[Congressional Record Volume 164, Number 60 (Friday, April 13, 2018)]
[House]
[Pages H3214-H3223]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               VOLCKER RULE REGULATORY HARMONIZATION ACT

  Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 811, I call 
up the bill (H.R. 4790) to amend the Volcker rule to give the Board of 
Governors of the Federal Reserve System sole rulemaking authority, to 
exclude community banks from the requirements of the Volcker rule, 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 (Mr. Mitchell). Pursuant to House Resolution 
811, in lieu of the amendment in the nature of a substitute recommended 
by the Committee on Financial Services printed in the bill, an 
amendment in the nature of a substitute consisting of the text of Rules 
Committee Print 115-67, is adopted, and the bill, as amended, is 
considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 4790

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Volcker Rule Regulatory 
     Harmonization Act''.

     SEC. 2. RULEMAKING AUTHORITY UNDER THE VOLCKER RULE.

       (a) In General.--Paragraph (2) of section 13(b) of the Bank 
     Holding Company Act of 1956 (12 U.S.C. 1851(b)(2)) is amended 
     to read as follows:
       ``(2) Rulemaking.--
       ``(A) In general.--The Board may, as appropriate, consult 
     with the Comptroller of the Currency, the Federal Deposit 
     Insurance Corporation, the Securities and Exchange 
     Commission, or the Commodity Futures Trading Commission to 
     adopt rules or guidance to carry out this section, as 
     provided in subparagraph (B).
       ``(B) Rulemaking requirements.--In adopting a rule or 
     guidance under subparagraph (A), the Board--
       ``(i) shall consider the findings of the report required in 
     paragraph (1) and, as appropriate, subsequent reports;
       ``(ii) shall assure, to the extent possible, that such rule 
     or guidance provide for consistent application and 
     implementation of the applicable provisions of this section 
     to avoid providing advantages or imposing disadvantages to 
     the companies affected by this subsection and to protect the 
     safety and soundness of banking entities and nonbank 
     financial companies supervised by the Board; and
       ``(iii) shall include requirements to ensure compliance 
     with this section, such as requirements regarding internal 
     controls and recordkeeping.
       ``(C) Authority.--The Board shall have sole authority to 
     issue and amend rules under this section after the date of 
     the enactment of this paragraph.
       ``(D) Conforming authority.--
       ``(i) Continuity of regulations.--Any rules or guidance 
     issued under this section prior to the date of enactment of 
     this paragraph shall continue in effect until the Board 
     issues a successor rule or guidance, or amends such rule or 
     guidance, pursuant to subparagraph (C).
       ``(ii) Applicable guidance.--In performing examinations or 
     other supervisory duties, the appropriate Federal banking 
     agencies, the Securities and Exchange Commission, and the 
     Commodity Futures Trading Commission, as appropriate, shall 
     update any applicable policies and procedures to ensure that 
     such policies and procedures are consistent (to the extent 
     practicable) with any rules or guidance issued pursuant to 
     subparagraph (C).''.
       (b) Conforming Amendments.--Section 13 of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1851) is amended--
       (1) by striking ``the appropriate Federal banking agencies, 
     the Securities and Exchange Commission, and the Commodity 
     Futures Trading Commission,'' each place it appears and 
     inserting ``the Board'';
       (2) by striking ``appropriate Federal banking agencies, the 
     Securities and Exchange Commission, and the Commodity Futures 
     Trading Commission'' each place it appears and inserting 
     ``Board'';
       (3) in subsection (c)(5), by striking ``Notwithstanding 
     paragraph (2)'' and all that follows through ``provided in 
     subsection (b)(2),'' and inserting ``The Board shall have the 
     authority''; and
       (4) in subsection (d)(1)--
       (A) in subparagraph (F)(ii)--
       (i) by striking ``the appropriate Federal banking 
     agencies'' and inserting ``the Board''; and
       (ii) by striking ``have not jointly'' and inserting ``has 
     not''; and

[[Page H3215]]

       (B) in subparagraph (G)(viii), by striking ``appropriate 
     Federal banking agencies, the Securities and Exchange 
     Commission, or the Commodity Futures Trading Commission,'' 
     and inserting ``Board,''.

     SEC. 3. ENFORCEMENT; ANTI-EVASION.

       (a) In General.--Subsection (e) of section 13 of the Bank 
     Holding Company Act of 1956 (12 U.S.C. 1851(e)) is amended to 
     read as follows:
       ``(e) Enforcement; Anti-evasion.--
       ``(1) Appropriate federal banking agency.--Notwithstanding 
     any other provision of law except for any rules or guidance 
     issued under subsection (b)(2), whenever the appropriate 
     Federal banking agency has reasonable cause to believe that a 
     banking entity or nonbank financial company supervised by the 
     Board has made an investment or engaged in an activity in a 
     manner that either violates the restrictions under this 
     section, or that functions as an evasion of the requirements 
     of this section (including through an abuse of any permitted 
     activity), such appropriate Federal banking agency shall 
     order, after due notice and opportunity for hearing, the 
     banking entity or nonbank financial company supervised by the 
     Board to terminate the activity and, as relevant, dispose of 
     the investment.
       ``(2) Securities and exchange commission and commodity 
     futures trading commission.--
       ``(A) In general.--Notwithstanding any other provision of 
     law except for any rules or guidance issued under subsection 
     (b)(2), whenever the Securities and Exchange Commission or 
     the Commodity Futures Trading Commission, as appropriate, has 
     reasonable cause to believe that a covered nonbank financial 
     company for which the respective agency is the primary 
     Federal regulator has made an investment or engaged in an 
     activity in a manner that either violates the restrictions 
     under this section, or that functions as an evasion of the 
     requirements of this section (including through an abuse of 
     any permitted activity), the Securities and Exchange 
     Commission or the Commodity Futures Trading Commission, as 
     appropriate, shall order, after due notice and opportunity 
     for hearing, the covered nonbank financial company to 
     terminate the activity and, as relevant, dispose of the 
     investment.
       ``(B) Covered nonbank financial company defined.--In this 
     paragraph, the term `covered nonbank financial company' means 
     a nonbank financial company (as defined in section 102 of the 
     Financial Stability Act of 2010) supervised by the Securities 
     and Exchange Commission or the Commodity Futures Trading 
     Commission, as appropriate.''.
       (b) Rule of Construction.--Nothing in this section shall be 
     construed to abrogate, reduce, or eliminate the backup 
     authority of the Federal Deposit Insurance Corporation 
     authority under the Dodd-Frank Wall Street Reform and 
     Consumer Protection Act (12 U.S.C. 5301 et seq.), the Federal 
     Deposit Insurance Act (12 U.S.C. 1811), or Federal Deposit 
     Insurance Corporation Improvement Act of 1991.

     SEC. 4. EXCLUSION OF COMMUNITY BANKS FROM VOLCKER RULE.

       Section 13(h)(1) of the Bank Holding Company Act of 1956 
     (12 U.S.C. 1851(h)(1)) is amended--
       (1) in subparagraph (D), by redesignating clauses (i) and 
     (ii) as subclauses (I) and (II), respectively, and adjusting 
     the margins accordingly;
       (2) by redesignating subparagraphs (A), (B), (C), and (D) 
     as clauses (i), (ii), (iii), and (iv), respectively, and 
     adjusting the margins accordingly;
       (3) in the matter preceding clause (i), as so redesignated, 
     in the second sentence, by striking ``institution that 
     functions solely in a trust or fiduciary capacity, if--'' and 
     inserting the following: ``institution--
       ``(A) that functions solely in a trust or fiduciary 
     capacity, if--'';
       (4) in clause (iv)(II), as so redesignated, by striking the 
     period at the end and inserting ``; or''; and
       (5) by adding at the end the following:
       ``(B) that does not have and is not controlled by a company 
     that has--
       ``(i) more than $10,000,000,000 in total consolidated 
     assets; and
       ``(ii) total trading assets and trading liabilities, as 
     reported on the most recent applicable regulatory filing 
     filed by the institution, that are more than 5 percent of 
     total consolidated assets.''.

