▶ 0:05:37The committee will come to order. Without objection, the chair is authorized to declare a recess of the committee at any time. Without objection, all members will have five legislative days within which to submit additional materials to the chair for inclusion in the record. I recognize myself for 5 minutes for an opening statement. Good morning.
▶ 0:05:58Welcome to our markup for Today we're marking up a series of bills reflecting the committee's priorities, fostering innovation, ensuring comprehensive oversight, and solidifying the United States leadership in the global financial system.
▶ 0:06:16As we consider these measures, we face the critical task of formulating and refining policies that respond to the needs of American families while keeping with the age of rapid technological The bills before us reflect the challenge of modernizing our financial while staying true to the core principles that underpin it. Together we must work to forge a financial system made for every American, one that promotes opportunity,
▶ 0:06:42increases access to capital, and operates with a level of trust that allows businesses to grow and flourish. We must ensure that our rules do not stifle innovation and drive smaller institutions or investors out of the market while maintaining adequate transparency and accountability to protect consumers, ensure orderly markets, and safeguard against fraud.
▶ 0:07:05Our founders designed our institutions not to eliminate risk or competition, but instead to guide them in a way that fosters economic growth while mitigating Leaders like our first Hamilton recognized that a stable and resilient financial system is essential to the strength of a nation.
▶ 0:07:26The bills before us today reflect the same ongoing effort to strike that right balance between advancing innovation while upholding accountability, easing regulatory burden without sacrificing transparency, and fostering economic growth while safeguarding the integrity of the financial system. That work's evidence in the bills like Representative Warren Davidson's Repealing Big Brother Overreach Act, which seeks to relieve American small business owners from the overly burdensome reporting requirements and compliance costs.
▶ 0:07:56By codifying the administration's rule-making to eliminate onerous beneficial ownership reporting requirements for ordinary Americans, we're helping small business owners allocate more of their time and resources towards serving their local customers and their local community. We're also supporting the small small businesses through another bill, the bill like my Small Lender Act.
▶ 0:08:18This bill addresses section 1071 of the Dodd-Frank Act by delaying the implementation of small business lending data collection requirements, narrowing their scope, and exempting our smallest institutions. Community banks play a principal role in our financial ecosystem. They foster competition, serve underserved communities, and drive economic growth.
▶ 0:08:40By reducing excessive reporting requirements, we're not only alleviating burdens that on these institutions, but we're enhancing their ability to deliver customer service to their small We will also consider Representative Pete Sessions' Exchange Rate Accountability Act of 2026, which directs the Treasury Secretary to oppose increases in the voting power for certain IMF member countries that fail to adopt exchange rate policies consistent with balanced and fair global trade
▶ 0:09:10practices. This measure underscores America's leadership in promoting transparency and accountability in the international financial system while addressing the growing challenges posed by geopolitical competition. Additionally, Representative Bryan Steil's Protecting American Savings from Politics Act takes important steps to refocus the proxy voting and investment decision-making on the best economic interests of investors rather than uh political or ideological agendas.
▶ 0:09:41This bill will strengthen transparency and accountability in the proxy process, curb conflicts of interest among proxy advisory firms, empower shareholders, and help that American savings are managed with a focus on economic return.
▶ 0:09:58The bills before today encompass a wide range of policy areas, each reflecting the committee's focus on promoting economic growth, strengthening market integrity, and ensuring that our regulatory framework keeps up with the rapidly evolving financial landscape. I look forward to the day's discussion among our members on these important bills to support American competitiveness and reinforce the strength and resilience of our financial system. I yield back and I recognize our ranking member, Mrs.
▶ 0:10:27Waters of California, for 5 minutes for her opening comments.
▶ 0:10:32Thank you, Chairman Hill. A report last week found that more than half of Americans have already withdrawn or planning to withdraw early from their retirement savings to keep up with rising costs. Now, I know that's true cuz I'm in the same situation. At the same time, more families are turning to buy now, pay later loans just to cover basic needs like groceries.
▶ 0:10:56In fact, 54% [clears throat] of BNPL users say they wouldn't be able to make ends meet otherwise. Mr. Chairman, is this the golden age that Donald Trump promised working families? Or is it a dark age? From what I see, American families are falling behind, all because of the reckless, selfish, and just flat-out dumb policies of this administration.
▶ 0:11:23Across the country, Americans are paying more at the pump because of Trump's ill-conceived decision to wage war on Iran. And our constituents and small businesses must deal with higher cost of all types of goods because of Trump's unlawful tariffs. This is a reality under Donald Trump's disastrous agenda and failing Republican majorities in the House and Senate.
▶ 0:11:46[clears throat] Unfortunately, instead of offering any solutions to help working families today, committee Republicans will push policies that will make things worse. For ex- instance, one bill undermines the Corporate Transparency Act, a strongly bipartisan law that was designed to crack down on anonymous shell companies used by criminals, drug cartels, human traffickers, and foreign adversaries who hide their dirty money. Let me be clear.
▶ 0:12:16Repealing or weakening that law doesn't help small businesses. It doesn't lower costs. Instead, it makes it easier for bad actors, including some in Trump's orbit, to exploit our financial system, scam people from their savings, and harm our national security. The next Jeffrey Epstein will fully fly under the radar, and maybe that's what they want.
▶ 0:12:40Republicans will also try to advance a bill that weakens guardrails Congress passed to ensure small businesses can access fair credit. Under Trump's administration, small businesses are already facing rising loan denials and tighter credit. And it is even worse for women and entrepreneurs of color.
▶ 0:13:02Rather than fixing that, Republicans are weakening transparency and undermining support for community lenders like CDFIs, the very institutions that help get capital to underserved communities. That means fewer loans, fewer opportunities to grow, and more small businesses having to close their doors altogether. And it doesn't stop there.
▶ 0:13:23Republicans who want to make it harder for investors, especially retail investors, to use their own money to buy independent analysis and make informed decisions when voting on proposals that affect the companies they own. Taking away this shareholder right is not efficiency.
▶ 0:13:41It's about silencing investors and protecting corporate executives from accountability, and it's No one would be surprised that by this anti-capitalist trend, Republicans are doing nothing when Trump demanded gold and shares and profits from private companies to do business.
▶ 0:14:00They said nothing as Trump demanded free legal businesses from private law firms, and Republicans did nothing as Trump undermined free trade with illegal tariffs. The result of this bill is clear: less transparency, weaker oversight, and power concentrated at the top away from people who provide the capital and own these companies. Mr.
▶ 0:14:23Chairman, committee Democrats are focused on what actually matters: lowering costs, protecting consumers, strengthening our financial system, and making sure small businesses and working people have a fair shot. We should be cracking down on fraud, not making it easier. We should be expanding access to capital, not cutting it off, and we should be protecting investors, not silencing them.
▶ 0:14:48Families, workers, and entrepreneurs cannot afford any more of this presidency or these Republican I yield back the balance of my time. The gentlewoman yields back. Pursuant to notice, I'll start our markup by calling up H.R. 941, the Small Lender Act, which I introduced. The clerk will report the bill, which was distributed in advance. H.R.
▶ 0:15:13941 to amend the Equal Credit Opportunity Act to provide for an effective date and a temporary safe harbor for compliance with certain small business lending data
▶ 0:15:23Without objection, the first reading is dispensed with. Without objection, the bill is considered read and open to amendment at any point. I have an amendment in the nature of a substitute, the copies of which were also distributed in advance. The clerk will report that amendment. Amendment in the nature of a substitute to HR 941 offered by Mr. Hill of Arkansas, designated as Hill AR 076. Without objection, the amendment is considered read and will serve as base text for purposes of the amendment.
▶ 0:15:47I'll recognize myself for 5 minutes to provide background on HR 941, the Small Lender Act.
▶ 0:15:55Since the 117th Congress, I've introduced legislation to tackle this uh vexing and misdirected challenge. The Small Lender Act would reform Section 1071 of the Dodd-Frank Act, which spells out the statutory requirements for the CFPB's small business lending rule.
▶ 0:16:13Section 1071 mandates the collection and reporting of demographic data on small businesses from loan applicants, placing unnecessary burdens on lenders and small businesses alike, and cutting off credit to the very small businesses that need it the most.
▶ 0:16:31While the disastrous Biden-era rule from 10 2023 went beyond the statutory requirements in Section 1071 and continues to face legal challenges, the Trump administration is currently working on a new proposal that would streamline the regulation, reduce complexity for lenders, and improve data And I think this is a key point that the the Biden administration put out their rule in 2023, and yet this was part of
▶ 0:17:01and neither the Obama administration, the first Trump administration, uh could find a way or path forward for this rule, and that this was really the first effort we saw out of President Biden. The Republicans on this committee support the effort of the Trump administration to modify uh the rulemaking. This bill would codify the kinds of changes that are being proposed by the CFPB and make additional reforms to section 1071 that are only possible through legislation.
▶ 0:17:31And that's why we're marking the bill up For example, HR 941 would exempt smaller institutions from the requirements of section 1071 and extend the compliance date to 2031, providing certainty to market participants on coordinating their IT systems and their collection of the data and reporting it.
▶ 0:17:51Critically, the bill enshrines small business loan applicants quote right to refuse close quote as intended in Dodd-Frank by requiring lenders to inform applicants that they are not required to provide 1071 data and that in doing so will not affect the lender's credit decision.
▶ 0:18:10HR 941 would also ban lenders from using visual observation to collect data from their applicants such as race, sex, or ethnicity, which all members should support given serious privacy concerns. And finally, the bill builds on the previous efforts championed by Small Business Committee Chair Roger Williams. The committee marked up legislation last April that would have repealed section 1071 altogether.
▶ 0:18:36Before we go into debate, I want to address one of the claims that we're going to hear potentially from our friends on the other side of the aisle. Some may argue that HR 941 will weaken fair lending and harm small businesses by preventing regulators from identifying fair lending violations.
▶ 0:18:54But you cannot help small businesses if lenders stop making loans in the first Instead of weakening transparency, HR 90 941 strengthens it by ensuring higher quality data and more consistent reporting standards are the standard. I want to thank Senators Katie Britt and John Boozman for introducing the Senate companion legislation uh S. 2352, the PROTECT it Act.
▶ 0:19:21And I'd like to insert in the record letters of support for the Small Lender Act from the American Bankers Association, the Independent Community Bankers of America, the Consumer Bankers the Equipment Leasing and Finance Association, and the Electronic Transactions Association. Without objection, they will be included. I urge all members to support the Small Lender Act. Look forward to the debate. And I yield back the balance of my time. Who seeks recognition on the amendment in the nature of a substitute?
▶ 0:19:57Strike the last word.
▶ 0:19:58Uh the ranking member, uh you are recognized to strike the last word. In a time when the Trump administration has shut down the Consumer Financial Protection Bureau, robbing American consumers of a federal watchdog that returned $21 billion to 200 million harmed consumers, I'm disappointed we're considering another bill to roll back consumer protections Chairman Hill's bill, which sharply reduces
▶ 0:20:28transparency of the small business lending market by significantly narrowing the data collection requirements of Dodd-Frank Section 1071. I was proud to work with our Small Business Committee Ranking Member Representative Velázquez to advance and pass Section 1071 into law.
▶ 0:20:50We modeled that provision after the Home Mortgage Disclosure Act, or HMDA, which for decades has promoted transparency, competition, and fairness in the mortgage market. This has helped expand access to affordable mortgage credit.
▶ 0:21:08In recent years, HMDA data also revealed that modern-day redlining continues in more than 60 cities across the United States, which bolstered efforts in the Biden administration to strengthen the enforcement of our fair lending and community reinvestment laws. So, section 1071 was designed to do the same thing for small business financing.
▶ 0:21:32Unfortunately, the bill exempts nearly all lenders from the section 1071 reporting requirements, except the largest banks, and further narrows the scope of 1071 to only cover loans to small businesses with annual revenues of 1 million or less instead of 5 million in CFPB's rule.
▶ 0:21:57Also troubling, the bill delays any compliance until June 2023, nearly a quarter of a century after Congress passed the section into law in 2010. And this is despite the fact that small business owners, like Rashonda Young in Ohio, who testified before this committee, had to sue the CFPB and secured a court-supervised settlement requiring CFPB
▶ 0:22:27to finally implement this law during Trump's first term. Truly small and underserved businesses are tired of struggling to get across to affordable loans they According uh rather, during the first round of the Paycheck Protection Program, when the big banks helped their concierge clients, Representative Velázquez and I worked with Treasury Secretary Mnuchin to secure a 60 billion set-aside for CDFIs and MDIs and other small lenders
▶ 0:22:58to better lend those PPP loans to small businesses who really needed it. While that was a successful bipartisan effort, there's there's more we need to do to support small business owners. Unfortunately, lenders too often get away with charging entrepreneurs higher rates and fees, if not denying them credit. That's because this market has been opaque for far too long.
▶ 0:23:23No wonder then that more than 200 million civil rights consumer and other groups across the country opposed this harmful We need the small business data because you can't improve what you don't measure. If members support market transparency, you should vote no. If you support fair competition that will lower borrowing costs, you should vote no.
▶ 0:23:50And if members really want to support small businesses, you should vote no. Thank you, and I yield back the balance of my Jon Runyan yields back. Who seeks recognition? The chair recognizes the chair of the Financial Institutions Subcommittee, Mr. Barr of Kentucky. Move to strike the last word. Gentleman's recognized for 5 minutes.
▶ 0:24:07Thank you, Chairman Hill, and appreciate your leadership on this issue and in trying to reduce the burdens on our small community financial institutions who are doing great work supporting small businesses on Main Street and entrepreneurs who are trying to access credit to build the American dream. This committee has been dedicated to reforming burdensome regulations for community banks, and that's exactly what Chairman Hill's legislation does.
▶ 0:24:37HR 941 supports community banks by exempting smaller financial institutions from the CFPB's small business lending rule, extending the compliance date for 1071 regulation, and ensuring the regulation is voluntary, as the original statute makes clear.
▶ 0:24:55Uh and by the way, as the ranking member conceded in an earlier debate, as I recall on on the House floor, section 1071 was intended to help identify the needs and opportunities of small businesses, but the Biden administration's proposed rule making went far beyond section 1071's intended scope and created a compliance nightmare for small business lenders and forced financial institutions to overly standardize their loan making processes.
▶ 0:25:24The 2023 uh Chopra rule sought to implement section 1071 by vastly expanding the data collection requirements for financial institutions in in the small business lending market well beyond what was required by law.
▶ 0:25:41In fact, under that rule, under the Chopra rule, lenders were required to report 81 data points, including, listen to this, offensive questions like the applicant's minority-owned business status, women-owned business status, and LGBTQI+ owned business status, uh as well as ethnicity, race, and sex of the applicant's principal owners.
▶ 0:26:05I uh that we were supposed to be moving to a color-blind society, where the content of your character was what counted as opposed to the color of your skin, but apparently under the Biden administration, the only thing that matters uh is the is are these immutable characteristics as opposed to the content of character uh of the borrowers.
▶ 0:26:28In the 2023 rule, the CFPB itself admitted that it believed that the cost of compliance would be passed on to small businesses through higher interest rates or fees. So, the 2023 rule not only discouraged small business lending, but it disincentivized small business owners from using small banks in favor of larger competitors that could spread the compliance cost more broadly. And I and I I I witnessed this um with my own constituents.
▶ 0:26:55The CEO of a small commercial bank in Lexington, Kentucky, told me that the that the Chopra rule making would, if implemented, force his institution to completely exit small business lending, diminishing credit availability to Central Kentucky area businesses, including minority-owned and women-owned businesses.
▶ 0:27:16This was a community bank that prided itself on lending to minority-owned and women-owned businesses, and the result of the Chopra rule was that this bank was going to no longer be able to provide credit to those very small businesses.
▶ 0:27:33So, this was a disastrous proposal, and fortunately Chairman Hill's legislation, HR 941, codifies the smart reforms proposed by the Trump administration CFPB, and creates a workable implementation of 1071 by ensuring that it's supporting, not burdening, small businesses, while also establishing the framework for 1071 implementation.
▶ 0:27:55So, this bill protects the data privacy of borrowers and ensures that smaller institutions, like the community bank in my district, are not burdened by excessive data collection requirements, and so that small businesses of all have access to to the credit that they need to build successful businesses. I urge members to support this bill and yield back my time. Gentleman yields back. Who seeks recognition? Mr. Chairman, from New You're recognized for 5 minutes.
▶ 0:28:24to strike the last word. Recognized. Thank you, Mr. Chairman. Here we are, once again, debating the merits of Section 1071. We have discussed this provision so many times, I have literally lost count.
▶ 0:28:41Let me say, one more time, that I believe in Section 1071's mission, and believe it is necessary tool to ensure all of America's small businesses have access to capital on fair and equal terms.
▶ 0:28:56As both chair and ranking member of the House Small Business Committee and a senior member of this committee, I have seen for far too long women and minority-owned small businesses experience obstacle in accessing During the COVID pandemic, ranking member Waters and I saw firsthand how our underserved small businesses were shut out of the first round of PPP funding
▶ 0:29:27by financial institutions. We told Secretary Mnuchin and Speaker Pelosi that we will not support a a second round of funding unless we were assured small businesses in our nation's underserved communities will be able to access these funds.
▶ 0:29:48I will argue that had Section 1071 been in place, we would have known where the funding gaps were, and the entire scenario could have been avoided. And I think our small businesses and our economy would have been better off for it. Now, there are portion of this bill that I think are reasonable and deserve merit.
▶ 0:30:13I think it is a worthwhile idea for the financial institution to inform a credit borrower that the institution is required to ask, collect, and report demographic data under federal law. I think it's also a worthwhile idea to inform the borrower in writing that they are not required to respond. And the creation of a model form to ensure uniformity is also equally sound.
▶ 0:30:44Had these ideas been presented years ago and offered as a genuine compromise to support the rule, I probably would have supported them. Yet, congressional Republicans and their industry allies took the opposite approach, instead doing everything possible to undermine, discredit, and destroy the rule. They sued the CFPB.
▶ 0:31:11They tried to nullify the rule-making through the Congressional Review Act. And last year, they passed legislation out of the House to strip Section 1071 entirely from federal law. Thankfully, our colleagues in the Senate have not taken up this measure.
▶ 0:31:30Perhaps more egregious and incendiary, congressional Republicans and industry allies ignore repeated statement offered by me, Ranking Member Waters, Ranking Member Warren, former CFPB Director Chopra, and other supporters about the rule's details, its impact, and how it will be implemented.
▶ 0:31:52In fact, I heard former Director Chopra make repeated statement in this very room about the rule having safe harbors, model forms, and giving borrowers the right to decline. All details that Chairman Hill included in today's bill. Mr. Chairman, what was wrong in the view of Republicans 16 years ago is welcome today under your bill. This is why the American people don't trust us.
▶ 0:32:19And they're going to show in big numbers coming next year.
▶ 0:32:23yield? Uh no, I don't have time. I'm sorry. So, while on the surface this idea seem reasonable, they must be viewed in a broader context and after 16 years of endless debate. We should also not ignore that the bill once again extends the rules compliance date, a compliance date that was already repeatedly extended in good faith by Director Chopra in order to accommodate Republican lawsuits against the CFPB and dramatically increases
▶ 0:32:53the number of loan originations required for rules compliant, blowing a massive hole in the final rule. Finally, and perhaps more importantly, we will we also cannot ignore what a Russell Boat and President Trump are doing right now at the CFPB. Since the start of the second Trump administration, Director Boat and President Trump have undermined the CFPB at every turn. They have tried to fire staff, starve the agency of resources.
▶ 0:33:24This means critical rules, enforcement actions, settlements, and consent orders have been undone. Consumer complaints have been disregarded and bad actors continue to profit of consumers. Gentlewoman your time has expired. that I ask my colleagues to do Gentlewoman your time has expired.
▶ 0:33:41Now I yield back. Gentlewoman yields back. Who seeks recognition? Gentleman from Oklahoma. Mr. Chairman, could I yield to you for a response? I thank the gentleman from Oklahoma. Let me uh make some comments. I appreciate the gentlewoman from New York's uh outline of the history of this rule, and she's right. 16 years ago is when Dodd-Frank passed this section 1071. And guess when we finally got a rule making on it? 2023. 2023, the Biden administration.
▶ 0:34:09We're debating essentially Chopra's exercise in trying to implement 1071. And the gentleman is 100% right. Uh we made uh comments to uh the director uh since 2023 about some of the things, the core principles that are in this bill. She She's correct. Uh expanding the safe harbor, uh lowering increasing the number of compliant loans that would have to be there, streamlining the data points.
▶ 0:34:36These are all points that the has made, but in fact, that's not what the Biden administration did. And so, we have the rule that's before us. I think it's uh overkill uh in the keeping with the statutory intent of the Congress 16 years ago. And uh while yes, it's true that uh small business chair, your your colleague on the Small Business Committee, Roger Williams, proposed uh eliminating it, 1071. That that's true, and we debated it, and we have passed it.
▶ 0:35:05I've also, since the 117th Congress, pro offered these concrete ways to find a middle ground to simply accept the statutory fact that 1071 exists, but try to make it work both for small businesses and for community banks. And most of those ideas are in this bill that we're debating today.
▶ 0:35:24So, I I thank the gentlewoman for her for small business and for her advocacy for the topic, but I don't think fair lending, you know, is um is enhanced by an overwhelming amount of data data compliance on the part of banks or trying to fill out more forms if you're a small business trying to get credit from a bank.
▶ 0:35:46Uh and I just would uh members on both sides of the aisle, if you think we had don't have any data on small business lending, let me remind everybody that in the call report, we collect detailed information on bank loans to small businesses and small farms. Small businesses and small farm lending data is also collected individually by the bank regulators under CRA requirements, Community Reinvestment.
▶ 0:36:13The FDIC also conducts small business lending surveys, a nationally representative sample of US banks that offers important insights into all their small business lending Next, all 12 Federal Reserve banks jointly conduct an annual small business credit survey that includes information on non-depository lenders.
▶ 0:36:35And in my view, having been in the industry for a couple of decades before I was in Congress, 1071 is duplicative of these data requirements and is an unnecessary burden on our community banks and will deter, in my view, uh small business lending. But we'll continue the debate and I yield back to the gentleman from Thank you, Mr. Chairman, and I yield back. Gentleman yields back. Who seeks recognition? The gentleman from California, Mr. Vargas, you're
▶ 0:37:03Uh thank you very much, Mr. Chair. I move to strike the last word. You're recognized for 5 minutes. Uh thank you, Mr. Chair. What 1071 does is collect data. That's the requirement. And I hear one of my colleagues said, "Well, there's these banks and and they lend to minority businesses. They lend to women." And that's their word. We don't know what the data is.
▶ 0:37:28I recall back when I early '90s, I've been in politics for a long time, when I was on the San Diego City Council, we had these contractors that used to say the same thing. Of course, we hire lots of people of color and we hire lots of And the neighboring district to mine was one held by a gentleman named George Stevens, an African-American.
▶ 0:37:51And he noticed that in the construction of the school and in the construction of all the infrastructure that was being built in this area where his district, where over over 50% of the people that lived there were black, there wasn't one black person working on any of those jobs. And yet the contractors that said, "Oh yeah, great diversity here." Not one person.
▶ 0:38:16He invited me to come and see and I didn't find one black person working on these projects that together were over $50 million back when $50 million was a hell of a lot of money. And so we demanded data. After that, we passed an ordinance saying, "No, we want to see that the the data of this. We don't want to see your word. We don't want to hear your word because often your word's not worth anything.
▶ 0:38:44You say, "Yeah, sure, you hire people of color." And they did some, of course. But not one person from the community, not one African-American in a community that was over 50% African-American. That's why it's so important to get the actual facts and not the words of people. Say, "Oh, yeah, I do it. Sure you do." Let's see the facts. And with that, I yield back. Gentleman from California yields back. Who seeks recognition? Chairman Mr.
▶ 0:39:14Meuser of Pennsylvania, or the chair of our Oversight Committee, you're I thank you, Mr. Chairman. I move to strike the last word. You're recognized for 5 minutes. Uh I do urge colleagues to support HR 941, the Small Lender Act, introduced by Chairman Hill. Through our work on Financial Services and Small Business Committees, we've seen how critical it is to preserve access to capital for small businesses.
▶ 0:39:36The CFPB Section 1071 Small Business Data Collection Rule remains a very clear example of regulatory overreach that threatens that access. It is misguided, invasive, and imposes unnecessary burdens on the very institutions that serve our communities best. It went way beyond the scope of the CFPB.
▶ 0:39:58As written, the rule requires financial institutions to collect and store highly sensitive personal information that has nothing to do with a borrower's ability to repay a loan. Uh 1071 was passed 16 years ago in uh Dodd-Frank. Uh the Biden administration, um CFPB under Chopra uh, went again well beyond its scope. it it covered lenders.
▶ 0:40:29Um, it required collection data points including applicant race, sex, ethnicity, revenue, and whether the business is minority, women-owned, or LGBTQ, and other sexual preference data points.
▶ 0:40:49Uh, why that is necessary in determining a a loan is well uh, irrational government overreach that is somehow rationalized to sound as if it's Um, anyone who's in the business world can appreciate that business is business and you you always want to have a diversified group. Um, uh, and you want to provide based upon merit cuz that's what a bank does.
▶ 0:41:20Providing access to capital for those whom need it to grow their businesses and are creditworthy regardless of what any of these ridiculous um, data points uh, are. So, again, the banks don't make lending decisions based on personal characteristics. Their focus is and and remain on the creditworthiness of the business. Community banks and small lenders already face significant compliance costs.
