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House Financial Services U.S. House of Representatives
Follow its sittingsMaxine Waters
Thank you, Chairman Hill. Last week, Donald Trump had a chance to do something that would have made a real difference in the lives of millions of Americans. He could have signed the most significant bipartisan housing bill in more than three decades and finally taken meaningful action to address the housing affordability crisis devastating communities all across this country. Instead, he canceled signing the bill and in doing so blocked the hard work of the members of this committee and turned his back on families and hardworking Americans. Why?
Because Donald Trump wants to change the conversation away from how his policies have made this country truly unaffordable. His failed tariffs and failed war have inflated grocery prices, housing, and of course gasoline. I'm so happy that the World Cup has shown the world that we are more than the failed agenda of Donald Trump. Unfortunately, the problem doesn't stop with Trump. Today, Republicans are teaming up with Donald Trump to chip away at the safeguards that protect working families, and today's markup is no exception.
Take the so-called Earned Wage Access bill. Republicans say it helps workers get across, get access to the wages that they have already earned sooner. And workers should absolutely have affordable access to their own money. But that's not what this bill does. In reality, it creates new loopholes, weakens consumer protections, overrides strong state laws, which could leave workers paying more in fees and with fewer rights when something goes wrong.
Once again, Republicans are asking working people to settle for less to line the pockets of financial companies' executives. And it could not come at a worse time. Payment fraud is rising. Identity theft is becoming more sophisticated. Consumers continue to struggle with inaccurate credit reports that prevent them from getting a mortgage, buying a car, renting an apartment, and even getting a job.
This should be the moment to strengthen consumer protection. Instead, today, Republicans are advancing several bills that do absolutely nothing to address these growing threats while Donald Trump simultaneously dismantles the Consumer Financial Protection Bureau, the one agency dedicated to protecting consumers from financial abuse.
It's no surprise that credit reporting complaints have surged under this administration. Committee Democrats believe there is a better way. We believe our economy should work for the people who get up every morning to go to work, pay their bills, and play by the rules. That is why we support reauthorizing the Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity. Congress should be asking hard questions about whether our economic policies are creating opportunity for working families and small businesses, not just boosting profits for the biggest banks and the wealthiest Americans.
That's why Committee Democrats are not just focused on building more housing. We're fighting to keep families in their homes, preserve generational wealth through inherited property, and connect renters with the help they need before an eviction becomes homelessness. That's what it looks like to put people first. Donald Trump chose to abandon working families last week. Republicans continue choosing weaker consumer protections and less accountability.
I suppose I can take comfort in knowing that these terrible bills before us today are going nowhere because Trump will probably block them also. Democrats are choosing a different path that means fighting to lower housing costs, protect consumers, strengthen our financial system, and most importantly, we're fighting to make sure every hardworking family has a fair shot at economic security. And with that, I yield back the balance of my time.
J. Hill
The gentleman yields back. Pursuant to notice, I call up the resolution authorizing the Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity of the Committee. The clerk will report the resolution, which was distributed in advance.
Speaker 8
Resolution offered by Chairman Hill, reauthorizing the Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity of the Committee on Financial Services.
J. Hill
Without objection, the first reading is dispensed with. Without objection, the resolution is considered read and open to amendment at any point. I now recognize myself for five minutes. The Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity has successfully worked on a bipartisan manner throughout the 119th Congress. The task force has held hearings on the Federal Reserve's monetary policy framework, the dual mandate, the Treasury market structure, solutions to Treasury market fragilities, and most recently held a field hearing in Oklahoma City on the structure of the Federal Reserve's regional Fed banks.
In addition, the task force has supported the Financial Services Committee's statutory responsibility to oversee the Federal Reserve by hosting the chair's testimony on the Fed's semi-annual monetary policy report. Task force efforts have helped shine a spotlight on the challenges that require action from policymakers and other stakeholders. Until Congress enacts more meaningful fiscal reforms, deficit spending will continue to place pressure on Treasury markets and the broader financial system that relies on Treasury yields as the reference rate. Until the Federal Reserve becomes more effective at maintaining price stability and preventing inflation, Americans will continue to pay this shadow tax without getting any public good or service in return. I'm encouraged that as the task force continues its efforts, our new Federal Reserve chair, Kevin Warsh, is bringing a fresh perspective and new ideas to examine the institution, strengthen its effectiveness in carrying out its congressionally authorized responsibilities, and safeguard its independence by adhering closely to its statutory mandate.
Reforms are not intended to be punitive. Rather, reform is the process by which institutions can move beyond outdated and ineffective policies and better serve the American people. The right reforms will position the Fed for long-term success. I want to thank Chairman Lucas and Ranking Member Vargas for their leadership and look forward to the task force's continued work during the remaining of the 119th Congress. And I know all of our members look forward to our new Fed Chair's testimony this month.
I look forward to my colleagues supporting the reauthorization of this task force and its important work, and I yield back. Does anyone seek recognition on the resolution? Ranking member.
I move to strike the last word.
Maxine Waters
This resolution will extend the Monetary Policy, Treasury Market Resilience, and Economic Prosperity Task Force to the end of the 119th Congress. Led by Chairman Lucas and Ranking Member Vargas, the task force has had constructive hearings this Congress. In light of the Trump administration's attacks on independent agencies, his personal attacks on then-Chair of the Federal Reserve Jerome Powell, his illegal attempted firing of Fed Governor Dr. Lisa Cook, Democratic members led the task force in a focus on the importance of Fed independence. And we were heartened to see that yesterday the Supreme Court ruled in favor of Dr. Cook, allowing her to stay in her role as the litigation on the merits continues. However, this ruling falls far short of fully protecting the Federal Reserve's independence.
To be clear, the Supreme Court's decision is not the final word on Governor Cook's case. Unfortunately, Donald Trump can continue pursuing her removal, and he has already made clear he intends to do exactly that. Additionally, the Supreme Court handed Donald Trump sweeping new authority over what used to be independent federal agencies, including agencies like the Federal Trade Commission, Federal Deposit Insurance Corporation, Securities and Exchange Commission, and the National Credit Union Administration. This undermines the independence of the financial regulators, and it is unclear how this will apply to the Fed in the future. The consequences for consumers, investors, and our financial system could be dire.
Trump is playing with fire as he continues to try to control the Fed, which economists warn would cause markets to crash and lead to hyperinflation. So now that Chair Kevin Warsh has started his term, I hope the task force and the members of this committee will continue to stand up and defend the laws that Congress wrote that will make it clear that the Fed is independent from the president, as well as continue to hold the Fed to account. Thank you, and I yield back the balance of my time.
Mr. Chairman.
The gentleman from California.
Recognized for five minutes.
Juan Vargas
I thank you, Mr. Chairman. Let me begin by thanking you, Chairman Hill, and also along with the Ranking Member Waters for supporting the work of this task force, and Chairman Lucas for the collaborative and respectful way he has conducted our hearings.
Our hearings have centered around both the US Treasury market and our nation's monetary policy. And as you mentioned, Mr. Chair, we actually just held a field hearing on June the 12th in Oklahoma City focused on examining the structure of the Federal Reserve system. I thought the hearing was very informative and important, and I appreciate the help that this committee gave me to personally attend. So I want to thank them for the hearing. I also want to thank your staff for the hospitality that they showed me again.
Thank you very much. I'm very appreciative of all that. Our Treasury market is the deepest and most liquid market in the world, with over 30 trillion dollars outstanding, ensuring its continued resilience in periods of stress and volatility is critical. The stability of our Treasury market keeps our borrowing costs low, prevents financial panic, and supports retirement and pensions plans. But this stability is not inherent.
It comes from the credit and reliability of the US government. Credit development, credit developed through strong, respected institutions like the Federal Reserve. And the Fed is credible because of its ability to consider Americans' long-term economic interest. Just yesterday, as was stated by the ranking member, the Supreme Court ruled that Federal Reserve Board Governor Dr. Cook can remain on the board while the other case on removing her continues through the legal process. And as I've said from the start, Trump had no authority, no authority whatsoever to remove Federal Reserve Board Governor Dr. Lisa Cook.
The Federal Reserve is independent. It doesn't answer to Donald Trump. And neither does Dr. Cook. His attempt to fire Dr. Cook was an illegal power grab that yet another unprecedented attack on the Federal Reserve's independence and our economic stability. This ruling is an important win, but Trump's campaign to bring the Federal Reserve under his thumb is far from over.
As co-equal branch and legislative body with oversight responsibility, it's our obligation to hold these types of actions to account. I look forward to our continued discussion on the importance of both the Fed independence and the dual mandate. And I welcome the opportunity to resume our collaboration on making our Treasury market even more resilient. With that, I urge my colleagues to support this resolution. And once again, I thank this committee and your staff in particular for making my trip to Oklahoma City successful.
And again, thank you. I appreciate the hospitality. With that, I yield back.
J. Hill
Appreciate your services, ranking member. Gentleman yields back. Does anyone else seek recognition on the on the resolution? Hearing none, we'll move to amendments. Does anyone wish to offer an amendment to the resolution?
If there's no further discussion or amendments to the resolution, the question now occurs on the adoption of the resolution. All those in favor signify by saying aye. Aye. All those opposed signify by saying nay. In the opinion of the chair, the ayes have it, and the resolution is adopted.
We'll now move to the next bill. Pursuant to notice, I call up HR 1483, Protecting Investors' Personally Identifiable Information Act, which was introduced by the vice chairman of our Financial Institutions Subcommittee, Representative Loudermilk of Georgia. Clerk will report the bill, which was distributed in advance.
Speaker 9
HR 1483, to prohibit the Securities and Exchange Commission from requiring that personally identifiable information be collected under consolidated audit trail reporting requirements and for other purposes.
J. Hill
Without objection, the first reading is dispensed with. Without objection, the bill's considered read and open to amendment at any point. Representative Loudermilk has an amendment in the nature of a substitute, copies of which were also distributed in advance. The clerk will report that amendment.
Speaker 11
An amendment in the nature of a substitute to HR 1483, offered by Mr. Loudermilk of Georgia, designated as Loudermilk 037.
J. Hill
Without objection, the amendment's considered read and will serve as base text for purposes of amendment. The gentleman from Georgia, Mr. Loudermilk, you're now recognized for five minutes to describe your amendment.
Barry Loudermilk
Thank you, Mr. Chairman. I speak today in support of my bill, H.R. 1483, the Protecting Investors' Personally Identifiable Information Act. The federal government has two huge problems when it comes to cybersecurity. It collects way too much personally identifiable information, and it also has a poor track record of protecting this information from hackers. Look no further than the 2021 SolarWinds hack, which saw more than 30,000 public and private organizations breached and is considered one of the largest cyberattacks in modern history.
As I've said many times, you don't have to protect what you don't collect. Unfortunately, the federal government hasn't learned this lesson. The Securities and Exchange Commission's Consolidated Audit Trail tracks every trade an individual investor makes and can link it to their identity through a centralized system. Not only is collecting all this information unnecessary, since regulators already have similar systems that don't easily match identities with transactions, but it also makes the Consolidated Audit Trail a prime target for malicious cyber campaigns or insider threats. This is why I've introduced the Protecting Investors' Personally Identifiable Information Act, which would help prevent an accidental or intentional breach by restricting the SEC's ability to collect this data in the first place.
This is a common-sense solution aimed at protecting investors and in no way hinders the SEC's mission. While I'm encouraged by the SEC's announcement last year that they would exempt the reporting of certain PII in the CAT, legislation is needed to make this protection permanent and safeguard the privacy of Americans, including Main Street investors. This bill is a codification and acknowledgment of the fact that the SEC can detect violations and bring enforcement actions without the need for the Consolidated Audit Trail to include sensitive PII on ordinary Americans. As long as PII is stored in the CAT, it is vulnerable to external hackers and insider threats. Mr. Chairman, I now would like to insert a letter from the American Securities Association into the record that is in support of this bill.
Without objection.
Barry Loudermilk
Thank you, Mr. Chairman. I urge my colleagues to support this bill and I yield back.
J. Hill
Gentleman yields back. Who seeks recognition on Mr. Loudermilk's ANS? The ranking member?
Maxine Waters
I'm strongly opposed to H.R. 1483. At a time of unprecedented insider trading by the Trump administration and his family, and when the SEC's enforcement actions are at a record low and its staff has been cut by 20%, this bill would make it even harder for the SEC to use trading data to detect market manipulation and insider trading in our capital market. The Consolidated Audit Trail, or CAT, is a tool that we should all fully support to ensure that the SEC can monitor suspicious trading in real time, rather than wait for weeks and sometimes months to get trading information piecemeal through subpoenas and blue sheet requests. This bill would ignore the technological advances of the last 30 years, in addition to the advances of AI, and instead direct SEC to use time-consuming manual requests and make the SEC less able to detect and deter fraud.
Maybe this bill should also require SEC to use typewriters to be intellectually consistent. This bill would also not protect investor information. The Trump SEC has already issued orders restricting the ability of the SEC to collect names, addresses, social security numbers, and the birth date or year of US persons for CAT. Furthermore, HR 1483 ignores the fact that PII is routinely collected by broker-dealers and available to the SEC in response to subpoenas. You know, it's it's just hard for me to believe and understand that this committee, with the responsibility that we have for oversight, should not make it harder for the SEC to detect and deter insider trading and market manipulation.
We should not be making it harder for the SEC to fulfill its mission to protect investors, maintain fair, orderly, and efficient markets. The SEC is our cop on the block. The SEC, again, sole function is protect investors. I don't know why those of us who are concerned about insider trading and all of this would continue to go along with the President of the United States controlling all of these agencies. I mean, it's time to say no to him.
I mean, the President of the United States has a reputation for misusing the power that he has to enrich himself and to gain not only monetary opportunities, but to have his family involved in gaining monetary opportunities. When is this going to stop? This is outrageous that we should sit here and allow the President of the United States, who's already defined himself in the way that he has taken over cryptocurrency, in the way that the agencies are doing what they're told rather than what they should be doing and what the Constitution and law would have them do. Well, I'm yielding back, but I'm just disgusted that we have to see this happening. So I yield back the balance of my time.
Speaker 10
Ranking member yields back. The chair of the Capital Markets Subcommittee. You're recognized for five minutes.
Ann Wagner
Mr. Loudermilk's Protecting Investors' Personal Identifiable Information Act gives American investors critical privacy protections and safeguards their financial information from future threats. The Consolidated Audit Trail, or CAT, was originally designed to reduce market volatility following the 2010 flash crash. In the time since, it has become the largest government database of its kind outside the National Security Agency. Unacceptable. As members of this committee have repeatedly made clear, we must protect our constituents' constitutional right to privacy, and that includes their personal financial information.
The CAT would violate these rights by granting SEC employees access to every investor's financial transactions, even without evidence of wrongdoing.
While I'm encouraged by the SEC's recent decision to exclude personal information from the CAT, a problem of this scale requires permanent statutory solution. H.R. 1483 prevents the SEC from requiring an exchange, a national securities association, or other members from providing personally identifiable information with respect to individuals or a reportable event. Critically, nothing in this bill would inhibit the Commission's obligation and authority to go after securities fraud. I am proud to be an original co-sponsor of this bill, Mr. Chairman, and I want to thank Mr. Loudermilk for his leadership on this important issue. And I urge my colleagues to support this legislation and I yield back.
Would the gentlewoman yield to the gentleman from Georgia?
Barry Loudermilk
Thank you, Madam Chair, Mr. Chair, I appreciate that. Look, the ranking member laid out a misleading scenario that characterizes this bill as if it prohibits in some way or handcuffs the Securities Exchange Commission from investigating or detecting fraud or any violation of law, and that is not what this bill does. This bill protects individual citizens' personally identifiable information. The SEC has a way of connecting if they detect an issue, if they suspect there's fraud, they have a way of finding that information. What this bill does is it would prohibit the federal government from mass collection of PII that it doesn't need, and keep in mind, it's protecting the individual's constitutionally protected information.
