Various Measures
No chapters available yet
Legend
Transcript markers
- text Sentence being played
- text Search result
- text Intervention cited by the link you opened
Click a sentence to play the video from that moment. Select text to quote it with the speaker, timestamp and link.
More options
House Financial Services U.S. House of Representatives
Follow its sittingsSpeaker 2
Rather than fixing that, Republicans are weakening transparency and undermining support for community lenders like CDFIs, the very institutions that help get capital to underserved communities. That means fewer loans, fewer opportunities to grow, and more small businesses having to close their doors altogether. And it doesn't stop there. Republicans who wanna make it harder for investors, especially retail investors, to use their own money to buy independent analysis and make informed decisions when voting on proposals that affect the companies they own. Taking away this shareholder right is not efficient.
It's about silencing investors and protecting corporate executives from accountability, and it's anti-capitalist. No one would be surprised that by this anticapitalist trend, Republicans are doing nothing when Trump demanded gold, shares, and profits from private companies to do business. They said nothing as Trump demanded free legal services from private law firms, and Republicans did nothing as Trump undermined. Free trade with illegal tariffs. The result of this bill is clear.
Less transparency, weaker oversight, and power concentrated at the top, away from people who provide the capital and own these companies. Mister chairman, committee Democrats are focused on what actually matters, lowering costs, protecting consumers, strengthening our financial system, and making sure small businesses and working people have a fair shot. We should be cracking down on fraud, not making it easier. We should be expanding access to capital, not cutting it off, and we should be protecting investors, not silencing them. Families, workers, and entrepreneurs cannot afford any more of this presidency or these Republican proposals.
I yield back the balance of my talents.
Speaker 1
The gentleman yields back. Pursuant to notice, I'll start our markup by calling up H.R. 941, the Small Lender Act, which I introduced. The clerk will report the bill, which was distributed in advance.
Speaker 3
HR 941, to amend the Equal Credit Opportunity Act to provide for an effective date and a temporary safe harbor for compliance with certain small business lending data collects.
Speaker 1
Without objection, the first reading is dispensed with. Without objection, the bill is considered read and open to amendment at any time. I have an amendment in the nature of a substitute, the copies of which were also distributed in advance. The court will report that amendment. Amendment in the nature.
Speaker 3
of a substitute to HR 941 offered by mister Hill of Arkansas designated as Hill AR 076.
Speaker 1
Without objection, amendments considered read and will serve as base decks for purposes of the amendment. I'll recognize myself for five minutes to provide background on HR 941, the Small Lender Act. Since the 117th Congress, I've introduced legislation to tackle this vexing and misdirected challenge. The Small Lender Act would reform section 1071 of the Dodd Frank Act, which spells out the statutory requirements for the CFPB's small business lending rule. Section 1071 mandates the collection and reporting of demographic data on small businesses from loan applicants, placing unnecessary burdens on lenders and small businesses alike, and cutting off credit to the very small businesses that need it the most.
While the disastrous Biden era rule from 10/2023 went beyond the statutory requirements in section 1071 and continues to face legal challenges, the Trump administration is currently working on a new proposal that would streamline the regulation, reduce complexity for lenders, and improve data quality. And I think this is a key point that the Biden administration put out their rule in 2023, and yet this was part of Dodd Frank. And neither the Obama administration nor the first Trump administration could find a way or path forward for this rule. And that this was really the first effort we saw out of President Biden. The Republicans on this committee support the effort of the Trump administration to modify the rulemaking.
This bill would codify the kinds of changes that are being proposed by the CFPB and make additional reforms to section 1071 that are only possible through legislation, and that's why we're marking the bill up today. For example, HR 941 would exempt smaller institutions from the requirements of section 1071 and extend the compliance date to 2031, providing certainty to market participants on coordinating their IT systems and their collection of the data and reporting it. Critically, the bill enshrines small business loan applicants' right to refuse, as intended in Dodd Frank, by requiring lenders to inform applicants that they are not required to provide 1071 data and that in doing so will not affect the lender's credit decision. HR 941 would also ban lenders from using visual observation to collect data from their applicants such as race, sex, or ethnicity, which all members should support given serious privacy concerns. And finally, the bill builds on the previous severance championed by Small Business Committee chair Roger Williams.
The committee marked up legislation last April that would have repealed section 1071 altogether. Before we go into debate, I want to address one of the claims that we're going to hear, potentially from our friends on the other side of the aisle. Some may argue that HR 941 will weaken fair lending and harm small businesses by preventing regulators from identifying fair lending violations. But you cannot help small businesses if lenders stop making loans in the first place. Instead of weakening transparency, HR 90941 strengthens it by ensuring higher quality data and more consistent reporting standards are the standard.
I wanna thank senators Katie Brett and John Bozeman for introducing the senate companion legislation, S 2352, the Protected Act. And I'd like to insert in the record letters of support for the Small Lender Act from the American Bankers Association, the Independent Community Bankers of America, the Consumer Bankers Association, the Equipment Leasing and Finance Association, and the Electronic Transactions Association. Without objection, they will be included. I urge all members to support the Small Lender Act. Look forward to the debate, and I yield back the balance of my time.
Who seeks recognition on the amendment and the nature of a substitute?
Speaker 2
At a time when the Trump administration has shut down the Consumer Financial Protection Bureau, robbing American consumers of a federal watchdog that returned $21,000,000,000 to 200,000,000 harmed consumers. I'm disappointed. We're considering another bill to roll back consumer protections further. Chairman Hill's bill would sharply reduce transparency of the small business lending market by significantly narrowing the data collection requirements of Dodd-Frank's section 1071. I was proud to work with our small business committee, ranking member representative Velasquez, to advance and pass section 1071 into law.
We modeled that provision after the Home Mortgage Disclosure Act, or HMDA, which for decades has promoted transparency, competition, and fairness in the mortgage market. This has helped expand access to affordable mortgage credit. In recent years, HMDA data also revealed that modern-day redlining continues in more than 60 cities across the United States, which bolstered efforts in the Biden administration to strengthen the enforcement of our fair lending and community reinvestment laws. So section 1071 was designed to do the same thing for small business financing. Unfortunately, the bill exempts nearly all lenders from the section 1071 reporting requirements except the largest banks, and further narrows the scope of 1071 to only cover loans to small businesses with annual revenues of 1,000,000 or less instead of 5,000,000 in CFPB's rule.
Also troubling, the bill delays any compliance until June 2023, nearly a quarter of a century after Congress passed this section into law in 2010. And this is despite the fact that small business owners like Rishonda Young in Ohio who testified before this committee had to sue the CFPB and secured a court-supervised settlement requiring CFPB to finally implement this law during Trump's first term. Truly small and underserved businesses are tired of struggling to get access to affordable loans they deserve. According to weather during the first round of the paycheck protection program, when the big banks helped their concierge clients, representative Velasquez and I worked with treasury secretary Minutin to secure a 60,000,000,000 set aside for CDFIs and MDIs and other small lenders to better lend those PPP loans to small businesses who really needed it. While that was a successful bipartisan effort, then there's more we need to do to support small business owners.
Unfortunately, lenders too often get away with charging entrepreneurs higher rates and fees, if not denying them credit. That's because this market has been opaque for far too long. No wonder then that more than 200000000 businesses, civil rights, consumer, and other groups across the country oppose this harmful bill. We need this small business set up because you can't improve what you don't measure. If members support market transparency, you should vote no.
If you support fair competition, that will lower borrowing costs, you should vote no. And if members really want to support small businesses, you should vote no. Thank you, and I yield back the balance of my time.
Speaker 1
Gentleman yields back who seeks recognition. Chair recognizes the chair of the financial institution, Secretary Mister Barr of Kentucky.
Speaker 4
Thank you, chairman Hill, and appreciate your leadership on this issue and trying to reduce the burdens on our small community financial institutions, who are doing great work supporting small businesses on Main Street and entrepreneurs who are trying to access credit to build the American dream. This committee has been dedicated to reforming burdensome regulations for community banks, and that's exactly what Chairman Hill's legislation does. HR 941 supports community banks by exempting smaller financial institutions from the CFPB small business lending rule, extending the compliance date for the October regulation, and ensuring the regulation is voluntary as the original statute makes clear. And, by the way, as the ranking member conceded in an earlier debate, as I recall on the house floor, Section ten seventy one was intended to help identify the needs and opportunities of small businesses, but the Biden administration's proposed rulemaking went far beyond section ten seventy one's intended scope and created a compliance nightmare for small business lenders and forced financial institutions to overly standardize their loan making processes. The twenty twenty three, CHOPER rule sought to implement section ten seventy one by vastly expanding the data collection requirements for financial institutions in the small business lending market well beyond what was required by law.
In fact, under that rule, under the chopper rule, lenders were required to report 81 data points, including, listen to this, offensive questions like the applicant's minority-owned business status, women-owned business status, and LGBTQI plus-owned business status, as well as ethnicity, race, and sex of the applicant's principal owners. I thought that we were supposed to be moving to a color-blind society where the content of your character was what counted, as opposed to the color of your skin. But, apparently, under the Biden administration, the only thing that matters is these immutable characteristics as opposed to the content of character of the borrowers. In the 2023 rule, the CFPB itself admitted that it believed that the cost of compliance would be passed on to small businesses through higher interest rates or fees. So the 2023 rule not only discouraged small business lending, but it disincentivized small business owners from using small banks in favor of larger competitors that could spread the compliance costs more broadly.
And I, witnessed this, with my own constituents. The CEO of a small commercial bank in Lexington, Kentucky told me that the SHOPRA rulemaking would, if implemented, force his institution to completely exit small business lending, diminishing credit availability to Central Kentucky area businesses, including minority owned and women owned businesses. This was a community bank that prided itself on lending to minority-owned and women-owned businesses, and the result of the CHOPRA rule was that this bank was going to no longer be able to provide credit to those very small businesses. So this was a disastrous proposal. And, fortunately, chairman, Hill's legislation, H.R. 941, codifies the smart reforms proposed by the Trump administration, CFPB, and creates a workable implementation of 1071 by ensuring that it's supporting, not burdening small businesses, while also establishing the framework for 1071 implementation.
So this bill protects the data privacy of borrowers and ensures that smaller institutions like the community bank in my district are not burdened by excessive data collection requirements, and so that small businesses of all types have access to the credit that they need to build successful businesses. I urge members to support this bill and yield back my time.
Speaker 1
Gentleman yields back. Who seeks recognition? Mister chairman. New York? You're recognized as straight the last word.
Speaker 5
Thank you, Mr. Chairman. Here we are once again debating the merits of section 1071. We have discussed this provision so many times. I have literally lost count. Let me say one more time that I believe in section 1071's mission and believe it is a necessary tool to ensure all of America's small businesses have access to capital on fair and equal terms.
As both chair and ranking member of the House Small Business Committee and a senior member of this committee, I have seen for far too long women and minority-owned small businesses experience obstacles in accessing capital. During the COVID pandemic, ranking member Waters and I saw firsthand how our underserved small businesses were shut out of the first round of PPP funding by financial institutions. We told Secretary Minuchin and Speaker Pelosi that we will not support a second round of funding unless we were assured small businesses in our nation's underserved communities will be able to access these funds. I will argue that had section 10 71 been in place, we will have known where the funding gaps were, and the entire scenario could have been avoided. And I think our small businesses and our economy will have been better off for it.
Now there are a portion of this bill that I think are reasonable and deserve merit. I think it is a worthwhile idea for a financial institution to inform a credit borrower that the institution is required to ask, collect, and report demographic data under federal law. I think it's also a worthwhile idea to inform the borrower in writing that they are not required to respond, and the creation of a model form to ensure uniformity is also sound. Had these ideas been presented years ago and offered as a genuine compromise to support the rule, I probably would have supported them. Yet congressional Republicans and their industry allies took the opposite approach, instead doing everything possible to undermine this credit and destroy the rule.
They sued the CFPB. They tried to nullify the rulemaking through the Congressional Review Act. And last year, they passed legislation out of the House to strip section 1071 entirely from federal law. Thankfully, our colleagues in the Senate have not taken up this measure. Perhaps more egregious and incendiary.
Congressional Republicans and industry allies ignore repeated statements offered by me, ranking member Waters, ranking member Warren, former CFPB director Chopra, and other supporters about the rules details, its impact, and how it will be implemented. In fact, I heard former director Chopra make repeated statements in this very room about the rule having safe harbors, mother forms, and giving borrowers the right to decline. All details that Chairman Hill included in today's bill. Mister chairman, what was wrong in the view of Republicans 16 years ago is welcome today under your bill. This is why the American people don't trust us, and they're gonna show up in big numbers coming.
Speaker 5
No. I don't have time. I'm sorry. So while on the surface, these ideas seem reasonable, they must be viewed in a broader context. And after sixteen years of endless debate.
We should also not ignore that the bill once again extends the rules compliance date, a compliance date that was already repeatedly extended in good faith by director Chopra in order to accommodate Republican lawsuits against the CFPB, and dramatically increases the number of loan originations required for rules compliant, blowing a massive hole in the final rule. Finally, and perhaps more importantly, we also cannot ignore what Russell Vought and President Trump are doing right now at the CFPB. Since the start of the second Trump administration, director Vote and President Trump have undermined the CFPB at every time. They have tried to fire staff, starve the agency of resources, dismiss critical rules, enforcement action, settlements, and consent orders have been undone. Consumer complaints have been disregarded, and bad actors continue to profit off consumers.
Speaker 1
Gentleman yields back. Who seeks recognition? Gentleman from Oklahoma. Mister chairman, could I yield to you for a response? I thank the gentleman from Oklahoma.
Let me make some comments. I appreciate the gentlewoman from New York's outline of the history of this rule. And she's right. Sixteen years ago is when Dodd Frank passed the section 1071. And guess when we finally got a rule-making on it?
2023. 2023. The Biden administration, we're debating essentially Chopra's exercise in trying to implement 1071. And the gentleman is 100% right. We made comments to the director since 2023 about some of the things, the core principles that are in this bill.
She's correct. Expanding the safe harbor, lowering or increasing the number of compliant loans that would have to be there, streamlining the data points. These are all points that the industry has made, but in fact, that's not what the Biden administration did. And so we have the rule that is before us. I think it's overkill, in keeping with the statutory intent of the congress sixteen years ago.
And, while, yes, it's true that, small business chair, your colleague on the small business committee, Roger Williams, proposed eliminating it, ten seventy one. That is true, we debated it, and we have passed it. I've also, since the 117th congress, pro offered these concrete ways to find a middle ground to simply accept the statutory fact that 1071 exists, try to make it work both for small businesses and for community banks. And most of those ideas are contained in this bill that we're debating today. So I thank the general one for her advocacy for small business and for her advocacy for the topic.
But I don't think fair lending, you know, is enhanced by an overwhelming amount of data, compliance on the part of banks or trying to fill out more forms if you're a small business trying to get credit from a bank. And I just would remind members on both sides of the aisle, if you think we don't have any data on small business lending, let me remind everybody that in the call report, we collect detailed information on bank loans to small businesses and small farms. Small businesses and small farm lending data is also collected individually by the bank regulators under CRA requirements, community reinvestment. The FDIC also conducts small business lending surveys, a nationally representative sample of US banks, that offers important insights into all their small business lending practices. Next, all 12 Federal Reserve banks jointly conduct an annual small business credit survey that includes information on non-depository lenders.
And in my view, having been in the industry for a couple of decades before I was in Congress, October is duplicative of these data requirements and is an unnecessary burden on our community banks and will deter, in my view, small business lending. But we'll continue the debate, and I yield back to the gentleman from Oklahoma. Thank you, Mr. Chairman, and I yield back. Gentleman yields back. Who seeks recognition?
The gentleman from California, Mister Vargas, you're recognized.
Speaker 6
What 1071 does is collect data. That's the requirement. You know, I hear one of my colleagues said, well, there's these banks, and they lend to minority businesses. They lend to women, and that's their word. We don't know what the data is.
I recall back when in the early nineties, I've been in politics for a long time when I was on the San Diego City Council. We had these contractors who used to say the same thing. Of course, we hire lots of people of color, we hire lots of women. And the neighboring district to mine was one held by a gentleman named George Stevens, an African-American. And he noticed that in the construction of the school and in the construction of all the infrastructure that was being built in this area of his district, wherever over 50% of the people who lived there were black, there wasn't one black person working on any of those jobs.
And yet the contractors had said, oh yeah. Great diversity here. Not one person. He invited me to come and see, and I didn't find one black person working on these projects that together were over $50,000,000, back when $50,000,000 was a hell of a lot of money. And so we demanded data.
After that, we passed an ordinance saying no. We wanna see that the data to this. We don't wanna see your work. We don't wanna hear your word because often your words are not worth anything. You say, yeah, sure.
You hire people of color, and they did some, of course. But not one person from the community, not one African American in a community that was over 50% African American. That's why it's so important to get the actual facts, and not the words of people. So, yeah, I do it. Sure you do.
Let's see the facts. And with that, I yield back.
Speaker 1
Gentlemen from California yield back. Who seeks recognition? Chairman, Mister Mueller of Pennsylvania or the chair of our oversight committee, recognized.
Speaker 7
I do urge colleagues to support HR 941, the Small Lender Act introduced by chairman Hill. Through our work on financial services and small business committees, we've seen how critical it is to preserve access to capital for small businesses. The CFPB section 1071 small business data collection rule remains a very clear example of regulatory overreach that threatens that access. It is misguided, invasive, and imposes unnecessary burdens on the very institutions that serve our communities best. It went way beyond the scope of the CFPB.
As written, the rule requires financial institutions to collect and store highly sensitive personal information that has nothing to do with a borrower's ability to repay a loan. Ten seventy one was passed 16 years ago when Dodd Frank. The Biden administration, CFPB under CHOPRA, went well beyond its scope. It covered lenders, that required collection data points, applicant race, sex, ethnicity, revenue, income, and whether the business is minority, women owned, or LGBTQ and other sexual preference data points. Why that is necessary in determining a loan is, well, irrational government overreach that is somehow rationalized to sound as if it's necessary.
Anyone who's in the business world can appreciate that business is business, and you always want to have a diversified group, and you want to provide based upon merit because that's what a bank does, providing access to capital for those who need to grow their businesses and are creditworthy regardless of what any of these ridiculous data points are. So, again, the banks don't make lending decisions based on personal characteristics. They're focused and remain on the creditworthiness of the business. Community banks and small lenders already face significant compliance costs. Community banks are probably the most regulated and largest banks' entity in our economy, and this rule only adds to the burden.
The data collection mandates under section ten seventy one increase cost, discourage lending, and ultimately make it harder for small business to access the capital they need to grow and succeed. HR 941 takes a targeted approach to fix this by raising the threshold for those who are subject to the rule, ensuring that truly small lenders are not swept in. Under the CFPB's framework, lenders originating as few as 100 small business loans annually can be subject to these requirements. This bill increases that threshold, focusing compliance on larger institutions that have the scale and infrastructure to absorb these mandates. It's about rightsizing the rules so it does not unintentionally cut off access to credit in rural and underserved communities that rely on relationship banking.
I am encouraged to see the CFPB taking steps to revisit this rule and work toward improvement, ensure it does not impose unnecessary burdens, personal burdens on small and community banks that are essential to serving Main Street. We should be strengthening community banks, not overwhelming them with costly intrusive requirements, and we must protect the privacy of business owners, not inundate them with questions about their personal characteristics. Look, by the way, in the rule, if the bank does not receive, they are required to guess and report something on the documentation. So I thank chairman Hilton.
Speaker 1
I thank the gentleman. I wanna reiterate he's making some good points. We've raised the threshold of reporting to minimize the impact on the smallest companies in the country, with the number of loans that they make to qualify and also the bank size. But to my friend from California's point, Mister Vargas, and also the gentlewoman ranking member of the Small Business Committee, I'll remind you, the data under my bill still collects whether it's a minority-owned or women-owned business. They're not excluded.
And secondly, as I said, in my judgment, it was redundant. And, you know, in looking at the Federal Reserve Small Business Credit Survey, which I referenced a few minutes ago in response to the general woman from New York, the demographics I've been in that survey are collected by the federal government extensively: gender, race, minority ownership status. So I yield back to the gentleman from Pennsylvania.
Speaker 1
Gentleman yields back. Who seeks recognition? Seek recognition? The chair of our small business committee, Mister Williams.
Speaker 8
Thank you, chairman. Small businesses are the backbone of the American economy. And as chairman of the House Small Business Committee and small business owner myself, I understand one of the largest issues facing small business and entrepreneurs today is access to capital. One of the main drivers pushing necessary capital out of reach for small businesses is CFPB's section 1071, small business lending rule. This rule is a clear example of government overreach.
It hurts Main Street, America. Instead of helping small businesses, it creates new barriers for current business owners and entrepreneurs and aspiring entrepreneurs trying to secure the capital they need to start their business or expand their current operations. So I'm proud to be an original cosponsor of the Chairman Hill's HR 941, the Small Lender Act. This critical legislation would exempt smaller financial institutions from the requirements of the CFPB's disastrous rule. It also extends compliance dates, creates a two-year safe harbor, and ensures that 1071 regulatory compliance is voluntary for small business loan applicants.
This bill is about helping Main Street, Main Street America, making sure our financial policies actually support Main Street and give small businesses the chance to grow, hire, and succeed. Section 1071 is out of touch with reality and works against the very businesses it claims to support. So I wanna thank Chairman Hill for his leadership and for incorporating many of our shared priorities into this legislation. Urge all of my colleagues, I repeat all of my colleagues, who support HR 941, and I yield back the balance of my time. Joe, when yields back, chair recognizes the gentleman from Texas.
Speaker 9
Thank you, Mr. Chairman. Mister chairman, invidious discrimination still exists. And my fear is that we are allowing privacy, or the notion that somehow we are encroaching upon privacy, to prevent us from fighting invidious discrimination. I have some data that I'd like to share with you. CFPB pilot study found lenders expressed interest in applications from 40% of white participants, compared to 23% of black participants.
