[Congressional Record Volume 165, Number 164 (Thursday, October 17, 2019)]
[House]
[Pages H8209-H8224]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SEC DISCLOSURE EFFECTIVENESS TESTING ACT
General Leave
Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks on H.R.
1815, and to insert extraneous material thereon.
The SPEAKER pro tempore (Mr. Cartwright). Is there objection to the
request of the gentlewoman from California?
There was no objection.
The SPEAKER pro tempore. Pursuant to House Resolution 629 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the state of the Union for the consideration of the bill, H.R. 1815.
The Chair appoints the gentleman from Rhode Island (Mr. Langevin) to
preside over the Committee of the Whole.
{time} 1224
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the state of the Union for the consideration of the bill
(H.R. 1815) to require the Securities and Exchange Commission, when
developing rules and regulations about disclosures to retail investors,
to conduct investor testing, including a survey and interviews of
retail investors, and for other purposes, with Mr. Langevin in the
chair.
The Clerk read the title of the bill.
The CHAIR. Pursuant to the rule, the bill is considered read the
first time.
General debate shall be confined to the bill and amendments specified
in the first section of House Resolution 629 and shall not exceed 1
hour equally divided and controlled by the chair and ranking minority
member of the Committee on Financial Services.
The gentlewoman from California (Ms. Waters) and the gentleman from
Michigan (Mr. Huizenga) each will control 30 minutes.
The Chair recognizes the gentlewoman from California.
Ms. WATERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I rise in support of H.R. 1815, the SEC Disclosure
Effectiveness Testing Act crafted by Representative Casten from
Illinois, a new Member of Congress and member of the Financial Services
Committee.
H.R. 1815 requires the Securities and Exchange Commission to test its
disclosure documents with retail investors through one-on-one
interviews and surveys to ensure that these documents are actually
understood by their target audience.
The SEC's approach to protecting retail investors from conflicts of
interest and other risks has been based on informing them through
disclosure. This is a problem when those disclosures are written in a
way that retail investors don't understand.
Since at least 2012, when the SEC conducted a financial literacy
study, we have known that many of the disclosures intended for retail
investors are not well-understood by those investors.
While the public has the opportunity to comment on most rulemakings
or new disclosures, these comments are largely from well-funded
industry representatives, rather than the mom-and-pop investors who
will be receiving these new disclosures.
H.R. 1815 ensures that the SEC gets the input it needs from retail
investors on disclosure forms by requiring the SEC to test those forms
and engage in qualitative one-on-one interviews and nationwide surveys.
Investor testing has been embraced by both Democratic and Republican
commissioners at the SEC. In addition, the SEC itself has been engaged
in investor testing in several instances, including most recently in
2018, when it tested a proposed disclosure for brokers and investment
advisers to provide to retail investors known as Form Client
Relationship Summary, that is, CRS.
This proposed five-page disclosure was intended to help retail
investors understand the obligations owed and services provided by
investment professionals, as well as the fees and costs that could
affect their investment accounts.
To ensure that retail investors are able to use Form CRS as intended,
the SEC conducted a nationwide online survey of 1,800 individuals and
31 qualitative, in-depth interviews in Denver and Pittsburgh. The mixed
results of the SEC's testing of Form CRS showed that changes and
possibly more testing were necessary.
Unfortunately, in that instance, the SEC did not engage in the
robust, iterative investor testing that H.R. 1815 would require, and
finalized a vague disclosure.
H.R. 1815 would require the SEC to go back and review and test
existing disclosures like Form CRS and determine whether changes should
be made. This review of existing documents is particularly important as
the capital markets, investor behaviors, and investing trends change.
In addition to the SEC, other regulators like the Consumer Financial
Protection Bureau and the Federal Trade Commission also engage in
usability testing of their disclosures.
H.R. 1815 builds on the efforts of the SEC by requiring the
Commission to engage in a similar iterative process for all existing or
future disclosure, intended to help retail investors make informed
investment decisions.
I thank Representative Casten for putting forth this commonsense
piece of legislation that will help investors make better informed
financial decisions regarding their hard-earned earnings.
Mr. Chair, I reserve the balance of my time.
{time} 1230
Mr. HUIZENGA. Mr. Chair, I yield myself such time as I may consume.
Mr. Chair, I rise in opposition to H.R. 1815, the SEC Disclosure
Effectiveness Testing Act of 2019.
Mr. Chair, Democrats claim that this bill would ``build on efforts to
engage in investor testing by requiring the SEC to conduct usability
testing of any new disclosure.''
If my friends on the other side really wanted to build on efforts to
engage in investor testing, I believe they would have worked with
Republicans on the committee and the Securities and Exchange Commission
to craft a bill that would actually be signed into law. Unfortunately,
this bill is a deliberate effort to not only delay the SEC's rulemaking
on Regulation Best Interest and Form CRS, but it is also an effort to
tie the SEC's hands with regard to future disclosure rulemakings and
may have an effect even on past rulemakings.
In fact, what the bill's author won't tell you is that the SEC
already conducted investor testing on the very disclosure regulation
Democrats are targeting with this particular bill. With Reg BI, 1,800
Main Street investors nationwide were surveyed about the regulation.
There were 31 one-on-one, in-depth interviews with retail investors.
Seven roundtables were held that the SEC gained input from. Finally,
more than 6,000 comment letters were received by the SEC before they
actually put together the Reg BI.
The Securities and Exchange Commission collected all this, analyzed
the information from all of those sources, and very carefully crafted
what had been very contentious and, frankly, outside the bounds of what
had normally been accepted with Regulation Best Interest by having the
Department of Labor try to drive this rather than the Securities and
Exchange Commission. I believe that they have a good product.
The SEC used this information to adopt a workable regulation all
without the help--or the so-called help--of H.R. 1815. So what does the
final rulemaking package on Reg BI and Form CRS accomplish?
It raises the standard of care owed by broker-dealers to retail
investors, and that, at the end of the day, is what this is all about.
It is a standard that we agree needed to be addressed.
But why make the SEC do it again and further delay a rulemaking that
makes significant improvements for Main Street investors? It is a rule
that is in place. I can only surmise it is because my friends on the
other side didn't like the outcome and didn't like what they heard in
that investor testing.
Not only did they not like the current outcome for Reg BI and Form
CRS, but my friends on the other side of the aisle want to tie the
SEC's hands in future disclosure rulemaking. They accomplish this by
requiring investor
[[Page H8210]]
testing for documents and information that are relied on or
``substantially likely to be materially relied upon by retail
investors.''
Now, I don't know what that phrase means. Here is why I don't know
what that phrase means: It is because it wasn't in the version of the
bill reported out of the committee. That is a phrase thrown in at the
last minute by my friends on the other side of the aisle.
If that weren't enough, the bill targets the SEC's previous
disclosure rulemaking. H.R. 1815 requires the SEC to retroactively
conduct investor testing on similar disclosure rulemakings that were
finalized before enactment of this bill. This means disclosure rules
finalized 5, 10, 15, maybe even 20 years ago could be captured and will
be captured by this bill.
Finally, if subjecting past and future disclosure rulemakings to
investor testing weren't enough, the bill captures present rulemaking.
H.R. 1815 creates a bureaucratic loop by requiring the SEC to conduct
investor testing if substantive changes are made to a proposed
rulemaking, and those changes are untested before the rules are
finalized.
What does this bill mean for everyday investors? It means more
bureaucracy. It means less certainty. Certainly, it does not speed up
what all agree is an issue that needs to be addressed. There is no
doubt that investor testing is an effective tool for designing smart,
workable regulatory frameworks to benefit the Main Street investor. It
can help craft disclosures and information that everyday investors can
actually understand and use. It does not have to come in the form of a
mandate.
This bill is not only a delay tactic, but it will drastically
undermine the ability of the SEC to do its primary job of protecting
investors.
Under the last administration, that is all we heard about on the
committee. I have been on the subcommittee that handles this, and all
we heard was how Congress was undercutting the Securities and Exchange
Commission, that it wasn't supporting it enough and wasn't allowing it
to do its job.
What are my friends now doing? The exact thing that they were
complaining about.
By delaying it or in some cases preventing the SEC from finalizing
rules intended to protect investors and diverting resources from
cybersecurity and enforcement actions, Main Street investors that this
bill claims to serve will only be harmed.
I am confident the SEC can and will devote the utmost attention and
consideration to help everyday American investors without this
particular bill.
Mr. Chair, I reserve the balance of my time.
Ms. WATERS. Mr. Chair, I yield 4 minutes to the gentleman from
Illinois (Mr. Casten), who will correct all the misstatements that were
just made by the gentleman from Michigan. Representative Casten is the
sponsor of the bill.
Mr. CASTEN of Illinois. Mr. Chair, I rise in support of my bill, H.R.
1815, the SEC Disclosure Effectiveness Testing Act. I thank Chairwoman
Waters and Subcommittee Chair Maloney for their leadership on the
Financial Services Committee and their unwavering dedication to
protecting investors.
That is exactly what this bill does. It is a pro-investor bill that
has one goal: that the SEC ensures disclosures made to retail investors
are clear and concise so that Americans can make informed investment
decisions.
We are not here to relitigate the proper duty that brokers owe to
investors. Instead, this bill is about making sure that disclosure
documents convey information to investors effectively. We would never
let companies post warning labels in ancient Greek, yet we too often
allow disclosure documents--say, for conflicts of interest--to be
written in jargon that is unintelligible to anyone without a law
degree. Merely providing information to investors is not enough. We
have also to make sure that information is understood.
Whether it is buying a house, sending your kids to college, investing
in your retirement, or just saving for a rainy day, the American Dream
depends on our ability to invest in our future. This bill protects
Americans by doing pretty basic market research to ensure that legally
required disclosures can be understood by the average investor.
Disclosures are already legally mandated to disclose information about
fees, comparisons of investment advisory services, conflicts of
interest, and much more, but just because those forms are provided to
investors doesn't mean that investors understand them.
As we all know, the biggest lie on the internet is that ``I have read
and understand the terms and conditions.'' So we should not assume that
just because an investor has been provided a disclosure agreement means
that they understand it.
Now, in point of fact, the RAND Corporation--this was what my
colleague referred to--conducted this investor testing--we agree--with
1,800 individuals, 31 qualitative, in-depth interviews. This is what
they concluded: ``Nearly 90 percent of respondents opined that the
relationship summary would help them make more informed decisions about
investment accounts and services . . . but interview discussions
revealed that there were areas of confusion for participants, including
differences between types of accounts or financial professionals.''
There were no changes made after that. Yes, they did the surveys, but
many did not know and still do not know the difference between account
types or financial professions. Others didn't appear to have
synthesized the information in ways that they could apply it.
In other words, consumers want these disclosures. Qualitative testing
shows that what they are getting is not informing them properly, and
that is why this bill is so important.
The SEC Disclosure Effectiveness Testing Act would build on SEC's
investor testing efforts and require the agency to engage in a robust
iterative process for any existing or future disclosures intended to
help retail investors make investment decisions.
Specifically, the bill anticipates that the SEC will test those
documents used by retail investors when selecting an investment
professional to work with, assessing an investment recommendation, or
deciding to purchase or sell a security. This would include testing of,
for example, brokers' trade confirmation statements and investment
advisers' brochures that detail business practices, fees, conflicts of
interest, and disciplinary information.
In short, if we are going to rely on disclosures, we need to make
sure the disclosures work.
We use market research to convey simple and important messages. Take
an example: We don't put warnings on a box of cigarettes that says that
in multiple peer-reviewed papers, scientists have found that prolonged
exposure to cigarette smoke increases your risk to certain types of
cancers, and those results are less than 5 percent likely to have been
the result of sampling error.
Nobody would understand that. We say, ``Smoking kills,'' because our
job is to communicate. We would be delinquent if we weren't equally
clear in this case.
We are talking about disclosures like Form CRS that would require
financial professionals to deliver to their retail customers a short
and simple disclosure form to clarify the scope of their customers'
relationship and companies who offer them financial services.
A consumer disclosure has to do more than just protect the discloser.
If an investor doesn't understand what is being disclosed, then we
cannot say that anything was truly disclosed. We must make sure that
investors know what is being disclosed, and that is what the bill does.
The CHAIR. The time of the gentleman has expired.
Ms. WATERS. Mr. Chair, I yield the gentleman an additional 1 minute.
Mr. CASTEN of Illinois. This isn't a mandate on high to dictate to
the SEC what the disclosures should say but rather says that it must do
qualitative interviews to confirm that investors understand the
disclosure. That is why the AARP has endorsed the bill, as well as the
Financial Planning Coalition, the Consumer Federation of America, and
the Certified Financial Planner Board of Standards.
This is a narrowly tailored bill that applies to a number of
disclosure statements that Main Street retail investors rely on. It
does not apply to disclosures that are relied on primarily by
sophisticated institutional investors.
[[Page H8211]]
When I was growing up, there was an ad on television for a discount
menswear store called Syms. At the end of every commercial, their
president, Sy Syms, would say, ``An educated consumer is our best
customer.'' We owe nothing less to the American people, and I urge my
colleagues to vote ``yes.''
Mr. HUIZENGA. Mr. Chair, I yield 2 minutes to the gentleman from
Indiana (Mr. Hollingsworth), who is the vice ranking member of the
subcommittee.
Mr. HOLLINGSWORTH. Mr. Chair, I rise in opposition to the bill being
discussed today. While I appreciate my good friend Mr. Casten's effort
on the bill, the problem is in the details.
While he clearly stated that this is a narrowly tailored bill, the
reality is that a casual counting of SEC-promulgated rules yields over
600 rules that this would apply to. At 6 months of testing each, that
is over 300 years' worth of testing--300 years. Our Republic hasn't
been in existence for 300 years.
What I hear from Hoosiers back home is they are tired of our
regulators being distracted and going back and looking at the history,
and what they want to be focused on is how they protect investors going
forward.
As Mr. Casten and I have discussed before, I think we share those
laudable aims about ensuring that disclosures truly convey the
information we want them to convey, but this bill doesn't do that.
This bill distracts the SEC from the necessary work on regulating our
markets and protecting our investors by going back and doing hundreds
of investor tests on over 600 different SEC-promulgated rules. Because
of that, I will oppose the bill.
Ms. WATERS. Mr. Chair, I yield 2 minutes to the gentlewoman from New
York (Mrs. Carolyn B. Maloney), who is the chairwoman for the
Subcommittee on Investor Protection, Entrepreneurship, and Capital
Markets.
Mrs. CAROLYN B. MALONEY of New York. Mr. Chair, I thank the
chairwoman for yielding and for her leadership on the committee.
