Patrick McHenry

Mr. McHENRY

Mr. McHENRY. Madam Chair, I urge a ``yes'' vote, and I yield back the balance of my time

Mr. McHENRY. Mr. Chair, I yield 1 minute to the gentleman from the great State of North Carolina (Mr. Budd).

Mr. McHENRY. Madam Chair, I thank my colleague from North Carolina for raising this issue of student loans. It is a very important issue for a whole generation of Americans. But let's rewind and understand why we are in the position we are in with student loans. In 2009 and 2010, there was a Democratic majority in the House and the Senate that, in order to pass ObamaCare, they needed pay-fors to pass the Affordable Care and Patient Protection Act, the formal name of what we commonly call ObamaCare. One of the major pay-fors was the nationalization of student lending. So now we have a generation of American students that have a crushing debt burden because of a government program. Ninety percent of student loans are done through the Federal Government. So let's get to the fundamentals of this reform, so that consumers can have choice, students can have choice. This amendment doesn't do that. The memorandum of understanding between the CFPB and the U.S. Department of Education outlines the parameters to share student loan information. The Department of Education was clear in its letter terminating the memorandum of understanding, stating: It takes exception to the CFPB unilaterally expanding its oversight role to include the Department's contracted Federal student loan servicers. The Department has full oversight responsibility for Federal student loans under Federal law. The Department letter also expressed concern that: CFPB's intervention in this area adds confusion to borrowers who now hear conflicting guidance related to Title IV of student loan services for which the Department is responsible. So the memorandum of understanding was terminated because the two separate departments, the CFPB and the Department of Education, were sending information to students who were trying to make payments, some were trying to catch up on payments, and they are getting two different pieces of guidance. So to reinstate this provides more confusion for the very people that are being crushed by a generation of debt. So it is a deeply problematic amendment, not because it has an ill intent. The very issue that we are trying to confront here is a very real one to these students, to their families, and to the lost prosperity and economic opportunities that they are experiencing because of the structure of this debt load and because of this Federalized approach to student lending. Madam Chair, I ask my colleagues to reject this amendment, and I reserve the balance of my time.

Mr. McHENRY. Madam Chair, I rise in opposition to the amendment, though I am not opposed.

Mr. McHENRY. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I would commend to the House that, when someone gets into fundamental issues of a 5-year term that the only way the Director can be fired is for cause. The Democrats have created an unaccountable bureau of government. Now, I think what we have today is a bit of buyer's remorse by my Democratic colleagues who created the CFPB in order to be this unaccountable bureau, but headed by a Democrat or a Democratic Presidential appointee. Now that we have a Republican appointee in the CFPB, they want to reorder how the Director has her staff report to her. That is what a big chunk of this bill does. They want to micromanage the Bureau because they don't like what the current Director is doing. If we seek to actually have long-term consumer protection within our financial regulators, I think we need a bipartisan board to oversee an agency like this. I think it is a fundamentally different agency when you have a bipartisan board and it looks and acts more like the Securities and Exchange Commission that has long-term, lasting buy-in by both parties and by the American public for the enforcement actions that they take and gives investors confidence in that area. On this side of the ledger, what we said on the Republican side during the Dodd-Frank debate and we have said consistently since then is, if you want a lasting Bureau, you need to have a bipartisan board. And funny enough, I think that was originally a bipartisan idea, and it has now become mostly a Republican idea. What I would commend is, if we want to get into issues of reforming the Bureau, we need to get into the structural reforms about appropriations and a bipartisan board and inspector general to oversee an agency such as this rather than tinkering around the edges about reporting structures within the Bureau or the naming of the Bureau. Mr. Chairman, I reserve the balance of my time.

Mr. McHENRY. Mr. Chair, I yield such time as he may consume to the gentleman from Kentucky (Mr. Barr), ranking member of the Subcommittee on Oversight and Investigations of the Financial Services Committee.

