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US House

A Closer Look
at Financial Issues...

For constituents seeking to dig deeper into their representative's stands on issues concerning financial regulation and household economic security, this page provides additional detail on 10 key House votes from 2017-2018, including pro-and-con quotes that cut to the heart of partisan and ideological differences in these policy areas.
1. Deregulating Swaps Markets
(Votes lookup at Roll Call #54)

Voting 239 for and 182 against, the House on Jan. 12, 2017, passed a bill (HR 238) that would reduce the Commodity Futures Trading Commission's power to regulate the derivatives market under the 2010 Dodd-Frank financial-regulation law. An independent agency, the CFTC oversees derivatives trading as well as futures trading in farm commodities, oil and natural gas. In 2010, the agency began the first federal regulation of the then-$700 trillion derivatives market, whose collapse in 2008 helped crash the U.S. and global economies. In part, this bill would subject proposed CFTC rules to time-consuming cost-benefit analyses and impede the regulation of overseas derivatives trading by subsidiaries of U.S. financial institutions.

Supporter Mike Conaway, R-Texas:
The bill would help farmers, transportation firms, manufacturers, utilities and others "use futures and swaps markets to reduce the uncertainty that their businesses face."
Opponent Jim McGovern, D-Mass.:
Republican leaders "don't want to provide necessary resources to the [CFTC] to patrol Wall Street. Without cops on the beat, who will ensure Wall Street actors aren't gaming the system and putting the economy at risk for another meltdown?"
A yes vote was to send the Senate a bill that would reauthorize the CFTC for five years with weakened regulatory authority.
2. Nullifying Rule On Retirement Savings:
(Votes Lookup at Roll Call #96)

Voting 231 for and 193 against, the House on Feb. 15, 2017, nullified a rule designed to guide state governments in setting up privately managed payroll-deduction plans for private-sector workers who do not have access to retirement plans through their employers. Nationwide, about half of private-sector employees are in this situation. In response, at least seven states were setting up voluntary work-based IRA-style plans that uncovered individuals could use to save for retirement. Because these are mainly low-income employees, they have been a neglected market for Wall Street retirement plans.

Under a typical state program, workers at firms with at least five employees are automatically signed up but can opt out at any time. Participants contribute 3 percent of their pay or choose another rate. Employers are required to forward payroll deductions to the plan administrator but make no matching contributions and cannot be held liable for fund performances. States are expected use their experience in managing public-employee pension funds to ensure these new private-employee plans are soundly run.
Supporter Virginia Foxx, R-N.C.:
"It is already hard enough for many small businesses to provide their employees with retirement options, and this regulation only makes it less likely they will do so."
Opponent Jan Schakowsky, D-Ill.:
Killing the rule would "jeopardize the financial security of 1.3 million Illinois workers and millions of others across the country [who lack] access to job-based retirement plans."
A yes vote was to send the nullification measure (HJ Res 66) to the Senate, where it was passed and sent to President Trump, who signed it into law on May 17, 2017.
3. Nullifying Rule On Class Actions, Arbitration Clauses
(Votes Lookup at Roll Call #412)

Voting 231 for and 190 against, the House on July 25, 2017, nullified a Consumer Financial Protection Bureau rule that would enable individuals with similar grievances to band together in class-action lawsuits against credit card issuers, banks, payday lenders and other retail financial firms regulated by the bureau. Consumers entering into contracts with financial firms are required to agree to use mandatory arbitration to resolve disputes, thus signing away their right to pursue claims in court. The nullified rule sought to prohibit the use of arbitration clauses to bar customers from participating in class-action suits. Mandatory arbitration is conducted by company-approved mediators under rules that limit discovery, bar disclosure of the outcome and prohibit meaningful appeals.

Supporter Ken Buck, R-Colo.:
"Arbitration allows parties to use an independent mediator, instead of hiring expensive lawyers, to settle a dispute. While the [new] a bad deal for consumers, it is a huge win for trial lawyers, who make an average of $1 million per case."
Opponent Marcy Kaptur, D-Ohio:
Arbitration clauses "prevent cheated or defrauded consumers from going to court. In other words, they prevent the victims from going to court [and] handcuff the customers, not the megabanks that took them to the cleaners.":
A yes vote was to send the nullification measure (HJ Res 111) to the Senate, where it was passed and sent to President Trump, who signed it into law Nov. 1, 2017.
4. Deregulating Rule On Predatory Home Lending
(Votes lookup at Roll Call #64)

The House on Feb. 8, 2018, voted, 280 for and 131 against, to relax a Consumer Financial Protection Bureau rule designed to curb predatory home-lending practices such as those linked to millions of foreclosures in the 2008-2009 financial meltdown. The rule sets standards for "qualified mortgages," or QM, in which the borrower is judged a good credit risk, the lender is protected against certain lawsuits and points and fees are capped at 3 percent of the loan amount. This bill (HR 1153) would exempt from the cap upfront escrow charges and the cost of title insurance provided by firms affiliated with the lender. Backers said this would help community banks expand homeownership opportunities, while critics said it would inject unnecessary risk into many loans while allowing title companies to charge excessive fees.

