[Congressional Record Volume 164, Number 29 (Wednesday, February 14, 2018)]
[House]
[Pages H1155-H1169]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1515
                      TRID IMPROVEMENT ACT OF 2017

  Mr. HENSARLING. Madam Speaker, pursuant to House Resolution 736, I 
call up the bill (H.R. 3978) to amend the Real Estate Settlement 
Procedures Act of 1974 to modify requirements related to mortgage 
disclosures, and for other purposes, and ask for its immediate 
consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 736, an 
amendment in the nature of a substitute consisting of the text of Rules 
Committee Print 115-59, modified by the amendment printed in part B of 
House Report 115-559 is adopted, and the bill, as amended, is 
considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 3978

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Table of contents.

                       TITLE I--TRID IMPROVEMENT

Sec. 101. Amendments to mortgage disclosure requirements.

                  TITLE II--PROTECTION OF SOURCE CODE

Sec. 201. Procedure for obtaining certain intellectual property.

                    TITLE III--FOSTERING INNOVATION

Sec. 301. Temporary exemption for low-revenue issuers.

        TITLE IV--NATIONAL SECURITIES EXCHANGE REGULATORY PARITY

Sec. 401. Nationally traded securities exemption.

       TITLE V--ELIMINATING BARRIERS TO JOBS FOR LOAN ORIGINATORS

Sec. 501. Eliminating barriers to jobs for loan originators.
Sec. 502. Amendment to civil liability of the Bureau and other 
              officials.
Sec. 503. Effective date.

      TITLE VI--FINANCIAL STABILITY OVERSIGHT COUNCIL IMPROVEMENT

Sec. 601. SIFI designation process.
Sec. 602. Rule of construction.

     SEC. 2. SECURITIES AND EXCHANGE COMMISSION RESERVE FUND.

       Notwithstanding section 4(i)(2)(B)(i) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78d(i)(2)(B)(i)), the amount 
     deposited in the Securities and Exchange Commission Reserve 
     Fund for fiscal year 2018 may not exceed $48,000,000.

                       TITLE I--TRID IMPROVEMENT

     SEC. 101. AMENDMENTS TO MORTGAGE DISCLOSURE REQUIREMENTS.

       Section 4(a) of the Real Estate Settlement Procedures Act 
     of 1974 (12 U.S.C. 2603(a)) is amended--
       (1) by striking ``itemize all charges'' and inserting 
     ``itemize all actual charges'';
       (2) by striking ``and all charges imposed upon the seller 
     in connection with the settlement and'' and inserting ``and 
     the seller in connection with the settlement. Such forms''; 
     and
       (3) by inserting after ``or both.'' the following new 
     sentence: ``Charges for any title insurance premium disclosed 
     on such forms shall be equal to the amount charged for each 
     individual title insurance policy, subject to any discounts 
     as required by State regulation or the title company rate 
     filings.''.

                  TITLE II--PROTECTION OF SOURCE CODE

     SEC. 201. PROCEDURE FOR OBTAINING CERTAIN INTELLECTUAL 
                   PROPERTY.

       (a) Persons Under Securities Act of 1933.--Section 8 of the 
     Securities Act of 1933 (15 U.S.C. 77h) is amended by adding 
     at the end the following:
       ``(g) Procedure for Obtaining Certain Intellectual 
     Property.--The Commission is not authorized to compel under 
     this title a person to produce or furnish source code, 
     including algorithmic trading source code or similar 
     intellectual property that forms the basis for design of the 
     source code, to the Commission unless the Commission first 
     issues a subpoena.''.
       (b) Persons Under the Securities Exchange Act of 1934.--
     Section 23 of the Securities Exchange Act of 1934 (15 U.S.C. 
     78w) is amended by adding at the end the following:
       ``(e) Procedure for Obtaining Certain Intellectual 
     Property.--The Commission is not authorized to compel under 
     this title a person to produce or furnish source code, 
     including algorithmic trading source code or similar 
     intellectual property that forms the basis for design of the 
     source code, to the Commission unless the Commission first 
     issues a subpoena.''.
       (c) Investment Companies.--Section 31 of the Investment 
     Company Act of 1940 (15 U.S.C. 80a-30) is amended by adding 
     at the end the following:
       ``(e) Procedure for Obtaining Certain Intellectual 
     Property.--The Commission is not authorized to compel under 
     this title an investment company to produce or furnish source 
     code, including algorithmic trading source code or similar 
     intellectual property that forms the basis for design of the 
     source code, to the Commission unless the Commission first 
     issues a subpoena.''.
       (d) Investment Advisers.--Section 204 of the Investment 
     Advisers Act of 1940 (15 U.S.C. 80b-4) is amended--
       (1) by adding at the end the following:
       ``(f) Procedure for Obtaining Certain Intellectual 
     Property.--The Commission is not authorized to compel under 
     this title an investment adviser to produce or furnish source 
     code, including algorithmic trading source code or similar 
     intellectual property that forms the basis for design of the 
     source code, to the Commission unless the Commission first 
     issues a subpoena.''; and
       (2) in the second subsection (d), by striking ``(d)'' and 
     inserting ``(e)''.

                    TITLE III--FOSTERING INNOVATION

     SEC. 301. TEMPORARY EXEMPTION FOR LOW-REVENUE ISSUERS.

       Section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
     7262) is amended by adding at the end the following:
       ``(d) Temporary Exemption for Low-Revenue Issuers.--
       ``(1) Low-revenue exemption.--Subsection (b) shall not 
     apply with respect to an audit report prepared for an issuer 
     that--
       ``(A) ceased to be an emerging growth company on the last 
     day of the fiscal year of the issuer following the fifth 
     anniversary of the date of the first sale of common equity 
     securities of the issuer pursuant to an effective 
     registration statement under the Securities Act of 1933;
       ``(B) had average annual gross revenues of less than 
     $50,000,000 as of its most recently completed fiscal year; 
     and
       ``(C) is not a large accelerated filer.
       ``(2) Expiration of temporary exemption.--An issuer ceases 
     to be eligible for the exemption described under paragraph 
     (1) at the earliest of--
       ``(A) the last day of the fiscal year of the issuer 
     following the tenth anniversary of the date of the first sale 
     of common equity securities of the issuer pursuant to an 
     effective registration statement under the Securities Act of 
     1933;
       ``(B) the last day of the fiscal year of the issuer during 
     which the average annual gross revenues of the issuer exceed 
     $50,000,000; or
       ``(C) the date on which the issuer becomes a large 
     accelerated filer.
       ``(3) Definitions.--For purposes of this subsection:
       ``(A) Average annual gross revenues.--The term `average 
     annual gross revenues' means the total gross revenues of an 
     issuer over its most recently completed three fiscal years 
     divided by three.
       ``(B) Emerging growth company.--The term `emerging growth 
     company' has the meaning given such term under section 3 of 
     the Securities Exchange Act of 1934 (15 U.S.C. 78c).
       ``(C) Large accelerated filer.--The term `large accelerated 
     filer' has the meaning given that term under section 240.12b-
     2 of title 17, Code of Federal Regulations, or any successor 
     thereto.''.

        TITLE IV--NATIONAL SECURITIES EXCHANGE REGULATORY PARITY

     SEC. 401. NATIONALLY TRADED SECURITIES EXEMPTION.

       Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. 
     77r(b)(1)) is amended--
       (1) by striking subparagraph (A);
       (2) in subparagraph (B)--
       (A) by inserting ``a security designated as qualified for 
     trading in the national market system pursuant to section 
     11A(a)(2) of the Securities Exchange Act of 1934 that is'' 
     before ``listed''; and
       (B) by striking ``that has listing standards that the 
     Commission determines by rule (on its own initiative or on 
     the basis of a petition) are substantially similar to the 
     listing standards applicable to securities described in 
     subparagraph (A)'';
       (3) in subparagraph (C), by striking ``or (B)''; and
       (4) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (A) and (B), respectively.

       TITLE V--ELIMINATING BARRIERS TO JOBS FOR LOAN ORIGINATORS

     SEC. 501. ELIMINATING BARRIERS TO JOBS FOR LOAN ORIGINATORS.

       (a) In General.--The S.A.F.E. Mortgage Licensing Act of 
     2008 (12 U.S.C. 5101 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 1518. EMPLOYMENT TRANSITION OF LOAN ORIGINATORS.

       ``(a) Temporary Authority To Originate Loans for Loan 
     Originators Moving From a

[[Page H1156]]

     Depository Institution to a Non-Depository Institution.--
       ``(1) In general.--Upon employment by a State-licensed 
     mortgage company, an individual who is a registered loan 
     originator shall be deemed to have temporary authority to act 
     as a loan originator in an application State for the period 
     described in paragraph (2) if the individual--
       ``(A) has not had an application for a loan originator 
     license denied, or had such a license revoked or suspended in 
     any governmental jurisdiction;
       ``(B) has not been subject to or served with a cease and 
     desist order in any governmental jurisdiction or as described 
     in section 1514(c);
       ``(C) has not been convicted of a felony that would 
     preclude licensure under the law of the application State;
       ``(D) has submitted an application to be a State-licensed 
     loan originator in the application State; and
       ``(E) was registered in the Nationwide Mortgage Licensing 
     System and Registry as a loan originator during the 12-month 
     period preceding the date of submission of the information 
     required under section 1505(a).
       ``(2) Period.--The period described in paragraph (1) shall 
     begin on the date that the individual submits the information 
     required under section 1505(a) and shall end on the earliest 
     of--
       ``(A) the date that the individual withdraws the 
     application to be a State-licensed loan originator in the 
     application State;
       ``(B) the date that the application State denies, or issues 
     a notice of intent to deny, the application;
       ``(C) the date that the application State grants a State 
     license; or
       ``(D) the date that is 120 days after the date on which the 
     individual submits the application, if the application is 
     listed on the Nationwide Mortgage Licensing System and 
     Registry as incomplete.
       ``(b) Temporary Authority To Originate Loans for State-
     Licensed Loan Originators Moving Interstate.--
       ``(1) In general.--A State-licensed loan originator shall 
     be deemed to have temporary authority to act as a loan 
     originator in an application State for the period described 
     in paragraph (2) if the State-licensed loan originator--
       ``(A) meets the requirements of subparagraphs (A), (B), 
     (C), and (D) of subsection (a)(1);
       ``(B) is employed by a State-licensed mortgage company in 
     the application State; and
       ``(C) was licensed in a State that is not the application 
     State during the 30-day period preceding the date of 
     submission of the information required under section 1505(a) 
     in connection with the application submitted to the 
     application State.
       ``(2) Period.--The period described in paragraph (1) shall 
     begin on the date that the State-licensed loan originator 
     submits the information required under section 1505(a) in 
     connection with the application submitted to the application 
     State and end on the earliest of--
       ``(A) the date that the State-licensed loan originator 
     withdraws the application to be a State-licensed loan 
     originator in the application State;
       ``(B) the date that the application State denies, or issues 
     a notice of intent to deny, the application;
       ``(C) the date that the application State grants a State 
     license; or
       ``(D) the date that is 120 days after the date on which the 
     State-licensed loan originator submits the application, if 
     the application is listed on the Nationwide Mortgage 
     Licensing System and Registry as incomplete.
       ``(c) Applicability.--
       ``(1) Any person employing an individual who is deemed to 
     have temporary authority to act as a loan originator in an 
     application State pursuant to this section shall be subject 
     to the requirements of this title and to applicable State law 
     to the same extent as if such individual was a State-licensed 
     loan originator licensed by the application State.
       ``(2) Any individual who is deemed to have temporary 
     authority to act as a loan originator in an application State 
     pursuant to this section and who engages in residential 
     mortgage loan origination activities shall be subject to the 
     requirements of this title and to applicable State law to the 
     same extent as if such individual was a State-licensed loan 
     originator licensed by the application State.
       ``(d) Definitions.--In this section, the following 
     definitions shall apply:
       ``(1) State-licensed mortgage company.--The term `State-
     licensed mortgage company' means an entity licensed or 
     registered under the law of any State to engage in 
     residential mortgage loan origination and processing 
     activities.
       ``(2) Application state.--The term `application State' 
     means a State in which a registered loan originator or a 
     State-licensed loan originator seeks to be licensed.''.
       (b) Table of Contents Amendment.--The table of contents in 
     section 1(b) of the Housing and Economic Recovery Act of 2008 
     (42 U.S.C. 4501 note) is amended by inserting after the item 
     relating to section 1517 the following:

``Sec. 1518. Employment transition of loan originators.''.

     SEC. 502. AMENDMENT TO CIVIL LIABILITY OF THE BUREAU AND 
                   OTHER OFFICIALS.

       Section 1513 of the S.A.F.E. Mortgage Licensing Act of 2008 
     (12 U.S.C. 5112) is amended by striking ``are loan 
     originators or are applying for licensing or registration as 
     loan originators.'' and inserting ``have applied, are 
     applying, or are currently licensed or registered through the 
     Nationwide Mortgage Licensing System and Registry. The 
     previous sentence shall only apply to persons in an industry 
     with respect to which persons were licensed or registered 
     through the Nationwide Mortgage Licensing System and Registry 
     on the date of the enactment of this sentence.''.

     SEC. 503. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect on the date that is 18 months after the date of the 
     enactment of this Act.

