Financial Services and General Government Appropriations Act, 2024
Floor Speech
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Mr. NORMAN. Mr. Chair, I fully support Chairman Perry's amendment.
This agency is a rogue agency. Let me give an example to my friend to my left. The CFPB is irresponsible and reckless. In February 2023, a CFPB employee made an unauthorized transfer of records to a personal email account containing personal information of 256,000 customers. It affected over 45 institutions.
We sat with Mr. Chopra during a hearing. He is unregulated. I don't know if you have ever been on a bank board, but they are the most regulated group.
Do you know who pays the price, the fines, that they come up with through vague, in today's world, climate change? All these customers up here that are trying to borrow money.
It never should have existed. To keep it funded and to keep it as it exists with the personnel, we are going backward.
Mr. Chair, I fully support this amendment.
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Mr. NORMAN. Mr. Chair, what my amendment does is prohibits the use of funds to finalize, implement, or enforce a proposed rule titled: ``Conflicts of Interest Associated With the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers.''
On July 26, 2023, the SEC proposed a new rule that requires broker- dealers and investment advisers to confront challenges posed by predictive data analytics and related technologies like artificial intelligence. They did this despite no evidence that this technology harms investors.
While technological innovation has significantly enhanced the financial industry's capabilities in auditing, reporting, recordkeeping, trading, and surveillance, the SEC's proposed rule, despite claiming to be technology-neutral, appears to be fundamentally hostile to these advancements.
This rule creates a comprehensive regulatory regime governing any analytical or computational tool whereby information potentially relevant to investments is presented to the public.
This misguided, paternalistic rule declares it is a ``conflict of interest'' for a firm to communicate to customers any information generated using technology that so much as ``takes into consideration'' any interest of the firm.
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Mr. NORMAN. Mr. Chair, just like my good friend from Arkansas said, any time I hear an arm of the Federal Government say it is going to protect the public, that means another fine, that means another tax, that means another regulatory commission controlled by bureaucrats.
This proposal is misguided and rests on the false premise that delivering information to customers should be presumed harmful simply because it is consistent with the firm's interests.
The new rules would also impose significant operational challenges and expensive burdens on broker-dealers and investment advisers that use virtually any technology to any degree, without citing any compelling authority or evidence of abuse or wrongdoing.
It is abuse at its highest. It is vague at its highest.
The scope of the new rule also presents challenges. As SEC Commissioner Hester Peirce observed, the proposed definition of covered technology could include technologies long used by broker-dealers and investment advisers, such as spreadsheets, commonly used software, math formulas, and statistical tools.
Mr. Chair, I urge my colleagues to support my amendment, and I reserve the balance of my time.
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Mr. NORMAN. Mr. Chairman, I yield the balance of my time to the gentleman from Arkansas (Mr. Womack).
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Mr. NORMAN. Mr. Chairman, I yield back the balance of my time.
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Mr. NORMAN. Mr. Chairman, what my amendment does is prohibit the use of funds by the OMB to consider the ``social cost of greenhouse gases.'' Try to define ``social costs.'' It will just result in another fine by government bureaucrats. It is used in the development and implementation of budgets, Federal procurement processes, or environmental reviews.
President Biden is directing agencies to consider the flawed social cost of greenhouse gases in the development and implementation of budgets, the Federal procurement process, and environmental reviews.
Democrats use the social cost of greenhouse gas metrics to justify sweeping climate policies, strict regulations, and, I might add, strict fines.
This impacts everything, from purchasing goods or services to conducting environmental reviews for all kinds of projects and levying climate penalties against private businesses. This is against every private business that is under a lot of stress right now in this country. This is all this bureaucratic process does.
The social cost of greenhouse gases is an extremely inefficient policymaking tool that can easily be manipulated. By boosting the climate cost of projects, regulators could use the social cost of carbon to derail everything from energy to infrastructure projects, not to mention the cost of complying.
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Mr. NORMAN. Mr. Chairman, again, this is just another attempt by this radical administration to put up another commission to fleece the American taxpayers who are struggling as it is.
On January 21, 2021, President Biden signed the radical climate Executive Order No. 13990, which established an Interagency Working Group on the Social Cost of Greenhouse Gases and directed the working group to publish interim estimates of the social cost of carbon, nitrous oxide, and methane.
President Biden is now directing agencies to consider the SC-GHG in the development and implementation of their budgets, Federal procurement processes, and environmental reviews.
Social cost of greenhouse gases metrics are inefficient policymaking tools used to justify sweeping, radical climate policies and strict regulations that are interpreted by lifelong bureaucrats.
Mr. Chairman, I urge my colleagues to adopt my amendment, and I reserve the balance of my time.
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Mr. NORMAN. Mr. Chairman, 12 States, including South Carolina, filed a lawsuit against the Biden administration, claiming his calculations and use of the social cost of greenhouse gases are arbitrary and capricious and would harm their local economies.
Mr. Chairman, I urge the passage of my amendment, and I yield back the balance of my time.
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Mr. NORMAN. Mr. Chairman, what my amendment does is prohibits funding for the SEC's proposed rule titled: ``Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8.''
Since its origins in the 1940s, the shareholder proposal process has evolved from a modest effort to give shareholders an additional tool for influencing corporate governance to a complex and overpoliticized process.
Under the current SEC rules, even small shareholders who meet the $2,000 ownership requirement for at least 3 years can submit proposals on public company ballots. This process is overwhelmingly exploited by activists driven by social or political agendas and leads to hundreds of resolutions being filed related to environmental, social, and political issues rather than focusing on a company's growth and competitiveness.
