Volcker Rule Regulatory Harmonization Act

Floor Speech

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Mr. HILL. Mr. Speaker, I thank the chairman, and I appreciate the chairman's leadership in bringing this bill to the floor today.

I think the American people should be very pleased that this bill is coming to the floor in the form that it is, because we are doing two things here, Mr. Speaker, that I hear about from constituents all the time in terms of the way Congress should work.

First, the Dodd-Frank Act was passed 8 years ago this July and has been scrutinized by Congresses since that time on how it can be improved. What are the implications of it? What are the unintended consequences of it?

No section of this bill was talked about more than section 619, the Volcker rule. So we are evaluating it, and we are bringing today a bipartisan solution to something that regulators say is a problem, bankers say is a problem, and our consumers and businesses have had the unintended consequences of being hurt by, because it has not allowed our capital markets to function efficiently.

So, first, Dodd-Frank is subject to review after it was passed. That is something our constituents want. We know no law is perfect when it is passed. It is not a piece of the true cross discovered by St. Helena in Jerusalem. It is not part of the Rosetta Stone. It is subject to the scrutiny of the people--our people--the American people.

Secondly, people tell me all the time: Why can't you be more bipartisan?

So, Mr. Speaker, this is people's exhibit A of bipartisanship.

The Financial CHOICE Act that this House passed last year repealed the Volcker rule. We believe it harms the capital market system of this country. We believe it was an overreaction to the financial crisis.

We had members of the Obama administration who said that proprietary trading didn't even contribute to the financial crisis. But set that issue aside. We proposed repeal. Over in the United States Senate, they passed the bill with two-thirds of the Senate, Mr. Speaker, to say that the Volcker rule is not perfect.

Section 619 is not right, and they exempt community banks under $10 billion that don't have trading activity. They exempt them completely in the U.S. Senate bill passed with two-thirds of the Senate. I think all Americans know that two-thirds of the Senate agreeing on something is shocking. They can't even agree that there are 24 hours in a day.

So this bill represents an improvement. This bill represents bipartisanship. With my friend, Dr. Foster, we have worked from the yin of full repeal to the Senate-exempt community banks. We have identical language to exempt community banks in this bill, Mr. Speaker. That is why we got a 50-0 vote in our committee. It is common sense.

But we add one feature that we think improves that Senate language, and that is the heart of what is changed in this bill and the heart of what Dr. Foster worked on, which is, how do we harmonize the interpretation of this 1,000-page complex rule that our Federal Reserve bank presidents don't understand and our current chairman said that trading desks had to have a Ouija board to figure out how to do a trade? So we want a standard, harmonized interpretation of this rule, and that is what Dr. Foster and I propose today.

They have tried other ways. We have an Interagency Working Group. They sit around, drink coffee, and figure out ways to harmonize stuff. But they have failed. There were hundreds of questions submitted: How do we interpret this rule? They could come up with 21 answers, Mr. Speaker, out of hundreds submitted.

So for that reason, Dr. Foster and I suggest that the Federal Reserve system be first among equals in interpreting this complex rule. Why? Because they oversee all of the bank holding companies in the country, the most complex institutions in the country. In my view, that is what we need to do.

We are bipartisan. We have compromised. We have brought both sides together. We have improved the bill. Like our chairman, I wish it were repealed, but that is not possible right now. So we take a step forward to make it a better rule that provides more certainty for market makers.

If market makers have more certainty, Mr. Speaker, broker-dealers under $10 billion or over $10 billion will have a more clear compliance regime. Our towns and municipalities that require in their municipal bonds having market makers and trading will get better prices, which means our water and sewer systems are going to cost less when it comes to the net interest cost. That is what we are trying to do, is improve our capital markets and let our companies have more market makers.

So, Mr. Speaker, I urge my colleagues to support this bill. I thank Dr. Foster for his support, and I thank the chairman for bringing it to the floor.

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