Research shows black-owned businesses are charged on average 3.09 percentage points more in interest, while white women-owned businesses pay roughly 2.38. And the empirical evidence continues to support the fact that invidious discrimination exists. The question becomes, how will we, if we accord the privacy that is being discussed today, prevent invidious discrimination from becoming even greater than it currently is? People of color in this country have suffered historically. It is very difficult to overlook the history of invidious discrimination in this country.
I just find it very difficult to understand how privacy trumps the notion that persons ought not be discriminated against. This is rolling back the clock. We're moving back. We're making it easier to discriminate and impossible for some small businesses to get loans. The chairwoman of the Small Business Committee, former chair, is eminently correct.
Mister Vargas gave an excellent example. Invidious discrimination exists. And to be more specific, racism still exists. Discrimination against women still exists. Sexism, discrimination against people who are of the LGBTQ plus community exists.
We are now going to limit the tools that we use to fight invidious discrimination because we conclude that there's some encroachment upon privacy. This is unacceptable. I would encourage my colleagues to vote against this, and let's continue to move forward, and not take a quantum leap into the past. I yield back.
Speaker 1
Gentleman yields back. Who seeks recognition? Hearing none, we'll move to the amendments. Does anyone wish to offer an amendment to the amendment of nature substitute?
Speaker 1
The ranking member has an amendment on the desk. We'll pause while that amendment is distributed. Mister chairman? The gentleman from Oklahoma. Can I reserve a point of order, Mr. Chairman?
A point of order has been reserved. Without objection, the amendment is considered read, and the gentlewoman from California is recognized to describe her amendment.
Speaker 2
Thank you very much, Mr. Chairman. My amendment would restore the Consumer Financial Protection Bureau's budget to the original.
Speaker 1
Excuse me, a second. I've skipped over reading the amendment. The clerk, if the clerk would read the amendment. I apologize.
Speaker 3
An amendment to the amendment in the nature of a substitute to HR 941 offered by Miss Waters of California designated as Waters.
Speaker 1
No objection, ma'am. Considered read, the gentleman is now recognized. Four or five minutes to describe her amendment.
Speaker 2
My amendment would restore the Consumer Financial Protection Bureau's budget to the original 12% cap of funding from the Fed that was ended. This would reserve the harmful budget cuts Republicans passed into law last year to slash the CFPB's budget nearly in effect. And so back when we had a fully funded and functioning CFPB, we had a very popular agency with support from 80% of Americans, Republicans. That's because Americans, both Democratic and Republican, didn't like to pay junk fees or get ripped off. The CFPB was popular because it returned $21,000,000,000 to 200,000,000 consumers harmed by financial institutions.
But the Trump administration brought the CFPB's work to a halt. Mister chairman, while we're talking about CFPB, I look forward to hearing about any progress you have made in scheduling a hearing with CFPB's acting director at a time when families are struggling through Trump's affordability crisis. It is past time for Congress to stop ignoring their cries for help and step up to support them. So let's get the CFPB's hundreds of hardworking public servants back to work. I urge members to support this amendment, and I yield back.
Speaker 1
The ranking member yields back. Who seeks recognition? Oh, does the gentleman from Oklahoma insist on his point of order? I do not, Mr. Chairman. I'd like to withdraw.
Thank you so much. The point of order is withdrawn, and now the chair recognizes the gentleman from Kentucky, the chair of our subcommittee on financial institutions, Mister Barr.
Speaker 4
Thank you. I rise in opposition to the amendment. You know, our efforts, Republican efforts in the working families tax cut bill, was aimed at reducing the unaccountable funding feature, the unaccountable funding stream at the CFPB to promote more accountability and save American taxpayers money. As we all know, Dodd Frank unwisely permitted the CFPB to simply request funds from the Federal Reserve, which is itself not subject to the normal preparations process. Reducing the funding cap from transfers from the Fed system from 12 to six and a half percent is helping to reduce this opaque funding stream and save over $2,000,000,000, according to the CBO.
As Republicans on this committee have advocated for over a decade, the bureau should be under the normal congressional appropriations process where we could openly debate in Congress the proper level of funding. And we could get engaged in normal oversight where the activities, the rulemaking activities such as implementation of 1071 could be examined, through the lens of real accountability where members of Congress on both sides of the aisle could actually exercise the power of the purse to achieve whatever goal it might be in terms of implementation of the Dodd Frank law. But we can't do that. Neither this side of the aisle nor that nor the other side of the aisle can do that because we've ceded our power of the purse to the Federal Reserve. We've just given away our meaningful oversight of this agency.
So we have disagreements about October. That's fair. But what we should, what should unite us all is defending the congress as an institution. And with Dodd Frank, we gave that away. We gave away our authority.
And this amendment would take the opposite approach. It would reverse these reforms that Congress passed in July to help try to reclaim some of our authority, reducing transparency and accountability in the CFPB's funding. I wanna make another point. That even if we were to adopt the amendment and restore 12% of funding, this would have absolutely no impact on the Trump administration's reforms here. None.
The vote, CFPB, would be able to move forward with reversing the CHOPRA rulemaking, and restoration of funding wouldn't make a bit of difference. So if the amendment is designed to push back against the vote CFPB, this kind of illustrates the point I'm making, is that we don't have meaningful oversight over the CFPB, whether it is the vote CFPB.
Speaker 4
You the vote CFPB or whether it's the chopper C B CFPB. If the general lady and my friends on the other side of the aisle are dissatisfied with the current administration's approach to ten seventy one, then I invite them to join me and my colleagues on this side of the aisle in a bipartisan effort to reclaim our oversight over this renegade unaccountable agency.
Speaker 4
Restore the power of the purse, where we could have more meaningful oversight and influence the policy direction of the agency regardless of who is in the White House. I will yield back.
Speaker 2
Thank you. Thank you very much. Now he talks about accountability to Congress. That's okay. Why has your side refused to have the current acting director testify before our committee, as required by law?
Speaker 1
As I've said before in this committee, we expect director Volt, acting director Volt, to testify before the committee. We've certainly made that invitation, and we know the strong feelings the ranking member has about it. And I expect that to happen in the coming days.
Speaker 1
Further debate on the amendment from the ranking member? Anybody seek to comment on the ranking member's amendment? If there's no further debate, the question now occurs on the amendment. All those in favor of the amendment shall signify by saying aye. Aye.
All those signify by saying no. No. In the opinion of the chair, the noes have it. The noes have it, and the amendment is not adopted. Are there any further requests?
The general lady requests a recorded vote. All those in favor of a recorded 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. Further proceedings on the amendment are postponed.
Are there any further amendments to the amendment in the nature of a substitute? Seeing no further amendments without objection, the previous question of the substitute is ordered, and recorded votes on the pending amendments have been postponed. Once those votes are taken, the committee will immediately vote on the amendment and the 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 8286, the Protecting Americans' Retirement Savings from Politics Act, which was introduced by Representative Style, the chair of our Financial Technology, Digital Assets,
Speaker 3
and artificial intelligence subcommittee. The clerk will report the bill, which was distributed in advance. HR 82 86. To amend the federal securities laws with respect to the materiality of disclosure requirements, to establish the public company advisory committee, and
Speaker 1
For other purposes. Without objection, the first reading of the bill is dispensed with, without objection, the bill is considered read and open to amendment at any point, and Representative Style has an amendment in the nature of a substitute, copies of which have been distributed in advance. The clerk will report that amendment.
Speaker 3
Amendment in the nature of a substitute to HR 8286 offered by Mister Style of Wisconsin designated as Style WI 047.
Speaker 1
Without objection, amendments considered read, and will serve as base text for purposes of amendment. The gentleman from Wisconsin, Mister Style, you're now recognized for five minutes on your amendment.
Speaker 10
Thank you very much, Mr. Chairman. Thanks for holding today's markup. This is an incredibly important topic. A powerful proxy adviser duopoly has been weaponizing retirement funds to drive an ideological agenda. The protecting Americans' retirement savings from political act will rein in foreign owned proxy, the will rein in the foreign owned proxy adviser duopoly and protect the returns on your retirement funds from political games.
Millions of American families save for their retirement from professionally managed investment funds. I think many would be surprised to learn that the companies that manage your investments typically vote your proposals posed to shareholders on your behalf. Over the last few years, many of these proposals have been focused on divisive social and political issues with little connection to the company's core business. Institutional investors have come to rely on two powerful proxy advisors, ISS and Glass Lewis. They're relying on them when deciding how to vote on these politically charged proposals.
But the proxy advisor industry is riddled with problems, including ideological bias. Proxy advisors have recommended voting for proposals that have clearly harmed shareholder value, and have even supported proposals that direct companies to do illegal things. I'm gonna repeat that. Proxy advisors have recommended in favor of proposals that would require companies to do illegal things. ISS, the largest proxy adviser, also offers consulting services to the same companies that are subject to its recommendations.
That is a clear conflict of interest. Some may say that the proxy advisor's advice is simply a recommendation, but it's more than that. Report after report has shown that these recommendations are followed closely by asset managers. For example, an ISS recommendation can swing 20 to 30% of the shareholder votes. Robovoting, the practice of automatically filling in and voting proxy adviser recommendations, intensifies this dynamic.
At the end of the day, proxy advisers have a big impact on how public companies are run, which affects jobs, the economy, and the returns on your retirement savings. Given their impact and their well-known flaws, you should expect that proxy advisors would be tightly regulated. Instead, the previous administration actually unwound rules that were supposed to address the problems I just discussed. That's where my bill comes in. This legislation creates a specific registration process to harness the proxy advisor duopoly, and it ends robo-voting.
Registered proxy advisors must address conflicts of interest in their consulting services and provide issuers with an opportunity to correct bad information. It also refocuses corporate governance and the proxy process, and core principles of materiality and economic best interests. This legislation supports the ongoing movement towards investor choice, giving voting power back to the ultimate owners of the shares, and, in particular, American retirement savers. Protecting Americans' retirement savings from politics act will provide accountability. It'll provide transparency.
It'll provide clarity for families saving for their retirement. I urge all of my colleagues to support this legislation. Mister chairman, I yield back.
Speaker 1
Gentleman yields back who seeks recognition on the ANS. The ranking member of the full committee, Miss Waters, you're recognized.
Speaker 2
I strongly oppose HR 8286, which is nothing less than a full scale attack on the rights of investors who wanna pay out of their own pockets for independent investment advice as they manage their own savings. This bill would silence anyone who dares to consider the long-term material risk associated with climate change, unfair harassment, salary practices, excessive executive compensation, and more. The bill is an anti-capitalist power grab designed to favor corporate executives over the bare people who own these companies. For example, the bill switches the materiality analysis from one focused on what investors consider material to what company management thinks is material. In doing so, company managers can self-determine what information they disclose, giving them a license to hide inconvenient truths like climate risk or outrageous pay practices from the public and their investors.
This is a direct attack on one of the investors' underlying principles of capital markets. Furthermore, HR 8286 would saddle those who manage retail investor savings with burdensome new requirements. These fiduciaries would no longer be able to rely on research provided by proxy advisers who today analyze and offer sound recommendations on how shareholders' votes should be cast. There's even a provision that requires asset managers to conduct full scale economic analysis and disclose that analysis, but only when they dare to vote against company management, including on lavish executive compensation or golden parachutes proposals. This is ridiculous and clearly an attempt to shield executives who make 290 times the average worker at their firm.
Make no mistake. The attacks on investor freedom presented in this bill are all part of the Trump administration's broader and more dangerous attack on American democratic values and the rule of law. My colleagues wanna replace the free flow of information with state-mandated silence. They wanna replace shareholder democracy with corporate autocracy. This bill is anti-capitalist.
It is a step backward for our markets and a step backward for our country. Various titles within the bill were opposed in the 118th and 119th Congress by some of the following groups: Americans for Financial Reform, Better Markets, USSIF, the Interfaith Center on Corporate Responsibility, Serious, the Shareholder Rights Group, the Union of Concerned Scientists, and many more. When these provisions were included in another bill last congress. Every democrat on this committee opposes. Once again, I'm asking my colleagues to oppose this harmful anti-investor and anticapitalist bill.
I yield the balance of my tax back.
Speaker 1
Frank, your member yields back. Chair, who seeks recognition, Frank, you let me recognize the chairwoman of the Capitol, Arkansas. Miss Wagner, you recognized the strike last word.
Speaker 11
I thank you, mister chairman. And I would like to thank and commend Chairman Stahl for introducing some very important piece of legislation protecting Americans' retirement savings. Objective and fair corporate governance is critical to not just our capital markets, but more importantly, the retirement savings of all our constituents. For too long, the proxy process has put short-term political goals over long-term investor value, failing our markets, and taking money away from moms and dads, just saving for a better future. Chairman Stile's bill puts transparency and accountability back at the forefront of a proxy advising process that is too often plagued by conflicts of interest.
By enacting proper oversight of the industry, we can ensure the proxy process works best for shareholders rather than consultants and social activists. I strongly support this package, and I urge my colleagues to do so as well. I'd now like to yield whatever time you may consume to my good friend, the author of the piece of legislation, Congressman Style.
Speaker 10
I thank the gentlewoman, and echo her comments. A lot was offered by the ranking member. I think it's worth noting two things. It puts materiality back to what is material. Rather than making political judgments as to what is or is not material, it puts it back to determine what is actually material to the operations of the company, which is the core concept in securities law.
It also really empowers shareholders. Instead of having the proxy adviser duopoly come in and push the scales towards a political agenda, it goes back to the core concept of making sure that investors, in particular those saving for their retirement, are protected and shielded from the political decision making at these two respective proxy advisers. And so a lot was offered there. I wanted to highlight those two issues, and I do believe the underlying bill dramatically moves us forward to depoliticize the shareholder voting process. I yield back.
Speaker 11
I thank the gentleman. Happy to share the time. And just to underscore what he said, truly, the proxy process is broken, completely broken, and has put short-term political goals over long-term investor value. It has failed our markets, and it's taking away any kind of savings opportunities and retirement opportunities for everyday Main Street investors. I, again, wanna commend the gentleman for his forward thinking, action on this area.
It's one that the Capital Markets subcommittee has been delving into for some time. And, mister chairman, it is time that we cross the finish line with a package such as this, and I urge my colleagues to do so, and support this piece of legislation, and I yield back my time.
Speaker 1
Who seeks recognition? The gentleman yields back. This is the chairman. From New York, the ranking member of our Foreign Affairs Committee. Mister Meats, you recognize?
Speaker 1
Oh, no. We're not ready to do an amendment yet. Not doing amendments yet. But thank you. We'll be back to you.
Who seeks recognition on the underlying amendment they substitute? Heisman?
Speaker 13
I appreciate that. And I wanna say thank you to my friend, mister Style, who I and miss Wagner who has worked on this for long and hard. I have as well as in my years here, and I support strongly this ANS to the Protecting Americans' Retirement Savings from Politics Act, and do urge its adoption. So I appreciate that this package also incorporates two of my bills, the mandatory materiality requirement act in title one, and the empowering shareholders act of 2026 in title nine. Last congress, chairman McHenry and Republicans formed an ESG working group that I was privileged to lead to examine the threat to our capital markets posed by those on the far left pushing purely an environmental, social, or governance proposal outside of materiality.
This congress, our committee held in-depth hearings examining the power of proxy advisory firms. Much of what you can see is in this package as the culmination of these efforts. First, the title one's mandatory materiality provision requires that any information that a publicly traded company is obliged to disclose to the SEC be now hold on. Hold your hats. Crazy concept here.
Material. This is a basic, fundamental understanding. Materiality needs to inform voting or investment decisions regarding the issuers. So for decades, materiality has served as the foundation of our public company disclosure regime, dating back to the Securities Act of 1933, the Securities Exchange Act of '34. The statute requires companies to disclose information that is material to investors, ensuring that they make informed and safe investment and proxy decisions.
Under the Biden administration, we saw the pursuit of a social and political agenda through the disclosure process that has fundamentally threatened the SEC and the court's long-standing materiality standard, namely through the SEC's costly, burdensome 500-page climate rule that was rightfully abandoned this past year. So investors will be glad that title one of this bill ensures that any future SEC rulemaking adheres to the long-held legal principles based on materiality standard. Now turning to the empowering shareholders provision in title nine of the package. It addresses concerns over passive investing by requiring managers of passive funds to vote proxies in a couple of the following manners. Namely, to vote in accordance with the specific instructions of individual investors, vote in a way that aligns with the company's board, mirror vote, or simply abstain.
Passive index funds are designed to be passive and not, as too often has been the case, be used for someone to put their thumb on the scale in favor of controversial, unprofitable ideologies like ESG or DEI. These passive funds need to remain passive. When passive capital is manipulated to advance objectives beyond financial performance, its risks undermine the core promise investors rely on. Low cost, diversified exposure, focused on returns. And, mister chairman, you know this.
This does nothing to prohibit an ESG fund or a DEI fund or any other kind of fund as long as there is disclosure of it and a passive fund isn't actively in there managing it. So retail investors' financial interests must come first. This committee has received testimony that passive index investors have recently scaled back their support for these harmful proposals to an extent, which I'm happy to hear. However, proxy adviser firms can swing shareholder proposals by as much as 30%. An issue and the issue of proxy voting and shareholder proposals has become somewhat of a political football, as shifts in policy have been flip-flopping back and forth.
So targeted guardrails are warranted. As a committee, we've long discussed solutions to lessen these passive in funds, not acting passive. And starting with proposals like the index act, the legislation has evolved to be both workable within the industry and to maximize investor choice. Choice means ESG type votes aren't outlawed either way. Rather, the result would be a liberal activist investors aren't turning the tide to any given vote using proxy power.
Our work on the ESG working group proved that given the chance, force feeding a liberal social agenda into a company harms investor returns. In short, the Empowering Shareholders Act preserves market discipline in the face of politicization. It safeguards that passive intention of passive capital, keeps the focus where it belongs on delivering long-term gains for American investors. With that, I yield back.
Speaker 1
Joe Biden yields back who seeks recognition. Mister Meeks, I don't know you had an amendment. Mister Castan?
Speaker 14
Thank you, Mr. Chair. I look. Here we go again. If you were to say over and over again for three, four, five years that two plus two equals five, you might convince some reporters to say, hey, Democrats. You know, are you willing to negotiate with the Republicans and at least agree that two plus two is four?
But you wouldn't change the fact that two plus two is still 4. And by the same token, if you were to say over and over again for 3, 4, or 5 years, Congress has the ability to determine what is material to investors. It would not change the fact that investors are the owners of companies, and owners of companies are the only people who have an opinion on what is material with their money. If an investor says this is material, that's their call. They get to say it.
You've all heard me say this before. I cannot imagine. Back in my days of running a private equity-backed company, what would have happened to, well, I can't imagine. I know exactly what would have happened if I said to my investors, you know that thing you wanted me to do? It was non-material.
Suck it.
Speaker 14
How politics works. And yet this legislation would rewrite the definition of materiality to allow companies, not company owners, to decide what information is material, what's worth disclosing to investors so that they can say to their shareholders who say, I'm more interested in long term risks. I'm more interested in some structural things that may be misaligned with your compensation structure, Mr. CEO. Now the CEO can say no. No.
No. That's not material. Suck it. That's what this bill does. Now, under current rules, the guiding principle of materiality is that if a reasonable investor considers the disclosure important when making an investment or voting decision, then it's material.
99% of investors that are owned or managed more than $50,000,000,000,000 in assets supported requiring scope one or scope two greenhouse gas emissions, according to an analysis of the SEC's comment letter on that. 99%. And this bill would say, suck it, 99%. You all just don't know as much as I do about what's paternalistically in your interest, not material. The overwhelming majority of investors have demanded interest on companies' exposure to climate-related risks.
They don't get to talk under this bill. Now for years, my colleagues have said that climate-related information is not material, to which I say that's fine. Don't invest in it. That's your choice. If you're putting your money into a company, that's your choice about how to spend it, because your interests are the ones that are material.
But who are you to tell other people how to invest? How did it become so partisan to say that investors own the companies? How did it become so partisan to say that Milton Friedman was right when he said the purpose of a company is to look out for the interests of its shareholders? Not their C-suite. Not who donates to politicians on Capitol Hill.
And moreover, the vast majority of these proposals are non-binding. What are we protecting ourselves against? So this bill is going to make it harder to submit nonbinding proposals that investors would like, because it's gonna tell those investors that their interests are nonmaterial. It's gonna make it harder for proxy advisors representing smaller investors who maybe don't have the ability, don't have enough votes to matter on their own side, to say, we've looked at this and we'd make recommendations that affect, you know, broad, larger institutional holders. I guess if you, like my former life, would like the ability to tell your investors to go pound sand and suck it, this is a good bill.
I guess that if you are part of that half of the population that by definition is below average, then you find meritocracy is very threatening. And you don't want to have to compete in the deep end of the pool. And the last thing is you want is free markets to competitively allocate capital. I mean, hell, it worked for Don and Eric Jr. Right?
Those guys certainly couldn't compete in a meritocratic environment, but it helps if daddy's looking out for you and telling other people that they can't get money your way. But that's not capitalism. It's not how free markets work. And yet we are actually going to debate on this floor again whether or not shareholders are the owners of companies, whether companies look out for the interests of shareholders. I don't know how long we gotta keep doing this.
Speaker 14
If you are saying that I have finally convinced you that this is insane and stupid, yes. If not, I'm out of time, and I yield back.
Speaker 1
I will use this as a result. That was such a missed opportunity. The chair now recognizes the gentleman from Georgia, Mister Laudermill. Four or five minutes.
Speaker 16
Thank you, Mr. Chairman. I do speak in support of HR 8286, the Protecting Americans' Retirement Savings from Politics Act sponsored by my friend and colleague, Style. HR 8286 includes my legislation in Title VII that will require institutional investment managers who utilize proxy advisory firms to file annual reports with the SEC, providing a detailed explanation of their voting record on every shareholder proposal, including whether the votes aligned with proxy advisory recommendations. Title seven, along with the other provisions of HR 8286, takes a critical step toward restoring transparency, accountability, and fiduciary responsibility to our capital markets. For far too long, the proxy advisory process has operated with insufficient scrutiny, despite enormous influence over Americans' retirement savings.
