▶ 0:05:33Committee will come to order. Without objection, the chair is authorized to declare a recess of the committee at any time. Without objection, all members shall have five legislative days within which to submit additional materials to the chair for inclusion in our record. Well, good morning. Once again, happy new year. This is our first uh markup of 2026.
▶ 0:05:56Today, we're considering a series of bills that reflect the committee's continued commitment to reinforcing our financial system, strengthening our national security, and fostering uh greater economic growth. We want to reverse the curse of the Biden years where we witnessed runaway spending, rising cost, and regulatory overreach. Members of this committee and our Republican conference are working hard to restore growth, opportunity, and accountability to our government.
▶ 0:06:23From strengthening our defenses against emerging cyber threats to fostering innovation through artificial intelligence, the bills we have us have before us today reinforce the foundations of our financial system. Together, they empower the American people by promoting economic security, encouraging responsible innovation, and ensuring that Washington does not stand in the way of growth and opportunity.
▶ 0:06:47Looking ahead to the second half of our 119th Congress, we can advance thoughtful, targeted policy changes that strengthen economic opportunity and help the American dream become more attainable for every American family. We have Representative Mike Flood's reauthorization of the terrorism insurance program, extending TRIA. It not only safeguards American businesses, but it ensures our economy remains resilient against potential threats.
▶ 0:07:19As we look to the future, the integration of artificial intelligence and financial services and housing become paramount that this gets done in the right way. Representative Brian Styles resolution expresses our support for artificial intelligence in financial services and housing on a bipartisan manner.
▶ 0:07:39This resolution acknowledges that AI's growing role in these sectors recognizes both its benefits and the risks underscoring the need for appropriate oversight, enforcement of existing laws, and consumer protection. To combat in the increasing threat of cyber crime in our financial system, we will review Representative Scott Fitzgerald's combating money laundering and cyber crime act of 2025.
▶ 0:08:06This bill strengthens law enforcement's ability to address illicit activity tied to digital assets and better protects consumers and our financial institutions. Additionally, today we'll consider Representative Laudermel's financial reporting threshold modernization act, which modernizes the outdated reporting requirements by updating the currency transaction report threshold to reflect inflation and today's changed financial landscape
▶ 0:08:36and economy, reducing unnecessary regulatory burdens, and allowing businesses to focus on growth. We'll also consider Representative Garberino, Small Entrepreneurs Empowerment and Development or Seed Act, which amends the Securities Act of 1933 to allow small issuers to conduct micro offerings free of mandated disclosure or filings.
▶ 0:09:02By easing the regulatory burden on small issuers, we empower them to grow and innovate while ensuring that strict anti-fraud protections remain fully intact. How you doing?
▶ 0:09:13We'll consider Representative Dan Muser's Restoring Secondary Trading Market Act, which amends the Securities Act of 1933 to preempt state blue sky laws for off exchange secondary trading. Streamlining regulations for off-change trading creates a more conducive environment for companies that operate, enhances regulatory consistency, and increases investor confidence.
▶ 0:09:37Cumulative, these bills take steps forward toward reducing unnecessary regulatory burdens to allow businesses to focus on their core operations while protecting the health and security of our nation's financial system. These bills address the real challenges facing our financial sector while promoting innovation. I look forward to the discussion today on these important bills that work to benefit the American people.
▶ 0:10:00And I look forward to delivering on our committee goals and agenda for I yield back the balance of my time and I want to recognize our distinguished ranking members. Miss Waters, you're recognized for a five minute opening
▶ 0:10:16Uh thank you, Chairman Hill. Yesterday, I was joined by committee Democrats at the Supreme Court to stand up for the rule of law and defend the independence of our nation's central bank as Donald Trump and his crooked administration continue their unconstitutional attempt to fire Federal Reserve Governor Dr. Lisa Cook.
▶ 0:10:41I'm confident the Supreme Court will do the right thing and uphold the law by rejecting this brazen power grab. But let's be clear, this attack on Governor Cook and Trump's latest attack on the Fed Chairman Jerome Powell is part of a much broader and deeply dangerous agenda.
▶ 0:11:03Trump wants to take over our economy and run it like Trump's stakes, Trump University, or any of his other failed and fraudulent businesses, straight into the ground and into his pockets. From gutting uh the CFBC to derailing a housing agency, it's clear he wants to weaken independent institutions and rig the system for his own political and financial interests.
▶ 0:11:30At a moment when millions of Americans are being crushed by an affordability crisis that Trump himself created, his administration has chosen not to provide relief. Instead, Trump has raised taxes and imposed sweeping tariffs, making groceries and housing more expensive.
▶ 0:11:50and he has launched an allout assault on the protections that safeguard consumers, workers, retirees, homeowners, and small businesses from fraud, abuse, and financial collapse. Unfortunately, Trump has plenty of willing accompllices in Congress to abet him in this grift against the American people.
▶ 0:12:12Today, Republicans are advancing a slate of proposals that weaken our banking system, undermine national security, and allow bad actors to slip through the cracks, all while increasing harm to investors. Now, let me be clear about what that means in practice.
▶ 0:12:31At a time when scams, fraud, and financial crime are surging, Republicans are using this markup to advance proposals that would curtail banks reporting suspicious activity and making it easier for criminals to avoid detection.
▶ 0:12:48I'm not aware of any American asking Congress to weaken tour tools used to combat terrorism, drug trafficking, human trafficking, and financial exploitation. In fact, Trump's own FBI says that one of the bills today would quote severely limit the FBI's visibility into potential illicit financial activity end quote.
▶ 0:13:18I do support the bill, the bill to authorize the terrorism risk insurance act being considered today. I applaud the chairman for ensuring this bill garers bipartisan support, something prior Republican chairs failed to do. Passing TRIA is essential to unlocking economic development, supporting construction and sustaining growth in communities across this country.
▶ 0:13:47same time, I'm pleased that the committee's focus on artificial intelligence, responsible AI requires strong consumer protections, preserving state laws, and preparing our economy and institutions for the changes ahead. Committee Democrats are fighting for a strong economy that works for all Americans and not the wealthy and well-connected. That means supporting community lenders who serve consumers, not Wall Street CEOs.
▶ 0:14:17It means ensuring our capital markets work for small businesses, investors, and workers alike. And it means protecting the independence of the Federal Reserve from Donald Trump's illegal takeover. Let me close with this. After calling it a hoax and a scam, Trump appears to see how his failed economic policies are hurting Americans and has put forward proposals to try to make things more affordable.
▶ 0:14:45From proposing to cap interest rates, to reduce credit card swipes uh to banning private equity from buying homes. I would hope Republicans would also take up similar proposals to reduce costs for Americans and abandon their agenda to enrich frosters billionaires in Wall Street. However, you never know what Trump is going to do from day to day. One day he's proposing something. The next day he changes his mind.
▶ 0:15:12The next day he don't remember what he said the first day or the second day. However, committee Democrats will always stand up for consumers, families, and businesses, and we will always push back against reckless efforts to throw out our communities, our markets, and our economy to chaos. I yield back the balance of my time. Thank you, Mr.
▶ 0:15:34Your your time plus has been yielded back. Thank you so much. Pursuant to notice, I call up HR7128, the TRIA Program Reauthorization Act of which was introduced by the chair of our housing and insurance subcommittee. Mr. Flood, clerk will report the bill, which was distributed in advance. HR HR 7128 to extend the terrorism risk insurance program and for other purposes.
▶ 0:16:03Uh, without objection, bills considered read and open to amendment at any time. Representative Flood has an amendment in the nature of a substitute, copies of which were distributed in advance. The clerk will now report that amendment.
▶ 0:16:15An amendment in the nature of a substitute to HR 7128 offered by Mr. Flood of Nebraska designated as TRIA extension ANS.
▶ 0:16:23Without objection, the amendment is considered red will serve as the base text for the purposes of amendment. The gentleman from Nebraska, the housing insurance subcommittee chair, Mr. Flood, you're recognized on your ANS for five minutes. Thank you, Mr. Chairman. I also want to thank my co-lead on this legislation, Congressman Andrew Garberino, who is also the chairman of the House uh Homeland Security Committee.
▶ 0:16:45Uh this legislation would reauthorize the terrorism risk insurance program through 2034, an extension of 7 years beyond when the program is currently scheduled to lapse. Before the terrorism risk insurance act of 2002 was adopted, terrorism risk was incorporated directly into the underwriting of commercial property and casualty insurance. However, after the horrific attacks of September 11th, 2001, terrorism risk seemed much more difficult to underwrite.
▶ 0:17:15Since its inception, TRIA has been authorized four separate times, 2002, 2007, 2015, and again in 2019. In September of last year, the housing and insurance subcommittee held a hearing on the terrorism risk insurance program. We had a selection of witnesses that brought a wide variety of perspectives on the program and how the program has operated since its inception in 2002.
▶ 0:17:41However, during that hearing, we heard over and over again a similar theme from nearly all of them. In order to provide maximum stability and certainty to the terrorism risk insurance market, Congress should work towards a long-term reauthorization and complete its work well before any potential lapse in 2027. Our committee is doing just that.
▶ 0:18:01If we are able to advance the legislation before us in the committee today, we can work towards final passage on the House floor and hopefully get the extension signed into law later this year. This legislation does not does make a handful of minor changes to the terrorism risk insurance program. All of which are intended to make the program work better for insurers and importantly policyh holders.
▶ 0:18:25Specifically, the amendment in the nature of a substitute makes two changes to the certification process that determines whether an event qualifies as an act of terror pursuant to TRIA. Number one, it raises the amount of property and casualty insurance losses that must result from an act for it to be considered terrorism risk insurance eligible from 5 million to $10 million, which updates that threshold to current levels of inflation.
▶ 0:18:50Number two, it also provides a deadline or call it a shot clock for the Department of Treasury to certify whether an event is actually an act of terror. That process would work as follows. First, Treasury would publish its intent to examine a potential event more closely in the Federal Register. Second, after 90 days uh following publication of that notice in the Federal Register, Treasury would need to come to a decision about whether that event qualifies as an act of terror.
▶ 0:19:19Both the threshold change and the shot clock will provide greater clarity to policyh holders and insurers on what constitutes an act of terrorism covered by the program. Other than those two minor changes, the bill is straightforward and more or less a clean extension of the program. My hope is that we can consider this legislation quickly and efficiently without too much controversy.
▶ 0:19:41Um, I'd also ask unanimous consent to enter the following statements into the record indicating strong support for the TRIA program reauthorization act of 2026 and encourage advancing the legislation to the full house without delay. We have a letter from the Reinsurance Association of America, a letter from the Council of Insurance Agents and Brokers, a letter from Building Owners and Managers Association, and a news release statement from the American Property Casualty Insurance Association.
▶ 0:20:08Without objection, those will be put in the record.
▶ 0:20:11I yield back.
▶ 0:20:13Gentleman yields back. Who seeks uh recognition on the ANS?
▶ 0:20:16Mr. Chairman,
▶ 0:20:16the gentleoman from New York. You're recognized to strike the last word.
▶ 0:20:19Thank you. I move to strike the last
▶ 0:20:21To recognize for five minutes.
▶ 0:20:23Thank you, Mr. chairman. The terrorist attacks on September 11th, 2001 were the deadliest act of terrorism in human history. As a New Yorker and an American, I will never forget the tragic events of that day. In New York City, we lost more than 2,700 souls when the Twin Towers collapsed.
▶ 0:20:47In the years seen, it has been concluded that more than 1,40 additional people who either worked, lived, or study in lower Manhattan has been diagnosed with cancer due to exposure of toxins at ground zero. Passed in the aftermath of September 11, the TRIA program was created to help lower Manhattan and New York City rebuild.
▶ 0:21:13Prior to the 911 attacks, commercial insurance policies typically covered terrorism losses at daywood or the perils and without additional costs to the policy holders. But the 911 attacks were a shock to the overall economy and the insurance industry in particular.
▶ 0:21:34The insured losses on all insurance lines from the attacks were estimated at approximately $60 billion in current dollars, well above the costliest natural disaster that had occurred at that time and approximately four times the combined property insurance losses on the rest of the 20th 20 largest terrorist attacks.
▶ 0:22:01Responding to the disruptions in the insurance market and fearing a wider downturn in the economy, we established the TRIA program as a reinsurance and back stop to calm markets and give the industry time to collect the data and the capacity necessary for private sector to the risk.
▶ 0:22:22Initially passed as a temporary measure, the program has been reauthorized multiple times and it remains clear to me that we continue to need the TRIA program not just for New York but for the entire country. The relative calm that we have seen in the insurance market for terrorism coverage is underpinned by the existence of the program. Insurers are required to offer terrorism coverage under the act.
▶ 0:22:52And it seems possible, if not likely, that insurers well would again seeks to exclude terrorism losses if this requirement were to be removed. Now, that doesn't mean the program should continue to be reauthorized without any We must always look under the hood to see if programs are functioning properly and that includes TRIA.
▶ 0:23:20We have had lengthy discussions about the changes we're making here today and believe we have arrived at a good place. We have moved the trigger threshold to $10 million to adjust for inflation and delay the date of effectiveness until allowing the industry time to model for this adjust adjustment.
▶ 0:23:45If models indicate significant changes in premium have resulted because of this change, pushing back the date to the new trigger until 2029 give us time to make adjustments. The changes we're making to the certification window will require the Treasury Department to begin the process of determining whether to certify an event as an act of terrorism within 30 days.
▶ 0:24:12As ranking member of the House Small Business Committee, I can tell you that small businesses want certainty, a 30 days notice requiring for the Treasury Department to indicate whether they are investigating and act as act of terrorism provides small businesses with some certainty on whether they claim their claim will be paid out through the program.
▶ 0:24:37Lastly, and perhaps most importantly, the bill we're marking up today moves the legislation forward and begins the process of reertifying the program, which carriers, reinsurers, and brokers have all told me must happen right away. If edits to this text need to be made as we move to the floor, we're eager to work with all parties on a bipartisan basis on those adjustment.
▶ 0:25:04I urge my colleagues to vote yes on this bill and yield back the balance of my time.
▶ 0:25:09Gentlewoman yields back. Who seeks? Uh Mr. Rose seeks to strike the last word.
▶ 0:25:15Uh Mr. Chairman, I move to strike the last word.
▶ 0:25:17You're strike the last word. You're recognized for five minutes.
▶ 0:25:20Thank you. Uh Chairman Flood and Chairman Hill for your work on this legislation. At the outset, I think it's important to recall exactly what Congress intended when it created the terrorism risk insurance act or TRIA.
▶ 0:25:33The statute laid out that the program was established to provide for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism in order to one protect consumers by addressing market disruptions and ensure the continued widespread availability and affordability of property and casualty insurance for terrorism risk.
▶ 0:25:57and two, allow for a transitional period, a transitional period for the private markets to stabilize, resume pricing of such insurance and build capacity to absorb future losses while preserving state insurance regulation and consumer protections. That's the law's own language. And the key phrase here is temporary federal program. TRIA was never meant to be permanent. never meant to be permanent.
▶ 0:26:28It was designed to give the private market time to adjust, mature, and ultimately take full responsibility for ensuring against terrorism risk. Yet, here we are 20 plus years later, marking up another long-term reauthorization that continues to rely on federal involvement instead of meaningfully reducing it.
▶ 0:26:51I have great respect for my colleagues who have worked hard on this proposal, but I believe that HR7128 misses an opportunity. Rather than putting TRIA on a path toward less government and taxpayer exposure and greater private sector responsibility, this bill extends the federal backs stop for another decade, giving, I think, import to Ronald Reagan's old statement that the closest thing to immortality on this earth is a government program. We are proving that today.
▶ 0:27:21To put that in perspective, under this bill, TRIA would remain in place until December 31st, 2034, nearly 9 years from now. That's hardly consistent with the statute's intent of providing a transitional program. This is especially concerning given that to date, TRIA has never been activated. In the 20 plus years since TRIA was enacted, thankfully there has not been a single Treasurycertified act of terrorism that met the program's financial trigger.
▶ 0:27:51Not once has the federal government been required to step up under TRIA. That's a good thing. Meanwhile, the private insurance market has done very well in this space. Very well indeed. According to the Treasury Department, between 2003 and 20 2023, insurers earned approximately 56.7 billion in terrorism risk insurance premiums.
▶ 0:28:16That's a strong indication that insurers have both the experience and capacity to manage this risk without an ongoing federal backs stop. Yet, instead of taking steps to scale down taxpayer exposure or implement a glide path for eventual federal exit, this bill simply extends the program largely as is. This is deeply disappointing for those of us who believe the federal government should not be permanently backstopping risk the private sector is capable of handling on their own.
▶ 0:28:46The continued reauthorization of TRIA without meaningful reform runs counter to sound fiscal stewardship. As policymakers, we have a responsibility to safeguard taxpayers from bearing undue financial risk, especially when there is little evidence of current market failure or a pressing need for federal intervention. I want to thank Chairman Flood and Chairman Hill again for their leadership and their efforts to maintain stability in this space.
▶ 0:29:13I also appreciate their willingness to engage in this important discussion. However, I cannot support a reauthorization that extends TRIA's federal role for another seven years beyond the current reauthorization or nearly nine years from today without a plan to ultimately wind it down. TRIA was meant to be temporary. Instead, it's becoming indefinite, maybe permanent.
▶ 0:29:38It's past time to begin the process of responsibly transitioning this market away from taxpayer support and toward a fully privatebased model. For these reasons, uh, I will be opposing HR7128 in its current form. Thank you, Mr. Chairman, and I yield back.
▶ 0:29:55Gentleman yields back. Who seeks recognition on Mr. Flood's ANS? The gentleman from Missouri.
▶ 0:30:00Thank you, Mr. Chairman.
▶ 0:30:01Mr. Clever, you're recognized. Strike the last word.
▶ 0:30:04We'll strike the last word. Uh, uh, Mr. Floyd presented an entire list of uh um those who are endors endorsing this effort and I would just uh like to uh have included the National Association of Mutual Insurance Companies
▶ 0:30:20that would be included in the record without objection.
▶ 0:30:27Are you
▶ 0:30:29I yield back?
▶ 0:30:29Gentleman yields back. Who seeks
▶ 0:30:32Gentleman from New York, Mr. Garbino.
▶ 0:30:34Move the strike the last word.
▶ 0:30:35Gentleman's recognized for five minutes. Thank you, Mr. Chairman, and thank you to my colleague, Chairman Flood, uh, for leading on this. I urge all my colleagues to join me in supporting the TRIA Program Reauthorization Act of 2026, which extends terrorism risk insurance through 2034. Terror Terrorism Risk Insurance Act was created in response to a clear and urgent market failure in the aftermath of the September 11th terrorist attacks, which resulted in approximately $45 billion insured losses.
▶ 0:31:03Insurers and reinsurers determined that terrorism risk could not be reliably modeled or priced. Because of this, the uncertainty caused the market to react quickly. Premium surged. Coverage was withdrawn and entire sectors of the economy left exposed. These disruptions were especially severe in high-risisk highdensity regions like New York, where commercial real estate, transportation systems, and large employers depend on affordable and predictable terrorism coverage. Projects stalled.
▶ 0:31:31Financing became more difficult to secure and employers faced uncertainty not because of economic weakness but because insurance markets could not absorb the risk for region for reasons for regions like my district on Long Island whose economy is deeply integrated with New York City. These dis market disruptions had real and lasting consequences for development, employment, and investment.
▶ 0:31:53Congress responded by enacting TRIA in 2002 as a federal backs stop designed not to replace the private market but to stabilize it. Program restored confidence, encouraged private capital to reenter the market and allowed insurers time to rebuild capacity improve risk assessment. Congress has since reauthorized the program in 2005, 2007, 2015, and 2019.
▶ 0:32:15A recognition of the reality that terrorism risk remains difficult to predict, can cause widespread losses all at once, and potentially catastrophic catast catastrophic in ways that continue to challenge purely private insurance solutions. As a result, TRIA has served an important and effective stabilizing mechanism that supports the availability of terrorism risk insurance across key sectors of the economy.
▶ 0:32:39TRIA also supports broader public interest including law enforcement, national security, stable terrorism risk insurance. Insurance enables state and local governments, transit authorities, and operators of critical infrastructure to invest in security, reli resilience, and coordination with law enforcement rather than diverting resources to manage uninsurable risks. It is also important to emphasize that uncertainty surrounding TRIA's future can itself disrupt markets, which is why I'd like to commend the committee for beginning this process well before the program's expiration at the end of 2027.
▶ 0:33:10Policy holders and insurers need at least one year of certainty to renew coverage, negotiate multi-year policies, and secure financing tied to terrorism risk insurance. Even the prospect of a lapse can lead to higher premiums, reduced coverage availability, and delayed investment decisions well before any expiration actually occurs. This reauthorization bill directly addresses that risk by extending TRIA for seven years, providing insurers, policyh holders, and the broader financial system with a long-term certainty needed to support underwriting, lending, and development decisions.
▶ 0:33:40History shows that markets begin to react well in advance of a sunset date, and delaying action risks higher premiums, reduce availability, or contract exclusions. Reauthorizing TRIA before the end of 2026 is therefore critical to avoiding unnecessary disruption, particularly for long-term insurance arrangements, financing agreements, and development projects that depend on predictable coverage. For these reasons, I strongly support the reauthorization, encourage my colleagues on both sides aisle to join me in voting for this important bill. And Mr. Mr.
▶ 0:34:08Chairman, I ask unanimous consent to enter the following statements into the record indicating strong support for the TRIA program reauthorization act of 2026 and encouraging advancing legislation to the full house without delay. And that includes a letter from the coalition to ensure against terrorism, a letter from the National Association of Realtors, a letter from the American Bankers Association, and a letter from the National Association of Mutual Insurance
▶ 0:34:32Without objection, those will be made part of our record.
▶ 0:34:35Thank you. I yield back.
▶ 0:34:36Gentleman yields back.
▶ 0:34:37Yes. who seeks recognition. Uh, Mr.
▶ 0:34:42thank you, Mr. Chairman. I wasn't planning on speaking on I
▶ 0:34:47ask for five minutes.
▶ 0:34:48Gentleman's recognized for five minutes. Last one.
▶ 0:34:50Yeah, no worries. Uh, I wasn't planning to speak on this, but I was elected on September 11, 2001, the day of the attacks. Uh, one of the first bills that we ca and I came onto this committee uh, shortly thereafter and one of the first major pieces of legislation we we considered was uh, was this bill on TRIA.
▶ 0:35:10And uh in the midst of that uh we were also meeting with the families of flight attendants, people who had lost their lives on on September 11th.
▶ 0:35:28And the the fear in in the business community was that even though even though the ins the private insurance industry was able to cover the losses of that attack that that they would not be able to do so in the future.
▶ 0:35:51uh especially uh those businesses that operated large sporting arenas uh uh large venues where a lot of people would gather. The the colossal and catastrophic damages that would result from a a terrorist attack of that nature on a facility like that would make it impossible for them to to operate.
▶ 0:36:16So the fact that that we have not had to pay out uh since uh September 11, 2001, since after that attack is uh it should not be a a negative. It it should be a a positive. Uh the the debate over this bill TRIA was always about where are we going to put the backs stop?
▶ 0:36:41How much how much of the cost of of a terrorist attack would we require the private insurance companies to pick up? And then when it just became so massive, would would we just say, "Okay, the people at the end of the line, there would be no resources for those families who who may whose family members may have been killed or or or seriously injured." and instead we said no, we're going to we're going to
▶ 0:37:11back that up after after the private insurance industry picks up a huge amount of the damages. Then the government will will stand in line behind that to make sure that every family who loses a loved one would be would be compensated at least in a way that gave him a chance to to survive to continue. in the midst of of of all that anguish and loss.
▶ 0:37:41So, so that that was the dynamic behind this this this bill in its first iteration. Uh we can argue about where that backs stop should be, but I think especially today when miniaturaturization of some weapon systems actually presents a greater danger today than it did back in 2001.
▶ 0:38:05I worry greatly about terrorist organizations getting weapon systems that could do catastrophic damage to to parts of our country and to facilities within our country. We enjoy great freedoms and and I think that this I think that this bill uh maintains we can still argue about where that backs stop should be. There should be a significant uh level of coverage coverage for private insurers.
▶ 0:38:35But remember these these arena operators and mall operators where you have masses amount of people, they're buying this insurance because they believe they need it. They need it that they would not be able to exist if there was a a a a major terrorist event at their venue.