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Mr. NORMAN. Mr. Chairman, any time I hear the Federal government say they are going to streamline anything, it kind of raises my eyebrows.
In fact, based on the SEC's own data, a single shareholder proposal can impose costs of more than $100,000, with many firms reporting significantly higher costs, which are ultimately borne by that company's shareholders.
Congress never granted the SEC authority to make it mandatory for companies to include shareholder proposals in corporate proxy statements, especially after companies already rejected substantially similar politically charged proposals.
Not only does this rule overstep the authority given to the SEC, but it also raises numerous constitutional concerns and is a clear violation of the First Amendment's prohibition on government-compelled speech.
Political performance does not belong in the boardroom. Instead, companies should focus on maximizing shareholder value.
Again, all this does is add another bureaucratic nightmare to the taxpayers that are already struggling.
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Mr. NORMAN. Mr. Chairman, I urge adoption of this amendment, and I yield back the balance of my time.
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Mr. NORMAN. Mr. Chair, this is just another long list that you have witnessed today and really all through this administration of bureaucratic overreach and fines to administer on the taxpayer.
What my amendment does is prohibit use of funds to implement, finalize, or enforce a proposed rule titled: ``Enhanced Disclosures by Certain Investment Advisers and Investment Companies About Environmental, Social, and Government Investment Practices.''
On May 25, 2022, the SEC proposed rules that mandate additional disclosures for funds incorporating or contemplating ESG factors in their investment strategies.
If adopted, the rule would reflect a significant shift in the SEC's current disclosures regime for private fund sponsors by focusing disclosure on a particular targeted aspect of the investment process.
The primary purpose of this rule is to address the risk of greenwashing and furnish investors with more comprehensive information regarding ESG strategies.
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Mr. NORMAN. Mr. Chair, I take issue with my good friend on the opposite aisle. In fact, I would note the Supreme Court's recent decision in West Virginia v. EPA raises concerns about the Commission's ability to implement both this proposal and the broader Climate Disclosure Rule under the major questions doctrine.
This is overexcessive. It is excessively broad, intricate, overly prescriptive, and vague. Again, this is just another bureaucratic commission set up to fleece the taxpayers and fleece the people that made this country.
Mr. Chair, I urge the adoption of my amendment, and I yield back the balance of my time.
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Mr. NORMAN. Mr. Chair, as the designee of Mr. Steil, I have an amendment at the desk.
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Mr. NORMAN. Mr. Chairman, like so many amendments that I, along with many others, introduced today, this is an assault on the taxpayers and more bureaucratic red tape that they want the taxpayers to pay for.
Mr. Chair, this amendment prohibits the use of funds to implement the SEC's ``Staff Legal Bulletin 14L,'' also known as SLB 14L. This staff legal bulletin allows the SEC staff to open up a big loophole for activist proposals to the detriment of American workers and retirement savers.
It is either doing one or two things: paying staff twice or hiring staff to do something that was not anticipated by the SEC.
Traditionally, under rule 14a-8, public companies could request a no- action letter from the SEC allowing them to exclude shareholder proposals that are irrelevant to the company's business.
The SLB, or staff legal bulletin, said they will not issue no-action letters if a proposal concerns an issue with a broad societal impact. I don't even know what that is, ``a broad societal impact.'' Try defining that.
In other words, it doesn't matter if a shareholder proposal is illegal or irrelevant to the company. If it is on a significant social policy issue of broad societal impact--whatever that is--it has to be considered.
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Mr. NORMAN. Mr. Chairman, basically, what my friends on the opposite side of the aisle are saying is that investors are too stupid to know where they put their money, if it is legitimate or not--get this--and they need help from staff judgments to decide which societal policy issues to prioritize. This is basically saying the American people are stupid.
Nobody should be surprised that this has led to a spike in ESG- related shareholder proposals.
Again, this political performance does not belong in the boardrooms. Companies should be governed to a maximum shareholder value on our retirement plans that should work toward healthy returns. I guess they are going to get the staff judgments to say if they are healthy returns or not.
Allowing the SEC to politicize the shareholders' proposals hurts workers, retirement savers, and the American people.
Mr. Chair, I urge the adoption of my amendment, and I yield back the balance of my time.
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Mr. NORMAN. Mr. Chair, as the designee of Mr. Steil, I have an amendment at the desk.
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Mr. NORMAN. Mr. Chairman, much like the previous amendment to stop the assault on the American taxpayer, I rise in support of this amendment to prohibit funds for the SEC's 2022 proxy adviser rule.
By issuing this new rule, the Biden SEC gutted key safeguards from the previous administration. Those safeguards provided sorely needed accountability and transparency for the proxy adviser industry.
ISS and Glass Lewis, the two main proxy adviser firms, control 97 percent of the market for proxy advice. The businesses that manage our retirement savings rely on these firms when deciding how to vote on corporate governance issues.
The two that they rely on control 97 percent. They are the ones that have the expertise, and to say anything different is just flatout wrong and not in reality.
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Mr. NORMAN. Mr. Chair, I will close with the fact that, instead, this powerful duopoly is fueling a movement to weaponize your retirement funds to basically push a political agenda that this Biden administration has been so adamant on. Both firms often recommend in favor of harmful ESG measures and proposals that violate State or local law. They have a long track record of costly factual errors and uncontrolled conflicts of interest.
The 2022 Biden administration rule lets proxy advisers continue to push a political agenda and make bad recommendations. Our retirement savings should be geared toward higher returns and not political objectives.
Mr. Chair, I urge my colleagues to accept this amendment, and I yield back the balance of my time.
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