Maxine Waters

Ms. WATERS

Ms. WATERS. Mr. Chair, I yield back the balance of my time.

Ms. WATERS. Mr. Chair, I demand a recorded vote.

Ms. WATERS. Madam Chair, I claim the time in opposition.

Ms. WATERS. Madam Chair, I demand a recorded vote.

Ms. WATERS. Madam Chair, under H.R. 4763, crypto that is deemed to be a digital commodity would come under the CFTC's purview, which would include a new explicit authority for the CFTC to regulate crypto spot markets. However, this amendment would ensure that this new authority for the CFTC to regulate crypto spot markets does not include traditional commodity spot markets. It is already bad enough that this bill would result in mass deregulation of crypto and even some traditional securities, too. This amendment takes the bill to the next level by trying to preemptively block the CFTC to oversee non-crypto spot markets. The bill's supporters continue to insist that this bill is only about crypto, but it has serious implications for traditional securities. With this amendment, it would now appear to have serious implications for traditional commodities also. It is wholly unclear why Republicans, who have placed so much faith in the CFTC to police the spot markets of digital commodities, think that this agency is unable to oversee the spot markets of everyday commodities they currently regulate, like oil, wheat, and livestock. Excessive speculation in spot markets of tangible commodities is a real problem that can harm working families' budgets. For this reason, Democratic CFTC Commissioner Christy Goldsmith Romero has called on the CFTC to study excessive and harmful speculations in the commodities markets. Specifically, she has stated: ``The CFTC has an impressive surveillance program and an equally impressive cadre of commodity markets experts to rely upon as it seeks to understand these pressures of working families, farmers, and producers. We should use them more, and more publicly.'' I agree with her. Madam Chair, I urge my colleagues to stand up for working families and farmers by leaving the CFTC's existing authority to protect them from speculation in the traditional securities market fully intact. Madam Chair, I urge my colleagues to vote ``no'' on this amendment, and I reserve the balance of my time.

Ms. WATERS. Madam Chair, at the Rules Committee hearing, Republicans revealed their true intentions with this bill. My friend, Mr. Norman, stated, regarding the investors who were defrauded by FTX: I blame the investor. I mean, would I get on an airplane with two wheels missing and one wing? They should have done their homework. Representative Austin Scott of Georgia on the Rules Committee doubled down on this kind of victim blaming, saying that he believed we should use a buyer-beware approach. This is entirely offensive to consumers to simply say that they should have known better than to get defrauded. The very definition of fraud implies that the consumer could not have been expected to know or understand some facet of a contract. I would venture to say that this bill is even worse than just a buyer-beware approach. This bill creates a facade of regulation that is designed to make ordinary investors and consumers think they are protected and that the investments are safe. In reality, this bill would facilitate and legitimize fraud rather than warning consumers to beware of the risk. In addition to blaming millions of defrauded investors, Republicans continue to move forward with a bill that exempts the same crypto firms that were unlawfully issuing or facilitating crypto securities, giving them a get-out-of-jail-free card. This is what Republicans love to do. They blame consumers and investors who have been defrauded while also advancing bills to protect those same firms that are ripping off consumers and investors. Madam Chair, I reserve the balance of my time.

Ms. WATERS. Madam Chair, I yield the balance of my time to the gentleman from California (Mr. Sherman).

Ms. WATERS. Madam Speaker, I demand a recorded vote.