That's the key point component. Under the current or the previous regime, and fortunately the current SEC has suspended this activity, it was a violation of the Constitution to collect this information because it is protected, just to make their jobs easier. I'm not interested in making their job easier, I want their job to be effective, but I want to protect the personal information of my constituents, of the American people. That is the point here, and I don't believe that we throw the American people under the bus just to allow the federal government an easier path to spy on its citizens. With that, I yield to my good friend from Michigan.
Bill Huizenga
Thank you, I'm just reminded that there was a security breach at the SEC at one point a few years back where they went after PII. And at the time I noted that PII is the equivalent of the gold in the vaults right now today. And why would people go after that? Same reason why they would rob a bank, right, because that information is that valuable. And to have that turned over to any government agency for questionable reasons or outcomes just doesn't make sense.
So I applaud the gentleman for pursuing this. This has been a long time coming for many, many years this committee has worked on this issue and I applaud the gentleman for that. Yield back to the gentlelady.
J. Hill
The gentlewoman yields back. Who seeks recognition on Mr. Loudermilk's ANS? Mr. Foster.
Bill Foster
Thank you. Recognize to strike the last word. Thank you, Mr. Chairman. While I share the author's views on the importance of privacy and the need for effective cyber safeguards, I strongly support the mission of the Consolidated Audit Trail and want to reflect a little on the challenges that the CAT is meant to address.
I guess there are only two members in this room that were actually around during the 2010 flash crash, when the markets dropped and temporarily wiped out nearly a trillion dollars in market value inside the space of an hour. That crash shocked investors, exchanges, and regulators, and the main question was, what exactly happened and who did it? Regulators then went to the data, with interesting results. The Securities and Exchange Commission and FINRA were dealing with fragmented data sources from across different exchanges, pools, and brokers. When we had our hearing four days afterwards, the SEC was still collecting data and could not give us any definitive answers.
And a different, the CFTC, by contrast, had, I believe, the evening that the flash crash happened, they had a group of people with all the trading information on their laptops and were trying to figure out what happened on the parts that they regulate. And so having real-time data is absolutely crucial, or near real-time data is absolutely crucial to figuring out what's going on here. So we need, we need that. And ultimately, if you're going to, there's a large class of market manipulation where you have to know the true identities of the people involved in it, to find various frauds, things like front-running, things like wash trades. There is not an alternative.
Things like market manipulation based on insider information, you need to know who they are. The government collects information for a wide, personally identifiable information for a wide variety of dangerous activities, like driving a car and many other things. And the arguments that the government should in no case collect personally identifiable information, you know, it's clearly constitutional unless you believe that collecting PII for driving a car is unconstitutional. So the SEC and FINRA, let's back to the flash crash. You know, the CFTC, as I mentioned, was able to request useful information and they got the answer quickly.
And that was, they had a smaller, they had a smaller set of markets to regulate, smaller data sources, but it really was clear to everyone that we had to have the same sort of access to the immediate detailed information on trading that the CFTC had. And the CAT was created in large part as the solution to that problem. It's designed to collect and centralize the relevant order and trade information from across all the securities markets. It allows regulators to follow an order throughout its lifecycle, from origination, routing, modification, cancellation, to execution. It helps regulators see not only what happened in the market, but also which broker-dealers handled the orders and which parties were involved in the trading activity.
That ability matters enormously. When there's suspected manipulation, regulators need to know whether the trading was accidental, isolated, coordinated, or intentional, and who was doing it. They need to identify patterns across venues and accounts. They need to be able to connect activity that may appear harmless in isolation, but can become suspicious when viewed across the full market, or in regards to access to personally identifiable information and insider trading information. Without that consolidated view of financial markets, manipulative and disruptive traders can exploit the fragmentation and spread activity across different venues, across different intermediaries, and across accounts in ways that make their conduct harder to see.
The CAT helps close this gap, giving the SEC more effective tools to monitor for insider trading, wash sales, and other forms of market manipulation, while allowing them to respond to market disruptions more quickly than they once could. Of course, a system this significant must be subject to serious safeguards. Regulators have a responsibility to ensure that sensitive information is protected and accessed in accordance to the law.
having access to uniform and comprehensive market data. At the end of the day, regulators need to be able to identify a legally traceable person behind harmful market activity. The CAT allows them to identify disruptions, to know who's behind them, and to take corrective action quickly for the benefit of investors to preserve confidence in the US markets. You know, back more maybe 30 years ago, when we didn't have things like the trader ID, there's a biometrically duped trader ID if you're going to be a commodities trader. Before that happened, there were widely reported oceans of wash trades and all kinds of fraudulent activity on those markets that were cleaned up when we had a trader ID established in the commodities markets.
And the same thing's necessary in really any venue where you're trying to have a fair and responsible market.
Gentleman's time has expired.
Thank you, Mr. Chair. I move to strike the last word.
Juan Vargas
Thank you, Mr. Chairman. I would note that in 2020, the SEC excluded from the CAT the use of actual Social Security numbers, the individual taxpayer identification numbers, and the full birth dates. So it has narrowed significantly since implementation. I would now yield to the ranking member. Ranking member, I believe.
Maxine Waters
Thank you very much, Mr. Vargas. Mr. Loudermilk talked about the investors being protected. This bill would not protect investor information. The Trump SEC has already issued orders restricting the ability of SEC to collect, again, as I said, the names, addresses, Social Security numbers, and the birth date or year of US persons for CAT. Furthermore, HR 1483 ignores the fact that PII is routinely collected by broker-dealers and available to SEC in response to subpoenas.
Well, let me just say the reason Consumer Federation of America, Public Citizen, Americans for Financial Reform, Healthy Markets, all investor advocates oppose the PII or 11 louder, and Mr. Loudermilk should know that. This 11.
J. Hill
Gentlewoman yielding? Are you yielding back to Mr. Vargas?
Thanks, Mr. Vargas. Seeing no other bodies seeking time, I'll recognize myself. I want to thank, to strike the last word, I want to thank my colleague Congressman Loudermilk for working to protect individual investors' personally identifiable information. It's very, very important. And I agree with some of the comments made on other databases that are challenging, like the OPM, Office of Personnel Management, hack, the Equifax hack, the CFPB's lax oversight of every credit card transaction a few years ago.
Yield back.
I yield back also. Thank you, Mr. Chair.
J. Hill
These are all colossal databases, and that's where the risk comes in, tying together a particular trade or a particular ownership position with PII hacked by someone attempting to extort money or violate laws. All these big databases present that risk. And I agree, too, with Mr. Vargas, who just reported that the SEC back in 2020, in President Trump's first term, took efforts to protect that PII associated with CAT. The consolidated audit trail has grown in scope, grown in cost from an estimated just a few million dollars a year to some half a billion dollars a year in cost. And that's a whole another issue that the SEC's grappling with.
But today we're focused on protecting that personally identifiable information. And as Mr. Vargas pointed out, the commission's taken that step.
What Mr. Loudermilk's proposing is that we put that into law. So the commission took a step to protect PII, and now Mr. Loudermilk's proposing that we give that to our citizens by codifying that. And that is important. Secondly, the assertion is that perhaps if we somehow protect PII in this manner, codifying it, that we'll in fact open up the markets to rampant insider trading or not be able to investigate it ably. And I disagree with that argument as well, because the commission's charged with investigating insider trading by anyone in the country, no matter what their job, profession, or where they're located.
And every broker-dealer and every exchange has that as a core mission under the SEC rules. And that's what for decades a blue sheet has done. A blue sheet is indicating we see trouble in a particular trade, we suspect insider trading, and it gathers that data. Now they can do that through the consolidated audit trail. That's a benefit.
But we still want to protect people's privacy from that kind of a hack. And the changes that Mr. Loudermilk proposes, I think, are common sense. And even though, as Mr. Vargas points out, they're not currently collected, things like the Social Security number, other, as the gentleman from Georgia said, constitutionally protected private information, Congress must ensure future commissions cannot simply reverse course. And that's why the gentleman from Georgia brings this bill to codify what is an important protection for our citizens. And I support this bill, and I hope other members will consider support as well.
I don't think it weakens enforcement. I don't think it weakens the ability to investigate insider trading. I think it protects people's private information and prevents another big government database from being able to hack people's very valuable personal information. So I encourage a yes vote. I yield back.
Does anyone else seek recognition on Mr. Loudermilk's ANS? Hearing none, we'll move to amendments. Are there amendments? Does somebody wish to offer an amendment on the ANS? If there's no amendments, then we will read text, sorry.
The question now occurs on the adoption of the amendment in nature of a substitute. All those in favor signify by saying aye. Aye. All those opposed signify by saying nay. Nay.
In the opinion of the chair, the ayes have it, and the amendment is adopted. Question now occurs on ordering the bill as amended to be reported to the House with a favorable recommendation. Those in favor signify by saying aye. Aye. All those opposed signify by saying nay.
Nay. In the opinion of the chair, the ayes have it. For what purposes does the gentleman from Georgia seek recognition?
Request a recorded vote.
J. Hill
A recorded vote is requested. All those in favor of a recorded vote, raise your hands. A sufficient number having raised their hands, a recorded vote is so ordered. Pursuant to subsection C5 of rule 3 of the committee rules, the vote on this question is postponed. We will now move to the next bill.
Pursuant to notice, I call up HR 9329, which is the SEC Reform and Restructuring Act, which has been offered by our Capital Markets Subcommittee Chair, Representative Ann Wagner.
Clerk will report the bill, which was distributed in advance.
H.R. 9329, to make improvements to the securities laws and for other purposes. An amendment in the nature of a substitute to H.R. 9329, offered by Ms. Wagner of Missouri, designated as Wagner 057.
Without objection, the amendment's considered read, will serve as base text for purposes of amendment. The gentlewoman from Missouri, our subcommittee chair, Ms. Wagner, you're now recognized to describe your amendment for five minutes.
Ann Wagner
I thank you, Mr. Chairman. Members of this committee have worked tirelessly to ensure our markets are operating in the best interest of everyday Americans. Having a diligent and accountable Securities and Exchange Commission, or SEC, is central to that goal. Far too often, under former Chair Gensler, rules were advanced that threatened to stifle innovation, inhibit capital formation, and discourage economic growth, all without showing any clear, data-driven need. If those misguided rulemakings taught us one thing, Mr. Chairman, it's that the SEC needs reform.
H.R. 9329 accomplishes exactly that. While I'm glad Chairman Atkins has taken a different approach from his predecessor, this bill stands as a comprehensive and necessary package to ensure long-lasting transparency and accountability. It lays the groundwork for the Commission to foster thoughtful regulations, increase operational efficiencies, and stay laser-focused on its three-pronged mission. It recognizes the importance of stakeholder feedback by requiring the SEC to leave comment periods open for at least 60 days. With limited exceptions, this longer timeframe for public comment allows for higher quality feedback and aligns with the Administrative Procedures Act.
The bill also improves the quality of the SEC's cost-benefit analyses by directing the agency to define the specific problem a rule aims to solve. At the same time, the Commission would be required to consider the overlapping and cumulative impact of its rules. These rules would then be subject to periodic reviews to determine if they carry out the SEC's three-part mission, and the economic analyses of certain major rules would be studied by the GAO. Under this bill, Congress would be able to ensure greater visibility into these reforms and other Commission actions by requiring regular testimony from the SEC before this committee. We are also taking steps to better protect the SEC and therefore our financial system from outside threats such as AI-enabled cyberattacks.
This bill requires the SEC to undertake an evaluation of cyber infrastructure and readiness to defend against such attacks, prevent data breaches, and address other potential vulnerabilities. Additionally, this legislation consolidates the Public Company Accounting Oversight Board, PCAOB, into the SEC's Office of the Chief Accountant. Housing the PCAOB inside the SEC will eliminate duplicative reviews and streamline regulations, all while utilizing the same funding mechanisms currently in place.
Importantly, all cooperative agreements with foreign auditors are fully maintained, ensuring that regulators can continue to conduct oversight of Chinese firms. And finally, HR 9329 restructures the commission's organizational chart to give the chair additional flexibility in managing operations. In order to create durable rulemakings that carry out the SEC's core mission, this package delivers targeted reforms that promote transparency, increase efficiency, and improve the quality of commission rulemakings. These should not be partisan goals. I urge all my colleagues to support these common sense changes to ensure that the SEC works better for everyone who wishes to enjoy the many, many benefits of our capital markets.
I yield back the balance of my time.
Maxine Waters
The gentleman yields back. Who seeks recognition on Ms. Wagner's ANS? The ranking member of the full committee, Ms. Waters, you're recognized.
Thank you. I move to strike the last word.
Recognized for five minutes.
Maxine Waters
I'm strongly opposed to HR 9329, a hodgepodge package of provisions that would harm the agency's ability to carry out its mission of protecting investors and facilitating capital formation. While a few of the bill's provisions may be sensible if considered by themselves, the overwhelming majority of HR 9329's provisions are not. Rather than reform SEC, this bill would block the commission from doing its job by placing significant burdens on agency staff's time and resources and allowing for bad actors in our markets to escape accountability for their repeated law violations. But that may be the point. Let me explain just a few of the bad provisions of this bill.
First, the bill would require the SEC staff to take part in wasteful, never-ending analysis and require a lengthy public process before guidance can be provided to the marketplace. The types of analysis required are inherently flawed because they fail to take into consideration non-monetary, non-pecuniary factors that have just as much an impact on a rule's effects. But simply, the bill directs the SEC to consider the costs but gives little concern for the benefits of an action because those benefits are often harder to quantify. The notice and comment process has long been reserved for formal rulemaking so as not to impede staff's ability to issue clarifying guidance on the fly. This guidance is for the market participants to understand how to comply with the rules, but by requiring a rulemaking-like process for guidance, HR 9329 makes it harder for SEC staff to help market participants in a timely manner when providing critical regulatory relief.
Another harmful provision is Title V of the bill, which would dissolve the independent Public Company Accounting Oversight Board, or the PCAOB, in its entirety and moves its functions into the SEC, but without any new funding. The Enron scandal of 2001 exposed massive fraudulent accounting, which shattered investors' trust and prompted Congress to pass the Sarbanes-Oxley Act of 2002.
SOX, as the law is called, formally created the PCAOB to independently oversee public company audits and prevent future corporate fraud. By dismantling the PCAOB, Congress would return to the good old days of audit regulation that allowed auditors to aid and abet fraudsters. Yet another problematic provision is Title VIII, which would allow repeat violators of our securities laws to group prior violations together to form a single violation, so long as they can stem from the same cause. The effect would allow recidivist bad actors that continually break the law to squirt accountability and, in fact, is likely to encourage more behavior of this sort. This should be called the Wells Fargo provision, because by now, Wells Fargo would have a free pass under the bill for all future violations.
H.R. 9329 is opposed by Americans for Financial Reform and Public Citizen, and I would urge all members to oppose it as well. I thank you and I yield back the balance of my time.
Bill Huizenga
Chairwoman yields back. The Vice Chairman of the full committee, the gentleman from Michigan, would you like to strike the last word?
I would love to strike the last word.
Gentleman's recognized for five minutes.
Bill Huizenga
I was eager to address this, thank you, Mr. Chairman. I voice today strong support of the Wagner ANS to the SEC Reform and Restructuring Act and urge its immediate adoption. I appreciate that this package includes my bill, the Streamlining Public Company Accounting Oversight Act. We just heard the ranking member opine on it and certainly there's a few things that we are going to disagree about. This measure would simply transfer the Public Company Accounting Oversight Board, or PCAOB, into the Securities and Exchange Commission.
Specifically, it would dissolve the PCAOB's duplicative board structure and replace it with the Office of Public Accounting Oversight within the SEC. Now, why is that important? The office would then operate under the SEC's Office of Chief Accountant with the SEC Chief Accountant serving as its director. As was pointed out, this was born out of the Sarbanes-Oxley Act in response to major accounting scandals of the late 1990s and the early 2000s, including Enron, WorldCom, collapse of Arthur Andersen, and a number of other things. Prior to that, the accounting profession was largely self-regulated, obviously problematic.
