▶ 0:33:03the ranking member and I would like to we wish each of you a nice afternoon. The committee will come to order. The chair will advise the audience that disruption of congressional business is a violation of law and is a criminal offense. Chair also advises those in the audience that violations will not be tolerated and violators will be removed from the room and may be subject to arrest. The committee will come to order.
▶ 0:33:31Without objection, the chair is authorized to declare a recess of the committee at any time. A quorum being present. We will now proceed to today's business. Pursuant to notice, I call up 19001900, the Bank Failure Prevention Act, introduced by the gentleman from Kentucky, Mr. Bar, the chair of the subcommittee on financial institutions. The clerk will report the bill, which was distributed in advance.
▶ 0:34:00HR1900 to specify when the record is complete on certain acquisition applications related to depository institution holding companies and for other purposes. Without objection, the bill is considered read and open to amendment at any point. The gentleman from Kentucky has an amendment in the nature of a substitute, copies of which have been distributed in advance. The clerk will report the amendment. An amendment in the nature of a substitute HR1900 offered by Mr. Bar of Kentucky designated as bar 047.
▶ 0:34:29Without objection, amendments considered red will serve as base texts for the purposes of amendment. The gentleman from Kentucky, Mr. Bar, is now recognized for five minutes to discuss his bill. Thank you, Mr. Chairman. Uh, I am proud to support HR 19000, the Bank Failure Prevention Act, and I want to thank my good friend, Mr. Fitzgerald from Wisconsin for his partnership on this important legislation.
▶ 0:34:56Uh this uh amendment in the nature of a substitute uh establishes a shot clock for federal regulators to act on bank merger applications bringing muchneeded efficiency, transparency, and accountability to a process that has become opaque and unreasonably slow. Timely merger decisions are essential to the health of our banking system.
▶ 0:35:19Mergers and acquisitions help community and regional banks grow into new markets, expand their services, and achieve the economies of scale necessary to compete in a modern financial marketplace and provide lower cost and more innovative financial services and products. Regulatory indecision on merger applications impedes these beneficial uh outcomes. When responsibly executed, mergers don't stifle competition, they actually strengthen it.
▶ 0:35:48They help create more resilient institutions that can offer better services to more Americans, including small businesses and underserved communities by enabling banks to achieve the scale and flexibility needed to invest in technology and infrastructure. These mergers ultimately benefit the customer. Unfortunately, the current review framework is broken. Regulatory delays drag on for far too long, causing unnecessary costs, uncertainty, and in many cases deterring transactions that would benefit consumers.
▶ 0:36:17And as we all know, failure to act swiftly can result in missed opportunities for both financial institutions and their customers. HR1900 doesn't change the standards for approving mergers. It simply ensures regulators make a timely decision, giving applicants clarity and reducing wasteful delays. It's a common sense fix and it's long overdue. What's more, this bill ensures that any delays are limited to only those cases that involve complex applications and that they are managed in a fair and transparent man manner.
▶ 0:36:48This bill complements another bill of mine, the promoting new bank formation act, uh, which I was proud to sponsor and this committee passed last month. I'd like to thank Mr. Lynch for his support of that bill and recognize his commitment to revitalizing community banking. The ability of smaller independent banks to form and grow is essential to a competitive and diverse financial sector.
▶ 0:37:08Together, these measures aim to restore balance and competitiveness and dynamism to our banking system, ensuring community institutions can thrive, innovate, and better serve the people who depend on them. It's important that we acknowledge the reality that our banking system is evolving and that we must continue to make legislative adjustments that promote both stability and dynamism and recognize that the competitive landscape and the ecosystem for banking is different. It's not just that banks are competing with other banks.
▶ 0:37:35It's that banks are competing with a lot of non-bank financial technology and other firms and payment systems. In recent years, we've seen a steep decline in merger activity, largely due to the posture of the previous administration, which effectively shut down the process. That was not a policy of prudence. It was a policy of paralysis by fostering an environment of regulatory uncertainty and unnecessary delays. The last administration inadvertently hampered the ability of financial institutions to adapt, innovate, and grow in an increasingly competitive global marketplace.
▶ 0:38:06While I'm encouraged that the FDIC and OC res rescended restrictive merger policy statements and rules, that alone isn't enough. Congress must act to restore a fair functional process consistent with the intent of the Bank Merger Act, which was to preserve competition, not block all consolidation. We must ensure that regulations are not used as a tool to stifle growth, but as a safeguard to ensure that any merger is in the public's best interest. This legislation does just that.
▶ 0:38:32It strikes the right balance between accountability and efficiency, ensuring that the review process remains robust and also responsive by establishing clear timelines for regulatory decisions. It ensures a predictable, reliable process that banks, investors, and consumers can rely on. In addition, the bill emphasizes that decisions should be based on clear documented criteria, preventing third parties from unduly influencing the process. This is crucial for ensuring that banks are judged fairly and that the process is not swayed by outside pressures that may not align with the interest of consumers.
▶ 0:39:03Finally, uh the bill is called the bank failure prevention act for a reason. Um healthy mergers protect the deposit insurance fund and allow strong banks to acquire weak banks that are at risk of failing. This bill prevents that and makes sure that healthy mergers protect the deposit insurance fund. I urge my colleagues to support this bill and stand with us in promoting a banking system that is both competitive and innovative with a regulatory framework that is efficient, fair, and transparent.
▶ 0:39:33Together, we can make sure that our financial institutions have the ability to grow, compete, and serve all Americans more effectively. Thank you, Mr. Chairman. I yield back. The gentleman yields back. Who seeks recognition? The ranking member of the full committee, Mrs. Waters, is recognized. I move to strike the last word. Gentleman's recognized for five minutes. Thank you very much.
▶ 0:39:56I strongly HR1900, which would further weaken an already lax merger and acquisition process, one that has led to banking deserts and the creation of banks that are too big to manage, ultimately harming consumers and undermining financial state stability.
▶ 0:40:17Just last month, under Trump era deregulatory policies, the Capital One Discover merger was approved, creating the sixth largest commercial bank and the largest credit card lender in the country, 6,132 public comments submitted to regulators raising serious concerns about competition and systemic risk.
▶ 0:40:45This bill would limit the Fed's ability to consider feedback from the public or affected stakeholders on proposed mergers. This is a dangerous roll back of critical safeguards designed to protect consumers.
▶ 0:41:00The bill would also impose an arbitrary 90-day deadline for regulators to approve or deny merger applications even if those applications are incomplete or the merging parties have failed to provide requested information.
▶ 0:41:18This provision would handcuff regulators and prevent thorough This deregulatory approach mirrors the Trump era rollbacks that contributed to the 2023 regional bank failures by weakening oversight and enabling risky HR1900 would undoubtedly make it harder for banking supervisors to ensure safety and soundness across the system,
▶ 0:41:48especially in the face of growing complexity and risk among mega banks. At its core, this is an anti-competitive bill. It would allow big banks to grow even larger, resulting in higher prices for consumers, fewer branches, reduced lending to small businesses, and the continued erosion of community banks.
▶ 0:42:11Instead of addressing the rubber stamping problem that we've seen in recent years with nearly all bank merger applications being approved, this bill would accelerate that trend. Reducing the scrutiny of mergers will increase the cost and reduce the availability of services that consumers need.
▶ 0:42:32In places across the country, we have watched bank merges lead to branch closures, making it even harder to access banking services, particularly for lowincome consumers. One study examining banking deserts that were created as a result of industry consolidation between 2008 2016 showed these deserts disproportionately impact impacted people of color with 25% of rural
▶ 0:43:03branch closures occurring in majority minority census tracks despite Trump and Republicans campaign promises to lower prices for American consumers. They're proposing yet just one more, just another terrible, horrible policy that will cost consumers.
▶ 0:43:24The largest credit card companies charge higher interest rates than smaller issuers, costing families an additional $400 to $500 each year for the same product. Small businesses suffer. For in instance, fewer banks means lending declines and for those who are able to secure credit, it becomes more expensive and the average loan size shrinks.
▶ 0:43:49These are the same businesses that are already feeling the brunt of Trump tariff wars. I urge my colleagues to reject this bill and instead focus on policies that promote safety and soundness, fair competition, and ensure the stability of our financial system.
▶ 0:44:07Let me just say long before I came to Congress, uh I had the opportunity on more than one occasion uh to be invited to participate uh with the community on bank mergers. Uh and I I think uh this this bill uh would eliminate that kind of response to the community getting involved in trying to understand the decisions that are being made.
▶ 0:44:36So I think it's a bad bill and I ask for a no vote. Gentleoman yields back who seeks recognition. Recognize the chairman recognizes himself uh for five minutes to strike the last word on Chairman Bar's bill. Let me thank Chairman Bar for his leadership in designing this legislation. It's a dynamic and responsive banking sector uh that's critical for the economic growth of our nation.
▶ 0:45:04Our first Treasury Secretary, Alexander Hamilton, said bankry banks are the nurseries of the national wealth. And so we need a large, stable, uh, profitable, safe, sound banking industry for the health and stability of our economy.
▶ 0:45:21While we continue to support the creation of new community banks, we must also ensure that existing institutions can grow and adapt both in uh their structure, their business strategy, their geographic strategy. As I say, thriving community banks are critical to local economies. They provide the access to capital to support small business and expand financial opportunities and access.
▶ 0:45:49As I've outlined in my make community banking a great again agenda, we cannot allow regulators to unfairly and indefinitely delay smart, timely, prompetition bank mergers. These delays create uncertainty. They block growth opportunities. They create uncertainty for the employees in those companies. And ultimately, they can limit the services available in the communities that these banks serve.
▶ 0:46:17Mergers are often a strategic path for a banking company to stay competitive, expand their geographic reach, and deliver better services to their customers. When done responsibly, they enhance the efficiency and strength of our financial system. The HR HR1900, the Bank Failure Prevention Act of 2025, addresses this challenge head on.
▶ 0:46:43It imposes clear guard rails by establishing firm timelines for regulatory decisions on bank merger and applications. In my view, this will bring better accountability, predictability, and transparency to the process. Exactly what banks and communities uh and the communities they serve need.
▶ 0:47:05By streamlining the approval process, this legislation will help ensure regulatory oversight supports, not stifles, responsible growth and innovation. This bill is a common sense step towards a more effective regulatory system, one that uh works for community banks, their customers, and the broader economy. I urge my colleagues to support HR1900, and I yield back. Will the gentleman yield? Uh I would yield to the chairman of the subcommittee.
▶ 0:47:35Uh Mr. Chairman, I'll be very brief. I just wanted to add one point that that I neglected to make in my opening statement and that is that we often hear uh descriptive language about large banks as too big to fail. Uh what we don't hear as much but is a reality in the banking uh ecosystem today is uh too small to survive.
▶ 0:47:59And what a lot of bankers mean when they say that is that because of the the avalanche of regulatory compliance costs and also because of technological demands. Uh because the consumer is a discerning consumer right now and there's a lot of competition from non-bank financial technology firms and there's a ton of investment that is required uh by community banks and midsize banks to keep up uh and and continue to attract depositors
▶ 0:48:29who want those kind of online and digital services that in order to survive scale economies of scale has become increasingly critical. So, we don't want too small to survive, just like we don't want too big to fail. This merger legislation that puts a shot clock on these decisions is, as you pointed out correctly, the strategic path forward for many banks to make sure that they do in fact survive. I yield.
▶ 0:48:56I appreciate the gentleman's uh enhanced comment on I think that's true. who I think many people on uh on both sides of the aisle are very concerned about a lot of small banks, say 5,000 small community banks and then the GIPS we talk about the globally systemically important banks, the top five to seven banks.
▶ 0:49:16We want to make sure we have a healthy distribution of bank sizes, bank products, bank service up and down that distribution so that small businesses of all size have competition to get the credit and deposit services and investment advice that they need. With that, I will yield back. Does anyone else seek a recognition on Chairman Bar's bill? Hearing none, we'll move to amendments. Are there amendments to Mr.
▶ 0:49:44bars uh ans. There being no further discussion or amendments to the bill, without objection, the previous question on the substitute is ordered. The question now occurs on the adoption of the amendment in the nature of a substitute. All those in favor shall signify by saying I. I. All those opposed shall signify by saying nay. Nay. In the opinion of the chair, the eyes have it. The eyes have it and the amendment is adopted.
▶ 0:50:11The question now occurs on ordering the bill HR1 1900 as amended reported to the House with a favorable recommendation. Those in favor shall signify by saying I. I. All those opposed shall signify by saying nay. In the opinion of the chair, the eyes have it. For what purposes the gentleman from Kentucky seek recognition? Recorded vote. The gentleman from Kentucky asked for a recorded vote. All those in favor of recorded vote, please raise your hands.
▶ 0:50:38a sufficient number having raised their hands, a recorded vote is ordered. Pursuant to subsection C5 of rule three of the committee rules, the vote on this question is postponed. We'll now turn to the next Pursuant to notice, I call up HR 3380, taking account of institutions with low operation risk, the Taylor Act 2025, introduced
▶ 0:51:09by the gentleman from Georgia, Mr. Laudermel. Clerk will report the bill, excuse me, which was distributed in advance. HR 3380 to require the federal financial institutions, regulatory agencies to take risk profiles and business models of institutions into account when regulatory actions when taking regulatory actions and for other purposes. Without objection, the bill is considered read and open to amendment at any point.
▶ 0:51:35The gentleman from Georgia has an amendment in the nature of a substitute, copies of which were distributed in advance. The clerk will report the amendment. An amendment in the nature of a substitute to HR 3380 offer offered by Mr. Louderdermilk of Georgia designated as Louderder021. Well, without objection, the amendment is considered read and will serve as the base text for the purposes of the amendment. The gentleman from Georgia, Mr. Louderdermilk, who's the vice chairman of our financial institutions subcommittee, is now recognized for five minutes. Thank you, Mr.