Supporter Bill Huizenga, R-Mich.:
The bill "is narrowly focused to promote access to affordable mortgage credit without overturning the important consumer protections and sound underwriting required under [the Dodd-Frank law's] ability-to-repay provisions."
Opponent Maxine Waters, D-Calif.:
"Unfortunately, this bill is yet another attempt to undermine the strong consumer protections Democrats established under Dodd-Frank, taking us back to the days of the subprime bubble."
A yes vote was to send the bill to the Senate, where it failed.
5. Allowing Interest Rates To Bust State Usury Limits
(Votes lookup at Roll Call #78)

Voting 245 for and 171 against, the House on Feb. 14, 2018, passed a bill (HR 3299) that would allow interest rates to remain unchanged, even if they exceed legal limits in a borrower's state, when "non-bank" lenders purchase loans from federally chartered banks elsewhere. Numerous states and the District of Columbia have usury laws that limit interest rates charged on short-term loans by so-called payday lenders. This bill would allow such lenders to circumvent usury limits in a given state by partnering with national banks based in states with higher or non-existent limits.

The bill would overturn a 2015 ruling by the 2nd U.S. Circuit Court of Appeals that prevents the National Bank Act from pre-empting the usury laws of New York, Connecticut and Vermont. The Supreme Court declined to review the ruling, which critics say has disrupted consumer-lending markets in all states.
Supporter Jeb Hensarling, R-Texas:
The bill "would preserve the lawful interest rate on a loan originated by a bank even if the loan is sold, assigned or transferred to a nonbank third party."
Opponent Jared Polis, D-Colo.:
The bill would "make it easier for unscrupulous payday lenders to actually skirt state interest rate caps."
A yes vote was to send the bill to the Senate, where it failed.
6. Scaling Back Rule On Megabanks' Capital Reserves
(Votes lookup at Roll Call #89)

Voting 245 for and 169 against, the House on Feb. 27, 2018, passed a bill (HR 4296) that would direct federal banking regulators to redefine rules under which America's 10 largest banks hold capital as a cushion against future losses that could seriously damage the economy. At present, the "operational risk" for determining the megabanks' reserves is based largely on past performance. This bill would base risk instead on current and projected performance, disregarding previous management mistakes. The change would free up hundreds of billions of dollars that the banks could use for purposes such as lending, paying dividends or buying back stock. But critics said it could potentially lead to failures and taxpayer bailouts of banks deemed too big to fail.

Supporter Blaine Luetkemeyer, R-Mo.:
The existing risk measurement "has forced our banks to hold hundreds of billions of dollars in reserve rather than putting the money to work in the form of loans and investments. That is money that could be used to fund mortgage loans, car loans and other day-to-day financing for American consumers."
Opponent Tulsi Gabbard, D-Hawaii:
The bill "would allow big banks, like Wells Fargo, for example, who defrauded the American people just in the last several months by opening millions of fake accounts, to get away with a slap on the wrist. And the American people are set up to take the fall for their actions."
A yes vote was to send the bill to the Senate, where It failed.
7. Scaling Back 'Too Big To Fail' Banking Rules
(Votes lookup at Roll Call #135)

Voting 297 for and 121 against, the House on April 11, 2018, passed a bill (HR 4061) making it more difficult for the Financial Stability Oversight Council to regulate large non-bank financial institutions, such as insurance groups and mutual funds, whose failure could seriously damage financial markets and the overall economy. Under the bill, the FSOC would have to clear newly imposed bureaucratic hurdles before it could designate a non-bank institution for closer federal supervision and potentially new limits on its activities.