▶ 0:41:47Community banks are probably the most regulated and larger banks uh, entity in our economy. And this rule only adds to their burden. The data collection mandates under section 1071 increase costs, discourage lending, and ultimately make it harder for small business to access the capital they need to grow and succeed. Uh, HR 941 takes a targeted approach to fix this by raising the threshold for those who are subject to the rule, and ensuring that truly small lenders are not swept in.
▶ 0:42:17Under the CFPB's framework, lenders originating as few as 100 small business loans annually can be subject to these requirements. This bill increases that threshold, focusing compliance on larger institutions that have the scale and infrastructure to absorb these mandates. This about right-sizing the rules so it does not unintentionally cut off access to credit in rural and underserved communities that rely on relationship banking.
▶ 0:42:43I am encouraged to see the CFPB taking steps to revisit this rule and work toward improvement and ensure it does not impose unnecessary burdens, personal burdens on small and community banks that are essential to serving Main Street. We should be strengthening community banks, not overwhelming them with costly, intrusive requirements. And we must protect the privacy privacy of business owners, not inundate them with questions about their personal characteristics.
▶ 0:43:10Which, by the way, in the rule, if they the bank does not receive uh they are required to guess and report something on the documentation. So, um I um I thank Chairman Hill
▶ 0:43:27Will the gentleman yield? I urge my colleagues to support H.R. 941. Will the gentleman yield? I I yield. Uh I thank the gentleman and I want to reiterate he's making some good points. We raised the threshold of reporting to minimize the impact on the smallest companies uh in the country with the number of loans uh that they make to qualify and also the bank size. But to the my friend from California's point, Mr.
▶ 0:43:51Vargas, and also the gentlewoman, ranking member of the Small Business Committee, I remind you the data under my bill still collects whether they're a minority-owned or women-owned business. They're not excluded. And secondly, uh as I said it in my judgment it was redundant.
▶ 0:44:06And uh you know, in looking at the Federal Reserve Small Business Credit Survey, which I referenced a few minutes ago in response to the gentlewoman from New York, uh the demographics that have been in that survey are collected by the federal government extensively: gender, race, minority ownership status. So, I yield back to the gentlewoman from I yield. Gentleman yields back. Who seeks Seek rec
▶ 0:44:34uh the The chair of our uh Small Business Committee, Mr. Uh thank you, Chairman. Uh small businesses are the backbone of the American economy, and as chairman of the House Small Business Committee and small business owner myself, I understand that one of the largest issues facing small business and entrepreneurs today is access to capital. One of the main drivers pushing necessary uh capital out of reach for small businesses is CFPB Section 1071 Small Business Lending Rule.
▶ 0:45:03This rule is a clear example of government overreach. It hurts Main Street America. Instead of helping small businesses, it creates new barriers for current business owners and and aspiring entrepreneurs trying to secure the capital they need to start their business or expand their current operations. So, I'm proud to be an original co-sponsor of Chairman Hill's HR 941, the Small Lender Act. This critical uh legislation would exempt smaller financial institutions from the requirements of the CFPB's disastrous rule.
▶ 0:45:32It also extends compliance dates, creates a 2-year safe harbor, and ensures that 1071 regulatory compliance is voluntary for small business loan applicants. This bill is about helping Main Street Main Street America, making sure our financial policies actually support Main Street and give small businesses a chance to grow, hire, and succeed. Section 1071 is out of touch with reality and works against the very businesses it claims to support.
▶ 0:45:58So, I want to thank Chairman Hill for his leadership and for incorporating many of our shared uh priorities into this legislation. Urge all of my colleagues, I repeat all of my colleagues, to support HR 941 and I yield back the balance of my time. Gentleman yields back. Chair recognizes the gentleman from Texas, Mr. Green. Uh Green of Texas uh desire to strike the last word.
▶ 0:46:25is recognized for 5 minutes. Thank you, Mr. Chairman. Uh Mr. Chairman invidious discrimination still exists. my fear is that we are allowing privacy or the notion that somehow we are encroaching upon privacy to prevent us from fighting invidious I have some data that I'd like to share
▶ 0:46:55with you. CFPB pilot study found lenders expressed interest in applications from 40% of white participants compared to 23% of black participants.
▶ 0:47:13Research shows black-owned businesses are charged on average more in interest while white women-owned businesses pay roughly 2.38.
▶ 0:47:33And the empirical evidence continues to support the fact that invidious discrimination The question becomes how will we if we accord the privacy that is being discussed today how will we invidious discrimination from becoming even
▶ 0:48:04greater than it currently is? People of color in this country have suffered It is very difficult to overlook the history of invidious discrimination in this country.
▶ 0:48:23I I just find it very difficult to how privacy the notion that persons ought not be discriminated this is this is rolling back the clock. We're moving back.
▶ 0:48:46We're we're making it easier to discriminate and impossible for some small businesses to get loans. the chairwoman of the small business committee, former chair, is is eminently Mr. Vargas gave an excellent example. Invidious discrimination exist.
▶ 0:49:14And to be more specific, racism still exist. Discrimination against women still exist.
▶ 0:49:34Discrimination against people who are of the LGBTQ We are now going to limit the tools that we use to fight invidious discrimination we conclude that there's some upon privacy. This is unacceptable.
▶ 0:50:01I would encourage my colleagues vote against this and let's continue to move forward and not take a quantum leap into the I yield back. Gentleman, you're back. Who seeks I hearing none, we'll move to amendments. Does anyone wish to offer an amendment to the amendment in nature substitute? I have an amendment at the desk. Uh the ranking member has an amendment at the desk. We'll pause while that amendment is distributed.
▶ 0:50:37Mr. Chairman. Uh the gentleman from Oklahoma. Can I reserve a point of order, Mr. Chairman? A point of order has been reserved.
▶ 0:51:21With that objection, the amendment's considered read and the gentlewoman from California is recognized to describe her amendment.
▶ 0:51:29Thank you very much, Mr. Chairman. My amendment would restore the Consumer Financial Protection Bureau's budget to the original
▶ 0:51:37me a second. I I skipped over uh reading the amendment. Clerk if the clerk would read the amendment, I An amendment to to amendment in the nature of a substitute to HR 941 offered by Ms. Waters of California designated as Waters
▶ 0:51:51Mr. Chairman. The clerk will read. The gentleman is now recognized for 5 minutes to describe her amendment. My amendment would restore the Consumer Financial Protection Bureau's budget to the original 12% cap of funding from the Fed that was in Dodd-Frank. This would reserve the harmful budget cuts Republicans passed into law last year to slash CFPB's budget nearly in half.
▶ 0:52:22And so, back when we had a fully funded
▶ 0:52:26and functioning CFPB, we had a very popular agency with support from 80% of Americans including Republicans. That's because Americans, both Democratic and Republican, didn't like to pay junk fees or get ripped off. The CFPB was popular because it returned $21 billion to 200 million consumers harmed by financial institutions.
▶ 0:52:54But the Trump administration brought the CFPB's work to a halt. Mr. Chairman, while we're talking about CFPB, I look forward to hearing about any progress you have made in scheduling hearing with CFPB's acting director. At a time when families are struggling through Trump's affordability crisis, it is past time for Congress to stop ignoring their cries for help and step up to support them.
▶ 0:53:24So, let's get the CFPB's hundreds of hard-working public servants back to work. I urge members to support this amendment and I yield back. The ranking member yields back. Who seeks recognition? Oh, well, does the gentleman from Oklahoma insist Chairman, point of order? I do not, Mr. Chairman. I'd like to withdraw. Thank you so much. The point of order order is withdrawn and now the chair recognizes the gentleman from Kentucky, the chair of our subcommittee on financial institutions, Mr. Barr.
▶ 0:53:52Thank you. I have moved to strike the last word.
▶ 0:53:53You're recognized for 5 minutes. Thank you. I I rise in opposition to the amendment. Um you know, our efforts, Republican efforts in the the the the working families tax cut bill uh was aimed at reducing the unaccountable funding feature um the unaccountable funding stream at the CFPB to promote more accountability and save American taxpayers money.
▶ 0:54:18As we all know, Dodd-Frank unwisely permitted the CFPB to simply request from funds from the Federal Reserve, which is itself not subject to the normal preparations process. Reducing the funding cap from transfers from the Fed system from 12 to 16.5% is helping to reduce this opaque funding stream and save over $2 billion according to the CBO.
▶ 0:54:41As Republicans on this committee have advocated for over a decade, the bureau should be under the normal congressional preparations process where we could openly debate in Congress the proper level of funding. And we could get engage in normal oversight where the activities, the rule-making activities such as implementation of 1071 could be uh through the lens of real accountability where members of Congress on both sides of the aisle could actually exercise
▶ 0:55:12the power of the purse to achieve whatever goal it might be uh in terms of implementation of the Dodd-Frank law. But we can't do that. Neither this side of the aisle nor that nor the other side of the aisle can do that because we've ceded our power of the purse to the Federal Reserve. We've just given away our meaningful oversight over this agency. So, we have disagreements about 1071.
▶ 0:55:36That's That's But what we should What What should unite us all is defending the Congress as an And we've In Dodd-Frank, we gave that away. We gave away our authority away. And this amendment would take the opposite approach. It would reverse these reforms that Congress passed in July to help try to reclaim some of our reducing transparency and accountability in the CFPB's funding. I I want to make another point.
▶ 0:56:05That even if we were to adopt the amendment and restore 12% of funding, this would have absolutely no impact on the the Trump administration's reforms here. None. Uh the the vote uh CFPB would be able to move forward with reversing the Chopra rulemaking.
▶ 0:56:32And restoration of funding wouldn't make a bit of difference. So, if the amendment is designed to push back against the vote CFPB, this kind of illustrates the point I'm making. Uh is that we don't have meaningful oversight over the CFPB, whether it is the vote CFPB or whether or not I will not. Let me finish the point. Whether it's the vote CFPB or whether it's the Chopra CFPB.
▶ 0:56:57If the gentle lady and my friends on the other side of the aisle are dissatisfied the current administration's approach to 1071, then I invite them to join me and my colleagues on this side of the aisle in a bipartisan effort to reclaim our oversight over this renegade unaccountable agency.
▶ 0:57:19Restore the power of the purse where we could have more meaningful oversight and influence the policy direction of the agency, regardless of who is in the White House. I I will yield back. Thank you. Thank you very much. Now, he talks about accountability to Congress. Why has your side refused to have the current acting director testify before our committee as required by law?
▶ 0:57:51I'll yield uh to the chairman. Um, as I've said before in this we expect Director Vote to uh acting director Vote to testify before the committee. We've certainly made that invitation and we know the strong feelings the ranking member has on it and I expect that to happen in coming I yield back. Further debate on the amendment from the ranking member.
▶ 0:58:21Anybody seek uh to comment on the ranking member's amendment? If there's no further debate, the question now occurs on the amendment. All those in favor of the amendment shall signify by saying I. I. All those signify by saying no. No. In the opinion of the chair, the no's have it. The no's have it and the amendment is not adopted. Are there any further I request Uh the gentle lady requests a recorded vote. All those in favor of a recorded vote, raise your hand.
▶ 0:58:46A sufficient number having raised their hand, a recorded vote is so ordered pursuant to subsection C5 of rule 3 of the committee rules. Further proceedings on the amendment are postponed. Are there any further amendments to the amendment in the nature of a substitute? Seeing no further amendments, without objection, the previous question on the substitute is ordered and recorded votes on the pending amendments have been postponed.
▶ 0:59:11Once those votes are taken, the committee will immediately vote on the adoption of the amendment in the nature of a substitute and then we'll consider the question to report the measure. We'll now move to the next uh Pursuant to to notice, I call up HR 8286, the Protecting Americans Retirement Savings from Politics Act, which was introduced by Representative Steil, the chair of our Financial Technology, Digital Assets, and Artificial Intelligence Subcommittee. The clerk will report the bill, which was distributed in advance.
▶ 0:59:43HR 82-86 to amend the federal securities laws with respect to the materiality of disclosure requirements to establish the public company advisory committee and for other purposes.
▶ 0:59:52Without objection, the first reading of the bill is dispensed with. Without objection, the bill is considered read and open to amendment at any point, and Representative Steil has an amendment in the nature of a substitute, copies of which have been distributed in advance. The clerk will report that amendment. Amendment in the nature of a substitute to HR 82-86 offered by Mr. Steil of Wisconsin, designated as Steil WI 047. Without objection, the amendment is considered read and will serve as base text for purposes of amendment. The gentleman from Wisconsin, Mr.
▶ 1:00:20Steil, you're now recognized for 5 minutes on your amendment. Thank you very much, Mr. Chairman. Thanks for holding today's markup. This is an incredibly important topic. A powerful proxy advisor duopoly has been weaponizing retirement funds to drive an ideological agenda.
▶ 1:00:38The Protecting Americans' Retirement Savings from Political Act will rein in foreign-owned proxy advisor will rein in the foreign-owned proxy advisor duopoly and protect the returns on your retirement fund funds from political Millions of American families save for their retirement through professionally managed investment funds.
▶ 1:00:59I think many would be surprised to learn that the companies that manage your investments typically vote your proposal your your proposals posed to shareholders on your Over the last few years, many of these proposals have been focused on divisive social and political issues with little to the company's core business. Institutional investors have come to rely on two powerful proxy advisers, ISS and Glass Lewis.
▶ 1:01:29They're relying that on them when deciding how to vote on these politically charged proposals. But the proxy adviser industry is riddled with problems, including ideological bias. Proxy advisers have recommended voting for proposals that have clearly harmed shareholder value, and have even supported proposals that direct companies to do illegal things. I'm going to repeat that.
▶ 1:01:55Proxy advisers have recommended in favor of proposals that would require companies to do illegal things. ISS, the largest proxy adviser, also offers consulting services to the same companies that are subject to its is a clear conflict of interest.
▶ 1:02:20may say that the proxy adviser's advice is simply a recommendation, but it's more than that. Report after report have shown that these recommendations are followed closely by asset managers. For example, an ISS recommendation can swing 20 to 30% of shareholder votes. Robo voting, the practice of automatically filling in and voting proxy adviser recommendations, intensifies this dynamic.
▶ 1:02:49At the end of the day, proxy advisers have a big impact on how public companies are run, which affects jobs, our economy, and the returns on your retirement Given their impact and their well-known flaws, you should expect that proxy advisers would be tightly regulated. Instead, the previous administration actually unwound rules that were supposed to address the problems I just That's where my bill comes in.
▶ 1:03:17This legislation creates a specific registration process to harness the proxy advisor duopoly and it ends robo voting. Registered proxy advisors must address conflicts of interest and their consulting services and provide issuers with an opportunity to correct bad It also refocuses corporate governance and the proxy process and core principles of materiality and economic best interest.
▶ 1:03:46This legislation supports the ongoing movement towards investor choice, giving voting power back to the ultimate owners of the shares and in particular American retirement savers. Protecting Americans retirement savings from politics act will provide accountability, it'll provide transparency, it'll provide clarity for families saving for their retirement. I urge all of my colleagues to support this legislation. Mr. Chairman, I yield back.
▶ 1:04:17Gentleman yields back. Who seeks recognition on the ANS? The ranking member of the full committee, Ms. Waters, you're recognized.
▶ 1:04:22to strike the last
▶ 1:04:24Recognized for 5 minutes. I strongly oppose HR 8286, which is nothing less than a full-scale attack on the rights of investors who want to pay out of their own pockets for independent investment advice as they manage their own savings. This bill would silence anyone who dares to consider the long-term material risk associated
▶ 1:04:47with climate change, unfair hiring salary practices, excessive executive compensation, and more. The bill is an anti-capitalist power grab designed to favor corporate executives over the very people who own these companies. For example, the bill switches the materiality analysis from one focus on what investors consider material to what company management thinks is material.
▶ 1:05:17In doing so, company managers can self-determine what information they disclose, giving them a license to hide inconvenient truths like climate risk or outrageous pay practices from the public and their investors. This is a direct attack on one of the investors underlying principles of capital markets.
▶ 1:05:41Furthermore, HR 8286 will saddle those um who manage retail investors' savings with burdensome new requirements. These fiduciaries would no longer be able to rely on research provided by proxy advisers, who today analyze and offer sound recommendations on how shareholders' vote should be cast.
▶ 1:06:04There's even a provision that requires asset managers to conduct full-scale economic analysis and disclose that analysis, but only when they dare to vote against company including on lavish executive compensation or golden parachutes proposal. This is ridiculous and clearly an attempt to shield executives who make times the average worker at their firms.
▶ 1:06:33Make no mistake, the attacks on investor freedom presented in this bill all part of the Trump administration's broader and more dangerous attack on American democratic values and the rule of law. My colleagues want to replace the free flow of information with state-mandated They want to replace shareholder democracy with corporate auto autocracy. This bill is anti-capitalist.
▶ 1:07:02It is a step backwards for our markets and a step backwards for our country. Various titles within the bill were opposed in the 118th and 119th Congress by some of the following groups: Americans for Financial Reform, Better Markets, USSIF, the Interfaith Center on Corporate Responsibility, Ceres, the Shareholder Rights Group, the Union for Concerned Scientists, and many more.
▶ 1:07:30When these provisions were included another bill last Congress, every Democrat on this committee opposed. Once again, I'm asking my colleagues to oppose this harmful, anti-investor, and anti-capitalist bill. I yield the balance of my time back. Ranking member yields back. Chair, who seeks recognition? Ranking member, may I recognize the chairwoman of the Capital Markets Subcommittee, Ms. Wagner? You're recognized.
▶ 1:08:00The strike last word. I uh thank you, Mr. Chairman, and I would like to thank and commend Chairman Steil for introducing this some very important piece of legislation protecting Americans' retirement Objective and fair corporate governance is critical to not just our capital markets, but more importantly the retirement savings of all of our For too long the proxy process has put short-term
▶ 1:08:30political goals over long-term investor value, failing our markets, and taking money away from moms and dads just saving for a better Chairman Steil's bill puts transparency and accountability back at the forefront of a proxy advising process that is too often plagued by conflicts of interest.
▶ 1:08:58By enacting proper oversight of the industry, we can ensure the proxy process works best for shareholders rather than consultants and social I strongly support this package and I urge my colleagues to do so as well. I'd now like to yield whatever time you may consume to my good friend, the author of the piece of legislation, Congressman Steil.
▶ 1:09:26I I thank the gentlewoman and echo her comments. A lot was offered by the ranking member. I think it's worth noting two things. It puts materiality back to what is Rather than making political judgments as to what or is what is not material, it puts it back to determine what is actually material to the operations of the company, which is the core concept in securities law. It also really empowers shareholders.
▶ 1:09:55Instead of having the proxy advisor duopoly come in and push the scales towards a political agenda, it goes back to the core concept of making sure that investors, in particular those saving for their retirement, are protected and shielded from the political decision-making at these two respective proxy advisors. And so, a lot was offered there.
▶ 1:10:22I wanted to highlight those two issues and I I do believe the underlying bill dramatically moves us forward to depoliticize the shareholder voting process. I yield I I I thank the gentleman. I'm happy to share the time and just to underscore what he said. Truly, the proxy process is broken. Completely broken and it's put short-term political goals over long-term investor value.
▶ 1:10:49It has failed our markets and it's it's taking away uh it's taking away any kind of savings opportunities and retirement opportunities for everyday Main Street investors. Um, I again want to commend the gentleman uh uh for his forward-thinking action on this area. It's one that the Capital Markets Subcommittee has been delving into for some time. And Mr.
▶ 1:11:19Chairman, it is time that we cross the finish line with a package such as this, and I urge my colleagues to do so and support this piece of legislation, and I yield back my time. Who seeks recognition? Uh the gentleman yields back. Mr. Chairman Gentleman from New York, the ranking member of our Foreign Affairs Committee, Mr. Meeks, you're recognized. I have an amendment at the desk.
▶ 1:11:42Oh, no, we're not ready to do amendments yet. Not doing amendments yet. But thank you. We'll We'll be back to you. Who seeks recognition on the underlying amendment in the substitute? Mr. Huizenga. Uh thank you, Mr. Chairman. I want to say uh I move to strike the last word. Gentleman's recognized for 5 minutes. Uh I appreciate that, and I want to say thank you to my friend uh Mr. Steil, uh who I uh and Ms. Wagner, who has worked on this uh for long and hard. I have as well as uh in my years uh here.
▶ 1:12:13Uh and I support strongly this and ask to Protecting Americans' Retirement Savings from Politics Act, and do urge its adoption. So, I appreciate that this package also incorporates two of my bills, the Mandatory Materiality Requirement Act in title one, and the Empowering Shareholders Act of 2026 in title nine.
▶ 1:12:35Uh last Congress, uh Chairman McHenry and the Republicans formed an ESG working group that I was privileged to lead to examine the threat to our capital markets posed by those on the far left pushing purely an environmental, social, or governance proposal outside of materiality. This Congress, our committee held in-depth hearings examining the power of proxy advisory firms. Much of what you can see is in this package as the culmination of these efforts.
▶ 1:13:03First, the title one's mandatory materiality provision requires that any information that a publicly traded company is obliged to disclose disclose to the SEC be Now, hold on. Hold your hats. Crazy concept here. Material. Uh this is a basic fundamental understanding. Uh materiality needs to in inform voting or investment decisions regarding uh the issuers.
▶ 1:13:28So, for decades, materiality has served as the foundation of our public uh company disclosure regime regime dating back to the Securities Act of 1933, the Securities Exchange Act of '34. The statute requires companies to disclose information that is material to investors, ensuring that they make informed and safe investment and proxy decisions.
▶ 1:13:48Under the Biden administration, we saw the pursuit of a social and political agenda through the disclosure process that has fundamentally threatened the SEC and the courts' long-standing materiality Namely through the SEC's uh costly burdensome 500-page climate rule that was rightfully abandoned uh this past year.
▶ 1:14:11So, investors will be glad that title one of this bill ensures that any future SEC rule making adheres to the long-held legal principles-based materiality standard. Uh now turning to the empowering shareholders provision in title nine of the package, it addresses concerns over passive investing by requiring managers of passive funds to vote proxies in uh couple of the following manners.
▶ 1:14:36Namely to vote in accordance with the specific instructions of individual investors, vote in a way that aligns with the company's board, mirror vote, or simply abstain. Passive index funds are designed to be passive and not as too often has been the case be used for someone to put their thumb on the scale in favor of controversial unprofitable ideologies like ESG or DEI. Uh these these passive funds need to remain passive.
▶ 1:15:08When passive capital is manipulated to advance objectives beyond financial performance, its risks undermine the core promise investors rely on. Low-cost, diversified exposure, and focused on returns. And Mr. Chairman, you know this. Uh this does nothing that uh to prohibit an ESG fund or a DEEI fund or any other kind of fund as long as there is uh is disclosure of it and a passive fund isn't actively in there managing it.
▶ 1:15:38So, retail investors' financial interests must come first. This committee has received testimony that passive index investors have recently scaled back their support for these harmful proposals to an extent, which I'm happy to hear. However, proxy advisor firms can swing shareholder proposals by as much as 30% and issue in the issue of proxy voting and shareholder proposals has become somewhat of a political football as shifts in policy have been flip-flopping back and forth.
▶ 1:16:06So, targeted guardrails are warranted. As a committee, we've long discussed solutions to lessen these passive in funds not acting passive and starting with proposals like the Index Act, the legislation has evolved to be both workable within the industry and maximize investor choice. Choice means ESG type votes aren't outlawed by any other way.
▶ 1:16:31Rather, the result would be a liberal activist investors aren't turning the tide to any given vote using proxy power. Our work on the ESG working group proved that given the chance, force-feeding a liberal social agenda into a company harms investor returns. In short, the Empowering Shareholders Act preserves market discipline in the face of politization. It safeguards that passive intention of passive capital, keeps the focus where it belongs, on delivering gains for American investors. With that, I yield back.
▶ 1:17:01Gentleman yields back. Who seeks recognition? Mr. Meeks, I know you had an amendment. Mr. Casten. Move to strike the last word.
▶ 1:17:08You're recognized for 5 minutes. Um thank you, Mr. Chair. Look, here we go again. If you were to say over and over again for three, four, five years that 2 + 2 = you might convince some reporters to say, "Hey Democrats, you know, are you willing to negotiate with the Republicans and at least agree that 2 + 2 is 4 and 1/2?" Um but you wouldn't change the fact that 2 + 2 is still 4.
▶ 1:17:37by the same token, if you were to say over and over again for three, four, five years, "Congress has the ability to determine what is material to investors." It would not change the fact that investors are the owners of companies and owners of companies are the only people who have an opinion on what is material with their money. If an investor says this is material, that's their call. They get to say it. You've all heard me say this before.
▶ 1:18:03I cannot imagine back in my days of running a private equity backed company, what would have happened to Well, I can't imagine. I know exactly what would have happened if I said to my investors, "You know that thing you wanted me to do? It was non-material. Suck it."
▶ 1:18:18That's That's not how business works. That might be how politics works. And yet this legislation would rewrite the definition of materiality to allow not company owners, companies to decide what information is material, what's worth disclosing to investors, so that they can say to their shareholders who say I'm more interested in long-term I'm more interested in some structural things that may be misaligned with your compensation structure, Mr. CEO. Now the CEO can say, "No, no, no, that's not material.