▶ 0:52:05Chairman. And I may say you uh you look incredibly well for the marathon that I believe you just went through. And so hopefully we won't make this uh hearing quite as uh as uh long. But uh thank you, Mr. Chairman. And I'd like to speak in support of my bill HR 3380, the Taylor Act, not only because it is a good bill, but because I truly believe in the need to rightsize federal regulation, especially for the small and midsize banks that it would most benefit.
▶ 0:52:32For too long, federal financial regulators have taken a one-sizefits-all approach to regulation, applying the same regulatory standards to small and midsize institutions as they would to large and well-resourced institutions. While the biggest banks often have the resources to comply with new regulations, small firms and even some midsize firms might struggle to meet those same regulatory requirements.
▶ 0:52:59Every time I have met with community banks and credit unions in my district, they have all said the same thing. One sizefits-all regulation is a death by a thousand cuts. As I've said before, it is not one single regulation that makes it difficult for a bank to do business, but a combination of regulations. Federal regulatory compliance is a maze of rules and statutes that small banks must navigate before they can even take their first deposits.
▶ 0:53:26Few states have seen the detriments of overregulation like the state of Georgia. We have lost more banks than any other state in the nation. Not due to mismanagement, but due to the overwhelming cost of running a business under the boot of big government. This isn't only bad for the small businesses that depend on community banks for access to credit. In 2023, 7% of Georgians were unb unbanked, and the number of unbanked people continues to grow, not shrink.
▶ 0:53:55Every day, there are fewer and fewer options for people to access basic in-person financial services because we have regulated competition out of the system, creating a no man's land between the largest global banks and the smallest community banks. FinTech partnerships have helped, but we've already seen the regulators start to tighten their grip around those, too.
▶ 0:54:18Over the years, various attempts have been made to tailor regulation to the size of the institution, and they have all ultimately relied on arbitrary asset thresholds as a proxy for risk instead of the risks themselves. Instead of maintaining a healthy rate of growth, many banks linger around these thresholds, afraid to cross them because of the leap and regulatory requirements that face on the other side. This system doesn't punish unhealthy risk-taking. It punishes growth.
▶ 0:54:45It keeps the small guys small and the big guys get even bigger with ever shrinking room for a healthy competition in the middle. As I've said before, the Taylor Act is so important for the small guy. It's it is important because it requires all future regulations to be tailored to the risk of the regulated institution. It also looks back at regulations that haven't been right-sized in the past and it requires the regulators to apply its tailoring requirements to those.
▶ 0:55:14It rewards institutions who who adopt sound riskmanagement practices with fewer regulations and it punishes those who take an unhealthy amount of risk. I believe it's much more aligned with the goal of a safe and sound financial system without the constraints on growth that come with excess regulation. Over the years, I have either led or co-sponsored this bill, and critics on the other side of the aisle have accused us of giving banks free reign to write their own regulation. They couldn't be more wrong.
▶ 0:55:44The Taylor Act ask regulators to tailor their regulations to the risk of each type of firm they that they regulate. If my colleagues across the aisle don't trust the regulators to use the powers they gave them, then you wonder why they empowered them in the first place. This is a common sense bill that simply protects the little guy in the banking industry, allowing them to grow if they want to without the fear of their business being snuffed out by big government.
▶ 0:56:11I urge my colleagues to support this bill, and I yield back. Gentleman yields back. Who seeks The ranking member of the full committee, Mrs. Waters, is recognized. I move to strike the last word. The gentleman's recognized for five minutes. I strongly oppose HR 3380, which is a dangerous, sweeping, deregulatory measure that goes far beyond aiding community banks.
▶ 0:56:38It would severely undermine the ability of financial regulators and the CFPB to protect consumers and ensure a safe, sound financial system. The bill would also reduce reporting requirements for certain well- capitalized community banks and require a report on modernizing bank supervision.
▶ 0:57:01Rather than focusing on small institutions, this bill opens the door for wealthy mega banks to challenge virtually any regulation on the grounds that it wasn't specifically tailored to the company's unique risk profile or business model. Any one institution out of thousands could sue and block a rule, creating legal chaos and grinding the rulemaking process to a halt.
▶ 0:57:30The bill requires regulators to consider only costs, not benefits of regulations. That means agencies could be barred from acting in the public interest if protecting consumers and stabilizing the economy comes with a price tag for industry. The DoddFrank Act and other existing laws already require regulators to tailor rules based on risk. This bill is not about smarter regulation.
▶ 0:58:00It's about handcuffing regulators under the guise of tailoring at the expense of consumers and the safety and soundness of the financial system. Recent court rulings have made it easier for industry to block rules through litigation.
▶ 0:58:17And Trump's administration has worked to shut down the CFPB while undermining the independence of financial agencies by requiring White House approval of all regulations. This bill makes matters worse by making it hard for agencies to issue any rules given the ambiguous tailoring standards they would have to meet for each rule.
▶ 0:58:48The bill would severely stim the rule making process, including when agencies need to update old rules to deal with evolving marketplace. Let's be clear, this bill is not about regulatory efficiency. It's about making it nearly impossible to regulate. We should not tie the hands of agencies that protect consumers, investors, and stability of our economy.
▶ 0:59:16besides, I believe that our so-called regulators should be absolutely insulted by the idea that they got to run to the White House and get approval for whatever they do or don't do. I yield back. Gentlewoman yields back. Uh, Mr. Bar, the chairman of the subcommittee on financial institution recognized. Thank you, Mr. Chairman. I want to thank my friend from Georgia for his leadership on this important legislation.
▶ 0:59:43And um, we've heard this so often from members on both sides of the aisle, uh, that we all support community banks. Every member, I think, at one time or another on this committee, on both sides of the aisle, has made this claim that they are supportive of community, the community bank business model. And today, here we are. we have an opportunity to turn that support, that rhetorical support into action.
▶ 1:00:09So, I challenge my friends on the other side of the aisle who claim that they are for community banks. Here's your chance. Here's your chance. It's you're going to be on record. Do you support community banks or do you not? The Taylor Act is a simple common sense bill that says federal bank regulators must consider an institution's size, risk profile, and business model before issuing regulations or supervisory actions.
▶ 1:00:36That should not be controversial, but for too long, regulators have imposed a one-sizefits-all model, applying the same costly rules to banks of all sizes, regardless of their risk profiles or business models.
▶ 1:00:49the the the the small I mean tiny community banks in rural Kentucky often call this trickle down regulation where regulations that apply to big banks or big regional banks or Wall Street banks somehow find their way into supervisory exams for uh these uh small maybe 200 million asset size banks. It's just absurd. It's totally ridiculous. And uh this approach is backfiring. It's pushing small banks to the margins.
▶ 1:01:19It's reducing access to credit. It's harming the very communities that depend on local institutions for jobs, capital, and economic stability. It's why we have banking deserts. It's why we're losing bank branches. I I commend and applaud the ranking member for highlighting this in our debate. We disagree on the bill yesterday, but she she pointed out the the need for more physical branches in rural and underserved areas. And by the way, not just in rural communities, also in urban communities.
▶ 1:01:49If we if we want to deal and address with this banking desert issue, if we want more fiscal branches, we've got to give relief to these community banks. Uh a 2024 survey by the Conference of State Bank Supervisors found that regulation costs were tied with funding as the top external risk facing community banks with 89% of banks calling them extremely or very important. The Taylor Act uh introduced by my friend Mr.
▶ 1:02:19Louderdermilk from Georgia addresses this directly. It restores proportionality to our regulatory framework. It requires agencies to explain how they are tailoring tailoring regul regulations and to report those efforts to Congress. It also calls for a review of outdated rules and cuts unnecessary paperwork through streamlined call reports. This isn't about rolling back oversight.
▶ 1:02:42It's about smart oversight calibrated to risk so that we don't punish low-risk relationship based banks with red tape designed for entirely different institutions. And I'd return to the point, too small to survive. That's the problem. Many of these institutions shouldn't be uh shouldn't have survival on the line just because they're small. We want small relationship banks, community banks.
▶ 1:03:09We want them to survive, but we need tailored regulation in order to help them survive. That's why I'm proud to support HR 3380, and I encourage all my colleagues to do the same. I yield back. Gentlemen yields back. Who seeks recognition? Seeing no takers on that, I'll recognize myself for five minutes. I want to join the uh subcommittee chairman and the sponsor, Mr. Louderdermilk, in support of the Taylor Act.
▶ 1:03:40And I encourage all the members on both sides of the aisle to do the same. And I've spent so much of my uh adult life in community banking, both in u medium-sized publicly traded company and then in a small community bank located in in Little Rock, my hometown with offices throughout the state. I really understand this significantly.
▶ 1:04:09Um, and one of my guiding principles for this committee is try to rightsize our regulations. And what Mr. Louderdermilk's bill has done is attempt to structure a process by right sizing that can be obtained with congressional direction and then reported to Congress so that we can see the regulatory supervisors led by Mickey, our soon Mickey Bowman, the vice chair for supervision at the Fed.
▶ 1:04:38the OC, the FDIC, working with our conference of state bank supervisors. They do this through the financial exam council. Uh they do this through the coordinating through the financial exam council. But when Congress has asked for tailoring over the time Mr. Laddermok and I have been in Congress, Congress has spoken on a bipartisan basis like S2155 passed in 2018, signed into law by President Trump, and then it's ignored.
▶ 1:05:08it's ignored. And what Mr. Louderderbel's doing is saying, "Let's put some parameters around what we mean by tailoring, what we want you to look for, and then we're going to ask you to follow up with us." And I think it's a very constructive bill. All institutions are not the same. Regardless of size, complexity, or risk, they have to be looked at individually. This gives the regulatory examination process the ability to do that.
▶ 1:05:37Examiners want this direction, too. I would say to my colleagues on both sides of the aisle, they don't like a one-sizefits-all rule book either because it doesn't give them the discretion to customize their approach to risk, size, complexity, simple straightforward nature of a particular business strategy. So, to be clear, the Taylor Act doesn't deregulate any bank.
▶ 1:06:06All federal regulators, supervisors under title 10 maintain all their authorities to preserve the safety and soundness of the system and compliant full compliance with consumer protection. This bill simply requires that those tools be applied in a way that's proportionate to risk and complexity. Community banks do not pose a systemic risk to this nation.
▶ 1:06:31They didn't cause the financial crisis and they shouldn't be treated that way and since DoddFrank's implementation that's happened in spades and it has caused the exact problem that chairman bar outlined the regulatory cost have risen and risen raising the costs for the smallest institutions making it very hard to attract capital to their own business model to achieve a competitive return on equity in their own business model.
▶ 1:06:58And if you can't if you can't do that, uh it's hard to then serve your small businesses. When I was talking to my colleagues about serving as chair of this committee, I said in the last few years of my service as CEO of a bank, I spent more time worrying about the next week's compliance exam than the loan pipeline for the bank.
▶ 1:07:27and we were a small company and that's not right. And that's what chairman bar and vice chairman Louderdermilk hear every day when they travel Kentucky, Georgia, and this country. They accept regulation. They want to run a safe and sound institution. They just want that to be commiserate with what they're doing in their companies. And so I congratulate my friend Mr. Louderdermilk and Mr.
▶ 1:07:53bar for their passion around this exe uh this uh agenda that this committee has. It's past time we do more to tailor and support our robust community banking system across this nation. I yield back the balance of my time. Who seeks recognition? If we don't have anyone else seeking recognition, we will move into amendments. Are there amendments on Mr. Laddermilk's bill? Yes.
▶ 1:08:22The ranking member of the full committee is
▶ 1:08:54uh there being no further discussion or amendments on Mr. Laudermel's bill without objection the previous question on the substitute is ordered. The question now occurs on the adoption of the amendment of the nature of a substitute. All those in favor shall signify by saying I. I. All those opposed shall signify by saying nay. And the pen share the eyes have it. The eyes have it. The amendment is adopted. The question now occurs on ordering the bill HR 3380 as amended reported to the house with a favorable recommendation.
▶ 1:09:22Those in favor shall signify by saying I. I. Those opposed shall signify by saying nay. In the opinion of the chair, the eyes have it. For what purpose does the gentleman from Georgia seek recognition? Request a recorded vote. The gentleman from Georgia requests a recorded vote. A recorded votes requested. All those in favor recorded vote raise your hands. A sufficient number having raised their hands. A recorded vote is ordered. Pursuant to subsection C5 of rule three, the committee rules the vote on this matter is postponed.
▶ 1:09:52We'll now move to the next measure. Pursuant to notice, I call up HR2702, the Firm Act, introduced by the gentleman from Kentucky, Mr. Bar, the chair of our subcommittee on financial institutions. The clerk will report the bill, which was distributed in advance.
▶ 1:10:15HR2702 to to curtail the political weaponization of federal banking agencies by eliminating reputational risk as a component of the supervision of depository institutions. Without objection, the bill is considered read and open to amendment at any point. The gentleman from Kentucky has an amendment in the nature of a substitute, copies of which have been distributed in advance. Clerk will report the amendment.
▶ 1:10:41An amendment in the nature of a substitute to HR 2702 offered by Mr. Bar of Kentucky designated as bar 046. Without objection, the amendment is considered read and will serve as base text for the purposes of amendment. The gentleman from Kentucky, Mr. Bar, is recognized to explain his bill for five minutes. Thank you, Mr. Chairman.
▶ 1:11:03I am honored to sponsor HR2702, the Financial Integrity and Regulation Management Act or the Firm Act, with the support of my good friend and colleague from New York, Mr. Torres. This bipartisan legislation is designed to restore fairness and transparency to our financial system by ensuring that bank supervision remains focused on clear, objective criteria.
▶ 1:11:28The issue we're addressing is the increasing use of regulatory power to limit access to banking services for lawful businesses. Businesses that are not involved in any illegal activities, but may be politically controversial in some quarters. Let me be clear. This bill does not require banks to open accounts for anyone. Banks will still have full discretion to assess customers based on creditworthiness, financial health, and legal compliance.
▶ 1:11:55But what this bill does do is ensure that banks decisions are not influenced by external political pressures from federal agencies. Banks are banks and in this highly parti partisan politicized world uh where you have red versus blue, it's in so often uh in so many of our public discussions.