Interestingly, Sarbanes-Oxley placed the PCAOB under, wait for it, Mr. Chairman, SEC oversight, giving the SEC authority over its members, its budgets, its rules, its appeals, literally every function that the PCAOB has. This isn't an independent board as we would often think of it in many other contexts that we have here in Financial Services Committee.
So under my provision, the new Office of Public Accounting Oversight would assume all of the PCAOB's responsibilities, rules, records, and regulatory functions. It would also require the SEC to establish the office's rules, inspection procedures, and enforcement processes while giving the SEC explicit rulemaking authority to issue any additional regulations necessary to ensure an orderly transition. We're not abandoning this in any stretch of the imagination. And now, you may ask, why do we need to do this? Well, the purpose of the reform is straightforward.
It's to streamline regulation, reduce duplication, improve accountability, strengthen oversight, not weaken it, not to, not to take away accountability, not to, uh, to, to somehow erode regulation that is properly there, but to make sure that it is done efficiently and effectively. And what's more efficient with a, uh, with, what is more efficient about this is actually it's an upgrade. It's going to have the very people, the SEC, that are in charge of this, uh, this organization already, to be able to make those direct decisions. So the SEC, as I said already, reviews and approves PCAOB, PCAOB rulemaking, but the status quo allows for too much overlap between the functions of the PCAOB and the SEC's existing responsibilities. Here's an example: whistleblower protection.
The, the PCAOB's 2019 whistleblower protection virtually mirrors the SEC's whistleblower program, raising reasonable questions about whether maintaining two separate systems is practical or necessary, all within the same space. Integrating public accounting oversight in the SEC would improve decision-making by strengthening cost-benefit analysis, broadening access to expertise, and ensuring rules and enforcement decisions better account for their economic impact. This policy has an important history. I advocated for years that the PCAOB be folded into the SEC, particularly as concerns grew regarding the board's politicization. I first introduced this bill in 2021 during Gary Gensler's tenure at the SEC, when it became increasingly clear that the PCAOB was not operating as a truly independent body.
And under the Biden administration, the PCAOB issued prescriptive rules that imposed significant compliant costs while its budget grew at a rate far faster than the SEC's, and annual salaries for the board members exceeded half a million dollars. I'm glad many of those trends are being reversed under Chair Atkins, and I'm glad to see that this was included in this package. I'm confident it would be a meaningful step towards a more efficient, accountable, and effective public accounting company accounting oversight regime. I yield back.
Speaker 19
The gentleman from, who's our ranking member on Capital Markets, Mr. Sherman of California.
Brad Sherman
Our capital markets are the envy of the world and the heartbeat of American capitalism. Capitalism will prevail over socialism. But crony capitalism will not. So our goal is to have fair capitalism, and that requires a strong SEC. Unfortunately, the SEC continues to have vacancies on its board and an apparent refusal by the president to know that there should be two Democrats on that board.
The SEC has functioned for a hundred years with a five-member board including participation by the political party that is not in power in the White House. We just saw a bill considered right before this one, which in the name of privacy would make it virtually impossible for the consolidated audit trail to track down insider trading. And insider trading is one of the great scourges of capitalism and our capital markets and is the symbolic, the greatest symbol of crony capitalism. Now we have this bill that contains some good provisions, but undermines the SEC in language that would sound good. It says that before a proposal is issued, instead that the SEC would have comment periods, etc., commensurate with the complexity of the matter.
The SEC should do this. The SEC does do this. So why do I object to putting it into statutory language? Because it's a vague standard that will be used in court to challenge everything the SEC does, because you can always go to a court and claim that it wasn't long enough. We didn't comment long enough.
Now, I have on occasion asked the SEC to take more time on a regulation, to consult with more people, and we should continue to do that. And the SEC should continue to provide more than the minimum amount of time when the complexity of the matter requires that. But to put a giant club in the hands of those who would attack every SEC regulation and to put that in statute, that's not just a vague statement of a wonderful platitude, that is a litigation device. The bill also would dramatically reduce the fines for violations in many cases by looking at several violations and calling them one. Now, as the gentleman I believe from Michigan pointed out, the bill does contain material, a provision regarding the PCAOB.
I am the only CPA on this committee, so you'd think I'd have an opinion on that, but I am an agnostic on what we should do, whether the PCAOB should remain an independent board. I look forward to studying the matter further. But I will say that the gentleman's arguments are just as strong with regard to the FASB as they are the PCAOB. So we either should have independent structures or everything folded into the SEC. So I oppose this bill because it weakens enforcement.
I oppose this bill because it provides a club in the hand of anyone trying to invalidate any SEC regulation, no matter how carefully considered or how logically based on law. And I oppose this bill because it seems to be part of a day in which we are moving away from honest capitalism and toward crony capitalism, and I yield back.
Chairman, I move to strike the last word.
Speaker 22
The gentlewoman from California is recognized to strike the last word for five minutes.
Young Kim
Thank you, Chairman Hill. Under the Biden-Harris administration, rogue regulator Gary Gensler proposed and finalized over 60 rulemakings. The excess of rulemakings coming out of the SEC render risk of seriously damaging our capital markets. Thankfully, SEC Chairman Paul Atkins has taken a much more deliberative approach to rulemaking that is focused on need and economic analysis.
However, we cannot take for granted that future SEC chairs will not follow the same mistaken path that Chair Gensler took. That is why I'm proud to support Chairwoman Wagner's SEC Reform and Restructuring Act that would prioritize investor protection, eliminate onerous and ineffective programs, and ensure that the SEC, now and in the future, is accountable to the people, not to the unelected government bureaucrats. My bill, which is the Review the Expansion of Government Act, REG Act, is also included in the SEC Reform and Restructuring Act, and it will require the SEC to consider the cumulative impact of related existing and proposed rules, ensuring that regulators measure the full weight of their actions on companies and American families. Our capital markets are the crown jewel of our economies. Our regulation should be focused on maintaining that and uplifting our small businesses and retail investors.
So I urge my colleagues to support the underlying bill, and I yield back.
J. Hill
The gentlewoman yields back. Who seeks recognition on Ms. Wagner's ANS? The ranking member? Oh, you have—we're not quite ready for that. Mr. Downing, the gentleman from Montana, you're recognized to strike the last word.
Mr. Chairman, I move to strike the last word.
You're recognized for five minutes.
Matthew Rosendale
Thank you, Mr. Chairman. Given the SEC's actions under previous administration, it is abundantly clear the commission is in desperate need of reform. You know, as a former securities commissioner for the state of Montana, I've had to deal with this directly in dealing with Gary Gensler's SEC with everything from pushing Green New Deal aspirations onto companies under his purview, which had nothing to do with protecting investors, to the complete ambiguity in digital assets. But I'm proud to cosponsor and support HR 9329, the SEC Reform and Restructuring Act, to increase transparency, efficiency, and accountability at the SEC. Specifically, this legislation will improve the SEC's cost-benefit analysis on proposed rules and establish a minimum 60-day comment period to allow for adequate industry stakeholder feedback.
You know, time and time again, we saw the SEC under Gary Gensler underestimate the cost of his many rules and curtail the notice and comment period to rush through major regulations. You know, among other provisions, this bill also includes my legislation, the SEC Modernization Act, to eliminate unnecessary bureaucracy to make the SEC operate in a more efficient manner. I have a pretty strong business background, and when leading an organization, it is critical to consider ways to streamline the way things are done. Today, the SEC has 43 total offices, 36 of which are not in statute, and the SEC chair has more than 20 direct reports. This is not an efficient way to operate.
So my legislation directs the SEC chairman to review the organizational structure of the commission and ultimately to consolidate the number of offices and direct reports to the best extent possible. So this creates an increase in efficiency. The SEC will also be required to submit a report to Congress on legislative recommendations on how to better effectuate this reorganization. I want to say I really appreciate Chair Wagner for including my legislation, and I urge my colleagues to vote yes, and on that, Mr. Chair, I yield back.
J. Hill
Gentleman yields back. Who seeks recognition? I'll recognize—seeing no other comments on the ANS, I'll recognize myself for five minutes. I want to thank our Capital Markets Subcommittee Chair Wagner for her tireless work in assembling this group of bills, which in my view advocate for American investors, and for her leadership in designing this package.
The SEC plays a critical role in maintaining fair, orderly, and efficient markets and facilitating capital formation. And unfortunately, under the previous administration, the commission strayed from its mandate by subjecting market participants to unprecedented bureaucratic overreach and a hostile environment of regulation by enforcement. Congress has an obligation to ensure accountability, transparency, and rigorous economic analysis remain central to the commission's work. The SEC Reform and Restructuring Act provides that clear statutory guardrail so that future commissions remain focused on the core mission. This bill requires the SEC to conduct rigorous cost-benefit analysis, evaluate the cumulative effect of its rules, and mandate a baseline public comment period so stakeholders have an opportunity to provide thoughtful feedback.
In my own experience, being a former senior officer in three different brokerage companies, having a number of days in which to count on your ability to comment is very helpful. And secondly, this point which so gets glossed over, I think, in the political rhetoric of the cumulative effect of rules. How they pile on top of each other, how sometimes they're frequently in conflict with each other, sometimes the cost-benefit analysis of a rule at the margin doesn't take into account all the work necessary in the total package of topics. And so this cumulative effect really has an impact on small business and entrepreneurs in this industry. So I think that particularly is of keen interest to me, and I thank the gentlewoman for her work on it.
And then this comment and the work by our vice chairman, Mr. Huizenga, and the conversation he had with Mr. Sherman about the future of the PCAOB is of keen interest as well. We're not gutting the SEC's responsibility in ensuring that our public accounting firms have high audit standards and meet the tests that were laid out in the aftermath of the Enron-Arthur Andersen disaster. It's simply streamlining it, cutting out some of the bureaucratic aspect of it, and letting the SEC, which is fully in charge of this process, be in charge of this process without an intermediate activity. So I commend the gentleman from Michigan for his work there as well. And while we're seeing excellent progress under Chairman Paul Atkins in returning the SEC to its core mission, these durable reforms are important.
And that way, the Congress provides clear statutory oversight to the commission, and we reduce the back-and-forth of policy depending on who leads the commission. I think it's a good idea. I urge support for this package, and I yield back the balance of my time. Anyone else seek recognition on the ANS? Hearing none, we'll move to amendments.
Does anyone wish to offer an amendment to the ANS?
The ranking member has an amendment at the desk, and we'll pause while it's distributed.
Speaker 27
The gentleman from Michigan reserves a point of order on Ms. Waters' amendment.
Speaker 11
An amendment to the amendment in the nature of a substitute to HR 9329 offered by Ms. Waters of California designated as Waters 176.
J. Hill
Without objection the amendment's considered read and the gentlewoman from California, Ms. Waters, you're now recognized to describe your amendment.
Maxine Waters
Thank you. While the majority of HR 9239's provisions would greatly interfere with the SEC's ability to protect investors and hold bad actors in our markets accountable, it does contain a few reasonable titles. My amendment is simple. It strips out the bad titles and keeps the good ones in place. With this amendment, we could get to a good broadly bipartisan bill.
These include Title 2, which would require the SEC chair to testify semi-annually to the House Financial Services and Senate Banking Committees. Title 3, which calls for the GAO to perform an audit of the SEC's technology and data handling practices and then present its findings to Congress so that we might improve the agency's cybersecurity capabilities. And Title 7, which establishes a minimum 60-day comment period for all SEC rulemakings as well as an expedited 30-day period in the event the Commission determines there would be imminent investor harm. I urge all members to support this common sense amendment and yield back the balance of my time.
J. Hill
The gentleman from Michigan withdraws his point of order. Who seeks recognition? The chair of our subcommittee on capital markets, Ms. Wagner, you're recognized to strike the last word.
Ann Wagner
I thank you, Mr. Chairman, I do move to strike the last word. Mr. Chairman, I strongly oppose this amendment, which would remove five, five of the nine titles from this bill. Each title in this bill has been thoughtfully crafted to increase accountability, transparency, and efficiency at the SEC by, among other things, improving the rulemaking process, including cost-benefit analysis, and also clarifying the meaning of a single violation that you brought up, Mr. Chairman, a single violation in an enforcement action. Additionally, the bill streamlines the Commission's operations by consolidating its internal reporting structure and moving the PCAOB into the SEC. In order to create durable rulemaking that carry out the SEC's core mission, and let's review that again, Mr. Chairman.
SEC has a three-part mission. Number one, protecting investors, protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. This package delivers targeted reforms that promote transparency, increase that efficiency, and improve the quality of the Commission's rulemakings. I urge my colleagues to oppose this amendment, which would eliminate needed reforms at the Commission, and I yield back, Mr. Chairman.
J. Hill
The gentlewoman yields back. Who seeks additional recognition for Ms. Waters' amendment? If there's no further debate, the question now occurs on the Waters amendment. All those in favor of the amendment shall signify by saying aye. All those opposed signify by saying no.
In the opinion of the chair, the nos have it, the nos have it, and the amendment is not adopted.
Recorded vote is requested.
J. Hill
The gentlewoman has requested 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 3 of the committee rules. Further proceedings on this amendment are postponed. Are there further amendments on Ms. Wagner's amendment in the nature of a substitute? The gentleman from Massachusetts.
Speaker 27
We'll pause while that amendment is distributed from the gentleman from Massachusetts. The gentleman from Michigan reserves a point of order on the Lynch amendment. Mr. Clerk, would you report the amendment?
Speaker 11
An amendment to the amendment in the nature of a substitute to HR 9329 offered by Mr. Lynch of Massachusetts, designated as Lynch 069.
J. Hill
Without objection, this amendment's considered read and the gentleman from Massachusetts, Mr. Lynch, you're recognized for five minutes to describe your amendment.
Stephen Lynch
Thank you, Mr. Chairman. This amendment would require that the Security and Exchange Commission cost-benefit analysis that is proposed in the bill account for the impacts of those regulations on digital asset markets and on market activity driven by artificial intelligence. These analyses must include algorithmic trading and AI-generated disclosures and conversely must also account for the risks that those expanding activities, markets, and systems pose to investors. As ranking member of the subcommittee on digital assets, fintech, and artificial intelligence, I believe that if we're going to require the SEC to conduct a more rigorous cost-benefit analysis, as the bill does, then that analysis must reflect the reality that our markets are increasingly reliant on artificial intelligence in trading, investment management, risk management, and disclosure. The SEC has recently rescinded its earlier cautionary guidance that provided important guardrails for digital asset markets and banks and AI-driven market activity.
Retail investors are now left without clear information about the risks they face in entering these markets without the confidence that regulators are watching. As written, this bill would make it harder for the SEC to issue new rules to protect investors and market participants. So my amendment is needed to make sure that any cost-benefit analysis included in the bill keeps the investors as its North Star. In closing, my amendment requires the SEC to assess both the impact of regulation on digital asset markets and AI-driven activity and the extent to which the regulation mitigates or fails to address the risks those markets and systems pose to investors and market integrity. If my colleagues truly believe the SEC should be held to a higher standard of accountability in its rulemaking, they should also believe, I think, that those standards must account for the full scope of today's changing markets.
I urge support for the amendment and I yield back the balance of my time.
Speaker 33
Gentleman from Massachusetts yields back. Who seeks recognition? Ranking Member Waters.
Move to strike the last word.
You're recognized for five minutes.
Maxine Waters
Thank you. Mr. Lynch's amendment is as practical as it is simple. If SEC staff is going to conduct more analysis than it already does, let it at least focus on the impact a proposal would have on digital asset market infrastructure as well as financial market participants that use AI. The amendment would also consider a proposal's effects on investors and market integrity caused by the use of AI, which is critical to consider as this technology becomes more embedded in our daily life. And we're seeing market participants deploying AI in their trading and portfolio reallocations, raising concerns about over-reliance on similar models.
And impact analysis by the SEC would help market participants to mitigate these types of risk. I urge all members to support Mr. Lynch's amendment and I yield back.
J. Hill
Gentlewoman yields back. Who seeks recognition? The gentlewoman from Missouri.