Mr. Chair, I strongly support H.R. 1815, which is just plain common
sense, and I congratulate my colleague and friend for his leadership
and hard work on this bill.
We want investors to understand the disclosures that companies,
brokers, and advisers are required to give them.
What would be the point of requiring disclosures that the vast
majority of investors don't even understand? If they don't understand
the disclosures--or worse, if they haven't even read the disclosures--
then they are not making their investment decisions with all the
information that they need.
The best way to ensure that investors understand the disclosures is
actually to engage in investor testing of proposed disclosure forms.
{time} 1245
Disclosures that a sophisticated institutional investor might
understand or that the experts on the SEC staff might understand might
not be clear and understandable to the average retail investor.
This isn't surprising. The SEC staff who designed these disclosures
are typically lawyers and not disclosure design experts. That is why it
is important to require the SEC to engage in investor testing of these
disclosures. That way, they don't end up requiring a disclosure that
simply does not work.
Quite frankly, I don't understand why anyone would oppose this bill,
because that would be the equivalent of saying that you don't want
investors to understand the disclosures. And if you think the SEC has
the authority to do investor testing, then why would you oppose simply
codifying that authority? Other agencies have done effective usability
testing for disclosures.
The CHAIR. The time of the gentlewoman has expired.
Ms. WATERS. Mr. Chair, I yield an additional 1 minute to the
gentlewoman from New York.
Mrs. CAROLYN B. MALONEY of New York. The Consumer Financial
Protection Bureau, under Director Cordray, engaged in extensive
consumer testing of new disclosure forms that it was proposing for
prepaid cards. It came up with two different proposed disclosure forms
and then field-tested the two forms for months before finalizing the
prepaid card rule. That is the kind of data-driven regulation that
helps consumers, investors, and, ultimately, all market participants
because it improves trust in the entire financial markets.
Mr. Chair, I urge my colleagues to support this bill.
Mr. HUIZENGA. Mr. Chairman, I yield 2 minutes to the gentlewoman from
Missouri (Mrs. Wagner), who has had extensive history and experience
with this particular issue at the Securities and Exchange Commission.
Mrs. WAGNER. Mr. Chair, I thank the gentleman from Michigan (Mr.
Huizenga) for yielding his time. He has been a terrific leader on
capital markets and has been serving in his capacity as we try and work
hard for that low- and middle-income investor, that Main Street
investor who is so important that we finally get some regulation and
some guidance in place that is going to make sure that they are getting
the information that is going to help them make good investment and
savings decisions that are truly in the best interest of that consumer.
The gentleman from Michigan (Mr. Huizenga), the ranking member of the
Subcommittee on Investor Protection, Entrepreneurship, and Capital
Markets, is absolutely right.
Since my very first year in Congress 7 years ago, I have been
fighting for that Main Street investor. I have been fighting to make
sure that the best interest of that investor is in place.
This is not about Wall Street; it is about Main Street. It is about
taking care of the low- and middle-income consumer. And the SEC has
been dealing with this fiduciary rule and with the best interest
standard for years and years and years.
Mr. Chairman, we have studied it. We have had countless comment
periods. It has been litigated. The investor testing has been done.
Years and years have gone into this moment where the SEC is finally
ready and has, in fact, moved forward with the best interest standard.
The difficulty with this piece of legislation, H.R. 1815, is it is,
frankly, just a political ploy, Mr. Chairman, a political ploy that is
an attempt to stop the rule in its tracks, one that is going to take
care of those that need the kind of support from their broker-dealer
the most.
It is important that we finally have this issue back in the
jurisdiction of the SEC where it belongs. It is time that this rule
move forward and that we look out--all of us--for the best interest of
our retail investors. Let's let this go forward and stop the political
ploys.
Ms. WATERS. Mr. Chair, I yield 2 minutes to the gentleman from
Illinois (Mr. Foster).
Mr. FOSTER. Mr. Chair, I thank the gentlewoman from California (Ms.
Waters), the chairwoman, for yielding.
Mr. Chair, I rise in support of H.R. 1815, which would simply require
the SEC to conduct investor testing when developing rules and
regulations about disclosures to retail investors.
Creating effective disclosures is often a difficult task and requires
developmental testing with consumers. It is a complex and technical
task in its nature. These disclosures are meant to be clear and concise
so that retail investors understand the scope of their relationships
with brokers and investment advisers and important decisions regarding
their investments.
The SEC has had evidence since at least 2012, when it conducted a
financial literacy study, that many of the disclosure documents that we
currently rely on are not well understood by those investors. This
includes cost disclosures that don't clearly convey costs, risk
disclosures that don't clearly convey risks, and conflict disclosures
that do not clearly convey the nature and the impact of these
conflicts.
Effective disclosure testing is imperative for facilitating informed
decisionmaking on the part of consumers who are trying to save and
invest their hard-earned money, and that is why the AARP and many other
groups have endorsed H.R. 1815.
By requiring qualitative testing in the form of one-on-one cognitive
interviews of investors, it provides a deeper look into how typical
retail investors synthesize information. If investors understand key
differences in firms' conflicts, obligations, and revenue streams, then
more retail investors will receive and interpret correctly the
professional guidance that is right for them.
[[Page H8212]]
The framework laid out here will increase transparency and access to
critical and understandable information, as well as facilitate informed
decisionmaking for Americans making investment decisions and saving for
their retirement. This should be accomplished without delay.
Mr. Chair, I urge a ``yes'' vote on H.R. 1815.
Mr. HUIZENGA. Mr. Chairman, I include in the Record the following
letters:
An October 16, 2019, letter from the SIFMA expressing support for
both of my amendments that exempt Regulation Best Interest and Form CRS
from the bill's requirements, and the gentlewoman from Missouri, Mrs.
Wagner's amendment, which would make the bill effective beginning on
January 21, 2021, and apply only to future rulemaking; an October 16,
2019, letter from SIFMA opposing H.R. 1815; and also, an October 16,
2019, letter to the Speaker of the House and Leader McCarthy from ACLI,
FSI, IPA, IRI, ICI, NAIFA, SIFMA, and the Chamber of Commerce
expressing concern with H.R. 1815 and the negative impact it would have
on retail investors.
As we are starting to have discussion on these particular amendments,
I look forward to my friends across the aisle who are saying that the
bill does not change any of the current situation, I look forward to
them potentially supporting these amendments.
SIFMA,
October 16, 2019.
Hon. Nancy Pelosi,
Speaker, House of Representatives,
Washington, DC.
Hon. Kevin McCarthy,
Minority Leader, House of Representatives,
Washington, DC.
Dear Speaker Pelosi and Leader McCarthy: The Securities
Industry and Financial Markets Association (SIFMA)
appreciates the opportunity to comment on two of the
amendments made in order by the Rules Committee to H.R. 1815,
the ``SEC Disclosure Effectiveness Testing Act.'' This
legislation would impose on the Securities and Exchange
Commission (``SEC'') an investor testing requirement for all
past and future regulations, with some exceptions, about
disclosure to retail investors.
The amendment offered by Representative Huizenga would
exempt Form CRS from the bill's retroactive investor testing
requirements. In the development of the Regulation Best
Interest rulemaking package (commonly referred to as ``Reg
BI''), the SEC conducted extensive investor testing of Form
CRS. The SEC's testing involved both a comprehensive national
survey to collect information on the opinions, preferences,
attitudes, and level of self-assessed comprehension of the
Form CRS, as well as qualitative interviews to obtain further
insight into individuals' attitudes toward the Form CRS. We
support Rep. Huizenga's amendment, as further testing of Form
CRS would unduly interfere with and delay the implementation
process which is already well underway.
Representative Wagner's amendment would apply the bill's
investor testing requirements only to applicable disclosure
documents developed after January 21, 2021. Based on our firm
belief in the heightened strength of the new Reg BI conduct
standards and their value to everyday investors, which have
been fully effective since September 10, 2019 with a
compliance date of June 30, 2020, SIFMA supports the Wagner
amendment. We believe the underlying legislation would
unnecessarily delay the implementation of a new set of
sweeping regulations that would provide strong investor and
consumer protections for 43 million households. SIFMA has
long supported enhancing the standard of conduct applicable
to broker-dealers when providing personalized investment
advice about securities to retail investors and we believe
the SEC has successfully accomplished this important goal
through Reg BI.
SIFMA appreciates and shares the interest of Representative
Casten and the Committee on Financial Services in advocating
for robust investor testing of retail investor disclosures.
We agree that in many cases, investor testing is appropriate
and makes sense. We believe disclosures are designed to give
the investing public the information they need to make
informed financial decisions but could be held up in an
endless loop of repeated testing if the underlying bill is
enacted. SIFMA therefore supports the proposed amendments
made by Representatives Huizenga and Wagner, which improve
the legislation and offer a better approach to investor
testing.
We appreciate the opportunity to comment and we appreciate
your consideration of our views. If you have any questions or
require any additional information, please feel free to
contact us.
Sincerely,
Kenneth E. Bentsen, Jr.,
President & CEO, Securities Industry
and Financial Markets Association.
____
SIFMA,
October 16, 2019.
Hon. Nancy Pelosi,
Speaker, House of Representatives,
Washington, DC.
Hon. Kevin McCarthy,
Minority Leader, House of Representatives, Washington, DC.
Dear Speaker Pelosi and Leader McCarthy: The Securities
Industry and Financial Markets Association (SIFMA)
appreciates the opportunity to comment on H.R. 1815, the
``SEC Disclosure Effectiveness Testing Act.'' H.R. 1815 would
impose on the Securities and Exchange Commission (``SEC'') an
investor testing requirement for all past and future broker-
dealer regulations, with some exceptions, about disclosure to
retail investors.
SIFMA appreciates and shares the interest of Representative
Casten and the Committee on Financial Services in advocating
for robust investor testing of retail investor disclosures.
We agree that in many cases, investor testing is appropriate
and makes good common sense. In fact, the SEC conducted
extensive investor testing of the proposed Form CRS, an
important component of the Regulation Best Interest
rulemaking package (collectively, ``Reg BI'')--the most
comprehensive enhancement of standard of conduct rules
governing broker-dealers since the enactment of the
Securities Exchange Act of 1934. The SEC's testing involved
both a comprehensive national survey to collect information
on the opinions, preferences, attitudes, and level of self-
assessed comprehension of the Form CRS, as well as
qualitative interviews to obtain further insights related to
the reasoning and beliefs behind individuals' attitudes
toward the Form CRS.
Reg BI has been fully effective since September 10, 2019
and has a compliance date of June 30, 2020. Further testing
of Reg BI would unduly interfere with and delay the
implementation process which is already well underway.
Ultimately, the bill would divert valuable and limited
regulatory resources and thereby undermine the roll-out of a
significantly strengthened best interest standard of conduct
designed to better protect and serve retail investors.
Over the past several months, the SEC and FINRA have been
working diligently to assist financial services firms in
answering Reg BI interpretive questions and developing Reg BI
compliance programs. Late last month, the SEC published a
small entity compliance guide to Reg BI. Just last week,
FINRA published a Reg BI compliance checklist and announced
additional resources to aid firms in compliance.
Based on our firm belief in the heightened strength of the
new Reg BI conduct standards and their value to everyday
investors, SIFMA respectfully opposes H.R. 1815. We believe
the bill would likely unnecessarily delay the implementation
of historically new set of regulations that would provide
strong investor and consumer protections for forty-three
million households. SIFMA has long supported enhancing the
standard of conduct applicable to broker-dealers when
providing personalized investment advice about securities to
retail investors and we believe the SEC has succeed in
accomplishing this important goal through Reg BI.
Further, enactment of the bill as written, despite the
carve outs listed in the manager's amendment, will subject
other rules that apply to broker dealers under the federal
securities laws to retroactive review and testing, including
Form ABD, Investment Company Act disclosures, Trust Indenture
Act disclosures, order routing, order execution, penny stock
disclosures and others. These disclosures are designed to
give the investing public the information they need to make
informed financial decisions, but could be held up in an
endless loop of repeated testing under the bill. While we
understand and appreciate that this was likely not the
Committee's intent or purpose, we believe that imposing such
a requirement would likely result in an unprecedented,
costly, resource intensive undertaking by the SEC.
We appreciate the opportunity to comment and we appreciate
your consideration of our views. If you have any questions or
require any additional information, please feel free to
contact us.
Sincerely,
Kenneth E. Bentsen, Jr.,
President & CEO, Securities Industry
and Financial Markets Association.
____
October 16, 2019.
Hon. Nancy Pelosi,
Speaker, House of Representatives,
Washington, DC.
Hon. Kevin McCarthy,
Minority Leader, House of Representatives,
Washington, DC.
Dear Speaker Pelosi and Leader McCarthy: The undersigned
associations, representing investment advisers, broker-dealer
firms, life insurers and their financial professionals as
well as registered investment companies, appreciate the
opportunity to comment on H.R. 1815, the ``SEC Disclosure
Effectiveness Testing Act,'' which would impose on the
Securities and Exchange Commission (``SEC') an investor
testing requirement for all past and future regulations, with
some exceptions, about disclosure to retail investors.
We appreciate and share the interest of Representative
Casten and the Committee on Financial Services in advocating
for robust investor testing of retail investor disclosures.
Retail investors should be provided clear and understandable
disclosures, and we agree that in many cases, investor
testing
[[Page H8213]]
makes good common sense. However, we are concerned that this
legislation will have an immediate negative impact on retail
consumers as it would interfere with the implementation of
the Regulation Best Interest rulemaking package
(collectively, ``Reg BI'')--the most comprehensive
enhancement of standard of conduct rules governing broker-
dealers since the enactment of the Securities Exchange Act of
1934. This result is nonsensical--as investor testing was
part of SEC's Reg. BI rulemaking promulgation. Specifically,
the SEC conducted extensive investor testing of the proposed
Form CRS, an important component of the Regulation Best
Interest rulemaking package. The SEC's testing involved both
a comprehensive national survey as well as qualitative
interviews with investors.
Reg BI has been fully effective since September 10, 2019
and has a compliance date of June 30, 2020. Financial
services firms have spent months developing Reg BI compliance
programs, and further testing of Reg BI would unduly
interfere with and delay this ongoing implementation process.
Based on our firm belief in the heightened strength of the
Reg BI conduct standards that will better protect forty-three
million households, we respectfully oppose H.R. 1815.
Further, despite the carve outs in the manager's amendment,
enactment of the bill as written will subject other rules
regarding disclosure to retail investors to retroactive
review and testing. These rules include, among others, retail
disclosure requirements that are designed to give consumers
the information they need to make informed investing
decisions. Under H.R. 1815, however, these existing rules
could be held up in an endlessly iterative loop of repeated
testing.
