[Congressional Record (Bound Edition), Volume 160 (2014), Part 10]
[House]
[Pages 14669-14677]
[From the U.S. Government Publishing Office, www.gpo.gov]




         INSURANCE CAPITAL STANDARDS CLARIFICATION ACT OF 2014

  Mr. HUIZENGA of Michigan. Mr. Speaker, I move to suspend the rules 
and pass the bill (H.R. 5461) to clarify the application of certain 
leverage and risk-based requirements under the Dodd-Frank Wall Street 
Reform and Consumer Protection Act, to improve upon the definitions 
provided for points and fees in connection with a mortgage transaction, 
and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5461

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

     SECTION 1. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Table of contents.

                  TITLE I--INSURANCE CAPITAL STANDARDS

Sec. 101. Short title.
Sec. 102. Clarification of application of leverage and risk-based 
              capital requirements.

               TITLE II--COLLATERALIZED LOAN OBLIGATIONS

Sec. 201. Short title.
Sec. 202. Rules of construction relating to collateralized loan 
              obligations.

   TITLE III--DEFINITION OF POINTS AND FEES IN MORTGAGE TRANSACTIONS

Sec. 301. Short title.
Sec. 302. Definition of points and fees.
Sec. 303. Rulemaking.

       TITLE IV--BUSINESS RISK MITIGATION AND PRICE STABILIZATION

Sec. 401. Short title.
Sec. 402. Margin requirements.
Sec. 403. Implementation.

                  TITLE I--INSURANCE CAPITAL STANDARDS

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Insurance Capital 
     Standards Clarification Act of 2014''.

[[Page 14670]]



     SEC. 102. CLARIFICATION OF APPLICATION OF LEVERAGE AND RISK-
                   BASED CAPITAL REQUIREMENTS.

       Section 171 of the Dodd-Frank Wall Street Reform and 
     Consumer Protection Act (12 U.S.C. 5371) is amended--
       (1) in subsection (a), by adding at the end the following:
       ``(4) Business of insurance.--The term `business of 
     insurance' has the same meaning as in section 1002(3).
       ``(5) Person regulated by a state insurance regulator.--The 
     term `person regulated by a State insurance regulator' has 
     the same meaning as in section 1002(22).
       ``(6) Regulated foreign subsidiary and regulated foreign 
     affiliate.--The terms `regulated foreign subsidiary' and 
     `regulated foreign affiliate' mean a person engaged in the 
     business of insurance in a foreign country that is regulated 
     by a foreign insurance regulatory authority that is a member 
     of the International Association of Insurance Supervisors or 
     other comparable foreign insurance regulatory authority as 
     determined by the Board of Governors following consultation 
     with the State insurance regulators, including the lead State 
     insurance commissioner (or similar State official) of the 
     insurance holding company system as determined by the 
     procedures within the Financial Analysis Handbook adopted by 
     the National Association of Insurance Commissioners, where 
     the person, or its principal United States insurance 
     affiliate, has its principal place of business or is 
     domiciled, but only to the extent that--
       ``(A) such person acts in its capacity as a regulated 
     insurance entity; and
       ``(B) the Board of Governors does not determine that the 
     capital requirements in a specific foreign jurisdiction are 
     inadequate.
       ``(7) Capacity as a regulated insurance entity.--The term 
     `capacity as a regulated insurance entity'--
       ``(A) includes any action or activity undertaken by a 
     person regulated by a State insurance regulator or a 
     regulated foreign subsidiary or regulated foreign affiliate 
     of such person, as those actions relate to the provision of 
     insurance, or other activities necessary to engage in the 
     business of insurance; and
       ``(B) does not include any action or activity, including 
     any financial activity, that is not regulated by a State 
     insurance regulator or a foreign agency or authority and 
     subject to State insurance capital requirements or, in the 
     case of a regulated foreign subsidiary or regulated foreign 
     affiliate, capital requirements imposed by a foreign 
     insurance regulatory authority.''; and
       (2) by adding at the end the following new subsection:
       ``(c) Clarification.--
       ``(1) In general.--In establishing the minimum leverage 
     capital requirements and minimum risk-based capital 
     requirements on a consolidated basis for a depository 
     institution holding company or a nonbank financial company 
     supervised by the Board of Governors as required under 
     paragraphs (1) and (2) of subsection (b), the appropriate 
     Federal banking agencies shall not be required to include, 
     for any purpose of this section (including in any 
     determination of consolidation), a person regulated by a 
     State insurance regulator or a regulated foreign subsidiary 
     or a regulated foreign affiliate of such person engaged in 
     the business of insurance, to the extent that such person 
     acts in its capacity as a regulated insurance entity.
       ``(2) Rule of construction on board's authority.--This 
     subsection shall not be construed to prohibit, modify, limit, 
     or otherwise supersede any other provision of Federal law 
     that provides the Board of Governors authority to issue 
     regulations and orders relating to capital requirements for 
     depository institution holding companies or nonbank financial 
     companies supervised by the Board of Governors.
       ``(3) Rule of construction on accounting principles.--
       ``(A) In general.--A depository institution holding company 
     or nonbank financial company supervised by the Board of 
     Governors of the Federal Reserve that is also a person 
     regulated by a State insurance regulator that is engaged in 
     the business of insurance that files financial statements 
     with a State insurance regulator or the National Association 
     of Insurance Commissioners utilizing only Statutory 
     Accounting Principles in accordance with State law, shall not 
     be required by the Board under the authority of this section 
     or the authority of the Home Owners' Loan Act to prepare such 
     financial statements in accordance with Generally Accepted 
     Accounting Principles.
       ``(B) Preservation of authority.--Nothing in subparagraph 
     (A) shall limit the authority of the Board under any other 
     applicable provision of law to conduct any regulatory or 
     supervisory activity of a depository institution holding 
     company or non-bank financial company supervised by the Board 
     of Governors, including the collection or reporting of any 
     information on an entity or group-wide basis. Nothing in this 
     paragraph shall excuse the Board from its obligations to 
     comply with section 161(a) of the Dodd-Frank Wall Street 
     Reform and Consumer Protection Act (12 U.S.C. 5361(a)) and 
     section 10(b)(2) of the Home Owners' Loan Act (12 U.S.C. 
     1467a(b)(2)), as appropriate.''.

               TITLE II--COLLATERALIZED LOAN OBLIGATIONS

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Restoring Proven Financing 
     for American Employers Act''.

     SEC. 202. RULES OF CONSTRUCTION RELATING TO COLLATERALIZED 
                   LOAN OBLIGATIONS.