Ann Wagner
Thank you, Mr. Chairman. I would oppose this amendment. The cost-benefit analysis done by the SEC would already consider these topics if relevant to the rulemaking as laid out in paragraphs two and three in Title I. This is clearly duplicative, Mr. Chairman, and the SEC would consider the impact on these markets when conducting cost-benefit analyses going forward, so I see it as unnecessary and duplicative and I oppose.
Would the gentlewoman yield?
Yes, I will.
J. Hill
I just want to thank the gentleman from Massachusetts for his amendment and I understand his point, but I do agree that since the SEC already has a requirement to do cost-benefit analysis of anything affecting consumer protection and orderly markets in its rulemaking, that it certainly can do that now. And two other comments I'd make. One, this committee voted unanimously for a resolution on artificial intelligence which outlined the responsibilities of not only our oversight but the jurisdiction and oversight of the committee, the supervisors that we oversee on their responsibility to putting proper AI oversight in place in their regulations. Secondly, we passed last year, last July, a year ago this month, with 78 Democratic votes, the Clarity Act, which this committee worked on for several years and passed last year, which lays out specifically the directives to the Securities and Exchange Commission on how to regulate and conduct oversight and supervision of blockchain-related markets. And thirdly, this committee also reported to the Congress our artificial intelligence sandbox effort where we direct supervisors like the SEC to work with its their private sector supervised entities and together conduct cost-benefit analysis and practical oversight of how AI will impact investors and orderly markets.
So for all those reasons, I agree with the gentlewoman from Missouri that I don't believe this amendment is necessary and I would urge Republicans to vote no and I yield back to the gentlewoman from Missouri.
J. Hill
Gentlewoman yields back. Who seeks recognition? The gentleman from California.
Stephen Lynch
Yeah, thank you. Here's the problem with that sort of thinking. Right now you have every sizeable investment company out there using AI to some degree already. It is again an example where technology has outpaced regulation. And we do not have currently a way of measuring the risk and or the usage of AI within those firms.
So it is not, it has not been targeted. In many cases these firms are using black box models that are very difficult to discern, you know, the direction or the risk being created. It is very difficult to discern the reasoning behind a certain investment decision or advice to those individual investors. So to say that it's already covered, I think might have been true several years ago, but with the adoption of AI by all these firms using different models, some of them overlapping, some of them are using the exact same models. But I think as we go forward, a lot of these new LLMs, these large language models, will offer competitive advantage and you'll have a spread in terms of the number of algorithmic devices that are being used to advise retail investors.
And we don't have anything in place right now that would preclude damaging or very risky advice being given to those retail investors. So look, we're doing, we're going to do within this bill, and I agree, we're going to do some cost-benefit analysis. I'm saying a huge chunk of this, and this is almost an exception that swallows the rule, pretty soon every single, every single investment decision is going to be made by AI. This is going to be market-wide. And I don't believe that we have empowered or instructed in any of those bills that have been mentioned, even though we create a small sandbox, I don't think out in the markets, in the wild so to speak, we have instructed the SEC to look at the cost-benefit analysis of AI generally and also in very specific context, the investment in digital assets.
So I think the bill is very good in certain aspects. I think it could be improved by the inclusion of this provision. And I think frankly we will rue the day that we did not be more diligent in our oversight of the use of AI in financial services and probably generally in society. So I thank the gentleman from California for yielding and I yield him back his time.
J. Hill
The gentleman from California yields back. Any other seek recognition on the amendment? If there's no further debate, the question now occurs on the Lynch amendment. All those in favor of the amendment shall signify by saying aye. All those opposed signify by saying no.
In the opinion of the chair, the noes have it, the noes have it, and the amendment is not adopted.
Request a roll call.
J. Hill
The gentleman from Massachusetts has requested a roll call vote. All those in favor of a recorded vote raise your hands. A sufficient number having raised their hands, a recorded vote is ordered pursuant to subsection C5 of rule 3 of the committee rules. Further proceedings on this amendment are postponed. Are there further amendments to the Wagner bill, please?
If there's no further discussion or amendments to the bill, the question now occurs on the adoption of the amendment in the nature of a substitute. Seeing no further amendments, without objection, the previous question on the substitute is ordered. Recorded votes on the pending amendments have been postponed. Once the votes are taken, the committee will immediately vote on the adoption of the amendment in the nature of a substitute and then will consider the question to report the measure. We'll now move to the next bill.
Pursuant to notice, I call up HR 5775, the FCRA Liability Harmonization Act, which was introduced by our vice chairman of the Financial Institutions Subcommittee, Mr. Loudermilk. Excuse me, pursuant to notice, I call up HR 7187, Clarity for Compensation Act, which was introduced by Representative Nunn of Iowa. The clerk will report the bill, which was distributed in advance.
Speaker 9
HR 7187, to amend the Securities Exchange Act of 1934 to provide an exemption from the definition of a broker for a certain registered representative-owned personal services entity and for other purposes.
J. Hill
Without objection, the first reading is dispensed with. Without objection, the bill is considered read and open to amendment at any point. Representative Nunn has an amendment in the nature of a substitute, copies of which were distributed in advance. The clerk will report that amendment.
Speaker 11
An amendment in the nature of a substitute to HR 7187 offered by Mr. Nunn of Iowa, designated as Nunn 170.
J. Hill
Without objection, the amendment is considered read and will serve as base text for the purposes of amendment. The gentleman from Iowa, Mr. Nunn, you're recognized for five minutes.
Zachary Nunn
Well, thank you very much, Mr. Chairman, and thank you to my fellow members of the House Financial Services Committee here today. I strongly support this bill, HR 7187, and the Clarity for Compensation Act. And as noted in my home state of Iowa, local financial advisors work hard to provide their families' financial well-being. Unfortunately, they often find themselves tangled up in a complex rulebook created for Wall Street firms, not hometown lenders. Today, financial advisors who run their pay through their own business risk being labeled as an unregistered broker simply by getting paid through their company that they themselves own.
As a result of this risk, many don't even bother routing out their pay through their own business. Instead, they potentially miss out on meaningful tax and business benefits. My bill would make a simple adjustment to the Securities and Exchange Act of 1934, allowing financial advisors to pass their earnings through their own personal entities without being labeled an unregistered broker. This is not a brand new idea or a loophole. It simply provides in law that the SEC is permitted in its November guidance, providing that advisors need that certainty and that they've led on that aspect.
And this adjustment is made carefully. The advisor's personal business still cannot engage in any trading, oversight stays fully in place, and every investor stays intact.
Let me be clear about what this bill does not do. It does not let anyone escape arbitration, dodge a customer complaint, or weaken an investor protection. And investors keep every right to recover as they do today. Reducing this regulatory friction is what helps financial advisors in a place like Winterset, Iowa, grow, hire, and serve the community members who rely on their financial advice. I think we can all agree this is a common sense and it is a bipartisan solution that I'd like to thank my colleagues from across the aisle, particularly Representative Meeks, for making sure we give local financial advisors a fair shake, a clean shot, and a real opportunity.
At the end of the day, this is about making sure folks who help folks in Iowa plan for college, retirees be able to retire, and those who are families build a future that aren't held back by a rule that was never meant to apply to them. I would also like to submit a letter, Mr. Chair, in support from the Sheros Center of Financial Markets and Policy for the record.
Zachary Nunn
Thank you, Chair. And I ask that my colleagues join me in support of Clarity for Compensation Act. With that, I thank you all, and I yield back.
J. Hill
Gentleman yields back. Who seeks recognition on the Nunn amendment in the nature of a substitute? Mr. Chairman. The ranking member.
Maxine Waters
I thank you, Chairman Hill. I rise in support of H.R. 7187, and I thank the sponsors of both sides of the aisle for bringing forward a narrow, common sense fix. My office spent some time on this bill at the request of my friend, Mr. Meeks. I welcome its inclusion in this markup. Here's what the bill does plainly.
When a registered representative sets up a personal services entity to receive their own compensation, this bill clarifies that the entity is not itself a broker. That is the whole bill. Professionals in every other field route their earnings through a business entity. Doctors do it, lawyers do it, accountants do it. Securities representatives face legal uncertainty when they do the same thing.
This bill ends that uncertainty and does so with real guardrails. The guardrails matter, so let me be specific. The representative stays fully registered. The broker stays fully responsible and must supervise and control the representative. The entity cannot hold itself out as a broker.
It cannot do a single thing a broker does except receive the representative's pay. And it must produce every record to the SEC and FINRA on request. I would also like to thank investor advocate organizations like Americans for Financial Reform and Public Investors Arbitration Bar Association for bringing to my attention yesterday the urgent need for an additional safeguard to ensure that broker-dealers do not hide away financial assets that would otherwise go to harmed investors. So I want to thank Chairman Hill and the sponsors of this bill for accommodating my request for such revisions. This bill is nonpartisan.
It is narrow. It gives honest representatives the same business tools every other professional already has, and it does it without weakening a single protection investors rely on. So I urge my colleagues to support H.R. 7187, and I yield back the balance of my time.
Ann Wagner
Gentlewoman yields back. Who seeks recognition?
The Clarity for Compensation Act introduced by my colleague Mr. Nunn and Mr. Meeks offers a common sense solution that puts local financial advisors on a level playing field with other licensed professionals. Many Missourians aren't using Wall Street wealth managers. They're going to their local financial advisor down the street. But right now, these smaller independent advisors are barred from receiving compensation through their own business entities unless they go through the costly headache of registering as a broker. While the SEC took a step in the right direction by granting temporary no-action relief on this issue in November, these small businesses need the certainty of a permanent statutory fix.
That seems to be something that we are pounding in this particular markup, Mr. Chairman. A permanent statutory fix. The narrow exemption in H.R. 7187 removes administrative red tape and enables better strategic planning for Main Street businesses, all while keeping oversight responsibilities firmly in place. I urge support for this bipartisan bill, and I yield back the balance of my time.
Gentlewoman yields.
J. Hill
Yes, I yield. I just would add my support and thanks to Congressman Meeks of New York and Congressman Nunn of Iowa for working on this. This has been a long-standing point of confusion for people registered as broker-dealers, particularly as compensation styles have changed over the years with different vendors and under different broker-dealer ownership requirements. And as the ranking member of the full committee noted, financial professionals in other industries such as law and accounting use a similar administrative organizational component. So I really thank Meeks and Nunn for working on this, clarifying it, and giving some stability and clarity to this organizational component for those who are registered as financial advisors.
I support it, and I yield back to the gentlewoman from Missouri.
Speaker 48
Gentlewoman yields back. Who seeks recognition? Mr. Meuser. You're recognized for five minutes.
Daniel Meuser
Thank you, Mr. Chairman, and I agree with my colleagues on both sides of the aisle. Congratulations to Congressman Greg Meeks and Congressman Nunn. I too support H.R. 7187, the Clarity for Compensation Act. It's a common sense, it's an important bill that supports independent financial advisors across Pennsylvania and throughout the country. Most financial advisors aren't Wall Street firms.
They're smaller businesses. They hire employees, lease office space, build businesses that are often passed down to the next generation. Current law can treat an advisor's own business entity as a broker because it receives advisor's compensation. Other licensed professionals like attorneys, accountants, insurance agents do not face this problem. So H.R. 7187 fixes that.
It makes clear that these personal services entities are not brokers solely because they receive compensation, while keeping existing investor protections and regulatory oversight in place. This is about reducing unnecessary blue tape, giving independent financial advisors clear rules to operate under, and allowing them to spend more time serving their clients instead of navigating outdated regulatory barriers, and I yield back.
J. Hill
Gentleman yields back. Seeing no further debate or amendments to the bill, the question now occurs on adoption of the amendment in the nature of a substitute of Mr. Nunn's ANS. All those in favor signify by saying aye. Aye. All those opposed signify by saying nay.
Nay. In the opinion of the chair, the ayes have it, the amendment is adopted. Question now occurs on ordering the bill as amended to be reported to the House with a favorable recommendation. Those in favor shall signify by saying aye. Aye.
All those opposed signify by saying nay. Nay. In the opinion of the chair, the ayes have it. For what purpose does the gentleman from Iowa seek recognition?
J. Hill
Gentleman requests 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 so ordered. Pursuant to subsection C5 of Rule 3 of the committee rules, the vote on this question is postponed. We'll now move to the next bill.
Now, I pursuant to notice, I call up HR 5775, the FCRA Liability Harmonization Act, which was introduced in fact by the vice chairman of the Financial Institutions Subcommittee, Mr. Loudermilk. Clerk will report the bill, which was distributed in advance.
Speaker 9
HR 5775, to amend the civil liability requirements under the Fair Credit Reporting Act to include requirements relating to class actions and for other purposes.
J. Hill
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. Representative Loudermilk has also an amendment in the nature of a substitute, the copies of which have been distributed in advance, and the clerk, if you would report that amendment, please.
Speaker 11
An amendment in the nature of a substitute to HR 5775 offered by Mr. Loudermilk of Georgia, designated as ANS H5775.
Barry Loudermilk
Thank you, Mr. Chairman, and I speak today in support of my bill, HR 5775, the Fair Credit Reporting Act Liability Harmonization Act. This bill amends the civil liability provisions of the Fair Credit Reporting Act to cap statutory damages in class action lawsuits, eliminate punitive damages, and limit attorneys' fees. Together, these reforms would help curb abusive litigation practices while preserving strong consumer protections and effective dispute resolution process. Unlike other federal consumer protection statutes, including the Equal Credit Opportunity Act, Truth in Lending Act, Fair Debt Collection Practices Act, and the Electronic Fund Transfer Act, the Fair Credit Reporting Act permits unlimited damages, including punitive damages, in class action lawsuits. In practice, this structure creates incentives for costly litigation and settlements, even where alleged violations are technical in nature and lack concrete consumer harm.
For cases where there is consumer harm, class members often only receive pennies on the dollar while attorneys walk away with most of the award. In a sampling of recent FICRA class action settlements, class members have received anywhere from only nine dollars to twenty-one hundred dollars, while attorneys walked away with anywhere between two hundred thousand and over twenty-eight million. Even more notable, in some settlements, class members received only a service, such as credit monitoring, and the attorneys still received multi-million dollar awards for attorney fees. I would hardly call this consumer protection. HR 5775 strengthens consumer protection by focusing enforcement on genuine misconduct.
Businesses large and small, including employers, retailers, credit unions, credit bureaus, and tenant screeners, would be able to better serve consumers and offer affordable and innovative products and services if they do not have to face the risk of ruinous liability for FICRA class action lawsuits. Consumers would benefit from expanded access to affordable credit and services if the damages provisions of the FICRA were restructured to ensure that only individual consumers who were actually harmed by FICRA non-compliance are compensated for their injuries. The changes in this legislation to align the FICRA with other consumer financial protection statutes will strike an important balance between preserving the consumer's ability to seek meaningful recourse for harm and curbing abusive litigation tactics that exploit an outdated law.
Mr. Chairman, I'd like to submit the following letters of support for the record. American Fintech Council, a joint letter of support from Consumer Data Industry Association, the US Chamber of Commerce, Electronic Transactions Association, Consumer Bankers Association, as well as others, a letter from America's Credit Unions, a letter of support from Professional Background Screening Association, and one from America Bankers Association.
Speaker 45
Thank you, Mr. Chairman. I urge my colleagues to support this legislation and I yield back.
I move to strike the last word.
Maxine Waters
I oppose HR 5775 as it will weaken accountability for the national credit bureaus such as Equifax, Experian, and TransUnion, as well as other consumer reporting agencies by stripping consumers of meaningful legal remedies when they are harmed by inaccurate or unlawful credit reporting. And this adds insult to injury as the Trump administration has shut down the Consumer Financial Protection Bureau, which used to oversee the credit bureaus. As it stands, the credit reporting system is deeply flawed. According to the Consumer Financial Protection Bureau, credit reporting remains the top priority of all financial products and services that consumers file complaints about year after year. In fact, in 2022, consumers filed about 1 million complaints regarding credit reporting, but the complaints have been rising and last year it reached 5.8 million complaints about credit reporting.
