Service with the intent to promote or facilitate prostitution. This amendment avoids creating a broad federal law that covers conduct that is not necessarily federal in nature. Second, the amendment distribute managers amendment strikes language from the underlying bills civil recovery provision that was intended to encourage victims to successfully plead their cases. However, the language could have created a risk of confusion by the courts and so it has been removed. Further, the managers amendment clarifies that mandatory restitution provision is only applicable to victims of sex trafficking, not to those who voluntarily have engaged in prostitution. Finally, the managers amendment adds language inadvertently omitted from the original bill which permits defendants who face an aggravated charge for promoting or facilitating more than five people to assert the statutes of affirmative defense. If a defendant can prove advertisements were targeted where promotion is legal. Mr. Chairman, this managers amendment is the product of the judiciary committees repeated and thoughtful effort to produce a workable and technically sound piece of legislation. This bill will do a great deal to protect victims of sex trafficking. I am proud of the hard work by my colleagues and staff to ensure that the criminal law is appropriately tailored to achieve that goal and i urge my colleagues to support this amendment and reserve the balance of my time. The chair the gentleman reserves the balance of his time. For what purpose does the gentlewoman from texas rise . Ms. Jackson lee mr. Chairman, i ask unanimous consent to claim the time in opposition, although i am not opposed to the amendment. The chair without objection, the gentlewoman is recognized for five minutes. Ms. Jackson lee thank you very much. I rise to support the goodlatte amendment and i thank the chairman, along with our Ranking Member, mr. Nadler, for their hard work in working together. I think this amendment is particularly important because it clarifies that the restitution provision applies to victims of sex trafficking and ensures that the affirmative defense applies to both of the criminal offenses created in the underlying bill. These changes are simple and reasonable and with that i support the amendment and i yield back the balance of my time. The chair the gentlewoman yields back the balance of her time. The chair recognizes the gentleman from virginia. Mr. Goodlatte i urge my colleagues to support the amendment and i yield back. The chair the gentleman yields back the balance of his time. The question is on the amendment offered by the gentleman from virginia. Those in favor say aye. Those opposed, no. In the opinion of the chair, the ayes have it. He amendment is agreed to. It is now in order to consider amendment number 2 printed in ouse report 115583. For what purpose does the gentlewoman from california eek recognition . The clerk will designate the amendment. The clerk amendment number 2 printed in house report 115583 offered by mrs. Walters of california. The chair pursuant to House Resolution 748, the gentlewoman from california and a member opposed will each control five minutes. The chair now recognizes the gentlewoman from california. Mrs. Walters mr. Speaker, i rise today in support of my amendment to the allow states and victims to fight online sex trafficking act. I also want to thank my colleague, ann wagner, for her dedication to this issue and her efforts to bring this bill to the floor. The underlying bill will help crack down onion line facilitators of human sex trafficking to end this modern day slavery. My amendment will allow enforcement of criminal and civil sex trafficking laws against websites that knowingly facilitate online sex trafficking activities. Mr. Speaker, this issue is of significant local concern in the heart of my district in orange county. Last year a Major International sex trafficking ring was uncovered in a quiet irvine, california, neighborhood. Young women from overseas were sold repeatedly through the website backpage. Com. Websites like backpage, which are essentially store fronts for the facilitation of sex trafficking, have been able to operate with impunity. My amendment, in conjunction with the underlying bill, will help prosecutors crack down on websites that knowingly facilitate or promote sex trafficking while keeping in place safeguards for those who responsibly accomplish third party content. This legislation will empower sex trafficking survivors to come forward and seek justice. I urge my colleagues to join me in supporting this bill and put an end to human sex trafficking to the human sex trafficking industry in america. And i yield back the balance of my time. The chair the gentlewoman yields back the balance of her time. For what purpose does the gentlewoman from california rise . To claim the time in opposition. The chair without objection, the gentlewoman is recognized by unanimous consent. Mr. Speaker, section 230 of the Communications Decency act stands for a very simple, powerful idea. That a website should not be liable for the actions of its users. Because of section 230, we have the internet, as we know it today. Ms. Lofgren and also because of section 230, the vast majority of websites can safely and effectively report and coordinate with Law Enforcement on various crimes, including sex trafficking, child pornography, and the like. Unfortunately section 230 has been utilized by bad actors, including a notorious one, backpage, to traffic in children and to exploit victims really, theyre slavery victims. The underlying bill, this bill, h. R. 1865, puts a stop to that. As the department of justice has noted, it will allow for the prosecution of people who are trafficking in victims online. The walters amendment, however, for the first time would carve a hole in 230 and make it actually more difficult than the underlying bill to prosecute traffickers online. By creating potential liability for, quote, knowing that a user is using their website for facilitating sex trafficking, the walters amendment would create what legal experts call the moderators dilemma. Theres no obligation under law to moderate your website, and in fact, if you have two million users or 10 million users, you really dont know whats being posted by your users. By under this amendment, if you made any effort to try and find out what was happening among your users, as many websites do today, especially for child pornography, but also for trafficking, you would incur liability because you would then have a reason to know. Now, other laws that deal with intermediary liability, such as the requirement to report child pornography, or copyright safe harbors of the dmca have very clear and specific provision on when a website has sufficient knowledge and what express actions it should take. The walters amendment has none of these and theres no case law on it either. So so the amendment would put web owners in a very weird place. If you do anything to moderate youre risking liability and the incentive would be to not monitor at all and that would be tragic and a gain for child predators, though i know thats not the intention. You cant stop moderating just for trafficking. You either moderate or you dont moderate. We do know theres been tremendous advances for machine operated filters to find child pornography. Actually, thats one of the easiest things to find using filters, and its very important that websites cooperate with Law Enforcement to catch those bad guys. Under the walters amendment, the disincentive would be huge not to do that. And i think thats why the department of justice does not support the walters amendment. As i said, earlier, and the chairman put the letter into the record, the department believes define revision to participation is unnecessary and they say while wellintentioned, this new language would impact prosecutions by effectively creating additional elements that prosecutors would have to prove at trial. Thats why its a bad idea to adopt this amendment and as the chairman of the committee has said, section 4 of the amendment also violates the ex post facto clause of the constitution by attaching corral liability to actions that proceeded preceded the enact of the bill, clearly unconstitutional. So although i dont have any doubt as to the as to the good intentions behind the offering of this amendment, it would actually impair the ability to protect victims, it would make it more difficult to prosecute if the department of jus as the department of justice has pointed out. Its something that, you know, it didnt go through the judiciary committee, i think thats a major fault. One of the things we were able to do in the committee and we did this together in a bipartisan on a bipartisan basis, was to sort through the unintended consequences of seemingly simple language. Nothing in writing law is simple and certainly nobody wants a provision that is going to negatively impact prosecutions, have unintinded consequences for state actions as the department of justice has pointed out, and would provide a sis incentive for people to moderate activities to try and catch bad guys and to work with Law Enforcement. So although the intentions are good, the amendment is flawed, i hope you vote no on it and then i hope we get a resounding, unanimous vote yes for the underlying bill. I see that my time has expired and i yield back. The speaker pro tempore the gentlewomans time has extired. For what purpose does the gentlewoman from california rise . I ask unanimous consent to reclaim the time i yielded. The speaker pro tempore without objection. Id like to yield to my colleague. Thank you for bringing up the walters amendment to h. R. 12865, the allow states and victims to fight online sex trafficking act, called fosta. The walters amendment reinstates critical provictim provisions from think original bill and reflects the work that has been done in the senate on those which is the meat of the senate bill 1693, the stop enabling sex trafficking act, or sesta. Ms. Wagner sesta has over 67 senate cosponsors, these two bills depend on each other to address the problem of online sex trafficking. Mr. Speaker, we should not allow big tech money and special interests to try and overdefine this conversation and override our criminal justice system. Fosta amends section 230 to allow for stronger prosecution and sesta amends section 230 to allow for stronger Civil Enforcement against web psis that profit from Human Trafficking. They are two sides of the same coin and they must pass together. We need both criminal and civil tools to properly combat the highly lucrative industry of online sex trafficking. Moreover, it is imperative that we clarify that section 230 does not impair or limit the ability of trafficking victims to use the federal private right of action that congress clearly provided in the trafficking victims protection act. Two years ago, the First Circuit court of appeals ruled that theres a fundamental tension between this private right of action and section 230. Today by voting yes on the walters amendment, the house will dispel this tension. No website is immune from civil liability for knowingly facilitating the sale of trafficking victims. Thank you. The speaker pro tempore the gentlelady yields. The gentlelady is recognized. Ms. Jackson lee let me just read, 16yearold was found beaten, stabbed to death, after being advertised as a prostitute on backpage. I might suggest we follow one great philosopher in california that said, can we all get along . This amendment is needed in order to give enhanced powers to state attorneys general that ey can provide the extra litigation