2017: Fitzpatrick Voted Against Disapproving The Cardin-Lugar Rule,
Which Required That Oil, Gas And Mineral Extraction Public Companies
Publish Payments To Foreign Countries Where They Operate. In February
2017, Fitzpatrick voted against disapproving the Cardin-Lugar Rule via
the Congressional Review Act. According to Congressional Quarterly,
"This resolution disapproves the rule issued by the Securities and
Exchange Commission (SEC) on July 27, 2016, known as the Disclosure of
Payments by Resource Extraction Issuers Rule, that requires resource
extraction issuers to provide detailed, public reporting of all payments
to governments that equal or exceed $100,000 per project annually." The
vote was on the legislation. The House agreed to the legislation by a
vote of 235 to 187. The Senate then passed the resolution, which the
president later signed the into law. [House Vote 72,
2/1/17; Congressional
Quarterly, 1/27/17;
Congressional Actions, H. J. Res.
41]
The SEC Created A Rule In June 2016 That Required "Foreign And
Domestic Companies Listed On U.S. Stock Exchanges And Involved In
Oil, Gas And Mineral Resource Extraction Must Publish The
Project-Level Payments They Make To Foreign Countries In Which They
Operate." According to a press release from Sen. Ben Cardin
(D-MD), "The U.S. Securities and Exchange Commission (SEC) ruled
Monday that all foreign and domestic companies listed on U.S. stock
exchanges and involved in oil, gas and mineral resource extraction
must publish the project-level payments they make to foreign
countries in which they operate. The rule implements Section 1504 of
the Dodd-Frank Wall Street Reform and Consumer Protection Act, a
provision authored by U.S. Senators Ben Cardin (D-Md.) and Richard
Lugar (R-Ind.) in 2010. America led the international community in
promoting transparency in the extractive industry by adopting
Cardin-Lugar six years ago, but delays by the SEC and a spurious
court challenge by the oil and gas industry have allowed other
countries to surpass the United States." [Sen. Cardin Press
Release,
6/27/16]
Purpose Of The Rule Was In Part To Fight Global Corruption.
According to Congressional Quarterly, "The Dodd-Frank Wall Street
Reform and Consumer Protection Act (PL 111-203) directs the
Securities and Exchange Commission (SEC) to develop rules that
require companies that extract oil, natural gas or other minerals
and that are registered in the United States to disclose certain
payments to foreign governments or to the U.S. federal government.
The provision in the law was meant 'to support global efforts to
improve the transparency of payments made in the extractive
industries in order to combat global corruption and promote
accountability.'" [Congressional Quarterly,
1/27/17]
Republican Rule Opponents Argue, In Part, That The Rule May Put
Resource Extraction Issuers (REIs) At Risk By Forcing Disclosure Of
Information That The Host Nation Prohibits. According to
Congressional Quarterly, "Supporters of the resolution, primarily
Republicans, argue that the rule puts REIs at risk because it may
require them to disclose information that the host nation of their
project prohibits from disclosure or is commercially sensitive. They
argue that oil and natural gas companies in the U.S. are already
leading the push for transparency in payments to foreign governments
and do not require an inflexible rule to force them to do so. They
also point to the extractive industries transparency initiative, a
voluntary international transparency program, as a better, more
realistic alternative to the rule." [Congressional Quarterly,
1/27/17]
Rule Was In Part Designed To Combat Bribery. According to The
Atlantic, "The final bill included a measure, co-sponsored by
Senators Ben Cardin and Richard Lugar, requiring that all oil, gas,
and mineral companies on the U.S. stock exchange disclose any
payments they make to foreign governments for licenses or permits
for development. It aimed to curb bribery and give poor countries
rich in resources a chance to hold their governments and
resource-extraction companies accountable. After years of delay, on
June 27, 2016, the Securities Exchange Commission published a final
version of the rule that enforces Cardin-Lugar. It was set to go
into effect in 2018." [The Atlantic,
2/1/17]