At its core, my legislation is about restoring trust and reinforcing a fundamental principle that the asset managers have a fiduciary duty to act in the best economic interest of their clients, the shareholders, not in pursuit of political agendas, not in respect to outside pressures, but in service of maximizing long-term value for the millions of Americans whose pensions, 401(k)s, and savings are on the line. When asset managers outsource critical voting decisions without sufficient oversight, they risk substituting their own judgment and their fiduciary responsibility with the recommendations of third parties that may not share the same priorities or obligations to the shareholders. Title seven addresses this directly. It requires greater disclosure around how proxy advisory firms formulate their recommendations, and how institutional investors use those recommendations in their voting decision. It ensures that asset managers remain accountable for the votes cast on behalf of clients, rather than simply rubber stamping external guidance.
The required annual reports to the SEC encompass essential information such as the percentage of votes cast in accordance with proxy advisory recommendations, the percentage of votes in favor of ESG related shareholder proposals, and their explanation of how firms reconcile their votes with their fiduciary duty to act in the best economic interest to their shareholders. This legislation strengthens the integrity of our capital markets by ensuring that decisions are made transparently, responsibly, and with a clear focus on economic returns. The American investor deserves to know who is making decisions with their money, why those decisions are being made, and whether those decisions are truly serving their financial interests or serving someone else's political agenda. By passing this legislation, we take an important step toward protecting investors, strengthening market confidence, and ensuring that those interested in managing the American people's hard earned savings remain focused on what truly matters. With that, mister chairman, I'd yield some time to chairman style if he would like to utilize that time.
Speaker 10
I thank the gentleman. I can be brief. Just a comment on our previous colleagues' comments. Materiality is determined by what is material. It shouldn't be determined by anyone in this room beyond here's a materiality threshold.
So it's a fact-based analysis. Is the question presented before the company material to that company or not? We've seen time and again, I know where some of our colleagues across the aisle want to predetermine what is and what is not material on a given company. We've had votes on that as it relates to Green New Deal ideas, HR policies. The focus is putting this back on the core, understanding the business, a lot of the business, in conjunction with shareholders to determine what's material.
It's also interesting that the underlying bill and the Protecting Americans' Retirement Savings from Politics Act protects it from politics writ large. And so this protects it from the left, from the right. It's saying, the politics out of the boardroom. Allow businesses to operate to the benefit of their employees, their shareholders of The United States. Get the politics out of this.
And so shifting the materiality standard back to what is actually material is a way to do that, both from a protection on the left and on the right. And so I know my colleague maybe had to step out, but it is a real opportunity here just to bring us back to core principles of securities law. I think most Americans who are saving for retirement would be excited to know that there's going to be less politics in their retirement savings, not more. I appreciate the time of my colleague. Yield back to him.
Speaker 1
Gentlemen from Georgia yield back. Chair recognizes the gentlewoman from Texas. Miss Garcia, you're recognized to speak the last word.
Speaker 17
Thank you. And, you know, I've been listening and quietly sitting here, and it seems to me that all of these arguments we've heard in the past, and I agree, miss with Mister Caston. This is more of the same, and more importantly, it's just beginning to sound like a broken record. The one thing that I did hear is a sort of different tune. I wanted to ask mister chairman if we could ask mister Style to give one or two examples of these illegal things that he referred to that proxy advisers have asked investors to do.
I mean, he said illegal two things.
Speaker 10
Appreciate it. There was a specific instance that I was referencing there as it relates to the company Travelers, a large insurance company. There's a proposal put forward, and I'm gonna oversimplify this a little bit, because I'm going off the cuff.
Speaker 10
Yeah. So oversimplified that they would do, not risk-based pricing, price based on race. Of course, we've outlawed that in the United States because you shouldn't be pricing insurance based on race. There was an idea that it'd be a discount for some individuals, but, of course, that's pricing based on race.
Speaker 10
I mean, that we've pricing insurance based on race is, I believe, illegal in every state. For sure, it's illegal in the state of Wisconsin.
Speaker 10
I can tell you for a fact you cannot price insurance based on race in the state of Wisconsin.
Speaker 10
I could give you the language of it. You can't base price insurance based on race. That's a law in almost, to my knowledge, every state.
Speaker 17
Determined it's illegal for you to state here in front of everybody that proxy advisers are telling people to do something illegal. I mean, that's a very strong statement.
Speaker 17
What case or what data are you happen to back it up that someone has determined, not you and your opinion because,
Speaker 10
We had a hearing on this, we had a hearing. We had the general counsel from ISS and the general counsel from Glass Lewis who sat before us. I asked them directly, do they review proxy proposals for legality? Both of them said no. Then we had chairman Gensler was in at the time, we had two of his deputies who came in.
They said the SEC reviews for legality. I asked both of them. They're both sitting right here before us. They said, do you review for legality? Because I believe this is illegal.
They both said no. The point is no one's reviewing these for legality. ISS wrecked in favor of it, and the underlying proposal would have required travelers to price insurance based on race. That's illegal.
Speaker 17
So did you ask anybody on the table that represented the proxy advisers?
Speaker 10
I did. We've I asked the general counsel of ISS and the general counsel
Speaker 10
Those are the two monster proxy advisors that we're dealing with under the legislation. They control well over 80% of the proxy advisor market. Both general counsels sat before us. I asked them both on the record.
Speaker 17
Did you realize that just because someone, and if that is true, and I'm not suggesting that it is true. If that is true and two people give the opinion that they would be illegal, doesn't mean they truly are. Has any of these issues been litigated and determined to be illegal?
Speaker 10
We've had lots of that's like saying, is it legal to rob a bank? I mean, it's illegal to rob a bank. It's illegal to price insurance based on race. Or does the gentleman
Speaker 17
The bottom line, mister Charles, is you really don't have any documents, any data, or you don't know anyone who's really determined that these are illegal acts. You're just saying that. I mean, it's just, you know, it's kinda like saying the war is over, the vessels can come through and all that, and the next day it changes. I just, you know, I like facts. Name a case.
But with that, mister chairman, I yield back unless the ranking member has anything else that she might wanna add.
Speaker 2
thank you very much. I was enjoying for a moment the colloquy that was taking place. We need to do more of that. Sylvia, you hit it right on the head. And it is amazing that as we sit here today dealing with very important legislation, the people can be dismissed and not thought of by the opposite side of the aisle in the way that they're doing.
It is absolutely unbelievable that we on this side of the aisle have to fight for the Consumer Financial Protection Bureau, let alone for fairness, for investors. With that, Sylvia, I thank you for your comments and the members on this side of the aisle for never forgetting why we're here and who we're supposed to represent, and I yield back the balance.
Speaker 1
Time has expired. Who seeks recognition? Mr. Mueller. I move to strike the last word. You're recognized for five minutes.
Speaker 7
I wanna thank Representative Style for his leadership on the broader issue of rightly scrutinizing the broken proxy advisory process in the United States. Two firms, ISS and Glass Lewis, control 97% of the proxy advisory market. Pension funds and asset managers rely on them to vote shares. And too often, these firms push votes based on the climate agenda and political priorities instead of returns. What makes it worse is that these firms have almost no regulatory oversight.
Every other major player in the financial system has accountability. Proxy advisory firms do not. This bill, H.R. 8286, to protect the Americans' retirement savings from politics act, fixes that. It brings transparency and accountability to an industry that has avoided it for too long. This package also includes a provision I or one introduced last congress, which requires the SEC to study the EU's corporate sustainability due diligence directive, CS3D mandate, and its effects on American businesses.
It's not a climate issue. It's a sovereignty issue. CSD requires American companies to report climate emissions and meet compliance standards if their parent company does business in Europe. That is a foreign government imposing its rules on American businesses operating on American soil. Let me be clear.
Republicans are not against ESG as an investment choice. If an individual investor wants to prioritize environmental, social, or governance factors, that's their prerogative in business. What we oppose is when these ideological views are mandated, especially from outside the US. American businesses are forced to comply with burdensome regulations that prioritize political ideology over a company's fiduciary responsibility to its shareholders, that harms the economy and undermines Americans' freedom to make their own investment decisions. I support this bill, and I urge my colleagues to do the same. I yield back.
Speaker 1
The gentleman yields back, seeks recognition. I recognize myself for five minutes of comments on the amendment nature of substitute. I wanna thank Congressman Style, Congressman Heisega, Lucas, and Mueller for working together and their leadership in addressing some of the key factors about reforming the proxy voting system and the proxy advisory firms critical to our capital markets. This bill is an aggregation of a group of bills that have been aggregated that I think really address many of the things we've heard about for decades about the failures of the proxy voting system. By reinforcing the materiality standard, the bill ensures that public companies are not forced to become vehicles for social engineering.
Instead, they'll focus on disclosing the financial realities that directly affect shareholder interests, like a retiree's pension or a family's college fund. Furthermore, they're bringing long-overdue oversight to the proxy advisory firms. For too long, this duopoly of ISS and Glass Lewis has exerted outsized influence over the corporate governance process through conflicted recommendations. In other words, telling boards of directors what positions they should take on policy positions, and then in turn recommending to shareholders how to vote on those, particularly through automated robo voting. And this dates back to, I think, 2003 when Harvey Pitt was chair of the Securities and Exchange Commission, where a safe harbor was granted to institutional investors that if they used a proxy advisory firm on a vote recommendation, they had a safe harbor that then they automatically complied with voting.
And it's just been over 20 years extended into the system we see today. This bill breaks that grip, requiring proxy firms registration and transparency, resulting in increased accountability and a rightful return to fiduciary duty. We're putting power back into the hands of shareholders and ensuring that our economy is driven by long-term growth, not short-term ideological political agendas. I thank the members who work together on these bills, and I yield back the balance of my time. Does anyone else seek recognition on the underlying A and S?
If not, we'll turn to the amendments. And the gentleman from, I know the gentleman from New York, I believe, has amendment.
Speaker 3
The clerk will report the amendment. An amendment to the amendment in the nature of a substitute to HR 8286 offered by Mister Meeks of New York designated as Meeks 125.
Speaker 1
Without objection, the amendment will be considered read, and I recognize the distinguished gentleman from New York, the ranking member of our House Foreign Affairs Committee. Mister Meeks, you're recognized on your amendment.
Speaker 12
Thank you, Mr. Chairman. This amendment expresses the sense of Congress that companies that incorporate diversity, equity, and inclusion into their business strategy often perform better and are better positioned to compete in today's economy. Across numerous studies, diverse leadership teams are associated with stronger financial performance and better decision-making. At the same time, recent data from the Russell 3000 shows that progress on board diversity is, in fact, slowing, with the share of board seats for diverse individuals falling drastically. 96% of HR professionals say diversity leads to a better-functioning company.
That's 96%. And 77% of respondents say diversity initiatives improve financial performance. Financial performance. Not only that, but many companies have said this directly too, anytime I talk to them. One such company, whose product the president is a big fan of, Coca Cola has warned that policies leading to a less diverse workforce would harm its business.
The company makes clear that a diverse, high-performing workforce drives innovation and growth, and it helps ensure that it reflects the consumers and markets it serves around the world. Another example is Costco, which told shareholders that the originality and creativity of its diverse workforce help stock its shelves with unique products. And guess what? They have some of the most loyal customer bases in the industry, with a 90% membership renewal rate in the United States and Canada. In other words, for many companies, diversity is not just a value, it's a business strategy.
Instead of putting forward economic reports as an attempt to score political points, let's pay attention to what American businesses are saying. Let's help them succeed. This is good business practice. It helps companies make money. It also helps them to grow and have greater and more customers from all types of the region, from every region, all ethnicities, all religions.
Diversity, equity, and inclusion is simply good for business, and many businesses, as I've stated, say that without it, they will lose, won't gain more. They will lose money. So this is not about this, this is helping business. It's a good business decision. And so with that, I urge my colleague to support this amendment, and I yield back the balance of my time.
Speaker 1
The point of order is withdrawn. Who seeks recognition on the Meeks amendment? The ranking member of the full committee.
Speaker 2
This amendment highlights a simple, powerful fact. Companies that embrace diversity, equity, and inclusion perform better. The data is clear. The market knows it, and the American people know it. The DEI is not a political distraction.
It is a proven business imperative. When companies foster inclusive environments, they attract better talent and spark more innovation, and ultimately deliver better returns for their shareholders. That's because when you have a workforce that represents all of America, your company can better serve all of America. Must go on the record to affirm that inclusive capitalism is strong capitalism. We cannot let a narrow, shortsighted ideology blind us to what actually drives success in the modern global economy.
To Miss Tamiz, I wanna thank you for offering this amendment. I have been amazed at the way that some of the members of Congress and some of the members of companies have taken the president's desire to eliminate diversity in all aspects of our lives, and basically complying with what the president wants. Some say, because they're frightened. Some say that they don't believe in diversity, and they believe that, as Mister Vega said earlier, when he was taken on a location, I think that was George Stevens, years ago. I remember him in San Diego.
And, we see this all the time. We walk by construction sites. We walk by all kinds of projects. And I stop, and I look, and I see who's working on the job and who's not working on the job. And I have stopped, and I've spoken with superintendents and others on these work sites.
And I say to them, do you realize, in this community, we have so many men and women who are excluded from opportunities? How is it you can have a project this big, particularly in some of the construction work, and not have women, not have people of color on the job? And so whether we're talking about construction sites or in the big, you know, corporations of America who are wishing to exercise their power in whatever way they want to do it and exclude those that, for some reason, they don't believe they should have opportunity. We witness this every day and every time we just wonder what the opposite side of the aisle is thinking on this diversity, equity, and exclusion by the president that so many of them are following. And I raised your question time and again.
Thank you for including this in the discussion, that we're talking about at the highest level of investment. Thank you. Who's doing? I yield. Let me.
Speaker 12
Just say this too. This is the greatest country in the world. But it wasn't as great as it could have been initially, when we had people who were denied. African Americans who were enslaved and could not, and for a long period of time, right now, denied jobs. Women not having the opportunity to participate.
What is making America great and move forward and wise, good for business is it includes everybody. And we know that we've had systems that deliberately, not based upon their quality and their capabilities and what they add to the country and to a company, were specifically excluded. What makes us great and what will make us continue as the greatest country that everybody can see, the example is that everyone has the opportunity to participate. You can see anybody from any region. Women, African Americans, Latinos, Asians, everybody having a chance to participate, to help business grow.
With that, I thank the gentleman, lady. I yield back.
Speaker 2
Very much. I just want you to know, when we see discrimination and we speak to it, it is not because we don't have anything else to do. It's because we don't understand why it still exists in the way it does. I yield back.
Speaker 1
Gentlemen, as time has expired, the chair recognizes the chair of the financial technology, digital assets, artificial intelligence subcommittee, the author of the bill, mister Style.
Speaker 10
Thank you very much, Mr. Chairman. The amendment offered by our colleague inserts a series of DEI findings advocating for companies to prioritize DEI, declares DEI can have a material impact on company performance, and declares that Congress should legislate in a way that directs companies to incorporate DEI into their operations. That's the fundamental of this amendment. The sense of Congress is not about transparency. It's not about bypassing materiality.
It's about bypassing the materiality standard to advance a social agenda. The gentleman, social agenda in this case, DEI. The sense that Congress would encourage the SEC to mandate disclosures based on social or political interest rather than whether the information is actually necessary for a reasonable investor to make a financial decision. Companies and, ultimately, shareholders would bear the cost of auditing, reporting the data that doesn't contribute to investor returns, doesn't benefit their employees. And so I'd urge my colleagues to reject the amendment, and I yield back.
Speaker 1
Shaun from Wisconsin yields back. Who seeks recognition on the Meeks amendment? Is there, if there's no further debate on the Meeks amendment, the question now occurs on the amendment. All those in favor shall signify by saying aye. Aye.
All those opposed, signify by saying no. No. The chair of the noes has it. The nose have it. The amendment is not adopted.
The gentleman from New York requests a roll-call vote. All those in favor, raise your hands. A sufficient number having raised your hand to record voters, so ordered. Pursuant to subsection c5 of rule three of the committee rules, further proceeding the amendment are postponed. Are there further amendments to the nature of a substitute offered by Mr. Stile?
Gentlemen from California.
Speaker 1
General from Kentucky reserves a point of order. The clerk will report the amendment.
Speaker 3
An amendment to the amendment in the nature of a substitute to HR 8286 offered by Mister Vargas of California designated as Vargas 032.
Speaker 1
Without objection, the amendment's considered read, and the gentleman from California is now recognized to describe his amendment.
Speaker 6
Thank you very much, Mr. Chairman. Mister chairman, my amendment simply states that this bill should not be construed to limit the ability of the SEC to issue any disclosure-based rulemaking, including any rulemaking pertaining to standardized climate-related disclosures, corporate diversity, or human capital management. Disclosure-based rulemaking benefits both investors and issuers, and it's built on a simple, enduring idea. Investors deserve access to material information. The Supreme Court's definition of materiality, authored by Justice Thurgood Marshall in the 1976 case TSC Industries versus Northway, was that a fact is material if, quote, there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote.
This is very similar to beauty is in the eye of the beholder. Here, materiality is in the eye of the investor, of the shareholder, not of the management. The determination of materiality is made from the investor's point of view, not the issuer's. And that's what makes our disclosure requirement so robust. It's a standard that plays a major role in making our capital markets the gold standard globally.
And investors agree. Series, a nonprofit advocacy organization, analyzed comment letters from 320 institutional investors on the SEC's climate-related disclosure rule. Of that group, 270 institutional investors mentioned that disclosure requirement, and 97% of them wrote in favor. Despite that overwhelming investor support, the SEC has walked away from defending this climate disclosure ruling in court. Meanwhile, the current administration has created an environment of fear and retribution for companies who believe measuring corporate diversity and human capital management practices is valuable for market participants.
Whether a company is analyzing both physical and transition climate-related risk for sustainable economic growth is material to investors. Whether a company is walking the walk or just talking the talk of boardroom diversity, comments is material to investors. Whether a company has workforce issues like safety violations, labor disputes, or excessive turnover rates is material to investors. Today, we heard from one of my colleagues, and I think it's correct, that business is business, and you want a diversified group. I think that's correct.
And how do you get that? By knowing the facts. And that's what this amendment allows. Because the bill, unfortunately, before us, prevents us from getting some of that information. We lose sight of who is the owner of the company.
The owner of the company are the investors, the shareholders, not the management company. And, it's not necessarily in the best interest of the company to have these golden parachutes. No. It's not. That's why investors need to have this information.
And with that, mister chair, I yield back.
Speaker 1
Gentlemen from California yields back. Who seeks recognition? I know. Does the gentleman from Kentucky insist on his point of order?
Speaker 2
I support this amendment, which ensures that nothing in this anticapitalist bill can be used to tie the hands of the SEC when it comes to providing transparency around corporate diversity, human capital management, and climate change risk. We know that the most valuable, rather, asset any company has is its people. Investors are making it clear. They wanna know how companies are recruiting, retaining, and promoting a diverse workforce. They wanna know if a company is truly investing in its workers or just paying lip service to equity and inclusion.
Additionally, the stats show that the majority of investors believe information like this is important when deciding whether or not to purchase shares in a company. This also includes information about how a company is dealing with the risk of climate change and what they're doing to reduce its carbon footprint. By protecting the SEC's authority to demand transparency in these areas, as Mister Vargas's amendment does, members can protect the rights of investors and the public to see the full picture of a company's health. I urge all members to support this amendment. I yield back.
Speaker 1
Gentlewoman yields back. Who ceased recognition? Gentleman from Kentucky, mister Bard, chair of our National Institution Subcommittee.
Speaker 4
I oppose this amendment because it would force investors to view public companies through the lens of climate disclosures, corporate diversity, human capital management, when many investors are looking for returns and want the prioritization of returns as opposed to politicizing these companies, politicizing the allocation of capital or prioritizing unquantifiable environmental, social, or governance objectives over investor returns. These disclosure mandates, let's face it, often advance unrelated policy goals at the expense of investor returns. It would steer investors toward higher fee, less diversified, and in many cases, lower return investments, all for the ostensible purpose of disclosing climate risk or diversity or human capital management. My friend from California says, well, we want a diversified group. Well, some investors, I would argue, most investors want returns.
They want retirement security. They want to have maximum returns to save for college. And to the extent that this proposal would force them to view companies through the eyes of a vocal set of stakeholders, maybe not even owners of the company, but through the eyes of stakeholders for whom a company's climate reputation is of greater importance than the company's financial performance, that's wrong. And so I also oppose the amendment because it would really undermine the legislation that I've offered to be included in this bill, title 10, which would amend the investment advisors act of 1940 to specify that the requirements concerning the consideration of pecuniary and nonpecuniary factors with the option for investors to consent to the use of nonpecuniary factors in decision making. So let's just take Mister Vargas's point.
Let's just concede the point that there may be some investors who do care about corporate diversity or climate and would prioritize those over returns. Because as we've seen in so many of these cases, these companies that prioritize, and I've seen many examples of ESG fantasies that went public in a SPAC and then were spectacular failures because the management focused on immaterial objectives totally unrelated to the core purpose of delivering returns or earnings or profitability. Instead, we're engaged in political errands, as opposed to actually running a business. But stipulating that there may be investors out there who do want to prioritize corporate diversity or they want to invest in a company that's very climate focused. Why wouldn't we give the investor the decision making power?
The ranking member talks about the corruption of capitalism. The corruption of capitalism is forcing an investor to subordinate returns to some of these immaterial issues. What we should be doing is giving investors the choice. It's their money. And if the default should be the fiduciary obligation of directors and officers to deliver maximum returns.
If the investor wants to prioritize these nonpecuniary factors, this legislation, Mister Styles' package, would allow the investor to so choose. So if you really want to empower investors to choose what's more important to them, maximizing returns, corporate diversity, climate, our legislation, mister Stahl's legislation, title 10 of that legislation, gives the investor ultimate control over his or her investment. And so that's one of the reasons why I would oppose the gentleman's amendment, which would take that choice away from the investor and, quote, unquote, standardize the prioritization of nonpecuniary factors at the expense of financial returns. And I yield back.
