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HFSC June Markup

House Financial Services Committee

Markup

Wednesday, June 23, 2021

Bills Considered 

Opening Statements
Chairwoman Maxine Waters (D-Calif.)
In her opening statement, Waters said she was pleased by the strong legislative solutions under consideration, saying they build on lessons learned during the pandemic. Waters said minority-owned businesses struggled to access Paycheck Protection Program (PPP) loans and emphasized that moving forward, she wants to ensure minority owned businesses have the support they need to reopen their doors. She criticized the charging of overdraft fees to consumers during the pandemic and said the proposed G-SIB Act will bring greater transparency and accountability in this space. Waters concluded by mentioning the stimulus payments for households issued during the pandemic, noting that many unbanked individuals struggled to receive their payments and expressed her support for the Municipal IDs Acceptance Act to help reduce this underserved population.

Ranking Member Patrick McHenry (R-N.C.)
In his opening statement, McHenry thanked members on both sides of the aisle for cooperating during the virtual hearings and markups. He criticized all four bills on the markup agenda, arguing they are not a result of bipartisan committee work and do not protect consumers. McHenry said there is no data on the Central Liquidity Facility’s (CLF) effectiveness and no need to make it permanent. He said municipal IDs do not need to be added to the customer identification program guidance as there is not a complete understanding of the impact it would have on Anti-Money Laundering and Bank Secrecy Act programs. McHenry expressed his displeasure with H.R. 3948, the G-SIB Act, arguing it is an attempt to name and shame banks, adding that it will not make them more accountable or help achieve greater financial inclusion. McHenry concluded that committee Republicans want more data on the Minority Business Development program before expanding it, as well as data on the effectiveness of the money in reaching minority communities.

H.R. 2689, the Minority Business Resiliency Act of 2021 the Minority Business Resiliency Act of 2021
Rep. Al Green (D-Texas) introduced his bill and his Amendment in the Nature of a Substitute (ANS) which would require the Minority Business Development Agency (MBDA) of the Department of Commerce to promote and administer programs in the public and private sectors to assist the development of minority business enterprises and ensure that MBDA has the necessary supporting resources, particularly during economic downturns. The bill would also increase the MBDA’s fiscal year budget. He noted that this bill will require an Assistant Secretary of Commerce to lead the MBDA, who would be Senate approved and charged with ensuring that the loans are properly used. Rep. Blaine Luetkemeyer (R-Mo.) agreed that the role of the MBDA is important but said he cannot support another grant program to small businesses as he is concerned about fraud and abuse, as well as the lack of success demonstrated in previous grant programs. Rep. Ann Wagner (R-Mo.) criticized the $100 million requested to fund the agency, arguing it requires further discussion as this would more than double the current annual appropriation. Wagner also said she wants an understanding of the effectiveness of the previously appropriated money before any additional appropriation. Rep. Warren Davidson (R-Ohio) said more federal money will not help prevent business failure. Reps. Joyce Beatty (D-Ohio), Alma Adams (D-N.C.), and Al Lawson (D-Fla.) spoke in favor of the bill to codify the MBDA, noting it helped raise one billion dollars in capital, created 11,000 jobs, and secured $7 billion in contracts. Waters also expressed her support and said this money is not nearly enough to make up for the wealth gap caused by systemic racism and the lack of ability for people of color to get government contracts.

The Amendment in the Nature of a Substitute was agreed to and the amended measure was reported favorably to the House by a vote of 28 – 23.

H.R. 3948, the Greater Supervision in Banking (G-SIB) Act
Rep. Ayanna Pressley (D-Mass.) introduced her bill and her Amendment in the Nature of a Substitute which would require each global systemically important bank holding company to issue an annual report to the Board containing a description of the activities of the company during the previous year and a description of the company’s objectives and goals for the following year. The bill would also mandate reporting in particular on employee misconduct, ethics complaints, and the use of forced arbitration. McHenry voiced his opposition to the bill, arguing it requires many unnecessary and non-material reporting requirements that ramp up the cost of being a bank. Rep. Andy Barr (R-Ky.) criticized the bill as an attempt to “name and shame” large financial institutions and require them to disclose non-material information. He added that the reporting in this bill is redundant and can already be found publicly. Barr noted that the requirement for banks to disclose their approach to cybersecurity could allow cybercriminals to use the public reports as a roadmap to understand their defenses and launch a more targeted attack. Pressley said this bill is intended to help consumers and the public, who have a right to know if G-SIBs are meeting their responsibility to address climate change, pay their workers livable wages, and promote financial sustainability. Waters also spoke in support of the bill.

The Amendment in the Nature of a Substitute was agreed to and the amended measure was reported favorably to the House by a vote of 28 – 22.

H.R. 3958, the Central Liquidity Facility Enhancement Act
Waters introduced her bill and her Amendment in the Nature of a Substitute which would amend the CARES Act to make certain enhancements to the Central Liquidity Facility permanent. Reps. Juan Vargas (D-Calif.), Ed Perlmutter (D-Colo.), Adams, Green, and Waters spoke in support of the measure. Adams said that it is time to take necessary action with this amendment to ensure protection for credit unions. Green cited external endorsements for this amendment from Todd Harper, Chairman, National Credit Union Administration, the National Association of Federally Insured Credit Unions, the Credit Union National Association, and both the California and Nevada Credit Unions. Waters said that another liquidity crisis is bound to happen and that this legislation will better prepare us in case of that event. Vargas emphasized that this amendment would ensure preparation for future crises and the current COVID-19 struggle. Perlmutter stated that the members who oppose the bill are asking the wrong questions, because the backstop is what has worked in the past, citing the success of the 2008 CLF law. Reps. Bryan Steil (R-Wis.), McHenry, Luetkemeyer, Davidson, Wagner, and Barr criticized the amendment and stated that there should be a bipartisan coordination on this measure because there has been only one hearing on the CLF. McHenry argued that this is an unnecessary piece of legislation as the U.S. economy has moved back to full employment. He stated that the CLF has issued zero loans since October and that there is no data to support this amendment. He also questioned the measure’s impact on providing greater leverage for taxpayer backstop, which is not provided in other legislation. Luetkemeyer stated that the CLF was “temporary and targeted” and is no longer necessary because credit unions are satisfied, adding that Congress should wait to craft legislation after fully hearing from the credit unions. Steil criticized the bill, stating that the U.S. has turned a corner with COVID-19 and that this legislation is no longer needed. Davidson stated his opposition to the bill and argued that the government should be putting money into the economy rather than into measures that are not currently in demand.

The Amendment in the Nature of a Substitute was agreed to and the amended measure was reported favorably to the House by a vote of 28 – 22.

H.R. 3968, the Municipal IDs Acceptance Act
Rep. Ritchie Torres (D-N.Y.) introduced his bill and his Amendment in the Nature of a Substitute, which would require financial regulators to update guidance on customer identification regulations with respect to the use of identification cards issued by a municipality. Torres stated that this bill will ensure that minority communities will have access to banking services. Reps. Sylvia Garcia (D-Texas), Adams, and Waters outlined their support. Garcia and Waters offered various examples, including New Haven and Los Angeles, where this ability to use a Municipal ID has helped the elderly, homeless individuals, and the youth. Davidson criticized the bill.

The Amendment in the Nature of a Substitute was agreed to and the amended measure was reported favorably to the House by a vote of 27 – 23.

For more information on this hearing, please click here.