Mr. McHENRY. Madam Chair, the gentlewoman from Michigan has offered an amendment that will help ensure the Consumer Advisory Board has a balanced perspective by including individuals who represent community banks, credit unions, and small business owners, or economic growth experts. Community banks, credit unions, and small businesses are disproportionately affected by heightened regulatory burdens. Dodd-Frank imposed 4,000 new Federal regulations on financial institutions, including smaller institutions that lack the resources of larger ones. As a result of that, we have seen the decline of nearly 2,000 banks, from about 6,400 banks at the end of 2010, to the end of last year, that number was 4,600. This is a significant issue for community financial institutions, the weight of regulation. The number of credit unions has also declined by nearly 3,000 over a similar period of time, down to 5,600. While community banking organizations, such as credit unions and small community banks, represent 17 percent of all U.S. bank assets, they make up nearly half of all small business loans. Small businesses account for over half of all U.S. employment, and nearly two-thirds of all employment growth over the last decade. These institutions fuel our economy and spur job growth. They deserve a seat at the table. I commend my colleague from Michigan for offering this amendment. Madam Chair, I reserve the balance of my time.

Mr. McHENRY. Madam Chair, I am prepared to close, so I reserve the balance of my time.

Mr. McHENRY. Madam Chair, I claim time in opposition to the amendment, although I am not opposed.

Mr. McHENRY. Madam Chair, this bill, this amendment, reinstates an older form of regulation of HMDA data. This is the data that is collected when you have a home mortgage. It is required data. Under the old regulation, there were 48 pieces of data that had to be collected. Under the new regulation, it is 23. That is a modest change that was agreed upon by a bipartisan vote of this House and the Senate and signed into law last Congress under S. 2155. A changed regulatory structure, still collecting the data. The most important thing this bill does, however, is it subjects small credit unions and small banks to a higher level of regulation than contemplated under the new regulations and the new law. We are rolling back to an older form, whereby community institutions, small banks, and small credit unions have been disproportionately disadvantaged in the mortgage marketplace. They have been given a higher regulatory burden, a higher cost structure, which means that they are out of the home mortgage game. The net effect of this amendment is that you will have small credit unions and small banks not being able to participate as fully as under existing regulations in home mortgage making, and I think that is one of the deep flaws of this amendment. Madam Chair, I urge my colleagues to oppose this amendment, and I reserve the balance of my time.

Mr. McHENRY. Madam Chair, I yield myself such time as I may consume. I urge my colleagues to vote ``no'' on this amendment. This rolls back to an older form of regulation, not a new, modern form of regulation. We still collect very important data from mortgage makers, those that are actually in the mortgage marketplace. What we did was right-size our regulation so that small financial institutions like community banks and credit unions could be in the mortgage marketplace once again. This amendment rolls back those reforms and hurts small community banks and hurts small credit unions in a way that this body, I don't think, wants to support. Madam Chair, I urge my colleagues to vote against this amendment, and I yield back the balance of my time.

Mr. McHENRY. Mr. Chair, I yield 3 minutes to the gentleman from Tennessee (Mr. John W. Rose), a new member of the Financial Services Committee.

Mr. McHENRY. Madam Chair, I think the gentleman from Wisconsin has authored a very good amendment. It is a constructive amendment in this legislative process to make a bad bill less bad. It strikes the findings sections, not the legislation contained therein. It is the egregious findings and the personalities in the first 21 pages that the gentleman removes and says we should use the arm of Congress to look at those findings of fact and to get a report from the General Accountability Office on those matters raised in the findings section. I urge my colleagues to support this very good amendment.

Mr. McHENRY. Madam Chair, I claim the time in opposition to the amendment.

