. But I am opposed, however, to adding to the already significant requirements of this investor testing bill. I will note that the bill, as drafted, would already require that the SEC do whatever testing it, in consultation with the Office of the Investor Advocate, determines is ``appropriate for evaluating the effectiveness of retail disclosures.'' It doesn't say for young people. It doesn't say middle-income people. It doesn't say for old people. It says for everyone. This is already covered. Earlier, you heard my amendment, that I was going to add to an exemption. Well, there is already a list of exemptions, that forms are exempted. Mine would have been in addition to that. The purpose of my amendment and my opposition to this amendment is to simplify, not to make it duplicative, not to make it more complicated, not to make it more cumbersome, burdened, and bureaucratic. As I read it, for the amendment to have any type of meaning, the amendment suggests that testing is either: A, flawed as it currently is; or, B, wouldn't consider seniors. I am assuming that is not what the author is intending to do, to question that. I just see this as unnecessary, duplicative testing that would add to the bill's cost and expand another layer of bureaucracy that doesn't ultimately help those retail investors. John and Jane 401(k), those mom-and-pop investors, whatever title you want to put to them, they need to be our focus. Now, there is a cottage industry of now-congressionally mandated investor testers. I am not really interested in continuing to give them jobs. I want to make sure that we protect those investors, but also give them that protection in a timely manner because timeliness is part of that protection. Mr. Chairman, I reserve the balance of my time.

Mr. HUIZENGA. Mr. Chair, I am prepared to close. I am curious on the remaining balance of time on both sides.

Mr. HUIZENGA. Mr. Chair, I reserve the balance of my time.

Mr. HUIZENGA. Mr. Chairman, again, my opposition to the amendment has nothing to do with putting seniors in danger. In fact, that is why I supported a litany of bills and a package of bills that included the author's Senior Security Act this last April. The House is unified in supporting seniors. What we are not unified in is supporting bureaucracy. By the way, the aforementioned that I had talked about, the Office of the Investor Advocate, would you like to know where that came from? The Dodd-Frank Act. What this amendment is saying is the Dodd-Frank Act failed in protecting seniors. The Dodd-Frank Act must have failed in protecting investors because we now need to have a specific, senior-worded sort of category that needs to be looked out after. The law is supposed to be blind, whether you are young, old, middle income, rich, poor, whatever it is. That protection also goes there. My opposition, again, is not about who has been affected but what is going to slow down that protection that those people deserve. Reasonable cost equals access. If we continue to increase costs, it limits the ability for people to access that protection, that advice. That is why I rise in opposition to my friend's amendment. Mr. Chair, I yield back the balance of my time.