[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
MEMBER DAY
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 9, 2023
__________
Printed for the use of the Committee on Financial Services
Serial No. 118-56
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
55-024 PDF WASHINGTON : 2024
HOUSE COMMITTEE ON FINANCIAL SERVICES
PATRICK McHENRY, North Carolina, Chairman
FRANK D. LUCAS, Oklahoma MAXINE WATERS, California, Ranking
PETE SESSIONS, Texas Member
BILL POSEY, Florida NYDIA M. VELAZQUEZ, New York
BLAINE LUETKEMEYER, Missouri BRAD SHERMAN, California
BILL HUIZENGA, Michigan GREGORY W. MEEKS, New York
ANN WAGNER, Missouri DAVID SCOTT, Georgia
ANDY BARR, Kentucky STEPHEN F. LYNCH, Massachusetts
ROGER WILLIAMS, Texas AL GREEN, Texas
FRENCH HILL, Arkansas, Vice EMANUEL CLEAVER, Missouri
Chairman JIM A. HIMES, Connecticut
TOM EMMER, Minnesota BILL FOSTER, Illinois
BARRY LOUDERMILK, Georgia JOYCE BEATTY, Ohio
ALEXANDER X. MOONEY, West Virginia JUAN VARGAS, California
WARREN DAVIDSON, Ohio JOSH GOTTHEIMER, New Jersey
JOHN ROSE, Tennessee VICENTE GONZALEZ, Texas
BRYAN STEIL, Wisconsin SEAN CASTEN, Illinois
WILLIAM TIMMONS, South Carolina AYANNA PRESSLEY, Massachusetts
RALPH NORMAN, South Carolina STEVEN HORSFORD, Nevada
DAN MEUSER, Pennsylvania RASHIDA TLAIB, Michigan
SCOTT FITZGERALD, Wisconsin RITCHIE TORRES, New York
ANDREW GARBARINO, New York SYLVIA GARCIA, Texas
YOUNG KIM, California NIKEMA WILLIAMS, Georgia
BYRON DONALDS, Florida WILEY NICKEL, North Carolina
MIKE FLOOD, Nebraska BRITTANY PETTERSEN, Colorado
MIKE LAWLER, New York
ZACH NUNN, Iowa
MONICA DE LA CRUZ, Texas
ERIN HOUCHIN, Indiana
ANDY OGLES, Tennessee
Matt Hoffmann, Staff Director
C O N T E N T S
----------
Page
Hearing held on:
November 9, 2023............................................. 1
Appendix:
November 9, 2023............................................. 27
WITNESSES
Thursday, November 9, 2023
Auchincloss, Hon. Jake, a Representative in Congress from the
State of Massachusetts......................................... 6
Beatty, Hon. Joyce, a Representative in Congress from the State
of Ohio........................................................ 12
Cleaver, Hon. Emanuel, a Representative in Congress from the
State of Missouri.............................................. 11
Garcia, Hon. Sylvia R., a Representative in Congress from the
State of Texas................................................. 14
Gonzalez, Hon. Vicente, a Representative in Congress from the
State of Texas................................................. 18
Green, Hon. Al, a Representative in Congress from the State of
Texas.......................................................... 10
Kilmer, Hon. Derek, a Representative in Congress from the State
of Washington.................................................. 4
Lamborn, Hon. Doug, a Representative in Congress from the State
of Colorado.................................................... 15
Pettersen, Hon. Brittany, a Representative in Congress from the
State of Colorado.............................................. 16
Rutherford, Hon. John H. a Representative in Congress from the
State of Florida............................................... 3
Sherman, Hon. Brad, a Representative in Congress from the State
of California.................................................. 21
Tlaib, Hon. Rashida, a Representative in Congress from the State
of Michigan.................................................... 23
Williams, Hon. Nikema, a Representative in Congress from the
State of Georgia............................................... 20
APPENDIX
Prepared statements:
Auchincloss, Hon. Jake....................................... 28
Beatty, Hon. Joyce........................................... 30
Cleaver, Hon. Emanuel........................................ 32
Cole, Hon. Tom............................................... 35
Garcia, Hon. Sylvia R........................................ 37
Gonzalez, Hon. Vicente....................................... 44
Green, Hon. Al............................................... 47
Kilmer, Hon. Derek........................................... 49
Lamborn, Hon. Doug........................................... 53
Pettersen, Hon. Brittany..................................... 55
Rutherford, Hon. John H...................................... 58
Sherman, Hon. Brad........................................... 61
Tlaib, Hon. Rashida.......................................... 67
Wexton, Hon. Jennifer........................................ 69
Williams, Hon. Nikema........................................ 71
MEMBER DAY
----------
Thursday, November 9, 2023
U.S. House of Representatives,
Committee on Financial Services,
Washington, D.C.
The committee met, pursuant to notice, at 9:04 a.m., in
room 2128, Rayburn House Office Building, Hon. Patrick McHenry
[chairman of the committee] presiding.
Members present: Representatives McHenry; Waters, Sherman,
Green, Cleaver, Beatty, Gonzalez, Tlaib, Garcia, Williams of
Georgia, and Pettersen.
Also present: Representatives Auchincloss, Kilmer, Lamborn,
and Rutherford.
Chairman McHenry. The Financial Services Committee will
come to order.
Without objection, the Chair is authorized to declare a
recess of the committee at any time.
Today's hearing is entitled, ``Member Day.'' We got
creative with the title.
And I would like to note that we will have three panels of
witnesses today to accommodate Members. We will receive
testimony from the first panel and conduct Q&A, and then we
will move on to our second panel, receive testimony from them,
and so on.
[Text of all of the bills referenced in this hearing can be
found on the committee website, http://
financialservices.house.gov/calendar]
I will now recognize myself for 5 minutes to give an
opening statement.
Good morning. I wanted to welcome all of you to the
Committee Member Day hearing for the 118th Congress. Today's
hearing is an opportunity for lawmakers across the House,
regardless of their committee assignment, to engage with
legislation that falls under our jurisdiction here at the
Financial Services Committee. We have a nice panel to start
off, with one former Member of the committee, Mr. Auchincloss,
but everybody has an opinion across the wide view of what we do
as legislators, and we want to hear from all Members about
their feedback.
In today's ever-evolving economic and geopolitical
landscape, the challenges that America faces are growing more
and more complex. In many instances, these challenges require
multidisciplinary solutions to ensure a robust legislative
response. With that in mind, we welcome the unique point of
view of Members from both sides of the aisle. Your work in
other fields will help to inform Members of this committee when
crafting legislation in response to the issues discussed here
today.
On October 7th, we saw a barbaric and unjustified attack on
innocent Israeli civilians perpetrated by the Iran-backed
terrorist group, Hamas. This has prompted Members from across
the Congress to consider ways in which the United States can
prevent Iranian financial aid from reaching its proxies.
Another foreign threat is in the form of the Chinese Communist
Party (CCP), and they have garnered attention from Members of
Congress. We must work to combat the CCP, which engages in
genocide, facilitates the flow of deadly fentanyl into our
communities, and seeks to outcompete and ultimately replace
American global preeminence.
Domestically, we have failed. Progressive economic policies
have threatened the financial security of families across the
nation and have driven up the cost of goods and services as
Americans race to keep pace amidst stagnating real wages. All
of this is against the backdrop of financial regulators who
have taken their eyes off the ball. Repeatedly, we have seen
Biden appointees overstep their mandates to institute
rulemakings that disregard congressional intent and weaken our
global competitiveness instead of focusing on the safety and
soundness of our financial institutions and our financial
system.
In conclusion, our nation faces many challenges, and this
committee is constantly looking for thoughtful ways to meet
them. As I have said since I became chairman, my door is always
open. Please come to me with any ideas and any feedback. I
can't promise we will always agree, but we will find common
ground wherever we possibly can, and I am committed to trying
to work together on every issue across-the-board.
We welcome the testimony of those appearing before the
committee today in service of these goals, and I thank them for
taking the time to be here with us to share their ideas.
And with that, I yield back, and I recognize the ranking
member of the committee, Ms. Waters, for 5 minutes.
Ms. Waters. Thank you very much, Mr. Chairman. I am pleased
to be here with you today, but I am reminded that we are 8 days
away from a government shutdown, and I and my colleagues on
this side of the aisle are trying desperately to find a path
toward ensuring that critical Federal agencies, like HUD and
the SEC, aren't completely shuttered, and that our hardworking
servicemembers and government employees get their paychecks,
and that during the crisis in the Middle East, we are able to
safeguard our interests and support our allies.
