James Setterlund

ATR Opposes H.R. 4344, which would Expand SEC Bureaucratic Authority

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Posted by James Setterlund on Monday, October 28th, 2019, 2:55 PM PERMALINK

ATR President Grover Norquist sent a letter to Speaker Nancy Pelosi (D-Cal.) and Minority Leader Kevin McCarthy (R-Cal.) expressing his strong opposition to Rep. Ben McAdams’ (D-U.T.) legislation, H.R. 4344. This legislation would overturn a unanimous Supreme Court decision and allow members of Congress to push precedent aside and allow the Securities and Exchange Commission to target businesses with little deference toward due process and allowing for pending complaints to remain dormant for over a decade.

H.R.4344 would expand the SEC’s statute of limitations for disgorgement claims from 5 years to 14 years, a new threshold that provides an avenue for greater power centralized at the Commission. In the letter, Norquist voices concern that this legislation would heighten compliance costs, costs that would be passed on to the investors saving for retirement at a time when the cost to retire comfortably continues to rise. 

 

The full letter can be found here and below.

 

The Honorable Nancy Pelosi, Speaker

US House of Representatives

H-323, The Capitol

Washington, DC 20515

 

The Honorable Kevin McCarthy, Minority Leader

H-204, The Capitol

US House of Representatives

Washington, DC 20515

 

Dear Speaker Pelosi and Minority Leader McCarthy:

I write in strong opposition to H.R. 4344, a bill to amend the Securities Exchange Act of 1934 to allow the Securities and Exchange Commission to seek and Federal courts to grant disgorgement of unjust enrichment, and for other purposes. This legislation would do little to protect investors and instead would expand the SEC’s authority. H.R. 4344 would create uncertainty within the marketplace as investors would begin operating under the assumption that future statutes of limitations established by legal precedent are movable and can be changed on a political whim. Should this legislation become law, those saving for retirement will be expected to pick up the tab for the additional regulatory burdens placed on businesses.  

In 2017, the Supreme Court agreed to hear Kokesh v. SEC, in which the question before the Court was whether the SEC has the authority to seek the repayment of funds through disgorgement after a five-year statute of limitations has expired. The Supreme Court unanimously held that “Disgorgement, as it applied in SEC enforcement proceedings, operates as a penalty under Section 2462. Accordingly, any claim for disgorgement is an SEC enforcement action must be commenced within five years of the date the claim accrued.”

Under current law, the SEC is required to bring disgorgement claims within 5 years of an alleged violation. This promotes effective deterrence and provides the SEC with more than enough time to discover violations of securities laws and file complaints in a timely manner. Anything longer would undermine the due process rights of defendants and hamper their ability to address the claims.

If H.R. 4344 were to be enacted, Congress will have effectively overturned a unanimous decision by the Supreme Court. Additionally, this bill will expand the SEC’s authority to target businesses with little deference toward due process that allows pending complaints to remain dormant for over a decade.

For these reasons, I oppose H.R. 4344 and encourage Representatives to vote against this legislation as it would restrict the due process rights of businesses and investors. I worry H.R. 4344 provides a gateway for future legislation that moves the goal posts of due process and provides even greater power to government regulators over legally operating businesses. This would be a slippery slope for the rule of law.

Sincerely,

Grover G. Norquist
President, Americans for Tax Reform

Photo Credit: Wikimedia


ATR Op-Ed in Townhall Urges California Pension Against Private Prison Divestment

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Posted by James Setterlund on Wednesday, October 16th, 2019, 9:26 AM PERMALINK

In his op-ed for Townhall, ATR’s Ryan Goff examined the result of politically motivated divestments from CalPERS’ portfolio, finding lost revenues exceeding $3.5 billion. As demonstrated in his piece, the state’s pension is only 70% funded and the prospect of further divestment away from private prisons — potentially renewed after the recent passage of Assembly Bill 32 banning state contracts with such prisons — only stands to exacerbate a critical problem. Read the full op-ed here.

Photo Credit: Sacramento Capitol During The Drought


ATR Submits Comments to FSOC on Nonbank SIFI Designation

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Posted by James Setterlund on Friday, May 24th, 2019, 9:11 AM PERMALINK

Recently, Americans for Tax Reform submitted comments to the Financial Stability Oversight Council on their proposed guidance. This guidance would act as guidelines for the Council, its regulators and nonbank financial institutions to follow before the Council takes the drastic step of designating and institution as a Systemically Important Financial Institution. This designation comes with increased regulatory oversight, often times from the Federal Reserve, whose mission is to oversee banks not asset managers or insurers.