In addition, with respect to future rulemakings, the SEC is
well-positioned to determine the most efficient way to test
and support their disclosure related rulemakings. The SEC
conducting investor testing may or may not be appropriate,
depending on the rulemaking. For each rulemaking, however,
the SEC already is required to seek public comment; the
comment period is intended to get public input, including
from investors and entities that represent investors and
entities that regularly engage with investors. In this way,
the SEC is able to get real insights into what may or may not
work well for investors. H.R. 1815 may impede rulemakings
intended to provide valuable information to investors, a cost
that exceeds its possible benefits.
We appreciate the opportunity to comment and your
consideration of our views. If you have any questions or
require any additional information, please feel free to
contact us.
Sincerely,
American Council of Life Insurers (ACLI).
Financial Services Institute, Inc. (FSI).
Institute for Portfolio Alternatives (IPA).
Insured Retirement Institute (IRI).
Investment Company Institute (ICI).
National Association of Insurance and Financial Advisors
(NAIFA).
Securities Industry and Financial Markets Association
(SIFMA).
U.S. Chamber of Commerce.
Mr. HUIZENGA. Mr. Chair, I reserve the balance of my time.
Ms. WATERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, H.R. 1815 is a commonsense bill that is supported by
our Nation's seniors, investment advisers, and investor advocates. Here
is what they have said about the bill:
According to AARP, they wrote: ``AARP, on behalf of our nearly 38
million members and all older Americans nationwide, is pleased to
endorse H.R. 1815, which would require the Securities and Exchange
Commission to conduct investor testing when developing rules and
regulations about disclosures to retail investors. Robust investor
testing of retail investor disclosures will assist investors in getting
the information they need to make informed choices about their hard-
earned savings.''
According to the Financial Planning Coalition: ``The coalition
believes that H.R. 1815 would provide the statutory framework necessary
for the SEC to ensure to Congress and Main Street investors that
disclosures required under SEC rules have been thoroughly and
adequately tested by the SEC and are reasonably effective in achieving
their intended purpose.''
According to the Consumer Federation of America: ``Disclosure is both
an important investor protection tool and a regulatory requirement that
imposes significant cost on industry. We, therefore, have an obligation
to make those disclosures as effective as possible. H.R. 1815 would
help to achieve that goal by updating the SEC's approach to disclosure
development. Anyone who supports commonsense, evidence-based regulation
should support this legislation.''
Mr. Chair, before reserving the balance of my time, I include in the
Record correspondence from the Financial Planning Coalition, the AARP,
and the CFA, that is the Consumer Federation of America.
Financial Planning Coalition,
October 11, 2019.
Re Support for H.R. 1815, the ``SEC Disclosure Effectiveness
Testing Act''.
Dear Member of Congress: On behalf of the Financial
Planning Coalition (Coalition), we are writing to express our
strong support for H.R. 1815, the ``SEC Disclosure
Effectiveness Testing Act.'' We encourage you to support the
legislation when it is considered on the House floor in the
coming week.
A fundamental public policy goal of the federal securities
laws is to ensure full and adequate disclosure of
``material'' information to American investors. The
expectation is that the disclosure will assist investors in
making an informed investment decision. Given this, we
appreciate the work the U.S. Securities and Exchange
Commission's (SEC) Office of the Investor Advocate has done
to identify and confront the challenges to improve investor
disclosure.
Research conducted on behalf of AARP, Consumer Federation
of America and the Coalition organizations, as well as
separate research conducted by the SEC, all highlight the
challenges and difficulties in developing clear,
understandable investor disclosures. Information about
financial issues and investments is often complex and
technical in nature, and investor comprehension of this
information typically is poor. All too often, mandated
disclosures contain technical language and concepts that, as
research confirms, are confusing to or misunderstood by
investors. Indeed, research studies prove time and again how
difficult it is to convey even the most basic financial and
investment concepts in a way that typical Main Street
investors understand.
To determine whether proposed investor disclosures would be
effective at achieving their regulatory purpose of informing
investor decision-making, it is not enough simply to survey
investors generally on their likes or preferences. Thorough
and adequate investor testing must go beyond that and, more
importantly, must assess investors' ability to integrate
information and synthesize it into a rational evaluation.
This involves a more complex and higher-level cognitive
skill. Conducting thorough one-on-one cognitive testing is
the only proven way to determine whether a proposed
disclosure document will achieve its intended purpose.
For these reasons, we are particularly pleased that the
proposed legislation includes a requirement for qualitative
testing in the form of one-on-one cognitive interviews of
investors. A deeper look into the way investors analyze and
synthesize information is necessary to determine the
usefulness and effectiveness of any disclosure document in an
investor's decision-making process.
The Coalition believes that H.R. 1815 will provide the
statutory framework necessary for the SEC to ensure to
Congress and Main Street investors that disclosures required
under SEC rules have been thoroughly and adequately tested by
the SEC and are reasonably effective in achieving their
intended purpose. The legislation to be considered on the
House floor appropriately clarifies that the scope of testing
is limited to those disclosures that are intended to be used
by retail investors in choosing a financial professional or
investment product. The modified legislation to be considered
on the House floor makes additional important clarifications
that the Coalition supports.
We urge a ``Yes'' vote when the legislation comes up for a
vote on the House floor.
Sincerely,
Kevin R. Keller, CAE,
Chief Executive Officer, CFP Board.
Lauren Schadle, CAE,
Executive Director/CEO, FPATM.
Geoffrey Brown, CAE,
Chief Executive Officer, NAPFA.
____
AARP
Washington, DC, October 16, 2019.
Hon. Maxine Waters,
House of Representatives,
Washington, DC.
Dear Chairwoman Waters: AARP, on behalf of our nearly 38
million members and all older Americans nationwide, is
pleased to endorse H.R. 1815, which would require the
Securities and Exchange Commission (SEC) to conduct investor
testing when developing rules and regulations about
disclosures to retail investors. Robust investor testing of
retail investor disclosures will assist investors in getting
the information they need to make informed choices about
their hard-earned savings.
AARP has a long history of fighting for investor
protections and is especially eager to provide clarity and
transparency to the often confusing and overly complicated
investment world. AARP has experienced firsthand the value of
investor testing to provide individuals with meaningful
information needed for financial decision-making. In response
to the SEC's proposed Client Relationship Summary (CRS)
disclosure forms, AARP commissioned two, independent rounds
of research
[[Page H8214]]
and testing to gauge retail investor understanding. The
findings provided valuable information that helped guide our
recommendations for design and content modifications to
improve consumer understanding. AARP believes that such
retail testing should be utilized extensively by the SEC for
the development of effective, consumer facing disclosures.
AARP appreciates that creating effective disclosure is
often a difficult and daunting task. We also understand that
the price of ineffective disclosures can be poor investment
decisions and inadequate levels of retirement savings. We
believe testing is imperative for facilitating informed
decision-making on the part of consumers trying to save and
invest their hard-earned money.
We look forward to working with you and your colleagues to
increase transparency and access to critical and
understandable information, as well as facilitate informed
decisionmaking for older Americans making investment
decisions and saving for their retirement. If you have any
questions, please feel free to contact me.
Sincerely,
Bill Sweeney,
Senior Vice President, Government Affairs.
____
Consumer Federation of America.
Dear Representative: We understand that H.R. 1815, the SEC
Disclosure Effectiveness Testing Act, will soon be brought to
the House floor for a vote. We are writing to urge you to
vote yes on this pro-investor bill, which would help to
ensure that the disclosures retail investors rely on convey
as effectively as possible the key information needed to make
an informed choice about decisions that are critical to their
financial wellbeing.
The sad reality is that the disclosures investors receive
when choosing investment professionals or evaluating
investment options often do a poor job of conveying
critically important information in a way that typical retail
investors can understand. This includes cost disclosures that
don't clearly convey costs, risk disclosures that don't
clearly convey risks, and conflict of interest disclosure
that do not clearly convey the nature or impact of those
conflicts. Evidence of this can be found, for example, in a
2018 SEC proposal to create a summary prospectus for variable
products that, while sound in concept, is long, dense, poorly
organized, and full of technical jargon.
As a result, retail investors, and particularly the least
sophisticated retail investors, are too often flying blind
when making investment decisions that will affect their
ability to afford a secure and independent retirement or fund
other long-term financial goals. There are several reasons
for this. One is the inherent difficulty of the Securities
and Exchange Commission's task of developing clear
disclosures of complex topics for a non-expert retail
audience. But the other is the SEC's failure to adopt best
practices widely used by industry and some other government
agencies to develop more effective disclosures, including
incorporating qualitative testing of disclosure effectiveness
early in the development process.
This bill would help to correct the second of these two
problems. It would do so, first, by requiring the SEC to
incorporate qualitative disclosure effectiveness testing in
the development of new disclosures designed for retail
investors. Importantly findings of the testing would have to
be made available for public comment. This would both hold
the SEC accountable for addressing those findings in any
rulemaking subject to the testing requirement and provide all
stakeholders with an opportunity to weigh in.
Second, the bill would require the SEC, with input from the
Office of Investor Advocate, to develop a plan for testing
existing retail disclosures, without imposing a rigid
timeframe for completing that review. Appropriately,
disclosures primarily relied on by institutional investors,
analysts, and other sophisticated market participants would
not be subject to the testing requirement. This, along with
the involvement of the Office of Investor Advocate in
determining which existing disclosures are priorities for
testing, would help to ensure resources are devoted to
testing the disclosures most important for retail investors.
Disclosure is both an important investor protection tool
and a regulatory requirement that imposes significant costs
on industry. We, therefore, have an obligation to make those
disclosures as effective as possible. H.R. 1815 would help to
achieve that goal by updating the SEC's approach to
disclosure development. Anyone who supports common sense,
evidence-based regulation should support this legislation.
Respectfully submitted,
Barbara Roper,
Director of Investor Protection.
Micah Hauptman,
Financial Services Counsel.
Ms. WATERS. I reserve the balance of my time.
Mr. HUIZENGA. Mr. Chair, may I inquire how much time is remaining on
each side and whether the gentlewoman is prepared to close at this
time.
The CHAIR. The gentleman from Michigan has 21\1/2\ minutes remaining.
The gentlewoman from California has 14 minutes remaining.
Ms. WATERS. Mr. Chair, I am prepared to close.
Mr. HUIZENGA. Mr. Chair, I yield myself the balance of my time.
Mr. Chair, I do want to point out that as the gentlewoman from
Missouri and I were chatting a little bit about this, it is amazing,
when this issue came to a head at the end of the Obama administration,
there was a massive move away from the Securities and Exchange
Commission where this Reg Best Interest traditionally has been the
domain of such regulation and was moved over to the Department of
Labor.
Why? Because the administration believed they needed to move so
quickly and they couldn't get the Securities and Exchange Commission to
act and agree--parenthetically, agree--with them as to what it should
look like, they kicked it over to the Department of Labor, which has a
small little silver of oversight of this area because of pensions. But,
nonetheless, they came up with a wholly unsatisfactory rule that caused
a tremendous amount of confusion. The Securities and Exchange
Commission put itself forward and said: No, we need to get this done.
That is what kicked off all of the roundtables and the interviews and
the 1,800 surveys and the 6,000 comment letters. We are now at this
point where we can deliver on much-needed reform, and my colleagues
across the aisle want to kick it backwards.
Now, Mr. Chairman, you heard the author say that they are not
interested in relitigating current rulemaking, so I look forward to
them all supporting my amendment that we are going to be talking about.
And let's exempt Form CRS and the Reg BI. But I am afraid, Mr. Chair,
that is not their goal and intent. I am afraid that they don't like the
policy; therefore, they want to go back in and delay.
When the gentleman was talking about how there was no changes because
of this, that is simply not true. The Form CRS went from four pages
down to two pages, with significant, simplified changes that were
inserted into that.
And so that is the goal and objective at the end of the day, Mr.
Chairman: to protect investors, to give them certainty and clarity; to
give those who provide the advice to them certainty and clarity; and,
frankly, to move forward.
I am afraid that H.R. 1815 here does the exact opposite. It is going
to delay it. It is going to make it even more murky than what it had
been previously.
I just want to urge my colleagues to think this through, what they
are proposing to do to the Securities and Exchange Commission, the
power of the Securities and Exchange Commission.
And again, my first term was spent listening to how the Republicans
``were trying to destroy the Securities Exchange Commission'' by not
funding them enough, by not allowing them to do their job, by not
having the appointees do what their backgrounds and expertise would
allow them to do. I never bought that charge, Mr. Chairman, because it
simply wasn't true.
But we can see clearly, right now, this is a delaying tactic by the
opposition; and how we would put not just current rulemaking, not just
future rulemaking, but even past rulemaking back into this system would
simply be a huge mistake.
Mr. Chairman, I urge my colleagues to oppose this bill, and I yield
back the balance of my time.
{time} 1300
Ms. WATERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I must admit that I am a bit surprised at this
opposition. I am a bit surprised at this opposition because, first of
all, everyone must understand that the SEC is our cop on the block.
This agency has, as its basic mission, to protect investors.
Who best to be protected than the small, retail investors? We have so
many schemes, so much fraud that we witness every day that is being
brought forth to basically take advantage of the most vulnerable people
in our society, many of them who don't have a lot of resources, who
don't have money that they could lose. So, we believe that they must
understand in what they are investing.
This is not about the big, institutional investors. This is about
your retail investors. This is about the little
[[Page H8215]]
guy. This is about those people who are depending on the information
that they get and their investment advisers to help guide them so they
can have enough money in retirement, for example.
Why is it we would have any elected official coming to represent the
people from their districts who would be opposed to making sure that
these small investors are represented, that they are protected, that
they are cared about?
So, I am surprised at this opposition, and I don't know why there
would be so much time spent saying that the SEC does not need to do
additional kinds of testing, that they don't need to be concerned about
these disclosures.
What is it you need to protect about the SEC from doing its basic
job? I don't understand that.
But, however, let me just say that H.R. 1815 is a commonsense bill
that benefits mom-and-pop investors by putting a process in place to
ensure that the SEC's disclosures are clear and comprehensible for
those investors.
A disclosure is only useful if it can be understood by its audience,
and this legislation ensures that disclosures are tested in a robust
way so that they are clear.
This bill is supported, again, by groups such as the AARP, our
seniors; the Financial Planning Coalition; and the Consumer Federation
of America, looking out for consumers.