▶ 0:38:56and they're they're buying this insurance so that if anybody comes into that arena or into that mall and and suffers the victimization that we saw on September 11th that at least those families will be protected and and and that they will they will fulfill their obligation to make sure that whoever takes a seat in that stadium or in that mall knows that that there's some level of protection of them that is completely beyond the the the the the the
▶ 0:39:26normal expectations of of any proprietor or any operator of one of those stadiums. So, um I I understand the gentleman's frustration uh with where the line is drawn, but I I think that the drafters and and it was a bipartisan effort here. They've done their very very best to to create that balance and and I I hope members support this bill and I yield back.
▶ 0:39:48Gentleman yields back who seeks recognition. Gentleman from Oklahoma.
▶ 0:39:51Chairman wish to strike the last word.
▶ 0:39:53Gentleman's recognized for five minutes. Thank you, Mr. Chairman. My colleague did a really amazing job of describing what we went through as committee members in 2001, and the ranking member remembers this. But before 2001, I had been a member for 11 months.
▶ 0:40:11I've been a member of this committee for five months when we had an act of domestic terror in Oklahoma City where deranged people created a massive truck bomb and took the lives of 168 good citizens and destroyed millions of millions of dollars worth of property. The president and congressional, bipartisan, bicameal leadership at the time responded that that was an attack on the United States of America and we stepped up.
▶ 0:40:42911 was an act of international terror, but it was an attack against all of us in this country and once again we stepped up. There was an acknowledgement in the debate at the time that the insurance industry would have to adjust their expectations, their potential liabilities, and the fees they were charged for coverage to reflect what had happened in Oklahoma City and what had happened in New York City and what might happen the next day or the next day down the road.
▶ 0:41:12We understood that we were not going to let our fellow citizens suffer and we wanted to be practical as Mr. about giving the insurance companies certainty so that they could adjust their rates to reflect the help that would come in a catastrophic event. This has been good legislation that has worked amazingly well. Tweaked on every reauthorization, of course, like all good legislation should be, but amazingly well.
▶ 0:41:42If you let this expire in a world that continues to be unstable and dangerous, then you'll compel all the entities who look at these potential exposures to try and factor this into their costs. And we will all pay dramatically more. It's been 25 years since the tragedy in New York City, but we don't know what happens tomorrow or the next day or 5 years from now. This legislation is necessary and must be maintained.
▶ 0:42:12And those of us in the committee who worked on it in the beginning understand that and those of us who've been exposed to the tragedies when these occur understand that. With that, I respectfully yield back. Mr.
▶ 0:42:23gentleman from Oklahoma yields back. The chair recognizes the ranking member. Strike the last word.
▶ 0:42:28I move to strike the last word.
▶ 0:42:30Gentleoman's recognized for five minutes. I'm pleased that today we're considering HR7128 to reauthorize the Terrorism Risk Insurance Act or TRIA for seven years. I would like to thank Chairman Hill and his staff for working with me and my staff uh to ensure long-term certainty and availability of affordable terrorism risk insurance coverage across our country.
▶ 0:42:56This coverage is critical for small businesses, hospitals, universities, nonprofits, and others that rely on this critical federal program. This TRIA legislation is a bipartisan bill, as it has been in recent reauthorizations. As chairwoman of this committee, in 2019, I led the last reauthorization, which was the longest, and have supported previous reauthorizations.
▶ 0:43:25TRIA was first enacted after the September 11 terrorist attacks which resulted in the largest insured losses from a non-natural disaster on record. After that, tourism risk insurance all but disappeared and any coverage that could be afforded was extremely expensive. Without terrorism risk insurance, commercial reconstruction stalled.
▶ 0:43:52In response, Congress passed TRIA in 2002 uh to ensure the availability and affordability of terrorism risk insurance and provide a federal backs stop in the event of catastrophic losses since then. The program has effectively done just that. TRI is set to expire uh at the end of 2027 and marketing up now will offer certainty to policy makers moving forward.
▶ 0:44:21This legislation will provide a long-term reauthorization through 2034 and make targeted but sensible updates to the program. Mr. Chairman, it is also my understanding that Treasury may still have technical assistance to provide on the bill that we may need to explore and I'm pleased you have agreed to do so.
▶ 0:44:44I would also like to thank Chairman Flaud, Ranking Member Clever, Congresswoman Velasquez, and Congresswoman Presley for their efforts to work on this bill today. So, I hope we can quickly act to move this bill forward and would urge all my colleagues to support this legislation. I thank you and I yield back.
▶ 0:45:06General Gentlewoman yields back who seeks recognition on Mr. Fleds. Seeing no other members, I I'll recognize myself for five minutes to strike the last word. TRIA uh remains an important way that we can manage the inherent risks of terrorism and terrorist risk in our economy. It's helped us reconcile that that threat is always now part of our life. As Mr. Lynch just noted.
▶ 0:45:30Whether you're in Boston, the Big Apple, or in Little Rock, we've used the reauthorization process to look critically at TRIA to see how it meets our needs and what adjustments should be made in order to accomplish the twin goals of providing market certainty and stability.
▶ 0:45:46That's why we work with ranking member Waters on ideas to fine-tune the program just as she did as chair in 2019 to continue to provide greater clarity now as to what would happen if the program were ever We've sought feedback from members and from others as we move quickly to get out in front of this program's scheduled expiration of December 2027. So, everyone has a chance to review and debate improvements on this bill.
▶ 0:46:16The last thing I want to do as Congress is be debating this bill in November of As noted in Mr. Rose's statement, Congress always has the responsibility of scrutinizing this programming and considering on a bipartisan basis how to structure it. The changes in Mr. Flood's bill are certainly not groundbreaking per se, but represent reasonable efforts which show that the realities of the threats evolve too, and as they evolve, the program should evolve.
▶ 0:46:45So let's keep in mind the fundamental purpose of TRIA which is clear in the original 2002 law as so eloquently spoken to by Lucas Lynch Velasquez. Section 101B states TRIA is designed to provide a for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism in order to protect consumers. That's the goal here.
▶ 0:47:12To give policy makers, policy holders access to the financial protection they need to build buildings, construct malls, employ workers, and run our economy. As time has passed, quirks and tria have appeared, making it harder for those policyh holders to get their claims paid quickly and fully, and left insurers a drift in the lurch of what some what some would describe as a clunky uh will they, won't they certification process.
▶ 0:47:41As Miss Presley observed at our September hearing, the 2013 Boston Marathon bombing left businesses waiting for weeks, months, and ultimately more than a year to learn if Treasury would classify the event as a terrorist attack. Ask yourself, is that fair to those businesses along that marathon route? And is that good for the economy?
▶ 0:48:07Instead of providing certainty and stability, we saw how some events, particularly ones that do horrible damage, but not large commercial property and casualty losses, can put insurers and policyh holders in a bind as everyone tries to do the right thing under that uncertain certification process.
▶ 0:48:28At that same hearing, Representative Mike Lawler stressed the need to have both clear rules and expectations for policyholders and And our witnesses all agreed, testifying that having clear rules and certainty is critical for both the insurance companies doing the underwriting, providing the coverage, and the business community that really needs the required And that just makes sense.
▶ 0:48:52No one wants a program that promises policyh holders one thing and delivers another or worse doesn't deliver at all. Chairman Flood's bill proposes a modest set of improvements that will add that clarity to the certification process and makes it easier for insurers to pay their claims in a more timely manner and policy holders to recover financially when they need those payments the most.
▶ 0:49:19The bill before us is a solid bill with reasonable improvements to an important program that everyone on both sides of the aisle should support. As the process continues, I commit that we're going to try to keep discussing these issues on how to make TRIA better, more effective so it meets the diverse needs of all of its participants. I support uh Mr. Flood's ANS, the underlying bill, and I urge its passage, and I yield back the balance of my time. Does anyone seek recognition on the ANS?
▶ 0:49:50Hearing none, we'll move to amendments. Does anyone wish to offer an amendment to the ANS?
▶ 0:49:54Mr. Chairman, I have an amendment at the
▶ 0:49:56Mr. Rose has an amendment at the desk. We'll pause while it is distributed.
▶ 0:50:02Mr. Chairman,
▶ 0:50:03Mr. Lucas,
▶ 0:50:04serve a order on the amendment.
▶ 0:50:06Uh, Mr. Lucas reserves a point of order. It's the chair's intention uh to hear from Mr.
▶ 0:50:28Rose on his uh amendment and then we'll adjourn to the House floor for votes and then come immediately back and continue debate on Mr. Rose's amendment to Mr. Flood's ANS. Clerk will report the amendment.
▶ 0:50:50An amendment to the amendment in the nature of a substitute to HR 7128 offered by Mr. Rose of Tennessee designated as Rose TN045.
▶ 0:50:59Without objection, the amendment is considered a read. The gentleman from Tennessee, Mr. Rose, is now recognized for five minutes to describe his
▶ 0:51:07Thank you, Mr. Chairman. I must say, and I know you probably share my disappointment at the lackluster attendance uh for this important hearing this morning, uh I'd like to take a moment to briefly explain my amendment, which is intended to make some measured good governance improvements to the underlying TRIA bill and better protect taxpayers over the long term.
▶ 0:51:29Like so many of my colleagues this morning, I understand and uh herald the success of this program in providing a much needed temporary backs stop. My amendment makes four key changes. First, it reduces the federal cost share. Under current law, the federal government covers 80% of covered losses above insured deductibles. My amendment would reset that share to 75% and then reduce it by one percentage point a year until it reaches 70%.
▶ 0:51:58This is a gradual, predictable glide path that gives insurers time to adjust while steadily reducing the federal exposure and putting more responsibility back on the private market. Second, the amendment raises and modernizes the program trigger. Right now, the trigger remains at 200 million. My amendment would increase that trigger by 10 million per year until it reaches 250 million.
▶ 0:52:23Once that level is reached, the trigger would be indexed for inflation using a benchmark selected by the Treasury Secretary through rule through a rulemaking process that ensures the trigger keeps pace with economic conditions instead of shrinking in real terms and quietly expanding the federal role over time. Third, my amendment shortens the length of the reauthorization.
▶ 0:52:46Instead of adding seven years to the end of the current authorization, which effectively results in nearly a nine-year reauthorization, it changes the program termination date to 5 years from enactment. Five years provides plenty of certainty for markets, but it also reflects the fact that TRIA was supposed to be temporary and that Congress should routinely revisit the scope of federal involvement.
▶ 0:53:12Fourth, the amendment directs a serious study at Treasury on a participation fee, something this committee uh has considered in the past before I was a part of the committee. A dedicated fund and a possible small insurer opt out.
▶ 0:53:26Treasury would be required to evaluate how an annual participation fee of insurers in TRIA could be structured, including options that would generate substantial aggregate fees and place them into a dedicated fund within the Treasury that can be used solely to pay future federal outlays or reimbursements under the program.
▶ 0:53:47The study must look at fee structures that are proportionate to insurer size and premiums to avoid unduly burdening small and regional insurers. And it must assess whether allowing small insurers to opt out of the mandatory availability requirement could work without undermining the long-term health of the program. Treasury would then report back to this committee with findings and legislative options so we can consider additional reforms with real data in hand.
▶ 0:54:18The common thread here is simple. TRIA was created as a temporary program to provide a transitional period for private markets to stabilize, resume pricing terrorism risk and build enough capacity to to absorb future losses. Over time, however, TRIA has come to look more and more like a permanent federal backs stop. In any reauthorization of TRIA, we have an obligation at minimum to take concrete steps toward the program's original goal, transitioning away from federal involvement.
▶ 0:54:48My amendment does not pull the rug out from under anyone. It takes modest, measured steps to reduce the federal share, raise the index, uh, raise and index the trigger, shorten an overly long reauthorization, and begin a serious conversation about a participation fee and a fund that can better protect taxpayers. If we truly believe this program was never meant to be permanent, then we have to start somewhere.
▶ 0:55:14My amendment is a practical way to begin that process to put TRIA on a path to less government involvement and to build uh and to better shield taxpayers from potential future losses. I urge my colleagues to support the amendment, Mr. Chairman, and I yield
▶ 0:55:30The gentleman yields back. Does the gentleman from Oklahoma insist on insist on his point of order?
▶ 0:55:34Mr. Chairman, I by unanimous consent request would withdraw my point of order. As I previously uh thank the gentleman that his point of order is withdrawn. As I noted a minute ago, pursuant to the previous order, the chair declares the committee in recess subject to the call of the chair. We will reconvene immediately after floor votes. Let me emphasize that word immediately after four votes. Committee stands in recess.
▶ 1:37:59The committee will come to order following our recess for votes. Is there additional uh debate on Mr. Rose's If there's no further I'm sorry, uh Mr. flood. Uh, chairman of the subcommittee, you recognize the strike to last word.
▶ 1:38:17Thank you, Mr. Chairman. While I truly respect the sentiment behind this amendment, unfortunately, I can't support it. The TRIA Program Reauthorization Act of 2026 is the product of a bipartisan collaboration after the housing and insurance subcommittee's hearing in September of last year. The bill is intended to provide stability to the terrorism risk insurance market and prevent a lapse in coverage going into next year. Listen, I understand the concerns of my colleague, Congressman Rose.
▶ 1:38:43I also want to ensure that we limit the taxpayers's exposure to any potential risk from this program. However, I do think we have to be mindful that we have a delicate balance to maintain with the program. I agree that we absolutely must protect the taxpayer from potential losses, but we also must keep in mind the potential for negative consequences in an environment where it is absolutely difficult to attain coverage or coverage is priced at such a premium that is prohibited.
▶ 1:39:11Uh taking a look at history can be a useful guide here. In the aftermath of the 9/11 attacks, the terrorism risk insurance program did not exist. And as a result, property owners affected by the attacks largely relied on commercial insurance to cover damages. When it came time for policy holders to file claims on the very extensive damage from those attacks, many of them were locked into litigation for years before they were able to secure repayment.
▶ 1:39:38Even worse, after the attacks, insurers stopped covering terrorism risk altogether. So, if we don't have a terrorism risk insurance program, we do run the risk that more commercial real estate goes uninsured altogether, which could create a disastrous situation in the event of an attack, an attack that I hope never ever ever ever happens. Sadly, such an environment may not take taxpayers off the hook either.
▶ 1:40:03in the in the event of a serious and damaging attack, there would likely be enormous pressure for Congress and the federal government to intervene with relief. Again, I understand the sentiments behind this bill or behind the uh Mr. Rose's amendment. I agree that we must limit taxpayer exposure through the reinsurance program, but we also have to consider the implications of dramatic changes to the program structure that could lead to some unintended uh consequences.
▶ 1:40:30Uh for those reasons, I urge my colleagues to vote against this amendment and I yield back.
▶ 1:40:37Jonas from Nebraska yields back. Is there any further debate? Hearing none. The question now occurs on the amendment by Mr. Rose. All those in favor of the amendment shall signify by saying I. All the post signify by saying nay. Nay. And Penn chair the nays have it.
▶ 1:40:54Ask for recorded vote.
▶ 1:40:55The nays have it and the amendment is not adopted. Mr. Rose has I'm sorry um Mr. Rose has requested a recorded vote. All those in favor record vote raise your hand. Sufficient number having raised their hand a record vote is ordered pursuant to subsection C5 of rule three of the committee rules. Further proceedings on the amendment are postponed. We'll now move to the next amendment. Is there an additional amendment? The gentleoman from Texas.
▶ 1:41:23Mr. Chairman, I have an amendment at the
▶ 1:41:25We'll pause while it's distributed. Mr. Chairman,
▶ 1:41:34Mr. Lucas, I seek a point of order on this amendment.
▶ 1:41:37Gentleman reserves a point of order on the amendment. Thanks, sir.
▶ 1:42:05An amendment to the amendment in the nature of a substitute to HR7128 offered by Miss Waters of California. This is the wrong amendment.
▶ 1:42:13It's Miss Garcia of Texas.
▶ 1:42:15Or is this the right one? Here's what she passed.
▶ 1:42:18Wrong amendment.
▶ 1:42:18Stand by.
▶ 1:42:20Just a moment. that is
▶ 1:42:26we'll distribute the
▶ 1:42:26I believe we should have had a Garcia amendment distributed not a waters amendment. Please just take a moment
▶ 1:43:21we hear from the clerk reporting the Garcia amendment?
▶ 1:43:24An amendment to the amendment in the nature of a substitute to HR 7128 offered by Miss Garcia of Texas designated as TRIA amend one. Well, without objection, the amendment is considered read. And the gentleoman from Texas, Miss Garcia, you're recognized for five minutes to describe your
▶ 1:43:39Thank you, Mr. Chairman. Uh, my amendment is simple. It would require TRIA to also cover losses incurred by a US citizen because of US immigration and customs enforcement. TRIA at its core ensures losses after tragedies. Mr. Chair, there have been a lot of tragedies and deaths over the past year. The one that stands out the most, of course, is the death of a US citizen, Renee Good.
▶ 1:44:07A 37year-old mother of three, Good was shot and killed by an ICE agent in Minneapolis on January 7th. Trump calls it a mistake, but it sure didn't look to me like a flatout murder at the hands of US federal officers. In addition to death, ICE activity like raids and uh raids have halted operations impacting businesses and communities as sales decline and productivity is reduced.
▶ 1:44:34As we sit here today talking about ways to help businesses, especially small businesses, we cannot ignore the real impact and harm that ICE is causing to our communities, businesses, and their properties. Houston, Minnesota, Chicago, Portland, Los Angeles, New York City, the list goes on. If my colleagues are insistent on voting to help American citizens, well, then let's be fair to everyone. Mr.
▶ 1:44:59Chairman, you yourself have said that it's only fair to businesses in on the marathon route after the BA Marathon incident. It's well, I would submit to you that it would be only fair to help those businesses that are in the line of fire uh anywhere near ICE or any other rage or any of the uh activity that they're doing in these cities. If our government, if it's not the government and if not TRIA, then who is going to help rebuild their businesses that are destroyed?
▶ 1:45:29We're getting reports of many restaurants and retail owners having to shut down during this rates and during the occupation of cities across America. Who is going to help them with their losses? Who's going to help them rebuild their communities? Who's going to help them be able to train and rehire the workers that they're going to need since so many of them have been displaced? I urge my colleagues on both sides of the aisle to w to be fair to everyone to support this amendment. And with that, I yield back.
▶ 1:46:01gentleoman yields back who seeks recognition. Just a moment, Mr. Flood. Does the gentleman from Oklahoma still insist on his point of order?
▶ 1:46:08I would like to withdraw, Mr. Chairman. My point of order.
▶ 1:46:11Gentleman withdraws a point of order. Mr. Flood, you're recognized.
▶ 1:46:14Thank you. Move to strike the last word.
▶ 1:46:16Gentleman's recognized for five minutes.
▶ 1:46:18I'll be very brief. Uh with all due respect to the gentle lady from Texas, uh this amendment in the nature of a substitute in front of us is the product of a bipartisan effort to address something that has been addressed four times prior and that's the reauthorization of TRIA.
▶ 1:46:35Um the chairman of this committee and the ranking member have fostered a uh a committee full of bipartisanship and this work product in front of us represents that spirit of bipartisanship and for that reason I uh urge my college to reject the amendment and vote for the underlying amendment in the nature of a substitute. I yield back.
▶ 1:46:56Gentleman yields back who seeks recognition to talk about Miss Garcia's amendment. Ranking member.
▶ 1:47:02Uh thank you Mr. Chairman. I'm going to start the last Gentlewoman's recognized for five
▶ 1:47:07We are here today to reauthorize a program that offers a federal backs stop for losses that are beyond the control of Americans. And Ms. Garcia's amendment would accomplish just that by making US citizens whole again after they sustained property losses caused by ICE and its agents.
▶ 1:47:31President Trump is having thousands of ICE agents descend on our cities using brutal force to hunt, harass, and harm those in our uh communities. Whether intended or not, US citizens and their businesses and property, shopholders and small business owners who are American citizens are caught in the middle of the reckless and inappropriate responses of illtrained ICE agents only to be left with broken windows and damaged storefronts to repair.
▶ 1:48:01Who pays for this? workers and families. Also, US citizens drive home at the end of the day only to be snatched out of their cars by masked men with tactical gear and wind up with their windows smashed in. Who pays for this? This Sunday in St. Paul, Minnesota, over a dozen ICE agents broke down the front door of a napping US citizen.
▶ 1:48:25They forced and trampled their way into his home, pointing their guns and yelling at his family while this four-year-old grandson He was led out in handcuffs and enter the freezing cold after the damage they did to his home. ICE agents refused to let him get identification to prove he was a citizen, only to realize their mistake hours later and returned him.
▶ 1:48:53who's paying for his broken door and the damages to his home and trauma to him and his family and of course who will compensate the family of Renee Good whose murder was filmed for the whole world to see. Mr. Chairman, the people living in this country should not be treated like this and should certainly not be expected to pick up the tab after they have arrested uh from out of control and illtrained ICE agents.
▶ 1:49:21This amendment would correct that and make sure they don't have to pay. Um, I was not aware of uh this amendment. This is a great amendment. This is a sensible amendment. This is an amendment that the American people deserve. I want to tell you, I know uh that the president is anxious to do more deportations and some of the members on the opposite side of the aisle support that.
▶ 1:49:50But I also think there must be some of the members on the opposite side of the aisle to know uh that these untrained ICE agents, many of them leaving uh as guards from the prisons where they operate quite differently. A big uh initiation fee for them to come of $50,000 and join no matter where they come from, what their backgrounds are. I know that's not what you intended for deportation.
▶ 1:50:16It is all right if you believe what the president believes, but for God's sake, you know, we have American citizens who are being killed. Now, I want to say this today and I want it to be remembered. The president is increasing uh the well, not increasing, but initiating armed services to go into Minnesota. The mayor of Minnesota said he's in charge of the National Guard. He's going to call out the National Guard.
▶ 1:50:46What are we going to have? A front off between ICE and the National Guard. Is this the start of a civil war that the president has alluded to? Republicans on the opposite side of the aisle. You can do better than this. You can stand up for Miss Good who was killed. The mother of three, an American citizen. Other American citizens. People who look like they think should be deported.
▶ 1:51:13people of color, uh, American citizens who are brown, who are yellow, who are black, etc., etc., stand up. Stand up, uh, for the citizens of this country. Otherwise, you're going to see a civil war that is being created between ICE and the National Guard. You don't want to see that in this country. Miss Garcia, this is a wonderful amendment.
▶ 1:51:39It is a great amendment and I hope that we can get some support for this amendment. I yield back the balance of my time.
▶ 1:51:47The gentleoman yields back. Who seeks recognition on Miss Garcia's amendment?
▶ 1:51:52Uh Mr. Muser, you're recognized to strike the last word.
▶ 1:51:56Uh thank you, Mr. Chairman. I oppose uh this amendment and do strongly support the underlying bill HR7128 Tree Authorization Act introduced by Representative Mike Flood. Uh the bill is very important and it makes sure our terrorism risk insurance framework continues to work the way Congress intended, protecting policyholders, supporting economic activity and providing stability to insurance markets without distorting them.
▶ 1:52:25Um it is important that we do not distort the bill because of how important it is. The terrorism risk insurance act tree exists for a very simple reason. Terrorism risk is fundamentally different from other insurable risks. It is unpredictable, highly correlated and potentially catastrophic. Private market alone cannot reliably price or absorb it. And history has shown that when coverage disappears, construction stops, jobs are delayed, and economic activity slows.
▶ 1:52:53TRIO was created after 911 to ensure lapses in insurance because of terrorism won't occur. This reauthorization makes meaningful improvements for policy holders while responsibly updating the program without disrupting the insurance market. By extending the program for seven years, Congress gives insurers, lenders, and businesses the predictability they they need to plan, invest, and build. That certainty matters long before any attack ever occurs.
▶ 1:53:21Uh, additionally, the bill improves protections for policyh holders by increasing transparency and reducing uncertainty after an event. Uh, the insurance industry lii relies on predictable terrorism insurance uh to protect their customers when the unthinkable happens. This legislation allows our insurance companies to continue to provide that certainty. For these very common sense reasons, I urge my colleagues to support the bill and I yield back. Gentleman from Pennsylvania yields back who seeks recognition. Mr.
▶ 1:53:51Lynch from
▶ 1:53:53Thank you, Mr. Chairman.
▶ 1:53:54Recognize the strike. Last word.
▶ 1:53:55Uh thank you. Uh look, when government agents act outside the law, there is a strong argument for for accountability. Uh comments compensation for damages could be viewed as a necessary step in holding the government responsible for inappropriate or illegal actions by its employees.
▶ 1:54:17Also, protecting private property rights is is a fundamental right within our legal system and one that has often been raised by my colleagues on the other side of the aisle. Allowing the government to escape accountability for wrongful actions undermines the rule of law and will eventually erode public trust in government institutions.
▶ 1:54:38There are legal frameworks in place that govern how property damage caused by the government is addressed and compensation could depend on whether the actions were deemed lawful or if they've violated constitutional rights as uh Miss Garcia's amendment anticipates.
