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House Financial Services Committee Markup

House Financial Services Committee

Markup Part I

Thursday, July 11, 2019

Bills Considered

Opening Statements

Chairwoman Maxine Waters (D-Calif.)

In her opening statement, Waters said the markup will consider a set of bills on a range of issues, including housing, credit reporting, diversity and inclusion, and investor protection. Waters said the credit reporting system is “deeply broken” which can penalize consumers, and the committee would consider a “long overdue” series of bills to address these issues. Waters noted that the committee would consider bills designed to increase diversity in corporate boardrooms, in C-suites, and at Federal Reserve banks. Waters also highlighted that there were several housing bills under consideration to address the appraisal process and affordable rural housing. Finally, Waters added that there were several capital markets and investor protection bills under consideration aimed at improving transparency and advancing protections for whistleblowers.

Ranking Member Patrick McHenry (R-N.C.)

In his opening statement, McHenry said the markup had an “ambitious agenda,” noting that committee Republicans would support some bills, including those to facilitate greater diversity and inclusion and those that focus on housing issues, but take issue with the credit reporting bills under consideration. McHenry noted that the committee has only held one hearing on credit reporting issues, and six months later the committee is taking up six bills that would make “significant changes” to the Fair Credit Reporting Act.

H.R. 281, the “Ensuring Diverse Leadership Act of 2019”

Rep. Joyce Beatty (D-Ohio) introduced her bill and her Amendment in the Nature of a Substitute, which would require the 12 regional Federal Reserve banks to interview at least one qualified individual reflective of gender diversity and at least one qualified individual reflective of racial and ethnic diversity for every president vacancy. Beatty noted that these 12 banks nominate and appoint their own presidents, and in the 100-year history of the Federal Reserve bank system, the first African American president was only just appointed in 2017 and there has never been a Hispanic president. She said that although former Chairwoman Janet Yellen and current Chairman Jerome Powell have made great progress in diversifying the Federal Reserve, there is much work left to do. Rep. Ann Wagner (R-Mo.) spoke in support of the bill, saying that an equal playing field is an “imperative component” in building a successful workforce and attracting talent. Reps. Anthony Gonzalez (R-Ohio), Nydia Velazquez (D-N.Y.), Al Green (D-N.Y.), Greg Meeks (D-N.Y.), Steve Stivers (R-Ohio), Carolyn Maloney (D-N.Y.), McHenry and Waters spoke in support of the bill.

The amended measure was reported favorably to the House by a vote of 56-2.

H.R. 1018, the “Improving Corporate Governance through Diversity Act of 2019”

Rep. Gregory Meeks (D-N.Y.) introduced his bill and his Amendment in the Nature of a Substitute, which would require public companies to publish their diversity data annually in their proxy statements based on the voluntary self-identification on the racial, ethnic and gender composition of their board of directors, nominees for the board, and executive officers. The bill would also require these companies to disclose the adoption of any board policy, plan or strategy to promote diversity. Meeks explained the bill would also direct the Office of Minority and Women Inclusion (OMWI) Director at the Securities and Exchange Commission (SEC) to publish every three years best practices for the disclosure requirements of the bill, as well as establish an advisory council to advise on these best practices. Meeks called it a “simple, effective and impactful bill” to inform markets about the status of diversity and inclusion in corporate America. Reps. Waters, Beatty, Maloney, Green, and XXX spoke in support of the bill. Reps. French Hill (R-Ark.) and Wanger spoke in support of the bill but highlighted that there are similarities between this and H.R. 3279, and encouraged Meeks and Maloney to work together as the two bills move to the House floor.

The amended measure was reported favorably to the House by a vote of 53-5.

H.R. 2852, the “Homebuyer Assistance Act of 2019”

Rep. Brad Sherman (D-Calif.) introduced his bill and his Amendment in the Nature of a Substitute, which would expand those permitted to conduct Federal Housing Administration (FHA) appraisals from solely certified appraisers to include state-licensed appraisers, explaining that some areas of the country have a shortage of certified appraisers and the bill would ensure the FHA process is available in all parts of the country, including those where a certified appraiser is not available. Reps. Sean Duffy (R-Wis.) and Maloney spoke in support of the bill, saying that all people need accurate and objective appraisals performed by qualified and trained appraisers.

The amended measure was reported favorably to the House by a voice vote.

H.R. 3279, the “Diversity in Corporate Leadership Act of 2019” 

Maloney introduced her bill and her Amendment in the Nature of a Substitute, which would require public companies to report the gender, racial and ethnic composition of their boards in their annual proxy statement to enable investors to quickly sort the companies that do and do not have diverse boards when making their investment decisions. She explained that the bill would also establish a diversity advisory group within the SEC to study strategies to increase diversity on corporate boards. Maloney said that the Government Accountability Office (GAO) found that even if the same amount of women and men started joining corporate boards right now, it would take more than 40 years for women and men to have equal representation, so “clearly something needs to change.” Reps. Beatty, Al Green (D-Texas), and Meeks spoke in support of the bill. Rep. Andy Barr (R-Ky.) spoke in support of the bill but highlighted that there are inconsistencies between this and H.R. 1018, and urged Maloney and Meeks to work together to harmonize the two bills on their way to the House floor.

The amended measure was reported favorably to the House by a vote of 52-6.

