[Congressional Record (Bound Edition), Volume 162 (2016), Part 4]
[House]
[Pages 5075-5076]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  INVESTOR CLARITY AND BANK PARITY ACT

  Mr. GARRETT. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4096) to amend the Volcker Rule to permit certain investment 
advisers to share a similar name with a private equity fund, subject to 
certain restrictions, and for other purposes.

[[Page 5076]]

  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4096

       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 ``Investor Clarity and Bank 
     Parity Act''.

     SEC. 2. NAMING RESTRICTIONS.

       Section 13 of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1851) is amended--
       (1) in subsection (d)(1)(G)(vi), by inserting before the 
     semicolon the following: ``, except that the hedge fund or 
     private equity fund may share the same name or a variation of 
     the same name as a banking entity that is an investment 
     adviser to the hedge fund or private equity find, if--

       ``(I) such investment adviser is not an insured depository 
     institution, a company that controls an insured depository 
     institution, or a company that is treated as a bank holding 
     company for purposes of section 8 of the International 
     Banking Act of 1978;
       ``(II) such investment adviser does not share the same name 
     or a variation of the same name as an insured depository 
     institution, any company that controls an insured depository 
     institution, or any company that is treated as a bank holding 
     company for purposes of section 8 of the International 
     Banking Act of 1978; and
       ``(III) such name does not contain the word `bank'''; and

       (2) in subsection (h)(5)(C), by inserting before the period 
     the following: ``, except as permitted under subsection 
     (d)(1)(G)(vi)''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
Jersey (Mr. Garrett) and the gentleman from Massachusetts (Mr. Capuano) 
each will control 20 minutes.
  The Chair recognizes the gentleman from New Jersey.


                             General Leave

  Mr. GARRETT. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
include extraneous material on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  Mr. GARRETT. I yield myself such time as I may consume.
  Mr. Speaker, I rise today in support of H.R. 4096, the Investor 
Clarity and Bank Parity Act. I want to thank the primary sponsors of 
the legislation--the gentleman from Massachusetts (Mr. Capuano) and the 
gentleman from Ohio (Mr. Stivers)--for their work in bringing this very 
technical, yet needed, legislation to the floor of the House today.
  Mr. Speaker, during this time of divided government, it may come as a 
surprise to some that the Committee on Financial Services has generated 
a significant amount of bipartisan legislation since the beginning of 
2015. In fact, this Congress our committee has approved over 70 bills, 
with the vast majority of these receiving bipartisan support, and in 
many cases unanimous support.
  I am pleased that we are able to bring to the floor today a number of 
bills that received the backing of both Republicans and Democrats out 
of our committee. One of these bills is the Investor Clarity and Bank 
Parity Act, which passed out of the committee by a voice vote.
  What does that bill do?
  Well, this bill corrects a statutory error made in section 619 of 
Dodd-Frank, more commonly known as the Volcker Rule. The Volcker Rule 
limited the ability of bank holding companies or their affiliates to 
invest in hedge funds or private equity funds, collectively known as 
covered funds.
  Now, we had a number of debates in our committee as to the general 
wisdom of the Volcker Rule and whether it actually reduces systemic 
risk and protects taxpayers or not. I think one thing we can all agree 
on is that so long as section 619 is the law of the land, Congress 
should do what it can to limit any negative and unintended consequences 
of the Volcker Rule.
  Because of the way that Dodd-Frank was drafted, a bank or one of its 
affiliates was prohibited from sharing its name with a covered fund 
that it was invested in. By disallowing a covered fund to share a name 
with the sponsoring entity, this provision of the Volcker Rule could 
actually lead to more and widespread investor confusion about who is 
actually managing the assets of that particular fund.
  As Jeffrey Plunkett of Natixis Global Asset Management told our 
subcommittee at a hearing back in February, he said: ``We believe that 
compliance with the name-sharing prohibition of the Volcker Rule . . . 
risks confusion among investors and burdens firms that are affiliated 
with banks, leading to a lack of transparency for clients.''
  So the fix envisioned here today in H.R. 4096 is really a simple one. 
It allows a covered fund to share its name with a sponsoring entity in 
order to provide clarity and transparency to the investor.
  I urge all my colleagues to vote ``yes'' on H.R. 4096.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CAPUANO. Mr. Speaker, I yield myself such time as I may consume.
  I also rise to support H.R. 4096 for the exact reasons that Mr. 
Garrett just pointed out. I would like to be as clear as I can. I am a 
strong proponent and supporter of the Volcker Rule, and I would not 
support anything that would undermine that rule. That is not what this 
does. This is simply a clarification of an item that was never 
intended. Even as a supporter of that rule, this is not the outcome we 
intended. It is simply to clarify naming abilities by certain entities.
  I want to be also clear that nothing in this provision would allow 
something like the Bank of America Fund. You still cannot name it after 
a bank. These are subsidiaries of some banks. In this particular case, 
Natixis happens to be located in my district. They are the ones who 
brought this issue to my attention. They also happen to be affiliated 
with Loomis Sayles.
  Loomis Sayles is not a bank, but it is an affiliate of a bank. 
Therefore, Loomis Sayles would not be allowed to say this is a Loomis 
Sayles item. They have to call it some funny name, ABCD Fund or 
whatever it might be. That was never the intention of the Volcker Rule.
  The Volcker Rule was to make sure that the finances of this country 
and this world are as stable as possible so that people couldn't have 
conflicts of interest and on and on and on. This is a technical 
amendment, something that I strongly support.
  Mr. Speaker, I yield back the balance of my time.
  Mr. GARRETT. Mr. Speaker, inasmuch as the gentleman has yielded back, 
has no other speakers, I don't believe that we have any other speakers 
on this side of the aisle.
  I will close by saying thank you to the gentleman for working with us 
on this and a bunch of other legislation I also hope to bring to the 
floor sooner rather than later. I encourage Members on both sides of 
the aisle to support this bipartisan piece of legislation.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New Jersey (Mr. Garrett) that the House suspend the 
rules and pass the bill, H.R. 4096.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. GARRETT. 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.

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