▶ 1:12:15Uh this bill seeks to extricate banks from that uh politic politically charged environment and allow banks to simply do their job and be banks. Over the years uh we have u we have seen instances of political interference whether it was during operation chokepoint under the Obama administration or in the recent treatment of certain industries like digital assets.
▶ 1:12:39Law-ab-bing companies have been denied banking services due to their association with sectors viewed as politically controversial, politically unfashionable, but not because of any misconduct. This isn't just an issue for specific industries. It's a threat to the broader system. Once regulators are allowed to inject political bias into their decisions, no one is safe. Today, it's firearms or fossil energy or the coal industry in Kentucky, for example. tomorrow.
▶ 1:13:07It could be a faith-based group group or a nonprofit or crypto business. The precedent is concerning. The firm act removes reputational risk from regulatory supervision and ensures that decisions are based on measurable financial factors. Regulators will still be able to enforce laws, fight fraud, assess credit risk. What they won't be able to do is push banks to refuse services to lawful businesses based solely on political considerations.
▶ 1:13:36Now, it's important to stress that the firm act is not about granting access to financial services for risky or financial financially unstable businesses. Rather, it is about ensuring that lawful businesses that are creditworthy are not subject to political interference uh in ways that have nothing to do with their financial soundness. This legislation makes sure that regulators focus on factors related to and by the way, objective factors related to the financial health of institutions.
▶ 1:14:04This bill strengthens the integrity of our financial system and ensures that all businesses, regardless of their political or ideological leanings, are treated fairly. The Firm Act is a bipartisan solution to a growing problem, and it's one that will ensure regulatory consistency for everyone. Furthermore, this legislation directly addresses the issue by requiring federal banking agencies to remove any reference to quote reputational risk unquote in their supervisory guidelines.
▶ 1:14:31By doing so, we are reinforcing a focus on financial stability and risk mitigation, areas that are directly related to the safety and soundness of the banking system. I've I've heard from many um CEOs of banks and compliance officers of banks that talk about supervisory exams where reputational risk with really no advanced warning uh comes into uh the exit review and uh that's not due process.
▶ 1:14:57Um firm the firm act also promotes transparency by requiring banking regulators to submit regular reports to Congress confirming the implementation of the bill and outlining any changes made to their internal policies. This oversight will ensure accountability and stren strengthen the law's intent. In the end, we must make it clear that regulatory power should be used to enforce the law, not to target individuals or industries based on ideology.
▶ 1:15:24A a healthy financial system requires a level playing field where decisions are made based on facts, objective criteria, and not political agendas. When we allow political considerations to influence financial decisions, we undermine the principles that keep our system stable and fair. Uh banks should not be politicized. Banks are not the Democratic National Committee. Banks are not the Republican National Committee. Let's keep politics out of banking.
▶ 1:15:52I urge all of my colleagues to support HR2702. It's time to restore fairness and transparency to our financial system and protect the rights of lawful businesses to access the services they need to grow and thrive. Thank you, Mr. Chairman. I yield back. Gentleman's time has expired. Gentleman yields back. Who recognition? Gentleman from Pennsylvania. Oh, I'm sorry. Gentleman from New York, Mr. Torres. Thank you, Mr.
▶ 1:16:21Chair, I'm proud to partner with my friend, Congressman Andy Bar from Kentucky in co-leading the Financial Integrity and Regulation Management Act, otherwise known as the Firm Act. The enduring principle of our constitutional republic is that no one should be deprived of liberty without due process. In today's world, access to banking is not just a convenience, it is a cornerstone of economic liberty.
▶ 1:16:46If you are a law-abiding family or business, you should never be debanked unless the decision is based on objective quantifiable risk. The problem with so-called reputational risk is that it's it's inherently subjective and amorphous, inviting arbitrary and capricious and even discriminatory If you're a Democrat concerned about organizations, a Republican regulator could target them under
▶ 1:17:17the guise of reputational risk. And if you're a Republican concerned about right-leaning organizations, a Democratic regulator could do the same. There should be a bipartisan biccameal commitment to ensuring that access to the banking system never becomes a weapon of political warfare. Banking regulation is designed not to be a sword against our political enemies, but rather a shield for the safety and soundness of the overall financial system.
▶ 1:17:46One of the lessons learned from the early months of the Trump presidency is that Congress has passed too many laws seeding too much authority to the executive branch. Congress may be article one on paper, but the president has become article one in practice. The framers envisioned a system of congressional primacy and the time has come to reclaim the power we have seated.
▶ 1:18:11The firm act is about returning power where it constitutionally belongs to the people's elected representatives here in Congress. I yield back. The gentleman yields back. The gentleman from Pennsylvania. Uh Mr. Chairman, I move to strike the last word and the gentleman's recognized for five minutes. Thank you, Mr. Chairman.
▶ 1:18:32I am in support of HR2702 the financial integrity and regulation management act otherwise known as firm introduced by uh our colleague our esteemed colleague Mr. Bar and do appreciate the support of uh Mr. Torres as well as a co-sponsor.
▶ 1:18:50Let us remind the committee uh that this um this firm act is really a response to the debanking that has taken place over the last four years and such debanking should not occur uh today or tomorrow.
▶ 1:19:06Industry and academics told this committee at our first oversight hearing how bank supervisors wield the catch-all label reputational risk to pressure institutions into cutting ties with entirely legal customers from crypto firms to energy producers and firearm manufacturers and others that we may not even know of. They describe sudden account closures and pause letters driven by ideology not by capital liquidity or anti-money laundering concerns. Reputational risk appears nowhere in US law.
▶ 1:19:36Yet it still lurks in many examination manuals uh giving regulators a readymade excuse to punish industries they do not like. That loophole was weaponized in Operation Chokepoint and in other occurrences. HR2702 uh which I am also co-sponsor removes every reference to reputational risk from agency guidance redirects examiners to the mission Congress actually set safety soundness and compliance with the law.
▶ 1:20:04This codifies what President Trump's appointees at the FDIC OC and Fed have already started taking ideological debanking tools out of regulators hands. Banks may still exit clients from real credit, liquidity, or elicit financial risks. They just can't be pressured by regulators for political purposes. Debbanking by regulation threatens any lawful industry that falls out of political favor.
▶ 1:20:30Pulling this weapon from the supervisory toolbox is a very is a first step towards restoring neutral rules-based banking and ensuring every legal business gets a fair shot at banking services. urge my colleagues to support the firm act to codify the Trump administration's goals and I yield back. Gentleman yields back. Who seeks recognition? The ranking member of the full committee, Miss Waters, is recogn. I move to strike the last word. The gentleoman's recognized for five minutes.
▶ 1:21:00I oppose HR 2702, which is a sweeping and consequential proposal that would for the first time direct federal regulators to completely ignore any kind of risk a bank must manage. In this case, reputational risk.
▶ 1:21:19By eliminating reputational risk as a component of the supervision of depository institutions, this legislation hamstrings regulators and injects challenges into longstanding bank supervision frameworks.
▶ 1:21:36While I understand that this legislation is attempting to address issues related to debanking, this bill would ultimately not prevent discrimination and improve access to financial um services. For years, I've urged for improvements on debanking and have worked on legislation to improve improve both the evaluation and examination of banking risk.
▶ 1:22:05Uh, as a matter of fact, I'd like to point out uh that it has not only been a concern of mine about US banks. I led a congressional delegation to Barbados on improving financial ex access in Caribbean nations. I insisted on the inclusion of a treasuryled US governmentwide derisking strategy in the anti-moneyaundering act of 2020 to combat the problem.
▶ 1:22:35It's why we codified the riskbased approach for the bank secrecy act. However, this bill would likely raise unintended consequences. In fact, when former Treasury Assistant Secretary for Financial Institutions Graham Still testified before our committee this year, he stated, and I quote, "We have seen time and again that public
▶ 1:23:06and confidence and sound management affect the stability of banks and the entire banking system. From the failure of Rigs Bank in the 2000s to the global financial crisis to the failure of Silicon Valley Bank, Signature Bank and Credit Swiss in 2023. The irony is that this bill cannot make the underlying risk go away.
▶ 1:23:34Instead, they just require banking agencies to ignore reality and experience, quote unquote. So for these reasons, I urge my colleagues to reject this bill and I yield back the balance of my time. The gentleoman yields back who seeks recognition of the gentleman from North Carolina. Mr. Moore is recognized. Thank you, Mr. Chairman.
▶ 1:23:56I want to speak today in support of HR 2702, the Financial Integrity and Regulation Management Act, introduced by my colleague, Representative Andy Bar. This bill is a critical step toward ensuring fair, transparent, and objective supervision of our nation's depository institutions by eliminating the vague and subjective concept of reputational risk from regulatory oversight. HR 2702 prevents regulators from using reputational risk as a factor in supervising banks.
▶ 1:24:25This undefined metric lacks a statutory basis and has no measurable standards. It leaves the door open to politicize decisionmaking, allowing regulators to penalize institutions based on subjective interpretations. This bill refocuses supervision on objective material factors such as capital adequacy, liquidity, and operational integrity. Our community banks and credit unions operate in good faith, serving as engines of economic opportunity.
▶ 1:24:52This is an important opportunity to eliminate unnecessary bureaucra bureaucracy and promote fair standings. With that, Mr. Chairman, I yield back. Gentleman from North Carolina yields back. Who seeks recognition? Mr. Chairman, speak on the bill. Yeah. The gentleman California recognizes strike glass. Mr. uh I think uh Mr. Torres said it well.
▶ 1:25:24Um, we do not want to politicize those who get banking the decision as to whether people get banking services. If you're not creditworthy, the bank shouldn't give you a loan.
▶ 1:25:39There are those on uh the liberal side that are a gasast that some banks um lend money to fossil fuel companies and they're free to take their money out of those banks. They're free to demonstrate in front of those banks. But the bureaucracy that enforces safety and soundness of banks should not be part of that effort.
▶ 1:26:09I say that with some trepidation because I don't like telling my environmental friends who point out the dangers of global warming that any tactic uh should be uh off limits. But today's executive branch is only partial is in a transition. The bureaucracy tilts liberal. The White House does not.
▶ 1:26:38And this White House will over time get more and more power over the bureaucracy. We see they haven't been And today's Republican party simply wants to say, "Well, let's make sure those liberals don't pressure banks into not doing business with this or with gun manufacturers or oil uh uh companies uh and seems to settle for neutrality." And I'd embrace that.
▶ 1:27:10Um, if the MAGA movement continues at its present uh uh direction a year from now, the MAGA movement will say, "Why in the hell should the Democratic Socialists of America be able to get a bank account? Why should Planned Parenthood be able to get a bank account?
▶ 1:27:27Why should Sherman for Congress be able to get a bank account?" So I believe that we should seize the day and lock in as much protection as we can against uh politically uh motivated uh Uh that being said, I uh can't uh I'm not sure I like the exact text of this bill and I'm also concerned that today we're dealing
▶ 1:27:57with six financial institutions bills. And it's my understanding that uh Democratic bills and even bipartisan bills are not being And even if I uh support uh this bill's uh if you know uh I would hope that before we're voting on this bills, it's made this bill it's made clear which Democratic bills will be um subject to markup at the uh
▶ 1:28:27at the next markup. Uh because uh we can make progress and move forward um in a bipartisan way. And uh Democrats have traditionally opposed this bill because Democrats have traditionally seen reputational risk as uh the loss of reputation from being associated with oil companies and gun
▶ 1:28:58Uh I don't think that those on our side of the aisle ca have yet anticipated what reputational risk would mean if you had uh bank regulators all of whom were hired from Liberty Liberty University and all of them were wearing MAGAPIN to work. So, I would accept the Republican offer that uh neither side should be in a position to politicize bank regulation.
▶ 1:29:27That doesn't mean that people aren't free to demonstrate in front of banks, pull their money out of banks. You don't like what the bank's doing, don't do business with the bank. But the regulators should be non-political. Now, I hope very much that before we vote on this bill, there's an understanding that Democratic bills will be considered at the next markup. I will have an amendment on this bill, but I'll talk about that when it comes up.
▶ 1:29:52Gentleman yields back who seeks recognition. Let me recognize myself as chairman for five minutes to strike the last word. I do stand in support of HR 2702, the Financial Integrity and Regulation Management Act or firm act. It's a critical step towards ending, in my view, aspects of the politization of supervision. I appreciate very much the work on this by Mr.
▶ 1:30:21Bar and other members who've engaged on it and by the comments that uh Mr. Sherman made. I certainly want to associate myself with no bias in this process. As a as a bank CEO, uh I was interested in making a return on investment and serving our community. And I didn't certainly didn't let my personal views engage in who did or did not receive a loan in the bank.
▶ 1:30:47And I think all banks should have the ability to make their own decisions about who they do business with based on their own strategy, geography, expertise, risk assessment. I always use the example of if a if a bank in of Iowa has an excellent citizen in their uh town in Iowa come to the bank and say I'd like to have a line of credit.
▶ 1:31:11I believe that the future is in oil and gas drilling and I want a line of credit to do an oil and gas drilling partnership uh in Alaska. of the bank in Iowa might say, "Well, that's a tremendous opportunity and you have a remarkable financial statement and we wish you very very well, but we have no expertise in this bank on oil and gas drilling.
▶ 1:31:34So, but we'd be happy to work with you to try to find a bank in Texas or Colorado or California or Alaska that have that expertise and refer you to them." So, this is not debanking this person. This is simply saying uh our company doesn't have the expertise to assess that risk.
▶ 1:31:53But as Treasury Secretary Bessant said recently in a speech to the American Bankers Association, he thinks too much focus is on the management rating in banks and this idea of reputational risk and it's diverting from the core financial analysis of core financial risk to the banking system. And I I share that. So, I appreciate Congressman Torres working with Chairman Bar on this.
▶ 1:32:19Federal financial regulation must be grounded in one core mission, protecting safety and soundness of our depository institutions and ensuring those depository institutions are in compliance with law. That mission is best achieved when regulators focus on material financial risks, providing consistency and clarity in the supervisory process.