  The SPEAKER pro tempore. The bill, as amended, shall be debatable for 
1 hour equally divided and controlled by the chair and ranking minority 
member of the Committee on Financial Services.
  After 1 hour of debate on the bill, as amended, it shall be in order 
to consider the further amendment printed in part C of House Report 
115-559, if offered by the Member designated in the report, which shall 
be considered read, shall be separately debatable for the time 
specified in the report equally divided and controlled by the proponent 
and an opponent, and shall not be subject to a demand for a division of 
the question.
  The gentleman from Texas (Mr. Hensarling) and the gentlewoman from 
California (Ms. Maxine Waters) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. HENSARLING. Madam Speaker, I ask unanimous consent that all 
Members may have 5 legislative days in which to revise and extend their 
remarks and submit extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HENSARLING. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise today in strong support of H.R. 3978, which is 
a package of five strongly bipartisan bills, yet again, from the 
Financial Services Committee of the House. As standalone bills, all 
were favorably reported, again, with strong bipartisan support of at 
least three-quarters of the committee.
  The title provision of this package is the TRID Improvement Act by 
Congressman French Hill. This bill amends CFPB's complex TILA/RESPA 
integrated disclosure, known as the TRID rule, in order to simplify the 
closing documents consumers get when they close a mortgage.
  It does this by allowing for the calculation of the discounted rate 
that title insurance companies provide to consumers when they purchase 
a lender's and owner's title insurance policy simultaneously. This 
makes it more accurate, Madam Speaker.
  Title II is the Protection of Source Code Act introduced by 
Representatives Sean Duffy and David Scott, a Republican and a 
Democrat. This provision ensures that the Securities and Exchange 
Commission cannot require financial services firms to disclose 
algorithmic trading source code without first obtaining a subpoena. 
Source code is among a firm's most sensitive information, and this 
bipartisan provision balances privacy and due process concerns while 
preserving the SEC's ability to obtain such information when necessary.
  The third title is the Fostering Innovation Act which was introduced 
by Representatives Sinema and Hollingsworth to provide relief to small 
and emerging businesses by extending the popular onramp exemption of 
the JOBS Act for emerging growth companies in a more tailored manner. 
In short, it provides emerging growth companies more time to reach a 
size when they reasonably can be expected to financially sustain the 
legal, accounting, and compliance costs associated with the full 
Sarbanes-Oxley section 404(b) compliance.
  Fourth, Madam Speaker, is the National Securities Exchange Regulatory 
Parity Act which was introduced by Mr. Royce and which will ensure 
further clarity and competition among national security exchanges by 
modernizing the blue sky exemption in the Securities Act. Modernizing 
this provision will ensure all national security exchanges operate on a 
level regulatory playing field and help protect retail investors from 
arbitrary acts by State regulators that may bar investors in one State 
from buying stock freely available to investors in every other State.

[[Page H1157]]

  The final title of this bill is a provision introduced by Congressman 
Stivers to allow mortgage loan originators who work as loan officers in 
banks and credit unions to transition to a new job at a nonmortgage 
company without losing the ability to originate loans. Without this 
bill, the transition process can take weeks or months depending on the 
State.
  Each of these measures, Madam Speaker, will cut through layers of red 
tape and help level the playing field making regulations smarter, 
fairer, clearer, and more efficient, thus ensuring that there are more 
competitively priced credit opportunities, more credit opportunities 
for consumers, and that investors have greater investment opportunities 
in competitive markets. They will provide commonsense regulatory 
relief. They are practical, they are bipartisan, and they are needed.
  Madam Speaker, I encourage all of my colleagues to support the 
measure, and I reserve the balance of my time.
  Ms. MAXINE WATERS of California. Madam Speaker, I yield myself such 
time as I may consume.
  Madam Speaker, I rise in strong opposition to H.R. 3978, the TRID 
Improvement Act of 2017.
  H.R. 3978 has been dramatically expanded without input from Democrats 
to include several highly problematic and damaging bills. If enacted, 
this amended package of bills would ease the ability of high frequency 
traders to manipulate the stock markets undetected, encourage a 
regulatory race to the bottom in our Nation's stock exchanges, and harm 
investors and small businesses by weakening efforts to prevent 
accounting fraud at smaller public companies.
  Taken together, this deregulatory package could significantly 
undermine market stability and gut investor and consumer protections at 
a time when our financial markets are already rattled.
  Madam Speaker, from January 26 until last Thursday, the stock markets 
plunged just over 10 percent, becoming what the financial services 
industry calls ``stock market correction,'' and for the past two 
trading days, markets have rebounded the most since 2016.
  Although market corrections are not new, what distinguishes today's 
volatility is that it is driven by complex computer strategies designed 
to buy and sell stocks and options millions of times a day. As many of 
us have witnessed, the Dow Jones Industrial Average may be up 500 
points and then down 600 in less than a few minutes. For the average 
American who was hoping to one day retire with dignity by investing her 
hard-earned savings in the stock market, it can be distressing to see 
such wild swings always wondering whether the markets are truly fair or 
whether she is going to be fleeced. Unfortunately, the passage of H.R. 
3978 would likely make those swings more extreme and increase the 
likelihood of problems going forward.

  I am going to walk through each of the problematic provisions in this 
bill. Beginning with title IV, this provision is identical to H.R. 
4546, the National Securities Exchange Regulatory Parity Act, which 
would weaken the standards for listing public companies for trading at 
U.S. stock exchanges. Today, exchanges listing standards set minimum 
requirements for a company's shares to be sold to the public without 
having to comply with State law. Exchanges can only revise these 
standards if the Securities and Exchange Commission first finds that 
new standards are substantially similar to the listing standards of the 
New York Stock Exchange.
  This bill would remove any separate analysis for changing the 
standards and, thus, automatically preempt State oversight. As a 
result, the bill would encourage a race to the bottom of listing 
standards as exchanges compete with each other to attract companies 
with less restrictions, even if the standards are beneficial to the 
investors.
  I believe that we should be strengthening the current analysis to 
promote fair and rigorous listing standards and only preempt State law 
when companies meet high standards. This is why I worked with the 
cosponsors last Congress to strike a bipartisan compromise which passed 
the House unanimously to require the SEC to develop a core qualitative 
listing standard. Unfortunately, my Republican colleagues have reversed 
their position in favor of empowering the industry over the investing 
public.
  Turning to title III which is identical to H.R. 1645, the so-called 
Fostering Innovation Act, this provision would eliminate the 
independent audit of a company's financial reporting controls for up to 
10 years for newly public companies provided that they have $50 million 
or less in gross revenues and less than $700 million in outstanding 
shares. Passed in the wake of the Enron and WorldCom accounting 
scandals, the requirement that public companies conduct an independent 
audit of financial controls is one of the many accounting provisions 
required by the bipartisan Sarbanes-Oxley Act that directly benefits 
investors and public companies by improving the accuracy of their 
financial reporting.
  In fact, companies that are not subject to such review by an 
independent auditor are more likely to issue corrections to their 
financial reports leading to investor losses and higher losses for the 
company.
  Investors like these audits because they improve the veracity of the 
reports they rely on to make investment decisions. Today, truly small 
public companies--those with less than $75 million worth of shares--are 
already exempt from the audit requirement. But this bill would extend 
the exemption to large companies that are nearly ten times that size. 
The law already provides newly public companies with an exemption for 5 
years. Extending it to a decade would harm investor confidence and all 
such companies, hurting the very companies the bill's supporters 
purport to help.
  Title II of this bill is the same language as H.R. 3948, the 
Protection of Source Code Act. This bill bans the SEC from inspecting 
source code used by regulated entities to engage in algorithmic or 
computer-driven trading and other activities that impact the securities 
markets and investors without first obtaining a subpoena. This 
provision would severely hamper the ability of the SEC to effectively 
examine persons like high-frequency traders and to investigate market 
disruptions.
  The recent stock market volatility, which has seen all of the major 
stock indices decline by more than 10 percent in less than 2 weeks, has 
been exacerbated by high-frequency traders using complex computer 
algorithms to determine when to buy and sell millions of trades per 
second by making it harder for the capital markets COP to detect and 
stop bad actors and rein in fraudulent trading schemes. This provision 
will inevitably harm everyday Americans and retirees who rely on fair 
capital markets to invest their hard-earned savings.
  To make matters worse, Republicans added a provision to pay for the 
cost of the bill by taking $2 million from the Securities and Exchange 
Commission's reserve fund. As a result, our financial watchdog will 
have less resources to support its capacity to oversee the markets 
through investments in IT and to respond to unforeseen market events 
like the flash crash.
  In short, this bill asks taxpayers to pay for the costs of diminished 
capital market oversight by taking away SEC's funding to respond to 
emergency market situations that threaten market stability. This 
provision doubles down on the irresponsible policymaking we often see 
by the opposite side of the aisle.
  The bill before us today would also make two less significant changes 
which I believe the Republicans included to garner additional support 
for the legislation. Nevertheless, even with these provisions, the 
package should be soundly rejected.
  Title I, which includes the version of H.R. 3978, TRID Improvement 
Act of 2017, that the committee previously considered, would amend a 
mortgage disclosure known as TRID or the know-before-you-owe disclosure 
that informs home buyers of the terms and conditions of their mortgage. 
Responding to the concerns of some in the real estate industry, this 
provision would amend the disclosure to account for the discounts paid 
to borrowers in States where simultaneous lender and buyer title 
insurance is issued. However, the revised form does nothing for bars in 
States that do not provide such special rates to home buyers, and the 
provision eliminates the Consumer Bureau's ability to fix this aspect 
of the form even if a problem arises in the future.

[[Page H1158]]

  The final provision, title V, is identical to H.R. 2948, the SAFE 
Mortgage Licensing Act. This title would ease the ability of 
individuals employed as mortgage originators to change employers by 
creating a temporary 120-day licensing regime so that they can continue 
to work at their new employer.

  This bill would effectively treat mortgage originators who work for 
State registered firms the same as federally registered firms and was 
unanimously supported by committee Democrats. Unfortunately, because 
this legislation has been packaged with other deeply problematic and 
destructive bills, sensible relief to these individuals that has broad 
bipartisan support is being held hostage by Republicans' efforts to 
roll back as many safeguards as they can this year.
  Madam Speaker, H.R. 3978, as amended, threatens many of the important 
reforms Democrats made to restore investor confidence to our capital 
markets after the worst financial crisis in generations. As the stock 
markets continue to wobble ominously in ways that threaten the savings 
of hardworking Americans, Congress should be strengthening oversight of 
the financial system, not weakening it.
  Not surprisingly, H.R. 3978 is strongly opposed by the North American 
Association of Securities Administrators who serve on the frontline 
combating securities fraud on the State level and by nonpartisan 
organization who speak on behalf of our Nation's consumers, investors, 
and unions, including Consumer Federation of America, Center for 
American Progress, Americans for Financial Reform, AFL-CIO, and Public 
Citizen, and so do I.
  Madam Speaker, I urge everyone to reject this harmful package of 
bills and to vote ``no'' on H.R. 3978.
  Madam Speaker, I reserve the balance of my time.

                              {time}  1530

  Mr. HENSARLING. Madam Speaker, I yield 5 minutes to the gentleman 
from Arkansas (Mr. Hill), the majority whip of the committee and the 
sponsor of the legislation.
  Mr. HILL. Madam Speaker, I rise in support of my bill, H.R. 3978, the 
TRID Improvement Act.
  I want to focus my comments on the actual improvements to the Truth 
in Lending and RESPA form, TILA-RESPA, which is now referred to as 
TRID.
  Back in 2010, when Dodd-Frank was being considered, one of the goals 
that then-White House staffer Elizabeth Warren, now Senator Elizabeth 
Warren, had was: Well, we are going to make this a win for both banks 
and consumers. One of the things we are going to do is we are going to 
make forms simpler and consumer disclosure better. America's exhibit A 
today is the TILA-RESPA form.
  TILA was about truth in lending, and let's make sure the interest 
rate you are going to pay on your mortgage is calculated right, it is 
accurate. And RESPA, the Real Estate Settlement Act, said that whatever 
you were paying in extras, such as title insurance, was disclosed 
accurately.
  Well, we now flash forward a number of years.
  Back in 2013, the CFPB finalized this new, combined rule, the TRID 
rule: know before you owe. It should have been called: know before you 
confuse.
  This rule, finalized in 2013, was still subject to delay due to 
errors that the CFPB made, and it finally got put in place back in 
2015.
  There was $1.5 billion in software compliance costs for banks to try 
to merge this form that is supposed to be so simple and so easy for 
consumers. The CFPB offered no concrete guidance about it. So this 
House came together and over 300 Members of this House voted to direct 
the CFPB to improve this rule; that it was not a success story.
  So, in fact, in April 2016, the CFPB decided to open the rulemaking 
for TILA-RESPA and try to find some clarifying and amending procedures 
that would make it more clear.
  Well, as you can hear, it is a massive, complex rule that is 
expensive. The American Bankers Association said if there was one thing 
to fix in consumer compliance, it would be TILA-RESPA; the TRID. It 
wouldn't be the qualified mortgage definition. It wouldn't be all the 
capital rules embedded in Dodd-Frank. It would be this rule.
  When I have been at home in my district, I have heard about it 
countless times from mortgage bankers and community bankers.
  So we are still not there, which is why we are here today, Madam 
Speaker. And that is, this bill does one simple thing, which says: if 
you buy a title insurance policy, in the majority of States, the CFPB 
rule is not accurate.
  You can see here that the rule for Arkansas on a $200,000 sales price 
house says that the consumer should pay $382.50 after this complex 
formula when, in reality, they are really paying either $525 or the 
actual charge of $35. So it is not an improvement.
  In these States, the CFPB is not allowing for the calculation of a 
discounted rate, known as a simultaneous issue, which is a rate title 
insurance companies provide to consumers when they purchase both the 
lender's and owner's title policy simultaneously.
  Madam Speaker, this bill offers clarity and actually takes a complex 
rule and makes this part of it simpler so our consumers actually will 
see on the closing statement what the cost of the title insurance is. 
It will be transparent.
  There are many other challenges with this rule, and we have talked 
about them in our committee. Today, we are only debating and discussing 
one small one.
  But I urge my colleagues on both sides of the aisle--when this bill 
came out of our committee--bipartisan--this is a bill that Members of 
Congress have heard from across this country and all 50 States from 
community bankers, mortgage bankers of all sizes who are trying to 
provide an accurate, fast closing for our most important thing we do as 
a family, and that is to decide to buy a home.
  I thank the chairman of the full committee for yielding. I urge my 
colleagues to support this full package of bipartisan bills through 
regular order, through our committee, and that are presented here to 
improve our economy, improve the balance in our regulatory system, and 
help make credit more accessible for consumers at better prices.
  Ms. MAXINE WATERS of California. Madam Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. Madam Speaker, I yield 4 minutes to the gentleman 
from Wisconsin (Mr. Duffy), the chairman of the Subcommittee on Housing 
and Insurance and the sponsor of title 2 of the Protection of Source 
Code in this bill.
  Mr. DUFFY. Madam Speaker, I thank the chairman for all of his work 
and support on this legislation, as well as the gentleman from Arkansas 
(Mr. Hill), for which my provision is made part of a larger package.
  I also thank the gentlemen from Georgia and Illinois, my good friends 
across the aisle, David Scott and Bill Foster, both of whom are 
cosponsors of the Protection of Source Code Act. It is a bipartisan 
bill.
  The recent cyber incidents at Equifax, SEC, and even at the NSA, has 
shown that all organizations are vulnerable to security risks. These 
incidents are a timely reminder of the risks that we face in this 
digital age.
  Given this reality, it is important for government agencies such as 
the SEC to rethink what they collect, how they collect it, how it is 
stored, and what they do with this information in the long run.
  The Protection of Source Code Act is a bipartisan bill intended to 
reduce some of the cybersecurity risks to our financial markets posed 
by the SEC when it gathers highly sensitive trading or source code 
information as part of their oversight duties.
  The Protection of Source Code Act establishes a process for the SEC 
with respect to requesting source code and other intellectual property 
that forms the basis of source code.
  It does not preclude the SEC from requesting data that it determines 
it needs for market oversight. It merely puts a process in place for 
how the SEC seeks access to certain intellectual property.
  Having a process in place for how the SEC requests source code and 
similar intellectual property will better protect registrants and their 
clients and investors from inadvertent disclosure or cyber theft of 
their most valuable and important intellectual property.