       Section 13(g) of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1851(g)) is amended by adding at the end the following 
     new paragraphs:
       ``(4) Collateralized loan obligations.--
       ``(A) Inapplicability to certain collateralized loan 
     obligations.--Nothing in this section shall be construed to 
     require the divestiture, prior to July 21, 2017, of any debt 
     securities of collateralized loan obligations, if such debt 
     securities were issued before January 31, 2014.
       ``(B) Ownership interest with respect to collateralized 
     loan obligations.--A banking entity shall not be considered 
     to have an ownership interest in a collateralized loan 
     obligation because it acquires, has acquired, or retains a 
     debt security in such collateralized loan obligation if the 
     debt security has no indicia of ownership other than the 
     right of the banking entity to participate in the removal for 
     cause, or in the selection of a replacement after removal for 
     cause or resignation, of an investment manager or investment 
     adviser of the collateralized loan obligation.
       ``(C) Definitions.--For purposes of this paragraph:
       ``(i) Collateralized loan obligation.--The term 
     `collateralized loan obligation' means any issuing entity of 
     an asset-backed security, as defined in section 3(a)(77) of 
     the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(77)), 
     that is comprised primarily of commercial loans.
       ``(ii) Removal for cause.--An investment manager or 
     investment adviser shall be deemed to be removed `for cause' 
     if the investment manager or investment adviser is removed as 
     a result of--

       ``(I) a breach of a material term of the applicable 
     management or advisory agreement or the agreement governing 
     the collateralized loan obligation;
       ``(II) the inability of the investment manager or 
     investment adviser to continue to perform its obligations 
     under any such agreement;
       ``(III) any other action or inaction by the investment 
     manager or investment adviser that has or could reasonably be 
     expected to have a materially adverse effect on the 
     collateralized loan obligation, if the investment manager or 
     investment adviser fails to cure or take reasonable steps to 
     cure such effect within a reasonable time; or
       ``(IV) a comparable event or circumstance that threatens, 
     or could reasonably be expected to threaten, the interests of 
     holders of the debt securities.''.

   TITLE III--DEFINITION OF POINTS AND FEES IN MORTGAGE TRANSACTIONS

     SECTION 301. SHORT TITLE.

       This title may be cited as the ``Mortgage Choice Act of 
     2014''.

     SEC. 302. DEFINITION OF POINTS AND FEES.

       (a) Amendment to Section 103 of TILA.--Section 103(bb)(4) 
     of the Truth in Lending Act (15 U.S.C. 1602(bb)(4)) is 
     amended--
       (1) by striking ``paragraph (1)(B)'' and inserting 
     ``paragraph (1)(A) and section 129C'';
       (2) in subparagraph (C)--
       (A) by inserting ``and insurance'' after ``taxes'';
       (B) in clause (ii), by inserting ``, except as retained by 
     a creditor or its affiliate as a result of their 
     participation in an affiliated business arrangement (as 
     defined in section 2(7) of the Real Estate Settlement 
     Procedures Act of 1974 (12 U.S.C. 2602(7))'' after 
     ``compensation''; and
       (C) by striking clause (iii) and inserting the following:
       ``(iii) the charge is--

       ``(I) a bona fide third-party charge not retained by the 
     mortgage originator, creditor, or an affiliate of the 
     creditor or mortgage originator; or
       ``(II) a charge set forth in section 106(e)(1);''; and

       (3) in subparagraph (D)--
       (A) by striking ``accident,''; and
       (B) by striking ``or any payments'' and inserting ``and any 
     payments''.
       (b) Amendment to Section 129C of TILA.--Section 129C of the 
     Truth in Lending Act (15 U.S.C. 1639c) is amended--
       (1) in subsection (a)(5)(C), by striking ``103'' and all 
     that follows through ``or mortgage originator'' and inserting 
     ``103(bb)(4)''; and
       (2) in subsection (b)(2)(C)(i), by striking ``103'' and all 
     that follows through ``or mortgage originator)'' and 
     inserting ``103(bb)(4)''.

     SEC. 303. RULEMAKING.

       Not later than the end of the 90-day period beginning on 
     the date of the enactment of this Act, the Bureau of Consumer 
     Financial Protection shall issue final regulations to carry 
     out the amendments made by this Act, and such regulations 
     shall be effective upon issuance.

       TITLE IV--BUSINESS RISK MITIGATION AND PRICE STABILIZATION

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Business Risk Mitigation 
     and Price Stabilization Act of 2013''.

[[Page 14671]]



     SEC. 402. MARGIN REQUIREMENTS.

       (a) Commodity Exchange Act Amendment.--Section 4s(e) of the 
     Commodity Exchange Act (7 U.S.C. 6s(e)), as added by section 
     731 of the Dodd-Frank Wall Street Reform and Consumer 
     Protection Act, is amended by adding at the end the following 
     new paragraph:
       ``(4) Applicability with respect to counterparties.--The 
     requirements of paragraphs (2)(A)(ii) and (2)(B)(ii), 
     including the initial and variation margin requirements 
     imposed by rules adopted pursuant to paragraphs (2)(A)(ii) 
     and (2)(B)(ii), shall not apply to a swap in which a 
     counterparty qualifies for an exception under section 
     2(h)(7)(A), or an exemption issued under section 4(c)(1) from 
     the requirements of section 2(h)(1)(A) for cooperative 
     entities as defined in such exemption, or satisfies the 
     criteria in section 2(h)(7)(D).''.
       (b) Securities Exchange Act Amendment.--Section 15F(e) of 
     the Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)), as 
     added by section 764(a) of the Dodd-Frank Wall Street Reform 
     and Consumer Protection Act, is amended by adding at the end 
     the following new paragraph:
       ``(4) Applicability with respect to counterparties.--The 
     requirements of paragraphs (2)(A)(ii) and (2)(B)(ii) shall 
     not apply to a security-based swap in which a counterparty 
     qualifies for an exception under section 3C(g)(1) or 
     satisfies the criteria in section 3C(g)(4).''.

     SEC. 403. IMPLEMENTATION.

       The amendments made by this title to the Commodity Exchange 
     Act shall be implemented--
       (1) without regard to--
       (A) chapter 35 of title 44, United States Code; and
       (B) the notice and comment provisions of section 553 of 
     title 5, United States Code;
       (2) through the promulgation of an interim final rule, 
     pursuant to which public comment will be sought before a 
     final rule is issued; and
       (3) such that paragraph (1) shall apply solely to changes 
     to rules and regulations, or proposed rules and regulations, 
     that are limited to and directly a consequence of such 
     amendments.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Michigan (Mr. Huizenga) and the gentlewoman from California (Ms. 
Waters) each will control 20 minutes.
  The Chair recognizes the gentleman from Michigan.


