Maxine Waters

Ms. MAXINE WATERS of California

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

Ms. MAXINE WATERS of California. Mr. Chairman, may I inquire as to how much time we have remaining?

Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, we are now considering a bill that not only could put our community banks at risk, but strikes at the heart of why compromise in Congress can be so challenging. H.R. 3791 would direct the Federal Reserve to raise the asset threshold under the small bank holding company policy statement, allowing small banks and private equity firms to take on additional debt for mergers and acquisitions. The threshold would be increased to $5 billion in consolidated assets from $1 billion. Let me stress that this would be 5 times as much as the current threshold and 10 times as much as the initial level that was in place before a bipartisan compromise was enacted last Congress. The small bank holding company policy statement is important because it allows small institutions, like community banks and minority-owned depositories, to access additional debt so they can continue serving their communities. However, it is important that this threshold is carefully calibrated so it cannot be abused by speculative investors. If the threshold is raised too high, it will have the opposite of the intended impact. It will lead to mergers and acquisitions, riskier banking activities, and a reduction in banking services and credit availability to rural, low-income, minority, and underserved communities. Indeed, Democrats and Republicans on the Financial Services Committee worked together just a little over a year ago to provide relief to almost 5,000 community banks by doubling the asset threshold under the policy statement to the current level of $1 billion from $500 million in assets. We did so after working closely with regulators and determining that $1 billion was the most appropriate threshold to help community banks grow without making them targets for mergers and acquisitions. At $1 billion, the policy statement covers 89 percent of banks in the country, providing relief to the vast majority of community banks and minority-owned depository institutions. I am trying very hard to understand why my colleagues are reneging on that compromise and undermining the careful, considerate policy that we enacted. The administration has threatened to veto this measure because of the potential danger to our smaller banks and to the communities they serve. They have called this bill an unnecessary and risky change because we know what will happen if the Federal Reserve has to make this change. For one, raising the threshold would have a serious impact on the consolidation of community banks. The majority purports to be concerned with consolidation in the banking industry and the disappearance of community banks. This bill will all but ensure that larger banks and investors come in and purchase smaller banks and then cut branches in the communities that need them the most. We have already seen this happen with banks across the country, both large and small, that have been forced to shut down hundreds of branches because investors and shareholders demand higher and higher returns. I supported the change we made last year to $1 billion because it would help ensure that small community banks are able to continue serving their communities. That is the point of the small bank holding company policy statement. We must help our communities retain access to local banks that know the specific needs of their consumers and small businesses. This bill would do the opposite. Even those that did survive wouldn't be able to provide the same personalized service because of their size. I am particularly concerned about how this would impact our underserved communities. Another problem with this legislation is that it would allow banks with as much as $5 billion in assets to operate under lower standards and less oversight by regulators. Many community banks failed during the 2008 financial crisis because they became overleveraged. Certainly, if a bank makes bad decisions in the amount of risk they take on, then it is appropriate to let it fail, but the failure of any bank, and especially a bank with up to $5 billion in assets, has a tremendous impact on the community it serves and on the Deposit Insurance Fund. At the end of the day, more bank failures will increase premiums for all the banks protected by the Deposit Insurance Fund. We cannot allow reckless behavior that benefits investors and bank shareholders at the expense of small banks and the communities they serve. Mr. Speaker, H.R. 3791 is not a small change. It is a risky move that threatens both bipartisanship and these already polarizing times, as well as the safety and soundness of our community banks and the customers they serve. I urge my colleagues to join me in voting ``no'' on this bill. Mr. Speaker and Members, allow me to reiterate the point. We worked very hard in reaching across the aisle, in making compromise, in making commitments to each other, and in agreeing that we would raise the asset limit from $500 million to $1 billion. We had that agreement, and before the ink was dry on the deal, here we have a bill that says: So, we really didn't mean it. We want to raise it to $5 billion. Ha, ha, ha. People wonder why we don't compromise more, why we can't get together more, why we can't understand what is in the best interests of all of our constituents, to put aside our differences, and work on behalf of those people we say we care about. The other side claims it cares about community banks. Then why would it renege on this agreement? If it cares about community banks, why would it put them in the position of being bought up by private equity firms and special money interests, which only want to find a way to make more money and more profit by closing down branches and firing people? That is what they do. When these private equity firms come in, they borrow a lot of money in order to make these kinds of purchases. Then guess what? They have to take the money back. So guess who are the victims of this kind of agreement? They are the small banks and the constituents. While my chairman--a gentleman whom I like very much and get along with very well--opens with statements that have nothing to do with this bill and while he talks about the plight of those in our communities who are suffering, let me tell you why they are suffering not only in his community but in communities across this country. It is because in 2008, we had a subprime meltdown and a crisis that was created by these kinds of reckless public policy attempts. We discovered that, because of all of the exotic products and all of the recklessness of some of the big banks and others, we put our people at risk, and we put our constituents at risk. Guess what? They lost their homes. Many of them are homeless and are on the streets now. Many of them cannot afford the rents that have risen because of the crisis that we have come out of. If you really want to help small banks and community banks and if you really want to help your constituents, you will not be for a bill like this one. This only puts them at risk. I ask my colleagues to vote ``no'' on this bill. Mr. Speaker, I reserve the balance of my time.