▶ 1:32:40When regulators stray and use their discretion to block federally legal businesses from accessing financial services, this being the insinuation in writing or verbally to the bank, the bank supervisory process becomes a political tool, not a safety and soundness compliance mechanism.
▶ 1:33:02And look, members of this committee on both sides of the aisle, we've seen this take place with our own eyes at the end of the Obama administration, Operation Chokepoint, the Department of Justice, the FDIC did pressure banks to cut ties with legal businesses that those agencies of the government did not favor. And that's a problem. And that's what this bill seeks to provide.
▶ 1:33:29again some structure around to address and this applies to banks of all sizes. Traditional banks that we spend so much time with talking about community banks that have a psycho exam between their state commissioner or a federal regulator like the Fed or the FDIC or the OC or those bigger banks with a resident exam program. This applies to banks of all sizes.
▶ 1:33:55Um, so this bill prohibits the use of reputational risk and supervision. Regulators can still assess real financial operational risk, but not have a non-safety and soundness, non-compliance motive, but instead some sort of a political agenda. And as we witnessed, Operation Chokepoint showed the weaponization of bank regulation can cut both ways, whether it's gun manufacturers, fossil fuel companies, or environmental groups. And that's why, as Mr.
▶ 1:34:23Sherman argued it isn't a Republican bill or a Democratic bill. It's a common sense bill and I urge colleagues on both sides to consider it. I thank members Bar and Torres working together. I yield back. Does someone else seek recognition on this bill? Hearing none, we'll move to amendments. Are there amendments to the bar bill? For what purposes the gentleman from California seek recognition? I have an amendment at the desk.
▶ 1:34:53Uh is is your amendment designated the one you have Sherman space 044? I assume so. Uh you assume so, but we ask the clerk to verify that. We'll pause while this amendment from Mr. Sherman is Does the gentleman from Kentucky reserve a point of order? I reserve a point of order. I thank the gentleman.
▶ 1:35:23We'll pause for the distribution. Okay, Mr.
▶ 1:35:42Chairman, can I Clerk will report an amendment to the amendment in the nature of a substitute to HR 2702 offered by Mr. Sherman of California designated as Sherman044. Without objection, the amendment's considered read and the gentleman from California, the ranking member on the capital market subcommittee, Mr.
▶ 1:36:10Sherman's recognized to explain his amendment for five Um, it's a simple amendment. Uh, Mr. Chairman, the bill itself is structured to deal with legal businesses operating here in the United States that obey American laws. Um, there has been some discussion of the reputational risk that a bank has uh if one of its foreign branches uh deals with a foreign terrorist organization or a state sponsor of terrorism.
▶ 1:36:39This amendment is narrowly tailored to those organizations that are officially designated by the State Department as state sponsors of terrorism and foreign organizations. Uh I believe that every legal business, even the ones I disagree with, uh should have access to the American banking system. I don't think that applies to foreign terrorist organizations sponsors of terrorism.
▶ 1:37:08And uh uh since the bill was structured with a mental picture of focusing on American businesses, I thought it might be helpful uh to amend it to make it plain that this particular bill has not been crafted to deal uh with uh these foreign terrorists. And I yield back. Gentleman from California yields back. Does Mr. Bar insist on his point of order. Uh with withdraw the point of order.
▶ 1:37:37Gentleman withdraws his point of order. Who seeks recognition? The gentleman from Kentucky, Mr. Bar, the chairman of the financial institutions subcommittee is recognized. Let's strike the last word. I strike the last word, Mr. Chairman. And I thank my colleague, the gentleman from California, for his thoughtful amendment. Uh the amendment clarifies simply that regulators can only consider reputational risk in bank supervision in very specific circumstances that relate to terrorist financing.
▶ 1:38:05We we obviously all share a common desire to prevent state sponsors of terror and foreign terrorist organizations from hijacking our financial system. And I would note that nothing in the underlying text of the bill in any way uh impedes the enforcement of Fininsen regulations, anti-moneylaundering rules, the bank secrecy act, OFAC sanctions. Uh it does not in any way uh conflict with any of those laws.
▶ 1:38:33And in fact in the findings of the amendment in the nature of a substitute in the finding section uh the language specifically uh provides that financial services providers or private entities entitled to provide services to whichever customers they so choose provided that those decisions do not violate the law. Uh the gentleman's amendment is designed I think to provide belt and suspenders around that idea.
▶ 1:39:02Uh we're not asking or forcing banks to violate any law here. And so I think this is a friendly amendment. Uh I would be happy to accept it uh if my friend from California will commit to supporting the underlying bill. And let me yield to Mr. Sherman to confirm. Uh my hopes and philosophy will be with the uh bill.
▶ 1:39:27Uh we do I I did make it plain that today we're dealing with six uh financial institutions bills, all of which are Republican bills. And uh um uh I uh I can't you know I I I have to see how that issue plays out. But I will support uh this bill in its purposes and its text uh if this amendment is adopted.
▶ 1:39:56Uh but whether there's an overall effort to to deal with the the the fact that Democratic bills aren't considered, I I I don't know how that's going to develop during the day. Well, let me reclaim my time. And again, I want to thank the gentleman because we share uh a common objective here to prevent any kind of terrorist financing obviously and again nothing in this bill in any way conflicts with or impedes the enforcement of Fininsen regulations or OFAC sanctions and clearly uh we don't want any
▶ 1:40:26um exploitation of the American banking system by designated terrorist organizations. Let me yield to the chairman to uh respond to uh uh the gentleman from California. Well, I thank Chairman Bar and I want to thank you and Mr. Sherman for your work, not only on this committee, but your work on the House Foreign Affairs Committee just passionately committed to stopping terror finance around the world in any form.
▶ 1:40:53And it's a it's an enormous challenge and both of you are up to it. Both of you have spent a lot of time on this committee on it. Let me address though Mr. Sherman's point about working handin glove with the minority on bills from the other side of the aisle in the financial institution space. The ranking member has raised this wish with me and I believe she knows that we seek uh bills from the minority that we can work on together in this space.
▶ 1:41:20She's offered some specific ideas today that we are going to work on both at a staff level and a member level. I know she appreciates Mr. Sherman, you raising that issue to make sure that we work hard to have ideas reflective of the points of view on both sides of the aisle and find consensus where we can, which is obviously the real the real goal.
▶ 1:41:41So anyway, with that, I do want to tell you that we are working committing resources to that and I thank the gentleman for your constructive amendment. I too support the Sherman amendment. May let me yield back to chairman Bar. Thank you uh Mr. Mr. Chairman, and and um with the Mr. Chairman's uh um indication that he will uh and I take him in good faith that he will support the legislation with the amendment, I urge my colleagues to accept this amendment and I yield back.
▶ 1:42:14Uh is pardon is there further recognition uh the ranking member of the full committee, Miss Waters. I move to recognize. Gentleoman is recognized for five minutes. I want to thank Mr. Chairman for his work on this amendment. Congressional Republicans want to stop telling bank regulators from examining for reputational risk. This amendment would allow banking regulators to continue considering reputational risk when banks finance terrorist organizations.
▶ 1:42:42This amendment would solve for Rigs Bank, a bank that had multiple AML BSA issues and received negative perception from their customers because of those issues. Customers began to get worried the bank was helping other bad actors and they started to pull their deposits from the bank.
▶ 1:43:04This would have normally caused the bank run similar to that of Silicon Valley Bank, but instead rigs were sold to PNC. However, this amendment does not solve other problems that congressional representatives are ignoring. What about a repeat offender like Wells Fargo? What about it if a bank is um banking human traffickers?
▶ 1:43:31What about a bank whose customer is someone like Jeffrey Epstein? There are so many bad activities outside the scope of terrorists that could sink a bank's reputation, fueling their rapid demise. This was an issue for Signature Bank and its failure. We will keep seeing a repeat of the regional banks collapse if congressional Republicans are successful. I urge members to support this amendment and I yield back the balance of my time.
▶ 1:44:01The gentleoman yields back. Is there any further debate? Then the question now occurs on the amendment offered by the gentleman from California, Mr. Sherman. All those in favor of the amendment shall signify by saying I. I. All those opposed shall signify by saying nay. Independent the chair the eyes have it. The eyes have it and the amendment is adopted.
▶ 1:44:24Are there further amendments to the bar amendment in the nature of substitute? There being no further When there be no further amendments or discussion on the bill, without objection, the previous question on the substitute is ordered. The question now occurs on the adoption of the amendment in the nature of a substitute offered by the gentleman from Kentucky.
▶ 1:44:54All those in favor shall signify by saying I. I. All those opposed shall signify by saying nay. In the penitenture, the eyes have it. The eyes have it. The amendment is adopted. The question now occurs as for not yet. Stand by. Question now occurs on ordering the bill. HR 2702 is amended, reported to the House for a favorable recommendation. Those in favor shall signify by saying I. I. I. All those opposed shall signify by saying nay. Opinion chair the eyes have it.
▶ 1:45:23For what purposes the gentleman from Kentucky secret ask for recorded vote. A recorded vote has been requested. All those in favor recorded vote raise your hands. A sufficient number having raised their hands. Recorded vote is ordered pursuant to subsection C5 of rule three. The committee rules a vote on this question is postponed. We will now move to the next measure.
▶ 1:46:44Pursuant to notice, I call up HR 3379, the Halting Uncertain Methods and Practices in Supervision uh Act of 2025 or the Humps Act of 2025, introduced by the gentleman from Wisconsin, Mr. Fitzgerald. The clerk will report the bill which was distributed in advance.
▶ 1:47:04HR 3379 to amend the Federal Financial Institutions Examination Council Act of 1978 to require the Federal Financial Institutions Regulatory Agencies to update the camel's rating system and for other purposes. Without objection, the bill is considered read and open to amendment at any point. The gentleman from Wisconsin has an amendment in the nature of a substitute, copies of which have been distributed in advance. The clerk will report the amendment.
▶ 1:47:31An amendment in the nature of a substitute to HR 3379 offered by Mr. Fitzgerald of Wisconsin designated as FitzG_026. Without objection, the amendment is considered read and will serve as base text for purposes of amendment. The gentleman from Wisconsin, Mr. Fitzgerald, is recognized for five minutes. Thank you, Chairman. Well, it's Wednesday. Happy Humps Day, everybody. Uh, thank you, Mr. Chairman.
▶ 1:47:58and I am proud to speak in support of my bill HR 3379, the halting uncertain methods and practices in supervision act or the humps act. This bill addresses a long-standing problem, the over reliance on subjective judgment and how bank regulators rate financial institutions under the camel system. The camel's system is a framework used by banking authorities to assess the overall health and stability of financial institutions.
▶ 1:48:26It evaluates six key factors represented by its acronym capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk. Right now, there are no uniform standards for how examiners assess these categories. That's a problem. Two similar banks in two different regions can get very different ratings based purely on examiner discretion.
▶ 1:48:50In particular, the management component of camels is often used as a subjective tool to justify lower composite scores. These downgrades can lead to detriment for banks, blocking a bank's merger application, increasing their deposit insurance premiums or even triggering enforcement actions. The subjectivity of the current system opens the door to debanking, where regulators pressure banks to cut off lawful customers based on politics or ideology.
▶ 1:49:20Specifically, the humps act directs the federal financial institutions examining council to establish objective measurable criteria for each camel's component, including transparency on how those scores feed into the overall composite rating. The bill gives the FFIC two options on the management component. Either eliminate it or risk or revise it to focus strictly on tangible governance and risk controls, not personalities or vague impressions.
▶ 1:49:50Additionally, the bill requires the banking agencies to conduct a full public notice and comment rulemaking process to implement those changes within 12 months. We have heard from bankers across the country who feel blindsided by their exams. They do everything by the book, but walk away with a poor camel score and no clear explanation.
▶ 1:50:11This bill ensures the bank supervision is predictable, transparent, and fair, especially for smaller and midsize institutions that lack the resources to push back. I urge my colleagues to support the Humps Act so we can bring some muchneeded clarity and accountability to the camel's process. Thank you, and I yield back. The gentleman yields back. Does anyone seek Uh, the ranking member is recognized. I move to strike the last word.
▶ 1:50:40The general lady is recognized. I strongly oppose HR 3379, which would weaken the ability of federal banking regulators to conduct comprehensive riskbased supervision by eliminating or limiting the management component of the camel's rating system.
▶ 1:51:03Uh well um camels is an essential tool used to access the safety and soundness of banks by providing ratings to depository institutions for capital adequacy asset management earnings liquidity and sensitivity to market risk.
▶ 1:51:28The failure of Silicone Bank in 2023 underscored the importance of strong management oversight. JO and the Federal Reserve's own reviews found that supervisory concerns about Silicon Valley banks mismanagement were not escalated quickly enough. If this bill had been law, it would have made it virtually impossible for regulators to flag in response to those management failures in time.
▶ 1:51:58The bill removes consideration of management quality from key provisions of the bank holding company act which regulators use to evaluate mergers and expansions. This change would allow poorly managed banks to acquire other institution or expand into riskier financial activities without adequate scrutiny.
▶ 1:52:23Camel's ratings are substantive scores that reflect both quantitative data and quantitative qualitative assessments. By sidelining the management component, this bill allows banks to appear financially sound on paper while concealing deeper leadership and governance issues that often lead to failure.
▶ 1:52:49Examiners rely on the management rating to capture and respond to a wide range of supervisory concerns, including issues of ethics, internal controls, and compliance culture. This bill would tie their hands and limit their ability to intervene when bank leadership is falling short.
▶ 1:53:12This legislation is a response to complaints from large banks that dislike the subjectivity of management ratings. But these complaints should not outweigh the public's interest in preventing taxpayer bailouts and systemic crisis caused by mismanaged financial institutions.
▶ 1:53:32So rather than eliminating the management rating, Congress should consider increasing transparency around camel's ratings such as by releasing them on a delayed basis. what would that would promote general accountability without compromising supervisor efficiency.