                             General Leave

  Mr. HUIZENGA of Michigan. Mr. Speaker, I ask unanimous consent that 
all Members have 5 legislative days with which to revise and extend 
their remarks and submit extraneous materials for the Record on H.R. 
5461 currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  Mr. HUIZENGA of Michigan. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I rise today in support of H.R. 5461, a bill authored by 
the gentleman from Kentucky (Mr. Barr), my colleague on the Financial 
Services Committee, and cosponsored by Mr. Gary G. Miller of California 
and myself.
  This bill contains four titles, three of which having already passed 
this House with overwhelming or unanimous support and one of which 
passed with only a dozen ``no'' votes.
  Mr. Speaker, it is rare that the Senate sends us meaningful 
legislation; and, frankly, it is even rarer when they send us 
legislation that amends and fixes the Dodd-Frank Act. As we on the 
Financial Services Committee have seen in our hearings and our markups, 
our friends on the other side of the aisle and the other side of the 
Capitol usually defend Dodd-Frank to the hilt, bestowing on it 
deference normally reserved for the sacred texts handed down from the 
heavens.
  Well, we should agree that Congress doesn't always get it right. When 
sweeping legislation is enacted--remember, Dodd-Frank is a 2,300-page 
bill--there are often areas that later need clarification, and that is 
exactly what we are talking about here today.
  Whatever one's position is on Dodd-Frank, we should all be able to 
agree that the text is not sacred and does need some fixing. That is 
why I am pleased that the Senate has sent us a bill to clarify that 
regulators should not impose regulatory capital requirements designed 
for banking institutions on insurance companies. That was not what was 
intended.
  The Senate bill, S. 2270, passed the other body unanimously. There is 
broad support in the House for a companion measure, but there is 
equally broad support for three other Dodd-Frank technical correction 
amendments that have previously passed this House: Mr. Barr's bill on 
the treatment of collateralized loan obligations under the Volcker 
rule, Mr. Grimm's bill to exempt end users from derivatives from Dodd-
Frank's overreaching margin requirements, and my own bill on how points 
and fees are treated under Dodd-Frank's onerous qualified mortgage 
rule.
  My legislation that is included in this package is a strong 
bipartisan provision that modifies and clarifies the way points and 
fees in a real estate transaction are calculated. This provision is 
narrowly focused to promote access to affordable mortgage credit 
without overturning the important consumer protections and sound 
underwriting requirements that Dodd-Frank's ability to repay provisions 
has in place.
  Homeownership has been a pillar of American life for generations, and 
this particular provision will help more Americans realize this portion 
of the American Dream.
  This bill is a commonsense measure that should and, I believe, does 
have broad bipartisan support. I was puzzled, however, by a Dear 
Colleague letter produced by Ranking Member Waters circulated earlier 
today. In the letter, she writes that Mr. Barr has coupled the 
insurance capital bill with other ``divisive legislation.''
  Now, I would ask my friend the ranking member: What divisive 
legislation are you referring to? Is it the CLO bill which passed the 
House on voice vote? Is it the end user bill which passed the House on 
the ranking member's ``yes'' vote herself and only a dozen ``nay'' 
votes? Or is it my bill that also passed the House by voice vote? I 
don't see the divisiveness, and I don't see where the problem is.
  The reality is Americans don't care about the parliamentary process 
so much as they want results.
  We are pleased that the Senate has finally come to the table on Dodd-
Frank reforms. This is legislation that represents a step forward in 
working with the other body to make sure that my constituents and your 
constituents can get mortgages to buy their first home, that farmers 
can access the financing that they need to buy tractors and work their 
land, and that Americans can buy insurance policies without severe 
premium increases.
  I encourage my colleagues to support H.R. 5461, especially my 
Democrats friends who I believe support every component of the package.
  I reserve the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, before I begin my remarks, I must correct the gentleman 
from Michigan when he talked about our unwillingness to look at Dodd-
Frank in any critical way and our unwillingness to modify, amend, or do 
anything to Dodd-Frank. It is absolutely not true.
  As a matter of fact, I am recorded time and time again--even in my 
speech before the Chamber of Commerce, where I have said and I have 
acted in this manner and in this fashion--that where there were 
complications, I was willing to work with the opposite side of the 
aisle to try to deal with those complications so that everybody would 
understand what was intended. Where there appeared to be conflicts, I 
would work to undo those conflicts.
  I have no problem with changing or modifying or dealing with problems 
in Dodd-Frank, and I have acted that way time and time again.
  Today, I rise to express my disappointment with a Republican Party 
that has politicized consensus legislation that would provide real, 
tangible regulatory relief.
  When we began this Congress, Democrats on the House Financial 
Services Committee and Senate Banking Committee both agreed to support 
technical fixes to the Dodd-Frank Act that have broad bipartisan 
support.
  In that spirit, the gentlewoman from New York, Representative Carolyn

[[Page 14672]]

McCarthy, who is on this floor this evening, worked hard, provided 
leadership, helped to straighten out any confusion, and worked with 
both sides of the aisle to come together in a consensus around the 
legislation that we are going to hear so much about.
  I worked with Mrs. McCarthy. I worked with both sides of the aisle 
also. We came up with targeted, bipartisan insurance capital standards, 
and we fixed it, and our hard work paid off.
  After months of holding hearings and building consensus, we delivered 
to our chairman a bill with no opposition. Democrats and Republicans 
supported the measure, as did outside experts on financial reform and 
the financial services industry.
  It was a bill that unanimously passed the Senate, a bill that 
represented the kind of work Congress should be doing. In other words, 
Mr. Speaker, virtually no one opposed these reasonable changes to 
insurance capital standards; but, instead of passing the measure, this 
noncontroversial technical change has been ``repackaged'' into a 
broader and more controversial bill by attaching provisions that make 
substantive changes to Dodd-Frank that, unlike the insurance capital 
standards fix, are nontechnical in nature and are not universally 
supported.
  The reality is, by circumventing and politicizing the process, this 
commonsense legislation is going nowhere in the United States Senate. 
Countless Senate Democrats have made clear that any changes to Dodd-
Frank must be targeted and have overwhelming bipartisan support; and 
Republicans, like Senator Collins, whose contributions to the Dodd-
Frank Act we are fixing today, are opposed to it as well.
  Her statement was unequivocal, saying, ``I would hate for a bill, 
after many months to have achieved consensus, to get bogged down in 
unrelated issues.'' She went on to say, ``This isn't reopening a major 
issue in Dodd-Frank. It is simply bringing clarity to a provision that 
I authored that the Fed has misinterpreted. I think, given how closely 
we've worked with everyone, it really is more of a technical 
correction.''
  Senator Johanns, another author of the ``clean'' Senate bill, also 
wants to see an up-or-down vote on the House side; and he said, ``My 
hope is that we can do this in a straightforward way and get it done.'' 
He went on to say, if changes were made to the bill, he has to ``start 
all over.''
  Mr. Speaker, this Congress has been infamous for its inability to get 
anything done; but, on this one issue, we have managed to get the 
policy right and get incredibly broad support. We have a clear path to 
getting something done; but, unfortunately, the chairman has decided to 
throw a wrench in the works at the last minute for no reason.
  Finally, it is clear that this is an exercise in political theater. 
It is well-known and widely reported that Republican leadership has 
privately told insurance industry stakeholders that they would bring up 
a ``clean'' insurance capital standards bill after the midterm 
elections.
  It simply shows the disgraceful nature of this debate and the 
partisan, dilatory tactics that create more distrust in the political 
process. Rather than do what is right and enact legislation that 
everyone has agreed on, the chairman has decided to create a fight 
where there was none.
  Make no mistake, but for the chairman's intransigence, the insurance 
capital fix bill could be on the President's desk for a signature 
tomorrow.
  I oppose this bill due to the particularly flagrant affront to 
bipartisan efforts to fix narrow issues in the Wall Street Reform Act, 
an important and complex bill.
  I reserve the balance of my time.