Ms. MAXINE WATERS of California. Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. Carolyn B. Maloney).

Ms. MAXINE WATERS of California

Ms. MAXINE WATERS of California. Mr. Chairman and Members, I would ask the Members of this Congress to not pay attention to what has been attempted by the opposite side of the aisle. Again, I challenged them and I asked them to talk about FIRREA. I asked them to talk about the bill that takes away the investigatory powers of the Justice Department. I asked them to explain why they would take away subpoena powers from the Justice Department. I asked them if they remembered what happened when this country went into a recession, almost a depression, because of predatory lending. I asked them did they want to have their name and their vote behind big banks that are guilty of fraud, who have been fined enormous sums of money by the Justice Department because they were found guilty, and I am asking them to talk about this. So this is a distraction. This is obscuring the real bill that is before us. Forget about this Choke Point part of the bill. We have time to work on that. There are some Members on the opposite side of the aisle that share some of those concerns, but not in this bill. They coupled it with this taking away of the Department of Justice power because they knew that they could somehow divert the attention over to the so-called Choke Point and talk about this administration and talk about guns and talk about payday loans and talk about rent to own and pawn shops and all that. This is not about small business protection. This is about using the Choke Point argument as a way to divert attention away from what they are really doing. Ladies and gentlemen, you can't go home and explain to your constituents why you would protect the too big to fail banks, why you would take away the power to make them accountable. They have harmed this country. They have harmed our citizens. They have caused people to lose their homes, and they have increased the homelessness with their predatory lending. We have reform that we are trying to implement. I know every trick in the book has been played to try to undermine Dodd-Frank and to keep us from having the kind of reform because there are people who are just very close to the big banks and they are not going to cross the big banks. As a matter of fact, they used too much of their career to protect the big banks. This is an outrage. I want the Members of this Congress to understand, we have got time to have a discussion about Choke Point and all of that. We have Members on both sides of the aisle who would work with you on those issues. This is not it. You should not have placed this part in this bill. You should not have had to try and make believe that this is all about Choke Point when, in fact, the real big deal in this bill is about how you are going to try to protect the biggest and the worst banks. We have pointed out to you in this discussion all of the big fines that have been imposed against these banks. Did these banks say, ``No, we didn't do it''? Did these banks say, ``I am not going to accept this. I am going to court, and I am going to fight''? You know they rolled over because they are guilty, and you know that they are. Please do not be diverted from the real meaning of this bill. This bill is about crippling the Department of Justice and not about Choke Point. I yield back the balance of my time.