That represents 88% of all complaints filed with the CFPB in 2025 about a wide range of consumer financial products and services. Past studies have found that one in five consumers have errors in their credit reports and one in 20 have errors serious enough to result in credit denial, higher borrowing costs, or other adverse consequences. Yet, instead of improving credit reporting accuracy and consumer protections, this bill shields bad actors from accountability by capping damages in class action lawsuits and capping attorney's fees. Even if a company harms millions of consumers or causes massive economic harm, they will barely receive a slap on the wrist for potential extreme corporate misconduct. Even more troubling, this bill eliminates punitive damages for willful violations of the Fair Credit Reporting Act.
Removing these damages, which are meant to deter reckless misconduct, signals to large corporations that even egregious violations carry limited consequences. Before I close, I think it is interesting that the last time Republicans tried to move this bill through committee, it was 2017 and right before news broke that Equifax had one of the largest data breaches in history. Equifax exposed the sensitive data of 147 million Americans, basically half the country, and consumers were rightfully outraged.
Republicans quietly shelved the bill and waited nearly a decade before bringing it back up, hoping that we forgot. Well, I have not forgotten that or all the other ways the credit bureaus have screwed up and made it harder for consumers to get a mortgage or small business loan or even an apartment or a job. Mr. Chairman and members, I don't know why we have this bill. The complaints continue to grow. You know that even in your offices, not only on the Democratic side but on the Republican side, some of the biggest complaints come from these credit bureaus.
They mix up people's names, they delete information, they have so many errors in what they do, which causes people not to have any credit. They can end up not buying things that are necessary for a decent quality of life because the credit bureaus just mess up all the time. We should be doing a lot more to correct the errors and the way that the credit bureaus mishandle information. And so I'm sorry to see this bill. I'm surprised to see it.
I don't know why it's coming back, but I think consumers will pay attention to the fact that the complaints that they make are being ignored by the members that they send to protect them. This is outrageous. This is ridiculous. We shouldn't have this bill before us and I yield back the balance of my time.
Speaker 47
Gentlewoman yields back. Gentleman from Texas. You're recognized for five minutes.
Speaker 46
Thank you, Mr. Chairman. Every year, the business community is burdened by excessive litigation that exploits outdated provisions in the Fair Credit Reporting Act. These lawsuits are targeting businesses based on minor technicalities, which is shifting the focus to creating a profit for litigators instead of preventing consumer harm. This threatens a wide range of American businesses, from local lenders and retailers who can't afford a lengthy lawsuit to companies responsible for hundreds of employees. By allowing unlimited statutory and punitive damages, the current FCRA framework forces companies to divert resources away from innovation and job creation to defend against frivolous lawsuits.
When businesses are free to focus on what they do best, Main Street and the American economy simply reap the benefits. And I'm proud to cosponsor H.R. 5775, the FCRA Liability Harmonization Act, introduced by my colleague and Congressman and my friend Loudermilk. This important litigation establishes common sense limits in class action lawsuits and stops abusive litigation tactics while maintaining consumer protections. And I want to thank Congressman Loudermilk for his hard work and leadership on this extremely important issue, and I urge all of my colleagues to support H.R. 5775. And I yield back the balance of my time.
Move to strike the last word, Mr. Chairman.
Sylvia Garcia
The gentlewoman from Texas is recognized to strike the last word for five minutes.
Mr. Chairman, I, you know, been listening to the conversation here and this bill should have just been named the anti-lawyer bill or the anti-consumer bill because quite frankly, we've got to do all that we can to protect consumers when these erroneous mistakes and errors are made on the consumer reports because they do impact the average working American.
It keeps them from getting credit, it keeps them from getting jobs, it keeps them from getting housing. And it's particularly in a district like mine in Houston where many constituents remain unbanked or underbanked due in part to many of these credit issues. And it takes a lot of time and trouble to undo any of this. I actually had the personal experience of having to undo some credit report issues when I tried to buy my home because there was another Sylvia Garcia, I think she was from Austin, that they had mistakenly put her credit report issues on my account. And it took me, even as a lawyer, a lot of time and trouble to fix this.
So I think it's important that when there is real harm made, that people do have a right to go to court and resolve these issues. I trust judges, I trust juries to make the right decision. So the lack of banking further impacts their ability to tap into the credit system, which is really, really hard, especially when we're seeing a society that's becoming more and more cashless, that unless you have a credit card or a debit card, then you can't even participate in some very, very common consumer practices. So this really is about limiting lawyers' and attorneys' fees, and we should just call it that. And I think it's unconscionable that we try to do this for the average consumer who has been harmed by bad credit reports in some way.
Mr. Chairman, I think, you know, if we think that we're exercising excessive litigation, well, all we have to do is look to the White House. No one has litigated more and filed a lawsuit over every single little thing, even now as president, than Donald Trump. So if we want to limit litigation, let's look at the right place where there's real damage done, not only to our process but also to our country. So with that, I yield back my balance of my time to the ranking member if she needs to, and if not, then I yield my balance of my time.
Maxine Waters
Thank you very much for yielding time. I'm absolutely outraged that this could be happening. As a matter of fact, I remember what was happening with the Consumer Financial Protection Bureau. And it seems as if Elon Musk had been sent in to the Consumer Financial Protection Bureau to fire those people who were working so diligently to try and deal with consumer issues. Now, I want you to know the Consumer Financial Protection Bureau is extraordinarily important to the consumers in this country.
Prior to it coming into being, consumers really had nowhere to go. They had nowhere to register their complaints. And they have done a magnificent job being able to help millions of consumers who found their way to the Consumer Financial Protection Bureau. Do you understand that a renter may not be able to rent a place to live if the Consumer Financial Protection Bureau messes up and they can't get the credit that they need or the information that is needed back to them to keep them from, you know, simply destroying their ability to have a decent place to live? I don't care whether it's a car loan, whether you're trying to get a mortgage, whether or not you're trying to rent a place.
This is ridiculous. Why would members of Congress, whose number one job is to come here and represent the consumers and the citizens of this country, and allow itself to get in a position where it's protecting those who are legally organized in order to make sure that they don't get ripped off or they don't get to be the victims of mistakes, etc., etc.?
This is outrageous. It doesn't make good sense to me and I'm hoping that the next amendment that I come up with will help you to get off the hook on this mess. I mean, we got to do something about this. We cannot allow this to happen. I yield back.
Speaker 50
Gentlewoman from Texas yields back. Who seeks recognition? The gentleman from Pennsylvania? You're recognized for five minutes.
Daniel Meuser
We do urge my colleagues to support HR 5775 introduced by Representative Loudermilk, which I did co-sponsor. The Fair Credit Reporting Act requires that consumers have the ability to correct inaccurate information on their credit report and recover damages when they are harmed. The current litigation structure has become unbalanced. Some would say completely out of whack. The FCRA litigation has increasingly been used to drive large settlements over technical violations that there is little or no actual consumer harm.
It's become a routine big money maker for trial lawyers. The FCRA litigation has grown into one of the most heavily litigated consumer statutory or statutes with thousands and thousands filed every year. It does not help consumers, it helps trial lawyers. The bill brings FCRA liability more in line with other federal consumer protection laws. More in line with other protection laws.
It caps statutory damages in class actions, eliminates punitive damages, and limits attorneys' fees. The consumer still maintains the right to seek damages that harm them. This bill doesn't change that, it only limits frivolous lawsuits and doesn't undermine existing consumer protection. We should be focusing on fixing errors quickly, protecting consumers, and stopping misconduct. We should not preserve a system that rewards abusive litigation and drives up costs across the credit reporting system.
Hogs get fat, pigs get slaughtered. I urge support and yield back.
J. Hill
Gentleman from Pennsylvania yields back. Who seeks recognition on this amendment? Gentleman from Wisconsin.
Scott Fitzgerald
Thank you Chairman. This is an excellent piece of legislation. I rise today in support of HR 5775, the Fair Credit Reporting Act Liability Harmonization. And I'm proud to be an original co-sponsor of the legislation with my colleague Congressman Loudermilk. Fair Credit Reporting Act plays a critical role in protecting consumers and ensuring the accuracy of our credit reporting system.
At the same time, businesses should not face disproportionate liability for technical or procedural violations that cause little or no actual consumer harm. Over the years, inconsistent interpretations of the FCRA's civil liability provisions have created significant uncertainty for businesses that make good faith efforts to comply with the law. The legislation brings greater consistency to the statute by establishing clearer standards for class action liability while preserving consumers' ability to recover actual damages when they have been harmed. Specifically, the bill clarifies that courts may not automatically award statutory minimum damages to every member of a class and establishes reasonable limits on aggregate class action recoveries and attorneys' fees under both of the willful and neglectable liability provisions of the FCRA. These changes help ensure that this litigation remains focused on compensating consumers for legitimate injuries rather than encouraging excessive class action awards that primarily benefit trial attorneys.
Importantly, nothing in this legislation changes consumers' underlying rights under the Fair Credit Reporting Act or weakens the obligation of companies to comply with the law. Instead, this bill promotes a more balanced and predictable liability framework that protects consumers while reducing unnecessary litigation costs and legal uncertainty. I thank Congressman Loudermilk for his leadership on this issue and urge my colleagues to support the legislation.
I do yield time.
Barry Loudermilk
Thank you very much. And I just wanted to clarify. I heard a statement a moment ago that it must have been Mr. Musk that wrote this. No, it doesn't take someone as a genius or a high IQ to understand the basic principles here. Even somebody with a low IQ can understand that it is of the inequity of someone who is harmed through FICRA receiving pennies when the attorneys who received no harm receive millions of dollars.
That's just common sense. That doesn't require high IQ. So, that is the basis of this. Let's let's enforce the statutes under FICRA, but let's make sure those who are harmed are protected, not the law firms, the attorneys who rake in millions of dollars and leave them with basically nothing. So, Mr. Chair, my good friend Mr. Fitzgerald, I yield back.
J. Hill
The gentleman yields back. The gentleman yields back. Is there anyone else seeking on the underlying ANS? I'll recognize myself for five minutes before we consider amendments. I rise in support of Mr. Loudermilk's bill and let me explain a couple reasons why.
First, the targeted reform is aligning the Fair Credit Reporting Act civil liability provisions with all the other principal consumer protection statutes: Equal Credit Opportunity Act, the Fair Debt Collection Practices Act, the Electronic Funds Transfer Act. Each of those consumer protection statutes have this same liability limitation that Mr. Loudermilk is offering. So we're not inventing anything new here. We're aligning the Fair Credit Reporting Act with precisely the same approach as it relates to litigation that our other consumer statutes like Equal Credit Opportunity Act, Fair Debt Collection Practices Act, and the EFT Act have. So that's a key point I hope members on both sides of the aisle just take into account.
That's where Mr. Loudermilk's coming from. Secondly, nothing is prohibiting a consumer's ability to recover actual damages resulting from errors in their credit reports while maintaining strong federal and state oversight of that consumer reporting marketplace. The bill actually encourages greater competition and participation in the consumer reporting system because the threat of uncapped class action liability is a barrier to entry for new firms who are trying to enter into this arena. It also discourages some data furnishers like banks or credit unions or auto dealers from providing information necessary to maintain a comprehensive and accurate consumer reporting system. So for those reasons, I think Mr. Loudermilk's tackled a really important tailored change that I believe encourages competition, aligns this credit reporting bill with all the other consumer statutes, and still fully preserves consumers' rights to sue and and get corrections.
One of the fattest files in my office at home, ranking member, is a me trying to fix my credit about 20 years ago. I haven't thrown the file away because I wanted to hunt down this person named Jody Hill. And Jody had a terrible credit record that somehow was connected to my address, and it took me over a year to get it cleaned up. So I think everybody on this dais, Republican, Democrat, really absolutely empathizes with our consumers when they're fighting for credit accuracy. And I believe this bill does not harm that, and so I'm supportive of Barry Loudermilk's bill.
I yield back the balance of my time. Does anyone else seek recognition? If not, let's turn to amendments. Is there an amendment on the bill?
Mr. Chairman, I'd like to reserve a point of order.
Speaker 27
The gentleman from Georgia reserves a point of order on the Waters amendment. The clerk, I think we're ready for you to report the amendment.
Speaker 11
An amendment to the amendment in the nature of a substitute to HR 5775 offered by Ms. Waters of California, designated as HR 5775B.
J. Hill
Without objection, the amendment's considered read, and now the gentlewoman, our ranking member, is recognized for five minutes for her amendment.
Maxine Waters
Thank you very much, Mr. Chairman. My amendment is straightforward. It simply ensures that the Consumer Financial Protection Bureau has the funding and staff to do oversight of credit bureaus. Shortly after his inauguration last year, President Trump fired the CFPB director, Rohit Chopra, installed his own OMB director, Russell Vought, and ordered nearly all staff to stop working and tried to fire all of the staff members. That was until the United States District Court put a pause on the actions.
Trump's CFPB recently issued a revised reduction in force, known as a RIF plan, but it would cut the workforce from 1,200 employees to about 550. And importantly for this bill, many of the plan cuts would come from the supervision and enforcement divisions. If we expect companies like Equifax to follow our laws, we should make sure there are staff doing the examination to hold them accountable for their actions. Now, just going back to what I said a few minutes ago, Equifax exposed the sensitive data of 147 million Americans, basically half the country, and consumers were rightfully outraged. Republicans quietly shelved the bill and waited nearly a decade before bringing it back up, hoping that we would forget.
Well, we can't forget. Let me just say, and this is particularly for young renters having such a difficult time. As a matter of fact, you know, two, three, four, five of them will get together in order to try and rent a decent place for them to stay. Now, I want to tell you, one mistake on credit bureau, that kind of coming together for three, four, or five young people could be harmed, could be stopped.
That means four or five of them wouldn't have any place to live because they can't rent. I don't know if any members have heard the stories about people who could not rent a decent place to live because the credit bureau was basically messing with their ability to get a decent credit report. Do you know what it means for these young people, many of whom work here in the Capitol, who have a hard time finding a place to live, and when they all get together to pool their money, that means that all of them could get harmed at one time by this credit bureau? Trump's CFPB recently issued this advisory reduction that I just told you about, and you know why? He wanted to cut the workforce, and he did, from again 1,200 employees to about 550, and importantly for this bill, many of the planned cuts would come from the supervision and enforcement division, which means that when people file those complaints, when those young people go in there and try to get a place to live, they don't have the enforcement division anymore that would help them.
If we expect companies like Equifax to follow our laws, we should make sure that our staff doing the examinations to hold them accountable for their actions. Listen, I can't emphasize enough what you're doing to families getting a decent quality of life and opportunities. If they can't get credit, if there's errors being made, I'm glad you remembered what happened to you some years ago and it took you a year to straighten it out. Well, now nobody can straighten it out. Now, don't tell me that you have all these other laws and that people can sue.
Do you know what it takes to sue? Do you know you've got to get an attorney? Do you know you've got to pay a lot of money? The average person working every day can't afford to get an attorney. They're just out with no protections, and you all know this, and I don't know why you're protecting the credit bureaus.
They're ultra-rich folks making a lot of money and making decisions about people's lives. Why be on their side, even if you were making an error, even if you were wrong? Why would you rather be wrong on behalf of young people trying to get a decent place rather than the bureaus who's causing them such pain in their lives? This is outrageous, it doesn't make good sense, and I want the people listening to know who's doing this.
You got it back.
Move to strike the last word.
Gentleman is recognized for five minutes.
Barry Loudermilk
Thank you, Mr. Chairman. The tail end of those comments, I couldn't tell if she was talking about credit unions or trial attorneys that were so rich and leaving the consumers with only pennies because that was an exact description of what's happening right now. Let's also clarify something about the Equifax data breach. That would is not covered under FICRA. In fact, any lawsuit that was filed was dismissed by the court because FICRA governs the accuracy and the permissible use of credit reports rather than general data security.
This would have made no difference with the Equifax data breach.