▶ 1:18:48Suck it." That's what this bill does. Now under current rules, the guiding principle of materiality is that if a reasonable investor considers the disclosure important when making an investment dis- or voting decision, then it's material. 99% of investors that are owned or managed that under manage more than $50 trillion in assets supported requiring scope one or scope two greenhouse gas emissions according to an analysis of the SEC's comment letter on that.
▶ 1:19:1599% and this bill would say, "Suck it, 99%. You all just don't know as much as I do about what's paternalistically in your Not material." Overwhelming majority of investors have demanded interest on companies' exposure to climate-related risks. They don't get to talk under this bill. Now for years, my colleagues have said that climate-related information is not material, to which I say that's fine. Don't invest in it.
▶ 1:19:45That's your choice. If you're putting your money into a company, that's your choice about how to spend it because your interests are the ones that are But who are you to tell other people how to invest? How did it become so partisan to say that investors own companies? How did it become so partisan to say that Milton Friedman was right when he said the purpose of a company is to look out for the interests of its Not their C-suite. Not who donates to politicians on Capitol Hill.
▶ 1:20:16And moreover, the vast majority of these proposals are non-binding. What are we protecting ourselves against? So this bill is going to make it harder to submit non-binding proposals that investors would like because it's going to tell those investors that their interests are non-material.
▶ 1:20:38It's going to make it harder for proxy advisors representing smaller investors who maybe don't have the ability, don't have enough votes to matter on their own side to say we've looked at this and we'd make recommendations that affect, you know, broad larger institutional holders. I guess if you like my former life would like the ability to tell your investors to go pound sand and suck it, this is a good bill.
▶ 1:21:08I guess that if you are part of that uh half of the population that by definition is below average, then you find meritocracies very And you don't want to have to compete in the deep end of the pool. And the last thing is you want to free markets to competitively allocate capital. Um I mean, hell, it worked for Don and Eric Jr., right?
▶ 1:21:33Um those guys certainly couldn't compete in a meritocratic environment, but it helps if daddy's looking out for you and telling other people that they can't get money your way. But that's not capitalism. It's not how free markets work. And yet we are actually going to debate on this floor again whether or not shareholders are the owners of companies, whether companies look out for the interests of I don't know how long we got to keep doing this. I suspect the gentleman
▶ 1:22:00won't yield. Um if you are saying that I have finally convinced you that this is insane and stupid, yes. If not, I'm out of time and I yield back. I will use the gentleman's
▶ 1:22:11time has expired. That was such a missed opportunity. The chair now recognizes the gentleman from Georgia, Mr. Loudermilk, uh for 5 minutes. Thank you, Mr. Chairman. I do speak in support of HR 8286, the Protecting Americans Retirement Savings from Politics Act, sponsored by my friend and colleague, Mr. Steil. H.R.
▶ 1:22:338286 includes uh my legislation in title 7 that will require institutional investment managers who utilize proxy advisory firms to file annual reports with the SEC providing a detailed explanation of their voting record on every shareholder proposal, including whether the votes aligned with proxy advisory Title 7, along with the other provisions of H.R.
▶ 1:22:568286, takes a critical step toward restoring transparency, accountability, and fiduciary responsibility to our capital markets. For far too long, the proxy advisory process has operated with insufficient scrutiny despite its enormous influence over Americans' retirement savings. At its core, my legislation is about restoring trust and reinforcing a fundamental principle that the asset managers have a fiduciary duty to act in the best economic interest of their clients, the shareholders.
▶ 1:23:25Not in pursuit of political agendas, not in respect to outside pressures, but in service of maximizing long-term value for the millions of Americans whose pensions, 401(k)s, and savings are on the line. When asset managers outsource critical voting decisions without sufficient oversight, they risk substituting their own judgment and their fiduciary responsibility with the recommendations of third parties that may not share the same priorities or obligations to shareholders. Title 7 addresses this directly.
▶ 1:23:56It requires greater disclosure around how proxy advisory firms formulate their recommendations and how institutional investors use those recommendations in their voting decisions. It ensures that asset managers remain accountable for the votes cast on behalf of their clients rather than simply rubber-stamping external guidance.
▶ 1:24:13The required annual reports to the SEC encompass essential information such as the percentage of votes cast in accordance with proxy advisory recommendations, the percentage of votes in favor of ESG-related shareholder proposals, and their explanation of how firms reconcile their votes with their fiduciary duty to act in the best economic interest of their show This legislation strengthens the integrity of our capital markets by ensuring that decisions are made transparently, responsibly, and with a clear focus on
▶ 1:24:43economic returns. The American investor deserves to know who is making decisions with their money, why those decisions are being made, and whether those decisions are truly serving their financial interest or serving someone else's political agenda. By passing this legislation, we take an important step toward protecting investors, strengthening market confidence, and ensuring that those entrusted with managing the American people's hard-earned savings remain focused on what truly matters. Uh with that, Mr.
▶ 1:25:11Chairman, um I'd yield some time to uh Chairman Steil if he would like to utilize that time. I I I thank you, gentlemen. I I can be brief. Just a comment on our previous colleagues' comments. Materiality is determined by what is material. It shouldn't be determined by anyone in this room beyond here's materiality threshold.
▶ 1:25:35So, it's a fact-based Is the question presented before the company material to that company or not? Uh we've seen time and again, I know where some of our colleagues across the aisle uh want to predetermine what is and what is not material on any given company. We've had votes on that as it relates to uh green new deal ideas, HR policies. The focus is putting this back on the core understanding the business.
▶ 1:25:59A lot of the business uh in conjunction uh with shareholders to determine uh what's Uh it's also interesting that the underlying bill and the Protecting um Americans Retirement Savings from Politics Act protects it from politics writ large. And so, this this protects it from from the left, from the right. It's saying, "Get the politics out of the boardroom. Allow businesses to operate to the benefit of their employees, their shareholders, of the United States.
▶ 1:26:27Get the politics out of this." And so, shifting the materiality standard back to what is actually material is a way to do that both from a protection on the left and on the right. And so, I know my colleague maybe had to step out. But it is a real opportunity here just to bring us back to core principles of securities law. I think most Americans who are saving for retirement would be excited to know that there's going to be less politics in their retirement savings, not more. I appreciate the time for my colleague.
▶ 1:26:58I Gentleman from Georgia yields back. Chair recognizes the gentlewoman from Texas, Ms. Garcia. You're recognized to strike the last word. I move to strike the last word, Mr. Chairman.
▶ 1:27:11for 5 minutes, ma'am.
▶ 1:27:12Thank you. And um you know, I've been listening and quietly sitting here, and it seems to me that all of these arguments we've heard in the past. And I agree with Mr. Casten, this is um more of the same. And more importantly, it's just beginning to sound like a broken record. Uh the one thing that I did hear is a sort of different tune. Um I wanted to ask Mr. Chairman um if we could ask Mr.
▶ 1:27:38Steil to give me one or two examples of these illegal things that he referred to. Um the proxy um uh uh advisors have asked investors to do. I mean, he said illegal the things.
▶ 1:27:53If the gentlewoman yields, I'd be happy
▶ 1:27:55I would. That's what I'm asking.
▶ 1:27:56I appreciate it. There there was a specific instance that I was referencing there as it relates to the company a large insurance company. There was a proposal put forward and I'm going to oversimplify this a little bit cuz I'm going off the cuff
▶ 1:28:11it simple. I've only got 4 minutes.
▶ 1:28:12Yeah, so so oversimplified that they would do not risk-based pricing, they would price based on race. Of course, we've outlawed that in the United States because you shouldn't be pricing insurance based on race. There was an idea that it'd be a discount for some individuals, but of course, that's pricing based on race.
▶ 1:28:28that was illegal? I mean, that we've pricing insurance based on race is in I believe illegal in every state. For sure, it's illegal in the state of
▶ 1:28:38But you don't know for fact. I can tell you for a fact you cannot price insurance based on race in the state of
▶ 1:28:44sure it was not based on race, but race could be a factor? I could give you the language of it. You can't You can't base You can't price insurance based on race. That's a That's a law in almost to my knowledge every state. No, well, you say they're illegal, so I want to know It's definitely illegal in the state of
▶ 1:29:01it's illegal for you to state here in front of everybody that proxy advisers are telling people to do something illegal? I mean, that's a very strong statement. I The The company What case or what data you have it to back it up that someone has determined, not you in your opinion, because you know
▶ 1:29:18had a If I can. Yeah, please.
▶ 1:29:21We We had a hearing on this We had a hearing. We had the general counsel from ISS and the general counsel from Glass Lewis who sat before us. I asked them directly, do they review proxy proposals for legality? Both of them said no. Then we had Chairman Gensler is in in the at the time. We had two of his deputies who came in. They said the SEC reviews for legality. I asked both of them, they're both sitting right here before us. I said, do you review for legality because I believe this is illegal. They both said no. The point is no one's reviewing these for legality.
▶ 1:29:51ISS wrecked in favor of it. In the underlying The underlying proposal would have required travelers to price insurance based on race. That's illegal. So, did you ask any anybody on the at the at the table that represented the proxy advisors? I did. We I asked the the general counsel of ISS and the general counsel of proxy
▶ 1:30:14familiar with both groups, sir. I'm sorry. Well, those are the two monster proxy advisors that we're dealing with under the legislation. They control well over 80% of the proxy advisor market. Both general counsels sat before us. I asked them both on the record.
▶ 1:30:24realize that just because someone and if that is true and and I'm not suggesting that it is true, if if that is true and two people are give the opinion uh that they would be illegal doesn't mean they truly are. Has any of these issues been litigated and determined to be legal? We've had lots of That's like saying is it legal to rob a bank? I mean, it's illegal to rob a bank. It's illegal to price insurance based on race.
▶ 1:30:49So you have Does the Does the gentleman On the bottom line, sir, you really don't have any document any data or you don't know of anyone who's really determined that these are illegal acts. You're just saying that. I mean, it's just it's uh you know, it's kind of like saying the war is over where the vessels can come through and all that and the next day it changes. I I just uh you know, I like facts. Name a case. But with that, uh Mr.
▶ 1:31:16Chairman, I I yield back unless uh the ranking member has anything else that she might want to Uh thank you very much. I was uh enjoying for a moment the colloquy that was taking place. Uh we need to do more of that. Uh Sylvia, you you hit it right on the head.
▶ 1:31:34Um and and it is amazing uh that as we sit here today uh dealing with very important legislation that the uh can be dismissed and not thought of by the opposite side of the aisle in the way that they're doing. Uh it is absolutely unbelievable that we on this side of the aisle have to fight for the Consumer Financial Protection Bureau, let alone for fairness of our investors.
▶ 1:32:04With that, Sylvia, I thank you for your comments and the members on this side of the aisle for never forgetting why we're here and who we're supposed to represent, and I yield back to balance
▶ 1:32:15time has expired. Who seeks recognition? Uh Mr. Meuser. I move to strike the last word.
▶ 1:32:24You're recognized for 5 minutes. I want to thank Representative Steil for his leadership on the broader issue of rightly scrutinizing the broken proxy advisory process in the United States. Two firms, ISS and Glass Lewis, control 97% of the proxy advisory market. Pension funds and asset managers rely upon them to vote shares, and too often these firms push votes based on climate agenda and political priorities instead of returns.
▶ 1:32:51What makes it worse is that these firms have almost no regulatory oversight. Every other major player in the financial system has accountability. Proxy advisory firms do not. This bill, HR 8286, the Protecting Americans Retirement Savings from Politics Act, fixes that. It brings transparency and accountability to an industry that has avoided it for too long.
▶ 1:33:14This package also includes a provision I or one introduced last Congress which requires the SEC to study the EU's Corporate Sustainability Due Diligence Directive, CS3D, mandate and its its effects on American businesses. It's not a climate issue, it's a sovereignty issue.
▶ 1:33:33CS3D requires American companies to report climate emissions and meet compliance standards if their parent company does business in That is a foreign government imposing its rules on American businesses operating on American soil. Let me be clear, Republicans are not against ESG as an investment choice. If an individual investors want to prioritize environmental, social, or governance factors, that's their prerogative and business.
▶ 1:33:59What we oppose is when these ideological views are mandated, especially from outside the US, and American businesses are forced to comply with burdensome regulations that prioritize political ideology over companies' fiduciary responsibility to its shareholders, that harms the economy and undermines Americans' freedom to make their own investment decisions. I support this bill and urge my colleagues to do the same. I yield back. Gentleman yields back, seeks I recognize myself for 5 minutes of comments on the amendment in the nature of substitute.
▶ 1:34:30I want to thank Congressman Steil, Congressman Huizenga, Lucas, and Meuser for working together and their leadership in addressing some of the key factors about reforming the proxy voting system and the proxy advisory firms uh critical to our capital markets.
▶ 1:34:49This bill is an aggregation aggre- group of bills that um have been aggregated that I think really address many of the things we've heard for decades about the failures of the proxy voting system. By reinforcing the materiality standard, the bill ensures that public companies are not forced to become vehicles for social [snorts] engineering.
▶ 1:35:17Instead, they'll focus on disclosing the financial realities that directly affect shareholder interests like a retiree's pension or a family's college fund. Furthermore, they're bringing long-overdue oversight to the proxy advisory firms.
▶ 1:35:32For too long, this duopoly of ISS and Glass Lewis have exerted outsized influence over the corporate governance through conflicted recommendations, in other words, telling boards of directors what positions they should take on uh policy positions, and then in turn recommending to shareholders how to vote on those.
▶ 1:35:54Particularly through automated robo And this dates back to I think 2003 when Harvey Pitt was chair of the Securities and Exchange Commission where a safe harbor was granted to institutional investors that if they used a proxy advisory firm on a vote recommendation, they had a safe harbor that then they automatically complied voting and it's just been over 20 years extended into the system we see today.
▶ 1:36:22This bill breaks that grip requiring proxy firms registration and transparency resulting in increased and a rightful return to fiduciary duty. We're putting power back into the hands of shareholders and ensuring that our economy is driven by long-term growth not short-term ideological political I thank the members who worked together on these bills and I yield back the balance of my time. Does anyone else seek recognition on the uh A&S?
▶ 1:36:53If not, we'll turn to amendments and the gentleman from I know the gentleman from uh New York I believe has an amendment
▶ 1:36:59Yes, I have an amendment at the desk. Uh we'll pause while that is distributed. Mr. Chairman, reserve a point of order. Mr. Loudermilk reserves a point of order on the Meeks amendment.
▶ 1:38:08The clerk will report the amendment. An amendment to the amendment in the nature of a substitute to HR 8286 offered by Mr. Meeks of New York designated as Meeks 125. Without objection, the amendment will be considered read and I'll recognize the distinguished gentleman from New York, the ranking member of our House Foreign Affairs Committee, Mr. Meeks. You're recognized on your amendment. Thank you, Mr. Chairman.
▶ 1:38:32Uh this amendment expresses the sense of Congress that companies that incorporate diversity, equity, and inclusion into their business strategy often perform better and are better positioned to compete in today's economy. Across numerous studies, diverse leadership teams are associated with stronger financial performance and better decision-making.
▶ 1:38:59At the same time, recent data from the Russell 3000 shows that progress on board diversity is in fact slowing and with the share of board seats for diverse individuals falling 96% of HR professionals say diversity leads to a better-functioning company. That's 96%.
▶ 1:39:24And 77% of respondents say diversity initiatives improve financial Financial performance. Not only that, but many companies have said this directly, too, anytime I talk to them.
▶ 1:39:42One such company whose product the president is a big fan of, Coca-Cola, has warned that policies leading to a less diverse workforce would harm its business. The company makes clear that a diverse, high-performing workforce drives innovation and growth. And it helps ensure that it reflects the consumers and markets it serves around the world.
▶ 1:40:10Another example is Costco, which told shareholders that the originality and creativity of its diverse workforce helps stock its shelves with unique products. And guess They have some of the most loyal customer bases in the industry with a 90% membership renewal rate in the United States and Canada.
▶ 1:40:33In other words, for many companies, diversity is not just a value, it's a business strategy. Instead of putting forward economic reports as an attempt to score political points, let's pay attention to what American businesses are saying. Let's help them succeed. This is business practices. It helps companies make money.
▶ 1:41:01It also helps them to grow and and have greater and more customers from all types of the region, from every region, all ethnicities, all religions. Diversity, equity, and inclusion is good for business. And many businesses, as I've stated, say that without it, they will lose. They won't gain more. They will lose money.
▶ 1:41:30So, this is not about This is helping business. It's a good business decision. And so, with that, I urge my colleagues to support this amendment, and I yield back the balance of my time. The gentleman yields back. Um I withdraw my point. And does the gentleman from uh Georgia insist on his point of order? No. No, Mr. Chairman. Uh the point of order is withdrawn. Who seeks recognition on the Meeks amendment?
▶ 1:41:57The ranking member of the full I [clears throat] move to strike the
▶ 1:42:01for 5 minutes. This amendment highlights a simple, powerful fact. Companies that embrace diversity, equity, and inclusion perform better. The data is clear. The market knows it, and the American people American people know it. The DEI is not a political distraction. Uh it is a pro- proven business imperative.
▶ 1:42:24When companies foster inclusive environments, they attract better talent and spark more innovation, and ultimately deliver better returns for their shareholders. That's because when you have a workforce that represents all of American, uh your company uh can better serve all of America. We must go on the record to affirm that inclusive capitalism is strong capitalism.
▶ 1:42:48We cannot let a narrow, short-sighted blind us uh to what actually drives success in the modern global economy. Uh to Mr. Meeks, I want to thank you uh for offering this amendment.
▶ 1:43:04Uh I have been amazed uh at the way that uh some of the members of Congress and some of the members of companies have uh taken uh the president's desire uh to eliminate diversity in all aspects of our lives, uh and basically complying uh with what the president wants. Some say uh because they're frightened.
▶ 1:43:31Uh some say uh that they don't believe uh in diversity and they believe uh that as Vegas said earlier uh when he was taken on a location. I think that was George years ago. I remember him in San Diego. And uh we see this all the time. We walk by uh construction sites.
▶ 1:44:00We walk by all kinds of projects. And I stop and I look and I see who's working on the job and who's not working on these jobs. And I have stopped and I've spoken with superintendents and others on these work sites and I say to them, "Do you realize uh in this community we have so many men and women who are excluded from opportunities?
▶ 1:44:27How is it you can have a project this big, particular in some of the construction and not have women, not have people of color on the job? And so whether we're talking about on construction sites or in the big, you know, corporations uh of America who are wishing to exercise uh their uh power in whatever way they want to do it and exclude those
▶ 1:44:58uh that for some reason uh they don't believe they should have opportunity. We witness this every day every time we just wonder what the opposite side of the aisle is thinking on this diversity, equity, and inclusion exclusion uh by the president that so many of them are following. And I raise the question time and time again.
▶ 1:45:23Thank you for including this in this discussion uh that we're talking about at the highest level of investment. Thank you.
▶ 1:45:31Will the gentle lady I yield. Let me just say this, too. This is the greatest country in the But it wasn't as great as it could have been initially when we had people who were denied, African-Americans who were enslaved enslaved and could not and for a long period of time till right right now denied jobs, women not having the opportunity to What is making America great
▶ 1:46:02and move forward and why it's good for business is it includes everybody. And we know that we've had systems that deliberately not based upon their and their capabilities and what they add to the country and to a company, they were specifically excluded.
▶ 1:46:24What makes us great and what will make us to continue as the greatest country that everybody can see the example is that everyone has the opportunity to participate. You can see anybody from any region, women, African-Americans, Latinos, Asians, everybody having a chance to participate to help business With that, I thank the gentle lady. I yield back. Very much.
▶ 1:46:53Um I just want you to know uh when we see discrimination um and we speak to it, it is not because we don't have anything else to do, it's because we don't understand why it still exists in the way that it does. I yield Gentlewoman's time has expired. Chair recognizes the chair of the Financial Technology, Digital Assets, Artificial Intelligence Subcommittee, the author of the the bill, Mr. Steil. Thank you very much, uh Mr. Chairman.
▶ 1:47:20The uh the amendment offered by our colleague uh inserts a series of DEI findings advocating for companies to prioritize DEI, declares DEI can have a material impact on company performance, uh and declares that Congress should legislate in a way that directs companies to incorporate DEI into their operations. That's that's the fundamental of this uh amendment.
▶ 1:47:44The sense of Congress is not about transparency, is not about bypassing materiality, it's about bypassing materiality standard to advance social agenda. The gentleman social agenda, in this case, DEI. The sense of Congress would encourage the SEC to mandate disclosures based on social or political interest rather than whether the information is actually necessary for a reasonable investor to make a financial decision.
▶ 1:48:09Companies and ultimately shareholders would bear the cost of auditing, reporting the data that doesn't contribute uh to investor returns, doesn't benefit their employees. Inside, I urge my colleagues to reject uh the amendment, and I yield back. Gentleman from Wisconsin yields back. Who seeks recognition on um the um Meeks amendment? Uh is there If there's no further debate on the Meeks amendment, the question now occurs on the amendment. All those in favor shall signify by saying I.
▶ 1:48:39I. All those opposed signify by saying no. No. The chair the no's have it. The no's have it. The amendment is not adopted. The gentleman from New York requests a roll call vote. All those in favor, raise your hands. A sufficient number having raised your hand, a record vote is so ordered pursuant to subsection C5 of rule three of the committee rules. Further proceeding on the amendment are Are there further amendments to the nature of a substitute offered by Mr. Gentleman from California. Thank you, Mr. Chairman.
▶ 1:49:07I do have an amendment at the desk.
▶ 1:49:09We'll pause while that's distributed. Thank you.
▶ 1:49:22Good hygiene. She's testing, testing. Mr.
▶ 1:49:49Chairman, can I reserve a point of Gentleman from Kentucky reserves a point of order. The clerk will report the amendment. An amendment to the amendment in the nature of a substitute to HR 8286 offered by Mr. Vargas of California designated as Vargas 032. Without objection, the amendment's considered read and the gentleman from California is now recognized to describe his amendment.
▶ 1:50:19Thank you very much, Mr. Chairman. Mr. Chairman, my amendment simply states that this bill should not be construed to limit the ability of the SEC to issue any disclosure-based rule making, including any rule making pertaining to standardized climate-related disclosures, corporate diversity, or human capital management. Disclosure-based rule making benefits both investors and issuers and it's built on a simple enduring idea.
▶ 1:50:46Investors deserve access to material The Supreme Court definition of materiality authored by Justice Thurgood Marshall in the 1976 case TSC Industries versus Northway was that a fact is material if, quote, there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote. This is very similar to beauty is in the eye of the beholder.
▶ 1:51:16Here, materiality is in the eye of the investor, of the shareholder, not of management. The determination materiality is made from the investor's point of view, not the issuer's. And that's what makes our disclosure requirement so robust. It's a standard It's standard that plays a major role in making our capital markets the gold standard globally.
▶ 1:51:46And investors agree. Ceres, a nonprofit advocacy organization, analyzed comment letters from 320 institutional investors on the SEC's climate-related disclosure rule. Of that group, 270 institutional investors mentioned that disclosure requirement, and 97% of them were in favor wrote in favor. Despite that overwhelming investor support, the SEC has walked away from defending this climate disclosure rule in in court.
▶ 1:52:16Meanwhile, the current administration has created an environment of fear and retribution for companies who believe measuring corporate diversity and human capital management practices are valuable for market participants. Whether a company is analyzing both physical and transition climate-related risk for sustainable economic growth is material to investors. Whether a company is walking the walk or just talking the talk of boardroom diversity comments is material to investors.
▶ 1:52:45Whether a company has workforce issues like safety violations, labor disputes, or excessive high turnover rates is material to investors. Today we heard from one of my colleagues and I and I think it's correct that business is business and you want a diversified group. I think that's correct. And how do you get that by by knowing the facts? And that's what this amendment allows for.
▶ 1:53:15Because the bill, unfortunately, before us prevents us from getting some of that information. We lose sight of who is the owner of the company. The owner of the company are the investors, the shareholders, not the management company. And no, it's not in the best interest necessarily of the company to have these golden No, it's not. That's why investors need to have this information. And with that, Mr. Chair, I yield back.
▶ 1:53:47Gentleman from California yields back. Who seeks recognition? Uh oh, does the gentleman from uh Kentucky insist on his point of order? Uh I do not. Point of order is uh dropped by the gentleman from Kentucky. Uh I move to strike the last word. Uh the gentleman from California. Thank you very much. I move to strike the last word.
▶ 1:54:07for 5 minutes. I support this amendment which ensures that nothing in this bill can be used to tie the hands of the SEC when it comes to providing transparency around corporate diversity, human capital management, and climate change risk. We know that the most vulnerable or valuable, rather, asset any company has is its people. Investors are making it clear.
▶ 1:54:34They want to know how companies are recruiting, retaining, and promoting a diverse workforce. They want to know if a company is truly investing in its workers or just paying lip service to equity and inclusion. Additionally, the stats show that the majority of investors believe information like this is important when deciding whether or not to purchase their shares in a company.
▶ 1:55:01This also includes information about how a company is dealing with the risk of climate change and what they're doing to reduce their carbon footprint. By protecting the SEC's authority to demand transparency in these areas as Ms. Vargas' amendment does, members can protect the rights of investors and the public to see the full picture of a company's health. I urge all members to support this amendment. I yield back.
▶ 1:55:31The gentlewoman yields back. Who seeks recognition? The gentleman from Kentucky, Mr. Barr, chair of our Financial Institutions Subcommittee. I move to strike the last word.