▶ 1:53:56So I urge my colleagues to reject legislation that would not want the management of banks to be scrutinized in any shape or form and particularly uh with camel's uh scrutiny that is done in helping banks to understand one of the key issues in banking and that is management. I yield back the balance. The gentle woman yields back.
▶ 1:54:25Uh, does anyone else seek recognition on the gentleman from Wisconsin's legislation? If not, I now recognize myself for five minutes. Thank you, Mr. Fitzgerald, for your leadership on this bill.
▶ 1:54:39We've heard testimony um in this committee recently about how the management prong of the camel's rating system is very vague and results in um challenges in uh supervisory examinations. Uh we appreciate uh the gentleman shining a light on the consequences of inconsistent financial oversight.
▶ 1:55:05Bank examiners are tasked with evaluating an institution's health by assessing capital liquidity, asset quality, and risk exposure. These are these are actually quantifiable objective metrics. They're rooted in precedent and grounded in law. However, inconsistency in the examination process undermines trust in our regulatory framework. Um, as the chairman emphasized in his make community banking great again principles, transparency and consistency from federal regulators are essential.
▶ 1:55:34Two banks with similar size and business models located in the same region should not receive drastically different supervisory ratings simply because of shifting administrations or subjective interpretations across regulatory bodies. I have heard this uh repeatedly from community banks in Kentucky uh that uh the outcome of a supervisory examination depends on what examiner you get.
▶ 1:56:01uh that is uh that is not uh that is not professional. That is not the kind of consistent uh bank exam examination process that we should all be that we should all want. The humps act requires federal financial regulators to revise the camel's rating system focusing on objective and measurable criteria. This reform will ensure examiners prioritize material financial risks and reduce the influence of discretion in the ratings process.
▶ 1:56:31the ranking member site Silicon Valley Bank. I think this is why we need the humps act because the super the supervisory the examiners from the San Francisco Fed were not focused on objective financial risk. I mean basic stuff blocking and tackling looking at interest rate sensitivity like that's not what they were focused on objective risk.
▶ 1:56:54Instead, they were off on uh tangents, climate, and diversity, equity, and inclusion. That was their focus. Subjective criteria not rooted in basic uh financial risks. So, importantly, this bill does not eliminate any oversight authority or hinder regulators ability to manage risk. It focuses the regulators ability to manage risk.
▶ 1:57:20It requires them to focus on objective criteria, not subjective criteria, and it strengthens their ability to focus on what they do best, ensuring safety and soundness. I'm proud to support this thoughtful urge my colleagues to do the same.
▶ 1:57:35And yes, uh let's let's take uh the case of Silicon Valley Bank seriously as a supervisory failure, not a regulatory failure, a supervisory failure because there was not focus on financial risk. And that's why that's precisely why we need the Humps Act. I yield back. Does anyone else seek recognition? Hearing none, we will move on to amendments. Are there any amendments? The gentle lady from California. The ranking member is recognized.
▶ 1:58:05For what purpose does the gentleoman from California I have an amendment at the desk. Is your amendment designated as uh HR 3379 bad actors. Yes, it is. What the 15. 15. Yes. We will pause while the amendment is distributed. Mr. chairman. Um, reserve a point of order.
▶ 1:58:35The gentleman from Georgia reserves a point of point of order. The clerk will report the amendment.
▶ 1:59:03An amendment to the amendment in the nature of a substitute to HR 3379 offered by Miss Waters of California designated as HR 337915. Without Without objection, the amendment is considered red. The gentleoman is recognized uh on her amendment. Thank you.
▶ 1:59:24This amendment ensures that the biggest banks with over one trillion in assets do not benefit from weakened regulatory oversight under this bill. Banks with over one trillion in assets pose unique risk to the financial system and the economy.
▶ 1:59:44These institutions should not be allowed to escape meaningful supervisory scrutiny, especially if they have a documented pattern of misconduct. This amendment also ensures banks with a recent history of harming consumers or breaking the law are exempt from the Republicans deregulatory bill.
▶ 2:00:08If a bank has harmed over one million, If a big bank has harmed over one million consumers, it should not be shielded from having its management assets through the Campbell's framework. The Republican bill, as written, would allow even the worst behaving mega banks to escape accountability for poor governance or management failures.
▶ 2:00:37This amendment corrects that by holding the largest most problematic banks to a higher standard. This amendment draws a clear line that if a big bank has broken the law or harm consumers on a massive scale uh that uh they should be viewed uh differently and it cannot expect Congress to weaken regulatory oversight in his favor.
▶ 2:01:03harm to over one million consumers should never be forgotten or erased by the passage of time. This amendment ensures that banks remain accountable for the full extent of their misconduct regardless of when it occurred. I urge everyone to support this amendment and I yield back the balance of my gentleoman yields back. Uh for what purpose does the gentleman from Wisconsin seek recognition? Uh strike last word. Gentleman is recognized.
▶ 2:01:33Um, chairman, I mean the problem with the ranking members amendment is that uh the figures used clearly are arbitrary and the common sense bill kind of asked for banking regulators to revise Camel's rating system. So that should be from the uh smallest of banks all the way to the top and forcing even these largest banks to be somewhat subjected to these assessments.
▶ 2:02:03It still prevents them from serving the customers in a uh in a just in a fundamental way. So I'm I'm not sure exactly what the ranking members getting at, but I would uh I would urge uh I would urge members to vote no on. Will the gentleman yield? I do yield. I appreciate the gentleman uh from Wisconsin. You know, I just want to make one point. You know, I can see that there may be out of the 4,500 banks in America.
▶ 2:02:34Their their management comes in all shapes and sizes and there may be cases where we have substandard management in some banks. I would submit I would argue that the checks in place, the the rigorous scrutiny that goes into a board of directors and sophisticated shareholders selecting who will lead the most complex, large, sophisticated, globally systemic banks in the world.
▶ 2:03:04that that only the most talented bankers on planet Earth would even get near applying or even having the opportunity to apply for that kind of a job. Of all the institutions, management is probably not the issue with those larger banks. Um but again, the the real point is that these are not objective criteria.
▶ 2:03:34So I I I yield back. And I yield back. Gentleman yields back. Uh does the gentleman uh from Georgia insist on his point of order? I withdraw my point of order. Gentlemen uh withdraws his point of order. Is there further debate on the amendment? Uh seeing no further debate on the amendment, the question now occurs on the amendment offered by the gentleoman from California, Mrs. Waters. All those in favor of the amendment shall signify by saying I. I. All those opposed shall signify by saying nay.
▶ 2:04:04Nay. In the opinion of the chair, the nays have it. The naysay have it. And the vote is requested. A recorded uh a recorded vote is requested. All those in favor of a recorded vote raise your hand. A sufficient number having raised their hand. A recorded vote is ordered. Pursuant to subsection C5 of rule three of the committee rules. Further proceedings on the amendment is postponed. Are there further amendments?
▶ 2:04:28There being no further amendments, when proceedings resume on the postponed amendments, without objection, the previous question will be considered ordered on the substitute. Pursuant to the previous order, the chair declares the committee and recess subject to the call of the chair. We will reconvene at 1:30. Thank you. The committee stands in recess.
▶ 3:50:46Committee will come to order. Pursuant to the notice, I call up 3230, the financial institution regulatory tailoring enhancement act introduced by the gentleman from Kentucky, Mr. Bar, the chair of our financial institutions subcommittee. The clerk will report the bill which was distributed in advance. HR 3230 to increase the asset thresholds at which financial institutions become subject to certain requirements and for other purposes.
▶ 3:51:17Without objection, the bill is considered read and open to amendment at any point. The gentleman from Kentucky has an amendment in the nature of a substitute, copies of which have been distributed in advance. The clerk will report the amendment. An amendment in the nature of a substitute to HR 3230 offered by Mr. Bar of Kentucky designated as bar 048. Without objection, the amendment's considered read and will serve as base text for the purposes of amendment. The gentleman from Kentucky, Mr.
▶ 3:51:47Bar, is recognized to describe his bill for five minutes. Thank you, Mr. Chairman. I am proud to sponsor HR 3230, the Financial Institution Regulatory Tailoring Enhancement Act. Once again, this Congress, this straightforward, bipartisan bill modernizes outdated statutory thresholds that have imposed unnecessary and disproportionate burdens on smaller, lower risk financial institutions.
▶ 3:52:15Let me be clear, this bill is not about rolling back regulations. It's about ensuring that our regulatory framework is smart and appropriately tailored to reflect the actual size, complexity, and risk profile of today's institutions, not those of 15 years ago. Throughout this year, we've held several hearings with community banks, credit unions, and regional institutions. One concern came through loud and clear. The $10 billion asset threshold. Crossing that line doesn't just increase supervision.
▶ 3:52:45It activates a costly web of compliance obligations, stress testing, and exam frequency that small institutions are often not prepared to absorb. In fact, some are intentionally limiting their growth, deliberately staying below the threshold, not due to credit or operational risk, but because of the sheer cost and complexity tied to an arbitrary line in statute.
▶ 3:53:09One credit union executive in California told the committee that even while still under 10 billion, they've already started diverting staff and resources away from customer service and loan programs to prepare for the inevitable regulatory burden. That's not promoting safety and soundness. That's wasting resources that could be used serving members and growing communities. And that has very real consequences at the local level. When a small financial institution pulls back on growth, it's not just a business decision. It's a ripple effect felt across communities.
▶ 3:53:39It means fewer small business loans, reduced funding for local housing and infrastructure, and fewer financial services for working families. in rural and underserved areas where these banks and credit unions are often the only financial presence. It can even lead to closures or consolidation. The $10 billion threshold was established during the DoddFrank Act in 2010. But even then, it wasn't based on any empirical risk analysis. It was a policy shortcut.
▶ 3:54:06And after 15 years of inflation, economic growth, and consolidation, that figure is badly outdated. That's why my bill raises the threshold to $50 billion for several key regulations, ensuring that only those institutions truly large and complex enough to warrant enhanced scrutiny are now treated accordingly. While smaller banks to grow, innovate, and compete without being penalized for their success. Let me emphasize, nothing in this legislation diminishes the regulators ability to supervise for safety, soundness, or consumer protection.
▶ 3:54:36agencies still retain every tool they need to monitor risk and ensure stability in the financial system. This is not a novel approach. In 2018, Congress passed S2155 with bipartisan support to better align oversight with risk. HR 3230 builds on that success by updating another set of outdated thresholds that are undermining the ability of community-based institutions to serve Main Street, from farmers and families to small businesses and working Americans.
▶ 3:55:04We should all want a regulatory system that's strong, transparent, and fair. That means ensuring large institutions are held appropriately to high standards, but also making sure small lowrisk lenders aren't buried under compliance regimes that were that they were never designed uh for. This is not just about easing the regulatory burden on banks and credit unions. This is about ensuring that our regulatory system serves communities, promotes innovation, and helps local economies grow.
▶ 3:55:30It's time to modernize outdated thresholds and put an end to the one-sizefits-all regulatory approach. Let's also make sure that we don't create an incentive for institutions that are at the $9 billion or above range, but just below that threshold, have to grow very very rapidly in order to absorb the new compliance obligations imposed on them for tripping up that tripping that $10 billion threshold. That leads to mistakes.
▶ 3:55:57um that leads to uh uh growth that some of these institutions are not prepared for and uh and that's that's really stifling uh the organic growth that many of these institutions uh want to find themselves uh uh uh achieving. So let's create a system that rewards success, supports small businesses, and ensures financial stability. I urge my colleagues to support HR 3230 and I yield back. Gentleman yields back. Who seeks recognition?
▶ 3:56:27Ranking member of pool committee, I move to strike the last word. The gentleoman's recognized for five minutes. I strongly oppose HR 3230 as it proposes too many dramatic increases in regulatory thresholds with little justification. For example, the bill would dramatically raise a number of exemption thresholds by 500% from 10 billion to 50 billion.
▶ 3:56:56And even though 97% of all banks already exempt from things like CFTB supervision, this bill will also exempt these institutions from qualified mortgage requirements and the vulker rules prohibition on proprietary trading.
▶ 3:57:19This bill is a massive roll back of postcrisis safeguards that were carefully crafted after the 2008 financial collapse to protect consumers and the broader economy. Let me be clear. By no means is 50 billion in assets a small bank. These are large institutions with significant footprints in our financial system.
▶ 3:57:45Loosening oversight of these firms is reckless and unjustified. Only 2% of banks and credit unions currently exceed the 10 billion threshold. Of those, 70% fall between 10 billion and 50 billion. mean this bill would gut oversight for the vast majority of large institutions subject to these consumer and safety protections.
▶ 3:58:15There is no economic rationale for a 500% increase in the oversight threshold. If Congress simply adjusted the 10 billion figure from DoddFrank for inflation, it would only rise to about 14.7 billion, not 50 billion.
▶ 3:58:35Similarly, the community bank leverage ratio CBLR was created in 2018 and adjusting for inflation would only increase its threshold modestly from 10 billion to around 12.75 billion.
▶ 3:58:53This bill would allow institutions with up to 50 billion in assets to sidestep critical capital and leverage requirements so long as they meet the looser CBLR standard. In effect, this bill treats midsize and even large banks as if they pose no risk to the financial system.
▶ 3:59:20Despite lessons from recent bank failures like Silicon Valley Bank, we should be raising the fear for regulatory oversight, not lowering it, particularly for institutions with billions in assets and national reach.
▶ 3:59:37The American people expect us to remember the hard lessons of 2008 and This bill moves us backward and exposes consumers and taxpayers to unnecessary risk. So I urge my colleagues to reject this bill and I yield back. Gentleoman yields back.
▶ 4:00:00Who seeks Seeing no additional speakers, the chair will recognize himself for to strike the word. I'm pleased to support Mr. Bars bill HR 3230, Financial Institutions Regulatory Tailoring Enhancement Act. This bill recognizes a basic truth that asset thresholds haven't kept pace with inflation or industry consolidation.
▶ 4:00:28A10 billion dollar bank today is not the same as it was 15 years ago, either in business mission or uh in size based on As a result, smaller, less complex institutions are being swept into the regulatory framework that never was meant for them, driving up compliance costs, stifling innovation, and accelerating mergers, bank closures, particularly in rural communities.