The Hill: Senate Votes To Repeal Transparency Rule For Oil
Companies. According to The Hill, "Senate votes to repeal
transparency rule for oil companies. The Senate voted strictly along
party lines Friday morning to repeal a regulation requiring
disclosures for the payments that energy companies make to foreign
governments. The measure passed 52-47 in a pre-dawn vote. The
Securities and Exchange Commission's (SEC) foreign payments rule was
mandated by a key provision of the 2010 Dodd-Frank financial reform
bill and was meant to reduce corruption in resource-rich countries
by detailing the royalties and other payments that oil, natural gas,
coal and mineral companies make to governments." [The Hill,
2/3/17]
NOTE TO RESEARCHER. Find companies that would have been subject
to this rule that the target is a) invested in b) has received
campaign donations from. [Congressional Quarterly,
1/27/17]
2018: Fitzpatrick Voted To Raise The Threshold Set By Dodd-Frank Where
A Bank Is Deemed Large Enough That If It Failed, It Would Cause
Significant Economic Harm. In May 2018, Fitzpatrick voted for a bill
that increased the asset threshold for financial institutions to $250
billion for when they were subject to more stringent financial
regulations. According to Congressional Quarterly, "Passage of the bill
that would apply the more stringent bank regulation provisions of the
2010 financial overhaul to banks with $250 billion in assets, instead
of those with at least $50 billion in assets. It would also allow banks
with less than $10 billion in assets to trade with depositors' money.
The bill would lift the threshold for disclosure requirements to $10
million for employee-owned securities and would allow venture capital
funds to have up to 250 investors and be exempt from certain registering
requirements. It would provide consumers with the right to request a
'security freeze' on their credit reports, which would prohibit a
consumer reporting agency from releasing information from the consumer's
credit report without express authorization. It would define a
'qualified mortgage' as any residential mortgage loan held by a bank,
removing the requirement that for a 'qualified mortgage,' a bank must
determine that a mortgage recipient has the ability to repay." The vote
was on passage. The House passed the bill by a vote of 258 to 159. The
bill was later signed into law by the president. [House Vote 216,
5/22/18; Congressional
Quarterly, 5/22/18; Congressional
Actions, S.
2155]
The Legislation Divided Democrats. According to the AP, "The
Republican-led legislation, pushed by Wall Street banks as well as
regional banks and smaller institutions, garnered some votes from
House Democrats. Similarly, the bill splintered Democrats into two
camps when the Senate voted 67-31 to approve it in March."
[Associated Press via the PBS,
5/22/18]
The Bill Was Ostensibly Aimed At Helping Small Banks. According
to the AP, "The legislation is aimed at especially helping small and
medium-sized banks, including community banks and credit unions. But
critics argue that the likelihood of future taxpayer bailouts will
be greater once it becomes law. They point to increases in banks'
lending and profits since Dodd-Frank's enactment in 2010 as
debunking the assertion that excessive regulation of the banking
industry is stifling growth." [Associated Press via the PBS,
5/22/18]
Legislation Increased The Threshold For Increased Regulation Five
Times Higher Than Dodd-Frank Created; Banks That Would No Longer Be
Subject Included BB&T Corp., SunTrust Banks, Fifth Third Bancorp and
American Express. According to the AP, "The bill makes a fivefold
increase, to $250 billion, in the level of assets at which banks
are deemed to pose a potential threat if they fail. The change would
ease regulations and oversight on more than two dozen financial
institutions, including BB&T Corp., SunTrust Banks, Fifth Third
Bancorp and American Express." [Associated Press via the PBS,
5/22/18]
Bank's Net Income Increased 27.5 Percent Since 2017. According
to the AP, "U.S. banks' net income climbed to $56 billion in the
January-March quarter, a 27.5 percent increase from a year earlier,
as profits were revved up by the corporate tax cuts enacted late
last year, the Federal Deposit Insurance Corp. reported Tuesday."
