September 14, 2022

McHenry, Berger discuss critical industry topics, future of Financial Services Committee

nafcu During day two of NAFCU’s 2022 Congressional Caucus, House Financial Services Committee Ranking Member Patrick McHenry, R - N.C., sat down with NAFCU’s President and CEO Dan Berger for a fireside chat to discuss industry issues currently being discussed and debated in Congress and what the future looks like for the Committee.

Starting the conversation discussing privacy standards, McHenry noted that House Republicans on the Financial Services Committee have taken steps to update the Gramm-Leach-Bliley Act, working on draft legislation as a way to jump start the conversation and ensure bipartisan support while also taking the time to get it right. “We should be the example for the rest of society for how you can appropriately do this,” stated McHenry, “We can get the balance right by updating these standards.”

When discussing the opportunities for legislation to become law by the end of the year, McHenry shared that there is room for legislation around stablecoins to pass out of the House, with two or three avenues in the Senate to get it across the finish line by the end of the year. Noting the likelihood of the House flipping to Republican control in November, McHenry also discussed his future priorities should he become Chairman of the Financial Services Committee next Congress, including data privacy, capital formation, and giving clarity to digital assets.

Focusing on capital markets, the Congressman noted that he wants to see legislation that increases opportunities for private companies to go into the public market. He also wants to see smaller financial institutions like credit unions get back to where they were a generation ago, and provide increased opportunity for credit unions to take risks in their communities, based on the needs of their communities.

In a conversation on Fintech, McHenry emphasized the importance of the partnership model to spur innovation, and the need for the model’s protection so that institutions like credit unions have increased opportunities for innovation to offer consumers more choices. “Without consumer choice, we’re worse off. We do not want to look like Europe, with fewer options and larger institutions, which leads to a less dynamic economy,” explained McHenry. “I think it’s important that we embrace innovation and drive for innovation,” stated the Congressman, who continued to note that any other management of the partnership model for Fintech innovation is wrong-headed, inappropriate and “must be checked.”

NAFCU’s Berger asked the Congressman about recent interchange legislation in the Senate, the Credit Card Competition Act, to which McHenry remarked, “The Senator from Illinois is at it again.” He noted that the legislation is misguided and mainly election-year debate fodder, and that there is no companion bill in the House. A “Main Street versus Wall Street” messaging bill  as noted by the Congressman, should be more focused on safety net soundness concerns and be “something we should bring out for competition, not bring out for legislative fiat.”

Shifting the focus of the conversation to the Committee’s oversight jurisdiction and its work with the CFPB, McHenry noted how the agency tends to regulate by enforcement,  emphasizing that employees within financial institutions should understand exactly what the CFPB is regulating and exactly how to adhere to such regulations. McHenry concluded his remarks by noting that he looks forward to hosting Director Chopra for many Committee oversight hearings next Congress.

NAFCU and its member credit unions will remain engaged with administration officials, lawmakers, and regulators to advocate for additional regulatory relief for the industry. View NAFCU’s 2022 advocacy priorities and join the association’s efforts by using the Grassroots Action Center to build relationships with lawmakers and advocate on behalf of the industry.