Ms. WATERS

Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in strong opposition to H.J. Res. 109, a Congressional Review Act resolution that would overturn accounting guidance for crypto assets from the Securities and Exchange Commission known as Staff Accounting Bulletin 121, or SAB 121. The bill's sponsors have falsely asserted that this bill is meant to address a narrow concern from a particular special interest group, but, in reality, it is drafted in a way that is far broader than this narrow concern. The collateral damage caused by this CRA resolution would be far- reaching, causing significant harm to investors, consumers, public companies, and the safety and soundness of our capital markets. The bill takes a sledgehammer to fix an issue that may merely need a scalpel, and it does so because my colleagues on the other side of the aisle are not only interested in doing the bidding of special interest groups, they are also interested in attacking and undermining the SEC in every possible way, as they have done relentlessly since the beginning of this Congress. SAB 121 is highly technical guidance, therefore, let me break it down simply. SAB 121 has been in place for 2 years, and it only applies to companies that hold crypto assets on behalf of their customers. This is known as providing custody services. SAB 121 provides guidance for these companies in two respects. First, it advises companies on how they should disclose crypto assets that they have in custody, and second, it advises companies on how they should record those crypto assets on their balance sheets. The first prong of the guidance I described on disclosure of crypto assets is critical to providing transparency for investors and the public on volatile crypto assets. This kind of transparency helps prevent the kind of fraud and mishandling of crypto assets that led to the collapse of major crypto companies like FTX. In fact, this disclosure guidance has been broadly supported by industry and advocate stakeholders alike. The second prong of SAB 121 advises relevant companies on how to record crypto assets on their balance sheets. Under the guidance, the amount of the liability should correspond to the fair value of the crypto assets they are obligated to safeguard. This ensures that the company providing custody services has sufficient resources to secure these assets for the users against any theft, loss, or other misuse that could result in financial consequences. The SEC has explained that this guidance is prudent due to the unique risks and uncertainties associated with crypto assets. The sponsor of this resolution has tried to reason that this bill is meant to respond to a narrow concern from largely custody banks, but it really has much more far-reaching, negative consequences. Specifically, this special interest group has raised concerns that the second prong of SAB 121 that I described on accounting mechanisms would interact with existing bank capital requirements in a way that would absolutely make it cost prohibitive for them to provide custody services for crypto assets. To be clear, even this special interest group has expressed support for the disclosure guidance in SAB 121. They are only concerned about how the accounting guidance applies to their balance sheet. In fact, a letter sent by the special interest group requests ``targeted modifications'' to address this concern. Mr. Speaker, I include in the Record a letter from the Bank Policy Institute, the American Bankers Association, the Financial Services Forum, and the Securities Industry and Financial Markets Association. February 14, 2024. Hon. Gary Gensler, Chair, U.S. Securities and Exchange Commission, Washington,

Ms. WATERS. Mr. Speaker, this bill does far more than implement targeted modifications, as this letter proposes. This CRA resolution would overturn all of SAB 121, not just the part that this special interest group has complained about. Mr. Speaker, I am curious whether my colleagues on the other side of the aisle have actually read this letter from the special interest group that they are trying to pander to or whether they are bothered to consult the largest custody bank in the United States, the Bank of New York Mellon, which holds in custody more than $45 trillion in customer assets because they told me that they do not want this CRA and did not push for it in any way because they share our concerns about the bill being overly broad. The consequences of using a CRA, rather than a more narrowly tailored bill, go beyond simply overturning SAB 121 entirely when the aforementioned concerns from special interests only have to do with one little piece of it. If this resolution is passed, the SEC would be prohibited from issuing any guidance in the future that is substantially similar to this one, including disclosure guidance on this issue. This means that the SEC would not be able to simply turn around and narrowly address this one little concern while preserving the rest of the guidance. It also means that while the crypto industry clamors for the SEC to provide for clarity, this resolution would tie the SEC's hands, making it harder for them to provide the clarity that the industry purportedly wants. I am further concerned that if this resolution is passed, industry and investors alike will no longer be able to receive timely guidance from the SEC staff, as this resolution is also intended to be a warning. Passing this resolution would have broad and negative consequences for all public companies and their investors, with implications for the entire securities market, not just crypto. The SEC has issued numerous staff accounting bulletins. The one being repealed today is No. 121, which has helped companies understand how SEC rules apply in specific situations. If the SEC were to pull back in this regard, it would be particularly harmful to smaller companies with less resources dedicated to compliance and could result in more enforcement actions as they struggle to understand how to best comply with SEC rules. Chairman McHenry and I have worked well together to find common ground on crypto issues like stablecoins. However, instead of finding ways to work together, Republicans are recklessly pushing this harmful, partisan resolution. Let us not forget, the SEC is our cop on the block and should be supported because they protect our investors. Mr. Speaker, I urge my colleagues to oppose this bill, and I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume. This is my response to the gentleman from Nebraska. My Republican colleagues have claimed that the SEC failed to consult with prudential regulators on SAB 121, but if this resolution is passed, the SEC will effectively be barred from consulting with prudential regulators in order to issue revised guidance on this matter. Again, the plain consequences of this bill do not match the purported goals of the bill's sponsor and supporters. If Republicans wanted the SEC to consult with prudential regulators and reissue modified guidance, they should do that. This bill does the opposite. It actually prevents the SEC from consulting with prudential regulators in order to reissue modified guidance. Mr. Speaker, I yield 5 minutes to the gentleman from California (Mr. Sherman), who is also the ranking member of the Subcommittee on Capital Markets.