▶ 1:54:58From a policy inspec perspective, uh compensating victims of illegal actions by government agencies could serve the public interest by restoring trust and ensuring justice for those wronged and discouraging future misconduct.
▶ 1:55:14uh providing compensation could also encourage the government to get their act together and cause those agencies to adopt stricter protocols and oversight to avoid situations that lead to illegal activities and damages in the first place. In this case, we have a situation where the Secretary Department of Homeland Security, Miss Gnome, has flatly refused to comply with the law.
▶ 1:55:44Uh, Miss Gnome has uh delivered false narratives, lied to the American people. She claimed that uh that Miss Good in in in Minneapolis had run over the agent and and he had responded uh to that fact and that he was in the hospital.
▶ 1:56:03That that that lie was repeated by the president and vice Right now in in in Minneapolis, we have uh we have thousands of of ICE agents going through the city, not with but just at random grabbing people who maybe people of color and saying, "Where are your papers? Where are your papers?
▶ 1:56:31Where have we heard that before?" Where in history have we heard where are your papers? That's what's going on right now in And ICE under the direction of Christine Nolm has has has completely gone off the rails and it is violating the basic rights of American citizens. They started out by saying they were going to get the worst of the worst.
▶ 1:57:00those people who had been, you know, had warrants and and uh outstanding charges against them, you know, gang members. Now they're they're just going random random stopping people on the street. Where are your papers? This has gone very very badly and very wrong. Later on today, we're going to have the Department of Homeland Security bill up before Congress.
▶ 1:57:26That's a bill that normally has bipartisan support, but because ICE has gone completely rogue and is daily violating the laws of American citizens in this country, I'm going to vote no. I'm going to vote to cut that funding.
▶ 1:57:44I will not I will not support an agency that is acting contrary to law on a daily basis and that has violated the constitutional rights of of my fellow citizens, my fellow Americans. That's not happening. And I'm hoping I'm hoping that my Republican colleagues will stand with us.
▶ 1:58:06It's the only power we have in Congress is the power of the This is our opportunity to say no to funding to for the Department of Homeland Security until they comply with the law. It's pretty basic. It's the one chance we have. It will wake them up if they don't have funding.
▶ 1:58:30So, while while it is a I will agree it is an extreme step, but we're living in extreme times. and American citizens are being put at extreme risk of and and their rights are being violated and we need to step up.
▶ 1:58:52So I ask members to support Miss Garcia's amendment and also that they vote against DHS funding later on today. I yield back, Mr. Chairman. Thank you.
▶ 1:59:02Gentleman's time is expired. Mr. Davidson, Mr. Davidson from Ohio, the chair of our national security Thank you, Mr. Chairman. I do move to strike the last word.
▶ 1:59:12You're well recognized for five minutes.
▶ 1:59:15Um Jesus said we can be angry and not sin. So I'm going to give it my best shot right here. The amount of red herrings and false stuff that's being spewed for the premises behind this amendment is offensive. to tell the American people and us in this room that ICE is a terrorist organization and therefore TRIA should cover the losses.
▶ 1:59:46Are you freaking kidding me? If you look at the proximate cause, you talk about the laws not being followed. The previous administration fueled an invasion of our country by failing to secure our borders by ignoring our laws.
▶ 2:00:13And now we have sanctuary cities who invited these people in who served as accompllices to the crime continuing to obstruct justice. The reality is Alejandro Mayorcis and all of his accompllices should be on trial today.
▶ 2:00:31And if we don't put them in jail for a really long time after due process and a trial, some future administration is going to think they can fuel an invasion, only we need to do more of it Now you get mad because ICE is enforcing the laws that the previous administration failed to enforce and want the government to cover for your game. the invasion you're fueling of our country.
▶ 2:01:02It's treason.
▶ 2:01:05It's treason. And it's a complete waste of this committee's time to even bring it up to try to grandstand over your fake agenda to destroy our
▶ 2:01:21Well, the gentleman
▶ 2:01:22related to terrorism. I will not yield to you on this subject. Period. Well, thank you.
▶ 2:01:27It's offensive if you can't gentlemen. Thank you.
▶ 2:01:30Silence. The time is mine. The time belongs to the care whose time it is.
▶ 2:01:34The gentle order for January.
▶ 2:01:38Ladies, ladies and gentlemen, ladies and gentlemen, the time belongs to the gentleman from Ohio.
▶ 2:01:46TRIA is a program that I support. Every contract I've entered into has a force majour clause and there are acts that are that are hard to ensure the risk for. I don't think the program's perfectly designed. I wish I was here for the debate Mr. Rose presented his amendment. I don't think I agree with the points, but I do think, hey, we probably don't have a perfect terrorism risk insurance program, but I applaud Mr. Flood, Mr.
▶ 2:02:16cleaver for working together on a reauthorization. That's what we should be focused on today. The idea that we would defund ICE is probably about as dumb as defunding the police, but Minneapolis wanted to do And so, yes, I hope those people are held accountable, but the financial services committee is not the committee of jurisdiction for that.
▶ 2:02:41So if you want to do that, go to one of the other committees, do your grandstanding somewhere else and quit wasting our time in this committee. I yield back.
▶ 2:02:48The gentleman yields back. If there's no further debate, the question now occurs on amendment. All those in favor of Miss Garcia's amendment, she'll signify by saying I.
▶ 2:02:57All those opposed signify by saying nay. Nay. In the opinion chair, the naysay have it. Mr. Chairman, ask for record is not adopted.
▶ 2:03:07Ask for recorded. The gentleoman from Texas requests the yays and nays. A recorded vote is requested. Those in favor of recorded vote raise your hands. A sufficient number having raised their hand, a recorded vote is ordered pursuant to subsection C5 of rule three of the committee rules. Further proceedings on the amendment are postponed. We'll now move to the next
▶ 2:03:27Amendment now
▶ 2:03:28on Mr. Flood's uh
▶ 2:03:30I have an amendment at I have an
▶ 2:03:32Miss Waters has an amendment at the desk. We'll pause for it to be Mr. Chairman,
▶ 2:03:42Mr. Lucas, I raise a point of order.
▶ 2:03:45Gentleman from Oklahoma raises reserves a point of order on the waters amendment so hard.
▶ 2:04:22The clerk will report the amendment.
▶ 2:04:24An amendment to the amendment in the nature of a substitute to HR 7128 offered by Miss Waters of California designated as TRIA amend Two.
▶ 2:04:32Without objection, amendments considered read. The gentleoman from California, Miss Waters, is recognized to describe her amendment. You're recognized for five minutes.
▶ 2:04:40I move to strike the last word.
▶ 2:04:42Gentleoman's recognized.
▶ 2:04:45I haven't Well, my amendment is simple. It would require the tri program to cover any property losses incurred by a US citizen uh as a result of the president invoking the insurrection act. He promised he was going to do that.
▶ 2:05:03By the way, our cities, our US citizens are under attack from this blustering president and his relentless obsession with hunting, harassing, and bullying Americans, including those simply exercising their First Amendment rights.
▶ 2:05:21As families and workers are going about their day with their kids at school drop off at their places of work, minding their business, they now need to worry about Trump sending in troops to back up his masked federal agents who have already hurt, detained, assaulted, and killed US citizens going doortodoor, blockto block, businesses to business.
▶ 2:05:50When this when is this going to end? And who is going to pay for the damages? Imagine a small business whose delivery trucks windows are bashed in because a Trump agent thinks their accent is different or they look like an immigrant, which to Trump means brown and black. Congress should immediately haunt this activity.
▶ 2:06:16put our committee well our committee should see how to pay for any damages. My amendment is simple. It says the president needs to be responsible and pay for his actions if US citizens get their doors bashed.
▶ 2:06:32It says the federal government will be accountable for smashing in causing cars to crash, and hurting small retailers that are already scraping to keep their doors in the midst of this mess. Sending in troops to our American cities is not the answer. We're not the enemy, and it is certainly not the responsibility of US citizens to clean up this mess.
▶ 2:07:01And this amendment would ensure that Trump, not Americans, pay for those property losses. Ladies and gentlemen, uh we just heard um from one of our members on the opposite side of the aisle saying protesters should be jailed.
▶ 2:07:22they should be imprisoned and talking about uh they are literally uh the blame for the damages that are being caused by ICE. ICE has gone into these cities. There were no protesters. Uh but they created the confrontation. Mr.
▶ 2:07:41Davidson had the audacity to talk about them being arrested and jailed and he and others on the opposite side of the aisle won't even admit that what happened January 6 in this country where we were under attack where our government was under attack uh by domestic terrorists that are aligned with the president of the United States the proud boys the oathkeepers the KKK descended on
▶ 2:08:11us. They broke into our windows. They were in our offices. They had their feet up on Nancy Pertos's desk. And they caused some of our Capitol police to commit suicide. And they are responsible for their deaths uh as they attack them with the American flag. How dare him or anybody on the opposite side to talk about that was not an insurrection, that was not an invasion, that they didn't do harm. You know what they did.
▶ 2:08:42You know what ICE is doing. You know Miss Good was killed. You know that he shot her driving away uh after having been nice to him. So don't bring that here today. And don't ask me to be quiet. Don't ask me to be nice. Don't ask me to do a darn thing. But if you don't like the fact that she's got an amendment, keep your mouth shut, but don't start lying and don't start talking about uh these protesters need to be criminalized and put in jail.
▶ 2:09:10If I have any time, I'm not going to yield it back. Thank you for talking about defunding because that's what we need to do. Homeland Security needs to be defunded and I'm with you. I would never vote for them as long as this is going on. Now you can have the time back. I yield.
▶ 2:09:28Gentlewoman yields back. Who seeks
▶ 2:09:32The gentleman from Ohio.
▶ 2:09:34I move to strike the last word.
▶ 2:09:35Gentleman's recognized for five minutes.
▶ 2:09:37I don't ask the gentle lady to be silent. I do ask her to be truthful. I didn't call for protesters to be jailed. I called for Alejandro Morcus and his accompllices operating sanctuary cities to be prosecuted with due process, convicted, and jailed with very long Um, so that is what I would like to see happen. I think justice demands it frankly.
▶ 2:10:02But the idea to say that if the president invokes the in insurrection act that we should treat that as an act of terror is tantamount to South Carolina saying that the that the union should pay for reconstruction of Fort Sumpter in South Carolina. Uh, no. Your state isn't that sovereign. The states are are the coalition that built the United States of America.
▶ 2:10:26The ninth amendment says clearly that all of the rights that people have aren't protected by the United States Constitution. And then in the 10th amendment, it says those powers not delegated to the federal government are reserved for the states.
▶ 2:10:40But the one thing that's very clear that out of the Constitution is the United States of America comes up with one standard set of naturalization laws, one standard definition of what is and is not a And we have states and cities in open rebellion to the sovereignty of the United States of America.
▶ 2:11:04Just as we had some states in open rebellion to the Union in the Civil War, today we have cities and states in open rebellion. And unfortunately, they still get funding. They still roam free. They still say inflammatory things. As the mayor of Minneapolis said to ICE, "Get the f out of Minneapolis." No, sir. We will not.
▶ 2:11:30We don't need to get to many of the cities and states around the country because they cooperate when you've got a warrant for someone's arrest. They support federal law enforcements. But the previous administration and the previous previous one, Obama and Biden, they they sued states like Arizona to prevent them from even helping enforce immigration law because they wanted sanctuaries. They wanted open rebellion to the sovereignty of the United States.
▶ 2:12:00Our Constitution does protect lots of sovereignty for states, but it doesn't let you pick who's a And the federal government is going to enforce those laws. Now, I hope ICE is more effective at it. I I hope they're more professional and beyond reproach in every way they do it. I hope protesters can't even get access because they blockade the road effectively so that everyone's safer.
▶ 2:12:27I prot I support the right to protest, but there's time, manner, and place restrictions that are reasonable on that, and we're going to talk about that soon with respect to churches. Imagine thinking you're the good guys when you crash a worship service on Sunday. And you look at where this is headed. It's headed the same way as a civil war was.
▶ 2:12:46If you've got cities and states, an open rebellion to the sovereignty of this country, just as George Washington looked at, he said, "Are we going to put this rebellion down or we going to let it spread?" I think we let it spread far too far already. And that's why I think Alejandro Morcus ought to be on trial and every other accomplice operating a city, a sanctuary city or state. and frankly the people facilitating and including the non-government organizations that were fueled with cash from government money.
▶ 2:13:17There's a lot of accompllices here and I really hope that Pam Bondi's inaction on lots of prosecutions doesn't represent inaction but diligence so that the trials are very successful. I think justice demands it. The idea that the terrorism risk insurance program that we operate for terrorists against the United States would apply to the actions of the United States to defend the sovereignty.
▶ 2:13:46We already have a law, the Insurrection Act, and I hope it's never needed in our country. But if it is, I hope it's wielded to restore the sovereignty of the United States. And of course, the people that caused it will be responsible for the damage. I yield back. Gentleman yields back. Who seeks recognition on Mr. Waters?
▶ 2:14:06I'm sorry. I'm very pardon. The gentleman from Mr. Chairman, I'd like to withdraw my point of order.
▶ 2:14:11Gentleman from Oklahoma withdraws his point of order.
▶ 2:14:14Move to strike the last word.
▶ 2:14:15Gentleoman from Texas is recognized on the waters amendment.
▶ 2:14:18Thank you, Mr. Chairman. I want to um just say a few comments uh about supporting u the waters amendment. I think it's clear, you know, again, I I I'm really focused on the comment that you made. You know, is it really fair to businesses in the marathon route if they suffered damages to their property because of the marathon bombing? It's the same thing.
▶ 2:14:42Is it fair for businesses in the occupation of a city uh because of in their instruure ad or in my case uh the ICE activity, the raids and the occupation that they're doing in cities across America? Well, it's not fair. So, who's going to pay for it? People's homes are being damaged. Cars are being damaged. Businesses are being damages. Schools, I mean, you name it. They are going everywhere.
▶ 2:15:10You know, my colleague across the aisle talked about houses of worship. I mean, they are going to schools. They're going to funerals, to hospitals, to courous. They're just stopping people anywhere they want. And in many cases, there is damages to property. So, who's going to pay for that? The average citizen may or may not have insurance, but they're going to be stuck with a bill of repair. And for many businesses, they don't have disruption of business insurance.
▶ 2:15:39They don't have insurance for the lost uh revenues. They don't have insurance for eventually having to shut down. Well, I do think it's a government response and I wish that uh the gentleman uh would would take time uh to read the amendment because my amendment and I don't even see it in in Representative Waters's amendment doesn't say anything about designating ICE as a terrorist group.
▶ 2:16:04We it doesn't it just says that we now will add this to the existing bill to cover for these property damages. And I don't know that the um uh the uh act itself requires a designation of of some group or or another group a terrorist. So you know he keeps talking about false suits on this side. I think he should check his own words first before he starts throwing throws stones our way.
▶ 2:16:33uh because it certainly sounds to me uh that he has made more than one misstatement and more than one uh uh you know alternative facts on this issue. Uh again, I support this amendment. You know, who should get stuck with the bill if you are in harm's way or in the line of fire or in the line of the raid when it comes to ICE or when it comes to insurrection act uh uh imposition uh by the felon in the White House.
▶ 2:17:02Uh well, I think we should because we're the ones who cost it and that's the US government. With that, I yield back.
▶ 2:17:09Gentlemen yields back. Members are reminded that pursuant to House Rule 17, they should avoid engaging in personalities when they speak about the president. It can always be about policy. It cannot be personal. Gentleman yields back. Who seeks
▶ 2:17:23Will the gentleman yield?
▶ 2:17:25No, I won't. I'm asking who seeks additional Mr.
▶ 2:17:29Chairman time on the waters amendment.
▶ 2:17:32Mr. Chairman.
▶ 2:17:33Mr. Lynch.
▶ 2:17:33Mr. Lynch.
▶ 2:17:34I move to strike the last word.
▶ 2:17:35Gentle woman's recognized for five
▶ 2:17:36Thank you, sir.
▶ 2:17:37U Mr. Chairman, I I I I take the gentleman from Ohio's comments uh at face value that we we do all wish that that every ICE agent would act within the law.
▶ 2:17:50Uh, we wish that that we wish that the legal process in investigating the killing of of Miss Wood in in and Miss Good, excuse me, in in uh in Minnesota uh would have been conducted with the usual legal process, the the investigation and and prosecution if necessary of those individuals involved. But that's not happening. That's not happening right now.
▶ 2:18:20The US attorney general has has banned the normal legal investigative process uh by state officials and city officials in in that in that killing. They've banned them from participating in the investigation have taken it over completely on the federal side.
▶ 2:18:43Uh, so now we have the federal government investigating federal personnel and and I think we all know how that's going to come out. The the other piece of this is that Department of Homeland Security funding used to be bipartisan. I have supported that for the past 25 years. Proud to do so. and and uh I cannot think of a an instance where our debate over Department of Homeland Security right from the beginning when it was created.
▶ 2:19:13I was I came in I was elected on September 11th. I came here shortly after when we created the Department of Homeland Security. Tom Ridge was from Pennsylvania was the the new secretary. And uh from that day forward to this day, we've never had in my memory any serious disagreement about funding for Department of Homeland Security. And and we have valued that.
▶ 2:19:39But right we have agents that are clearly not acting within the law. And the management of of ICE, especially in the person of Secretary Gnome, has flatly refused to ask those agents to comport with the law.
▶ 2:20:02uh she has instructed them as I described before uh to go out in the general public and and and just approach American citizens and ask them to produce their papers. That's that's wrong. That that's that's Gestapo like right. That's when we that's the last time in history we heard th that phrase show me your you know show me your papers. Those are American citizens that are being subject to that.
▶ 2:20:34You know, I'm part of a litigation task force. It's gotten so bad we had to create a litigation task force to bring suit against the president and and various secretaries in his cabinet for violation of of federal law and of constitutional rights.
▶ 2:20:53And at this point since since January when President Trump took office to now, we have we have filed over 600 cases of instances where the federal officials and federal personnel have and the president and the secretaries in his cabinet have violated the law. We've won a bunch. They just keep appealing them. But that's where we're at today. This this is different. Yeah.
▶ 2:21:21I I concede the fact that voting against uh ICE funding, voting against Department of Homeland Security funding is a drastic step and I don't want to take it. But as a the power of the purse is one of the few powers we actually have to hold the executive accountable.
▶ 2:21:43And I'm saying, yeah, yeah, it's crazy, but in this crazy world, it is necessary to protect my fellow American citizens from the illegal activity being perpetrated against them by this So yeah.
▶ 2:22:07So yeah, I'm going to I won't say happily, but energetically and support zeroing out funding for the Department of Homeland Security and ICE when that comes up later on the floor. And I encourage all my colleagues and hopefully we'll get some Republican votes on that as well. But I ask everybody to support that measure and hold them responsible. Get them back in line.
▶ 2:22:36Get them back under the rule of law. Mr. Chairman, I yield
▶ 2:22:40Gentleman's time has expired. Is there any further debate on the waters amendment? There's no further debate. Question now occurs on the amendment. All those in favor of the amendment shall signify by saying I.
▶ 2:22:50All those opposed signify by saying nay.
▶ 2:22:53In the opinion of the chair, the naysay have it. The naysay have it and the amendment is not adopted. vote.
▶ 2:22:58The ranking member requests a recorded vote. All those in favor of recorded vote uh raise your hands. Sufficient number having raised their hand a recorded vote is ordered. Pursuant to subsection C5 of rule three of the committee rules, further proceedings on the amendment are postponed. We'll now move to the next amendment on Mr. Flood's amendment and nature of a Seeing no further amendments without objection, the previous question on the substitute is ordered. Recorded votes on the pending amendment uh amendments have been postponed.
▶ 2:23:28Once those votes are taken, the committee will immediately vote on adoption amendment nature of a substitute and then we'll consider the question to report the measure to the house. We'll now move to the next bill. Pursuant to notice, I call up HRES 1007, a resolution expressing the sense of the House of Representatives with respect to the use, excuse me, of artificial intelligence in the financial services and housing industries which was introduced by Representative Brian Style. The clerk will report the resolution which was distributed in advance.
▶ 2:24:01House resolution 1007 expressing the sense of the House of Representatives with respect to use to the use of artificial intelligence in the financial services and housing industries.
▶ 2:24:11Without objection, the resolution is considered read open to amendment at any point. Representative Style has an amendment in the nature of a substitute, copies of which were distributed in advance. The clerk will report the
▶ 2:24:22An amendment in the nature of a substitute to HRZ 1007 offered by Mr. Style of Wisconsin designated as style
▶ 2:24:31Without objection, amendments considered red will serve as base text for the purposes of amendment. The gentleman from Wisconsin, the chair of our financial technology, digital assets and artificial intelligence subcommittee, Mr. Style, you're recognized for five
▶ 2:24:44Thank you very much, uh, Mr. Chairman. I also want to thank the ranking member, Mr. Lynch, uh, Mr. Downing, Mr. Licardo, uh, for their work on this important re re resolution. The AI re revolution is here and it's already reshaping the financial services industry. For two decades, the digital assets, financial technology, and artificial intelligence subcommittee has focused on advancing the development and deployment of AI.
▶ 2:25:13Through hearings and extensive engagement with experts, we've learned directly from those innovating in the space about the promise and potential risks of new AI tools and applications. That's why it's important that our nonpartisan resolution affirms our commitment to the following. One, unlocking new use cases under riskbased guardrails. Two, expanding agency's knowledge of governance and regulatory best practices. And three, understanding financial stability risks.
▶ 2:25:42and four, overcoming ineffective regulation. As generative and agentic AI continue to develop, these technologies present significant opportunities across the financial services sector.
▶ 2:25:56Market participants are deploying AI to improve customer experiences, enhance compliance, expand access to credit, enhance research capabilities, streamline mortgage services, increase repayment rates, and fight fraud. We've heard clearly from market participants about both the benefits of these technologies and the regulatory frameworks that they apply to in these use cases.
▶ 2:26:22We've also heard from the experts about where AI can pose potential risks, revealing uncertainties as well as inefficiencies in our regulatory framework. This resolution highlights several areas of consensus. Consensus across the aisle. It is about unleashing innovation, enforcing existing laws. It's about protecting consumers.
▶ 2:26:44It's about assessing the impact of AI in markets and workers, avoiding overly burdensome rules, strengthening cyber security, and ensuring America maintains global leadership in AI.
▶ 2:26:59Given the crit critical nature of the financial services and housing sectors and their long history of being intertwined with AI innovation, our resolution calls for this committee to lead on AI policy for these vital industries while ensuring consumers are protected. We must leverage our existing technology neutral financial regulations include including anti-discrimination and consumer protection laws and assess gaps as market participants adopt AI.
▶ 2:27:29At the same time, we must ensure our financial regulators have the tools, expertise and understanding necessary as new AI powered products and services come to market. We all agree this committee should promote pro- consumer, pro- investor, and pro- innovation culture for AI and financial services and housing. This nonpartisan resolution affirms these priorities. As the United States competes in the global AI race, this committee will help us win.
▶ 2:27:58Again, I want to thank the ranking member, Mr. Lynch, Mr. Downing, Mr. Licardo, for their work and their support on this, and I urge my colleagues to support this resolution. Mr. Chairman, I yield back. Gentleman yields back. Does the uh is there further debate on ENS? The gentleman from Massachusetts, the ranking member on our financial technology, digital assets, and artificial intelligence subcommittee.
▶ 2:28:24Thank you, Mr. Chairman. Uh like to strike the last word.
▶ 2:28:27Gentleman's recognized for five minutes.
▶ 2:28:29Thank you, Mr. Chairman. I'd like to thank uh Chairman Style for for his great work on this and ranking member Waters as well and and you, Mr. chairman in support of this bipartisan uh resolution. Our committee continues to serve as a leading role in conducting oversight of the development of artificial intelligence in the financial services sector from banking and housing to credit lending and anti-money laundering.
▶ 2:28:55As evidenced by the final report issued by our bipartisan working group on AI, a safe and responsible AI innovation protocol will require a sustained and collective effort on the part of regulators, Congress, and AI stakeholders to mitigate the potential for bias, discrimination, and other risks associated with AI systems whose results are not readily explainable to the end user.
▶ 2:29:22Toward this goal, we must ensure that regulators are equipped with the resources necessary to enforce existing consumer protection and civil rights laws while also addressing statutory and regulatory gaps in the AI space. House resolution 1007 reflects our previous bipartisan work on promoting safe and responsible innovation that also maximizes consumer protections.
▶ 2:29:49And as ranking member of the subcommittee on digital assets, fintech, and artificial intelligence, I urge my colleagues on both sides of the aisle uh to please support this resolution. And I yield back the balance of my time.