  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.
  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. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include 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. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, another day, another strong bipartisan bill presented to 
the House by the House Financial Services Committee.
  I take great pride in that fact.
  Today, I rise in strong support of H.R. 4790, the Volcker Rule 
Regulatory Harmonization Act.
  I want to thank, first, the gentleman from Arkansas (Mr. Hill) for 
his leadership on the issue and so many other issues in front of our 
committee.
  And I want to thank his bipartisan partner, the Democrat gentleman 
from Illinois (Mr. Foster) for his leadership on his side of the aisle 
on this very important piece of legislation.
  As a result of their hard work, this bill was reported out of our 
committee, Mr. Speaker, 50-10, which means 80 percent--80 percent--of 
our colleagues on the committee supported the legislation, including a 
majority of the Democrats.
  Now, Mr. Speaker, we enjoy, in America, the deepest, strongest, and 
most liquid capital markets, frankly, the world has ever known, and 
that helps us have a very strong, strong progrowth economy.
  Our capital markets are vital; vital to the job growth and job-
creating machine in America. Our capital markets provide very important 
funding to Main Street businesses and to entrepreneurs for short-term 
operations and long-term growth.
  Main Street businesses, for example, like an equipment and party 
rental store in my district, whose owner is named Arlis, who told me, 
``The number one issue for me to keep the doors open is access to 
capital.''
  That is why it is so critical that we ensure that he has access to 
capital.
  I also heard from Jeff from Henderson County in the Fifth District of 
Texas that I have the privilege of representing. He owns a farm and 
ranch store, and he explained, ``During the past year, I have been able 
to expand my business location and double my inventory. I have been 
able to hire additional employees as I grow. Without access to credit, 
things like this would not be possible.''
  Just two quick little vignettes about how in our economy capital 
formation, access to credit, how important that is for the job engine 
of America.
  So again, Mr. Speaker, members of the House Financial Services 
Committee on both sides of the aisle have been working very hard on 
bipartisan pieces of legislation that can result in smarter, more 
efficient, more effective regulation that our hardworking taxpayers 
expect so that we can have robust capital formation and our job 
creators, our small business people like Jeff and Arlis, can continue 
to grow and prosper.
  H.R. 4790 is just one example of this type of legislation. 
Specifically, Mr. Speaker, H.R. 4790 will streamline the regulatory 
authority set forth in section 619 of the Dodd-Frank Act, a section 
more commonly known as the Volcker rule. It provides a framework that 
will provide increased regulatory clarity for entities that must comply 
with the Volcker rule. It does this by consolidating--consolidating--
rulemaking authority and interpretation with the Federal Reserve Board, 
and for purposes of examination and enforcement, designating the 
primary Federal regulator for a covered entity as the sole regulator in 
those capacities.
  The challenge here, Mr. Speaker, is that some entities can have as 
many as five different regulators interpreting the Volcker rule and 
five different regulators enforcing the Volcker rule. Sometimes they 
conflict with each other, Mr. Speaker, and, frankly, the entity doesn't 
know what to do. You cannot have an economy based on the rule of law 
when, frankly, you don't know what the law says.
  So the gentleman from Arkansas (Mr. Hill) brings a very simple bill 
to the House floor that says we are going to have one--one--regulator 
in charge of interpreting the rules, and the primary regulator is going 
to be in charge of enforcing the rule. It is common sense. It creates 
efficiency.

                              {time}  0915

  Now, I want to be clear about one thing: H.R. 4790 does not repeal 
the Volcker rule. I wish it did, but it doesn't. That is not what we 
are debating here today.
  Outside of providing important relief to community banks--bipartisan 
regulatory relief that, by the way, has already been approved by a 
strong two-

[[Page H3216]]

thirds of our Senate colleagues--this bill doesn't require any changes 
to the Volcker rule itself.
  I highlight this because this legislation, again, represents 
something that Members of Congress should agree on, that regardless of 
how you stand on a particular rule or regulation, it at least ought to 
be clear, and there ought to be one interpretation and one enforcer of 
the rule so that you know what the rule is. You can't abide by the rule 
if you don't know what the rule is. This is only common sense, and it 
can only lead to, again, stronger, deeper, more liquid capital markets 
to help our job creators.
  So regardless of whether we support the Volcker rule or we wish to 
repeal it, hopefully, we can at least agree that it shouldn't be 
unnecessarily complex and burdensome and virtually impossible to abide 
by. And so that, again, is what H.R. 4790 is simply trying to do.
  Mr. Speaker, I commend this piece of legislation to all of my 
colleagues. It is a very important piece of legislation, again, 
strongly bipartisan. Eighty percent of the Members of the House 
Financial Services Committee support it.
  Again, I want to commend the leadership of the gentleman from 
Arkansas (Mr. Hill), and with that, I reserve the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, I would like to start off with a quote from Speaker Paul 
Ryan in a 2012 townhall meeting. This is what he said to his 
constituents: ``If you're a bank and you want to operate like some 
nonbank entity like a hedge fund, then don't be a bank. Don't let banks 
use their customers' money to do anything other than traditional 
banking.''
  I agree, and that is why Congress passed the Volcker rule in the wake 
of the 2008 financial crisis, to prevent taxpayer-backed banks from 
engaging in risky, speculative activities like owning hedge funds. But 
since that time, Republicans have engaged in a relentless attack 
against the Volcker rule at the behest of Wall Street megabanks.
  H.R. 4790, the so-called Volcker Rule Regulatory Harmonization Act, 
is the latest threat to that rule. Specifically, H.R. 4790, contains 
two problematic provisions that would create a loophole in the Volcker 
rule and make it easier for the Trump administration to weaken or 
repeal it.
  Leading up to the financial crisis, Wall Street megabanks engaged in 
proprietary trading, which is essentially speculative, highly leveraged 
betting that benefits their bottom line but uses federally insured 
loans backed by the U.S. taxpayer.
  These banks gambled on exotic financial instruments like 
collateralized debt obligations comprised of risky subprime mortgages 
and credit default swaps, which even the legendary investor, Warren 
Buffett, criticized as ``financial weapons of mass destruction.''
  When the Housing bubble finally burst, these bets led to massive 
losses and required the Federal Government to bail out the banking 
industry with trillions of taxpayer dollars to stop an economic 
catastrophe. To protect the American taxpayer and the economy from this 
sort of risky trading as well as to return banks to the business of 
helping consumers and small businesses, Congress included the Volcker 
rule's ban on proprietary trading as part of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act.
  Specifically, the Volcker rule prohibits taxpayer-backed banks from 
engaging in risky proprietary trading and from owning hedge funds and 
private equity funds. It also prohibits banks from owning the very same 
risky collateralized debt obligations that accelerated the 2008 crisis.
  According to Martin Gruenberg, Chairman of the Federal Deposit 
Insurance Corporation, that is, the FDIC, which is the agency charged 
with protecting taxpayers from bank bailouts, ``had it,'' this 
prohibition, ``been in place then, the Volcker rule would have 
constrained the proliferation of such instruments.''
  The result today is less reckless risk-taking by Wall Street 
megabanks and a stronger financial system. And despite dire predictions 
by Republicans, our banks have returned to lending to consumers and 
businesses, and our financial markets are adapting and thriving.
  For example, since passage of Dodd-Frank, bank lending to businesses 
has increased 80 percent; and in the bond market, which has long been 
dominated by bank dealers, we have seen record-new bond issuance by 
companies, States, cities, and towns seeking to raise funds and record 
trading volumes in those bonds. Most other metrics also show a healthy 
corporate bond market.
  Nevertheless, H.R. 4790 is just the latest Republican attempt to 
weaken the Volcker rule. First, the bill would provide a blanket 
exemption from the Volcker rule for 97 percent of our Nation's banks 
which have consolidated assets of $10 billion or less and with less 
than 5 percent of those assets in trading assets.
  To be clear, most community banks do not engage in any trading 
activities and, therefore, have no compliance requirements under the 
rule. However, H.R. 4790 would give all community banks the 
congressional thumbs-up to begin speculative trading instead of 
focusing on the traditional business of banking. It also makes 
community banks prime targets for hedge fund salesmen.
  Now, why is this an area of concern for me? It is an area of concern 
because I hear the community banks when they say that their numbers are 
going down because of mergers and consolidation. This bill does not 
help with this problem. It makes it worse because it sends a shining 
beacon to hedge funds all over the country that they can peddle risky 
and questionable investments to community banks, and the regulators 
will be none the wiser.
  I am extraordinarily concerned with the extent of the affordable 
housing crisis our Nation is facing. We need banks to invest in housing 
and in our communities. I believe that community banks can provide 
those kind of investments.