Let's start with housing. Today, nearly 600,000 people are
experiencing homelessness, and millions more are one crisis
away from eviction or foreclosure, all while rent and housing
prices continue to skyrocket. This is a crisis with no end in
sight. So this issue, along with many other issues that we are
dealing with, really have to be addressed in the best way that
we possibly can. And we are here today to hear from our
colleagues with, not questions, but advice in helping us to
understand what their concerns are and what they need to do for
their jurisdictions.
I mentioned, housing, and I would like to say that
Democrats are certainly taking the housing and homelessness
crisis very seriously, and when I was Chair, I held 55 hearings
on housing. Committee Democrats also worked to pass substantial
emergency housing funding during the pandemic. And as ranking
member, I have introduced several affordable housing bills,
including my Housing Crisis Response Act, which would finally
make the investments needed to build 1.4 million homes and help
homelessness and revive the dream of homeownership for all.
Now, on diversity and inclusion, after Republicans assumed
the Majority, we lost the Diversity and Inclusion Subcommittee
that I created. And as we have looked at the ways that the
budget has been handled by my friends on the opposite side of
the aisle, almost every area of government has been stripped of
any thought of diversity and inclusion, so I want you to know
that is a serious issue with which we must deal.
These are just a few of the key issues that have not been
addressed, and I look forward to hearing from all of my
colleagues today about these and other issues and legislation
that deserve to be addressed by this committee. I yield back.
Chairman McHenry. The ranking member yields back. We will
now recognize our distinguished first panel: the Honorable John
Rutherford of the State of Florida; the Honorable Derek Kilmer
of the State of Washington; and the Honorable Jake Auchincloss
of the State of Massachusetts. We thank each of you for being
here. Each of you will be recognized for 5 minutes to give an
oral summary of your presentation, and without objection, your
written statements will be made a part of the record.
Mr. Rutherford, we will begin with you.
STATEMENT OF THE HONORABLE JOHN H. RUTHERFORD, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF FLORIDA
Mr. Rutherford. Thank you, Mr. Chairman, and I thank
Ranking Member Waters and the other members of the----
Chairman McHenry. Mr. Rutherford, we will reset the time.
You have to pull the microphone pretty close to you. The
acoustics in here are terrible, and as a member of the
Appropriations Committee, I would flag that for your
consideration to improve the sound system, because it is
atrocious. I have long hated it, and I thank you for the
opportunity to vent a little bit.
So, Mr. Rutherford, we will begin with you again, but
please be sensitive to the terrible microphone.
Mr. Rutherford. Okay. Thank you again for this opportunity
to speak on my bill, H.R. 3170, the bipartisan, bicameral,
Homes for Every Local Protector, Educator, and Responder Act,
also known as the HELPER Act.
I can tell you that high home prices and high interest
rates have made homeownership almost out of reach for many of
our first responders and teachers around the country. The
HELPER Act would address this by creating a one-time use for a
home loan program through FHA for law enforcement officers,
firefighters, EMTs, paramedics, and pre-K through 12 teachers
who are first-time homebuyers only. Modeled after the
successful VA Home Loan Program, this bill would remove some of
the steepest financial obstacles that these public servants
face when trying to purchase a home, such as the large down
payment and the monthly mortgage insurance premium. The HELPER
Act also includes an up-front mortgage insurance premium to
ensure the solvency of this program, and a 5-year sunset so
that the program can be thoroughly evaluated.
Not only would the HELPER Act help these public servants
live in the communities where they serve, it would create a
much-needed recruitment and retention tool. I can tell you that
since the riots of 2020, retirements are up and recruiting is
down in the field of law enforcement, and that is a recipe for
disaster. As a former sheriff, I understand how important it is
for law enforcement officers to live in the communities that
they protect, and when our officers become part of the
community that they serve, morale goes up, safety improves, and
bonds between the community and the police are enhanced.
The HELPER Act has received the support of numerous
organizations, and I will read just a few: the Fraternal Order
of Police, the Major County Sheriffs of America, the Major
Cities Chiefs Association, the International Association of
Firefighters, the International Association of EMTs and
Paramedics, the American Federation of Teachers, the National
Association of Federally-Insured Credit Unions, and the
National Association of REALTORS. Additionally, the HELPER Act
has been endorsed by more than 130 elected officials around the
country, including 14 mayors just from the State of North
Carolina.
The HELPER Act has 97 bipartisan co-sponsors in the House,
and 13 in the Senate, where it is led by Senators Rubio,
Ossoff, and Brown. And I would like to extend a special thanks
to the 10 bipartisan members of this committee who have also
co-sponsored the bill already--I really do appreciate that--and
include Representative Watson Coleman, who is my primary co-
lead on this.
On behalf of the thousands of first responders and teachers
across this nation, I humbly ask for this committee's full and
fair consideration of the HELPER Act. I yield back.
[The prepared statement of Representative Rutherford can be
found on page 58 of the appendix.]
Chairman McHenry. The gentleman yields back. We will now
recognize Mr. Kilmer for 5 minutes.
STATEMENT OF THE HONORABLE DEREK KILMER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WASHINGTON
Mr. Kilmer. Thank you, Chairman McHenry and Ranking Member
Waters, for holding this hearing today. I am here to bring two
housing bills to your attention. As we find ourselves in the
midst of a housing affordability crisis, recent research
underscores the urgency of the situation. Residential
construction fell 7.3 million units short between 2000 and
2015. Research from Up For Growth, an organization committed to
solving the housing shortage and affordability crisis through
evidence-based policy, identified housing costs as the leading
factor contributing to the rise in household budgets over the
past 15 years.
There is not a single State, there is not a single
congressional district with enough housing supply to meet
demand, and that reality pushes dreams of homeownership out of
reach for far too many Americans, and we have to fix it.
Addressing the nation's housing crisis is a complex challenge,
but experts agree that restrictive zoning and land use policies
are part of the problem, and as a result, Representative Flood
and I introduced the bipartisan, bicameral, Yes In My Backyard
Act (YIMBY Act), which has been referred to your committee.
The YIMBY Act ensures Community Development Block Grant
(CDBG) Program recipients report on policies that may affect
housing affordability. Specifically, the bill would require
recipients of CDBG funding to track and report on the
implementation of certain land use policies that promote
housing production, such as enacting high-density, single-
family and multi-family zoning; addressing height limitations;
and encouraging and reducing minimum lot size. Recognizing that
CDBG funds are critical for localities, the bill seeks to
encourage local governments and CDBG practitioners to work
together to address severe housing underproduction and to
improve the lives of families and individuals who are
negatively impacted by a lack of affordable housing.
We count many of your committee members among our
bipartisan co-sponsors. Dozens of groups from across the
political spectrum are with us on this bill, too, from
Americans for Prosperity, to the National Apartment
Association, to the National Association of REALTORS, and the
National Low Income Housing Coalition, and more. This bill
passed under suspension in the 116th Congress, and we want to
work with you to see it over the finish line in this Congress.
The second bill I want to bring to your attention is called
the VALID Act. It, too, is bipartisan and bicameral, and it
focuses on housing affordability specifically for our nation's
veterans. My district is home to a large number of active-duty
servicemembers and veterans, and we all know that our nation is
stronger and our world is safer, as we approach Veterans Day,
because of their service and their sacrifice. One important way
we can honor their sacrifice is by ensuring those who served
can achieve their dream of one day owning a home.
VA home loans can offer veterans, active-duty
servicemembers, reservists, and National Guard members
advantages over other loan options, including lower down
payments, more favorable interest rates, and low closing costs,
often saving tens of thousands of dollars over the life of the
loan. Despite these benefits, overall usage of VA home loans is
surprisingly low, with only 10 to 15 percent of veterans
annually reported as using the benefit. Providing a simple
update to the U.S. Department of Housing and Urban
Development's already-existing Informed Consumer Choice
Disclosure Notice will help close that loop and ensure veterans
and servicemembers are aware of their hard-earned VA loan
benefit. Specifically, the bill will add VA home loans to the
current disclosure form that lenders must provide to
prospective homebuyers, which right now only compares
conventional and FHA loan options.
Like the YIMBY Act, several members of your committee have
co-sponsored this bill, and it is supported by stakeholder
organizations, including the Veterans Association of Real
Estate Professionals, Veterans United Home Loans, the Military
Officers Association of America, the National Association of
REALTORS, and the Veterans of Foreign Wars.