Ms. WATERS. Mr. Speaker, I yield an additional 1 minute to the gentleman from California.

Ms. WATERS. Mr. Speaker, I include in the Record a Statement of Administration Policy from the White House. Statement of Administration Policy H.J. Res. 109--Congressional Disapproval of ``Staff Accounting Bulletin No. 121'' Issued by the Securities and Exchange Commission--Rep. Flood, R-NE, and four cosponsors The Administration strongly opposes passage of H.J. Res. 109, which would disrupt the Securities and Exchange Commission's (SEC) work to protect investors in crypto-asset markets and to safeguard the broader financial system. H.J. Res. 109 would invalidate SEC Staff Accounting Bulletin 121 (SAB 121), which reflects considered SEC staff views regarding the accounting obligations of certain firms that safeguard crypto-assets. Moreover, as explained in staff's accompanying release, SAB 121 was issued in response to demonstrated technological, legal, and regulatory risks that have caused substantial losses to consumers. By virtue of invoking the Congressional Review Act, it could also inappropriately constrain the SEC's ability to ensure approriate guardrails and address future issues related to crypto-assets including financial stability. Limiting the SEC's ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty. If the President were presented with H.J. Res. 109, he would veto it.

Ms. WATERS. The President states that the resolution before us would ``disrupt the Securities and Exchange Commission's work to protect investors in crypto-asset markets and to safeguard the broader financial system.'' This statement not only explains how terrible this resolution is, but that the President of the United States of America will veto it. Mr. Speaker, I yield 3 minutes to the gentleman from Massachusetts (Mr. Lynch) who is also the ranking member of the Subcommittee on Digital Assets, Financial Technology and Inclusion.

Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, this bill has been opposed by the Biden administration. Further, this bill is opposed by the following organizations: Americans for Financial Reform, Better Markets, Public Citizen, Consumer Federation of America, United States Public Interest Research Group; New Jersey Citizen Action, Demand Progress, Institute for Agriculture and Trade Policy, Texas Appleseed, 20/20 Vision, and Bank of New York Mellon. Mr. Speaker, I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, Republicans have echoed calls from the crypto industry saying that legislation is needed to provide clarification on how securities laws apply to them, but their actions reveal their true motivation. They don't want clarity; they want broad exemption from securities laws. Let's look at their actions to date. The first crypto-related bill that Republicans marked up was the FIT 21 Act which they claimed was responsive to the need for clarity on crypto. The only thing clear about this highly convoluted bill is that it would provide the crypto industry with broad exemptions from current securities. Mr. Speaker, I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, the industry, the custody industry, the big banks that hold these crypto assets simply asked for a little correction, a little clarity, a little information. The Republicans are taking advantage of this, and this is the first crypto bill that Republicans are bringing to the floor today, and it would do what the majority always attempts to do, and this would actually reverse SEC guidance that provides clarity on accounting standards specifically for crypto assets. Not only that, but it would undermine the SEC's ability to provide clarity on crypto in the future. That is why the administration sees this bill for what it is and has advised us that they would veto it. Mr. Speaker, I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, the sponsor of this bill, Mr. Flood, has asked what the alternative to this CRA resolution would be, and that answer is very simple: Draft a bill that narrowly addresses the current question about how this guidance applies to banks. The use of a CRA is dangerous and reckless. Mr. Speaker, I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, Mr. Davidson entered a letter into the Record from several bank trades. What he did not mention was that the banks only asked for target modifications when they wrote about this legislation. In fact, in that letter, they supported the transparency requirements this resolution would repeal. Mr. Speaker, I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, I yield myself the balance of my time to close. Mr. Speaker, I would urge my colleagues to see this bill for what it is. It is a giveaway to one powerful special interest group in an effort to weaken the SEC, a crucial agency that protects investors and the functioning of our capital markets. This is the agency that is working to protect the retirement savings of millions of Americans. This is the agency that is crucial to making our capital markets the envy of the world. This is the agency at the forefront of ensuring that innovation, like in crypto, is done responsibly and in accordance with existing security laws. We simply cannot afford to weaken the SEC. Moreover, this resolution harms investors by eliminating much-needed transparency on volatile crypto assets, making it harder for them to make informed investment decisions. It also harms crypto users because transparency also deters fraud and other mismanagement of assets that can lead to devastating losses for consumers. Additionally, the resolution increases the likelihood of market volatility because a lack of transparency can result in more unexpected failures of crypto-related companies. Finally, this resolution harms all public companies who benefit from the SEC's practice of providing timely guidance through Staff Accounting Bulletins. If the Republicans would like to address the issue raised by large custody banks, they should do that, but there is no need to cause broader harm to the SEC and all of the people and companies that rely on it to maintain safety and stability. Mr. Speaker, the President of the United States would not be giving us this information this early about vetoing unless they saw this as a serious issue that must be dealt with right here on the floor of the House of Representatives. Mr. Speaker, I yield back the balance of my time.

Ms. WATERS

Ms. WATERS. Mr. Speaker, it is difficult for me to stand here this evening as I mourn the loss of my dear friend, Donald Payne, Jr. In my own way, I adopted Donald Jr. and he accepted me as his other mother. I loved him because he was a fighter. Experiencing his own health problems, he worked hard to address the health problems in our society and to educate and legislate to get healthcare and support for others. He was a gentleman. All the Members loved, supported, and respected him. All the Members of Congress loved him because of his spirit. I loved his support for all others when he was having his own problems. I also enjoyed loving his dress. Mr. Speaker, he had those beautiful bow ties, and he wore those fabulous suits and shoes in all of his colors that he coordinated. I would compliment him, and we would laugh and joke about the fabulous eyeglasses that he had and on and on. He was a man of style and fashion. I am going to miss him, and I am going to miss inquiring about his wonderful children, his triplets, and about what they were doing. Additionally, I am going to just plain be overcome with grief and try to get some relief in the fact that I knew him, and may he rest in peace.