▶ 2:30:03Lynch yields back. Who seeks recognition on our artificial intelligence
▶ 2:30:11I now recognize myself for five minutes. Not seeing any other speakers. The next generation of technological development is here. Generative artificial intelligence. Through the committee hearings and yesterday's AI expo, we've seen firsthand how artificial intelligence is already transforming our economy and financial services.
▶ 2:30:35We've examined its applications in the financial services and housing space, as well as how regulators themselves are using AI and supervising the use of AI. We've also heard clearly about the regulatory challenges and roadblocks to AI development or deployment. Today, we consider a resolution that underscores the importance of getting AI policy right in financial services and housing.
▶ 2:31:02For decades, these sectors have leveraged AI to improve fraud detection, risk management, investment decisions, operational efficiency. As generative and agenic AI continue to advance, it's vital that this committee plays a leading role in shaping how these technologies are used and overseen in the context of federal law.
▶ 2:31:28By adopting a tri first approach to AI regulation, we can assure that US financial services industry remains a global leader in AI adoption. I want to say thank you to the chair of our financial technology subcommittee and the ranking member for collaborating on this because setting this highlevel uh direction I think helps us find consensus as we work through uh policy areas we've done this before for example one that I've cited
▶ 2:31:58for the last four years in the 1990s Congress was led in a resolution about the internet by then Congressman Chris Cox Fox confronted with the rapid growth of the internet, members didn't know what direction it would take. It was it was a mystery. There was pornography on it. There was concern about our kids, concerned about how to regulate it.
▶ 2:32:21But Chris Cox led a bipartisan effort for the Congress to say, "We will tax and regulate the use of the internet, but we won't do it to the internet itself." And that allowed all the facilitation of what we've seen in the last 30 years of the use of the decentralized internet allowing Congress then to focus on how to deal with regulatory frameworks of people who use the internet in their business.
▶ 2:32:49We can adopt our existing approach to meet the next generation of technological advancement and seize opportunities without letting fear stand in the way of progress. So, I want to thank again Congressman Style, Congressman Lynch for collaborating. I urge my colleagues to support this bipartisan resolution and I yield back. Does anyone else seek recognition? The ranking member.
▶ 2:33:13I move to strike the last word.
▶ 2:33:14The gentleman is recognized for five
▶ 2:33:16Thank you. In the 118th Congress, former chair Patrick Mckenry and I established the bipartisan AI working group, which examine the use of AI in the housing and financial services industry.
▶ 2:33:32This working group held roundtable discussions with companies and government agencies building off the important work of the AI task force uh which I established under my leadership in the 116th uh and the 117th Congress.
▶ 2:33:52Today's resolution captures key lessons from last Congress's bipartisan working group as well as critical issues the committee must focus on now as consumers grow more exposed to AI technology in every part of their lives.
▶ 2:34:11This resolution contains new language directing the committee to evaluate state laws, emphasizing the importance of ensuring um states um regulations are considered on the committee agenda. This resolution also ensures Congress doesn't bail out AI companies in the event of financial collapse. I want to thank Mr.
▶ 2:34:38style for making important changes to his introduced resolution, including striking references to creating rulesfree zones for AI to operate and for recognizing the importance states play in setting safeguards for AI. However, this bipartisan resolution is only the first step. Much more action is needed.
▶ 2:35:06Since last Congress, newer developments like agenic AI have introduced unprecedented automation opportunities, but at the same time have raised serious concerns about the future of work and potential large-scale job Generative AI, which has captured the public's fascination, has in the most devastating cases,
▶ 2:35:36promoted self harm like suicide, carried out sexually explicit conversations, and even provided dangerous misinformation and disinformation to minors with only one full committee AI hearing. this Congress. Republicans have not sufficiently examined the space.
▶ 2:35:55Unfortunately, we also have seen the Trump administration pull back AI safeguards and undermine states oversight by weaponizing lawsuits and federal funding against states that are simply trying to protect their constituents. So, I don't know what this Trump administration is doing.
▶ 2:36:19they have tried uh to interfere and capture everything and to monetize everything so that they would have an opportunity he and his family uh to get more riches to get more profits. And so I'm sure he's got a scheme, the administration, the Trump administration has a scheme by which they can get involved and control AI and make money.
▶ 2:36:45Would the general general yield?
▶ 2:36:47I will yield. I thank the gentleman. I think you raised a really important point that we witnessed in the uh budget reconciliation debate last summer about federal moratorum on state law actions.
▶ 2:37:00This is something I think that is a really important issue for the Congress to consider. I don't think there's anything more interstate commerce than machine learning and artificial intelligence. So, we do have to find that balance. So I certainly uh hope the gentleoman will work with me to encourage the administration, the energy and commerce committee and others engaged in this to find a path where the states and the federal government can find lanes to work together and not you know be on 180 degrees opposed
▶ 2:37:30and I thank the gentleoman for raising that concept. Marks
▶ 2:37:34very much I thank you very much Mr. chairman and normally I question uh the commitment to states rights on everything but I'm with this committee
▶ 2:37:44we'll talk about privacy in California too no we won't okay I thank the gentleoman it's your time are you yielding back
▶ 2:37:52I'm yield back
▶ 2:37:53she's yielding back does anyone else offer an an amendment at this time to the ANS if there yeah seeing there's no further discussion or amendments ments on the style lynch resolution. The question now occurs on the adoption of the amendment in the nature of a substitute. All those in favor signify by saying I. I. Those opposed signify by saying nay. Opinion of the chair of the eyes have it. The amendment is adopted.
▶ 2:38:20Question now occurs on ordering the resolution as amended to be reported to the house with a favorable recommendation. Those in favor signify by saying I. I. All those opposed signify by saying nay. In the opinion chair of the eyes have it. For what purpose does a gentleman from Wisconsin say?
▶ 2:38:35Recorded vote.
▶ 2:38:36Gentleman's requested a recorded vote. All those in favor recorded vote, raise your hands. A sufficient number having raised their hand, a recorded vote is ordered. Pursuant to subsection C5 of rule three of the committee rules, the vote on this question is postponed. We'll now move to the next bill.
▶ 2:38:54We're going to call up uh HR7056, the Community Bank Regulatory Tailoring Act, which was introduced by the chair of our financial institutions Andy Bar of Kentucky. The clerk will report the bill, which was distributed in advance.
▶ 2:39:12HR 7056 to index statutory thresholds and for other purposes.
▶ 2:39:18Without objection, the bill is considered read and open to amendment at any time. Representative Bar has an amendment in the nature of a substitute, copies of which have been distributed in advance. Clerk will report that
▶ 2:39:29An amendment in the nature of a substitute to HR 7056 offered by Mr. Bar of Kentucky designated as bar 126.
▶ 2:39:37Without objection, amendments considered red will serve as base text for the purposes of amendment. The gentleman from Kentucky, the chair of our financial institutions subcommittee. Mr. Bar, you're recognized for five minutes.
▶ 2:39:47Thank you, Mr. Chairman, and thank you for um for prioritizing uh this uh important piece of legislation. I'm proud to sponsor HR 7056, the Community Bank Regulatory Tailoring Act of 2026. This straightforward bill is another in a long line of bipartisan legislation in this Congress that modernizes the outdated statutory thresholds imposing needless and disproportionate burdens on our community banks and credit unions.
▶ 2:40:17Let me be clear, this bill is not about limiting regulation or weakening financial oversight. DoddFrank created one of the most sweeping regulatory overhauls to our financial system in the nation's history, but it was blind to the impact of economic growth on our banking system. DoddFrank failed to account for a booming economy like we have now thanks to the great work by President Trump and this Congress.
▶ 2:40:41Static dollar denominated capital thresholds properly direct the most rigorous supervision towards the largest and most complex institutions. However, these thresholds have begun to punish and improperly regulate community banks and credit unions that have not meaningfully changed in risk or complexity. We have repeatedly heard from these institutions that quote bracket creep unquote is a real and growing problem.
▶ 2:41:08Under this current framework, institutions are improperly being pushed into a higher regulatory Not due to an increase in risk or complexity, but simply due to organic growth in our economy. While the nominal value of their assets has increased, their size and risk profile has remained the same relative to the broader economy.
▶ 2:41:30As a result of this higher classification, our low-risk community banks and credit unions face burdensome and excessive compliance costs that drain time and resources and limit their ability to compete and serve their communities. This mis this misalignment doesn't just harm the institutions themselves. It also leads to an inefficient use of supervisory resources.
▶ 2:41:52Regulators are incre are increasingly focused on institutions that have only grown on paper rather than in practice, diverting attention away from our more systemically impactful institutions. Our community banks and credit unions are being punished with unnecessary regulation and compliance costs due to factors outside of their control.
▶ 2:42:13which is why it's so important to advance my bill that indexes the new thresholds to nominal GDP for these community banks and credit unions while also codifying automatic adjustments on a permanent basis to prevent these sorts of issues in the future. Thresholds raised under my legislation include the qualified mortgage rule, Vulkar rule, and additional thresholds related to annual independent audit requirements for small banks.
▶ 2:42:39We have seen time and time and time again how one-sizefits-all approach has proven unsuccessful and continues to threaten to leave the US with a barbell banking system and many communities needs left unserved by banking organizations. By updating regulatory thresholds on an ongoing basis, we won't punish our small community financial institutions for merely growing along with the rest of our economy.
▶ 2:43:04It is imperative that Congress rightsize the regulatory framework for our community banks and credit unions to allow them to grow organically. We all want a regulatory system that is transparent, fair, and safe. That means ensuring large, complex institutions are held to appropriately high standards, but also opening the door for small, low-risk institutions to thrive without the burden of unnecessary compliance regimes that were never designed for them.
▶ 2:43:33This committee should seek to modernize the regulatory system to serve local communities, promote innovation, and help local economies grow. It's time to put an end to the one-sizefits-all approach, and ensure that our regulatory framework reflects economic reality. Let's create a system that rewards success, that supports local communities, and ensures financial stability.
▶ 2:43:57Let's let's work on this today to make sure that we can advance these community banks in a way that earns bipartisan support. I know many of my colleagues on the other side of the aisle uh talk about their support for community banks. There's no reason why this common sense piece of legislation should not earn bipartisan support and I urge all my colleagues to support HR 756 and I yield back.
▶ 2:44:20Gentleman yields back. Who seeks recognition on Mr. Bar's bill? Ranking move to la strike the last word.
▶ 2:44:28Did you want gentlemen recognized for five minutes?
▶ 2:44:30Oh, thank you very much. We all support community banks and credit unions. But Representative Bar's bill would increase 37 different regulatory thresholds across a wide range of important laws and it indexes these thresholds to continue to grow rapidly based on nominal GDP.
▶ 2:44:52Now, I know Chairman Hill has stressed the importance of taking a datadriven approach to deposit insurance reform. Maybe Representative Zar didn't get the memo, but I have not seen any data or studies or evidence to justify each of the changes made by this bill.
▶ 2:45:13Instead, consumer groups have raised strong warnings, including Americans, for financial reform, which wrote, and I quote, "Under the pretext of relief for community banks, this bill would rewrite a wide swipe of general of federal banking, consumer financial protection, and fair lending laws by simultaneously raising three dozen statutory thresholds and then locking in statutory
▶ 2:45:43future increases every five years. The National Community Reinvestment Coalition wrote, and I quote, "The measure is in essence a broad deregulatory effort that would disproportionately affect low and moderate income communities, communities of color, and rural communities. Indeed, the rollbacks are significant at a time when Trump has shut down the Consumer Financial Protection Bureau.
▶ 2:46:14This bill adds insult to injury by rolling back several key consumer protection and related laws like the Home Mortgage Disclosure Act and the Community Reinvestment Act. Those laws have ensured we have a transparent and competitive financial marketplace where underserved home buyers and small businesses are not redlined and have equal access to credit. But guess what? That's not all.
▶ 2:46:44Instead of focusing on community banks, Republicans snuck in relief once again for some of our largest banks as well. Roughly 87% of all banks have less than 1 billion in assets. And yet this bill helps out banks more than 100 times larger than those.
▶ 2:47:09And so specifically the bill increases two $50 billion thresholds. One goes up to 105 billion. Another goes up to 175 billion. and those thresholds will keep growing rapidly given the bill's indexing provision.
▶ 2:47:30I look forward to the sponsor trying to explain how helping the large the big banks with more than 100 billion somehow helps the community banks. Additionally, Representative Bar seems to have forgotten a very important threshold, one that is important to community banks, credit unions, small businesses, and Americans who put their money in banks.
▶ 2:47:56And so, I'm talking about an increase in the deposit insurance limit so that bank customers, and not just banks, can benefit from the bill, too. Now, I'm not sure why since his president's economic team from Vice President Vance to Treasury Secretary Bessent support raising this threshold.
▶ 2:48:21That's an issue that has broad bipartisan support in Congress, too. So, I hope that can be rectified soon. Finally, I would note that Representative Bar's bill contradicts an indexing approach that Trump's own regulators decided to use.
▶ 2:48:43The FDIC recently considered a similar nominal GDP indexing approach for several of the thresholds covered by this bill, but they rejected it, citing a number of laws of flaws. Instead, they issued a final rule updating thresholds based on inflation instead.
▶ 2:49:07So, with all due respect to my friend from Kentucky, we should heed the FDIC's warnings about this dangerous approach and vote no on HR 1756. And I yield back.
▶ 2:49:21The gentleoman yields back. Who seeks recognition on Mr. Bar's amendment nature substitute? Mr. Lynch, I move to strike the last word.
▶ 2:49:29You're recognized for five minutes.
▶ 2:49:31Thank you, Mr. Chairman. Uh, this is a this is a pretty broad bill. It has major impacts. As as the ranking member noted, this bill modifies 37 regulatory thresholds for banks and credit unions regarding a a huge uh range of topics including capital, mortgage disclosures, ability to repay uh consumer protections, community investment exams, the vocal rule which provides
▶ 2:50:02proprietary trading, executive compensation, uh gap accounting, audits, material loss reviews, orderly liquidation authority, Federal Reserve dividends. That's just the ones I can pick out here. And and so it it just automatically every 5 years it increases the thresholds based on based on GDP, gross domestic product. There's no data to support any of this that we have seen.
▶ 2:50:32It's a new bill. And in the past, capital requirements, just for one example, capital requirements were based on risk. Risk like what's the bank doing? And and would their activity be riskier and therefore warrant greater uh greater capital levels uh capital reserve levels. So uh you know, this this does away with that. And we're just going to look at GDP.
▶ 2:51:02And I don't I don't see I don't see you know the sense in that uh the bill provides no flexibility if we find danger because of the activity of some banks or credit unions. It provides no ability to to intervene. Um there's no off-ramp here. these these uh thresholds continue to increase every five years again based on nominal GDP.
▶ 2:51:33So uh the the other point I want to just contest here is the gentleman's statement that none of this has had any increase in Um I I would just point to a couple of bills we recently passed on crypto. So crypto is going to be part of the banking industry. uh consumer behavior is still unknown in that.
▶ 2:51:57There's a tremendous amount of complexity now being introduced because of because of stable coins, because of crypto, and how those are going to affect all of these institutions. You know, uh there there's there's tremendous complexity that we're embracing here that we don't have answers for right now. So that idea that this is going to just stay the same and it's not changing and so we can we can uh raise these thresholds and ignore risk I I think is is foolhardy.
▶ 2:52:26I think that we're in a we're in a an age of tremendous complexity in financial services. Uh and this this uh this bill actually is risk agnostic. In other words, we don't care how risky people operate. We're going to raise these thresholds and let them take on more risk regardless of what they do.
▶ 2:52:52And I I just think that um that is that is the wrong direction to take. I will agree with the gentleman that we need to find out we need to find ways to to address the needs and and operations and the world of community banks in a better way. and and and it is wrong to to just sort of graft on to their regulations the things that we think are necessary for the largest banks.
▶ 2:53:22And I'm worried about our I'm worried about our our community banks on a regular basis. I I think they do much for our local communities. They're the the, you know, they're they are the the lender that that takes the time and attention to small businesses and makes those loans and uh same same with a lot of our credit unions. And so we need to we need to really take action to protect them.
▶ 2:53:49But this does not this does not this this creates greater risk. And uh while while the good actors will probably keep doing what they've been doing, um it does open uh tremendous opportunity for for risk to be taken on by these by these banks u either intentionally or just because these these thresholds increase every five years regardless of what is happening in the world around them.
▶ 2:54:19So um so I I oppose this. I I would like to find a a more incremental way to reduce those regulations against our our community banks and uh I I welcome the opportunity to do that. Mr. Chairman, I yield back.
▶ 2:54:33Gentleman yields back. Seeks recognition on Mr. Bar's amendment nature substitute. Uh seeing no one seek recognition, I'll recognize myself for five minutes. Let me say that I I rise in support of Mr. ours bill HR756. I really have listened intently to the comments made by the ranking member and my good friend from Massachusetts and and some good points were made there. I I'd like to start by addressing those.
▶ 2:55:05First, an interesting point is you know that we're touching 37 different items and that's something Congress has created over all the years of attempting to tailor. So we've created this uh set of definitions that are not Uh and yet I think a majority of the committee particularly in this Congress recognize that tailoring based on size, complexity, risk is is appropriate, you know, generally
▶ 2:55:35speaking. And so I would hope Mr. bar that we could actually work with the vice chairman of the Federal Reserve, Mickey Bowman, who's the senior supervisory official to also make a recommendation to this Congress on skinnying down that number of places where we have tailoring in the you know in the statutes writ large. So I thought that was a constructive comment. Mr. Lynch also referenced, you know, does in some way does this weaken risk?
▶ 2:56:05And I would argue no, because the underlying nature of bank supervision, regardless of whether one is $500 million or $200 billion is any management team, any board of directors that is conducting any activity that's in unsafe or unsound is preempts any of this discussion we're having today.
▶ 2:56:29Meaning the supervisory agencies retain their right to intervene and take action against the management team or board of directors for unsafe unsound contact essentially irrespective of what the statute might say meaning on top of what the statute would say. So I do believe that risk is is addressed uh when you take Mr.
▶ 2:56:53far as effort to try to tailor using a broad definition of of GDP. You know, if one uses CPI, one captures the inflationary aspect, but you don't capture the economic growth. And I think that's one of the advantages that Mr. Bar offers is that nominal GDP that captures both economic growth and the uh price level. and every five years seems to be, you know, sort of a reasonable approach.
▶ 2:57:23So, I want to say I support this bill and calling attention to all this myriad of uh sizes that have not been indexed in any way and deserve adjustment some after 15 years, you know, of of time. So, I want to thank the uh chairman bar and I want to yield some time to him. give me some time to conclude. But yes, may Le yield your time.
▶ 2:57:50Just thank thank you for yielding just a few points. The gentleman from Massachusetts, my friend, says he doesn't see the sense in this. I I'll tell you who does see the sense in this. the top bank regulator of in the United States of America, Michelle Bowman. The we collaborated with uh the Federal Reserve, the vice chair of supervision on what would be appropriate and it was her recommendation that we use the nominal GDP as opposed to the CPI number.
▶ 2:58:18The ranking member says that we need to be data driven. Well, we are. We're we're driven entirely by the data here. We're driven by the data of GDP growth. When we talk about bracket creep, we're not talking about this is not even regulatory relief. This is just preventing bracket creep.
▶ 2:58:39This is preventing regulations that were never supposed to apply to banks of these sizes uh to apply or or to and in and in terms of this idea of uh we're just going to be ignoring risk. No, no, no, no. We're not. This bill doesn't eliminate regulation or bank supervision. If it's an I the FDIC examiners will still be in all these banks after this bill is becomes law. Hopefully, if it's a national bank, a small national bank, the OC will still be in charge.
▶ 2:59:10If if the Federal Reserve will still be supervising the holding companies if it's a state charter bank, the state the Kentucky Department of Financial Institutions will still be there. It's not like they're no longer going to have any supervision whatsoever or bank exams. They will. This is just simply accounting for the growth of the overall size of the economy. Uh and um with that, Mr. Chairman, I'll yield back to you.
▶ 2:59:37I I think that I think the chairman I'd urge a yes vote on this and I'd urge I'd ask the ranking member of the subcommittee and the you know the chairman to work with the Fed on providing education and also streamlining everything we're doing on how many levels that are touched. So I urge a yes vote. I yield back. Uh is anyone else seek recognition?
▶ 3:00:00Hearing none. We'll move to amendments. Is there anyone seeking to amend Mr. Bar's bill?
▶ 3:00:08Uh the ranking member has an amendment at the desk. We'll pause for it to be Reserve a point of order. Gentleman from Kentucky reserves a point of order.
▶ 3:01:12Clerk will report the amendment.
▶ 3:01:14An amendment to the amendment in the nature of a substitute to HR 7056 offered by Miss Waters of California designated as Waters 136. Without objection, this amendment's considered read and the gentleoman from California is now recognized for five minutes to describe her amendment.
▶ 3:01:34Thank you, Mr. Chairman. My amendment would simply ensure that one of the thresholds from our banking laws that Representative Mar forgot to include is added uh to his long list of other thresholds that are amended. Specifically, my amendment would increase the FDIC deposit insurance limit and National Credit Union Administration share insurance limit uh to 550.
▶ 3:02:04What is that? based on nominal GDP growth since when Congress initially increased the limit to 250,000. Like the other thresholds in the bill, the deposit insurance limit would continue to rapidly grow based on nominal GDP growth.
▶ 3:02:26This approach would help a number of small businesses, churches, and nonprofits who have previously lost money when their community bank failed, but they were too small to use systemic tools like Silicon Valley Bank. My amendment will help level the playing field allowing for community and midside banks uh to compete with the largest banks for those business accounts.
▶ 3:02:54Now listen uh there is broad uh bipartisan support to increase the deposit insurance limit and this is even supported by Trump the Trump administration. Now I don't understand uh 250,000 was initiated when how many years ago
▶ 3:03:19no earlier than
▶ 3:03:22anyhow it's been it's long overdue for increase and I think for all of the reasons that I have enunciated here uh that re really should be looking at increasing the deposit insurance I yield back the balance of my time.
▶ 3:03:41Gentleman yields back. Does the gentleman from Kentucky insist on his point of order?
▶ 3:03:47Withdraw the point of order.
▶ 3:03:49Gentleman withdraws his point of order. Who seeks recognition on the waters Mr. Bar.
▶ 3:03:56Uh, thank you, Mr. Chairman. Move to strike the last word.
▶ 3:03:59You're recognized for five minutes.
▶ 3:04:00Thank you. Um, so I appreciate the the the gentle lady's uh amendment, but this bill is is but I oppose it because this bill is about indep indexing regulatory thresholds for small banks to account for inflation and economic growth. Tackling broader deposit in insurance reform uh through this bill is inappropriate. Deposit insurance reform is a legitimate topic and the chairman has rightly included it on our agenda and we have had briefings and hearings about deposit insurance reform.
▶ 3:04:30uh but this is this bill is not the vehicle for that. We've concluded uh we have not concluded our review of the data and the issue and the committee has taken a datadriven approach to this issue and we will continue to do so. The committee has been examining proposals for broader reforms to the deposit insurance framework and we will ensure that robust conversations occur before making decisions that could greatly impact the banking system. The committee sent a letter to the FDI in December asking for more data to help inform our review.
▶ 3:04:57A key concern raised by that letter was that the data reported by banks on call reports is insufficient to target any proposals that would raise the insurance limit for specific account types. Similarly, without that call report data, it's impossible for the FDIC to make accurate estimates of the additional assessments banks would have to pay.
▶ 3:05:17have communicated this concern to the midsize bank coalition and they uh they uh are working on trying to help uh get us additional uh data so that we can make informed decisions on this. It is important uh that we are thoughtful about any additional coverage including the costs uh that it may impose on financial institutions especially community banks through higher diff And so, uh, I ask and urge my colleagues to oppose this amendment.
▶ 3:05:47Uh, but I look forward to continuing to work with all of my colleagues, including the ranking member, as we are, as we take a deliberative approach, uh, to deposit insurance reform. And I yield.
▶ 3:05:58Gentleman yields back. Who seeks recognition? The gentleman from
▶ 3:06:02Mr. Chairman, I move strike the last
▶ 3:06:04Gentleman's recognized for five minutes.
▶ 3:06:06Thank you, Mr. Chairman. As many in this committee know, I think the president's proposal to raise deposit insurance coverage levels for non-interest bearing transaction accounts is a good one, and I'm actively working with my colleagues to see that the proposal moves forward. With that said, I don't believe Mr. Bar's bill is the correct venue to do that. Let's keep Mr. Bar's bill on the thresholds as it is and then work together on improving deposit insurance.