Mr. Chairman, thank you again for your time and your
leadership on these issues. I look forward to working with you
to hopefully move these critical pieces of legislation forward.
I yield back.
[The prepared statement of Representative Kilmer can be
found on page 49 of the appendix.
Chairman McHenry. Thank you, Mr. Kilmer.
Mr. Kilmer. Thank you.
Chairman McHenry. And we will now recognize Mr. Auchincloss
for 5 minutes.
STATEMENT OF THE HONORABLE JAKE AUCHINCLOSS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF MASSACHUSETTS
Mr. Auchincloss. I appreciate Chairman McHenry and Ranking
Member Waters for holding a Member Day hearing in the Financial
Services Committee. I would like to take this opportunity to
talk about two of the bills I have introduced this Congress
over which the Financial Services Committee has jurisdiction:
the Power of the Mint Act; and the Promoting New and Diverse
Depository Institutions Act.
Article I, Section 8 of the Constitution states that
Congress has the power to, ``coin money, regulate the value
thereof and of foreign coin, and fix the standard of weights
and measures.'' This constitutional mandate extends to
authorizing both retail and wholesale central bank digital
currencies (CBDCs). While the Federal Reserve has recognized
that it lacks the authority to issue a CBDC without
congressional authorization, the Department of Justice has so
far refused to issue a legal opinion to that effect. It is
therefore imperative that Congress assert our constitutional
prerogative.
The U.S. dollar has been the world's reserve currency since
the end of World War II. The rule of law is critical for the
United States dollar to continue in this status. Issuing a CBDC
without congressional assent would undermine the rule of law
and, thus, the United States' geoeconomic standing, more than
any purported and unproven benefits of a CBDC would enhance it.
The Power of the Mint Act does not prohibit the Federal
Reserve or the Department of the Treasury from conducting
research and development or being involved in international
consultations on standard setting regarding CBDCs. It simply
asserts Congress' constitutional duty to authorize the minting
of money. Representative Hill has been a capable co-lead and
partner on this bill. I am grateful for his collaboration, and
I hope to work with the committee to move this bill forward.
Our economy has not always worked for all communities
equally, as is evident in the glaring wealth disparities across
the country. One way to address inequities is to ensure
Americans have access to diverse and affordable financial
services that can help them save money and help small
businesses raise capital. I introduced the Promoting New and
Diverse Depository Institutions Act to move our financial
system closer to economic equality. This bipartisan bill
requires that the prudential regulators come up with a
strategic plan to help reduce the barriers that new depository
institutions face when applying for a bank charter. This bill
specifically calls for the strategic plan to take into
consideration the challenges faced by de novo financial
institutions, including minority depository institutions
(MDIs), and community development financial institutions
(CDFIs).
Consumers should have access to affordable banking
services, which requires competition in the market. Over the
last several decades, there has been consolidation among banks
and credit unions. This has effectively limited the products
available to consumers and artificially driven up costs while
closing banking branches for people who already did not have
many choices. My bill will help new banks, and in doing so, it
will expand access to affordable services for unbanked
communities.
Starting and maintaining a new bank or credit union is a
difficult process. According to the Federal Reserve, only 7 new
banks were formed between 2009 and 2013. Based on the
decreasing number of new banks, Congress must act to direct
banking regulators to measure and mitigate the challenges new
banks face. This study will inform future steps that Congress
can take to expand competition and access for consumers. I am
pleased to have Chairman McHenry as a co-sponsor of this bill.
The bill passed the House twice last Congress. There is a
bipartisan Senate companion, and I ask this committee to
expeditiously move this bill so that we can help unbanked
communities and expand banking access to our constituents.
And finally, I want to call this committee's continued
attention to, and add my emphasis to. the need to expand the
Low-Income Housing Tax Credit (LIHTC) program. This has been a
bipartisan success over the last decades. In my home State of
Massachusetts, the lack of affordable housing is the single
biggest problem that we face. It is suffocating the ability of
our economy to reach its full potential, it is preventing young
families from gaining a foothold, and it is causing panic
amongst our senior population. The Affordable Housing Credit
Improvement Act would expand the LIHTC program in a measured
and thoughtful way, and I would encourage legislators of this
committee to give it serious consideration.
I thank the chairman and the ranking member for the
opportunity to testify and respectfully urge the committee to
support and advance the Power of the Mint Act and the Promoting
New and Diverse Depository Institutions Act. Thank you.
[The prepared statement of Representative Auchincloss can
be found on page 28 of the appendix.]
Chairman McHenry. Thank you. I will now recognize myself
for 5 minutes.
I want to thank this bipartisan panel for all proposing
bipartisan solutions. It is a welcome acknowledgment of the
situation we find ourselves in, in a divided government, which
means we have to work together to achieve legislative results,
but particularly with policy. To have enduring policy, we have
to have policy that meets some metrics for both parties and has
a wide cross-section of Congress that can support those
initiatives. So, I want to thank each of you for bringing
proposals that are squarely within the Financial Services
Committee's jurisdiction and are things we should address.
Housing affordability is clearly one, and that is a running
theme from all three of the Members testifying today, and I
want to thank you for that emphasis and focus. And, Mr.
Auchincloss, I want to thank you for your work on de novo
institutions. It is a work of financial inclusion that is much
needed, whether it is in Massachusetts or North Carolina or
wherever you may be in the United States, so thank you for your
leadership there.
And with that, I yield back and now recognize the ranking
member for 5 minutes.
Ms. Waters. Thank you so very much, Mr. Chairman, and I
would like to thank all of our witnesses, our colleagues who
are here this morning indicating what they care about and the
kind of work that they are doing. I am very appreciative for
that.
But, Mr. Rutherford, I would like to ask you a little bit
about your bill, the HELPER Act. As I understand it, it would
provide mortgage assistance to firefighters, police officers,
and teachers. I appreciate the effort to expand access to
affordable homeownership, and I certainly appreciate the public
service of people who take on these professions. They deserve a
chance at the American Dream of homeownership. But, Mr.
Rutherford, I don't believe that people in these specific
professions are the only ones who deserve that chance. I
believe, for example, that nurses, first responders, childcare
workers, elder care professionals, construction workers, social
workers, and any other person who works hard every day to
achieve their dream of homeownership deserves that balance.
Data from the U.S. Bureau of Labor Statistics shows that
the individuals assisted by your bill are in occupations that
are overwhelmingly more White, and more male than the overall
national workforce. For example, 85.5 percent of firefighters
are White, and nearly 94 percent are male. That is not
representative of America, let alone the workforce.
When the U.S. first created a Federal program to help
expand access to homeownership through low-down payment
mortgages, the government actively discriminated against people
of color, helping to create redlined neighborhoods and
segregated living patterns that are still visible in many
communities today. These policies helped create the racial
wealth and homeownership gaps. The Black homeownership rate
today sits at 42.7 percent, compared to 47.8 percent for Latinx
households, and 73.4 percent for White households. This is the
largest Black-White homeownership gap since 1890, with the
Latinx-White homeownership gap not far behind, at more than 25
percentage points.
Mr. Rutherford, can you please explain why you chose these
specific professions and whether you would be open to expanding
the people who qualify for mortgage assistance under your bill?
Under the Republican budget, 30 percent has been cut from
housing. Can you add some more people to your bill?
Mr. Rutherford. I thank the ranking member for the
question. One of the things that we focused on in this group
was those who actually serve their community, and as a result
of that, as I mentioned, need to live in the community that
they actually serve. And, in fact, one of the demographics that
you were talking about--I was a sheriff for 12 years in
Jacksonville, and one of the things that I always wanted to
achieve was for my agency to represent the community that I was
protecting, and it was programs like this that would allow me
to do that because those same individuals who need that
assistance to buy their first home and remain in the community
are some of our most-challenged populations.
And so, I would propose to you that this program will
actually help minority recruitment by keeping people in the
community that they serve and making it available for those
individuals. This was not drafted as a demographic effort, I
will tell you up front, but I can tell you this: It was based
on their service. Recruitment in every community is down
significantly. Retirements are up significantly. Already this
year, we have had a 22-percent increase in the number of police
officers who are shot, and not just shot, and this is the part
that concerns me the most: We have lost 109 officers in 92
ambush-style attacks already this year. They are being
targeted.
This is just one way for us to really help make the
agencies, and not just police officers, but also firefighters
and others, make them look like the community that they
protect. This program will actually help that. I yield back.