                              {time}  2045

  Mr. HUIZENGA of Michigan. Mr. Speaker, I yield myself such time as I 
may consume.
  I wish I had actually asked if the gentlewoman would yield because I 
am confused. I am confused on a bill that she has voted three times--I 
am positive--three different bills, how that is divisive, how it is not 
targeted with significant Democrat support.
  I personally with one of these bills--my bill has been sitting in the 
Senate since June. It has been targeted, it has had Democrat support, 
and it has had Republican support. We simply cannot get the Senate to 
move, and I am not sure why my colleague would support a Senate bill 
without any House input, but not expect the Senate to look at our 
material and to look at our bills.
  Mr. Speaker, with that, I yield now as much time as he may consume to 
the gentleman from Kentucky (Mr. Barr) the author of this legislation.
  Mr. BARR. Well, I thank the gentleman from Michigan for his 
leadership on title III of this package and the Mortgage Choice Act, 
and I appreciate the gentleman's yielding so that we can talk about why 
every Member of Congress should support this package of reforms.
  Before I get to the substance, I do also want to thank the ranking 
member, thank her for voicing support for the underlying policies in 
this legislation. I want to thank her for expressing absolutely no 
concern about the substance of the policy in her remarks, and I would 
also like to thank the ranking member for her recognition that the 
Dodd-Frank law may very well have flaws, even for those who adamantly 
supported the passage of the bill, and for her acknowledgement that she 
would have no problem changing or dealing with some of the flaws of the 
Dodd-Frank law. Well, this is our chance, Mr. Speaker. This is the 
chance to deal with those flaws.
  The legislation on the floor tonight is a package of four commonsense 
financial services bills that all share a common theme. They all have 
proven bipartisan support. They all have passed either the House or the 
Senate with unanimous or near-unanimous support, and, most 
importantly--put aside all of this procedure here--they all promote 
jobs.
  They all promote durable economic growth in this country, and Members 
on both sides of the aisle and Members in both this Chamber and in the 
Senate agree about that. Let's stop the games in Washington, and let's 
get the American people back to work. That is what we have an 
opportunity to do here in a bipartisan way; so I call on my colleagues 
to support this bill.
  This is a simple 14-page bill that is about fixing unintended 
consequences of the Dodd-Frank law. These fixes are technical 
corrections, and they are meant to clarify provisions in the law where, 
although congressional intent was clear, the authority provided by the 
statutory language led some regulators to enact or promulgate 
economically destructive regulations.
  The four titles of this legislative package represent the hard work 
of a number of Members of Congress on both sides of the aisle. Let me 
just go through those really quickly. Title I of the legislation is an 
important provision that clarifies the capital requirements applied to 
insurance companies subject to Federal Reserve Board supervision.
  Mr. Huizenga did a good job explaining what this title does; but, 
just in summary, it is important that the capital rules for insurance 
companies are carefully tailored to the business of insurance rather 
than arbitrarily holding insurance companies to standards that are 
meant for banks.
  I want to thank Congressman Gary Miller, a Republican from 
California, Congresswoman Maloney, a Democrat from New York, for their 
leadership--bipartisan leadership--for this Insurance Capital Standards 
Clarification Act and for helping push this provision forward.
  I would also like to further emphasize the bipartisan and 
noncontroversial nature of this title by noting that the Senate version 
of the Insurance Capital Standards Clarification Act passed the Senate 
by unanimous consent on June 3.
  Then there is title II. Title II is the text of a bill that I 
introduced in March which passed the House by a voice vote. This was a 
bill that no one opposed. This was a bill that simply incorporates 
bipartisan provisions of the Restoring Proven Financing for American 
Employers Act, and it is about jobs.
  It is about restoring a robust and dependable commercial lending 
market

[[Page 14673]]