Comprised of the heads of the government's nine financial-regulatory agencies, the FSOC was created by the 2010 Dodd-Frank law to give another layer of scrutiny to "systemically important" banks and non-bank institutions popularly deemed "too big to fail." The council can require potentially unstable institutions to increase capital and liquidity levels and refrain from certain high-risk business practices, among other steps.
Supporter Randy Hultgren, R-Ill.:
"Let's remember that investors bear the costs of inappropriate regulation being applied to nonbanks....We should be providing nonbanks like mutual funds a chance to work with the FSOC to address their concerns before slapping investors with new regulatory costs."
Opponent Maxine Waters, D-Calif.:
"One of the reasons Congress created the FSOC was to make sure that large, interconnected firms like Bear Stearns, AIG or Lehman Brothers would never again devastate the stability of our financial system and jeopardize our country's strong economy with...relentless demand for profits over safe and sound operations."
A yes vote was to send the bill to the Senate, where it failed.
8. Exempting Community Banks From Volcker Rule
(Votes lookup at Roll Call #139)

Voting 300 for and 104 against, the House on April 13, 2018, passed a bill (HR 4790) that would exempt most of the nation's 6,000 smaller "community" banks from the so-called Volcker Rule, which is designed, in part, to prohibit banks from making risky investments that could endanger their solvency and the overall financial system. Part of the 2010 Dodd-Frank financial-oversight law, the rule bars short-term trading by banks in instruments including stocks, derivatives and commodity futures. Community banks are loosely defined as depository institutions with less than $10 billion in assets. The bill also would give the Federal Reserve exclusive rulemaking authority over the Volcker Rule.

Supporter Ken Buck, R-Colo.:
The bill was needed because "community banks are suffering under an unbearable regulatory burden. And when our community banks suffer, our small towns and rural communities suffer also."
Opponent Jim McGovern, D-Mass.:
The Volcker Rule "prohibits banks from engaging in risky trading activities that contributed to the 2008 financial crisis. Simply put, it prevents banks from acting like casinos and gambling with our money."
A yes vote was to send the bill to the Senate, where it failed.
9. Repealing Consumer Bureau Action On Auto Lending
(Votes lookup at Roll Call #171)

Voting 234 for and 175 against, the House on May 8, 2018, repealed a five-year-old action by the Consumer Financial Protection Bureau against car and truck loans that charge higher interest rates to minority borrowers than to other similarly qualified borrowers. Backers of the repeal measure (SJ Res 57) said the bureau is prohibited by the 2010 Dodd-Frank law from regulating auto dealerships. But the bureau says it has authority under the 1974 Equal Credit Opportunity Act to combat discrimination in auto credit issued by third-party lenders. That law prohibits creditors from discriminating based on race, color, religion, national origin, sex, marital status or age.

Under third-party lending, finance companies originate loans that dealers arrange for their customers, with dealers marking up the interest rate and taking a share of the proceeds. Next to home mortgages and student loans, auto loans are the third-largest source of household debt in the United States.
Although the consumer bureau did not issue a formal rule on auto lending, critics say the 2013 guidance is essentially the same as a regulation and therefore subject to repeal under the Congressional Review Act. This would greatly expand the scope of the review act, which to date had been used only to nullify actual regulations within 60 working days of their effective date.
Supporter Lee Zeldin, R-N.Y.:
"Today's fight over this important resolution may sound like a wonky policy debate, but to my constituents, permanently repealing this flawed...ruling may make the difference between being denied or approved for an auto loan they desperately need."
Opponent Carolyn Maloney, D-N.Y.:
The bill "would have the effect of encouraging discrimination against minority borrowers in the auto lending market and discouraging the consumer bureau from cracking down on this horrible practice."
A yes vote was to send the repeal measure to President Trump, who signed it into law on May 21, 2018.
10. Rolling Back Dodd-Frank Financial Regulations
(Votes lookup at Roll Call #216)

Voting 258 for and 159 against, the House on May 22, 2018, passed a bipartisan bill (S 2155) that would largely exempt community banks and credit unions from the 2010 Dodd-Frank financial-oversight law. The measure would also scale back restrictions the law placed on about 15 of the largest banks and 25 medium-sized regional banks, while leaving intact the authority of the Consumer Financial Protection Bureau to operate as an independent agency largely free of congressional oversight.

The bill weakens anti-discrimination rules under which banks report data on lending to minorities, raising from 50 to 500 the number of home loans a bank can issue before becoming subject to the Dodd-Frank reporting requirement. Other provisions would require credit reporting companies to allow consumers to freeze their credit reports free of charge and protect student loan borrowers when a cosigner dies or enters bankruptcy.
Supporter Andy Barr, R-Ky.:
The bill "is not about Wall Street. This is about community eastern Kentucky who told me that they used to make a business judgment about the creditworthiness of a farmer and now the government, a bureaucrat, decides whether or not that farmer gets a loan."
Opponent Maxine Waters, D-Calif.:
"Community banks, credit unions and the economy are doing great with Dodd-Frank reforms in place. The banking industry keeps making record profits, an average of $167 billion in annual profits in the last three years....How much more money do they want from consumers?"
A yes vote was to send the bill to President Trump, who signed it into law on May 24, 2018.
Copyright 2019, Thomas Voting Reports, Inc.