▶ 1:55:39You're recognized for 5 minutes.
▶ 1:55:40I oppose this amendment because it would force investors to view public companies um through the lens of climate disclosures, corporate diversity, human capital many investors are looking for returns.
▶ 1:56:04And want the prioritization of returns as opposed to uh these companies um uh politicizing the allocation of capital or prioritizing unquantifiable environmental, social, or governance objectives over investor investor returns. These disclosure mandates let's face it. Uh often advance unrelated policy goals at the expense of investor returns.
▶ 1:56:35It would steer investors toward higher fee, less diversified, and in many cases lower return invest investments all for the ostensible purpose of disclosing climate risk or diversity or human capital management. Uh my friend from California says, "Well, we want a diversified group." Well, uh some investors, I would argue most investors want returns. They want retirement security.
▶ 1:56:59They want to to have maximum returns to save for Um and to the extent that this proposal would force them to view companies through the eyes of a a vocal set of maybe not even owners of the company, but through the eyes of stakeholders for whom a company's climate reputation is of greater importance than the company's financial performance, that's that's that's wrong.
▶ 1:57:29And so and I also oppose the amendment because it would really undermine the legislation that I've offered to be included in this bill title title 10, which uh would amend the Investment Advisers Act of 1940 uh to uh specify that the requirements concerning the consideration of pecuniary and non-pecuniary factors with the option for investors to consent to the use of non-pecuniary factors in decision-making.
▶ 1:57:58So, let's just take uh Mr. Vargas's uh point. Let's just concede the point that there may be some investors who do care about corporate diversity or climate uh and would prioritize those over returns.
▶ 1:58:13Uh because as we've seen in so many of these case these companies that prioritize and I I've seen many examples of uh of ESG fantasies that went public in a SPAC and then were spectacular failures because the management focused on um uh immaterial uh objectives totally unrelated to the core purpose of uh delivering returns or earnings or and
▶ 1:58:44instead were engaged in political errands as opposed to actually running a Um but stipulating that there may be investors out there who do want to prioritize corporate diversity or they want to uh, they want to invest in a company that's very climate focused. Why wouldn't we give the investor the the decision-making power? Uh, the ranking member talks about corruption of capitalism.
▶ 1:59:12The corruption of capitalism is forcing an investor to subordinate returns to some of these immaterial issues. What what what we should be doing is giving investors the choice. It's their And if the the default should be the the fiduciary obligation of directors and to uh, to deliver maximum returns. If the investor wants to prioritize these non-pecuniary factors, this legislation, Mr.
▶ 1:59:42Styles' package, would allow the investor to so choose. So, if you really want to empower investors to choose what's more important to them, maximizing returns, corporate diversity, climate, our legislation, Mr. Styles' legislation, title 10 of that legislation, gives the investor ultimate control over his or her investment.
▶ 2:00:05And so, that's uh, one of the reasons why I would oppose the gentleman's amendment, which would take that choice away from the investor and {quote} {unquote} standardize the of non-pecuniary factors at the expense of financial returns. And I yield back. Gentleman yields back. Uh, who seeks? Uh, Mr. Lynch. Thank you, Mr. Chairman. I move to strike the last word.
▶ 2:00:33You're recognized for 5 minutes on the Vargas amendment. I think in a sense we're talking past each other. And uh, first of all, I'm I'm in support of uh, the gentleman from California, Mr. Vargas's uh, amendment. And and what he speaks to is is not is not politics.
▶ 2:00:52Uh what the gentleman from California is speaking to is the opening phrase of our of our Constitution to form a more perfect It predates politics in this country in the in the partisan sense. It it speaks to who we are as a nation.
▶ 2:01:12And and what the gentleman is is trying to impress upon the the sponsor is that this is this is about full participation by in our nation to to to move forward and to create that more perfect union.
▶ 2:01:34you know, I know from my my own experience in the construction industry, there was a time when uh most of our unions were overwhelmingly white and and and reflected uh a a shutting out of of certain people in that in that industry. And I visit my union halls today and I see greater inclusion. I see greater diversity.
▶ 2:02:03I see men and women uh and and I also see a greater acceptance uh within especially when out of major uh of large construction projects because when they go by those construction projects, they see the people they see their neighbors. They they see they see the population of their city reflected on those job sites and that helps that helps the business community.
▶ 2:02:30That helps the construction industry people see the good in it. They see that that that participation is shared and that success and opportunity is shared. So, uh you know, people have said before that you know, America isn't just a place, it's a it's an idea.
▶ 2:02:51And I think I think the gentleman from California has hit upon that that that uh if we really want to achieve that high ideal that the preamble to our Constitution sets up to to form that more perfect union,
▶ 2:03:11uh his amendment is certainly not only in order, but consistent with that ideal. And for that reason, I I support the gentleman's amendment, and I would yield to him any additional time he may Thank you very much. I first want to my good friend from Massachusetts for those kind words and for his words of inspiration. I would uh tell my friends on the other side, this is a disclosure- based amendment.
▶ 2:03:42Disclosure, disclosure. It doesn't force anybody to invest in It just simply gives you the facts. When my good friend over there says, "It'll force investors to invest in this." No, it doesn't. This is just That's all this does. Lets you know the facts. An example was given earlier of Travelers Insurance. I know a little bit about insurance.
▶ 2:04:10I was in the insurance business for a while myself. Climate Climate matters big time for insurance We used to call them cats, catastrophic events. They used to be measured 5, 10, 25, and 50-year, and 100-year, and 1,000-year events. Those have changed dramatically because of climate change. Now you have hail that is no longer these little tiny things. They're the size of a softball sometimes, going through the windshield.
▶ 2:04:41So, yes, this is information. Information not for information's sake. These are for investors' sake because they do want a return. They do want to protect their investment. That's why this is important. Again, doesn't force anyone to invest in It's a disclosure. That's all it is, disclosure. With that, I I thank the gentleman from Massachusetts, and I hope we do get to that more perfect union. I appreciate and I yield back to him.
▶ 2:05:12I thank the gentleman, Mr. Chairman. I yield back. Gentleman from Massachusetts yields back. Who seeks recognition? Gentleman from Ohio, Mr. Davidson. Thank you, Chairman. I move to strike the last
▶ 2:05:21You're recognized for 5 minutes. Thank you. Um you know, the gentleman's amendment uh really has a faulty premise. Uh the premise is is that uh the Securities and Exchange Commission should be engaged in these kind of rule makings now. And the reality is they shouldn't. We didn't pass a statute that told them mandate climate-related disclosures, or corporate diversity disclosures, or human capital management disclosures.
▶ 2:05:48We do have a mandate for the Securities and Exchange Commission to uh have disclosures related to material impacts on the financial conditions of the firm. And what we want to be uh the outcome here is profits, not an ideal. We want that to be there. And we want these firms to get them so that they deliver uh the results that the investors expect.
▶ 2:06:14They don't uh you know, invest in these things so that they have this ideal about a future retirement plan. They want a real retirement plan where they get returns. And that's why materiality needs to be the standard. So, I think the whole premise of the amendment is faulty, and uh therefore I am opposed to it and I'd yield the balance of my time to Mr.
▶ 2:06:39I thank my friend from Ohio and I think he made some really good points and and my friend from California earlier cited TSA Industries versus Northway which is uh one of the uh seminal cases from the Supreme Court defining materiality for investors. And it was Justice Thurgood Marshall who wrote that opinion and in his opinion he addressed this issue of disclosures. And uh my friend talks about this is this is unobjectionable. It's just disclosures.
▶ 2:07:09It's the problem that Justice Marshall identifies in mandated disclosures is the following and I'm quoting here. Uh the question is information is material for purposes of disclosure if there is a substantial likelihood that a reasonable investor would consider the information important in deciding how to make an investment Quote, "Management's fear of subjecting itself to liability may cause it
▶ 2:07:39to simply bury shareholders in an avalanche of trivial information, a result that is hardly conducive to informed decision-making." Unquote. That's what Justice Marshall is talking about when he uh when he expresses a concern about mandating disclosures of this kind uh described in this uh or or set forth in this amendment.
▶ 2:08:05Because what you're doing with this amendment is you're taking away actually the choice of the investor to choose whether or not he or she wants to prioritize these non-pecuniary uh factors. W- Why would we take away the choice uh of of the investor to decide whether or not they want uh these uh these uh uh these these this information.
▶ 2:08:32If the if the investor wants to focus on financial returns, then let the investor focus on have the investment advisor focus on financial returns. If the investor on the other hand cares about these immaterial to other to to the average investor immaterial factors, allow that investor to make that choice. That's what title 10 of this bill would But mandating disclosures would generate liability. That's the issue.
▶ 2:09:02It's not just disclosures, it's about creating And that drives cost up, which drives returns down. That's the problem with a mandate like And it also takes away the choice of the investor. Most invest In my experience, and maybe the experience of the gentleman California's different. But but in my experience, and I I've I talked and I'm sure the gentleman does, too.
▶ 2:09:29I talked to constituent investment advisors, broker dealers all the time in my district, and I asked them because this is an interesting debate we have periodically in this committee. What would you say the percentage of your clients care about ESG factors and would prioritize those over the financial performance of their And invariably, the percentage that they cite to me, and I admittedly this is anecdotal, maybe the gentleman has some some other but it is like 1 or 2%
▶ 2:09:59maybe. I've had many investment advisors tell me that not one would prioritize these immaterial factors over returns. And even in the cases where a client says, you know, I really do care about climate, I really do care about corporate diversity, I really do care about these human capital management issues, even in those cases, if they if given the choice, would do you want us to pick stocks
▶ 2:10:28based on that or returns, they choose returns every time. Yield back. Gentleman yields back. Chair recognizes the gentleman from Wisconsin. Thank you very much, Mr. Chairman. Just quick clean-up item. The gentleman was talking about insurance companies and disclosure. I think it's worth noting roughly 85% of US insurance companies currently report some form of climate risk. They do so in their 10K filings often in item 1A risk factors or item 1 business. Why?
▶ 2:10:59Because it's material. So, the materiality standard, if those businesses determine that it's in the interest of their shareholders to make a it should be reported. That that's that's the standard here is materiality. The amendment that's offered, now let me get back to the amendment piece, is not really about transparency. It's about advocating a social agenda. And so, companies and ultimately shareholders bear the cost of auditing and reporting data that doesn't contribute to investment returns. Of course, if it's material, they should be reporting.
▶ 2:11:28If it's not material, they don't need to report. If climate risks are financial material, you report it. The goal here is to keep the SEC focused on financial reality, not on political Mr. Chairman, before I yield back, I just want to go back to the underlying bill for a second. I want to introduce two letters for the record.
▶ 2:11:52The National Association of Manufacturers letter American Association Securities letter American Securities Association letter in support of the underlying Those will be included in the record without objection. And I yield back. Gentleman yields back. Who else would like to speak to the Vargas amendment? There's no further debate. Question now occurs on that amendment.
▶ 2:12:19All those in favor of the amendment signify by saying All those opposed signify by saying no. No. The chair of the eyes I would I beg your pardon the no's have it. The no's have it. The amendment is not adopted. Is there any further amendment? Gentleman from California has requested a recorded vote. All those in favor of a recorded vote raise your hands. A sufficient number having raised their hand a recorded vote is ordered pursuant to subsection C5 of rule 3. The committee rules for the proceeding of the amendment are post poned. Are there further amendments to the amendment in the nature of a substitute?
▶ 2:12:49a minute. Are the ranking member? You have an amendment at the desk. We'll
▶ 2:12:53the last word. We'll pause while the amendment is distributed. Gentleman from Wisconsin reserves a point of order.
▶ 2:14:21Clerk report the amendment. An amendment to the amendment in the nature of a substitute to HR 8286 offered by Ms. Waters of California designated as Waters 165. The objection to the amendment is considered read and now the ranking member of the full committee is recognized to discuss her amendment. Thank you. Thank you very much, Mr. Chairman.
▶ 2:14:42One of the aims of this bill is to make it much harder for ordinary shareholders to file proposals, particularly related to diversity and human capital matters. Currently, even though the law says that a shareholder only needs to hold $2,000 in shares for 3 years, 15,000 for 2 years, 25,000 for 1 year to file a proposal, Trump's SEC issued guidance that allows companies to throw
▶ 2:15:12out any proposals they don't like. This is stifling the voices of countless investors who will no longer have a say in how the companies they are true owners of are run. Many may not remember but Reverend Jesse Jackson, who passed away earlier this year, took the civil rights movement to corporate America.
▶ 2:15:40He started the Wall Street Project, putting formal and informal pressure on companies like Goldman Sachs, Toyota, and the New York Stock Exchange. And as recently as 2018, he offered a um shareholder proposal uh to the Amazon Board of Directors demanding they increase board diversity.
▶ 2:16:05He said that, and I quote capital is not neutral quote unquote and used his capital to push for change. My amendment would ensure that investors following in Reverend Jesse Jackson's footsteps can still push companies in this country to do the right thing.
▶ 2:16:26It overturns that harmful Trump policy and in doing so restores the rights of shareholders to provide their input on important corporate management decisions. Although it allows it allows shareholders to band together in groups of five or more to offer a joint shareholder proposal without worrying a company would simply throw it out in the trash.
▶ 2:16:57This amendment goes a long way to restoring a core tenant of our capital markets that our financial system should abide by the same democratic principles that underlie our American democratic institution.
▶ 2:17:12Every shareholder should have a voice no matter how small and their voices should not be any more or any less favored than the voices of the C-suite that these shareholders elect to run their companies.
▶ 2:17:30As a matter of fact, uh during uh the memorial service of Reverend Jesse Jackson uh one of the gentlemen uh uh from Wall Street who knew Reverend Jackson said Reverend Jackson borrowed $5,000 from him so that he could go in and represent um you know small investors. Many people think of Reverend Jackson basically as you know saying keep hope alive and uh you are somebody and all of that.
▶ 2:17:59But he was on to what was going on uh in the financial in this country and he was intent on opening up the opportunities for small investors to have a say and not to be excluded and for proxy holders who are voicing the concerns of small investors working on diversity and inclusion, the environment and all of those issues
▶ 2:18:30that really are avoided and don't get heard in these in these shareholder meetings. And I just want to remind everyone in this room that in addition to whatever else I do, I'm going to advance some legislation dealing with small investor involvement and opportunities in ways that you've never seen before and it's going to be a Jesse Jackson proposal
▶ 2:19:01that I will be presenting. So I yield back as I warned Thank you very much. The gentlewoman yields back. Chair Mr. Style. Do you first do you have a withdraw your point of order? Withdrawn. Point of order is withdrawn and I now recognize you to strike last word. Thank you very much, Mr. Chairman. The amendment offered by our colleague from California pretty much says any five individuals can come forward with a shareholder proposal.
▶ 2:19:31They have to have worth of stock. And then pretty much obliterates staff bulletin 14M which of course overruled the 14L which empowers the staff which had empowered the staff of the Securities and Exchange Commission to drive forward a political Let's think about the real world consequences of this. The SEC under the current rules before they're even obliterated further under the proposed amendment.
▶ 2:19:57The SEC, five people, five individual investors accounted for 40% of the shareholder proposals submitted last year among the S&P 1500. Think about that. Five individuals a mere five individuals, noting the same number offered by my colleague from account for 40% of the shareholder proposals submitted last year to the S&P 1500.
▶ 2:20:251,500 That's shocking. You'd almost think there's a business motive in that. I wonder if some attorneys are making a little bit of And I wonder if that's why we want five people to be able to do even more. If you dig through these proposals, man, there's a lot of social policies that some of my colleagues on the left would But all this does is bog down and burden businesses that are trying to grow and employ people.
▶ 2:20:53And a lot of attorneys make a lot of money. We're trying to get the politics of our businesses. Politics on the right or the left. Let these business businesses focus on what they do. Building in the United States of America, hiring people in the United States of America. Don't draw them in to the political debates that we watch time and again come forward on this committee.
▶ 2:21:21So, the proposal to let five people to bring even more proposals saying the 40% wasn't good enough. We think that they should bring even That those attorneys or those five people SHOULD BE MAKING MORE MONEY. I DON'T know where they reside, if they're in LA in California or any other crazy city. is an opportunity to refocus.
▶ 2:21:49To refocus businesses on what they do. growing in the United States, hiring people in the United States. Let's just look at two more stats before we leave. 2025 alone, one shareholder submitted 19 separate proposals concerning whether or not companies would use a specific software program.
▶ 2:22:11I don't know if this individual had a business interest in the software but one person submitted 19 separate proposals concerning whether or not these companies were using a software proposal. Then these companies have to go to the SEC, try to get it excluded. Companies shouldn't be having to go and get this relief time and again.
▶ 2:22:31Because some of our colleagues on the left want to make it even easier for people to drive forward a political and social agenda inside our companies what they can't pass in Congress because the ideas are too radical. They're trying to put on the backs of publicly traded companies, which means they're trying to put on the back of retirees across this country who are trying to save for their retirement. I oppose the amendment as offered. Uh, Mr. Chairman, I'll yield back. Gentlewoman yields back.
▶ 2:23:02Who seeks to comment on the Waters amendment? Any I don't see here any other debate on the Waters amendment. There's no further debate. Question now occurs on the Waters amendment. All those in favor, please say I. I. All those opposed, any five of us saying no? No. I think the share of the no's have it. No's have it. The amendment is not adopted. Is there any further amendments? The gentlewoman has requested a recorded vote.
▶ 2:23:32All those in favor of a recorded vote, raise your hands. A sufficient number having raised their hand, a recorded vote is ordered pursuant to subsection C5 of rule 3 of the committee rules. Further proceedings on that amendment are postponed. Are there further amendments to the amendment in the of a substitute. Gentleman from Illinois. I have an amendment at the desk.
▶ 2:23:50Gentleman has an amendment at the desk. We'll pause for its uh distribution. Uh the gentleman from Wisconsin reserves a point of order on Mr. Casten's proposed amendment. Thanks for sharing. Of course, you're similar.
▶ 2:24:48Clerk will report the amendment. An amendment to the amendment in the nature of a substitute to HR 8286 offered by Mr. Casten of Illinois designated as Casten 105. Without objection, the amendment's considered read and the uh gentleman from Illinois, Mr. Casten, you're now recognized for 5 minutes to describe your amendment. Thank you, Mr. Chairman. And I if you'll indulge me to be a bit philosophical here, um th- the I want to start with a hypothetical and then get to some heavy philosophy.
▶ 2:25:17Uh 2025 more than half of the gains in the S&P have come from the the magnificent seven tech firms. I want you to imagine if we directed the Department of Labor under, you know, ERISA laws to say that we wanted them to uh investigate the detrimental effect of funds investing in the other 493 Now, that would undoubtedly accrue to the great financial
▶ 2:25:47benefit of Meta and Alphabet and Tesla and the other Magnificent Seven. Um I think we might have some concerns about that as far as uh drawing those conclusions, even though we could cherry-pick data that says that that funds would have performed better if they just invested in those companies. I I I say that to get to my philosophical point that back in my back in my corporate days when young engineers would come with projects that they wanted us to invest in, I would always make them read Immanuel Kant.
▶ 2:26:15because Kant had this I had this observation that you can't prove something is true, you can only disprove something that's false. And so, if you really have a quest to learn what's true, you have to be you have to approach things with an open mind that says, "I'm trying to disprove my thesis, not I'm trying to prove it." And you could always tell whether someone had put together a good investment thesis in a spreadsheet of whether it was even possible to ask those kinds of Um which brings me to this amendment.
▶ 2:26:42This amendment um says that the it simply stipulates that the EU's environmental, social, and governance disclosure regime is detrimental. And uh asks the SEC to simply confirm what it already believes. What my amendment is trying to do is to say, "Let's Let's take a more balanced approach.
▶ 2:27:04Let's Let's honor the wisdom of Kant." And say, "Let's study both the positive and the negative effects of of complying with the EU's corporate sustainability reporting directive or CSRD program." This matters because remember what the CSRD says. It doesn't say you got to invest in well companies. The CSRD says that we need to standardize ESG reporting. When Congressman Vargas and I first created the Sustainable Investing Caucus before it became all political, our whole reason for doing this was that you had all of this capital that wants to invest in ESG funds.
▶ 2:27:35Every ESG rating agency has a different standard. You can cherry-pick your rating standards. For markets to work, we need clear and consistent disclosure. That's what the CSRD is doing. I'm hard-pressed to imagine a scenario where standardized reporting for companies that choose to be, you know, in an ESG fund for people who are managing the ESG funds, why is it bad for us to do as the EU is suggesting? Maybe you disagree. I am open to being proven wrong.
▶ 2:28:05But to be open to be proven wrong, you've got to direct the SEC to say, "Let's look at both sides of this The amendment would require that the study include an economic analysis of how failure to implement a mandatory climate-related disclosure regime in the US could harm investors and multinational corporations. I'd note that the EU's disclosures broadly align with the Task Force on Climate-Related Financial Disclosures or TCFD framework, which has been widely invested by lots of issuers and investors.
▶ 2:28:33In 2021, nearly 80% of S&P 500 companies voluntarily disclosed scope one and scope two emissions consistent with the TCFD framework. I don't think anybody was hurt by that. The SEC's 2024 climate disclosure rule was was modeled off those recommendations. It was driven by the same idea, not saying, "We're going to define who's good." It was saying, "Let's come up with a standard set of One company might benefit from scope one. One company might benefit from scope two.
▶ 2:29:01If investors don't know how to understand that, we don't get good investment. So, or efficient investment. So, there's really no argument against standard consistent climate disclosures for those who want to make it. And I think we got to check both sides. The last [snorts] thing I'd say is that I would just caution my Republican from telling our financial regulators, or trying to pressure our financial regulators, into condemning the policies of our allies. When I'm talking about our allies, I'm not talking about Hungary. Not talking about Russia.
▶ 2:29:32I'm talking about the democratic free market countries who have long been the United States partners. Um, because shouldn't we expect them to counter if we start going down that Imagine if they were to say what deleterious impacts on multinationals who are domiciled in the EU have come from Donald Trump's tariff policy. After all, the IMF just said lowered global GDP forecast, quote, primarily due to the Iran war-driven energy price spikes and geopolitical fragmentation.
▶ 2:30:02Y'all are living in a glass house, and I would encourage you not to throw this particular stone. Yield back. Mr. Grothman from Wisconsin, yields Seeks recognition. Chairman of the Oh, I'm sorry. Does You just said that
▶ 2:30:17point of order. We Thank you for withdrawing your point of order. Now, I recognize you, Mr. Swalwell, to strike the last word. Thank you very much, Mr. Chairman. I appreciate your your recognizing me on this topic. King Charles is coming next week. So, why not discuss a little bit about how the European economy is doing with all these rules and regulations? I appreciate my colleague from Illinois for bringing the topic up. Uh, in Wisconsin and Illinois, we border each other.
▶ 2:30:45We like to look at uh how things are going in Illinois. They like regulations a little more than we do in the state of Wisconsin. And so, let's let's dig in. How's the EU They put forward a corporate sustainability and due diligence directive. It imposes onerous reporting requirements on European companies and some non-European companies with significant exposure uh to the EU.
▶ 2:31:08There's a study done on this, and that directive determined that the cost to US businesses if the United States implemented uh the CSDDD, that it would cost about a trillion So, the proposal that was just supported, let's put What would happen if we put in place these European rules and regulations in the United States? Be about a trillion-dollar cost.
▶ 2:31:32And what we're looking at is trying to actually grow jobs and economy here in the United States. We don't want to emulate Europe, and we shouldn't be importing their policies here in the United States. I think it's important to look back and say, have we seen economic divergence?
▶ 2:31:54Is Europe has doubled down in the regulatory burdens on their business The United States now enjoys a 35% higher income than the Europeans. Since the financial crisis, EU GDP grew by about 13%, while the United States has grown by 87%. If you want 13% growth since the financial crisis, my colleagues on the left are offering all sorts of ideas and suggestions for how to accomplish that.
▶ 2:32:24You want to see the 87% growth since the financial crisis that we've seen in the United States? We're saying let's right-size this. Let's get the politics out of the way. Let's grow the US economy here [snorts] in the United States. We can look at the the tech industry. Out of the top 50 tech firms in the are based in Europe.
▶ 2:32:47So, if you want to jettison the next wave of companies, tech companies, and you want to kick them outside the United States, my colleagues on the left have a to do that. But, if you care about of the United States, if you care about jobs in the United States, the answer is not to import the European model that the evidence is pretty clear is not working, that is wildly costly.
▶ 2:33:14It's to come back to basics and the principles of what grew the United States capital markets to be the greatest capital markets in the world with no real near competitor. It's about focusing in a materiality, what matters, getting the politics out of the way. The underlying bill before does that, empowers individuals and The amendment does not move us forward. I encourage my colleagues
▶ 2:33:40yield? I I will yield to the chairman. I want to thank the gentleman for his uh compare and contrast. There I do think it's important for members to think about that as we uh compare uh the uh growth of the American economy versus our great friends and allies across the Atlantic and in Europe and how they've struggled. And I was in reading the material on these bills last night, reflecting on that, and I looked up what the total of the equity markets in Europe is.
▶ 2:34:10This is all of Europe, I would say to my a continent of uh many of our founding principles and certainly the uh of many origins of of the US uh basic economy uh had their origins there in Europe. But the capitalization today of the total equity markets is 225 billion dollars. Capitalization of our public markets in America? 50 trillion.
