[Congressional Record Volume 160, Number 131 (Monday, September 15, 2014)]
[House]
[Pages H7508-H7515]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INSURANCE CAPITAL STANDARDS CLARIFICATION ACT OF 2014
Mr. HUIZENGA of Michigan. Mr. Speaker, I move to suspend the rules
and pass the bill (H.R. 5461) to clarify the application of certain
leverage and risk-based requirements under the Dodd-Frank Wall Street
Reform and Consumer Protection Act, to improve upon the definitions
provided for points and fees in connection with a mortgage transaction,
and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5461
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
[[Page H7509]]
SECTION 1. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Table of contents.
TITLE I--INSURANCE CAPITAL STANDARDS
Sec. 101. Short title.
Sec. 102. Clarification of application of leverage and risk-based
capital requirements.
TITLE II--COLLATERALIZED LOAN OBLIGATIONS
Sec. 201. Short title.
Sec. 202. Rules of construction relating to collateralized loan
obligations.
TITLE III--DEFINITION OF POINTS AND FEES IN MORTGAGE TRANSACTIONS
Sec. 301. Short title.
Sec. 302. Definition of points and fees.
Sec. 303. Rulemaking.
TITLE IV--BUSINESS RISK MITIGATION AND PRICE STABILIZATION
Sec. 401. Short title.
Sec. 402. Margin requirements.
Sec. 403. Implementation.
TITLE I--INSURANCE CAPITAL STANDARDS
SEC. 101. SHORT TITLE.
This title may be cited as the ``Insurance Capital
Standards Clarification Act of 2014''.
SEC. 102. CLARIFICATION OF APPLICATION OF LEVERAGE AND RISK-
BASED CAPITAL REQUIREMENTS.
Section 171 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5371) is amended--
(1) in subsection (a), by adding at the end the following:
``(4) Business of insurance.--The term `business of
insurance' has the same meaning as in section 1002(3).
``(5) Person regulated by a state insurance regulator.--The
term `person regulated by a State insurance regulator' has
the same meaning as in section 1002(22).
``(6) Regulated foreign subsidiary and regulated foreign
affiliate.--The terms `regulated foreign subsidiary' and
`regulated foreign affiliate' mean a person engaged in the
business of insurance in a foreign country that is regulated
by a foreign insurance regulatory authority that is a member
of the International Association of Insurance Supervisors or
other comparable foreign insurance regulatory authority as
determined by the Board of Governors following consultation
with the State insurance regulators, including the lead State
insurance commissioner (or similar State official) of the
insurance holding company system as determined by the
procedures within the Financial Analysis Handbook adopted by
the National Association of Insurance Commissioners, where
the person, or its principal United States insurance
affiliate, has its principal place of business or is
domiciled, but only to the extent that--
``(A) such person acts in its capacity as a regulated
insurance entity; and
``(B) the Board of Governors does not determine that the
capital requirements in a specific foreign jurisdiction are
inadequate.
``(7) Capacity as a regulated insurance entity.--The term
`capacity as a regulated insurance entity'--
``(A) includes any action or activity undertaken by a
person regulated by a State insurance regulator or a
regulated foreign subsidiary or regulated foreign affiliate
of such person, as those actions relate to the provision of
insurance, or other activities necessary to engage in the
business of insurance; and
``(B) does not include any action or activity, including
any financial activity, that is not regulated by a State
insurance regulator or a foreign agency or authority and
subject to State insurance capital requirements or, in the
case of a regulated foreign subsidiary or regulated foreign
affiliate, capital requirements imposed by a foreign
insurance regulatory authority.''; and
(2) by adding at the end the following new subsection:
``(c) Clarification.--
``(1) In general.--In establishing the minimum leverage
capital requirements and minimum risk-based capital
requirements on a consolidated basis for a depository
institution holding company or a nonbank financial company
supervised by the Board of Governors as required under
paragraphs (1) and (2) of subsection (b), the appropriate
Federal banking agencies shall not be required to include,
for any purpose of this section (including in any
determination of consolidation), a person regulated by a
State insurance regulator or a regulated foreign subsidiary
or a regulated foreign affiliate of such person engaged in
the business of insurance, to the extent that such person
acts in its capacity as a regulated insurance entity.
``(2) Rule of construction on board's authority.--This
subsection shall not be construed to prohibit, modify, limit,
or otherwise supersede any other provision of Federal law
that provides the Board of Governors authority to issue
regulations and orders relating to capital requirements for
depository institution holding companies or nonbank financial
companies supervised by the Board of Governors.
``(3) Rule of construction on accounting principles.--
``(A) In general.--A depository institution holding company
or nonbank financial company supervised by the Board of
Governors of the Federal Reserve that is also a person
regulated by a State insurance regulator that is engaged in
the business of insurance that files financial statements
with a State insurance regulator or the National Association
of Insurance Commissioners utilizing only Statutory
Accounting Principles in accordance with State law, shall not
be required by the Board under the authority of this section
or the authority of the Home Owners' Loan Act to prepare such
financial statements in accordance with Generally Accepted
Accounting Principles.
``(B) Preservation of authority.--Nothing in subparagraph
(A) shall limit the authority of the Board under any other
applicable provision of law to conduct any regulatory or
supervisory activity of a depository institution holding
company or non-bank financial company supervised by the Board
of Governors, including the collection or reporting of any
information on an entity or group-wide basis. Nothing in this
paragraph shall excuse the Board from its obligations to
comply with section 161(a) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C. 5361(a)) and
section 10(b)(2) of the Home Owners' Loan Act (12 U.S.C.