▶ 3:06:36I welcome I encourage my colleagues on either or both sides of the aisle to work with me in improving this system. And with that, Mr. Chairman, I yield back.
▶ 3:06:46Gentleman from Oklahoma yields back. Who seeks recognition on M Miss Waters Hearing none. Uh all those will turn will consider the amendment. All those in favor, please say I.
▶ 3:06:59All those opposed, please say no. No. Uh the naysay have it in the opinion share of the naysay have it naysay have it and the amendment is not adopted. We'll now move to the next amendment. Is there another amendment to Mr. Bar's bill?
▶ 3:07:19Uh the gentleoman from California.
▶ 3:07:23Thank you very much Mr. Chairman. Member
▶ 3:07:25I'll let you have an amendment at the desk. Yes. Yeah. So, we're going to let the clerk pass that out and then we'll recognize you.
▶ 3:07:40Reserve a point of order.
▶ 3:07:41Gentleman from Kentucky reserves a point of order on this second waters amendment to the bar ANS. I'll read those.
▶ 3:08:33Clerk will report the amendment.
▶ 3:08:35An amendment to the amendment in the nature of a substitute to HR 7056 offered by Miss Waters of California designated as HR 70563. Without objection, this amendment is considered read and the gentleoman from California is now recognized for five minutes to describe.
▶ 3:08:53Thank you very much, Mr. Chairman. Members, as the president is finally waking up uh to we have an affordability crisis in this country. It's getting harder and harder for too many of our constituents to not only buy a home and build wealth, but even to make ends meet. with prices for groceries going so high that some people are using buy now pay later products even to buy food for their families.
▶ 3:09:22Meanwhile, big banks and credit card companies are making record profits and have plenty of room to give consumers a break. As the Wall Street Journal recently put it, I quote, "Wall Street is rolling into the new year, firing on all cylinders after the nation's biggest banks had one of the strongest years on record in 2025. Six.
▶ 3:09:49The biggest banks brought in some billion dollar in revenue in 2025, up 6% and better than any prior year. The bank CEOs are doing well, too. Jamie Diamond at U JP Morgan made a 707 million windfall based on their stock last year.
▶ 3:10:15While Capital One's CEO made 300 million and city CEO made 100 million. Trump who has suddenly realized apparently that the affordability crisis isn't a hoax or a scam as he previously suggested. But don't forget, I told you he'd change his mind any time. And so we don't know where he really stand. Um is now offering up all sorts of proposals to try and lower cost.
▶ 3:10:46We think we don't know what will be happen tomorrow morning when we wake up. Trump said, and I quote, "One of the biggest barriers to saving for a down payment has been surging credit card debt. The profit margin, let me just make sure I get this out of here. Uh the profit margin for credit card let's see companies now exceeds 50%.
▶ 3:11:13One of the biggest and they charge Americans interest rates of 28% 30% 31% 32%. What happened to usury? He went on to say, and I quote, "I'm asking Congress to cap credit card interest rates at 10% for one year, and this will help millions of Californians save for a home. They have no idea they're paying 20%.
▶ 3:11:41They go out and there is a they are a little late in their payment and they end up losing their house. It's terrible," he said, quote unquote. So, my amendment would allow Republicans to champion the president's proposal to impose a simple one-year cap on credit card interest rates at 10%. This is an idea that has bipartisan support in the House and in the Senate.
▶ 3:12:07And I'm curious if any Republicans on this committee will speak or vote in support. I don't expect any of them will. I don't expect they're going to go against the president, but you know, while you're hanging out with the president, when you wake up tomorrow morning, he may have changed his mind anyway. And so, you know, you should be very cautious about giving him support on some of these crazy things. This is not a crazy thing. This is a good thing.
▶ 3:12:36This is a wonderful thing to reduce the credit card interest rates. But don't hold your breath until the president of the United States uh you know do what he normally does. Uh he will probably change his mind. So anyhow, I ask for a I vote. Probably not going to give, but I'm asking for it anyway. Give me an I vote.
▶ 3:12:57Gentleman yields back. Does gentleman Kentucky insist on his point of order?
▶ 3:13:01Mr. Chairman, I insist on the point of order pursuant to clause seven of rule 16 of the House rules. The amendment is not gerine to the underlying bill as it relates to a subject matter that is different than the underlying bill. Chair is prepared to rule. Pursuant to clause seven of rule 16 of the house rules, the chair finds that the amendment is not gerine to the underlying bill. Therefore, a point of order is sustained. Is there any other
▶ 3:13:23Mr. Chair, may
▶ 3:13:25uh if I may,
▶ 3:13:26there be no further discussion or amendments to the bill. The question now occurs on the adoption amendment, the nature of substitute. All those in favor signify by saying I. I all those opposed signify by saying nay. P share the eyes have it. The amendment is adopted. Question now occurs on ordering the bill as amended reported to the house with a favorable recommendation. Those in favor signify by saying I. I. Those opposed signify by saying nay. P. Share the eyes have it. For what purposes gentleman from Kentucky seek recognition?
▶ 3:13:56Request a recorded vote.
▶ 3:13:57Recorded vote is requested. All those in favor recorded vote raise your hand. A sufficient number having raised their hand. A recorded vote is ordered. Pursuant to subsection C5 of rule three, the committee rules the vote on this question is postponed. We'll now move to the next bill. Pursuant to notice, I call up HR 5877, the Combating Moneyaundering and Cyber Crime Act of 2025, which was introduced by the gentleman from Wisconsin, Representative Fitzgerald.
▶ 3:14:26The clerk will report the bill, which was distributed in advance. to stren to strengthen the authority of the United States Secret Service to investigate various crimes related to digital asset transactions and to counter n transnational cyber criminal activity including unlicensed money transmitting businesses structured transactions and fraud against financial institutions and for other purposes.
▶ 3:14:51Without objection, the bill is considered read open to amendment anytime. Representative Fitzgerald has an amendment in the nature of a substitute, copies of which have been distributed in advance. The clerk will report that amendment.
▶ 3:15:03An amendment in the nature of a substitute to HR5877 offered by Mr. Fitzgerald of Wisconsin, designated as Fitz G074.
▶ 3:15:13Without objection, the amendments now considered red will serve as the base text for purposes of an amendment. The gentleman from Wisconsin, Mr. Fitzgerald, you're now recognized for five minutes on your amendment.
▶ 3:15:23Thank you so much, Mr. Mr. Chairman, the United States Secret Service plays a critical role in investigating cyber enabled financial crime, including the illicit use of digital assets through its global network of cyber fraud task forces and its long-standing expertise in financial investigations.
▶ 3:15:41Today, a growing share of cyber crime involves unlicensed money transmitting businesses, structured transactions designed to evade reporting requirements, and fraud targeting financial institutions as defined under the Bank Secrecy Act, which are generally not federally insured. That is why I was proud to introduce the Combating Money Laundering and Cyber Crime Act of 2025 alongside my colleagues, Miss Patterson, Mr. Nun and Mr.
▶ 3:16:11Sherman to clarify and strengthen the Secret Services statutory authority to investigate money laundering and related offenses tied to illicit digital asset activity. This legislation harmonizes criminal law and banking law by explicitly ensuring that Secret Service has the authority to investigate money laundering, structured transactions, and fraud against financial institutions as defined in statute. closing gaps that sophisticated cyber criminals have been exploiting.
▶ 3:16:41The bill also extends from five years to 10 years the reporting requirement related to the Fininscent exchange providing Congress with a greater long-term visibility into how information sharing between law enforcement and financial institutions supports high impact investigations. I have consistently raised concerns about government surveillance of private financial transactions. Those concerns were made important and legitimate.
▶ 3:17:08At the same time, the Fininscent Exchange remains the primary forum where law enforcement and financial institutions can jointly analyze suspicious activity reports and currency transaction reports to identify the most serious threats and disrupt transnational cyber criminal networks. This information sharing framework predates the corporate transparency act and has been widely widely viewed as an effective tool when appropriately overseen.
▶ 3:17:36Extending the report requirement enhances congressional oversight and helps guard against misuse. Finally, the legislation extends from six years to 10 years a provision directing US engagement at international financial institutions to support technical assistance that strengthens global capacity to combat moneyaundering and terrorist financing. Recognizing that cyber enabled financial crime is inherently transnational, excuse me.
▶ 3:18:08This is a targeted bipartisan bill that strengthens law enforcement authorities, improves oversight, and better equipss the United States to conform confront modern cyber crime without expanding new surveillance powers. I urge my colleague support this legislation. I yield back.
▶ 3:18:26The gentleman yields back. Is there any further debate on the ANS?
▶ 3:18:30Mr. Chairman,
▶ 3:18:32gentleman's recognized.
▶ 3:18:33Thank you, Mr. Chairman. Uh, first of all, I want to thank the gentleman, Mr. Fger, for his his thoughtful legislation. I know he's been collaborating with uh Mr. Sherman and others on our side of the aisle. Uh I I I in the past I was uh chair of the uh financing task force that we had on this committee before it became part of a full committee operation. I think the work that he is doing here is commendable.
▶ 3:19:04Uh I think there's tremendous evidence that that we do need to extend the provisions that he has identified. I also uh want to point out that uh the recent national money laundering risk assessment offers some examples that that actually provide great support for uh Mr.
▶ 3:19:24Fitzgerald's uh one they note that cyber crime groups linked to or receiving safe haven from Russia and the Democratic Republic of Korea, North Korea have been responsible for an overwhelming share of recently identified ransomware related incidents and have openly attacked US organizations and businesses and also included an indictment charging a Russia and US national of creating, operating and promoting tornado
▶ 3:19:54cash which is a asset mixer that facilitated more than a billion dollars in in money laundering transactions and and which laundered hundreds of millions of dollars for the Lazarus group the sanctioned uh North Korean cyber crime organization and I know Mr. Sherman and Mr. Fitzgerald worked on that aspect of it. So uh just saying I I fully support this legislation. I think it's well thought out.
▶ 3:20:20Uh it's well drafted and uh I I compliment my my colleagues for putting that together and I yield back.
▶ 3:20:27The gentleman yields. The gentleman from Ohio, Mr. Davidson's recognized.
▶ 3:20:32I thank you. I do move to strike the last word.
▶ 3:20:35Gentleman's recognized.
▶ 3:20:36I want to thank uh Mr. Fitzgerald for his continued leadership and commitment. This is thoughtful legislation. As chairman for national security and elicit finance, I'm encouraged by the fact that there's no real partisanship in terms of going after scam centers and illicit finance. Um, with some notable exceptions involving government fraud. But I digress.
▶ 3:20:58Uh, as financial crime increasingly moves its way online, cyber enabled money laundering has become a core component of fraud schemes, scams, ransomware, identity theft, human trafficking, and other transnational criminal activity. The FBI's Internet Crime Complaint C Center's 2024 report revealed that losses from investment fraud, including schemes involving digital assets, exceeded $6.5 billion.
▶ 3:21:26This underscores the notion that as our lives become increasingly digitally connected, so too does the cyber threat landscape. Our approaches to combining these forms of illicit activity or combating these forms of illicit activity haven't fully been fully leveraged uh the expertise of one agency in particular, which is the United States Secret Service. That's where this legislation kicks in.
▶ 3:21:50While best known for protecting our national leaders here in the United States, the Secret Service has played a crucial role in investing investigating and solving financial crime since its inception in 19 in 1865. However, the Secret Service has met limitations in its uh capacity to fully counter modern sophisticated cyber enabled threats that we face today.
▶ 3:22:14would explicitly expand the Secret Services Statuto authorities to ensure its mission includes detecting, assessing, and responding to cyber enabled money laundering risks. At a time when cyber crime is driving billions of dollars in losses each year for American citizens, it's important that we formally integrate the Secret Service long-standing expertise and mission into our broader uh bank secrecy act AML strategy.
▶ 3:22:40This reflects a bipartisan recognition that our AML policy must evolve alongside technology and that the growth of digital assets protecting both our national security and the integrity of our US financial system is uh is vital.
▶ 3:22:55This bill would additionally extend congressional reporting requirements related to finsen uh exchange a voluntary public private partnership that serves as a forum for information sharing between law enforcement and financial institutions to identify how high value high impact financial intelligence. This program has been widely regarded within law enforcement and national security as a success.
▶ 3:23:19Extending these reporting timelines will help ensure sustained congressional oversight and a clear understanding of how frontline agencies and financial institutions are better equipped to detect, prevent, and investigate illicit finance uh financial activity.
▶ 3:23:33I support HR5877 as a common sense measure that strengthens the Secret Services ability to combat uh cyber enabled financial crime uh while also reinforcing cooperation with partners in the broader global effort to disrupt illicit finance networks. This bill doesn't do everything in the space. There's a broad set of legislation that we need. Uh Mr.
▶ 3:23:56Lynch referenced Tornado Cash, um the the company Samurai Wallet, and look uh they were designated as a money service business when they were prosecuted and reached a a plea agreement, but facilitating the storage of uh private keys is is is not operating a money service business. I think the law was improperly applied in that case related to the entities.
▶ 3:24:26Now, with regards to the individuals that, you know, pled to crimes, I don't know uh for sure whether they had an intent to facilitate elicit finance or not, but the idea that simply operating software or um equipping someone to have self-custody of their own digital assets is illicit activity, I think that's why the reporting requirements are important. We need to be clear and frankly, we need to overtly protect self-custody.
▶ 3:24:52We need to overtly protect uh decentralized finance because the law is being abused. And while I welcome Secret Services uh engagement in this and because they've been very effective and they pay attention at lower thresholds than others, there's a lot of uh lawfare that has been used by previous administrations to try to kill this industry. And I hope that we don't see that abuse continue here.
▶ 3:25:19Uh so with that caveat, I do support the legislation in the effort. Uh but I think there's a challenge for us in this committee to finally get uh clarity across the finish line and the Senate is working on just that and I hope they keep it integral by protecting self-custody. I yield back.
▶ 3:25:39Gentleman yields back. Does anyone else seek recognition on the amendment and nature of substitute?
▶ 3:25:46Hearing none, we'll move to amendments. Does anyone wish to offer an amendment to the ANS? There being no further discussion or amendments on the bill, the question is now the question now occurs on the adoption of the amendment and the nature of a substitute. All those in favor shall signify by saying I. I.
▶ 3:26:02All opposed by saying nay. In the opinion of the chair in the opinion of the chair, the eyes have it and the amendment is adopted. The question now occurs on considering occurs on ordering the bill as amended to be reported to the house with a favorable recommendation. Those in favor shall signify by saying I.
▶ 3:26:29Those opposed signify by saying nay. In the opinion of the chair, the eyes has
▶ 3:26:40may I may I request a roll call on that? A recorded vote is requested. All those in favor of a recorded vote shall raise their hand. A sufficient number having raised their hand, a recorded vote is ordered. Pursuant to subsection C5 of rule three, the committee the committee rules the vote on this question is postponed.
▶ 3:26:58We'll now move on to the next Pursuant to notice, I call up HR 1799, the Financial Reporting Threshold Modernization Act, which was introduced by Representative Louderdermilk. The clerk will report the bill, which was distributed in advance.
▶ 3:27:17HR 1799 to update thresholds for certain currency transaction reports and suspicious activity reports, and for other purposes.
▶ 3:27:26Without objection, the bill is considered read and open to amendment at any point. Representative Laddermilk has an amendment in the nature of a substitute copies which have been distributed in advance. The clerk will report the amendment.
▶ 3:27:38An amendment in the nature of a substitute to HR 1799 offered by Mr. Louderderm Milk of Georgia designated as
▶ 3:27:49Without objection, the amendment is considered. Mr.
▶ 3:27:51Chairman, reserve a point of order.
▶ 3:27:54No point of order. Without objection, the amendment is considered read and will serve as the base text for purposes of an of amendment. The gentleman myself is recognized now for five minutes. I speak today in support of my bill HR 1799, the Financial Reporting Threshold Modernization Act.
▶ 3:28:16A bill to modernize the current bank secrecy act and anti-money laundering framework and adjust it for inflation every 5 years going forward. When Congress passed the Bank Secrecy Act of 1970, they did so with the clear intent to monitor significant and unusual financial transactions. The BSA has since served as the cornerstone of the US anti-moneyaundering and counterterrorism finance regime.
▶ 3:28:43The law requires financial institutions to maintain records and file reports such as currency transaction reports and suspicious activity reports and has been amended over the years to create an even more extensive framework to detect and deter financial crime. However, there are a few key components of the law that have needed evaluation and reform for quite some time. For example, the Bank Secrecy Act established a $10,000 threshold for currency transaction reports.
▶ 3:29:12Now, consider that in 1972, $10,000 was enough money to buy two brand new Corvettes. It could represent a substantial down payment on a house or even several years of college tu tuition for children. In 1972, $10,000 exceeded the median household income in the United States. $10,000 was a significant amount of money in 1972. It does not represent the same value for consumers today.
▶ 3:29:38In fact, if you adjust for inflation, the threshold would represent roughly $80,000 in purchasing power. Furthermore, there does not need to be a crime or suspicion of a crime for a CTR to be generated. Just the simple fact of crossing the $10,000 transaction threshold. As a result, the current threshold is grossly outdated and captures millions of commonplace transactions like used car purchases and small business cash deposits.
▶ 3:30:07Congress has also steadily expanded the definition of financial inst institutions that must report these transactions, capturing institutions such as car dealerships, insurance companies, and even the US Postal Service. My bill simply raises the currency transaction report threshold from $10,000 to $30,000 and indexes it to inflation. It would also raise the current suspicious activity report threshold and index it to inflation.
▶ 3:30:34These changes would reduce the compliance burden for banks and credit unions by 60 to 80% while ensuring law enforcement still has access to this tool when needed. For years, I have heard from banks and credit unions in my district and across the country about the financial administrative burdens these reports place on them.
▶ 3:30:54In fact, according to Fininsson's own data for fiscal year 24, there were approximately 4.7 million SARS and two 2 million CTRs filed with roughly 12,850 SARS and 56,000 CTRs filed daily from 324,000 registered financial institutions and other e- filers.
▶ 3:31:22The Bank Policy Institute recently conducted a survey of 15 of its member institutions with at least 100 billion dollars in assets and found the average burden estimate of SAR filing was 21.41 hours per SAR. Those burdens are also acutely felt by our small and midsize community banks and credit unions.
▶ 3:31:42This begs the question, does all the effort from large and small financial institutions across the country to generate CTR and SAR reports lead to a flurry of law enforcement initiatives crack down on illicit activity? Let's just look at the data. When it comes to IRS criminal investigations, Finson reported that only 13.3% of the investigations conducted in 2024 originated from reports required under the Bank Secrecy Act. That's down 13.9% in 2023 and 15.8% 8% in 2022.
▶ 3:32:12According to IRS's own data, the agency conducted investigations in 2024, meaning only 370 investigations originated from a BSA report. Let me put that into perspective. The financial services industry sends approximately 59 billion per year to generate roughly 27 million reports with the BSA regime, and only 370 of them are used to initiate criminal investigations.
▶ 3:32:38I think that the members of this committee owe it to our constituents and the financial institutions that serve them to evaluate whether these reports are useful in their current form. I would argue today that we have no real way to determine that because this committee has yet to receive the report from Fininsson to assess the appropriateness of banks the bank secrecy act. I have often said that utilizing these reports to catch criminals is like looking for a needle in the haststack.
▶ 3:33:05All HR 1799 attempts to do is make that hay stack a little smaller, allowing for law enforcement to better focus on real illicit finance risks. I urge my colleagues to support this bill and I yield back.
▶ 3:33:21Does anyone else seek further uh recognition on the ANS?
▶ 3:33:25I move to strike the last word. Move to strike the last word.
▶ 3:33:28The ranking min gentleoman from uh California is recognized.
▶ 3:33:32Thank you very much. which I find this bill to be um extremely concerning. This bill would undermine the Bank Secrecy Act by eliminating approximately 80% of currency transaction reports that CTRs and 50% of suspicious activity reports SARS that banks to the federal com federal government.
▶ 3:33:56The Bank Secrecy Act is America's law to combat money laundering, terrorist finance, and proliferation financing. It is a recordkeeping and reporting statute establishing requirements for financial institutions to pro provide quote highly useful information to agencies that conduct criminal tax regulatory intelligence and counter intelligence investigation
▶ 3:34:26and other activities. These records, collectively called BSA data, are also designed to facilitate the tracking of funds related to illicit activity, to protect the US financial system from bad actors, and to safeguard American national security. This bill would eliminate a significant portion of the BSA data used by law enforcement and other government officials to combat financial crime.
▶ 3:34:58These missing reports will impact the Federal Bureau of Investigation, SFBI, which investigates domestic and foreign terrorism, white collar crimes, benefits, fraud, and other bad acts. I like to yield for a colloqu with this sponsor, Mr. Lmac. Mr. Lot of milk, if you may. I'd like to have a colloqui. Did he leave?
▶ 3:35:24No, he Mr. Lame.
▶ 3:35:30Yes, ma'am.
▶ 3:35:31What does the FBI think about the effects of your bill? Well, I uh I'm I'm sure that uh law enforcement agencies, including ICE, would love to even lower the threshold, but uh this is about protecting consumers financial information, and it does not change the fact that all law enforcement agencies still will have access to the data through Finins and through the constitutional process, due process of a search warrant if needed.
▶ 3:35:58And financial institutions will still have suspicious activity reports.
▶ 3:36:02Okay, reclaiming my time. It's my understanding that the Trump FBI thinks the bill will severely limit their visibility into potential illicit financial activity. And that's not surprising because you are taking away a key tool. Now, I'm a little bit confused because uh the Republicans have a reputation of being law and order, have campaigned on it for years, law and order.
▶ 3:36:28And now you're stripping away the ability for the FBI uh to deal with money laundering and uh all kind of illicit activity. I don't get it. Similarly, no reclaiming my time.
▶ 3:36:41the Internal Revenue Services Criminal Investigation Arm, IRSCI, which does both tax and non-tax financial crime investigations, have published data showing that it surged BSA filings over 2.3 million times in 2024 and that 87% of its cases open had a BSA record on the primary subject.
▶ 3:37:06Further, the IRS uh CI median cash in CTRs tied to their cases just over 22,000, a medium that would be significantly dis diminished if this bill were to become law. So, I ask unanimous consent to submit the March 25 RSCI fact sheet and press record for the record. Um, which one is it? This one. I got it.
▶ 3:37:35Without objection, uh it will be included in the record.
▶ 3:37:38Thank you. This suggests that this bill helps tax cheats, frauds, traffickers, and terrorists. It also suggests that it does nothing to help the people of Ohio. Mr. a lot of milk. Your home state suffered over 4,400 drug overdose deaths in 2023, according to Ohio health officials, and your state citizens reported over a billion dollars of losses from cyber enabled crime in 2024 according to the FBI.
▶ 3:38:08So, I want to say one more thing. I agree that banks are making an effort here and that there may be changes that are appropriate to the thresholds. In fact, there may be changes that are appropriate to the whole of the BSA reporting process, but that has to be balanced or with the needs of law enforcement and the needs of victims of financial crime. So, if we weren't collecting the information, we'd never have a case for victims.
▶ 3:38:32Maybe 5,000 is nothing to Trump's billionaire boys club, but 5,000 is a lot of money for most Americans.
▶ 3:38:38Gentle woman's time is expired.
▶ 3:38:42who seeks recognition on Mr. Mr. Davidson? You're recognized.
▶ 3:38:47Thank you, Mr. Chairman. And as chairman of the subcommittee on national security and elicit finance, uh we are in a bipartisan way very serious about combating illicit finance. Uh and I had hoped that Mr. Ladder's effort would be bipartisan. As he illustrated in his opening remarks, if we simply kept up with inflation and really did no change, uh no change would be something that was indexed to inflation. And this would be over $80,000. when you look at the price of a Corvette as he referenced that's even more expensive.
▶ 3:39:18Those have gotten uh even even pricier. Uh so the change I am sort of surprised to hear the ranking member expressed the idea for change but the change that the previous administration wanted to do with respect to surveillance on bank accounts was to take it down to below $600. But I guess unless you're doing government money and then you know when Doge wants to look at fraud, waste, and abuse or other people, well, that's a problem that we look at the data there that we're spending with tax dollars.
▶ 3:39:47So, it seems like they're against scams in a bipartisan way unless it's scams against the government. Um, I think it's disappointing that we couldn't get a bipartisan uh effort because frankly, you know, Mr. Loudermilk's bill does represent a compromise against uh just indexing for inflation or indexing to GDP or uh cost of other things. So the bank secrecy act or BSA served as cornerstone for the United States approach to any money laundering.
▶ 3:40:16Uh at its core it was designed to standardize how our financial institutions and law enforcement detect, deter and disrupt illicit finance activity in our system. Uh two most well uh known tools in BSA's toolkit are the currency transaction report or CTRs and suspicious activity reports known as SARS. It's well understood that they are designed to work in tandem but not in isolation.