▶ 2:34:4050 trillion. That's a stark difference, and it's why Mario former central bank expert, uh uh banker extraordinaire in Europe, said it gave a report to the Europeans saying we the Europeans have to get their act together and focus on economic growth and economic opportunity for their And I think that's encapsulated by the statistics that you talked about in terms of macroeconomic But the
▶ 2:35:10the continent of Europe is struggling in investments, and I don't think they offer something that the United States wants to emulate. Now, I yield back to my friend. Gentlewoman yields back. Who seeks recognition on uh Mr. Casten's amendment? The ranking member. Is this on Mr. Casten's
▶ 2:35:25Mr. Casten's amendment, yes, ma'am. This uh is about cold, hard facts. It requires the SEC to study the economic impact on American investors if the US fails to adopt uniform climate disclosures or harmonize with global standards. While my colleagues across the aisle are busy playing these political games, the rest of the world is moving forward.
▶ 2:35:53One effect of Trump jacking up oil prices around the world with his unlawful war in Iran has been China becoming the willing supplier of solar, wind, and other renewable technologies to the world. At the same time, AI server farms are using up electricity that would have gone to millions of Americans, further dividing up costs.
▶ 2:36:19And climate change is creeping up day by day, posing unknown risks to US companies and our economy. And Trump's response? His SEC is abandoning standardized climate risk disclosures, leaving US investors in the dark about how the companies they own are addressing these risks.
▶ 2:36:45We need a clear-eyed report so that this committee can make policy based on reality, not rhetoric. We cannot afford to put our heads in the sand while American capital is put at a competitive disadvantage on the global stage. So, I would urge you members to support this amendment, and I yield back the balance of my time. Ranking member yields back. Is there further debate on Mr. Casten's amendment. Mr.
▶ 2:37:12Chairman, I seek Other gentleman from Texas is recognized. And I yield to Mr. Casten. Gentleman's uh gentleman's yield to Mr. Casten. Thank you. Look, I'll I'll I'll be brief. Um there's a rich conversation we could have about all the reasons why the US economy has outpaced Europe, and I don't think you'll find anybody here who thinks that they would rather have European capital markets. I I don't believe that this bill says that we should adopt everything that is opposed to European capital markets.
▶ 2:37:41And this amendment uh does not say that we should adopt every provision of European capital markets. I also would challenge you to find any economist who says that the reason why European capital markets are so much shallower than the United States is because of the CSRD rules. I mean, these are these are straw man arguments. Come on, you guys are smarter than that. if you do want to compare and contrast, I mean, jeez, we could have a conversation. Why is it that over the last three decades job growth, GDP growth, dollar strength is always stronger under Democratic presidents?
▶ 2:38:11That's a conversation we could have about the US economy. I suspect y'all wouldn't want to have that conversation. But that's not what this is about. This amendment, and let's talk about the structure of the amendment, not some weird straw man about the structure of the EU. Should we do the research to honestly inquire whether or not the assertions in this amendment are true?
▶ 2:38:34And I would simply say to you that outside of the Pope, I don't know anybody who is currently alive who claims to be infallible. Maybe there's some other religious traditions who claim that as well. but I would be very suspicious. I'm always very suspicious. We should all be very suspicious of anybody else who says that they alone have access to absolute truth, especially when they are standing in the way of honest inquiry.
▶ 2:39:01This amendment is simply about whether we are going to ask the SEC to look look both sides of the question. Or if you all who are standing there not criticizing Trump for saying that the Pope has got problems are going to say unlike Trump's view of the Pope, you all are infallible. I yield yield back to the gentleman from I yield back. Gentleman from Texas yields back. Uh uh is there any further debate on the Castro amendment? Hearing none, the question occurs on the amendment.
▶ 2:39:30All those in favor of the amendment shall signify by saying I. I. All those opposed signify by saying no. And it No. And it The chair of the no's have it. No's have it. Amendment is not adopted. I request a recorded vote. Gentleman requests a recorded vote. A recorded vote is requested. All those in favor of a recorded vote, raise your hands. A sufficient number having raised your hand, a recorded vote is ordered. Pursuant to subsection C5 of rule three, the committee rules further proceedings on the amendment are postponed. Are there further amendments to the amendment in the nature of substitute? Ms. Tlaib. Mr.
▶ 2:40:00Chair, I have an amendment at the
▶ 2:40:01We'll pause while that's distributed. Gentleman from Wisconsin reserves a point of order on the Tlaib amendment. No, you don't have to do that, but we must wait Wait, we're not ready yet. We're going to distribute it.
▶ 2:40:18Just one Clerk
▶ 2:41:02will report the amendment. Amendment to the amendment in the nature of a substitute to HR 8286 offered by Ms. Tlaib of Michigan designated as Tlaib 127. Without objection, amendment's considered read and the gentlewoman from Michigan is now recognized for to describe her amendment. Thank you, Mr. Chair. As you know, CEO compensation has exploded in the recent decades and shareholders have a right to be concerned.
▶ 2:41:27CEOs in 1960s and 70s made about 20 to 30 times the average pay of their own Today or we're I think 2023, studies show that the average CEO at the largest 350 publicly owned firms in the United States now make 290 times the median pay of their typical worker. So, are CEOs today 10 times as hard working as CEOs were in decades prior? Doubtful.
▶ 2:41:57Or might be because of massive compensation packages come at the cost of investments in the company and its workforce. That to us and for the public and many folks that look at the CEO compensation pays are very concerned about. We've seen how misaligned incentives actually can cause executives to take higher excessive risks. We've seen it with the bailouts. We've seen it with the continued bankruptcy that we see in especially in the banking institution.
▶ 2:42:22You know that in 2010 in the wake of the 20 2008 financial Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act and section 956 of the act tasked the federal regulatory agencies to implement a rule banning compensation incentives that encouraged inappropriate risk taking, just high risk actions that they take.
▶ 2:42:48However, this rule to this day, again, this happened in to this day has not been implemented. After Silicon Valley Bank failed, you saw the Fed issue a report and found that the incentive compensation practices at Silicon Valley Bank encouraged excessive risk-taking to maximize short-term financial metrics.
▶ 2:43:06You know that shareholders right now and those who operate their interest should be able to hold a management accountable including on issues like executive Institutional investors like pension funds and employee benefit plans manage the retirement savings of millions of Americans. Those are our constituents. Who effectively vote on thousands of proposals each year, such investors rely on the services of proxy advisors.
▶ 2:43:32So by discouraging the use of proxy advisors, whether that be by a compromising their independence, establishing administrative barriers and compliance costs, restricting the use of criteria that cannot be easily measured in financial terms, we know that this bill would make it harder would make it harder for investors to ensure that countless families retirement savings are well managed and not exposed to excessive risks risk-taking and risks, you know, due to poorly structured incentives of firms' executive compensation
▶ 2:44:02pay. So my amendment, Mr. Chair, ensures that these and similar provisions of HR 8286 do not pertain do not pertain to executive compensation, shareholders, retirees whose livelihoods are tied in the success of the company, and those who operate on their behalf deserve the right to make informed decisions to advocate for their own interest. So my amendment basically supports shareholders' voices. It ensures management can be held accountable to with respect to executive compensation especially because we have not acted.
▶ 2:44:33We have not acted since again the passage of Dodd-Frank Wall Street reform. And I promise you, go to your community, go to your districts, they will tell you that they want us to hone in on these excessive high risk I mean that these excessive compensation packages that allow again for many these CEOs to go completely no blemish on them.
▶ 2:44:55I mean they get to walk away with these big packages when they make these excessive risk actions risk actions that are very risky. And again, we saw this just alone and we saw it in this committee. We all in bipartisan effort said that we were very very disappointed but what happened at Silicon Valley Bank.
▶ 2:45:14And again, this is important especially because so many of our constituents and folks um you know, see this as a way to again, if anything, allow a lack of accountability is to actually promote excessive packages and allow people to walk away when they risk people's retirement packages. So again, I urge my colleagues to support this amendment and I yield back to you. Mr. Chairman The gentlewoman yields back and the gentleman withdraws Uh the gentleman withdraws his point of order. Six recognition.
▶ 2:45:44Um right remember? Um I would just like the last word. Gentlewoman's recognized. I support the amendment being offered by Ms. Kelly. Which would ensure that investors can rein in executive uh excessive pay and benefits.
▶ 2:46:03executive pay often comes at the direct expense of long-term shareholder value draining capital that could otherwise be used for research, development, dividends, or human capital. When compensation is not linked to actual performance, it creates perverse incentives for short-term risk-taking that can destabilize a company's financial health.
▶ 2:46:31The underlying bill would stifle the ability of investors and fiduciaries to receive sound advice on these matters. This amendment preserves and ensures sunlight on company clawback provisions, golden parachutes, and pay for performance alignment. This is a good amendment, and I urge all of my colleagues to support it support it, and I yield back.
▶ 2:47:00Gentlewoman yields back who seeks recognition. Mr. Style. Thank you very much, uh Mr. Chairman. Um what the amendment it actually does versus what it purports to do has has a bit of a gap here. So, I think it's worth discussing that gap just for a minute.
▶ 2:47:17The underlying bill holds proxy advisors accountable to provide accurate It holds them accountable in particular they provide false or misleading proxy and voting advice on sections in what this bill does is then carves that out as it relates to executive compensation. So, executive compensation votes are in some ways routine, in some ways it's a giant morass. We could have the debate on on reforms inside executive compensation.
▶ 2:47:47Happy to engage in that dialogue The underlying bill is about proxy advisors, ISS and Glass Lewis. Are they accurate information to shareholders? At a bare minimum I I would hope, but maybe not. That we could all agree is this information is coming out, it be accurate. It shouldn't be misleading.
▶ 2:48:11And because ISS and Glass Lewis, due to the massive duopoly in the system that are unregulated, conflicts of interests, They play a unique role in the information system. And so, my legislation recognized that. And so, let's let's hold them accountable. Let's make sure they have some skin in the game to make sure that these statements are accurate.
▶ 2:48:33I would assume my my colleague would agree that the company should be held accountable if they had false or misleading information about executive compensation in the underlying proxy. So then it would be reasonable to make sure that proxy advisors who are all pining on how individuals should be voting in this regard, that they should also be held accountable to be accurate, to be truthful.
▶ 2:48:55But her bill or her amendment carves that out and says, "Oh, don't If the proxy advisor, ISS or Glass Lewis gets it wrong, if they're false, if they provide misleading information, don't worry about it. They're protected. It almost seems like the amendment that's being offered is to keep ISS and Glass Lewis in business, protected, shielded.
▶ 2:49:23What I'm trying to do is to say, "No." ISS and Glass Lewis play such a significant role in the ecosystem that we need to make sure that they're providing good information. They need to be held accountable for the information that they're It does a whole bunch of other things that I think are important, too, but as it relates to this amendment, that's a really important step.
▶ 2:49:45And so, because it protects the proxy advisor duopoly and prevents us from holding them accountable for false or misleading information, one, I can't believe anybody would support this underlying amendment as drafted, but two, I can't recommend anyone in here vote for this. If you believe that executive compensation is too high, if you believe executive compensation should be something different, hold your opinion on that. That's fine.
▶ 2:50:16But at a bare minimum, the information regarding it needs to be truthful, needs to be accurate. We need to hold people accountable if they're providing false or misleading information. And so, I would encourage my colleagues to reject this amendment. In fact, I would encourage all of my colleagues in this entire committee to reject this amendment. And anyone that votes for this to protect false and misleading information should be held accountable. I yield back. Gentleman yields back. Who seeks recognition on Ms. Lee's amendment?
▶ 2:50:49If there's no further debate, the question now occurs on the Tlaib amendment. All those in favor of the amendment shall signify by saying I. I. All those opposed signify by saying no. No. Opinion of the chair, the no's have it. No's have it. The amendment is not
▶ 2:51:02I ask for Ms. Lee's request of a recorded vote.
▶ 2:51:05Thank you. All those in favor of a recorded vote, raise your hands. Sufficient number raising their hands, a recorded vote is so ordered pursuant to subsection C5 of rule 3 of the committee rules. Further proceeding on the amendment are postponed. Are there additional amendments on Mr. Styles' amendment in the nature of a substitute? Seeing no further amendments without objection, the previous question on the substitute is ordered and recorded votes on the pending amendments have been postponed.
▶ 2:51:32Once those votes are taken, the committee will immediately vote on the adoption of the amendment in the nature of a substitute, and then we'll consider the question to report the measure. We'll now move to the next Pursuant to notice, I call up HR 8290, the Exchange Rate Accountability Act of 2026, which was introduced by the distinguished gentleman from Texas, Pete Sessions. Clerk will report the bill, which was distributed in advance.
▶ 2:51:58HR 8290 to require the use of the voice and vote of the United States to oppose any quota increase at the International Monetary Fund for member countries that employ certain exchange rate practices and for other purposes. Without objection, the first reading is dispensed with. Without objection, the bill is considered read and open to amendment at any point. Representative Sessions has an amendment in the nature of a substitute, copies of which were also distributed in advance, and the clerk would report that amendment.
▶ 2:52:26Amendment in the nature of a substitute to HR 8290 offered by Mr. Sessions of Texas, designated as E R A N S. Without objection, the amendment's considered read will serve as the base text for purposes of amendment. And now the gentleman from Texas, Mr. Sessions, you're recognized for 5 minutes to describe your amendment. Mr. Chairman, thank you very much. And I want to thank you for not only today's markups, but the opportunity for my legislation being included.
▶ 2:52:54It's called the Exchange Rate Accountability Act. Mr. Chairman, the International Monetary Fund knows the IMF has long been devoted to the balanced growth of international trade. It is there as a balancing effort to make sure that there's fairness, opportunity, and perhaps transparency that would be available to the world through the IMF.
▶ 2:53:20To achieve this mission, the fund not only acts as a lender of last resort, it also monitors vulnerabilities in the global It is It is and has become clear to us that the that China, the IMF's third largest shareholder, is a significant source of such vulnerabilities.
▶ 2:53:43These vulnerabilities that have been noted by the IMF fund to, in my opinion, raise some doubts and concerns. Despite the world's second largest economy, China [snorts] still does not produce reliable economic data, nor does it act with transparency in managing its exchange rate.
▶ 2:54:07It's worthy noting It's worth noting that there was a lengthy exchange in the foreign exchange report produced by the Treasury Department in January. And Treasury Department of the United States noted, "China has enacted policies which have resulted in weak domestic demand suppressing imports, producing large-scale non-market support for domestic manufacturing, and reinforcing the economy's
▶ 2:54:37excessive reliance on export growth. In 2025, China's goods trade surplus reached $1.2 trillion, a record high, and accounted for nearly 70% of global goods trade surpluses.
▶ 2:54:56China continues to rely on a range of tools to manage its currency, uh particularly the daily exchange rate fix and more opaque foreign exchange activities of China's state-owned banks. That's the end of of the quote. So, so much for balanced growth of international trade.
▶ 2:55:18It in fact is All of the problems that which I believe Treasury pointed to pose a profound threat to manufacturers, whether in the United States or anywhere but China. And it's not just China's currency that is undervalued. It through the IMF, it believes this to be the case also.
▶ 2:55:41It's It's that we can't even be certain of how Beijing is intervening in currency markets in the first place. So, I believe that we have presented to Bill today a chart H.R.
▶ 2:55:5590, which would require the Secretary of the Treasury to oppose any increase in China's IMF voting power, giving them more power over these questions that abound until we can certify that China is publishing credible balance of payment data and is engaging in transparent exchange rate practices.
▶ 2:56:20I believe bringing China or requiring them to come to the table with reliable data and information is in the best interest of the entire world. So, if we can make sure that we do not allow anyone to have more influence at the IMF until they become a sound, responsible party as other countries have done, I am having HR 8290 send a strong signal signal to
▶ 2:56:50Beijing precisely because the US wields a veto over shareholding increases at the fund. And we need to make sure that we have an opportunity to provide our IMF the opportunity to have fair and transparent dealings. Mr.
▶ 2:57:11Chairman, I want to thank you for considering my legislation, and I hope that my colleagues see this as a very important bipartisan event, and I yield back my time. Thank you, Mr. Sessions. Is there further debate on the ANS? Uh the chair recognizes the ranking member of the full committee, Ms. Waters of California, for 5 minutes. I move to strike the last word. The gentle lady is recognized. I'm deeply concerned about this bill.
▶ 2:57:39HR 8290 requires the United States to oppose proposals to change the voting shares at the International Monetary uh when Treasury determines that China is a currency manipulator. The real effect of this bill, and perhaps its true purpose, is to prevent the IMF from ever increasing the size of its lending capacity. Now, let me explain a few things about the IMF.
▶ 2:58:09The IMF, created after World War II, has a mission to promote international macroeconomic stability by providing financial assistance programs to countries in crisis, surveillance of the international economy, and technical assistance to help countries formulate and implement sound economic policies. It is and has been an essential partner to nations around the world, especially in crisis.
▶ 2:58:40A stable global economy is good for America. The IMF funds its activities through something called which represents the monetary contribution of each member country. When the IMF enacts a quota increase, it's to raise more finance for fund activities, allowing it to keep up with the changing global economy.
▶ 2:59:04For individual members, their quota generally reflects its size and position in the world economy. This means that larger, wealthier countries will contribute more to the IMF and less uh to the developed countries will have smaller They will have smaller quotas. That country-by-country quota is so reflective of the vote share in the IMF.
▶ 2:59:30Unlike other international organizations, where each country has only one vote, in the IMF the amount of your quota largely determines your voting share. Put another way, with every quota increase, the voting share may be affected. And countries can't vote on quota increases by saying that one country gets this and another can't have that.
▶ 2:59:56Rather, when the IMF puts forward a proposal for a new quota increase, everyone votes on a package for the entire fund at once. This is why this bill is problematic. While it claims to target one country, China, effectively is an attack on all. The game was given away when the original text was posted for this markup targeting the IMF quota increases.
▶ 3:00:26Given that Chairman Hill has previously said that IMF funding, even in crisis, is a, quote, "blank check to genocidal regimes and state sponsors of terrorism." End quote. It is not surprising that we are here debating such a bill yet again. Now, to be clear, I and Democrats on this committee have supported measures to rein in China's currency manipulation.
▶ 3:00:56We've supported in multiple Congresses, for example, the bills from Representative Meuser uh that promote transparency around China's exchange rate activities and the IMF. But, this bill doesn't do anything to stop China. In fact, it helps it. China seeks to replace the US in the international financial system and would love to see the IMF, which is US-led, become a relic of the past.
▶ 3:01:26We all know that many Republicans, including the president, do not like the international financial institutions, including the IMF. In fact, Trump proposed an executive order, which shocked the global community, and which suggested the United States should withdraw from the IMF. At the end of the day, H.R.
▶ 3:01:498290 will not affect China, which has generally rebuffed any accusations about currency manipulation, but instead harm the IMF itself at a time when global tensions are at their highest with Russia's war in Ukraine and President Trump's war in Iran, we need the IMF more than ever.
▶ 3:02:14And so, I urge you members to reject this harmful bill, and I yield back the balance of my The gentlewoman yields back. Is there further debate on the ANS? I now recognize myself for 5 minutes. I want to voice my support for Mr. Sessions' bill.
▶ 3:02:30The Exchange Rate Accountability Act will implement the common sense principle that China, as a major shareholder of the International Monetary Fund, would adhere to the IMF's core Among the IMF the IMF's purposes are to promote exchange rate stability, facilitate the balanced growth of trade, and assist in the elimination of foreign exchange restrictions.
▶ 3:02:52The People's Republic of China undermines each of these purposes on a massive and globally distorted scale through its opaque exchange rate management, industrial subsidies, and capital controls. The Treasury Department, for instance, regularly reports to Congress on China's limited transparency in its exchange rate management.
▶ 3:03:13The IMF has estimated that the RMB is undervalued by 16% and that Beijing lavishes industrial subsidies totaling 4% of GDP last year. As the fund's third largest shareholder, the Chinese Communist Party has allowed to both enjoy the benefits of the substantial influence at the fund while flagrant flagrantly disregarding its basic mission, in fact, undermining it.
▶ 3:03:38Rather than reform its behavior, China has argued that the size of its economy entitles it to even more sway. But, this is completely misguided. They use the same arguments to say they're still a developing economy. As I've said for years, it is not China's GDP, but its adherence to multilateral standards that should dictate a role in multilateral bodies.
▶ 3:04:03The United States is the largest shareholder with a veto over IMF quota Can ensure that the PRC does not grow its influence at the fund while simultaneous simultaneously undermining it. Mr. Sessions' bill will help make this a reality. At the same time, I commend Mr.
▶ 3:04:20Sessions for ensuring that our committee's consistency with mandates at the International Monetary His bill, long a policy goal of mine, provides clear direction to achieve a specific policy goal, more transparency from while giving the president appropriate flexibility and sunsetting the bill's The gentleman from Texas has offered a sensible, targeted policy that will hold China accountable. I urge all of our colleagues to support it.
▶ 3:04:50I yield back. Does anyone else seek recognition on the Hearing none, we will now move to amendments. Does anyone wish to offer an amendment to the ANS? No. This is a different bill with any 82 Is this an amendment?
▶ 3:05:06Yes. Yes. All right. Yes. It seems there is an amendment at the desk. Uh for what purposes the gentle lady seek recognition? I have an amendment at the desk.
▶ 3:05:17We will pause while the amendment is Mr. Chairman, I reserve I reserve point of order. Mr. Sessions reserves a point of order. Sure. I just I got to go. A point of order has been reserved. The clerk will report the amendment. I will wait for the more distribution.
▶ 3:05:57Mr. Sessions is prepared to speak on it.
▶ 3:06:19The clerk will report the amendment. An amendment to the amendment in the nature of a substitute to HR 8290 offered by Ms. Waters of California designated as amendment 001. Without objection, the amendment is considered read. The gentle lady is recognized for her Thank you very much.
▶ 3:06:39In October of 2025, Treasury Secretary Scott Bessent inappropriately used taxpayer dollars through the Exchange Stabilization Fund or the ESF to provide a $20 billion bailout to Argentina.
▶ 3:06:59Donald Trump used the bailout to influence Argentina's election and to do a favor for his political ally, Javier This bailout was and is unacceptable.
▶ 3:07:13Americans are taking out loans to buy groceries, skipping meals to save on their food bills, and unable to drive their cars because of the high gas prices, but Trump's team think it's acceptable to give $20 to a foreign country to help out a right-winger run for president. Now, to add insult to injury, we as Congress have no details, none, on this bailout. And do you know that Argentina did You know what they did?
▶ 3:07:44Immediately after getting this golden kiss from Treasury, Argentina announced that it was selling its soybeans and other goods to China, undermining American farmers. I want to point out that China, the currency manipulator we all want to stop, also loans to Argentina. China has provided 23 billion in investments and loans to Argentina.
▶ 3:08:11This amendment will provide clarity with regards to these US loans that Argentina or other debtors uh to the IMF might receive when these countries also receive loans from alleged currency manipulators like It's very clear. I urge members to support this amendment and I yield back. The gentle lady yields back. Does the gentleman insist on his point of order?
▶ 3:08:40mhm no, sir, but I would ask uh to oppose uh to to speak to oppose the gentlewoman's amendment. Point of order is withdrawn and the chairman now recognizes the gentleman from Texas Texas, Mr. Sessions for 5 minutes. Thank you very much, Mr. Chairman. Mr. Chairman, the the gentlewoman is is and has offered a nature of a substitute.
▶ 3:09:01Uh and as I look at this, the actual words that are on here, we are asking for February 1st of each of the five calendar years beginning after the date and then announcement for the Treasury to do what they already do.
▶ 3:09:20They already do provide information that identifies countries that do not maintain transparent exchange rates, that does not publish credible balance of payments, China, and does not support the stabilization fund, which is not even included in this piece of legislation. It's extraneous uh to the monetary fund.
▶ 3:09:47So, I a oppose [clears throat] what she's doing, and I think the amendment is mostly because she has already alluded to, which I believe everyone here understands, China is the issue.
▶ 3:10:02And my my my bill is simply saying that we recognize that we would like to have China come and provide credible data information, and just like everyone else, to not have uh manipulation of their currency.
▶ 3:10:20So, I think that if we look at the real intent of this, it appears to be the uh acquisition of information from the exchange stable of Asian stabilization fund, and it's not even part of the subject of what this legislation is about.
▶ 3:10:38So, I completely believe that what I'm attempting to do, if the gentlewoman uh as she reflects on it, she will see that we are trying to say we're going to do something about it as opposed to a report that we're going to make sure that they are not getting credit for the continuation of what they do, but rather to encourage them to come in line with uh away from market manipulation, away
▶ 3:11:08from currency data uh that is not reported, and to report things as they should be. With the understanding they already underreport data and information based upon what they seek. So, I uh I appreciate the gentlewoman engaging in this, but I'm going to oppose the gentlewoman's amendment. Thank you, Mr. Chairman. I yield back. Gentleman yields back. Is there further debate on the amendment? If there's no further debate, the question now occurs on the amendment.
▶ 3:11:37All those in favor of the amendment shall signify by saying I. I. All those opposed shall signify by saying no. No. In the opinion of the chair, the no's have it. The no's have it and the amendment uh see a recorded vote has been 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 are postponed.
▶ 3:12:06Are there any further amendments to the amendment in the nature of a substitute? Seeing no further amendments, without objection, the previous question on the substitute is ordered and recorded votes on the pending amendments have been postponed. Once those votes are taken, the committee will immediately vote on the adoption of the amendment in the nature of substitute and then will consider the question to report the measure.