The Council was created from Dodd-Frank with the purpose of harmonizing communication and oversight between multiple federal agencies, state-based regulatory bodies and an independent insurance expert. FSOC is chaired by the Treasury Secretary and is comprised of 15 members, 10 with voting power and five serving as nonvoting members.

The Council has the ability to designate certain bank holding companies, non-bank institutions and financial market utilities as systemically important financial institutions. If a SIFI designation is made, the financial institution is subject to enhanced prudential oversight by the Federal Reserve Board.

ATR applauded the Council’s revised guidance and asked the Council to go further than guidance alone to create certainty for nonbank financial institutions. Additionally, ATR asked the Council to consider three additional suggestions for any finalized package.

  • The Council should consider the current regulations in effect for nonbank institutions and how additional regulations may affect how the nonbank operates.
  • The proposal would charge the Council to undertake a cost benefit analysis of the heightened oversight regulations associated with the SIFI designation. The analysis should also consider the indirect costs associated with designation.
  • Any final package should retain the requirement that the Council must first consult with the nonbank institution’s primary regulator throughout the designation process and allow the nonbank institution to offer its own solution for the Council to consider. This approach reserves the SIFI designation as a last resort option, similar to legislation (S. 603) proposed by Senator Rounds (R-S.D.) that ATR has previously supported.

ATR appreciates and is supportive of FSOC’s initiative to create certainty for nonbank financial institutions, something that was missing during the previous administration as they sought to first capture and punish rather than work to prevent future harm through due process and working with institutions to enhance their best practices. Click here to view the comments.

Photo Credit: Patrick Rasenberg


ATR Launches Shareholder Advocacy Forum to Counter Rise of Corporate Activists

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Posted by James Setterlund on Friday, May 17th, 2019, 2:08 PM PERMALINK

Americans for Tax Reform today launched the Shareholder Advocacy Forum, a project to preserve the long-term interests of shareholders and counter the rise of activist shareholder proposals that often force a company into a stance on an unrelated social policy. The Shareholder Advocacy Forum’s goal is to protect all shareholders’ interests and to maximize their return on investment, including pension fund beneficiaries and small shareholders who rely on the continued growth of these investments for their retirement planning.

SAF will also examine the role proxy advisor firms play in providing recommendations to shareholders. These supposed conflict-of-interest-free organizations have been cited as a reason for the chilling effect in the IPO market. Existing public companies have seen these firms become more activist in nature when providing recommendations and the role their recommendations have had in undermining the long-term interests of company’s shareholders. SAF plans to hold directors and executives accountable when they place the social agenda of some ahead of their fiduciary duty to all shareholders.

SAF will also be a voice at the table to provide support for legislative and regulatory proposals and serve as an educational platform to emphasize why it is important for shareholders to continue participating in the voting process. In addition, SAF will maintain that decisions of private institutions and shareholders should be respected and protected from government intrusion, including instances of shareholders supporting mergers and acquisitions.

SAF will publish recommendations on shareholder proposals, highlights from recently published research, and letters supporting and opposing legislation. James Setterlund will serve as the Executive Director of SAF.

Photo Credit: Walmart - flickr


ATR Leads Coalition of Groups to Eliminate the Office of Financial Research

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Posted by James Setterlund on Wednesday, May 15th, 2019, 4:31 PM PERMALINK

ATR led a coalition letter supporting Senators Ted Cruz (R-Texas), Thom Tillis (R-N.C.), and Tom Cotton (R-A.R.) and Congressmen Ted Budd (R-N.C.) Alex Mooney (R-W.V.) and Warren Davidson’s (R-Ohio) legislation that would eliminate the Office of Financial Research, S. 1478 and HR 2743.

Established under Dodd-Frank, the OFR was created with the purpose of using data provided by financial institutions to examine risks to the financial markets. This data for the most part is volunteered by private financial institutions, like bank holding companies, but the alternative is OFR using its subpoena power to demand these institutions hand over the data. That alone is a cause for concern for why a “research” agency should have subpoena issuing capabilities.