[Associated Press via the PBS,
5/22/18]
Bill Also Exempted Certain Banks And Credit Unions From Being
Forced To Report Certain Mortgage Loan Data. According to the AP,
"The legislation also exempts certain banks and credit unions from
requirements to report some mortgage loan data. The exempted data
includes the age of a loan applicant, credit score, total loan costs
and interest rate. Critics say that would make it easier for banks
to discriminate against minorities seeking home mortgages and go
undetected." [Associated Press via the PBS,
5/22/18]
2017: Fitzpatrick Voted Against The FY 2018 Republican Study Committee
Budget Resolution Which In Part Significantly Reformed Dodd-Frank. In
October 2017, Fitzpatrick voted against a budget resolution that would
in part, according to Congressional Quarterly, "provide for $2.9
trillion in new budget authority in fiscal 2018. It would balance the
budget by fiscal 2023 by reducing spending by $10.1 trillion over 10
years. It would cap total discretionary spending at $1.06 trillion for
fiscal 2018 and would assume no separate Overseas Contingency Operations
funding for fiscal 2018 or subsequent years and would incorporate
funding related to war or terror into the base defense account. It would
assume repeal of the 2010 health care overhaul and would convert
Medicaid and the Children's Health Insurance Program into a single block
grant program. It would require that off budget programs, such as Social
Security, the U.S. Postal Service, and Fannie Mae and Freddie Mac, be
included in the budget." The underlying legislation was an FY 2018 House
GOP budget resolution. The House rejected the RSC budget by a vote of
139 to 281. [House Vote 555,
10/5/17; Congressional
Quarterly, 10/5/17; Congressional
Actions, H. Amdt.
455;
Congressional Actions, H. Con. Res.
71]
2017: Fitzpatrick Voted For Legislation That Would Have Repealed
Significant Portions Of Dodd-Frank. In June 2017, Fitzpatrick voted
for the Financial Choice Act. According to NPR, "House Republicans voted
Thursday to deliver on their promise to repeal Dodd-Frank --- the
massive set of Wall Street regulations President Barack Obama signed
into law after the 2008 financial crisis. In a near party-line vote, the
House approved a bill, dubbed the Financial Choice Act, which scales
back or eliminates many of the post-crisis banking rules." The vote was
on passage. The House passed the bill by a vote of 233 to 186. The
Senate took no substantive action on the legislation. [House Vote 299,
6/8/17; NPR,
6/8/17;
Congressional Actions, H.R.
10]
Dodd-Frank Was Enacted As A Result Of The Great Recession;
Legislation Would Reduce Scrutiny For Big Banks. According to the
Washington Post, "The Republican-led House on Thursday voted to free
Wall Street from many of the constraints put in place after the 2008
financial crisis, the opening salvo in what is likely to be a
protracted battle over deregulation of the powerful banking
industry. Big banks, from Goldman Sachs to Bank of America, would
face less scrutiny, and other large financial institutions, such as
insurance giant MetLife, could escape tougher rules allaltogether
[sic] under the legislation approved largely along party lines."
[Washington Post,
6/9/17]
Legislation Exempted Banks From A Large Number Of Financial
Regulations If The Bank Increased Its Capital, But Some Big Banks,
Such As JP Morgan Are Not Expected To Do. According to the
Washington Post, "The newly approved legislation would attempt to
ease the burden on the country's nearly 6,000 banks by offering them
a choice: If they want to avoid many of the regulatory barriers
imposed during the Obama administration, they would have to
significantly increase their emergency financial surpluses. That
way, if they run into financial trouble, the banks would be more
likely to survive without taxpayers' help, supporters of the bill
say. [...] For many of the country's largest banks, building the
bigger financial cushion called for under the bill would be
expensive. JPMorgan Chase would need to set aside an additional
$107 billion to take advantage of that option, according to
research by Nomura, a global investment bank. Goldman Sachs and Bank
of America would need to set aside an additional $45 billion and
$82 billion, respectively." [Washington Post,
6/9/17]
Capital Requirement Would Be A Ten Percent Capital Ratio.
