Michael Oxley

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, behind every successful Member of Congress is a good staff. When I was elected in 1981, I was told that my first and most important decision would be to find an outstanding Chief of Staff who could build a loyal and effective team. That first decision turned out to be my best. Jim Conzelman has been my only Chief of Staff during an amazing 25 years in the history of the House of Representatives and our Country. He is a trusted aide and personal friend who has played an integral role in our accomplishments on behalf of the Fourth District and the Nation as a whole. Jim came to me from that hotbed of political activism--Bozeman, Montana--with credentials from the Ford presidential campaign, the Select Committee on Assassinations, and a Member office. I was the newest recruit of a minority party near its low ebb in the House. But it was a good time to be young and a Republican because the Reagan Revolution had begun. As I cast votes to advance the President's agenda, Jim assembled a support team that allowed me to meet my twin objectives of becoming a respected legislator in Washington and a persuasive advocate for my constituents. The foundation that Jim built proved to be a lasting one during the quarter-century that followed. There have been memorable legislative battles, from telecommunications reform to financial services modernization to the Sarbanes-Oxley Act. In 2001, we made the unprecedented move from the Commerce Committee to the newly created Financial Services Committee. As counselor to the chairman, Jim helped me organize a committee soon recognized for its productivity and responsiveness to all of its members. Jim inspires great loyalty by treating everyone he meets with respect. Considering the transient nature of most staff, the retention rate in my office is unheard of. My core staff when I announced my retirement had combined legislative experience of more than 250 years, a true tribute to Jim's management skills. Many other staffers have gone on to successful careers after getting their first ``break'' from Jim, who remembers the feeling of starting a career in a city where the U.S. Capitol exerts a magical influence. In a town where success often depends on the relationships you build, Jim has thrived professionally through the strength of his personal character. It is evident in both his work on the Hill and his volunteerism for charitable causes like the Multiple Sclerosis Society. I am reminded of the observation that Doris Kearns Goodwin made in Team of Rivals, her book about Lincoln, that ``the qualities we generally associate with decency and morality--kindness, sensitivity, compassion, honesty, and empathy--can also be impressive political resources.'' Jim's ideals have remained the same since the day he arrived in Washington from Montana. He came for the same reason we all come--to serve the people and our Country. It is above all a privilege, but that should not prevent us from showing appreciation to those who have done the job well. With gratitude, ``Team Oxley'' salutes Jim Conzelman for his service.

Mr. OXLEY

Mr. OXLEY. Madam Speaker, I rise today in support of S. 3938, the Export-Import Bank Reauthorization Act of 2006, a strong compromise between the House and Senate versions of bills reauthorizing this country's vital export credit agency. This is the second time as Chairman of the Financial Services Committee that I have been involved with the Ex-Im Bank's reauthorization and I remain a strong supporter of the Bank primarily because it continues to create and sustain American jobs. Since our last authorization in 2002, the Bank has provided guarantees on loans to buyers of U.S. exports and insurance products numbering close to 11,500 total transactions--of which $7 billion of authorizations supported over $63 billion in export value. Alongside these numbers is the very impressive fact that last year alone the Bank returned over $1.7 billion to the U.S. Treasury in the form of fees, far outstripping the $145 million appropriated. Madam Speaker, I also am proud to note that like many of the bills we have passed throughout my chairmanship of the Financial Services Committee, this was an overwhelming bipartisan effort, led by Chairman Deborah Pryce and Ranking Member Carolyn Maloney as well as Representatives Biggert, Velazquez and Manzullo and with the strong support of this committee's next chairman, Barney Frank. This bill also represents important input from the Committee on Small Business, various export and banking experts, representatives of both small and large businesses, environmentalists and even a former president of the Bank. Madam Speaker, the bill before us makes changes necessary to keep the Bank vital through the five years of this reauthorization. The greatest of these changes will be the creation of a permanent Small Business Division whose function will be conducting outreach programs and tailoring Bank products to be more user-friendly for small businesses. This division will better equip the Bank to meet its mandate of making 20 percent of its total loans and guarantees available to small businesses, with particular emphasis towards helping small businesses owned by women, minorities, and the socially and economically disadvantaged. Additionally the bill contains a number of reporting requirements that will allow Congress to better monitor the Bank's activities. Madam Speaker, passage of S. 3938 will enable the Bank to be even more successful during the next five years. I urge its passage today.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I yield back the balance of my time.