I, again, commend Representative Casten for putting forth this
important legislation, and I thank him for his work. But, more than
that, I thank him as a new Member of Congress who understands that his
job, his responsibility, is to look out for his constituents and for
the small investors, the little people, those people who need some
protection, those people who don't need to be ripped off, those people
who need to have clear information and disclosure about what they are
getting into.
I thank Representative Casten for his vision, for his foresight, and
for understanding the responsibility of the SEC.
Mr. Chair, I urge all Members to vote ``yes'' on this bill, and I
yield back the balance of my time.
The CHAIR. All time for general debate has expired.
Pursuant to the rule, the bill shall be considered for amendment
under the 5-minute rule.
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 116-34 modified by the amendment printed in part A of House
Report 116-237, shall be considered as adopted. The bill, as amended,
shall be considered as the original bill and shall be considered as
read.
The text of the bill, as amended, is as follows:
H.R. 1815
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``SEC Disclosure Effectiveness
Testing Act''.
SEC. 2. DISCLOSURE TESTING.
(a) In General.--Section 23(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78w(a)) is amended by adding at the
end the following:
``(4) Investor testing.--
``(A) In general.--The Commission shall engage in investor
testing prior to issuing any rule or regulation which
designates documents or information to be disclosed under the
securities laws, if such documents or information are
required to be delivered to, and are intended or
substantially likely to be materially relied upon by, a
retail investor when--
``(i) selecting a broker-dealer or investment adviser,
evaluating their services and fees, or materially altering a
brokerage or advisory relationship;
``(ii) assessing a securities recommendation or investment
advice provided by a broker- dealer or investment adviser;
``(iii) making a decision to purchase or sell a security;
or
``(iv) such other circumstances as the Commission may, with
input from the Investor Advocate, determine appropriate for
the protection of retail investors.
``(B) Exemption for certain disclosures.--This section
shall not apply to--
``(i) disclosures made pursuant to Regulations S-K and S-X
(including Industry Guides), Regulation 14A, Form N-PX, Form
10-K, Form 10-Q, Form 8-K, Form SD, Form N-PORT, Form PF,
Regulation SBSR, disclosures mandated by or jointly with the
Board of Governors of the Federal Reserve System or the
Financial Stability Oversight Council, or successors thereto;
or
``(ii) any other documents or information that the
Commission, with input from the Investor Advocate, determines
are outside the intended scope and purposes of this Act.
``(C) Commission authority to conduct additional testing.--
This section shall not be construed to limit the Commission's
ability to conduct any investor testing on any other
documents or information not subject to this section 23(a),
provided that any such investor testing shall not be subject
to the requirements of this section 23(a).
``(D) Contents.--Investor testing conducted pursuant to
subparagraph (A) shall include the following:
``(i) Qualitative testing in the form of one-on-one
cognitive interviews of retail investors about documents or
information, or samples of such documents or information, to
be provided.
``(ii) Such other forms of testing that the Commission,
with input from the Investor Advocate, deems appropriate for
evaluating the effectiveness of retail disclosures.
``(iii) Analysis and publication in the Federal Register of
the results of the testing.
``(iv) An opportunity for the public to comment on such
results published in the Federal Register.
``(E) Substantive changes.--If the Commission, in the
period between engaging in investor testing and publishing a
final rule, makes substantive changes to such rule that the
Commission determines would have a significant impact on
retail investors, and such changes were not already investor
tested, the Commission shall again engage in investor testing
related to such changes.
``(F) Public availability of retail testing results.--The
Commission shall make the data and results of any investor
testing performed pursuant to this paragraph available to the
public.
``(G) Rules of construction.--
``(i) The determination that some or all of a document or
information is deemed to be subject to this paragraph shall
not forestall the determination that such document or
information may also be used or relied upon by the public,
market participants other than retail investors, or
government agencies.
``(ii) The Commission may, in consultation with the
Investor Advocate, determine which, if any, components of
such document or information are substantially likely to be
relied on by retail investors for the purposes outlined in
paragraph (4)(A) above and focus testing under this paragraph
on those components of the disclosure.
``(iii) Notwithstanding clause (ii) above, where any
information subject to testing under this paragraph may be
used or relied upon by the public, market participants other
than retail investors, or government agencies, the results of
testing made pursuant to this paragraph shall not provide
grounds for reducing or eliminating (including any
undermining of reliability of and accountability for) the
information that existing or proposed regulation requires or
would require be made available to the public, market
participants other than retail investors, and government
agencies, whether or not such information is delivered to
retail investors.''.
(b) Participation of Investor Advocate.--Section 4(g) of
the Securities Exchange Act of 1934 (15 U.S.C. 78d(g)) is
amended--
(1) in paragraph (4)--
(A) in subparagraph (D)(ii), by striking ``and'' at the
end;
(B) by redesignating subparagraph (E) as subparagraph (F);
and
(C) by inserting after subparagraph (D) the following: "(E)
engage in investor testing--
``(i) to carry out the functions of the Office; and
``(ii) pursuant to section 23(a)(4), as appropriate; and'';
(2) by adding at the end the following:
``(9) Publication of data and results of investor
testing.--With respect to any investor testing carried out by
the Investor Advocate pursuant to paragraph (4)(E), the
Investor Advocate may make the data and results of such
investor testing available to the public, without further
review or editing by the Commission.
``(10) Personnel.--If the Investor Advocate decides, within
its sole discretion, to conduct testing under this Section,
the Investor Advocate may do so and the Commission shall
provide the Office of the Investor Advocate with sufficient
personnel and funding necessary to carry out such testing.
Such testing may qualify as the testing covered by this
section, provided that all requirements of the section are
met.''.
(c) Prior Rules.--
(1) In general.--For any final rule or regulation issued by
the Securities and Exchange Commission (in this subsection
referred to as the ``Commission'') before the date of the
enactment of this Act that would be subject to investor
testing under section 23(a)(4) of the Securities Exchange Act
of 1934, had such rule been issued on or after the date of
enactment of this Act, the Commission shall perform investor
testing with respect to such rule or regulation that includes
the contents described in such section 23(a)(4).
(2) Schedule.--The Commission shall, not later than 6
months after the date of the enactment of this Act, with
input from the Investor Advocate, establish a schedule for
completing any investor testing required under paragraph (1)
that prioritizes testing of any final rules and regulations
that designate documents or information central to retail
investor decision making, and in particular prioritize the
testing of documents or information required to be delivered
to retail investors in the form of summary documents or
summary sections of documents including for the purpose of
determining whether and how such summary documents can
achieve the goals of informed investor decision-making in the
circumstances set forth in Section 23(a)(4) of the Securities
6 Exchange Act of 1934
=========================== NOTE ===========================
October 17, 2019, on page H8215, the following appeared: set
forth in Section 23(a)(4) of the Securities Exchange Act of 1934
The online version has been corrected to read: set forth in
Section 23(a)(4) of the Securities 6 Exchange Act of 1934
========================= END NOTE =========================
[[Page H8216]]
above while maintaining full accessibility by retail investors, the
public, other market participants, and government regulators to the
full range of documents and information that they may utilize or rely
on, whether or not such documents or information are required to be
delivered to retail investors.
(3) Report.--The Commission shall, with input from the
Investor Advocate, issue a report to Congress each year
containing the following:
(A) The status of any investor testing required under
paragraph (1) initiated within the last year or otherwise
ongoing.
(B) The results of any investor testing completed under
paragraph (1) within the last year.
(C) Any priorities the Commission has, based on results of
investor testing required by paragraph (1), for--
(i) revising any proposed or final rule or regulation based
on the results of testing pursuant to;
(ii) initiating any rulemaking or actions to arising from
the results of the testing pursuant to; and
(iii) the Investor Advocate's views on the above priorities
and any such other matters arising from the testing or
results of testing pursuant to.
=========================== NOTE ===========================
October 17, 2019, on page H8216, the following appeared: (i)
revising any proposed or final rule or regulation based on the
results of testing pursuant to this paragraph; (ii) initiating any
rulemaking or actions to arising from the results of the testing
pursuant to this paragraph; and (iii) the Investor Advocate's
views on the above priorities and any such other matters arising
from the testing or results of testing pursuant to this paragraph.
The online version has been corrected to read: (i) revising any
proposed or final rule or regulation based on the results of
testing pursuant to; (ii) initiating any rulemaking or actions to
arising from the results of the testing pursuant to; and (iii) the
Investor Advocate's views on the above priorities and any such
other matters arising from the testing or results of testing
pursuant to.
========================= END NOTE =========================
The CHAIR. No further amendment to the bill, as amended, shall be in
order except those printed in part B of House Report 116-237. Each such
further amendment may be offered only in the order printed in the
report, may be offered only by a Member designated in the report, shall
be considered as read, shall be debatable for the time specified in the
report equally divided and controlled by the proponent and an opponent,
shall not be subject to amendment, and shall not be subject to a demand
for division of the question.
Amendment No. 1 Offered by Mr. Huizenga
The CHAIR. It is now in order to consider amendment No. 1 printed in
part B of House Report 116-237.
Mr. HUIZENGA. Mr. Chairman, I have an amendment at the desk.
The CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 2, line 17, after ``Guides),'' insert the following:
``Form CRS''.
The CHAIR. Pursuant to House Resolution 629, the gentleman from
Michigan (Mr. Huizenga) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Michigan.
Mr. HUIZENGA. Mr. Chairman, my amendment is very simple. It would add
Form CRS to the list of exempted disclosures that would not require SEC
investor testing. They have gone through it.
Now, you just heard one of my colleagues talk about why somebody
would oppose this. I can tell you why somebody would oppose this:
Because we have been doing it for 7 years.
For 7 years Reg BI has been debated. It has been litigated. It has
been confusing. And it is time to move forward.
The Securities and Exchange Commission has done that.
So, again, the author of the bill earlier had said, Mr. Chair, that
he was not interested in relitigating current rulemaking. Now is the
time to show that. Now is the time to prove that. Support my amendment.
So, Form CRS was part of the Regulation Best Interest rulemaking
package. The form is a short, plain-language description of an
investor-adviser or a broker-dealer's relationship summary.
It is designed to help retail investors select or determine to remain
with an advisory or brokerage firm. They are trying to figure it out.
Importantly, Form CRS was the result of an extensive deliberative
process at the SEC. Beyond the typical comment process--and the SEC did
consider 6,000 comments for the Reg BI rulemaking package--the SEC also
engaged in substantial investor outreach, including in-person meetings
across the country; surveys--1,800 of those surveys--and, importantly,
engaged the RAND Corporation to perform one-on-one, in-depth investor
testing of the proposed Form CRS.
Now, earlier it was claimed, Mr. Chair, that the initial form was
unchanged. That is not true. The SEC did figure out that four pages was
too long, too confusing. They streamlined that down to two.
So, that is, the SEC did its work--again, for the last 7 years. And
we are now at a critical juncture. We can choose to take this road, or
we can choose to turn around and head backward. I, for one, do not want
to turn around and head backward. I want to provide that protection to
my Main Street investors and my constituents back in my district.
So, the SEC did its job. It did testing that was substantially
similar to what was proposed by this bill on Form CRS already. It has
been 7 years that we have been going through this process. We could not
get, under the last administration and in the beginning of this
administration, the Department of Labor and the Securities and Exchange
Commission to agree on how to move forward.
And when in the Trump administration, this current administration,
the Department of Labor was trying to assert itself, the Securities and
Exchange Commission did its job and stepped in, which it didn't do
under the last administration, and said: Nope. We got it. We are the
lead agency. We will take this, and we will come up with a final
product.
And the reason why I oppose this bill, certainly without my
amendment, is all this does is it reverts back to what we had before
this rulemaking was done by the Securities and Exchange Commission.
Confusion, muddiness, and uncertainty will be the rule of law, and we
are trying to clear that up. The Securities and Exchange Commission is
trying to clear that up.
Mr. Chair, I reserve the balance of my time.
Ms. WATERS. Mr. Chairman, I claim the time in opposition to the
amendment.
The CHAIR. The gentlewoman from California is recognized for 5
minutes.
Ms. WATERS. Mr. Chair, this amendment is unnecessary and could
undermine the investor understanding of how retail investors relate to
brokers.
H.R. 1815, the SEC Disclosure Effectiveness Testing Act, simply
requires the Securities and Exchange Commission to test its documents
with retail investors through one-on-one interviews and surveys to
ensure that disclosure documents intended for retail investors are
actually understood by their target audience.
H.R. 1815 is in no way intended to repeal Regulation Best Interest, a
rule adopted by the SEC in June to change the standard of conduct for
brokers when providing retail investors with personalized investment
advice.
And, to be clear, the bill does not require testing of the standard
imposed by the SEC under Regulation Best Interest. Instead, it requires
testing of how well retail investors understand the standard and how it
impacts the advice they receive, along with any other disclosures.
In addition, the bill contemplates that the SEC, in consultation with
the investor advocate, would develop a schedule of disclosures that it
intends to test and report to Congress. There is nothing in the bill
that requires investor testing of disclosures related to Regulation
Best Interest on day one of enactment.
But this amendment would say that the SEC should never test these
disclosures, regardless of changes to the markets, investment product
offerings, investor behaviors, and investment trends. This makes little
sense, particularly considering the rise of riskier products like
cryptocurrencies that are being targeted to retail investors.
I would also point out that, to the extent that the SEC, in
consultation with the investor advocate, determines that it should make
substantial changes to the disclosures that would have a significant
impact on retail investors, H.R. 1815 would simply require the SEC to
test new and existing disclosure forms to ensure that they are actually
understood by the intended audience.
Mr. Chair, I oppose this amendment, I ask all of my colleagues to do
so, and I reserve the balance of my time.
Mr. HUIZENGA. Mr. Chairman, just to address a couple of things: This
bill clearly says it will add Form CRS to the list of exempted
disclosures that would not require SEC investor testing. It has nothing
to do with cryptocurrencies unless, somehow, magically, a crypto broker
appears.
There is no such thing. It has no application. This amendment is only
going to be narrow. It is going to exempt Form CRS from having to go
through this again.
The author of the bill had said that he had no interest in
relitigating current rulemaking. Here is the opportunity to prove it
because, I would hope, Mr. Chairman, that we would all agree that Form
CRS does not need to be subject to further testing.
[[Page H8217]]
It has been 7 years. I don't want it to be another 7 years. As my
colleague from Indiana earlier was saying, 600 rules at 6 months per
rule is 300 years. We don't have that time.
Mr. Chair, I hope that my colleagues would support my amendment, and
I yield back the balance of my time.
Ms. WATERS. Mr. Chairman, I would like to inquire how much time I
have remaining.