According to Congressional Quarterly, "The bill includes numerous
provisions intended to reduce the regulation of banks and financial
service companies, and it establishes a new regulatory regime under
which banks that maintain at least 10% capital ratio as a financial
buffer would no longer be subject to numerous regulatory
requirements." [Congressional Quarterly,
6/7/17]
Legislation Significantly Reduced The Authority Of The Consumer
Finance Protection Bureau. According to Vox, "The Choice Act would
also gut the Consumer Finance Protection Bureau, the brainchild of
Sen. Elizabeth Warren (D-MA). As Mike Konczal wrote for Vox, the
CFPB has won millions from big corporations by suing those who use
'deceptive practices' for their customers." [Vox,
6/8/17]
Legislation Allowed The President To Fire The Head Of The CFPB And
The FHFA For Any Reason. According to CNN, "Hensarling's bill
would give the president the power to fire the heads of the Consumer
Financial Protection Bureau, a consumer watchdog agency created
under Dodd-Frank, and the Federal Housing Finance Agency, which
oversees mortgage giants Fannie Mae and Freddie Mac, at any time for
any -- or no -- reason." [CNN,
6/8/17]
Legislation Removed The CFPB's Ability To Monitor Financial Firms
Closely For Consumer Protections And From Writing Payday and
Car-Title Loan Rules. According to the Los Angeles Times, "The
Financial Choice Act would strip the agency of its ability to
closely monitor financial firms for compliance with consumer
protection laws and specifically prohibits the bureau from writing
any regulations on payday and car-title loans." [Los Angeles Times,
6/8/17]
Legislation Renamed The CFPB To The Consumer Law Enforcement
Agency And Subjected The Agency To The Congressional Appropriations
Process. According to Congressional Quarterly, "The measure
significantly modifies the structure and authority of the CFPB,
converting it into an executive agency funded by annual
appropriations, rather than an independent agency funded directly
from the Fed, and it makes the agency's director subject to removal
by the president 'at will' (rather than for cause, as under current
law). [...] The CFPB would be renamed as the Consumer Law
Enforcement Agency (CLEA)." [Congressional Quarterly,
6/7/17]
CFPB Fined Wells Fargo $100 Million In 2016 For Deceptive
Practices; Legislation Would No Longer Allow The CFPB To Do So In
The Future. According to the Washington Post, "Hensarling's bill
would strip the agency of some of its most important powers. It
would no longer be able to write major rules regulating consumer
financial companies, such as debt collectors, without getting
approval from Congress. The agency would lose some of its
independence because its director would serve at the pleasure of the
president. And it would also no longer be able to levy hefty fines
against financial institutions for 'unfair' or 'deceptive'
practices. The CFPB used those powers to fine Wells Fargo $100
million last year for opening up to 2 million accounts customers did
not ask for or know about." [Washington Post,
6/9/17]
Legislation Repealed The Fiduciary Rule. According to the Los
Angeles Times, "The bill also would repeal a new Labor Department
regulation, largely still pending, that requires investment brokers
who handle retirement funds to put their clients' interests ahead of
their own compensation, company profits or other factors." [Los
Angeles Times,
6/8/17]
The Volker Rule, Which The Legislation Repealed, Prevented Banks
That Have Federally Insured Depositors From Using Their Own Money
For Proprietary Trading And Thus Prevent Banks From Repeating Some
Of The Mistakes That Lead To The Great Recession. According to
Congressional Quarterly, "The measure repeals the Volcker rule
included in Dodd-Frank, which prohibits banks that hold the funds of
federally-insured depositors from using their own funds for
proprietary trading to increase their own profits, or from
maintaining certain relationships with 'risky' hedge funds and
private equity funds. The goal of the Volcker Rule is to prevent
banks from making the types of speculative investments that
contributed to the 2008 financial crisis. Critics, however, say the
rule does not actually address any of the problems that led to the
financial crisis and that it is unwieldy and essentially unworkable,
while supporters of the rule say it is needed to prevent banks from
gambling with the taxpayer-backed funds of depositors."