leverage for individuals who are impacted in a devastating manner. As i said, we have to be concerned about the first amendment, but weve got to protect our children. And every time i think of this precious young lady, desiree, and the tears of her mother who testified before the other body, the senate hearing, i think it is important that we move forward. We move forward, we can build on this legislation. I intend to offer additional legislation that we will need, all of us, working. So that we can put a stop sign in front of the dastardly behavior of online sex trafficking. I ask my colleagues to support the walters amendment in order to ensure that we can move forward, as we move forward, make a tinches in the lives of these children. I yield back. The speaker pro tempore the gentlewoman yields. The gentlewomans time has expired. The question is on the amendment offered by the gentlewoman from california. Those in favor say aye. Those opposed, no. In the opinion of the chair the ayes have it. The amendment is agreed to. The gentlewoman from california is recognized. Id like the yeas and nays on that amendment. The chair does the gentlewoman request a recorded vote . I do. The chair pursuant to clause 6 of rule 1, further proceedings on the amendment offered by the gentlewoman from california will e postponed. It is now in order to consider amendment number 3 printed in house report 115583. For what purpose does the gentlewoman from texas seek recognition . Ms. Jackson lee i have an amendment at the desk. The chair the clerk will designate the amendment. The clerk house report 115583, offered by ms. Jackson lee of texas. The chair pursuant to House Resolution 748 the gentlewoman from texas, ms. Jackson lee, and a member opposed, each will control five minutes. The chair now recognizes the gentlewoman from texas. Ms. Jackson lee let me thank you very much, mr. Chairman. ve already raised the picture of desiree, who is dead. And it was driven by being exposed as a socalled prostitute, sex trafficking, a little girl, on backpage. Or to j. S. , who in fact was victimized in seattle, raped and put on backpage, rescued by her family, and failed in court before this legislation. My legislation is very simple. Does this bill work . What more can we we do . So im asking for a g. A. O. Study, the g. A. O. Will be instructed to assess the damages awarded to victims and restitution amounts imposed against defendants as a result of this bill. Victims of the of sex trafficking require a multifaceted response to rebuild their lives. That includes housing, counseling, job training, and in many cases drug treatment and rehabilitation. We as members of Congress Need to be able to know, does it work . A citizenled movement called fight for us along with a team of influential citizens called the houston 20 work to fill in the gaps and strengthen the services for victims and survivors in the city of houston. I was proud to meet with them at the community of faith church a socially motivated church led by bishop james dixon. Jackie is the lead and they were all committed, children at risk, and many other organizations, to eliminating some of the gaps for the houston 20 which will allow them to utilize resources for even greater work. Does this really work . So i ask my colleagues who support the jackson lee amendment and i reserve my time. The chair the gentlewoman reserves. For what purpose does the gentlewoman from alabama rides . I ask unanimous consent to claim time in opposition although i am not opposed. The chair without objection. I support ms. Jackson lees amendment requiring a g. A. O. Study. Ts always mrs. Roby this legislation this study will help determine if this is the tool we believe it will be. I commend ms. Jackson lee for this amendment and her commitment to sex trafficking. I would like to yield three minutes to the gentlelady from missouri. The chair the gentlelady is recognized. In recent years, sex trafficking has moved from the streets to the internet, a National Center for missing and exploited children has witnessed an 846 increase in suspected child sex trafficking reports. Ms. Wagner 81 of the reports concern online trafficking facilitated by websites that help traffickers post, advertise post advertisements of children and victims. I find it hard to imagine that if a neighborhood business hosted a slave auction the auctioneer would not be considered liable. But thats exactly what is happening with websites like backpage. Com and hundreds of others. I have spoke within state and local prosecutor across america who want to hold online advertisers accountable for facilitating trafficking and promoting prostitution. But they cannot. Section 230 has been interpret sod broadly that courts have ruled in favor of backpage. Com in criminal and civil cases, despite the websites clear criminal conduct. These rulings defy congressional intent. 2 years ago, senator jim exxon of nebraska sponsor of the Communications Decency act, stated, quote, the information superhighway should not be become a red light district. Section 230 was an amendment to the c. D. A. That intended to motivate websites to screen explicit content in good faith and shield websites from unfair liability for third party content. However, section 230 was never intended to shield websites from liability for criminal conduct. Congress did not intend to allow businesses to commit trafficking crimes online that they could never commit offline. It never meant to imply that criminal conduct can hide behind the defense of he jate mt. Publishing or editing. H. R. 1865 is a long overdue clarification of section 230, explaining to americans that to americas courts that state and local prosecutors are not handcuffed from protecting their community and the state law should be freely enforced against websites that unlawfully promote prosecution prostitution and sex. Mr. Speaker, the lee amendment will help us track the yution of this new crime and im delighted to support it. I thank the gentlelady for offering it. Mr. Speaker, im horrified that children and adults are sold on the internet like a tshirt or takeout. Im horrified that human beings are sold with impunity and have no access to justice. Today, please vote yes for justice. I thank the gentlelady for yielding time. Mrs. Roby i reserve. The speaker pro tempore the gentlewoman from texas is recognized. Ms. Jackson lee how much time does each side have . The chair three minutes for texas and two minutes for alabama. Ms. Jackson lee im pleased to yield one minute to the gentlelady from ohio. The chair the gentlewoman is recognized. Thank you, thank you congresswoman Sheila Jackson lee for yielding time but more importantly, thank you for your amendment as the amendment. As the lead democrat sponsor on this bill, i proudly join you with that amendment. Like my colleague, congresswoman roeby said, its always good when you have a great bill that you can have an amendment that asks for a study to make sure its effective. Lastly let me just say to you, thank you for sharing the stories. Mrs. Beatty whether its the story of kathy or erica or in my district the resasm it makes me proud to stand with you and i thank you for not only this amendment but for your work in judiciary. What we know your amendment will do, it will protect the innocent. Thank you and i yield back. The speaker pro tempore the gentlewoman reserves. The chair recognizes the gentlewoman from alabama. The gentlewoman reserves. Ms. Jackson lee do you have an additional speak her i will close at this time. As i indicated mr. Speaker, and i thank the gentlelady from ohio, from new york, i thank the gentlelady, congresswoman wagner, i thank congresswoman lofgren for her concern as evidenced by her statement but i want to focus on building blocks. And i want to say to fight for us and the coalition of 20 i met with, my promise is that we are in building blocks. Were going to build on what were doing today and were going to continue to mount the assault on sex trafficking and Human Trafficking and were going to literally wipe it out. Were going to wipe it out because of shond rah, were going to wipe it out because of this young, beautiful lady, 16 years old, desiree. Were going to wipe it out because of desiree. Were going to wipe it out because of j. S. Were going to wipe it out because desiree was found beaten, stabbed to death after being advertised as a prostitute on backpage. We wanted her mother to know that we are outraged that children are treated in this way. And my amendment will be the guide post, is what were doing working . It will provide a report on the amounts of damages awarded, the restitution awarded, report the amounts that are requested by victims and the government on their behalf. The nature and description of the losses that are claimed. And the justification for amounts ordered to be paid. My amendment asks g. A. O. To report cases that are dismissed and provide information describing the reason for those dismissals. We dont want anything to go under the rug. Our children are too important. I ask my colleagues to support the jackson lee amendment and in conclusion i would say to those who i met with, to those groups around the nation, meeting in local communities, thinking that they are alone, fighting this dastardly act of sex trafficking and Human Trafficking and of course a moneymaker like backpage, you are not alovene, were starting today, weve done work before and we are not going to stop and i will work with you for the ongoing blocks that are going to continue to stamp out sec trafficking online sex trafficking and Human Trafficking. With that, i ask for support of the legislation and my amendment. I yield back. The chair the gentlewoman from alabama. Mrs. Roby again, mr. Speaker, i support ms. Jackson lees amendment and urge my colleagues to vote yes. With that, i yield back. The chair the question is on the amendment offered by the gentlewoman from texas. Those in favor say aye. Those opposed, no. In the opinion of the chair, the ayes have it. He amendment is agreed to. For what purpose does the gentlewoman from alabama seek recognition . Mrs. Roby mr. Speaker, i move that the committee will now rise. The chair the question is on the motion that the committee rise. Those in favor say aye. Those opposed, no. The ayes have it. The motion is adopted. Accordingly, the committee rises. The speaker pro tempore mr. Chairman. The chair mr. Speaker, the committee of the whole house on the state of the union, having had under consideration h. R. 1865, directs me to report that it has to no resolution thereon. The speaker pro tempore the chair of the committee of the whole house on the state of the Union Reports that the committee has had under consideration h. R. 1865, and has come to no resolution thereon. Pursuant to clause 8 of rule 20rks the chair will postpone further 20, the chair will postpone further proceedings today on motions to suspend the rules on which a recorded vote or the yeas and nays are ordered. Or votes objected to under clause 6 of rule 20. The house will resume proceedings on proastpone on postponed questions at a later ime. For what purpose does the gentleman from arkansas seek recognition . Mr. Speaker, i move to suspend the rules and pass the bill, h. R. 5078, as amended. The speaker pro tempore the clerk will report the title of the bill. The clerk h. R. 5078, a bill to amend the real estate settlement procedures act of 1974, to modify requirements related to mortgage disclosures, and for other purposes. The speaker pro tempore pursuant to the rule, the gentleman from arkansas, mr. Hill, and the gentleman from minnesota, mr. Ellison, each will control 20 