H.R. 3614, the “Restricting Use of Credit Checks for Employment Decisions Act” 

Rep. Al Lawson (D-Fla.) introduced his bill and his Amendment in the Nature of a Substitute, which would prohibit the use of credit checks for most employment decisions. Rep. Barr spoke against the bill, saying some employers should have a “full picture” when making hiring decisions, saying in some employment settings, an applicant’s credit background could be seen as a qualification. Reps. Denver Riggleman (R-Va.) and Barry Loudermilk (R-Ga.) also spoke in opposition to the bill. Reps. Green and Waters spoke in support of the legislation.

The amended measure was reported favorably to the House by a vote of 32-26.

H.R. 3618, the “Free Credit Scores for Consumers Act of 2019”

Beatty introduced her bill and her Amendment in the Nature of a Substitute, which would require credit reporting agencies to include a free credit score with a consumer’s annual free credit report. Beatty explained that “few three-digit numbers are as important to consumers as their credit score,” but under current law consumers are only entitled to an annual free credit report, but not a free credit score, saying “this is data that belongs to the consumer.” Barr spoke in opposition to the amendment, saying it goes beyond the intent of the original legislation by additionally requiring credit reporting agencies to provide educational materials and past credit scores in a consumer’s file, adding that this could create a complex and potentially costly process. Waters spoke in favor of the bill.

Amendment Offered by Rep. Tom Emmer (R-Minn.)

Emmer introduced his amendment, which would “simplify” the legislation “while still ensuring consumers have access to credit scores.” Rep. Scott Tipton (R-Colo.) spoke in support of the amendment, critiquing that the underlying legislation adds additional requirements and mandates that credit scores be erased after two years. Reps. Blaine Luetkemeyer (R-Mo.) and Barr also spoke in support of the amendment. Beatty spoke against the amendment. The amendment was not agreed to.

The amended measure was reported favorably to the House by a vote of 32-26.

H.R. 3619, the “Appraisal Fee Transparency Act of 2019”

Rep. Lacy Clay (D-Mo.) introduced his bill and his Amendment in the Nature of a Substitute, which would provide the appraisal subcommittee with greater flexibility to determine the structure and amount of the fee charged to appraisal management companies, provide greater flexibility for the subcommittee to use fee proceeds to partner with different entities to ensure compliance with federal standards, include a representative from the Department of Veterans Affairs to the subcommittee, create a national registry of appraisers in training, and provide consumers with greater transparency in the disclosure of fees paid for appraisals. Duffy spoke in support of the bill.

The amended measure was reported favorably to the House by a voice vote.

H.R. 3620, the “Strategy and Investment in Rural Housing Preservation Act of 2019”

Clay introduced his bill and his Amendment in the Nature of a Substitute, which would provide rental assistance to low-income tenants in certain multifamily rural housing projects financed by the Rural Housing Service of the Department of Agriculture (USDA), and would establish and advisory committee to develop and implement a plan for preserving the affordability of rural rental housing. Duffy spoke in support of the bill, pledging to work with Clay on certain issues with the bill as it moves to the floor. Waters and McHenry also spoke in support of the bill.

The amended measure was reported favorably to the House by a vote of 57-0.

H.R. 3622, the “Restoring Unfairly Impaired Credit and Protecting Consumers Act”

Rep. Rashida Tlaib (D-Mich.) introduced her bill and her Amendment in the Nature of a Substitute, which would shorten the time frame credit information is on consumer reports, require the removal of medical debt from credit reports, and mandate the expedited removal of paid or settled debt from consumer reports. She explained the bill would also establish a right for victims of financial abuse to have adverse information associated with an abuser’s fraudulent activity removed from their consumer report. Waters spoke in favor of the bill. McHenry spoke against the bill, citing provisions that make “fundamental changes” to the collection of data used in underwriting.

Amendment Offered by Rep. Barry Loudermilk (R-Ga.)

Loudermilk introduced his amendment, which would maintain the provisions regarding the removal of credit history related to debt due to predatory lending, fraudulent or abusive loans and medical debt, but would strike the “more controversial provisions.” Reps. Michael San Nicolas (D-Guam), Ayanna Pressley (D-Mass.), Alma Adams (D-N.C.), Green, Velazquez and Tlaib spoke in opposition to the amendment. McHenry and Luetkemeyer spoke in favor of the amendment. The amendment was not agreed to.

The amended measure was reported favorably to the House by a vote of 32-26.

H.R. 3642, the “Improving Credit Reporting for All Consumers Act”

Adams introduced her bill and her Amendment in the Nature of a Substitute, which would improve the process for consumers to resolve inaccuracies on their credit reports, including by creating a new right to appeal credit reporting decisions, and direct the Consumer Financial Protection Bureau (CFPB) to develop minimum standards for the credit reporting agencies. Waters and Lawson spoke in favor of the bill. Reps. Bryan Steil (R-Wis.), Barr and Luetkemeyer spoke in opposition to the bill.

The amended measure was reported favorably to the House by a vote of 32-26.

Please note that this markup will continue on Tuesday, July 16, 2019. It is expected that the committee will at that time consider:

  • H.R. 3621, the “Student Borrower Credit Improvement Act”
  • H.R. 3624, the “Outsourcing Accountability Act of 2019”
  • H.R. 3625, the “PCAOB Whistleblower Protection Act of 2019”
  • H.R. ____, the “Clarity in Credit Score Formation Act of 2019”
  • H.R. ____, the “Stronger Enforcement of Civil Penalties Act of 2019”

For more information on this markup, please click here.

For a summary of Part II of this markup, please click here.