[[Page H1159]]

  Such disclosure or theft could destroy the American businesses that 
own the intellectual property. Worse, it could undermine investor 
confidence and create significant volatility in our financial markets.
  In general, the SEC should not be requesting source code or 
intellectual property that forms the basis of source code. They 
shouldn't be collecting that on a regular basis. Such information is 
generally unnecessary for the SEC to perform its market oversight 
function and, as we have learned from recent cyber hacks, could create 
a very inviting treasure trove of sensitive data for computer hackers.
  This bill ensures that the SEC will gather source code when it is 
truly needed, under a subpoena process that provides appropriate due 
process for the information.
  Under this bill, the SEC, in conducting an exam, may continue to ask 
a registrant for general information about a registrant's trading 
system or trading strategies.
  So let's break this down a little bit. We have source code that is 
highly sensitive. It is intellectual property. If you are the SEC, you 
can actually go onsite and look at the source code. I am fine with 
that.
  But if you are going to collect the source code and take it back to 
the SEC and store it and you have a whole bunch of intellectual 
property from American businesses stored at the SEC, this is one-stop 
shopping for hackers. You have just got to do it once. Get in the SEC 
and you get it all.
  My friend across the aisle, the ranking member, wants to talk about 
volatility. Wait and see if there is an SEC hack where they get all 
this information, all this source code. That is a risk we don't want to 
have.
  We want due process. If you want to come in and take the source code, 
get a subpoena.
  Do we believe in due process in America?
  For the most sensitive data, the most sensitive information, get a 
subpoena and you can take it. But those are basic measurers, basic 
protections that we offer in America that we should employ at the SEC 
when they want this intellectual property that is of great value to 
these firms.
  My bill, contrary to the ranking member's point, Madam Speaker, 
doesn't offer exemptions to exams. Exams will still happen. Also, it is 
still illegal to manipulate markets. Those things haven't changed.
  This is just about due process.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HENSARLING. Madam Speaker, I yield an additional 30 seconds to 
the gentleman from Wisconsin.
  Mr. DUFFY. It is important that we have truthful and honest 
information on the floor. This does not prohibit exams. This doesn't 
make legal manipulation of the markets. It is still illegal. All we are 
saying is we have sensitive source code, and if you want to take it to 
the SEC, you get a subpoena.
  Frankly, we think there are problems with that. The SEC has been 
hacked. The NSA has been hacked. Everybody has been hacked. If you 
compile all this information, the risk that poses to our markets and 
volatility to our markets, I think, is unacceptable. That is why it is 
bipartisan.
  I would encourage all Members of this House to take a step forward 
for due process.
  Ms. MAXINE WATERS of California. Madam Speaker, I yield myself such 
time as I may consume.
  Madam Speaker, given the extreme volatility in the stock markets over 
the past few weeks, I am particularly troubled by title II of this 
bill, which would make it easier for high-frequency traders to evade 
regulatory oversight of their potentially disruptive automated trading 
algorithms.
  This provision is widely opposed by nonpartisan consumer and investor 
advocacy groups who recognize the impact automated trading has on our 
markets.
  Let me read for you excerpts from a few letters from these groups 
that highlight the dangers of title 2.
  Americans for Financial Reform--a coalition of more than 200 
consumer, civil rights, investor, retiree community, labor, faith-
based, and business groups--wrote: ``Title II would prevent regulators 
from inspecting not only their raw source code used in automated 
trading, but also any related intellectual property that `forms the 
basis for the design of' source code. Examination of such intellectual 
property would only be possible in an enforcement context pursuant to a 
subpoena. This implies that the SEC would have to wait until the damage 
was done through a `flash crash' or similar market disruption before 
taking any action, which would have to be retrospective.
  ``In light of the significance of automated trading to modern 
markets, and the potential risk of high-frequency trading, it makes no 
sense to tie the hands of regulators in examining detailed trading 
strategies and methods of high frequency traders.''
  The Center for American Progress cautioned that: ``But in an era of 
fast-moving, `flash-crash'-prone markets, the SEC may have a wide range 
of regulatory reasons for why it may need to examine source codes, 
including approvals of new trading products or the supervision of 
trading venues. The SEC should only exercise that authority carefully 
and under the strictest protections for confidential information, but 
blocking it by law dangerously limits the SEC's ability to address the 
significant technology-based challenges to financial markets.''
  The Consumer Federation of America, an association of nearly 300 
consumer advocacy groups, similarly opposed title 2 because it ``would 
weaken SEC oversight of algorithmic trading and hamstring the agency 
from responding quickly to flash crashes or other market breakdowns.''
  Further, the CFA wrote that: ``At a time when algorithmic trading is 
taking on increased importance in our capital markets, this bill would 
make it more difficult for the SEC to properly oversee such trading.

                              {time}  1545

  ``The bill would require the SEC to first issue a subpoena before it 
could compel a person to produce or furnish to the SEC algorithmic 
trading source code or `similar intellectual property.' This would 
undermine the SEC's examination authority by creating a gaping hole in 
its ability to gain access to firm records relevant to the examination. 
It would also have a devastating effect on the agency's ability to 
respond quickly in the event of another `flash crash' or such events in 
the future. In order to oversee the markets effectively, the SEC needs 
to be able to accurately and efficiently reconstruct order entry and 
trading activity, including for algorithmic traders.''
  Public Citizen, a consumer rights advocacy group with over 400,000 
members and supporters, wrote: ``Market volatility caused not by real 
events such as outbreak of a war, but by computers, including computer 
glitches, threatens to erase savings to some innocent investors and 
erodes general investor confidence. The recent swings in the markets 
attest to the need for robust and urgent supervisory inspection. The 
May 6, 2010 `Flash Crash,' where markets collapsed by more than $1 
trillion in less than an hour, revealed that such a robust and urgent 
supervision has been lacking. The SEC required nearly a half year to 
investigate this incident before identifying a flawed algorithmic at 
one major trader. SEC oversight should be streamlined, not hampered. 
Trading instructions and records of human traders are already subject 
to inspection, so it should be no different for those instructions and 
records generated by a machine. Hiding source code from regulatory 
scrutiny will leave those responsible for mistakes as well as those 
attempting to manipulate markets unaccountable.''
  These letters demonstrate the wide opposition to title II by groups 
that truly understand that robust oversight of algorithmic trading is 
necessary for the help of our makers.
  Madam Speaker, I include in the Record letters from these groups.

                                                February 13, 2018.
     Please vote NO on H.R. 3299 and H.R. 3978.

     Hon. Member,
     House of Representatives,
     Washington, DC.
       Dear Hon. Member: On behalf of more than 400,000 members 
     and supporters of Public Citizen, we ask you to vote NO on 
     H.R. 3299 and H.R. 3978, which are expected to be considered 
     by the full House on Wednesday, February 14, 2018. Provisions 
     in these bills would expose borrowers to abusive loans, 
     investors to dubious securities, and Americans generally to a 
     riskier financial system.

[[Page H1160]]

       H.R. 3299, the Protecting Consumers' Access to Credit Act 
     of 2017, would allow predatory lenders to escape state limits 
     on high interest rates. The bill would nullify the Second 
     Circuit Court ruling in Madden v. Midland Funding. That 
     decision provided that a financial institution that buys 
     loans originated by a national bank could not benefit from 
     the National Bank Act's preemption of state interest rate 
     caps. While the Madden decision did not limit interest rates 
     that banks charge on credit, it does limit nonbanks from 
     evading state interest rate caps. This bill would pave the 
     way for payday lenders, financial technology (fintech) 
     companies and others to exploit that loophole and use a 
     ``rent-a-bank'' arrangement in order to charge high interest 
     rates. Twenty state Attorneys General have written to oppose 
     this measure, noting that it undermines their efforts to 
     protect borrowers from abusive loan rates. We urge you to 
     oppose this bill.
       H.R. 3978, the TRID Improvement Act of 2017, is actually a 
     package of bills that were considered separately in the House 
     Financial Services Committee. One of these is the Financial 
     Stability Oversight Council Improvement Act (formerly H.R. 
     4061). This measure would add numerous procedural 
     requirements for the Financial Stability Oversight Council 
     (FSOC) when it considers the designation or continued 
     designation of a nonbank firm as a systemically important 
     financial institution (SIFI). Current rules already make SIFI 
     designation a high hurdle. The case of MetLife, for example, 
     shows that firms enjoy more than ample methods to contest 
     designation. After FSOC designated MetLife as systemically 
     important, it contested it in court and the case is pending. 
     Increasing the government's burden for designation would 
     restrict its ability to apply enhanced supervision to major 
     institutions. However, the largest bailout of the 2008 
     financial crash went to AIG, a nonbank engaged in reckless 
     derivatives activity beyond the purview of banking 
     supervisors. We oppose this measure.
       Another bill contained in H.R. 3978 is the Fostering 
     Innovation Act (previously H.R. 1645). This bill amends 
     Section 404(b) of the Sarbanes-Oxley (SOX) law by increasing 
     from five to 10 years the time that CEOs of firms with less 
     than $50 million in revenue must attest to the accuracy of 
     their financial reporting. Congress approved SOX in response 
     to the accounting scandals at the turn of the millennium. The 
     rules are designed to promote accounting accuracy to the 
     shareholders who have entrusted their savings to these firms. 
     A Government Accountability Office (GAO) report found that 
     companies with inferior financial reporting controls have a 
     significantly higher likelihood of issuing a restatement of 
     their financial accounts. Firms that are unwilling to oblige 
     SOX should not be trusted with the capital of savers. 
     Extending the CEO attestation requirement from five to 10 
     years exacerbates the problem. From an investor perspective, 
     accounting safeguards are more important for smaller 
     companies, since larger companies generally attract a larger 
     and more sophisticated base of stock and bond holders who can 
     perform effective oversight. We oppose this measure.
       A third bill that is part of the H.R. 3978 package is the 
     National Securities Exchange Regulatory Parity Act (formerly 
     H.R. 4546). This bill would eliminate state supervision of 
     securities if they are listed on an exchange, even if the 
     exchange has reduced standards compared with those of major 
     exchanges such as the New York Stock Exchange. Under current 
     law, state supervision is pre-empted only if the security is 
     listed on exchanges with rules overseen by the Securities and 
     Exchange Commission (SEC). Rules may differ between 
     exchanges, but they must be approved by the SEC to ensure 
     that they prevent fraud, serve the public interest and 
     protect investors. Moreover, exchanges must adopt and enforce 
     rules that are ``substantially similar'' to the major 
     exchanges, known formally as ``Named Markets,'' under current 
     law. The existing system deters a race to the bottom, where 
     an exchange may attempt to attract companies with weaker 
     rules. Conversely, this bill would actually promote that race 
     to the bottom by removing the requirement that the exchange 
     adopt rules that are substantially similar to those of the 
     Named Markets. We oppose this measure.
       A fourth measure in H.R. 3978 is the Protection of Source 
     Code Act, (formerly H.R. 3948). This measure would impede the 
     ability of the SEC to conduct effective compliance 
     examinations of market volatility involving computer-driven 
     algorithms. The bill imposes a strict subpoena requirement 
     before staff could inspect otherwise routine business records 
     that involve source code. Market volatility caused not by 
     real events such as the outbreak of a war, but by computers, 
     including computer glitches, threatens to erase savings to 
     some innocent investors and erodes general investor 
     confidence. The recent swings in the markets attest to the 
     need for robust and urgent supervisory inspection. The May 6, 
     2010 ``Flash Crash,'' where markets collapsed by more than $1 
     trillion in less than an hour, revealed that such robust and 
     urgent supervision has been lacking. The SEC required nearly 
     a half year to investigate this incident before identifying a 
     flawed algorithm at one major trader. SEC oversight should be 
     streamlined, not hampered. Trading instructions and records 
     of human traders are already subject to inspection, so it 
     should be no different for those instructions and records 
     generated by a machine. Hiding source code from regulatory 
     scrutiny will leave those responsible for mistakes as well as 
     those attempting to manipulate markets unaccountable. We 
     oppose this measure.
       Because of our opposition to these elements in H.R. 3978 
     and to H.R. 3299 we urge you to vote NO on these bills. As we 
     are marking the 10th anniversary of the Wall Street Crash, 
     it's clear that American consumers and investors deserve 
     stronger financial reforms, not weakened protections that 
     will make our economy more susceptible to another collapse.
       Thank you for your consideration. For questions, please 
     contact Bartlett Naylor.
           Sincerely,
     Public Citizen.
                                  ____