▶ 3:40:42As our financial system and economy have evolved, the sheer volume of CTRs and SARS being reported has grown exponentially given their respective thresholds have not changed since 1972 and 1996 and they haven't proven incredibly effective. So less than five five to six% of them are even used ever. So you collect more and more data and you shrink the percentage that's even usable by law enforcement.
▶ 3:41:12So some uh as I say don't want to change this or if they do they only want it to go smaller. So if you care about making our system work uh you want to increase the signal not the noise. So instead of collecting more data and varying the illicit finance you would refine it so it gets more f focused. And I was encouraged to see Finson talk about just this approach.
▶ 3:41:34So there has been collaboration on it and there's collaboration to even rethink in first principles about the kind of premise behind the bank secrecy act. The whole third party doctrine the idea that if you choose to share your information with your bank you no longer have an expectation of privacy is a problem. The premise here is you haven't even committed a crime but you've got a reporting requirement on cash.
▶ 3:41:59So I hope we go towards more freedom and less government as this bill does uh as we approach things because we should the right to transact predates any government and frankly the government shouldn't even interject itself without due process and uh probable cause or at least reasonable suspicion. Now that's uh both balances individual liberty and um the desire to solve our crimes. So I applaud Mr.
▶ 3:42:25loud milk for doing this um uh to seek, you know, bipartisan solution, but let's recognize that even when he's tried compromise after compromise, they tend to move the football and and walk away from it. So, we're flooding Finson and law enforcement agencies with low value data, lots of noise, and little signal. It's long overdue to change these thresholds. And I also thank the chairman for bringing this bill up.
▶ 3:42:50You know, people have long avoided it because there's a Oh, well, you're making it easier to get away with uh illicit finance. Getting after illicit finance is getting better. We're getting better at it. Just last fall, we cracked down on a $15 billion scam center in So, uh that's a significant chunk of GDP. So, you recognize the scams are growing in scale and complexity. Americans, especially seniors, are being targeted. And we are working on bipartisan legislation to counter that.
▶ 3:43:20But this is not something that weakens it. It strengthens it. And I applaud Mr. Loudermilk and everyone who's co-sponsored it for getting it to this point. And I hope we get it across the floor and enact it. I yield back.
▶ 3:43:31Gentleman yields back. Who seeks for unanimous consent request?
▶ 3:43:37Uh yes, I have um cley grants uh by President Donald Trump. uh and um I can see where he has basically pardoned about 70 uh criminals and so I bet he likes this bill. Uh I'd like to submit it to this to the record. Thank you.
▶ 3:43:55Without objection. That will be added to our record.
▶ 3:43:59Uh who seeks recognition? The gentleman from Tennessee, Mr. Rose, you're recognized to strike the last word.
▶ 3:44:04Thank you, Mr. Chairman. Uh I move to strike the last word.
▶ 3:44:09Wasn't 17. That was it. Mr. Chairman, move to strike. Last word
▶ 3:44:16recognized for five minutes.
▶ 3:44:17Thank you. In 1972, a reporting reporting a $10,000 cash transaction made sense. I think in that time a Coke cost 10 or 15 cents most places in this country. That was a very large sum of money. Today, that same threshold captures routine transactions that have nothing to do with the illicit activity Congress intended to monitor.
▶ 3:44:39When someone in Tennessee's sixth district buys a used truck or pays cash for farm equipment or cattle, their bank files a currency transaction report. That's not money laundering. That's just commerce in rural America. But our financial institutions are drowning in paperwork filing reports on these everyday transactions.
▶ 3:44:59Raising the threshold would reduce compliance burdens on our community banks and credit unions by an estimated 60 to 80% while law enforcement maintains the tools they need to catch actual criminals. Think about what this means in practice. Our community financial institutions are spending countless hours and significant resources processing and filing reports that add zero value to law enforcement investigations.
▶ 3:45:25Every currency transaction report filed on a legitimate business transaction is time and money that could be spent on customer service, small business lending, or keeping costs down for account holders. And it's not just the banks bearing this burden. The Financial Crimes Enforcement Network is overwhelmed with millions of reports annually, the vast majority of which document perfectly legal activity. By updating this threshold to reflect current economic reality, we help everyone.
▶ 3:45:55Banks can focus on actual suspicious activity. Law enforcement can focus on genuine threats, and consumers don't bear the hidden cost of outdated compliance requirements. Our small financial institutions shouldn't waste resources on regulatory compliance for transactions that pose little or no threat. This bill lets them focus on serving their communities instead of filing reports on routine purchases.
▶ 3:46:21I intend to co-sponsor this common sense reform and urge my colleagues to support it and I yield back the balance of my
▶ 3:46:27Gentleman from Tennessee yields back who seeks recognition. Gentleman from
▶ 3:46:32Yeah. Thank you, Mr. Chairman. U
▶ 3:46:34you're recognized for five minutes.
▶ 3:46:35Thank you. Uh this bill on its face would would basically eliminate a significant portion of the bank secrecy act uh data that we get uh from the banks that go to law enforcement and uh that allows government officials to combat fraud uh terrorist finance, money laundering and other financial crimes.
▶ 3:46:58This bill would mean that that if it passed that other financial institutions with reporting requirements would not be required to report applicable currency transactions or cash transactions under $30,000 and would not be required to investigate and report scams against their customers unless the victim's losses exceed $10,000.
▶ 3:47:21Now, I appreciate that a cost of a Corvette has gone up and and education has gone up, but $10,000 is still a lot of money to the average American. It really is. If you get ripped off of, you know, $10,000, that's a serious serious blow to most Americans. That's that's more than their entire savings.
▶ 3:47:38So, the other thing I want to point out is, you know, Donald Trump's IRS, this is Donald Trump's IRS, uh, their IRS criminal investigations department, was so concerned about the introduction of this bill that they issued a a fact sheet to demonstrate the significance of the Bank Secrecy Act data to its operation. And and and they they were very good in spelling this out.
▶ 3:48:07It noted in a press release that quote during the previous three fiscal 2022 to 2024, 87% of the IRS criminal investigations recommended for prosecution had a primary subject with a related BSA filing. So, they're going off the data that you're no longer going to give them.
▶ 3:48:33and adjudicated cases resulting in 97% conviction rate. So, we're getting the bad guys with this data with defendants receiving average prison sentences of 37 months. This is coming from Trump's IRS. The IRS criminal investigation department also said BSA data uh it used BSA data to identify 21.1 billion in fraud tied to tax and for uh financial crimes.
▶ 3:49:03Also allowed them to seize 8.2 billion in assets tied to criminal activity and obtain $1.4 billion in restitution for crime victims. It's kind of like a tariff. So BSA data has also proven effective in helping the IRS criminal investigation and narcotics trafficking and pandemic era tax fraud.
▶ 3:49:25So So this is all stuff that we're using that that Trump's IRS criminal investigation department wants and they're concerned about this bill. The other part of this is, you know, Treasury, look, look, look, I agree. We're collecting too many CTRs, too many uh suspicious activity reports. We need to reduce that to take the burden off some of these banks. But this is not the way to do it.
▶ 3:49:54You know, jumping from from, you know, 10,000 to 30,000 and leaving that huge gap. I do want to note that that even Trump's Treasury has made useful and desirable clarifications to the guidance around the filing of cash transaction reports and suspicion activity reports. They get it. They understand the the burden on these especially smaller banks and and they're trying to reduce the number of those reports that are necessary.
▶ 3:50:23So, um I think we're going in the right direction. I think this is a huge leap. I think it exposes uh our banking system to to tremendous fraud and and I think it it uh it really handcuffs Fininsen. It hands it hand handcuffs the IRS criminal investigation uh department. It handcuffs the FBI.
▶ 3:50:49So, it's really making it easier for the bad actors and and we've got plenty of them out there. as as the gentleman from Ohio noted, there's been some massive massive frauds. So So why are we why are we making it easier for people to scam and harder for law enforcement to to protect consumers, even if it's only $10,000, that's a lot of money to the average American.
▶ 3:51:15and uh you know we we shouldn't be taking the lid off of you know someone could get ripped off for for you know massive amounts of money here and and the bank wouldn't have to report it. So, I just uh for those reasons, I I I I I wish the member would would uh think about, you know, revising the the the limits here and and work with us across the aisle, but if it stays in this sim similar form, I'd have to oppose it.
▶ 3:51:45Thank you. I yield back.
▶ 3:51:46Gentlemen yields back. Seeks
▶ 3:51:48Mr. Chairman, I'd like to
▶ 3:51:49gentleman from Oklahoma.
▶ 3:51:50Mr. Chairman, I would like to yield to Mr. Laddermilk.
▶ 3:51:53Gentleman is yields his time to the gentleman from Georgia.
▶ 3:51:55Thank you, Mr. Chairman. Thank you, my friend from Oklahoma. Um, we've heard a lot of uh things thrown around here today and and let me clarify something. This is not repealing the BSA. Not at all. It's actually strengthening it because what you're referencing here is that this is going to stop banks from reporting scams that are less than $30,000. It does not.
▶ 3:52:23The suspicious activity report is still in place. And if a banker sees something that is suspicious, regardless of the amount, they can report that. This actually cleans it up and reduces the noise. I use the analogy of finding a needle in the haystack.
▶ 3:52:41What we're doing is reducing the size of the haystack and eliminating banks arbitrarily, mandatorily reporting
▶ 3:52:50data and financial transactions that they know are not suspicious. they're normal in the daily activity. So, it reduces the amount of noise that law enforcement has to go through or to filter through to actually find the perpetrators. Um, I mean, I I I appreciate the sudden uh support of law enforcement. It it's a it was a refreshing change from just a couple hours ago when ICE was uh related to Satan, I think.
▶ 3:53:20Um, and you're right, law enforcement would love to reduce the limit to zero and be able to track every dollar from every person, but that is not feasible. It's not advisable and it's unconstitutional. And the fact is this bill has been out there since 2018. I have introduced it every Congress since the 115th Congress. So, this isn't something that's just been dropped on everyone.
▶ 3:53:49We've been trying to negotiate this entire Congress on this. In fact, I think this is a huge compromise being at $30,000. If it was index to inflation, it would be over $80,000 today. But even if it was $80,000, it would not eliminate banks who know their customers better than anyone else of filing suspicious activity reports.
▶ 3:54:15they still can they still can and will introduce or or file suspicious activity reports. So I believe after spending 30 years in the IT and data security business that this actually strengthens our law enforcement community. And uh with that uh I yield back to my my friend from Oklahoma.
▶ 3:54:38Mr. Chairman, I yield back the balance of my time.
▶ 3:54:41Gentlemen yields back. The chair seeks Uh, let me seeing nobody else speaking on the underlying ANS, let me recognize myself and then we'll turn to I want to thank the gentleman from Georgia for his decade of persistence in bringing up this issue before your efforts when you and I were both freshman uh in Congress.
▶ 3:55:05Steve Pierce of New Mexico worked on this issue trying to find consensus on both sides of the aisle about how to move the thresholds. I want to emphasize a couple of key points. First on uh the responsibility of a bank uh before and after this bill uh the responsibility they have is when they see something suspicious, they are to report it. That's not being changed in this bill.
▶ 3:55:32uh if they have a reason to suspect illegal activity involving $5,000 or more when a suspect can be identified. In other words, a person with a pattern of coming in and out of the bank or $25,000 when there's no suspect, but it's just they're looking at transactions in the computer. They're still required to to file a suspicious activity report. I know that's confusing because we have these this this cash transaction threshold of $10,000 moving to 30.
▶ 3:56:02But bad actors try to structure uh moneyaundering transactions, you know, to avoid any number that's picked uh by this Congress. And I say as a former banker of three decades, the suspicious activity rule is preemptive to the currency transaction reporting limit. Meaning if you see something that looks suspicious, as I just indicated, you have to file.
▶ 3:56:26But one other feature that we haven't talked about today is the what banks do for our small businesses that are take cash in payment or use cash and receive cash from customers. And that's the exemption list that banks have to administer to that $10,000 currency transaction reporting. So moving that to $30,000 is beneficial to that retailer, beneficial to that equipment dealer and to the bank.
▶ 3:56:56Uh and that's something that hasn't been mentioned. So I'm convinced that I hear what law enforcement says because we've taken testimony for years about various law enforcement issues and there's never enough data if you're an investigator. I mean or or even a federal regulatory agency. We want infinite data from every citizen. will promise we'll keep the PII secure whether we will or not. Uh so it it it's not surprising that somebody won't testify on that.
▶ 3:57:25But I just want to encourage members to if they're recognition as Mr. Lynch has said that yeah that was 50 years ago we set the limit uh and you recognize that that's a legitimate comment that Mr. Louderdermilk has made. I just would argue people are not abdicating their law enforcement investigative responsibility or their bank monitoring of suspicious activity.
▶ 3:57:52And I'm hopeful that one of the of the roles that artificial intelligence can play in compliance in transaction monitoring at commercial banks and credit unions and broker dealers is uh even being more accurate in looking for clearly structured suspicious transactions. whether they're $1 or $29,200. So, I I thank the gentleman from Georgia for the work and the constructive comments from members on both sides.
▶ 3:58:20And I urge a yes vote on Mr. Loudermilk's bill. I yield back. Balance of my time. Anyone else seek recognition on the ANS. Uh then we'll turn to
▶ 3:58:33Yeah. So, we're ready to turn to amendments on Mr. Louderdermilk's ANS. Who has an amendment?
▶ 3:58:39Mr. Lynch. Uh you Mr. Lynch has an amendment at the desk. We'll pause for it to be uh passed out, distributed.
▶ 3:58:53Mr. Chairman, could I reserve a point of order on this amendment?
▶ 3:58:56Gentleman from Oklahoma reserves a point of order on the Lynch amendment.
▶ 3:59:03Thank you.
▶ 3:59:28Clerk will report the amendment.
▶ 3:59:30An amendment to the amendment in the nature of a substitute to HR 1799 offered by Mr. Lynch of Massachusetts designated as amend HR1 1799.
▶ 3:59:42Without objection, the amendments considered read. The gentleman from Massachusetts, Mr. Lynch, you're recognized for five minutes.
▶ 3:59:47Thank you, Mr. Chairman. Mr. Chairman, in support of federal law enforcement efforts to combat financial fraud and cyber crime. This amendment would preserve the ability of financial institutions to generate suspicious activity reports and currency transaction reports under the bank secrecy act when sus suspicious activity involves the use of deep fakes and other artificial intelligence technology.
▶ 4:00:14If adopted, the increased reporting thresholds required by the underlying bill would therefore not apply in these AI related cases. The Financial Crimes Enforcement Network or Fininsen has already issued multiple alerts on fraud schemes involving deep fakes that have been created with generative artificial intelligence tools to target and exploit financial institutions and American consumers.
▶ 4:00:39According to Fininsson, the agency continues to observe a marked increase in suspicious activity reporting by depository institutions, mortgage companies, and other financial institutions describing the use of fraudulent identity documents, photos, and other deep fake media to circumvent verification and authentication methods.
▶ 4:01:00The FBI has issued similar warnings regarding the growing threat stemming from the proliferation of AI generated manipulated data, including images, video, and audio that is used to impersonate government officials, law enforcement personnel, and other trusted individuals.
▶ 4:01:18According to the FBI, more than 4.2 2 million related fraud reports have been filed since 2020, mostly involving deep fake scams and resulting in over 50 billion in losses. Our ongoing oversight work on this committee in the area of anti-moneyaundering and anti-terrorist financing has also revealed an explosion in AIdriven fraudulent activity.
▶ 4:01:42We have received multiple reports about malicious actors that are leveraging AI to gain access to personal financial information to perpetrate extortion schemes and even impersonate corporate chief financial officers to trick employees into completing fraudulent wire transfers or disclosing sensitive data.
▶ 4:02:03Given the surge in AI related financial fraud, the FBI and other law enforcement agencies have underscored to our committee that now is not the time. This is including President Trump's IRS criminal investigation team. This is not the time to severely limit their visibility into illicit financial activity.
▶ 4:02:26Regrettably, the underlying bill does just that by significantly increasing the reporting thresholds for currency transaction reports from 10,000 to 30,000 and for suspicious activity reports from 5,000 to 10,000. My amendment would ensure that in the case of deep fake and other AI related fraud, a financial institution will still report suspicious activities even where the transaction amount does not meet these new higher thresholds.
▶ 4:02:55These reports are critical to the ability of law enforcement to identify criminal networks, connect related cases, build prosecutions, and recover stolen funds. We should not be raising the floor for reporting these dangerous and increasingly frequent sophisticated crimes, and compromising law enforcement's ability to pursue justice for victims of AI related crime.
▶ 4:03:20As ranking member for the subcommittee on digital assets, fintech and artificial intelligence, I urge my colleagues to support this common sense amendment and I yield back the balance of my time.
▶ 4:03:31Gentleman from Massachusetts yields back. Does the gentleman insist on his point of order?
▶ 4:03:36Mr. Chairman, I wish to withdraw my point of order.
▶ 4:03:38Is there any further debate on this amendment? Mr. Laddermouth
▶ 4:03:41move strike last word.
▶ 4:03:43Gentle gentle from Georgia is recognized to strike the last word.
▶ 4:03:46Thank you, Mr. Chairman. Um, I I appreciate what the gentleman from uh Massachusetts is is trying to do here, but I do oppose the amendment because it is actually unnecessary. See, the underlying bill squarely addresses this issue and adding redundant language does not strengthen the policy.
▶ 4:04:03It actually mudd muddies it, which is what this bill is trying to do is clear the water to allow law enforcement to more clearly identify bad Nothing in this bill does anything to change current law requirements to file a suspicious activity report when a financial institution believes it's being used to facilitate a scam regardless of the transaction amount.
▶ 4:04:26In addition, nothing in this bill does anything to change the current law or the authorities allowing Finen to require currency transaction reports below a transaction threshold. How do we know this bill doesn't undermine our ability to fight scams? It's simple. Ask the institutions that have skin in the game. Every member on this committee knows that America's banks face enormous costs from scams.
▶ 4:04:50From customer reimbursements to investigative cost, from litigation to reputational risks, from regulatory penalties to higher insurance premiums. These institutions, they want to stamp out fraud because it's devastating to their operations. Well, guess who actually does support this bill? And uh Mr. Chairman, I'd like to submit several um letters of support for this bill into the record.
▶ 4:05:16First of all is a letter from the American Bankers Association that includes all 50 state bank associations. All 50 state bank associations support this bill, in and in addition to the bankers association of the District of Columbia and Puerto Rico.
▶ 4:05:37I have a letter from the Bank Policy Institute, a letter from the American Gaming Association, as well as America's credit unions, the Institute of International Bankers, International Community Bankers, Defense Credit, Union Council, National Taxpayers Union, the US Chamber of Commerce, and a statement of support from Nicholas Anthony at the Ko Institute, as well as a letter to Secretary Benson from 164 individual banks requesting an update to the BSA
▶ 4:06:07Without objection, they'll be added to the record.
▶ 4:06:11Thank you, Mr. Chairman. These organizations have a vested stake in making sure that our anti-fraud policies work. They support reporting, but they don't support irrelevant reporting that squanders resources while doing nothing to protect their customers. That's why they are vocally supporting HR 1799 and so should all members of this committee. I yield back.
▶ 4:06:31Gentleman yields back who seeks recognition. The ranking member of the full committee, Miss Waters. I move to strike the last word.
▶ 4:06:36You're recognized for five minutes.
▶ 4:06:38I want to thank Mr. Lynch for his work on this amendment. This amendment would ensure uh that threshold increases do not apply uh to uh AI related scams including deep fakes. AI has a lot of potential as an emerging technology and could even be used to mitigate some of the burdens that banks site or to when it comes to these SAR and CTR reports.
▶ 4:07:07However, bad actors are seeking to exploit AI to defraud American businesses and consumers. As director Aaki pointed out on November 13, 2024 is quote, "Diligence by financial institutions to the use of deep fakes and reporting of related suspicious activity will help safeguard the United States financial system and protect innocent Americans from the
▶ 4:07:37abuse of these tools." End AI scams are on the rise and they're becoming more believable as technology develops further. As I mentioned during debate on this bill, Americans cannot afford to lose $5,000, let alone 10,000 in this economy. We need to protect our American consumers and financial institutions from these bad actors. So, I urge members to support this amendment.
▶ 4:08:06I yield back the balance of my time. Gentlewoman yields back. Who seeks recognition? Mr. Rose of Tennessee.
▶ 4:08:13I move to strike the last word.
▶ 4:08:14Gentleman's recognized for five minutes.
▶ 4:08:16Mr. Chairman, I'd like to respond to Mr. Lynch's earlier statement which referenced several IRSCI Bank Secrecy Act related statistics uh describing how that data is used to support criminal investigations, prosecutions, adjudications, and convictions.
▶ 4:08:32In March of 2025, IRSCI disclosed that uh during fiscal years 2022 through 2024, its special agents conducted on average or an average of approximately 966,900 searches per year of currency transaction reports. Over that same period, 2022 to 2024, Fininsen data showed that a total of 61.9 million CTRs were filed.
▶ 4:09:02This means that the IRSCI or criminal investigation unit accessed roughly 0.05% of all CTRs filed during that time frame. I just point out that again, as uh my friend Mr. Milk has made clear we are talking about reducing the size of the hay stack so that we can uh and law enforcement is not sifting through countless normal everyday transactions.
▶ 4:09:30And we again have to put this in the context of when this $10,000 limit was set uh in my childhood and and how much um you know the transaction values have changed in relative importance over that period of time. So I think as Mr. Laddermuk has said this is a modest his bill is a modest move in the right direction.
▶ 4:09:52I'd like to see us go much further and I think it would make good sense in terms of the allocation of our scarce resources and so again uh you know I I certainly opposed to this amendment uh and favor uh the the bill as it's been presented by Mr. Ladderman. Thank you. Mr. Chairman, would you like some time? I yield back.
▶ 4:10:12Gentleman from Tennessee yields back. Who seeks recognition on uh the Lynch Uh if we don't have any other speakers, uh all those in favor of the lynch amendment, please say I.
▶ 4:10:29All those opposed, please say nay. Nay. Share the nays have it. Nays have it. Amendment is not adopted. We'll now move to the next amendment. and a
▶ 4:10:41gentleman has requested the yays and nays. A record vote is requested. All those in favor of the record vote raise your hand of sufficient number having raised their hand and record vote is ordered. Pursuant to subsection C5 of rule three, the committee rules further proceeding on the amendment are postponed. We'll now consider additional amendments to the latter milk bill. Mr.
▶ 4:11:02Thank you so much. Uh Mr. Chair, I have an amendment at the desk.
▶ 4:11:05Mr. Lee has an amendment at the desk. We'll pause while that's distributed. Mr. Chairman,
▶ 4:11:11gentleman from Oklahoma,
▶ 4:11:12I'd like to uh raise a point of order on this amendment.
▶ 4:11:15Gentleman reserves a point of order on the Talib amendment.
▶ 4:13:00Clerk will report the amendment.
▶ 4:13:02An amendment to the amendment in the nature of a substitute to HR 1799 offered by Miss Tibbe of Michigan designated as amend HR1 179915.
▶ 4:13:14Amendment will be considered as read. and the gentleoman from Michigan, you're recognized for 5 minutes to discuss your
▶ 4:13:22Uh thank you, Mr. Chair. Uh as we understand in this bill, um it would increase the threshold for suspicious activity reports from $5,000 to $10,000. In general, I think we should make it even harder uh not easier for criminals to mask their activities, illegal activities. I'm also incredibly concerned uh of the timing uh especially because this bill may limit future efforts to investigate the financial activities of Jeffrey Epstein.
▶ 4:13:51As you know, many banks failed to file the reports and some are still filing the reports years later after his death. Uh we are still waiting for the administration to release all of the Epstein files and there may still be information. And again, the banks have not provided or reported and they have a reputation uh to that and and some, you know, uh I don't know, a culture from within to not report it until they're forced to. Uh but when I met with survivors, Mr. Chair, you heard me say this, uh and they were so clear.
▶ 4:14:20Number of them said follow the money. Um and so we shouldn't take any action that could hinder ongoing and future investigations. That's why I'm offering this amendment. It would ensure that none of the changes proposed in this bill would go into effect for financial activities of Jeffrey Epstein, his businesses, or his extended network. We know the Treasury Department has suspicious activity reports now, not in the millions, but the billions. It's thousands of transactions totaling $1.5 billion in total.