▶ 3:12:31We will now move on to the next Pursuant
▶ 3:13:34to notice, I call up HR 425, the Repealing Big Brother Overreach Act, which was introduced by me. The clerk will report the bill, which was distributed in advance. HR 425 to repeal the Corporate Transparency Act. Uh without objection, the first reading is dispensed with. Without objection, the bill is considered read and open to amendment at any point. I have an amendment in the nature of substitute, uh copies of which have been distributed in advance. The clerk will report the amendment.
▶ 3:14:03An amendment in the nature of a substitute to HR 425 offered by Mr. Davidson of Ohio, designated as Davidson OH 121. Without objection, the amendment's considered read and serves as base text for purposes of further amendment.
▶ 3:14:33The gentleman from Ohio, Mr. Davidson who chairs our National Security Subcommittee is now recognized for 5 minutes to describe his amendment. I I thank the chairman, and I want to thank all of our colleagues. This bill has over 190 co-sponsors. There's broad support because we've heard from small businesses and individual citizens from around the country who have been shocked to find that their small business is presumed to have committed a crime.
▶ 3:14:59Therefore, they're essentially being served a search warrant. They're going to report to an agency they've never heard of, FinCEN, on the corporate ownership structure of their company. Or as a gentleman reached out to our office on CaseWare saying, "Look, I'm the president of a homeowners association. I don't know anything. Why do I have to do this?" We thought, surely that must be a misreading of the rulemaking process.
▶ 3:15:26And lo and behold, they do intend uh under the Biden administration for people who manage the bank account at a homeowners association to report because that report is supposed to be the the self-incriminating evidence that the people laundering money for the Sinaloa Cartel providing sanctions evasion for Iran or North Korea, they're going to get tripped up by this report.
▶ 3:15:54But meanwhile, there's some of the most nefarious actors in the world. This is the most poorly thought-out, poorly structured, poorly approach that I could think of and I was glad to have so many other like-minded colleagues say, "Yeah, this is this is this is a big brother overreach act. Why is the government telling us we have to report this information?
▶ 3:16:17And well, we don't want bad things to happen to our country, but on the other side, how is a small business equipped to do this?" And so, when people reached out to their peers, they started in their network. Groups like the National Federation of Independent Businesses made this one of their top priorities. Uh frankly, the Chamber of Commerce made it a big priority and they got the number down below 20, so it really made the nexus very small businesses.
▶ 3:16:45Courts intervened and they said the the premise on this is faulty. So thankfully, there was an election and we got President Trump to staff the executive branch appropriately and the first two months of his second term, the administration put out a rule that said, "Let's think through this. Let's find out who the foreign ownership and interests are in our companies. There's a void.
▶ 3:17:13Foreign owners aren't protected by the Fourth Amendment, whereas American citizens are protected by the Fourth Amendment. So we can put this burden on people that aren't protected by the Constitution and not violate their constitutionally protected rights. So, we can do that much. But to go further would would violate the Fourth Amendment. And that's the direction I think courts were headed. What we need to do today is lock in the the rule making that the executive branch has done. And that's exactly what this ANS does.
▶ 3:17:45locks in the rule making that has already been done. They've had the notice of proposed rule making. They've had massive feedback and the feedback overwhelmingly says that the people want They want to They want to They want security, but they also want privacy, just like the founding fathers did. And that's why our Constitution structured the way that it is. So, I think the administration's thoughtfully addressed this uh with rule making. And now it's our burden to do this with law making.
▶ 3:18:12And so, I urge all of our colleagues to support this amendment in the nature of substitute. Uh and then we can expeditiously get it to the floor. Uh with that, I yield back. Thank the gentleman from Ohio. Yields back. Who seeks recognition? Ranking member of the full committee. I move to strike the last word.
▶ 3:18:29for 5 minutes. Thank you very much. Uh today the public should will see uh Republicans vote to protect terrorists, drug traffickers, gun smugglers, and even people like Jeffrey Epstein as these bad actors use shell companies to hide their ill-gotten gains.
▶ 3:18:50Today, Republicans will vote to gut one of the most significant crime-fighting national security tools that Congress has created this century. And to be clear, this bill will do nothing to lower grocery costs, prices at the pump, or housing costs.
▶ 3:19:11Early in this administration, Trump's team moved to gut the Corporate Transparency Act, which created a database at the Treasury Department to identify the beneficial owners, the real people behind shell companies and other companies in America.
▶ 3:19:29Every developed nation on Earth has or is increasing data base like this to stop these criminals, but Trump's officials instead want to welcome these bad actors to our shores to hide their money. HR 425 would codify this terrible decision permanently harming our economy.
▶ 3:19:55Trump and his GOP are already the reason why gas is up 45% year over year. They're the reason why price of utilities, food, and even the cup of coffee that you may have had with breakfast are all through the roof. Housing, if you can find it, is unaffordable. Consumer sentiment currently sits at the lowest that it has ever been in survey's 74-year history.
▶ 3:20:23And now, families drawing on their retirement savings in record numbers, not for retirement, but to make ends meet. Even the small businesses that the GOP claims to support oppose this bill.
▶ 3:20:38The Small Business Majority and the Main Street Alliance, among others, say the Corporate Transparency Act protects small businesses by stopping these anonymous shell companies from unfairly competing for contracts and exploiting programs meant for small businesses.
▶ 3:20:58HR provides cover for cybercriminals, fraudsters, and scammers to continue to target Americans and yes, even Americans small businesses. It gives scammers who target the elderly, the young, America's businesses, and even the federal government an advantage in getting away with their crimes.
▶ 3:21:23It helps North Korea and Iran to build their weapons programs in defiance of US and allied sanctions. It was for all of these reasons that Democrats and Republicans came together to pass the CTA in the first place, and why even the first Trump White House supported the law.
▶ 3:21:43It's why the CTA's passage was supported by a broad coalition that included businesses, financial institutions, anti-corruption organizations, religious groups, law enforcement and state governments. And it is for all of these reasons I urge my colleagues to vote against this dangerous bill. Wow. Why would my colleagues do this? Why would they vote for this bill? I don't know.
▶ 3:22:12I yield back the balance of my time. Gentlewoman yields back. Who seeks recognition on Mr. Davidson's underlying bill? Mr. Chairman.
▶ 3:22:22Mr. Lynch. Uh thank you, Mr. Chairman. regretfully, you know, I have to say I think this is probably probably one of the worst bills that I've seen come before this committee or any other committee that I sit on in the past 25 I've been here 25 years. This is This is This is among the worst. It's among the very worst. So, this is This is a bill to repeal to Let's just be clear. It's to repeal the Corporate Transparency Act. That's what this is doing.
▶ 3:22:53So, the Corporate Transparency Act is designed to target bad actors, uh anonymous shell companies, uh which are commonly used by drug cartels, human traffickers, terrorists, fraudsters, scammers, some oligarchs, and other bad actors to hide and move their illicit activities and funds. Okay?
▶ 3:23:17What this What the Corporate Transparency Act does is it a company to say who is behind them. Who is behind Who are the natural people who are behind the company? You can't have a shell corporation. We have to know who the people are behind that corporation. That's the Corporate Transparency Act.
▶ 3:23:41This bill This bill would repeal that so that people could create shell companies and and do all the things that I just mentioned. This is an attack on a rule-based financial system, nothing less. This is a direct attack.
▶ 3:24:03Prior to the Transparency Act, the Corporate Transparency Act passage, there was no federal requirement for natural persons who own or control indirectly or or directly our corporate entities such as limited liability corporations to disclose their identities. That's So, we're not putting any onerous burden on anybody. It's a a form and it takes about 10 minutes to fill out. There's two things. One, you got to fill out who you are, your name.
▶ 3:24:33and and and any uh doing business as, any other affiliates of that. You have to put in your tax ID number. And you have to have a real ID, like your license. May I think most states have already gone to the real ID. That's it. There's no big brother. This This whole idea about the What What they called? It was called the uh repealing big brother overreach. You have to put your name down.
▶ 3:25:02If you're If you're doing business in the in the general economy, yet have to know who you are. You can't scam us. That's what this bill requires. No more No more people hiding behind shell That's where it stops. To identify and verify the natural persons behind any legal entity customer or beneficial owner.
▶ 3:25:30That's what this Let me tell you who's behind who's against this. Who's against this? The National Association of District Attorneys offered in its response to that they said, quote, "Weakening or narrowing the Corporate Transparency Act will have devastating consequences on law enforcement's ability to fight criminal enterprises that exploit shell companies to launder to
▶ 3:26:01traffic drugs." These are the the district attorneys that represent all of our all of our neighborhoods and counties and cities. Weapons human trafficking, terrorism. Without this data, prosecutors are left blind when investigating shell companies.
▶ 3:26:17The proposed rule, this one, change as as currently drafted would greatly curtail our ability to combat shell companies fueling illegal operations plaguing communities across our country and would jeopardize public safety and our nation's national If that weren't enough, the National Narcotics Offices Association coalition said in its comment letter, "Offices on the ground know first how
▶ 3:26:48first hand how difficult it is to build a financial case when the true owners of a company are hidden behind layers of paperwork and front people." That's what this bill does, plain and simple. It allows shell companies to pull these scams. You know, we passed this law recently and President Trump signed it into law. But now we we're in favor of scams.
▶ 3:27:15We're in favor of foreign companies coming in here and and operating We're we're we're in favor of people scamming the government and escaping justice. That's what we're all about in this country now. We're we're gangster nation. Gentleman's time has expired.
▶ 3:27:32this bill. Mr. Chairman. Gentleman's time has expired. Who seeks recognition? Ms. Velazquez, you're recognized. Mr. Chairman, I move to strike the last Thank you, Mr. Chairman. The ANS to HR 425 got the beneficial ownership database and reporting requirements from the Corporate Transparency Act. It also deletes the domestic data that the Treasury Department has collected already.
▶ 3:28:01Passed in 2021 with wide bipartisan support and from a broad array of stakeholders, including President Trump. The CTA required the Treasury Department to develop and maintain a registry of the real beneficial owners of established businesses to crack down on the use of anonymous shell companies here in the US. Mr.
▶ 3:28:27Chairman, I would like to include for the record a statement of administration policy from the first Trump administration supporting passage of the CTA in 2019 and a letter signed by 585 law enforcement and small business organization supporting passage of the CTA as well. Without objection, it'll be included in the record.
▶ 3:28:51Well, there's no doubt that there were problems and delays with FinCEN's rollout and establishment of the BOI registry, and too many small businesses remain unaware of their reporting obligations. That is not a justification for elimination of the statute. Instead, we must look to improve it.
▶ 3:29:11Last year, I introduced HR 3829, the FinCEN SBA Coordination and Beneficial Ownership Ownership Registration Act to improve the BOI reporting process.
▶ 3:29:26My bill requires FinCEN and the SBA to enter into an MOU to disseminate information in multiple languages to small businesses, trade associations, and other entities that represent small businesses to help small businesses understand their reporting obligations. It also includes reporting requirements that will keep Congress up to date on implementation.
▶ 3:29:53Small businesses want practical solutions and tools, not legislative proposals premised on outlandish accusations that actually make them less safe. Passage of HR 425 will further increase the use of anonymous shell companies here in the US and give further rise to illicit activity.
▶ 3:30:17On the small On the [clears throat] Small Business Committee, we received more than a dozen examples of how anonymous companies were used to cover up the laundering of proceeds of drug trafficking, human human trafficking, sanctions evasion, counterfeiting operation, and scam that harmed small businesses, including stolen contract and disruptions to supply chains. Mr.
▶ 3:30:43Chairman, we all um saw what happened to with the PPP money and how bad actors and ineligible uh businesses access money that was not supposed to go for them. And Republicans every day and every hearing are reminding us about that.
▶ 3:31:03But yet, they don't approve increasing the budget for the Inspector General or worse yet, they haven't the president has not appointed all of the Inspector Generals in every federal agency.
▶ 3:31:20Legitimate small businesses benefit from the BOI registry and supported its creation because the use of anonymous companies also have the ability to distort markets and price competition.
▶ 3:31:35While considering the CTA in 2018, Small Business Majority conducted a poll and found more than three quarters of small businesses expressed support for legislation requiring businesses to divulge their owners' true identities at the time of formation. In the same survey, 84% of small business owners said the use of anonymous companies to win contracts or obtain government funding was a problem.
▶ 3:32:04The NFIB, the most vocal opponent of the CTA, surveyed their members in 2024 after the CTA went into effect on the most severe problems they faced and no law include and no laws, including the CTA, were mentioned. The NFIB has also vastly overinflated the projected time and cost of filing with the registry.
▶ 3:32:28Federal paperwork was 15th on the list of most severe problems faced by their members, below the cost of health insurance, cost of supplies, and locating qualified employees, among other concerns. Passage of this bill will tie the hands of law enforcement, increase criminal activity, and endanger endanger our economy. I urge my colleagues to vote no, and I yield back. Gentlewoman yields back.
▶ 3:32:56The chair recognizes the gentleman from Tennessee, Mr. Ogles. Thank you, Mr. Chairman. You know, this really a common sense piece of legislation that's removing barriers for corporations and and it's quite frankly getting government out of the over collection of data. Um it's really not that complicated and and you just kind of Mr.
▶ 3:33:20Chairman, it's it's kind of ironic that you know, under the Biden administration, the the border was wide open, and our colleagues didn't really seem to care about drug trafficking and drug use and damage to individuals, but now you you you remove a simple reporting requirement and and that they're concerned about it. But but with that, Mr. Chairman, I'd like to yield some time to the the gentleman from Ohio, Mr. Davidson. Um thanks, Mr. Ogles.
▶ 3:33:44Um I just want to share that that some of the people we've heard from in support of this legislation uh the Associated Builders and Contractors, the International Franchise Association, National Association of Convenience Stores, the National Association of Wholesale Distributors, the National Cattlemen's Beef the NFIB, National Labor or National Lumber and Building Material Dealers Association, National Roofing Contractors Association,
▶ 3:34:15S Corporation Association, tons of folks. So, I just ask unanimous uh consent to enter into the record letters of support from the National Association of Convenience Stores, National Lumber and Building Materials uh Dealers Association, from the NFIB, statements of support from uh National Association of Wholesalers and Distributors, and the International Franchise Associations, as well as a letter from over 60 small businesses, small business association supporting
▶ 3:34:45you know, this legislation. Without objection, I'll be included in the record. I yield back to Mr. Ogles. Mr. Chairman, I yield back. Chairman Mr. Meeks yields back. Uh the chair recognizes the ranking member on our Capital Market Subcommittee, Mr. Sherman from California. Thank you. I want to commend the patriotic businesses that supported the entire idea of providing full disclosure.
▶ 3:35:12This uh the FACT Coalition that was put together that got us to pass this bill was supported by the United States Chamber of Commerce. Now, I've spent 30 years on the Foreign Affairs Committee and 30 years trying to prevent Iran from having a nuclear And this president has put the lives and limbs of our men and women in uniform on the line with that as an objective.
▶ 3:35:40But now we are told that certain scammy business interests may lose a buck. And we have to make sure that those scammy business interests aren't hurt even while we turn to our men and women in uniform and tell them to risk life and limb.
▶ 3:35:58There is nothing more disgusting than those who say that our soldiers should die for a cause that they are unwilling to ask some of the most corrupt businesses in this country to do a little something to achieve. And keep in mind, stopping Iran requires all of the economic power of the United States. That's why in 2021 Congress passed the Corporate Transparency Act.
▶ 3:36:29And that is why we need it today. That's why I would put into to record a statement letter we received from AIPAC, but I think everybody else did as well. Urging members to oppose this bill and amendment in the nature of a substitute. Without objection, that'll be included.
▶ 3:36:49It states, "This ultimately leaves a gaping hole in the US anti-money laundering framework, which will undoubtedly be supported by Iran and other malign actors." They further point out how before we had this act, a Chinese national arranged a billion-dollar global trafficking of Iranian oil to China, and this global transparency act might well have stopped But
▶ 3:37:19it's not just a matter of national security. Why do the district attorneys support this, etc.? Where's the real market for this nefarious enterprise? It is in bankruptcy fraud, and it is Husbands, it's usually the husbands. Hiding assets from their spouses, or their estranged spouses, or their soon-to-be ex-spouses.
▶ 3:37:43Why do we want to facilitate crime in the suites when we should not why we should not be defunding those who fight crime in the streets.
▶ 3:37:59This is a bill put forward not by drug dealers, but by those who have a chance to make money investing the funds of drug dealers and soon-to-be ex-husbands, and those engaged in bankruptcy fraud. Why are they on that side? Because there's money and power on that side. There's money to be made from drug dealers.
▶ 3:38:25There's money to be made from Iran and and and and Russian oligarchs. And there's no lobby on the other side. There's no money and power on the other this bill constitutes an attempt to say, "We want a strong America, but we don't want an America whose government is strong enough to stand up to Iran, to stand up to Russia, to stand
▶ 3:38:55up to human drug uh free human uh traffickers and drug dealers, and to say, 'No, in a family court setting, you have to disclose all your assets to your spouse, and you can't engage in bankruptcy fraud and hide your assets from your creditors.'" So, this is a clear vote. Whose side are you on? Concealment or transparency? Honesty or profits from some of the most nefarious business interests? Uh unfortunately, we know where some people stand on this.
▶ 3:39:24I'm proud to say that our party stands for transparency and stands for a bill that this Congress passed with a clear uh in with a clear majority uh bipartisan majority just a few years ago before the most shady business interests in our country decided that it was hurting their profits. And uh with that, I yield The gentleman yields back. Six Ms. Beatty.
▶ 3:39:54I move to strike the last word.
▶ 3:39:56You're recognized for 5 minutes. Mr. Chairman, I'd like to express my strong opposition to HR 425 offered by my friend, the gentleman from Ohio, Mr. Davidson. Let me remind everybody, in 2020, this committee passed the most sweeping anti-money laundering reforms in decades with the Anti-Money Laundering Act of 2020, including the historic Corporate Transparency Act, referred to hereafter as CT CTA, which sought to crack down on
▶ 3:40:26money laundering through shell companies by imposing for the first time a federal requirement to identify the beneficial owners of certain companies. The CTA was intended to streamline industry compliance, increase transparency, and make it easier for small businesses to access banking services while making critical improvements to national security.
▶ 3:40:50We talk a lot about fentanyl trafficking, human trafficking, terrorist financing, evasion, sweeping fraud schemes, and many other forms of criminal activity. The CTA and the beneficial ownership database the law sought to create would create would be a critical tool in law enforcement's arsenal to crack down on these exact crimes.
▶ 3:41:17A decade ago in the Financial Action Task Force FATF highlighted that the lack of a BOI database is one of the most critical gaps in the United States' compliance with FATF Executive branch officials from both Democratic and Republican administrations have underscored the law enforcement utility of a BOI
▶ 3:41:47registry. So, I agree, Mr. Chairman, it's quite simple. Currently, there are 170 countries across the globe that have some form of beneficial ownership registry, leaving the United States, once again, if we do what my colleagues on the other side of the aisle want to do, lagging behind with a weaker and less effective anti-money laundering regime. I ask, Mr.
▶ 3:42:15Chairman, unanimous consent to submit to the record a map which showing which countries have taken action on beneficial ownership
▶ 3:42:26Without objection, that'll be included in the record. In testimony before the Senate Banking Committee, the Criminal Investigative Division of the FBI stated that the lack of a US BOI database attracts unlawful actors to abuse our estate-based registration system and the United States financial industry.
▶ 3:42:49Congress appropriately acted on the feedback by passing the Corporate Transparency Act, which President Trump signed into law and Treasury began implementing during the Biden administration. Again, Mr. Chairman, quite simple. We've done it before. Congress appropriately acted on this feedback by passing the Corporate Transparency Act, again which Donald Trump signed.
▶ 3:43:15Last year, the Trump administration's abrupt decision to limit enforcement of the CTA to foreign entities only, exempting over 99% of the companies Congress intended the law to cover, takes us back to square one with the very same national security vulnerabilities we started with. What are we trying to hide over there, Mr.
▶ 3:43:41Letting companies put us in this situation, now instead of standing up for the law that passed with overwhelmingly bipartisan support, the majority is moving to codify Treasury's blatant disregard of congressional intent and our national security needs. I want to take a moment to acknowledge concerns from small businesses we've heard from over the last couple of years regarding this new reporting requirement and the threat of potential fines for non-compliance.
▶ 3:44:10That is why last Congress I worked with FinCEN to improve small business education about the BOI rule, even hosting an information session in my district in Columbus for more than 100 small business owners with former Secretary Brian Nelson and FinCEN Director Gacki and former member of this committee, Republican Steve Stivers.
▶ 3:44:34I also reached out to several of my Republican colleagues to explore pathways to reform the law to ease small businesses compliances. Instead of working in a bi-parti- bi-partisan manner to improve the law while preserving its national security goals, my colleagues are now trying to repeal the law almost in its entirety. This is an extremely short-sighted policy with grave national consequences. I urge my colleagues to vote against this bill and I yield back.
▶ 3:45:04Gentleman's time has expired. He yields back. Six Seeing no other speakers on the on the underlying bill, let me voice my support. You Uh yes, ma'am. You want to speak on the underlying Uh may I yield my time to Mr. Lynch? Um yes. I'd like to yield my time to Mr. Lynch. I I'm sorry, I just can't hear what you're saying. I'm sorry, I'm short.
▶ 3:45:33And this is as close as I can get. I'd like to yield my time to Mr. Lynch. Uh gentle lady yields her time to Mr. I thank the gentle lady for yielding. I just want to make sure people understand perfectly what's going on what the what the Corporate Transparency Act requires, what it would require, is is two things.
▶ 3:45:59One, that a company has to list its full legal name and any trade names it's doing business under, uh its address, and its what whatever it's in and its IRS taxpayer identification number.
▶ 3:46:15The other The other thing that it requires is that they have to list the names of the the full legal name of anyone who owns owns 25% or more of the company or or directs substantially directs its its operations. That's it. It's like a two-page It's a two-page compliance application. It's just basic. What you'd have to do if you were applying for a loan at a bank or something like that. They want to know who you are.
▶ 3:46:44That's what this That's what the the underlying bill would would require. The The Corporate Transparency Act. What this amendment in the nature of substitute does it does away with all that. Now They're talking about uh you know, We just want to know what your name is and where you are. What What What's your And so they want to keep the going on here.
▶ 3:47:10Uh so uh and let's let's let's get the list of people who are against this against this uh against this amendment in the nature of a a substitute. We got Transparency International uh the US office, the Financial Accountability and Corporate and Transparency Coalition, Public Citizen, Americans for Financial Nash The National District Attorneys Association of the United States.
▶ 3:47:41Those of Those of you That's your every district attorney and every single district across this country. They They who are responsible for protecting citizens uh you know, and and and preventing crime. Polaris. Polaris is the leading anti-human trafficking organization on the planet. Because they want to stop people like Jeffrey Epstein.
▶ 3:48:05This This would allow people like Epstein to operate sub rosa on the sly not putting their name behind anything. That's how he operated anyway. The American Bankers Association They're They're against this.
▶ 3:48:23Freedom House Global Witness Human Rights Watch again because of the trafficking that goes on when companies are allowed to operate in the United States without us knowing who's them.
▶ 3:48:37The Independent Community Bankers of The National Association of Assistant United States Attorneys operating in every single district and every single state in the union The National Association of Assistant United States Attorneys This is not overreach. This is just enforcing the law.
▶ 3:48:56The Project on Government Oversight The United States Council for International Business again as others have noted will be the only country the only country that does not have a register of of beneficial ownership.
▶ 3:49:12We'll be as a matter of fact the uh FATF the Financial Action Task Force has said that they will lower the US rating if we adopt this because they have a requirement that people operate terrorist financing.
▶ 3:49:36and money laundering and this would allow money laundering and and human trafficking and drug trafficking in spades across the board. This is crazy. This is a This is a bad bill and I'm surprised I'm surprised that so many people are supporting it. I understand people are afraid of the president and he's got his and he's got a total disrespect for the law. But sometime you have to grow a spine.
▶ 3:50:04You got to stand up and oppose things like that. And we're at a time like that right now in this country. We can't allow allow this lawlessness to continue. Even if it is supported by the President of the United States. We got to stand up. We got to fight for the rule of law. This is where we're at. I'm sad to say it, but this is where we're at. I want my country back. I want my country back. And this this is bringing us in the wrong direction.
▶ 3:50:35I'm asking my colleagues oppose this bill. Stand up for America. Stand up for the Constitution for God's sakes. I yield back. I yield back to the gentle lady. Thank you for yielding. Gentleman's time is Miss Wilden's time has expired. Who seeks recognition? Is this for an amendment or you're speaking on the bill?
▶ 3:50:56Uh this is um Uh you've already spoken. Amendment now my Wilden's amendment. No, we're not ready to do amendments yet. Uh I'd like to recognize myself for 5 minutes. I want to offer my support for Mr. Davidson's uh amendment. And let's start out with some some basic principles here. First, uh it is uh illegal to do money laundering, illegal to structure transactions, illegal to hide money through the American corporate system.
▶ 3:51:24And we have a rule on that that's been in place since 2016, the customer due diligence form, where every bank already collects the beneficial ownership information for everyone who has a business entity in the company. So, let's be clear that this data is collected. It is the law. It is the rule. No one's proposing changing that. That's point one.