The CHAIR. The gentlewoman from California has 2\1/2\ minutes
remaining.
Ms. WATERS. Mr. Chair, I yield the balance of my time to the
gentleman from Illinois (Mr. Casten), the sponsor of this important
legislation.
{time} 1315
Mr. CASTEN of Illinois. Mr. Chairman, I rise in opposition to the
Huizenga amendment, and I want to clarify a couple of points.
The bill gives the SEC Office of the Investor Advocate a larger role
to prioritize which disclosures to test. The bill also says that once
testing is completed and is found to be clear, there is no need to do
further testing unless there are substantive changes.
To argue that every single bill is going to have to be reviewed every
single time is not an argument that is made in good faith. The question
here on the amendment is simply: Should we exempt one single form from
the broad discretion given to the SEC in this rule? It is not clear to
me why you would exempt Form CRS from investor testing, unless you
don't want investors to understand the fees, costs, or conflicts of
interest of investment professionals.
We know, through the testing that was done, that Form CRS appeared to
be helpful for investors who had already read similar documents and who
had more investing experience. And we know from the testing that was
done that Form CRS, as currently written, is not that helpful for
investors who haven't otherwise read similar documents.
We can't tie the SEC's hands in determining which disclosure
documents need further investor testing. But if we are sitting here and
believe that we have an obligation to look out for the best interests
of the American people, for investors, for Main Street investors, then
the only choice before us is to vote ``no'' on this amendment, and I
encourage all of my colleagues to do so.
Ms. WATERS. Mr. Chairman, I yield back the balance of my time.
The CHAIR. The question is on the amendment offered by the gentleman
from Michigan (Mr. Huizenga).
The question was taken; and the Chair announced that the noes
appeared to have it.
Mr. HUIZENGA. Mr. Chairman, I demand a recorded vote.
The CHAIR. Pursuant to clause 6 of rule XVIII, further proceedings on
the amendment offered by the gentleman from Michigan will be postponed.
Amendment No. 2 Offered by Mr. Gottheimer
The CHAIR. It is now in order to consider amendment No. 2 printed in
part B of House Report 116-237.
Mr. GOTTHEIMER. Mr. Chairman, I have an amendment at the desk.
The CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 4, insert after line 8 the following:
(v) A consideration of unique challenges faced by retail
investors age 65 or older.
The CHAIR. Pursuant to House Resolution 629, the gentleman from New
Jersey (Mr. Gottheimer) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from New Jersey.
Mr. GOTTHEIMER. Mr. Chairman, my amendment is straightforward. It
simply requires the SEC to specifically consider the unique challenges
senior investors face as part of its overall investor testing.
Since I took office, I have been committed to helping seniors save
their hard-earned money for retirement so they can afford to stay in
New Jersey and enjoy their lives with their kids and grandkids.
Unfortunately, there are millions of senior investors across the
country who have been the victims of financial scammers, hucksters, and
snake oil salesmen who have cheated them out of their rightful
retirement.
That is why, earlier this year, I introduced the Senior Security Act,
bipartisan legislation that overwhelmingly passed out of the House to
help the SEC protect vulnerable seniors from predatory scams and
financial abuse.
This amendment is another critical step in making sure that the SEC
continues to do right by our seniors, by making sure there is explicit
consideration of senior investors as they proceed with investor
testing.
New Jersey seniors have given us so much. I will always have their
backs to ensure they have the help they need to stay in Jersey and to
protect them from those who would seek to take advantage of them.
I thank my colleague and friend, Mr. Casten, for introducing this
bill and for his commitment to protecting seniors. I thank the
chairwoman also for her excellent leadership. And I urge my colleagues
to support this commonsense amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. HUIZENGA. Mr. Chairman, I rise in opposition to the proposed
amendment.
The CHAIR. The gentleman from Michigan is recognized for 5 minutes.
Mr. HUIZENGA. Mr. Chairman, I share my colleague's concerns about the
challenges that senior investors face. I have had that with my own
parents, who, unfortunately, are no longer with us. But I was a part of
those investment discussions and decisions, and I had a brother who was
very, very involved in that and a sister who also. We all worked
together as a family, trying to figure this all out. This is a concern
that all of us had.
The author of the amendment was also the author of the Senior
Security Act, which I supported, and massive bipartisan support came
out of this House. Many people would be surprised about that, I would
bet.
But I am opposed, however, to adding to the already significant
requirements of this investor testing bill. I will note that the bill,
as drafted, would already require that the SEC do whatever testing it,
in consultation with the Office of the Investor Advocate, determines is
``appropriate for evaluating the effectiveness of retail disclosures.''
It doesn't say for young people. It doesn't say middle-income people.
It doesn't say for old people. It says for everyone. This is already
covered.
Earlier, you heard my amendment, that I was going to add to an
exemption. Well, there is already a list of exemptions, that forms are
exempted. Mine would have been in addition to that.
The purpose of my amendment and my opposition to this amendment is to
simplify, not to make it duplicative, not to make it more complicated,
not to make it more cumbersome, burdened, and bureaucratic.
As I read it, for the amendment to have any type of meaning, the
amendment suggests that testing is either: A, flawed as it currently
is; or, B, wouldn't consider seniors.
I am assuming that is not what the author is intending to do, to
question that.
I just see this as unnecessary, duplicative testing that would add to
the bill's cost and expand another layer of bureaucracy that doesn't
ultimately help those retail investors. John and Jane 401(k), those
mom-and-pop investors, whatever title you want to put to them, they
need to be our focus.
Now, there is a cottage industry of now-congressionally mandated
investor testers. I am not really interested in continuing to give them
jobs. I want to make sure that we protect those investors, but also
give them that protection in a timely manner because timeliness is part
of that protection.
Mr. Chairman, I reserve the balance of my time.
Mr. GOTTHEIMER. Mr. Chairman, I would like to add one thing. Given
the gravity of the situation with seniors in this country getting
scammed out of billions of dollars or more every year, I don't think we
can do enough.
The only thing I would urge my friend here is, anything we can do to
actually protect our seniors, we should be doing because what we are
doing now is not working.
When I go anywhere, I hear from seniors about these awful instances
and stories of what is happening to them on these calls and getting
defrauded. I think anything that we can do to help protect our seniors
and go the extra
[[Page H8218]]
mile to help them is critically important. This is a way to do it that
I think is effective, efficient, and will get the backs of our seniors,
which, to me, is the least we can do for our seniors who have given so
much to us.
Mr. Chair, I yield 2 minutes to the gentleman from Illinois (Mr.
Casten), the sponsor of the bill.
Mr. CASTEN of Illinois. Mr. Chairman, I rise in support of the
Gottheimer amendment. I would like to thank my friend, Representative
Gottheimer, for his amendment and for his longtime support for seniors
and their financial health.
This amendment rightfully highlights that the SEC should take into
account the unique circumstances that seniors face in making investment
decisions when they do their investor testing.
The financial health of seniors is critically important, and I am
delighted that this bill has the support of the AARP and the 38 million
seniors who they represent across our country. I stand with them in
making clear that effective disclosure testing is imperative for
facilitating informed decisionmaking for Americans trying to save and
invest their hard-earned money.
I urge my colleagues to vote ``yes'' on the Gottheimer amendment.
Mr. HUIZENGA. Mr. Chair, I am prepared to close. I am curious on the
remaining balance of time on both sides.
The CHAIR. The gentleman from Michigan has 2 minutes remaining. The
gentleman from New Jersey has 2 minutes remaining.
Mr. HUIZENGA. Mr. Chair, I reserve the balance of my time.
Mr. GOTTHEIMER. Mr. Chairman, I would like to add, just one more
time, to the critical importance, please.
There is a reason why I think Mr. Casten and so many others have been
driving this bipartisan legislation, and why the Senior Security Act
was bipartisan is for a pretty simple reason.
We all recognize that we have to do whatever possible to keep these
fraudsters, these hucksters, these snake oil salesmen from scamming our
seniors. It is beyond upsetting when you hear these stories of what has
happened to our moms, our dads, and so many people in our community who
have been, frankly, ripped off by these scam artists.
This legislation--not just this amendment, but the legislation--will
help protect our seniors; will help protect investors; and with my
amendment, will make sure that when people are ready to retire, they
have the nest egg they need to not just take care of themselves and
have the medicine they need but, of course, buy a gift for their
grandkid and make sure they are able to have those resources that they
spent their whole lives saving for.
Mr. Chairman, I yield back the balance of my time.
Mr. HUIZENGA. Mr. Chairman, again, my opposition to the amendment has
nothing to do with putting seniors in danger. In fact, that is why I
supported a litany of bills and a package of bills that included the
author's Senior Security Act this last April. The House is unified in
supporting seniors. What we are not unified in is supporting
bureaucracy.
By the way, the aforementioned that I had talked about, the Office of
the Investor Advocate, would you like to know where that came from? The
Dodd-Frank Act.
What this amendment is saying is the Dodd-Frank Act failed in
protecting seniors. The Dodd-Frank Act must have failed in protecting
investors because we now need to have a specific, senior-worded sort of
category that needs to be looked out after.
The law is supposed to be blind, whether you are young, old, middle
income, rich, poor, whatever it is. That protection also goes there.
My opposition, again, is not about who has been affected but what is
going to slow down that protection that those people deserve.
Reasonable cost equals access. If we continue to increase costs, it
limits the ability for people to access that protection, that advice.
That is why I rise in opposition to my friend's amendment.
Mr. Chair, I yield back the balance of my time.
The CHAIR. The question is on the amendment offered by the gentleman
from New Jersey (Mr. Gottheimer).
The question was taken; and the Chair announced that the ayes
appeared to have it.
Mr. GOTTHEIMER. Mr. Chairman, I demand a recorded vote.
The CHAIR. Pursuant to clause 6 of rule XVIII, further proceedings on
the amendment offered by the gentleman from New Jersey will be
postponed.
Amendment No. 3 Offered by Mrs. Wagner
The CHAIR. It is now in order to consider amendment No. 3 printed in
part B of House Report 116-237.
Mrs. WAGNER. Mr. Chairman, I have an amendment at the desk.
The CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 1, line 11, insert after ``regulation'' the following
``after January 21, 2021''.
Page 7, strike line 12 and all that follows through the
end.
The CHAIR. Pursuant to House Resolution 629, the gentlewoman from
Missouri (Mrs. Wagner) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentlewoman from Missouri.
Mrs. WAGNER. Mr. Chairman, I rise in support of my amendment to H.R.
1815, which would apply the bill's additional investor testing
requirements only to disclosure documents developed after January 21,
2021.
If enacted, this legislation would hinder the implementation of
important rules designed to better protect Main Street investors,
particularly, the SEC's Regulation Best Interest rule. This rule has
been in effect since September 10, 2019, but it has a compliance date
of June 30, 2020.
If further and ongoing testing were required, it would onerously roll
back and delay further--after 7 years of testing, debate, deliberation,
comment periods, litigation, it would only roll back and further delay,
Mr. Chairman, all of the SEC's efforts to better protect those retail
investors.
{time} 1330
The bottom line is that this legislation is duplicative for rules
already under consideration. The SEC has already conducted extensive
investor testing of the proposed Form CRS, a component of the
Regulation Best Interest rule. This is nothing, Mr. Chairman, but a
political ploy, rope-a-dope, more neglect in not doing the work of the
people. It does not serve those low- and middle-income investors, those
constituents of mine in Missouri's Second Congressional District.
It makes no sense to go back and conduct repetitive investor testing,
leaving broker dealers and their clients--again, there are low- and
middle-income investors--without a uniform best interest standard.
That is why I ask all of my colleagues to support this commonsense
amendment, and if it is not agreed to, to oppose the underlying bill,
H.R. 1815, that does nothing but delay and disserve the people that we
should be working hard to protect, those low- and middle-income retail
investors that are a part of our beautiful and wonderful Main Street
districts.
I reserve the balance of my time.
Ms. WATERS. Mr. Chairman, I claim the time in opposition to the
amendment.
The CHAIR. The gentlewoman from California is recognized for 5
minutes.
Ms. WATERS. Mr. Chairman, I yield myself such time as I may consume.
First, let me just say, no matter how many amendments the opposite
side can come up with, no matter how many ways they try to explain why
they are not speaking for the retail investors, the small folks, the
people with not a lot of resources, the people who depend on good
information to be disclosed to them, they can come up with all the
amendments they want, but no one thinking clearly about this will
understand why they are trying to protect the SEC, our cop on the
block, from doing everything they possibly can do to protect our
seniors and our most vulnerable people.
So H.R. 1815 seeks, again, to ensure that disclosures specifically
designed for the most vulnerable investors, including mom-and-pop
retail investors, can actually be used and understood by their intended
audiences. Isn't that a simple request in this bill, that our most
vulnerable retail investors understand what they are investing in, that
that information should be disclosed to them? I don't get the arguments
against it.
This amendment, however, directly conflicts with the scope of the
bill,
[[Page H8219]]
which covers new as well as existing disclosures. Requiring existing
disclosures to be subjected to investor testing makes good sense.
Evidence has shown many existing disclosures are not understood. The
evidence is there that tells you that we have discovered that the
disclosures are not understood by these vulnerable people. We have
information that documents that, that the investors, the small
investors, these seniors, don't understand. This bill is about helping
them to understand what they are signing on the dotted line for.
Mandatory disclosures that are unused or not understood impose
unnecessary costs on the companies making those disclosures, and
importantly, fail to inform retail investors of key risks that they
should know when making investment decisions.
However, this amendment that is before you would treat disclosures
that are put forth before the next Presidential election as perfect,
without need for further investor input through testing. Such an
exemption is inconsistent with the object and purpose of this bill.
This undermines H.R. 1815 and its value to retail investors. So I
could say this another 100 ways, they can come up with all the
amendments they want to come up with; the fact of the matter is, this
bill that is put forward by Mr. Casten is to protect the citizens who
need the information the most, because they are vulnerable. And so
having said that, I would urge my colleagues to join me in opposing
this amendment.
I reserve the balance of my time.
Mrs. WAGNER. Mr. Speaker, may I inquire how much time is remaining?
The CHAIR. The gentlewoman from Missouri has 2 minutes remaining. The
gentlewoman from California has 1\1/2\ minutes remaining.
Mrs. WAGNER. Mr. Chairman, I yield such time as he may consume to the
gentleman from Michigan (Mr. Huizenga), the ranking member of the
Investor Protection, Entrepreneurship, and Capital Markets
Subcommittee, my friend, to speak in support of the amendment and in
opposition to the underlying bill.
Mr. HUIZENGA. Mr. Chairman, I thank my colleague and friend for
yielding.