minutes. The chair now recognizes the gentleman from arkansas. Mr. Hill i thank the speaker. Mr. Speaker, i ask unanimous consent that all members may have five legislative days in which to revise and extend their remarks and include extraneous material on this bill. The speaker pro tempore without objection. Mr. Hill mr. Speaker, ill yield myself such time as i may consume. The speaker pro tempore the gentleman is recognized. Mr. Hill mr. Speaker, i rise today in favor of my bill, h. R. 5078, the trid improvement act. This important package will cut through the red tape and level the Playing Field for making sure that regulations are smarter, fairer, clearer and more efficient, while at the same time ensuring that consumers and investors are protected. You know, mr. Speaker, when the cfpb, the Consumer Financial protection bureau, was first initiated as a part of the doddfrank act, one of then staffer, now senator elizabeth warrens goals was, simpler regulation. That we would streamline regulation. That we would take bulky, complex consumer forms and make them simpler. And the tilarespa, truth in lending form, and the real estate settlement form, were examples in those early days. That they were going to make these forms simpler and easier for consumers. Well, thats what were talking about today, mr. Speaker. For it did not become simpler and easier. It became costly, complex and difficult for consumers. Today were back on the floor on this issue. Its not a new issue or a new concern. Because the confusion related to trid has been apparent for years. In november, 2013, the cfpb finalized trid. Combining, as i said, the truth in lending form with the real estate settlement procedures form, necessary for consumers in this country to close a home loan, to have that American Dream. The Effective Date for this final rule was originally set for Mortgage Applications received on or after august 1, 2015. But due to the administrative errors of the cfpb, the agency delayed it until october 3, 2015. In october the house of representatives passed h. R. 3192, the homebuyers assistance act, which i proudly sponsored. And it passed with a bipartisan vote in this house of 303221. It would have provided a hold harmless period for those trying to make a goodfaith effort to comply with this complex rule. In april, 2016, with complaints pouring in from both homeowners, homebuyers, consumers, bankers, title companies, the cfpb decided to reopen the rulemaking on tilarespa, and the trid rule. The cfpb issued a final rule clarifying and amending certain mortgage disclosure provision. So as you can hear from this long story, mr. Speaker, this rule is complex. And so were here today to try to fix a part of it. A small part of it that will make it easier, better and more clear for consumers. The American Bankers Association stated if there was one thing to fix about the current regulatory system, it would be the tilarespa integrated disclosure rule, trid. Not qualified mortgage definitions. Not the volcker rule. The trid rule. Mortgage lenders is seen regulatory change around every aspect of their lending for the last eight years and this rule is no exception. Today, mr. Speaker, over in the house Small Business committee, the g. A. O. Testified. Theyve issued a report about the tilarespa integrated disclosure rule. They told the committee today that this rule was one of the most expensive facing Community Banking across the country. The most burdensome. So, here the tilarespa rule before our house Small Business Committee Says we are burdening Community Banks and they are in turn not able to do the kind of work we expect for our homebuyers across the country. The Society Director said the bureau agreed with the associate director said the bureau agreed that it assessed the effectiveness of the trid guidance and it intended to ask the public for input on ways to improve regulatory guidance. Mr. Speaker, im glad to have this report from the g. A. O. But weve been calling for this for almost 2 1 2 years, that we want this rule made simpler and more direct and better for our consumers. H. R. 5078 fixes the Title Insurance disclosures so that consumers actually know what their expenses are going to be for Title Insurance. And despite our best efforts, the cfpb has been unwilling to fix this problem on its own, so today Congress Comes to act. The other aspect of this bill, and i want to thank my good friend from minnesota, representative ellison, and my good friend, congressman pittinger from North Carolina, for the second portion of this bill. The Credit Access and inclusion act of 2017. The Credit Access and inclusion act amends the fair credit reporting act to allow the reporting of certain positive Consumer Credit information for consumer reporting agencies. Specifically a person or the department of housing and urban Development Might report information related to a consumers performance in making payments either under a lease arrangement for a dwelling, or pursuant to a contract providing utility or telecommunications services. This kind of positive reporting on a consumers ability to make their payments on time will help more families in our country build a credit record. So with that, mr. Speaker, i will reserve the balance of my time. The speaker pro tempore the gentleman reserves the balance of his time. The chair now recognizes the gentleman from minnesota. Mr. Ellison thank you, mr. Chairman. Let me allow to thank you as well, mr. Hill, from the great state of arkansas. And also congressman pittinger, as well as many other members of the Financial Services committee on both sides of the aisle. Its always a pleasure to be able to Work Together on things. This is what our constituents expect. And thats what the Credit Access and inclusion bill actually represents. So, mr. Speaker, if i told you that we could help millions of people get access to an apartment, lower the cost of a loan, lower the deposit they may have to put down on a phone or utility deposit, and we could do all these things without creating a new government program, we could do it without government mandate, and we could do it with virtually no new tax dollars, would you take that deal . Because i would. Id say, wow. Help millions of people . Be able to afford services that they need before, lower the cost of loans . Yeah, why wouldnt we do that . Well, the truth is that we can. If we vote yes on the Credit Access and inclusion bill. Im proud to tell you that this particular piece of legislation, which is bipartisan, will bring about basic fairness in the credit scoring system. Credit is currency in our society. It unlocks credit to access to goods and services, hardworking americans need to build, some Economic Security for themselves and their families. But there are currentably 26 Million People currently about 26 Million People or one in 10 americans who do not have a credit record. And theres another 19 million americans who do not have enough information to even score. Lowincome individuals are in even worse shape. About one in four latinos and africanamericans either dont have a credit score or dont have enough information in the file to get a score. And almost half of the residents of lowincome communities do not have a score of any background. And this allows Credit Rating agencies to use this bill allows Credit Rating agencies to use ontime, rent, phone and utility payments when determining Credit Scores. Now, you should know, mr. Speaker, if people are late with these lines of information, it can and often does show up on their credit score now. If people take out loan products which they pay back on time, that helps their credit score. What about people who pay phone bill, utility bills, they pay every month on time but theyre not building anything to help them get in a better credit situation . This bill allows them to do that. As a result, more than a third of previously unscoreable americans will now have access to prime credit and the opportunities that come with it if when we pass this bill this bill isnt just about access to credit though. Its also about saving hard working americans real money. Thousands of dollars on car loans and their mortgages. Mr. Speaker, you do if youre unscoreable, you can often get a loan, but the Interest Rate is always higher when that happens. So if people are scoreable, they get a credit score, theyll be able to save money for themselves and put into their house holes budget. Thats money. Money were talking about is going to be used, the money that used to be going to autolenders and mortgage brokersers will go into the pocket of consumers to improve their the lives of their family and thats a Good Days Work to me. At this time, i yield back to my colleagues and ill reserve for the moment. The speaker pro tempore the gentleman reserves. The chair recognizes the gentleman. I thank the speaker. I thank my friend from minnesota for his work on this bill. And providing the chance to build credit file for those who really need it. Mr. Speaker, i want to please i am pleased to yield two minutes to my friend from north week i know this hased a decades of friendship with reverend billy graham, we salute their Work Together for the betterment of our world, i yield two minutes to the vice chairman of the subcommittee, mr. Pittenger. The speaker pro tempore the gentleman is recognized. Mr. Pittenger i rise in support for congressman hills bill this bill will Lower Consumer costs and lesser regulatory burdens for growing businesses which will lead to healthier and well functions financial markets. I would like to thank congressman hill for your great work and leadership on this issue. Im pleased that this legislation does include the credit accuracy inclusion act, h. R. 435, which i cosponsored with congressman ellison, which we introduced together. H. R. 435 is designed to give hardworking americans better access to a form of credit by providing more funts opportunities for them to build credit on their own merit without federal funds or new burachcism at a time when act stose credit is a necessity, tens of millions of americans are ham struck because they have little or no credit history. Currently on time utility and rent payments are not reflected in Credit Scores. The credit accuracy and inclusion act amends the fair credit reporting act of or fcra, to allow for nonfinancial Service Providers such as telephone, cable, wireless, electric and Gas Companies as well as landlords, to report their customers ontime payments to credit reporting agencies or c. R. A. s. By incorporating these ontime payments called alternative or Additional Data in credit reports, more americans can access responsible credit products, buy homes and cars, build wealth, strengthening our entire economy. In total, our bill would enable nearly 100 million americans to establish or raise their credit score. All without federal mandates. Ultimately this legislation will give every american the ability to build a better life. Thank you, congressman ellison, for working together on this very important issue and thank you, congressman hill, for your work on tread improvements act. Please join us in supporting this commonsense legislation. Thank you and i yield back the balance of my time. The speaker pro tempore the gentleman reserves. The chair recognizes the gentleman from minnesota. Mr. Ellison i have no other speakers and urge a yes vote on the bill, i yield back. The speaker pro tempore the gentleman yields. The chair recognizes the gentleman from arkansas. Mr. El hill mr. Hill thank you to mr. Hill and mr. Ellison for their work on thsh and thank you to those on both sides of the aisle who brought these bills to the