Speaker 15
I think, in a sense, we're talking past each other. And, first of all, I'm in support of the gentleman from California, mister Vargas's, amendment. And what he speaks to is not politics. What the gentleman from California is speaking to is the opening phrase of our constitution to form a more perfect union. It predates politics in this country in the partisan sense.
It speaks to who we are as a nation. And what the gentleman is trying to impress upon the sponsor is that this is about full participation by everyone in our nation to move forward and to create that more perfect union. And, you know, I know from my own experience in the construction industry, there was a time when most of our unions were overwhelmingly white and reflected a shutting out of certain people in that industry. And I visit my union halls today, and I see greater inclusion. I see greater diversity.
I see men and women. And I also see a greater acceptance, especially within our major cities, of large construction projects because when they go by those construction projects, they see the people, they see their neighbors. They see the population of their city reflected on those job sites. And that helps the business community. That helps the construction industry because people see the good in it.
They see that that participation is shared, and that success and opportunity are shared. So, you know, people have said before that, you know, America isn't just a place. It's an idea. And I think the gentleman from California has hit upon that if we really wanna achieve that high ideal that the preamble to our constitution sets up to form that more perfect union, then his amendment is certainly not only in order, but consistent with that ideal. And for that reason, I support the gentleman's amendment, and I would yield to him any additional time he may require.
Speaker 6
Thank you very much. I first wanna thank my good friend from Massachusetts for those kind words and for his words of inspiration. I would tell my friends on the other side, this is a disclosure-based amendment. Disclosure. Disclosure.
It doesn't force anybody to invest in anything. It just simply gives you the facts. When my good friend over there says, it'll force investors to invest in this. No. It doesn't.
This is just disclosure. That's all this does. Let's you know the facts. An example was given earlier of Travelers Insurance. I know a little bit about insurance.
I was in the insurance business for a while myself. Climate matters. Climate matters big time for insurance companies. We used to call them cats, catastrophic events. They used to be measured five, ten, twenty-five, and fifty years, and a hundred years and a thousand year events.
Those have changed dramatically because of climate change. Now you have hail that is no longer these little tiny things. There's a size of softball sometimes going through windshields. So, yes, this is information. Information not for information's sake.
These are for investors' sake because they do want to return. They do want to protect their investment. That's why this is important. Again, it doesn't force anyone to invest in anything. It's a disclosure.
That's all it is: disclosure. But with that, I thank the gentleman from Massachusetts, and I hope we do get to that more perfect union. I appreciate it, I yield back to him.
Speaker 1
Gentleman from Massachusetts yields back who seeks recognition. Gentleman from Ohio, mister Davidson.
Speaker 19
Thank you. You know, the gentleman's amendment really has a faulty premise. The premise is that the Securities and Exchange Commission should be engaged in these kinds of rule makings now, and the reality is they shouldn't. We didn't pass a statute that told them to mandate climate-related disclosures or corporate diversity disclosures or human capital management disclosures. We do have a mandate for the Securities and Exchange Commission to have disclosures related to material impacts on the financial conditions of the firm.
And what we want to be, the outcome here is profits, not an ideal. We want that to be there. We want these firms to get them so that they deliver the results that the investors expect. They don't, you know, invest in these things, so that they have this ideal of a future retirement plan. They want a real retirement plan where they get returns, and that's why materiality needs to be the standard.
So I think the whole premise of the amendment is faulty, and therefore, I am opposed to it. And I'd yield the balance of my time to Mr. Barr.
Speaker 4
I thank my friend from Ohio, and I think he made some really good points. And my friend from California earlier cited TSA Industries versus Northway, which is one of the seminal cases from the Supreme Court defining materiality for investors. And it was Justice Thurgood Marshall who wrote that opinion. And in his opinion, he addressed this issue of disclosures. And, my friend talks about this is unobjectionable.
It's just disclosures. It's the problem that Justice Marshall identifies in mandated disclosures is the following, and I'm quoting here. The question is, information is material for purposes of disclosure if there is a substantial likelihood that a reasonable investor would consider the information important in deciding how to make an investment decision. Quote, management's fear of subjecting itself to liability may cause it to simply bury shareholders in an avalanche of trivial information, a result that is hardly conducive to informed decision-making, unquote. That's what Justice Marshall is talking about when he expresses a concern about mandating disclosures of this kind, described in this, or set forth in this amendment.
Because what you're doing with this amendment is you're taking away actually the choice of the investor to choose whether or not he or she wants to prioritize these non-pecuniary factors. Why would we take away the choice of the investor to decide whether or not they want these information. If the investor wants to focus on financial returns, then let the investor focus on, have the investment adviser focus on financial returns. If the investor, on the other hand, cares about these immaterial to the average investor, immaterial factors, allow that investor to make that choice. That's what Title 10 of this bill would do.
But mandating disclosures would generate liability. That's the issue. It's not just disclosures. It's about creating liability. And that drives cost up, which drives returns down.
That's the problem with a mandate like this. And it also takes away the choice of the investor. Most investors in my experience, and maybe the experience of the gentleman account for, it's different. But in my experience, and I talked, and I'm sure the gentleman does too. I talked to constituent investment advisers, broker dealers all the time in my district, and I asked them, because this is an interesting debate we have periodically in this committee.
What would you say the percentage of your clients who care about ESG factors and would prioritize those over the financial performance of their portfolio? And, invariably, the percentage that they cite to me, and I admittedly, this is anecdotal. Maybe the gentleman has some other, but it is one or 2% maybe. I've had many investment advisers tell me that not one client would prioritize these immaterial factors over returns. And even in the cases where a client says, you know, I really do care about climate.
I really do care about corporate diversity. I really do care about these human capital management issues. Even in those cases, if given the choice, do you want us to pick?
Speaker 1
Gentleman yields back. The chair recognizes the gentleman from Wisconsin.
Speaker 10
Thank you very much, Mr. Chairman. Just a quick cleanup item. The gentleman was talking about insurance companies and disclosure. I think it's worth noting roughly 85% of US insurance companies currently report some form of climate risk. They do so in their 10k filings, often in item 1a.
Risk factors are item one. Business. Why? Because it's material. So the materiality standard, if those businesses determine that it's in the interest of their shareholders to make a decision, that should be reported.
That the standard here is materiality. The amendment that's offered, now let me get back to the amendment piece, is not really about transparency. It's about advocating a social agenda. And so companies and, ultimately, shareholders bear the cost of auditing and reporting data that doesn't contribute to investment returns. Of course, if it's material, they should be reporting.
If it's not material, they don't need to report it. If climate risks are financially material, you report it. The goal here is to keep the SEC focused on financial reality, not on political theory. Mister chairman, before I yield back, I just wanna go back to the underlying bill for a second. And I wanna introduce two letters for the record, the National Association Manufacturers' Letter, the American Association Securities letter, American Securities Association letter in support of the underlying.
Speaker 1
Those will be included in the record without objection. And I yield back. Gentlemen, yields back. Who else would like to speak to the Vargas amendment?
Speaker 1
There's no further debate. Question now occurs on that amendment. All those in favor of the amendment, signify by saying aye. Aye. All those opposed, signify by saying no.
No. In a chair, the ayes, I beg your pardon. The nose have it. The nose have it. The amendment is not adopted.
Is there any further amendment? Gentlemen from California has requested a recorded vote. All those in favor of a recorded vote, raise your hands. A sufficient number having raised their hand, a recorded vote is ordered. Pursuant to subsection c5 of rule three, the committee rules for the proceeding of the amendment are postponed.
Are there further amendments to the amendment of a substitute?
Speaker 1
We'll pause while the amendment is distributed. Gentlemen from Wisconsin reserve a point of water. Clerk will report the amendment.
Speaker 3
An amendment to the amendment in the nature of a substitute to HR 8286 offered by Miss Waters of California designated as Waters 165.
Speaker 1
Objection. Amendments considered red. And now the ranking member of the full committee is recognized to discuss her amendment.
Speaker 2
Thank you. Thank you very much, Mr. Chairman. One of the aims of this bill is to make it much harder for ordinary shareholders to file proposals, particularly related to environmental, diversity, and human capital matters. Currently, even though the law says that a shareholder only needs to hold $2,000 in shares for three years, $15,000 for two years, $25,000 for one year. To file a proposal, Trump's SEC issued guidance that allows companies to throw out any proposals they don't like.
This is stifling the voices of countless investors who will no longer have a say in how the companies they are the true owners of run. Many may not remember this. But Reverend Jesse Jackson, who passed away earlier this year, took the civil rights movement to corporate America. He started the Wall Street project, putting formal and informal pressure on companies like Goldman Sachs, Toyota, and the New York Stock Exchange. And as recently as 2018, he offered a shareholder proposal to the Amazon board of directors demanding they increase board diversity.
He said that, and I quote, capital is not neutral, quote unquote, and used his capital to push for change. My amendment would ensure that investors following Reverend Jesse Jackson's footsteps can still push companies in this country to do the right thing. It overturns that harmful Trump policy, and in doing so, restores the rights of shareholders to provide their input on important corporate management decisions. Although it allows, additionally, it allows shareholders to band together in groups of five or more to offer a joint shareholder proposal without worrying a company would simply throw it out in the trash. This amendment goes a long way to restoring a core tenet of our capital markets, that our financial system should abide by the same democratic principles that underlie our American democratic institution.
Every shareholder should have a voice, no matter how small. And their voices should not be any more or any less favored than the voices of the C-suite executives that these shareholders elect to run their companies. As a matter of fact, during the memorial service of Reverend Jesse Jackson, one of the gentlemen from Wall Street who knew Reverend Jackson said Reverend Jackson borrowed $5,000 from him so that he could go in and represent, you know, small investors. Many people think of Reverend Jackson basically as, you know, saying, keep hope alive, and you are somebody and all of that. But he was on to what was going on in the financial world, in this country.
And he was intent on opening up the opportunities for small investors to have a say, and not to be excluded. And for proxy holders who are bossing the concerns of small investors working on diversity and inclusion, the environment, and all of those issues that really avoid it or don't get heard in these shareholder meetings. And I just wanna remind everyone in this room that in addition to whatever else I do, I'm going to advance some legislation dealing with small investor involvement and opportunities in ways that you've never seen before, and it's gonna be a Jesse Jackson proposal that I will be representing. So I yield back, as I warn you. Thank you very much.
Speaker 1
The gentleman yields back. Chair recognizes Mister Style. Do you first do you have a point of order. Withdrawn. Point of order is withdrawn, and I now recognize you. Strike the last word.
Speaker 10
Thank you very much, Mr. Chairman. The amendment offered by our colleague from California pretty much says any five individuals can come forward with a shareholder proposal. They have to have 2,025 dollars worth of stock. And then pretty much obliterates stat bulletin 14 m, of course, overruled the 14 l, which empowers the staff, which had empowered the staff of the Securities and Exchange Commission to drive forward a political agenda. Let's think about the real-world consequences of this.
The SEC, under the current rules, before they're even obliterated further under the proposed amendment, the SEC, five people, five individual investors accounted for 40% of the shareholder proposals submitted last year among the S and P 1,500. Think about that. Five individuals, a mere five individuals, noting the same number offered by my colleague from California, account for 40% of the shareholder proposals submitted last year to the S and P 1500, 1500 companies. That's shocking. You'd almost think there's a business motive in that.
I wonder if some attorneys are making a little bit of money, and I wonder if that's why we want five people to be able to do even more. If you dig through these proposals, man, there's a lot of social policies that some of my colleagues on the left would like. But all this does is bog down and burden businesses that are trying to grow and employ people, and a lot of attorneys make a lot of money. We're trying to get the politics out of our businesses. Politics on the right or the left.
Let these businesses focus on what they do. Building in the United States of America, hiring people in the United States of America. Don't draw them into the political debates that we watch time and again come forward on this committee. So the proposal to allow five people to bring even more proposals, saying the 40% wasn't good enough. We think that they should bring even more.
That those attorneys for those five people should be making more money. I don't know where they reside, if they're in LA, California, or any other crazy city. This is an opportunity to refocus businesses on what they do, growing in The United States, hiring people in The United States. Let's just look at two more stats before we leave. 2025 alone, one shareholder submitted 19 separate proposals concerning whether or not companies would use a specific software program.
I don't know if this individual had a business interest in the software program, but one person submitted 19 separate proposals concerning whether or not these companies were using a software program. Then these companies have to go to the SEC, try to get it excluded. Companies shouldn't be having to go and get this relief time and again because some of our colleagues on the left want to make it even easier for people to drive forward a political and social agenda inside our companies. But they can't pass in Congress because the ideas are too radical. They're trying to put on the backs of publicly traded companies, which means they're trying to put on the back of retirees across this country who are trying to save for their retirement.
I oppose the amendment offered. Mister chairman, I'll yield back.
Speaker 1
Showman yields back. Who seeks to comment on the Waters amendment? Any other? I don't see here any other debate on the waters amendment. There's no further debate.
The question now occurs on the water's amendment. All those in favor, please say aye. Aye. All those posts, signify by saying no. No.
The nose have it. Noes have it. The amendment is not adopted. Is there any further amendment?
Speaker 1
The gentleman has requested a recorded vote. All those in favor, record the vote. Raise your hands. A sufficient number having raised your hand, a recorded vote is ordered pursuant to subsection c5 of rule three of the committee rules. Further proceedings on that. Go ahead.
Amendments are postponed. Are there further amendments to the amendment of the nature of a substitute? John from Illinois.
Speaker 1
John has an amendment at the desk. We'll pause for its distribution. The gentleman from Wisconsin reserves a point of order on Mr. Castan's proposed amendment.
Speaker 3
An amendment to the amendment in the nature of a substitute to H.R. 8286 offered by Mister Castan of Illinois designated as Castan 105.
Speaker 1
Without objection, the amendment's considered read, and the gentleman from Illinois, mister Castan, you're now recognized for five minutes to describe your amendment.
Speaker 14
Thank you, Mr. Chairman. And, if you'll indulge me to be a bit philosophical here, then I wanna start with a hypothetical and then get to some heavy philosophy. 2025, more than half of the gains in the S and P have come from the magnificent seven tech firms. I want you to imagine if we directed the Department of Labor under, you know, Arissa laws to say that we wanted them to investigate the detrimental effect of funds investing in the other 493 companies. Now that would undoubtedly accrue to the great financial benefit of Meta, Alphabet, Tesla, and the other Magnificent Seven.
I think we might have some concerns about that as far as drawing those conclusions, even though we could cherry pick data that says that funds would have performed better if they just invested in those companies. I say that to get to my philosophical point that back in my corporate days when young engineers would come with projects that they wanted us to invest in, I would always make them read a manual Kant. Because Kant had this observation that you can't prove something as true. You can only disprove something that is false. And so if you really have a quest to learn what's true, you have to be, you have to approach things with an open mind that says, trying to disprove my thesis, not I'm trying to prove it.
You could always tell whether someone had put together a good investment thesis in a spreadsheet or whether it was even possible to ask those kinds of questions, which brings me to this amendment. This amendment says that it simply stipulates that the EU's environmental, social, and governance disclosure regime is detrimental, and asks the SEC to simply confirm what it already believes. What my amendment is trying to do is to say, let's take a more balanced approach. Let's just honor the wisdom of Kant and, say, let's study both the positive and the negative effects of complying with the EU's corporate sustainability reporting director or CSRD program. This matters because remember what the CSRD says, it doesn't say you got to invest in world-class companies.
The CSRD says that we need to standardize ESG reporting. When congressman Vargas and I first created the sustainable investing caucus before it became all political, our whole reason for doing this was that you had all of this capital that wants to invest in ESG funds. Every ESG rating agency has a different standard. You can cherry-pick your rating standards. For markets to work, we need clear and consistent disclosure.
That's what the CSRD is doing. I'm hard pressed to imagine a scenario where standardized reporting for companies that choose to be, you know, in an ESG fund, for people who are managing the ESG funds. Why is it bad for us to do as the EU is suggesting? Maybe you disagree. I am open to being proven wrong.
But to be open to be proven wrong, you've gotta direct the SEC to say, let's look at both sides of the question. The amendment would require that the study include an economic analysis of how a failure to implement a mandatory climate-related disclosure regime in the US could harm investors and multinational corporations. I'd note that the EU's disclosures broadly align with the task force on climate-related financial disclosures or TCFD framework, which has been widely invested in by lots of issuers and investors. In 2021, nearly 80% of S and P 500 companies voluntarily disclose scope one and scope two emissions consistent with the TCFD framework. I think nobody was hurt by that.
The FCC's 2024 climate disclosure rule was modeled off those recommendations. It was driven by the same idea, not saying we're going to define who is good. It was saying, let's come up with a standard set of disclosures. One company might benefit from scope one. One company might benefit from scope two.
If investors feel a little better, understand that we don't get good investment. So for efficient investment. So there's really no argument against standard consistent climate disclosures for those who want to make it, and I think we gotta check both sides. The last thing I'd say is that I would just caution my Republican colleagues from telling our financial regulators or trying to pressure our financial regulators into condemning the policies of our allies. When I'm talking about our allies, I'm not talking about Hungary.
I'm not talking about Russia. I'm talking about the democratic free market countries who have long been the United States' partners. Because shouldn't we expect them to counter if we start going down that path? Imagine if they were to say, what deleterious impacts on multinationals who are domiciled in the EU have come from Donald Trump's tariff policy? After all, the IMF just set a lowered global GDP forecast, quote, primarily due to the Iran war-driven energy price spikes and geopolitical fragmentation.
Y'all are living in a glass house, and I would encourage you not to throw this particular stone. They yield back.
Speaker 1
Joe from Wisconsin yields back. Seeks recognition. Chairman of the Assist. Oh, I'm sorry. Does
Speaker 1
Thank you for withdrawing your point of order, and I recognize you, mister Faure, to strike the last word.
Speaker 10
Thank you very much, Mr. Chairman. I appreciate, you're recognizing me on this topic. King Charles is coming next week. So why not discuss a little bit about how the European economy is doing with all these rules and regulations? I appreciate my colleague from Illinois for bringing up the topic.
In Wisconsin and Illinois, we border each other. We like to look at how things are going in Illinois. They like regulations a little more than we do in the state of Wisconsin. And so let's dig in. How's the EU doing?
They put forward a corporate sustainability and due diligence directive. It imposes onerous reporting requirements on European companies and some non-European companies with significant exposure to the EU. There's a study done on this, and that directive determined that the cost to US businesses, if the United States implemented the CSDDD, that it would cost about a trillion dollars. So the proposal that was just supported, let's put what would happen if we put in place these European rules and regulations in the United States, be about a trillion dollar cost. And what we're looking at is trying to actually grow jobs in the economy here in The United States.
We don't wanna emulate Europe, and we shouldn't be importing their policies here into the United States. I think it's important to look back and say, have we seen economic divergence as Europe has doubled down on the regulatory burdens on their business environment? The United States now enjoys a 35% higher income than the Europeans. Since the financial crisis, EU GDP grew by about 13%, while the United States has grown by 87%. If you want 13% growth since the financial crisis, my colleagues on the left are offering all sorts of ideas and suggestions for how to accomplish that.
You wanna see the 87% growth since the financial crisis that we've seen in the United States? We're saying let's right-size this. Let's get the politics out of the way. Let's grow the US economy here in the United States. When you look at the tech industry, out of the top 50 tech firms in the world, four are based in Europe.
So if you wanna jettison the next wave of companies, tech companies, you wanna kick them outside the United States, my colleagues on the left have a proposal to do that. But if you care about growth of The United States, if you care about jobs in The United States, the answer is not to import the European model that the evidence is pretty clear is not working, that is wildly costly. It's to come back to the basics and the principles of what grew The United States capital markets to be the greatest capital markets in the world, with no real near competitor. It's about focusing on a materiality, what matters, getting the politics out of the way. The underlying bill before us does that, empowers individuals and shareholders.
The amendment does not move us forward. I encourage my will. The gentleman yield? I will yield to the chairman.
Speaker 1
I wanna thank the gentleman for his compare and contrast there. I do think it's important for members to think about that as we compare the growth of the American economy versus our great friends and allies across the Atlantic and in Europe, and how they've struggled. And I was reading the material on these bills last night, reflecting on that, and I looked up what the total capitalization of the equity markets in Europe is. This is all of Europe, I would say to my friends. A continent of many of our founding principles and certainly, of many origins of The US basic economy, had their origins there in Europe.
But the capitalization today of the total equity markets is 225,000,000,000. Capitalization of our public markets in America, 50,000,000,000,000. 50,000,000,000,000. That's a stark difference. And it's why Mario Draghi, former central bank expert, former banker extraordinaire in Europe, senate gave a report to the Europeans saying we the Europeans have to get their act together and focus on economic growth and economic opportunity for their citizens.
And I think that's encapsulated by the statistics that you talked about in terms of macroeconomic growth. But the continent of Europe is struggling in investments, and I don't think they offer something that The United States wants to emulate. Now yield back to my friend. Gentleman yields back. Who seeks recognition on Mr. Caston's amendment?
The ranking member.
Speaker 2
This amendment is about cold, hard facts. It requires the SEC to study the economic impact on American investors if the US fails to adopt uniform climate disclosures or harmonize with global standards. While my colleagues across the aisle are busy playing these political games, the rest of the world is moving forward. One effect of Trump jacking up oil prices around the world with his unlawful war in Iran has been China becoming the willing supplier of solar, wind, and other renewable technologies to the world. At the same time, AI server farms are using up electricity that would have gone to millions of Americans, further dividing up costs.
And climate change is creeping up day by day, posing unknown risks to US companies and our economy. And Trump's response? His SEC is abandoning standardized climate risk disclosures, leaving US investors in the dark about how the companies they own are addressing these risks. We need a clear-eyed report so that this committee can make policy based on reality, not rhetoric. We cannot afford to put our heads in the sand while American capital is put at a competitive disadvantage on the global stage.