OFR is also funded through fees collected from these same financial institutions providing the agency with their data. By intention, this set up avoids direct congressional oversight and allows OFR to determine almost unanimously on their own what their budget should be and go to their financial backers with their hands out as their regulator. For example, under the Obama administration’s appointed Director, OFR’s budget was $101.4 million, as opposed to $75.3 million for fiscal year 2019.

The agency is duplicative in nature as there are roughly 20 other federal agencies that conduct the same research as OFR, most notably the Department of the Treasury, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the Federal Reserve. The creation of OFR is another example of expanding the government to find a solution to a problem that does not exist.

The organizations who joined this coalition letter are proud to support Senator Cruz and Representatives Budd, Mooney and Davidson and their efforts to stop government intervention and protect taxpayers from future overreach.

Americans for Tax Reform led the coalition letter supporting their legislation, which can be found here and below.

Click here to see last year’s coalition letter of support for similar legislation.

May 15, 2019

Dear Senators Cruz, Tillis and Cotton and Representatives Budd, Mooney and Davidson:

On behalf of the undersigned organizations, we write to express our support for your legislation to eliminate the Office of Financial Research, a duplicative and opaque agency created from Dodd-Frank and without congressional oversight.

In 2018, Congress passed bipartisan landmark legislation addressing numerous regulatory shortcomings and agency overreach stemming from Dodd-Frank. To complement this reform effort, Congress should consider terminating the OFR. As directed under Section 153 of Dodd-Frank, its mission is to support the Financial Stability Oversight Council and its member agencies by collecting and analyzing data and risk toward financial markets. However, this objective already exists within roughly 20 other agencies, departments, bureaus and committees, most notably within the Department of the Treasury, the Federal Deposit Insurance Corporation and the Federal Reserve.

OFR’s capabilities also raise serious questions regarding data and privacy security for financial institutions forced to turn over similar information to federal agencies, often already available with the institution’s primary regulator. In order for the agency to have access to this data, Congress granted OFR sweeping authority to collect information from the companies that fund it, including regulatory agencies, using subpoena power. Concerningly, this allows OFR to gather information for any reason and with no accountability. 

OFR is funded outside the appropriations process, receiving its funding through fees collected from predominantly bank holding companies and some non-financial companies with little oversight of how the fees are spent. For fiscal year 2019, OFR’s budget was $75.3 million, compared to its budget under the previous administration of $101.4 million for fiscal year 2017.

For these reasons, we, the undersigned organizations, strongly support your legislation which would eliminate the redundancies created through the establishment of OFR and its underlying provisions produced from Dodd-Frank.

Sincerely,

Grover Norquist

President, Americans for Tax Reform

Brent Wm. Gardner

Chief Government Affairs Officer, Americans for Prosperity

Adam Brandon

President, FreedomWorks

Matthew Kandrach

President, Consumer Action for a Strong Economy

Andrew F. Quinlan

President, Center for Freedom and Prosperity

Phil Kerpen

President, American Commitment

Pete Sepp

President, National Taxpayers Union

Tom Schatz

President, Council for Citizens Against Government Waste

Nathan Nascimento

Executive Vice President, Freedom Partners Chamber of Commerce

Steve Pociask

President, The American Consumer Institute

Iain Murray

Vice President, Competitive Enterprise Institute

Photo Credit: Mark Pouly


ATR Supports Sen. Tillis Questioning Federal Reserve Oversight Framework

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Posted by James Setterlund on Tuesday, April 30th, 2019, 2:17 PM PERMALINK

In February, Senator Thom Tillis sent a letter to the Government Accountability Office’s Comptroller General asking for clarification on several Federal Reserve guidance letters that established the Large Institution Supervision Coordinating Committee. The letter asks GAO to determine if the guidance constitutes a “rule” and is subject to the Congressional Review Act. The LISCC guidance letters themselves carry the weight of additional Federal Reserve oversight subjecting financial institutions to compliance and enforcement. 

Senator Tillis’ letter follows in the footsteps of Senator Pat Toomey’s letter to GAO requesting the agency to determine if a Consumer Financial Protection Bureau Bulletin also constituted a rule. Known as the “Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act” Bulletin, itset out to address a common lending arrangement between auto dealerships, customers and third-party lenders. At the end of 2017, GAO determined the Bulliten, or “guidance”, was in fact a rule and is subject to the Congressional Review Act.