Mr. McHENRY. Madam Chair, I yield myself such time as I may consume. Madam Chair, let me close by saying what I said briefly in debate. This bill is about buyer's remorse. I would say to my colleague from Massachusetts who raised the issue about Wells Fargo, there was a bipartisan hearing. Chairwoman Waters called the hearing. We had bipartisan questioning of the Wells Fargo CEO. We have taken bipartisan work on the oversight of regulators and the regulated when it came to malfeasance by Wells Fargo and some of the employees who were within that firm. There was a bipartisan level of cooperation there. I would also highlight, to my colleague from Massachusetts, that it was not the regulators who found the malfeasance of Wells Fargo, it was the good and wise reporting of the Los Angeles Times. Through investigative journalism, they found the malfeasance, the bad actors, and the bad policies within Wells Fargo--not the regulators. That is a failure of the regulators. It is a failure of the CFPB. We have yet to have a hearing about those failures. Let me say from the outset about this bill; it proves what Republicans have said since the passage of Dodd-Frank: the Consumer Financial Protection Bureau is unaccountable. We hear my Democrat colleagues complain about the actions of a legal overseer of the Bureau, Mick Mulvaney, and now the complaints about the Republican-appointed Director, Kathy Kraninger. We are here today because Democrats regret that during Dodd-Frank they didn't go far enough by mandating outcomes by this Bureau, because they didn't consider that a Republican could actually be a leader of that Bureau and they may not like the action of that unaccountable Director. They have buyer's remorse, and, unfortunately, they have decided to advance legislation that does nothing to create a more responsible CFPB over the long term. Instead of taking this opportunity to work together, to bring transparency and accountability to the CFPB, the majority is moving a bill that does little more than advance their political agenda and micromanage the Bureau. H.R. 1500 codifies and recreates offices inside the CFPB, some of which are given more authority and some of which, like the Office of Cost Benefit Analysis, are given less. H.R. 1500 actually directs what Bureau staff can refer to the Bureau as in public. Now, let me explain: if it is called the Consumer Financial Protection Bureau under this bill, it is okay. If it is called the CFPB, that is okay. If it is referred to as the Bureau, a law has actually been broken under this bill. That is one of the more substantive changes in the bill, actually. I don't think it is wise legislating by Congress. That represents the policy side of the legislation. One look at this bill's findings is enough to tell Members what H.R. 1500 is really about. There are more pages of findings than there are of actual legislative text. The issues they raise in the findings sections, however, are not remedied in the legislative text part of the bill. In a series of disparaging statements, former Acting Director Mick Mulvaney, a former colleague of ours here in the House and member of the Financial Services Committee, and Director Kathy Kraninger are vilified as irresponsible zealots. Specifically, the text describes former Acting Director Mulvaney as ``anticonsumer,'' ``destructive,'' and ``inane,'' only working ``to hamstring the good work, passion, and the capacity of dedicated staff.'' The findings also opine that ``the appointment of Mr. Mulvaney aimed to diminish and undermine the mission of the Consumer Bureau.'' This is a highly suspect section of legislation before this House. I don't think it is becoming of this House to opine in this way. While Mick Mulvaney may be many things, he is not inane nor is he anticonsumer. Now, I may say, jokingly, that I find him destructive, probably destructive with his humor, but not destructive in the work that he achieves in public policy. I think he is a good public servant, serving our country admirably; and, with the work that he did at the Bureau, he was trying to achieve the best results possible for consumers, for institutions, for financial safety and soundness, and for the economy at large. He did good work. With that context in mind, we know that this bill is not about helping consumers. This bill is about constraining Republican Directors from making decisions they believe are in the best interest of the agency. In the Financial Services Committee markup, Republicans offered amendments that would have made responsible changes to the Bureau. Had those amendments been adopted, the majority would have a much better bill. An inspector general would have provided oversight of the Director, ensuring the mission of the agency is not undermined. That is important for all branches of government. Subjecting the Bureau to annual appropriations would have also ensured congressional oversight of the CFPB, or the Bureau, and a voice in the prioritization of Bureau functions. A GAO study examining the efficacy in which the Bureau meets its statutory obligations would have actually yielded insight into the workings of the otherwise opaque Bureau. But those amendments were not adopted. The choice was made to move forward with a partisan declaration instead of meaningful bipartisan legislation. That is unfortunate. Thankfully, there will be a Senate, and the Senate has a different view on this. It is my hope that this bill does not become law. Unfortunately, we can't improve this legislation through a meaningful amendment process because of the nature of the rule passed by the Rules Committee. We are merely adding more political fodder for press releases as a result of this bill. H.R. 1500 will pass the House and will go nowhere in the Senate. The Financial Services Committee will then turn to the next issue. Hopefully, it is bipartisan legislating, where Chairwoman Waters and I have had success in the past, and I hope we have success in the future. But, to the American people, I say that the Financial Services Committee Republicans remain committed to bettering this organization of the CFPB. We will protect consumers, while maximizing financial choice. We will work to advance solutions, not sound bites. It is my sincere hope that we can do that with cooperation from the majority. I ask my colleagues to join me in opposing H.R. 1500, legislation that puts politics first, not consumers. Madam Chair, I yield back the balance of my time.