▶ 4:00:56While online banking has certainly expanded access, it hasn't replaced the need for in-person services like cash handling, deposits, financial counseling, particularly in underserved areas, rural and urban. This bill updates outdated thresholds so banks are regulated according to their actual size and risk, not a number frozen in time. Let me be clear, this is not a deregulatory bill.
▶ 4:01:21Institutions under $50 billion remain under strong oversight by both state and federal regulators. And if we were to pass uh and sign into law Mr. Loudermilks bill that we debated this morning. It would be even more clear how that regulatory process should be tailored.
▶ 4:01:40And were a bank under $50 billion that were had a disproportionate unique business strategy or risk-taking scenario, they'd have more regulatory additional oversight, not less. By right sizing the rules, we allow regulators to focus on higher risk institutions and reducing uh a level of burden on smaller institutions. I all my urge all my colleagues to support this common sense reform and I yield back the balance of my time.
▶ 4:02:09Does anyone seek recognition? Hearing none, we'll move to amendments. Are there amendments on Mr. Bar's bill? Ranking member, I have an amendment at the desk. We will pause. Uh uh your amendment is your amendment designated Uh we'll check on that. Let's see. You just showed it to me. Which one is it? You're right. He's right. The number.
▶ 4:02:39Okay, there it is. Here it is over here. We'll pause while your amendment 32312 is distributed. No, that's not uh Lucas. Mr. Chairman, I'd like to reserve a point of order, please. The gentleman from Oklahoma reserves a point of order.
▶ 4:03:34Clerk will report the amendment. An amendment to the amendment in the nature of a substitute to HR 3230 offered by Miss Waters of California designated as HR 323012. Without objection, the amendments considered red. Ranking member of the full committee, Miss Waters, is recognized to explain her amendment.
▶ 4:03:58Chairman, at a time when the Trump administration and Republicans are trying to shut down the Consumer Financial Protection Bureau, they have this bill to modify what is subject to its supervision.
▶ 4:04:14However, no one is currently doing supervision at the CFPB and hardly anyone would would going forward if Republicans are successful to slash the CFPB's budget by 70%. Moreover, it is actually the community banks and credit unions that are harmed when the CFPB doesn't do its job in supervising the largest banks for consumer compliance.
▶ 4:04:43that has created an unlevel playing field while their primary banking regulator still supervises them for consumer compliance. So my amendment stipulates that this bill should not take effect unless the CFPB is adequately staffed and fully functioning in the supervisory and examination role.
▶ 4:05:05Specifically, the amendment requires that the CFPB have at least the average number of examiners and supervisory staff who are actively conducting their duties based on levels during the period from November 24th, 2017 to January 20, 2021. These dates are when Mick Mulaney and Kathy Crowninger ran the CFPB.
▶ 4:05:34And while it was clear they did not like the agency, they felt they had a duty to implement the law as Congress drafted it. So while they reduced staff a little bit, at the lowest point they had 1,430 employees carrying out the functions of the CFPB, including supervising large banks.
▶ 4:05:58Trump's administration is trying to convince a court they can carry out all of its duties with less than 200 people, which is a cruel joke on consumers that will result in extensive consumer harm that will go unchecked. So my amendment will ensure that the CFPB at least has the supervisory staff carrying out examinations of big banks and other non-banks.
▶ 4:06:25They supervise like the giant credit bureaus. Let's not forget it wasn't that long ago when Equifax had one of the largest data breaches in history and with half of the communities positive personnel data exposed to hacklers.
▶ 4:06:44So regardless of who is in CFPB's leadership is bound by the law and my amendment will ensure they're carrying out this supervisory task force. I urge members to support this amendment and I yield Gentlewoman yields back. Who seeks recognition? Chairman of the subcommittee on financial institutions, Mr. Bar, you're recognized. I thank you. I rise in opposition to the amendment.
▶ 4:07:10Um, and no surprise that I do because the amendment would defeat the entire purpose of the underlying bill. This is about tailoring regulations. So, if we're going to tailor regulations, we we don't want more regulators. The idea is that when you have a non-complex smaller firm, you have less red tape, you have less burden, you have less compliance costs.
▶ 4:07:34If you if you're just throwing more regulators at these institutions, you're totally defeating the point. So, I don't understand why you would want the same number of supervisors uh at the CFPB if the CFPB is going to have fewer institutions to supervise. again defeating the whole point of the bill.
▶ 4:07:56But maybe it proves the the it maybe it proves the point that many uh currently exempt institutions make which is that the deal that was made in DoddFrank creating this arbitrary bifurcation between banks below 10 billion in assets and banks above 10 billion in assets was really illusory to begin with because the CFPB nevertheless even currently reaches its heavy hand into the affairs of these smaller community banks.
▶ 4:08:24Uh many many call this trickle down regulation, trickle down supervision because uh the FDIC or the Fed or the OC or the state regulator uh will apply the same standards that the CFPB uh puts forth in their compliance exams.
▶ 4:08:43Uh and so maybe the the um with this amendment, the ranking member is implicitly acknowledging that reality and wants the same level of army of supervisors because the intent all along is regardless of thresholds is to disregard those thresholds and just continue to apply massive amounts of compliance costs on all these uh institutions in a one-sizefits-all manner. So, I I oppose the amendment for the reasons I've outlined.
▶ 4:09:13Um, again, the purpose here is to provide tailoring to give institutions under 50 billion in assets some relief uh from the CFPB. Uh, this is not getting rid of consumer protection laws. The consumer protection laws still exist. the credential regulators who have the responsibility of uh overseeing these institutions will continue to apply and enforce those laws.
▶ 4:09:41It just means that the CFPB is no longer needed for the smallest, least complex firms. And I'll I'll I'll end with this kind of on a more generalized point why this bill is needed. Again, we have heard over and over again from many uh growing community banks that their only way out their only way out is a merger.
▶ 4:10:04And the ranking member because of the massive regulatory compliance cost, the the ranking member opposed our bill, the bank failure prevention act, she she wanted to avoid mergers. Well, if you want to avoid mergers, let these let these small banks grow organically so that they can survive. Right now, they're too small to survive.
▶ 4:10:26They need to be able to grow above 10 billion in order to manage the technological and compliance costs that have been put upon them. This would give them the relief. And frankly, this bill might uh achieve the ranking member's goal of not seeing as many mergers. So, she's got to she's got to pick wh which which position is she going to take? Does she want mergers or does she not want mergers?
▶ 4:10:50And this uh legislation would give some of these institutions a fighting chance to grow organically without uh resorting to a merger. With that, I yield back. Gentleman yields back. Who seeks Does the gentleman from Oklahoma insist on his point of order? I would like to withdraw my point of order, Mr. Chairman. Gentleman withdraws his point of order. Is there further debate on the Waters amendment?
▶ 4:11:23If there's no further debate, the question now occurs on the amendment offered by the gentleoman from California, Mrs. Waters. All those in favor of the amendment shall signify by saying I. I. All those opposed shall signify by saying nay. Nay. In the opinion, chair the nays have it. The nays have amendment is not adopted. Recorded vote is requested. The gentleoman requests a recorded vote. All those in favor recorded vote, raise your hands. A sufficient number having raised their hands. A recorded vote is so ordered.
▶ 4:11:52Pursuant to subsection C5 of rule three, the committee rules further proceedings on the amendment are postponed. Are there further if are there further amendments to the bar bill? There being no further amendments, when the proceedings resume on the postponeed amendments, without objection, the previous question will be considered as ordered on the substitute. We'll now proceed to the next bill before us.
▶ 4:12:19Pursuant to notice, I call up HR 940, the Fair Exams Act, which I introduced. The clerk will report the bill, which was distributed in advance. HR 940 to amend the Federal Financial Institutions Examination Council Act of 1978 to improve the examination of depository institutions and for other purposes. Without objection, the bill's considered read and open to amendment at any time.
▶ 4:12:46I've got an amendment at the desk in the nature of a substitute and the copies have been distributed in advance. The clerk will report the amendment. An amendment in the nature of a substitute to HR 940 offered by Mr. Hill of Arkansas designated as Hill AR Without objection, the amendment is considered read and will serve as base text for the purposes of amendment.
▶ 4:13:10I recognize myself for five Today we're considering a bill that I've worked on for several months called HR940, the Fair Audits and Inspections for Regulators Exam Act or the Fair Exams Act. Back in 1994, Congress passed the Regal Act with broad bipartisan support.
▶ 4:13:35Among its many provisions, it required each federal bank regulator to establish a process whereby financial institutions could appeal supervisory findings. This was on the heel of the collapse of the savings and loan industry in 1989 and the real estate lending crisis of 199091. There were many disputes and exam findings from well-managed institutions.
▶ 4:14:02I witnessed this firsthand in the Bush 41 Treasury and while a economic policy staffer on the White staff while each agency since has implemented some version of an appeals process the reality is those processes don't work as they should.
▶ 4:14:24At a recent hearing of the financial institutions subcommittee, we heard expert testimony detailing why the concerns were clear and troubling. Lack of independence, insufficient oversight, fear of retaliation, and conflicts of interest within the appeals framework. As a result, few institutions are willing to pursue appeals.
▶ 4:14:49And of those that do, even fewer are successful in overturning findings. That's why I'm pleased that the committee is considering HR 940, the Fair Exams Act, legislation I've introduced along my good friend and colleague and longtime collaborator on this committee, Representative David Scott of Georgia. Mr.
▶ 4:15:13Scott and I came together on this because we recognize the need for reform and to implement the uh and have it work properly of Senator Regal's named act from so long ago 30 years ago in 1994. We believe there's a better path forward and one that promotes fairness, independence, and transparency in the supervisory appeals process.
▶ 4:15:40And that's what this legislation is designed to do. Let me be clear. I've seen firsthand how our well-trained bank examiners, state and federal, play a vital role in ensuring safety and soundness in our financial system. But with that responsibility comes great influence. A negative supervisory finding can impact a bank's capital, constrain its growth, and harm its reputation.
▶ 4:16:08By establishing a more functional and independent appeals process, the Fair Exam Act will not only protect institutions from unfair treatment, it will help examiners apply the rules more consistently and confidently, ultimately strengthening the exam process itself. This isn't a new idea.
▶ 4:16:28Back in 2018, the House passed a similar bill, the Financial Institutions Exam Fairness and Reform Act, with strong support. I'd like to note for the record that many of my colleagues here today voted for that bill in 2018, including Representatives Foster, Godheimer, Heimmes, Meeks, Scott, Sherman, and Vargas. This should be no different. Let's build on that bipartisan track record with today's vote.
▶ 4:16:59Let me close by thanking all those who've worked diligently on this bill, both the staff and our our members, Congressman Scott, Subcommittee Chair Bar, and particularly Senator Morant for his long-standing leadership on this issue in the US Senate. I urge all my colleagues to support the Fair Exams Act. And with that, I yield back the balance of my time.
▶ 4:17:21Who seeks the ranking member of the full Thank you, Mr. Chairman. Um, we love our community banks and some have expressed concerns about different aspects about their examinations, including excessive paperwork or examinations that could be better coordinated or less frequent. I believe there's space for us to work together.
▶ 4:17:49However, this sweeping bill goes well beyond helping community banks. Chairman Hill's bill will help mega banks challenge every single material supervisory finding that they may have. And bear in mind, for the largest banks, it can be dozens and dozens of findings.
▶ 4:18:10We're also not just talking about a Federal Deposit Insurance Corporation exam, but this bill covers all Consumer Financial Protection Bureau examinations also. So, big banks could challenge any and all material supervisory determinations issued by the Fed, the OCC, the FDIC, and the CFPB.
▶ 4:18:40to new appeals board. But this appeals board has no mandate to ensure the safety and soundness of depository institutions, consumer protection or financial stability and the regulations with those important mandates would have to offer. This could interfere with ensuring institutions properly address compliance issues.
▶ 4:19:10If they are not properly addressed, these problems could become bigger safety and soundness issues, risk or consumer plan uh protection problems. In fact, that's what we saw with Silicon Valley Bank.
▶ 4:19:28SVB was repeatedly warned about compliance problems starting in 2020 2018, but the regulators did not do enough to escalate their concerns quickly enough to ensure the bank's shortcomings were promptly corrected.
▶ 4:19:47Moreover, the expertise of the appeals board is focused on industry experience with no requirement that a consumer protection expert be on the panel too. Even though they could be reviving consumer protection violations, this bill also creates a new appeals process.
▶ 4:20:10Each of these agencies already have an umbra agency formal review and repeals process. Banks are also already free to bring a court charge to any formal regulatory enforcement action by creating a more expensive appeals process.
▶ 4:20:33The bill allows banks to resist supervisory oversight and delay providing consumer remediation and when regulators find consumer compliance problems in supervisory process.
▶ 4:20:50Moreover, I do find it ironic that as Republicans are attempting to close the PCAOB and gutting the CFPB and the Financial Stability Oversight Council, they would be creating a whole new Federal Oversight Board with the sole mission of making mega banks life easier. Are you kidding me? Well, no.
▶ 4:21:19This committee should be working on real problems and towards preventing another Silicon Valley bank, not getting rid of processes that protect American consumers from being ripped off or even bank failures. I urge members to vote no on the bill and I yield back. Gentlewoman yields back, seeks recognition. Yeah. Chair recognizes himself for five minutes of strike. Oh, sorry.
▶ 4:21:49Yeah. Uh, is anyone else seek recognition on the bill? Hearing none. Uh, I'm sorry, Mr. Bar. Mr. Bar, you're recognized. Strike the last. Uh, strike the last word. Um, thank you, Mr. Chairman. I support your bill HR 940, the Fair Exams Act, and applaud you for your focus on this important issue.
▶ 4:22:11The federal banking regulators have failed to meet their obligation to provide a fair and transparent process for financial institutions to appeal supervisory determinations as required by law. This failure has denied institutions due process when they face adverse regulatory actions. The 1994 Regal Act required federal banking agencies to implement an independent process to review material supervisory determinations. The purpose of this was to protect institutions from decisions that could have severe far-reaching consequences.
