The House Financial Services Committee approved 15 bills this week, including some that would roll back Dodd-Frank provisions, another that changes money market funds, and one that would make it harder to sue mutual fund companies.
Among the bills approved by the committee is the Financial Stability Oversight Council Improvement Act (H.R. 4061), introduced by Rep. Dennis Ross (R-FL), which amends the Dodd-Frank Act to require the Financial Stability Oversight Council (FSOC), to consider the appropriateness of imposing heightened prudential standards on financial companies, rather than other forms of regulation, to mitigate risks to U.S. financial stability. It passed 45-10.
Further, the Alleviating Stress Test Burdens to Help Investors Act (H.R. 4566), sponsored by Rep. Bruce Poliquin (R-ME), would exempt nonbank financial institutions that are not under supervision by the Federal Reserve from the Dodd-Frank Act’s stress testing requirements. It also provides the Federal Reserve with the ability to limit stress testing requirements for nonbank financial institutions it may supervise. It was approved 47-8.
Regarding mutual funds, the Consumer Financial Choice and Capital Markets Protection Act (H.R. 2319), sponsored by Rep. Keith Rothfus (R-PA), would allow all money funds, including institutional and retail, to use a stable NAV approach to calculate price per share. The 2014 SEC rule required institutional prime and municipal money market funds to adopt a floating net asset value (NAV), which opponents say, brought an element of risk to money funds that didn’t exist before. The bill passed 34-21.
In addition, the committee advanced the Mutual Fund Litigation Reform Act (H.R. 4738), Introduced by Rep. Tom Emmer (R-MN), says that when suing mutual fund companies, plaintiffs must prove a breach of fiduciary duty with clear and convincing evidence. The bill passed 31-25.
“The House Financial Services Committee took important action today, approving measures to appropriately tailor financial stability regulation and help reduce the threat of abusive lawsuits that could harm registered funds and their shareholders,” Investment Company Institute President and CEO Paul Schott Stevens said of the bills.
The committee also moved ahead four bills that impact credit unions, including the Community Financial Institution Exemption Act (H.R. 1264), introduced by Rep. Roger Williams (R-TX). The bill, which passed 30-25, exempts insured depository institutions or credit unions with less than $50 billion in assets from all rules issued by the Consumer Financial Protection Bureau (CFPB).
Also, the Portfolio Lending and Mortgage Access Act (H.R. 2226), sponsored by Rep. Andy Barr (R-KY), would allow certain mortgage loans from an insured depository institution or credit union with less than $10 billion in assets be considered as qualified mortgages. The bill passed 55-0.
In addition, the Business of Insurance Regulatory Reform Act of 2017 (H.R. 3746), sponsored by Rep. Sean Duffy (R-WI), exempt people who are in the business of insurance and are already regulated by a state regulator from CFPB enforcement. It was approved 37-18.
“This bipartisan legislation clarifies that the Consumer Financial Protection Bureau should only exercise regulatory jurisdiction over the business of insurance where it has clear authority from Congress and that deference should be given to state insurance regulators when it comes to the business of insurance,” American Council of Life Insurers President and CEO Dirk Kempthorne said.
Finally, the Comprehensive Regulatory Review Act (H.R. 4607), introduced by Rep. Barry Loudermilk (R-GA), would requires federal financial regulators (including the CFPB and National Credit Union Administration) to conduct a review of all regulations at least once every seven years. The bill passed 38-17.
“These bills would provide much-needed regulatory relief for credit unions and other community financial institutions and work to move away from the one-size-fits-all regulatory regime that is ultimately harming American consumers,” CUNA President and CEO Jim Nussle said.
Others bills that advance to the full House include: the Federal Savings Association Charter Flexibility Act of 2017 (H.R. 1426); Housing Opportunities Made Easier Act (H.R. 2255); Community Bank Reporting Relief Act (H.R. 4725); National Strategy for Combating the Financing of Transnational Criminal Organizations Act (H.R. 4768); Small Bank Holding Company Relief Act (H.R. 4771); the American Customer Information Protection Act (H.R. 4785); and the Small Business Access to Capital after a Natural Disaster Act (H.R. 4792);
“The bills we passed today will help to lift this regulatory burden and make America stronger and more prosperous. I want to thank the sponsors and co-sponsors for their hard work to get them to this point,” Financial Services Committee Chairman Rep. Jeb Hensarling (R-TX) said.