floor and for working to help consumers have more access to credit, whether its a speedier, more transparent mortgage closing, or the chance to build credit. I have no further requests for time and yield back the balance of my time. The speaker pro tempore the gentleman yields. The question is will the house suspend the rules and pass the bill h. R. 5078 as amended. Those in favor say aye. Those opposed, no. In the opinion of the chair, 2 3 being in the affirmative, the rules are suspended, the bill is passed, and without objection, the motion to reconsider is laid n the table. For what purpose does the gentleman from texas, mr. Hensarling, seek recognition . Mr. Hensarling pursuant to House Resolution 747, i call up h. R. 4296 and ask for its immediate consideration in the house. The speaker pro tempore the clerk will report the title of the bill. The clerk Union Calendar number 434, h. R. 4 96, a bill to place requirements on Operational Risk Capital Requirements for Banking Organizations, established by an appropriate federal Banking Agency. The speaker pro tempore pursuant to House Resolution 747, 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 11560 modified by the amendment printed in part of house report 115582 is adopted and the bill as amended is considered read. The bill as amended shall be debated for one hour equally divided and controlled by the chair and ranking minority member of the committee on Financial Services. The gentleman from texas, mr. Hensarling, will be and the gentlewoman from california, ms. Watt education waters, will each control 30 minutes. The chair recognizes the gentleman from texas. Mr. Hensarling i ask unanimous consent that all members have five ledge date legislative days to revise and extend their remarks and include extraneous materials on the bill under consideration. The speaker pro tempore without objection. Mr. Hensarling i rise today in strong support of h r. 4296, an important bill authored by mr. Luetkemeyer, who is a real leader on our committee, as the chairman of the committee on Financial Institutions and consumers credit and leden many bills on this floor this particular one addresses the burden that unnecessary operational Capital Requirements have imposed on our Financial Institutions and then consequently on our hardworking families and Small Businesses who are seeking credit. The committee requires u. S. Financial institutions to hold excessive capital based on a look back, a look back approach to an organizations risks. Previous earnings and other provisions that provide in indication of future risk. Again, mr. Speaker, this is about holding operational capital for past activities. This methodology employed by the International Standard setters has forced our banks to hold hundreds of billions of dollars in reserve rather than putting that money to work in the real economy, in loans and investments for people to buy cars, to launch Small Business enterprises, maybe to make a down payment on that first home. Again, mr. Speaker, let me say it, so that all can hear. Hundreds of billions of dollars is currently sitting in banks across the country, not being utilized, to fund the Mortgage Loans and car loans and other daytoday financing that American Families and individuals demand. On top of this is the increased cost of compliance that banks have had to shoulder under the doddfrank onslaught of regulation. Banks that makes coatsville savings bank, the only remain bank in coatsville, pennsylvania, tell us 95 of their annual budget is nothing but compliance costs, mr. Speaker. This is detrimental to the coatsville, pennsylvania, community, because as 25 , thats a huge figure, mr. Speaker, they that cannot be used to fund the American Dream in coatsville, pennsylvania. So again, chairman luetkemeyer brings us a very common a very commonsense reform and very necessary reform. Most agree and recognize that the importance of our Financial Institutions to hold capital in the event of future crisis or distress, nobody denies that. This legislation does not remove those requirements. But mr. Speaker, requiring Banking Organizations to look back, look back in ther. And hold operational capital against this continued activities or against discontinued products is not just nonsensical, it is crazy. It makes no sense. H. R. 4296 amends the method on how reserve capital is calculated by establishing standards based on an organizations Current Business activities. Making the requirements more accurate and tailored to a banks current risk profile. Again, mr. Speaker, its just common sense. That means banks would still retain sufficient reserves to weather an economic storm but they would be able to put the billions of dollars currently sitting on the sidelines, to work to help make the economy grow to make it healthier. In short, this method based approach proposed by h. R. 4296 properly calibrates operational capital while also ensuring a strong, healthy, Financial Institution and thus a stronger economy for our constituents. Again, to be very clear, mr. Speaker, h. R. 4296 does not prevent federal financial regulators from instituting Operational Risk Capital Requirements. It does not eliminate the authority of a regulator to assess Operational Risk. Nor does it prevent regulators from requiring that capital be held against riskier activecies or activities or businesses. The bill simply puts forth a thoughtful framework that sets parameters while allowing regulators the flexibility needed to ensure that capital standards are appropriately tailored. A healthy Financial System, mr. Speaker, will enhance individuals Financial Freedom and will lead to a healthier and better regulatory system. H. R. 4296 has garnered strong bipartisan support in our committee, passing by a vote of 4317. Again, because it is practical and commonsense. I again want to thank the gentleman from missouri, mr. Luetkemeyer who chair ours Financial Institution subcommittee, for his leadership on this bill, i urge all my colleagues to join me in supporting this important, bipartisan measure and i reserve the balance of my time. The speaker pro tempore the gentleman reserves. The chair recognizes the gentlewoman from california. Ms. Waters thank you very much. I yield myself such time as i may consume. Mr. Speaker, i rise in strong opposition to h. R. 4296. This bill is simply another rollback of rules put in place after the financial crisis. It would undermine the stability of our countrys largest financial banks by restricting the way regulators set Capital Requirements for these institutions. Before i get into why this bill is problematic, let me take a moment to clarify what capital is and what it is not. Some have said that capital is money that is held on the side or in reserve and cannot be used to lend to borrowers this couldnt be further from the truth. Capital is not a reserve. It refers to the terms of the financing a Bank Receives. In the most simplistic example a Bank Receives funds from customers making deposits. Loans it receives from other institutions, and stock it has issued to investors. The bank uses all of these sources of funding to make mortgages and other loans to customers. However, there are important differences. Bank debt has terms like regular Interest Payments that if it stops paying, the bank fails. However, a bank can stop paying dividends on its stock without it failing. Banks funded with lots of debt are described as being higher leveraged and risky because only a small drop in the value of their mortgages and other assets can cause them to default. Funding a bank through higher levels of capital makes the bank stronger because even if the loans it has made lose value, the bank can avoid default by temporarily halting payments to their investors or lowering the value of the stock. H. R. It would impact something called Operational Risk capital, which is the capital used to cover the possibility of losses to the largest banks from their operational failures, such as failed practices and cyber breaches. H. R. 4296 would diminish this type of capital, which only about 10 mega banks are required to maintain under an enhanced framework by restricting the information that regulators can use to determine the appropriate balance of safe funding like bank stock versus debt that mega banks should have to address potential operational losses that they may occur. The bill would direct regulators to primarily consider a mega banks current activity and not their past behavior. When setting the capital level. Thereby, enabling a bank to take on more debt. According to americans for financial reform, a Nonpartisan Coalition of more than 200 civil rights consumers, faithbased and civic and community groups, i quote, while current activities are central to Operational Risk and are already treated as such, the recent loss experience of banks is the best concrete evidence regulators usually have as to the magnitude of current and future risk. Recent past activities are also vital to understanding the future exposures of the bank, including potential legal exposures, end quote. Thus, this change to how regulators determine the appropriate amount mega banks should maintain for Operational Risk is inprudent. A megas banks past actions are the best indicators of future potential risk that it may experience. Well, memories seem to quickly fade in congress about the problems that led to the last financial crisis. So let me list some of the examples of past mega banks operational failures by jpmorgan, london, and wells fargo, long list of violations that have ripped off millions of consumers including those harmed by their fraudulent account scangedal. Given these past examples that mega banks collectively paid 1260 bill quon in fines since. 160 billion in fines several committee which of President Trump eye appointees now serve on, agreed n december when they finalized reforms where the capital risk originates, banks which have experienced risks historically assumed to be more likely to experience Operational Risk loss in the future. So, it makes no sense to have a forwardlooking assessment that deemphasizes a banks past failures. This bill is saying dont Pay Attention no matter how bad they have been. Dornt look at their past performance, because if you do, you will make a different decision about Capital Requirements. The bills changes would cost the federal government 22 million. This calculation was based on the fact that the capital change would not only affect the banks probability of failure, but also the magnitude of losses to our Financial Stability which affects lt overall economy. This is not to do with Community Banks. This is not a bill to have Community Banks. What we wish we would not hear is someone talking about how its going to hurt Community Banks. Excuse. Ften used as this is a bill for the 10 largest banks in this country. The mega banks are hoping that ongress will let them to downplay and ignore the recent and extensive operational failures. Mr. Diamond, c. E. O. Wrote in his his letter to share holders, Operational Risk capital should be significantly modified, if not eliminated, quote, unquote. Lets think about it like this. Most adult consumers have a credit score. Banks use those Credit Scores to determine whether or not to lend to a consumer, and if so, under what terms. These Credit Scores are based on a consumers what . A consumers past payment history because this information is considered one of the best indicators of a persons likelihood to default on future credit obligations. Now we know that Credit Scores are problematic. No one, including me is proposing to get rid of them because we can all agree that past Payment