So, we just want to make sure that, you know, as we declare Armageddon, we need to be factual. That there would be very little change. Any change that would happen would be in favor of the consumer if we were to pass this, this bill. Because those who were actually harmed would actually receive compensation that they're due. Now, I also oppose the gentlelady's amendment, um, because H.R. 5775 simply replaces reasonable limits, as the chairman has said, on private rights of action to prevent litigation that makes certain lawyers rich while doing very little to help the consumers they purport to help.
But obviously, the minority is, uh, in favor of the status quo to keep making the lawyers richer and the consumers poorer. Furthermore, the CFPB has already stated publicly that they will focus enforcement in areas where there is actual consumer harm rather than on foot faults or to expand their regulatory power. Thus, there is no reason to doubt that if there are violations of FICRA and Reg V, that results in tangible and measurable consumer harm, the CFPB will be ready to step in to correct and make victims whole. This does not require teams of enforcement attorneys or overbearing supervision as we saw in the last administration. If Democrats are serious about discussing the right level of CFPB funding, then they should support putting them through the normal congressional appropriations process as Republicans have advocated for years.
And with that, Mr. Chairman, I yield back.
J. Hill
Gentleman withdraws the point of order. Chair recognizes the gentlewoman from Texas, Ms. Garcia. You're recognized to strike the last word.
Sylvia Garcia
Thank you, Mr. Chairman. I'd like to strike the last word. And I'm glad you shared that it, it took you about a year. And I believe you've said that you've held various positions in banking and two major positions in some of the, uh, the regulators that are involved in banking. So imagine if with your expertise it took you a year, and I know it took me about that long, and I didn't hire a lawyer because I was in fact a lawyer at the time, um, but it took me probably about six months or so to unravel and figure out who the other Sylvia Garcia was that, that was responsible for the, well, I think it was some loan repayment issues.
So it's important that we have staffing, uh, at the Consumer Financial Protection Board to deal with these issues. So if you don't have staffing to handle them, well then the only choice that someone would have is maybe to try to hire a lawyer or visit some sort of a legal assistance office to try to, try to navigate these issues because they really are very complicated. I don't know the last time some of my colleagues have had to face this issue, but it's not easy. Uh, and the other thing I wanted to just mention that this is being sold as this is like what we do in all of consumer protection and it's nothing new. But I know of no other consumer law that limits attorney's fees in the manner that this bill does or caps actual damages in class action suits to five hundred thousand dollars.
That's a change in my, to me. And, you know, I was a legal aid lawyer many, many moons ago when I practiced consumer law. This is really again an attempt to limit what lawyers do. And, uh, I don't know which major lawsuits my colleagues are talking about that the lawyers get millions and the consumer gets pennies, because I, that was not my experience and it's certainly I've not read about anyone doing that.
So I'm just concerned that the Consumer Protection Board would not have the staffing required that again, then the person would have no choice but to seek legal help. So I'm glad the right to sue is there, but I don't see it necessary to limit attorney's fees or put caps on damages. If a harm is done, you know, in this country, you get, you know, again, we trust lawyers, we trust especially judges, speaking as a former judge myself, we trust juries. They will make the right decision and be fair and equitable. So I don't think that this huge concern for all these millions and millions are warranted.
With that, I yield any of the remainder of my time to my ranking member if she needs to add to the discussion about her amendment.
Maxine Waters
Well, I want to thank you, Ms. Garcia, for sharing that information with us. You know, you may hate lawyers, that's your problem. With these kind of cases, you can't even get a lawyer. They don't take these cases on contingency. You gotta come up with some money upfront.
So, you know, you don't even get to the point where you got to cap the damages. It's not going to be any because the average person cannot get and pay for a lawyer. And you know, I see it all the time. I hear it all the time and a lot with renting. We're here trying to provide housing, you know, whether you're renting or whether you're buying.
But you make it more difficult for the average person out there working every day to have a decent quality of life. This is outrageous. I want you to know everybody out here knows what it means to even try and file a legal case against this bureaucracy that we have created and we work in. This bureaucracy is absolutely impossible to penetrate. It does not allow young people to have a decent chance at being able to fight something like a Consumer Protection Bureau.
And you know it. And you may be mad at lawyers, you may not like them, but this is not the way to get at them. Wait until you gotta file some lawsuits that's not backed up by the government in some way and see what happens to you. First of all, I want to tell you, I'm working on housing, we're all working on housing, trying to get housing provided for everybody. Renting is extraordinarily important to young people.
They're not buying any houses at this point. They can't afford a 20% down. All they want to do is rent a decent place. And I want to tell you, one bedrooms across this country are more than $1,000 a month. And you're putting them in a position where they could be harmed by one of these credit bureaus and not a darn thing they can do about it.
Gentlewoman's time has expired. The chair recognizes myself for five minutes. Well, first let me say that I'm not mad at lawyers because I married one and she took me on a contingency. She took me on a contingency and still the jury is out, as they say. So enough lawyer jokes.
I thank the good debate, but I want to yield some time to my friend, the author of this legislation, Mr. Loudermilk, to address a couple of these key points. I yield to you, sir.
J. Hill
Thank you, Mr. Chairman. Yeah, again, we're hearing the sky is falling, but what is failed to be brought up again, that only our side is bringing up, is all this does is harmonize the Fair Credit Reporting Act with all the other consumer protection statutes. This just puts them in line with the others. In fact, damages are given through others. This isn't going to alienate anyone.
And by the way, yes, lawyers do take these cases on contingencies. They do them quite often. So I just want to point out, the sky isn't falling. In fact, we're building a foundation under FICRA to bring it in line with all the other statutes that have been very effective in actually providing consumers with the damages proportionate with the damages that was done to them, with awards proportionate with their damage. This is all this does.
Barry Loudermilk
This is, this is all this does. It's time that we, we do something that favors the consumers, not the litigants. And with that, Mr. Chair, I yield back.
J. Hill
It's time that we do something.
Gentleman yields back to the chair and the chair yields back. Is, who seeks further recognition on the Waters amendment? If there's no further question, the question now occurs on the Waters amendment. All those in favor of the amendment shall signify by saying aye. All those opposed signify by saying nay.
In the opinion of the chair, the noes have it, the noes have it, and the amendment is not adopted. Is there any further amendment to the amendment in the nature of a substitute? Seeing no further amendments, without objection, is it the red one? I want, I'm trying to get a recorded vote. Okay, well, gotta be faster on the draw.
But because I'm a judicious person, there's, your, your aides are asleep back there, man. Appealing to the chair, the gentlewoman, the gentlewoman has requested a recorded vote. Would you raise your hand, please? Okay, thank you. All those in favor of a recorded vote raise your hands.
A sufficient number having raised their hand, a recorded vote is so ordered pursuant to subsection C5 of Rule 3 of Committee Rules. Further proceedings on the amendment are postponed. Are there further amendments to Mr. Loudermilk's ANS? Seeing no further amendments, without objection, the previous question on the substitute is ordered. 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 nature of a substitute and then consider the question of report the measure. We'll now move to the next bill, which is, pursuant to notice, I call up H.R. 8141, the Fair Credit Reporting Reseller Accuracy Act, which was introduced by the gentleman from New York, Mr. Lawler. Clerk will report the bill, which was distributed in advance.
Speaker 11
H.R. 8141, to amend the Fair Credit Reporting Act to require resellers of information contained in consumer reports to follow reasonable procedures to assure maximum possible accuracy of such information before transmitting such information and for other purposes.
J. Hill
Without objection, first reading is dispensed with. Without objection, the bill is considered read and open to amendment at any point. The gentleman from New York has an amendment in the nature of a substitute, copies of which have been distributed in advance. Clerk will report the amendment.
Speaker 11
An amendment in the nature of a substitute to H.R. 8141 offered by Mr. Lawler of New York, designated as ANS H8141.
J. Hill
Without objection, the amendment is considered read and will serve as the base text for purposes of amendment. The distinguished gentleman from New York, Mr. Lawler, you're now recognized for five minutes to describe your amendment.
Michael Lawler
Thank you, Mr. Chairman. Credit reporting touches nearly every American household, and accuracy in that system is essential for families seeking a mortgage, financing a car, or accessing basic financial opportunities. Yet today, a growing share of consumer reports is not produced by the major credit bureaus alone. They are transmitted, reformatted, and compiled by resellers, entities that play a critical role in the modern credit ecosystem.
Under the Fair Credit Reporting Act, resellers are defined as consumer reporting agencies that simply aggregate information from other CRAs and transmit it to third parties. They do not maintain their own databases or generate new consumer reports. They are especially common in the mortgage market, where they provide credit reports for lenders. Despite this limited role, resellers are increasingly being pulled into litigation when discrepancies arise between bureau files. Current law requires all CRAs to follow "reasonable procedures" to ensure maximum possible accuracy.
But resellers, who are contractually obligated to deliver bureau data exactly as received, and who cannot legally alter or correct that data, are being sued for inaccuracies they did not create and cannot legally fix. That is not sound policy. It does not improve consumer protection, and it does not strengthen the accuracy of the credit reporting system. The legislation before us, the Fair Credit Reporting Reseller Accuracy Act, provides a targeted and necessary clarification. It amends Section 607(b) of the FCRA to make clear that resellers are not liable for the accuracy of credit information they are required to transmit as received.
Accountability remains exactly where it belongs, with the entity that originated the data. And this is a common sense fix. It preserves consumer protection by ensuring that the source of inaccurate information remains responsible. It shields resellers, many of them small and mid-sized businesses, from misdirected litigation. And it protects the speed and efficiency of mortgage lending, where delays caused by unnecessary legal exposure can raise costs for families already struggling with affordability.
Whether you're a first-time homebuyer, a retiree refinancing a mortgage, or a lender trying to serve your community, you deserve a credit reporting system that is accurate, fair, and modernized for today's data environment. This bill strengthens that system. It reflects bipartisan, solutions-driven policymaking, and it ensures that the FCRA continues to protect consumers without imposing liability on entities that neither create inaccuracies nor have the authority to correct them. I'm proud to support this measure and I urge all of my colleagues to do the same. Mr. Chairman, I yield back.
Sylvia Garcia
Mr. Chairman, here we are again considering another bill on credit reporting, which is the most error-ridden part of the financial system and is holding millions of Americans from getting a loan, an apartment, and a job. And this comes at a time when the Trump administration continues to shut down our lead federal agency, the Consumer Financial Protection Bureau, which should be holding the credit bureaus accountable. No wonder consumer complaints have been skyrocketing, hitting a record 5.8 million that were filed last year, focusing on credit reporting. Things are so bad, consumers filed more complaints with the CFPB the past 12-14 months as they did in CFPB's first 14 years. The House passed a package of bills led by committee Democrats comprehensively overhauling the broken credit system when Chairwoman Waters was chair of this committee.
We also passed Representative Gottheimer's bill, the Protecting Your Credit Score Act bill, which would have streamlined credit reporting to make it easier for consumers to correct errors and get their credit reports.
Turning to this bill. Resellers play a role in gathering several credit reports from different credit bureaus and sending them to companies to help determine whether someone receives a mortgage, what rate they are charged, or even whether they can get a job or apartment. I understand the sponsors of the bill are trying to ensure resellers are not held accountable for another party's mistake. However, the introduced version of the bill goes far beyond that, giving resellers a broad liability shield where they no longer need to be held accountable even when they pass along information that is so obviously wrong. The examples are staggering.
For example, there have been times when a reseller has merged files showing a consumer is alive and making payments and another report claiming the consumer has died. Despite this obvious conflict, the reseller still forwarded the report on. These are just examples of where a reseller forwarded one file showing a consumer may have a foreclosure proceeding along with a more current report showing that there'd be a settlement reached without a foreclosure. These blatantly obvious inaccuracies directly harm consumers. Consumers should not be losing housing, employment, or credit opportunities because their reseller failed to prevent the sharing of such blatantly false information.
Let's also bear in mind the national credit bureaus own and operate their own resellers, so these can be large, sophisticated companies that should know better. I am open to exploring options that clarify the role of resellers to ensure they are part of the solution and not turning a blind eye to obvious errors without consequence. But the language has to be carefully crafted to ensure it's truly to the benefit of the consumer. So long as these concerns are not addressed, I urge members to oppose the bill. Thank you and I yield back.
J. Hill
I thank the gentlewoman for yielding back. Who seeks recognition?
I'll recognize myself for five minutes. I support HR 8141, the Fair Credit Reporting Reseller Accuracy Act. I want to thank Mike Lawler and Josh Gottheimer for collaborating on this bipartisan bill. Resellers have long played a critical role in the lending markets, particularly in the most securitized market in the world, which is our mortgage market, compiling credit reports so that consumers can secure fair, reliable, and fast loan support for that major purchase, that of a home, which leads to their family pursuit of happiness and financial stability. However, resellers have faced increased litigation and are often accused of being liable for incorrect information contained in credit reports.
That's not their mission. Resellers are contractually obligated to provide credit information exactly as they receive it, and they cannot legally alter the data, period, full stop. Because of this obligation, litigation against a reseller that did not originate the data is unsound, in addition to obviously unfair, as they didn't create it and they can't correct it under their obligation, legal obligation. So imposing liability on resellers creates a duplicative, burdensome litigation that does nothing to improve the accuracy of the credit reports, something that we've all talked about all morning, the importance of accurate credit reports. So we agree that that is a fundamental tenet that we've all mentioned on both sides of the aisle today, but that's not the reseller's mission.
And I've seen firsthand how resellers help consumers by providing lenders with consolidated credit reports, again, speeding up fast, secure mortgage finance, for example. This litigation only slows all that down, makes it more expensive, and under this legislation that Lawler and Gottheimer are proposing, resellers remain subject to the procedures designed to ensure the maximum possible accuracy of credit reports while being protected from liability from errors made by one of the agencies, thereby preventing unnecessary burdens on lending markets. So to me, this is super common sense. Thanks for the bipartisan work on it. I urge support for H.R. 8141 and I yield back.
Is there further conversation on the ANS? If not, we'll consider amendments. Is there an amendment to the ANS?
Mr. Chairman, I have an amendment at the desk on behalf of Ranking Member Waters.
Speaker 27
The gentlewoman from Texas has an amendment at the desk on behalf of Ranking Member Waters. We'll pause while that's distributed. And the gentleman from Georgia reserves a point of order. And the clerk will report the amendment.
Sylvia Garcia
An amendment to the amendment in the nature of a substitute to H.R. 8141 offered by Ms. Garcia on behalf of Ms. Waters.
Bill Huizenga
Without objection, the amendment is considered read and the gentlewoman is recognized on her amendment.
Sylvia Garcia
Thank you, Mr. Chairman. This amendment would ensure we get the Consumer Financial Protection Bureau back to work conducting oversight of the credit reporting system, including resellers. As the Trump administration has shut down the CFPB, bad actors are harming consumers left and right with no accountability. Complaints have exploded and there have been more complaints filed in the last 14 months during this shutdown than consumers filed in CFPB's first 14 years. Most of those complaints are about credit reporting, so we really need to get the federal cop on the beat who was designed to protect consumers.
And let me remind my colleagues, the CFPB doesn't just protect consumers in blue states, but they protect all consumers across America and have returned more than 21 billion to more than 200 million harmed consumers. No wonder four out of five Americans, including four out of five Republicans, support CFPB and its mission. I urge my members to support my amendment and I yield back the balance of my time.
Barry Loudermilk
Gentlelady yields back. Does the gentleman insist on his point of order?
I withdraw my point of order.
Barry Loudermilk
Point of order is withdrawn. Is there further debate on the amendment? Gentleman from Georgia is recognized.
Thank you, Mr. Chairman. I'll move to strike the last word.
You are recognized.
Barry Loudermilk
Thank you, Mr. Chairman. Again, this is another bill that strives to make credit reporting agencies more responsive, more accurate, and more efficient and focused upon the consumers. And H.R. 8141 simply clarifies the role of resellers who don't control the data.