  But I am also concerned that, if the hedge funds can prey on 
community banks with little oversight, then they will be unable to 
provide the kinds of investments in housing and small businesses that 
communities need. Instead, we will see more community banks investing 
in hedge funds and possibly leaving these communities behind.
  So when Members ask: How can we create more affordable housing or 
address the issues that experts like Dr. Matthew Desmond are raising on 
the housing crisis in America, one thing that we can do is not think 
narrowly about the impact of financial services legislation, and, 
particularly, legislation like H.R. 4790 that can create lasting, 
unintended consequences if not carefully considered.
  We should think broadly and realize that the policies that we make 
for banks can have real impacts on the communities they serve. And the 
regulators and experts have done just that. They have carefully 
considered the bill's provisions and the unintended consequences that 
could ensue.
  That is why the blanket carve-out in this bill is opposed by former 
Federal Reserve Chairman and the rule's namesake, Paul Volcker, who has 
said: ``I know from my long experience in banking and savings and loan 
regulation that plausibly small loopholes can be `gamed' and exploited 
with unfortunate consequences.'' Paul Volcker was Chairman of the 
Federal Reserve for part of the savings and loan crisis, which, during 
that time, more than 1,000 S&Ls failed, fully one-third of the 
industry.
  The exemption is also opposed by FDIC Chairman Gruenberg, FDIC Vice 
Chairman Thomas Hoenig, and investors and advocates.
  If we truly want to reduce regulatory burdens on community banks that 
engage in permitted trading activity, we should be looking at other 
ways to accommodate them, such as by creating a presumption of 
compliance with the Volcker rule, which reduces compliance costs 
without opening up a loophole. Rather than encouraging banks, 
especially community banks, to make speculative bets on hedge funds or 
derivatives, we should be doing everything possible to ensure banks are 
focused on supporting their communities by offering mortgages and 
commercial loans.
  Second, H.R. 4790 would repeal the requirement that the Federal 
Reserve, FDIC; Office of the Comptroller of Currency, that is the OCC; 
Securities and Exchange Commission, that is the SEC; and the Commodity 
Futures Trading

[[Page H3217]]

Commission, that is the CFTC, work together to jointly implement the 
rule. Instead, the bill would delegate sole rulemaking authority to the 
Federal Reserve, which could choose to consult or not consult with the 
other regulators.
  This would unreasonably cut the FDIC out of any future rule changes, 
even though it is the regulator charged with protecting deposit 
insurance against the very risky, speculative activities the Volcker 
rule was designed to prevent.
  It would also cut the OCC out of the rulemaking process, even though 
it oversees institutions that account for approximately 40 percent of 
bank holding company trading revenues.
  And it would cut out the SEC and the CFTC, even though those agencies 
have the expertise and jurisdiction over broker dealers and future 
traders and their marketmaking activities.
  Worse, appointing the Fed a single regulator would make it easier for 
the Trump administration to weaken and repeal the Volcker rule, even 
though it was expeditiously promulgated in 2 years and the regulators 
are now working together to make appropriate changes. While the bill 
would at least allow the appropriate banking regulators--SEC and CFTC--
to enforce the rule, such enforcement authority is meaningless if the 
Volcker rule is effectively gutted by the Trump administration.
  But this is what my Republican colleagues want. Chairman Hensarling's 
600-page Big Bank giveaway, H.R. 10, known as the ``Wrong'' CHOICE Act, 
would have repealed the Volcker rule outright. H.R. 4790 is merely the 
latest attempt to do the same thing.
  Mr. Speaker, I strongly oppose H.R. 4790, and I reserve the balance 
of my time.
  Mr. HENSARLING. Mr. Speaker, I yield myself 30 seconds just to say I 
am not sure what bill the ranking member is debating. It does not 
appear to be H.R. 4790, and I have my own quotes.
  Paul Volcker, himself, said the Volcker rule is ``much more 
complicated than I would like to see.''
  President Obama's Federal Reserve Chairman Janet Yellen, said: 
``Implementation of the Volcker rule is, frankly, complex. . . .''
  President Obama's Federal Reserve Governor Tarullo said: ``Several 
years of experience have convinced me that . . . the Volcker rule is 
too complicated.''
  President Obama's former Comptroller of the Currency said the Volcker 
rule ``has been one of the most complex rulemakings I can remember 
being involved in.''
  That is why we need to simplify it.
  Mr. Speaker, I am now very happy to yield 5 minutes to the gentleman 
from Arkansas (Mr. Hill), the bill's sponsor, one of the hardest 
working and most knowledgeable members on our committee.

                              {time}  0930

  Mr. HILL. Mr. Speaker, I thank the chairman, and I appreciate the 
chairman's leadership in bringing this bill to the floor today.
  I think the American people should be very pleased that this bill is 
coming to the floor in the form that it is, because we are doing two 
things here, Mr. Speaker, that I hear about from constituents all the 
time in terms of the way Congress should work.
  First, the Dodd-Frank Act was passed 8 years ago this July and has 
been scrutinized by Congresses since that time on how it can be 
improved. What are the implications of it? What are the unintended 
consequences of it?
  No section of this bill was talked about more than section 619, the 
Volcker rule. So we are evaluating it, and we are bringing today a 
bipartisan solution to something that regulators say is a problem, 
bankers say is a problem, and our consumers and businesses have had the 
unintended consequences of being hurt by, because it has not allowed 
our capital markets to function efficiently.
  So, first, Dodd-Frank is subject to review after it was passed. That 
is something our constituents want. We know no law is perfect when it 
is passed. It is not a piece of the true cross discovered by St. Helena 
in Jerusalem. It is not part of the Rosetta Stone. It is subject to the 
scrutiny of the people--our people--the American people.
  Secondly, people tell me all the time: Why can't you be more 
bipartisan?
  So, Mr. Speaker, this is people's exhibit A of bipartisanship.
  The Financial CHOICE Act that this House passed last year repealed 
the Volcker rule. We believe it harms the capital market system of this 
country. We believe it was an overreaction to the financial crisis.
  We had members of the Obama administration who said that proprietary 
trading didn't even contribute to the financial crisis. But set that 
issue aside. We proposed repeal. Over in the United States Senate, they 
passed the bill with two-thirds of the Senate, Mr. Speaker, to say that 
the Volcker rule is not perfect.
  Section 619 is not right, and they exempt community banks under $10 
billion that don't have trading activity. They exempt them completely 
in the U.S. Senate bill passed with two-thirds of the Senate. I think 
all Americans know that two-thirds of the Senate agreeing on something 
is shocking. They can't even agree that there are 24 hours in a day.
  So this bill represents an improvement. This bill represents 
bipartisanship. With my friend, Dr. Foster, we have worked from the yin 
of full repeal to the Senate-exempt community banks. We have identical 
language to exempt community banks in this bill, Mr. Speaker. That is 
why we got a 50-0 vote in our committee. It is common sense.
  But we add one feature that we think improves that Senate language, 
and that is the heart of what is changed in this bill and the heart of 
what Dr. Foster worked on, which is, how do we harmonize the 
interpretation of this 1,000-page complex rule that our Federal Reserve 
bank presidents don't understand and our current chairman said that 
trading desks had to have a Ouija board to figure out how to do a 
trade? So we want a standard, harmonized interpretation of this rule, 
and that is what Dr. Foster and I propose today.
  They have tried other ways. We have an Interagency Working Group. 
They sit around, drink coffee, and figure out ways to harmonize stuff. 
But they have failed. There were hundreds of questions submitted: How 
do we interpret this rule? They could come up with 21 answers, Mr. 
Speaker, out of hundreds submitted.
  So for that reason, Dr. Foster and I suggest that the Federal Reserve 
system be first among equals in interpreting this complex rule. Why? 
Because they oversee all of the bank holding companies in the country, 
the most complex institutions in the country. In my view, that is what 
we need to do.
  We are bipartisan. We have compromised. We have brought both sides 
together. We have improved the bill. Like our chairman, I wish it were 
repealed, but that is not possible right now. So we take a step forward 
to make it a better rule that provides more certainty for market 
makers.
  If market makers have more certainty, Mr. Speaker, broker-dealers 
under $10 billion or over $10 billion will have a more clear compliance 
regime. Our towns and municipalities that require in their municipal 
bonds having market makers and trading will get better prices, which 
means our water and sewer systems are going to cost less when it comes 
to the net interest cost. That is what we are trying to do, is improve 
our capital markets and let our companies have more market makers.
  So, Mr. Speaker, I urge my colleagues to support this bill. I thank 
Dr. Foster for his support, and I thank the chairman for bringing it to 
the floor.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 3\1/2\ minutes 
to the gentleman from Illinois (Mr. Foster), who is a member of the 
Financial Services Committee.
  Mr. FOSTER. Mr. Speaker, I thank Ranking Member Waters for yielding 
me the time and for her commitment to thoughtful debate in our caucus 
to get the best results for the people that we represent.
  I thank Congressman Hill for working with me and our staff for months 
to craft the bipartisan bill that you see on the floor today.
  When I first entered Congress, the Great Recession required an 
emergency response for lawmakers to save the economy from collapse, and 
then it required a thoughtful response to make sure that we would have 
an economy that would remain stable and work for everyone.