Mr. OXLEY. Mr. Speaker, I am pleased to yield such time as he may consume to the able gentleman from Connecticut (Mr. Shays), the author of this legislation.

Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, today I rise in support of H.R. 5347, the HOPE VI Reauthorization Act of 2006, introduced by the gentleman from Connecticut (Mr. Shays). This important piece of legislation would simply reauthorize the HOPE VI program for one more year and would continue to provide a resource to revitalize severely distressed public housing units. Since 1993, this program has been an important part of the transformation of public housing by encouraging public housing authorities to seek new partnerships with private entities to create mixed-finance and mixed-income affordable housing that is developed and operated very differently from traditional public housing. HOPE VI epitomizes public-private partnerships for funding redevelopment projects. Mixed-finance development projects have allowed the government to raise millions of dollars from the private sector for redevelopment projects using Federal funds as bait. For every governmental dollar, these partnerships can yield $3 or $4 additional in private investment. Despite the obvious advantages of HOPE VI, the program has needed improvement. In 2003, in a previous reauthorization of HOPE VI, the Financial Services Committee added reforms by requiring the HUD to select grantees, among other criteria, on their capacity to bring planning and ultimately development to fruition within a more expedited time frame. In addition, the committee was concerned that the HOPE VI program was biased toward larger urban areas. Thus, the committee required that at least 5 percent of the HOPE VI funds be awarded to smaller communities, particularly rural areas, where public housing authorities are not present, to assist in the redevelopment of town areas for affordable housing. Now known as the Main Street Project, many rural communities are able to access these vital redevelopment funds. The HOPE VI program has been a valuable program in addressing many of this country's housing needs by revitalizing communities rather than simply building public housing. This House has repeatedly spoken on this program by continuing to fund HOPE VI in the relevant appropriations bills year after year. I would like to thank good friend Chris Shays for his leadership on this important affordable housing program. By reauthorizing HOPE VI, this bill will continue the reforms established in 2003 to ensure that smaller communities have access to important revitalization dollars and will continue to make HOPE VI a cost-effective and efficient program for the American taxpayer. Mr. Speaker, I reserve the balance of my time.

Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks on this legislation and to insert extraneous material thereon.

Mr. OXLEY. Mr. Speaker, I now yield 2 minutes to the gentleman from Pennsylvania (Mr. Dent).

Mr. OXLEY

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

Mr. OXLEY. Mr. Speaker, I have no further speakers, just to wrap up and say this has been a concerted effort. It has taken 5 years. While I guess all of us are frustrated in one way or another with the other body at times and this bill particularly, at the end of the day we did a good job and got what we could, and we will save some other things for a later day. But Jeb Hensarling and all of the folks who worked on this legislation, I want to thank them for their cooperation. Mr. Speaker, I yield back the balance of my time.

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

Mr. OXLEY. Mr. Speaker, I yield such time as he may consume to the gentleman from Texas (Mr. Hensarling). (Mr. HENSARLING asked and was given permission to revise and extend his remarks.)