1467a(b)(2)), as appropriate.''.
TITLE II--COLLATERALIZED LOAN OBLIGATIONS
SEC. 201. SHORT TITLE.
This title may be cited as the ``Restoring Proven Financing
for American Employers Act''.
SEC. 202. RULES OF CONSTRUCTION RELATING TO COLLATERALIZED
LOAN OBLIGATIONS.
Section 13(g) of the Bank Holding Company Act of 1956 (12
U.S.C. 1851(g)) is amended by adding at the end the following
new paragraphs:
``(4) Collateralized loan obligations.--
``(A) Inapplicability to certain collateralized loan
obligations.--Nothing in this section shall be construed to
require the divestiture, prior to July 21, 2017, of any debt
securities of collateralized loan obligations, if such debt
securities were issued before January 31, 2014.
``(B) Ownership interest with respect to collateralized
loan obligations.--A banking entity shall not be considered
to have an ownership interest in a collateralized loan
obligation because it acquires, has acquired, or retains a
debt security in such collateralized loan obligation if the
debt security has no indicia of ownership other than the
right of the banking entity to participate in the removal for
cause, or in the selection of a replacement after removal for
cause or resignation, of an investment manager or investment
adviser of the collateralized loan obligation.
``(C) Definitions.--For purposes of this paragraph:
``(i) Collateralized loan obligation.--The term
`collateralized loan obligation' means any issuing entity of
an asset-backed security, as defined in section 3(a)(77) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(77)),
that is comprised primarily of commercial loans.
``(ii) Removal for cause.--An investment manager or
investment adviser shall be deemed to be removed `for cause'
if the investment manager or investment adviser is removed as
a result of--
``(I) a breach of a material term of the applicable
management or advisory agreement or the agreement governing
the collateralized loan obligation;
``(II) the inability of the investment manager or
investment adviser to continue to perform its obligations
under any such agreement;
``(III) any other action or inaction by the investment
manager or investment adviser that has or could reasonably be
expected to have a materially adverse effect on the
collateralized loan obligation, if the investment manager or
investment adviser fails to cure or take reasonable steps to
cure such effect within a reasonable time; or
``(IV) a comparable event or circumstance that threatens,
or could reasonably be expected to threaten, the interests of
holders of the debt securities.''.
TITLE III--DEFINITION OF POINTS AND FEES IN MORTGAGE TRANSACTIONS
SECTION 301. SHORT TITLE.
This title may be cited as the ``Mortgage Choice Act of
2014''.
SEC. 302. DEFINITION OF POINTS AND FEES.
(a) Amendment to Section 103 of TILA.--Section 103(bb)(4)
of the Truth in Lending Act (15 U.S.C. 1602(bb)(4)) is
amended--
(1) by striking ``paragraph (1)(B)'' and inserting
``paragraph (1)(A) and section 129C'';
(2) in subparagraph (C)--
(A) by inserting ``and insurance'' after ``taxes'';
(B) in clause (ii), by inserting ``, except as retained by
a creditor or its affiliate as a result of their
participation in an affiliated business arrangement (as
defined in section 2(7) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2602(7))'' after
``compensation''; and
(C) by striking clause (iii) and inserting the following:
``(iii) the charge is--
``(I) a bona fide third-party charge not retained by the
mortgage originator, creditor, or an affiliate of the
creditor or mortgage originator; or
``(II) a charge set forth in section 106(e)(1);''; and
(3) in subparagraph (D)--
(A) by striking ``accident,''; and
(B) by striking ``or any payments'' and inserting ``and any
payments''.
[[Page H7510]]
(b) Amendment to Section 129C of TILA.--Section 129C of the
Truth in Lending Act (15 U.S.C. 1639c) is amended--
(1) in subsection (a)(5)(C), by striking ``103'' and all
that follows through ``or mortgage originator'' and inserting
``103(bb)(4)''; and
(2) in subsection (b)(2)(C)(i), by striking ``103'' and all
that follows through ``or mortgage originator)'' and
inserting ``103(bb)(4)''.
SEC. 303. RULEMAKING.
Not later than the end of the 90-day period beginning on
the date of the enactment of this Act, the Bureau of Consumer
Financial Protection shall issue final regulations to carry
out the amendments made by this Act, and such regulations
shall be effective upon issuance.
TITLE IV--BUSINESS RISK MITIGATION AND PRICE STABILIZATION
SEC. 401. SHORT TITLE.
This title may be cited as the ``Business Risk Mitigation
and Price Stabilization Act of 2013''.
SEC. 402. MARGIN REQUIREMENTS.
(a) Commodity Exchange Act Amendment.--Section 4s(e) of the
Commodity Exchange Act (7 U.S.C. 6s(e)), as added by section
731 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, is amended by adding at the end the following
new paragraph:
``(4) Applicability with respect to counterparties.--The
requirements of paragraphs (2)(A)(ii) and (2)(B)(ii),
including the initial and variation margin requirements
imposed by rules adopted pursuant to paragraphs (2)(A)(ii)
and (2)(B)(ii), shall not apply to a swap in which a
counterparty qualifies for an exception under section
2(h)(7)(A), or an exemption issued under section 4(c)(1) from
the requirements of section 2(h)(1)(A) for cooperative
entities as defined in such exemption, or satisfies the
criteria in section 2(h)(7)(D).''.
(b) Securities Exchange Act Amendment.--Section 15F(e) of
the Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)), as
added by section 764(a) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, is amended by adding at the end
the following new paragraph:
``(4) Applicability with respect to counterparties.--The
requirements of paragraphs (2)(A)(ii) and (2)(B)(ii) shall
not apply to a security-based swap in which a counterparty
qualifies for an exception under section 3C(g)(1) or
satisfies the criteria in section 3C(g)(4).''.