to U.S. companies so that they can obtain affordable financing to 
expand their businesses.
  Collateralized loan obligations, known as CLOs, have proven to be a 
critical source of funding for U.S. businesses for over 20 years. 
Today's CLOs continue to provide $300 billion in financing to U.S. 
companies on Main Street, including companies that are well-known to 
all of us in this room: Dunkin' Donuts, American Airlines, Burger King, 
Toys R Us, Delta Airlines, Goodyear Tire, and even a mattress company 
in Lexington, Kentucky, my home district, Tempur Sealy.
  Because of this innovative source of financing, U.S. employers have 
expanded, jobs have been created, and our economy has grown; and, 
despite a proven track record with a default rate below even a half a 
percent, this valuable form of corporate finance is under assault 
because of the Volcker rule.
  Further relief from the Volcker rule for these CLOs is necessary to 
prevent a fire sale in the CLO market that will cause significant 
losses for banks of all size. This defined, narrow fix which clarifies 
that the Volcker rule should not be construed to require the 
divestiture of any debt securities of CLOs prior to July 21, 2017, if 
such CLOs were issued before January 31, 2014, is a commonsense 
solution.
  It clarifies that a bank shall not be considered to have an ownership 
interest in a CLO if such debt security has no indicia of ownership 
other than the right to participate in the removal for cause in the 
selection of a replacement investment manager or investment adviser of 
the CLO.
  This title is a bipartisan commonsense fix to a real-world problem 
voiced by community banks and by companies on Main Street that want 
access to this affordable and reliable source of commercial credit. It 
prevents an unnecessary fire sale in the CLO market that would cause 
significant losses to banks currently holding these legacy CLOs, and it 
will help keep the cost of borrowing affordable in the future for Main 
Street U.S. businesses looking to expand, grow, and create much-needed 
jobs.
  I want to personally thank Congresswoman Maloney and Ranking Member 
Waters for working with me to enact a CLO fix so that it could pass by 
a voice vote in April.
  Then, also, title III, this is the fix that Congressman Huizenga 
helped pass, and Congressman Huizenga worked in a bipartisan way with 
Congressman Meeks to support this Mortgage Choice Act, and it passed 
the House by a voice vote--not a single objection--on June 19, and I 
won't go over the details which Congressman Huizenga has done well, but 
I will say that this measure will greatly advance our efforts to help 
the housing market and our economy recover as Members on both sides of 
the aisle have demonstrated with their support and supporting it by 
voice vote.
  Finally, title IV, this is the fourth and final title of this 
package, and it is a provision that has broad support for Main Street 
and businesses of all sizes. Like other provisions of this package, 
title IV is meant to alleviate the unintended consequences created by 
Dodd-Frank. It is a technical fix that has proven bipartisan support 
and passed the House on June 12 with 411 votes in favor.
  The provision simply clarifies and codifies congressional intent that 
Dodd-Frank was not supposed to impose margin requirements on end user 
derivative transactions. We are talking about nonfinancial companies 
that produce goods for the American people and simply use derivatives 
to hedge against commercial risk.
  This provision is not about speculation. It is about promoting 
responsible risk-management practices among U.S. companies. In fact, 
failure to enact this provision could lead to more risk as companies 
may be deterred from engaging in hedging transactions.
  It requires them to needlessly tie up capital that could otherwise be 
used to do more productive things like expand operating plants, perform 
research and product development, and ultimately create jobs. Again, 
this is a provision that previously passed the House with near 
unanimous support.
  In conclusion, Mr. Speaker, what do we have here today? We have a 
package of four bills, 14 pages, unlike the 2,300 pages in Dodd-Frank--
14 pages, each of which of these four bills--overwhelmingly 
bipartisan--each of which are vital to preserving and creating jobs, 
each of which are noncontroversial in nature, and two of these 
provisions previously passed the House by voice vote, a third passed 
with 411 votes, and the fourth is a commonsense critically important 
solution for the 75 million American families that rely on life 
insurance for financial and retirement security, a bill that passed the 
Senate by unanimous consent.
  The substance and the policy behind these bills are bipartisan. It is 
solid. I would certainly expect that, if you would support the 
underlying policy, then you would support this commonsense package of 
bills to promote jobs and durable economic growth.
  Ms. WATERS. Mr. Speaker, I am so proud to yield as much time as she 
may consume to the gentlewoman from New York (Mrs. McCarthy), a 
distinguished member of the Financial Services Committee. She is a 
woman that has worked hard to bring a clean bill to the floor.
  Mrs. McCARTHY of New York. Just for the record, when my colleague was 
speaking, my name is Carolyn McCarthy, not Carolyn Maloney, just so we 
clarify that, and I want to thank Ms. Waters. I want to thank the 
ranking member on Financial Services.
  I have a speech here, but I need to clarify a few things. I am not 
sure, my memory has not been good since I was sick, but I was on 
Financial Services when we did Dodd-Frank, and we worked very hard, 
bipartisanly, on that committee, and we saw the problems on some of the 
language, and we corrected them bipartisanly.
  We made sure that when we were dealing with derivatives, that it 
didn't have the language that you are complaining about. That came from 
the Senate side.
  When we are talking about the insurance companies and making it 
easier to make sure they could do their job and not be treated like a 
bank, we got the language here on the House side. Again, the Senate 
side misinterprets some and had the wrong language. Gary Miller and I 
have been working a year--over a year--to make the corrections that are 
coming out today.
  Now, I support everything that we are going to be voting on, but I am 
reluctant about it because talking to my colleagues on the Senate side, 
they have said that they will not do it; so something that you all want 
has a really good chance of never seeing the light of day. Maybe next 
year. That is fine. Whom are you hurting, and what are you proving? 
Mainly because, now, the insurance companies are going to be in limbo. 
We don't know what is going to happen; so you are putting off something 
again.
  I am ending my career here in Congress. I will be retiring, and I 
have to say, for 18 years, I have worked bipartisanly, and I have 
gotten a lot of things done, and I hope to continue to get some things 
done between now and when I retire, but I also think what I have seen 
here is this politicking that words are said and people don't get to 
know each other.
  Now, the audience might not understand everything that is going on 
here on the floor, but I do believe that what we have done on Dodd-
Frank--and, now, yes, there are technical changes; but, to be very 
honest with you, in 18 years, I do not remember any bill--major bill--
being passed here, going through the Senate, that didn't come back for 
technical changes.
  We are not perfect. As many times as people want to think we are, we 
are not. We are human beings; and, unfortunately, we do not take the 
time to legislate and to work things out as we have done in the past. I 
am not blaming Republicans, and I am not blaming Democrats.
  We have got good people on both sides of the aisle, and it hurts me 
terribly to see this going on when everybody should be working together 
for the country, not whether you are a Republican or a Democrat.
  There are many of us who care very much about getting jobs. There are

[[Page 14674]]

many of us that care to get everybody forward, and I think that is 
something that people have to start realizing. We have so many members 
on your side of the aisle and members on our side of the aisle that 
have been friends for years and years, and you have got to learn to 
work together. You can have your opinions, and we have ours, but you 
have got to sit down and work together.
  I know the big word around here is don't compromise. It is not 
compromising. It is trying to represent all of our constituents for the 
whole country.

