House Financial Services Committee Members Announce Bill on Housing Finance Reform
House Financial Services Committee Chairman Jeb Hensarling (R-TX) and Committee Members Scott Garrett (R-NJ), Randy Neugebauer (R-TX), and Shelley Moore Capito (R-WV) announced their plans to introduce the “Protecting American Taxpayers and Homeowners Act” or PATH Act to reform housing finance. Highlights of the bill include a plan to phase out the government sponsored enterprises over five years, “right-size” the Federal Housing Administration (FHA), and encourage private capital to re-enter the mortgage and housing markets.
Sens. Tim Johnson (D-SD) and Mike Crapo (R-ID) Announce Plan to Introduce FHA Reform Bill
On Thursday, July 11, Senate Banking Committee Chairman Johnson and Ranking Member Crapo released a joint statement announcing that they have reached bipartisan agreement on a path forward for the FHA and are optimistic that they will quickly move legislation to give the FHA the “tools it needs,” possibly within the next week.
Sens. Elizabeth Warren (D-MA) and John McCain (R-AZ) Introduce Bill to Recreate Glass-Steagall Act Conditions
On July 11, Sen. Elizabeth Warren and co-sponsor Sen. John McCain introduced legislation (S. 1282) that would reinstitute the strict divide between traditional banking and speculative activities that was once in place under the Glass-Steagall Act (which was repealed in 1999). The bill would force deposit-taking banks to cease most of their trading of derivatives and give banks five years to comply with its requirements. Other co-sponsors of the bill include Sens. Maria Cantwell (D-WA) and Angus King (I-ME).
This Week’s Hearings:
- Tuesday, July 16: The Senate Banking Committee will hold a confirmation hearing for the following nominees:Wednesday, July 17: The Senate Agriculture Committee will hold a hearing on the Commodity Futures Trading Commission’s (CFTC) reauthorization. The hearing will feature testimony from market participants and stakeholders who will address issues related to the Commodity Exchange Act and the CFTC generally.
- Rep. Mel Watt (D-NC) to be Director, Federal Housing Finance Agency (FHFA)
- Dr. Jason Furman to be a Member, and Chairman, Council of Economic Advisers
- Ms. Kara Stein and Dr. Michael Piwowar to be Members, Securities and Exchange Commission (SEC)
- Mr. Richard Metsger to be a Member, National Credit Union Administration (NCUA) Board
- Wednesday, July 17: The Senate Banking Subcommittee on Financial Institutions and Consumer Protection will hold a hearing titled, “Shining a Light on the Consumer Debt Industry.”
- Wednesday, July 17: The House Financial Services Committee will hold a hearing to receive the Federal Reserve Board of Governors’ Semi-Annual Monetary Policy Report to Congress from Federal Reserve Chairman Ben Bernanke.
- Thursday, July 18: The Senate Banking Committee will hold a hearing to receive the Federal Reserve Board of Governors’ Semi-Annual Monetary Policy Report to Congress from Federal Reserve Chairman Ben Bernanke.
- Thursday: July 18: The House Financial Services Committee will hold a hearing titled, “A Legislative Proposal to Protect American Taxpayers and Homeowners by Creating a Sustainable Housing Finance System.” The hearing will discuss the draft “Protecting American Taxpayers and Homeowners” or PATH Act of 2013.
- Thursday, July 18: The House Oversight and Government Reform Subcommittee on Economic Growth, Job Creation and Regulatory Affairs will hold a hearing titled, “Regulatory Burdens: The Impact of Dodd-Frank on Community Banking.”
Executive Branch Activity
CFTC Reaches Agreement with EU, Approves Cross-Border Guidance
On Thursday, July 11, CFTC Chairman Gary Gensler and EU Commissioner Michel Barnier announced an agreement, titled Path Forward, on an approach for overseeing the global derivatives market. The announcement came a day before the CFTC approved final guidance on regulations for cross-border swaps transactions by a 3-1 vote. Also on July 12, the CFTC approved an exemptive order giving the industry 75 more days to comply with the new cross-border guidance.
SEC Lifts Ban on Hedge Fund Ads
On Wednesday, July 10, the SEC approved a new rule to implement part of the Jumpstart Our Business Startups (JOBS) Act that lifts an 80-year-old general advertising ban on private securities deals. The new rule will allow hedge funds, private equity firms, and similar companies to reach a new population of investors through the use of television and the Internet, although they will only be allowed to sell to “accredited investors.” The SEC also voted 3-2 to propose a new rule that will require firms offering private placements to make numerous additional disclosures to regulators before they can broadly advertise for it.
FDIC Approves Capital Rules to Meet Basel III Standards, Plans for Stricter Ratios in Future
On Tuesday, July 9, the Federal Deposit Insurance Corporation (FDIC) approved an interim final rule to implement the Basel III international agreement on regulatory capital requirements for banking institutions. Additionally, the FDIC proposed a rule that would go beyond the Basel III standards, and require the eight largest U.S. banks to keep stricter leverage ratios of regulatory capital