SEC. 403. IMPLEMENTATION.
The amendments made by this title to the Commodity Exchange
Act shall be implemented--
(1) without regard to--
(A) chapter 35 of title 44, United States Code; and
(B) the notice and comment provisions of section 553 of
title 5, United States Code;
(2) through the promulgation of an interim final rule,
pursuant to which public comment will be sought before a
final rule is issued; and
(3) such that paragraph (1) shall apply solely to changes
to rules and regulations, or proposed rules and regulations,
that are limited to and directly a consequence of such
amendments.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Michigan (Mr. Huizenga) and the gentlewoman from California (Ms.
Waters) each will control 20 minutes.
The Chair recognizes the gentleman from Michigan.
General Leave
Mr. HUIZENGA of Michigan. Mr. Speaker, I ask unanimous consent that
all Members have 5 legislative days with which to revise and extend
their remarks and submit extraneous materials for the Record on H.R.
5461 currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. HUIZENGA of Michigan. Mr. Speaker, I yield myself such time as I
may consume.
Mr. Speaker, I rise today in support of H.R. 5461, a bill authored by
the gentleman from Kentucky (Mr. Barr), my colleague on the Financial
Services Committee, and cosponsored by Mr. Gary G. Miller of California
and myself.
This bill contains four titles, three of which having already passed
this House with overwhelming or unanimous support and one of which
passed with only a dozen ``no'' votes.
Mr. Speaker, it is rare that the Senate sends us meaningful
legislation; and, frankly, it is even rarer when they send us
legislation that amends and fixes the Dodd-Frank Act. As we on the
Financial Services Committee have seen in our hearings and our markups,
our friends on the other side of the aisle and the other side of the
Capitol usually defend Dodd-Frank to the hilt, bestowing on it
deference normally reserved for the sacred texts handed down from the
heavens.
Well, we should agree that Congress doesn't always get it right. When
sweeping legislation is enacted--remember, Dodd-Frank is a 2,300-page
bill--there are often areas that later need clarification, and that is
exactly what we are talking about here today.
Whatever one's position is on Dodd-Frank, we should all be able to
agree that the text is not sacred and does need some fixing. That is
why I am pleased that the Senate has sent us a bill to clarify that
regulators should not impose regulatory capital requirements designed
for banking institutions on insurance companies. That was not what was
intended.
The Senate bill, S. 2270, passed the other body unanimously. There is
broad support in the House for a companion measure, but there is
equally broad support for three other Dodd-Frank technical correction
amendments that have previously passed this House: Mr. Barr's bill on
the treatment of collateralized loan obligations under the Volcker
rule, Mr. Grimm's bill to exempt end users from derivatives from Dodd-
Frank's overreaching margin requirements, and my own bill on how points
and fees are treated under Dodd-Frank's onerous qualified mortgage
rule.
My legislation that is included in this package is a strong
bipartisan provision that modifies and clarifies the way points and
fees in a real estate transaction are calculated. This provision is
narrowly focused to promote access to affordable mortgage credit
without overturning the important consumer protections and sound
underwriting requirements that Dodd-Frank's ability to repay provisions
has in place.
Homeownership has been a pillar of American life for generations, and
this particular provision will help more Americans realize this portion
of the American Dream.
This bill is a commonsense measure that should and, I believe, does
have broad bipartisan support. I was puzzled, however, by a Dear
Colleague letter produced by Ranking Member Waters circulated earlier
today. In the letter, she writes that Mr. Barr has coupled the
insurance capital bill with other ``divisive legislation.''
Now, I would ask my friend the ranking member: What divisive
legislation are you referring to? Is it the CLO bill which passed the
House on voice vote? Is it the end user bill which passed the House on
the ranking member's ``yes'' vote herself and only a dozen ``nay''
votes? Or is it my bill that also passed the House by voice vote? I
don't see the divisiveness, and I don't see where the problem is.
The reality is Americans don't care about the parliamentary process
so much as they want results.
We are pleased that the Senate has finally come to the table on Dodd-
Frank reforms. This is legislation that represents a step forward in
working with the other body to make sure that my constituents and your
constituents can get mortgages to buy their first home, that farmers
can assess the financing that they need to buy tractors and work their
land, and that Americans can buy insurance policies without severe
premium increases.
I encourage my colleagues to support H.R. 5461, especially my
Democrats friends who I believe support every component of the package.
I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, before I begin my remarks, I must correct the gentleman
from Michigan when he talked about our unwillingness to look at Dodd-
Frank in any critical way and our unwillingness to modify, amend, or do
anything to Dodd-Frank. It is absolutely not true.
As a matter of fact, I am recorded time and time again--even in my
speech before the Chamber of Commerce, where I have said and I have
acted in this manner and in this fashion--that where there were
complications, I was willing to work with the opposite side of the
aisle to try to deal with those complications so that everybody would
understand what was intended. Where there appeared to be conflicts, I
would work to undo those conflicts.
I have no problem with changing or modifying or dealing with problems
in Dodd-Frank, and I have acted that way time and time again.
Today, I rise to express my disappointment with a Republican Party
[[Page H7511]]
that has politicized consensus legislation that would provide real,
tangible regulatory relief.
When we began this Congress, Democrats on the House Financial
Services Committee and Senate Banking Committee both agreed to support
technical fixes to the Dodd-Frank Act that have broad bipartisan
support.