Ms. MAXINE WATERS of California. Mr. Chairman, Mr. Gosar's amendment is a dangerous amendment to an already highly problematic bill. As the OCC deputy comptroller noted in 2015 testimony before our committee: ``In the rare cases where a customer has engaged in suspected criminal or other illegal activity,'' the OCC ``may order the bank through an enforcement action to terminate the customer's account.'' H.R. 766 creates a national security exception for customer notice, but it leaves the term undefined in a case where the illegal activity does not pose a threat to national security. Mr. Gosar's amendment would potentially force banks to tip off someone engaging in criminal activity, frustrating regulators' oversight of Federal anti-money laundering laws. Mr. Gosar's amendment exacerbates an already highly problematic proposal, and I would urge my colleagues to oppose this amendment. Mr. Chairman and Members, again, I just want to point out, since I have time on this amendment, that this bill is not about all of this anyway. They keep focusing on Choke Point, and they come up with these questionable amendments, et cetera, such as Mr. Gosar's. This is about the Republicans on the opposite side of the aisle stripping the Justice Department of its authority to go after these too big to fail banks and taking away their investigatory powers and their subpoena powers, thus threatening the citizens of this country once again to the kind of predatory lending that helped to almost bring down this economy starting in 2008. I ask for a ``no'' on this amendment, and I am going to ask for a ``no'' on the bill. I reserve the balance of my time.

Ms. MAXINE WATERS of California. Mr. Chairman, I claim the time in opposition.

Ms. MAXINE WATERS of California. Mr. Chair, I yield an additional 1 minute to the gentleman.

Ms. MAXINE WATERS of California. Mr. Chairman, I would like to thank the gentleman from California who has shown his concern about the Choke Point provisions of the bill. He is absolutely right. Both of these issues are in this bill. We cannot divide it in the way that we are moving forward. And it means that if this bill passes, no matter what the concern may be, the overriding concern must be about stripping the Justice Department of its investigatory power and its subpoena power. It must be about undermining the Justice Department's ability to hold these big banks accountable. I don't think you can divide this. This is one bill.

Ms. MAXINE WATERS of California. I yield myself such time as I may consume. Mr. Chairman and Members, after the Justice Department finally began to use the Financial Institutions Reform, Recovery, and Enforcement Act that we refer to as FIRREA to create some semblance of justice for financial crisis-era bank fraud and misconduct, my Republican colleagues respond by restricting the Department of Justice's most powerful tool for holding banks accountable. This is an interesting debate that we are having. We are sitting here wondering why it is that not one Member on the Republican side of the aisle who has taken to the floor to debate this bill will talk about FIRREA and will talk about the Justice Department and what you are doing in stripping away their powers. I know why. Because you know that, if, in fact, you really got up and talked about what you were doing, you would lose all of the votes even on your side of the aisle. This is outrageous. So you are hiding behind Choke Point. Not one Member on the opposite side of the aisle has the guts to get up and say: I can't do this. I am going to talk about what this bill is really about. And so they continue to march down here, taking their orders to talk about Choke Point, Choke Point, Choke Point. No. No. No. This is about stripping the Justice Department of its investigatory powers and its subpoena powers. FIRREA is the last line of defense between consumers and investors and bank fraud. Central to the DOJ's ability to investigate fraud and to build cases against financial institutions is its subpoena power, power that H.R. 766 singles out for unprecedented and burdensome restrictions. Instead of bolstering the Justice Department's ability to investigate mortgage fraud, H.R. 766 seeks to actually protect the banks and to insulate them from accountability. Wow. Wow. Can you just imagine that anyone could go home to their constituents and say: I just voted for a bill that would actually protect banks and insulate them from accountability, I just voted for a bill to strip the Justice Department of its power to investigate? Bank fraud should be met with the full force of the Federal Government. H.R. 766 is a dangerous step backwards for an economy still reeling from financial crisis-era fraud and misconduct. Every regulator has been clear that account closures aren't the result of pressure from regulators, but from banks that have decided that, for some customers, they would rather lose their business than investigate any anti-fraud practices to protect our financial system from money laundering. Look, you have got people who are willing to work on that part of public policy that you would like to see some changes in, but this is not it. When you couple that discussion to overshadow what you are doing, to strip the Justice Department of its powers to investigate, what you are doing is you are setting up a situation to take us backwards and to harm so many people. Have you forgotten the lessons already of 2008? Have you forgotten already what this country went through? Have you forgotten that the citizens of this country had to bail out the biggest banks to keep us from going into a depression? We went into a recession. We tore up communities. We threw people out of their homes. We increased homelessness. Now you want to come back and give the banks an opportunity to do what got us into trouble in the first place? Well, I can't imagine that you are prepared to defend that. The common theme throughout H.R. 766 and many of the proposals that, unfortunately, cleared the Financial Services Committee is that, even in the aftermath of the financial crisis, my Republican colleagues would have you believe it is the big banks that are the ones in need of protection, protection from the Consumer Financial Protection Bureau. Mr. Chairman, I yield back the balance of my time.

Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such time as I may consume. Let me draw Members' attention to what is being attempted on the opposite side. They keep talking about Choke Point and how they want to save payday lenders and rent-to-own and pawnshops and all of that. I may have some issues with some of that, but that is not what this is about today. Today, this is about the fact that they refuse to tell you what is really in this bill. They cannot stand up and defend why in the world they would be taking away the Justice Department's ability to investigate bad banks. They cannot tell you why they are ignoring the lessons of 2008 and predatory lending and what the Justice Department has been able to do using FIRREA and investigating and fining and getting settlements. They cannot tell you why they would ignore the fact that many innocent middle class folks who work every day and who fought hard to make down payments and signed on the dotted line for mortgages didn't know that they were being tricked into signing mortgages that they could never really keep up with and that the interest rates would reset and go higher and higher and they were going to lose their homes. They cannot defend the predatory lending practices. They cannot defend the fraud. They cannot defend the undermining of the average American family. They cannot defend the fact that Americans lost their homes. So they are going to keep talking about Choke Point and how they have got to protect payday lenders and how they have got to protect pawnshop owners and how they have got to protect rent-to-own and all those businesses they hold so dearly and want to protect. This really doesn't have anything to do with that. If they want to have a real discussion about Choke Point, we are willing to do that; but, this is not the time to do it. This is not the time to use this to hide behind the fact that you want to protect the big banks. As a matter of fact, this is so outrageous, it basically says that, instead of the Justice Department or anyone going after the banks, it would protect the banks by saying that you can't go after the banks and you have to protect them and you can't go against them. I am simply saying over and over again that I don't care how many Members they call up and I don't care how many Members come and talk about Choke Point, somebody needs to tell us why they can't talk about taking away the investigatory powers and the power to subpoena from the Justice Department, a Justice Department that has proven that it is willing to use its investigatory powers in order to deal with these big banks. So listen very carefully and listen to all this Choke Point stuff that they are trying to ram down your throats. Listen and look them in the eye and see if they can look you back in the eye and defend what they are doing. Don't allow them to mislead you, Members of this Congress, into thinking that this bill is all about protecting payday lenders and rent-to-own and pawnshop owners and all these businesses that they care so much about. This is about stripping the Department of Justice of their power to investigate and subpoena. This is about pulling the rug out from under the citizens of this country who have tried to own homes and who have not been protected by their own government until we had reform. This is about saying they don't care what the Justice Department has been able to do to rein in these practices. They are going to come here today with a bill and tell you it is all about Choke Point. I reserve the balance of my time.

Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman and Members, if you listen carefully to my colleague on the opposite side of the aisle, Mr. Luetkemeyer, you would think that the major point of this bill is the Choke Point controversy. Considerable time was spent by my colleague on the opposite side of the aisle talking about Choke Point. Well, I do not want that discussion to obscure the real problem with this very bad legislation. H.R. 766 eliminates core provisions of the Financial Institutions Reform, Recovery, and Enforcement Act, or FIRREA, that the Justice Department has used to investigate and prosecute bank fraud. This is what this discussion should be about: bank fraud. FIRREA has proven to be the Justice Department's most effective tool for holding Wall Street accountable. We hear a lot of talk about Wall Street. We went through 2008 and the subprime meltdown, the bailout, and all of that. Most of the Members on both sides of the aisle agree that we had to rein in the practices of Wall Street. Here we have a bill today that would basically protect them and take away the very tool that is used in order to make them accountable. After using FIRREA to secure historic settlements against Wall Street, including a $7 billion settlement against Citibank, a $5 billion settlement against Goldman Sachs, a $13 billion settlement against JPMorgan Chase, and a historic $16 billion settlement against Bank of America, now H.R. 766 seeks to stifle the Justice Department's investigative powers over financial fraud. In fact, there are still ongoing settlement negotiations with banks like Wells Fargo and Goldman Sachs that were announced just this week. Without investigatory powers and an extended statute of limitations granted to the Justice Department by FIRREA, it would be impossible for us to identify and rectify the fraudulent activity that set us up for a crisis 10 years ago. Apparently, H.R. 766 supporters believe that actually holding banks accountable for fraud was too much of a burden for them, replacing our system of too big to jail with one where our biggest banks are now too frail to fine. H.R. 766 also invites the next crisis by imposing burdensome requirements--listen to this--imposing burdensome requirements on the Justice Department's ability to investigate bank fraud, allowing fraud schemes to continue at the expense of consumers and the financial system. The Justice Department's ability to identify and rout out fraud would be critical in averting future crises, and H.R. 766 would be a free pass to banks that make their money by breaking the law. That would include banks like Plaza, Commerce West, and Four Oaks, all of which knowingly aided fraudsters, despite the many red flags raised by their financial activities. At Commerce West in particular, the bank admitted fraud for failing to file suspicious activity reports with regulators even after the bank's own employees determined that one of their customers was routinely submitting fraudulent checks to the bank. According to the Justice Department's complaint, the bank also failed to heed the warning of other banks that pointed out to Commerce West that some of their customers were fraudulent businesses. Furthermore, H.R. 766's account closure provisions are a solution in search of a problem as regulators are now forcing financial institutions to close customer accounts. Every Federal banking regulator has been clear, except for rare cases involving national security or systemic risks. The responsibility for closing accounts is a decision for financial institutions. Some financial institutions are simply deciding that they would rather lose a customer than invest in the resources needed to ensure that our financial system is not being used for money laundering or other criminal activity. In order to protect our economy from the next financial crisis, regulators have to have the necessary tools to prevent fraud and protect consumers. Americans are still reeling from the effects of the financial crisis. We should be in the business of seeking ways to continue to hold banks more accountable for their misconduct, not rolling back the Federal Government's most effective tool for protecting consumers, investors, and taxpayers from bank fraud. Banks that break the law don't deserve get-out-of-jail-free cards. The administration will veto H.R. 766. I urge my Democratic colleagues to oppose H.R. 766. I just want to say that, despite yesterday when we had five bills that had been rolled into one that I warned our Members of Congress about because of what they literally did, particularly in terms of allowing corporations to not have to disclose information about the stock that they were giving to their employees, and I talked about how bad that was. This is worse. This is worse because we are able to call names and to point out banks because we have the information. It is real. We are able to point out how the Justice Department has been affected in making these banks accountable. So why in the world would we want to take away the Justice Department's tool that is FIRREA? Why would we want to prevent the Justice Department from going after these banks who know they are dealing with crooks and fraudsters? I would ask for a ``no'' vote on this bill. I reserve the balance of my time.

Ms. MAXINE WATERS of California. Mr. Chairman, I continue to reserve the balance of my time.

Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such time as I may consume. Again, my friends on the opposite side of the aisle will talk about guns. They will talk about Choke Point. They will talk about unfairness to businesses based on a bank's ability to close accounts. They will talk about everything except the real point of this legislation. I don't know why, I don't know where it came from, and I don't know who can convince a serious public policymaker that somehow you are to take away the investigative power of the Justice Department, a Justice Department that has proven that it could use FIRREA--that is the Financial Institutions Reform, Recovery, and Enforcement Act--to investigate banks that are guilty of fraud. I don't know where this would come from. Given what we have gone through in this country, starting in 2008, I don't know why any serious public policymaker would want to do that. What have we witnessed in this country, based on the predatory practices of banks? We have seen whole communities devastated. We have seen foreclosures and people lose their homes. We have seen homes underwater. We have increased homelessness. We have seen the targeting of some of the most vulnerable communities in our country, based on the fraudulent practices of banks. The Justice Department has a tool, and they are using this tool. Why would any credible Member of Congress want to take away the Justice Department's ability to investigate and to fine these institutions? No, ladies and gentlemen, this is not about Choke Point. This is not about guns. This is not about any of that other stuff that they are trying to make you believe you should pay attention to. Every legislator and every public policymaker should ask themselves: Do I want to be a part of ever allowing this institution to once again revert back to the practices that caused people to lose their homes, that threw this country into a recession, that still has us reeling from the negative impacts of those decisions by a bank? Why would anybody want to take away the Justice Department's investigative powers? In addition to that, this bill will not even allow the Justice Department to exercise its authority to subpoena. Why do you want to do that? It doesn't make good sense. Again, you can talk about Choke Point all night long. You can describe it as being unfair to businesses, you can talk about what we need to do, but that is not what this is about. I know why you don't want to talk about it because you have got to be ashamed of it. You have got to be ashamed of the fact that you are leading this institution to do away with investigative powers of the Justice Department. Let me just say this. The Department of Justice has relied heavily on the powers granted under FIRREA to pursue billions of dollars of mortgage fraud cases since the financial crisis. In these cases, financial firms defrauded the government by knowingly selling faulty mortgages while representing them as high quality. Without FIRREA, investigations would have stalled and taxpayers would have been left on the hook for even more losses. FIRREA powers were also instrumental in securing the historic $25 billion mortgage servicing settlement. As many of our colleagues know, there are still many more problems in the mortgage servicing industry, and eliminating this tool would encourage fraudulent practices by mortgage services that end up wrongfully kicking Americans out of their homes. I reserve the balance of my time.

Ms. MAXINE WATERS of California. Mr. Chair, I yield 3 minutes to the gentleman from Washington (Mr. Heck), a valued member of the Committee on Financial Services.

Ms. MAXINE WATERS of California. I yield an additional 1 minute to the gentleman.

Ms. MAXINE WATERS of California. Mr. Chairman and Members, I would simply like to point out that Mr. Mulvaney just continued in the vein that Mr. Luetkemeyer started out in, obscuring the real point of this bill. They are going to keep telling you it is all about Choke Point. What they are not going to talk about is taking away the Justice Department's ability to use FIRREA to go after these banks that are committing crimes. I don't want the Members to be misled. Ask them why they are refusing to talk about the main point of this bill. I yield 4 minutes to the gentleman from Minnesota (Mr. Ellison).