So I would urge members to support this amendment, and I yield back the balance of my time.
Speaker 1
Right. Member yields back. Is there further debate on Mr. Castan's amendment?
Speaker 14
Thank you. Look. I'll be brief. There's a rich conversation we could have about all the reasons why the US economy has outpaced Europe. I don't think you'll find anybody here who thinks that they would rather have European capital markets. I don't believe that this bill says that we should adopt everything that is opposed to European capital markets, and this amendment does not say that we should adopt every provision of European capital markets.
I also would challenge you to find any economist who says that the reason why European capital markets are so much shallower than the United States is because of the CSRD rules. I mean, these are strong man arguments. Come on. You guys are smarter than that. If you do wanna compare and contrast, I mean, jeez, we could have a conversation.
Why is it that over the last three decades, job growth, GDP growth, and dollar strength are always stronger under Democratic presidents? That's a conversation we could have about the US economy. I suspect y'all wouldn't want to have that conversation, but that's not what this is about. This amendment, and let's talk about the structure of the amendment, not some weird straw man about the structure of the EU. Should we do the research to honestly inquire whether or not the assertions in this amendment are true?
And I would simply say to you that outside of the pope, I don't know anybody who is currently alive who claims to be infallible. Maybe there are some other religious traditions who claim that as well. But I would be very suspicious. I'm always very suspicious. We should all be very suspicious of anybody else who says that they alone have access to absolute truth, especially when they are standing in the way of honest inquiry.
This amendment is simply about whether we are going to ask the SEC to look at both sides of the question. Or if you all who are standing there not criticizing Trump for saying that the pope has got problems are gonna say that, unlike Trump's view of the pope, you all are infallible. Yield back to the gentleman from Texas.
Speaker 1
Gentleman from Texas yields back. Is there any further debate on the casting amendment? Hearing none, the question occurs on the amendment. All those in favor of the amendment shall signify by saying aye. Aye.
All those opposed, signify by saying no. And it's chair of the noes have it. Noes have it. Member is not a dog.
Speaker 1
Gentlemen, request a recorded vote. Record vote is requested. All those in favor, record the vote. Raise your hands. A sufficient number having to raise your hand, a recorded vote is ordered.
Pursuant to subsection c5 of rule three, the committee rules further proceeding amendment are postponed. Are there further amendments to the amendment in the nature of substitute? Miss Dalip.
Speaker 1
We'll pause while that's distributed. Gentlemen from Wisconsin reserve a point of order on the Talib amendment. Now you don't have to do that, but let's wait. We're not ready yet. We're gonna distribute it.
Just one moment. Clerk will report the amendment.
Speaker 3
An amendment to the amendment in the nature of a substitute to H.R. 8286 offered by Miss Talib of Michigan designated as Talib 127.
Speaker 1
Without objection, amendment is considered read, and the gentlewoman from Michigan is now recognized to describe her amendment.
Speaker 21
Thank you, Mr. Chair. As you know, CEO compensation has exploded in recent decades, and shareholders have a right to be concerned. CEOs in the nineteen sixties and seventies made about 20 to 30 times the average pay of their own workers. Today, or I think 2023, studies show that the average CEO at the largest 350 publicly owned firms in the United States now make 290 times the median pay of their typical worker. So our CEOs today 10 times as hardworking as CEOs were in decades prior, doubtful.
Or might be because massive compensation packages come at the cost of investments in the company and its workforce. That to us and for the public and many folks that look at the CEO compensation pay are very concerned about. We've seen how misaligned incentives actually can cause executives to take excessive risks. We've seen it with the bailouts. We've seen it with the continued bankruptcy that we've seen, especially in the banking institutions.
You know that in 2010, in the wake of the 2008 financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. And section 956 of the act tasked the federal regulatory agencies to implement a rule banning compensation incentives that encourage inappropriate risk taking, just high risk actions that they take. However, this rule, to this day, again, this happened to this day, has not been implemented. After Silicon Valley Bank failed, you saw the Fed issued a report and found that the incentive compensation practices at Silicon Valley Bank encourage excessive risk-taking to maximize short-term financial metrics. You know that shareholders right now and those who operate in their interest should be able to hold management accountable, including on issues like executive compensation.
Institutional investors, like pension funds and employee benefit plans, manage the retirement savings of millions of Americans. Those are our constituents. To effectively vote on thousands of proposals each year, such investors rely on the services of proxy advisors. So by disencouraging the use of proxy advisors, whether that be by compromising their independence, establishing administrative barriers, and compliance costs. Restricting the use of criteria that cannot be easily measured in financial terms, we know that this bill would make it harder.
It would make it harder for investors to ensure that countless families' retirement savings are well managed and not exposed to excessive risk taking and risks, you know, due to poorly structured incentives of firms' executive compensation pay. So my amendment, mister chair, ensures that these and similar provisions of HR 8286 do not pertain to executive compensation. Shareholders, retirees, whose livelihoods are tied to the success of the company, and those who operate on their behalf deserve the right to make informed decisions to advocate for their own interests. So my amendment basically supports shareholders' voices and ensures management can be held accountable with respect to executive compensation, especially because we have not acted. We have not acted since, again, the passage of Dodd-Frank Wall Street reform.
And I promise you, go to your community, go to your districts. They will tell you that they want us to hone in on these excessive high, I mean, these excessive compensation packages that allow, again, for many of these CEOs to go completely, no blemish on them. I mean, they get to walk away with these big packages when they make these excessive risk actions that are very risky. And, again, we saw this alone, and we saw it in this committee. We all, in bipartisan effort, said that we were very disappointed about what happened at Silicon Valley Bank.
And, again, this is important, because so many of our constituents and folks, you know, see this as a way to, again, if anything, allow a lack of accountability to actually promote excessive packages and allow people to walk away when they risk people's retirement packages. So, again, I urge my colleagues to support this amendment, and I yield back to you.
Speaker 1
The gentleman withdraws his point of order, seeks recognition. The ranking member?
Speaker 2
I support the amendment being offered by Miss Khalid, which would ensure that investors can rein in executive excessive pay and benefits. Skyrocketing executive pay often comes at the direct expense of long-term shareholder value, draining capital that could otherwise be used for research, development, dividends, or human capital. When compensation is not linked to actual performance, it creates perverse incentives for short-term risk taking that can destabilize a company's financial health. The underlying bill would stifle the ability of investors and fiduciaries to receive sound advice on these matters. This amendment preserves and ensures sunlight on company clawback provisions, golden parachutes, and pay-for-performance alignment.
This is a good amendment, and I urge all of my colleagues to support it, and I yield back.
Speaker 10
Thank you very much, Mr. Chairman. What the amendment actually does versus what it purports to do has a bit of a gap here. So I think it's worth discussing that gap just for a minute. The underlying bill holds proxy advisors accountable to providing accurate information. It holds them accountable in particular if they provide false or misleading proxy or voting advice on sections.
And what this bill does is then carve that out as it relates to executive compensation. So executive compensation votes are, in some ways, routine. In some ways, it's a giant morass. We could have the debate on reforms inside executive compensation. Happy to engage in that dialogue sometime.
The underlying bill is about proxy advisors, ISS, and Glass Lewis. Are they providing accurate information to shareholders, at a bare minimum? I would hope, but maybe not, that we can all agree as this information is coming out, it should be accurate. It shouldn't be misleading. And because ISS and Gilles Lewis, due to the massive duopoly in the system, are unregulated, conflicts of interest, etcetera, they play a unique role in the information system.
And so my legislation recognized that. And so let's hold them accountable. Let's make sure they have some skin in the game, to make sure that these statements are accurate. I would assume my colleague would agree that the company should be held accountable if they had false or misleading information about executive compensation in the underlying proxy. So then it would be reasonable to make sure that proxy advisors who are opining on how individuals should be voting in this regard, that they should also be held accountable to be accurate, to be truthful.
But her bill or her amendment carves that out and says, oh, don't worry. If the proxy adviser of ISS or Glass Lewis gets it wrong, if they're false, if they provide misleading information, don't worry about it. They're protected. It almost seems like the amendment that's being offered is to keep ISS and Glass Lewis in business, protected, shielded. What I'm trying to do is say no.
ISS and Glass Lewis play such a significant role in the ecosystem that we need to make sure that they're providing good information. They need to be held accountable for the information that they're providing. It does a whole bunch of other things that I think are important too, but as it relates to this amendment, that's a really important step. And so because it protects the proxy advisor duopoly and prevents us from holding them accountable for false or misleading information, I can't believe anybody would support this underlying amendment as drafted. But two, I can't recommend anyone in here to vote for this.
If you believe that executive compensation is too high, if you believe executive compensation should be something different, hold your opinion on that. That's fine. But at a bare minimum, the information regarding it needs to be truthful, needs to be accurate. We need to hold people accountable if they're providing false or misleading information. And so I would encourage my colleagues to reject this amendment.
In fact, I would encourage all of my colleagues in this entire committee to reject this amendment, and anyone who votes for this to protect false and misleading information should be held accountable. I yield back.
Speaker 1
Gentleman yields back who seeks recognition on Miss Talib's amendment. 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 aye.
Speaker 1
All those opposed, signify by saying no. No. Oppounded chair of the noes have it. Noes have it. The amendment is not adopted.
Speaker 1
All those in favor of a record vote, raise your hands. Sufficient number of raising their hands or recorded vote is so ordered pursuant to subsection c5 of rule three. The committee rules further proceeding on the amendment are postponed. Are there additional amendments on Mr. Stiles' amendment in the nature of a substitute? Seeing no further amendments without objection, the previous question on the substitute is ordered, and recorded votes on the pending amendments have been postponed.
Once those votes are taken, the committee will immediately vote on the adoption of an amendment in nature of a substitute, and then we'll consider the question to report the measure. We'll now move to the next bill. For a sent notice, I call up HR 82 90, the Exchange Rate Accountability Act of 2026, which was introduced by distinguished gentleman from Texas, Pete Sessions. Clerk will report the bill, which was distributed in advance.
Speaker 3
HR 8290 to require the use of the voice and vote of The United States to oppose any quota increase at the International Monetary Fund for member countries that employ certain exchange rate practices, and for other purposes.
Speaker 1
Without objection, the first reading is dispensed with, Beth. Without objection, the bill is considered read and open to amendment at any point. Representative Sessions has an amendment in the nature of a substitute, copies of which were also distributed in advance, and the clerk would report the amendment.
Speaker 3
Amendment in the nature of a substitute to HR 82 90 offered by Mister Sessions of Texas designated as ERA ANS. Without objection.
Speaker 1
The amendments considered red will serve as the base text for the purposes of amendment. And now the gentleman from Texas, Mister Sessions, you're recognized for five minutes to describe your amendment.
Speaker 18
Mister chairman, thank you very much. And, I wanna thank you for not only today's markups, but the opportunity for my legislation to be included. It's called the Exchange Rate Accountability Act. Mister chairman, the international monetary fund, known as the IMF, has long been devoted to the balanced growth of international trade. It is there as a balancing effort to make sure that there's fairness, opportunity, and perhaps transparency that would be available to the world through the IMF.
To achieve this mission, the fund not only acts as a lender of last resort, but it also monitors vulnerabilities in the global economy. It is and has become clear to us that China, the IMF's third largest show shareholder, is a significant source of such vulnerabilities. These vulnerabilities that have been noted by the IMF fund continue to, in my opinion, raise some doubts and concerns. Despite being the world's second largest economy, China still does not produce reliable economic data, nor does it act with transparency in managing its exchange rate. It's worth noting that there was a lengthy exchange in the foreign exchange report produced by the treasury tarp in January.
And the Treasury Department of the United States noted, has enacted policies which have resulted in weak domestic demand, suppressing imports, producing large scale nonmarket support for domestic manufacturing, and reinforcing the economy's excessive reliance on export growth. In 2025, China's goods trade surplus reached $1,200,000,000,000, a record high, and accounted for nearly 70% of global goods trade surpluses. China continues to rely on a range of tools to manage its currency, particularly the daily exchange rate fix and more opaque foreign exchange activities of China's state-owned banks. That's the end of the quote. So much for balanced growth of international trade.
It, in fact, is one sided. All of the problems that I believe treasury pointed to pose a profound threat to manufacturers, whether in The United States or anywhere but China. And it's not just China's currency that is undervalued. It is through the IMF, it believes this to be the case. Also, it's this that we can't even be certain of how Beijing is intervening in currency markets in the first place.
So I believe that we have presented to bill today, HR 8290, which would require the secretary of the treasury to oppose any increase in China's IMF voting power, giving them more power over these questions that abound until we can certify that China is publishing credible balance of payment data and is engaging in transparent exchange rate practices. I believe bringing China or requiring them to come to the table with reliable data and information is in the best interest of the entire world. So if we can make sure that we do not allow anyone to have more influence at the IMF until they become a sound responsible party as other countries have done, I am having HR 829 send a strong single to Beijing precisely because the US wields a veto over shareholding increases at the fund, and we need to make sure that we have an opportunity to provide our IMF the opportunity to have fair and transparent dealings. Mister chairman, I wanna thank you for concerning my legislation, and I hope that my colleagues see this as a very important bipartisan event, and I yield back my time.
Speaker 19
Thank you, Mr. Sessions. Is there further debate on the ANS? The chair recognizes the ranking member of the full committee, Miss Waters of California, for five minutes.
Speaker 2
I'm deeply concerned about this bill. HR 8290 requires The United States to oppose proposals to change the voting shares at the International Monetary Fund, when the treasury determines that China is a currency manipulator. The real effect of this bill, and perhaps its true purpose, is to prevent the IMF from ever increasing the size of its lending capacity. Now let me explain a few things about the IMF, though. The IMF created after World War two has a mission to promote international macroeconomic stability by providing financial assistance programs to countries in crisis, surveillance of the international economy, and technical assistance to help countries formulate and implement sound economic policies.
It is and has been an essential partner to nations around the world, especially in a crisis. A stable global economy is good for America. The IMF funds its activities through something called quotas, which represent the monetary contribution of each member country. When the IMF enacts a quota increase, it is to raise more finance for fund activities, allowing it to keep up with the changing global economy. For individual members, their quota generally reflects their size and position in the world economy.
This means that larger, wealthier countries will contribute more to the IMF, and the developed countries will have smaller quotas. That country-by-country quota is so reflective of the vote share in the IMF. Unlike other international organizations where each country has only one vote, in the IMF, the amount of your quota largely determines your voting share. But, put another way, with every quota increase, the voting share may be affected. And countries can't vote on quota increases by saying that one country gets this and another country can't have that.
Rather, when the IMF puts forward a proposal for a new quota increase, everyone votes on a package for the entire fund at once. This is why this bill is problematic. While it claims to target one country, China, effectively, it's an attack on all. The game was given away when the original text was posted for this markup targeting the IMF's quota increases, given that chairman Hill has previously said that IMF funding, even in crisis, is, I quote, a blank check to genocidal regimes and state sponsors of terrorism, end quote. It is not surprising that we are here debating such a bill yet again.
Now, to be clear, I and Democrats on this committee have supported measures to rein in China's currency manipulation. We've supported in multiple congresses, for example, the bills from representative Melzer that promote transparency. Mhmm. Around China's exchange rate activities and the IMF. But this bill doesn't do anything to stop China. In fact, it helps.
China seeks to replace the US in the international financial system and would love to see the IMF, which the US led, become a relic of the past. We all know that many Republicans, including the president, do not like the international financial institutions, including the IMF. In fact, Trump proposed an executive order which shocked the global community, which suggested the United States should withdraw from the IMF. At the end of the day, HR 82 90 would not affect China, which has generally rebuffed any accusations about currency manipulation, but instead harm the IMF itself. At a time when global tensions are at their highest with Russia's war in Ukraine and President Trump's war in Iran.
We need the IMF more than ever, and so I urge members to reject this harmful bill, and I yield back the balance of my time.
Speaker 19
The gentlelady yields back as there is further debate on the ANS. I now recognize myself for 5 minutes. I wanna voice my support for Mr. Sessions' bill. The Exchange Rate Accountability Act will implement the common-sense principle that China, as a major shareholder of the International Monetary Fund, would adhere to the IMF's core principles. Among the IMF's purposes are to promote exchange rate stability, facilitate the balanced growth of trade, and assist in the elimination of foreign exchange restrictions.
The People's Republic of China undermines each of these purposes on a massive and globally distorted scale through its opaque exchange rate management, industrial subsidies, and capital controls. The Treasury Department, for instance, regularly reports to Congress on China's limited transparency in its exchange rate management. The IMF has estimated that the RMB is undervalued by 16% and that Beijing lavished industrial subsidies totaling 4% of GDP last year. As the fund's third largest shareholder, the Chinese Communist Party has been allowed to both enjoy the benefits of the substantial influence at the fund while flagrantly disregarding its basic mission, in fact, undermining it. Rather than reform its behavior, China has argued that the size of its economy entitles it to even more sway.
But this is completely misguided. They use the same arguments to say there's still a developing economy. As I've said for years, it is not China's GDP, but its adherence to multilateral standards that should dictate a role in multilateral bodies. The United States is the largest shareholder with a veto over IMF quota increases. Can ensure that the PRC does not grow its influence at the fund, while simultaneously undermining it.
Mister Sessions' bill will help make this a reality. At the same time, I commend Mister Sessions for ensuring that our committee's consistency with mandates at the International Monetary Fund stands. His bill, long a policy goal of mine, provides clear direction to achieve a specific policy goal, more transparency from China, while giving the president appropriate flexibility and sunsetting the bill's requirements. The gentleman from Texas has offered a sensible, targeted policy that will hold China accountable, and I urge all of our colleagues to support it. I yield back.
Does anyone else seek recognition on the NHS? Hearing none, we will now move to the amendments. Does anyone wish to offer an amendment to the ANS? No.
Speaker 19
It seems there is an amendment at the desk. For what or does the general lady seek recognition?
Speaker 19
Our point of order has been reserved, the clerk will report the amendment. We'll wait for more distribution.
Speaker 3
Clerk will report the amendment. An amendment to the amendment in the nature of a substitute to H.R. 8290 offered by Miss Waters of California designated as amendment 001.
Speaker 19
Without objection, the amendment is considered read. General Lady is recognized for her amendment.
Speaker 2
Thank you very much. In October 2025, Treasury Secretary Scott Bessent inappropriately used taxpayer dollars through the Exchange Stabilization Fund, or the ESF, to provide a $20,000,000,000 bailout to Argentina. Donald Trump used the bailout to influence Argentina's election and to do a favor to his political ally, Javier Millet. This bailout was and is unacceptable. Americans are taking out loans to buy groceries, skipping meals to save on their food bills, and unable to drive their cars because of the high gas prices.
But Trump's team think it's acceptable to give $20,000,000,000 to a foreign country to have a right winger run for president. Now, to add insult to injury, we as Congress have no details, none, on this bailout. And do you know that Argentina, did you know what they did? Immediately after getting this golden kiss from the treasury, Argentina announced that it was selling its soybeans and other goods to China, undermining American farmers. I wanna point out that China, the currency manipulator, we all wanna stop also loans to Argentina.
China has provided 23,000,000,000 in investments and loans to Argentina. This amendment will provide clarity with regards to these US loans that Argentina or other debtors to the IMF might receive when these countries also receive loans from alleged currency manipulators like China. It's very clear. I urge members to support this amendment. I yield back.
Speaker 19
General, lady yields back. Does the gentleman insist on his point of order?
Speaker 18
No, sir. But I would ask to oppose, to speak to oppose the gentleman's amendment.
Speaker 19
Order is withdrawn, the chairman now recognizes the gentleman from Texas, mister Sessions, for five minutes.
Speaker 18
Thank you very much, Mr. Chairman. Mister chairman, the gentlewoman is and has offered a nature of a substitute. And as I look at this, the actual words that are on here, we are asking for February 1 of each of the five calendar years beginning after the date and an announcement for the treasury to do what they already do. They already do provide information that identifies countries that do not maintain transferred exchange rates. China does not publish a credible balance of payments.
China. And does not support the stabilization fund, which is not even included in this piece of legislation. It's extraneous to the monetary fund. So I oppose what she's doing, and I think the amendment is mostly unnecessary because she has already alluded to it, which I believe everyone here understands. China is the issue.
And my bill is simply saying that we recognize that we would like to have China come and provide credible data information, and just like everyone else, do not have manipulation of their currency. So I think that if we look at the real intent of this, it appears to be the acquisition of information from the exchange stabilization fund, and it's not even part of the subject of what this legislation is about. So I completely believe that what I'm attempting to do, if the gentlewoman, as she reflects on it, she will see that we are trying to say we're gonna do something about it, as opposed to a report that we're gonna make sure that they are not getting credit for the continuation of what they do, but rather to encourage them to come in line with, away from market manipulation, away from currency data that is not reported, and to report things as they should be, with the understanding they already underreport data and information based upon what they seek. So I appreciate the gentlewoman, engaged in this, but I'm gonna oppose the gentlewoman's amendment. Thank you, Mr. Chairman.
I yield back.
Speaker 19
Gentleman yields back. Is there further debate on the amendment? If there's no further debate, the question now occurs on the amendment. All those in favor of the amendment shall signify by saying aye. Aye.
All those opposed shall signify by saying no. No. In the opinion of the chair, the noes have it. Noes have it. And the amendment, so a recorded vote has been requested.
All those in favor of a recorded vote, raise your hand. 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. Are there any further amendments to the amendment in the nature of a substitute?
Seeing no further amendments, without objection, the previous question on the substitute is ordered, and recorded votes on the pending amendments have been postponed. Once those votes are taken, the committee will immediately vote on the adoption of the amendment in the substitute, and then we'll consider the question to report the measure. We will now move on to the next bill. Pursuant to notice, I call up HR 425, the repealing Big Brother Overreach Act, which was introduced by me. The clerk will report the bill, which was distributed in advance.
H r
Speaker 19
Without objection, the first reading is dispensed with. Without objection, the bill is considered read and open to amendment at any point. I have an amendment in the nature of a substitute, copies of which have been distributed in advance. The clerk will report the amendment.