Nobody is opposed to the idea of investor testing of SEC disclosure
documents. By the way, neither is the SEC. They just proved that, as we
know, from their testing of Form CRS.
What I am opposed to, and I believe the gentlewoman is opposed to, is
a testing loop. You test and refine, test-refine, test-refine. What is
happening in between those time periods? What does it revert back to?
And we can get into a death spiral or paralysis by analysis sometimes.
Not that we don't have the best intentions and have the SEC move
forward, we just need closure.
Again, cost is a part of the access, but timeliness is part of access
for everybody as well, and I am just afraid that with what we could get
into we are going to be in this testing loop.
Mrs. WAGNER. Mr. Chairman, let me just say, I have been working on
this issue and fighting for the retail investors for all 7 of my years
here in Congress with several pieces of legislation to bring this to
fruition and to always, always hold that retail investor in the best
interest to make sure that we are taking care of them and giving them
the best advice, the best access, the best cost, but most of all that
we secure their savings and their retirement investment and do
everything we can to serve in their best interests. And that is why we
must bring this after 7 long years to a close.
It is time that we stop playing rope-a-dope with duplicative rules
that have already been under consideration and by conducting extensive
investor testing that has already been done. The SEC is the absolute
body of jurisdiction. They must harmonize with the Department of Labor,
and have, and now we have got a short, two-form page. We have got
disclosures and titles that are clear that is serving the best
interests of our constituents.
I would ask everyone to consider my amendment to H.R. 1815, and if it
is not agreed to, to oppose the underlying bill.
Mr. Chair, I yield back the balance of my time.
Ms. WATERS. Mr. Chairman, I yield such time as he may consume to the
gentleman from Illinois (Mr. Casten), the author of this bill, to
continue to tell the public why we must protect the most vulnerable in
our society.
Mr. CASTEN of Illinois. Mr. Chairman, I rise in strong opposition to
the Wagner amendment. The wealth that Americans hold in their
retirement accounts, in their 401(k)s, in their IRAs, all the places
that they hold their wealth, the fees they pay on that wealth, the
returns they earn on that wealth do not care when the law was written,
or the form was processed.
We know, we have evidence, that many of the existing disclosure
documents intended for retail investors are not well understood by
their target audience. So I would ask you: What is the cost to your
wealth of another percent a year in asset management fees? What is the
cost to you, to your wealth, of another percent a year compounding in
the growth of your wealth? Multiply that by all the Americans who make
their investments. Billions, trillions of dollars.
This amendment was offered as a way to protect people. It is
protecting people, but it isn't protecting investors. I strongly urge
my colleagues to vote ``no'' on this amendment.
Ms. WATERS. Mr. Chairman, I yield back the balance of my time.
The CHAIR. The question is on the amendment offered by the
gentlewoman from Missouri (Mrs. Wagner).
The question was taken; and the Chair announced that the noes
appeared to have it.
Mrs. WAGNER. Mr. Chairman, I demand a recorded vote.
The CHAIR. Pursuant to clause 6 of rule XVIII, further proceedings on
the amendment offered by the gentlewoman from Missouri will be
postponed.
Amendment No. 4 Offered by Mr. Casten of Illinois
The CHAIR. It is now in order to consider amendment No. 4 printed in
part B of House Report 116-237.
Mr. CASTEN of Illinois. Mr. Chairman, I rise as the designee for the
gentleman from New York (Mr. Sean Patrick Maloney) to offer amendment
No. 4.
The CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 6, insert after line 5 the following:
``(H) Retail investor defined.--For the purposes of this
paragraph, the term `retail investor' means any investor that
is not an institutional investor.''.
The CHAIR. Pursuant to House Resolution 629, the gentleman from
Illinois (Mr. Casten) and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Illinois.
Mr. CASTEN of Illinois. Mr. Chair, H.R. 1815 was drafted specifically
for SEC disclosures that are required to be delivered to or intended or
substantially likely to be materially relied on by retail investors,
but not by sophisticated institutional investors like mutual funds or
hedge funds.
Representative Sean Maloney's amendment clarifies that this bill is
intended to protect retail investors. That is a commonsense amendment,
which allows the bill to achieve our goal, which is to ensure that mom-
and-pop investors are able to use the disclosures intended specifically
for them.
I thank Representative Maloney for this amendment, and I urge my
colleagues to vote ``yes.''
I reserve the balance of my time.
Mr. HUIZENGA. Mr. Chairman, I claim the time in opposition to the
amendment.
The CHAIR. The gentleman from Michigan is recognized for 5 minutes.
Mr. HUIZENGA. Mr. Chairman, this amendment simply attempts to define
an unclear and undefined term by making reference to another unclear
and undefined term.
For context, let me be clear on where this comes from. The Securities
and Exchange Act of 1934 does not define either the term ``retail
investor'' or ``institutional investor.'' This amendment pretends to
add clarity, but arguably further muddies an already confusing bill by
adding a second new undefined term.
In fact, there are some who believe that the amendment might actually
expand the bill's reach, because the bill, as amended, could be
interpreted to apply to any document designed to reach anybody other
than that ``institutional investor.''
[[Page H8220]]
So we have a problem here, Mr. Chairman. We have undefined terms. We
have muddied, not clear goals and objectives here, and so, I would
rhetorically ask, what is an institutional investor? Is it a small-town
investment manager who is a sole practitioner, but has set up their own
business and now is, thus, an institution? Does the business require
multiple employees? Does it require a large number of employees? I, for
one, am not sure. Does it have a dollar amount attached to it? It could
be one person, a very wealthy person investing millions or a whole
bunch of smaller investors, who don't have millions, banding together
and now they are suddenly institutional investors.
So let's just not make H.R. 1815 more confusing than it already is. I
urge my colleagues to oppose this amendment, and I reserve the balance
of my time.
{time} 1345
Mr. CASTEN of Illinois. Mr. Chair, I encourage my colleagues to vote
for the amendment, and I yield back the balance of my time.
Mr. HUIZENGA. Mr. Chairman, the Securities Exchange Act of 1934 has
been a living, breathing document; but in those subsequent years from
1934, there has never been a definition of either ``retail investor''
or ``institutional investor,'' and to hang an amendment on those terms
which are undefined legally is simply a mistake.
So, Mr. Chair, I do not support this unnecessarily confusing
amendment, and I urge a ``no'' vote on this amendment.
Mr. Chair, I yield back the balance of my time.
The CHAIR. The question is on the amendment offered by the gentleman
from Illinois (Mr. Casten).
The amendment was agreed to.
Announcement by the Chair
The CHAIR. Pursuant to clause 6 of rule XVIII, proceedings will now
resume on those amendments printed in part B of House Report 116-237 on
which further proceedings were postponed, in the following order:
Amendment No. 1 by Mr. Huizenga of Michigan.
Amendment No. 2 by Mr. Gottheimer of New Jersey.
Amendment No. 3 by Mrs. Wagner of Missouri.
The Chair will reduce to 2 minutes the minimum time for any
electronic vote after the first vote in this series.
Amendment No. 1 Offered by Mr. Huizenga
The CHAIR. The unfinished business is the demand for a recorded vote
on the amendment offered by the gentleman from Michigan (Mr. Huizenga)
on which further proceedings were postponed and on which the noes
prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The CHAIR. A recorded vote has been demanded.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 188,
noes 229, not voting 20, as follows:
[Roll No. 561]
AYES--188
Abraham
Aderholt
Allen
Amodei
Armstrong
Arrington
Bacon
Baird
Balderson
Banks
Barr
Bergman
Biggs
Bilirakis
Bishop (UT)
Bost
Brady
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Budd
Burchett
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Cheney
Cline
Cloud
Cole
Collins (GA)
Comer
Conaway
Cook
Crawford
Crenshaw
Curtis
Davidson (OH)
Davis, Rodney
DesJarlais
Diaz-Balart
Duncan
Dunn
Emmer
Estes
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foxx (NC)
Fulcher
Gaetz
Gallagher
Gianforte
Gibbs
Gonzalez (OH)
Gonzalez-Colon (PR)
Gosar
Graves (GA)
Graves (LA)
Graves (MO)
Green (TN)
Griffith
Grothman
Guest
Guthrie
Hagedorn
Harris
Hartzler
Hern, Kevin
Herrera Beutler
Hice (GA)
Higgins (LA)
Hill (AR)
Holding
Hollingsworth
Horn, Kendra S.
Hudson
Huizenga
Hunter
Hurd (TX)
Johnson (LA)
Johnson (OH)
Johnson (SD)
Jordan
Joyce (OH)
Joyce (PA)
Katko
Keller
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Kustoff (TN)
LaHood
LaMalfa
Lamborn
Latta
Long
Lucas
Luetkemeyer
Marchant
Marshall
Massie
Mast
McCarthy
McCaul
McClintock
McHenry
McKinley
Meadows
Meuser
Miller
Mitchell
Moolenaar
Mooney (WV)
Mullin
Murphy (NC)
Newhouse
Norman
Nunes
Olson
Palazzo
Palmer
Pence
Perry
Posey
Reed
Reschenthaler
Rice (SC)
Riggleman
Roby
Rodgers (WA)
Roe, David P.
Rogers (AL)
Rogers (KY)
Rooney (FL)
Rose, John W.
Rouzer
Roy
Rutherford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Shimkus
Simpson
Slotkin
Smith (MO)
Smith (NE)
Smith (NJ)
Smucker
Spano
Stauber
Stefanik
Steil
Steube
Stewart
Stivers
Taylor
Thompson (PA)
Thornberry
Timmons
Tipton
Turner
Upton
Wagner
Walberg
Walden
Walker
Walorski
Waltz
Watkins
Webster (FL)
Wenstrup
Westerman
Wilson (SC)
Wittman
Womack
Woodall
Young
Zeldin
NOES--229
Adams
Aguilar
Allred
Amash
Axne
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brindisi
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Carbajal
Cardenas
Carson (IN)
Cartwright
Case
Casten (IL)
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Cisneros
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Cooper
Correa
Costa
Courtney
Cox (CA)
Craig
Crist
Crow
Cuellar
Cunningham
Davids (KS)
Davis (CA)
Davis, Danny K.
Dean
DeFazio
DeGette
DeLauro
DelBene
Delgado
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Engel
Escobar
Eshoo
Espaillat
Evans
Finkenauer
Fletcher
Foster
Frankel
Fudge
Gabbard
Gallego
Garamendi
Garcia (IL)
Garcia (TX)
Golden
Gomez
Gonzalez (TX)
Gottheimer
Green, Al (TX)
Grijalva
Haaland
Harder (CA)
Hastings
Hayes
Heck
Higgins (NY)
Hill (CA)
Himes
Horsford
Houlahan
Hoyer
Huffman
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson (TX)
Kaptur
Keating
Kelly (IL)
Kennedy
Khanna
Kildee
Kilmer
Kim
Kind
Kirkpatrick
Krishnamoorthi
Kuster (NH)
Lamb
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lee (CA)
Lee (NV)
Levin (CA)
Levin (MI)
Lewis
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan
Luria
Lynch
Malinowski
Maloney, Carolyn B.
Maloney, Sean
Matsui
McAdams
McBath
McCollum
McGovern
McNerney
Meeks
Meng
Moore
Morelle
Moulton
Mucarsel-Powell
Murphy (FL)
Nadler
Napolitano
Neal
Neguse
Norcross
Norton
O'Halleran
Omar
Pallone
Panetta
Pappas
Pascrell
Payne
Perlmutter
Peters
Peterson
Phillips
Pingree
Plaskett
Pocan
Porter
Pressley
Price (NC)
Quigley
Raskin
Rice (NY)
Richmond
Rose (NY)
Rouda
Roybal-Allard
Ruiz
Ruppersberger
Sablan
Sanchez
Sarbanes
Scanlon
Schakowsky
Schiff
Schneider
Schrader
Schrier
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shalala
Sherman
Sherrill
Sires
Smith (WA)
Soto
Spanberger
Speier
Stanton
Stevens
Suozzi
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tlaib
Tonko
Torres (CA)
Torres Small (NM)
Trahan
Trone
Underwood
Van Drew
Vargas
Veasey
Vela
Velazquez
Visclosky
Wasserman Schultz
Waters
Watson Coleman
Welch
Wexton
Wild
Yarmuth
NOT VOTING--20
Babin
Bishop (NC)
Gohmert
Gooden
Granger
Lawson (FL)
Lesko
Loudermilk
McEachin
Ocasio-Cortez
Radewagen
Ratcliffe
Rush
Ryan
San Nicolas
Weber (TX)
Williams
Wilson (FL)
Wright
Yoho
{time} 1415
Messrs. PANETTA, O'HALLERAN, ENGEL, and JOHNSON of Georgia changed
their vote from ``aye'' to ``no.''
Messrs. CRAWFORD, BILIRAKIS, BURCHETT, and BROOKS of Alabama changed
their vote from ``no'' to ``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
Amendment No. 2 Offered by Mr. Gottheimer
The Acting CHAIR (Ms. Pingree). The unfinished business is the demand
for a recorded vote on the amendment offered by the gentleman from New
Jersey (Mr. Gottheimer) on which further proceedings were postponed and
on which the ayes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIR. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIR. This will be a 2-minute vote.
[[Page H8221]]
The vote was taken by electronic device, and there were--ayes 240,
noes 178, not voting 19, as follows:
[Roll No. 562]
AYES--240
Adams
Aguilar
Allred
Axne
Bacon
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brindisi
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Carbajal
Carson (IN)
Cartwright
Case
Casten (IL)
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Cisneros
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Cooper
Correa
Costa
Courtney
Cox (CA)
Craig
Crist
Crow
Cuellar
Cunningham
Davids (KS)
Davis (CA)
Davis, Danny K.
Dean
DeFazio
DeGette
DeLauro
DelBene
Delgado
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Engel
Escobar
Eshoo
Espaillat
Evans
Finkenauer
Fitzpatrick
Fletcher
Foster
Frankel
Fudge
Gallego
Garamendi
Garcia (IL)
Garcia (TX)
Golden
Gomez
Gonzalez (TX)
Gottheimer
Green, Al (TX)
Haaland
Harder (CA)
Hastings
Hayes
Heck
Higgins (NY)
Hill (CA)
Himes
Horn, Kendra S.
Horsford
Houlahan
Hoyer
Huffman
Hurd (TX)
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson (TX)
Kaptur
Katko
Keating
Kelly (IL)
Kennedy
Khanna
Kildee
Kilmer
Kim
Kind
Kirkpatrick
Krishnamoorthi
Kuster (NH)
Lamb
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lee (CA)
Lee (NV)
Levin (CA)
Levin (MI)
Lewis
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan
Luria
Lynch
Malinowski
Maloney, Carolyn B.