[Congressional Quarterly,
6/7/17]
Legislation Repealed A Rule Requiring Credit Rating Groups Confirm
That Their Procedures Are Valid. According to Congressional
Quarterly, "It also repeals a requirement that national credit
rating agencies attest to internal controls over the processes used
for determining credit ratings." [Congressional Quarterly,
6/7/17]
Legislation Repealed A Rule Requiring Companies Release A
Comparison Between Its CEO And Its Average Employee. According to
the Washington Post, "The bill would also eliminate rules meant to
rein in Wall Street pay and force companies to release how much
chief executives earn compared with their average employees, a
potentially embarrassing disclosure." [Washington Post,
6/9/17]
Legislation Repealed The "Orderly Liquidation Process" For Firms,
Instead Requiring Them To Go Bankrupt. According to the Washington
Post, "Under the legislation, failing financial firms would be
forced to go through the bankruptcy process rather than the 'orderly
liquidation process' run by regulators under Dodd-Frank."
[Washington Post,
6/9/17]
Orderly Liquidation Was Designed To Prevent A Firms Collapse From
Spreading. According to Vox, "Hensarling isn't just making this
stuff up: His bill would get rid of what's called the Orderly
Liquidation Authority, a key part of Dodd-Frank that controls what
happens when financial firms that could sink the whole economy go
belly-up. Under OLA, the Federal Deposit Insurance Corporation can
step in during a panic to immediately take control of the bank. So
if JPMorgan is on the verge of going bankrupt, the federal
government can declare an emergency and essentially take control of
it overnight, to make sure its collapse doesn't spread throughout
the financial sector. Having a bank go through OLA --- which has
never happened, since we haven't had a real bank panic since
Dodd-Frank was passed --- also ensures that the emergency funding
doesn't come from taxpayers, since the law requires other financial
firms with a stake in the failing bank to pay back the costs. OLA
also allows the government to immediately fire all of the bank's
managers and forces its employees to pay back bonuses." [Vox,
6/8/17]
Legislation Removed The FSOC's Ability To Label Non-Banks
Systemically Important, Which Subjected Those Firms To Stricter
Regulation. According to the Washington Post, "The legislation
would also strip power from the Financial Stability Oversight
Council, an interagency group now led by Mnuchin, to label financial
firms that are not banks, such as MetLife, 'too big to fail' and
subject them to tougher regulatory oversight." [Washington Post,
6/9/17]
Legislation Required The Federal Reserve Create A Mathematical
Formula To Dictate Policy. According to Congressional Quarterly,
"The bill requires the FOMC to develop a mathematical rule --- the
Directive Policy Rule (DPR) --- to direct its decision making on
monetary policy to achieve its dual mandate. The DPR must provide a
strategy to achieve specified goals, identifying which interest rate
is targeted and describing the strategy for systematic adjustment of
the target through response to changes in inflation, estimates of
GDP, estimates of the monetary aggregate and any other variable that
the FOMC determines to be relevant. The DPR must state whether
variables used are historical, current or a forecast and must
include the method of calculating the variable. It must include a
mathematical function and a formula that predicts a range of future
values for the targeted interest rate based on changes to inflation,
GDP, the monetary aggregate and the other relevant variables, and
describe how bank reserves will be adjusted to achieve the target
interest rate. It must also include a calculation that describes
with mathematical precision the expected annual inflation rate over
a five-year period." [Congressional Quarterly,
6/7/17]
Legislation Reduced The Number Of "Stress Tests" On Large Banks.