▶ 3:51:46Point two, it's true that we would not have a universal for every single of the 33 million businesses in America beneficial ownership database, because we would in this bill limit it to foreigners operating in the United States. People from outside the US, corporations or individuals who try to form a pass-through entity in the US would be subject to this rule. So, we're not exempting a non-citizen foreign interest and corporate interest in complying with the beneficial ownership form.
▶ 3:52:16But, I would remind my friends that Cyprus, UAE, Turkey all have beneficial ownership databases and they're the most renowned money laundering places on the planet according to the Financial Action Task Force. And they have a form. Because, you know what? People who are criminals don't fill out forms honestly. topic, the impact on the small business community.
▶ 3:52:4233 million businesses have to comply with the rule as designed by the committee, signed into law by President Trump. That's right. President Trump signed this bill into law as an amendment to the National Defense Authorization Bill back in 2020. But, we're asking Joe's HVAC company to go through the process of complying with a form with a government entity he's never heard he or she has never heard of, filling out another form that could be a database that could be leaked.
▶ 3:53:11And so, it is true that as passed by this act imposed an onerous, confusing, duplicative filing requirement on small And their burden is all on them, not on the banks. Of course, the banks are for this because it makes the small business take all the liability, subject to civil penalties and criminal prosecution if you don't fill the form out right. 30 million small businesses, which is why they all wrote letters in opposition to this.
▶ 3:53:41I debated this bill in 2020 with Carolyn Maloney, the author of the bill from New York, at the Heritage Foundation. And it's why the National Federation of Independent Businesses and Heritage opposed this bill because there's a better way to have chosen to collect it and we didn't do it.
▶ 3:53:56And so we have this burden on our small businesses, our plumbers, our electricians, our real estate entrepreneurs, hardworking Americans who are asked to go fill out a form subject to criminal prosecution if they don't do it right because we're trying to catch drug dealers, human traffickers, which we're already doing daily through the suspicious activity report, through our money laundering rules, through our surveillance of the financial system, and through the fact that we're demanding that foreigners, foreign operators,
▶ 3:54:26foreign corporations still comply with this FinCEN notification. It does not represent the CTA as drafted a durable consensus policy, but an overbroad regime that all we're trying to do here is narrow the scope of what Congress has passed, and that was the attempt of this Trump administration.
▶ 3:54:51Even though the previous Trump administration signed into law, they've seen in the last 5 years how onerous this should be and how it should uh in my judgment narrowed uh the scope. if we do limit the beneficial ownership database to foreign actors, foreigners inside the United States, aren't we marshaling our resources directly at the people we are suspected of tax evasion or human trafficking or money laundering, like the cartels
▶ 3:55:21active in every one of our communities? So I think it better focuses uh federal and I think it's more fair to our small businesses who I get stopped on the street with all the time. CPA firms, accountants, bankers, small business owners asking me why they have to impose this form.
▶ 3:55:43They were glad it was stayed by a President Trump's regulatory action, but they're concerned about their criminal liability if they don't fill out uh this form when they've already given the information to their So, I I really appreciate the debate today, but I have to say I side with uh uh Mr. Davidson's bill on this. I would appreciate the comments and passion of my colleagues on the other side of the aisle, and I yield back.
▶ 3:56:13Uh is there any additional uh discussion on the underlying bill? There are amendments to the bill. I have an amendment at the desk. Uh ranking member has an amendment at the desk. We'll pause while it's Mr. Chairman, could I reserve a point of
▶ 3:56:28Uh Davidson of Ohio reserves a point of
▶ 3:57:15Clerk will report the amendment, please. An amendment to the amendment in the nature of a substitute to HR 425 offered by Ms. Waters of California, designated as HR 42508. Without objection, the amendment's considered read, and the gentlewoman from uh California is now recognized to describe her amendment.
▶ 3:57:33Uh thank you very much. Before I get into my amendment, I'd like a a colloquy with Mr. Lynch. Uh cuz I want to make sure I understood what you said. Did you say all district attorneys in this country oppose this bill? That's correct.
▶ 3:57:51The National Association of district attorneys across this country are opposed to this change in the law which you know, go back to allowing, shell companies to operate within the United States. And assistant United States attorneys? That's correct. The The assistant US attorneys is it?
▶ 3:58:13US attorneys.
▶ 3:58:14Yeah. And you said we're the only That's correct. Of 170 major, uh, economies across the globe, we would be the only one that does not have a, uh, a beneficial ownership registry.
▶ 3:58:30Well, I wanted to make sure that I heard you correctly and that is what you reiterated and thank you very Um, the bipartisan corporate transparency act was designed to bust anonymous shell companies commonly used by drug cartels, human traffickers, terrorists, fraudsters, scammers, oligarchs, and other bad actors as they hide and move their illicit activity in the dark.
▶ 3:58:58Beneficial ownership means the true ownership or control of a company and the CTA promotes transparency into these shell companies by establishing national requirements in a beneficial ownership at Treasury's Financial Crimes Enforcement Network, that is FinCEN.
▶ 3:59:21The database in the law collects this information from certain companies that are of the type, size, and function typically seen in such shell companies. The law also provides essential streamlined access to this information for qualifying law enforcement, national security, and regulatory bodies such as the Federal Bureau of Investigation and the United States Secret Service, which investigates cybercrimes
▶ 3:59:52committed against American citizens and businesses. The FBI, through its Crimes Complaint Center, or the IC3, collects reports of these crimes, helping to initiate investigations of investment fraud, extortion, ransom where attacks, business email compromise, confidence or romance scams, identity theft, and so much more.
▶ 4:00:21In 2025, FBI received over a million complaints, generating 21 billion in losses, a 24% increase over the previous year. That's just a small slice of the estimated fraud losses in the United States, which may surpass 500 billion annually. These crimes and their proceeds are exactly why this amendment is essential.
▶ 4:00:50My amendment says that this bill, which narrows reporting entities from an estimated 32 million to just over 11,000, would not apply to beneficial ownership information for any legal entity that would be highly useful in national security, intelligence, or law enforcement agency efforts to detect, prevent, or prosecute crimes in the FBI's uh IC3 annual report.
▶ 4:01:20The resources provided by the CTA are needed now more than ever as Main Street America faces an affordability crisis that has no foreseeable end. This weekend, Trump's energy secretary said that gas prices won't fall until 2027.
▶ 4:01:41Prices at the pump, in the grocery store, and even the house itself are becoming more and more unaffordable, so Americans cannot afford to lose more to these scam artists. Republicans like to claim that they care about affordability, but if they did, they wouldn't be offering this bill.
▶ 4:02:01They wouldn't be facilitating the cyber fraud and scams that steal seniors' life savings, empty business bank accounts, and prey on economically disadvantaged. So, uh I have a fact sheet here uh for the record that describes how CTA helps law enforcement and victims to combat cybercrime, including fraud and I would like to submit for the record
▶ 4:02:31the FACT Coalition, Financial Accountability and Corporate Your We'll accept accept it in the record without objection. Uh I don't want to be insulting anybody, uh but Your time has expired. I want to know if Your time has expired. Davidson would rethink this and Your time has expired.
▶ 4:02:53withdraw this bill? Oh, my time is up?
▶ 4:02:56Your time is up, yes, ma'am.
▶ 4:02:59who seeks recognition? Mr. Davidson, you're recognized to strike the last Uh Mr. Chairman, I withdraw my point of order. You have He withdraws your point of order, and I now recognize you to strike the last word. I do strike the last word. Uh the gentlewoman's amendment is is redundant to what is already in the CTA as enacted.
▶ 4:03:17The administration found that beneficial ownership information of Americans and and American small businesses is not, quote, highly useful to national security, law enforcement, and use the exemption authority provided by the CTA to exempt the very class of small small businesses that this legislation covers.
▶ 4:03:37In fact, it addressed matters that the court were raising that there's a presumption that because you have a small business or because you're have access to a bank account for a homeowners association or whatnot, that therefore you're a criminal. And that's the faulty logic that our colleagues continue to assail us under. Thankfully, the administration saw through that. I oppose this amendment, and I yield back. Will the gentleman yield? Will the gentleman yield? Oh, I yield to the chairman. Uh I thank the gentleman.
▶ 4:04:08I just um I think I want I want to reiterate for the debate because it just keeps being there is a beneficial owner ownership database in the US. If Davidson's bill was adopted, then it would be limited to going forward to foreigners, foreign actors, foreign corporations. So, we're it's not going away.
▶ 4:04:31Secondly, perhaps more importantly, it's already the law to disclose beneficial ownership, and it is collected by every financial institution, broker-dealer, asset manager in the company for anyone who has touches the financial system. It's a fundamental issue, as I said in my opening comments, and it's been a requirement since um 2016 to 2018 time frame. just a moment.
▶ 4:05:03So, the definition uh the definitions in the CTA as adopted were over 5 million in revenue and over 20 employees is who's required uh to under, I should say. Yeah, under 5 million in revenue and 20 or fewer employees. In other words, that's their definition of a shell business for a human trafficker or money launderer.
▶ 4:05:30But you come to Arkansas, 5 million in revenues, 20 employees, that's the goal. That's the dream. And yet we're calling it a shell company and adding more regulatory burden to which OMB and OIRA, the Office of Intergovernmental Affairs, Intergovernmental Regulatory Affairs, says it could cost a hundred billion dollars to comply with this rule.
▶ 4:05:55In Arkansas, I'd say a typical small business might have 500,000 in revenue and three to five, three to eight, under 10 employees, for sure. So every one of them, this is the plumbing guy, this is the heating and cooling, a family-owned business, construction business, small real estate business, 30, over 30 million of them. So I just want to be on the record. It is the law. America is complying with the law.
▶ 4:06:22And jurisdictions outside the United States, like Dubai and the UAE, has a beneficial ownership register, but is a centerpiece of illegal and illicit activity. And I think what Mr. Davidson's trying to do is narrow the scope of the collection on this new FinCEN form. He's not abolishing the requirement that you have to disclose beneficial owners. It's already the law.
▶ 4:06:49What he's doing is he's narrowing the scope of who has to fill out yet again another form on that topic, directly at FinCEN, by the way, only available online. Your CPA is not allowed to help you do it because they don't have liability insurance as an accountant to provide that information. State law governs that. It's very confusing to a lot of small business people. So I want to again thank Mr. Davidson for just trying to narrow the scope of this onerous uh duplicative effort.
▶ 4:07:19I yield back to Uh thank you, Chairman. I think those points are well made um in in regards to the um uh underlying uh objective. The the the fallacy is that if you just fill out a piece of paper that everything would be discernable. And think how many things we could solve by just requiring everyone to file a piece of paper every year. W- We we already do that uh for the most part with a tax return, for example.
▶ 4:07:47There are all kinds of things that people are already doing that the people that try to stop crimes in our country use to successfully stop The idea that Joe the plumber is somehow presumed to be in engaged in a listed activity because he's got less than 20 employees and uh less than 5 million in revenue is completely fallacious and and uh this this gets at it. And the gentle lady's amendment doesn't help that.
▶ 4:08:16time has expired. Who seeks uh recognition? Um Mr. Lynch. Well, let me let me try to straighten out some of the confusion because you guys sure share it. Number one, the reason the reason that that the Corporate Transparency Act exempted uh people who have 20 and over businesses those are probably legitimate businesses, right?
▶ 4:08:42And uh for small businesses, 82% of small businesses in the United States today have no It's just one person. That's why I sub-chapter S corporations in favor of your bill or your your your amendment in the nature of of substitute. Secondly, so so the bill was trying to get at the companies that most that are most likely to be shell corporations.
▶ 4:09:09That's what the bill the original Corporate Transparency Act that President Trump signed into law. That was what he was trying to get at, what we were all trying to get at. We're trying to narrow the number of people we were going after to just those companies that were had the characteristics of a shell corporation, number one.
▶ 4:09:31Number two, the idea that we would somehow criminalize paperwork, like if you filled out the form wrong, uh that we were going to that we're going to prosecute you is is totally false, you know. Uh as a matter of fact, we wrote in the bill, we were all here.
▶ 4:09:47Uh you know, this is and and what we're hearing is a different deliberate misinterpretation of law, which it states explicitly in law that penalties will come solely for those who willfully lie or omit material in an attempt to deceive government authorities.
▶ 4:10:04The law states A, they willfully willfully provide or attempt to provide a false or fraudulent beneficial owner ownership information, including a false or fraudulently identifying photograph or a false document. That's that's when you fall a foul of the law.
▶ 4:10:22We recognize that sometimes people make honest mistakes and we we carved that out in the the uh Corporate Transparency Act trying to make sure that we didn't catch anyone in the net unintentionally. That that's what we were working towards. But Will the gentleman yield for a question?
▶ 4:10:42Sure, sure, absolutely.
▶ 4:10:44I think when you started out you you implied when you gave the Subchapter S example, because 80% of small businesses don't have employees or sole proprietors effectively, that you implied that they're not covered by this. Excuse me? You you implied I thought you said that they were not
▶ 4:11:01more likely to be a the the smaller the number of employees, the lower like if you have one employee. You you you probably have an easier course. People wouldn't go through, you know, hiring all kinds of employees and actually having a payroll to be a shell corporation. That's not what a shell corporation is.
▶ 4:11:22Yeah, what I was just trying trying to make sure I understood what you said is that you're not saying those people aren't required to fill the form out. No, it's every This law says everyone with What What Reclaiming my time. So so the amendment in the nature of a substitute basically exempts everybody, right? What What Trump has done and what this ANS would do is you just exempt 32 million people 32 million businesses. So nobody has to fill any of this out.
▶ 4:11:50So when you say we're already collecting this, you know, those 32 million people don't have to
▶ 4:11:55That's not true. That's not true. What are you saying? Because the law requires those 30 new million people to disclose to their financial institution their Yeah, yeah, yeah, that Yeah, there's no central Hit Reclaiming my time again. So so this the law required the establishment of a a central database that would be used by law enforcement. Not that everyone would have to go around to their their individual bank.
▶ 4:12:22When they comply with this CTA, with the co- you know, Corporate Transparency Act. Once they comply, they get a number. They get a number and it says, "For 5 years it's good. You comply with the CTA. Now you can go to any bank what if and you say, 'Here's my number just like you would, you know, you know, if you're certified in some other fashion. You don't have to drag all your stuff with you and and prove that you're you're not a shell corporation. It is stamped.
▶ 4:12:48You are certified and you can go ahead and do That's what That's That piece is what the ANS eliminates. That's what it eliminates. Other Other forms might be possible, but but what we passed and what the president signed into the law, that's what Mr. Davidson, the gentleman from Ohio's bill does, uh amendment does. It eliminates that requirement. How am I doing on time? I'm just about I guess I yield back, Mr. Chairman.
▶ 4:13:18Thank you. Mr. Lynch yields back. Further debate on this amendment? If there's no further debate on the amendment, the question now occurs on the amendment. Those in favor of the amendment shall signify by saying I. All those opposed signify by saying no. The chair is in doubt. The no's have it. The no's have it. The amendment is not The ranking member requests a recorded vote. All those in favor of a recorded vote, raise your hand.
▶ 4:13:47A sufficient number having raised their hand, a recorded vote is so ordered. Pursuant to subsection C5 of rule 3 of committee rules, further proceedings on the amendment are postponed. Are there further amendments to on Mr. Davidson's amendment in the nature of a Ms. Beatty of Ohio. I have an amendment at the desk.
▶ 4:14:05We'll pause while that's distributed. Mr. Chairman, I reserve a point of order. Mr. Davidson reserves a point of
▶ 4:14:52Thank you.
▶ 4:15:17Clerk will report the amendment, please. An amendment to the amendment in the nature of a substitute to HR 425 offered by Ms. Beatty of Ohio designated as HR Without objection, the amendment's considered read and the gentlewoman from Ohio is now recognized to describe her Thank you, Mr. Chairman. Uh let me try this a a different way. We're going back and forth.
▶ 4:15:42And so, let me just say, my amendment would ensure that the changes made to the Corporate Transparency Act made by HR 425 do not apply to any corporation LLC or other similar entity if the beneficial ownership information of that entity would be highly useful to detect, prevent, or prosecute crimes committed by transnational criminal organizations.
▶ 4:16:06Certainly, as we all know that TCOs commit a vast array of crimes that span international borders including drugs, narcotic trafficking, human trafficking, money laundering, weapons of trafficking, and many other types of illicit activities. Certainly, we would want to be on the side of making sure that we've done everything to prevent this. And here's the thing, it was just a few years ago that the same president signed it. So, I'm going to be like Mr. Lynch, what?
▶ 4:16:36He made a phone call? What are we covering up? What are we trying to do? The impact of TCOs in America cannot be understated. You know, I could go through a whole litany of stuff. But, let me just tell you, criminal organizations are also conducting human trafficking and smuggling of in a massive scale. They're siphoning up to $250 billion a year from our economy through intellectual property theft and counterfeiting. How do do they do that?
▶ 4:17:06In short order, it's money laundering and come on, my Republican colleagues know this. It is at the center of their operations allowing them to transact and hide their profits through front companies. These TCOs and drug trafficking organizations know exactly how to exploit gaps in the corporate transparency to move money, hide true ownership, and to ensure that their key players fly under the radar of law enforcement. That's simple.
▶ 4:17:36No one should be against what we're trying to do. And we did it before just a few years ago, bipartisanship. That's why one of our most effective weapons to intercept TCOs is to enable law enforcement and the Financial Crimes Enforcement Network to strip away the to strip away all of these things that these TCOs are hiding behind and follow the money to the true criminals behind these transactions.
▶ 4:18:05If my colleagues across the aisle really serious, Mr. Chairman, about the importance of preserving the United States national security and protecting our constituents from traffickers, they wouldn't be weakening a law uh a law enforcement tool like the Corporate Transparency Act delivering a huge win to the bad guys. Now, Mr. Chairman, let me just say this, you brought up the CDD rule and said it was duplicative.
▶ 4:18:35Well, let me follow up on Mr. Lynch's comment because the CTA was designed to close gaps that were left open by the Consumer Due Diligence Rule, left open. Currently, there is no central database that covers all businesses regardless of whether they have a financial institution relationship. And we also know that there gaps in the CDD rule with that.
▶ 4:19:03So, I implore my colleagues to rethink this. Let's come together. This is not new. The same president, the same Republicans and Democrats just did this a few years ago. So, somebody's going to have to explain to me why all of a sudden are we dealing with this in reverse when we know that people are laundering money. We know that there's human trafficking. We know that there are 170 other countries who are doing this. And Mr.
▶ 4:19:33Lynch just rattled off a litany of information. It just doesn't make sense to me. And I yield back. Gentlewoman yields back. Does the gentleman insist on his point of order? I withdraw my point of order. And Mr. Davis, do you move to strike last week?
▶ 4:19:47Do you move to strike the last week?
▶ 4:19:48You're recognized for 5 minutes. Uh thank you, Chairman. Um the core claim here in the general lady's amendment is that law enforcement is more difficult when some degree of privacy is afforded individuals and small businesses. Well, law enforcement's used to having some degree of privacy accommodation. Uh the Fourth Amendment guarantees it.
▶ 4:20:09It says, quote, "The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures shall not be violated. And no warrants shall issue but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched and the person or things to be seized." I mean, Mr. Chairman, our colleague, Mr.
▶ 4:20:34Lynch, just laid out the idea that, well, 82% of these small businesses have one employee. So, therefore, they're more likely to be engaged in illicit finance than bigger businesses. So, therefore, we can just infringe on their right to privacy. I mean, that's a that's a crazy precedent.
▶ 4:20:58If we're just going to go into probable stats, I mean, uh predictive modeling, we could we could infringe all kinds of But, the Founding Fathers put limitations on that. They didn't just say more likely than not it might be the case.
▶ 4:21:13They said probable cause, not not even reasonable And I will say that this law does spell out what what it is we're looking for and what must be complied with, we do in this country have a deep commitment to civil liberties enshrined in the Constitution because we believe that the government has a burden of proof. And we do want them to solve crimes. I'm glad to see that uh law enforcement and criminal justice have become paramount on both sides of the aisle.
▶ 4:21:42Um but, in America, we balance this effectiveness with everyone's rights. And Mr. Chairman, you've stated it clearly. You know, if you're going to launder money, you need a bank account to launder the money. And the banks already have a burden to collect this information. We're collecting massive amounts of information on on companies individual because a crime might be committed. And then we're not doing enough work when crimes have been committed. And that's the real problem here.
▶ 4:22:11If we look at the the layers and layers of what might be committed, we're adding adding noise. And we need to focus our resources on the signal so that we can do it. And as Chairman, you pointed out, places around the world that are synonymous with uh shell companies, money laundering, frankly, illicit banking uh in in a lot of cases, they have all kinds of reporting regimes. I'm reminded of people that would point out how eloquent the Soviet Union's constitution was.
▶ 4:22:40Um but they didn't do it. And that's the thing, the fallacy that you're going to fill out this paperwork. People that are sophisticated enough to launder money for the Sinaloa Cartel. People that are sophisticated enough to move weapons and ammunition in and out of Iran are going to somehow be tripped on a form that says, "Well, I don't know. Who are you and what are you doing? Oh, you got me." This is the form that tripped the whole thing up. This is the craziest approach to this.
▶ 4:23:09It's all noise and almost no signal. And uh it is also redundant to the existing law.
▶ 4:23:16the gentleman yield? I yield to the chairman. So, we we talked about just doing this in 2020 and all that is accurately portrayed by my friends on both sides, but I'd like to be on record here with a new audience, with a new group of people, with new members on this committee saying how I how strongly I oppose this when it was offered back in 2020 and I offered an alternative, which was rejected by Steven Mnuchin, the Treasury Secretary for the Trump administration, rejected by the House Ways and Means Committee, and rejected by members on this committee. That's fine.
▶ 4:23:46But I just want to be on record, there's a better, easier, more straightforward way to do this that I offered then, which was just simply to let FinCEN, for law enforcement purposes, have an exception to look at Form 1065, which every American with a pass-through entity, foreign or domestic, fills out. And guess what that has on it? It has every owner and what their percentage ownership is, their address, their taxpayer ID number.
▶ 4:24:14It's under the law, it's machine readable, it's already collected by the IRS, and that was rejected by Mr. Mnuchin and by members of this committee and by members of the Ways and Means Committee. So, I understand it, but I just want to be on record, we're not for uh illicit finance, we're for removing a and putting a targeted burden for our small businesses who are not money launderers and I yield back to the gentleman from Ohio. Thank you Chairman. I just like to point out Mr.
▶ 4:24:41Lynch also said the ICBA and the APA ABA are opposed to this bill. They are not. Gentleman yields back. Who seeks recognition on the Brady amendment? Ranking member.
▶ 4:24:55uh move to strike the last
▶ 4:24:56for 5 minutes. Yes. I want to thank Ms. Beatty for her work on this amendment. This amendment would ensure that the bill does not apply to beneficial ownership information or banking activity or access by law enforcement for any legal entity related to transnational criminal organizations like drug cartels.
▶ 4:25:24The Corporate Transparency Act that is CTA establishes America's beneficial ownership registry helping law enforcement to understand who truly owns and controls the corporate entities. This includes entities controlled by transnational criminal organizations that engage in a wide range of illegal activities that harm Americans and our national security such as the cartels that sell fentanyl.
▶ 4:25:53If Republicans support President Trump's actions on drug cartels and human traffickers, they should be eager to support this amendment. I yield back. Gentlewoman yields back. Who seeks recognition? Mr. Lynch, you're Thank you very much. Uh Let's see.
▶ 4:26:15Couple of things, you know, filling out a form when when you're when going into business uh when you're uh engaging in commerce,
▶ 4:26:26um it is not a violation of the Fourth Amendment to ask who you are. You're you're you're you're presenting yourself, you're going to the business, and and that is a normal way of of uh of building trust and and and protecting your customers, right? And other people that you're dealing with. So, it is not you're not kicking someone's door down by asking them if they're in business, you know, who they are.
▶ 4:26:53And that's exactly what this uh the Corporate Transparency Act Uh you've got to say who you are, you've got to say what your address is, and uh when you register you you are basically providing a real ID or a license of some sort, so the people actually know who the heck you are. That's that's the That's the That's the danger of this amendment in the nature of a substitute.
▶ 4:27:22Uh that it it does away with that. the original text of this Corporate Transparency Act uh covered about 32 million Uh about half of those had already registered. 16 million people had already complied.
▶ 4:27:41They filled it out, private provided the information, what the ANS would do would be reduce the number of companies from 32 million 11,000 foreign corporations, about 0.02% of all US registered corporations. Everyone else is exempt. So, that's that's what this does.
▶ 4:28:09That's that's what this amendment in the nature of substitute it uh does. It It uh gives everybody a pass. The other thing is, you know, we we asked the companies that were signing up. Like I said, 16 million companies signed up, provided the and were in compliance or or would have been in compliance with the transparency act. We asked them how difficult it was.
▶ 4:28:39And there were 6% of the the the applicants who said it was difficult. The other 94% said it was pretty easy. So, you know, I guess filling out your name, filling out your you know, filling out your social security number or your tax ID number, and uh and the names of the other people who are in business with you, who who also run the corporation, that was difficult for some people.
▶ 4:29:09But, there's a 170 other countries that folks are doing that. And again, we're going to be the outlier. Uh you know, the uh FATF, which is the global agency on anti-money laundering, anti-terrorist financing, uh we will be we will be severely criticized and downgraded.