The CRA provides Congress 60 legislative days to use the CRA and issue a resolution that disapproves and overturns a federal agency’s rules and prevents the agency from issuing a substantially similar rule in the future. If GAO determines LISCC to be a rule, the rule is considered published in the Congressional Record, starting the 60-day clock.

Through a series of Supervision and Regulation Letters the Federal Reserve created the LISCC supervisory program to oversee large financial institutions operating domestically and abroad with multiple business operations. The Large Institution Supervision Coordinating Committee currently supervises a total of 12 banks – eight US-charted banks and four-foreign banks with significant US operations – and is overseen by four Federal Reserve Banks in which the 12 banks are geographically located.

As Senator Tillis points out:

"Though the Federal Reserve did not pursue notice and comment, the LISCC Guidance appears to be generally applicable within its intended range, prospective in nature, and designed to implement, interpret, or prescribe law or policy. The LISCC Guidance not only describes the Federal Reserve's approach to examining large institutions, but also imposes significant substantive requirements on the banking institutions subject to the guidance."

Should GAO conclude that the LISCC Guidance constitutes a rule, and the Federal        Reserve Board moves to codify existing regulatory framework, the Federal Reserve should provide transparency that includes:

  • Establishing an official rulemaking process, allowing for public notice and public comments, as well as a cost-benefit analysis for future rulemaking and SR Letters. 
  • Create a formal process that provides financial institutions with a clearly defined criteria for LISCC designation and a pathway for de-designation. 
  • The ability for institutions designated for LISCC oversight the opportunity to appeal the designation.

 

Click here to view the letter applauding Senator Tillis’ leadership on the issue or see below:

April 29, 2019 

The Honorable Thom Tillis United States Senate
185 Dirksen Senate Office Washington DC 20510 

Dear Senator Tillis: 

I write in support of your letter to the Government Accountability Office Comptroller Dodaro questioning whether the Federal Reserve’s Large Institution Supervision Coordinating Committee process constitutes a rule subject to the Congressional Review Act. I share your concern that the Federal Reserve has established a regulatory framework through compliance and enforcement, without allowing for public input through the appropriate rule making process. 

In 2010, the Federal Reserve created a new supervisory program to oversee large financial institutions operating domestically and abroad with multiple business operations. The Large Institution Supervision Coordinating Committee currently supervises a total of 12 banks – eight US-charted banks and four-foreign banks with significant US operations – and is overseen by four Federal Reserve Banks in which the 12 banks are geographically located.1 

Through a series of Supervision and Regulation Letters (SR 12-17, 14-08 & 15-07) referenced in your letter to Comptroller Dodaro, LISCC appears to have been established following a report2 and its recommendations conducted by former Columbia University professor David O. Beim. According to a 2017 Government Accountability Office report, the four Reserve Banks are responsible for “designating firms for supervision under the LISCC program, the Federal Reserve takes into account a number of factors, such as the size of the financial institutions, their interconnectedness, a lack of readily available substitutes for the services they provide, their complexity, and their global activities.”3 

The designation process is concerning for two reasons. First, it appears that financial institutions subject to SR Letters 12-17 and 14-84 are automatically captured by LISCC and subject to Federal Reserve enforcement. Additionally, this could capture non-bank financial institutions that have been designated as Systemically Important 

Financial Institutions by the Financial Stability Oversight Council.5 In effect, non- bank SIFI’s could be subject to all compliance costs and examinations administered by LISCC’s Operating Committee and may include the Comprehensive Capital Analysis Review6. 

For non-bank institutions to no longer be subject to any Federal Reserve oversight, including LISCC requirements, FSOC must first act to de-designate the institutions as SIFIs. For financial institutions held as large and “noncomplex,” the Federal Reserve will work on a case-by-case basis to determine if their risk profile continues to warrant LISCC designation.7 For the largest and complex financial institutions there is no formal and clearly understood process de-designation.8 

Should GAO conclude that the LISCC Guidance constitutes a rule, and the Federal Reserve Board moves to codify existing regulatory framework, the Board should consider reforms that provide transparency through the rulemaking process, allowing for public notice and public comments, as well as a cost-benefit analysis for future rulemaking and SR Letters. Transparency includes providing financial institutions with a clearly defined criteria for LISCC designation and pathway for de-designation. The rulemaking process should provide institutions designated for LISCC oversight the ability to appeal the designation. 