Maloney, Sean
Mast
Matsui
McAdams
McBath
McCollum
McGovern
McNerney
Meeks
Meng
Moore
Morelle
Moulton
Mucarsel-Powell
Murphy (FL)
Nadler
Napolitano
Neal
Neguse
Norcross
Norton
O'Halleran
Ocasio-Cortez
Omar
Pallone
Panetta
Pappas
Pascrell
Payne
Perlmutter
Peters
Peterson
Phillips
Pingree
Plaskett
Pocan
Porter
Posey
Pressley
Price (NC)
Quigley
Raskin
Reed
Rice (NY)
Richmond
Rose (NY)
Rouda
Roybal-Allard
Ruiz
Ruppersberger
Sablan
Sanchez
Sarbanes
Scanlon
Schakowsky
Schiff
Schneider
Schrader
Schrier
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shalala
Sherman
Sherrill
Sires
Slotkin
Smith (NJ)
Smith (WA)
Soto
Spanberger
Speier
Stanton
Stefanik
Stevens
Suozzi
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tlaib
Tonko
Torres (CA)
Torres Small (NM)
Trahan
Trone
Underwood
Van Drew
Vargas
Veasey
Vela
Velazquez
Visclosky
Wasserman Schultz
Waters
Watson Coleman
Webster (FL)
Welch
Wexton
Wild
Wilson (FL)
Yarmuth
Young
NOES--178
Abraham
Aderholt
Allen
Amash
Amodei
Armstrong
Arrington
Baird
Balderson
Banks
Barr
Bergman
Biggs
Bilirakis
Bishop (UT)
Bost
Brady
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Budd
Burchett
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Cheney
Cline
Cloud
Cole
Collins (GA)
Comer
Conaway
Cook
Crawford
Crenshaw
Curtis
Davidson (OH)
Davis, Rodney
DesJarlais
Diaz-Balart
Duncan
Dunn
Emmer
Estes
Ferguson
Fleischmann
Flores
Fortenberry
Foxx (NC)
Fulcher
Gaetz
Gallagher
Gianforte
Gibbs
Gonzalez (OH)
Gonzalez-Colon (PR)
Gosar
Graves (GA)
Graves (LA)
Graves (MO)
Green (TN)
Griffith
Grijalva
Grothman
Guest
Guthrie
Hagedorn
Harris
Hartzler
Hern, Kevin
Herrera Beutler
Hice (GA)
Higgins (LA)
Hill (AR)
Holding
Hollingsworth
Hudson
Huizenga
Hunter
Johnson (LA)
Johnson (OH)
Johnson (SD)
Jordan
Joyce (OH)
Joyce (PA)
Keller
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Kustoff (TN)
LaHood
LaMalfa
Lamborn
Latta
Lesko
Long
Lucas
Luetkemeyer
Marchant
Marshall
Massie
McCarthy
McCaul
McClintock
McHenry
McKinley
Meadows
Meuser
Miller
Mitchell
Moolenaar
Mooney (WV)
Mullin
Murphy (NC)
Newhouse
Norman
Nunes
Olson
Palazzo
Palmer
Pence
Perry
Reschenthaler
Rice (SC)
Riggleman
Roby
Rodgers (WA)
Roe, David P.
Rogers (AL)
Rogers (KY)
Rooney (FL)
Rose, John W.
Rouzer
Roy
Rutherford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Shimkus
Simpson
Smith (MO)
Smith (NE)
Smucker
Spano
Stauber
Steil
Steube
Stewart
Stivers
Taylor
Thompson (PA)
Thornberry
Timmons
Tipton
Turner
Upton
Wagner
Walberg
Walden
Walker
Walorski
Waltz
Watkins
Wenstrup
Westerman
Wilson (SC)
Wittman
Womack
Woodall
Zeldin
NOT VOTING--19
Babin
Bishop (NC)
Cardenas
Gabbard
Gohmert
Gooden
Granger
Lawson (FL)
Loudermilk
McEachin
Radewagen
Ratcliffe
Rush
Ryan
San Nicolas
Weber (TX)
Williams
Wright
Yoho
Announcement by the Acting Chair
The Acting CHAIR (during the vote). There is 1 minute remaining.
{time} 1422
So the amendment was agreed to.
The result of the vote was announced as above recorded.
Amendment No. 3 Offered by Mrs. Wagner
The Acting CHAIR. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentlewoman from Missouri
(Mrs. Wagner) on which further proceedings were postponed and on which
the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIR. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIR. This will be a 2-minute vote.
The vote was taken by electronic device, and there were--ayes 188,
noes 230, not voting 19, as follows:
[Roll No. 563]
AYES--188
Abraham
Aderholt
Allen
Amodei
Armstrong
Arrington
Bacon
Baird
Balderson
Banks
Barr
Bergman
Biggs
Bilirakis
Bishop (UT)
Bost
Brady
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Budd
Burchett
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Cheney
Cline
Cloud
Cole
Collins (GA)
Comer
Conaway
Cook
Crawford
Crenshaw
Curtis
Davidson (OH)
Davis, Rodney
DesJarlais
Diaz-Balart
Duncan
Dunn
Emmer
Estes
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foxx (NC)
Fulcher
Gaetz
Gallagher
Gianforte
Gibbs
Gonzalez (OH)
Gonzalez-Colon (PR)
Gosar
Graves (GA)
Graves (LA)
Graves (MO)
Green (TN)
Griffith
Grothman
Guest
Guthrie
Hagedorn
Harris
Hartzler
Hern, Kevin
Herrera Beutler
Hice (GA)
Higgins (LA)
Hill (AR)
Holding
Hollingsworth
Hudson
Huizenga
Hunter
Hurd (TX)
Johnson (GA)
Johnson (LA)
Johnson (OH)
Johnson (SD)
Jordan
Joyce (OH)
Joyce (PA)
Katko
Keller
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Kustoff (TN)
LaHood
LaMalfa
Lamborn
Latta
Lesko
Long
Lucas
Luetkemeyer
Marchant
Marshall
Massie
Mast
McCarthy
McCaul
McClintock
McHenry
McKinley
Meadows
Meuser
Miller
Mitchell
Moolenaar
Mooney (WV)
Mullin
Murphy (NC)
Newhouse
Norman
Nunes
Olson
Palazzo
Palmer
Pence
Perry
Posey
Reed
Reschenthaler
Rice (SC)
Riggleman
Roby
Rodgers (WA)
Roe, David P.
Rogers (AL)
Rogers (KY)
Rooney (FL)
Rose, John W.
Rouzer
Roy
Rutherford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Shimkus
Simpson
Smith (MO)
Smith (NE)
Smith (NJ)
Smucker
Spano
Stauber
Stefanik
Steil
Steube
Stewart
Stivers
Taylor
Thompson (PA)
Thornberry
Timmons
Tipton
Turner
Upton
Wagner
Walberg
Walden
Walker
Walorski
Waltz
Watkins
Webster (FL)
Wenstrup
Westerman
Wilson (SC)
Wittman
Womack
Woodall
Young
Zeldin
NOES--230
Adams
Aguilar
Allred
Amash
Axne
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brindisi
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Carbajal
Carson (IN)
Cartwright
Case
Casten (IL)
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Cisneros
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Cooper
Correa
Costa
Courtney
Cox (CA)
Craig
Crist
Crow
Cuellar
Cunningham
Davids (KS)
Davis (CA)
Davis, Danny K.
Dean
DeFazio
DeGette
DeLauro
DelBene
Delgado
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Engel
Escobar
Eshoo
Espaillat
Evans
Finkenauer
Fletcher
Foster
Frankel
Fudge
Gallego
Garamendi
Garcia (IL)
Garcia (TX)
Golden
Gomez
Gonzalez (TX)
Gottheimer
Green, Al (TX)
Haaland
Harder (CA)
Hastings
Hayes
Heck
Higgins (NY)
Hill (CA)
Himes
Horn, Kendra S.
Horsford
[[Page H8222]]
Houlahan
Hoyer
Huffman
Jackson Lee
Jayapal
Jeffries
Johnson (TX)
Kaptur
Keating
Kelly (IL)
Kennedy
Khanna
Kildee
Kilmer
Kim
Kind
Kirkpatrick
Krishnamoorthi
Kuster (NH)
Lamb
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lee (CA)
Lee (NV)
Levin (CA)
Levin (MI)
Lewis
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan
Luria
Lynch
Malinowski
Maloney, Carolyn B.
Maloney, Sean
Matsui
McAdams
McBath
McCollum
McGovern
McNerney
Meeks
Meng
Moore
Morelle
Moulton
Mucarsel-Powell
Murphy (FL)
Nadler
Napolitano
Neal
Neguse
Norcross
Norton
O'Halleran
Ocasio-Cortez
Omar
Pallone
Panetta
Pappas
Pascrell
Payne
Perlmutter
Peters
Peterson
Phillips
Pingree
Plaskett
Pocan
Porter
Pressley
Price (NC)
Quigley
Raskin
Rice (NY)
Richmond
Rose (NY)
Rouda
Roybal-Allard
Ruiz
Ruppersberger
Rush
Sablan
Sanchez
Sarbanes
Scanlon
Schakowsky
Schiff
Schneider
Schrader
Schrier
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shalala
Sherman
Sherrill
Sires
Slotkin
Smith (WA)
Soto
Spanberger
Speier
Stanton
Stevens
Suozzi
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tlaib
Tonko
Torres (CA)
Torres Small (NM)
Trahan
Trone
Underwood
Van Drew
Vargas
Veasey
Vela
Velazquez
Visclosky
Wasserman Schultz
Waters
Watson Coleman
Welch
Wexton
Wild
Wilson (FL)
Yarmuth
NOT VOTING--19
Babin
Bishop (NC)
Cardenas
Gabbard
Gohmert
Gooden
Granger
Grijalva
Lawson (FL)
Loudermilk
McEachin
Radewagen
Ratcliffe
Ryan
San Nicolas
Weber (TX)
Williams
Wright
Yoho
{time} 1428
Mr. BUCHANAN changed his vote from ``no'' to ``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
The Acting CHAIR (Mr. Richmond). There being no further amendments
under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Ms.
Pingree) having assumed the chair, Mr. Richmond, Acting Chair of the
Committee of the Whole House on the state of the Union, reported that
that Committee, having had under consideration the bill (H.R. 1815) to
require the Securities and Exchange Commission, when developing rules
and regulations about disclosures to retail investors, to conduct
investor testing, including a survey and interviews of retail
investors, and for other purposes, and, pursuant to House Resolution
629, he reported the bill, as amended by that resolution, back to the
House with sundry further amendments adopted in the Committee of the
Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on any amendment reported from the
Committee of the Whole? If not, the Chair will put them en gros.
The amendments were 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.
(By unanimous consent, Mr. Hoyer was allowed to speak out of order.)
Mourning the Passing of the Honorable Elijah Cummings
Mr. HOYER. Today, Mr. Speaker, is a sad day. It is a sad day for us;
it is a sad day for this institution; and it is a sad day for America.
We have lost a wonderful human being, a good and decent human being, a
human being who made a difference for this institution, for all of us
who knew him and were his friend, for his constituents, and for all
Americans. All of us in this House lost a respected colleague. Many of
us lost a dear, longtime, and good friend.
He came in 1996 to this body, and every time I ran for a leadership
position, my friend Elijah Cummings nominated me. The passing this
morning of Chairman Elijah Cummings of the Committee on Oversight and
Reform was a painful shock to all who have served with him, more, of
course, to his family, Dr. Rockeymoore Cummings, his wife, and his
three children.
Elijah was a prophet of God whose name means ``my God is the Lord.''
Elijah Cummings was true to his name.
He was a leader for our country and for our State of Maryland, and we
have the Members, including our favorite daughter. He was a leader for
our State. He was a leader, like our brother John Lewis, for
principle, for comity, and for civility.
He was a quiet man who did not seek the limelight, but he was not
afraid to step out into the arena and fight hard for the causes in
which he believed strongly. As all of us know, those causes were
justice, equality, opportunity, civil rights, education, and children.
He liked to say that children are the message we send to a future that
we will never see. His parents sent Elijah into the future, and how
much better the future was.
He was beloved by his constituents, both those in the city of
Baltimore and those in its suburbs. Indeed, Elijah was probably better
loved in my district than I am. Most of my colleagues will understand
that, of course.
He worked hard, even in his final days. The Speaker is going to
speak, and I am sure she will say something about the telephone call
she had with him just days ago, doing the people's business. As his
health faltered, his passion for his work did not.
In the days ahead, we will have many opportunities, of course, to
speak about our friend, Elijah, about his passion for service, his many
contributions to Maryland and our Nation, and his deep convictions as a
moral leader and a man of decency and love for his neighbor.
Some of you recall Elijah at the time of great distress in
Baltimore--anger, outbursts. Elijah walked among them as a man of peace
and, like no other person in our State, brought peace where there was
no peace. We will have opportunities to remember that. And we have a
chance to reflect on the love he had for his wife, Maya, and his three
children.
Today, in remembering Elijah Cummings, we have a chance to promote
the vision he held of the people's House coming together in a spirit of
unity and purpose. Sadly, today, that purpose is to mourn his passing
and remember a dear friend who will no longer be with us as we continue
his work to which he gave his all. But, hopefully, his example will be
with us.
Elijah used to say, when he saw conflict and confrontation, when he
saw things he thought were not up to the standards we had set for our
country and for ourselves because of our faith, our Constitution, and
our Declaration, he would say, ``We are better than that.''
As we human beings do things, from time to time, that are not kind to
one another, not thoughtful, and not respectful to one another, let us
say to ourselves: We are better than that. That is what Elijah said to
himself.
Mr. Speaker, in that spirit of unity, I will be yielding shortly to
the Republican leader to share his reflections. But first, as I
referred to her as Maryland's favorite daughter, I am honored to yield
to the Speaker of the House, Nancy Pelosi D'Alesandro. Now she would
say Nancy D'Alesandro Pelosi. I understand that. We are so proud of our
Speaker.
Mr. Speaker, I yield to the gentlewoman from California (Ms. Pelosi).
Ms. PELOSI. Mr. Speaker, it is a very disconcerting day for so many
of us here.
I thank Mr. Hoyer for bringing us together to mourn the loss of our
dear friend and colleague, Elijah Cummings. I thank my friend for his
beautiful statement calling forth so many of the beautiful attributes
of Elijah Cummings.