Furthermore, regarding the gentlelady's amendment, the CFPB already has stated publicly that they will focus enforcement in areas where there is actual consumer harm, rather than on foot faults or to expand their regulatory power. Thus, there is no reason to doubt that if there are violations of FICRA and Reg V that result in tangible and measurable consumer harm, the CFPB will be ready to step in to correct and make victims whole. This does not require teams of enforcement attorneys or overbearing supervision as we saw in the last administration. If Democrats are serious about discussing the right level of CFPB funding, then they should support putting them through the normal congressional appropriations process as we Republicans have advocated for years, and with that, Mr. Chairman, I yield back.
Bill Huizenga
Gentleman yields back. Is there further debate on the amendment? Seeing none, there are no further discussion or amendments on the bill.
I have an amendment.
Bill Huizenga
I'm sorry. All those... sorry, the gentleman from New Jersey, I know we're not at the end of the bill, but we're going to deal with this amendment first. So if there's no further debate on this amendment, the question now occurs on the amendment. All those in favor of the amendment shall signify by saying aye. All those opposed shall signify by saying no, nay.
In the opinion of the chair, the noes have it, noes have it, and the amendment is not adopted. Now, for what purpose does the gentleman from New Jersey seek recognition?
Thanks, Mr. Chairman, I have an amendment at the desk.
We'll pause while the amendment is distributed.
Speaker 63
Gentleman from Georgia has reserved a point of order. Clerk will report the amendment.
Josh Gottheimer
An amendment to the amendment in the nature of a substitute to HR 8141 offered by Mr. Gottheimer of New Jersey, designated as Gottheimer 253.
Speaker 73
Without objection, the amendment is considered read and the gentleman is recognized on his amendment.
Josh Gottheimer
In Jersey, we've got a saying, Mr. Chairman, if you sell somebody something, you better stand behind it or they're coming for you. Thank you, Mr. Chairman. It's not a crazy idea, it's just basic decency, it's just doing business the right way. And the good news is most companies in the credit reporting world already operate that way, but under the current rules, there's a gap. Resellers, the middlemen of the credit reporting world, can pass information along into a consumer report even when there's good reason to believe it might be wrong.
Not because anyone's acting in bad faith, but because the system doesn't give them a clear, consistent standard to follow. And when that information is wrong, who feels it? The consumer. The mom in Paramus, New Jersey, who gets turned down for a car loan, or the veteran in Hackensack stuck paying a higher rate on his mortgage. The small business owner in Teaneck who can't get approved for a lease, all because of a piece of bad data nobody caught down the line.
That's not good for families, and honestly, it's not good for business either. Bad data leads to bad decisions for consumers and for the lenders relying on that information. Everybody does better when the numbers are right. That's what my amendment's all about. Here's how it works.
If a reseller realizes that information might be inaccurate, they've got five days to notify the credit reporting agency and the consumer. They share a copy of that information, where it came from, and how to dispute it. Reasonable, workable steps, and steps a lot of responsible resellers already take. And here's the key piece.
If a reseller knows or has reasonable cause to believe that information is wrong, they don't pass it along to a third party. That gives everybody in the process a clear, common sense rule to follow, and it gives consumers confidence the system is working the way it should. This is just common sense, and it's good business, making sure the system works for people across the country and works better for everybody in it. Jersey families and all families deserve accurate information. American families deserve accurate information, and this amendment delivers it without piling on burdensome new mandates.
I urge my colleagues to support it. Although I'm opening to removing, to withdrawing, I would like to continue this conversation now and down the road, and I yield.
Gentleman yields back, and I understand the gentleman is withdrawing his amendment.
Michael Lawler
Thank you, Mr. Chairman, and I want to thank my colleague, Representative Gottheimer, for working with me on the underlying bill. And I am happy to continue working with my friend, Mr. Gottheimer, to ensure that consumer reports are as accurate as possible while recognizing the significant limitations resellers have given they do not maintain the underlying databases that generate consumer reports. It is critical that we do not set expectations for resellers that are impossible to fulfill or unintentionally create confusion for consumers when the clear best path forward remains consumers disputing incorrect information with the underlying controllers of the information, not resellers. So I look forward to seeking common ground to ensure that facially inaccurate information gets corrected as quickly as possible and working with my colleague, Representative Gottheimer, to make sure the language of this bill ultimately reflects that. I would ask him to consider withdrawing this so that we can continue working towards that possibility, and with that, I yield back to the chair.
Speaker 57
Gentleman yields back. Is there further discussion? For what purpose is the gentleman from California seek recognition?
Maxine Waters
The ranking member is recognized for five minutes.
Thank you. I appreciate Representative Gottheimer's leadership on this issue and working with me to address my concerns through this amendment. This ensures resellers won't be accountable for someone else's mistake, but will ensure they don't pass along information that is obviously wrong. Importantly, consumers would be alerted when a reseller notes such an error, giving them a chance to dispute the information and get it corrected. And so I urge members to support the amendment.
But I learned, with that said, I understand Representative Gottheimer will withdraw the amendment. While I do not support the underlying bill in its current form, I will be happy to support the bill on the floor if this amendment or similar language were adopted. I yield back.
Gentlelady yields back. Is there any further discussion on the amendment?
Speaker 74
I just want to thank the ranking member, very grateful for your comments there. I really want to thank Mr. Lawler for his leadership and working collaboratively as ever in a strong bipartisan way, and I'm grateful for that as well. And with that, Mr. Chairman, unless anyone else wants to add anything, I'll withdraw.
Bill Huizenga
Gentleman withdraws. Seeing no other discussion or amendments to the bill, 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. Those opposed shall signify by saying nay.
And those opposed shall signify by saying nay.
In the opinion of the chair, the ayes have it.
Speaker 63
The gentleman has requested a recorded vote. The chair recognizes the gentleman from Georgia.
I'll withdraw my request for the recorded vote.
Speaker 70
The gentleman withdraws his request for a recorded vote. And with that, the voice vote will stand. All right. Pursuant to notice, I call up HR 5402, the Credit Access and Inclusion Act of 2025, which was introduced by me. The clerk will report the bill, which was distributed in advance.
Speaker 11
HR 5402, to amend the Fair Credit Reporting Act to clarify federal law with respect to reporting certain full-file consumer credit information to consumer reporting agencies and for other purposes.
Young Kim
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, so the clerk will report the amendment.
Speaker 11
An amendment in the nature of a substitute to HR 5402 offered by Mrs. Kim of California, designated as ANS 5402.
Young Kim
Without objection, the amendment is considered read and will serve as base text for purposes of amendment. The I will now recognize myself for five minutes. The homeownership remains the cornerstone of the American dream. Unfortunately, over 25 million Americans remain locked out of that dream due to our outdated credit payment system, identifying them as credit invisible or not having a credit history with any of the three national credit reporting agencies. My bill would improve access to credit by allowing additional data, such as utility and phone payments, to be used as factors in determining creditworthiness so that millions of hardworking Americans can receive credit for the small things that they are already doing.
As the co-chair of Financial Literacy and Wealth Creation Caucus, I often remind my constituents in Orange, Riverside, and San Bernardino counties that the journey to wealth creation has to start somewhere. I saw this firsthand when my mother would collect cans and bottles on the beaches of Guam and turn them in for cents that eventually became dollars, which would be donated to our local church. Credit scoring doesn't have to be a system that rewards people for taking on debt and paying it off in a timely fashion. It can be a system where a consistent payment history or savings habits reward hardworking American families for living within their means and practicing fiscal discipline. Whether it is payroll data, utility, phone, or rental payments, when 25 million Americans are left behind, we must rethink the way our system operates.
My legislation today will unlock more capital for hardworking families and reopen the path to homeownership. I hope my colleagues can join me in supporting the Credit Access and Inclusion Act, and I would remind them that in the 115th Congress, this bill passed the committee unanimously and passed the House floor with a unanimous support. I yield back. Is there further debate on ANS?
Maxine Waters
I move to strike the last word. Yes. Eight years ago, the House passed a similar bill when it was led by our colleague Representative Keith Ellison, and I appreciated that back then. We were seeking to promote the use of alternative data like the reporting of rental, cell phone, and utility bill payment. But a lot has changed since then.
For starters, back then, even in a Republican administration, we had a functioning Consumer Financial Protection Bureau, CFPB, did a lot of things I didn't care for, but we didn't see the kind of of radical and unlawful shutdown of the CFPB that we've seen in Trump's second term. Under this Trump administration, there is no oversight of the credit reporting system today. Furthermore, alternative data has been increasingly reported and included in various types of credit scores. I'm very disappointed the Republicans dropped an opt-out provision that the lead Democratic member, Representative Bynum, advocated for.
Now I oppose this bill because it would expand the collection and use of highly sensitive consumer data without strengthening consumer protections. Though this bill does allow rent utility and telecom payment data to be included in credit reports to expand access to credit. This is already allowed under Fair Credit Reporting Act. Alternative data can already be reported and in many cases is being reported. The only purpose that this bill serves is to strip away consumer safeguards including the state level protection and consumer control over their own personal financial information.
Credit reports already function as a gatekeeper to economic opportunity as they significantly affect whether someone can get a mortgage rent on apartment secure employment obtain insurance. When errors occur as they often do the consequences can be devastating. Nearly half of consumers who receive their reports find errors and many of those errors damage their credit scores. This concern is especially troubling given the credit reporting is consistently one of the top sources of consumer complaints. In 2025 alone 5.8 million complaints filed with the CFPB involved credit reporting issues.
Yet Republicans are advancing this legislation while simultaneously weakening the very agency responsible for policing the credit bureaus. This bill also preempts state laws that protect consumers from abusive tenant screening practices and utility related harms. I'm particularly concerned that the bill removes a consumer choice provision that would have allowed individuals to control whether this data is shared. An opt in framework is far more appropriate than automatic reporting. And so consumers should affirmatively consent before sensitive payment data is furnished to credit bureaus.
Until this bill restores consumer control preserves state protections and ensures robust federal oversight I cannot support it and I urge my colleagues to vote no. I yield back.
Speaker 66
Is the is there any further debate on ANS? Rep Bynum is now recognized.
Without objection.
Suzanne Bonamici
Thank you. Madam Chair I'd like to thank you for your work on the Credit Access and Inclusion Act and for your commitment to expanding credit access for the millions of Americans who remain credit invisible or have thin credit files. And this is a real problem. Too many Americans including students recent graduates immigrants veterans and low income families are locked out of access to credit. And it's not because they're financially irresponsible but because the traditional scoring system doesn't capture the financial behavior they actually have.
Paying rent on time paying their utility bills paying their phone bills. That requires financial responsibility and that should count for something. And currently it doesn't. This bill recognizes that gap and I support that goal. I do however Madam Chair have concerns about the bill as currently drafted.
Now when the bill was being developed there was an understanding a very clear understanding that consumers would have meaningful control over whether their payment history is shared with consumer reporting agencies. The idea was that this bill shouldn't create new ways for Americans credit to get dinged.
The version before us today does not reflect that understanding. As drafted, the bill would allow this information to be provided without providing, without requiring the consumer's affirmative consent. And I believe that that is a mistake. Not because the underlying goal is wrong, but because how we get there matters. Credit reporting decisions affect whether people can buy a car, get a mortgage, and increasingly even rent an apartment or get a job.
And I believe that consumers deserve to be in the driver's seat when it comes to their own financial data, particularly when that data, utility and rent payments for instance, can reflect circumstances like temporary hardship or billing disputes that don't always indicate creditworthiness. Madam Chair, I'll be offering an amendment to address this by establishing an opt-in requirement and by ensuring that states retain the ability to enforce stronger consumer protections than those that are in this bill. I believe my amendment will strengthen this legislation and make it more durable because a credit building tool that consumers trust and choose to participate in will serve them and the goals of this bill far better than one that they are enrolled in by default. I look forward to that discussion and Madam Chair, I yield back.
Young Kim
Thank you. Does anyone else seek recognition on the ANS? Hearing none, we'll move to the amendments. Does anyone wish to offer an amendment to the ANS? Ms. Waters, you are recognized.
I have an amendment at the desk.
Reserve a point of order.
Speaker 11
An amendment to the amendment in the nature of a substitute to HR 5402 offered by Ms. Waters of California designated as HR 5402B.
Maxine Waters
It is well documented how damaging Trump's shutdown of the CFPB has been. One study showed that Trump's shutdown has already cost consumers $19 billion. Credit reporting complaints have skyrocketed and they are through the roof at nearly 6 million complaints filed last year.
And no one is monitoring Equifax and the other credit bureaus to know if they're following the law. Newsflash, they probably aren't. We need to get the public servants at CFPB back to work and fulfilling their statutory mission to protect consumers in the financial marketplace. So my amendment would ensure that the CFPB has the same level of supervision and enforcement staff with respect to the credit bureaus. If members really care about consumers, then I'd urge them to support this amendment.
And I yield back.
Young Kim
I will now recognize myself for a few minutes. This is the third time that this amendment has been offered despite it having nothing to do with the underlying bill, which is about promoting access to credit through the use of alternative data. Furthermore, the CFPB has already stated that they will focus on areas of real consumer harm, including as it relates to credit reporting. This does not require the type of overbearing supervision and enforcement we saw in the last administration, and this amendment is entirely unnecessary. So 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. All those opposed shall signify saying no. In the opinion of the chair, the noes have it. The noes have it and the amendment is not adopted.
The gentlelady requests the recorded vote. A recorded vote is requested. All those in favor of a recorded vote raise your hand. A significant number having raised their hand, a recorded vote is ordered. Pursuant to subsection C5 of rule 3 of the committee rules, further proceeding on the amendment are postponed.
Are there any further amendments to the amendment in the nature of a substitute? Ms. Bonamici is recognized.
Speaker 71
We'll pause while the amendment is distributed. For what purpose does the gentleman seek recognition?
Speaker 77
Thank you. The point of order has been reserved. The clerk will report the amendment.
Speaker 11
An amendment to the amendment in the nature of a substitute to HR 5402 offered by Ms. Bonamici of Oregon designated as Bonamici 091.
Young Kim
Without objection, the amendment is considered read. The gentlelady is now recognized on her amendment.
Suzanne Bonamici
Thank you, Madam Chair. I rise today in support of my amendment to the Credit Access and Inclusion Act. Expanding access to credit for the millions of Americans who are credit invisible or have thin credit files is a goal that I'm proud to champion, and this bill takes important steps in that direction. Allowing rent, utility, and communications payment data to be considered in credit decisions can open doors for first-time homebuyers, young workers, veterans, and low-income families who have demonstrated financial responsibility but lack the traditional credit history to prove it. But expanding access to credit must include consumers' terms.
We cannot in this country continue to stack the deck against the poor, the vulnerable, and the young.
That is what they are telling us every single day. And that is what my amendment addresses. The version of this bill before us today does not include the consumer consent protections I believe are essential to making this policy work as intended. My amendment establishes an opt-in requirement, ensuring that before a consumer's rent or utility payment history is furnished to a consumer reporting agency, that consumer has made an affirmative choice to participate. This is about agency, and this is about failing to continue stacking the deck against the American people.
They keep telling us over and over and over again the deck is stacked. My amendment is not a departure from the bill's goal, it is the fulfillment of it. Opt-in is the gold standard for consumer financial privacy. It ensures that the consumers this bill is designed to help are active participants in their own financial futures and not passive subjects of a data collection system they may not even know exists. And frankly, a credit building tool that consumers trust and choose to use is a more durable and effective policy than one that they are enrolled in without their knowledge.
I believe my colleagues believe in agency and free will and privacy and protection. The current bill does not address that. So my amendment also preserves the ability of states to maintain stronger consumer protections where they exist now. Several states have enacted meaningful safeguards around the use of alternative credit data, and this bill should not be a vehicle for stripping those protections away from consumers who currently benefit from them. I try to be positive and talk about what we do want.
And I was very clear about what I wanted in this bill and what I thought would protect the American people. I have two children that are young adults, and we are fighting like hell to make it so that they can launch into this world on their own two feet. And this is a step backwards. My amendment is a step forward. I look forward to working with my colleagues on both sides of the aisle to advance a credit access framework that is both expansive and protective, because those two goals are not in conflict.