Senator Tillis, your concern is valid in that the Federal Reserve Board has created LISCC under its own initiative and discretion, unfairly designating institutions for stringent compliance requirements and burdens. The process for designation lacks transparency and as you correctly assert in your letter to Comptroller Dodaro, the framework for establishing LISCC appears to constitute rulemaking authority, though its creation stems from guidance carrying the full weight of enforcement and without a defined criteria available for public comment from industry stakeholders and the public found in rulemaking. I applaud your initiative and am looking forward to working with you on this issue. 

Sincerely,

Grover G. Norquist
President, Americans for Tax Reform 

 

 

Photo Credit: Rafael Saldaña


ATR Signs Coalition Letter Reforming the CFPB’s Short-Term Loan Rule

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Posted by James Setterlund on Tuesday, April 30th, 2019, 1:58 PM PERMALINK

ATR recently joined a coalition letter led by the Competitive Enterprise Institute in support of the Consumer Financial Protection Bureau’s decision to rescind portions of the small-dollar loan rule, particularly the “ability to repay” requirement. 

The small-dollar loan rule was drafted by the Obama era director Richard Cordray and finalized in 2017, who sought to impose such a high regulatory burden on lenders it would have shuttered over half of the industry. This would have choked off access to millions of Americans from affordable financial products to help, in many cases, cover unexpected costs.

The “ability to repay” standard associated with the rule puts the onerous regulations on the lender to determine if a customer has enough of a funding source or income to pay back their loan. This puts the compliance burden of the lender to go through multiple records of the customer before they can receive the loan. Often times these loans are made to customers when their week is longer than what they have in their wallets and a small $50 - $100 loan will allow them to put food on their table until their next paycheck. Determining a customer’s “ability to repay” would have put many of these short-term lenders out of business and made these small loans unserviceable because the costs of compliance exceeded the loan itself. As the Wall Street Journal pointed out, it was Cordray’s plan all along to dismantle through regulation an industry he found unsavory.

Fortunately, newly confirmed Director Kathy Kraninger announced in February that a new proposal would rescind the ability-to-repay portion of the rule. 

Click here to view the letter

Photo Credit: Haydn Blackley


ATR Supports Sen. Rounds’ (R-S.D.) FSOC Improvement Act

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Posted by James Setterlund on Tuesday, April 30th, 2019, 1:45 PM PERMALINK

Senator Mike Rounds recently introduced his Financial Stability Oversight Council Improvement Act of 2019, which would reform the process federal financial regulators use for assessing financial risk. S. 603 enjoys bipartisan support from Senators Krysten Sinema (D-A.Z.), Doug Jones (D-A.L.) and Thom Tillis (R-N.C.) joining the efforts to provide greater certainty for non-bank financial institutions subject to FSOC oversight. 

The Council was created from Dodd-Frank with the purpose of harmonizing communication and oversight between multiple federal agencies, state-based regulatory bodies and an independent insurance expert. FSOC is chaired by the Treasury Secretary and is comprised of 15 members, 10 with voting power and five serving as nonvoting members.

The Council has the ability to designate certain bank holding companies, non-bank institutions and financial market utilities as systemically important financial institutions. If a SIFI designation is made, the financial institution is subject to enhanced prudential oversight by the Federal Reserve Board. 

In the case of S. 603, the legislation stipulates that FSOC must consider other factors first, before voting to designate a non-bank financial institution as a SIFI. These factors include first working in consultation with the non-bank institution and their primary financial regulator, whether it be federal like the Securities and Exchange Commission or state-based regulator like insurance commissioners. The Council must first work with and allow the lead regulator to propose a different oversight approach and allow the non-bank institution to propose its own solution for the Council to consider. If the Council is not satisfied with these approaches, only then can the Council designate the institution as a SIFI, reserving the SIFI designation as a last resort option after other options for correcting the institutions best practices are exhausted. 

The Senate Banking Committee held a hearing on the FSOC non-bank designation on March 14th. American Action Forum’s Douglas Holtz-Eakin said the FSOC Improvement Act “would provide primary regulators a beneficial step in the process and create a chance for non-banks to know their risks to remediate and offramp.” S. 603 provides greater certainty and transparency for non-bank financial institutions to address concerns before the heavy hand of regulation is imposed. 

ATR President Grover Norquist said: 

“I applaud Senator Rounds for creating a bipartisan coalition to address some of the issues associated with the current process of SIFI designation. Without tearing down any framework of the existing process, it is important to consider regulation that provides certainty and transparency for institutions, instead of immediately throwing the book at them and S. 603 does just that. Thank you Senator Rounds for your leadership on this important reform. I encourage other Senators to support this legislation.”