Speaker 3
An amendment in the nature of a substitute to H.R. 425 offered by Mister Davidson of Ohio, designated as Davidson OH 121.
Speaker 1
Objection. Amendments considered red and serve as base decks for purposes of further amendment. Gentleman from Ohio, Mister Davidson, who chairs our national security subcommittee, now recognized for five minutes to describe his amendment.
Speaker 19
I thank the chairman, and I wanna thank all of our colleagues. This bill has over 190 cosponsors. It's broad support because we've heard from small businesses and individual citizens from around the country who have been shocked to find that their small business is presumed to have committed a crime. Therefore, they're essentially being served a search warrant. They're gonna report to an agency they've never heard of and send on the corporate ownership structure of their company.
Or as a gentleman reached out to our office on casework saying, look, I'm the president of a homeowners' association. I don't own anything. Why do I have to do this? We thought, surely, that must be a misreading of the rulemaking process. And, lo and behold, they do intend, under the Biden administration, for people who manage the bank account at a homeowners association to report because that report is supposed to be the self-incriminating evidence that the people laundering money for the Sinaloa cartel, providing sanctions evasion for Iran or North Korea, they're gonna get tripped up by this report.
But meanwhile, they're some of the most nefarious actors in the world. This is the most poorly thought out, poorly structured approach that I could think of. And I was glad to have so many other like minded colleagues say, yeah, this is a big brother overreach act. Why is the government telling us we have to report this information? And we don't want bad things to happen to our country.
But on the other side, how is a small business equipped to do this? And so when people reached out to their peers, they started in their networks. Groups like the National Federation of Independent Businesses made this one of their top priorities. Frankly, the chamber of commerce made it a big priority, and they got the number down below 20. So it really made the nexus very small businesses.
Courts intervened, they said that the premise on this is faulty. So thankfully, there was an election, and we got President Trump to staff the executive branch appropriately. And in the first two months of his second term, the administration put out a rule that said, let's think through this. Let's find out who the foreign ownership and interests are in our companies. There's a void.
Foreign owners aren't protected by the Fourth Amendment, whereas American citizens are protected by the Fourth Amendment. So we can put this burden on people that aren't protected by the constitution and not violate their constitutionally protected rights, so we can do that much. But to go further would violate the Fourth Amendment, and that's the direction I think courts were headed. What we need to do today is lock in the rulemaking that the executive branch has done, and that's exactly what this ANS does. It locks in the rulemaking that has already been done.
They've had the notice of proposed rulemaking. They've had massive feedback, and the feedback overwhelmingly says that the people wanna they want security, but they also want privacy just like the founding fathers did. And that's why our constitution is structured the way that it is. So I think the administration's thoughtfully addressed this with rulemaking, and now it's our burden to do this with lawmaking. And so I urge all of our colleagues to support this amendment in the nature of substitute, and then we can expeditiously get it to the floor.
With that, I yield back.
Speaker 1
Thank the gentleman from Ohio. He yields back. Who seeks recognition? Frank, a member of the full committee?
Speaker 2
Thank you very much. Today, the public should, we'll see, Republicans vote to protect terrorists, drug traffickers, gun smugglers, and even people like Jeffrey Epstein as these bad actors use shell companies to hide their ill-gotten gains. Today, Republicans will vote to gut one of the most significant crime-fighting national security tools that Congress has created this century. And to be clear, this bill will do nothing to lower grocery costs, prices at the pump, or housing costs. Early in this administration, Trump's team moved to gut the Corporate Transparency Act, which created a database at the Treasury Department to identify the beneficial owners, the real people behind shell companies and other companies in America.
Every developed nation on earth has or is increasing a database like this to stop these criminals. But Trump's officials instead want to welcome these bad actors to our shores to hide their money. HR 4425 would codify this terrible decision, permanently harming our economy. Trump and his GOP are already the reason why gas is up 45% year-over-year. They are the reason why the price of utilities, food, and even the cup of coffee that you may have had with breakfast are all through the roof.
Housing, if you can find it, is unaffordable. Consumer sentiment currently sits at the lowest that it has ever been in survey's 74 year history. And now families are drawing on their retirement savings in record numbers, not for retirement, but to make ends meet. Even the small businesses that the GOP claims to support oppose this bill. The Small Business Majority and the Main Street Alliance, among others, say the Corporate Transparency Act protects small businesses by stopping these anonymous shell companies from unfairly competing for contracts and exploiting programs meant for small businesses.
HR 425 provides cover for cybercriminals, fraudsters, and scammers to continue to target Americans, and, yes, even American small businesses. It gives scammers who target the elderly, the young, America's businesses, and even the federal government an advantage in getting away with their crimes. It helps North Korea and Iran to build their weapons programs in defiance of US and allied sanctions. It was for all of these reasons that Democrats and Republicans came together to pass the CTA in the first place, and why even the first Trump White House supported the law. It's why the CTA's passage was supported by a broad coalition that included businesses, financial institutions, anti-corruption organizations, religious groups, law enforcement, and state governments.
And it is for all of these reasons. I urge my colleagues to vote against this dangerous bill. Wow. Why would my colleagues do this? Why would they vote for this bill?
I don't know. I yield back to the balance of my time.
Speaker 1
General Woman yields back. Who seeks recognition on Mr. Davidson's underlying bill? Mister Church. Mister Lynch?
Speaker 15
Thank you, Mr. Chairman. Regretfully, you know, I have to say that this is probably one of the worst bills that I've seen come before this committee or any other committee I sit on in the past 25 years. I've been here 25 years. This is among the worst. This is among the very worst.
So this is a bill to repeal, let's just be clear. It's to repeal the Corporate Transparency Act. That's what this is doing. So the Corporate Transparency Act is designed to target bad actors, anonymous shell companies, which are commonly used by drug cartels, human traffickers, terrorists, fraudsters, scammers, some oligarchs, and other bad actors to hide and move their illicit activities and funds. Okay?
What the corporate transparency act does is it requires a company to say who is behind them. Who is behind? Who are the natural people behind the company? You can't have a shell corporation. We have to know who the people are behind that corporation.
That's the Corporate Transparency Act. This bill would repeal that so that people could create shell companies and do all the things that I just mentioned. This is an attack on a rule-based financial system. Nothing less. This is a direct attack.
Prior to the corporate transparency act passage, there was no federal requirement for natural persons who own or control indirectly or directly corporate entities such as limited liability corporations to disclose their identities. That's so we're not putting any onerous burden on anybody. It's a form, it takes about ten minutes to fill out. There are two things. One, you gotta fill out who you are, your name, basically, and any, doing business as, any other affiliates of that.
You have to put in your tax ID number, and you have to have a real ID, like your license. Many, I think most states have already gone to the real ID. That's it. There's no Big Brother. This whole idea about the what was it called?
It was called the repealing Big Brother overreach. You have to put your name down. If you're doing business in the general economy, we have to know who you are. You can't scam us. That's what this bill requires.
No more scams. No more people hiding behind shell corporations. That's what it stops. To identify and verify the natural persons behind any legal entity, customer, or beneficial owner. That's what this requires.
Let me tell you who's behind, who's against this. The National Association of District Attorneys offered in its response to this that they said, quote, weakening or narrowing the corporate transparency act will have devastating consequences on law enforcement's ability to fight criminal enterprises that exploit shell companies to launder money, to traffic drugs. These are the district attorneys that represent all of our neighborhoods and counties and cities. Weapons trafficking, human trafficking, terrorism. Without this data, prosecutors are left blind when investigating shell companies.
The proposed rule, this one, change as currently drafted would greatly curtail our ability to combat shell companies fueling illegal operations plaguing communities across our country and would jeopardize public safety and our nation's national security. If that weren't enough, the National Narcotics Officers Association coalition said in its comment letter, offices on the ground know firsthand how difficult it is to build a financial case when the true owners of a company are hidden behind layers of paperwork and front people. That's what this bill does. Plain and simple. It allows shell companies to pull these scams.
You know, we passed this law recently, and President Trump signed it into law. But now we are in favor of scams. We're in favor of foreign companies coming in here and operate. We're in favor of people scamming the government and escaping justice. That's what we're all about in this country now.
We're against the nation.
Speaker 5
Mister chairman, I move to strike the last word. Thank you, Mr. Chairman. The ANS to HR 425 got the beneficial ownership database and reporting requirements from the corporate transparency act. It also deletes the domestic data that the treasury department has collected already, passed in 2021 with wide bipartisan support and from a broad array of stakeholders, including President Trump. The CTA required the treasury department to develop and maintain a registry of the real beneficial owners of established businesses to crack down on the use of anonymous shell companies here in the US. Mister chairman, I would like to include for the record a statement of administration policy from the first Trump administration supporting passage of the CTA in 2019, and a letter signed by 585 law enforcement and small business organizations supporting passage of the CTA as well.
Speaker 5
Well, there's no doubt that there were problems and delays with FinCEN's rollout and establishment of the BIG OI registry, and too many small businesses remain unaware of their reporting obligations. That is not a justification for the elimination of the statute. Instead, we must look to improve it. Last year, I introduced HR 3829, the FinCEN, SBA coordination and beneficial ownership registration act to improve the BOI reporting process. My bill requires Vincent and the SBA to enter into an MOU to disseminate information in multiple languages to small businesses, trade associations, and other entities that represent small businesses, to help small businesses understand their reporting obligations.
It also includes reporting requirements that will keep Congress up to date on implementation. Small businesses want practical solutions and tools, not legislative proposals premised on outlandish accusations that actually make them less safe. Passage of HR 425 will further increase the use of anonymous shell companies here in the US and give further rise to illicit activity. On the small business committee, we received more than a dozen examples of how anonymous companies were used to cover up the laundering of proceeds of drug trafficking, human trafficking, sanctions evasion, counterfeiting operation, and scam that harmed small businesses, including stolen contract and disruptions to supply chains. Mister chairman, we all saw what happened with the PPP money and how bad actors and ineligible businesses accessed money that was not supposed to go to them.
And Republicans, every day, in every hearing, are reminding us about that. But yet, they don't approve increasing the budget for the inspector general, or worse yet, the president has not appointed all of the inspector generals in every federal agency. Legitimate small businesses benefit from the BOI registry and supported its creation because the use of anonymous companies also have the ability to distort markets and price competition. While considering the CTA in 2018, small business majority conducted a poll and found more than three-quarters of small businesses express support for legislation requiring businesses to divulge their owners' true identities and the time of formation. In the same survey, 84% of small business owners said the use of anonymous companies to win contracts or obtain government funding was a problem.
The NFIB, the most vocal opponent of the CTA, surveyed their members in 2024 after the CTA went into effect on the most severe problems they face, and no laws, including the CTA, were mentioned. The NFIB has also vastly overinflated the projected time and cost of filing with the registry. Federal paperwork was 15th on the list of most severe problems faced by their members, below the cost of health insurance, cost of supplies, and locating qualified employees among other concerns. Passage of this bill will tie the hands of law enforcement, increase criminal activity, and endanger our economy. I urge my colleagues to vote no, and I yield back.
Speaker 1
Gentlewoman yields back. The chair recognizes the gentleman from Tennessee, Mr. Ogles.
Speaker 22
Thank you, Mr. Chairman. You know, this is really a common sense piece of legislation that's removing barriers for corporations and quite frankly getting government out of the over collection of data. It's really not that complicated, and you just kinda, mister chairman, it's kind of ironic that, you know, under the Biden administration, the border was wide open, and our colleagues didn't really seem to care about drug trafficking and drug use and damage to individuals. But now you remove a simple reporting requirement and that they're concerned about it. But with that, mister chairman, I'd like to yield some time to the gentleman from Ohio, mister Davidson.
Speaker 19
Thanks, Mr. Ogles. I just wanna share that some of the people we've heard from in support of this legislation, the associated builders and contractors, the international franchise association, national association of convenience stores, the national association of wholesale distributors, the national cattleman's beef association, the NFIB, the national lumber and building material dealers association, national roofing contractors association, the s corporation association, tons of folks. So I'd just ask unanimous consent to enter into the record. Letters of support from the National Association of Convenience Stores, National Lumber and Building Materials Dealers Association, from the NFIB, statements of support from National Association of Wholesaler Distributors and the International Franchise Associations, as well as a letter from over 60 small businesses, small business associations supporting, you know, this legislation. Without objection, I'll.
Speaker 1
Jones, Tennessee yields back. The chair recognized the ranking member on our Capital Markets Subcommittee, Mr. Chairman, from California.
Speaker 23
Thank you. I wanna commend the patriotic businesses that supported the entire idea of providing full disclosure. This, the fact the coalition that was put together that got us to pass this bill was supported by The United States Chamber Of Commerce. Now I've spent 30 years on the foreign affairs committee and 30 years trying to prevent Iran from having a nuclear weapon. And this president has put the lives and limbs of our men and women in uniform on the line, with that as an objective.
But now we are told that certain scammy business interests may lose a buck, and we have to make sure that those scammy business interests aren't hurt, even while we turn to our men and women in uniform and tell them to risk life and limb. There is nothing more disgusting than those who say that our soldiers should die for a cause that they are unwilling to ask some of the most corrupt businesses in this country to do a little something for to achieve. And keep in mind, stopping Iran requires all of the economic power of the United States. That's why in 2021, Congress passed the Corporate Transparency Act, and that is why we need it today. That's why I would put into the record a statement, letter we received from APAC, but I think everybody else did as well, urging members to oppose this bill and its amendment in the nature of a substitute.
Speaker 23
It states this ultimately leaves a gaping hole in the US anti money laundering framework, which will undoubtedly be supported by Iran and other malign actors. They further point out how before we had this act, the Chinese national arranged a billion-dollar global trafficking of Iranian oil to China, and this global transparency act might well have stopped them. But it's not just a matter of national security. Why do the district attorneys support this, etc.? Where's the real market for this nefarious enterprise?
It is in bankruptcy fraud, and it is husbands, it's usually the husbands hiding assets from their spouses or their estranged spouses or their soon to be ex spouses. Why do we want to facilitate crime in the suites when we should not be? Why should we not be defunding those who fight crime in the streets? This is a bill put forward, not by drug dealers, but by those who have a chance to make money investing the funds of drug dealers and soon-to-be ex-husbands and those engaged in bankruptcy fraud. Why are they on that side? Because there's money and power on that side.
There's money to be made from drug dealers. There's money to be made from Iran and Russian oligarchs. And there's no lobby on the other side. There's no money or power on the other side. So this bill constitutes an attempt to say we want a strong America, but we don't want an America whose government is strong enough to stand up to Iran, to stand up to Russia, to stand up to human traffickers and drug dealers, and to say no in a family court setting.
You have to disclose all your assets to your spouse, and you can't engage in bankruptcy fraud and hide your assets from creditors. So this is a clear vote. Whose side are you on? Concealment or transparency, honesty, or profits from some of the most nefarious business interests? Unfortunately, we know where some people stand on this.
I'm proud to say that our party stands for transparency and stands for a bill that this congress passed with a clear, bipartisan majority just a few years ago before the most shady business interests in our country decided that it was hurting their profits. And, with that, I yield back.
Speaker 24
Mister chairman, I'd like to express my strong opposition to HR 425 offered by my friend, the gentleman from Ohio, mister Davidson. Let me remind everybody. In 2020, this committee passed the most sweeping anti-money laundering reforms in decades with the Anti-Money Laundering Act of 2020, including the historic Corporate Transparency Act, referred to hereafter as CT CTA, which sought to crack down on money laundering through shell companies by imposing for the first time a federal requirement to identify the beneficial owners of certain companies. The CTA was intended to streamline industry compliance, increase transparency, and make it easier for small businesses to access banking services, while making critical improvements to national security. We talk a lot about fentanyl trafficking, human trafficking, terrorist financing, sex sanction evasion, sweeping fraud schemes, and many other forms of criminal activity.
The CTA and the beneficial ownership database the law sought to create would be a critical tool in law enforcement's arsenal to crack down on these exact crimes. A decade ago, in 2016, the Financial Action Task Force, FATF, highlighted that the lack of a BOI database is one of the most critical gaps in the United States' compliance with FATF standards. Executive branch officials from both Democratic and Republican administrations have underscored the law enforcement utility of a BOI registry. So I agree, Mr. Chairman. It's quite simple.
Currently, there are 170 countries across the globe that have some form of beneficial ownership registry, leaving the United States once again, if we do what my colleagues on the other side of the aisle want to do, lagging behind with a weaker and less effective anti-money laundering regime. I ask mister chairman unanimous consent to submit to the record a map which is showing which countries have taken action on beneficial ownership transparency.
Speaker 24
In testimony before the Senate Banking Committee, the criminal investigative division of the FBI stated that the lack of a US VOI database attracts unlawful actors to abuse our state-based registration system and the United States financial industry. Congress appropriately acted on the feedback by passing the Corporate Transparency Act, which President Trump signed into law, and Treasury began implementing during the Biden administration. Again, mister chairman, quite simple. We've done it before. Congress appropriately acted on this feedback by passing the Corporate Transparency Act, which Donald Trump signed.
Last year, the Trump administration's abrupt decision to limit enforcement of the CTA to foreign entities only, exempting over 99% of the companies Congress intended the law to cover, takes us back to square one with the very same national security vulnerabilities we started with. What are we trying to hide over there, Mr. Chairman? Letting companies put us in this situation. Now instead of standing up for the law that passed with overwhelmingly bipartisan support, the majority is moving to codify treasury's blatant disregard of congressional intent and our national security needs. I wanna take a moment to acknowledge concerns from small businesses we've heard from over the last couple of years regarding this new reporting requirement, and the threat of potential fines for noncompliance.
That is why last congress, I worked with Fin San to improve small business education about the BOI rule, even hosting an information session in my district in Columbus for more than 100 small business owners with former secretary Brian Nelson and fence-in director Gacke, and former member of this committee, Republican Steve Stiverse. I also reached out to several of my Republican colleagues to explore pathways to reform the law to ease small businesses' compliance. Instead of working in a bipartisan manner to improve the law while preserving its national security goals, my colleagues are now trying to repeal the law almost in its entirety. This is an extremely shortsighted policy with grave national consequences. I urge my colleagues to vote against this bill, and I yield back.
Speaker 1
Gentlemen, time has expired, she yields back, seeks recognition. Seeing no other speakers on the underlying bill, let me voice my support. You, yes, ma'am. You wanna speak on the underlying bill?
Speaker 15
I thank the gentle lady for yielding. I just wanna make sure people understand perfectly what's going on here. What the corporate transparency act requires, what it would require, is two things. One, that a company has to list its full legal name and any trade names doing business under. Its address, and whatever state it's in, and its IRS taxpayer identification number.
The other thing that it requires is that they have to list the full legal name of anyone who owns 25% or more of the company or substantially directs its operations. That's it. It's like a two-page compliance application. It's just basic. What you'd have to do if you're applying for a loan at a bank or something like that, they want to know who you are.
That's what the underlying bill would require, the corporate transparency act. What this amendment and the nature of substitute does, it does away with all that. Now they're talking about, you know, overreach. We just wanna know what your name is, and where you are. What what's your address?
And so they wanna keep the scamification going here. So, and let’s get the list of people who are against this amendment in the nature of a substitute. We got Transparency International, the US office, the Financial Accountability and Corporate Transparency Coalition, Public Citizen, Americans for Financial Reform, Nash, the National District Attorneys Association of the United States.
Speaker 15
That's it. Every district attorney in every single district across this country, they who are responsible for protecting citizens, you know, and preventing crime. Polaris. Polaris is the leading anti-human trafficking organization on the planet because they wanna stop people like Jeffrey Epstein. This would allow people like Epstein to operate Sub Rosa on the sly, not putting their name behind anything.
That's how we operated, anyway. The American Bankers Association, they're against this. Freedom House, Global Witness, Human Rights Watch, again, because of the trafficking that goes on when companies are allowed to operate in the United States without us knowing who's behind them. The Independent Community Bankers of America, the National Association of Assistant United States Attorneys, operating in every single district and every single state in the union. The National Association of Assistant United States Attorneys.
This is not overreach. This is just enforcing the law. The project on government oversight, the United States Council for International Business, again, as others have noted, will be the only country that does not have a register of beneficial ownership. We'll be as a matter of fact, the FADF, the Financial Action Task Force, has said that they will lower the US rating if we adopt this because they have a requirement that people operate against terrorist financing and money laundering. And this would allow money laundering and human trafficking and drug trafficking in spades across the board.
This is crazy. This is a bad bill, and I'm surprised that so many people are supporting it. I understand people are afraid of the president, and he's got a total disrespect for the law. But sometimes you have to grow a spine. You gotta stand up and oppose things like that.
And we're at a time like that right now in this country. We can't allow this lawlessness to continue, even if it is supported by the president of the United States. We gotta stand up. We gotta fight for the rule of law. This is where we're at.
I'm sad to say it, but this is where we're at. I want my country back. I want my country back. And this is bringing us in the wrong direction. I'm asking my colleagues to oppose this bill.
Stand up for America. Stand up for the constitution, for god's sakes. I yield back. I yield back to the gentlelady. Thank you for yielding.
Speaker 1
Gentlemen's time is miss Bynum's time has expired. Who seeks recognition? Is this for an amendment, or you're speaking on the bill?
Speaker 1
I'd like to recognize myself for 5 minutes. I wanna offer my support for Mister Davidson's amendment. And let's start out with some basic principles here. First, it is illegal to do money laundering, illegal structure transactions, illegal to hide money through the American corporate system. And we have a rule on that that's been in place since 2016, the customer due diligence form, where every bank already collects the beneficial ownership information for everyone who has a business entity in the company.
So let's be clear that this data is collected. It is the law. It is the rule. No one's proposing changing that. That's point one.
Point two, it's true that we would not have a universal for every single one of the 33,000,000 businesses in America beneficial ownership database because we would, in this bill, limit it to foreigners operating in The United States. People from outside the US, corporations or individuals who try to form a pass-through entity in the US would be subject to this rule. So we're not exempting a non-citizen foreign interest and corporate interest in complying with the beneficial ownership form. But I would remind my friends that Cyprus, UAE, Turkey, all have beneficial ownership databases, and they're the most renowned money laundering places on the planet according to the Financial Action Task Force. And they have a form, because you know what?