In that spirit, the gentlewoman from New York, Representative Carolyn
McCarthy, who is on this floor this evening, worked hard, provided
leadership, helped to straighten out any confusion, and worked with
both sides of the aisle to come together in a consensus around the
legislation that we are going to hear so much about.
I worked with Mrs. McCarthy. I worked with both sides of the aisle
also. We came up with targeted, bipartisan insurance capital standards,
and we fixed it, and our hard work paid off.
After months of holding hearings and building consensus, we delivered
to our chairman a bill with no opposition. Democrats and Republicans
supported the measure, as did outside experts on financial reform and
the financial services industry.
It was a bill that unanimously passed the Senate, a bill that
represented the kind of work Congress should be doing. In other words,
Mr. Speaker, virtually no one opposed these reasonable changes to
insurance capital standards; but, instead of passing the measure, this
noncontroversial technical change has been ``repackaged'' into a
broader and more controversial bill by attaching provisions that make
substantive changes to Dodd-Frank that, unlike the insurance capital
standards fix, are nontechnical in nature and are not universally
supported.
The reality is, by circumventing and politicizing the process, this
commonsense legislation is going nowhere in the United States Senate.
Countless Senate Democrats have made clear that any changes to Dodd-
Frank must be targeted and have overwhelming bipartisan support; and
Republicans, like Senator Collins, whose contributions to the Dodd-
Frank Act we are fixing today, are opposed to it as well.
Her statement was unequivocal, saying, ``I would hate for a bill,
after many months to have achieved consensus, to get bogged down in
unrelated issues.'' She went on to say, ``This isn't reopening a major
issue in Dodd-Frank. It is simply bringing clarity to a provision that
I authored that the Fed has misinterpreted. I think, given how closely
we've worked with everyone, it really is more of a technical
correction.''
Senator Johanns, another author of the ``clean'' Senate bill, also
wants to see an up-or-down vote on the House side; and he said, ``My
hope is that we can do this in a straightforward way and get it done.''
He went on to say, if changes were made to the bill, he has to ``start
all over.''
Mr. Speaker, this Congress has been infamous for its inability to get
anything done; but, on this one issue, we have managed to get the
policy right and get incredibly broad support. We have a clear path to
getting something done; but, unfortunately, the chairman has decided to
throw a wrench in the works at the last minute for no reason.
Finally, it is clear that this is an exercise in political theater.
It is well-known and widely reported that Republican leadership has
privately told insurance industry stakeholders that they would bring up
a ``clean'' insurance capital standards bill after the midterm
elections.
It simply shows the disgraceful nature of this debate and the
partisan, dilatory tactics that create more distrust in the political
process. Rather than do what is right and enact legislation that
everyone has agreed on, the chairman has decided to create a fight
where there was none.
Make no mistake, but for the chairman's intransigence, the insurance
capital fix bill could be on the President's desk for a signature
tomorrow.
I oppose this bill due to the particularly flagrant affront to
bipartisan efforts to fix narrow issues in the Wall Street Reform Act,
an important and complex bill.
I reserve the balance of my time.
{time} 2045
Mr. HUIZENGA of Michigan. Mr. Speaker, I yield myself such time as I
may consume.
I wish I had actually asked if the gentlewoman would yield because I
am confused. I am confused on a bill that she has voted three times--I
am positive--three different bills, how that is divisive, how it is not
targeted with significant Democrat support.
I personally with one of these bills--my bill has been sitting in the
Senate since June. It has been targeted, it has had Democrat support,
and it has had Republican support. We simply cannot get the Senate to
move, and I am not sure why my colleague would support a Senate bill
without any House input, but not expect the Senate to look at our
material and to look at our bills.
Mr. Speaker, with that, I yield now as much time as he may consume to
the gentleman from Kentucky (Mr. Barr) the author of this legislation.
Mr. BARR. Well, I thank the gentleman from Michigan for his
leadership on title III of this package and the Mortgage Choice Act,
and I appreciate the gentleman's yielding so that we can talk about why
every Member of Congress should support this package of reforms.
Before I get to the substance, I do also want to thank the ranking
member, thank her for voicing support for the underlying policies in
this legislation. I want to thank her for expressing absolutely no
concern about the substance of the policy in her remarks, and I would
also like to thank the ranking member for her recognition that the
Dodd-Frank law may very well have flaws, even for those who adamantly
supported the passage of the bill, and for her acknowledgement that she
would have no problem changing or dealing with some of the flaws of the
Dodd-Frank law. Well, this is our chance, Mr. Speaker. This is the
chance to deal with those flaws.
The legislation on the floor tonight is a package of four commonsense
financial services bills that all share a common theme. They all have
proven bipartisan support. They all have passed either the House or the
Senate with unanimous or near-unanimous support, and, most
importantly--put aside all of this procedure here--they all promote
jobs.
They all promote durable economic growth in this country, and Members
on both sides of the aisle and Members in both this Chamber and in the
Senate agree about that. Let's stop the games in Washington, and let's
get the American people back to work. That is what we have an
opportunity to do here in a bipartisan way; so I call on my colleagues
to support this bill.
This is a simple 14-page bill that is about fixing unintended
consequences of the Dodd-Frank law. These fixes are technical
corrections, and they are meant to clarify provisions in the law where,
although congressional intent was clear, the authority provided by the
statutory language led some regulators to enact or promulgate
economically destructive regulations.
The four titles of this legislative package represent the hard work
of a number of Members of Congress on both sides of the aisle. Let me
just go through those really quickly. Title I of the legislation is an
important provision that clarifies the capital requirements applied to
insurance companies subject to Federal Reserve Board supervision.
