House reps focus on Dodd-Frank, housing finance during Day 2 of Caucus
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, told hundreds of NAFCU Congressional Caucus attendees Tuesday that the goal of his committee is to "help create a healthier economy with greater opportunity for all, built from Main Street up, not Congress down."
Achieving that goal requires a strong housing finance system in the country, he said, which will only happen when the federal government has a clearly defined role in the system, arbitrary rules that keep people out are eliminated and consumers are given clear information to make their decisions.
Hensarling said government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac played a central role in the financial meltdown, and they need to be replaced by a competitive market that's not backed at taxpayers' expense.
Hensarling also drew attention to another issue he's currently spearheading – reforming the National Flood Insurance Program (NFIP). The NFIP "incentivizes people to live in harm's way," using taxpayer resources to subsidize high-risk decisions, Hensarling asserted. By allowing private insurers into the market and reforming risk disclosure rules, Hensarling expects costs to decrease for both the government and consumers.
In addition to Hensarling, House Financial Services Committee members French Hill, R-Ark., Denny Heck, D-Wash., subcommittee Chairman Blaine Luetkemeyer, R-Mo., subcommittee Ranking Member Ed Perlmutter, D-Colo., and subcommittee Ranking Member Lacy Clay, D-Mo., commended attendees on the work they and their credit unions do for the American people. Rep. Bill Posey, R-Fla., was unable to make it due to Hurricane Irma, but his chief of staff gave remarks on his behalf.
On top of housing finance, the lawmakers also addressed these issues:
- Regulatory reform: "I worry about regulatory burdens making it too complicated to operate," Heck said. Clay reiterated Heck's sentiment, telling the crowd that the financial services industry needs "common sense regulatory relief." Hill encouraged credit union representatives to remind senators they speak with about the House-passed CHOICE Act – which Hensarling described as "an escape route" – and request an overview of what's possible to pass in the Senate. The CLEARR ACT is another option, introduced by Luetkemeyer earlier this spring, which will amend various sections of the Truth in Lending Act added by Dodd-Frank.
- Data security: Clay said the Equifax data breach reinforces the need for stronger data security in this country. Luetkemeyer said the committee will hold hearings to get to the bottom of what happened, and while he's opposed to government intervention in the market, "we'll see if there's anything we need to do. [Retailers] often get a 'get out of jail free' card, but there's no fairness there."
- Economic growth: Economic growth "has been stuck in neutral for a little over a decade," Hill said. To get the country back to 3 percent annual growth, Hill outlined plans to lower tax rates for individuals and businesses and simplify the code. Each of the congressmen also noted how big an impact regulatory reform will have on the economy, as businesses will have fewer rules to sort through and institutions such as credit unions will have fewer restrictions preventing them from meeting consumer needs.
Perlmutter also touched on the need for marijuana banking in states such as his that have legalized the drug. You can read more about the complexities surrounding the issue in this month's NAFCU Compliance Monitor.
NAFCU's Caucus will wrap up today in Washington. Follow the hashtag #NAFCUCaucus on Twitter for the latest information.
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