Chairman McHenry. The gentlelady's time has expired. Do any
other Members seek recognition?
[No response.]
Chairman McHenry. If not, we would like to thank the panel
for coming to appear before the committee, and it's awkward to
tell my colleagues that you are dismissed, but you are
dismissed. We will now move to the second panel, so we will
take a pause here while the panel resets. Thank you all.
[Pause.]
Ms. Waters. We are going to add him.
Chairman McHenry. If the witnesses can accommodate one more
panelist. We are trying to accommodate everyone as best we can
before votes.
Today, we welcome the testimony of a number of our
committee members and one off-committee member who was
originally going to be on the first panel. Please don't try to
embarrass him with your knowledge about the jurisdiction; I am
joking or at least attempting to joke on this Thursday morning.
We will now recognize the Honorable Al Green from the State
of Texas; the Honorable Emanuel Cleaver from the State of
Missouri; the Honorable Joyce Beatty from the State of Ohio;
the Honorable Sylvia Garcia from the State of Texas; the
Honorable Doug Lamborn from the State of Colorado; and the
Honorable Brittany Pettersen from the State of Colorado.
We thank each of you for taking the time to be here. Each
of you will be recognized for 5 minutes to give an oral
presentation of your remarks. You all know the terrible
acoustics of these microphones, so I appreciate you all being
put through the pain that we put our panelists and our
witnesses through. So with that, we will recognize you for 5
minutes. We will begin with you, Mr. Green.
STATEMENT OF THE HONORABLE AL GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Green. Thank you very much to the ranking member and
the Speaker Pro Tempore. I greatly appreciate this opportunity
to speak.
I rise to speak on: H.R. 1244, the original legislation
awarding a historic Congressional Gold Medal, collectively, to
Africans and their descendants enslaved within our country from
August 20, 1619, to December 6, 1865; H.R. 5490, the Reforming
Disaster Recovery Act; H.R. 5223, the Original Open for
Business Act of 2023; H.R. 4204, the Shielding Community Banks
from Systemic Risk Assessments Act; H.R. 4116, the Systemic
Risk Authority Transparency Act; H.R. 2465, the Financial
Compensation for CFPB Whistleblowers Act; and H.R. 166, the
Fair lending for All Act. And finally, I will make comments on
the Consumer Financial Protection Bureau (CFPB).
H.R. 1244 would award a Congressional Gold Medal to the
foundational mothers and fathers of this country. In 1956, the
Congress of the United States of America, in its infinite
wisdom, awarded a Congressional Gold Medal to Confederate
soldiers. I think it is time for us to recognize the economic
foundational mothers and fathers of the country whose lives
were sacrificed to make America great.
H.R. 5490 would codify into law the fundamental
requirements and the objectives of the Community Development
Block Grant Disaster Recovery Program (CDBG-DR). It would
ensure timely and efficient distribution of relief funds.
H.R. 5223 would mandate in-person bank branch offices to
remain open until 7:00 p.m., one day a week, and for 4 hours on
Saturdays.
H.R. 4204 would exempt community banks from any special
assessment of the Federal depository institutions, and it would
also do so as a result of some of the incidents of which we are
all well aware.
H.R. 4116 would require financial regulators to issue a
report following the use of the systemic risk authority.
H.R. 2465 would require the Consumer Financial Protection
Bureau to provide awards to whistleblowers who come forward
with evidence of wrongdoing, and H.R. 166 would create an
Office of Fair Lending Testing within the Consumer Financial
Protection Bureau to expose invidious discrimination and hold
predatory financial institutions and individuals accountable.
Finally, moving to the Consumer Protection Bureau, dear
friends, the CFPB's success can be measured, and the numbers
speak for themselves. The CFPB is one of the most effective and
popular agencies within our government; 4 out of 5 Americans,
including 77 percent of Republicans, support the CFPB. The CFPB
has obtained $19 billion for consumers in the form of relief,
and this is for 195,000,000 people. Four million consumer
complaints have been filed with the CFPB, and 98 percent of
those have received a timely response from their financial
company. If we did not have the CFPB, we would surely want to
create it. Our desire would be there, but sadly, I am not sure
that it could be accomplished at this time. So I invite all to
please, let's do what we can to protect the CFPB.
Finally, returning to the Congressional Gold Medal for the
enslaved people, 249-plus years of lives sacrificed should
merit some consideration from this Congress. It is my belief
that these economic foundational mothers and fathers are the
persons who can be said to have laid the foundation that we all
happen to stand upon today when it comes to the economy, the
economic order, and the stability of this country. So, I am
hopeful that we will be able to secure the 290 votes, two-
thirds needed, and that we will be able to present something to
this committee so that we may present to the economic
foundational mothers and fathers whose lives were sacrificed
over 240 years to make America great, to present them with a
Congressional Gold Medal. I thank you for the time, and I yield
back.
[The prepared statement of Representative Green can be
found on page 47 of the appendix.]
Chairman McHenry. The gentleman yields back. We will now
recognize Mr. Cleaver for 5 minutes.
STATEMENT OF THE HONORABLE EMANUEL CLEAVER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MISSOURI
Mr. Cleaver. Thank you, Mr. Chairman. I thank you and the
ranking member for presenting us with this opportunity to share
our views on things that we would like to bring before the
committee.
As you know, I represent Missouri's 5th Congressional
District, which includes Kansas City, Missouri, the State's
largest municipality. I also serve as the ranking member of our
Subcommittee on Housing and Insurance.
It shouldn't be news to anyone that we are in a housing
crisis. Demand for housing is far outpacing supply. As a
result, millions of Americans in urban, suburban, and rural
neighborhoods are finding shelter to be increasingly
unaffordable. Prospective homebuyers are facing record-high
home prices, and millions of renters are cost-burdened and
spending soaring amounts of their income on housing.
Project-based Section 8 rental and the Section 8 Housing
Choice Voucher Programs remain critical tools to support
renters with the lowest income and reduce housing instability.
Cuts to these programs and many others would exacerbate
affordable housing challenges for low-income families
throughout the nation. I have a number of bills that address
this nation's affordable housing crisis, as does our ranking
member, Maxine Waters. I would like to highlight two.
The first piece of legislation is the Choice in Affordable
Housing Act. HUD's Housing Choice Voucher Program is the
Federal Government's major program for supporting affordable,
safe, and sanitary housing for the elderly, the disabled, and
very low-income families in the private market. The success of
the program depends on the participation of private-market
housing owners, but landlord participation has markedly
decreased since 2009. At times, we have seen in excess of
10,000 landlords exiting the program annually. My bill, co-led
by Congresswoman Chavez-DeRemer, would remove bureaucratic
barriers and incentivize greater landlord participation. This
bill has significant agreement and support from both industry
and advocates.
The second piece of legislation is the Strategy and
Investment in Rural Housing Preservation Act. We are now in the
discussion phase. The U.S. Department of Agriculture (USDA)
supports investments in affordable rural housing by providing
Sections 515 and 514 direct loans to developers to build or
rehabilitate rental housing for low-income families. When these
loans mature, property owners are no longer required to offer
affordable units, and tenants are no longer eligible for USDA's
rental assistance.
Combined with the lack of new investment, the looming wave
of maturing loans threatens the stability of hundreds of
thousands of families. These families have an average household
income of $13,000, and a large percentage of these families
have members who are elderly or disabled, meaning this
assistance is vital to them staying in their homes. My
legislation would require the USDA to implement a program for
the preservation and revitalization of such housing projects
financed with USDA loans. This legislation has previously
passed through this committee on a bipartisan basis. I have
also included additional legislation with this statement.
The Good Documentation and Enforcement of Estate Deeds Act
(Good DEED Act), which directs the Secretary of Housing and
Urban Development, is something that is very serious, and I
appreciate working with Congresswoman Nikema Williams. As many
of you know, people are stealing other people's homes just
about every hour of the day, and many of them won't even report
it because they are embarrassed. We will also be providing a
statement to all of you so that we can continue to discuss this
issue.
It is my hope that this committee prioritizes advancing
serious bipartisan legislation addressing the affordable
housing crisis in this Congress. Thank you very much for the
opportunity to share.
[The prepared statement of Representative Cleaver can be
found on page 32 of the appendix.]
Chairman McHenry. Thank you, Mr. Cleaver. Mrs. Beatty is
now recognized for 5 minutes.