[[Page H3218]]

  That is why I worked hard to draft the Dodd-Frank Wall Street Reform 
and Consumer Protection Act, and I am proud that it has succeeded in 
creating a more stable and better capitalized financial system so that 
hardworking families should never have to endure a similar financial 
crisis. The balance has generally been good between reining in risk and 
allowing financial services firms to play their necessary role in our 
economy.

  We have to constantly monitor for new risks and ways that regulation 
may unintentionally reduce liquidity or restrict access to capital. But 
first and foremost, we need to fight to preserve the substantive pieces 
that we got right and to build on its success with improvements to the 
law. That includes the Volcker rule, a crucial aspect of protecting the 
system. The current arrangement uses a committee of five agencies--the 
Fed, OCC, FDIC, SEC, and CFTC--to write and update the rule.
  During Volcker rulemaking, each regulator on the committee has an 
effective veto over any proposed policy. I spoke with former regulators 
who were involved in that rulemaking process and came to understand 
that the committee decision often formed around the weakest regulatory 
position, which is not good. The veto of each regulator also applies to 
interpreted guidance, which makes it very hard for either industry or 
watchdog groups to get a straight answer on what the details of the 
Volcker rule actually are.
  H.R. 4790 would strengthen Dodd-Frank by making regulatory practices 
more efficient and clear. The bill, including my amendment, would make 
the Federal Reserve the sole rulemaking agency for the Volcker rule, 
identify the regulator primarily responsible for oversight of an 
institution, and provide relief to community banks who are not going to 
threaten our economy by setting up a massive proprietary trading desk.
  Consolidated rulemaking at the Fed will also streamline the process 
for updating the Volcker rule to new market conditions that may create 
new threats. As markets change, we need a single nimble regulator to 
respond by amending the rule and providing an interpretation for new 
conditions.
  Identifying the single regulator responsible for Volcker oversight of 
an institution ensures consistent implementation and enforcement. This 
will be the Fed for a bank holding company, the OCC for a national 
bank, the FDIC for a federally insured State-chartered bank, the SEC 
for a broker-dealer, and the CFTC for a swap dealer. Importantly, the 
FDIC retains its backup examination authority for banks to protect the 
Deposit Insurance Fund with respect to all insured institutions.
  Exempting small community banks will relieve a significant compliance 
cost that is unnecessary because few of these banks have any interest 
in proprietary trading. This would also allow the regulators to focus 
on the largest banks which are the only ones capable of having large 
trading operations. These large banks hold 82 percent of all deposits 
and are the potential source of nearly all systemic risk.
  The bill limits the exemption to banks with less than $10 billion in 
assets and less than 5 percent of those assets being in trading assets.
  The SPEAKER pro tempore (Mr. Lance). The time of the gentleman has 
expired.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield the gentleman 
from Illinois an additional 30 seconds.
  Mr. FOSTER. Mr. Speaker, this 5 percent limitation means that any 
well-capitalized small bank that decides to invest in tradeable assets 
could take 100 percent losses on its trading positions without becoming 
insolvent and without threatening the Deposit Insurance Fund. So there 
is no gambling with taxpayer funds involved here.
  Mr. Speaker, I urge you to support a stronger Volcker rule by 
bringing greater efficiency and transparency to the policy formulation 
and greater consistency to implementation and enforcement.
  I thank, again, the ranking member for yielding me the time, and I 
urge a ``yes'' vote on the final passage of H.R. 4790, the Volcker Rule 
Regulatory Harmonization Act.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Michigan (Mr. Huizenga), who is the chairman of the Capital Markets, 
Securities, and Investment Subcommittee.
  Mr. HUIZENGA. Mr. Speaker, the ranking member seems as if she would 
like to have a conversation about housing and prices. I am happy to do 
that--I am a former realtor and builder--just not right now.
  Today, we are here to talk about H.R. 4790, the Volcker Rule 
Regulatory Harmonization Act, introduced by my good friend and 
colleague, Mr. Hill.
  H.R. 4790 would streamline the regulatory authority over the Volcker 
rule by granting the Federal Reserve the exclusive primary authority, 
while requiring all of the other agencies to yet do their job as 
prescribed.
  This was really about proprietary trading. Because of the key role 
that market making plays in ensuring deep, liquid capital markets, the 
framers of the Volcker rule sought to exempt market-making activities 
from the coverage of its prohibition on proprietary trading.
  There is just one problem: The line between impermissible 
``proprietary trading'' and permissible ``market making'' is virtually 
impossible to draw.
  To add insult to injury, the framers of the Volcker rule unartfully 
conferred responsibility for both implementing and enforcing the rule 
on five different Federal financial regulators, all of which have 
different mandates and regulatory philosophies: the Federal Reserve, 
FDIC, OCC, SEC, and the CFTC. It is an alphabet soup of regulators.
  With each regulator having different statutory mandates and 
regulatory missions, is it any surprise that these five agencies have 
failed to reach a consensus on the regulation to implement the Volcker 
rule's vague legislative language?
  Let me give you another example. This is a little like driving down 
an unmarked section of the road where the State police, the Department 
of Transportation, the local police, the parking attendant, and the FBI 
have all been told that they have primary enforcement responsibilities 
for the speed limit. It just doesn't make sense. As a result, banks are 
getting out of the market-making business for fear of running afoul of 
the Volcker rule. This is a great detriment to the U.S. capital 
markets.
  The real-world implications of the Volcker rule have been higher 
borrowing costs for job creators, smaller investment returns for 
hardworking families, and less economic activity overall because of 
further regulatory restraints placed on already reduced liquidity 
margins in key fixed-income markets, including the corporate bond 
market.

  So, needless to say, from its inception, the Volcker rule has been a 
solution in search of a problem. It seeks to address activities that 
had nothing to do with the financial crisis, and its practical effect 
has been to undermine financial stability rather than to preserve it.
  H.R. 4790 is a much-needed first step to addressing the numerous 
unintended and negative consequences of the Volcker rule. This 
bipartisan bill, as has been pointed out, streamlines the rulemaking 
authority of the Federal Reserve. It consolidates examination and 
enforcement authority into a single primary regulator.
  This legislative measure makes important and sensible changes to 
ensure much-needed regulatory clarity and reduces burdensome compliance 
costs.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HENSARLING. Mr. Speaker, I yield the gentleman from Michigan an 
additional 30 seconds.
  Mr. HUIZENGA. Mr. Speaker, despite the hyperbole you are hearing from 
the ranking member, nothing in this bill grants the Federal Reserve the 
ability to repeal the Volcker rule--nothing. Additionally, the other 
regulators, that alphabet soup of regulators, are still required to 
enforce the law.
  Everyone deserves to have clarity and understanding of what the rules 
of the road are, and that is what this bill is trying to do.
  Mr. Speaker, I urge my colleagues to vote ``yes'' on H.R. 4790.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, when the gentleman from Michigan started his remarks, he

[[Page H3219]]

accused me of wanting to talk about housing. He is absolutely correct. 
I want to talk about housing. I believe that if we really understood 
the needs of our constituents all over this country, instead of talking 
about megabanks and how we can give them whatever they want in order to 
make more profits, we should be talking about housing. We should be 
talking about housing needs in this country.
  As a matter of fact, I have said to the chairman more than once that 
I really would like to have a hearing on homelessness because 
homelessness is exploding all over the country. In the city of Los 
Angeles, we have probably over 53,000 homeless people every night 
without a place to lay their heads.
  Oh, yes, we should be talking about housing. You cannot separate 
trading from housing in the way that maybe some would attempt to do: 
Oh, this is about Volcker; it has nothing to do with housing.
  Oh, yes, it does.