As the gentleman spoke, I was reminded of how he always was a calmer
of the waters. No matter how rough and tumble things would be, he would
always just calm the waters and reach out, whether it was across the
aisle, across the issue, across the Capitol, or down Pennsylvania
Avenue.
I know that the people of Baltimore, the U.S. Congress, and America
have lost the voice of the unsurpassed moral clarity and truth of our
beloved Mr. Chairman, Elijah Cummings. I am personally devastated by
his passing, as I know many of us are.
We have flowers in his place where he sat, where we all sought
counsel, learned more, or calmed down and were lifted up by the wisdom,
the graciousness, and the goodness of Elijah Cummings.
[[Page H8223]]
In the House, Elijah was the North Star. He was a leader of towering
character and integrity whose stirring voice and steadfast values
pushed the Congress and the country to give rise to a higher purpose of
why we are here.
His principled leadership as the chair of the Committee on Oversight
and Reform was a perfect testament to his commitment to restoring
honesty and honor to government, and he leaves a powerful legacy for
years to come.
People think of him as that chairman but meaning so much to him was
his role as a senior member of the Transportation and Infrastructure
Committee. He was always fighting for his district, for his State of
Maryland, and for the country. He was a powerful voice for building the
infrastructure of America and for creating good-paying jobs. He was a
working-class guy in terms of whom he was here to serve.
I was very proud of him as a member of the U.S. Naval Academy Board
of Visitors. He took great pride in the Naval Academy, his role on the
board, and Maryland's role in our national security. I know we have
some Naval Academy graduates here, and that was a source of great
pride. He said that you have taken me to a new level of decisionmaking,
in terms of national security.
Chairman Cummings' story was the story of America. He was a
sharecropper's son who dedicated his life to advancing justice,
respecting human dignity, and--as the gentleman from Maryland said--
ending discrimination.
He believed in the promise of America because he had lived it. He
dedicated his life to advancing those values that safeguard our
Republic: justice, equality, liberty, and fairness.
As our distinguished leader, Mr. Hoyer, said earlier, we were always
listening to Elijah. These flowers remind me of it because of the
growth and renewal that are there. He said, ``Our children are the
living messages we send to a future we will never see.''
He also wanted to build a future that was worthy of the aspirations
of our children. He always wanted to make sure that they took with them
the values that nurtured him and that he was promoting in his public
service.
Earlier this year, Chairman Cummings asked us: ``When we are dancing
with the angels, the question will be asked: In 2019, what did we do to
make sure we kept our democracy intact?''
He is now with the angels, out of pain.
And Maya said this morning, he fought the fight right up until the
end. And those of us who communicated with him--I didn't know he was
this close. I thought he was coming back in a few weeks.
But our Members, as I stated to our Republican colleagues, we had a
conference call on Friday, this past Friday, not a full week ago, in
which Elijah, as always, was passionate about what he believed in,
dispassionate about how he conveyed a plan for how we would go forward
with fairness, with justice, with dignity, worthy of the oath of office
that we take to the Constitution, worthy of the vision of our Founders
establishing this institution, and worthy, again, of the aspirations of
our children, his words: messengers to a future we will never see.
His leadership made a difference in strengthening our democracy.
Again, during difficult times, let us draw strength from his righteous
words that the leader has been reminding us of all day: ``We are better
than this. We are better than this.''
In the Congress, we will miss his wisdom, his dignity, the brilliance
of his mind, the kindness of his heart, the friendship that meant so
much to us and that we could all call upon.
In Baltimore, we will miss him as a champion.
May it be a comfort to his wife, Maya, to whom I conveyed the good
wishes of the Congress this morning, may it be a comfort to Maya, to
his three children and Chairman Cummings' entire family and, I want to
add to that, his dedicated and devoted staff, in every capacity--as a
Member, as a chairman, as a member of the committee, whom he just
treated with such fairness and respect, his staff--may it be a comfort
to them all that so many mourn their loss and are praying for them at
this sad time and that he will always be inside of our hearts as we
make decisions about our responsibilities and how we will be
accountable when we are dancing with the angels.
God bless you, darling Elijah. We all love you. We miss you, but we
will never forget you, and your legacy will live in the Congress of the
United States in this House of Representatives.
Mr. HOYER. Mr. Speaker, I thank the gentlewoman from California (Ms.
Pelosi), Speaker of the House, for her remarks.
I know Elijah felt very strongly about her and his support of her and
her leadership and how proud he was that she was from the city of
Baltimore that he loved so greatly.
Mr. Speaker, I yield to the gentleman from California (Mr. McCarthy),
my friend, the minority leader, and another good friend of Elijah's.
Mr. McCARTHY. Mr. Speaker, I thank my friend for yielding. I thank
him for his words, and I thank the Speaker.
We lost more than just a Member of Congress when we lost Elijah
Cummings. As the Speaker spoke of his life, she talked about him
bringing calmness. I want you to reflect for one moment, when have you
ever served in this body that we have been this calm and this quiet and
this reflective? Elijah's work is still good with us right now.
Chairman Cummings had enormous presence. As many times he would be an
adversary, he was a respected adversary because he was tough. He had
such a presence on this side of the aisle and an impression that, when
we would sit inside our steering committee--and maybe I am breaking the
rule; we are never supposed to talk about what we say in there. When we
would select a chair or a ranking member, this is the one committee we
weighed who we went against.
And every time we spoke of selecting an individual who can rise to
the occasion, to be in debate with him, we would look for somebody who
was strong. And every time someone was selected, they would come back
to be a very best friend of Elijah Cummings.
It is a tough committee. It is a committee of accountability. It is a
committee of debate. I can't tell you how many friends would call me
and be in fear because they got a letter from Cummings. But he was a
man of fairness.
You will know this because, in committees, at times, you have these
debates. But when you are sitting as a chair and ranking member, what
we would talk about is Elijah would share with us the life lessons, you
know what he would say privately to the chair or the ranking member on
the other side, what he would say to Jim Jordan, what he would say to
Trey Gowdy.
Trey shared with me today, he never stopped talking, even though he
left Congress.
Jim Jordan shared with me today that he was talking to Elijah just
last week about committee business.
Trey talked about a story.
Trey was pretty tough on one person. And Trey is good; that
prosecutor in him can get to the point. Elijah turned to him and said:
She is not a government employee. She has a family, and she has
children. You can be a little softer next time.
And that hit on his heart.
And what I fear in the world today, that when they look at us, they
get this persona through cameras and social media, but it doesn't show
our character. We are the only ones who get the window into one
another's character of how we act. We are the ones who should share the
message.
Because he was so strong in his beliefs, I am afraid some people in
America won't know what type of character he actually had, not as a
Member of Congress and not as a political figure, but as a person,
because that is how I knew Elijah. He was a fighter. So many times in
his life people told him no, and he would say, yes, he could.
He was a leader, but not in the sense that America probably thinks as
a Member of Congress. His entire life he wanted to overturn racial
injustice.
A Member shared with me the first time he got to know him was on a
codel down in Mexico. Most of the people on the bus were asleep because
it was one of those long trips, and Elijah sat and talked to him. This
Member was from the South, and he talked about how his grandparents
were there, but his grandparents moved him away
[[Page H8224]]
because they felt he would have a better chance just because of the
color of his skin, that he would get a better education.
Elijah was not upset by that. He felt this country gave him the
opportunity. That is why he wanted to serve.
So, all those who are here, it was an honor, a fortune, and a
privilege to know him. If you are a freshman, I hope you took a few
moments with him, because it didn't matter if you were a chair or a
ranking member or if you were a Republican or a Democrat, he would
spend that time with you.
I feel I am better for having known him, and I want you to know, from
this side of the aisle, no matter how hard of a debate we were in, I
have only heard respect for how he carried out the business. We
respected him because he was good. We respected him because he beat us
many times. We respected him because of what he fought for, he believed
in.
Our deepest prayers go to Maya, because in those life lessons and in
that window that we get to see, it is not the easiest to have a family
in these jobs. We have a lot of things pulled on us, but we knew where
his heart stood, where his family mattered, and what he continued to
believe in.
So, yes, today we lost more than just a Member, but I hope as the
days progress, as the times change and our debate gets heated again,
that we reflect on this moment of calmness, reflect on this moment of
thinking of one another, and we reflect on the idea that, yes,
television may give us a different persona of who we are, but, yes, you
and I get to see the window of the character within each and every one
of us. I think that is what Elijah would want us to do.
So in his honor, let's find that tomorrow will be better than today
and that this calmness will last longer than the next vote.
Mr. HOYER. Mr. Speaker, I thank the gentleman for his remarks.
Mr. Speaker, in that spirit, I will ask for a moment of silence. But
before I do that, let me mirror the remarks of the leader on the other
side of the aisle.
A moment of silence will not be enough to respect the life of Elijah
Cummings. What will be enough is we follow his example for a lifetime--
not for a moment, but for a lifetime--if we give one another the
respect that he would give to us, if we give one another the
consideration that the leader indicated that he gave to him.
So, Mr. Speaker, I ask that we stand for a moment of silence and a
lifetime of following an example.
The SPEAKER pro tempore (Mr. Clyburn). The Chair asks that all
Members please rise for a moment of silence in remembrance of our good
friend and colleague, the Honorable Chairman Elijah E. Cummings.
The SPEAKER pro tempore (Ms. Pingree). 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. STEIL. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--yeas 229,
nays 186, not voting 16, as follows:
[Roll No. 564]
YEAS--229
Adams
Aguilar
Allred
Axne
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brindisi
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Carbajal
Cardenas
Carson (IN)
Cartwright
Case
Casten (IL)
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Cisneros
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Cooper
Correa
Costa
Courtney
Cox (CA)
Craig
Crist
Crow
Cuellar
Cunningham
Davids (KS)
Davis (CA)
Davis, Danny K.
Dean
DeFazio
DeGette
DelBene
Delgado
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Engel
Escobar
Eshoo
Espaillat
Evans
Finkenauer
Fletcher
Foster
Frankel
Fudge
Gabbard
Gallego
Garamendi
Garcia (IL)
Garcia (TX)
Golden
Gomez
Gonzalez (TX)
Gottheimer
Green, Al (TX)
Grijalva
Haaland
Harder (CA)
Hastings
Hayes
Heck
Higgins (NY)
Hill (CA)
Himes
Horn, Kendra S.
Horsford
Houlahan
Hoyer
Huffman
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson (TX)
Kaptur
Keating
Kelly (IL)
Kennedy
Khanna
Kildee
Kilmer
Kim
Kind
Kirkpatrick
Krishnamoorthi
Kuster (NH)
Lamb
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lee (CA)
Lee (NV)
Levin (CA)
Levin (MI)
Lewis
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan
Luria
Lynch
Malinowski
Maloney, Carolyn B.
Maloney, Sean
Matsui
McAdams
McBath
McCollum
McGovern
McNerney
Meeks
Meng
Moore
Morelle
Moulton
Mucarsel-Powell
Murphy (FL)
Nadler
Napolitano
Neal
Neguse
Norcross
O'Halleran
Ocasio-Cortez
Omar
Pallone
Panetta
Pappas
Pascrell
Payne
Perlmutter
Peters
Peterson
Phillips
Pingree
Pocan
Porter
Pressley
Price (NC)
Quigley
Raskin
Rice (NY)
Richmond
Rose (NY)
Rouda
Roybal-Allard
Ruiz
Ruppersberger
Rush
Sanchez
Sarbanes
Scanlon
Schakowsky
Schiff
Schneider
Schrader
Schrier
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shalala
Sherman
Sherrill
Sires
Slotkin
Smith (WA)
Soto
Spanberger
Speier
Stanton
Stevens
Suozzi
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tlaib
Tonko
Torres (CA)
Torres Small (NM)
Trahan
Trone
Underwood
Van Drew
Vargas
Veasey
Vela
Velazquez
Visclosky
Wasserman Schultz
Waters
Watson Coleman
Welch
Wexton
Wild
Wilson (FL)
Yarmuth
NAYS--186
Abraham
Aderholt
Allen
Amash
Amodei
Armstrong
Arrington
Bacon
Baird
Balderson
Banks
Barr
Bergman
Biggs
Bilirakis
Bishop (UT)
Bost
Brady
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Budd
Burchett
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Cheney
Cline
Cloud
Cole
Collins (GA)
Comer
Conaway
Cook
Crawford
Crenshaw
Curtis
Davidson (OH)
Davis, Rodney
DesJarlais
Diaz-Balart
Duncan
Dunn
Emmer
Estes
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foxx (NC)
Fulcher
Gaetz
Gallagher
Gianforte
Gibbs
Gonzalez (OH)
Gosar
Graves (GA)
Graves (LA)
Graves (MO)
Green (TN)
Griffith
Grothman
Guest
Guthrie
Hagedorn
Harris
Hartzler
Hern, Kevin
Herrera Beutler
Hice (GA)
Higgins (LA)
Hill (AR)
Holding
Hollingsworth
Hudson
Huizenga
Hunter
Hurd (TX)
Johnson (LA)
Johnson (OH)
Johnson (SD)
Jordan
Joyce (OH)
Joyce (PA)
Katko
Keller
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Kustoff (TN)
LaHood
LaMalfa
Lamborn
Latta
Lesko
Long
Lucas
Luetkemeyer
Marshall
Massie
Mast
McCarthy
McCaul
McClintock
McHenry
McKinley
Meadows
Meuser
Miller
Mitchell
Moolenaar
Mooney (WV)
Mullin
Murphy (NC)
Newhouse
Norman
Nunes
Olson
Palazzo
Palmer
Pence
Perry
Posey
Reed
Reschenthaler
Rice (SC)
Riggleman
Roby
Rodgers (WA)
Roe, David P.
Rogers (AL)
Rogers (KY)
Rooney (FL)
Rose, John W.
Rouzer
Roy
Rutherford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Shimkus
Simpson
Smith (MO)
Smith (NE)
Smith (NJ)
Smucker
Spano
Stauber
Stefanik
Steil
Steube
Stewart
Stivers
Taylor
Thompson (PA)
Thornberry
Timmons
Tipton
Turner
Upton
Wagner
Walberg
Walden
Walker
Walorski
Waltz
Watkins
Webster (FL)
Wenstrup
Westerman
Wilson (SC)
Wittman
Womack
Woodall
Young
Zeldin
NOT VOTING--16
Babin
Bishop (NC)
DeLauro
Gohmert
Gooden
Granger
Lawson (FL)
Loudermilk
Marchant
McEachin
Ratcliffe
Ryan
Weber (TX)
Williams
Wright
Yoho
{time} 1503
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________