People who are criminals don't fill out forms honestly. Secondly, topic: the impact on the small business community. 33,000,000 businesses have to comply with the rule as designed by the committee, signed into law by President Trump. That's right. President Trump signed this bill into law.
There was an amendment to the National Defense Authorization Bill back in 2020. But we're asking Joe's HVAC company to go through the process of complying with a form with a government entity he or she has never heard of, filling out another form that could be a database that could be leaked. And so it is true that as passed by Congress, this act imposed an onerous, confusing, duplicative filing requirement on small businesses. And their burden is all on them, not on the banks. Of course, the banks are for this because it makes the small business take all the liability subject to civil penalties and criminal prosecution if you don't fill the form out right.
30,000,000 small businesses, which is why they all wrote letters in opposition to this. I debated this bill in 2020 with Caroline Maloney, the author of the bill from New York, at the Heritage Foundation, and it's why the National Federation of Independent Businesses and Heritage oppose this bill, because there's a better way to have chosen to collect it, and we didn't do it. And so we have this burden on our small businesses, our plumbers, our electricians, our real estate entrepreneurs, hardworking Americans who are asked to go fill out a form subject to criminal prosecution if they don't do it right, because we're trying to catch drug dealers, human traffickers, which we're already doing daily through the suspicious activity report, through our money laundering rules, through our surveillance of the financial system, and through the fact that we're demanding that foreigners, foreign operators, foreign corporations still comply with this FinCEN notification. It does not represent the CTA as drafted, a durable consensus policy, but an overbroad regime that all we're trying to do here is narrow the scope of what Congress has passed, and that was the attempt of this Trump administration. Even though the previous Trump administration signed into law, they've seen in the last five years how onerous this should be and how it should be, in my judgment, narrowed in scope.
If we do limit the beneficial ownership database to foreign actors, foreigners inside the United States, aren't we marshaling our resources directly at the people we are suspected of tax evasion or human trafficking or money laundering, like the cartels active in every one of our communities? So I think it better focuses federal resources, and I think it's more fair to our small businesses who I get stopped on the street with all the time. CPA firms, accountants, bankers, small business owners asking me why they have to impose this form. They were glad it was stayed by president Trump's regulatory action, but they're concerned about their criminal liability if they don't fill out this form when they've already given the information to their bank. So I really appreciate the debate today, but I have to say I side with, mister Davidson's bill on this.
I appreciate the comments and passion of my colleagues on the other side of the aisle, and I yield back. Is there any additional discussion on the underlying bill? Are there amendments to the bill?
Speaker 1
A ranking member has an amendment at the desk. We'll pause while it's being distributed.
Speaker 1
Davidson of Ohio reserves a point of order. Clerk will report the amendment, please.
Speaker 3
An amendment to the amendment in the nature of a substitute to H.R. 425 offered by Miss Waters of California, designated as H.R. 42508.
Speaker 1
Without objection, the amendment is considered read, and the gentlewoman from California is now recognized to describe her amendment.
Speaker 2
Thank you very much. Before I get into my amendment, I'd like a colloquy. What, mister Lynch, because I want to make sure I understood what you said. Did you say all district attorneys in this country oppose this bill?
Speaker 15
That's correct. The National Association of District Attorneys across this country are opposed to this change in the law, which would, you know, go back to allowing shell companies to operate within the United States.
Speaker 15
That's correct. Of 170 major economies across the globe, we would be the only one that does not have a beneficial ownership registry.
Speaker 2
Well, I wanted to make sure that I heard you correctly, and that is what you reiterated. And thank you very much. The Bipartisan Corporate Transparency Act was designed to bust anonymous shell companies commonly used by drug cartels, human traffickers, terrorists, fraudsters, scammers, oligarchs, and other bad actors as they hide and move their illicit activities and thoughts. Beneficial ownership means the true ownership or control of a company, and the CTA promotes transparency into these shale companies by establishing national requirements and a beneficial ownership database at Treasury's Financial Crimes Enforcement Network, that is FinCEN. The database and the law collect this information from certain companies that are of the type, size, and function typically seen in such shale companies.
The law also provides essential streamlined access to this information for qualifying law enforcement, national security, and regulatory bodies such as the Federal Bureau of Investigation and the United States Secret Service, which investigates cybercrimes committed against American citizens and businesses. The FBI, through its Internet Crimes Complaint Center or the IC3, collects reports of these crimes, helping to initiate investigations of investment fraud, extortion, ransom, ware attacks, business email compromise, confidence or romance scams, identity theft, and so much more. In 2025, the FBI received over a million complaints, generating 21,000,000,000 in losses, a 24% increase over the previous year. That's just a small slice of the estimated fraud losses in the United States, which may surpass 500,000,000,000 annually. These crimes and their proceeds are exactly why this amendment is essential.
My amendment says that this bill, which narrows reporting entities from an estimated 32,000,000 to just over 11,000, would not apply to beneficial ownership information for any legal entity that would be highly useful in national security, intelligence, or law enforcement agency efforts to detect, prevent, or prosecute crimes in the FBI's IC3 annual report. The resources provided by the CTA are needed now more than ever as Main Street America faces an affordability crisis that has no foreseeable end. This weekend, Trump's energy secretary said that gas prices won't fall until 2027. Prices at the pump, in the grocery store, and even the house itself are becoming more unaffordable, so Americans cannot afford to lose more to these scam artists. Republicans like to claim that they care about affordability.
But if they did, they wouldn't be offering this bill. They wouldn't be facilitating the cyber fraud and scams that steal seniors' life savings, empty business bank accounts, and prey on the economically disadvantaged. So, I have a fact sheet here for the record that describes how CTA helps law enforcement and victims to combat cybercrime, including fraud and scams. I would like to submit for the record the FACT Coalition, Financial Accountability and Corporate Transparency.
Speaker 1
Who seeks recognition? Mister Davidson, you recognize strike the last word.
Speaker 1
Yeah. He withdraws your point of order, I now recognize you to strike the last word.
Speaker 19
I do strike the last word. The general lady's amendment is redundant to what is already in the CTA as enacted. The administration found that beneficial ownership information of Americans and American small businesses is not, quote, highly useful to national security. Law enforcement used the exemption authority provided by the CTA to exempt the very class of small businesses that this legislation covers. In fact, it addressed matters that the court were raising, that there's a presumption that because you have a small business or because you have access to a bank account for a homeowners association or whatnot, that therefore, you're a criminal.
And that's the faulty logic that our colleagues continue to assail this under. Thankfully, the administration saw through that. I oppose this amendment, and I yield back.
Speaker 1
I thank the gentleman. I just, I think I wanna reiterate for the debate because it just keeps being repeated. There is a beneficial ownership database in the US. If Davidson's bill was adopted, then it would be limited to, going forward, foreigners, foreign actors, foreign corporations. So where it's not going away.
Secondly, and perhaps more importantly, it's already the law to disclose beneficial ownership, and it is collected by every financial institution, broker dealer, manager in the company for anyone who has touched the financial system. It's a fundamental issue, as I said in my opening comments, and it's been a requirement since the 2016 to 2018 time frame. Just a moment. So the definition, the definitions in the CTA as adopted were over 5,000,000 in revenue and over 20 employees is who's required to file under, I should say. Yeah.
Under 5,000,000 in revenue, and 20 or fewer employees. In other words, that's their definition of a shell business for a human trafficker, a money launderer. But you come to Arkansas, 5,000,000 in revenues, 20 employees. That's the goal. That's the dream.
And yet we're calling it a shell company and adding more regulatory burden to which OMB and OIRA, the office of intergovernmental regulatory affairs, says it could cost $100,000,000,000 to comply with this rule. In Arkansas, I'd say a typical small business might have 500,000 in revenue and three to five, three to eight under 10 employees for sure. So every one of them, this is the plumbing guy. This is the heating and cooling, a family owned business, construction business, small real estate business, 30 over 30,000,000 of them. So I just wanna be on the record.
It is the law. America is complying with the law. And jurisdictions outside the United States like Dubai and the UAE have a beneficial ownership register but is a centerpiece of illegal and illicit activity. And I think what Mister Davidson's.
Speaker 1
To do is narrow the scope of the collection on this new fence and form. He's not abolishing the requirement that you have to disclose the beneficial owners. It's already the law. What he's doing is he's narrowing the scope of who has to fill out yet another form on that topic directly at FinCent, by the way, only available online. Your CPA is not allowed to help you do it because they don't have liability insurance as an accountant to provide that information.
State law governs that. It's very confusing to a lot of small business people. So I wanna, again, thank Mister Davidson for just trying to narrow the scope of this onerous duplicative effort. I yield back to him.
Speaker 19
Thank you, chairman. I think those points are well-made. And regard to the underlying objective, the fallacy is that if you just fill out a piece of paper, that everything would be discernible. And think how many things we could solve by just requiring everyone to file a piece of paper every year. We already do that for the most part, with a tax return, for example.
There are all kinds of things that people are already doing that the people who try to stop crimes in our country use to successfully stop crimes. The idea that Joe the Plumber is somehow presumed to be engaged in illicit activity because he's got less than 20 employees and less than 5,000,000 in revenue is completely fallacious. And, this gets at it, and the general ladies' amendment doesn't help that.
Speaker 15
Well, let me try to straighten out some of the confusion because you guys sure share it. Number one, the reason that
Speaker 15
The Corporate Transparency Act exempted people who have 20 or more businesses because those are probably legitimate businesses. Right? And for small businesses, 82% of small businesses in the United States today have no employees. It's just one person. That's why subchapter s corporation is in favor of your bill, your amendment in the nature of substitute.
Secondly, so the bill was trying to get at the companies that are most likely to be Shell corporations. That's what the bill, the original corporate transparency act, that President Trump signed into law. That was what he was trying to get at, what we were all trying to get at. We're trying to narrow the number of people we were going after to just those companies that had the characteristics of a Shell corporation, number one. Number two, the idea that we would somehow criminalize paperwork, like, if you filled out the form wrong, that we were gonna prosecute you is totally false.
You know? As a matter of fact, we wrote in the bill. We were all here. You know, this is and what we're hearing is a different deliberate misinterpretation of law, which states explicitly in law that penalties will come solely for those who willfully lie or omit material in an attempt to deceive government authorities. The law states, they will be willfully provide or attempt to provide false or fraudulent beneficial ownership information, including a false or fraudulently identifying photograph or a false document.
That's when you fall afoul of the law. We recognize that sometimes people make honest mistakes, and we carve that out in the corporate transparency act, trying to make sure that we didn't catch anyone in the net unintentionally. That is what we were working towards. But,
Speaker 1
Will the gentleman yield for a question? Sure. Sure. Absolutely. I think when you start out, you implied when you gave the subchapter s example, because 80% of small businesses don't have employees or sole proprietors effectively, that you implied that they're not covered by this.
Speaker 15
They're more likely to be the smaller the number of employees, the lower like, if you have one employee.
Speaker 15
You probably have an easier course. People wouldn't go through, you know, hiring all kinds of employees and actually having a payroll to be a shell corporation.
Speaker 1
That's what Shell Corporation is. Yeah. What I was just crying trying to make sure I understood what you said is that you're not saying those people aren't required to fill out the form. No. It's every this law says everyone.
Speaker 15
With reclaiming my time. You're sure. So the amendment and the nature of the substitute basically exempts everybody. Right? What Trump has done and what this ANS would do is you just exempt 32,000,000 people, 32,000,000 businesses. So nobody has to fill any of this out.
So when you say we're already collecting this, you know, those 32,000,000 people don't have to.
Speaker 1
Because the law requires those 30 million new pay people to disclose to their financial institution, their
Speaker 15
Oh, yeah. Yeah. Yeah. That is no central, yeah. We're claiming my time again.
So this law required the establishment of a central database that would be used by law enforcement. Not that everyone would have to go around to their individual bank. When they comply with this CTA, with the, you know, Corporate Transparency Act, once they comply, they get a number. They get a number, and it says, for five years, is good. You comply with the CTA.
Now you can go to any bank, whatever, and you say, here's my number just like you would, you know, if you're certified in some other fashion. You don't have to drag all your stuff with you and prove that you're not a Shell corporation. It is stamped. You are certified, and you can go ahead and do business. That's what that piece is, what the a n s eliminates.
That's what it eliminates. Other forms might be possible, but what we passed and what the president signed into law, that's what mister Davidson, the gentleman from Ohio's bill does, amendment does, it eliminates that requirement. How am I doing, out of time? I'm just about done. I guess I yield back, mister chairman.
Speaker 1
Thank you. Mister Lynch yields back. Further debate on this amendment. If there's no further debate on the amendment, the question now occurs on the amendment. Those in favor of the amendment shall signify by saying aye.
All those posts signify by saying no. Depending on the chair of the noes have it. The nose have it. Amendment is not adopted.
Speaker 1
The ranking member requests a recorded vote. All those in favor of a recorded vote, raise your hand. A sufficient number having raised their hand, a recorded vote is ordered. Pursuant to subsection c5 of rule three of committee rules, further proceedings on the amendment are postponed. Is there further amendments to on Mister David's amendment nature substitute?
Miss Bayou of Ohio?
Speaker 3
Clerk will report the amendment, please. An amendment to the amendment in the nature of a substitute to H.R. 425 offered by Miss Beatty of Ohio, designated as H.R. 42510.
Speaker 1
Objection. Amendment is considered read, and the gentleman from Ohio is now recognized to describe her amendment.
Speaker 24
Thank you, Mr. Chairman. Let me try this a different way. We're going back and forth. And so let me just say, my amendment would ensure that the changes made to the Corporate Transparency Act made by HR 425 do not apply to any corporation, LLC, or other similar entity if the beneficial ownership information of that entity would be highly useful to detect, prevent, or prosecute crimes committed by transnational criminal organizations. Certainly, as we all know, TCOs commit a vast array of crimes that span international borders, including drugs, narcotic trafficking, human trafficking, money laundering, weapons trafficking, and many other types of illicit activities.
Certainly, we would want to be on the side of making sure that we've done everything to prevent this. And here's the thing. It was just a few years ago that the same president signed it. So I'm a be like Mr. Lynch. What?
He made a phone call. What are we covering up? What are we trying to do? The impact of TCOs in America cannot be overstated. You know, I could go through a whole litany of stuff.
But let me just tell you, criminal organizations are also conducting human trafficking and smuggling at a massive scale. They're siphoning up to $250,000,000,000 a year from our economy through intellectual property theft and counterfeiting. How do they do that? In short order, it's money laundering. And, come on, my Republican colleagues know this.
It is at the center of their operations, allowing them to transact and hide their profits through front companies. These TCOs and drug trafficking organizations know exactly how to exploit gaps in corporate transparency, to move money, hide true ownership, and to ensure that their key players fly under the radar of law enforcement. That's simple. No one should be against what we're trying to do. And we did it before, a few years ago.
Bipartisanship. That's why one of our most effective weapons to intercept TCOs is to enable law enforcement and the financial crimes enforcement network to strip away all of these things that these TCOs are hiding behind and follow the money to the true criminals behind these transactions. If my colleagues across the hour were really serious, mister chairman, about the importance of preserving The United States national security and protecting our constituents from traffickers, they wouldn't be weakening a law enforcement tool like the Corporate Transparency Act, delivering a huge win to the bad guys. Now, mister chairman, let me just say this. You brought up the CDD rule and said it was duplicative.
Well, let me follow-up on mister Lynch's comment because the CTA was designed to close gaps that were left open by the consumer due diligence role, left open. Currently, there is no central database that covers all businesses, regardless of whether they have a financial institution relationship. And we also know that there are gaps in the CDD rule with that. So I implore my colleagues to rethink this. Let's come together.
This is not new. The same president, the same Republicans and Democrats just did this a few years ago. So somebody's gonna have to explain to me why all of a sudden we are dealing with this in reverse when we know that people are laundering money. We know that there's human trafficking. We know that there are 170 other countries who are doing this, and mister Lynch just rattled off a litany of information.
It just doesn't make sense to me, and I yield back.
Speaker 1
Gentlewoman yields back. Does the gentleman insist on his point of order?
Speaker 1
And, mister Davis, do you move to strike the last one? You moved to strike.
Speaker 19
Thank you, chairman. The core claim here and the general ladies' amendment is that law enforcement is more difficult when some degree of privacy is afforded to individuals and small businesses. Well, law enforcement's used to having some degree of privacy accommodation. The Fourth Amendment guarantees it. It says, quote, the right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures shall not be violated, and no warrants shall issue but upon probable cause supported by oath or affirmation, and particularly describing the place to be searched and the person or things to be seized.
I mean, mister chairman, our colleague, mister Lynch, just laid out the idea that, well, 82% of these small businesses have one employee. So, therefore, they're more likely to be engaged in illicit finance than bigger businesses. So, therefore, we can just infringe on their right to privacy. I mean, that's a crazy precedent. If we're just gonna go into prob and stats, I mean, predictive modeling, we could infringe all kinds of things.
But the founding fathers put limitations on that. They didn't just say more likely than not. It might be the case. They said probable cause, not even reasonable suspicion. And I will say that this law does spell out what it is we're looking for and what must be complied with.
But we do in this country have a deep commitment to civil liberties enshrined in the constitution, because we believe that the government has a burden of proof. And we do want them to solve crimes. I'm glad to see that law enforcement and criminal justice have become paramount on both sides of the aisle. But in America, we balance this effectiveness with everyone's rights. And, mister chairman, you've stated it clearly.
You know, if you're gonna launder money, you need a bank account to launder the money, and the banks already have a burden to collect this information. We're collecting massive amounts of information on company's individual because a crime might be committed, and then we're not doing enough work when crimes have been committed. And that's the real problem here. If we look at the layers and layers of what might be committed, we're adding noise, and we need to focus our resources on the signal so that we can do it. And as, chairman, you pointed out, places around the world that are synonymous with shell companies, money laundering, frankly, illicit banking, in a lot of cases, they have all kinds of reporting regimes.
I'm reminded of people that would point out how eloquent the Soviet Union's constitution was, but they didn't do it. And that's the thing, the fallacy that you're gonna fill out this paperwork. People that are sophisticated enough to launder money for the Sinaloa cartel, people that are sophisticated enough to move weapons and ammunition in and out of Iran are gonna somehow be tripped up on a form that says, well, I don't know. Who are you and what are you doing? Oh, you got me.
This is the form that tripped the whole thing up. This is the craziest approach to this. It's all noise and almost no signal, and it is also redundant to the interesting law.
Speaker 1
So we talked about just doing this in 2020, all that is accurately portrayed by my friends on both sides. But I'd like to be on record here with a new audience, with a new group of people, with new members on this committee saying how strongly I oppose this when it was offered back in 2020. And I offered an alternative, which was rejected by Steven Mnuchin, the treasury secretary for the Trump administration, rejected by the House Ways and Means Committee, and rejected by members of this committee. That's fine. But I just wanna be on record.
There's a better, easier, more straightforward way to do this that I offered then, which was just simply to let fence in for law enforcement purposes, have an exception to look at form 1065, which every American with a pass-through entity, foreign or domestic, fills out. And guess what that has on it? It has every owner and what their percentage ownership is, their address, and their taxpayer ID number. It's under the law. It's machine-readable.
It's already collected by the IRS, and that was rejected by Mr. Mnuchin and by members of this committee and by members of the Ways and Means Committee. So I understand it, but I just wanna be on record. We're not for illicit finance. We're for removing and putting a targeted burden for our small businesses who are not money launderers. And I yield back to the gentleman from Ohio.
Speaker 19
Thank you, chairman. I'd just like to point out Mister Lynch also said the ICBA and the APA ABA are opposed to this bill. They are not.
Speaker 1
Gentleman yields back. Who seeks recognition on the Beatty amendment? Move Ranking member.
Speaker 2
I wanna thank Miss Beatty for her work on this amendment. This amendment would ensure that the bill does not apply to beneficial ownership information or banking activity or access by law enforcement for any legal entity related to transnational criminal organizations, like drug cartels. The Corporate Transparency Act, that is CTA, establishes America's beneficial ownership registry, helping law enforcement to understand who truly owns and controls the corporate entities. This includes entities controlled by transnational criminal organizations that engage in a wide range of illegal activities that harm Americans and our national security, such as the cartels that sell fentanyl. If Republicans support President Trump's actions on drug cartels and human traffickers, they should be eager to support this amendment.
I yield back.
Speaker 1
General Woman yields back. Who seeks recognition? Mister Lynch, you're recognized.
Speaker 15
Thank you very much. Let's see. A couple of things. You know, filling out a form. When you're going into business, when you're engaging in commerce, it is not a violation of the Fourth Amendment to ask who you are.
You're presenting yourself. You're going into the business, and that is a normal way of building trust and protecting your customers, right, and other people that you're dealing with. So it is not you're not kicking someone's door down by asking them if they're in business, you know who they are. And that's exactly what the Corporate Transparency Act requires. You gotta say who you are.
You gotta say what your address is. And, when you register, you are basically providing a real ID or a license of some sort, so the people actually know who the heck you are. That's the danger of this amendment and the nature of a substitute, that it does away with that. So the original text of this corporate transparency act covered about 32,000,000 businesses. About half of those had already registered.
16,000,000 people had already complied. They filled it out, prior to provided the information. But what the ANS would do would be reduce the number of companies from 32,000,000 to 11,000. 11,000 foreign corporations, about 0.02% of all US registered corporations. Everyone else is exempt.
So that's what this does. That's what this amendment and the nature of substitute does. It gives everybody a pass. The other thing is, you know, we asked the companies that were signing up. Like I said, 16,000,000 companies signed up, provided the information, and were in compliance or would have been in compliance with the corporate transparency act.