                                                     Americans for


                                             Financial Reform,

                                Washington, DC, February 13, 2018.
       Dear Representative: On behalf of Americans for Financial 
     Reform, we are writing to urge you to vote in opposition to 
     H.R. 3978, which is being considered on the House floor 
     today. This legislation is a grab bag of bad legislative 
     ideas that should never have advanced through the House 
     Financial Services Committee. Especially notable given the 
     recent wild swings in stock prices, Title II of this bill 
     would sharply limit the ability of the Securities and 
     Exchange Commission (SEC) to investigate high-frequency 
     automated trading strategies that can disrupt markets. But 
     that is hardly the only harmful bill in this package. There 
     are several other provisions that would weaken consumer and 
     investor protections.
       Title I, ``TRID Improvement,'' would amend the TILA/RESPA 
     Integrated Disclosure Rule (also known as TRID) to change how 
     title insurance fees are disclosed, in a manner that would 
     increase confusion and potentially misinform consumers as to 
     the final cost of these important fees. The title insurance 
     market already lacks transparency and fairness; fees are 
     grossly inflated in relation to the value of the insurance. 
     The Consumer Financial Protection Bureau (CFPB) carefully 
     studied this issue in its rulemaking to determine the 
     clearest and most accurate way to disclose fees in light of 
     varying state laws on title insurance and differences in 
     practices by different companies. The changes in the 
     statutory language here would limit the CFPB's authority to 
     create a consistent method of disclosure across different 
     companies and different states, and to reflect ways in which 
     title insurance costs can change at closing. Further 
     refinement in title insurance disclosures can be addressed 
     through rulemaking by the CFPB itself in consultation with 
     stakeholders.
       Title II, ``Protection of Source Code,'' would severely 
     restrict the ability of the SEC to examine the detailed 
     trading strategies of high-frequency traders or automated 
     traders, even in cases where such traders posed a risk to 
     markets or the financial system. Title II would prevent 
     regulators from inspecting not only the raw source code used 
     in automated trading, but also any related intellectual 
     property that ``forms the basis for the design of'' source 
     code. Examination of such intellectual property would only be 
     possible in an enforcement context pursuant to a subpoena. 
     This implies that the SEC would have to wait until the damage 
     was done through a ``flash crash'' or similar market 
     disruption before taking any action, which would have to be 
     retrospective.
       In light of the significance of automated trading to modern 
     markets, and the potential risks of high frequency trading, 
     it makes no sense to tie the hands of regulators in examining 
     detailed trading strategies and methods of high frequency 
     traders. At any brokerage, trading instructions to a human 
     trader, including the conditions under which such a trade 
     would be carried out (e.g., a limit order) are part of the 
     books and records routinely open to inspection by FINRA or 
     the SEC. Trading instructions must not be exempt from 
     inspection simply because they are automated. They should be 
     part of the books and records of the organization, just as 
     other order-related documents are. Intellectual property 
     related to source code clearly involves trading strategies, 
     which have always been a subject for regulatory inspection 
     and oversight.
       The continued high volatility on Wall Street is giving 
     evidence of the potential systemic dangers of high-frequency 
     automated trading. Now is not the time to tie the SEC's hands 
     in doing oversight of such trading.
       Title III, ``Fostering Innovation,'' would double the time 
     for which certain new public companies are exempt from key 
     financial reporting controls, most notably attestation by an 
     auditor that their earnings and accounting are accurate. It 
     grants this exemption to a class of companies, newly public 
     companies with low revenue growth, which have a particular 
     strong incentive to manipulate their financial statements and 
     deceive investors. This piece of the legislation would both 
     harm investors and undermine the integrity of our capital 
     markets.
       Title IV, ``National Securities Exchange Regulatory 
     Parity,'' would dangerously expand Federal pre-emption from 
     state securities laws designed to protect investors from 
     securities fraud. Under current law, a national securities 
     exchange needs to meet listing standards similar to those of 
     a major national exchange--e.g., the New York Stock Exchange, 
     NASDAQ--for its securities to be deemed ``covered 
     securities.'' Under this

[[Page H1161]]

     classification, securities enjoy the advantages of exemptions 
     from state-level regulations.
       Title IV in H.R. 3978 would amend the Securities Act of 
     1933 to remove the requirement that companies meet listing 
     standards rigorous enough to be considered similar to those 
     of major exchanges, effectively allowing riskier, less liquid 
     securities to qualify as ``covered securities'' and avoid 
     state securities laws designed to protect investors and 
     financial markets. Under this section of H.R. 3978, a 
     security would be exempt from state-level fraud protections 
     as long as it is traded on a national exchange that is a 
     member of the National Market System. This would mean that 
     securities could be pre-empted from the oversight of state 
     securities regulators without meeting the strong standards 
     that the SEC has laid out for individual securities to 
     qualify for preemption under Section 18 of the Securities 
     Act.
       Both the North American Securities Administrators 
     Association (NASAA), the main body of state securities 
     regulators, and the chief securities regulator for the 
     Commonwealth of Massachusetts have made the dangers of this 
     legislation clear in strongly worded opposition letters. In 
     these letters, they advocated for fair and rigorous listing 
     standards as essential to protect retail investors and 
     savers, to maintain high standards for corporate governance, 
     and to avoid conflicts of interests that harm investors. 
     Title IV of H.R. 3978 unacceptably weakens these listing 
     standards.
       The sections of H.R. 3978 discussed above are, 
     individually, bad bills for consumers and investors rights 
     and protections. Packaging them together only worsens the 
     harm. We urge you to reject H.R. 3978.
       Thank you for your attention to this matter. For more 
     information please contact AFR's Policy Director, Marcus 
     Stanley.
           Sincerely,
     Americans for Financial Reform.
                                  ____



                                 Mortgage Bankers Association,

                                Washington, DC, February 13, 2018.
     Hon. Paul Ryan, Speaker of the House,
     House of Representatives, Washington, DC.
     Hon. Jeb Hensarling,
     Chairman, House Financial Services Committee, House of 
         Representatives, Washington, DC.
     Hon. Nancy Pelosi,
     Minority Leader, House of Representatives, Washington, DC.
     Hon. Maxine Waters,
     Ranking Member, House Financial Services Committee, House of 
         Representatives, Washington, DC.
       Dear Speaker Ryan, Leader Pelosi, Chairman Hensarling and 
     Ranking Member Waters: On behalf of the Mortgage Bankers 
     Association (MBA), I am writing to express our support for 
     H.R. 3978, the TRID Improvement Act, which the House of 
     Representatives will vote on this week. I would highlight 
     MBA's strong support for the inclusion of two individual 
     bills--H R. 2948 and the previously free-standing H.R. 3978--
     within this updated vehicle.
       MBA enthusiastically supports the inclusion of Title V, 
     Section 501, entitled ``Eliminating barriers to jobs for loan 
     originators,'' within the newly re-packaged bill. The Secure 
     and Fair Enforcement for Mortgage Licensing (SAFE) Act of 
     2008 created two parallel but asymmetrical regimes for 
     mortgage loan originators (MLOs) that have resulted in uneven 
     consumer protections and an un-level playing field for 
     mortgage originators. The SAFE Act requires MLOs employed by 
     non-bank lenders to be licensed, which includes pre-licensing 
     and annual continuing education requirements, passage of a 
     comprehensive test, and criminal and financial background 
     reviews conducted by state regulators. These MLOs are also 
     registered in the Nationwide Mortgage Licensing System and 
     Registry (NMLS). By contrast, MLOs employed by federally-
     insured depositories or their affiliates must only be 
     registered in the NMLS, and do not have to pass a test or 
     meet specific education requirements.
       The result is a two-tiered system that inhibits job 
     mobility for loan officers and makes it difficult for non-
     bank lenders to compete for talented employees. Rather than 
     leaving a job on a Friday and starting a new job on a Monday, 
     an MLO who moves from a bank to a non-bank lender must sit 
     idle for weeks, and sometimes months, unable to engage in 
     loan origination activities while they complete the SAFE 
     Act's licensing and testing requirements -- despite the fact 
     they have already been registered in the NMLS and originating 
     loans. This bill promotes a fair and competitive labor market 
     by eliminating barriers to the ability of non-bank lenders 
     (especially small lenders) to compete for talented staff, and 
     allowing MLOs to more easily move to the employer that offers 
     them the best chance to succeed.
       Section 501 of the bill is a bipartisan, narrow solution 
     that would provide ``transitional authority'' to originate 
     mortgages for individuals who change corporate affiliation 
     from a federally-insured institution to a non-bank lender, or 
     move across state lines, while they work to meet the SAFE 
     Act's licensing and testing requirements. Transitional 
     authority would be available only to MLOs that have a clean 
     history as an originator (e.g., no license denials, 
     revocations or suspensions, cease and desist orders, or 
     felonies that preclude licensing).
       MBA is especially grateful for the leadership of the bill's 
     author, Representative Steve Stivers (R-OH), as well as its 
     bipartisan original cosponsors: Representatives Joyce Beatty 
     (D-OH), Bruce Poliquin (R-ME), and Kyrsten Sinema (D-AZ). 
     Last Congress, the bill was unanimously reported from the 
     House Financial Services Committee, and shortly thereafter 
     passed the full House of Representatives under suspension of 
     the rules. Again, late last year, the bill was reported from 
     committee by a unanimous vote of 60-0.
       MBA also supports Title I, Section 101, entitled ``TRID 
     Improvement'', of the newly re-packaged bill, as originally 
     introduced as a free-standing vehicle by Representatives 
     French Hill (R-AR) and Ruben Kihuen (D-NV). This section 
     would amend the Real Estate Settlement Procedures Act (RESPA) 
     to require the Consumer Financial Protection Bureau (CFPB) to 
     allow the accurate disclosure of title insurance premiums and 
     any potential available discounts to homebuyers. Under 
     current regulations, the CFPB does not permit title insurance 
     companies to disclose available discounts for lender's title 
     insurance on the government-mandated disclosure forms. This 
     creates inconsistencies in mortgage documents and causes 
     confusion for consumers. This section would minimize that 
     confusion by allowing title insurance companies to disclose 
     available discounts and accurate title insurance premiums to 
     consumers across the country.
       MBA urges all members of the House to support the newly 
     reframed H.R. 3978. Thank you for your consideration of our 
     views on this bill, which will help promote a more 
     competitive real estate finance market and thereby enhance 
     overall economic development and growth.
           Sincerely,

                                                 Bill Killmer,

                                Senior Vice President, Legislative
                                            and Political Affairs.

  Ms. MAXINE WATERS of California. Madam Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. Madam Speaker, I yield myself 30 seconds to say the 
widespread opposition to the bill alluded to by the ranking member 
doesn't include roughly half the Democrats on the committee, including 
the gentleman from Illinois (Mr. Foster), who was quoted in our markup 
as saying: ``As someone who can code in at least seven languages, I 
understand that source code is qualitatively different from other 
documents that a firm might have and that our regulators should have 
legitimate access to. They are truly the crown jewels of an electronic 
trading firm, and there are obvious dangers that have been exposed in 
transferring things really not just to the government, to any entity. 
The first line of defense in cybersecurity is to keep the data as 
closely held as reasonable and still be able to do your job.''
  Madam Speaker, I reserve the balance of my time.
  Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Madam Speaker, I yield 2 minutes to the gentleman 
from Illinois (Mr. Hultgren), the vice chairman on the Subcommittee on 
Capital Markets, Securities, and Investment.
  Mr. HULTGREN. Madam Speaker, I thank Chairman Hensarling, and I am so 
grateful for his work on this package of bills that are so important.
  I rise today to speak in support of H.R. 3978, the TRID Improvement 
Act, and all the additional measures that have been included in the 
Rules Committee print. I am a cosponsor of four of the five bills. The 
TRID Improvement Act sponsored by Representatives Hill and Kihuen make 
important improvements to the TILA-RESPA integrated disclosure forms so 
home purchasers have the accurate representation of title insurance 
costs.
  I am also a strong supporter of the National Securities Exchange 
Regulatory Parity Act, which I cosponsored with Chairman Royce. This is 
a commonsense technical fix to a 20-year-old statute that didn't 
foresee an increase in the number of exchanges in today's competitive 
market structure.
  Currently, exchanges not named in the law must have substantially 
similar listing standards as those that are specifically named. This 
means the Chicago Stock Exchange, the CBOE, and others that have 
registered with the SEC since 1996 cannot be first movers in adopting 
innovative listing standards.
  The Chicago Stock Exchange has told me: ``This change would remove 
this current impediment to companies listing their securities on CHX 
and would help in the exchange's efforts to develop a robust primary 
listing market here in Illinois.''
  I am also very supportive of Chairman Duffy's legislation, the 
Protection of Source Code Act, and I am an original cosponsor of that, 
because I