▶ 4:22:40Although some agencies have attempted to create such a process, their efforts have been insufficient and no meaningful review of the process has taken place over 20 years. Institutional barriers at these agencies deter financial institutions from pursuing appeals given the long time frames and low likelihood success.
▶ 4:22:57In fact, anecdotally, if you talk to uh bank uh uh officials um executives, they kind of chuckle at the idea uh of appealing adverse supervisory determinations knowing full well that they'll be rejected summarily because there's no real independence in those reviews and they're appealing the very same uh to the very same agency that handed down the adverse supervisory determination.
▶ 4:23:25As a result, very few institutions even consider appealing and even fewer succeed. Between 1994 and 2012, only 9% of nearly 400 appeals filed with the banking agencies were reversed. I've seen statistics of even lower uh success rates. Compounding the issue is the lack of transparency in the appeals process, which only discourages institutions from seeking recourse.
▶ 4:23:49Uh this bill HR940 would address these problems by establishing an independent examination review director to oversee the appeals process. This overdose solution will increase transparency, consistency and fairness, providing financial institutions with a genuine opportunity to challenge regulatory decisions.
▶ 4:24:07uh and uh it also I believe provides uh more certainty uh on the timing of exit interviews and make sure that there's not an un uh uh unreasonable delay in institutions getting their exam findings back from the from the uh conduct of the exam. So I applaud Chairman Hill and Representative Scott for their leadership in advancing this important reform.
▶ 4:24:33I encourage all my colleagues to support HR940 and u I yield back. Gentleman yields back. Additional members seeking recognition. Seeing none, uh we'll turn amendments. Uh for what purpose does the gentleman from California seek I have an amendment at the desk. Uh the gentleman has gentleman has an amendment at the desk.
▶ 4:25:00We'll pause for it to be Gentleman from Oklahoma. Mr. Chairman, I'd like to reserve a point of order. Gentleman reserves a point of order.
▶ 4:26:15Clerk will report the amendment. An amendment to the amendment in the nature of a substitute to HR 940 offered by Miss Waters of California designated as from California is recognized to discuss her amendment for five minutes. Thank you, Mr. Chairman.
▶ 4:26:38To the extent we are re uh reforming bank examinations, we should aim to address a major problem exposed by the failure of Silicon Valley Bank two years ago, which my amendment seeks to do. As early as 2018, Federal Reserve examiners were identifying multiple compliance problems SVB had.
▶ 4:27:03They were reluctant, however, to escalate these matters into formal enforcement actions, which may have spurred the bank to correct their shortcomings before they failed. Specifically, my amendment would require that federal banking regulators develop a strategic plan on how they will promptly escalate supervisory matters to address concerns at large banks over 100 billion dollars before they fail like
▶ 4:27:34SVB did. Regulators will be required to seek public comment in drafting their strategic plan as well as describe how they'll use the full extent of the enforcement tools to hold repeat offenders accountable.
▶ 4:27:52For example, if another large bank repeatedly breaks the law like Wells Fargo did, regulators should follow former Fed Chair Janet Yalen's lead and impose an asset cap on the bank until they clean up their act. Unlike the underlying bill, my amendment will address a needed improvement to bank supervision that SVB's failure expose.
▶ 4:28:21I urge member to support uh the amendment and I yield back. Gentleoman yields back. Who seeks recognition? Does the gentleman from Oklahoma withdraw his point of order? I do withdraw my point of order, Mr. Chair. Point of order is drawn. Thank the gentleman who seeks recognition. Chairman will recognize himself to speak on the waters amendment.
▶ 4:28:41I want to thank the uh the member for pointing out some of the failings in the supervisory process that were so terribly exposed by the failure of Silicon Valley Bank. Um it the some of the factual comments you made I I think I fully agree with that for many quarters in advance to the spring of Silicon Valley's failure uh the bank's financial position was deteriorating.
▶ 4:29:08It was available in the publicly available information on the FDIC call report and uni and uniform bank comparison reports. And I I believe that then vice chairman Michael Bar from the Federal Reserve came to this committee and and testified about the failures in supervision that were evident both on the part of the state regulator in Sacramento and the Federal Reserve Bank in in San Francisco.
▶ 4:29:36So, uh, I agree with that and but in my judgment, the regulators already have the ability to accelerate their powers under the supervisory process in in title 10 for safety and soundness and could take action in a situation like Silicon Valley in a very timely way. And they just did not do it. I don't think it was a failure of the supervisory exam manual.
▶ 4:30:02I don't think it was a failure of of the lack of a supervisory acceleration process. I think it was purely a terrible failure of management by those state and federal bank regulators. In the case of Silicon Valley, having a functional appeals process does not weaken the supervisory framework.
▶ 4:30:23It actually strengthens the supervisory framework promoting greater transparency and consistency across all the supervisors because we're divided as I think all our members know between state bank commissioners the FDIC the comproy and the federal reserve all were engaged in bank uh examination processes in addition obviously to for large banks the consumer financial protection bureau The
▶ 4:30:53Fair Exams Act includes a provision that clarifies that appealing a supervisory determination does not affect the uh negotiator standing to take any or the regulator standing pardon me to take any action deemed necessary to ensure the safety and soundness of the financial institution. That's a sacrosan legal and regulatory capability of our bank supervisors.
▶ 4:31:19Uh so I don't believe that uh the bill the fair exams act in any way weakens supervision. In fact I think it enhances it uh and uh regulators ability to step in when something goes wrong in no way is deteriorated uh by the tone of this bill.
▶ 4:31:40And it's critical that we not forget that Don Regal, our senator from Michigan in the 1980s and 90s, who was then the chairman of the Senate Banking Committee back in 1994, had this as a hallmark coming out of the bank challenges in the 1990s and the SNL failures uh and the bank failures in the 1980s and that he got overwhelming bipartisan support for this concept.
▶ 4:32:07What we've tried to do, what Senator uh Congressman Scott and Congressman Bar and I have tried to do is outline a framework that provides a transparent way for a bank to appeal a decision and get an an answer and have an independent assessment and have that not be politicized.
▶ 4:32:28So, I would uh I appreciate the discussion of the ranking member, but I have to urge a no vote on her amendment, and I yield back the balance of my time. Is there anyone else seeking recognition on the Waters amendment? There's no further debate. The question now occurs on the amendment offered by the gentleoman from California, Mrs. Waters. All those in favor of the amendment shall signify by saying I. I. All those opposed shall signify by saying nay.
▶ 4:32:59Nay. In the opinion of the chair, the naysay have it. The nays have it. The amendment is not adopted. Vote is the gentleoman from California has requested a recorded vote. All those in favor of recorded vote raise your hands. A sufficient number having raised their hand. A recorded vote is ordered. Pursuant to subject subsection C5 of rule three of the committee rules, further proceedings on this amendment are postponed. Are there further amendments? Gentleman from Georgia. Yes.
▶ 4:33:26Uh, chairman, I have an amendment at the desk. The gentleman from Georgia has an amendment at the desk. Let's pause while it's distributed. Mr. Chairman, the gentleman from Oklahoma. I would like to reserve point of order. M. The gentleman from Oklahoma reserves a point of order.
▶ 4:34:37The clerk will report the amendment. An amendment to the amendment in the nature of a substitute to HR 940 offered by Mr. Scott designated as HR 940_5. Gentleman from U Oklahoma has reserved a point of order and we recognize the gentleman from Georgia to discuss his amendment. Uh thank you m Mr. Chairman.
▶ 4:35:06Chairman, this amendment comes at a time and a place uh where we feel that this amendment addresses some of the concerns that were raised by Miss Waters. My staff uh with Chris on my staff have worked with uh Miss Waters's staff and with your staff as well, Chairman.
▶ 4:35:34And um there's no denying that the Fair Audits and Inspections for Regulators or the Fair Exams Act has gone through several changes since the 115th However, while this latest version now includes significant adjustments to the reporting timelines, the availability of
▶ 4:36:04certain regulatory information and the establishment of a new three member board, the prime concern still exists as Miss Waters herself has pointed out and uh we have as I mentioned this is a an amendment that uh our entire team has worked on both your staff chairman as well
▶ 4:36:34as Miss Ward staff along with my staff and Chris uh on my staff and supervisory appeals financial institutions do not have the same options they would in a typical court proceeding.
▶ 4:36:54For example, when it comes to issues like discovery, receiving testimony or accessing documents. And when it comes to accessing documents, financial institution can obtain examination workpapers relevant to their case and other documents that regulatory
▶ 4:37:25agencies rely on for material determination. However, this access is highly limited and is often heavily redacted.
▶ 4:37:41And while I have serious concerns with the ability of banks to resist supervisory oversight with little push back from current administration, it is important to improve the bank examination process at every step.
▶ 4:38:05And that's what this amendment that is a joint amendment by the entire team on both sides of this debate up here. Now this amendment would provide that no more than two board members shall be from the same political party.
▶ 4:38:31And yet this hopefully will ensure bipartisan balance placing the three member board in line with other bank regulators like the FDIC.
▶ 4:38:50Additionally, my amendment will expand the qualification class of individuals that can serve on the three member board to include individuals with relevant work related experience in consumer affairs and consumer protection laws.
▶ 4:39:18And in keeping with some of the concerns raised by uh Miss Waters, again, we've addressed jointly on both sides of the aisle with those concerns that Miss Waters has raised and Democrats on this committee.
▶ 4:39:39My amendment will ensure that board members with significant consumer financial experience are considered on an equal footing with those who have worked in a bank or trade association which brings more fairness.
▶ 4:40:07Banks and other financial institutions have strong lobbying power and technical and consumer protection efforts advocates for ordinary individuals. The gentleman's time is important. So I think u Mr. Chairman, thank you Mr. Scott. It's very important that we address Miss Waters concern. Gentlemen gentleman yields back.
▶ 4:40:36I think we your friend your friend friend will yield you more time. I yield back. I'll make sure we get it. Who seeks recognitions on Mr. Scott's amendment? The ranking members recognized. do this. Mr. Chair, I uh I move to strike the last word. The gentleoman's recognized for five minutes.
▶ 4:41:04I appreciate what our colleague Representative Scott is doing with his amendment and I support it. It does not resolve all of my many concerns with the bill, but I certainly appreciate that he's doing this. I appreciate the gentleman's amendment tries to make sure there's consumer protection experience on this board and that it is not dominated by people from the financial industry.
▶ 4:41:30The underlying bill also sets up a whole new board, but there is no consideration if it would be bipartisan or not, which this amendment would attempt to address. I appreciate that Representative Scott also included a quorum requirement as unfortunately we have seen President Trump unlawfully fire a bunch of Democratic board members on boards like this including the National Credit Union Administration.
▶ 4:42:01In light of these new dynamics, I believe we need to be more careful on how we draft bills like this. And there probably needs to be further improvements on this language to make sure that any president cannot undermine the will of Congress by only appointing some and not all board members.
▶ 4:42:22Moreover, even with these changes, I still have many concerns with how mega banks could really abuse this whole new process and how it could cause bank failures and delay consumer remediation. And with that, I yield back the balance of my time. Gentleoman yields back, seeks recognition. uh chair recognizes himself for to strike the last word for five minutes to discuss the Scott amendment.
▶ 4:42:52First, let me thank uh my friend Mr. Scott. It always enhances my reputation to legislate with Mr. Scott. I'm a a Wharton graduate wannabe and therefore to be associated with one is a definite upgrade for this kid from Arkansas. So, I thank him for working together on it. I also think these were substantive changes that made the bill stronger.
▶ 4:43:19I look forward to working with Senator Moran in the Senate to discuss with him and share with him the uh good ideas that Mr. Scott has suggested. And and as he noted, he it specifically addressed a comment that our ranking member made about the composition of the appeal process. But let's be clear, this is an appeal process.
▶ 4:43:40We want people with expertise in both safety and soundness, regulation and supervision and compliance supervision and law in order to make a good decision on uh when a financial institution takes the very um decision to actually appeal uh a decision by their supervisor. You can imagine the intimidation factor associated with that.
▶ 4:44:09And that's why I believe that this bill with Mr. Scott's assistance will create more transparency and more uniformity in how our supervisors spread across the federal agencies will apply bank supervisory practices. And further, I think it tries to bring uh after a three decade absence uh brings to light the goals that Senator Regal had when he originally proposed this.
▶ 4:44:38So, this is definitely uh a common sense bill. I want to thank uh Mr. Scott and his staff for working with the committee staff and my staff along with chairman bar to achieve these changes that makes the board more independent and the appeals process work better for both financial institutions and the supervisory agencies. And I want to thank the uh the member, Mr.
▶ 4:45:02Scott, for uh work on the underlying bill HR940 and our ability to collaborate on this. I urge my colleagues to support both the amendment and the bill and I yield back the balance of my time. Is there further Is there further debate on the amendment?
▶ 4:45:27If hearing none, then the the uh question now occurs on the amendment from my friend from Georgia, Mr. Scott. All those in favor of Mr. Scott's amendment shall signify by saying I. I. All those opposed shall signify by saying nay. In the opinion chair, the eyes have it. The eyes have it and the amendment is adopted. Ask for vote. The gentleman from Georgia requests a recorded vote. A record votes requested. All those in favor of record vote raise your hands. A sufficient number having raised their hand. A recorded vote is ordered.
▶ 4:45:57Pursuant to subsection C5 of rule three of the committee rules, further proceedings on amendment are postponed. Are there further amendments? Can I do this? amendment now. Yes, I have an amendment. Uh the ranking member has an amendment at the desk. Let's pause and see it distributed. Ask the gentleman from Oklahoma like to reserve a point of order. I would very much like to reserve point of order.
▶ 4:46:27Delighted to receive your uh suggestion, your motion, and point of order has been reserved.