STATEMENT OF THE HONORABLE JOYCE BEATTY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mrs. Beatty. Good morning, Chairman McHenry and Ranking
Member Waters. Thank you for hosting this Member Day hearing. I
am testifying today about the importance of diversity and
inclusion in our financial system and the need for this matter
to be seriously considered by the committee.
As you know, two Congresses ago, then-Chairwoman Maxine
Waters made history by establishing the first-ever Subcommittee
on Diversity and Inclusion (D&I). I had the honor to serve as
the first ever-Chair, and my good friend, Congresswoman Ann
Wagner, served as the first-ever ranking member. For the first
time, Congress conducted oversight of D&I in the financial
industry and held firms accountable for their D&I practices. No
surprise, we discovered rampant disparity. We received data
from 44 of the largest banks with more than $50 billion in
assets, 31 of the largest investment firms with more than $400
billion in assets, and the 27 largest insurance companies with
direct premiums of more than $7 billion. The data we collected
revealed a staggering lack of workforce and supplier diversity
across the industry.
On average, less than 20 percent of executive leaders at
the largest banks were people of color. Women comprised less
than one-third of corporate boards at the largest investment
firms. On average, insurance companies spent less than 3
percent on diversity suppliers. We also uncovered the stark
inequality prevalent in asset management. Of the $82 trillion
in assets under management, only 1.4 percent are managed by
minority- or women-owned firms. Overall, we found that women-
and minority-owned businesses face clear barriers to market
industry, limited access to capital, and persistent
discrimination.
Through public hearings and published reports, the D&I
Subcommittee pushed the industry to do more, and we actually
moved the needle towards this progress. You have heard today
from Members on all panels that they have introduced bills on
D&I, including my two bills, H.R. 2123, and H.R. 7795. I would
like to enter into the record quotes made by my Republican
colleagues acknowledging the importance of D&I.
Chairman McHenry. Without objection, it is so ordered.
Mrs. Beatty. Despite our gains, we realize that our work is
not done. I was extremely disappointed, Mr. Chairman, when the
Chair chose to eliminate the D&I Subcommittee this Congress. On
February 1, 2023, at this committee's organizational meeting,
Chair McHenry said on the record that diversity and inclusion
policies would be under the jurisdiction of every subcommittee.
At the same meeting, Congresswoman Wagner said she wanted to
work together to make sure the issue is addressed. Despite
these promises, nearly a full year into this Congress, we have
held 55 hearings and not one dedicated to D&I.
To this day, the jurisdiction has blatantly ignored this
problem. Economic inequality continues to pervade this country.
Women still earn only 83 cents for every dollar earned by a
man. Minorities, and especially Black Americans, consistently
experience higher rates of unemployment and poverty compared to
White people. Many groups continue to face high barriers to
full participation in our financial system. To make matters
worse, D&I practices are under attack. Virtually every
Republican-led Fiscal Year 2024 appropriations bill prohibits
funds from being used to promote diversity and inclusion
initiatives.
We are seeing what appears to be a coordinated strategy to
systematically undo each and every gain achieved over recent
years. Whether it is on college campuses, universities, or at
corporations or government agencies, like the Small Business
Administration (SBA) and minority business development
agencies, D&I is definitely under attack. We have the data, we
have the need, and we have moved the needle. Mr. Chairman, I
come here today to ask that this committee hold hearings
dedicated to D&I. Thank you for your time, and I yield back.
[The prepared statement of Representative Beatty can be
found on page 30 of the appendix.]
Chairman McHenry. The gentlelady yields back. We will now
recognize Ms. Garcia for 5 minutes. We will pause the time, and
reset the time, Ms. Garcia.
Ms. Garcia. Partisan effort now.
[laughter]
Chairman McHenry. Yes.
Ms. Garcia. Thank you.
Chairman McHenry. We need electronic voting in committee.
Ms. Garcia. It says green----
Chairman McHenry. I know Ms. Waters started that process
pre-COVID. We need to make that happen, and we need to get
microphones so we all can just basically hear.
Ms. Garcia. Okay.
Chairman McHenry. So, I am sorry, Ms. Garcia.
Ms. Garcia. It's okay. Thank you.
Chairman McHenry. Thank you.
STATEMENT OF THE HONORABLE SYLVIA R. GARCIA, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Ms. Garcia. Thank you again, Mr. Chairman and Ranking
Member Waters, for hosting this Member Day. As I have mentioned
many times before in this committee, I represent a district
that is 77-percent Latino and over 90 percent people of color.
My district, like our great nation, is racially, ethnically,
and linguistically diverse. I urge the committee's immediate
consideration and support for my bills: the Community Finance
Language Inclusion Act, H.R. 2834; and the Multilingual
Financial Literacy Act, H.R. 2835.
H.R. 2834 would allow the Community Development Financial
Institution Fund to provide resources and outreach materials in
additional language other than English. This Act would direct
the Financial Literacy and Education Commission to study the
impact of language barriers on financial health. The bill would
also require the Commission to promote efforts of Federal
agencies to make financial literacy resources available in at
least eight of the most-spoken languages in the United States.
Combined, these bills would support over 65 million people
nationwide who speak a language other than English at home, and
more than 26 million individuals who have limited English
proficiency.
This is one of the many ways Congress can act to improve
the economic status of diverse communities like many in my
district. Ensuring everyone in the United States can thrive
financially is not only the right thing to do, but it is also
the smart thing to do for a country which has about 380 spoken
languages.
I also encourage this committee to consider Representative
Payne's bipartisan Payment Choice Act. The Payment Choice Act
would guarantee that every consumer has a choice to pay for
goods and services in cash. As I have always said, cash is
king. Cash is simple and common. This is not a partisan issue.
It is an American issue to protect American currency, and I
encourage all Members to support Mr. Payne's bill, and that we
consider this bill in committee.
Furthermore, as the first Hispanic member of the Houston
congressional delegation, and one of the first two Latinas to
represent Texas, I urge the committee to focus on making sure
that we have diverse witnesses. Mrs. Beatty has already
mentioned diversity and inclusion as a topic. I would urge this
committee to consider diversity and inclusion, beginning with
our committee witnesses. Diversity among the witnesses
presented before the committee is critical to better
representation, and safeguards against implicit bias and
artificial barriers.
Finally, as co-Chair of the Congressional Homelessness
Caucus, I would like to draw the attention of the committee
again to the nation's housing crisis. As many of our colleagues
have said before me, soaring housing prices have a critical
impact on the shortage of housing across America. The lack of
housing units is impacting the most-vulnerable lowest-income
individuals, leading to more homelessness. In 2022, a total of
582,462 individuals experienced homelessness on any given
night, and homelessness has been on the rise since 2017,
experiencing an overall increase of 6 percent.
It is November, and this committee has yet to hold one
hearing on affordable housing. And as mentioned by Mrs. Beatty,
we have had 55 hearings. We must do more, and we must do
better. Allowing Americans to live in the streets is not a
standard that our nation should be willing to accept. It is un-
American and it is un-Christian, and it is certainly
unacceptable.
Once again, I urge consideration of all of these topics,
these bills, and I am happy to answer any questions that you
may have today. Thank you, and I yield back.
[The prepared statement of Representative Garcia can be
found on page 37 of the appendix.]
Chairman McHenry. The gentlelady yields back. We will now
recognize Mr. Lamborn of Colorado.
STATEMENT OF THE HONORABLE DOUG LAMBORN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Mr. Lamborn. Thank you, Mr. Chairman, and Ranking Member
Waters, for having this Member Day hearing and for yielding me
time to discuss a timely and important bill which was referred
to this committee. I am here to talk about the bipartisan
Taylor Force Martyr Payment Prevention Act.
Taylor Force was a U.S. army artillery officer, West Point
graduate, and Vanderbilt University graduate student, and he
served two tours in Afghanistan where he was killed by a Hamas-
affiliated terrorist in 2016. The terrorist killed Mr. Force
and wounded 10 other civilians before being fatally shot by
Israeli police. Following the attack, the Palestinian Authority
made a martyr payment to the family of the terrorist. The
Palestinian Authority maintains a Martyrs Fund, which pays out
$300 million annually in monetary rewards to the families of
killed or incarcerated terrorists. The payments go up when more
Jews are killed in the attack. Numerous Palestinian and Middle
Eastern banks facilitate or support martyr payments,
perpetuating the system which incentivizes attacks on U.S. and
Israeli citizens.