                              {time}  0945

  Because, instead of this risky trading that the banks are doing, they 
should be investing in our communities and providing for affordable 
housing.
  And let me just tell you, African-American homeownership today is as 
low as it was when housing discrimination was legal. There is not a 
single county in the United States with sufficient affordable housing.
  So, yes, we should be talking about housing, and thank you for 
bringing it to my attention. Thank you for accusing me of wanting to 
talk about housing.
  Last year our Nation's banks reported $164.8 billion in profit. Had 
it not been for the Republicans' new tax law which required them to 
take a one-time charge, the FDIC estimates that the banks would have 
profited to the tune of $183.1 billion, which is an all-time high and 
an increase of 7.2 percent from 2016 and a 26 percent increase from 
2006.
  So I think it is a little hard to argue that banks don't have enough 
money to lend, but let's look at what they did with that money.
  The Wall Street megabanks returned a lot of that money to their 
shareholders in the form of dividends and stock buybacks. For example, 
in June 2017, J.P. Morgan announced a stock repurchase program of up to 
$19.4 billion, its biggest buyback since the financial crisis. 
Citigroup also announced its largest ever stock buyback program, worth 
up to $15.6 billion, and doubled its dividend.
  The Wall Street megabanks also handsomely rewarded their CEOs with 
some of the biggest paydays since 2006. Five Wall Street banks, 
combined, paid their CEOs a total compensation of $126 million, the 
highest amount since before the financial crisis. Each chief of the 
banks--which includes Bank of America, J.P. Morgan, and Morgan 
Stanley--received an average $25.3 million for their work, and that was 
up 17 percent from 2016.
  Mr. Speaker, we listen to Chairman Hensarling's stories. He shares a 
lot of stories with us that he receives from his constituents about 
problems they are having receiving car loans or a mortgage. And I 
agree, we should be doing more to expand access to credit for 
consumers; but what I do not agree with is the Republican argument 
that, if we only repealed bank regulations, then all of a sudden those 
individuals would receive the car loans and the mortgages that they 
currently cannot.
  Banks are raking in money hand over fist, and they could use that 
money now to lend to creditworthy borrowers instead of paying millions 
of dollars in bonuses to their CEOs. Let's be clear about what is 
really going on. No amount of regulatory relief will cure Wall Street 
greed.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Wisconsin (Mr. Duffy), chairman of the Subcommittee on Housing and 
Insurance.
  Mr. DUFFY. Mr. Speaker, I thank the chairman for yielding time to me.
  Mr. Speaker, I want to congratulate Mr. Hill on putting together such 
a great bill, the Volcker Rule Regulatory Harmonization Act, a bill 
that you might not know from this conversation has wide bipartisan 
support in our committee, which has a lot of different views, left and 
right. It passed 50-10--passed 50-10.
  I want to talk about the Volcker rule in a second, but my good friend 
across the aisle--I call her a friend--is talking about big banks and 
all the bad things they are doing. Listen, when banks do well, our 
communities do well. When banks don't do well, we see crises spread 
across America, and people get hurt.
  When we talk about some of the biggest banks and making sure they 
have strong and stiff regulation, I would agree with the ranking 
member; but when we talk about their stock prices going up, we have got 
to ask: Who owns J.P. Morgan? Who owns Wells Fargo? Who owns the 
biggest banks in America?
  The people who President Trump had on his stage yesterday in the Rose 
Garden: It is truck drivers. It is the Wisconsin teachers. It is the 
people who work across this country who put money in their 401(k)s that 
own all of these stocks. And when those stock prices rise, so, too, do 
the values of the 401(k)s, because they own those American businesses.
  When you look at the Volcker rule and this ham-handed way in which it 
was put together and you are starting to reduce marketmaking in an 
effort to get away from proprietary trading, what you find is more 
volatility. And what you see then is the price of mortgages actually go 
up.
  Having markets that actually work is a way to get the most efficient 
pricing to homeowners, which is what we are trying to do here, which is 
why so many Democrats voted for a bill like this from Mr. Hill.
  I know this is not a housing conversation, but it is true that there 
are a lot more homeless people in America. We were devastated by the 
Obama economy.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HENSARLING. Mr. Speaker, I yield the gentleman from Wisconsin an 
additional 30 seconds.
  Mr. DUFFY. Mr. Speaker, I think we can't deny the fact that, when you 
want to buy a house, you have to have a salary. You have to have a job.
  As the President likes to point out, the unemployment rate for the 
African-American and the Hispanic communities, of which my wife is one, 
is at all-time lows. They have jobs. And when you have a job, you have 
a salary. When you have a salary, you can buy a house.
  What I don't want to do is what we did before the 2008 crisis, which 
is give mortgages to people who can't afford to pay them, and then they 
lose those homes in foreclosure and their lives are devastated. We want 
to make loans to people who can afford to pay the mortgage and keep 
their home. Now is the time under a Trump economy where people have 
jobs, income, and can now afford to buy a home.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, this is absolutely amazing. We had the gentleman earlier 
who said this is not the time to talk about housing, and then we have 
the gentleman from Wisconsin who says, when the banks do well, our 
constituents do well.

  The banks are making millions of dollars; the CEOs are making 
millions of dollars; and they have bank tellers and people who work who 
are not even making $15 an hour. We can't even get a minimum wage 
increase, Federal minimum wage increase for our constituents, and many 
of them are working in these megabanks where the CEOs are walking away 
every year with millions of dollars in pay.
  So these statements, when banks do well, everybody does well, I wish 
my good friend would reexamine that statement because I think, when he 
thinks about it, he might want to retract it and take that back.
  ``Certainly, we have to do a better job ring-fencing, fire-walling--
whatever metaphor you want to use--between an insured depository 
institution and a noninsured investment bank.'' That is a quote from 
Chairman Jeb Hensarling, March 2013. That appeared in The Wall Street 
Journal.
  And this is just what the Volcker rule does.
  ``If you're a bank and you want to operate like some nonbank entity 
like a hedge fund, then don't be a bank. Don't let banks use their 
customers' money

[[Page H3220]]

