Vote Explanations for H.R. 3791 and H.R. 3340
After two weeks back home in the district, Republican leadership welcomed us back to Washington with two bills that would undermine the financial regulations and accountability measures of the Dodd-Frank Wall Street Reform Act.
H.R. 3791 — To raise the consolidated assets threshold under the small bank holding company policy statement
Today, I voted against H.R. 3791, which passed the House 239–179. This bill would require the Federal Reserve (Fed) to expand its policy statement on the allowable debt levels of certain bank holding companies. In recognition of the important role community banks play in the financial system, the Fed issued the Small Bank Holding Company Policy Statement, which made it easier for small banks and thrift holding companies with assets under $500 million to raise additional capital by issuing debt.
Last Congress, Democrats and Republicans worked together on a bipartisan bill to provide relief to these smaller banks by doubling the threshold from $500 million to $1 billion. Now, less than a year since the President signed that change into law, Republicans are seeking increase by five-fold the regulatory cap. This would result in a threshold that is ten times what is was just a year ago.
Community banks in Massachusetts and throughout the county provide consumers and small businesses with more personal services than larger banks. I am concerned that raising the asset threshold to $5 billion would unnecessarily encourage consolidation of these small banks that are so important to our communities, and introduce unneeded threats to the stability of the financial system.
H.R. 3340 — Financial Stability Oversight Council Reform Act
In the wake of the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) created the Financial Stability Oversight Council (FSOC), which is charged with identifying risks to the financial stability of the United States and responding to emerging threats to the nation’s financial system. Dodd-Frank also created the Office of Financial Research (OFR) to collect data and to provide the FSOC with analytical support. Under Dodd-Frank, both of these entities set their own budgets, meaning Congress does not allocate the agencies’ funding. This independence helps ensure the FSOC and the OFR can do their important, data-driven work without being subject to political gridlock or partisan politics.
H.R. 3340, the Financial Stability Oversight Council Reform Act, would subject the FSOC and the OFR to the Congressional appropriations process, where Congress would set and authorize the agencies’ spending limits. This legislation would also require the OFR to solicit public comment prior to issuing any report — a requirement that does not exist for any other federal agency.
This bill sets a precedent that would politicize the very agencies tasked with protecting consumers and looking out for threats to our nation’s financial system. It would be unwise to allow these important financial regulators to fall victim to congressional micromanagement. For this reason, I voted against H.R. 3340.