Information is a good indicator of how someone will handle credit in the future. This bill takes that principle and throws it out the window when it comes to the 10 largest banks in this country. Keep in mind, these same banks will use a consumers credit score for underrating mortgages and other consumer loans. But the mega banks are asking this congress not to judge them on their past behavior as they judge consumers. And to let them have a clean slate moving forward, if that isnt a double standard, im not sure what is. Mr. Speaker, bank proosts reaps an alltime record high. Exention for wall street c. E. O. Oomplet has shot back up to levels last seen in 2006. And business lending is up 75 . All this happened while u. S. Banks added more than 700 billion in capital. There is a simple reason for this. Healthy banks lend. U. S. Banks lend significantly more than their european counterparts because they boosted capital levels while the european banks did not. Despite republicans chicken little arguments about the dire consequences of the doddfrank act and related regulatory reform. Banks are making more money and lending more than ever but apparently thats not enough. So im here appealing for congress to continue to uphold the commonsense safeguards for consumers, the broader economy. And i reject this wall street giveaway. I urge my colleagues to oppose this harmful legislation and i reserve. The speaker pro tempore the gentlewoman resenchings. Mr. Hensarling i yield five minutes to the gentleman from missouri, mr. Luetkemeyer, chairman of the subcommittee Financial Institution and the ill is recognized. Mr. Luetkemeyer thank you, mr. Speaker. I rise in support of h. R. 4296, legislation that will set reasonable parameters for financial regulators for establishing risk requirements so banks can grow their local economies. Operational risk Capital Requirements, by a Foreign Group of folks that get together and we have accepted some of their advice, unfortunately and implemented by the fdic, the Federal Reserve. Like many concepts, the organization intent may have seemed to be a good idea. But it has brought about confusion and unintended consequences. The committee has revised its Operational Risk standards on more than one occasion in the last few years. The first was in the fall of 2014 when the Committee Found that its original standards were undercalibrated. The second came in 2016 when they suggested a requirement to force banks to look back and hold discounts. This is not an appropriate way to determine Capital Requirements. And what does this mean . It means that today, a bank that exits a particular line of business must still hold the same amount of capital as a bank that is engaged in that business. It means that a bank that spends money to improve Risk Management will be saddled with the same standards than the bank that has done nothing to improve Risk Management. This would instill competence in installing clear guardrails. This is particularly important that the european regulators moved the goal posts several times. H. R. 4296 would ensure that the imposition of forwardlooking Capital Requirements focus on the banks current practices. This would incentivize to mitigate risks creating safer banks and a safer Financial System. This legislation does not prevent federal financial regulators from instituting Operational Risk Capital Requirements. It does not eliminate the authority of a regulator to assess Operational Risk nor dees it require that capital be held against riskier activities or businesses. In other words, it would allow the regulators to regulate but putting common sense into the regulation and alying the flexibility of assessing risk rather than being fixed to do a lookback type of risk analysis. This is a thought fall prame work and allowing regulators to ensure that standards are appropriately tailored. Due to my background as a banker and regulator, im one of the voices in favor of Strong Capital standards and at the same time the standards need to make sense and need to reflect the actual risk posed by the Financial Institution. These standards have a tremendous impact and regulators need to get them right. So they dont hamstring the economy and local community. Join me in voting in favor of this legislation. I thank you for your support. And i yield back. The speaker pro tempore the gentleman reserves the balance of his time. The chair recognizes the gentlewoman from california. Ms. Waters mr. Speaker, i yield to the gentlelady from ohio, a member of the Financial Services committee, mrs. Beatty, as much time as she may consume. Mrs. Beatty thank you to our Ranking Member, congresswoman waters, for yielding me time, but also for your steadfast leadership in opposing the financial choice act and many of the provisions included in the bill, including the one that we are considering on the floor today. Mr. Speaker, this bill flies in the face of the old maxim, those who do not remember the past are condemned to repite. This bill would effectively blindfold our regulators when calculating Operational Risk capital at our largest institutions, worth repeating again. Not our Community Banks but our largest Financial Institutions, by precluding them from looking at an institutions historic losses as an indicator of possible future losses. Now, earlier, the Ranking Member injected an example of asking about our Credit Scores. So i think its worth repeating or elaborating. Imagine if i go to a bank for a Mortgage Loan and ask me for my credit score and i told them they couldnt look at my past Financial Behavior in order to decide whether or not they are going to give me the loan. When you talk about common sense for good regulation, we all know the answer to that question, mr. Speaker. This bill would effectively do just that to our regulators. Instead of a credit score which determines credit worthyness, Operational Risk determines the risk of loss resulting from inadequate or failed internal processes, people and systems. I would tell our regulators, when determining the appropriate level of capital, a Financial Institution needs to hold against Operational Risk, you cannot look at an institutions past losses especially if they got out of their business. Mr. Speaker, i think this is common sense. Whether you are a banker or a regulator, you clearly understand that we need to make sure that we dont blind fold our regulators. So i oppose this bill, which would reduce capital at our countrys largest Financial Institution and blindfold our regulators to safeguard the ability of our economy and i urge my colleagues to vote no. And i yield back. The speaker pro tempore the gentlelady reserves. The chair recognizes the gentleman from texas. Mr. Hensarling i yield hice 30 seconds, she uses the wrong analogies. We dont pay our Home Insurance premiums on the home we sold but on the home we own. If you move from a swamp and move to a mountaintop in olorado, you pay different premiums. This has to do with your risk profile today, not yesterday. Im now pleased to yield three minutes to the gentleman from ohio, a member of the Financial Services committee, mr. Stivers. Mr. Stivers i rise in support of this bill. This bipartisan bill makes important corrections in the operation requirements. It would do so in a forwardlooking manner. Currently Financial Institutions are required to hold riskbased capital even for discontinued activities and products. Accounting and the Capital Markets often use the concept of pro forma financials which means you consider the Ongoing Operations or the way that it would look if it looks like it is today going forward. This bill would institute that same approach for regulators to use pro forma Operational Risk so they wouldnt have to continue to charge a capital charge on operations that have been discontinued. I think the chairman made a great comment about you dont buy Home Insurance on a home you already sold. My colleague, mr. Luetkemeyer, during markup of this bill talked about how the Basel Committee has revised the specific Capital Requirements several times but its still a work in progress. This legislation is just a commonsense change to make sure that banks are not charged capital charges against things that they arent doing anymore. This approach will free up capital that is needlessly on the sidelines and put it back in reach of americas job creators. I urge my colleagues to vote yes on h. R. 4296, and i yield back my time, mr. Chairman. The speaker pro tempore the gentleman from ohio yields back. The gentleman from texas reserves. The gentlelady from california. Ms. Waters yes. Would yield additional time to the gentlelady from ohio. She has raised a question about the analogies that the chairman made. Those analogies seem to escape ordinary logic, and so ill yield to the gentlelady another two minutes. The speaker pro tempore the gentlelady is recognized for two minutes. Mrs. Beatty thanks to the Ranking Member. Maybe i should right that wrong analogy, mr. Chairman, thought. Maybe if i take his analogy that its not based on the house i sold but based on the house im living in. Well, whats the difference . If i went to the bank and want to put my house up for collateral but hadnt paid the payment on it in four months and it was getting ready to be foreclosed on, i think they would want to know that. And that would be maybe a better analogy on it because what were trying to say to the people who are out there watching and listening to this, you cannot not be able to let the regulators for our larger banks to put us at risk. What we know also happened in 2008. So that was the point i was making. So lets say the analogies dont work so we dont have to go back and forth. Let me say i will be voting no on this because i dont want to blindfold or tie the hands of regulators being able to do their jobs. Thank you and i yield back. The speaker pro tempore the gentlelady from ohio yields back. The gentlelady from california reserves. The gentleman from texas. Mr. Hensarling mr. Speaker, im pleased to yield three minutes to the gentleman from illinois, mr. Hultgren, the vice chairman of the Financial Services subcommittee on Capital Markets. The speaker pro tempore the gentleman from illinois is recognized for three minutes. Mr. Hultgren thank you, mr. Speaker. I also want to thank chairman hensarling for all of this work moving this important regulate reform through. I speak in support of h. R. 4296 to place requirements on Operational Risk Capital Requirements for Banking Organizations established by an appropriate federal Banking Agency. This bill is one of many that are being reported by the Financial Services committee with bipartisan support. I want to commend congressman luetkemeyer, congressman meeks for working together to get a very strong vote from the Financial Services committee. I hope thats something we can accomplish today on the house floor. This legislation acknowledges we can make improvements to the regulate framework thats been implemented or is still pending in response to the financial crisis. My constituents and i are very pleased to see the Economic Growth over the last year, but that does not mean we shouldnt take additional steps to ensure we have an efficient regulate system. For example, the fed is likely going to continue tightening rates and i am not sure congress will always be able to provide the pro growth fiscal policy that weve seen as of late. One of our other tools for affecting the performance of the economy is a pro growth but sensible regulate regime that permits for investment, job creation and financial security. H. R. 4296 will ensure our banking regulators institute Operational Risk capital