to do anything other than traditional banking.'' Again, I repeat, that 
is what Speaker Paul Ryan said in May 2012 in a townhall meeting.
  ``I do support the Volcker rule. I think the concept of proprietary 
trading does not belong in banks with FDIC insurance.'' That is a quote 
from Treasury Secretary Steve Mnuchin, January 2017, during the Senate 
confirmation hearings.
  Another quote: ``I think the Volcker rule is very important and it is 
good. I think the Volcker rule is good. Banks should not be a last 
resort to sell securities. Banks should not have prop desks buying 
them.''
  That was Carl Icahn, the hedge fund manager and currently special 
adviser to President Trump on regulatory reform during a 2015 
conference.
  Another quote: ``Proprietary trading played a big role in 
manufacturing the CDOs and other instruments that were at the heart of 
the financial crisis. . . . If firms weren't able to buy up the parts 
of these deals that wouldn't sell . . . the game would have stopped a 
lot sooner.''
  This is a quote by Michael Madden, a managing director of the 
investment firm BlackEagle Partners and a former Lehman executive.
  We have more quotes. Here is one: ``The industry should be 
compartmentalized so as to limit the propagation of failures and also 
to preserve cultural boundaries.'' That is a quote by John Reed, the 
former Citigroup chairman, in a Senate testimony, February 2010.
  Further quoting: ``A strong Volcker rule is one of the most important 
provisions to prevent `too big to fail' financial institutions, stop 
conflicts of interest, and support credit in our economy. . . . Failure 
to comply should be severely punished.'' And this is what Reed said in 
a letter to regulators, February 2012.
  Again, in looking at all of these quotes, we find that there is one 
from former Democratic and Republican Secretaries of the Treasury W. 
Michael Blumenthal, joined by Nicholas Brady, Paul O'Neill, George 
Schultz, and John Snow.
  This is what they said: ``Banks benefiting from public support by 
means of access to the Federal Reserve and FDIC insurance should not 
engage in essentially speculative activity unrelated to essential bank 
services.'' Again, all of these gentlemen said this in a letter, 
reported in The Wall Street Journal, February 2010. This was a letter 
to the editor.
  And let me just, again, refer to one of the greatest economists in 
this country and the former Chair of the FDIC, Paul Volcker. What did 
he say?
  He said, in essence: The five banking regulatory authorities have now 
successfully responded to the provisions of the Dodd-Frank Act by 
setting out a comprehensive regulation restricting proprietary trading 
by commercial banks in the United States. . . . The agencies have dealt 
comprehensively with thousands of particular conceptual and practical 
questions raised by affected bankers, by legions of lobbyists, by other 
interested parties, and by the general public. . . . The result should 
help the process of restoring trust and confidence in commercial 
banking institutions. It is, after all, those institutions which 
benefit from explicit and implicit public support that we count on to 
provide a strong, safe, and effective financial system--Paul Volcker, 
December 2013.
  ``The Volcker rule will make it illegal for firms to use government-
insured money to make speculative bets that threaten the entire 
financial system and demand a new era of accountability from CEOs who 
must sign off on their firms' practices. Our financial system will be 
safer, and the American people are more secure because we fought to 
include this protection in the law.'' That was President Obama, 
December 2013.
  Mr. Speaker, with that, I will reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois (Mr. Hultgren), who has come to actually speak on H.R. 4790 as 
opposed to H.R. red herring, the vice chairman of the Financial 
Services Subcommittee on Capital Markets, Securities, and Investments.
  Mr. HULTGREN. Mr. Speaker, I first want to thank the hardest working, 
most effective chairman in all of Congress; and I also want to thank my 
good friend and colleague French Hill for sponsoring this legislation. 
I also want to thank my friend and colleague from Illinois, Bill 
Foster, for his work on this.
  I am also very happy to be a cosponsor of the Volcker Rule Regulatory 
Harmonization Act. This legislation strikes a bipartisan balance for 
simplifying some of the regulatory burden of the Volcker rule and 
provides a clear exemption for community banks.

                              {time}  1000

  The Dodd-Frank Act granted responsibility to five different financial 
regulators with implementing and enforcing the Volcker rule: the Fed, 
OCC, FDIC, SEC, and CFTC. Every Member of this body knows that it can 
be difficult to come to an agreement when you have too many cooks in 
the kitchen. Imagine if this were the case for promulgating, 
implementing, and enforcing something as complicated as the Volcker 
rule.
  One Illinois bank, that serves thousands of my constituents, 
explained it is this way: ``This overlapping authority with respect to 
interpretations and guidance, as well as examinations and supervision, 
is inefficient and requires unnecessary time and effort, on the part of 
banks as well as regulators, to ensure compliance.''
  The Volcker Rule Regulatory Harmonization Act is an artful solution 
to dealing with this issue. It grants the Federal Reserve the exclusive 
rulemaking authority under section 619 of the Dodd-Frank Act and 
provides the sole examination and enforcement authority by an entity's 
primary Federal regulator. The bill also addresses the concerns that 
community banks have raised with the Volcker rule.
  H.R. 4790 exempts banking organizations that do not have or are not 
controlled by entities with $10 billion or more in total consolidated 
assets and total trading assets or trading liabilities that are more 
than 5 percent of total consolidated assets.
  Because of the Volcker rule's complexity, even those community banks 
that do not conduct any proprietary trading have, nonetheless, had to 
incur large costs simply proving what the regulators already know, that 
they are not engaged in activities covered by the rule. This is simply 
not fair to subject community banks to these costs associated with 
this.
  Mr. Speaker, I encourage my colleagues to support this legislation.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 2 minutes to 
the gentlewoman from Ohio (Ms. Kaptur), my friend and champion of 
consumers.
  Ms. KAPTUR. Mr. Speaker, I thank Ranking Member Waters for her 
constant leadership to restore prudent banking to this country and rein 
in reckless speculation.
  When six megabanks in our country control over 75 percent of the 
wealth, that is too much power in too few hands. It has become 
increasingly clear that the Republican Party is focusing its efforts in 
this Congress on the only issue in which the GOP can seem to collect a 
consensus: handing out massive giveaways to the fat cats on Wall Street 
and their 1 percent buddies.
  The number of Dodd-Frank rollbacks we have seen this year alone is a 
blizzard. Now, this bill, the Volcker rule repeal, is just that, 
another Dodd-Frank rollback wrapped and tied with a big bow for giants 
Goldman Sachs and J.P. Morgan and their like.
  The bill rolls back key prudent banking protections put into place to 
prevent another financial meltdown and protect hardworking Americans 
from losing their wealth. You know, not one of those buzzards went to 
jail.
  The bill allows for a blanket exemption for the Volcker rule for 
banks with less than $10 billion in assets. Oh, I feel so sorry for 
them. They only have $10 billion. There is no logic behind allowing 
banks of a certain size to engage in the exact type of speculative--
risky speculation that contributed to the financial crisis that we are 
still digging our way out of.
  Don't we remember Countrywide? It wasn't so long ago. You know, my 
unflagging dedication to leveling the playing field and building up our 
prudent lenders, community banks, and credit unions is the reason I 
stand to object to this legislation today. We can't allow such 
foundational building blocks of our communities to be wrecked again 
into the mangled progeny of the big six, and that is just what

[[Page H3221]]

my colleagues on the Republican side are about.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield an additional 
30 seconds to the gentlewoman from Ohio.
  Ms. KAPTUR. Mr. Speaker, on top of this blanket exemption, the bill 
also hands complete rulemaking power to the Fed rather than having 
checks and balances inside the executive branch, paving the way to 
completely gut the Volcker rule.
  You know, Fed Chair, formerly Paul Volcker, had said: ``I know from 
my long experience in banking and savings and loan regulation that 
plausibly small loopholes can be `gamed' and exploited with unfortunate 
consequences.''
  Again I say: Remember Countrywide?
  African Americans lost half their accumulated wealth since the 
founding of the Republic, Latinos a third, and everybody else a fifth. 
You know what, it is time to keep prudent banking elevated and curb the 
speculators.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
North Carolina (Mr. Pittenger), who is familiar with the eight-page 
bill and knows that H.R. 4790 does not repeal the Volcker rule. He 
happens to be the vice chairman of the Financial Services Subcommittee 
on Terrorism and Illicit Finance.
  Mr. PITTENGER. Mr. Speaker, I thank the chairman for his exceptional 
leadership on this important consideration and legislation.
  Mr. Speaker, I rise today in strong support of the gentleman from 
Arkansas, as well and the whip of the Financial Services Committee, for 
his work on H.R. 4790, the Volcker Rule Regulatory Harmonization Act.
  Mr. Hill's legislation streamlines the rulemaking process by granting 
the Federal Reserve sole authority to make exemption determinations 
under the Volcker rule. This simplification is a vital change from the 
confusion and the regulatory inconsistencies of the current Volcker 
rule by resolving the problem of having five different regulators 
weighing in on the same issue. This bill also exempts community banks 
under $10 billion in assets from the rule.
  Mr. Speaker, I want to note that, according to the FDIC, community 
banks with less than $10 billion in assets represent 92 percent of the 
insured institutions. Now, more than ever, actions like this need to be 
taken to provide relief to community banks and smaller financial 
institutions.