[[Page H1162]]

recognize that the entire value of some companies are embodied in their 
source code. We need to have strong checks in place before our 
government can demand such information.
  Chris Giancarlo, now chairman of the CFTC, described the value of a 
subpoena when criticizing the idea of a source code repository at the 
agency he serves. I quote him when he said: ``The subpoena process 
provides property owners with due process of law before the government 
can seize their property. It protects owners of property, not the 
government that already has abundant power.''
  Finally, I want to mention my support for the Fostering Innovation 
Act, sponsored by Kyrsten Sinema and Trey Hollingsworth; and the SAFE 
Mortgage Licensing Act, sponsored by Steve Stivers and Joyce Beatty. I 
am a cosponsor of those measures as well.
  I urge all of my colleagues to vote in support of this very 
bipartisan package of bills.
  Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Madam Speaker, I yield 2 minutes to the gentleman 
from Texas (Mr. Williams), the vice chairman of our Subcommittee on 
Monetary Policy and Trade.
  Mr. WILLIAMS. Madam Speaker, I rise in support of H.R. 3978, the TRID 
Improvement Act introduced by my colleague from Arkansas (Mr. Hill) and 
my colleague from Nevada (Mr. Kihuen).
  This important and overwhelmingly bipartisan legislation, which 
passed out of the House Financial Services Committee by a vote of 53-5, 
is a straightforward, commonsense solution that will help hardworking 
Americans buy a new home or refinance their existing home.
  Under the CFPB's misnamed ``Know before you owe'' TRID rule, those in 
the home buying or refinancing process may not actually know everything 
about the price they are going to pay before closing.
  Because of the TRID rule and the restrictions placed on the listing 
of discounted title loan insurance rates on loan estimates, consumers 
may see one title loan insurance price on their loan estimate and 
another on their closing form.
  The TRID rule creates unnecessary confusion, and this bill is a step 
in the right direction to reducing the burdensome and overreaching 
authority of the CFPB.
  I am proud to join this bipartisan effort, but I do wish that the 
CFPB had been more willing to work with the chorus of voices from both 
sides of the aisle calling for this change.
  The home buying experience is complicated enough as it is, and the 
rationale displayed by the CFPB discourages homeownership and levies 
unjust penalties for those Americans striving for the dream of 
homeownership.
  I am proud to join my colleagues in support of this measure, the TRID 
Improvement Act.
  In God we trust.
  Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Madam Speaker, I yield 2 minutes to the gentleman 
from Maine (Mr. Poliquin), a hardworking member of the Financial 
Services Committee.
  Mr. POLIQUIN. Madam Speaker, I thank the chairman for moving this 
very important package of bills through the Financial Services 
Committee and now to the floor.
  Madam Speaker, I want to congratulate a terrific Congressman from the 
State of Arkansas (Mr. Hill) for the great work he has done in 
reconstituting the TRID Improvement Act. This bill, Madam Speaker, is 
designed to help our homeowners or would-be homeowners go through the 
process comfortably and efficiently, and also help our financial 
professionals who help them, in turn, to secure residential mortgages.
  This bill, as has been noted earlier, Madam Speaker, passed with very 
strong bipartisan support, and I encourage everybody on the floor, 
Republicans and Democrats, to weigh in with a ``yes'' vote on H.R. 
3978.
  Now, Madam Speaker, Mr. Hill's bill has two very important pieces 
that help our families and also help our economy grow.
  First, in title I, section 101, this bill allows title insurance 
companies to accurately disclose the premiums they charge for their 
service and also the discounts that are available to our home buyers 
across the country. Right now, the CFPB does not allow such 
disclosures, which is unfair and confusing for our home buyers.
  Madam Speaker, secondly, in title V, section 501, this bill includes 
the Eliminating Barriers to Jobs for Loan Originators Act, of which I 
am proudly a cosponsor. This bill, Madam Speaker, allows mortgage loan 
officers at a bank to move to do the same work at a nonbank financial 
institution without sometimes waiting weeks or months for redundant and 
unnecessary relicensing.
  Now, that is just not fair, Madam Speaker, to the folks who are 
trying to help our families secure mortgages so they can move into a 
new place to work.
  I encourage everybody on both sides of the aisle to support this 
excellent bill. It is bipartisan. Again, I congratulate the gentleman 
from Arkansas (Mr. Hill), and I salute our chairman for moving this so 
quickly through the process.
  Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Madam Speaker, I yield 2 minutes to the gentleman 
from New York (Mr. Zeldin), another member of the Financial Services 
Committee.
  Mr. ZELDIN. Madam Speaker, I rise in strong support of the TRID 
Improvement Act, bipartisan legislation introduced by the gentleman 
from Arkansas (Mr. Hill).
  I am a proud cosponsor of this legislation, which combines three 
bipartisan proposals that will improve the home buying process, protect 
intellectual property, and help emerging businesses thrive and create 
jobs. By reforming confusing regulations that make it difficult for 
prospective buyers or businesses to get title insurance, this 
legislation will help get more families into homes and help local 
businesses grow.
  By protecting the intellectual property of investors, we are 
improving the access to capital that is essential for growth and job 
creation in communities on Long Island, where my district is located, 
and all across our country.
  And last but not least, by reforming the outdated definition of what 
constitutes an emerging growth company, this legislation takes 
important steps towards fostering innovation and ensuring that new 
businesses are not discouraged from expansion and job creation.
  The sum of these important bipartisan solutions are more innovation, 
more hiring, and a more vibrant economy. I urge all of my colleagues to 
vote for this important piece of legislation. I thank my colleague, 
Congressman Hill, for his leadership with it, and Chairman Hensarling 
and his great staff for all their efforts to get this bill to the 
floor.
  Ms. MAXINE WATERS of California. Madam Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Madam Speaker, I yield 2 minutes to the gentleman 
from Georgia (Mr. Loudermilk), another proud member of the Financial 
Services Committee.
  Mr. LOUDERMILK. Madam Speaker, I thank Chairman Hensarling for his 
leadership and for allowing me to come here and speak in support of the 
TRID Improvement Act and the other bills that are in this package.
  Madam Speaker, we have seen countless examples of overregulation and 
regulatory mission creep by many agencies, and especially of the CFPB. 
But one of the things the CFPB should be doing is making sure that 
consumers have the right information when closing on a home.
  Unfortunately, the CFPB's 2015 mortgage disclosure caused many home 
buyers to not have an accurate disclosure of their title insurance 
premiums. The commonsense bill proposed by my colleague, Mr. Hill, will 
make sure that home buyers know exactly the cost of their title 
insurance, not two different prices from a loan estimate and a closing 
document.
  I also strongly support several other pieces of legislation that have 
been included in this package. Mr. Ross' bill, the FSOC Improvement 
Act, will make regulation of large financial institutions much smarter 
and more effective.

[[Page H1163]]

Instead of only focusing on punishing companies for violations of 
rules, regulators should also focus on what should be the real purpose 
of financial regulations, which is reducing risk.
  Mr. Ross' bill will also allow nonbank financial companies the 
opportunity to reduce any risky activities before they are designated 
as systemically important. This will help financial regulators to 
achieve their intended purpose rather than simply being a gotcha game 
on regulated companies.
  All of these bills we are considering today received overwhelming 
bipartisan support in the Financial Services Committee, and I urge all 
of my colleagues to support this legislative package.
  Ms. MAXINE WATERS of California. Madam Speaker, may I inquire as to 
whether or not the chairman has more speakers?
  Mr. HENSARLING. Madam Speaker, I would tell the ranking member that I 
have potentially two speakers, if they make it. They are on their way 
from a hearing, but they are not here now.

                              {time}  1600

  Ms. MAXINE WATERS of California. Madam Speaker, I yield myself the 
balance of my time.
  Madam Speaker, it has become par for the course for the majority to 
recklessly advance harmful deregulatory packages like H.R. 3978. My 
friends on the other side of the aisle are moving forward with 
regulatory roadblocks at a furious pace, pushing dangerous bills 
through the House nearly every week.
  It appears that they may have already completely forgotten a way that 
lacks financial regulation and allowed the crisis in 2008 to occur. 
That crisis badly damaged the whole economy and harmed all of our 
constituents. The impact was enormous: $13 trillion in household wealth 
was lost; 11 million people lost their homes to foreclosure; and the 
unemployment rate reached 10 percent.
  Democrats responded by enacting Wall Street reform to ensure that 
consumers, investors, and our economy are protected from reckless 
actors and bad practices, but now Republicans cannot wait to take us 
back to the bad old days. It makes no sense.
  As we have discussed, the package of bills now before us guts 
important financial protections at a time when markets are already 
experiencing turmoil. It would allow high-frequency traders to 
manipulate the stock markets undetected, encourage a regulatory race to 
the bottom at our Nation's stock exchanges, and harm investors by 
weakening efforts to detect accounting fraud at smaller public 
companies. This package of bills threatens important progress we have 
made to reduce risk in the financial system and return investor 
confidence.
  In recent weeks, we have seen volatile markets that threaten the 
savings of hardworking American families. These circumstances should 
serve as a clear reminder that Congress should be strengthening 
oversight of the financial system, not weakening it by undermining or 
removing important protections.
  H.R. 3978 is strongly opposed by our State's security cops, who are 
at the front line of combating fraud, and it is opposed by groups 
representing consumers, investors, and unions.
  Madam Speaker, for all of these reasons, I urge Members to oppose 
H.R. 3978, and I yield back the balance of my time.
  Mr. HENSARLING. Madam Speaker, may I inquire how much time I have 
remaining.
  The SPEAKER pro tempore. The gentleman from Texas has 7 minutes 
remaining.
  Mr. HENSARLING. Madam Speaker, there may be other Members coming, so, 
at the moment, I yield myself 4 minutes.
  Madam Speaker, again, all over America today, fortunately, because of 
the Tax Cuts and Jobs Act, people are waking up to new opportunities. 
They are finally seeing their wages begin to grow. We have seen the 
greatest wage growth in almost a decade, Madam Speaker, again, thanks 
to President Trump and thanks to a Republican Congress, a bill that was 
opposed by every single Democrat.
  But as they wake up to these new opportunities, Madam Speaker, they 
also need new credit. As their incomes rise--this is good--they still 
need credit in order to buy a home, in order to purchase that car, and 
sometimes just to put groceries on the table. Unfortunately, over the 
last 8 years of the Obama administration where we saw probably one of 
the greatest increases in the cost, expense, and burden of costly 
Washington red tape, we have seen fewer credit opportunities.
  So now, fortunately, today there are good men and women on both sides 
of the aisle who are trying to work together to bring some rationale 
and reason to the regulatory burden. Many Members on the other side of 
the aisle do realize that Dodd-Frank did not come down as tablets from 
Mt. Sinai, that it isn't chiseled into stone, and that maybe there are 
some improvements that could be made.
  So today, we are taking a number of very bipartisan bills to the 
House floor. The Protecting Consumers' Access to Credit Act, which we 
debated earlier, Madam Speaker, passed by 42-17.
  The TRID Improvement Act by Mr. Hill from Arkansas passed through our 
committee 53-5--90 percent. Almost all of the Democrats but the ranking 
member supported the bill. The Protection of Source Code Act, 46-14; 
the Fostering Innovation Act passed by a vote of 48-12, a Democratic 
bill; the National Securities Exchange Regulatory Parity Act, 46-14.
  We have a lot of bipartisan bills, but with one exception, title V of 
the TRID Improvement Act, none of them were supported, unfortunately, 
by the ranking member.
  So there is, again, a lot of bipartisan work we are trying to get 
done here. Unfortunately, very little of it is supported by the ranking 
member.
  And why is this important? It is important, Madam Speaker, because 
every day we are still hearing from our constituents who need access to 
competitive affordable credit. And because of this Washington red tape 
and regulatory burden, they are not getting it.
  It wasn't that long ago we heard from Ann of Wisconsin, who said:

       My husband and I had very high credit scores. We have 
     plenty of equity in our home. But because my husband has a 
     seasonal job and finds other employment in the winter, many 
     banks we contacted rejected our loan request. They based our 
     annual income only on the job he has currently and said that 
     was part of the new regulations.

  Part of the new regulations--there is somebody who won't buy a home; 
they can't get a home.
  I heard from a mortgage banker in North Carolina who said:

       Last year, we declined a young man and his family fixed 
     rate financing to purchase a primary home. The applicant 
     recently relocated to work for a family business. Prior to 
     Dodd-Frank, it would have been easy to qualify, but no more.

  Another potential American home buyer denied credit because of this 
regulatory burden. Madam Speaker, that is what many of us, on both 
sides of the aisle, are trying to remedy today.

  Madam Speaker, I am pleased to yield 2 minutes to the gentlewoman 
from Arizona (Ms. Sinema), a sponsor of title III of the Fostering 
Innovation Act.
  Ms. SINEMA. Madam Speaker, I rise in support of H.R. 3978, a package 
of commonsense solutions, each passed with support of both parties by 
the House Financial Services Committee. Madam Speaker, I also thank 
Congressman Hill of Arkansas for his leadership in moving the package 
forward.
  One of these solutions is H.R. 1645, the Fostering Innovation Act, 
legislation we introduced to help Arizona biopharmaceutical companies 
make lifesaving breakthroughs.
  Business expenses always involve tradeoffs. When Arizona small 
businesses spend money on costly regulations that provide little public 
benefit, they have less money to invest in research, development, and 
job creation for Arizona families.
  That is why I introduced this bill. This narrow fix ensures that 
innovative emerging growth companies, or EGCs, have the time and 
capital to develop and perfect scientific breakthroughs. Right now, 
they are exempted only for 5 years from these costly external audit 
requirements. That is often not enough time for these emerging 
companies to prepare innovations for commercialization. Our bill 
temporarily extends this exemption for an additional 5 years for a 
small subset of these EGCs with an annual revenue of less than $50 
million and less than $700 million in public float.