Mr. Huizenga did a good job explaining what this title does; but,
just in summary, it is important that the capital rules for insurance
companies are carefully tailored to the business of insurance rather
than arbitrarily holding insurance companies to standards that are
meant for banks.
I want to thank Congressman Gary Miller, a Republican from
California, Congresswoman Maloney, a Democrat from New York, for their
leadership--bipartisan leadership--for this Insurance Capital Standards
Clarification Act and for helping push this provision forward.
I would also like to further emphasize the bipartisan and
noncontroversial nature of this title by noting that the Senate version
of the Insurance Capital Standards Clarification Act passed the Senate
by unanimous consent on June 3.
Then there is title II. Title II is the text of a bill that I
introduced in March which passed the House by a voice vote. This was a
bill that no one opposed. This was a bill that simply incorporates
bipartisan provisions of the Restoring Proven Financing for American
Employers Act, and it is about jobs.
[[Page H7512]]
It is about restoring a robust and dependable commercial lending
market to U.S. companies so that they can obtain affordable financing
to expand their businesses.
Collateralized loan obligations, known as CLOs, have proven to be a
critical source of funding for U.S. businesses for over 20 years.
Today's CLOs continue to provide $300 billion in financing to U.S.
companies on Main Street, including companies that are well-known to
all of us in this room: Dunkin' Donuts, American Airlines, Burger King,
Toys R Us, Delta Airlines, Goodyear Tire, and even a mattress company
in Lexington, Kentucky, my home district, Tempur Sealy.
Because of this innovative source of financing, U.S. employers have
expanded, jobs have been created, and our economy has grown; and,
despite a proven track record with a default rate below even a half a
percent, this valuable form of corporate finance is under assault
because of the Volcker rule.
Further relief from the Volcker rule for these CLOs is necessary to
prevent a fire sale in the CLO market that will cause significant
losses for banks of all size. This defined, narrow fix which clarifies
that the Volcker rule should not be construed to require the
divestiture of any debt securities of CLOs prior to July 21, 2017, if
such CLOs were issued before January 31, 2014, is a commonsense
solution.
It clarifies that a bank shall not be considered to have an ownership
interest in a CLO if such debt security has no indicia of ownership
other than the right to participate in the removal for cause in the
selection of a replacement investment manager or investment adviser of
the CLO.
This title is a bipartisan commonsense fix to a real-world problem
voiced by community banks and by companies on Main Street that want
access to this affordable and reliable source of commercial credit. It
prevents an unnecessary fire sale in the CLO market that would cause
significant losses to banks currently holding these legacy CLOs, and it
will help keep the cost of borrowing affordable in the future for Main
Street U.S. businesses looking to expand, grow, and create much-needed
jobs.
I want to personally thank Congresswoman Maloney and Ranking Member
Waters for working with me to enact a CLO fix so that it could pass by
a voice vote in April.
Then, also, title III, this is the fix that Congressman Huizenga
helped pass, and Congressman Huizenga worked in a bipartisan way with
Congressman Meeks to support this Mortgage Choice Act, and it passed
the House by a voice vote--not a single objection--on June 19, and I
won't go over the details which Congressman Huizenga has done well, but
I will say that this measure will greatly advance our efforts to help
the housing market and our economy recover as Members on both sides of
the aisle have demonstrated with their support and supporting it by
voice vote.
Finally, title IV, this is the fourth and final title of this
package, and it is a provision that has broad support for Main Street
and businesses of all sizes. Like other provisions of this package,
title IV is meant to alleviate the unintended consequences created by
Dodd-Frank. It is a technical fix that has proven bipartisan support
and passed the House on June 12 with 411 votes in favor.
The provision simply clarifies and codifies congressional intent that
Dodd-Frank was not supposed to impose margin requirements on end user
derivative transactions. We are talking about nonfinancial companies
that produce goods for the American people and simply use derivatives
to hedge against commercial risk.
This provision is not about speculation. It is about promoting
responsible risk-management practices among U.S. companies. In fact,
failure to enact this provision could lead to more risk as companies
may be deterred from engaging in hedging transactions.
It requires them to needlessly tie up capital that could otherwise be
used to do more productive things like expand operating plants, perform
research and product development, and ultimately create jobs. Again,
this is a provision that previously passed the House with near
unanimous support.
In conclusion, Mr. Speaker, what do we have here today? We have a
package of four bills, 14 pages, unlike the 2,300 pages in Dodd-Frank--
14 pages, each of which of these four bills--overwhelmingly
bipartisan--each of which are vital to preserving and creating jobs,
each of which are noncontroversial in nature, and two of these
provisions previously passed the House by voice vote, a third passed
with 411 votes, and the fourth is a commonsense critically important
solution for the 75 million American families that rely on life
insurance for financial and retirement security, a bill that passed the
Senate by unanimous consent.
The substance and the policy behind these bills are bipartisan. It is
solid. I would certainly expect that, if you would support the
underlying policy, then you would support this commonsense package of
bills to promote jobs and durable economic growth.
Ms. WATERS. Mr. Speaker, I am so proud to yield as much time as she
may consume to the gentlewoman from New York (Mrs. McCarthy), a
distinguished member of the Financial Services Committee. She is a
woman that has worked hard to bring a clear bill to the floor.
Mrs. McCARTHY of New York. Just for the record, when my colleague was
speaking, my name is Carolyn McCarthy, not Carolyn Maloney, just so we
clarify that, and I want to thank Ms. Waters. I want to thank the
ranking member on Financial Services.
