Volcker Rule Regulatory Harmonization Act

Floor Speech

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Mr. HUIZENGA. Mr. Speaker, the ranking member seems as if she would like to have a conversation about housing and prices. I am happy to do that--I am a former realtor and builder--just not right now.

Today, we are here to talk about H.R. 4790, the Volcker Rule Regulatory Harmonization Act, introduced by my good friend and colleague, Mr. Hill.

H.R. 4790 would streamline the regulatory authority over the Volcker rule by granting the Federal Reserve the exclusive primary authority, while requiring all of the other agencies to yet do their job as prescribed.

This was really about proprietary trading. Because of the key role that market making plays in ensuring deep, liquid capital markets, the framers of the Volcker rule sought to exempt market-making activities from the coverage of its prohibition on proprietary trading.

There is just one problem: The line between impermissible ``proprietary trading'' and permissible ``market making'' is virtually impossible to draw.

To add insult to injury, the framers of the Volcker rule unartfully conferred responsibility for both implementing and enforcing the rule on five different Federal financial regulators, all of which have different mandates and regulatory philosophies: the Federal Reserve, FDIC, OCC, SEC, and the CFTC. It is an alphabet soup of regulators.

With each regulator having different statutory mandates and regulatory missions, is it any surprise that these five agencies have failed to reach a consensus on the regulation to implement the Volcker rule's vague legislative language?

Let me give you another example. This is a little like driving down an unmarked section of the road where the State police, the Department of Transportation, the local police, the parking attendant, and the FBI have all been told that they have primary enforcement responsibilities for the speed limit. It just doesn't make sense. As a result, banks are getting out of the market-making business for fear of running afoul of the Volcker rule. This is a great detriment to the U.S. capital markets.

The real-world implications of the Volcker rule have been higher borrowing costs for job creators, smaller investment returns for hardworking families, and less economic activity overall because of further regulatory restraints placed on already reduced liquidity margins in key fixed-income markets, including the corporate bond market.

So, needless to say, from its inception, the Volcker rule has been a solution in search of a problem. It seeks to address activities that had nothing to do with the financial crisis, and its practical effect has been to undermine financial stability rather than to preserve it.

H.R. 4790 is a much-needed first step to addressing the numerous unintended and negative consequences of the Volcker rule. This bipartisan bill, as has been pointed out, streamlines the rulemaking authority of the Federal Reserve. It consolidates examination and enforcement authority into a single primary regulator.

This legislative measure makes important and sensible changes to ensure much-needed regulatory clarity and reduces burdensome compliance costs.

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Mr. HUIZENGA. Mr. Speaker, despite the hyperbole you are hearing from the ranking member, nothing in this bill grants the Federal Reserve the ability to repeal the Volcker rule--nothing. Additionally, the other regulators, that alphabet soup of regulators, are still required to enforce the law.

Everyone deserves to have clarity and understanding of what the rules of the road are, and that is what this bill is trying to do.

Mr. Speaker, I urge my colleagues to vote ``yes'' on H.R. 4790.

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