▶ 4:14:50These transactions represent one of the key ways that Jeffrey A. Epstein was able to build his sexual abuse and trafficking empire. Uh it is disgusting and so horrific to have Americans, women come to us begging us to do more to make sure this never happens again. We know Jeffrey Epstein had many enablers when JP Morgan Chase, Bank of America, and others decided to look the other way.
▶ 4:15:14And that's exactly what they did when they failed to adhere to the Bank Secrecy Act and file timely suspicious activity reports. They enabled Epstein's horrific crimes. But it is obviously just not just the banks. Many of Epstein's enablers are still hiding in plain sight. Mr. Chair, uh who fueled the planes, who moved the money? We deserve to know and they deserve to be uh brought to justice. Um and uh you know, justice for the survivors.
▶ 4:15:42If and when future uh evidence comes to light, this bill would change what banks are required to report. The banks have already shown the lack of urgency. As you know, they have a reputation when it comes to the interest of Epstein's crimes. I don't want to make it easier for them to let those who enabled the horrific abuse off the hook. We must not allow Mr. Chair Epstein's enablers to evade justice. They must fa face the full consequences of their actions. Jeffrey Epstein's countless victims deserve a complete and thorough investigation. They deserve justice.
▶ 4:16:12The public deserves the full story. And my amendment will help ensure we don't prevent it from all coming out. And again, I urge my colleagues to please again support this amendment to ensure that anything related to Epstein uh is not um that the the threshold increase does not impact um again uh being able to have discovery in those in those documents. With that, Mr. Chair, I yield the balance of my time to the ranking
▶ 4:16:42She's yielded to you, Miss Waters. She's yielded to you. I move to strike the last word.
▶ 4:16:49No, it's her time. She's yielded 1 minute 33 seconds.
▶ 4:16:52Oh, thank you very much. Thank you very much. Um, let me just say that um, you know, in this discussion that we have been involved in. I started out uh by saying that um you know the reefs for the most part um are known as the law and order um Republican party and uh to have uh any instances where they would be relaxing
▶ 4:17:22ways by which um the banks could you know u be in control of suspicious activity. um for as low as 5,000. Now, having to can ignore all of that and just go to looking at 10,000 and 30,000 and all of that is baffling to me. I don't understand. Uh the the FBI uh this is Trump's FBI uh that's involved in this issue.
▶ 4:17:50And I do believe uh that um the Republicans for the most part um know and and understand uh what is happening out there with fraud. You know I said earlier uh and I was you know being a little bit facitious about it that the president had been involved with uh 70 pardons. Ladies and gentlemen, it's more like thousands of pardons, not 70 pardons.
▶ 4:18:20And so here we are again faced with an issue where clearly
▶ 4:18:25gentleoman's time has expired.
▶ 4:18:27Thank you. I yield back.
▶ 4:18:28And the gentlewoman yields back.
▶ 4:18:30Does uh Mr. Lucas insist on his point of
▶ 4:18:33Mr. Chairman, I would withdraw my point of order, please.
▶ 4:18:36Point of order is withdrawn. Is there further debate on the to amendment? The gentleman from Georgia.
▶ 4:18:41That was her time. M last word.
▶ 4:18:45You're recognized for five minutes.
▶ 4:18:47Thank you, Mr. Chairman. Look, I I oppose this amendment. Um mainly because this is using an incredible atrocity as a stunt that should be rejected. As we already know, nothing in HR 1799 changes current law authorities regarding suspicious activity reports. Nothing. Moreover, there will be no SARS filed on Jeffrey Epstein because he's dead.
▶ 4:19:13Mr. Chair,
▶ 4:19:14Mr. Lee's amendment,
▶ 4:19:15Mr. Lou's time.
▶ 4:19:16I know
▶ 4:19:17Mr. Lee's amendment would also implicate any associate of Jeffrey Epstein. Perhaps she intends her amendment to include SARS filed on former President Bill Clinton or former Treasury Secretary Larry Summers. However, Miss Tibb has nothing to fear. Under HR 1799, financial institutions must still file SARS when a financial institution suspects it is being used to facilitate a crime.
▶ 4:19:42Former President Clinton can still be held accountable just as he was recently held accountable by the House Committee on Oversight and Government Reform when he held in contempt for refusing to appear for a deposition. Our colleagues here, Mr. Lynch, Miss Presley, and yes, Mr. De Lee, voted with Republicans on this resolution, and I appreciate that. Mr. Lee also voted to hold former Secretary of State Hillary Clinton in
▶ 4:20:07It's Mr. Louderdermilk's time. M
▶ 4:20:10Well, I apologize and I withdraw that comment. As we all know, the full house has also already voted for the full release of Epstein related documents. So again, this amendment is nothing but a and it would do nothing to change what is already in law. All of this can be done even under my my bill. I urge my colleagues to reject this amendment and I yield back the balance of my time.
▶ 4:20:35Mr. Ladder yields back.
▶ 4:20:39The ranking member.
▶ 4:20:40I move you recognize.
▶ 4:20:41You're recognized for five minutes.
▶ 4:20:44Yeah. And I think it's really important for the public to know Bank of America did not file any of their SARS the suspicious activity forms until 2020 170 million years after Epstein's death. This is important because Bank of New York Melon did not file any of their suspicious activity forms. By the way, it was $378 million worth of reports. Did not file it until 2019 after his death.
▶ 4:21:13You you see the pattern here. JP Morgan didn't even do it until what 2013 and then they they're still trying to submit more forms. Uh Deutsche Bank, same thing. I can go on and on. Uh D T T T T T T T T T T T T T T T T T T T T T D Bank didn't file until three months after Epstein's arrest. And then in 20 uh um 19, I think they even issued some more two two months after his death. I just think that there's a pattern here and it needs to be told in regards to the state suspicious activity reports. I just have a question for the chair through the chair.
▶ 4:21:44Does this bill increase the thresh threshold of suspicious activity reports from 5,000 to 10,000?
▶ 4:21:51it does not.
▶ 4:21:52It does not. This is a cash transaction report and goes from $10,000 to $30,000.
▶ 4:21:58Is that And if the gentleoman would would continue to yield, it's not it's prospective. If this
▶ 4:22:04gentle woman cannot yield to you, it's
▶ 4:22:08hold on my time. However, I yield to
▶ 4:22:10I can yield back to the ranking member, but I believe this increases the
▶ 4:22:17It increases the threshold.
▶ 4:22:20Yes or no? Because one, there's inaccuracy about how I voted because I don't care who it is, the Clintons or or uh uh Trump or anybody, I will hold somebody in contempt. These sexual abuse survivors deserve justice. Mr.
▶ 4:22:34Bank that sees something that's
▶ 4:22:37but does it increase the threshold? Mr.
▶ 4:22:39it it $5,000 if it's identified with a person has to be reported.
▶ 4:22:44Excuse me.
▶ 4:22:44But I think it's been mis it's m the the public is being misled here because I hear the comments that hasn't. Is it or not? If I'm mistaken, I apologize, but does it increase the threshold from 5,000 to 10,000? I'm asking that it doesn't get increased when it comes to Epstein. That's all I'm asking. But you guys are saying that doesn't change. What are you talking about? My amendment basically is trying to address the fact that you did increase the threshold and you're saying you're not.
▶ 4:23:09The gentle lady continues on my time.
▶ 4:23:13Yeah. And I I I just want folks to know it's very clear
▶ 4:23:17the suspicious activity report threshold increased from 5,000 to 10,000. And all I'm saying not even other transactions which all should never be in. I'm saying just for Epstein related files. And guess what? to my wonderful colleague on the other side. If there isn't any Epstein related files, uh, suspicious activity for reports that apply, then great, it won't apply to them.
▶ 4:23:39But I'm saying we need to exempt, especially now in this moment where we're expecting more documents from banks and other folks that we need to make sure that this increase of threshold for sus for to trigger suspicious activity reports is not applied to Epstein related network or his activities.
▶ 4:23:57Well, that's all I'm saying. Actually, I would. I see. I'm nice. I will leave.
▶ 4:24:01The gentle lady can The time belongs to me. Are you sure you're finished?
▶ 4:24:05I think so, but I just don't want people being be misled here about this bill.
▶ 4:24:10All right. Thank you.
▶ 4:24:11I'll yield back to
▶ 4:24:12Just want to make a point of
▶ 4:24:15It raises a threshold, but it is not applicable to any there. When it comes to suspicious activity, the thresholds don't matter.
▶ 4:24:23Banks can report any suspicious reclaim regardless of the amount. I yield back to the gentle lady.
▶ 4:24:31I think just to be clear, why can't we just say it does not do that? I I want to work with all of you because I'm really worried that we're getting another out for the banks that did not even report suspicious activity reports. It is it does increase the threshold. Then why you guys put it in there if it doesn't apply? No. No. You guys can smile and laugh all you want. Why put it in there? The banks the lawyer. If I'm a lawyer for a bank and I see that, you know what I'm going to say? I'm going to say I don't have to do it. It's not $10,000.
▶ 4:24:58I know it's criminal and it's suspicious, but I'm not going to report it because the law says$10,000. If I'm their lawyer, I would tell them you're not required by law because it's not 10,000. That's exactly you have a loophole here. All I'm saying just do it for Epstein. You're screw. I mean, the other parts of criminal activity that happens and you know, money is getting moved in very creative ways now and people are hurt by that. But I'm just saying you cannot mislead the public and say they have to report it. Guess what? They didn't report it for years.
▶ 4:25:28And I don't want them to have another out and say, "Well, that doesn't reach the 10,000 My amendment makes it very clear. If it's at five, it's at the current threshold of 5,000, you're reporting it.
▶ 4:25:40Reclaiming my time. I want to thank Miss Taliv for her work on this amendment.
▶ 4:25:45Woman's time has expired.
▶ 4:25:48Who seeks recognition? Seeing no other uh people seeking recognition, I'll recognize myself to strike the last word on this amendment. I'd like to make the point about uh first of all, any bank who is reviewing anything under any circumstance has an obligation to report a suspicious activity report at any level if it's criminal behavior, structuring, money laundering, undocumented reporting, period. And I think Mr.
▶ 4:26:16believe actually made the case when she said that some of these banks that she uh put into the record didn't follow it in a timely way. They went back and recreated uh the records and research the records to find out years after the fact because Epstein was deemed a very suspicious person uh obviously. So no one here condones any of that.
▶ 4:26:41But one point that has not been made in this debate is this is about amending a law to take place in the future if it were enacted into law. And everything that had to do with Epstein, Epstein's network, Epstein's friends, Epstein's banks, anything that had to do with Jeffrey Epste from the from day one until post death is governed by the existing law, not this law.
▶ 4:27:07So they're under the obligation if you take the argument, which you do, that it's you want it status quo. Well, it is status quo in my judgment, you know, visa v this. So I I I thank the woman for raising this. No one has any toleration for Epstein and all this.
▶ 4:27:23And we I want to compliment publicly on the record uh the oversight committee on which you serve and COMR's work to disclose material uh and bring to light uh the the crimes and syndicated crimes and network of Jeffrey Epstein. But I still urge a no vote on the TLE amendment. Is there and I yield back to my time. If there's no further debate, the question now occurs on the Talib amendment. All those in favor of the amendment shall signify by saying I. I
▶ 4:27:53all those post signify by saying nay. Penny of the chair pen chair the naysay have it nays have it amendment is not
▶ 4:27:59Mr. Chair can I request
▶ 4:28:00the gentleoman
▶ 4:28:02gentleoman has requested a recorded vote the record votes requested all those in favor vote raise your hand sufficient number raise your hand record vote is ordered pursuant to subsection C5 of rule three of the committee rules further proceedings on amendment are postponed we'll now move to the next amendment on Mr. Louder Milk's bill. The ranking member has a member to the desk.
▶ 4:28:21We'll pause while it's being clerk
▶ 4:28:58will report an amendment to the amendment in the nature of a substitute to HR 1799 offered by Miss Waters California designated as HR1 1799001.
▶ 4:29:14Gentleman from Oklahoma.
▶ 4:29:15Mr. Chairman, I raise point of order on
▶ 4:29:16Gentlemen, Oklahoma reserves a point of Without objection, uh, Miss Waters amendment will be considered read. And we recognize the ranking member to describe her amendment for five minutes.
▶ 4:29:30Thank you very much, Mr. Chair. In 2021, the Treasury Department issued its first set of anti-money laundering and countering the uh financial uh financing of terrorism AML Uh that was the national priorities directed at financial institutions with bank secrecy act that is BSA compliance responsibilities.
▶ 4:30:00The AML CFT priorities reflect long-standing and continuing financial crime concerns are intended to assist banks and other financial institutions with focusing resources and efforts on tackling the most urgent significant threats identified by Treasury and its local enforcement and national security partners.
▶ 4:30:27The priorities assert that transnational criminal organizations, that is TCOs operating in the United States, including drug trafficking organizations or priority threats due to the crime terror nexus and TCOs engagement in a wide range of illicit activities including cyber crime, drug trafficking, fraud, wildlife trafficking, human smuggling, human trafficking trafficking,
▶ 4:30:57intellectual property, theft, weapons, traffic trafficking, and corruption. These are crimes with notable financial components that affect our communities across the nation, regardless of whether it's a so-called red or blue state or district.
▶ 4:31:15from um drug dealers and opiads to modern slavery to escrow stealing, real estate scams, the list goes on and on and that includes fentinol. This bill, HR1 1799, would eliminate a significant number of the records that law enforcement uses to detect these crimes and to map out the illicit networks that support the criminals.
▶ 4:31:45It would eliminate the records used to trace the professional money launderers from China and elsewhere. and it would limit the information available to allow for potential victim restitution through asset forfeiture.
▶ 4:32:02So to be very clear, the proposed change to the currency transaction that is reporting that is a CTR's threshold from 10,000 to 30,000 would wipe out a projected 80% of all CTRs that are filed. It would also wipe out a significant number of the suspicious activity reports that is the SARS file by increasing the threshold from 5,000 to 10,000.
▶ 4:32:31This would eliminate not only all SARS in between, but also any SARS related to CTRs that would no longer exist. These are records used by law enforcement to pursue TCOs to ensure that our communities are protected.
▶ 4:32:51I urge my colleagues to join me in voting for this amendment that would ensure that the current thresholds continue to apply whenever the suspicious activity is detected by financial institutions involving transnational criminal organizations and their bad acts. stand up to transnational organized crime by continuing the access that law enforcement has to these important records.
▶ 4:33:19I urge members to support this amendment and I yield back.
▶ 4:33:23Gentlewoman yields back. Does the gentleman insist on his point of order?
▶ 4:33:27I withdraw my point of order.
▶ 4:33:28Is there further debate on this
▶ 4:33:32There's no further debate. The question now occurs on the amendment. All those in favor of the amendment shall signify by saying I.
▶ 4:33:38I. All those opposed signify by saying nay. Nay chair the nays have it. Nays have it. The amendment is not adopted.
▶ 4:33:47We'll now move to the next amendment.
▶ 4:33:55Seeing no further amendments without objection. The previous question the substitute is ordered and recorded votes on the pending amendments have been for a recorded vote.
▶ 4:34:03I'm sorry it's too late madam.
▶ 4:34:05No it's not. Once these are taken the committee is will immediately vote on adoption of the amendment the nature of a substitute and then we'll consider the question to report the measure. We'll now move to the next bill. Pursuant to notice I call up HR 6967 public company advisory committee act of which was introduced by representative Lucas. Committee will report the bill which was distributed in advance.
▶ 4:34:35HR 6967 to amend the Securities Exchange Act of 1934 to establish within the Securities and Exchange Commission, the Public Company Advisory Committee, and for other purposes.
▶ 4:34:46Representative Lucas has an amendment in the nature of a substitute, copies of which were distributed in advance. Clerk will report the amendment. An amendment in the nature of a substitute to HR6967 offered by Mr. Lucas of Oklahoma designated as Lucas 023.
▶ 4:35:04Without objection, this amendment will be considered a read and serve as base text for the purposes of amendment. The gentleman from Oklahoma, Mr. Lucas, is recognized for five minutes to describe your amendment.
▶ 4:35:13Thank you, Mr. Chairman. I want to speak today in support of my bill HR6967, the Public Company Advisory Committee Act. HR6967 would establish an advisory committee within the SEC to provide a formal communications channel for public companies to provide advice and commit recommend submit recommendations to the commission. My bill specifies the issues of the committee will focus on public reporting, market trading, corporate governance and capital formation.
▶ 4:35:42A public company advisory committee will help identify any technical or implementation issues with regulations before they happen and prevent unintended consequences that could result in years of administrative delay. An advisory committee will help make regulations durable by providing substantial and diverse industrial feedback and meaningful engagement between the commission and the companies it regulates.
▶ 4:36:06This type of formal mechanism for the SEC is to provide recommendations from specific stakeholders is not new. Two advisory committees are currently operational including the investor advisory committee and a small business capital formation advisory committee. Additionally, three other advisory committees on asset management, fixed income market structure, and emerging companies have operated in the past.
▶ 4:36:30My bill would simply add to this list an advisory committee focused on the unique regulatory issues faced by public companies. Some have said that HR6967 would affect investor protections and I respectfully but emphatically disagree. As I mentioned, the SEC has a standing investor advisory committee that will remain intact. Its purpose is to provide the SEC with advice and recommendations on protecting investor interest and promoting investor confidence.
▶ 4:37:00My bills does nothing to change that. HR6967 merely adds an advisory committee focused on issues related to public companies at no cost to investors. The committee would provide advice and recommendations. It wouldn't promagate rules or affect enforcement actions.
▶ 4:37:18I wouldn't think I wouldn't think this would be controversial, but I want to thank Miss Patterson for her partnership and I look forward to a strong bipartisan vote advancing our bill today. And I yield back.
▶ 4:37:32The gentleman yield.
▶ 4:37:33Uh the chair would uh re yield to the gentle lady from Missouri. Uh, I thank the gentleman from for yielding and I I um I want to thank Congressman Lucas and Congresswoman Patterson for their bipartisan leadership on this legislation as a chairman of um of the uh capital markets uh subcommittee that falls under this jurisdiction. The SEC currently operates advisory committees as a gentleman has said for investors and for small businesses.
▶ 4:38:02Yet public companies themselves have no comparable formal body to provide feedback to the commission on regulatory proposals that directly affect their operations. This gap uh matters because public companies are uniquely positioned to identify practical compliance challenges and operational impacts that may not be apparent during the rulemaking process.
▶ 4:38:27Their input can help the commission design more effective regulations from the very outset. As markets evolve rapidly with new technologies like artificial intelligence, complex proxy battles, and challenging shareholder dynamics, the SEC would benefit greatly from structured input from experienced corporate practitioners.
▶ 4:38:51The capital market subcommittee has consistently emphasized the value of informed input during the regulatory process. This legislation fills an institutional gap in a limited and very measured way. This legislation creates a balanced forum for that expertise without compromising the commission's independence or investor protection mandate.
▶ 4:39:17I too urge my colleagues to support this bipartisan piece of legislation and I yield back to the gentleman from Oklahoma.
▶ 4:39:24I want to thank the subcommittee chairwoman for her very thoughtful words. And with that, Mr. Chairman, I yield back.
▶ 4:39:29Gentleman from Oklahoma, author of the bill yields back. Who seeks recognition? The ranking member.
▶ 4:39:33I move to strike the last word.
▶ 4:39:35Gentleoman's recognized. This bill would establish a formal advisory committee comprised entirely of corporate directors, officers, trade association executives, and their professional service providers.
▶ 4:39:53By design, this committee excludes the very people the SEC is tasked with protecting the everyday investors, pensioners, and workers whose savings depend on fair and transparent markets. Now, let's be clear. Public companies are not struggling to have their voices heard at the SEC. These entities already employ armies of lawyers, bankers, and lobbyists.
▶ 4:40:22They already spend millions of dollars a year to petition this Congress and the SEC. There is absolutely no reason why the American taxpayers should subsidize, pay for, spend our money on a platform for these billiondoll entities to advocate for their own interest. This is ridiculous.
▶ 4:40:47Not to mention, according to SEC Chair Atkins public record, the chair has taken meetings with dozens of public companies and industry trade associations. But guess what? Not a single meeting with retail investors or small business. Not one. Not one.
▶ 4:41:08This bill simply enhances the existing front row seat corporate insiders have to influence the SEC's thinking on everything from proxy voting to disclosure requirements. It creates an inherent conflict of interest where the regulated parties are the primary advisers to their own regulator.
▶ 4:41:31If we're going to establish advisory committees that affect particular issues at the SEC, they should be balanced and represent the full spectrum of participants affected by those issues, including including retail investor advocates, consumer groups, and labor representatives.
▶ 4:41:50Instead, this bill creates an echo chamber for corporate executives and their advisers to complain about the very rules that are designed to hold them accountable.
▶ 4:42:05While it is true that small businesses and ordinary investors have their own advocates within the SEC, this is because writ large they are not in a position to afford the litany of advisors and advocates that the large public corporations can afford to push their mission in DC.
▶ 4:42:27At a time when Congress should be addressing the many Americans that are struggling to pay the bills, this bill provides a permanent government sanction megaphone for the richest folks on Wall Street and in the corporate world.
▶ 4:42:46My God, I urge my colleagues to stand up for the everyday American investor and don't sit here and give support to these billionaires and these big corporations and allow them to come in and basically decide what the SEC is going to do. Is it going to follow the law? Is going to give them advantages? Is going to ignore it? What is going on here? Please.
▶ 4:43:12Um, this is a necessary and a biased piece of legislation and there should be a no vote from everyone on this legislation. I yield back.
▶ 4:43:22Gentleoman yields back. Who seeks recognition? How the co-sponsor of this legislation, the gentleoman from Colorado, you're recognized.
▶ 4:43:31Thank you, Mr. Chairman. I move to strike the last word.
▶ 4:43:33You're recognized for five minutes. I want to thank my friend from Oklahoma for working with me on this bill and continuing to work with me to improve it even as late as last night with an updated amendment. As Mr. Lucas explained, this bill would create an advisory committee at the SEC to help the commission better understand and address the issues ranging from capital formation to shareholder voting to compliance with emerging securities laws.
▶ 4:43:58An important part of this bill is also transparency, accountability and an order in it will bring to the SEC on how it interacts with the public company This advisory committee like the other advisory committees that the SEC operates will have meeting records, agendas, and notes publicly available online for anyone to see.
▶ 4:44:22It is my hope that this committee will produce a more collaborative and thoughtful policy recommendations under the SEC's fully transparent advisory committee process. And I also want to mention a couple of changes that we made compared to last Congress. We consulted and received technical assistance from the Biden administration last Congress and their feedback made the bill more functional, especially in terms of the board rotation. These changes have been incorporated into the introduced version of the bill.
▶ 4:44:50And last, based on a recommendation from public citizen, the ANS for the bill removes subsection E, which would have allowed for travel expenses to be reimbursed to board members. While this is a privilege that other board members on advisory committees have, I agree with my friends at public citizen that taxpayers don't need to foot the bill. In conclusion, this bipartisan bill is about transparency and thoughtful governance of our capital markets, and I urge my colleagues to support it, and I yield back.
▶ 4:45:19Would my would the gentle lady yield to me for a moment before she yields back?
▶ 4:45:22Yes. I I yield my time to Mr. Lucas.
▶ 4:45:26Thank you very much. Number one, I want to express my appreciation for your cooperation. And you're exactly right. We've worked on this together right up until the last possible moment to try and refine and enhance and improve and several of the principles that we worked on together. making sure that those other two advisory committees uh remain operational. The investor advisory committee and the small business capital formation advisory committee. Two key elements that address a broad spectrum of things here.
▶ 4:45:53Bottom line is this is a necessary step in the right direction and a dramatic refinement as we've gone along. And I want to thank the gentle lady for her efforts. With that, I yield back to the gentle lady.
▶ 4:46:05Thank you. I yield my time.
▶ 4:46:07Gentleoman yields back. who seeks recognition on Mr. Lucas, Miss Peterson's bill. Seeing none, I'll recognize myself and strike the last word for five minutes. So this is a uh I think an important topic with all the issues that have confronted public companies over the past uh 25 years having a formal process where there's feedback to the corporate finance division the investment management division the SEC commissioners on public companies
▶ 4:46:38particularly as it relates to rulemakings that impact the corporate governance process. I think this is very constructive. I commend the gentleoman from Colorado working hand in hand with the gentleman from West Oklahoma on this bill and I do urge a yes vote and I yield back the balance of my time. Who seeks recognition? Uh hearing none, we'll move to amendments. Is there an amendment to the Lucas Peterson bill?
▶ 4:47:11There being no further discussion amendments, the question now occurs on adoption of the amendment and nature of a substitute. All those in favor signify by saying I. I. All those opposed signify by saying nay. In the pen, chair, the eyes have it. Amendment is
▶ 4:47:24Question now occurs on ordering the bill as amended reported to the house with a favorable recommendation. Those in favor signify by saying I. I. All those opposed signify by saying nay.