I have a speech here, but I need to clarify a few things. I am not
sure, my memory has not been good since I was sick, but I was on
Financial Services when we did Dodd-Frank, and we worked very hard,
bipartisanly, on that committee, and we saw the problems on some of the
language, and we corrected them bipartisanly.
We made sure that when we were dealing with derivatives, that it
didn't have the language that you are complaining about. That came from
the Senate side.
When we are talking about the insurance companies and making it
easier to make sure they could do their job and not be treated like a
bank, we got the language here on the House side. Again, the Senate
side misinterprets some and had the wrong language. Gary Miller and I
have been working a year--over a year--to make the corrections that are
coming out today.
Now, I support everything that we are going to be voting on, but I am
reluctant about it because talking to my colleagues on the Senate side,
they have said that they will not do it; so something that you all want
has a really good chance of never seeing the light of day. Maybe next
year. That is fine. Whom are you hurting, and what are you proving?
Mainly because, now, the insurance companies are going to be in limbo.
We don't know what is going to happen; so you are putting off something
again.
I am ending my career here in Congress. I will be retiring, and I
have to say, for 18 years, I have worked bipartisanly, and I have
gotten a lot of things done, and I hope to continue to get some things
done between now and when I retire, but I also think what I have seen
here is this politicking that words are said and people don't get to
know each other.
Now, the audience might not understand everything that is going on
here on the floor, but I do believe that what we have done on Dodd-
Frank--and, now, yes, there are technical changes; but, to be very
honest with you, in 18 years, I do not remember any bill--major bill--
being passed here, going through the Senate, that didn't come back for
technical changes.
We are not perfect. As many times as people want to think we are, we
are not. We are human beings; and, unfortunately, we do not take the
time to legislate and to work things out as we have done in the past. I
am not blaming Republicans, and I am not blaming Democrats.
We have got good people on both sides of the aisle, and it hurts me
terribly to see this going on when everybody should be working together
for the country, not whether you are a Republican or a Democrat.
There are many of us who care very much about getting jobs. There are
many of us that care to get everybody forward, and I think that is
something that people have to start realizing. We have so many members
on your side of the aisle and members on our side of the aisle that
have been friends for
[[Page H7513]]
years and years, and you have got to learn to work together. You can
have your opinions, and we have ours, but you have got to sit down and
work together.
I know the big word around here is don't compromise. It is not
compromising. It is trying to represent all of our constituents for the
whole country.
{time} 2100
And Ms. Waters is absolutely right. She worked very hard during Dodd-
Frank, as many of your Republican colleagues did. But it was Gary
Miller and I who have been working with the Senate for over a year and
to see this bill come onto the floor, which is going to pass, and it
will pass. What upsets me is it is not going to go anywhere in the
Senate. Another bill will die. And there is no reason for it. 204
Members bipartisanly want to see the Capital Standards Clarification
Act of 2014 passed.
I understand where you want to put everything together so you see it
is efficient. Sometimes you have to know how the Senate works so that
we can be efficient and work with them as we go forward because, if had
you done that, you would hear Republicans and Democrats in the Senate
and their aides who are saying, This is not the way it is done. That is
why we are upset.
When you have so many people working on this, many of your
colleagues, my colleagues signing on to having it done, and now we are
going to see, most likely, it die or put off until next year, which is
really a shame because the companies you are talking about, everything
you are talking about as far as the jobs bills and everything else like
that, I would like to see that signed by the President tomorrow. That
ain't going to happen now, and it is not going to happen now.
So what I will say is Ms. Waters is correct, but I will vote for this
bill tomorrow. Many of my colleagues will vote for this bill tomorrow
because we are hoping we will go forward. But in my heart of hearts,
because I have been around here too long, I don't think the Senate is
going to pass it, and that is a shame because that is what you are
working for. That is what we are working for. But the Senate's
procedures do not do it.
They will take a stand-alone bill. And from what I understand, Mr.
Miller and I will hopefully introduce a stand-alone bill in the next
few days, because if this dies in the Senate, we will take up the
Senate bill, which is our bill, and hopefully get a vote here and have
the President sign it within a few days.
Mr. Speaker, tonight the House is considering the Insurance Capital
Standards Clarification Act of 2014 under suspension of the rules.
This bill contains four Financial Services Bills including S. 2270.
I am pleased to be the lead democrat on H.R. 4510, the House
companion to S. 2270, the Insurance Capital Standards Clarification Act
of 2014. However, this is not the same bill that we will be voting on.
Though I will reluctantly support the bill, I am disappointed in the
process and believe that S. 2270 should have been brought up as a
stand-alone bill, rather than combined with three other bills which
have already passed the House. The Senate has indicated they would need
to start all over if changes were made to the original bill.
Ranking Member Waters rightly objected to this procedure last week
yet her concerns were ignored.
S. 2270 supports a more precise application of capital standards that
furthers the interests of strong prudential supervision. This
legislation grants the Federal Reserve the appropriate flexibility to
apply accurate capital standards for insurers. This bill will help keep
insurance products affordable and available by ensuring the correct
capital standards are applied to insurance companies that fall under
the supervision of the Federal Reserve.
This House version already has 204 bipartisan cosponsors and S. 2270
would easily pass under suspension. This bill has already passed the
Senate by unanimous consent. Passing S. 2270 on its own in the House
would have sent the bill directly to the president's desk.
Instead, the Financial Services committee majority leadership has
insisted on combining four bills and using our title, even though this
is different legislation. This creates uncertainty as to the future of
the original bill.