To counter these pay-to-slay programs, in 2018, I
introduced the bipartisan Taylor Force Act, which was signed
into law by President Trump. The Taylor Force Act aimed to
eliminate the martyr payment system and force the Palestinian
Authority to stop incentivizing the killing of Americans and
Israelis. My bill severely restricted the ability of the
Palestinian Authority to access U.S. non-humanitarian aid.
Regrettably, the Martyr Payment system has continued, due
in large part to Middle Eastern financial institutions refusing
to block these transactions. These banks, often in nominally-
friendly jurisdictions, purposefully evade U.S. anti-terrorist
sanctions and continue to knowingly provide banking services to
Hamas and others. These services are often in U.S. dollar-
denominated transactions for terrorist organizations that
intentionally target Americans. Such financial conduct is only
possible through the use of correspondent accounts within U.S.
banks.
It is because of this that I introduced the bipartisan
Taylor Force Martyr Payment Prevention Act, which is before the
committee. The bill would expand the institutional factors the
Department of the Treasury must consider when determining if a
foreign financial institution is of primary money laundering
concern and subject them to the prohibition of maintaining and
opening accounts in U.S. financial institutions. Financial
institutions are not permitted to knowingly provide services to
Hamas, and this bill would make it harder to skirt the anti-
terrorism laws which prevent banks from working with Hamas to
move money to terrorists and their families.
Blocking terrorists from accessing financial tools has
always been an important issue, but recent atrocities carried
out by Hamas against Israel in their recent invasion on October
7th have brought the need for my bill back into the spotlight.
Congress must act to stop the flow of funding to Hamas. We must
act to drive Hamas out of the banking system completely.
Mr. Chairman, and other members of this committee, it is
clear that stopping martyr payments is as important to you as
it is to me. I want to thank your committee staff who have
cooperated with my office as we have worked to move this bill
and get feedback from stakeholders such as the Treasury's
Financial Crimes Enforcement Network (FinCEN). Thank you for
the opportunity to speak with you all, and I yield back.
[The prepared statement of Representative Lamborn can be
found on page 53 of the appendix.]
Chairman McHenry. The gentleman yields back. We will now
recognize Ms. Pettersen for 5 minutes.
STATEMENT OF THE HONORABLE BRITTANY PETTERSEN, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF COLORADO
Ms. Pettersen. Thank you, Mr. Chairman, and Ranking Member
Waters, for allowing me this opportunity to speak to our
committee and highlight some of the areas that I hope that we
are able to work on together. I want to thank you both for
running a professional committee where we actually come
together to find common ground and work on policies that will
positively impact the American people.
I am here to talk about an issue that continues to be
greatly impactful in Colorado to our economy and our small
businesses. It is the Secure and Fair Enforcement Banking Act
(SAFE). You all know that this is a bipartisan piece of
legislation that was spearheaded by my predecessor and friend,
Congressman Ed Perlmutter, and it previously passed the House
of Representatives 7 times since 2019.
Eleven years ago, Colorado became the first State to
legalize marijuana, and as the cannabis industry took off,
these businesses ran into significant challenges in accessing
basic and critical banking services. Because of existing law
related to marijuana and cannabis, many financial institutions
are unable to provide banking and financial services to these
cannabis-based businesses. Even worse, concerns about Federal
regulations tie up more than just marijuana growers and
retailers. Instead, suppliers, vendors, landlords, and
employees who have been even indirectly tied to the cannabis
industry see their access to the banking sector at risk, and
this poses numerous concerns for our community. It also puts
people in an unsafe position when they are utilizing cash
instead of using the banking services. I hope that this
committee is once again going to take up this very important
piece of legislation.
Another thing that is a big priority for me, and I know
that we have already done a lot of work on this issue, is
addressing the fentanyl crisis. One of the pieces that we still
have yet to work together on, and I look forward to the
opportunity, is looking at how our social media companies are
playing a role in disseminating and, unfortunately, selling
fentanyl. This is impacting our young people at a very high
rate, and it is past time that social media companies actually
have to come to the table and be held accountable for the use
of their platforms in illicit trafficking.
I also want to highlight key areas that I think we have the
opportunity to focus on with housing and insurance. We all talk
often about the housing crisis. We have a limited supply, and
we need to all work together. It is an all-hands-on-deck moment
to ensure that everybody across our communities has the
opportunity to provide shelter, a roof over their heads for
themselves and their families.
Colorado has been impacted by this at a very high rate. We
have many people who have been moving to Colorado for the last
10 years, and it significantly increased during the pandemic,
especially for places in rural Colorado and in my community.
People have seen the cost of housing increase threefold in just
a couple of years and are getting pushed out of the communities
that they have lived in their entire lives. So, I look forward
to working with this committee to provide the financial
incentives needed for developers to build the types of
attainable housing that our communities desperately need.
I also encourage our committee to look at and explore
legislation modernizing the FHA loan limits, exploring the
impact that restrictionary zoning practices are having on our
housing prices, and ensuring that Federal grant programs
through HUD, FHFA, and FHA work with rural mountain communities
like the ones in my community. Another big barrier that we are
facing in Colorado, and this is happening across the country,
is the inability to actually insure your home because of
wildfire risk. I think that we can look at what has worked well
with the National Flood Insurance Program, what lessons we can
learn from and look at what options we can provide for people
across the United States to make sure that if you are at risk
of a wildfire, you still have options to buy your home and
insure your home.
In my remaining time, I want to focus on the risks of
artificial intelligence (AI) in the banking sector. Financial
institutions are already utilizing artificial intelligence to
identify fraud and protect consumers, so this is the benefit.
However, the risk of deepfakes potentially threatens the safety
and security of consumer accounts. This is why I introduced the
Preventing Deep Fake Scams Act with my friend and member of
this committee, Congressman Mike Flood. This bill will
establish a task force to examine AI in the financial services
sector, including both the potential benefits of the technology
for financial institutions and the unique risks it poses to
customer account security.
I look forward to working with all of you on these critical
issues, and I really appreciate the time. I yield back.
[The prepared statement of Representative Pettersen can be
found on page 55 of the appendix.]
Chairman McHenry. The gentlelady yields back. I want to
thank the panel. We have votes on the Floor. I don't know if
the ranking member wishes to say anything, but I will yield
back, and if you are good to go, then we are good to go. I want
to thank the panel for your presentation and your feedback and
your participation. Thanks so much. We will now----
Mrs. Beatty. Mr. Chairman?
Chairman McHenry. Yes?
Mrs. Beatty. Can I submit my revised remarks for the
record?
Chairman McHenry. Yes. Without objection, the gentlelady's
revised remarks will be submitted for the record.
We will now recess until after votes, and then we will have
our third and final panel of the day. Thanks so much.
Ms. Waters. Thank you all very much.
[recess]
Chairman McHenry. The committee will come to order. Welcome
back.
For today's third panel, we will hear testimony from a
number of our committee members. We will hear from the
Honorable Vicente Gonzalez of the State of Texas; the Honorable
Nikema Williams of the State of Georgia; the Honorable Brad
Sherman of the State of California; and the Honorable Rashida
Tlaib of the State of Michigan.
We thank each of you for your time. You will be recognized
for 5 minutes to give an oral presentation of your remarks, and
without objection, your written statements will be made a part
of the record. We will begin with you, Mr. Gonzalez.
STATEMENT OF THE HONORABLE VICENTE GONZALEZ, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Gonzalez. Thank you. Chairman McHenry and Ranking
Member Waters, thank you for hosting today's Member Day
hearing. As a member of this committee, I am proud of the work
we are doing to expand access to capital, protect American
consumers, and strengthen our economy.
For background, my district encompasses much of South
Texas, from McAllen on the border to Brownsville where the
border meets the sea, and up the coast to Kingsville, Texas,
home of the King Ranch and Naval Air Station Kingsville. My
constituency is a predominantly underserved, low- to moderate-
income community. We also have over 21,000 veterans located in
my district. With military installations in my district and
further north in Corpus Christi and San Antonio, our region is
large and vast. It is Texas, bigger than most places. We are
also growing rapidly, and our local economy is booming. For
reference, our population is projected to double by 2045, but
to accommodate a growing population, we must foster an
environment that creates stability, wealth, and growth.
Starting a small business is expensive and risky. Fifty
percent of small businesses fail within the first 5 years, but
they are also the lifeblood of burgeoning communities like
mine. While some entrepreneurs use personal savings to open a
business, that is not an option for everyone, including many
veterans. According to the Institute for Veterans and Military
Families, 75 percent of reporting veterans have trouble
accessing capital to start or grow a small business.