                              {time}  2100

  And Ms. Waters is absolutely right. She worked very hard during Dodd-
Frank, as many of your Republican colleagues did. But it was Gary 
Miller and I who have been working with the Senate for over a year and 
to see this bill come onto the floor, which is going to pass, and it 
will pass. What upsets me is it is not going to go anywhere in the 
Senate. Another bill will die. And there is no reason for it. 204 
Members bipartisanly want to see the Capital Standards Clarification 
Act of 2014 passed.
  I understand where you want to put everything together so you see it 
is efficient. Sometimes you have to know how the Senate works so that 
we can be efficient and work with them as we go forward because, if had 
you done that, you would hear Republicans and Democrats in the Senate 
and their aides who are saying, This is not the way it is done. That is 
why we are upset.
  When you have so many people working on this, many of your 
colleagues, my colleagues signing on to having it done, and now we are 
going to see, most likely, it die or put off until next year, which is 
really a shame because the companies you are talking about, everything 
you are talking about as far as the jobs bills and everything else like 
that, I would like to see that signed by the President tomorrow. That 
ain't going to happen now, and it is not going to happen now.
  So what I will say is Ms. Waters is correct, but I will vote for this 
bill tomorrow. Many of my colleagues will vote for this bill tomorrow 
because we are hoping we will go forward. But in my heart of hearts, 
because I have been around here too long, I don't think the Senate is 
going to pass it, and that is a shame because that is what you are 
working for. That is what we are working for. But the Senate's 
procedures do not do it.
  They will take a stand-alone bill. And from what I understand, Mr. 
Miller and I will hopefully introduce a stand-alone bill in the next 
few days, because if this dies in the Senate, we will take up the 
Senate bill, which is our bill, and hopefully get a vote here and have 
the President sign it within a few days.
  Mr. Speaker, tonight the House is considering the Insurance Capital 
Standards Clarification Act of 2014 under suspension of the rules.
  This bill contains four Financial Services Bills including S. 2270.
  I am pleased to be the lead Democrat on H.R. 4510, the House 
companion to S. 2270, the Insurance Capital Standards Clarification Act 
of 2014. However, this is not the same bill that we will be voting on.
  Though I will reluctantly support the bill, I am disappointed in the 
process and believe that S. 2270 should have been brought up as a 
stand-alone bill, rather than combined with three other bills which 
have already passed the House. The Senate has indicated they would need 
to start all over if changes were made to the original bill.
  Ranking Member Waters rightly objected to this procedure last week 
yet her concerns were ignored.
  S. 2270 supports a more precise application of capital standards that 
furthers the interests of strong prudential supervision. This 
legislation grants the Federal Reserve the appropriate flexibility to 
apply accurate capital standards for insurers. This bill will help keep 
insurance products affordable and available by ensuring the correct 
capital standards are applied to insurance companies that fall under 
the supervision of the Federal Reserve.
  This House version already has 204 bipartisan cosponsors and S. 2270 
would easily pass under suspension. This bill has already passed the 
Senate by unanimous consent. Passing S. 2270 on its own in the House 
would have sent the bill directly to the president's desk.
  Instead, the Financial Services committee majority leadership has 
insisted on combining four bills and using our title, even though this 
is different legislation. This creates uncertainty as to the future of 
the original bill.
  I will support the Insurance Capital Standards Clarification Act of 
2014 on the floor tonight and urge my colleagues to do the same. 
However, I am disappointed in the process that has been used. Had S. 
2270 been passed as a stand-alone bill, it would have been sent 
directly to the President's desk. Instead, we will likely have to vote 
on S. 2270 as a stand-alone bill during the lame duck session, which is 
already filled with a long list of remaining actions.
  The House delay in passing this bill is causing uncertainty for 
insurance companies who cannot plan for the future of their businesses 
without knowing the appropriate capital standards. I encourage my 
colleagues to cosponsor H.R. 4510, the House version of S. 2270, so 
that we can reach 218 cosponsors and bring this to the floor.
  The SPEAKER pro tempore. Members are reminded to direct their remarks 
to the Chair.
  Mr. HUIZENGA of Michigan. Mr. Speaker, I yield an additional 30 
seconds to my colleague from Kentucky (Mr. Barr), who would like to 
clarify.
  Mr. BARR. Mr. Speaker, I thank the gentleman, and I thank the 
gentlewoman for her comments. I appreciate what she is saying about 
bipartisanship. Let me just make sure I clarify. I was referring to 
Congresswoman Maloney on the legislation that she and I worked on 
together, the CLO bill. So, in a very bipartisan way, I worked with her 
on that.
  But to the substance of the gentlewoman's remarks, I appreciate what 
she is saying, absolutely, and that is what is such a shame about this 
whole situation because we have four bills that have been worked on in 
a bipartisan way. There shouldn't be any controversy about this 
whatsoever.
  Let's do the business of the American people, get them back to work. 
Pass these bipartisan bills.
  Mr. HUIZENGA of Michigan. Mr. Speaker, I yield myself such time as I 
may consume.
  I am curious why we are here. The House of Representatives is only 
going to pass Senate bills. I am curious why my colleagues would be 
willing to do that. I would love to hear from my colleagues, which 
overwhelmingly passed House bill does the Senate object to? We simply 
cannot get them to take our bills up.
  I am glad to hear that my colleague, Mrs. McCarthy, is going to be 
supporting this bill package. I too am hopeful. But I do believe that 
this is not political theater, for the robust list of supporters, like 
credit unions, banks, insurers of all sizes, the entire real estate 
community and end-users strongly support the policies that are within 
this bill. And I do have that list available as well, which I will 
include for the Record.
  So, Mr. Speaker, I am prepared to close, and with that, I reserve the 
balance of my time.
                                               September 15, 2014.
       Dear Members of Congress: The undersigned trade 
     associations, representing job creators across the country of 
     all shapes and sizes, write to urge your support for 
     bipartisan legislation recently introduced by Reps. Andy Barr 
     (R-KY), Gary Miller (R-CA), Bill Huizenga (R-MI), and David 
     Scott (D-GA). H.R. 5461, currently scheduled for floor 
     consideration on Monday, September 15th, includes important 
     technical corrections to the Dodd-Frank Wall Street Reform 
     and Consumer Protection Act that strengthen the underlying 
     Act and provide critical clarifications to better oversee our 
     financial system while allowing for economic growth.
       The ongoing implementation of the Dodd-Frank Act has 
     revealed unintended consequences that have adversely impacted 
     job creation and economic growth. We believe that the Barr-
     Miller bill, comprised of a series of noncontroversial, 
     thoroughly examined, bipartisan proposals will fix these 
     unintended consequences and help make financial reform more 
     workable and effective. Specifically, this legislation 
     contains the text of three bills previously approved by the 
     House (H.R. 634, the Business Risk Mitigation and Price 
     Stabilization Act; H.R. 3211, the Mortgage Choice Act; H.R. 
     4167, the Restoring Proven Financing for American Employers 
     Act) as well as one bill that recently passed the Senate (S. 
     2270, the Insurance Capital Standards Clarification Act) by 
     unanimous consent. In fact, three of the four titles of this 
     package have previously passed either

[[Page 14675]]

     the House or Senate without one dissenting vote.
       We urge your support for the Barr-Miller-Huizenga-Scott 
     bill to help foster job creation and economic growth.
           Signed,
       American Bankers Association; American Bankers Insurance 
     Association (ABIA); American Financial Services Association; 
     American Insurance Association; Consumer Bankers Association; 
     Consumer Mortgage Coalition; Community Mortgage Lenders of 
     America; Credit Union National Association; The Financial 
     Services Roundtable; The Financial Services Forum; 
     Independent Community Bankers of America; Leading Builders of 
     America; The Loan Syndications and Trading Association; 
     Mortgage Bankers Association; National Association of Federal 
     Credit Unions; National Association of Home Builders; 
     National Association of Mutual Insurance Companies; National 
     Association of Realtors; The Realty Alliance; Real Estate 
     Services Providers Council, Inc. (RESPRO); Securities 
     Industry and Financial Markets Association; U.S. Chamber of 
     Commerce.