Mr. OXLEY. Yes, that is my understanding as well. I will insert into the Record a letter dated August 5, 2006, from the OCC, FDIC, the Fed, and OTS. This letter clarifies the regulators' intentions for the provision. It also reaffirms their intent to enforce the language precisely and to not routinely impose financial or other conditions on bank directors or officers that contain a personal guarantee against loss by the institution seeking to change a charter or providing deposit insurance. I believe this addresses concerns raised by the gentleman from Massachusetts, and the committee will continue our oversight role in implementation of this provision. Office of the Comptroller of the Currency, August 7, 2006. Hon. Mike Crapo, U.S. Senate, Washington, DC. Dear Senator Crapo: This responds to your letter dated July 28, 2006, concerning section 102 of S. 2856, ``The Financial Services Regulatory Relief Act of 2006.'' We agree completely that banking policies should welcome the participation of qualified individuals on the boards of directors of insured depository institutions. We believe that enactment of this section would be fully consistent with that goal and that the provision should be implemented in that spirit, if enacted. Section 102 is intended to enable the appropriate Federal banking agency to enforce conditions imposed in writing in connection with any action on an application, notice or other request, and written agreements between a Federal banking agency and a depository institution or an institution- affiliated party, in accordance with the terms of the condition or agreement, without the necessity of showing unjust enrichment or reckless disregard for the law, applicable regulations, or prior order of the appropriate Federal banking agency. The language is intended to address the effect of court decisions in a few cases that questioned the authority of the banking agencies to enforce such conditions or agreements without first establishing that the institution-affiliated party was unjustly enriched or engaged in reckless disregard for the law or previous agency orders. It is our intention to utilize this provision with care and precision. Specifically, we do not intend to use it routinely in connection with corporate applications, notices or requests to impose financial or other conditions on bank directors or officers that contain a personal guarantee against loss by the institution. In particular, it is not our intention to use it routinely to require directors or officers of insured depository institutions to enter into capital maintenance agreements with the agencies as a condition of granting a charter or providing deposit insurance. Nor is it our intention to use it routinely to require bank directors or officers to maintain the capital of a troubled insured depository institution without the director's or officer's agreement. We hope this addresses your concerns. Sincerely, John C. Dugan, Comptroller of the Currency; John M. Reich, Director, Office of Thrift Supervision; Ben S. Bernanke, Chairman Board of Governors of the Federal Reserve System; Sheila C. Bair, Chairman, Federal Deposit Insurance Corporation.

Mr. OXLEY. Yes. I thank the gentleman for giving me an opportunity to do so. In adopting this provision, it is our intention that the regulatory agencies utilize section 702 with care and precision. Specifically, it is not intended to be used routinely in corporate applications, notices or requests to impose financial or other conditions on bank directors or officers that contain a personal guarantee against loss by the institution. For example, it is not intended to be used by the regulatory agencies to routinely require directors or officers of insured depository institutions to enter into capital maintenance agreements with the agencies as a condition of granting a charter or providing deposit insurance. It is also not intended to be used by the regulators to routinely require bank directors or officers to maintain the capital of a troubled insured depository institution without the directors or officers agreement. While we believe it is important that banking agencies are able to enforce agreements that protect the deposit insurance fund, we also believe that our national banking policies should encourage the participation of highly qualified people on the boards of those institutions. It would be counterproductive to create an environment where the threat of personal liability may cause bank directors to resign or keep well-qualified people from becoming directors in the first place. We will continue to monitor closely how this provision is applied by the regulatory agencies to ensure that this does not happen.

Mr. OXLEY. Mr. Speaker, before I do, I want to make clear that we, and it is pretty obvious that we have not rehearsed this in advance.

Mr. OXLEY. Mr. Speaker, I appreciate the ranking member's concern. I want to assure you that this amendment is prospective only and applies only to new investments made by banks and not to investments or written commitments already in place. There is nothing in this amendment that is intended to require banks that have made investments that comply with the law that was in effect prior to the enactment of the Financial Services Regulatory Relief Act of 2006 to undo or divest themselves of these investments or renege on their written commitments to invest in community development.

Mr. OXLEY. Mr. Speaker, will the gentleman yield?

Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and to insert extraneous material thereon.

Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, today the House will consider regulatory relief legislation for the financial services industry and its regulatory agencies. The Financial Services Committee has been working on this legislation for 5 years now, and I am pleased to announce that we have reached agreement with the Senate on this important legislation. The bill before us today should be taken up by the Senate later this week and on the President's desk shortly thereafter. On March 8, 2006, the House began the effort in this Congress by passing H.R. 3505, the Financial Services Regulatory Relief Act of 2005, by a vote of 415-2. On May 25, 2006, the Senate passed its version of this legislation, S. 2856, by voice vote. S. 2856 includes only about one-half of H.R. 3505's provisions and five sections that were not part of the bill coming from the House. Two of the five provisions added by the Senate were contained in H.R. 1224, which passed the House on May 24, 2005, by a 424-1 vote. These provisions authorize the Fed to pay interest on reserve balances and giving the Fed greater flexibility to set the ratio of reserve deposits a depository institution must maintain against transaction accounts. The other provision added by the Senate in S. 2856, one, allows the Treasury Department to determine the types of securities that may be pledged in lieu of security bonds; two, requires the Government Accountability Office to study and report to Congress on currency transaction reports filed with the Treasury Department and on the costs of regulatory compliance. And, three, direct the SEC and banking agencies to jointly issue regulations implementing a section of the Graham-Leach-Bliley Act. Today, I am recommending that the House accept the Senate version of this legislation with six amendments that have been agreed to by the minority in this Chamber and by both sides of the aisle in the Senate. Two amendments make acceptable changes to sections concerning a prohibition on employment of convicted individuals in banking organizations and regarding consumer notices under the Fair Debt Collection Practices Act. A third amendment mandates that the SEC and the Fed jointly adopt rules concerning banks' brokerage activities exempt from SEC oversight in accordance with the intent of the Graham-Leach-Bliley Act and deletes the provision in the Senate bill which would have permitted the Federal banking regulators to seek an expedited judicial review of any SEC rule making in this area. The fourth amendment concerns a budget offset related to the payment of interest on Fed reserve balances. The fifth increases the amount of unimpaired capital and surplus that a national bank may invest to promote the public welfare. Finally, the sixth amendment updates the Federal Deposit Insurance Act to provide clarity and certainty for depository institutions lacking Federal deposit insurance as it relates to disclosure and advertising. Mr. Speaker, the financial services industry is laboring under an enormous regulatory burden. While many of the regulations are necessary to protect consumers and meet other worthy public policy objectives, a number are clearly burdensome. For this reason, shortly after I assumed the chairmanship of the committee, I asked the financial regulators and industry trade groups to give us their best advice on how we could ease regulatory requirements faced by insurer depositors. The goal was to free depository institutions from such regulations so they can better serve their customers and communities. It was clear then, as it is now, that there also needs to be a counterbalance to the significant compliance responsibilities placed on depository institutions by the USA PATRIOT Act, as well as other Government efforts to counter terrorist financing. Excessive regulation affects all sectors of the financial services industry but presents the greatest burden for smaller institutions. For small banks that continue to serve their historic role as a financial lifeline for local communities, they must be free to operate in a regulatory environment that does not unduly constrain them. The bill contains a broad range of constructive provisions that, taken as a whole, will allow banks, thrifts and credit unions to devote more resources to the business of providing financial services and less to compliance with outdated and unneeded regulations. I want to congratulate Mr. Hensarling and Mr. Moore, who introduced the bill last year, and Mr. Bachus, the chairman of the Financial Institutions Subcommittee, which held numerous hearings on this important issue. Mrs. Capito also deserves recognition for her longstanding support of regulatory relief legislation and actually sponsoring the first legislation in the last Congress before she moved to the Rules Committee. Mr. Speaker, the financial services industry spends a great deal of money every year complying with outdated and ineffective regulation. That is money that could instead be loaned for new homes, new cars, and new projects, fueling job growth in local communities. The sooner we enact this legislation, the sooner we will provide needed relief to depository institutions and increased financial opportunities for both consumers and businesses. Mr. Speaker, I urge Members to support passage of S. 2856, as amended. Mr. Speaker, I reserve the balance of my time.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, just in closing, let me salute our good friend from California, who has had a passionate interest in housing ever since she got here and has worked extremely well as the ranking member of the subcommittee with the chairman and with both the full committee chairmen, myself and the gentleman from Ohio. We have surprised a lot of people with what we have been able to produce. They say politics is the art of the possible, and I think we have proven it time and time again. This is commonsense legislation that is good for all concerned, and I just want to salute her dedication to that effort.

Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume. I rise in strong support of H.R. 6115, the Mark-to-Market Extension Act of 2006, legislation introduced by my friend and colleague from Ohio, Congresswoman Deborah Pryce. This legislation extends the Multifamily Assisted Housing Restructuring and Affordability Act of 1997 for 5 years beyond its current expiration date of September 30, 2006. Legislation creating the Mark-to-Market program was enacted in 1997 to reduce the cost to the Federal Government of renewing section 8 contracts. At that time, 4,000 multifamily projects with FHA-insured mortgages were receiving project-based rent subsidies under section 8 of the U.S. Housing Act of 1937. The original Housing Assistance Payment contracts attached to these projects were written for periods ranging from 15 to 40 years. The majority of these projects had units with rents that exceeded those for comparable unassisted units; however, HUD did not have the authority to renew the contract at above-market rents. Consequently, few of these projects would have remained financially viable when their rental income was reduced to market rates, as owners would not have been able to cover their costs. With the reduced rents, such projects would most likely have gone into default on their mortgages, generating losses to the FHA insurance fund and possibly displacing many tenants in those projects. Under the current law, if the Mark-to-Market program expires, HUD will be required to renew Housing Assistance Payment Contracts at market levels, but the authority to restructure mortgage debt will no longer be available for projects that have yet to enter the Mark-to- Market program. Without that authority, many projects would not generate sufficient cash flow to support their mortgage after rents are reduced to market levels. CBO estimates that the cost of restructuring is less expensive than the cost of default by about $500,000 per project, on average. Consequently, CBO estimates that enacting H.R. 6115 will reduce direct spending by $188 million over 5 years principally by avoiding defaults on FHA-insured multifamily mortgages that otherwise would occur under current law. H.R. 6115 will ensure that HUD continues to have the tools necessary to restructure mortgages and lower rents, thereby reducing the Fed's cost of oversubsidized section 8 properties. I want to commend Congresswoman Pryce for her work on this important legislation. And I urge the adoption of H.R. 6115, the Mark-to-Market Extension Act of 2006. Mr. Speaker, I reserve the balance of my time.

Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and to insert extraneous material thereon.

Mr. OXLEY

Mr. OXLEY. Mr. Speaker, in closing, I want to pay special tribute to our friend from Pennsylvania (Mr. Fitzpatrick). It is rare in this House that a freshman has been able to pass major legislation as we have before us today, and it is a real tribute to his leadership and hard work and the cooperation on both sides of the aisle that we were able to get this bipartisan and bicameral bill finished. We had a most impressive and informative field hearing in the City of Brotherly Love last November, and it really did set the template and the opportunity for the committee to move forward with this legislation. It is particularly poignant because it is a natural after passage of Sarbanes-Oxley, and I know Senator Sarbanes and I both appreciate the work and the leadership that Mr. Fitzpatrick has provided for us and for Chairman Baker to move that legislation through his subcommittee. I want to thank all involved, including the staffers that Mr. Fitzpatrick mentioned. This has been a labor of love, and it will be one that will have enormous implications for our capital markets down the road. Mr. Speaker, I yield back the balance of my time.

Mr. OXLEY. Mr. Speaker, I recognize the chairman of the Capital Markets Insurance Subcommittee, the gentleman from Louisiana (Mr. Baker), for 2 minutes.

Mr. OXLEY. Mr. Speaker, I recognize the gentleman from Georgia (Mr. Price) for 2 minutes.

Mr. OXLEY. Mr. Speaker, I am pleased to recognize the gentlewoman from Florida (Ms. Ginny Brown-Waite) for 1 minute.