▶ 4:47:17The clerk will report the amendment. An amendment to the amendment in the nature of a substitute to HR 940 offered by Miss Waters of California designated as HR 9404. Without objection, amendments considered read. And the gentleoman from Oklahoma is recognized for five minutes to discuss her amendment. Oklahoma. I mean, I'm reading now. You said I was from Arizona one day. Remember that?
▶ 4:47:46I I've resented it ever since. The gentleoman is the ranking member. She is from California. I yield to her for five minutes. Uh, thank you, Mr. Chairman. Americans have been alarmed at the broad access to sensitive data and systems that the Trump administration has given Elon Musk and a bunch of 20 year olds through Doge.
▶ 4:48:10I offer this amendment that would prevent any employee or individual affiliated uh with Doge uh from accessing confidential supervisory information with respect to any depository institution. This would include exam files on any bank. This is important uh because recent reports suggested that Doge showed up at the FDIC.
▶ 4:48:39But what did they do there? What databases did they access? What did they do with that information? There's been no transparency about what they are doing at a banking regulator like FDIC. Let's not forget Elon Musk plans to get into payments with his X app, formerly known as Twitter. He also has a car business that isn't doing so well.
▶ 4:49:10But for the fewer and fewer folks still purchasing, one often need a loan. So is M seeking to benefit from obtaining sensitive data on potential competitors like banks offering payment and car loans to their customers. But the FDIC is not the only agency that Doge has visited.
▶ 4:49:34Recently we had Treasury Secretary Bessett testify before our committee. I along with several Democratic members asked Mr. Besset about the access he granted Doge to the Treasury Department and the CFPB. Mr. Besset stated that for one thing, these Doge people were not in fact Doge employees. They're Treasury employees, which is interesting.
▶ 4:50:04Tom, I think it is Krauss in a court affidavit stated he serves as the Doge team lead for the Treasury Department. also known as the Treasury Doge team. I continued to be disturbed by Mr. Besset's responses when he stated that Mr. Elles had read only access because in a court ruling it was exposed that Mr.
▶ 4:50:34Le in fact have read and write access. I am deeply disturbed by Doge's access to the all to all of these agencies with little information or transparency. Elon Musk, his gang of 25year-old in sales should not have access to confidential information, including bank exam files.
▶ 4:51:02The Trump administration has shown no respect to protect confidential information. Whether it's discussing matters of military attacks on signal with the reporter in the chat or allowing those to access have access to extensive sensitive data, including confidential information on thousands of banks and countless individuals.
▶ 4:51:30I urge amendments to support my amendment and I yield back. Gentlewoman yields back. Does the gentleman from Oklahoma insist on his point of order? I wish to withdraw my point of order, Mr. Chairman. Gentleman withdraws point of order. Who seeks recognition?
▶ 4:51:48Chair recognizes himself to strike the last word on the waters Thank the gentleoman for her amendment and expressing concern about the absolute essential nature of confidentiality and exam records. Confidential supervisory information is a hallmark of the exam process for all of our federal supervisors and our state supervisors as well.
▶ 4:52:13For example, uh the board and the council shall keep confidential all meetings, discussions and information provided by financial institutions and federal financial institutions, regulatory agencies that involve confidential supervisory information and privileged information and all information and communication exchanged between a financial institution and the office of independent examination review and all information and communications exchanged between the federal financial
▶ 4:52:43uh regulatory agency and the office of independent exam review. So this bill requires strict confidentiality both between the financial institution and their supervisor and the board in that very delicate uh deliberative process. Further, the amendment in the nature of a substitute only strengthens the confidential or supervisory information protections from the bill as originally introduced.
▶ 4:53:10Because of those reasons and the strict standards that both the agencies already have and the contemplated very specific standards that we have in the amendment and nature of a substitute, I do not believe that the waters amendment is necessary. So I urge my colleagues to vote no and I yield back the balance of my time. There's no further debate. The question now occurs on the amendment offered by the gentleoman from California, Mrs. waters.
▶ 4:53:40All those in favor of the amendment shall signify by saying I. All those opposed shall signify by saying nay. Nay. In the opinion chair, the nays have it. The naysay have it. And the amendment is not agreed to, not adopted. For what? Gentleoman from uh California has requested a recorded vote. A recorded vote is requested. All those in favor of recorded vote, raise your hands. A sufficient number having raised their hand. A recorded vote is ordered.
▶ 4:54:05Pursuant to subsection C5 of rule three of the committee rules, further proceedings on amendment are postponed. Are there further amendments? Okay. Pursuant to the previous order, the chair declares the committee in recess. Subject to the call of the chair, we will reconvene at 3:10 3:10 p.m. Thank you. The committee stands in resource recess.
▶ 5:26:07There's Yeah. committee will reconvene. A quorum being present, the committee will come to order.
▶ 5:26:23I'd like to start uh the proceedings this afternoon before we vote with asking our members to join me in paying tribute to one of the great characters in the house and somebody who loved uh his incredible legislative work including the fact that which something I never understood as an arcan how somebody from Northern Virginia could attempt to sound like John F. Kennedy on the House floor.
▶ 5:26:52But I love Jerry Connley. I thought he was an amazing member of the House, a great member on the oversight committee. And I'd like to ask uh all of you just to join me in a moment of silence in honor of Congressman Connelly.
▶ 5:27:24Thank you very much. We're going to uh take our votes now. We're going to use electronic device and pursuant to the chair's previous order, we'll now take a vote pending on ordering HR1900 as amended favorably reported to the house. Members will vote electronically.
▶ 5:27:51Clerk will open the of whatever prison that was last night a little more tired today, but I'm just as cheerful,
▶ 5:28:41Is there any member who has not voted? Is there any member who wishes to change their vote? There's Mr. Norman. Is there any member who would like to change their vote? Clerk will report. Mr.
▶ 5:29:10Chairman, on this vote, the eyes are 29 and the nays are 21. A majority having voted in favor of HR1 1900 as amended. The bill is ordered favorably be reported to the House. Without objection, a motion to reconsider is laid on the table. Without objection, the staff are authorized to make necessary and conforming changes to the bill. Pursuant to House Rule 11, clause 2L, I give notice that all members have the requisite number of days to file supplemental, minority, additional, or dissenting views.
▶ 5:29:40Pursuant to the chair's previous order, we'll now take the vote pending on ordering HR 3380 as amended, favorably reported. Members will vote by electronic device. The clerk will open the vote. Is there any member who's
▶ 5:30:10not voted? Uh, Mr. Green. No, you're doing fine. You're doing what's appreciate you. Is there any member who wishes to change their vote?
▶ 5:30:41Clerk will close the vote. Clerk will report. Mr. Chairman, on this vote, the eyes are 29 and the nays are 23. Majority having voted in favor of HR 3380 as amended. The bill is a ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. Without objection, the staff are authorized to make necessary and conforming changes to the bill in pursuant to House Rule 11 clause 2L. I give notice that all members have the requisite number of days to file supplemental minority additional or dissenting views.
▶ 5:31:12Pursuant to the chair's previous order, we'll now take the vote pending on ordering HR 2702 as amended. Favorably reported, members will vote electronically. The clerk will open the vote.
▶ 5:31:56Yeah, there you go. Is there any member who's not voted? Is there any member who wants to change their vote? The clerk will close the vote. Clerk will report. Mr. Mr. Chairman, on this vote, the eyes are 33 and the nays are 19. A majority having voted in favor of HR 2702 is amended. The bill is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. Without objection, staff are authorized to make necessary and conforming changes to the bill. And pursuant to House Rule 11, clause 2L.
▶ 5:32:26I give notice that all members have the requisite number of days to file supplemental minority additional or dissenting views. Committee will now take the postponed votes on the pending amendments to HR 3379. The question is on the amendment offered by the gentleoman from California, Mrs. Waters. This is amendment HR 3379-15. The clerk will open the vote.
▶ 5:33:08Is there any member who hasn't voted? Is there any member who wishes to change their vote? Any member who wish to change their The clerk will close the vote. The clerk will report. Mr. Chairman, on this vote, the eyes are 23 and the nays are 29. A majority having voted against the amendment. The amendment is not agreed to.
▶ 5:33:37The question now occurs on the adoption of the amendment in the nature of a substitute. Uh offered by the gentleman from Wisconsin, Mr. Fitzgerald. All those in favor shall signify by saying I. I. All those opposed shall signify by saying nay. In the opinion chair, the eyes have it. The eyes have it. The amendment in the nature of a substitute is adopted. The question now occurs on ordering the bill HR 3379 as amended reported to the house with a favorable recommendation. Those in favor shall signify by saying I.
▶ 5:34:08I. All those opposed shall signify by saying nay. Independent chair the eyes have it. For what purposes the gentleman from Wisconsin seek recognition? A gentleman asked for a recorded vote. All those in favor of recorded vote, raise your hands. A sufficient number having raised their hands. A recorded vote is so ordered. We will now take the vote on ordering HR 3379 is amended amended favorably reported.
▶ 5:34:37Members will vote electronically. The clerk will open the vote. Is there any member has not voted? Is there any member wishes to change their vote?
▶ 5:35:07Clerk will close the vote. The clerk will report. Mr. Chairman, on this vote, the eyes are 29 and the nays are 23. A majority having voted in favor of HR 3379 is amended amended. The bill is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. Without objection, the staff's authorized to make necessary and conforming changes to the bill in pursuit to House Rule 11 clause 2L.
▶ 5:35:31I give notice that all members have the requisite number of days to file supplemental minority additional or dissenting views. The committee will now take postponed votes on the pending amendments to HR 3230. The question is on the amendment offered by the gentleoman from California, Mrs. Waters. This is amendment HR 3230 12. Clerk will open the vote.
▶ 5:36:19Is there any member who hasn't voted? Is there any member who wishes to change vote? The clerk will close the vote. Clerk will report. Mr. Mr. Chairman, on this vote the eyes are 23 and the naysay are 29. A majority having voted against the amendment the amendment is not agreed to. Question now occurs on the adoption of the amendment in the nature of a substitute offered by the gentleman from Kentucky, Mr. Bar.
▶ 5:36:48All those in favor shall signify by saying I. I. All those opposed shall signify by saying nay. In the opinion of the chair, the eyes have it. The eyes have it. The amendment and nature of a substitute is adopted. Question now occurs on ordering the bill HR 3230 as amended amended reported to the house with a favorable recommendation. Those in favor shall signify by saying I. I. All those opposed shall signify by saying nay. No. In the opinion chair the eyes have it. For what purposes? Gentleman from Kentucky.
▶ 5:37:18I request recorded vote. The gentleman requests a recorded vote. All those in favor of recorded vote raise your hand. A sufficient number having raised their hand recorded vote is ordered. will now take the vote on ordering HR 3230 as amended favorably reported. The members will vote electronically. The clerk will open the vote.
▶ 5:38:00Is there any member who has not voted? Is there any member who wishes to change vote? Clerk will close the vote. Clerk will report. Mr. Chairman, on this vote, the eyes are 29 and the nays are 23. Majority having voted in favor of HR 3230 is amended. The bill is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. Without objection, staff are authorized to make necessary and conforming changes to the bill.
▶ 5:38:29And pursuant to House Rule 11, clause 2L, I give notice that all members have the requisite number of days to file supplemental, minority, additional, or dissenting views. The committee will now take proposed votes on the pending amendments to HR 940. The question is on the amendment offered by the gentleoman from California, Mrs. Waters. This is Waters069.
▶ 5:38:53The clerk will open the vote. Is there any member who hasn't voted? Is there any member wishes to change their vote?
▶ 5:39:20Clerk will close the Clerk will report. Mr. Chairman, on this vote, the eyes are 23 and the nays are 29. A majority having voted against the amendment. The amendment is not agreed to. The question is now on the amendment offered by the gentleman from Georgia, Scott. This is HR 940-5. Clerk will open the vote.
▶ 5:40:03Is there any member who hasn't voted? Any member wishes to change their vote? Clerk will close the vote. Clerk will report. Mr. Chairman, on this vote, the eyes are 52 and the nays are zero. A majority having voted in favor of the amendment, the amendment is agreed to. The question is on the amendment offered by the got a piggy bank down there. The question is on the amendment offered by the gentleoman from California, Mrs. Waters.
▶ 5:40:31This is amendment HR940-4. The clerk will open the vote. Yeah, for sure.
▶ 5:41:02Go push. There we go. Is there any member hasn't voted? Any member wishes to change their vote? Clerk will close the vote. Clerk will report. Mr. Chairman, on this vote, the eyes are 23 and the nays are 29. A majority having voted against the amendment, the amendment is not agreed to. Question now occurs on the adoption of the amendment and the nature of a substitute offered by myself.
▶ 5:41:31All those in favor signify by saying I. I. All those opposed shall signify by saying nay. Nay. In the opinion of the chair, the eyes have it. The eyes have it. The amendment of nature of a substitute is adopted. The question now occurs on ordering the bill HR940 as amended reported to the House with a favorable recommendation. Those in favor shall signify by saying I. I. Those opposed shall signify by saying nay. And the appendent chair of the eyes have it. Mr. Chair, the gentleman from Michigan.
▶ 5:42:00I'd like to request a recorded vote. Gentleman from Michigan requests a recorded vote. All those in favor of recorded vote raise your hand. A sufficient number having raised their hand a recorded vote is ordered. We will now take the vote ordering HR 940 as amended. Favorably reported. Members will vote electronically.
▶ 5:42:18Clerk will open the is
▶ 5:42:51there any member who hasn't voted? Any member would like to change their vote? Wagner, you've turned yellow on me. turning it off. Is there any member who has not voted? Is there any member wishes to change their vote? Clerk will close the vote. Clerk will report. Mr. Chairman, on this vote, the eyes are 35 and the nays are 17.
▶ 5:43:20A majority having voted in favor of HR940 as amendment, the bills ordered. Favor will be reported to the House. Without objection, a motion to reconsider is laid on the table. Without objection, the staff are authorized to make necessary and conforming changes to the bill in pursuant to house rule 11 clause 2L. I give notice that all members have the requisite number of days to file supplemental minority additional or descending views. There being no further business pending, the committee is