▶ 4:47:35In the opinion of the chair, the eyes have it. For what purposes the gentleman from Oklahoma seek recognition?
▶ 4:47:42Mr. Chairman, I request a recorded vote.
▶ 4:47:43Recorded vote is requested. All those in favor recorded vote raise your hand. Sufficient number having raised their hand and recorded vote is ordered. Pursuant to subsection C5 of rule three of the committee rules, a vote on this question is postponed. We'll now move to the next bill.
▶ 4:48:01Pursuant to notice, I call up HR785, a bill to amend the Securities and Exchange Act of 1934 to repeal certain disclosure requirements related to conflict minerals and for other purposes, which was introduced by the committee's vice chairman, Representative Bill Heisa. The clerk will report the bill, which was distributed in advance.
▶ 4:48:23HR 7085 to amend the the Securities Exchange Act of 1934 to repeal certain disclosure requirements related to conflict minerals and for other purposes.
▶ 4:48:33Without objection, the bill is considered read and open to amendment at any point. Representative Heisinga has an amendment in the nature of a substitute, copies of which were distributed in advance. The clerk will now report that amendment.
▶ 4:48:43An amendment in the nature of a substitute to HR785 offered by Mr. Heisinga of Michigan, designated as Heisen 077. Without objection, the amendment is considered. Red will serve as base text for the purposes of amendment. The gentleman from Michigan, Mr. Heisinger, our vice chairman of the full committee is recognized for five minutes to describe his amendment.
▶ 4:49:03Thank you, Mr. Chairman. Um, and you know what? What's old is new again. Uh, here we are. uh section 15002 of the DoddFrank Act, which requires public companies to scour their supply chain and disclose whether they source quote conflict minerals from the DRC, the Democratic Republic of Congo and its nine neighboring countries. They call that the Great Lakes region. Those of us from Michigan dispute that. Uh but we can have two Great Lakes regions.
▶ 4:49:34Uh but my colleagues might be wondering why now? Why after 15 years are we trying to repeal this provision? Well, let me explain. In 2015, the chairman of the sub as chairman of sub of of the subcommittee on monetary policy and trade, I held a hearing on this very topic. And let me highlight some key takeaways from 11 years ago.
▶ 4:49:58Uh the Securities and Exchange Commission spent 21,000 staff hours and $2.7 million on conflict minerals. a subject the agency uh admitted they had little to no experience with. While the eventual rule may have been well intended at the time, and I don't think anyone disputes many of those intentions, it resulted in fewer purchases of minerals from the region, sending thousands of artisan miners into poverty.
▶ 4:50:28in 2014. In fact, we we actually had uh ministers of mining and resources from countries in that area come and testify in front of that hearing. In 2014, a Washington Post article highlighted that the conflict minerals rule quote set off a chain of events that propelled millions of Congalles miners and their families deeper into poverty with many miners forced to find other ways to survive, including joining armed groups. Close quote.
▶ 4:50:57In 2015, a report from the GAO found that 67% of companies were unable to determine whether the minerals in their supply chain came from the DRC or the surrounding region. Furthermore, no company could determine no company could determine whether minerals financed or benefited armed groups in those countries. Mr. Mr. Chairman, as we saw with the SEC's climate rule during the last administration, the SEC was then and now unqualified to regulate conflict minerals.
▶ 4:51:28In 2013, so 12 years ago, 13 years ago, former SEC chair Mary Joe White noted, quote, "Seeking to improve safety and minds for workers or to end horrible human rights atrocities in the Democratic Republican of Congo, are compelling objectives which I, as a citizen, wholeheartedly share.
▶ 4:51:49But as chair of the SEC, I must question as a policy matter using federal securities laws and the SEC's powers of mandatory disclosures to accomplish these goals. Close quote from Mary Joe White. Uh this was during the B uh the Obama administration. When the agency exceeds to uh uh when sorry when an agency uh exceeds its mandate, the agency is no longer regulating. the agency is legislating.
▶ 4:52:19So that brings us to 2024 when yet again the GAO published a report titled peace and security in the Democratic Republic of Congo have not improved the SEC disclosure have improved with the SEC disclosure rule. Mr. Chairman like to submit this rather substantive report for the record
▶ 4:52:38without objection that'll be included in the record.
▶ 4:52:40Thank you. Uh the Biden era report Biden era report. So we had the SEC securities and exchange commission from uh Obama. The Biden era SEC's uh report found that the SEC's 2012 conflict minerals disclosure rule had not reduced violence in the DRC. Further, the GAO found that the number of violent events in the adjoining countries did not change in response to the SEC rule.
▶ 4:53:07The report went on to conclude that although conflict mineral disclosures in 2023 had in had increased for the first time since 2014, many companies 62% of them continue to report being unable to determine their minerals origins. So that begs the question, what is this rule trying to accomplish? And is it still necessary when it has been determined that it has not moved the needle at all? Section 1502 imposes staggering compliance costs that stifle innovation and growth.
▶ 4:53:37The SEC's own estimates placed initial compliance costs at $3 billion to $4 billion with ongoing annual costs reaching up to $600 million. These expenses directly reduce the returns public companies can offer their investors. I would like to note that these minerals are used in a variety of products like cell phones, cosmetics, footwear, apparel, even auto suppliers which many are located in my district in south southwest Michigan.
▶ 4:54:03Needless to say, every single one of us has someone impacted by this very provision in our congressional
▶ 4:54:10Gentleman's time is expired.
▶ 4:54:12Thank you, Mr. Chairman.
▶ 4:54:14The ranking member, you're recognized.
▶ 4:54:18Thank you very much. I move to strike the last word. Mr.
▶ 4:54:20Recognized for five minutes.
▶ 4:54:21Thank you, Mr. Chairman. For decades, the exploitation of conflict minerals by armed groups in the Democratic Republic of Congo have helped finance a conflict uh by extreme violence and mass killings.
▶ 4:54:37Section 1502 of DoddFrank was drafted to help disrupt this conflict by requiring transparency around companies that use conflict minerals in their supply chains. An article recently published by Public Citizen points a harrowing picture of what happens when we prioritize short-term profits over human life.
▶ 4:55:04The report highlights that the DRC holds 24 trillion in mineral wealth. Yet, it remains one of the poorest nations on Earth. This is primarily due to the militant groups that are violently displacing millions of people to control conflict minerals, a crisis that has left 25 million people in need of emergency aid.
▶ 4:55:30Section 1502 was designed to break that curse by forcing companies to pull back the curtain and it's working. According to the Public Citizen article, major and some of the largest tech giants have built entire compliance departments because they know their consumers and their shareholders do not want to be complicit in a humanitarian crisis.
▶ 4:55:57As another example, a regional mineral certification system confirmed that hundreds of mines in eastern Congo are now conflict-free as a result of section 1502 reform. Additionally, the North KU province reported record high conflict-free export numbers in the wake of section 1502's adoption.
▶ 4:56:24If we resend section 502, we aren't just cutting red tape. We're cutting the only form of accountability that prevents a uh in Silicon Valley from being built by a child laborer in Congo. My colleagues on the other side of the aisle called disclosures around conflict minerals immaterial.
▶ 4:56:50I asked them, "Since when is the funding of mass rape, child labor, and regional instability in the heart of Africa, immaterial to an American investor? This bill was a bad idea when it was first proposed, and it's still a bad idea now. Uh, of course, I'm absolutely opposed. Uh, and I don't know why uh anyone would take their time with something like uh opposing 1502.
▶ 4:57:21What What are you trying to do? Are you trying to get, you know, the exploiting companies uh from America and all over the world to have access to those minerals, working with the worst uh in the Democratic of of uh Congo, Democratic Republic of the Congo? Listen, I've been there and I know what it's like. As a matter of fact, I was part of a team where we went up and we rescued Arist from the Democratic Republic of Congo.
▶ 4:57:50And so, don't tell me that 1502 is no good. It doesn't work. It does work. And what if it's still trying harder to do even better? Why would you care about disrupting something that's trying to do something on behalf of uh people who are being exploited, who are being misused, all of the things that I've alluded to.
▶ 4:58:15Why Why take the time of the Congress of the United States to say we don't need a 1502? Why take the time to say get rid of it when we have evidence that it is helping out, it is doing good? Why would you be interested? You know, I'm worried about, you know, this imperialism that's going on now with Trump talking about taking the minerals from Greenland. Let's stop this stuff. This is terrible. This is bad.
▶ 4:58:45You know, we shouldn't be here doing the work of billionaires and exploiters and those who want minerals from all around the world to do whatever they're doing to get more money. And to me, we're billionaires. Let's stop it. This doesn't make good sense. Let 1502 alone. This should not be a primary interest of your Well, no, I can't say that. I don't know what your interests are, but I know you should.
▶ 4:59:10I'm happy to share if you want to yield.
▶ 4:59:12I I I b I reserve. I will.
▶ 4:59:14Gentleoman yields back. Uh the gentleoman from Missouri, the chair of the capital market subcommittee, Miss
▶ 4:59:23I I thank you, Mr. Chairman, and I move to strike the last word.
▶ 4:59:26You're recognized for five minutes. Uh, I want to thank Congressman Heisa for introducing this legislation. HR 7085 repeals section 1502 of the DoddFrank Act, which requires public companies to disclose whether they source certain minerals from the Democrat Republic of the Congo region. And I'm going to give him plenty of time to explain why it is that he is in fact interested in in doing so.
▶ 4:59:52But I I do want to point out something very clear here. The Government Accountability Office, the GAO, recently, just recently confirmed that this disclosure 1502, uh, this disclosure regime has not, I underscore, not reduced violence or improved security conditions in the region despite imposing substantial compliance costs on public companies.
▶ 5:00:23Securities disclosure is intended to inform investors and facilitate capital formation. When a mandate fails to achieve its stated objectives and does not provide material information to investors, Congress has a responsibility to reassess it. And by accounting for GAO's nonpartisan findings and reassessing this disclosure uh requirement, this bill returns securities laws to, I believe, its intended purposes.
▶ 5:00:52So, I urge support of this legislation and I will yield to the gentleman um from Michigan, my good friend uh Mr. Heisingga to further elaborate. Thank you.
▶ 5:01:03Thank you. I I appreciate uh Chair Wagner and her work and and the work that we had done when I had chaired the the capital market subcommittee and going back to my time, you know, Mr. Chairman, the ranking member asks what my motivation is. Uh and I'm happy to I'm happy to explain. I want to help people. I want to help people in the DRC and the Great Lakes region of Africa. And oh, you can roll your eyes, ma'am.
▶ 5:01:32But I will I will I will tell you I'll recount what happened when we had our hearing in in 2013. um uh sorry 2015 where we had we had government officials and people representing the miners from Rwanda and from the DRC who testified how this rule was hurting them and hurting their citizens.
▶ 5:01:58Now the only people on that panel that defended it were white foreigners who were the consultants making money off of rule And uh you you're asking whether it is effective. It's not effective. There is a Obama era report. There is a Biden era report.
▶ 5:02:19I would reference people to look at the map that the GAO in the Biden administration produced outlining where the conflict uh happened in 2010 versus 2022 and where those regions are, where those mines are. It has increased. It hasn't decreased. And I understand that that the the motivation for putting the rule in in the first place. It's a I don't question that and I don't question the motives.
▶ 5:02:46Unfortunately, my motive is being questioned, but I don't question the motive of the people trying to reduce the conflict. The problem is is we have to ask ourselves, has it been effective? And the simple answer is no. Is there transparency? No, there is not. Has this quote broken the curse? No, it has not. Uh, is it immaterial? No, it's not immaterial, but it's ineffective.
▶ 5:03:14And you have to question yourself when when when consultants consultants in the West are simply making money off of it and are the only ones begging for this rule. Why are we doing it when it is literally plunging these countries into more conflict? I'm missing a hearing right now. I'm also on the Africa Subcommittee of Foreign Affairs and I'm missing a hearing right now on the exact conflict that is happening in the DRC and with Rwanda.
▶ 5:03:42We had a we had a classified briefing on it yesterday with what is going on. The conflict has increased, not decreased. This rule has not helped. This rule has taken resources away not just from the companies but more importantly from the people that it was supposed to benefit. I will not yield. It's not my time to yield. So, lastly, the courts have uh repeatedly highlighted the rules procedural and constitutional flaws.
▶ 5:04:12And in 2014 and 2015, the DC District Court ruled that forcing companies to label products regarding their conflict status constituted compelled speech. Ultimately, the court concluded that the SEC failed to prove the rule that would alleviate the humanitarian crisis in the DRC, which still holds true today. My time is expired. The gentle lady said time is expired.
▶ 5:04:32Mr. Chairman, time back.
▶ 5:04:35Gentlewoman yields back. Anybody seek recognition on uh tries ANS? Seeing no new speakers, I'll recognize myself. Strike last word. I want to thank the gentleman for 15 years actually of or since he entered Congress being focused on this issue and as a former chairman of the capital market subcommittee. And you make a couple of key key points.
▶ 5:05:01Uh people with good faith and good intentions added this into DoddFrank with an eye that they could disrupt the corruption in the Democratic Republic of Congo on mining and the labor implications and uh the worst sorts of human depravity connected to it.
▶ 5:05:22But here we are 15 years later and this particular rule has not been an effective contributor to the demonation of that and I think that's a key point here like this is this is the thing so many people have debated here for the last decade using the SEC disclosure rules to try to do enforce a foreign policy type activity is this is demonstr ministration that that's
▶ 5:05:52not an effective use of the US code. One final point then I'll yield to my friend is the downstream effect of this of people who are far far away from the mining of that material that comes into the years ago there was a company in the upper Midwest uh that I I met. They're a distributor of parts to every conceivable industry.
▶ 5:06:17They have something like 2,500 SKUs, you know, units that they stock and inventory in the tool space. And their CFO has to attest to the financial statements under Sarbain Oxley that they're fully in compliance to the best of their knowledge with all the laws.
▶ 5:06:35And she told me specifically the CFO, "Every time I sign my name, I know I cannot possibly certify to the best of my knowledge that our company is in compliance with the conflict mineral laws because I don't know all the things we sell, what what it's made." So the food chain is is clogged up and and that's driving up costs for companies that are miles away from the concept of conflict minerals.
▶ 5:07:04So, uh, I I admire the the gentleman's persistence at trying to get this right, both on his role in the foreign affairs committee, like legitimately find the right foreign policy, and as a former capital markets chair here, let me yield to my friend,
▶ 5:07:19Mr. Chairman, I appreciate it. And we have to remember the history of this. And again, I am not questioning the the motivations of people, even though mine are being questioned. I'm not questioning their motivations as to why. Because I I agree that this is an important issue but the question is is it effective and you have to remember in DoddFrank act this this particular issue received no hearings.
▶ 5:07:46It was inserted during the conference process where members were unable to debate its usefulness its relevance and to explore whether it would work. And again, we've seen the DC courts rule in 2014 and 2015 under the under the Obama administration. We saw Mary Joe White, the head of the Obama Securities and Exchange Commission, question the uh the the the the ability of the SEC to do this both legally and practically.
▶ 5:08:12uh the the 2015 hearing that we had with Minister of Mines from Rwanda and from the DRC and surrounding Great Lakes regions that were saying this rule is hurting their citizens, those artisan miners, not children, not children. These are these are the these are those small miners that are now having to leave mining and go and become armed combatants in the area.
▶ 5:08:38And now we fast forward to GAO study after study that's showing the ineffectiveness of this and unfortunately we have seen conflict maintain and even grow in that Great Lakes region. Uh I want an end to that. Uh I'm looking for those policy ends. Mr. Chairman, um unfortunately this rule uh as well-intentioned as 1502 may be, it is not effective. It is not uh transparent.
▶ 5:09:09It is not actually workable as we are trying to tackle these very interesting or very very difficult things. And I find it interesting that we still have people trying to defend the rule but who can't admit after study after study that it hasn't been effective. Uh but uh with that, I know I'll re I'll return that time to you, but I appreciate this. Uh it's just seems to me that what we're dealing with today is more relevant today than it was even 15 years ago.
▶ 5:09:39And with that, I yield back.
▶ 5:09:40Thank the gentlemen. I thank for the spirited debate to yield back my time. Does anyone else seek recognition on ANS? Hearing none, we'll move to amendments. Does anyone wish to offer an amendment to the ANS? There being no further discussion or amendments to the bill, the question now occurs on the adoption of amendment nature of a substitute. All those in favor shall signify by saying I.
▶ 5:09:59I. Any opposed shall signify by saying nay. In the opinion of the chair, the eyes have it. The amendment is adopted. Question now occurs on ordering the bill as amended to be reported to the house with a favorable recommendation. Those in favor shall signify by saying I. I. All those opposed signify by saying nay. If any chair of the eyes have it. For what purpose? The gentleman seek
▶ 5:10:22I request a recorded vote.
▶ 5:10:23A recorded vote is requested. All those in favor vote raise your hand. A sufficient number having raised their hand. A recorded vote is so ordered. Pursuant to subsection C5 of rule three of the committee rules, a vote on this question are proposed postponed. We'll now move on to the next uh bill. It's uh pursuant to the previous order, the chair declares the committee in recess. Subject to the call of the chair, we will reconvene at 3:30 uh to vote on the postponed votes. The committee now stands in recess.
▶ 5:10:59So are we.
▶ 5:37:26Committee will reconvene
▶ 5:37:30pursuant to the chair's previous order. Pursuant to the chair's previous order, we will now take the postponed votes on the pending amendments to HR7128, the TRIA program. Question is on the amendment offered by Representative Rose. This is Rose 1045. Going to vote electronically and the clerk will open the vote.
▶ 5:38:02farm. But even still, it's going to be every morning I'm going to have to wake up and mess.
▶ 5:38:14Oh, why is this not going?
▶ 5:38:18Well, no. There we go. Is there any member who has not voted or would like to change their vote? The clerk will close the vote.
▶ 5:38:50There's your button. It's hard to vote from the CNN portal.
▶ 5:39:04I love it. Okay,
▶ 5:39:13The clerk will close the vote and Oh, hang on. Sorry.
▶ 5:39:17One more. One more. One more.
▶ 5:39:19Stand by, clerk.
▶ 5:39:36I'm going to say this very slowly. Is there any member who hasn't voted
▶ 5:39:45or would like to change their vote?
▶ 5:39:48Clerk will close the vote and report. Mr. Chairman, on this vote, the eyes are two and the nays are 49. You
▶ 5:39:56missed it.
▶ 5:39:57I'm sorry, Mr. Mix. You missed it.
▶ 5:40:01Majority having voted against amendment. The amendment is not agreed to. Question is now on the amendment offered by Representative Garcia. This is TRIA amendment one. Clerk will open the vote.
▶ 5:40:37Is there any member who hasn't voted or would like to change their vote?
▶ 5:40:42Clerk will close the vote and report. Mr. Chairman, on this vote the eyes are 18 and the nays are 34.
▶ 5:40:53A majority having vote against the amendment. The amendment is not agreed to. The question now is on the amendment offered by the ranking member, Mrs. Waters. This is TRIA amendment two. The clerk will open the vote. What's wrong with my thing?
▶ 5:41:17Come on thing. Let's do it.
▶ 5:41:26Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report.
▶ 5:41:35Mr. Chairman, on this vote, the eyes are 18 and the naysay are 34.
▶ 5:41:38A majority having vote against the amendment. The amendment is not agreed to. The question now occurs on adoption of the amendment in the nature of a substitute. All those in favor shall signify by saying I. I. All those opposed signify by saying nay.
▶ 5:41:52In the opinion chair the eyes have it. The eyes have it. And the amendment is in the nature of a substitute is adopted. Question now occurs on ordering the bill as amended reported to the house with a favorable recommendation. Those in favor signify by saying I.
▶ 5:42:06I. All those opposed signify by saying
▶ 5:42:08I have request a recorded vote.
▶ 5:42:10In the opinion chair, the eyes have it. For what purpose does representative flood seek recognition?
▶ 5:42:14I request a recorded vote.
▶ 5:42:16A recorded vote is requested. All those in favor recorded vote. Raise your hands. A sufficient number having raised their hand. A recorded vote is ordered. We'll now take that recorded vote on ordering the bill as amended. Favorably reported. The clerk will open the vote.
▶ 5:42:48Is there any member who has not voted or would like to change their vote? The clerk will close the vote and report.
▶ 5:42:57Mr. Chairman, on this vote, the eyes are 51 and the nays are two. A majority having voted in favor of HR 7128 as amended. The bill is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. We'll now take the vote pending on ordering HRES 107 as amended favorably reported. Members will vote electronically.
▶ 5:43:22The clerk will open the Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report.
▶ 5:43:51Mr. Chairman, on this vote, the eyes are 54 and the nays are zero. A majority having voted in favor of HRES 1007 as amended. The resolution is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. We'll now take the vote pending on ordering HR 7056 by Congressman Bar as amended. Favorably reported. Members will vote electronically.
▶ 5:44:15The clerk will open the Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report.
▶ 5:44:47Mr. Chairman, on this vote, the eyes are 33 and the NAS are 21.
▶ 5:44:50A majority having voted in favor of HR756. As amended, the bill is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. We'll now take the vote pending on ordering HR 5877 authored by Representative Fitzgerald as amended favorably reported. Members will vote electronically.
▶ 5:45:10The clerk will open the Is there any member who has not voted would like to change their vote? The clerk will close the vote and report.
▶ 5:45:35Mr. Chairman, on this vote, the eyes are 54 and the nazs are zero.
▶ 5:45:39A majority having voted in favor of HR 5877 as amended, the bill is ordered, favorably reported to the House. Without objection, a motion to reconsider is laid on the table. We'll now take the vote the postponeed votes on the pending amendments to HR1 bill authored by Mr. Louderdermilk. The question the first question is on the amendment offered by Representative Lynch. This is amendment amend HR 1799 and the clerk will open the vote.
▶ 5:46:22Is there any member who hasn't voted or would like to change their vote? Clerk will close the vote and report.
▶ 5:46:29Mr. Chairman, on this vote, the eyes are 24 and the NAS are 30.
▶ 5:46:32A majority having voted against the amendment, the amendment is not agreed to. The question now occurs on the amendment offered by Representative Tib. This is amendment HR 1799-15. The clerk will open the vote.
▶ 5:47:04Is there any member who hasn't voted or would like to change their vote? clerk will close the vote and report.
▶ 5:47:27Mr. Chairman, on this vote, the eyes are 25 and the nays are 29. The
▶ 5:47:31majority having voted against the amendment, the amendment is not agreed to. The question now occurs on adoption of the amendment in the nature of a substitute. All those in favor so signify by saying I. I. All those opposed signify by saying nay. In the opinion chair the eyes have it. The eyes have it. The amendment in the nature of a substitute is adopted. Question now occurs on ordering the bill as amended reported to the house with a favorable recommendation. Those in favor shall signify by saying I. All those opposed signify by saying nay. Any of the chair the eyes have it.
▶ 5:47:59Mr. Chairman.
▶ 5:48:00Recognizing the gentleman from Georgia.
▶ 5:48:02Recorded vote please.
▶ 5:48:04A recorded vote is requested. All those in favor of recorded vote, raise your hand. A sufficient number having raised their hand, a recorded vote is ordered. We will now take that recorded vote on ordering the bill as amended favorably reported. The clerk will open the vote.
▶ 5:48:32Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report.
▶ 5:48:40Mr. Chairman, on this vote, the eyes are 30 and the nays are 24.
▶ 5:48:44A majority having voted in favor of HR 1799 is amended. The bill is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. We'll now take the vote pending on ordering HR6967 by Representative Lucas as amended. Favorably reported. Members will vote electronically.
▶ 5:49:04The clerk will open the Is there any member who has not voted or would like to change their vote? Clerk will report.
▶ 5:49:32Mr. Chairman, on this vote, the eyes are 39 and the nays are 15.
▶ 5:49:37A majority having voted in favor of as amended, the bill is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. We will now take the vote pending on ordering HR 7085 by Representative Heisinga as amended. Favorably reported. Members will vote electronically.
▶ 5:49:58The clerk will open the Is there any member who has not voted or would like to change their vote? The clerk will close the vote and report.
▶ 5:50:26Mr. Chairman, on this vote, the eyes are 30 and the naysay are 24.
▶ 5:50:29A majority having vote in favor of HR 7085 as amended. The bill is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. Without objection, staff are authorized to make necessary and conforming changes to the bills considered today. And pursuant to House Rule 11, clause 2L, I give notice that all members will have the requisite number of days to file supplemental, minority, additional, or dissenting views. There be no further business pending. The committee stands adjourned. Thank you all.
▶ 5:50:57Thank you.