standards that makes sense for the u. S. Financial system. This legislation ensures that Operational Riskbased Capital Requirements are reflective of the banks, organizations Current Businesses. This seems logical. But its based on historical performances and does not provide for adjustments based on changes made by a Banking Organization. So, for example, a Banking Organization might suffer from a cyberattack that results in losses for the organization. In fact, cyberattacks and data breaches are to be considered one of the largest categories of Operational Risk. In response, this Banking Organization could choose to overhaul its ability to detect and respond to such incidents. Shouldnt our capital framework reflect that work . Or shouldnt the Banking Organization continue or should the Banking Organization continue to suffer from a punitive framework that disincentivized proactively addressing Operational Risk . I for one am supportive of policies that will encourage investment by Banking Organizations to address reputational risks such as those that might pose a risk for a data breach. I would encourage all of my colleagues to vote in support of this Bipartisan Legislation. I would encourage our Financial Sector to proactively address Operational Risks and will also free up capital to permit for Economic Growth. With that i yield back. The speaker pro tempore the gentleman from illinois yields back. The gentleman from texas reserves. The gentlelady from california. Ms. Waters i yield such time to the gentlelady from hawaii, a member of the congressional progressive caucus, ms. Gabbard, such time as she may consume. The speaker pro tempore the gentlelady from hawaii is recognized for such time as she may consume. Ms. Gabbard thank you, mr. Chairman. Id like to thank Ranking Member waters for opposing this bill and standing for the protections of everyday americans. We cant forget that it was only 10 years ago that millions of hardworking families watched their life savings entirely wiped out. They lost their homes. They couldnt afford to send their kids to college. And all of this heartache, this pain, this suffering they went through was a direct result of risky predatory lending practices and toobigtoofail banks that didnt have sufficient capital in place to support and absorb their financial losses. It was in the aftermath of this financial disaster in 2008 that Congress Passed protections to prevent this from happening again. But here we are today where these big banks now believe we should simply forget the past mistakes that they made and instead only evaluate their current activities to determine certain Capital Requirements. I guarantee you those families who have suffered have not simply forgotten about what they went through and what they are still struggling to overcome and recover from. By ignoring critical indicators of past activities, this bill would allow big banks, like wells fargo, for example, who defrauded the American People just within the last several months by opening of millions of fake accounts to get away with a slap on the wrist. And the American People are set up to take the fall for their actions. Now, supporters of this bill claim current Capital Requirements stifle lending and hurt our banks and the economy, but the facts say otherwise. In 2016, bank profits reached an alltime high, and today business lending is up 75 since 2010. Our countrys banks added more than 700 billion in capital to absorb potential losses and protect americans and our economy from financial disaster. Higher Capital Requirements dont restrict lending. They simply ensure big banks that are even bigger today than they were in 2008 can absorb their losses without depending on taxpayers for a bailout. The American People deserve a Financial System that works for them and their families, not one that bets against them to boost wall street profits. We need to pass legislation that increases these Capital Requirements of banks with assets greater than 50 billion and continue to enact and strengthen reforms that will protect our economy and American Families from another massive collapse. Thats why im strongly urging our colleagues to reject this dangerous bill and instead Work Together towards efforts that to build a Financial System that serves the American People, not special interests or wall street banks. I yield back. The speaker pro tempore the gentlelady from hawaii yields back. The gentlelady from california reserves. The gentleman from texas. Mr. Hensarling mr. Speaker, i yield myself 30 seconds just to point out to my friends on the other side of the aisle there are over 20 different capital levels that are already applied to our Banking Organizations, including the total loss absorbing capital, the tilac. Id also point out if my friends are so concerned about capital levels, maybe they should have supported the financial choice act which is a tradeoff between greater levels of capital and washington micromanagement of our Financial Institutions. Last but not least, chairman powell of the Federal Reserve appeared before our committee this morning saying safety and soundness considerations allow the fed for all intents and purposes impose any capital level they want to on banking institutions, thus undercutting all the arguments we heard on the other side of the aisle. I am now pleased to yield three minutes to the gentleman from North Carolina, the vice chairman of the Financial Services committee on terrorism and illicit finance, mr. Pittenger. The speaker pro tempore the gentleman from North Carolina is recognized for three minutes. Mr. Pittenger id like to thank my good friend, mr. Luetkemeyer, for his work on this important legislation. In the aftermath of the financial crisis, the Basel Committee expanded regulations on Operational Risk requirements imposed on Financial Institutions. Unfortunately, like many of the implemented regulations, unintended consequences were brought about. The complexity and nature of the current Operational Risk Capital Requirements have greatly diminished the availability of credit for consumers, resulting in increased costs and prices for families and Small Businesses. To address these concerns, h. R. 4296 limits the burden of Operational Risk Capital Requirements to a banks current activities and businesses and permits adjustments to lessen Operational Risk. This will ensure that banks are holding increased capital more efficiently and will expand the credit market to better meet the needs of hardworking americans. Let me be clear this bill does not eliminate Operational Risk Capital Requirements but ensures requirements are forward looking and tailored to a banks current financial risk profile. As a key provision of the choice act, which passed the house in june, i want to thank mr. Luetkemeyer for his persistence and continued leadership on this important issue. I urge all of my colleagues to please join us in supporting this commonsense bipartisan bill. Thank you and i yield back the balance of my time. The speaker pro tempore the gentleman from North Carolina yields back. The gentleman from texas reserves. The gentlelady from california is recognized. Ms. Waters thank you very much, mr. Speaker. In addition to the concerns i have raised with this bill, i also want to mention a change rules 4296 made in the Committee Just last night because h. R. 4296 makes the 10 largest banks more likely to fail than Nonpartisan Congressional Budget Office determined there was a higher likelihood that taxpayer funds would be used to wind down a megabank. To offset these costs, republicans have taken funds from the Federal Reserve surplus account. So what is the feds capital surplus account . Effectively its a Rainy Day Fund intended to ensure adequate capital is available to absorb possible losses. Several stakeholders have raised concerns that by reducing the feds surplus account, congress could negatively affect the Federal Reserves independent and Monetary Policy decisionmaking by rendering it dependent on treasury for recapitalization in the event that total reserve bank capital is depleted. Put simply, this bill not only makes the 10 largest banks more likely to fail but it also makes it more likely that the Federal Reserve will be unable to address problems in the Financial System going forward. Id like to also mention that in a letter opposing this bill, the center for American Progress highlighted, again, several budgetary considerations we should keep in mind as we debate this bill. And of course i have either mentioned or eluded to it but its important we understand that the center for American Progress is very concerned and the c. B. O. , they quote, also projects that h. R. 4296 will increase the deficit due to an increase in expected losses to the federal government stemming from an increase in the likelihood of another financial crisis. The bill would pay for these costs by lowering the Federal Reserve systems surplus funds, once again, treating the fed like a piggy bank and shifting privately generated to the public, quoteunquote. And so with that ill reserve the balance of my time. Mr. Hensarling i yield three minutes to the gentleman from new york, mr. Zeldin, a hardworking member of the Financial Services committee. The speaker pro tempore the gentleman is recognized. Mr. Zeldin thank you to the chairman and recognizing me to be able to rise in strong support of this Bipartisan Legislation introduced by my colleagues on the financing shal services committee, congressman luetkemeyer and congressman meeks. Like so many regulations imposed y the 2010 doddfrank law, the Capital Requirements place a one size fits all solution on banks regardless of their capitalization. Their various lines of business and the customers they serve. The current standard requires banks to look back and hold Operational Risk. In plain english, this is to hedge against the risk of a product discontinued years ago. This is not an effective way to determine Capital Requirements or in the real risk these standards are meant to protect consumers from. This is hurting consumers. By making credit less available in the marketplace and it hurts the small and mediumsized hometown banks that our communities rely. My constituents on long island, and hardworking American Families, the consequences of these misguided regulations are more costly loans and less available mortgages. These are the Financial Products that help Small Business owners help expand or hire or help families buy a home. This reforms Operational Risk requirements so they can focus on a banks activities and line of business. This legislation keeps sound standards in place so banks must avoid risky behavior by freeing up needing capital so it can be lent to consumers and not be in a misguided government mandate. By ensuring the capital standards are transparent, fair removes a partisan road block and allocated to consumers, homeowners and businesses. I want to again applaud the Bipartisan Team work of my colleagues and i want to thank chairman hensarling for all of his leadership on this important issue and so many others. I urge all my colleagues to vote yes on this important bipartisan bill and i yield back. The speaker pro tempore the gentleman from new york yields back. The gentleman from texas reserves. The gentlelady from california is recognized. Ms. Waters early in my statement i warned there would be someone who would come on the floor and claim that it was going to hurt Community Banks, smalltown banks and this bill has nothing to do with Community Banks or smalltown banks. This is about mega banks. This is about sifi and the banks that can cause harm in the whole system. This