I will support the Insurance Capital Standards Clarification Act of
2014 on the floor tonight and urge my colleagues to do the same.
However, I am disappointed in the process that has been used. Had S.
2270 been passed as a stand-alone bill, it would have been sent
directly to the President's desk. Instead, we will likely have to vote
on S. 2270 as a stand-alone bill during the lame duck session, which is
already filled with a long list of remaining actions.
The House delay in passing this bill is causing uncertainty for
insurance companies who cannot plan for the future of their businesses
without knowing the appropriate capital standards. I encourage my
colleagues to cosponsor H.R. 4510, the House version of S. 2270, so
that we can reach 218 cosponsors and bring this to the floor.
The SPEAKER pro tempore. Members are reminded to direct their remarks
to the Chair.
Mr. HUIZENGA of Michigan. Mr. Speaker, I yield an additional 30
seconds to my colleague from Kentucky (Mr. Barr), who would like to
clarify.
Mr. BARR. Mr. Speaker, I thank the gentleman, and I thank the
gentlewoman for her comments. I appreciate what she is saying about
bipartisanship. Let me just make sure I clarify. I was referring to
Congresswoman Maloney on the legislation that she and I worked on
together, the CLO bill. So, in a very bipartisan way, I worked with her
on that.
But to the substance of the gentlewoman's remarks, I appreciate what
she is saying, absolutely, and that is what is such a shame about this
whole situation because we have four bills that have been worked on in
a bipartisan way. There shouldn't be any controversy about this
whatsoever.
Let's do the business of the American people, get them back to work.
Pass these bipartisan bills.
Mr. HUIZENGA of Michigan. Mr. Speaker, I yield myself such time as I
may consume.
I am curious why we are here. The House of Representatives is only
going to pass Senate bills. I am curious why my colleagues would be
willing to do that. I would love to hear from my colleagues, which
overwhelmingly passed House bill does the Senate object to? We simply
cannot get them to take our bills up.
I am glad to hear that my colleague, Mrs. McCarthy, is going to be
supporting this bill package. I too am hopeful. But I do believe that
this is not political theater, for the robust list of supporters, like
credit unions, banks, insurers of all sizes, the entire real estate
community and end-users strongly support the policies that are within
this bill. And I do have that list available as well, which I will
include for the Record.
So, Mr. Speaker, I am prepared to close, and with that, I reserve the
balance of my time.
September 15, 2014.
Dear Members of Congress: The undersigned trade
associations, representing job creators across the country of
all shapes and sizes, write to urge your support for
bipartisan legislation recently introduced by Reps. Andy Barr
(R-KY), Gary Miller (R-CA), Bill Huizenga (R-MI), and David
Scott (D-GA). H.R. 5461, currently scheduled for floor
consideration on Monday, September 15th, includes important
technical corrections to the Dodd-Frank Wall Street Reform
and Consumer Protection Act that strengthen the underlying
Act and provide critical clarifications to better oversee our
financial system while allowing for economic growth.
The ongoing implementation of the Dodd-Frank Act has
revealed unintended consequences that have adversely impacted
job creation and economic growth. We believe that the Barr-
Miller bill, comprised of a series of noncontroversial,
thoroughly examined, bipartisan proposals will fix these
unintended consequences and help make financial reform more
workable and effective. Specifically, this legislation
contains the text of three bills previously approved by the
House (H.R. 634, the Business Risk Mitigation and Price
Stabilization Act; H.R. 3211, the Mortgage Choice Act; H.R.
4167, the Restoring Proven Financing for American Employers
Act) as well as one bill that recently passed the Senate (S.
2270, the Insurance Capital Standards Clarification Act) by
unanimous consent. In fact, three of the four titles of this
package have previously passed either the House or Senate
without one dissenting vote.
We urge your support for the Barr-Miller-Huizenga-Scott
bill to help foster job creation and economic growth.
Signed,
American Bankers Association; American Bankers Insurance
Association (ABIA); American Financial Services Association;
American Insurance Association; Consumer Bankers Association;
Consumer Mortgage Coalition; Community Mortgage Lenders of
America; Credit Union National Association; The Financial
Services Roundtable; The Financial Services Forum;
Independent Community Bankers of America; Leading Builders of
America; The Loan Syndications and
[[Page H7514]]
Trading Association; Mortgage Bankers Association; National
Association of Federal Credit Unions; National Association of
Home Builders; National Association of Mutual Insurance
Companies; National Association of Realtors; The Realty
Alliance; Real Estate Services Providers Council, Inc.
(RESPRO); Securities Industry and Financial Markets
Association; U.S. Chamber of Commerce.
Ms. WATERS. Mr. Speaker, may I inquire as to how much time I have
left?
The SPEAKER pro tempore. The gentlewoman from California has 7\1/2\
minutes remaining.
Ms. WATERS. Oh, very good. I yield such time as he may consume to the
gentleman from Minnesota (Mr. Ellison).
Mr. ELLISON. Mr. Speaker, the bill we took up before this one, on
Father Flanagan, that is the kind of bill that we should be doing on
suspension calendar. In fact, the heart of this particular bill is
noncontroversial, and I think a lot of people would be looking forward
to just voting up the Insurance Capital Standards Clarification Act.
I think a lot of people would like to just get this bill up, pass it,
and send it right to the President. We could do that. Unfortunately,
this bill, even if it does have bipartisan support, has been loaded up
with other bills, and the Senate has indicated that they are not going
to take it up.