▶ 4:29:37The level of our security will be downgraded in the eyes of the world because we're going to we're going to adopt this thing that allows uh allows all of that. Uh allows companies to to operate in business without disclosing who's behind the company. You know, that that's a that's a shady way of doing business. Uh unfortunately, that seems to be uh more and more common in this country.
▶ 4:30:03And uh it's it's a regrettable that that is the that is the way it is. Uh our financial system has gained its strength and popularity and uh and its reputation based on our uh system that that protects investors, uh pres- protects consumers, and we are drifting away from that uh pretty Uh we're losing we're losing our reputation that that
▶ 4:30:33generations have uh worked hard to maintain internationally and here at home. So, again, I just urge my my colleagues to oppose uh this amendment in the nature of a substitute, and uh I yield back the balance of my time. Gentleman yields back. 6 uh comment on uh Ms. Beatty's amendment. Uh if there's no further debate on the amendment, uh the question then occurs on Ms.
▶ 4:31:03Beatty's amendment. All those in favor of the amendment shall signify by saying I. All those opposed signify by saying no. No. The chair the no's have it. The no's have it. The amendment is not adopted. Generalwoman Generalwoman's requested a recorded vote. Recorded vote uh raise your hands. Sufficient number having raised your hand to record vote is so ordered pursuant to subsection C5 of rule 3 of the committee rules. Further proceedings on the amendment are postponed. Is there further amendment to the Davidson amendment in the nature of a substitute?
▶ 4:31:35Uh yes, I have an amendment at the desk. We'll pause for it to be distributed. Mr. Chairman, can I reserve a point of order? Point of order has been reserved on the Gonzalez uh amendment. Thank you, sir.
▶ 4:33:16Clerk report. An amendment to the amendment in the nature of a substitute to HR 425 offered by Mr. Gonzalez of Texas designated as HR 42509. Without objection, amendment is considered read. The gentleman from Texas now recognized to describe his Thank you, um, Mr. Chairman.
▶ 4:33:36I'm a member who's long advocated for the right-sizing of regulation in this I believe that government should not burden honest, hard-working Americans and small businesses with unnecessary red tape. But I also believe we have the responsibility to combat illicit finance and protect the most vulnerable amongst Seniors and children. My amendment does just that.
▶ 4:34:02It preserves a targeted use of the Corporate Transparency Act so law enforcement can continue to fight to protect older Americans and young children, young kids through According to the AARP, 40% of black and Latino adults have been targeted on online scams.
▶ 4:34:23Reports by the Federal Trade Commission show a growing wave of schemes aimed at squarely attacking retirees' life These criminals impersonate trusted government agencies and legitimate businesses, hard to detect for even some of the brightest.
▶ 4:34:43In a cruel twist, they exploit older American vigilance by sending fake security alerts and warnings designed to trick them into handing over their money and their The consequences have been devastating. Some seniors have reported emptying their bank accounts and even draining their 401Ks. the scale of these losses is accelerating.
▶ 4:35:11According to FBI's 2025 Internet Crime Report, older Americans lost $7.7 billion to cyber crimes to cyber crimes just last week. An almost 59% increase from the year before. So, we're moving in the wrong And this hits home.
▶ 4:35:30In Texas, we rank third in the nation in the number of fraud complaints with almost 12,000 cases and almost $500 million in losses. These are patients, these are our parents, our seniors, neighbors, the people that are being exploited and targeted are the most vulnerable in American society. But this crisis doesn't stop with seniors and young Americans. It's increasingly targeted all of us.
▶ 4:36:01Victims under 20 reported hundreds of millions of dollars in losses often through social media scams, gaming fraud, and peer-to-peer payment These scams are sophisticated in nature, predatory, and growing. And let's be clear. These are not isolated bad actors.
▶ 4:36:22These schemes are tied to transnational criminal organizations including drug cartels and terrorist networks that exploit weaknesses in our financial system and move to hide illicit funds.
▶ 4:36:36My amendment strikes that balance to ensure that we're not unnecessarily harassing honest, hardworking Americans while preserving the ability to go after those who actually are committing the This is about protecting senior citizens who have worked their entire lives. It's about protecting young people who are navigating an increasingly dangerous digital world.
▶ 4:37:00And it's about ensuring that the United States remains capable of confronting illicit finance wherever it may exist. I urge my colleagues to support this amendment and I yield back. Gentleman yields back. Who seeks to Mr. Davidson, do you insist on your point of order? I'd like to withdraw my point of order.
▶ 4:37:21And are you seeking recognition?
▶ 4:37:22like to strike the last word. Gentleman from Ohio is recognized to strike the last word. I do move to strike the last word. Thank you, Mr. Chairman. Yesterday the Washington Post Yes, the Washington Post, I said, came out in support of this legislation and against the Corporate Transparency Act in an editorial titled The Corporate Transparency Act Sounds It's Not. I ask unanimous consent to enter to the record this editorial. Your editorial from the Washington Post will be entered in the record without objection.
▶ 4:37:53All right. I'll just share a few nugget few nuggets from their Quote, the Corporate Transparency Act in in addition to being unconstitutional is so confusing that the federal government's frequently asked questions web page about it has 122 Quote, there is always a risk of foreign powers taking advantage of America's economic freedom, but there are better ways to track them. Mr.
▶ 4:38:21Chairman, that's the point you've made today, that we made and many who objected uh you know, since for years uh before it became law and and after it became law uh to the approach. You know, the goal is lofty, but the approach is is all noise and no signal. They say also, quote, at a practical level, the law is ineffective because it adds a new reporting requirement to stop behavior that is already illegal.
▶ 4:38:50The businesses that would abide by the Corporate Transparency Act already follow the law, while criminals would ignore it or get around it. Uh my friends on the other side of the aisle keep making the point that the difference between the consumer due diligence rule and the Corporate Transparency Act is that there's no centralized database under the under the customer due diligence rule.
▶ 4:39:14Not that the information is underreported, not that the information uh maintains privacy, not that law enforcement can't follow the money. Their main difference is they don't have a centralized database. And frankly, that's what prompted the title. That's why it's called repealing the Big Brother Overreach Act. A duplicative centralized database is not There's a reason America is not the world's destination for illicit finance.
▶ 4:39:42Instead, with only 4% of the world's population, we've got over 50% of the world's invested capital. We're here because our system is safe and sound, and we aim to do it in a way that we aim to preserve that in a way that fosters capital formation, not in a way that undermines it and chases it out by burdensome regulations that accomplish nothing new. And with that, I just encourage our colleagues to oppose this amendment as well, and I yield to the chairman.
▶ 4:40:15I think you've said it all. I yield back to the gentleman. I yield to the chairman. Uh Chairman time.
▶ 4:40:20yields back uh and the chair recognizes the ranking member for her I'll just strike the last word. Thank you very much. I'll strike move to strike the last word. Recognized for 5 minutes. I want to thank uh Mr. Gonzalez for his on the on his amendment ensuring that nothing in the bill would apply to efforts to detect, prevent, or prosecute fraud and scams involving older Americans or our children.
▶ 4:40:49With the help hearings on romance scams that target older Americans and her testimony that details how shell companies are used by fraudsters to uh victims into believing that they're making real investments. Those hearings also have detailed how shell companies are used to quickly move the proceeds of the crime beyond the reach of the victims and their law enforcement agencies.
▶ 4:41:19I'm also concerned by the number of children affected by These crimes are increasing and often end in tragedy on top of the financial loss.
▶ 4:41:35Representative Gonzalez's amendment says that this bill would not apply to beneficial ownership information that would be highly useful in national security, intelligence, or law enforcement agency efforts to detect, prevent, or prosecute crimes of fraud against older and younger Americans. This is a sensible amendment that will protect our most vulnerable.
▶ 4:42:02So, I urge members to support this amendment, and I yield back. Gentlewoman yields back. Is there additional debate on the Gonzalez amendment? Mr. Lynch. Yeah, thank you, Mr. Chairman. I I ask this to strike the last word.
▶ 4:42:15You're recognized for 5 minutes. Thank you, sir. Uh first of all, I want to thank Mr. Gonzalez for his very thoughtful uh insightful and and pointed amendment. one of the other committees I serve on is the Committee on on oversight, and as you know, we are well into our investigation of Jeffrey Epstein, and it offers the perfect example of what Mr. Gonzalez's amendment is trying to get at.
▶ 4:42:42So, Jeffrey Epstein used a series of of of shell corporations uh to advance his, you know, financial but also used it to benefit himself in other ways as well by remaining So, Jeffrey Epstein uh and his organization, they were able to work uh on a number of tax havens uh you know, to make sure
▶ 4:43:12that uh you know, the the the tax laws of the US didn't apply. He used his anonymity and his uh his uh shell corporations to traffic women from Eastern Europe uh to the United States.
▶ 4:43:31there are a lot of benefits that a lot of uh as well that that he perpetrated on the American public because he was allowed to remain hidden.
▶ 4:43:45He was allowed to remain hidden. And that's what we were at when That's what we were trying to get at when we passed the Corporate Transparency Act. We thought bad actors bad actors should not be able to hide behind other people uh while they they perpetrate their crimes. And uh that is exactly what this amendment in the natural nature of a substitute would do.
▶ 4:44:12It would allow those people uh to to operate uh from the shadows and escape the prosecution of law enforcement authorities because we don't have a national database and we didn't have one until until we passed that law.
▶ 4:44:35So that anyone that wanted to avoid uh prosecution could simply go to a different uh a different state maybe that didn't have the the the laws in place or the technical wherewithal to to go after people that were operating, you know, behind the scenes and and using uh using the lack of transparency to commit crimes.
▶ 4:45:00So that This is a perfect example uh Jeffrey Epstein of the the wrongful conduct that can happen if we allow people to operate in commerce secretly without divulging their identities. That's what we're we're trying to get at.
▶ 4:45:17That's why this this amendment in the natural nature of a substitute is uh is uh is harmful to not only to our economy, but also uh it may put individuals uh at risk from bad actors. So with that, I hope that uh I hope that my colleagues will agree with me that to support Mr. Gonzalez's amendment and vote against the the underlying bill.
▶ 4:45:48I yield back. The gentleman yields back. Who seeks to on debate for the Gonzalez bill? If there's no further debate on the amendment, uh the question now occurs on Mr. Gonzalez's amendment. All those in favor of the amendment shall signify by saying I. All those opposed signify by saying no. No. Opinion of the chair, the no's have it. The no's have it. The amendment is not adopted. Gentleman from Texas. Yeah, Mr. Chairman, I ask for a recorded vote.
▶ 4:46:14A 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 3 of the committee rules. Further proceeding on the amendment are postponed. Are there further amendments to Mr. Davidson's amendment in the nature of a substitute? Ranking member? There's amendment at the desk. Let's pause while it's distributed. Mr. Chairman, can I Reserve a point of order? Uh the gentleman from Ohio reserves a point of order.
▶ 4:47:26The clerk will report. The clerk will report the amendment, An amendment to the amendment in the nature of a substitute to HR 425 offered by Ms. Waters of California designated as HR 42504. Without objection, amendments considered read and the gentlewoman from California is now recognized to describe her amendment. Thank you, Mr. Chairman. I'll ask my colleagues if they recognize the name of the following companies.
▶ 4:47:55Financial Trust Company, Southern Trust, Maple The Great St. Jim LLC, HB Arcade Associates Incorporated, Liquid Funding LTD, Eli Sham These are the shell companies of Jeffrey Epstein, or more specifically,
▶ 4:48:26those of which we are aware. They are the corporate vehicles through which Epstein found his victims, recruited his customers, took payment, or funded his operations. They represent and reveal the network of people around him who helped him to tran- traffic young girls and women, to launder money, and to commit so many terrible crimes.
▶ 4:48:55The investigation into Epstein, his associates, and their bad acts is ongoing, and there may be even more companies that will be uncovered. This is important for restitution to the survivors of Jeffrey Epstein's crimes. Epstein used a tangled web with many individuals involved in human trafficking and child sexual abuse in a web of shell companies.
▶ 4:49:24My amendment would ensure that these investigations can continue to leverage the benefits of the Corporate Transparency Act by prohibiting this bill from applying to beneficial ownership information that is highly useful in law enforcement [snorts] efforts to detect, prevent, or prosecute crimes related to Jeffrey Epstein and his associates so that those individual investigations
▶ 4:49:56can continue. I urge members to stand up for Epstein survivors and support this amendment to this bad bill. I yield back. The gentlewoman yields back. Does the gentleman from Ohio insist on his point of order?
▶ 4:50:11I withdraw my point of order. Gentleman seek time? I do. Gentleman from Ohio, Mr. Davidson, is recognized for 5
▶ 4:50:18Thank you, Mr. Chairman. I do move to strike the last word and I I oppose the general lady's amendment and uh you know, she knows that the Epstein scandal uh didn't go undetected. It went unprosecuted and frankly banking did detect a lot of these things and flagged them and and it didn't stop It took other actions to get after this and and even after uh the prosecution of Mr.
▶ 4:50:44Epstein in the early 2000s and settlement agreement in Miami, uh you know, there was other activity that continued and ultimately put him in jail under the previous Trump administration. So, uh the rules did go uh did detect the activity. In fact, the Virgin Islands reached a $75 million settlement with J.P. Morgan Chase because J.P. Morgan Chase uh felt that they didn't adequately comply with their existing burdens under the law uh or at least the Virgin Islands did and J.P.
▶ 4:51:14Morgan reached that settlement agreement. So, uh there are rules in um but it takes lawmakers to enforce uh or or it takes prosecutors in place to prosecute the law. It takes juries in place to convene the grand juries to convene trials and it takes due process in to get convictions.
▶ 4:51:36And so those are some deficiencies that that need addressed throughout our justice system, but a duplicative amendment like this is really a red herring on a salacious topic. I oppose the gentleman's amendment and yield to the chairman if you'd like time. I yield to balance my time. Mr. Davidson yields back. Is there further debate on Ms. Waters' amendment? Mr. Lynch. Yeah, move to strike the last word. The gentleman is recognized for 5 minutes.
▶ 4:52:06It it is easy, you know, being on the Oversight Committee and seeing how hard it was for people to track down the various shell corporations that were used by Jeffrey Epstein, you you gain a whole new appreciation for for law enforcement. And I think that's exactly why the National Association of District and the National Association of of Deputy US are against this this amendment.
▶ 4:52:34It is really hard if someone knows what they're doing and has the the financial wherewithal to to to move around to jurisdictions that less robust prosecution and less robust standards, how they can use these tools. So the bottom line is this amendment in the nature of substitute would be a huge and and help to people like Jeffrey Epstein.
▶ 4:53:01And you you could say, "Okay, the the the cops just got to work harder to get them." But you're putting obstacles in their way. You are definitely putting obstacles in their way. Uh Corporate Transparency Act created a And remember, Epstein, that went on for a good 20, 25 years what he was doing, abusing those little girls. And it took a long time to to bring him to justice.
▶ 4:53:31The Corporate Transparency Act creates a a database we can track who's behind certain Where where not everyone can, but those law enforcement agencies like the District Attorney's Office and like the US Attorney's Office can immediately uh individuals and and uh and companies that are operating outside
▶ 4:54:01the law. that that just it it if if we had had this in place it would have made it much much more difficult, maybe impossible for Jeffrey Epstein to to put together his whole network of uh tax havens and and shell corporations uh and give him the power and the to abuse those girls.
▶ 4:54:29uh it it is it is on point, uh and I support the ranking member's amendment. And uh we we were we were moving in the right direction when President Trump trying signed this Corporate Transparency Act into law uh just a few years ago. And uh I I I cannot understand why we would remove those protections.
▶ 4:54:56Uh seems like this country's taken a a real turn for the worse. And uh we're not we're not trying to catch bad guys anymore. Uh you know, we we've we've we've drifted from our constitutional ideals here. Uh now we're we're protecting the bad You know, we're we're part of gangster nation now. Where, you know, you just get what you can.
▶ 4:55:24You know, it's uh it's a sad day. But uh hopefully we'll get through it at some I yield back the balance of my time. The gentleman yields back. For additional uh debate on the Waters amendment. There's no further debate. The question now occurs on the Waters amendment. Those in favor of the amendment shall signify by saying I. I. All those opposed signify by saying no. No. In the opinion of the chair, the no's have it. The no's have it.
▶ 4:55:54The amendment is not Ranking member. Recorded vote is requested. Raise your hand. A sufficient number having raised their hand, a recorded vote is ordered pursuant to subsection C5 of rule three. Committee rules further proceedings on the amendment are postponed. Are there any further amendments to the amendment uh Mr. Davidson's amendment in the nature of a substitute? Pursuant to the previous Sorry.
▶ 4:56:21Seeing no further amendments, without objection, the previous question on the substitute is ordered and recorded votes on the pending amendments have been postponed. Once those votes are taken, the committee will immediately vote on the adoption of the amendment in the nature of substitute and then will consider the question to report the member. Pursuant to the previous order of the chair, declares the committee in recess subject to the call of the chair. All members are reminded we will reconvene immediately following votes on the House floor. The committee stands in
▶ 6:04:55The committee will reconvene. Pursuant to the chair's previous order, we will now take the postponed votes on the pending amendments to HR 941. The question on the amendment offered by Ranking Member Waters, this is Waters will be voting electronically and the clerk will open the vote.
▶ 6:05:43Aim a little lower there. It's right in front of There you go. Got it.
▶ 6:06:24Is any member who hasn't voted or would like to change their vote? The clerk will close the vote and Mr. Chairman, on this vote the eyes are 20 and the nays are 25. Majority having voted in favor of the amendment, the amendment Again, I'm sorry. The majority having voted against the amendment, the amendment is not agreed to.
▶ 6:06:54Question now occurs on the adoption of the amendment in the nature of a All those in favor shall signify by saying I. I. All those opposed signify by saying no. In the opinion of the chair, the eyes have it. The eyes have it and the amendment in the nature of a substitute is adopted. The question now occurs on ordering the bill as amended reported to the house with a favorable recommendation. Those in favor shall signify by saying I. I. All those opposed signify by saying no.
▶ 6:07:24In the opinion of the chair, the eyes have it. What purposes Representative Barr seek Request a recorded vote. Gentleman Rick requests a recorded vote. All those in favor recorded vote, raise your hands. A sufficient number having raised their hand, a recorded vote is ordered. We'll now take that recorded vote on ordering the bill as amended favorably reported. The clerk will open the vote.
▶ 6:07:59Who is Any member who has not voted or would like to change their vote. The clerk will close the vote and Mr. Chairman, on this vote the eyes are 26 and the nays are 22.
▶ 6:08:30A majority having voted in favor of HR 941 as amended, the bill is ordered favorably reported to the house. Without objection, a motion to reconsider is laid on the table. We now take the postponed votes on the pending amendments to HR 8286. The question is on the amendment offered by Representative Meeks. This is Meeks The clerk will open the vote.
▶ 6:09:17Is there any member who has not voted or would like to change their vote? The clerk will close the vote and Mr. Chairman, on this vote the eyes are 22 and the nays are 26. A majority having voted against the amendment, the amendment is not agreed to. The question is now on the amendment offered by Representative Vargas. This is amendment Vargas 032.
▶ 6:09:45032, the clerk will open the vote.
▶ 6:10:10Is there any member who has not voted? Or would like to change their vote? The clerk will close the vote and Mr. Chairman, on this vote the eyes are 24 and the nays are 26. A majority having voted against the amendment, the amendment is not agreed The question is now on the second amendment offered by ranking member Waters. This is Waters 165. The clerk will open the vote.
▶ 6:10:59Mr. Fitzgerald. We'll let you get Mr. Flood. Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report.
▶ 6:11:30Mr. Chairman, on this vote the eyes are 24 and the nays are 27. A majority having voted against the amendment, the amendment is not agreed Question now occurs on the amendment offered by Representative Casten. This is Casten 05. Clerk will open the vote.
▶ 6:12:06Does anybody shift? Is there any member who has not voted?
▶ 6:12:36Or would like to change their vote? Clerk will close the vote and report. Mr. Chairman, on this vote the eyes are 24 and the nays are 27. Majority having voted yes, the amendment the amendment is not agreed to. Question now is on the amendment offered by Representative Tlaib. This is Tlaib Clerk will open the vote.
▶ 6:13:45Where is he? Is there any member who has not voted? Or would like to change their vote? Clerk will close the vote and report. Mr.
▶ 6:14:10Chairman, on this vote the eyes are 23 and the nays are 26 A majority having voted against the amendment, the amendment is not agreed The question now occurs on the adoption of the amendment in the nature of the substitute. All those in favor shall signify by saying I. I. All those opposed shall signify by saying no. In the opinion of the eyes have it. The eyes have it and the amendment in the nature of the substitute is adopted.
▶ 6:14:39Question now occurs on ordering the bill as amended reported to the house with a favorable recommendation. Those in favor shall signify by saying I. I. All those opposed signify by saying no. In the opinion of the chair the eyes have it. The congressman from Wisconsin. Mr. Style. Mr. Style has requested a recorded vote. All those in favor of recorded vote raise your hands.
▶ 6:15:08A sufficient number having raised their hand a recorded vote is ordered. We'll now take the vote on ordering the bill as amended favorably reported. Clerk will open the vote.
▶ 6:15:40Mr. Meuser. Clerk will close the vote and report. Mr. Chairman, on this vote the eyes are 27 and the nays are 24. A majority having voted in favor of HR 8286 as amended, the bill is ordered favorably reported to the house.
▶ 6:16:08Without objection, the motion to reconsider is laid on the table. Well, I'll take the postponed votes on the pending amendments to HR 8290. The question is on the third amendment offered by ranking member Waters. This uh amendment one. Clerk will open the vote.
▶ 6:17:22Mr. Nunn.
▶ 6:17:44Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report. Mr. Chairman, on this vote the eyes are 24 and the nays are 28. 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. All those in favor shall signify by saying I. I. All those opposed signify by saying no. In the opinion of the chair, the eyes have it. The eyes have it and the amendment in the nature of a substitute is adopted.
▶ 6:18:14Question now occurs on ordering the bill as amended reported to the house with a favorable recommendation. Those in favor shall signify by saying I. I. All those opposed signify by saying no. In the opinion of the chair, the eyes have it. Mr. Sessions? The gentleman from Texas requests a recorded vote. All those in favor of a recorded vote, raise your hand. A sufficient number having raised their hand, a recorded vote is requested.
▶ 6:18:42We'll now take that recorded vote on ordering the bill as amended favorably reported. The clerk will open the vote.
▶ 6:19:12Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report. Mr. Chairman, on this vote the eyes are 32 and the nays are 20. Majority having voted in favor of the bill H.R. 8290 as amended, The bill is ordered favorably reported to the house. Without objection, a motion to reconsider is laid on the table.
▶ 6:19:40We'll now take the postponed votes on the pending amendments to HR 425. The question is on the fourth amendment offered by ranking member Waters. This is HR 42508. The clerk will open the vote.
▶ 6:20:19Is there any member who hasn't voted or would like to change their vote? Clerk will close the vote and report. Mr. Chairman, on this vote the ayes are 24 and the nays are 27. A majority having voted against the amendment, the amendment is not agreed to. The question now is on the amendment offered by Representative Beatty. This is HR 42510. Clerk will open the vote.
▶ 6:21:19Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report. Mr. Chairman, on this vote the eyes are 24 and the nays are 27. Majority having voted against the amendment, the amendment is not agreed to. Question now is on the amendment offered by Representative Gonzalez. This is HR 42509. The clerk will open the vote.
▶ 6:22:14Is there any member who has not voted or would like to change their vote? The clerk will close the vote and Mr. Chairman, on this vote the eyes are 24 and the nays are 27. Majority having voted against the amendment, the amendment is not agreed to. Question now is on the fifth amendment offered by Ranking Member Waters. This is HR 42504. The clerk will open the vote.
▶ 6:23:06Is there any member who hasn't voted or would like to change their vote? Clerk will close the vote and report. Mr. Chairman, on this vote the eyes are 25 and the nays are 26. Majority having voted against the amendment, the amendment is not agreed to. Question now occurs on the adoption of the amendment in nature of a substitute. All those in favor shall signify by saying I. I. All those opposed signify by saying no. No. Opinion of the chair, the eyes have it. The eyes have it. The amendment in the nature of a substitute is adopted.
▶ 6:23:37Mr. Chairman, could I ask for a recorded Uh not quite sure. Yeah, 1 second, sir. Question now occurs on ordering the bill as amended reported to the house with a favorable recommendation. Those in favor signify by saying I. All those opposed signify by saying no. Opinion of the chair, the eyes have it. Mr. Davidson. Mr. Chairman, could I ask for a recorded
▶ 6:23:58A recorded vote's been requested by the chair gentleman from Ohio. All those in favor record vote, raise your hands. A sufficient number having raised their hands, a recorded vote is so ordered. We'll now take that vote on ordering the bill as amended favorably reported. The clerk will open the vote.
▶ 6:24:30Uh yes, I just give us 1 minute. There you go. You got it. Is there any member who has not voted who would like to change their vote? Clerk will close the vote and report.
▶ 6:24:56A majority having voted in favor of HR 425 as amended, the bill's ordered favorably reported to the house without objection. Motion to reconsider is laid on the table. Without objection, staff are authorized to make necessary conforming changes. The bill is considered today in pursuant to House Rule 11, Clause 2L, I give notice that all members will have the requisite number of days to file supplementary, minority, additional, or dissenting views. There being no further business, the committee stands adjourned.
▶ 6:25:26Thank you, James.