Ms. WATERS

Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, at the Rules Committee yesterday, the sponsor of this bill, Mrs. Kim, said that we would need to pass this bill in order to send a strong message to Iran that its unprecedented attack over the weekend was unacceptable. I agree that the attack was unacceptable. It is wholly unclear how this bill, in any way, sends any such message. The bill would do nothing to deter another act by Iran. Instead, it would make it harder for the President to respond to emergency situations, including humanitarian crises. Under current law, a President has the authority to waive sanctions only if they determine that such a waiver is vital to the national security of the United States and submits a report to Congress providing justification for the waiver. The authority also limits a President to a waiver period of 180 days, and they must comply with the same requirements in order to renew the waiver. This is an authority that has been in place for decades and has been used effectively by Republican and Democratic Presidents to protect our national security. It is designed to allow the President to be nimble in response to situations that threaten our national security. This bill would hamstring this limited waiver authority by prohibiting the President from moving forward with a waiver until a waiting period of up to 70 days have passed. Let me repeat: It would prohibit the President from moving forward with a waiver until a waiting period of up to 70 days has passed. During this waiting period, American hostages could be languishing in a foreign prison, victims of a major catastrophe could be suffering, or tensions between American allies and adversaries could be escalating to result in a war. While any number of major threats to our national security are unfolding, this bill would impose an unreasonable waiting period during which the President would be required to jump through hoops as Congress holds hearings, receives briefings, and requests further information. This is an untenable way to handle emergency situations. Further, by hamstringing our ability to respond quickly, this bill could very well create a rift between us and our allies abroad who are relying on us to support them in critical moments. Let's be clear: The current law already provides for transparency on any waivers by requiring reports to Congress explaining the rationale for any waivers. Congress already has every right to do robust oversight by holding hearings, receiving briefings, and requesting further information to better understand the justification for any waivers. We don't need this bill to allow us to do that. The difference in this bill is that the President is subjected to a long waiting period, during which untold damage could be inflicted on the United States, our relationships with our allies, and our standing on the international stage. After decades of a shadow war between Israel and Iran, and months of combat between Israel and Hamas that has resulted in thousands of civilian casualties, this weekend's attack by Iran has brought us even closer to the precipice of an all-out war in the region. This is not the time to be tying the hands of our President to respond to emergencies, and this is not the time to be risking a rift in our international relationships with allies. Moreover, limiting our ability to facilitate the funding to provide humanitarian relief for people in need, as this bill would do, is simply shameful. It degrades basic American values supporting the life and dignity of all people. At the Rules Committee hearing yesterday, the bill's sponsor also claimed that the Biden administration had weakened sanctions on Iran and that this bill was designed to make it harder for the President to do so in the future, but the Biden administration's Iran sanctions program is the most extensive set of comprehensive sanctions against any country. In fact, the Biden administration has ramped up pressure on Iran since the Trump administration by imposing sanctions on hundreds of additional individuals and entities for activity related to Iran, including the illicit sale of Iranian oil. The Biden administration also successfully seized a tanker carrying Iranian oil, which was ``the first-ever criminal resolution involving a company that violated sanctions by facilitating the illicit sale and transport of Iranian oil,'' according to the Department of Justice. In fact, some of the examples that Republicans have cited for sanctions waivers that Biden has implemented were merely renewals of waivers that were initiated under the Trump administration. National security interest waivers, including those that facilitate humanitarian exceptions to sanctions, have long had bipartisan support, including under the Trump administration. This is just another example of the double standard that Republicans use to fuel their political talking points. They are desperately trying to find a way to blame the Biden administration for Iran's latest attack when there is simply no real basis to make that connection. Republicans are also applying a double standard to Ukraine and Israel. They are jumping to support our ally Israel and punish Iran, but they have been holding up badly needed funding for Ukraine, thereby emboldening our shared enemy, Russia. Mr. Speaker, H.R. 6323 will do nothing to stop or even deter Iran from attacking Israel again, nor will it end the humanitarian disaster and war in Gaza or help any of our allies under attack by authoritarian regimes. This bill does nothing to help Ukraine or provide Taiwan with any assurance that we have their back. Instead, this bill will have America sitting on its hands while any number of threats to our own national security unfold. Mr. Speaker, I urge my colleagues to reject this bill and affirm that America will continue to be a beacon of hope for people around the world. Mr. Speaker, I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, if my GOP colleagues want to combat terrorism finance, the way to do that is not through convoluted congressional waiting periods and lengthy proposal processes, tying the President's hands. Rather, I have a solid, bipartisan bill to propose, one which passed our Financial Services Committee markup with a unanimous vote of 50-0. That bill, my bill, is the Stopping Illicit Oil Shipments Act of 2023, H.R. 6365. The bill would target Iran's oil shipments and the Iranian ghost fleet, which is one of the biggest sources of funds for the terrorist Iranian regime. Iran and Russia both use this tactic to circumvent U.S. and allied sanctions. In fact, it is estimated that 2 million barrels of oil are transported daily on these ghost ships. If Republicans were serious about countering Iran and Russia, they could have brought this bill to the floor with these other provisions, a bill that passed markup with the same bills considered this week. Mr. Speaker, I reserve the balance of my time.

Ms. WATERS. Mr. Speaker, I yield 1 minute to the gentlewoman from Texas (Ms. Jackson Lee).