So, to the gentleman's point from Michigan, we are not just here to
pass Senate bills--that is a fair point of view to hold--but it is a
matter of pragmatic legislative action. This is the bill we could have
passed and could be passed into law and signed by the President. So to
pack this bill up even with bipartisan legislation slows it up, which
delays good outcomes for people who could have them.
In my opinion, that is unwise and ill-advised, and I am very sorry
that the President is not going to get the Insurance Capital Standards
Clarification Act on his desk because he certainly could if there was a
spirit of cooperation.
Mr. HUIZENGA of Michigan. Mr. Speaker, I am prepared to close, Mr.
Speaker, and reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield as much time as she may consume to
the gentlewoman from New York (Mrs. McCarthy).
Mrs. McCARTHY of New York. What I was trying to explain to you, it is
not that we are giving up our power from here to the Senate. The Senate
will not accept everything as a package because they have to change all
their language, and that is not going to happen.
They will send back here a stand-alone bill, probably pass the other
package--that is fine--but they are not going to change or open it up.
That is what I meant to tell you, that you have to understand how the
Senate works, and the House is totally different. That is all I am
saying, and that is why this bill might die, unfortunately, over in the
Senate, because they are not going to get to it because, let's face it,
we have too much to do between now and when we come back for a lameduck
session.
Mr. HUIZENGA of Michigan. Mr. Speaker, again, I am prepared to close,
and I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker and Members, I think the argument that we had a piece of
legislation here authored by Mrs. McCarthy and Mr. Miller that truly
had bipartisan support, that had been worked on so long and so hard by
the gentlewoman from New York, that could have passed, and it should
have, not been placed in this controversial position. This bill should
have been a clean bill that was put forth in a way that would allow the
Senate to support it, and to place it--well, the Senate--we would put
this on the President's desk if, in fact, we just passed this bill out
as a clean bill. It is quite unfortunate.
My colleagues can say all that they want to say about jobs and
creating jobs. They talked about bills that had been supported in the
committee and bills that had even been supported on the floor. Why are
you bringing them back again? Why are you repackaging them? Why are you
taking bills that you are identifying as having had all this great
support and passed off the floor, passed out of committee, why are you
repackaging them? I will tell you why you are repackaging them: because
you are trying to create this picture that somehow you have this great
jobs bill, that somehow you have worked in some extraordinary ways to
put together, despite the fact that you are just repackaging bills
that, as you said, had support.
The gentleman from Michigan said he is confused. Yes, I think you
are, and I think you are confusing others, and that is my point. My
point is it doesn't matter whether or not we have bills that were
jointly supported or passed out of committee or passed off the floor.
This process and this procedure that you are employing is one that is
not fair to the Members of this House.
You are putting forth a process that is complex, that is not easily
understood, and now the Members who come to the floor, if they have to
take a vote, are going to try to decide did I support that or didn't I
support that.
I think that the way that you are doing this is somewhat dangerous;
and I can just envision that for the future that we may have a
situation where you will hold all of the bills that perhaps do not have
bipartisan support, and again you will package them with maybe one
bill, as you are doing with this one, with support, and we will never
have an opportunity to have the kind of debate and amendments that we
should have.
It is about process. It is about procedure. It is about making sure
the American people understand what we are doing and how we are doing
it. It is not about being slick. It is not about being cute. It is not
about trying to take the process and package it in such a way that you
can get what you want with a big title of jobs to make people think you
have done something new, creative, and extraordinary.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Members are reminded to address their
remarks to the Chair.
Mr. HUIZENGA of Michigan. Mr. Speaker, I yield myself such time as I
may consume.
I will address my remarks to the Chair, but, again, this is not about
parliamentary procedure. This is about results.
The only bill that we will see here that may bring confusion to this
entire process is the one that my colleagues are advocating for, the
Senate bill. It is the only bill that we haven't dealt with in
committee. It is the only bill we haven't had a vote on in the Houses.
The other three bills have passed, two of them unanimously by voice
vote, and the other one had 12 people, out of a body of 435, vote
against it. Sounds like it is overwhelming. If it is that confusing to
my colleagues to figure out what bill and how they voted for it when
they come to the floor to vote on this package, they maybe should
reconsider their current line of work. This should not be that tough.
This is, again, something that we need to move forward on. The
political theater that seems to be happening here is on the other side.
I am not sure why, if it is about trying to play to a base for an
election issue or what, but this is the one time I think in the history
of my working career that the whole is worse than the sum of its parts.
This doesn't make any sense.
So there has not been bipartisan work on the underlying bill, Dodd-
Frank, which I might remind my colleagues passed with zero minority
Republican votes when the bill was passed. This package of bills has
passed with overwhelming bipartisan support. I applaud my colleagues on
the other side of the aisle when they oppose the Senate.
And I guess I needed to clarify that my comments about people acting
like this is holy writ from the heavens does tend to be concentrated
with my colleagues over in the Senate who apparently don't want to
touch this or others in the administration who oppose the nine-bill
package on derivatives reform that passed overwhelmingly bipartisanly
out of our committee as well.
That is the kind of holdup that we have that is frustrating
Americans, that is frustrating me as a policymaker and my colleagues,
that is frustrating, frankly, future generations as they look in on
this process.
It is time, Mr. Speaker, to pass this package of bills that includes
three bills that this House has already dealt
[[Page H7515]]
with, that the Senate should have absolutely no opposition to or excuse
why they will not take up.
With that, I again ask my colleagues to pass this particular bill,
H.R. 5461, and look forward to its passage here soon.
I yield back the balance of my time.
{time} 2115
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Michigan (Mr. Huizenga) that the House suspend the rules
and pass the bill, H.R. 5461.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
____________________