According to Congressional Quarterly, "The bill directs the Fed to
reduce the frequency of 'stress tests' it conducts on banks with
assets of $50 billion or more to determine whether the banks have
sufficient capital to continue operations in times of economic and
financial stress --- providing that such tests be conducted every
two years rather than annually." [Congressional Quarterly,
6/7/17]
The Financial Services Roundtable Supported The Legislation.
According to the Washington Post, "The Financial Services
Roundtable, an industry lobbying group, cheered the bill's passage,
saying it would 'modernize the financial regulatory system to
advance the goal of boosting the economy without sacrificing
important consumer and taxpayer protections.'" [Washington Post,
6/9/17]
Bank Profits Hit A Record Level In 2016 And Are Up Since
Dodd-Frank Was Enacted. According to the Los Angeles Times,
"Democrats said that bank profits are up and lending has increased
since Dodd-Frank was enacted. Bank profits hit a record $171
billion in 2016, according to the Federal Deposit Insurance Corp.
And in the first quarter of this year, profits were up 13% from a
year earlier, the FDIC said." [Los Angeles Times,
6/8/17]
Vox: "[The Financial Choice Act] Goes Further Than [Repeal],
Rolling Back Oversight In A Way That Could Dramatically Exacerbate
The Likelihood Of Another Financial Crisis, According To Experts In
Financial Regulation." According to Vox, "Spearheaded by House
Finance Chair Rep. Jeb Hensarling (R-TX), the Choice Act begins by
throwing out much of the banking oversight passed under President
Barack Obama's administration, mostly through the Dodd-Frank Act
signed in 2010. But it goes further than that, rolling back
oversight in a way that could dramatically exacerbate the likelihood
of another financial crisis, according to experts in financial
regulation. 'It's a little hard to get your mind around everything
this bill does, because there's almost no area of financial
regulation it doesn't touch,' says Marcus Stanley, policy director
for Americans for Financial Reform. 'There's a bunch of very radical
stuff in this bill, and it goes way beyond repealing Dodd-Frank.'"
[Vox,
6/8/17]
2018: Fitzpatrick Voted To Reduce To Every Two Years -- Down From
Every Year -- For How Often The Fed Conducts "Dodd-Frank" Stress
Tests. In April 2018, Fitzpatrick voted for legislation that would
have, according to Congressional Quarterly, "reduce[d] from twice a
year to once a year the requirement that the Federal Reserve conduct
Dodd-Frank stress tests of financial institutions, and it reduces from
three to two the sets of stress conditions under which banks must be
evaluated by removing the requirement that entities be evaluated under
the adverse conditions scenario. It also prohibit[ed] the Federal
Reserve, when carrying out the Comprehensive Capital Analysis and Review
(CCAR) test, from objecting to a company's capital plan on the basis of
qualitative deficiencies in that company's capital planning process.
(CCAR is comprised of a qualitative assessment of a bank's capital
planning processes and a quantitative assessment of the bank's ability
to maintain sufficient capital to continue operations under stress.)"
The vote was on passage. The House passed the bill by a vote of 245 to
174. The Senate took no substantive action on the legislation. [House
Vote 137, 4/11/18;
Congressional Quarterly,
4/6/18;
Congressional Actions, H.R.
4296]
2017: Fitzpatrick Voted For Legislation That Would Have Repealed
Significant Portions Of Dodd-Frank, Including The Ability Of The
Financial Stability Oversight Council To Declare Non-Banks As
Systemically Important. In June 2017, Fitzpatrick voted for the
Financial Choice Act. According to NPR, "House Republicans voted
Thursday to deliver on their promise to repeal Dodd-Frank --- the
massive set of Wall Street regulations President Barack Obama signed
into law after the 2008 financial crisis. In a near party-line vote, the
House approved a bill, dubbed the Financial Choice Act, which scales
back or eliminates many of the post-crisis banking rules." The vote was
on passage. The House passed the bill by a vote of 233 to 186. The
Senate took no substantive action on the legislation. [House Vote 299,
6/8/17; NPR,
6/8/17;
Congressional Actions, H.R.
10]