is about those banks that we must be concerned about because of the displacement that hey can cause not only in this country, but internationally. And with that, mr. Speaker, and members, i just remind you again, this has nothing to do with Community Banks. This has nothing to do with smalltown banks, but just the big banks that are significantly important banks. So i reserve. The speaker pro tempore the gentlelady from california reserves. Mr. Hensarling im pleased to yield three minutes to the gentleman from ohio, mr. Davidson, a very thoughtful member of the Financial Services committee. Mr. Davidson i rise today to offer my support for h. R. 4296 and for the bipartisan work of our committee, the work our chairman has helped lead and im encouraged that this bill will establish clear guardrails for Capital Requirements and improve capital framework as a whole. This legislation is another example of ensuring regulators work in the best interest of the u. S. Economy rather than abiding by International Standards that hold american businesses back rather than move them forward. The very premise of this legislation reminds me of a song. I remember when bill clinton was running, he had a song dont stop thinking about tomorrow. This piece of legislation thats in place today established by the committee in 2006 is thinking about tomorrow. Thinking about yesterday. What happened in the past is constraining what could happen in the future. So banks are reserving against past losses in an era that holds them from being able to adopt the Business Plans that maybe even under new leadership, new Board Members and a whole new set of governance requirements that will get the Company Moving forward at a better growth rate. This is better for for not just the company, the executives or the Board Members, but the consumers that would be served by this market. Take, for instance, historic losses being reserved against, that capital is sitting there not actively employed in the market. Even the committee saw how ridiculous this rule is. So they updated their guidance in 2016 to include this as an indicator instead of the sole factor. We need to move forward in the best interest of our country and help american businesses instead of holding them back. I yield the balance of my time. The speaker pro tempore the gentleman from ohio yields back. The gentleman from texas reserves. The gentlelady from california. Ms. Waters i reserve. The speaker pro tempore the gentleman from texas. Mr. Hensarling im pleased to yield two minutes to the gentlelady from new york, ms. Tenney, a hardworking member of the Financial Services committee. Ms. Tenney thank you, mr. Chairman, for yielding me the time to speak on this important bill and tremendous and strong leadership on our committee. H. R. 4296 would set reasonable standards for regulators that are based on the risk posed by banking authorities. Operational risk standards were created in the product of the committee and been amended twice but the adoption doesnt hit the mark. Thats why through the Committee Proposal is well intentioned, this bill and proposal would amend it to go to the efficiency of our banks. The current framework is based on that past activity and will hold operational capital or discontinued products. This bill will correct those errors by allowing our regulators to have the Capital Requirements they need. H. R. 4296 limits the burden of Operational Risk Capital Requirements to current activities and gives the bank to determine risk under forwardlooking assessment and this bill as you have heard does not eliminate the federals government to assess Operational Risk or alter the regulators authority to set requirements when doing business on highrisk customers. This legislation would create a common sense reform to the standards and i urge all members to support it and i say thank you to congressman meeks, a fellow new yorker for cosponsoring this legislation. I thank you, mr. Chairman, and mr. Luetkemeyer for his hard and on this bill for a person who is a banker, a business person from a rural area of our country who really understands the need to protect consumers and with that, i yield back. The speaker pro tempore the gentlelady from new york yields back. The gentleman fromer texas reserves. Ms. Waters may i inquire as to how much time i have left . The speaker pro tempore 9 1 2 minutes reminimumming. I would like to inquire whether or not he has any more speakers . Mr. Hensarling we may have one on the way. Otherwise, im prepared to close. Ms. Waters i reserve. The speaker pro tempore the entlelady from california is reserving. Mr. Hensarling i reserve. The speaker pro tempore the gentlelady from california. Ms. Waters thank you very much. I certainly have no further requests for time and i yield myself the remainder of my time. Ets put aside the complex terminology that we use with this legislation and call this bill what it really is, a shortsided giveaway tore 10e mega banks. The very largest banks in our nation to have to abide by Operational Risk standards under an enhanced framework and required to maintain this additional capital, so when they continue to engage in risky behavior like opening up millions of fake accounts to drive up profits, they will not immediately become insolvent sparking a financial crisis. And may i just stop here for a moment and say, it is odd that given the information that we have discovered about some of our mega banks, particularly wells fargo, who was involved not only in creating fake accounts, false accounts in their clients names, but also selling them basically insurance that they did not need. Im wondering why my friends on the opposite side of the aisle are not more concerned about this Operational Risk that they take. For example, when we talk about Operational Risk, including the fines. The fines we have placed on wells fargo and other banks who have been caught committing fraud on its clients, it seems to me that this would be taken into consideration. And i dont think they are going to stop. We have gone through a crisis. 2008, we had this meltdown and a recession, almost a depression. We had to bail out all of these banks. And yet, we have members particularly on the opposite side of the aisle, who are doing everything they can to go back to some of the practices that will cause us to be in the same situation we found ourselves in in 2008. And so i would just simply say that this attempt to basically say, dont look at our past, no matter how bad we have been, no matter how many fines have been placed on them, forget about them, we dont like that. And so, in saying that, what theyre basically saying is, they are going to create more risk and they are going to put banks in the position of possibly failing. And so that, i would just like us not to forget that our current Operational Risk capital standards didnt come out of nowhere. They are still recovering again rom 2007, 2009 financial crisis, which was largely caused by unsafe practices by large internationally active mega banks and inadequate regulation that ignored past conduct and risky activities. The crisis stripped wealth from millions of American Families. Since we passed the doddfrank act and the regulators implemented standards from the international committee, including our Operational Risk capital rules, we have made tremendous progress to create a more stable Banking System. And this has been the result. Mega banks have experienced recordbreaking profits for the past several years and now they expect us to believe that these commonsense rules that take into account their previous behavior of whats keeping them of providing more Affordable Credit to hardworking consumers in search of the American Dream, as i mentioned earlier, they can make loans to creditworthy consumers while funding those loans with capital instead of debt. Operational capital is not cash locked away at night but the value of its assets. A well capitalized bank that has adequate sources of funding can accommodate losses. In fact, it would lend in good times and bad. We should direct the regulators overseeing mega banks like wells fargo, with its years of , to us consumer abuses ignore these past failures and put our constituents at risk. My colleagues on the other side aisle are rushing through deregulatory measures to help their friends on wall street. The Congress Must not forget that it was hardworking consumers who paid dearly for wall streets he fault. I would urge members to vote no on this bill. And im pleased while my colleagues on the opposite of the aisle talk about this being a bipartisan and mention mr. Meeks name, we have the support of the congressional progressive caucus and congressional black cause us in opposition to this bill. I yield back. Hens i yield to mr. Mr. Hensarling i yield two minutes to mr. Hollingsworth. The speaker pro tempore the gentleman is recognized for two minutes. Mr. Hollingsworth this bill addresses a fundamental flaw. Fundamentally, we want banks to hold capital necessary for the risks they are taking today and the likely risks they may occur losses into the future. And by purely looking backwards, were driving down the interstate in the Financial System driving by looking in the Rearview Mirror only, and that is a terrible mistake by only looking at past risks instead of the risks they have today. If we want to encourage institutions to become less risky, then we need to ensure that they can reduce the amount of capital buffer if they are doing less risky activities. This is basically incentivizing the right behavior. If we continue to say to institutions, you will be penalized by the past, irrespective of the less risk you may take in the future, then we are providing them no incentive to become less risky. I think the lesson after 2008 is making sure we allow the free markets and we allow institutions to act with the right incentives, not the wrong incentives, and we want them to become less risky over time by their own decisions and by their own elections. And this doesnt change anything about the basic Operational Risk capital they must maintain except it says it should match what they are doing today and the activities they will be engaged on in the future. I do think this is commonsense legislation. I do think this is a thoughtful response to a genuine problem i hear about back home in indiana frequently. I continue to support h. R. 4296 and urge all of my colleagues to do the same. With that ill yield back. The speaker pro tempore the gentleman yields back. The gentleman from texas. Mr. Hensarling mr. Speaker, may i inquire how much time i have remaining . The speaker pro tempore the gentleman has 5 1 2 minutes remaining. Mr. Hensarling i yield myself the balance of the time. The speaker pro tempore the gentleman is recognized. Mr. Hensarling mr. Speaker, for the perhaps two dozen people who are watching us on cspan at the moment, i think its important to add a little bit of clarity to what we are debating here. And what we are debating is what is the proper capital level for a federally insured Financial Institution . And we know if that capital level is set too low, then perhaps the Financial Institution could fail. If it is set too high, then they will not have the capital to help fund the American Dream car loans, home loans, Small Business loans. So we have heard a lot about a very simple bill that helps clarify, one, one of perhaps two dozen different capital levels that are already applicable to our banking institutions, the total loss absorbing capital, the enhanced supplementary coverage ratio, the surcharge and the list goes on and on and on. We are talking about, mr. Speaker, one capital