  Ms. WATERS. Mr. Speaker, may I inquire as to how much time I have 
left?
  The SPEAKER pro tempore. The gentlewoman from California has 7\1/2\ 
minutes remaining.
  Ms. WATERS. Oh, very good. I yield such time as he may consume to the 
gentleman from Minnesota (Mr. Ellison).
  Mr. ELLISON. Mr. Speaker, the bill we took up before this one, on 
Father Flanagan, that is the kind of bill that we should be doing on 
suspension calendar. In fact, the heart of this particular bill is 
noncontroversial, and I think a lot of people would be looking forward 
to just voting up the Insurance Capital Standards Clarification Act.
  I think a lot of people would like to just get this bill up, pass it, 
and send it right to the President. We could do that. Unfortunately, 
this bill, even if it does have bipartisan support, has been loaded up 
with other bills, and the Senate has indicated that they are not going 
to take it up.
  So, to the gentleman's point from Michigan, we are not just here to 
pass Senate bills--that is a fair point of view to hold--but it is a 
matter of pragmatic legislative action. This is the bill we could have 
passed and could be passed into law and signed by the President. So to 
pack this bill up even with bipartisan legislation slows it up, which 
delays good outcomes for people who could have them.
  In my opinion, that is unwise and ill-advised, and I am very sorry 
that the President is not going to get the Insurance Capital Standards 
Clarification Act on his desk because he certainly could if there was a 
spirit of cooperation.
  Mr. HUIZENGA of Michigan. Mr. Speaker, I am prepared to close, and 
reserve the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield as much time as she may consume to 
the gentlewoman from New York (Mrs. McCarthy).
  Mrs. McCARTHY of New York. What I was trying to explain to you, it is 
not that we are giving up our power from here to the Senate. The Senate 
will not accept everything as a package because they have to change all 
their language, and that is not going to happen.
  They will send back here a stand-alone bill, probably pass the other 
package--that is fine--but they are not going to change or open it up. 
That is what I meant to tell you, that you have to understand how the 
Senate works, and the House is totally different. That is all I am 
saying, and that is why this bill might die, unfortunately, over in the 
Senate, because they are not going to get to it because, let's face it, 
we have too much to do between now and when we come back for a lameduck 
session.
  Mr. HUIZENGA of Michigan. Mr. Speaker, again, I am prepared to close, 
and I reserve the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker and Members, I think the argument that we had a piece of 
legislation here authored by Mrs. McCarthy and Mr. Miller that truly 
had bipartisan support, that had been worked on so long and so hard by 
the gentlewoman from New York, that could have passed, and it should 
have, not been placed in this controversial position. This bill should 
have been a clean bill that was put forth in a way that would allow the 
Senate to support it, and to place it--well, the Senate--we would put 
this on the President's desk if, in fact, we just passed this bill out 
as a clean bill. It is quite unfortunate.
  My colleagues can say all that they want to say about jobs and 
creating jobs. They talked about bills that had been supported in the 
committee and bills that had even been supported on the floor. Why are 
you bringing them back again? Why are you repackaging them? Why are you 
taking bills that you are identifying as having had all this great 
support and passed off the floor, passed out of committee, why are you 
repackaging them? I will tell you why you are repackaging them: because 
you are trying to create this picture that somehow you have this great 
jobs bill, that somehow you have worked in some extraordinary ways to 
put together, despite the fact that you are just repackaging bills 
that, as you said, had support.
  The gentleman from Michigan said he is confused. Yes, I think you 
are, and I think you are confusing others, and that is my point. My 
point is it doesn't matter whether or not we have bills that were 
jointly supported or passed out of committee or passed off the floor. 
This process and this procedure that you are employing is one that is 
not fair to the Members of this House.
  You are putting forth a process that is complex, that is not easily 
understood, and now the Members who come to the floor, if they have to 
take a vote, are going to try to decide did I support that or didn't I 
support that.
  I think that the way that you are doing this is somewhat dangerous; 
and I can just envision that for the future that we may have a 
situation where you will hold all of the bills that perhaps do not have 
bipartisan support, and again you will package them with maybe one 
bill, as you are doing with this one, with support, and we will never 
have an opportunity to have the kind of debate and amendments that we 
should have.
  It is about process. It is about procedure. It is about making sure 
the American people understand what we are doing and how we are doing 
it. It is not about being slick. It is not about being cute. It is not 
about trying to take the process and package it in such a way that you 
can get what you want with a big title of jobs to make people think you 
have done something new, creative, and extraordinary.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Members are reminded to address their 
remarks to the Chair.
  Mr. HUIZENGA of Michigan. Mr. Speaker, I yield myself such time as I 
may consume.
  I will address my remarks to the Chair, but, again, this is not about 
parliamentary procedure. This is about results.
  The only bill that we will see here that may bring confusion to this 
entire process is the one that my colleagues are advocating for, the 
Senate bill. It is the only bill that we haven't dealt with in 
committee. It is the only bill we haven't had a vote on in the Houses. 
The other three bills have passed, two of them unanimously by voice 
vote, and the other one had 12 people, out of a body of 435, vote 
against it. Sounds like it is overwhelming. If it is that confusing to 
my colleagues to figure out what bill and how they voted for it when 
they come to the floor to vote on this package, they maybe should 
reconsider their current line of work. This should not be that tough.
  This is, again, something that we need to move forward on. The 
political theater that seems to be happening here is on the other side. 
I am not sure why, if it is about trying to play to a base for an 
election issue or what, but this is the one time I think in the history 
of my working career that the whole is worse than the sum of its parts. 
This doesn't make any sense.
  So there has not been bipartisan work on the underlying bill, Dodd-
Frank, which I might remind my colleagues passed with zero minority 
Republican votes when the bill was passed. This package of bills has 
passed with overwhelming bipartisan support. I applaud my colleagues on 
the other side of the aisle when they oppose the Senate.

[[Page 14676]]

