2016: Schweikert Voted To Remove The Requirement That The Federal Reserve Automatically Review Certain Institutions With Greater Than $50 Billion In. In December 2016, Schweikert voted for legislation that would have, according to Congressional Quarterly, "modif[ied] the Dodd-Frank Act to eliminate the requirement that the Federal Reserve automatically review bank holding companies with assets greater than $50 billion. The measure would [have] authorize[d] the Financial Stability Oversight Council to require enhanced Federal Reserve supervision and regulation of any bank holding company based on the FSOC's determination of the individual institution's riskiness." The vote was on passage. The House passed the bill by a vote of 254 to 161. The bill died in the Senate. [House Vote 599, 12/1/16; Congressional Quarterly, 12/1/16; Congressional Actions, H.R. 6392]
The Legislation Would Impact 27 Large Banks Deemed "Too Big To Fail" While Leaving Eight On The List. According to Congressional Quarterly, "The bill would remove 27 large banks from the government's 'too big to fail' list. Those banks, whose failure has been deemed to pose a risk to the financial system, get extra scrutiny from the Federal Reserve as a result of the Dodd-Frank law (PL 111-203). The list includes a Deutsche Bank subsidiary, the source of at least $100 million in loans to Trump's businesses, and CIT Group Inc., the company that includes Mnuchin on its board of directors. [...] The bill would leave eight U.S. banks on the list of systemically important financial institutions, and under the stricter regulatory regime that includes stress tests and requirements for so-called living wills on how to unravel these complex institutions in the event of financial failure." [Congressional Quarterly, 12/1/16]
Current Law In Place Was Set Up As A Result Of The 2008 Financial Crisis And Applied "Enhanced Prudential Standards" To Bank Holding Companies With $50 Billion Or More In Assets. According to a Statement of Administration Policy, "The financial crisis revealed grave weaknesses in the Nation's financial regulatory framework. By passing and signing the landmark reforms of the Dodd-Frank Act, the Congress and the President, respectively, took significant steps to limit risks to financial stability and protect taxpayers from the consequences of such risks. Because of the Dodd-Frank Act, the financial regulators have better tools to deal with financial shocks when they occur, and are able to protect Main Street and taxpayers from Wall Street's recklessness. The law, among many other risk controls, provides the prudential regulators, and in particular the Federal Reserve Board of Governors, the ability to apply enhanced prudential standards to bank holding companies with more than $50 billion in total consolidated assets. In conjunction, the law provides for a rigorous stress-testing regime, along with capital, liquidity and living will requirements, to better ensure that financial institutions are prepared for severe economic circumstances. Only a financial system strong enough to withstand a major financial shock is capable of promoting sustainable economic growth." [Statement of Administration Policy, 11/29/16]
Legislation Would Remove Deutsche Bank, Which Has Ties To President-Elect Donald Trump And CIT Group, Which Both Purchased Treasury Secretary Nominee Steve Mnuchin's OneWest And Is Also On Its Board. According to Congressional Quarterly, "The smallest to be removed would be the $55 billion U.S. subsidiary of German giant Deutsche Bank, which has extensive ties to Donald Trump's businesses. Trump's May financial disclosure filing showed four debts to Deutsche Bank Trust Company Americas, two of which were shown between $5 million and $25 million. The other two debts to Deutsche Bank were listed as being more than $50 million each, including a loan taken out in 2015 in relation to the Old Post Office project in Washington. The building now hosts the Trump International Hotel. CIT Group would also come off the list. CIT bought Mnuchin's OneWest bank last year and he now sits on the CIT Group board." [Congressional Quarterly, 12/1/16]
2016: Schweikert Voted To Subject The Financial Stability Oversight Council (FSOC) And The Office Of Financial Research (OFR) To The Annual Appropriations Process. In April 2016, Schweikert voted for legislation that would have, according to Congressional Quarterly, "place[d] funding for the Financial Stability Oversight Council and the Office of Financial Research (OFR) under the annual appropriations process. Additionally, the bill would [have] require[d] the OFR to quarterly report to Congress on its spending, staff and performance. It also would provide for a minimum 90-day public notice and comment period before the OFR could issue any proposed rule, report or regulation." The vote was on the legislation. The House passed the bill by a vote of 239 to 179. The Senate took no substantive action on the bill. [House Vote 146, 4/14/16; Congressional Quarterly, 4/14/16; Congressional Actions, H.R. 3791]
Statement Of Administration Policy: The FSOC Was Created To Be An Independent Agency To Monitor Potential Risks Across The Entire Financial System. According to a Statement of Administration Policy, "The Wall Street Reform and Consumer Protection Act (Wall Street Reform) created FSOC to bring independent regulators together with a collective responsibility for monitoring risks across the system, wherever they may arise, and to identify and respond to emerging threats to financial stability. Before FSOC, no single entity was accountable for monitoring and responding to risks to financial stability. Similarly, the OFR plays a unique role in promoting financial stability by identifying and filling in gaps in data and knowledge about the financial system, monitoring financial stability metrics across the system, conducting independent research on financial stability policies and providing FSOC with data and analytical support." [Statement of Administration Policy, 4/12/16]
Statement Of Administration Policy: The OFR Was Created To "Monitoring Financial Stability Metrics Across The System." According to a Statement of Administration Policy, "Similarly, the OFR plays a unique role in promoting financial stability by identifying and filling in gaps in data and knowledge about the financial system, monitoring financial stability metrics across the system, conducting independent research on financial stability policies and providing FSOC with data and analytical support." [Statement of Administration Policy, 4/12/16]
Statement Of Administration Policy: The FSCO And The OFR Right Now Have Independent Funding Source From Financial Institutions; Subjecting It To The Political Appropriations Process Would Introduce Political Gamesmanship. According to a Statement of Administration Policy, "Wall Street Reform provided FSOC and the OFR with permanent funding through assessments on the largest financial institutions, including bank holding companies with total consolidated assets of $50 billion or more and nonbank financial companies supervised by the Federal Reserve Board of Governors. This funding system ensures that large financial institutions bear the costs of protecting financial stability. Maintaining a funding source independent of political interference allows FSOC and the OFR to function at full capacity and focus on threats to financial stability. Moreover, funding FSOC and the OFR through appropriations would subject these entities to political gamesmanship that could hinder their ability to conduct independent research, ask questions, and analyze information about industries, firms, or activities --- running the risk of ignoring the next threat to financial stability." [Statement of Administration Policy, 4/12/16]