  Look no further than my State in North Carolina, which has lost 50 
percent of its banks since this financial crisis and the inception of 
the Dodd-Frank bill. Mr. Speaker, I thank Mr. Hill for his work on this 
bipartisan piece of legislation. It is long past time that we provide 
commonsense reforms to overly complex regulations passed under the 
Dodd-Frank Act. This is why I strongly urge my colleagues to join me in 
voting ``yes'' on H.R. 4790.
  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from Texas (Mr. Williams), the vice chairman of the Financial Services 
Subcommittee on Monetary Policy and Trade.
  Mr. WILLIAMS. Mr. Speaker, I rise today in support of H.R. 4790, the 
Volcker Rule Regulatory Harmonization Act. I appreciate the gentleman 
from Arkansas (Mr. Hill) for his leadership on this issue.
  At over 930 pages, section 619 of Dodd-Frank, otherwise known as the 
Volcker rule, is as lengthy as it is complex and confusing. The Volcker 
rule is framed as a solution to a problem that never existed in the 
first place. Right now there are five different agencies responsible 
for overseeing the implementation of the Volcker rule. These five 
agencies all have different legal mandates and regulatory missions, 
which have led to duplicate and concurrent reviews into U.S. banks.
  In the 25th District of Texas, community banks are struggling to get 
by and wonder why they have five different regulators knocking on their 
doors about the same issue. Only in Washington would that kind of 
backwards thinking be rewarded.
  H.R. 4790 would streamline regulatory authority over the Volcker rule 
by giving the Federal Reserve exclusive rulemaking authority. In other 
words, banks won't have five different regulators coming to them about 
the same regulation. As a result, Main Street will be able to breathe 
again.
  Mr. Speaker, the bottom line is this: This is a commonsense way of 
governing that we should see more of in this Chamber. I am proud to 
support this piece of legislation that passed the committee with wide 
bipartisan support just last month, and I encourage the whole House to 
vote in favor of it today.
  Now, we have had a lot of quotes. I have a quote. ``Business is good 
and business is getting better. H.R. 4790 moves our economy to new 
levels like we have never seen in years. Roger Williams, small business 
owner. Thank you very much.''
  Ms. MAXINE WATERS of California. Mr. Speaker, may I inquire, how many 
more speakers does Mr. Hensarling have?
  Mr. HENSARLING. Mr. Speaker, the majority has three more speakers.
  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from Minnesota (Mr. Emmer), another hardworking member of the Financial 
Services Committee.
  Mr. EMMER. Mr. Speaker, I rise today in support of H.R. 4790, which 
makes important changes to our financial regulatory system that will 
provide clarity and consistency for our community financial 
institutions.
  I want to thank my colleague from Arkansas for bringing this 
important legislation forward. The Volcker rule, a creation of the 
Dodd-Frank Act, sought to prohibit reckless trading and investment 
strategies to protect consumers. Instead, it has led to yet another 
overly complex one-size-fits-all regulatory regime that adds additional 
pressure on our already overregulated community banks.
  The complexities of this rule and its unintended consequences have 
been acknowledged by the current and prior administration as well as by 
Members on both sides of the aisle. The mere fact that five different 
agencies: the Fed; the FDIC; Office of the Comptroller of the Currency, 
the OCC; Securities and Exchange Commission, the SEC; and Commodity 
Futures Trading Commission, the CFTC, are responsible for implementing 
and enforcing one rule should tell the American people everything they 
need to know about how fragmented and confusing the Volcker rule can 
be.
  That is why I am pleased to see H.R. 4790, the Volcker Rule 
Regulatory Harmonization Act come before the House today to provide an 
exemption for our small community financial institutions and to 
streamline the regulatory authority of the Volcker rule.
  Mr. Speaker, this bill will free up banks on Main Street Minnesota 
and in towns all across the country, allowing them to spend more time 
lending to consumers and small businesses and less time wondering if 
the heavy hand of the Federal Government is going to come crashing down 
on him.
  Again, I thank Mr. Hill for his hard work on this issue and urge my 
colleagues to vote ``yes'' on H.R. 4790.
  Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from Georgia (Mr. Loudermilk), a great member of the Financial Services 
Committee.
  Mr. LOUDERMILK. Mr. Speaker, I want to thank the gentleman from Texas 
(Mr. Hensarling) for yielding time and the gentleman from Arkansas (Mr. 
Hill) for bringing this bill, a very important bill, to the floor for a 
vote today. Mr. Hill's bill will simplify and streamline one of the 
most complicated regulations from Dodd-Frank, the Volcker rule.
  The Volcker rule is intended to prevent banks from engaging in risky 
investments that do not benefit their customers, also known as 
proprietary trading. There are currently five Federal regulatory 
agencies implementing the Volcker rule. This has caused overlap, 
duplication, and confusion among regulated companies.
  The bill on the floor today will ensure that one Federal agency, the 
Federal Reserve, is responsible for writing

[[Page H3222]]

this regulation and that each bank's primary regulator will have the 
sole enforcement authority for that bank. This will streamline and 
simplify this overly complicated rule so financial institutions can 
spend more of their time making loans to consumers and businesses and 
less time on regulatory compliance.

  This bill will also fully exempt our small community banks that 
maintain less than $10 billion in assets from the Volcker rule rather 
than requiring them to prove a negative.
  There are currently 176 banks headquartered in my home State of 
Georgia, and all but three of them have less than $10 billion in 
assets. This bill will go a long way toward relieving small community 
banks in Georgia from unnecessary, complicated, and burdensome 
regulation.
  This bipartisan bill passed out of committee by a vote of 50-10 with 
the support of all the Republicans and the majority of the Democrats. I 
urge all my colleagues to support this bill.
  Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from Ohio (Mr. Davidson), a good member of the Financial Services 
Committee.
  Mr. DAVIDSON. Mr. Speaker, I rise on behalf of Ohio constituents who 
have suffered reduced access to the banking system due to the loss of 
community financial institutions in Ohio's Eighth District.
  Like many things in Dodd-Frank that were intended to do good and 
protect consumers, the Volcker rule is doing the exact opposite. The 
Volcker rule was designed to protect depositors from having their 
deposits placed at risk through proprietary trading. It was not 
designed to discourage other forms of capital from flowing into our 
banking system, from increasing competition, or from lowering prices 
for a broad swath of customers.
  This pragmatic, bipartisan compromise on Volcker is a great step 
forward in enabling community banks to reach their compliance costs and 
allow them to deploy more capital in the communities that serve.
  My hope is we can move forward and pursue more commonsense solutions 
like this, especially to help underserved communities where we have 
seen local banking services dry up. I encourage support for this bill.

                              {time}  1015

  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself the 
balance of my time to close.
  This is the third bill that the majority has put on the House floor 
this week that is a harmful giveaway to the big banks. I could just 
list you all of the deregulatory bills that they have been bringing 
forward, but, today, the bill we are considering, H.R. 4790, would 
threaten the Volcker rule, which prevents banks from gambling with 
taxpayer money. As we have discussed, the Volcker rule is a key 
component of Wall Street reform and has prevented risky, speculative 
behavior by Wall Street and made our economy safer. It must not be 
compromised.
  It seems the Republicans have not learned the lessons of the 
financial crisis at all. They are working every day to reverse critical 
Dodd-Frank reforms and to reopen the door to risky and harmful 
practices that led our Nation to economic catastrophe, so I oppose this 
bill.
  I do not want our Members to be tricked or fooled talking about 
community banks. This is not about community banks. This is about the 
megabanks. They always use the community banks to lead on some of these 
arguments so that people will think that they are doing something for 
community banks.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HENSARLING. Mr. Speaker, may I inquire how much time I have 
remaining.
  The SPEAKER pro tempore (Mr. Byrne). The gentleman from Texas has 3 
minutes remaining.
  Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, as I listened very carefully to my friend and ranking 
member describe this parade of horribles that is going to befall our 
economy if H.R. 4790 is enacted, I would gently remind her that a 
majority of her own Members supported it. So all of these accusations 
that she has made against the majority party, I hope, and believe, she 
has, obviously, foisted upon the majority of her own Members who 
clearly do not support her in what she is attempting to do.
  In addition, Mr. Speaker, I would remind all Members, contrary to the 
Volcker rule, that weighs in at almost 1,000 pages, H.R. 4790 weighs in 
at 8 pages. If you read the bill, you will discover that it does not 
repeal the Volcker rule. Again, I don't know what bill the ranking 
member was debating, but it is not H.R. 4790.
  Now, Mr. Speaker, just think about it for a second. Paying your 
taxes--tax day is coming up--is not a pleasant time of year. And as 
unpleasant as that time is, think if you had to file your taxes with 
five different Federal agencies. Think about the fact that if you had a 
question about your taxes, that you had to call the Internal Revenue 
Service, you had to call the Department of Labor, you had to call the 
EPA, and you had to call the CFPB. What if you had five different 
agencies interpreting the Internal Revenue Code, all enforcing it in 
different ways? That would take one of the worst days of the year and 
compound it mightily.
  What the gentleman from Arkansas is trying to do on the majority 
side, and what the gentleman from Illinois is trying to do on minority 
side, is say: If we are going to have a Volcker rule--one of the most 
complicated, complex rules ever devised by the mind of man--maybe we 
ought to have one agency interpret it and one agency enforce it.
  Why do we do that, Mr. Speaker?
  We do that so that capital can be available to the people I spoke 
about in my opening statement. So that Jeff and Arlis can have capital 
to expand their small businesses on Main Street. That is what this is 
all about--so that our small businesses can thrive, so that the people 
who want to own a home can thrive, and so that this economy can grow. 
This is commonsense. It is why it is a strong, bipartisan measure--
another strong, bipartisan measure that, unfortunately, our ranking 
member chooses not to partake in. And it is one of the reasons why, 
unfortunately, Mr. Speaker, if we listen to that side of the aisle--or 
at least a particular voice--we will continue to have bad economic 
growth. We need good economic growth for all of the American people.
  Mr. Speaker, I urge all Members to support H.R. 4790, and I yield 
back the balance of my time.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 811, the previous question is ordered on 
the bill, as amended.
  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.
  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.
  Mr. HENSARLING. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The vote was taken by electronic device, and there were--yeas 300, 
nays 104, not voting 25, as follows:

                             [Roll No. 139]

                               YEAS--300

     Abraham
     Adams
     Aderholt
     Aguilar
     Allen
     Amash
     Amodei
     Arrington
     Babin
     Bacon
     Banks (IN)
     Barletta
     Barr
     Barragan
     Barton
     Beatty
     Bera
     Bergman
     Beyer
     Biggs
     Bilirakis
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Blunt Rochester
     Bost
     Boyle, Brendan F.
     Brady (TX)
     Brat
     Brooks (AL)
     Brooks (IN)
     Brown (MD)
     Brownley (CA)
     Bucshon
     Budd
     Burgess
     Butterfield
     Byrne
     Calvert
     Carbajal
     Cardenas
     Carter (GA)
     Carter (TX)
     Chabot
     Cheney
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Comer
     Comstock
     Conaway
     Connolly
     Cook
     Cooper
     Correa
     Costa
     Costello (PA)
     Cramer
     Crawford
     Cuellar
     Culberson
     Curbelo (FL)
     Curtis
     Davidson
     Davis (CA)
     Davis, Rodney
     Delaney
     DelBene
     Denham
     Dent
     DeSantis
     DesJarlais
     Diaz-Balart
     Donovan
     Duffy
     Duncan (SC)
     Duncan (TN)
     Dunn
     Emmer
     Estes (KS)
     Esty (CT)
     Evans

[[Page H3223]]


     Faso
     Ferguson
     Fitzpatrick
     Fleischmann
     Flores
     Fortenberry
     Foster
     Foxx
     Frelinghuysen
     Fudge
     Gaetz
     Gallagher
     Garrett
     Gianforte
     Gibbs
     Gohmert
     Gonzalez (TX)
     Goodlatte
     Gottheimer
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Green, Gene
     Griffith
     Grothman
     Guthrie
     Hanabusa
     Handel
     Harper
     Harris
     Hartzler
     Heck
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Higgins (LA)
     Hill
     Himes
     Holding
     Hollingsworth
     Hoyer
     Hudson
     Huizenga
     Hultgren
     Hunter
     Hurd
     Issa
     Jackson Lee
     Jeffries
     Jenkins (KS)
     Johnson (GA)
     Johnson (OH)
     Johnson, E. B.
     Johnson, Sam
     Jordan
     Joyce (OH)
     Katko
     Kelly (IL)
     Kelly (MS)
     Kelly (PA)
     Kilmer
     Kind
     King (IA)
     King (NY)
     Kinzinger
     Knight
     Kuster (NH)
     Kustoff (TN)
     Labrador
     LaHood
     LaMalfa
     Lamb
     Lamborn
     Lance
     Larsen (WA)
     Latta
     Lawrence
     Lawson (FL)
     Lewis (MN)
     LoBiondo
     Loebsack
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     Lujan Grisham, M.
     MacArthur
     Maloney, Sean
     Marchant
     Marino
     Marshall
     Mast
     McCarthy
     McCaul
     McClintock
     McEachin
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Meeks
     Meng
     Messer
     Mitchell
     Moolenaar
     Mooney (WV)
     Moulton
     Mullin
     Murphy (FL)
     Newhouse
     Norman
     Nunes
     O'Halleran
     O'Rourke
     Olson
     Palazzo
     Palmer
     Panetta
     Paulsen
     Pearce
     Perlmutter
     Perry
     Peters
     Peterson
     Pittenger
     Poe (TX)
     Poliquin
     Posey
     Quigley
     Ratcliffe
     Reed
     Reichert
     Renacci
     Rice (NY)
     Richmond
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Rokita
     Rooney, Francis
     Rooney, Thomas J.
     Ros-Lehtinen
     Rosen
     Roskam
     Ross
     Rothfus
     Rouzer
     Royce (CA)
     Ruppersberger
     Russell
     Rutherford
     Ryan (OH)
     Sanford
     Scalise
     Schneider
     Schweikert
     Scott, Austin
     Sensenbrenner
     Sessions
     Sherman
     Shimkus
     Shuster
     Sinema
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smucker
     Stefanik
     Stewart
     Stivers
     Suozzi
     Taylor
     Tenney
     Thompson (MS)
     Thompson (PA)
     Thornberry
     Trott
     Turner
     Upton
     Valadao
     Vargas
     Veasey
     Vela
     Wagner
     Walberg
     Walden
     Walorski
     Walters, Mimi
     Wasserman Schultz
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Williams
     Wilson (FL)
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Zeldin

                               NAYS--104

     Blumenauer
     Bonamici
     Capuano
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Cohen
     Courtney
     Crist
     Crowley
     Cummings
     Davis, Danny
     DeFazio
     DeGette
     DeLauro
     Demings
     DeSaulnier
     Deutch
     Doggett
     Doyle, Michael F.
     Ellison
     Engel
     Eshoo
     Espaillat
     Gabbard
     Gallego
     Garamendi
     Gomez
     Green, Al
     Grijalva
     Gutierrez
     Hastings
     Higgins (NY)
     Huffman
     Jayapal
     Jones
     Kaptur
     Keating
     Kennedy
     Khanna
     Kihuen
     Kildee
     Krishnamoorthi
     Langevin
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lieu, Ted
     Lipinski
     Lofgren
     Lowenthal
     Lowey
     Lujan, Ben Ray
     Lynch
     Maloney, Carolyn B.
     Matsui
     McCollum
     McGovern
     McNerney
     Nadler
     Napolitano
     Neal
     Nolan
     Norcross
     Pallone
     Pascrell
     Payne
     Pelosi
     Pingree
     Pocan
     Polis
     Price (NC)
     Raskin
     Roybal-Allard
     Ruiz
     Rush
     Sanchez
     Sarbanes
     Schakowsky
     Schiff
     Schrader
     Scott (VA)
     Serrano
     Sires
     Smith (WA)
     Soto
     Speier
     Swalwell (CA)
     Thompson (CA)
     Titus
     Tonko
     Torres
     Tsongas
     Velazquez
     Visclosky
     Waters, Maxine
     Watson Coleman
     Welch
     Yarmuth

                             NOT VOTING--25

     Bass
     Bishop (GA)
     Brady (PA)
     Bridenstine
     Buchanan
     Buck
     Bustos
     Dingell
     Frankel (FL)
     Gosar
     Jenkins (WV)
     Johnson (LA)
     Massie
     Moore
     Noem
     Rice (SC)
     Scott, David
     Sewell (AL)
     Shea-Porter
     Simpson
     Smith (TX)
     Takano
     Tipton
     Walker
     Walz

                              {time}  1047

  Messrs. DELANEY, LAWSON of Florida, and Mrs. LAWRENCE changed their 
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.
  Stated for:
  Mr. DAVID SCOTT of Georgia. Mr. Speaker, during the votes held on 
April 13th, 2018, I was away handling important matters related to my 
District and attending my 15th Annual Jobs Fair held in Atlanta. If I 
had been present I would have voted ``yes'' on H.R. 4790--the Volcker 
Rule Regulatory Harmonization Act.


                          personal explanation

  Mr. SIMPSON. Mr. Speaker, I was unable to be present to vote due to 
personal reasons. Had I been present, I would have voted ``yea'' on 
rollcall No. 138 and ``yea'' on rollcall No. 139.

                          ____________________