We asked them how difficult it was. And there were 6% of the applicants, who said it was difficult. The other 94% said it was pretty easy. So, you know, I guess filling out your name, filling out your address, you know, filling out your Social Security number or your tax ID number, and the names of the other people who are in business with you who also run the corporation, that was difficult for some people. But there are 170 other countries that folks are doing that.
And, again, we're gonna be the outlier. You know, the FADIF, which is the global agency on anti-money laundering, anti-terrorist financing, anti-human trafficking. We will be severely criticized and downgraded. The level of our security will be downgraded in the eyes of the world because we're gonna adopt this thing that allows all of that, allows companies to operate in business without disclosing who's behind the company. You know, that's a shady way of doing business.
Unfortunately, that seems to be more common in this country. And it's regrettable that that is the that is the way it is. Our financial system has gained its strength and popularity and its reputation based on our rule-based system that protects investors, protects consumers, and we are drifting away from that, pretty quickly. We're losing our reputation that generations have worked hard to maintain, internationally and here at home. So, again, I just urge my colleagues to oppose this amendment in the nature of a substitute, and I yield back the balance of my time.
Speaker 1
Gentleman yields back, seeks a comment on Miss Beatty's amendment. If there's no further debate on the amendment, the question that occurs on Miss Beatty's amendment, all those in favor of the amendment shall signify by saying aye. All those posts, signify by saying no. No. Opinion of chair, the noes have it. The noes have it.
The amendment is not adopted. General woman, general woman's requested a recorded vote. Recorded vote, raise your hands. Sufficient number having raised your hand, a recorded vote is ordered. Pursuant to subsection c5 of rule three, the committee rules further proceedings on the amendment are postponed.
There further amendment to the Davidson Amendment in the nature of substitute?
Speaker 3
Clerical report. An amendment to the amendment in the nature of a substitute to H.R. 425 offered by Mister Gonzalez of Texas designated as H.R. 42509.
Speaker 1
Without objection, amendments considered read. A gentleman from Texas is now recognized to describe his amendment.
Speaker 20
Thank you, Mr. Chairman. I'm a member who's long advocated for the rightsizing of regulation in this house. I believe that government should not burden honest, hardworking Americans and small businesses with unnecessary red tape, but I also believe we have the responsibility to combat illicit finance and protect the most vulnerable among us, seniors and children. My amendment does just that. It preserves a targeted use of the corporate transparency act so law enforcement can continue to fight to protect elder Americans and young children, young kids, through fraud.
According to the AARP, 40% of Black and Latino adults have been targeted in online scams. Reports by the Federal Trade Commission show a growing wave of schemes aimed at squarely attacking retirees' life savings. These criminals impersonate trusted government agencies and legitimate businesses. Hard to detect for even some of the brightest. In a cruel twist, they exploit older American vigilance by sending fake security alerts and warnings designed to trick them into handing over their money and personal information.
The consequences have been devastating. Some seniors have reported emptying their bank accounts and even draining their 401(k)s. And the scale of these losses is accelerating. According to FBI's 2025 Internet crime report, older Americans lost $7,700,000,000 to cybercrimes just last week, an almost 59% increase from the year before. So we're moving in the wrong direction, and this hits home.
In Texas, we ranked third in the nation in the number of fraud complaints, with almost 12,000 cases and almost $500,000,000 in losses. These are patients, these are our parents, our seniors, neighbors. The people that are being exploited and targeted are the most vulnerable in American society. But this crisis doesn't stop with seniors and young Americans. It's increasingly targeted at all of us.
Victims under 20 reported hundreds of millions of dollars in losses, often through social media scams, gaming fraud, and peer-to-peer payment platforms. These scams are sophisticated in nature, predatory, and growing. And let's be clear, these are not isolated bad actors. These schemes are tied to transnational criminal organizations, including drug cartels and terrorist networks, that exploit weaknesses in our financial system and move to hide illicit funds. My amendment strikes that balance to ensure that we're not unnecessarily harassing honest, hardworking Americans, while preserving the ability to go after those who actually are committing the crimes.
This is about protecting senior citizens who have worked their entire lives. It's about protecting young people who are navigating an increasingly dangerous digital world. And it's about ensuring that the United States remains capable of confronting illicit finance wherever it may exist. I urge my colleagues to support this amendment, and I yield back.
Speaker 1
Joan yields back. Who seeks Mr. Davidson. You assist on your point of order?
Speaker 19
I do move to strike the last word. Thank you, Mr. Chairman. Yesterday, the Washington Post, yes. The Washington Post, I said, came out in support of this legislation and against the Corporate Transparency Act in an editorial titled, The Corporate Transparency Act sounds harmless. It's not.
I ask unanimous consent to enter into the record this editorial.
Speaker 1
Your editorial from The Washington Post will be entered into the record without objection.
Speaker 19
Alright. I'll just share a few nuggets from their editorial. Quote, the corporate transparency act, in addition to being unconstitutional, is so confusing that the federal government's frequently asked questions web page about it has 122 questions. Quote, there is always a risk of foreign powers taking advantage of America's economic freedom, but there are better ways to track them. Mister chairman, that's the point you've made today that we made and many who objected, you know, for years, before it became law and after it became law, to the approach.
You know, the goal is lofty, but the approach is all noise and no signal. They say also, quote, at a practical level, the law is ineffective because it adds a new reporting requirement to stop behavior that is already illegal. The businesses that would abide by the Corporate Transparency Act already follow the law, while criminals would ignore it or get around it. My friends on the other side of the aisle keep making the point that the difference between the consumer due diligence rule and the Corporate Transparency Act is that there's no centralized database under the customer due diligence rule. Not that the information is unreported, not that the information maintains privacy, not that law enforcement can't follow the money.
Their main difference is they don't have a centralized database. And, frankly, that's what prompted the title. That's why it's called repealing the Big Brother Overreach Act. A duplicative centralized database is not needed. There's a reason America is not the world's destination for illicit finance.
Instead, with only 4% of the world's population, we've got over 50% of the world's invested capital. We're here because our system is safe and sound, and we aim to do it in a way that preserves that, in a way that fosters capital formation, not in a way that undermines it and chases it out by burdensome regulations that accomplish nothing new. And with that, I just encourage our colleagues to oppose this amendment as well, and I yield to the chairman.
Speaker 1
The gentleman time. Yields back, and the chair recognizes the ranking member for her to strike the last word.
Speaker 2
I wanna thank mister Gonzalez for his work on his amendment, ensuring that nothing in the bill would apply to efforts to detect, prevent, or prosecute fraud and scams involving older Americans or children. We have held hearings on romance scams that target older Americans, and heard testimony that details how shell companies are used by fraudsters to trick victims into believing that they're making real investments. Those hearings also have detail on how shell companies are used to quickly move the proceeds of the crime beyond the reach of the victims and their law enforcement agencies. I'm also concerned by the number of children affected by sextortion. These crimes are increasing and often end in tragedy, on top of the financial loss.
Representative Gonzalez's amendment says that this bill would not apply to beneficial ownership information that would be highly useful in national security, intelligence, or law enforcement agency efforts to detect, prevent, or prosecute crimes of fraud against older and younger Americans. This is a sensible amendment that will protect our most vulnerable. So I urge members to support this amendment, and I yield back.
Speaker 1
General Woman yields back. Is there additional debate on the Gonzalez amendment? Mister Lynch?
Speaker 15
Thank you, sir. First of all, I wanna thank mister Gonzalez for his very thoughtful, insightful, and pointed amendment. One of the other committees I serve on is the committee on oversight. And as you know, we are well into our investigation of Jeffrey Epstein. And it offers the perfect example of what Mr. Gonzalez's amendment is trying to get at.
So Jeffrey Epstein used a series of Shell corporations to advance his, you know, financial success, but also used it to benefit himself in other ways as well by remaining anonymous. So Jeffrey Epstein, and his organization, they were able to work on a number of tax havens, you know, to make sure that, you know, the tax laws of The US didn't apply. He used his anonymity and his shell corporations to traffic women from Eastern Europe to The United States. There are a lot of benefits, a lot of harm as well that he perpetrated on the American public because he was allowed to remain hidden. He was allowed to remain hidden.
And that's where we were trying to get at when we passed the Corporate Transparency Act. We thought bad actors should not be able to hide behind other people, while they perpetrate their crimes. And, that is exactly what this amendment and the nature of a substitute would do. It would allow those people to operate anonymously, from the shadows, and escape the prosecution of law enforcement authorities because we don't have a national database, and we didn't have one until we passed that law. So that anyone that wanted to avoid prosecution could simply go to a different jurisdiction, a different state maybe that didn't have the laws in place or the technical wherewithal to go after people that were operating, you know, behind the scenes and using the lack of transparency to commit crimes.
So that this is a perfect example, Jeffrey Epstein, of the wrongful contract that can happen if we allow people to operate in commerce secretly without divulging their identities. That's what we're trying to get at. That's why this amendment and the nature of a substitute is harmful not only to our economy, but also it may put individuals at risk from bad actors. So with that, I hope that my colleagues will agree with me to support mister Gonzalez's amendment and vote against the underlying bill. I yield back.
Speaker 1
Joe Manny yells back. Who seeks to, on debate for the Gonzalez bill? If there's no further debate on the amendment, the question now occurs on Mr. Gonzalez' amendment. All those in favor of the amendment shall signify by saying aye. Aye.
All those opposed, signify by saying no. No. Opinion of the chair, the noes have it. The nose have it. The amendment is not adopted.
Mister from Texas?
Speaker 1
A recorded vote is requested. All those in favor, record vote. Raise your hand. A sufficient number having raised their hand, a recorded vote is ordered. Pursuant to subsection c5 of rule three of the committee rules, further proceeding on the amendment are postponed.
Are there further amendments to Mister Davidson's amendment, nature of substitute ranking member?
Speaker 3
An amendment to the amendment in the nature of a substitute to H.R. 425 offered by Miss Waters of California, designated as H.R. 42504.
Speaker 1
Without objection, the amendment is considered read, and the gentlewoman from California is now recognized to describe her amendment.
Speaker 2
Thank you, Mr. Chairman. I'll ask my colleagues if they recognize the name of the following companies: Financial Trust Company, Southern Trust, Maple Incorporated, Plan DLCC, The Great Saint Jim LLC, HBRK Associates Incorporated, Liquid Funding LTD, Eli Sim Management. These are the shell companies of Jeffrey Epstein, or more specifically those of which we are aware. They are the corporate vehicles through which Epstein found his victims, recruited his customers, took payment, or funded his operations. They represent and reveal the network of people around him who helped him to traffic young girls and women, to launder money, and to commit so many terrible crimes.
The investigation into Epstein, his associates, and their bad acts is ongoing. And there may be even more companies that will be uncovered. This is important for restitution to the survivors of Jeffrey Epstein's crimes. Epstein used a tangled web with many individuals involved in human trafficking and child sexual abuse, in a web of shell companies. My amendment would ensure that these investigations can continue to leverage the benefits of the corporate transparency act by prohibiting this bill from applying to beneficial ownership information that is highly useful in law enforcement efforts to detect, prevent, or prosecute crimes related to Jeffrey Epstein and his associates, so that those investigations can continue.
I urge members to stand up for Epstein survivors and support this amendment to this bad bill. I yield back.
Speaker 1
Gentlewoman yields back. Does the gentleman from Ohio insist on his point of order?
Speaker 1
Gentlemen, seek time? I do. Gentlemen from Ohio, mister Davidson's recognized for five minutes.
Speaker 19
Thank you, Mr. Chairman. I do move to strike the last word, and I oppose the general lady's amendment. And, you know, she knows that the Epstein scandal didn't go undetected. It went unprosecuted. And, frankly, banking did detect a lot of these things and flagged them, and it didn't stop it.
It took other actions to get at this. And even after the prosecution of mister Epstein in the early 2000s and settlement agreement in Miami, you know, there was other activity that continued and ultimately put him in jail under the previous Trump administration. So, the rules did go, did detect the activity. In fact, the Virgin Islands reached a $75,000,000 settlement with JPMorgan Chase because JPMorgan Chase felt that they didn't adequately comply with their existing burdens under the law. Or at least the Virgin Islands did. JPMorgan reached that settlement agreement.
So, there are rules in place, but it takes lawmakers to enforce, or it takes prosecutors in place to prosecute the law. It takes juries in place, to convene the grand juries to convene trials, and it takes due process and trials, to get convictions. And so those are some deficiencies that need to address throughout our justice system. But a dude duplicative amendment like this is really a red herring on a salacious topic. I oppose the general A's amendment, and I'd yield to the chairman if you like time.
I yield the balance of my time.
Speaker 1
Mister Davidson yields back. Is there further debate on Miss Waters' amendment? Mister Lynch?
Speaker 15
It is easy. You know, being on the oversight committee and seeing how hard it was for people to track down the various shell corporations that were used by Jeffrey Epstein. You gained a whole new appreciation for law enforcement. And I think that's exactly why the National Association of District Attorneys and the National Association of Deputy US Attorneys are against this amendment. It is really hard if someone knows what they're doing and has the financial wherewithal to move around to jurisdictions that have less robust prosecution and less robust standards, how they can use these tools.
So the bottom line is this amendment and the nature substitute would be a huge assistance and help to people like Jeffrey Epstein. And you could say, okay. The cops just gotta work harder to get them. But you're putting obstacles in their way. You are definitely putting obstacles in their way.
The Corporate Transparency Act created a database. And remember, Epstein, that went on for a good twenty, 25 years, what he was doing, abusing those little girls. And it took a long time to bring him to justice. The corporate transparency act creates a database where we can track who's behind certain corporations, where not everyone can, but those law enforcement agencies like the district attorney's office and like the US attorney's office can immediately identify individuals and companies that are operating outside the law. That's just if we had had this in place, it would have made it much, much more difficult, maybe impossible for Jeffrey Epstein to put together his whole network of tax havens and Shell corporations and give him the power and the wherewithal to abuse those girls.
So it is on point, and I support the ranking member's amendment. And we were moving in the right direction when president Trump trying signed this corporate transparency act into law, just a few years ago. And, I cannot understand why we would remove those protections. It seems like this country's taken a real turn for the worse, and, we're not trying to catch bad guys anymore. You know, we have drifted from our constitutional ideals here.
Now we're protecting the bad guys. You know, we're part of gangster nation now where, you know, you just get what you can. You know, it's a sad day, but, hopefully, we'll get through it at some point. I yield back the balance of my time.
Speaker 1
Someone yields back. Is there additional debate on the Waters Amendment? There's no further debate. The question now occurs on the Waters Amendment. Those in favor of the amendment shall signify by saying aye.
Speaker 1
All those posts, signify by saying no. No. The chair of the noes has it. Noes have it. The amendment is not adopted.
Ranking member? Recorded vote is requested. Raise your hand. A sufficient number having raised their hand, a recorded vote is ordered pursuant to subsection c5 of rule three, committee rules. Further proceedings on the amendment are postponed.
Are there any further amendments to the amendment of Mister Davidson's amendment, the nature of a substitute? Pursuant to previous, sorry. Seeing no further amendments without objection, the previous question of the substitute is ordered, and recorded votes on the pending amendments have been postponed. Once those votes are taken, the committee will immediately vote on the adoption of the amendment in nature of substitute, and then we'll consider the question to report the member. Pursuant to the previous order, the chair declares the committee in recess, subject to the call of the chair.
All members are reminded we will reconvene immediately following votes on the House floor. The committee stands in recess.
Speaker 1
The committee will reconvene. Pursuant to the chair's previous order, we will now take the postponed votes on the pending amendments to H.R. 941. The question on the amendment offered by ranking member Waters, this is Waters 163. We'll be voting electronically, and the clerk will open the vote. Aiming a little lower there.
It's right in front of you there you go. Got it. Got it. Is any member who hasn't voted?
Speaker 1
Majority having voted in favor of the amendment, the amendment, again, I'm sorry. The majority having voted against the amendment, the amendment is not agreed to. Question now occurs on the adoption of the amendment in the nature of a substitute. All those in favor shall signify by saying aye. Aye.
All those opposed, signify by saying no. In veneer chair, the ayes have it. The ayes have it, and the amendment in the nature of a substitute is adopted. The question now occurs on ordering the bill as amended, reported to the house with a favorable recommendation. Those in favor shall signify by saying aye.
Aye. All those opposed, signify by saying no. No. In the opinion of the chair, the ayes have it. For what purposes, representative Barr seeks recognition?
Speaker 1
Gentlemen, I request a recorded vote. All those in favor of a 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.
Any member who has not voted or would like to change their vote. The clerk will close the vote and report. Mister chairman, on.
Speaker 1
A majority having voted in favor of HR 941 as amended, the bill is ordered favorably reported to the house without objection to motion to reconsider late on the table. We'll now take the postponed votes on the pending amendments to H.R. 8286. The questions on the amendment offered by Representative Meeks. This is Meeks 125. The clerk will open the vote.
Is there any member who has not voted or who would like to change their vote?
Speaker 1
A majority having voted against the amendment, the amendment has not been agreed to. The question is now on the amendment offered by Representative Vargas. This is amendment Vargas zero three two. The clerk will open the vote. Is there any member who has not voted or who would like to change their vote?
The clerk will close the vote and report.
Speaker 1
A majority having voted against the amendment, the amendment has not been agreed to. The question is now on the second amendment offered by ranking member Waters. This is Waters 165. The clerk will open the vote. Mister Fitzgerald, we'll let you get Mister Floyd.
Is there any member who has not voted or who would like to change their vote? Clerk will close the vote and report. Mister chairman, on.
Speaker 1
A majority having voted against the amendment, the amendment has not been agreed to. Question now occurs on the amendment offered by Representative Caston. This is Caston 05. Clerk will open the vote. Does anybody check?
Is there any member who has not voted or who would like to change their vote?
Speaker 1
Majority haven't voted against the amendment. The amendment is not agreed to. Question now is on the amendment offered by Representative Talib. This is Talib 127. Clerk will open the vote.
Where is he? Is there any member who has not voted or who would like to change their vote?
Speaker 1
A majority having voted against the amendment, the amendment is not agreed to. The question now occurs on the adoption of the amendment in the nature of a substitute. All those in favor shall signify by saying aye. Aye. All those opposed shall signify by saying no.
In the appendix here, the ayes have it. The ayes have it, and the amendment and 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 aye. Aye.
All those opposed, signify by saying no. No. In the opinion of the chair, the ayes have it. The congressman from Wisconsin? Mister Style has requested a recorded vote.
All those in favor of a recorded vote, raise your hands. A sufficient number having raised their hand on a recorded vote is ordered. We'll now take the vote on ordering the bill as amended, favorably reported. Clerk will open the vote. Mr. Mueller.
Dan.
Speaker 1
A majority having voted in favor of HR 8286 as amended, the bill was ordered favorably reported to the house. Without objection, a motion to reconsider is laid on the table. We'll now take the postponed votes on the pending amendments to HR 8290. The question is on the third amendment offered by ranking member Waters. This is amendment one.
Clerk will open the vote. Mister None? Is there any member who has not voted or who would like to change their vote?
Speaker 1
A majority having voted against the amendment, the amendment is not agreed to. Question now occurs on the adoption of the amendment in the nature of a substitute. All those in favor shall signify by saying aye. Aye. All those opposed, signify by saying no.
No. In the opinion of the chair, the ayes have it. The ayes have it, and the amendment and 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 aye.
Aye. All those opposed, signify by saying no. No. No. In the opinion of the chair, the ayes have it.
Mr. Sessions?
Speaker 1
The gentleman from Texas requests a recorded vote. All those in favor of a recorded vote, raise your hand. A sufficient number having raised your hand, a recorded vote is requested. We'll now take that recorded vote on ordering the bill as amended, favorably reported. The clerk will open the vote.
Is there any member who has not voted or who would like to change their vote?
Speaker 1
Majority having voted in favor of the bill, H.R. 8290 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 postponed votes on the pending amendments to H.R. 425. The question is on the fourth amendment offered by ranking member Waters.
This is HR 42508. The clerk will open the vote. Is there any member who hasn't voted or who would like to change their vote? Clerk will close the vote and report.
Speaker 1
A majority having voted against the amendment, the amendment has not been agreed to. The question now is on the amendment offered by Representative Beatty. This is HR 425 10. Clerk will open the vote. Is there any member who has not voted or who would like to change their vote?
Speaker 1
Majority having voted against the amendment, the amendment has not been agreed to. Question now is on the amendment offered by Representative Gonzalez. This is HR 42509. The clerk will open the vote. Is there any member who has not voted or who would like to change their vote?
The clerk will close the vote and report.
Speaker 1
A majority having voted against the amendment, the amendment has not been agreed to. Question now is on the fifth amendment offered by ranking member Waters. This is HR 42504. The clerk will open the vote.
Speaker 1
Is there any member who hasn't voted or would like to change their vote? Clerk will close the vote and report.
Speaker 1
Majority having voted against the amendment, the amendment is not agreed to. Question now occurs on the adoption of amendment in nature of a substitute. All those in favor shall signify by saying aye. Aye. All those opposed, signify by saying no.
No. Appointed as chair, the ayes have it. The ayes have it. The amendment and nature of a substitute is adopted.
Speaker 1
We're not quite sure yet. One second, sir. Question now occurs on ordering the bill as amended, reported to the house with a favorable recommendation. Those in favor signify by saying aye. All those opposed, signify by saying no.
No. If you know the chair of the ayes have it. Mr Davidson?
Speaker 1
For a recorded vote? You may. A recorded vote has been requested by the chair, gentleman from Ohio. All those in favor, record the vote. Raise your hands.
A sufficient number have raised their hands. A recorded vote is so ordered. We'll now take that vote on ordering the bill as amended, favorably reported. The clerk will open the vote.
Speaker 1
There you go. Yeah. Is there any member who has not voted or who would like to change their vote? Clerk will close the vote report. Up.
A majority of you voted in favor of HR 425 as amended. The bill is ordered favorably reported to the House. Without objection, 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 2 l, I give notice that all members will have the requisite number of days to file supplementary, minority, additional, or dissenting views. There be no knowing further business.
The committee stands adjourned.
Ask anything about this video — I analyse its transcript to answer.