Mr. McHENRY. Madam Chair, I rise in opposition to the amendment.

Mr. McHENRY. Mr. Chairman, I reserve the balance of my time.

Mr. McHENRY. Madam Chair, I inquire from Chairwoman Waters if she is prepared to close.

Mr. McHENRY. Madam Chair, this amendment will direct the CFPB to appoint representatives of the military- and veteran-serving financial institutions to advisory committees. It is another step in ensuring servicemembers, veterans, and their families have a voice in consumer protection. Military- and veteran-serving financial institutions are unique and can provide the CFPB advisory boards with insights into the biggest risks facing veterans, servicemembers, and their families. I do concur that there should be more military representation across all fronts at the CFPB and across the government. Madam Chair, I ask my colleagues to support this amendment, and I reserve the balance of my time.

Mr. McHENRY. Madam Chair, older consumers are undoubtedly at the highest risk of becoming the victims of financial crimes. That is the unfortunate case that we are facing today. That is why, earlier this month, the House passed multiple pieces of legislation to highlight the issues of elder financial abuse and the mechanisms to combat it. The statistics on senior citizens who are exposed to financial exploitation are shocking. Older Americans lose approximately $36.5 billion each year to financial crimes, scams, and abuse. One in five seniors have reported being victims of exploitation, and only 1 in 44 cases of financial abuse are reported. The gentleman from Colorado has offered an amendment that will require the CFPB to study and report on consumer complaints filed by older Americans and recommend legislative or regulatory actions to enhance consumer protections to those citizens. This amendment would increase transparency and allow the CFPB to identify trends in elder financial abuse. Those insights could be used and can be used to protect senior citizens. Madam Chair, I urge my colleagues to vote ``yes.'' I thank my colleague for offering a good amendment, and I reserve the balance of my time.

Mr. McHENRY. Madam Chair, I urge a ``yes'' vote, and I yield back the balance of my time

Mr. McHENRY. Madam Chair, I reserve the balance of my time.

Mr. McHENRY. Madam Chair, I claim the time in opposition, although I am not opposed.

Mr. McHENRY. Madam Chair, this amendment would ensure at least one member of the Consumer Advisory Board is an expert in consumer privacy. I think Congress has a proper role that they can exert in the make-up of boards, advisory boards, or make-up of commissions, and I think this is reasonable legislating around that. We constantly hear from both financial firms and their regulators that cybersecurity and insufficient data privacy standards are significant threats to consumers and financial stability. Moreover, as employees of the Federal Government, we know of Federal Government data breaches of Federal employees. We have to do more to make sure that we stop that and stop malicious state actors from these cyberattacks. Billions of people were impacted by data breaches and cyberattacks in 2018 alone. The problem is only growing, and the threats are becoming much more sophisticated. Given the importance of this conversation, ensuring that one individual on the Consumer Advisory Board has consumer privacy expertise offers a reasonable solution. Madam Chair, I commend my colleague from Hawaii for offering this amendment. I urge my colleagues to support it, and I reserve the balance of my time.

Mr. McHENRY. Madam Chair, I urge a ``yes'' vote, and I yield back the balance of my time.