[[Page H1164]]

  The Fostering Innovation Act empowers innovative Arizona companies, 
like HTG Molecular Diagnostics, to use valuable resources to remain 
competitive, stable, and, ultimately, successful.
  HTG is a Tucson-based developer of targeted molecular profiling 
technology. This innovation ensures genetic testing can be turned 
around accurately and quickly, in as little as 24 hours. For patients, 
doctors, and families grappling with unexplainable symptoms or 
illnesses, genetic testing can provide critical insights and inform the 
best course of treatment.
  These are lifesaving breakthroughs. It is what companies like HTG 
should use their limited resources to fund, not unnecessary and costly 
paperwork.
  I urge my colleagues to support American ingenuity, job creation, and 
growth by passing this act.
  Mr. Speaker, I thank, in particular, Chairman Hensarling and 
Congressman Hollingsworth of Indiana for working with me on a consensus 
solution that cuts red tape and supports innovative and potentially 
lifesaving medical research.
  Mr. HENSARLING. Mr. Speaker, may I inquire how much time I have 
remaining.
  The SPEAKER pro tempore (Mr. Yoder). The gentleman from Texas has 1 
minute remaining.
  Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, once again, I want to hear the voices of hardworking 
Americans, not just Washington, D.C., letterhead groups.
  We heard from a community banker, who said:

       A local union member wanted to refinance his primary 
     residence. He was currently laid off due to the winter 
     season. His tax return showed he was generally laid off for 
     about 6 weeks each year during the extreme cold but was 
     always called back when weather improved. Since he was laid 
     off, we could not meet the requirement to validate his 
     current income that would continue for 3 years. We had to 
     deny the loan.

  Yet again, Mr. Speaker, more Washington red tape taking away home 
opportunities from hardworking Americans. It is wrong. We must do 
something about it. It is why, on a bipartisan basis, so many of us 
have gotten together to pass H.R. 3978.
  Yes, we want to make sure that people can buy homes, they can buy 
cars, they can put groceries on the table, and right now, when the 
economy is finally starting to improve, thanks to President Trump and 
the Tax Cuts and Jobs Act, we want them to have opportunities.
  Mr. Speaker, I encourage all Members to support H.R. 3978, and I 
yield back the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Speaker, I include in the Record 
the following letters of opposition.

                                 Center for American Progress,

                                Washington, DC, February 13, 2018.
     Hon. Paul Ryan,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Nancy Pelosi,
     Democratic Leader, House of Representatives,
     Washington, DC.
       Dear Speaker Ryan and Leader Pelosi: The Center for 
     American Progress (``CAP'') is writing today to express 
     opposition to H.R. 4061, the Financial Stability Oversight 
     Council Improvement Act of 2017, which is included as Title 
     VI of the revised H.R. 3978 package. It is our understanding 
     that the revised H.R. 3978 package will be considered on the 
     floor of the House of Representatives this week, so we 
     welcome the chance to share our concerns regarding this 
     legislation with you and your Members.
       In short, this bill erodes a vital new financial regulatory 
     tool implemented following the devastating 2007-2008 
     financial crisis. If enacted, the U.S. financial regulatory 
     structure will be less equipped to handle risks that build up 
     outside of the traditional banking sector--making the 
     financial sector as a whole more vulnerable to another shock 
     and economic downturn. Americans paid for the last crisis 
     with their jobs, homes, and savings, while banks and other 
     financial institutions were bailed out. This bill 
     inexplicably makes a repeat of that economic calamity more 
     likely.
       The 2007-2008 financial crisis demonstrated that excessive 
     risk could build up outside of the traditional banking 
     sector. Nonbank financial institutions like Lehman Brothers, 
     Bear Stearns, and AIG did not face the type of oversight and 
     regulatory standards warranted by their systemic importance. 
     The failure or near-failure of these institutions threatened 
     the stability of the U.S. financial sector. AIG and Bear 
     Stearns were bailed out accordingly, while the failure of 
     Lehman Brothers brought the global financial system to the 
     brink of collapse. The crisis also revealed that no one 
     financial regulator had a system-wide mandate, meaning 
     individual regulators were only focused on their respective 
     segments of the financial sector. This left financial 
     regulators in the dark regarding risks that built up across 
     different parts of the sector or that emerged in 
     underregulated parts of the sector.
       In the wake of the financial crisis, President Obama worked 
     with Congress to pass the Dodd-Frank Wall Street Reform and 
     Consumer Protection Act--the most significant financial 
     regulatory reforms enacted since the Great Depression. One 
     important pillar of Dodd-Frank was the creation of the 
     Financial Stability Oversight Council (``FSOC''), a new 
     systemic risk regulatory body. The FSOC was created to bring 
     the disparate financial regulators together to identify and 
     mitigate threats to financial stability. The most important 
     tool given to the FSOC to fulfill this mission is the 
     authority to subject a nonbank financial company to enhanced 
     oversight and regulation by the Federal Reserve Board if 
     material distress at the company, or the company's 
     activities, could threaten financial stability. The FSOC has 
     used this designation authority sparingly and only after a 
     thorough, multi-stage review process in which the FSOC 
     communicates extensively with the company and the company's 
     primary regulators.
       H.R. 4061 would add multiple additional hurdles to the 
     FSOC's already-rigorous designation process. The proposed 
     changes would add an estimated two years to the designation 
     process, meaning it would take roughly four years for the 
     FSOC to designate a nonbank financial company that could 
     threaten U.S. financial stability. The four-year estimate 
     does not even factor in the time it will take for the legal 
     proceedings to play out when a company challenges the 
     designation in court. The legal challenge by MetLife took 
     years, and likely would have taken longer if the Trump 
     administration didn't agree to stop pursuing the case. If 
     anything, this bill increases the procedural issues a 
     designated company could raise in court. H.R. 4061 
     practically invites a legal filibuster of the designation. It 
     renders the designation authority nearly useless. Hollowing 
     out this crucial post-crisis authority makes it far more 
     likely that an underregulated systemically important nonbank 
     will cause or aggravate the next financial crisis.
       Contrary to critics of the FSOC, it is not a rigid body and 
     has in the past responded to legitimate process and 
     transparency suggestions. In 2015, after soliciting public 
     comment, the FSOC adopted 17 changes to its designation 
     process and transparency policies The current designation 
     process in place is rigorous and appropriately thorough. H.R. 
     4061 would add no less than nine new bureaucratic steps. 
     These proposed changes are excessive, and the intent is 
     clear: To prevent the FSOC from using this vital tool.
       This legislation is even more concerning given the actions 
     Treasury Secretary Steven Mnuchin, Chairman of the FSOC, has 
     taken since the start of the Trump administration. The FSOC, 
     under Mnuchin's leadership, has: (i) rescinded the 
     designation of AIG, the company that received a $182 billion 
     bailout during the crisis; (ii) slashed the FSOC's budget and 
     staff; (iii) dropped the legal proceedings regarding 
     MetLife's designation; (iv) signaled that Prudential's 
     designation may be rescinded this year; and (v) recommended 
     some deeply concerning additional changes to the FSOC's 
     designation process in a report published in late 2017. 
     Further restricting the FSOC's authority at a time when it is 
     being dismantled from within would be a grave mistake.
       For these reasons, CAP recommends that Members vote ``NO'' 
     when the revised H.R. 3978 package of bills, which includes 
     H.R. 4061, is considered on the floor.
       If you have any questions about this letter or would like 
     to discuss these issues further, please contact Gregg 
     Gelzinis.
           Sincerely,

                                               Gregg Gelzinis,

                                      Research Assistant, Economic
     Policy, Center for American Progress.
                                  ____

                                                February 13, 2018.
       Dear Representative, The undersigned organizations urge you 
     to vote against H.R. 3978, the TRID Improvement Act. The 
     bill, which amends Section 2603 of RESPA, would create 
     confusion and undermine consistency in mortgage disclosures. 
     In particular, the bill would make it harder for consumers to 
     understand how much they are paying for title insurance, a 
     required fee that already lacks a transparent, functioning 
     market.
       In 2007, a GAO report concluded that borrowers ``have 
     little or no influence over the price of title insurance but 
     have little choice but to purchase it.'' Instead, the lender 
     typically chooses the insurer. As a result, the fees are 
     grossly inflated in relation to the value of the insurance. 
     Recent studies have found that barely 5% to 11% of premiums 
     are paid out in claims. Almost the entirety of a title 
     insurance premium goes to commissions, not insurance 
     coverage. In contrast, for health insurance, minimally 80% of 
     premiums are returned to consumers in claim payouts and the 
     loss ratios for auto insurance fluctuate between 50% and 70%. 
     Borrowers already pay inflated title insurance costs. 
     Increased confusion in title insurance price disclosures 
     would only serve to exacerbate the problems in the market 
     with transparency and fairness.

[[Page H1165]]

       The method required by the Consumer Financial Protection 
     Bureau for disclosing title insurance premiums reduces 
     consumer confusion and enhances consistency between the 
     estimated and final loan cost disclosures. The bill would 
     change the final loan disclosure, decreasing consistency with 
     the initial disclosure. As a result, it would increase 
     consumer confusion, especially where the consumer opts not to 
     purchase both lender and owner policies (only the lender 
     policy is required) after getting the early disclosure 
     containing both.
       The bill's requirement to disclose the ``actual'' cost of 
     the insurance will lead to confusion in almost half of the 
     states because the calculation of premiums is not 
     standardized under state law and title companies within those 
     states do not provide comparable rates. In contrast, the CFPB 
     regulations take into account that comparison shopping in 
     such states is not possible and provides a standardized 
     approach. Further refinement of the title insurance 
     disclosures can be addressed by the CFPB itself in 
     cooperation with stakeholders to ensure any outstanding 
     issues are addressed with the input of all affected parties.
       We urge you not to undermine the CFPB's careful rules for 
     restoring transparency and market competition to the title 
     insurance market. Please vote no on H.R. 3978.
           Sincerely,
     Americans for Financial Reform.
     Center for Responsible Lending.
     National Association of Consumer Advocates.
     National Consumer Law Center (on behalf of its low-income 
     clients).
                                  ____



                               Consumer Federation of America,

                                                February 12, 2018.
       Dear Representative: We understand the House is scheduled 
     to vote this week on H.R. 3978, the ``TRID Improvement Act.'' 
     While we did not take a position on this bill when it came 
     before the House Financial Services Committee, we urge you to 
     oppose it now that it includes the following extraneous, 
     anti-investor bills: H.R. 3948, the ``Protection of Source 
     Code Act;'' H.R. 1645, the ``Fostering Innovation Act;'' and 
     H.R. 4546, the ``National Securities Exchange Regulatory 
     Parity Act.'' Each of these bills would harm investors and 
     undermine the integrity of our capital markets.
       H.R. 1645, the ``Fostering Innovation Act,'' would make 
     financial accounting fraud more likely.
       This legislation would extend the period of time in which 
     certain public companies would be exempt from a requirement 
     that provides important protections against financial 
     reporting errors, including errors that are the result of 
     fraud. That is the requirement under Section 404(b) of the 
     Sarbanes-Oxley Act that requires auditors, as part of their 
     audits of public company financial statements, to assess and 
     attest to the adequacy of the company's internal controls to 
     ensure accurate financial reporting. This bill would extend 
     this exemption for up to five years to a class of companies, 
     including those that have gone public but may be struggling 
     to produce significant revenues, that could have a particular 
     incentive to manipulate their financial statements in order 
     to attract more capital. Companies should not be permitted to 
     raise capital in the public markets if they do not have 
     adequate controls in place to prevent financial reporting 
     errors and fraud. And auditors cannot reasonably attest to 
     the accuracy of a company's financial statements without 
     carefully assessing those controls. Requiring auditors to 
     attest to the adequacy of those controls as part of the 
     financial statement audit contributes to the market 
     transparency and integrity that is essential to a healthy 
     capital formation process. Moreover, the number and severity 
     of financial restatements has declined since the requirement 
     was adopted, which demonstrates that these requirements have 
     benefited the market significantly. Because this legislation 
     would make financial accounting fraud more likely, we oppose 
     it. Furthermore, because this legislation is being attached 
     to the TRID bill, we urge you to oppose the entire package.
       H.R. 3948, the ``Protection of Source Code Act,'' would 
     weaken SEC oversight of algorithmic trading and hamstring the 
     agency from responding quickly to flash crashes or other 
     market breakdowns.
       At a time when algorithmic trading is taking on increased 
     importance in our capital markets, this bill would make it 
     more difficult for the SEC to properly oversee such trading. 
     The bill would require the SEC to first issue a subpoena 
     before it could compel a person to produce or furnish to the 
     SEC algorithmic trading source code or ``similar intellectual 
     property.'' This would undermine the SEC's examination 
     authority by creating a gaping hole in its ability to gain 
     access to firm records relevant to the examination. It would 
     also have a devastating effect on the agency's ability to 
     respond quickly in the event of another ``flash crash'' or 
     other such events in the future. In order to oversee the 
     markets effectively, the SEC needs to be able to accurately 
     and efficiently reconstruct order entry and trading activity, 
     including for algorithmic traders. Because this legislation 
     would weaken SEC oversight of algorithmic trading and 
     hamstring the agency from responding quickly to flash crashes 
     or other market breakdowns, we oppose it. Furthermore, 
     because this legislation is being attached to the TRID bill, 
     we urge you to oppose the entire package.
       H.R. 4546, the ``National Securities Exchange Regulatory 
     Parity Act,'' would drastically weaken standards for 
     securities to be listed and traded on exchanges.
       H.R. 4546 would change the terms on which securities are 
     deemed ``covered securities,'' and thus exempt from state 
     oversight. It would do so by removing any requirement that 
     these securities have to meet conditions comparable to the 
     current listing standards on leading national exchanges. 
     Instead, any security listed on an exchange that is a member 
     of the National Market System (NMS) would be exempt from 
     state regulation and oversight. Because the bill would not 
     establish any core quantitative or qualitative requirements 
     for covered securities to replace those eliminated by the 
     bill, it would likely accelerate an already troubling race to 
     the bottom in listing standards among NMS members. Moreover, 
     the bill does not sufficiently protect against the 
     possibility that a venture exchange could eventually be 
     established specifically to meet the bill's requirements for 
     state preemption. If this were to occur, smaller, more local 
     offerings typically overseen by states could be ``designated 
     as qualified for trading'' on such an exchange without any 
     assurance that they can meet basic quantitative and 
     qualitative standards designed to ensure investors are 
     appropriately protected. In short, this bill would eliminate 
     protections afforded by state oversight, fail to replace the 
     current meaningful protections afforded by high listing 
     standards with a comparable alternative, and leave investors 
     without any reasonable hope that the SEC will be able to 
     provide effective oversight at the federal level. Because 
     this legislation would drastically weaken standards for 
     securities to be listed and traded on exchanges, we oppose 
     it. Furthermore, because this legislation is being attached 
     to the TRID bill, we urge you to oppose the entire package.
       The TRID bill should not be used as a vehicle to pass 
     extraneous, anti-investor bills. Because the bills attached 
     to the TRID bill would harm investors and undermine the 
     integrity of our capital markets, we urge you to vote no on 
     the entire package when H.R. 3978 comes to the floor this 
     week.
           Respectfully submitted,
     Barbara Roper,
       Director of Investor Protection.
     Micah Hauptman,
       Financial Services Counsel.