A business loan provides the up-front capital needed to
open doors, pay staff, and provide a buffer until the business
starts churning a profit. Credit unions are one of the
institutions that provide loans to small businesses and support
them from the beginning of their venture to its end. Currently,
credit unions are constrained to only lending 12.25 percent of
their assets to small businesses, severely limiting who can
access this vital financial service. For a community on the
rise like mine, the arbitrary cap on member business loans
stunts economic growth.
This is happening across the country, which is why I
introduced H.R. 4867, the Veterans Members Business Loan Act,
with Congressman Brian Fitzpatrick. This bipartisan bill would
exempt loans made to veteran-owned businesses from the member
business lending cap imposed on credit unions.
Our servicemembers provide tremendous value to our society,
both while in service and as civilians. I think both parties
can agree that we need to support our veterans as they
transition back to civilian life. For many, at least 25
percent, that means starting a small business. We made a
promise to support our servicemembers after they put their
lives on the line to protect the freedoms we cherish, and we
should do just that. Our veterans deserve every chance to
contribute to their community, and that means accessing capital
to start a small business.
I urge this committee to mark up this important legislation
and support our veterans as they build a better life after
service. Thank you, and I yield back.
[The prepared statement of Representative Gonzalez can be
found on page 44 of the appendix.]
Chairman McHenry. Thank you, Mr. Gonzalez. We will now go
to you, Ms. Williams, for 5 minutes.
STATEMENT OF THE HONORABLE NIKEMA WILLIAMS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA
Ms. Williams of Georgia. Thank you, Chairman McHenry and
Ranking Member Waters, for having this opportunity to offer
testimony before our committee today. As our committee
considers legislative priorities for this Congress, I would
like to highlight a priority that deeply impacts not only my
constituents in Georgia's 5th District, but also many other
families around the country.
As a member of our Housing and Insurance Subcommittee, I
know that we have not adequately addressed ongoing housing
issues related to title theft and heir property. People are
walking into county offices around the country and forging
deeds all over the country, and it is not even a felony. This
kind of fraud is called title theft. Criminals are purposefully
targeting seniors, immigrants, and marginalized individuals who
lack the financial means to get their homes back through
expensive and time-consuming court proceedings. We can't
continue to allow something as precious and hard-earned as
someone's home to go unprotected. For most people, their home
is the biggest investment that they will make in their entire
life. It is an opportunity to build generational wealth that
can benefit their children, grandchildren, and generations to
come, working to close the racial wealth gap in this country.
People work hard for their homes, but there have been
numerous instances where people are thrown out of their homes
at a moment's notice due to title theft. One of my constituents
arrived home in November of 2021 to find a bulldozer in her
front yard tearing down her home. Her house was paid off, but a
stranger who had forged a deed and stolen her home decided to
bulldoze it, and I have the article from Atlanta's WSBTV that I
would like to submit for the record.
Chairman McHenry. Without objection, it is so ordered.
Ms. Williams of Georgia. This is why I am co-leading
Ranking Member Cleaver's Good DEED Act that addresses title
theft by establishing a $10-million annual grant program
administered by the U.S. Department of Housing and Urban
Development to fund applications that assist in the prevention,
detection, investigation, and prosecution of deed fraud;
mandating that States receive funding; amend State laws to
require identifiable information of individuals notarizing and
filing deeds; requiring HUD to report to Congress on activities
funded under the grant program and to identify best practices
in reducing deed fraud; directing the U.S. Sentencing
Commission to promulgate guidelines or amend existing
guidelines for offenses involving deed fraud; and requiring the
Federal Bureau of Investigation to add a category for deed
fraud to the Uniform Crime Reporting Program. The Good DEED Act
will support preventative measures to stop devastating land
loss from American families, provide better tools for the
investigation and prosecution of those engaged in such crimes,
and support victims in restoring homes to the rightful owners.
And another housing issue that disproportionately impacts
minority communities has to do with heir property and tangled
titles. Property becomes heir property and titles become
tangled when family homes or land are passed from generation to
generation through inheritance, usually without a will or a
formal estate strategy. One study found that people of color
were less than half as likely as their White peers to have a
will. This tendency is especially problematic in Georgia
because dying without a will converts a family home, land, or
other property into heir property.
A report by the Georgia Heirs Property Law Center puts the
scale of the problem in perspective. It is estimated that there
is over $47 billion in probable heirs property in Georgia--
billion with a, ``B.'' This is especially concerning because
low-income families, people of color, and other marginalized
groups are more likely to be the owners of heir properties,
putting them in vulnerable positions. Heir properties make it
much more difficult for families to generate wealth because
every heir is responsible for paying taxes and other expenses,
and has the ability to transfer their stake to an outsider, and
must agree to key decisions about the property. Taken together,
this means that owners of heir property are much more likely to
face eviction or a forced sale.
This is an issue that needs to be talked about more.
Tangled titles limit the ability of people of color to pass
wealth from generation to generation, putting the American
Dream even further out of reach. I am working to create
legislation with Ranking Member Cleaver to complement the Good
DEED Act and to address the issues caused by heir property and
tangled titles, and I hope the committee will give it the
consideration that it deserves. Together, we can address these
two critical issues that impact marginalized communities'
ability to generate wealth, and that is the only way that we
can truly begin to close the racial wealth gap, which,
unfortunately, my district continues to lead the nation in.
In closing, thank you, Chairman McHenry and Ranking Member
Waters, for the opportunity to testify before you today, and I
am hopeful that this committee can begin to address the issues
brought before you today. And I hope to find ways to work with
both the chairman and the ranking member as we do this work on
behalf of the people that we were sent here to represent. Thank
you so much.
[The prepared statement of Representative Williams of
Georgia can be found on page 71 of the appendix.]
Chairman McHenry. Thank you. We will now recognize Mr.
Sherman of California.
STATEMENT OF THE HONORABLE BRAD SHERMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Sherman. Thank you. Thank you, Chairman McHenry and
Ranking Member Waters, for this opportunity to testify. I want
to draw your attention to several pieces of legislation that I
have introduced or will introduce. All of them except one are
already before you in legislative language form, and it is good
to get a chance to get a hearing on these pieces of
legislation. Quite a number of them deal with investments in
China.
Capital builds economies, and from a macroeconomic
standpoint, we would prefer that Americans not invest in China
but invest here. However, we have very substantial flows of
capital from China really into debt instruments issued by the
United States and its companies. So, this is not an attempt to
prevent Americans from investing in China across-the-board but
to make that system fair and reasonable and provide adequate
investor protection.
The first bill is the China Risk Reporting Act, which
requires that when companies register with the SEC, they
discuss in their registration materials two things: first, the
degree to which the company is dependent upon China; and
second, the steps the company has taken to reduce its China
risk. That second is so important because as American companies
compete for capital, they should try to establish that they
have the best record of working to de-risk their companies. If
you de-risk your companies, you reduce risk for our entire
economy.
The second is the PRC Military and Human Rights Capital
Markets Sanctions Act. We currently prohibit Americans from
investing in certain Chinese companies involved in defense and
intelligence. This bill expands that to cover those who have
been designated by the United States as involving coerced labor
and human rights violations.
The third is the No China Index Funds Act. There are such
unique difficulties in evaluating a risk of investing in China,
that if the company is based in China, it should not be in a
low-cost fund or an index fund. It should only be invested in
by Americans who are looking very carefully at that company,
not paint by the numbers.
The fourth is the No Capital Gains Allowance for American
Adversaries Act. As you know, we encourage Americans to invest
in stock, not only by providing a capital gains allowance, but
a step up in basis upon death. That is because we believe we
want to encourage investment in American companies and the
American economy. So, why are we providing these incentives for
investing in the Chinese economy or that of Russia, Belarus, or
Iran?
This bill would treat as ordinary income and as an ordinary
income asset any investment in companies based in China,
Russia, Iran, or Belarus. Now, of course, that is mostly a
House Ways and Means Committee bill, but it is only appropriate
that investors fully understand the difference in taxation
investing in a Chinese company versus one that is not in one of
our adversaries, and that is why this bill also needs to be
referred here to make sure that those investor disclosures are
made.
The fifth is the Sanctioning Iran's Special Drawing Rights
Transactions Act, and this is one that says that the United
States won't move forward with increasing special drawing
rights until there is more accountability and transparency into
how Iran uses its special drawing rights.