Click here to view the letter or see below:

April 29, 2019

Dear Senator Rounds:

I write in support of your legislation, the Financial Stability Oversight Council Improvement Act of 2019. Your legislation would require the Council to consider alternative approaches before labeling a non-bank financial institution as a systemically important financial institution. I applaud Senators Jones, Sinema and Tillis for cosponsoring S. 603 as their participation demonstrates how bipartisanship can achieve smart and transparent solutions for institutions subject to FSOC oversight. I encourage additional Senators to join their efforts. 

The Financial Stability Oversight Council was established by Dodd-Frank with the purpose of harmonizing communication and oversight between multiple federal agencies, state-based regulatory bodies and an independent insurance expert and is chaired by the Treasury Secretary. The Council has the ability to designate certain bank holding companies, non-bank institutions and financial market utilities as systemically important financial institutions. The two most prominent factors for SIFI designation include an institution’s leverage and interconnectedness with other SIFI institutions.

If a bank holding company carries the label of SIFI, they are subject to enhanced regulatory requirements administered by the Federal Reserve, which oversees deposit-accepting institutions. For non-bank institutions and financial market utilities, carrying the SIFI designation creates additional regulatory barriers administered by the Federal Reserve but excludes bank specific regulations like the Comprehensive Capital Analysis Review. In other words, an investment institution helping savers plan for retirement that does not engage in banking activity is subject to Federal Reserve oversight even if the Federal Reserve had no jurisdiction originally.

Your legislation would provide much needed certainty for non-bank institutions by allowing them to work with regulators to strengthen their institutional best practices, leaving SIFI designation as a last resort. S. 603 provides an important avenue for much needed clarity in the larger process of creating transparency for non-bank financial institutions subject to FSOC oversight. I appreciate your leadership on this issue and commend you for creating a bipartisan path towards a solution that helps improve the SIFI designation process.

Sincerely,

Grover G. Norquist 
President, Americans for Tax Reform

 

 

Photo Credit: Roman Boed


ATR Leads Coalition Letter Supporting Dr. Calabria for Director of FHFA

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Posted by James Setterlund on Monday, March 25th, 2019, 1:47 PM PERMALINK

ATR led a coalition letter supporting Dr. Mark Calabria to be confirmed as the Director of the Federal Housing Finance Agency.

During the financial crisis, Congress passed the Housing and Economic Recovery Act of 2008, which created FHFA. HERA authorized FHFA to guarantee hundreds of billions in 30-year fixed-rate mortgages to help boost confidence in the housing market and government sponsored enterprises. FHFA also serves as the regulator of the GSE’s Fannie and Freddie.

Since taking Fannie and Freddie into conservatorship in September 2008, the GSE’s have remained in conservatorship, which has been seen as the last piece of the crisis that truly remains un-reformed. President Trump and Treasury Secretary Mnuchin have been vocal proponents of ending the status quo of the conservatorship, with reforms beginning through appropriate leadership at the top of the agency.

Dr. Mark Calabria represents this leadership change to help bring much needed reforms to the GSE’s and has the experience and education to lead the agency. ATR President Grover Norquist has called Dr. Calabria “one of the most qualified candidates to serve in government.”

The coalition letter urges the full Senate to consider his nomination and swiftly move to confirm his appointment. 

Click here to view the coalition letter or see below:

March 25, 2019

 

The Honorable Mitch McConnell

Majority Leader

United States Senate

S-230, U.S. Capitol

Washington, DC 20510

 

Dear Majority Leader McConnell,

We write to express support of Dr. Mark Calabria’s nomination to be

Director of the Federal Housing Finance Agency. Dr. Calabria has an extensive history and record that reflects his deep understanding of the housing finance industry that make him distinctly qualified for the position. We urge the Senate to act swiftly on his nomination. 

With the establishment of the FHFA as a result of the Housing and Economic    Recovery Act of 2008, Congress granted the agency substantial authority to oversee the government sponsored enterprises Fannie Mae and Freddie Mac. Soon after HERA’s enactment, the GSE’s were placed into conservatorship, where they have remained for more than a decade, spanning several administrations and various directors. President Trump and Treasury Secretary Mnuchin have been vocal about the need for reforming the status quo of conservatorship for both Fannie Mae and Freddie Mac, and proper leadership at this critical agency is needed for reform. The FHFA Director wields tremendous power to take certain administrative reform actions as conservator, and this should provide some momentum for bipartisan legislative reform to move the system beyond the status quo to better protect taxpayers and promote private capital.