  The SPEAKER pro tempore. All time for debate on the bill has expired.


                 Amendment No. 1 Offered by Mr. Foster

  Mr. FOSTER. Mr. Speaker, I have an amendment at the desk.
  The SPEAKER pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 3, line 4, strike ``source code, including''.
       Page 3, line 6, insert ``algorithmic trading'' before 
     ``source code''.
       Page 3, line 15, strike ``source code, including''.
       Page 3, line 17, insert ``algorithmic trading'' before 
     ``source code''.
       Page 3, line 25, strike ``source code, including''.
       Page 4, line 2, insert ``algorithmic trading'' before 
     ``source code''.
       Page 4, line 11, strike ``source code, including''.
       Page 4, line 13, insert ``algorithmic trading'' before 
     ``source code''.

  The SPEAKER pro tempore. Pursuant to House Resolution 736, the 
gentleman from Illinois (Mr. Foster) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentleman from Illinois.
  Mr. FOSTER. Mr. Speaker, my amendment clarifies that this bill is 
only intended to apply to the source code underpinning algorithmic 
trading rather than any computer code that exists anywhere in the 
enterprise.
  The algorithmic source code at a trading firm are its crown jewels. 
It is basically the core of its existence in its intellectual property.
  It is not merely historical or descriptive like books or records that 
regulators routinely have access to. Likewise, it is not a broad 
expression of strategies that a firm might use some time in the future. 
Rather, it is a specific and prescriptive algorithm that generates a 
specific outcome based on a specific set of inputs.
  The firms that rely on algorithmic trading have Ph.D. scientists, 
mathematicians, and economists researching correlations that lead to 
these relationships between the inputs and outputs. These may be simple 
but may also be incredibly complex, involving multiple inputs that do 
not appear related at first glance.
  This complexity, coupled with the fact that they are written largely 
in computer code, limits the usefulness of

[[Page H1166]]

inspecting source code as an examination tool. It is, rather, the 
behavior of the firm in the market that represents potential violations 
of security laws. Manipulative behavior, like frequently displaying or 
canceling orders, should get the regulators' attention and prompt them 
to ask the firm to explain it.
  Source code would be and will be a valuable part of any investigation 
or enforcement action into observed manipulation of the market, but 
this is not the basis and should not be the basis for casual 
inspection. It would probably be central to proving the element of 
intent in an enforcement action because it demonstrates that the 
algorithm was designed to engage in, for example, manipulative or 
abusive behavior.
  To this end, it is imperative that the firms achieve archived 
versions in effect at any given time and log modifications to those 
algorithms, including who made them, at any time that the code is 
altered. These should always be available by subpoena.
  Additionally, I believe that most firms would allow the regulator on 
site to examine the source code on an air gap computer. To treat the 
source code as ordinary books and records would not limit the regulator 
to onsite examination, but would allow for staff to request it and that 
it be made available offsite, which has real dangers.
  Because of the value the firm carries with its proprietary 
algorithms, it makes sense that the firm would be reluctant to allow 
any undue access to its crown jewels. It is really, I believe and I 
think the majority of my colleagues believe, something that should be 
accessible only by a subpoena.
  My amendment simply clarifies that it is only the algorithmic trading 
code and related information that should be covered. I urge my 
colleagues to support my amendment and, upon its adoption, to support 
the bill on final passage.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1615

  Ms. MAXINE WATERS of California. Mr. Speaker, I rise in opposition to 
the amendment.
  The SPEAKER pro tempore. The gentlewoman from California is 
recognized for 5 minutes.
  Ms. MAXINE WATERS of California. Mr. Speaker, the current language of 
title II of H.R. 3978 would require SEC examination staff to obtain a 
subpoena before it could inspect any source code whatsoever, including, 
for example, computer code reflecting a firm's adherence to the SEC's 
cybersecurity regulations.
  The amendment offered by Mr. Foster would narrow the requirement in 
title II to only apply to proprietary source code related to 
algorithmic trading. While I applaud Mr. Foster and the amendment's 
cosponsor, Mr. Scott, for narrowing the overbroad language of title II, 
the amendment cannot fix this untimely and ill-advised legislation. 
Even as amended, title II would undermine effective oversight of the 
high-frequency traders that simultaneously create and stand to benefit 
from the kind of extreme market volatility that we have seen in the 
past few weeks.
  Let's not forget that, on May 6, 2010, in an event referred to as the 
``flash crash,'' major U.S. stock indices inexplicably plummeted nearly 
$1 trillion in less than an hour before mostly rebounding. Alarmingly, 
market regulators took nearly 5 months to determine that the flash 
crash was caused by a combination of a flawed execution algorithm of 
one institutional investor and aggressive algorithmic trading by HFTs.
  While it is too early to tell exactly what created the recent 
volatility in the U.S. stock market, market analysts have suggested 
that algorithmic trading has played a central role. In fact, just last 
Tuesday, the day after the Dow Jones Industrial Average saw its biggest 
one-day point drop in history, Treasury Secretary Steve Mnuchin 
testified before the House Financial Services Committee that 
algorithmic trading ``definitely had an impact on market moves.''
  Given the importance of algorithmic trading in our stock market, it 
makes no sense to obstruct the SEC's access to the information that 
enables such activity merely because it exists in an electronic format. 
Americans who have trillions of their dollars in 401(k) and other 
retirement and savings plans deserve the SEC's best efforts in 
investigating and mitigating computer-driven market disruptions. For 
this reason and for all of these reasons, and given my broader concerns 
that the bill would significantly harm investor confidence in our 
markets even if the amendment is adopted, I am urging a ``no'' vote on 
H.R. 3978.
  Mr. Speaker, I yield back the balance of my time.
  Mr. FOSTER. Mr. Speaker, I would just like to simply reiterate that 
it should be the actions in the market that are the first indications 
that the regulators should have a look at, and when they see suspicious 
activity in the market, that is the time to get the subpoena and go 
after the source code.
  With that, I just urge the adoption of the amendment and the passage 
of the underlying bill.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Pursuant to the rule, the previous question 
is ordered on the bill, as amended, and on the amendment offered by the 
gentleman from Illinois (Mr. Foster).
  The question is on the amendment offered by the gentleman from 
Illinois (Mr. Foster).
  The amendment was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


                           Motion to Recommit

  Mr. CAPUANO. Mr. Speaker, I have a motion to recommit at the desk.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. CAPUANO. I am, in its current form.
  Mr. HENSARLING. Mr. Speaker, I reserve a point of order on the 
gentleman's motion.
  The SPEAKER pro tempore. A point of order on the motion is reserved.
  The Clerk will report the motion to recommit.
  The Clerk read as follows:

       Mr. Capuano moves to recommit the bill H.R. 3978 to the 
     Committee on Financial Services with instructions to report 
     the same back to the House forthwith with the following 
     amendment:
       Page 5, line 13, strike ``and''.
       Page 5, line 14, strike the period and insert ``; and''.
       Page 5, after line 14, insert the following:
       ``(D) has claw back policies to require any executive 
     officer incentive-based compensation to be clawed-back in the 
     event that the issuer is required to prepare an accounting 
     restatement due to the material noncompliance of the issuer 
     with any financial reporting requirement under the securities 
     laws (as defined in section 3(a) of the Securities Exchange 
     Act of 1934), regardless of whether such compensation was 
     paid to an officer who was a party to the actions that 
     resulted in such restatement.''.

  Mr. CAPUANO (during the reading). Mr. Speaker, I ask unanimous 
consent that the motion be considered as read.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  Mr. HENSARLING. I object.
  The SPEAKER pro tempore. Objection is heard.
  The Clerk will continue to read.
  The Clerk continued to read.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Massachusetts is recognized for 5 minutes in support of his motion.
  Mr. CAPUANO. Mr. Speaker, my amendment simply requires a company to 
have a policy in place to claw back executives' incentive-based pay if 
it is materially noncompliant with financial reporting requirements. 
Now, those words matter because the words ``materially noncompliant'' 
mean something in the accounting world. It has to be a big change, not 
just some minor, little accounting error.
  This amendment really should be noncontroversial. It is outrageous, 
not to mention shortsighted, that almost a decade after the crisis that 
wrecked the economy we still don't have commonsense safeguards in place 
to ensure that CEOs do not turn a blind eye to problems that lead to a 
public restatement of their company's financials.
  This is not something hypothetical. It happens on a pretty regular 
basis. It is not relegated to just the past. Everybody here is pretty 
familiar with Wells Fargo Bank. It has generated scandal after scandal 
by ripping off its own

[[Page H1167]]

consumers. Last year, the bank settled an 11-year lawsuit with the 
Department of Justice because it overcharged veterans who applied for 
home loan refinancing. At the same time, we learned of hundreds of 
thousands of car loan customers charged for car insurance that they 
never agreed to purchase.
  In 2016, we learned of millions of fake deposits and credit card 
statements opened up by Wells Fargo and then charging their customers. 
Last September, the bank failed to refund insurance payments made by 
customers who paid off their car loans early. And most recently, we 
found out that they delayed mortgage closing dates in order to jack up 
their own fees.
  These abuses come on top of $10 billion in fines by that bank that 
has been paid in recent years for everything from mortgage fraud, 
illegal marketing, kickback schemes, insider trading, racial 
discrimination, and student loan scams. Yet the bank believes that this 
kind of consistent misconduct is not materially financially important 
enough to require a restatement.
  Wells Fargo has only ever clawed back a few tiny dollars from its 
executives. All this recommit does is simply says that if you commit an 
act that requires a material change in your public statements, you 
shouldn't profit by it. That is all. Not basic pay; just the incentive 
pay tied to those actions.
  The underlying bill goes in the opposite direction. It makes it more 
likely that there will be material inaccuracies in certain public 
companies' financial statements. If this is what Congress is going to 
do, we should, at the very least, not incentivize that bad behavior. 
Title III of this bill allows new public companies to get out of 
independent audit requirements for 10 years--ten years.
  Now, we all think, well, that is fine for a small company. Small 
company? Up to $700 million of company shares? That is a small company? 
Those are significant companies that put lots of people at risk, 
shareholders and investors.
  In 2002, the Sarbanes-Oxley Act--I want to repeat, the Sarbanes-Oxley 
Act because Mike Oxley was the Republican chair of the Financial 
Services Committee at the time--requires companies to issue stock to 
publicly report their internal control structures and procedures for 
financial reporting. Those reports have to be attested to and covered 
in an audit report.
  There is a reason why an independent audit of large corporations is a 
good thing: it makes it harder for them to hide bad actions. This 
recommit, again, it is simple. It doesn't change the underlying bill. 
It simply says: If a corporation makes a material change to its 
publicly stated financial records and an executive's incentive pay has 
been tied to the profits made off of that now-changed policy, the 
company has to have a policy in place whereby to claw back those ill-
gotten profits. I don't think that is controversial. I don't think that 
is partisan. I don't think that is antibusiness. I don't think that is 
overregulation. It is simply fair.
  We don't let bank robbers keep their money. We don't let other people 
who commit wrongdoings keep the profits that they have. Why should we 
let corporations who go out of their way--some, not all, only a handful 
go out of their way--to make sure that they hide their bad actions, 
report them badly? And when they get caught and have to report them 
appropriately, they still get to keep the ill-gotten gains.
  That is all this recommit does. It is simple. It is straightforward. 
And I would hope that my friends on not just the other side but on both 
sides of this aisle see this as a thoughtful, insightful, and 
commonsense approach to amend this bill.
  Mr. Speaker, with that, I yield back the remainder of my time.
  Mr. HENSARLING. Mr. Speaker, I withdraw my reservation of a point of 
order.