The sixth is the Bank Safety Act. This requires that banks
of over $100 million recognize unrealized losses on available-
for-sale securities when they compute capital for bank
regulatory purposes. Silicon Valley Bank didn't do this, and
that is why we had to bail out the depositors of Silicon Valley
Bank.
And finally, the Effective Bank Regulation Act, which
requires that when we do stress testing, we stress test for
increases and decreases in interest rates. I have been here in
this room for a long time. Interest rates go up, and interest
rates go down. Banks, if they are going to show that they can
handle a stress, should prove that they can handle both up and
down.
The second thing I should point out is that credit risk is
most associated with loans to small businesses. Interest rate
risk is most associated with billion-dollar bond purchases by
banks. We now have a system that encourages banks to invest in
the big bonds and discourages them from investing in small
businesses. We ought to have a fair playing field as our small
businesses compete with Treasuries and with bonds issued by
giant businesses when they seek bank capital.
Thank you. I hope you have some questions.
[The prepared statement of Representative Sherman can be
found on page 61 of the appendix.]
Chairman McHenry. The gentleman's time has expired. We
thank the gentleman for his testimony. And I thank the
gentlelady from Georgia for her testimony as well. We are going
to pause to accommodate our final Member and her testimony.
Ms. Waters. Let me take this opportunity to thank our
Members for showing up today and sharing with us what you are
working on, and what you care about. It certainly does give me
an opportunity to know better how I can work with our Members
and how I can be helpful, so I appreciate you being here today
and I wish you a good weekend.
Mr. Sherman. Thank you.
Chairman McHenry. The panel may be dismissed, and we will
pause to accommodate our final Member.
[Pause.]
Chairman McHenry. The committee will return to order, and
we will now recognize our final panelist of the day, our
ultimate panelist of the day, the Honorable Rashida Tlaib of
the State of Michigan. You are now recognized for 5 minutes.
Thanks so much, and you are now recognized.
STATEMENT OF THE HONORABLE RASHIDA TLAIB, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Ms. Tlaib. Thank you, Mr. Chairman. And thank you to my
colleagues for this opportunity to talk about the impact of a
number of policies on my constituents. Today, I want to talk
about two issues affecting our residents: medical debt as a
factor in credit reports and auto insurance discrimination.
Mr. Chairman, roughly 20 percent of Americans have medical
debt, and it is a tremendous amount of burden. In addition to
regularly forcing families to exhaust their savings or cut back
on food or clothing, such debt also prevents--and this is the
key issue--residents from meeting their basic needs by marring
their access to credit, meaning access to homeownership, and a
number of issues, again, treating medical debt as if they
purchased a car and not actually sought health services. I
believe this is wrong. Mr. Chairman, undergoing, a medical
procedure should never haunt someone financially. No one
chooses to be sick.
To make matters worse, medical debt has questionable
predictive value. It is not necessary to use medical debt to
predict a borrower's future credit risk. Furthermore, debt
collectors often rely on inaccurate information, as many of our
residents have told us, also pressuring those recovering from
illnesses to pay bills they might not even owe. The issue also
hits particularly hard in communities like mine, where
residents already face challenges with access to credit, and I
have long advocated on behalf of those saddled with medical
debt. For instance, my Restoring Unfairly Impaired Credit and
Protecting Consumers Act would prohibit outright the reporting
of medical debt on consumer reports, among those provisions to
protect consumers.
A medical emergency should not and need not send a family
into financial ruin. I have seen it with my families who
literally have a loved one with cancer and so forth literally
go bankrupt, preventing them, again, from truly being able to
thrive in our country. I urge my colleagues to please join me
in ensuring that no one, no family has to face such
difficulties by please supporting this bill and bringing it
before this committee for consideration.
The next issue I would like to now discuss is auto
insurance discrimination. Discrimination is keeping my
residents in a cycle of poverty. Marital status, credit score,
and all of those things should not be factors in whether or not
somebody is a good driver, and right now, this has been
impacting folks. In order to take a new job or go to school or
deal with a medical emergency, one needs access to reliable
transportation, and for many of my residents in my district,
that means access to a car, yet Michigan has some of the most
expensive car insurance in the nation. So, it is outrageous to
me that my residents get asked whether or not they are married,
what kind of education level they have, or their credit score.
All of it is really incredibly hurtful in being put towards the
auto insurance rates.
This summer, I know Michigan residents saw a 42-percent fee
increase by the Consumer Michigan Catastrophic Claims
Association, adding to high fees that are already unaffordable
for many of our families. I know when I saw the University of
Michigan report showing somebody with a DUI--driving under the
influence--but he had a lower credit score compared to someone
with a very decent credit score, but not as high, but he had no
DUI. The person who had the DUI--driving under the influence--
was paying 3 times higher auto insurance rates than the person
who did not have any violation, so we must stop using these
non-driving factors in auto insurance rates.
So again, I am really grateful for my amazing partner in
this, Congresswoman Bonnie Watson Coleman. We have the Prohibit
Auto Insurance Discrimination Act, which would prohibit the use
of these proxies, like education and ZIP Codes, to calculate
insurance rates. Again, thank you so much for this opportunity
to uplift my residents in some of the struggles that they have,
and hopefully, my colleagues on the Financial Services
Committee will work with me on those issues.
[The prepared statement of Representative Tlaib can be
found on page 67 of the appendix.
Chairman McHenry. Thank you. Thank you for your testimony
on important policy matters, and I thank you for making it here
for Member Day. Yours is the final testimony of the day, so I
will yield to the ranking member.
Ms. Waters. Thank you very much. Ms. Tlaib, I want to thank
you for your strong leadership in highlighting all of the
problems with medical debt, and I would like to just get a
little advice from you here. Of course, we know how it unfairly
tarnishes so many consumers' credit scores, the way the
information gets reported by the major credit bureaus. There is
no research that shows medical debt is a good indicator of an
individual's creditworthiness. If you get sick and need medical
care, that should not affect your ability to take out a loan,
rent an apartment, or even get a job, but that is exactly what
has happened, given the way our broken credit reporting system
works.
After working on this issue myself for more than a decade,
I was pleased that the national credit bureaus have taken steps
to remove some medical debt information from consumers' credit
reports. However, much more needs to be done, and I am pleased
that CFPB Director Chopra is taking further steps to address
this issue.
Ms. Tlaib, we have not held any hearings in our committee
this year exploring this issue in any depth. Do you believe
that the committee should hold a hearing with the CEOs of the
national credit bureaus, and experts on these issues, and then
look to mark up your bill and others put forward by members of
our committee to fix our broken credit reporting system? What
do you think?
Ms. Tlaib. Yes, and, Ranking Member Waters, as you know, we
did actually have the three largest credit reporting agencies
before our committee, and many of us were able to ask some of
the tough questions that many of my residents are asking. I
know the Chair and I talked about medical debt and his personal
experiences of something getting paid, but it is still showing
up on people's credit reports.
I think folks don't realize how incredibly important it is
to fix credit reporting. It is literally the access to economic
opportunities, so even if you are doing well but you get sick,
again, it gets on your credit report. It impacts literally
whether or not you are able to thrive later, whether or not you
can even get a loan for a car. People are now looking at credit
reports, Ranking Member, for employment. Folks look to it as
some sort of factor in whether or not this person should be
getting a loan or for housing or whatever, but, again, medical
debt, to me, it is not like somebody is, like, hey, I am just
going to go and rack up medical debt. They are sick.
The majority of the time, when you hear folks talk about
filing for bankruptcy in our country, a big, huge factor is
medical debt. It is somebody in their family or themselves
getting very sick, and, again, cancer is one that I hear
consistently in my district, folks who have to pay an
exorbitant amount of money because their insurance doesn't
cover fully because they are underinsured or not covered as
much. It is the prescription drugs that continue to pile on my
residents. And again, they may not have to pay the full amount,
but all of it adds up, especially when it takes months and
sometimes years to recover from a serious illness.
Ms. Waters. Thank you so very much, and your being here
today certainly helps put more focus on the issue, and I
certainly will work with the chairman to see what we can do in
terms of the hearings that you are suggesting. Thank you.
Ms. Tlaib. Okay.
Chairman McHenry. The gentlelady yields back. I would like
to thank our witnesses for their testimony today. We appreciate
your insight.
The Chair notes that some Members may have additional
questions for these witnesses, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
This hearing is adjourned.
[Whereupon, at 11:42 a.m., the hearing was adjourned.]
A P P E N D I X
November 9, 2023
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