Ms. MAXINE WATERS of California

Ms. MAXINE WATERS of California. Mr. Chairman, I would like to thank Mr. Huizenga for addressing one of the many glaring problems with this bill. Title III of this bill significantly expands an exemption granted by the SEC to certain brokers but without providing the significant protections the SEC deemed important for small businesses or investors. This amendment would prevent people who have committed fraud and securities violations--individuals who couldn't sell used stock but who could sell your small business in the underlying bill--from claiming this exemption. However, why does the amendment limit the bad actor provision to just this title? Why not make it explicit that persons and companies that have committed fraud are not eligible to take advantage of any of the exemptions provided in this act? I also appreciate that the amendment prevents public shell companies from taking advantage of this title, which would otherwise allow private companies to circumvent important public company disclosure requirements. Mr. Chairman, I would like to know why the author completely ignores the other six investor protections in the SEC's no action relief. I am not aware of any witness before our committee who explained how these other investor protections were burdensome. Indeed, they seemed like commonsense protections. For example, the SEC required merger and acquisition brokers who represent both parties of the transaction to obtain the consent of both parties to that conflict of interest. Similarly, the SEC prohibited M&A brokers from engaging in private placements and arranging buyer financing because the narrow exemption from registration is intended for persons who fairly facilitate the merger of small businesses, not for the promoters who are compensated for their ability to hype up the value of the companies and attract new investment. If Republicans truly wanted to codify the SEC's administrative action to provide legal certainty for these brokers, then they should have accepted the Democratic amendment adding back in these protections. But that isn't the point of this bill, and this amendment is just a sleight of hand that all is well. Let me just mention here that registered broker-dealers are subject to a variety of regulatory requirements that nonbroker-dealer M&A advisers are not, including, without limitation, regarding antimoney laundering, privacy of customer information, supervisory reporting and recordkeeping requirements, inspections by the SEC and SRO, such as FINRA, supervision and regulation of employees' trading and outside business activities, insider trading, and regulations governing interactions between a broker-dealer's investment banking and research departments. H.R. 686 risks promoting lower standards and less rigor and regulatory oversight in the providing of this important advice. It is worthy to add that SIFMA is opposed to the amendment. I yield back the balance of my time.

Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I rise today in strong opposition to H.R. 1675. It is really a package of five bills which will harm investors and, perversely, the very small businesses Republicans say they want to help. It does so by ignoring and supplanting the good judgment of the Securities and Exchange Commission, which has already sought to provide small businesses with regulatory relief in these same areas while also ensuring that investors in those businesses have the protections they deserve. The SEC's balanced approach makes sense as investors who are not confident in the integrity of our markets will simply not invest, which means that job-creating companies will not have the capital they need to grow. In particular, this bill would reduce corporate transparency for employee stockholders by allowing private companies to compensate their employees with up to $10 million in stock every year without having to provide them with relatively simple disclosures about the financials of the company or the risk associated with these securities. Mr. Chairman and Members, I am not going to attempt to hide the facts of this bill with a lot of rhetoric. The fact of the matter is, if employees are being given stock up to $10 million that they don't know the value of, and the companies don't have to disclose anything about the stock, they could end up with worthless stock, not worth anything, where they had great expectations that somehow in lieu of raises and more money that they probably deserve, they are being given rotten stock. This provision would double the current disclosure threshold, allowing larger companies with at least $34 million in total assets to encourage overinvestment by employees in a company that they cannot value and that may never permit them to sell except back to the company at a price set by the company. That is another aspect of this. This type of deregulation invites more Enron-type fraud into the market. Remember Enron? I hope we have not forgotten it already and what happened to those employees. Sometimes you had two members of the family, the husband and the wife, who both had this bad stock that they couldn't sell back, they couldn't do anything with, where employees have to trust the accounting of their companies but instead are left with valueless stock. Similarly, this bill would exempt over 60 percent of public companies from using a computer-readable format known as XBRL in their SEC filings. Exempting such a large number of filers would prevent these companies from being easily compared to other companies that use XBRL, to the disadvantage of analysts, researchers and the SEC, investors, and even the companies themselves. Basically, what you are doing is saying, we are going to have a bill here that would prevent the kind of information that analysts and researchers, the SEC and investors should have, comparing them with other companies because somehow we want to protect those who don't want people to really know what their worth is. This is very serious stuff. According to the SEC's Investor Advocate, this exemption seriously impedes the ability of the SEC to bring disclosure into the 21st century. That is their quote. Title III of the bill further supplants the SEC's good judgment by significantly expanding the Commission's recently provided relief for certain mergers and acquisition brokers without imposing eight important investor protections granted by the SEC. As a result, bad actors who may have committed fraud and shell companies could use this relief and brokers wouldn't have to make basic disclosures about their conflict of interest. In committee markup, Democrats attempted to close these loopholes, but our efforts were rejected in a party-line vote. Can you imagine that the SEC has taken a big step, and they have listened to concerns, they have listened to complaints, and they have gone overboard to make sure that they were providing relief for certain kinds of mergers and acquisitions. What this bill would do is take away the ability of the SEC to have investor protections that they have already been granted. So again, this bill, which includes five bills all designed, basically, to disregard the investors, disregard the small-business people, disregard the average American citizen, is a bill that would simply go in the wrong direction, helping the corporations who would simply not want to disclose and not want to be seen for what they are. Title II also fails to sufficiently protect investors, as it eliminates offering liability for brokers who, under the guise of providing exchange-traded funds, or ETFs, could selectively use data to promote and sell highly risky, complex, and little-known ETFs to unsuspecting investors. Finally, the bill seeks to impose additional regulatory burdens on the SEC by requiring it to conduct a duplicative and more onerous retrospective review of its rules. Specifically, title V would require the SEC to, within 5 years of enactment, review and revise all of its rules, which I should mention date back to 1934. It would also allow the SEC to override congressional mandates, including those in the Dodd-Frank Wall Street reform bill. Republicans on the Financial Services Committee are always claiming that the SEC is unresponsive to Congress, yet this provision in the bill would allow the Commission to unilaterally repeal the will of Congress at their whim. Indeed, this title is a thinly veiled Republican attempt to impose cost-benefit type analyses on our regulators as a means of eliminating rules designed to benefit the public and protect investors. H.R. 1675 is an anti-investor bill that will reduce transparency, establish additional administrative burdens on the SEC, and create easily exploited loopholes for bad actors. It is well known that Members on the opposite side of the aisle do not like our ``cop on the block,'' which is the SEC. While they talk about what the SEC will, can, or will not do, they simply try and strangle it by being opposed to them having the adequate funding that they need in order to do their job. So, when we hear today, for example, as the chairman said, that he would be willing to support some funding for the SEC, it is very important that they put their money where their mouths are and make sure that the SEC has the money to do its job. In conclusion, this bill goes in the wrong direction. It is unfortunate that, at a time when we have gone through a recession based on 2008 and the unwillingness or the inability for our regulatory agencies to watch over our investors and to watch over our average small-business people and homeowners, et cetera, and while we are trying desperately to clean up this mess with Dodd-Frank reforms, we would come in here at this time, having experienced all of this, with a bill like this that would try and protect the worst actors in the financial services industry. I urge my colleagues to oppose H.R. 1675. Mr. Chairman, I reserve the balance of my time.

Ms. MAXINE WATERS of California. I yield 3 minutes to the gentlewoman from Ohio, (Mrs. Beatty), a member of the Financial Services Committee.

Ms. MAXINE WATERS of California. Mr. Chairman, I yield 3 minutes to the gentleman from Massachusetts (Mr. Lynch), the ranking member of the Task Force to Investigate Terrorism Financing on the Financial Services Committee.

Ms. MAXINE WATERS of California. I yield another 30 seconds to the gentleman.

Ms. MAXINE WATERS of California. Mr. Chairman, I yield 3 minutes to the gentlewoman from New York (Mrs. Carolyn B. Maloney), the ranking member of the Subcommittee on Capital Markets and Government Sponsored Enterprises of the Financial Services Committee.

Ms. MAXINE WATERS of California. I yield the gentlewoman an additional 1 minute.

Ms. MAXINE WATERS of California. Mr. Chairman, I yield 3 minutes to the gentlewoman from Illinois (Ms. Schakowsky), a true progressive champion.