  The SPEAKER pro tempore. The reservation of a point of order is 
withdrawn.
  Mr. HENSARLING. Mr. Speaker, I claim time in opposition.
  The SPEAKER pro tempore. The gentleman from Texas is recognized for 5 
minutes.
  Mr. HENSARLING. Mr. Speaker, I listened very carefully to my 
colleague on the Financial Services Committee. I lost track of how many 
times he mentioned Wells Fargo. That has nothing to do with an early 
growth company. That has nothing to do with this title of the bill.
  So the Fostering Innovation Act by the gentlewoman from Arizona is 
all about allowing emerging-growth companies the opportunity to 
actually grow. What a novel concept.
  What we know is, Mr. Speaker, in 8 years of Obamanomics, they were 
only able to produce about 1.8 percent economic growth, for all intents 
and purposes. Nobody's savings account came back. Wages were stagnant. 
And now that we have sensible regulation, now that we have passed the 
Tax Cuts and Jobs Act, now we have 3 percent economic growth, which is 
economic growth for America's working families. Unemployment is at a 
17-year low. It remains at a 17-year low.
  Again, wages grew at 2.9 percent last year, the fastest in almost a 
decade. Two million Americans have gone back to work, Mr. Speaker, and 
this is not by accident.
  So what the gentleman is doing with his motion to recommit is sending 
us back. He is rolling the clock back to an era where working Americans 
didn't get ahead, where entrepreneurship was at a generational low, 
where small businesses were finding it hard to access lines of credit. 
So the bill that he so much maligns from the gentlewoman from Arizona, 
who happens to reside on his side of the aisle--at markup, the ranking 
member of the relevant subcommittee, the gentlewoman from New York 
(Mrs. Maloney), supported the provision and said: This is a sensible 
compromise that provides a narrowly targeted relief to only the 
companies that truly need it.
  Researching a new drug and getting FDA approval is a very, very long 
process, which is exactly what we heard in our committee. For example, 
we have heard from John Blake, senior vice president of finance at Atyr 
Pharma, who testified before the Subcommittee on Capital Markets, 
Securities, and Investments. He said: It remains the case that the 
biotech development time line is a decades-long affair. It is extremely 
likely that Atyr will still be in the lab, in the clinic, when our EGC 
clock expires, our early growth company.
  In other words, they may have revenues, but they don't have profits. 
They don't have profits. This is something that is especially common in 
the biotech area. They need this capital for innovation.
  So once again, we have heard this rhetoric on the other side of the 
aisle before. This is all about Dodd-Frank revisited. They aim at Wall 
Street, but they are hitting Main Street, Mr. Speaker. The MTR, the 
motion to recommit, hits Main Street in the gut. It will mean fewer 
early growth companies. It will mean fewer jobs. It will mean lower 
wage growth. And it will mean, again, a decimated and declining 
American Dream.

                              {time}  1630

  Mr. Speaker, we should reject the motion to recommit, and we should 
support the underlying bill.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. CAPUANO. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, this 15-minute vote on the motion to recommit will be followed by 
5-minute votes on:
  Passage of the bill, if ordered; and
  Passage of H.R. 3299.
  The vote was taken by electronic device, and there were--yeas 189, 
nays 228, not voting 13, as follows:

                             [Roll No. 76]

                               YEAS--189

     Adams
     Aguilar
     Barragan
     Beatty
     Bera
     Beyer
     Bishop (GA)
     Blum
     Blumenauer
     Blunt Rochester
     Bonamici
     Brady (PA)
     Brown (MD)
     Brownley (CA)
     Bustos
     Butterfield
     Capuano
     Carbajal
     Cardenas
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)

[[Page H1168]]


     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Cooper
     Correa
     Courtney
     Crist
     Crowley
     Cuellar
     Davis (CA)
     Davis, Danny
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     Demings
     DeSaulnier
     Deutch
     Dingell
     Doggett
     Doyle, Michael F.
     Ellison
     Engel
     Eshoo
     Espaillat
     Esty (CT)
     Evans
     Foster
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Garamendi
     Gomez
     Gonzalez (TX)
     Gottheimer
     Green, Al
     Green, Gene
     Grijalva
     Hanabusa
     Hastings
     Heck
     Higgins (NY)
     Himes
     Hoyer
     Huffman
     Jackson Lee
     Jayapal
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Jones
     Kaptur
     Keating
     Kelly (IL)
     Kennedy
     Khanna
     Kihuen
     Kildee
     Kilmer
     Kind
     Krishnamoorthi
     Kuster (NH)
     Langevin
     Larsen (WA)
     Larson (CT)
     Lawrence
     Lawson (FL)
     Lee
     Levin
     Lewis (GA)
     Lieu, Ted
     Lipinski
     Loebsack
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham, M.
     Lujan, Ben Ray
     Lynch
     Maloney, Carolyn B.
     Maloney, Sean
     Matsui
     McCollum
     McEachin
     McGovern
     McNerney
     Meeks
     Meng
     Moore
     Moulton
     Murphy (FL)
     Nadler
     Napolitano
     Neal
     Nolan
     Norcross
     O'Halleran
     O'Rourke
     Pallone
     Panetta
     Pascrell
     Payne
     Pelosi
     Perlmutter
     Peters
     Peterson
     Pingree
     Pocan
     Polis
     Price (NC)
     Quigley
     Raskin
     Rice (NY)
     Richmond
     Rosen
     Roybal-Allard
     Ruiz
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez
     Sarbanes
     Schakowsky
     Schiff
     Schneider
     Schrader
     Scott (VA)
     Scott, David
     Serrano
     Sewell (AL)
     Shea-Porter
     Sherman
     Sinema
     Sires
     Slaughter
     Smith (WA)
     Soto
     Speier
     Suozzi
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Titus
     Tonko
     Torres
     Tsongas
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters, Maxine
     Welch
     Wilson (FL)
     Yarmuth

                               NAYS--228

     Abraham
     Aderholt
     Allen
     Amash
     Amodei
     Arrington
     Babin
     Bacon
     Banks (IN)
     Barletta
     Barr
     Barton
     Bergman
     Biggs
     Bilirakis
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Bost
     Brady (TX)
     Brat
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Buchanan
     Buck
     Bucshon
     Budd
     Burgess
     Byrne
     Calvert
     Carter (GA)
     Carter (TX)
     Chabot
     Cheney
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Comer
     Comstock
     Conaway
     Cook
     Costello (PA)
     Cramer
     Crawford
     Culberson
     Curbelo (FL)
     Curtis
     Davidson
     Davis, Rodney
     Denham
     Dent
     DeSantis
     DesJarlais
     Diaz-Balart
     Donovan
     Duffy
     Duncan (TN)
     Dunn
     Emmer
     Estes (KS)
     Farenthold
     Faso
     Ferguson
     Fitzpatrick
     Fleischmann
     Flores
     Fortenberry
     Foxx
     Frelinghuysen
     Gaetz
     Gallagher
     Garrett
     Gianforte
     Gibbs
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Griffith
     Grothman
     Guthrie
     Handel
     Harper
     Harris
     Hartzler
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Higgins (LA)
     Hill
     Holding
     Hollingsworth
     Hudson
     Huizenga
     Hultgren
     Hunter
     Hurd
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (LA)
     Johnson (OH)
     Johnson, Sam
     Jordan
     Joyce (OH)
     Katko
     Kelly (MS)
     Kelly (PA)
     King (IA)
     King (NY)
     Kinzinger
     Knight
     Kustoff (TN)
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Latta
     Lewis (MN)
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     MacArthur
     Marchant
     Marino
     Marshall
     Massie
     Mast
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Messer
     Mitchell
     Moolenaar
     Mooney (WV)
     Mullin
     Newhouse
     Noem
     Norman
     Nunes
     Olson
     Palazzo
     Palmer
     Paulsen
     Perry
     Pittenger
     Poe (TX)
     Poliquin
     Ratcliffe
     Reed
     Reichert
     Renacci
     Rice (SC)
     Roby
     Roe (TN)
     Rogers (AL)
     Rohrabacher
     Rokita
     Rooney, Francis
     Rooney, Thomas J.
     Ros-Lehtinen
     Roskam
     Ross
     Rothfus
     Rouzer
     Royce (CA)
     Russell
     Rutherford
     Sanford
     Scalise
     Schweikert
     Scott, Austin
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smucker
     Stefanik
     Stewart
     Taylor
     Thompson (PA)
     Thornberry
     Tipton
     Trott
     Turner
     Upton
     Valadao
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Walters, Mimi
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Zeldin

                             NOT VOTING--13

     Bass
     Boyle, Brendan F.
     Costa
     Cummings
     Duncan (SC)
     Gutierrez
     LoBiondo
     Pearce
     Posey
     Rogers (KY)
     Stivers
     Tenney
     Watson Coleman

                              {time}  1656

  Messrs. BOST, MESSER, DAVIDSON, BISHOP of Michigan, SMITH of Texas, 
McHENRY, STEWART, BARR, HUNTER, LaMALFA, and ROKITA changed their vote 
from ``yea'' to ``nay.''
  Messrs. COOPER, DOGGETT, and GRIJALVA changed their vote from ``nay'' 
to ``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Ms. MAXINE WATERS of California. Mr. Speaker, on that I demand the 
yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 271, 
nays 145, not voting 14, as follows:

                             [Roll No. 77]

                               YEAS--271

     Abraham
     Aderholt
     Aguilar
     Allen
     Amash
     Amodei
     Arrington
     Babin
     Bacon
     Banks (IN)
     Barletta
     Barr
     Barton
     Bera
     Bergman
     Beyer
     Biggs
     Bilirakis
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Bost
     Brady (TX)
     Brat
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Buchanan
     Buck
     Bucshon
     Budd
     Burgess
     Bustos
     Byrne
     Calvert
     Carter (GA)
     Carter (TX)
     Chabot
     Cheney
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Comer
     Comstock
     Conaway
     Cook
     Cooper
     Correa
     Costello (PA)
     Cramer
     Crawford
     Cuellar
     Culberson
     Curbelo (FL)
     Curtis
     Davidson
     Davis, Rodney
     Delaney
     DelBene
     Denham
     Dent
     DeSantis
     DesJarlais
     Diaz-Balart
     Donovan
     Duffy
     Duncan (TN)
     Dunn
     Emmer
     Estes (KS)
     Farenthold
     Faso
     Ferguson
     Fitzpatrick
     Fleischmann
     Flores
     Fortenberry
     Foster
     Foxx
     Frelinghuysen
     Gaetz
     Gallagher
     Garrett
     Gianforte
     Gibbs
     Gohmert
     Gonzalez (TX)
     Goodlatte
     Gosar
     Gottheimer
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Griffith
     Guthrie
     Handel
     Harper
     Harris
     Hartzler
     Heck
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Higgins (LA)
     Hill
     Himes
     Holding
     Hollingsworth
     Hudson
     Huizenga
     Hultgren
     Hunter
     Hurd
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (LA)
     Johnson (OH)
     Johnson, Sam
     Jordan
     Joyce (OH)
     Katko
     Kelly (MS)
     Kelly (PA)
     Kihuen
     Kilmer
     Kind
     King (IA)
     King (NY)
     Kinzinger
     Knight
     Kuster (NH)
     Kustoff (TN)
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Larsen (WA)
     Latta
     Lewis (MN)
     Lipinski
     Loebsack
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     MacArthur
     Maloney, Sean
     Marchant
     Marino
     Marshall
     Massie
     Mast
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Meeks
     Messer
     Mitchell
     Moolenaar
     Mooney (WV)
     Mullin
     Murphy (FL)
     Napolitano
     Newhouse
     Noem
     Norman
     Nunes
     O'Halleran
     O'Rourke
     Olson
     Palazzo
     Palmer
     Paulsen
     Perry
     Peters
     Peterson
     Pittenger
     Poe (TX)
     Poliquin
     Polis
     Ratcliffe
     Reed
     Reichert
     Renacci
     Rice (NY)
     Rice (SC)
     Roby
     Roe (TN)
     Rogers (AL)
     Rohrabacher
     Rokita
     Rooney, Francis
     Rooney, Thomas J.
     Ros-Lehtinen
     Roskam
     Ross
     Rothfus
     Rouzer
     Royce (CA)
     Ruppersberger
     Russell
     Rutherford
     Sanford
     Schneider
     Schrader
     Schweikert
     Scott, Austin
     Scott, David
     Sensenbrenner
     Sessions
     Sewell (AL)
     Sherman
     Shimkus
     Shuster
     Simpson
     Sinema
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smucker
     Soto
     Stefanik
     Stewart
     Suozzi
     Taylor
     Tenney
     Thompson (PA)
     Thornberry
     Tipton
     Trott
     Turner
     Upton
     Valadao
     Vargas
     Veasey
     Vela
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Walters, Mimi
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Zeldin

                               NAYS--145

     Adams
     Barragan
     Beatty
     Bishop (GA)
     Blumenauer
     Blunt Rochester
     Bonamici
     Brady (PA)
     Brown (MD)
     Brownley (CA)
     Butterfield
     Capuano
     Carbajal
     Cardenas
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Courtney
     Crist
     Crowley
     Davis (CA)
     Davis, Danny
     DeFazio
     DeGette
     DeLauro
     Demings
     DeSaulnier
     Deutch
     Dingell
     Doggett
     Doyle, Michael F.
     Ellison
     Engel
     Eshoo
     Espaillat
     Esty (CT)
     Evans
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Garamendi
     Gomez
     Green, Al
     Green, Gene
     Grijalva
     Hanabusa
     Hastings
     Higgins (NY)
     Hoyer
     Huffman
     Jackson Lee
     Jayapal
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Jones
     Kaptur

[[Page H1169]]


     Keating
     Kelly (IL)
     Kennedy
     Khanna
     Kildee
     Krishnamoorthi
     Langevin
     Larson (CT)
     Lawrence
     Lawson (FL)
     Lee
     Levin
     Lewis (GA)
     Lieu, Ted
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham, M.
     Lujan, Ben Ray
     Lynch
     Maloney, Carolyn B.
     Matsui
     McCollum
     McEachin
     McGovern
     McNerney
     Meng
     Moore
     Moulton
     Nadler
     Neal
     Nolan
     Norcross
     Pallone
     Panetta
     Pascrell
     Payne
     Pelosi
     Perlmutter
     Pingree
     Pocan
     Price (NC)
     Quigley
     Raskin
     Richmond
     Rosen
     Roybal-Allard
     Ruiz
     Rush
     Ryan (OH)
     Sanchez
     Sarbanes
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Shea-Porter
     Sires
     Slaughter
     Smith (WA)
     Speier
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Titus
     Tonko
     Torres
     Tsongas
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters, Maxine
     Welch
     Wilson (FL)
     Yarmuth

                             NOT VOTING--14

     Bass
     Boyle, Brendan F.
     Costa
     Cummings
     Duncan (SC)
     Grothman
     Gutierrez
     LoBiondo
     Pearce
     Posey
     Rogers (KY)
     Scalise
     Stivers
     Watson Coleman

                              {time}  1704

  Mr. POLIS changed his vote from ``nay'' to ``yea.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________