level, the operational capital, Operational Risk capital. So, number one, there are a multitude of different capital levels and liquidity levels that are already applied to our Financial Institutions. What we are saying is if we are measuring Operational Risk we should focus on current risk. If in doubt, mr. Speaker, i always recommend that members actually read the bills that are being debated. It is an always helpful exercise. And if you would actually read the bill, you would discover in section 1, the bill mr. Luetkemeyers bill said Operational Risk capital is based primarily on the risk osed by Banking Organizations current activities and business. You look at subparagraph a, its not based on historic losses. So it not prohibited to look at a historic loss, but primarily we must be focused on the current Operational Risk. As i used earlier in the debate analogy, who would want their Life Insurance premiums based on the fact at an earlier point in their life they were a skydiver or a scuba diver and now today theyre facing life as an accountant . Ok. Those are different risk profiles. If you build a home four feet below sea level yet you sell that home, i doubt you want your Flood Insurance premiums based on the home that you already sold. It makes no sense. And as i also said earlier in this debate, when it comes to proper levels of capital, as federal fed chair powell stated earlier today before our committee, safety and soundness considerations trump all. They have the power to adjust the capital levels, the regulators. Now, my friends on the other side of the aisle, or this friend on the other side of the aisle talk about, oh, my god, this is a huge risk to the economy. Its 22 million. Now, thats real money. Here. Thats not around 22 million over the 10year window. Other approximately 2 million risk and from the Congressional Budget Office report they say that it is a small, small chance that the fdic would incur additional cost. So this is not in creating more risk to the system. What were trying to do is calibrate the appropriate risk. If were going to measure Operational Risk as opposed to the other 20someodd capital levels, we ought to be focused on current risk because if were not, mr. Speaker, hardworking americans are losing current, current Credit Opportunities in order to pay for past Operational Risk. Thats not right. Thats not fair, and thats not smart. We ought to ensure we have the proper capital level, not only to make sure we have a safe and sound Financial System, but to make sure, to make sure we are capitalizing the American Dream for our constituents. My constituents in the Fifth District of texas who live in places like minneola and like forney who are desperately trying to fund their American Dream and put that down payment on a first house, we got to make sure theyre able, and so Many Americans are living paycheck to paycheck. They need these Credit Opportunities, mr. Speaker. Lets calibrate one capital ratio properly. Lets add a Little Common sense and lets not allow the good people in basel, switzerland, as good as they may be de facto impose whats an Irrational Capital system on our Banking System as were trying to help our Small Businesses and our families. So, mr. Speaker, i would yield back and say that i encourage all members to support h. R. 4296, a strong bipartisan bill to help Credit Opportunities for all families. I yield back the balance of my time. The speaker pro tempore all time for debate has expired. Pursuant to House Resolution 747, the previous question is ordered on the bill, as amended. The question is on engrossment and third reading of the bill. Those in favor say aye. Those opposed, no. The ayes have it. Third reading. The clerk a bill to place requirements on Operational Risk Capital Requirements for Banking Organizations established by an appropriate. Deral Banking Agency the speaker pro tempore for what purpose does the gentlewoman from california seek recognition . Ms. Waters mr. Speaker, i have a motion to recommit at the desk. The speaker pro tempore is the gentlewoman opposed to the bill . Ms. Waters im opposed to the bill. In its current form i am. The speaker pro tempore the gentlewoman qualifies. The clerk will report the motion. The clerk ms. Maxine waters of california moves to recommit the bill h. R. 4296 to the committee on Financial Services with instructions to report the same back to the house forthwith with the following amendment. In section 1 ms. Waters i ask unanimous consent to dispense with the reading of the bill. The speaker pro tempore pursuant to the rule, the gentlewoman from california is recognized for five minutes in support of her motion. Ms. Waters thank you very much. Mr. Speaker, this is the final amendment to the bill which will not kill the bill or send it back to committee. If adopted, the bill will immediately proceed to final passage, as amended. We have talked at length today about how h. R. 4296 is a bill for wall street megabanks, and i deeply disagree with the bills approach. So i offer this motion to recommit, not in a manner that sends the bill to the committee and kills the bill, but rather to attempt to improve the bill before the house votes on final passage of the measure. Lets discuss the elephant in the room. We all know megabanks have been given a free ride in washington for far too long. During the savings and loan crisis, the government had no problem throwing bankers in jail, breaking the law. Over 1,000 Bank Executives were prosecuted, but now megabanks just get a fine, a slap on the wrist for harming consumers. Since 2010, megabanks have racked up over 160 billion worth in fines. And yet, they keep breaking the law. We have talked about wells fargos growing list of illegal actions that have harmed millions of consumers. Sure, they have been find, but these fines are just fined, but these fines are just the cost of doing business. This soft enforcement approach is just increasing their Operational Risk and losses, which at the end of the day will impact not only all of their customers but the broader economy as well. I hope republicans and democrats can all agree that any megabank that engages in a pattern or practice of unsafe or unsound banking practices and other egregious violations that has resulted in profound consumer harm in the last 10 years is not entitled to any benefit of regulate relief provided under this bill. So my amendment would exclude a megabank, like wells fargo, that has fraudulently opened millions of accounts without their customers consent. Enroll consumers in Life Insurance policies without their consent. And forced nearly a million americans to purchase automobile insurance that they didnt even need. Since 2016, ive been calling for wells fargo to face real penalties. And last year, i introduced h. R. 3937, the megabank accountability and consequences act, to compel the federal Bank Regulators to fully utilize existing authorities to stop these megabanks from repeatedly throughouting the law and harming flouting the law and harming consumers. Janetialin on her last day at the fed take bold action to cap the bank size until it cleans up its act. I am talking about wells fargo did is what janet yellen on her last day at the fed. We must send a strong message to the megabanks there will be real consequences for their bad actions that mislead, abuse or deceive its customers. H. R. 4296 in its current form would send the opposite message to recidivist megabanks. They should not reap the profit of easier operational Capital Requirements while their operational breakdowns are only increasing. I urge my colleagues to adopt this motion to recommit so that we do not reward a recidivist megabank like wells fargo for repeated operational failures that ripped off millions of consumers. I yield back the balance of my time. The speaker pro tempore the gentlewoman yields back the balance of her time. For what purpose does the gentleman from texas seek recognition . Mr. Hensarling mr. Speaker, i claim time in opposition. The speaker pro tempore the gentleman is recognized for five minutes. Mr. Hensarling mr. Speaker, again, there are roughly two different capital two dozen, two dozen different capital and liquidity levels that are applied to our banks. Were talking about one. Operational capital and whether or not Operational Risk capital ought to be based on current risk. Now, i know my friend on the other side of the aisle always likes to wave the wells fargo flag. Wells fargo needs to be held accountable. There needs to be justice for all who have been wronged. There have been roughly 142 million now paid in restitution. There have been over 200 million paid in fines. The board of wells fargo has been replaced. The c. E. O. Was fired. The Federal Reserve capped their growth all under existing authorities. But under this motion to recommit potentially other Financial Institutions could be included and its not the Financial Institution that counts at the end of the day, it is capital that could be used to fund car loans. It is capital that could be used to fund homes. It is capital that could be used to fund the next apple or the next amazon, and instead, that capital would be put onto the sidelines. Again, we are talking about Operational Risk capital only and should it be calibrated for current risk or past risk. That is a completely different issue from ensuring that customers of wells fargo, who clearly have been wronged, that they receive justice and that wells fargo has been held accountable. And again i would point out, you know this might not have happened if the cfpb under the Previous Administration had been doing their business. They should have caught this. But they didnt. Instead it was the l. A. Times and the l. A. City attorney. The cfpb was asleep at the wheel under the Previous Administration. And so again there is existing uthority, but if the regulators, had the director been doing his job, this wouldnt have happened. The evidence was there and it was simply overlooked. And we see way too many instances of that, mr. Speaker. So, again, we want to properly calibrate one capital level, Operational Risk capital. Thats what the bill of the gentleman from missouri does. And we should not be confused by the jihad against banks because banks ultimately are still funding the American Dream and you punish, you punish our constituents, you punish Small Businesses every time you needlessly take away capital that could fund their American Dreams. So i urge a no vote on the motion to recommit and i urge an aye vote on mr. Luetkemeyers bill and i yield back the balance of my time. The speaker pro tempore the gentleman yields back the balance of his time. Without objection, the previous question is ordered on the motion to recommit. The question is on the motion. Those in favor say aye. Those opposed, no. The noes have it. The motion is not agreed to. Ms. Waters request a record vote. The yeas and nays. The speaker pro tempore the yeas and nays are requested. All those in favor of taking this vote by the yeas and nays will rise and remain standing until counted. A sufficient number having arisen, the yeas and nays are ordered. Members will record their votes by electronic device. Pursuant to clause 9 of rule 20rks the chair will reduce to five minutes the minimum time for any electronic vote on the question of passage of the bill. This is a 15minute vote. [captioning made possible by the national captioning institute, inc. , in cooperation with the United States house of representatives. Any use of the closedcaptioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u. S. House of representatives. ]
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