  And I guess I needed to clarify that my comments about people acting 
like this is holy writ from the heavens does tend to be concentrated 
with my colleagues over in the Senate who apparently don't want to 
touch this or others in the administration who oppose the nine-bill 
package on derivatives reform that passed overwhelmingly bipartisanly 
out of our committee as well.
  That is the kind of holdup that we have that is frustrating 
Americans, that is frustrating me as a policymaker and my colleagues, 
that is frustrating, frankly, future generations as they look in on 
this process.
  It is time, Mr. Speaker, to pass this package of bills that includes 
three bills that this House has already dealt with, that the Senate 
should have absolutely no opposition to or excuse why they will not 
take up.
  With that, I again ask my colleagues to pass this particular bill, 
H.R. 5461, and look forward to its passage here soon.
  I yield back the balance of my time.
  Mr. ELLISON. Mr. Speaker, I oppose The Insurance Capital Standards 
Clarification Act of 2014 (H.R. 5461). While I support efforts to 
provide flexibility under the Dodd-Frank Act's Collins amendment by 
explicitly stating that regulators are not required to apply minimum 
leverage capital and risk-based capital requirements to firms with 
state-regulated insurance operations, this bill does more than that. It 
contains The Mortgage Choice Act of 2013, (H.R. 3211).
  Mr. Speaker, as I stated during the hearing and the mark up on The 
Mortgage Choice Act of 2013 (H.R. 3211), there are serious concerns 
about steering consumers into buying title insurance with hidden 
commissions and inflated costs.
  I bought two homes in my life. Like most homebuyers, I was asked to 
sign a bunch of papers with lots of fees such as origination charges, 
appraisal fees, scoring fees, recording charges, tax service fee and 
title insurance. Like most consumers, I chose my title insurance 
provider based on referral: I did not comparison shop.
  For most of us, title insurance is the most expensive of the closing 
cost fees--sometimes running in the thousands of dollars. These fees 
are poorly understood by homebuyers. This can lead to paying higher 
fees than is necessary or appropriate.
  When Congress passed the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, we required the newly created Consumer Financial 
Protection Bureau (CFPB) to do a better job at protecting consumers 
when buying a home.
  We know that the housing finance system had too much predatory and 
discriminatory lending. African Americans and Latinos were frequently 
charged much higher interest rates than they qualified for. Homeowners 
were refinanced into high fee and interest rates they could not afford. 
The result was more than five million foreclosures and a colossal loss 
of wealth.
  In response to the new law, the CFPB wrote rules to protect people 
buying homes from products which would strip their wealth. One of those 
rules defined a Qualified Mortgage (QM) standard which was established 
in Dodd-Frank. As part of that QM standard, the CFPB established a 
``points and fees'' bright line limit for mortgages that qualified 
under the Ability to Repay provision.
  The CFPB established a limit on ``points and fees''--which account 
for a loan's origination costs--that exceed 3 percent of the loan 
amount--although it can be up to 8 percent for lower cost homes. 
Because of concerns that the affiliated title insurance system was 
leading to higher costs for borrowers in a market based on reverse 
competition, the CFPB wisely chose to require title insurance charges 
from affiliated title agents be within the points and fees cap.
  H.R. 3211 reverses the CFPB's decision.
  By excluding affiliated title insurance firms from within the points 
and fees cap, H.R. 3211 restores an incentive to overcharge homebuyers.
  We know how hard it is to get people into homes. Homebuyers need to 
save thousands of dollars for a downpayment. So why should we make it 
easier to let them get overcharged as much as a thousand or more 
dollars on title insurance? Some say that as much as half or more of a 
title insurance premium goes to the referral agent. Why would we want 
to preserve this practice of overpricing title insurance to fund 
referral commissions?
  At the Financial Services hearing that included this bill, I 
requested that we hear from independent land title agents as well as 
from groups like the Consumer Federation of America, the Center for 
Responsible Lending, Americans for Financial Reform and its 100 
affiliates and the AFL-CIO.
  I requested that the National Association of Independent Land Title 
Agents be invited to testify. I have heard concerns directly from title 
agents in my state that some referral sources ask to share ownership of 
their business. Since title insurance is based on referrals, when 
realtors, homebuilders and mortgage brokers refuse to provide referrals 
to a title agent firm, the firm may not be able to survive financially. 
Unfortunately, these independent unaffiliated title agents were not 
invited to testify nor was there another hearing on the bill.
  Many organizations opposed the bill including the AFL-CIO, Alliance 
for a Just Society, Americans for Financial Reform, Center for Economic 
Justice, Center for Responsible Lending, Connecticut Fair Housing 
Center, Consumer Action, Consumer Federation of America, Consumers 
Union, Empire Justice Center, Home Defenders League, The Leadership 
Conference on Civil and Human Rights, NAACP, National Association of 
Consumer Advocates, National Association of Independent Land Title 
Agents, National Consumer Law Center (on behalf of its low income 
clients), National Council of La Raza, National Fair Housing Alliance, 
New Economic Project, Public Citizen, Woodstock Institute and Center 
for Responsible Lending.
  These concerns about hidden referral commissions are not 
hypothetical. Last month, the Consumer Financial Protection Bureau 
(CFPB) fined RealtySouth, the largest real estate firm in Alabama for 
violations of the Real Estate Settlement and Practices Act (RESPA). 
RealtySouth improperly steered consumers to its affiliated firm, 
TitleSouth LLC. In addition, The CFPB has taken action against Borders 
& Borders PLC in Kentucky for funneling kickbacks to shell companies. 
In June, the CFPB fined Stonebridge Title Services in New Jersey for 
paying illegal kickbacks to referral sources.
  Some who support H.R. 3211 say there are some fixed costs in lending 
that could result in lower valued mortgages to need to pay loans higher 
than the Qualified Mortgage guideline of points and fees established by 
smaller loans. However, the Consumer Financial Protection Bureau 
already provided for flexible definitions based upon the amount of a 
borrower's mortgage:
  3 percentage cap on a loan balance at $100,000 or greater, 5 
percentage cap on a loan balance from $20,000.00 to $60,000, or 8 
percentage cap on loan balances of less than $12,500.
  Since the average mortgage origination fees are below one percent 
according to the Center for Responsible Lending, the caps set by the QM 
are appropriate. I have not seen any compelling evidence that shows 
that lenders will not make loans if the title premiums charged by their 
affiliates are included in the points and fees cap. Lenders are free to 
make loans outside the ability to repay rules as well.
  I have also heard the proponents of H.R. 3211 arguing that the 
availability of affiliate service providers helps reduce the overall 
cost of obtaining a mortgage loan. I question their evidence. The 2010 
Harris Interactive study paid by the National Association of Realtors 
is suspect. In that study, more than 70% of buyers ``did not know'' 
what an affiliate service provider provided or what benefit it 
allegedly gave.
  By contrast, in 2013, The National Association of Independent Land 
Title Agents (NAILTA) commissioned the first-ever national settlement 
preference survey of American real estate consumers. More than 900 
consumers participated in the nationwide survey. The results include:
  93% of American real estate consumers surveyed said it was important 
that title insurance agents remain a neutral third party in the 
performance of title insurance-related services.
  62% of American real estate consumers surveyed said that a title 
agency cannot remain objective if it is partially owned by a bank, real 
estate firm, mortgage company or homebuilder.
  Only 1% of American real estate consumers surveyed prefer a ``one 
stop shop''.
  For all the efficiencies that proponents assert existed prior to this 
new rule that provided a disincentive to refer homebuyers to 
controlled/affiliated title firms, settlement costs--exclusive of 
inflation--continue to rise. I believe the CFPB's rule could actually 
lower title insurance premiums and increase homeownership for 
Americans.
  I have concerns about a market where people assert that half or more 
the cost of the product is a referral fee unlinked to the product 
itself Consumers and independent title insurance agents say that title 
insurance premiums can provide remuneration to the referral source 
based on the capture rate such as lower desk rental fees, bonuses, 
gifts or higher commissions. This should not be permitted.

[[Page 14677]]

  I urge members to stand with homebuyers who want to understand all 
the fees they are charged.
  I urge members to support a market free of pressures for referral 
commissions.

                              {time}  2115

  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Michigan (Mr. Huizenga) that the House suspend the rules 
and pass the bill, H.R. 5461.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

                          ____________________