Dr. Calabria has been widely recognized as a leader in housing finance reform for his deep understanding of the complexity associated with the role FHFA plays in the market that makes him uniquely qualified to serve as the agency’s director.

Prior to serving in his current position as Vice President Mike Pence’s chief economist, he served as the Director of Financial Regulation Studies at the Cato Institute, where he authored numerous studies, journals and articles on the topic of housing reform. Dr. Calabria has also been a Committee staff member for both Ranking Member Richard Shelby and Chairman Phil Gramm of the Senate Banking, Housing and Urban Affairs Committee, and previously served as a Deputy Assistant Secretary for the Department of Housing and Urban Affairs’ Office of Regulatory Affairs. Additionally, he has held positions at Harvard University’s Joint Center for Housing Studies, the National Association of Home Builders, and the National Association of Realtors, and earned his doctorate in economics from George Mason University. His education and experience demonstrate that Dr. Calabria is distinctly qualified to serve as Director.

We, the undersigned organizations, support the confirmation of Dr. Mark Calabria to serve as the Director of the Federal Housing Finance Agency, and we urge the Senate to consider his nomination as a priority.

Sincerely,

Grover Norquist

President, Americans for Tax Reform

Tim Chapman

Executive Director, Heritage Action

Andrew F. Quinlan,

President, Center for Freedom and Prosperity

Adam Brandon

President, FreedomWorks

Heather R. Higgins

CEO, Independent Women’s Voice

Phil Kerpen

President, American Commitment

Pete Sepp

President, National Taxpayers Union

Iain Murray

Vice President, Competitive Enterprise Institute

Matthew Kandrach

President, Consumer Action for a Strong Economy

 

CC: Mick Mulvaney, Chief of Staff, Executive Office of the President

Larry Kudlow, Director, National Economic Council, Executive Office of the

President

Shahira Knight, Director, Office of Legislative Affairs, Executive Office of

the President

 

Photo Credit: Flickr


ATR Supports Coalition Letter Urging Regulators to Expand Relief as Prescribed in S. 2155

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Posted by James Setterlund on Tuesday, March 12th, 2019, 4:33 PM PERMALINK

Last year, Congress passed the Economic Growth, Regulatory Relief and Consumer Protection Act, and President Trump signed the legislation, more simply known as S. 2155.

The legislation is aimed at reforming portions of the Dodd-Frank Act, Congress’s knee-jerk legislation following the financial crisis that captured part or whole industries that had nothing to do with the crisis and resulted capital being shifted from investments being made in small businesses, discontinued banking products and the slowing mortgage processing to the cost of regulatory compliance created from the Act. 

A part of the S. 2155 is intended to provide clarity and relief for banks subject to Dodd-Franks “Volcker Rule”. The rule forbid banks from investing and engaging in short-term trading with their own assets on behalf of a bank’s customers.

In Section 203 of S. 2155, Congress voted to expand relief for banks from the Volcker Rule if they meet one of two requirements. The legislation provides exemptions to the Volcker Rule for banks under $10 billion in assets or banks that engage in limited asset trading. Instead, the five financial regulators tasked with writing and enforcing the rule and its proposed relief have taken a different approach that re-interprets what they believe was Congress’s intent of S. 2155, to instead provided targeted relief for only a handful of small financial institutions. 

Under their proposed rule the regulators would instead exclude only those banks that are under $10 billion in assets and engage in limited asset trading. This incorrect interpretation not only ignores Congressional intent but also questions the administrative law doctrine of “Chevron deference” that has empowered administrative agencies to interpret legislation as they see fit when the legislative “statute is silent or ambiguous with respect to the specific issue” and determined by the “rational” or “reasonable” intent of Congress.

In the case of Sec. 203 of S. 2155, Congress was neither silent nor ambiguous in determining how relief from Volcker may be granted. Narrowly tailoring the proposed rule for relief side-steps a bipartisan piece of legislation and goes against President Trump’s push for deregulation that will free-up more capital to be invested in our economy.

 

 The full letter can be found here.

 

Photo Credit: stantontcady


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