I urge my colleagues to support my amendment, support American young people, and get back to the business of the people. I yield back.
Young Kim
Thank you. Does the gentleman from Georgia insist on his point of order?
Young Kim
Thank you. I now recognize myself for a few minutes. I want to... yes, let me say a few words first. Yes, I want to thank my colleague Representative Bynum for your work with me on this bill, but I think the language as is is the best path forward for the consumers. The very purpose of my legislation is to increase access to credit for the families that are currently locked out of our traditional financial system.
If we actually want to ensure that credit reporting agencies use this data and that this data can uplift the families that need it most, then we need to ensure that lenders have access to the most accurate information to shape their decision-making.
If we were to adopt the amendment being debated, we would be leaving behind the very communities that would benefit the most from the implementation of the alternative credit data. Another key problem that my legislation seeks to address is creating consistent nationwide access to credit building opportunities. Unfortunately, the current patchwork of state reporting requirements undermines that very objective. In 1996 and again in 2003, Congress chose to expand and strengthen the preemption provisions of FICRA because of the value it placed on improving access to credit. By accepting the proposed amendment and maintaining the system of patchwork state regulation, we would only be increasing the cost of compliance and reducing the use of alternative data that would help lower the number of credit invisible Americans.
I would like to remind Ranking Member Waters that Representatives Velázquez, Sherman, Meeks, Lynch, Scott, Green, Cleaver, Himes, Foster, Beatty, Vargas, Gottheimer, Gonzalez in 2017, in each of these members voted for the Credit Access and Inclusion Act in this very committee in almost the exact same form. In 2017, this entire committee unanimously understood that a full file credit report, including alternative data, was the best product to promote access to credit. So I hope that we observe the similar sense from the entire committee today as well. Is there further debate on the amendment? The gentlelady is recognized.
Maxine Waters
I appreciate Representative Bynum's leadership on this issue. This straightforward amendment would put the control of consumer data back in the hands of consumers. We recently agreed to do this last year on a bipartisan basis when we enacted legislation from Representatives Rose and Torres to curb abusive trigger leads. Similar to this amendment, financial companies would need to have a consumer's permission through an opt-in to having their information shared before it could be. Moreover, this amendment preserves valuable protections available for consumers on the state levels.
For example, some states do the right thing and don't turn off someone's heat in the dead of winter when someone is behind on their utility payments. Some of those states have related protections and that just happens when it comes to their credit reports that would be preserved with this amendment. So I urge members to stand up for consumers and support this amendment. I yield back.
Young Kim
The gentlelady yields. If there is no further debate, the question now occurs on the amendment. All those in favor of the amendment shall signify saying aye. All those opposed shall signify by saying no. In the opinion of the chair, the noes have it.
The noes have it and the amendment is not adopted.
Young Kim
A recorded vote is 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 3 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 nature of a substitute and then will consider the question to report the measure. We'll now move on to the next bill.
Pursuant to notice, I call up HR 9331, the Strengthening Transaction Oversight and Preventing Stop Payments Fraud Act of 2026, which was introduced by myself, Representative Kim. The clerk will report the bill, which was distributed in advance.
Speaker 11
HR 9331 to amend the expedited funds availability act to provide exceptions in the case of fraudulent checks or wire transfers and for other purposes.
Young Kim
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 11
An amendment in the nature of a substitute to HR 9331 offered by Mrs. Kim of California, designated as Kim 130.
Young Kim
Without objection, the amendment is considered read and will serve as base text for the purposes of amendment. And now, I recognize myself for five minutes. When we think of fraud, we think of social media or another tech-driven cybercrime. However, some of the most rampant fraud happens within some of our earlier innovations, such as checks. From 2021 to 2022, reports of check fraud doubled from 350,000 to 680,000.
In 2023 and 2024, consumers and financial institutions lost more than $1.3 billion to criminals utilizing check fraud. In my state of California, one couple was told that they had missed their quarterly tax payment and now owed $12,000 plus interest and penalties. Just to find out that their check had cleared, but a criminal had committed a check fraud to reroute the funds. Fraudsters aren't just targeting personal checks, but are also going after business payments, tax refunds, and checks related to social security and unemployment benefits. Unfortunately, financial institutions are not currently equipped with all the tools that they need to counter these fraudsters and prevent these funds from being stolen.
My bill, the Stop Payments Fraud Act, would allow financial institutions to take an additional day to analyze checks and wires to identify whether there is reason to suspect fraud. Utilizing this additional time, financial institutions will then be able to clear the funds or place an extended hold for fraud as they attempt to collect more information that could lead to the capture of these criminals. When the consequences of a stolen check can be hardworking American families going without groceries or missing a rent payment, we cannot afford to miss a fraudulent check. I seek unanimous consent to submit the letters of support from ICBA, America's Credit Unions, FTA, and CBA. Without objection, these records are submitted.
Speaker 83
And I urge my colleagues to support the underlying bill and yield back. Ms. Walters is now recognized.
So recognized.
Maxine Waters
As financial fraud becomes more sophisticated, I support this bill, which takes important steps to better protect consumers from this rapidly growing threat. Fraud and scams are costing Americans billions of dollars each year, with bad actors increasingly using checks, wire transfers, and digital payment channels to steal hard-earned savings. This legislation gives financial institutions a targeted tool to pause suspicious transactions when fraud is suspected, while helping to stop losses before they happen. Importantly, the updated version of this bill preserves the CFPB's role alongside the Federal Reserve and adds meaningful guardrails to prevent abuse. These safeguards, which include clear timelines, consumer notice requirements, and oversight, help ensure that fraud prevention does not come at the expense of consumer access to funds.
And so, I want to thank Representative Kim as well as Representative Gonzalez for their leadership on this important issue. I also want to thank Chairman Hill for working collaboratively to reach a strong compromise. This is a thoughtful, bipartisan approach that balances fraud prevention with consumer protection. There's a lot more we need to do to combat financial fraud, but this is a good step. So I urge my colleagues on both sides of the aisle to support this bill.
Thank you, and I yield back.
Young Kim
Thank you, the ranking member yields. Does anyone else seek recognition on the ANS? Hearing none, we will move to amendments. Does anyone wish to offer an amendment to the ANS? No amendments.
There being no further discussion or amendments to the bill, the question now occurs on adoption of the amendment in the nature of a substitute. All those in favor shall signify by saying aye. All those opposed shall signify by saying nay. In the opinion of the chair, the ayes have it, and the amendment is adopted. The question now occurs on ordering the bill, as amended, to be reported to the House with a favorable recommendation.
Those in favor shall signify by saying aye. All those opposed shall signify by saying nay. In the opinion of the chair, the ayes have it. And I request a recorded vote. A recorded vote is 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 3 of the committee rules, the vote on this question is postponed. We will now move on to the next bill. Pursuant to the previous order, the chair declares the committee in recess subject to the call of the chair.
We'll convene immediately after floor votes. The committee stands in recess.
J. Hill
Committee will come to order. Pursuant to notice I call up HR 9330, the Earned Wage Access Consumer Protection Act, which was introduced by Representative Steil, the chair of our Fintech etc. committee. Clerk will report the bill which was distributed in advance.
Speaker 11
HR 9330 to regulate the business of offering and providing earned wage access services to consumers and for other purposes.
J. Hill
Without objection first reading's dispensed with, without objection the bill's considered read and open to amendment at any point. Representative Steil has an amendment in the nature of a substitute, copies of which have been distributed in advance as well. Clerk will report that amendment.
Speaker 11
An amendment in the nature of a substitute to HR 9330 offered by Mr. Steil of Wisconsin, designated as Steil 052.
J. Hill
Without objection the amendment is considered read will serve as base text for the purposes of amendment. The gentleman from Wisconsin, chair of our AI Fintech and committee, Mr. Steil, you're recognized for five minutes to describe your amendment.
Bryan Steil
Thank you very much, Mr. Chairman. Today we consider legislation built on a pretty simple principle: consumers should be able to access their wages as they earn them, while also receiving strong consistent consumer protections. Earned wage access, EWA, has become an important financial tool for millions of Americans, helping consumers bridge the gap between paychecks and better manage unexpected expenses. Yet despite the growing use of these services, there remains no clear federal framework governing this market. Instead, consumers and providers face a patchwork of inconsistent state laws that create uncertainty, limit innovation, and result in uneven protections.
The legislation before us is the product of years of bipartisan work spanning multiple Congresses. Members on both sides of the aisle have worked with consumer advocates, employers, providers, regulators, and other stakeholders to refine this proposal. The Earned Wage Access Consumer Protection Act pairs meaningful consumer protections with regulatory certainty. Here's what the bill does. Every EWA consumer is guaranteed a no-cost option to receive their earned wages within one business day.
Nobody'll have to pay to be paid. Under my legislation, every EWA user is entitled to clear disclosure explaining the following: one, any costs associated with an EWA transaction, while guaranteeing a fee-free option. Tips are voluntary. That choosing not to tip has no impact on service and that providers may not present a default tip above zero dollars. Any limits on usage frequency or the percentage of earned wages that a consumer may request.
And four, dispute resolution process and consumer rights including cancellation flexibility. The bill also makes clear that EWA is a non-recourse product. Once funds have been dispersed, providers may not pursue a customer for payment if that customer acted in good faith. Providers cannot charge interest, hire a debt collector, sue the consumer, or report the transaction to a credit bureau. The legislation also strengthens privacy protections by making earned wage access providers subject to Gramm-Leach-Bliley Act, ensuring they meet the same federal privacy and data safeguarding standards that apply to financial institutions.
Finally, the bill adopts a carefully tailored approach to federal preemption. It preserves state authority to enforce laws governing fraud, unfair and deceptive acts, and other generally applicable consumer protections. At the same time, it prevents states from treating compliant earned wage access products as loans or credit or otherwise prohibiting a federally regulated product, thereby providing the national consistency the market needs. At its core, the legislation recognizes that earned wage access is fundamentally different from traditional credit because consumers are accessing wages they've already earned, rather than borrowing funds. The question before us is not whether earned wage access should have consumer protections.
The bill answers this with a resounding yes. The question is whether we establish a uniform national framework with strong safeguards or continue to leave consumers subject to an inconsistent patchwork of state laws. I look forward to today's discussion and urge my colleagues to support the bipartisan legislation. Mr. Chair, I yield back.
J. Hill
Appreciate the gentleman offering this bill, he yields back. Who seeks recognition? Ranking member of the full committee, Ms. Waters.
I move to strike the last word.
You're recognized for five minutes.
Maxine Waters
I oppose HR 9330. Mr. Chairman, President Trump promised to reduce the cost of living, instead inflation is rising and he is eroding consumer protections. Trump called the affordability crisis a hoax and said he doesn't think about Americans' financial situation. And it shows. Under the Trump economy, people have been forced to use products like earned wage access to get early access to their paychecks.
I understand that fintech products like EWA may help families struggling to make ends meet, especially during this affordability crisis caused by President Trump's failed economic policies. However, as these products are used more and more by those who are living paycheck to paycheck or even whose paychecks do not cover their basic needs, strong consumer protections are more needed than ever. I'm concerned that HR 9330, which purports to regulate the EWA ecosystem, fails to ensure these products are safe for hardworking Americans. Consumer advocates have highlighted that the bill preempts the protections provided by state laws. In fact, the sweeping preemption provision specifies that states cannot interfere with the provision of EWA services, which will be used to block all state laws regarding EWA.
For example, the bill would directly preempt state interest caps. Wow. It also exempts EWA products from the Military Lending Act's 36 percent rate cap. Another thing I find problematic is that the bill exempts EWA products from the Equal Credit Opportunity Act and it replaces it with a meaningless statement against discrimination. This is a recipe for predatory products, but maybe that's the point.
And even though some EWA providers collect the geolocation and other personal data of consumers, there are woefully inadequate data privacy protections for consumers.
And the icing on the cake, the bill does not ensure the affordability of EWA services for consumers, even as Americans are struggling with higher rent, grocery prices, and gasoline prices. And possibly most absurdly, the bill directs CFPB to issue rules to carry out the bill, but does not grapple with the Trump administration's ongoing efforts to shut the CFPB down. The CFPB's latest revised reduction in force plan could cut the workforce from 1,174 to 556 employees. And importantly for this bill, many of the planned cuts would come from the supervision and enforcement divisions. Without proper enforcement at the federal level, this bill leaves consumers in danger.
Not surprisingly, this bill is opposed by more than 200 consumer advocacy, civil rights, and labor groups. I urge members to oppose this bill. I yield back the balance of my time.
J. Hill
Thanks, the right member. Who seeks to address Mr. Steil's ANS? The gentleman from California, Mr. Liccardo, you're recognized to strike the last word.
Sam Liccardo
I so move. Thank you, Mr. Chair. I appreciate the efforts of the chair and the ranking member, as well as subcommittee chair Steil and their teams for their hard work in trying to reach some agreement. I agree with the fundamental proposition that there is a vast difference between earned wage access and payday lending and some of what we consider to be more predatory approaches to helping those who are struggling through a tough time financially and may need the money in short notice. I think EWA is different in many important respects, as partly as it was already articulated, there are no rights to go after the consumer with litigation, for example, with earned wage access.
In this case, with this bill, EWA providers are mandated to provide the services at no cost. This is not a lending instrument. But I do have concerns about fees and about how fees can be excessive, how they could be, particularly if they're not transparent, could the fees could be used in various ways to undermine the reasonable expectation of consumers. And we know that the states are permitted under this bill to have some room within the bounds of the preemption under, I believe it's subsection B3. I would want to ask Mr. Steil if he would be willing to accept report language that would clarify that there would be no preemption as to state law that would ensure there would be some limitation on those fees.
And I would offer the following language as proposed language, that the intent in the savings clause of subsection B3 is that it does not preempt limitations on fees imposed by state law, so long as the fee cap does not appear so onerous as to prevent or significantly interfere with the provision of otherwise lawful earned wage access services. A court may assess significant interference of the fee by reference to the prevailing or average range of fee rates across the earned wage access services industry. Mr. Steil, would that be acceptable?
Speaker 86
I'd be happy to work with you to include that language in the report language.
Sam Liccardo
Thank you. I look forward to supporting this bill. I do have, when the time is appropriate, an amendment to offer, but I'm confident we can get to a good resolution. Thank you, Mr. Chair. I yield.
J. Hill
Gentleman from California yields back, who seeks recognition? Seeing no other people seeking recognition for the bill, let me recognize myself for five minutes before we turn to amendments. As noted by Mr. Liccardo and Mr. Steil, earned wage access services allow workers to access earned wages before their scheduled payday. This is their money. They've earned these wages.
For many families facing unexpected expenses, these services can provide an alternative to other costlier options, such as paying late fees or overdraft fees. As this industry continues to grow, consumers deserve clear rules, transparency, and significant accountability. Mr. Steil's bill delivers on those goals. The legislation requires providers that charge fees for earned wage access services to offer consumers a no-cost option to access their earned wages. It establishes comprehensive disclosure requirements so consumers can understand any fees, limitations, and the voluntary nature of tips before using these services.
The bill also protects consumers from being subject to debt collection-like practices for using an EWA product. Providers may not charge late fees or interest or report to consumer EWA activity to any credit bureau. They may not sue consumers for non-payment or sell payment rights to a debt collector, which should be clear since this isn't a credit product. In addition, consumers are protected through dispute resolution requirements, reimbursement for accidental overdraft or insufficient fund fees, and the bill has strong privacy safeguards that subject providers to federal financial data protection standards. Importantly, Mr. Steil's bill provides regulatory certainty to reflect the reality that earned wage access services operating in compliance with this federal law are not loans or credit products and that their providers of these services are not creditors.
At the same time, it preserves the application of generally applicable consumer protection laws. It's a very balanced approach and it recognizes the value that EWA can provide to consumers while ensuring that they receive meaningful protections, clear disclosures, and fair, uniform treatment by this federal framework. For consumers that need flexibility between paychecks and for a marketplace that benefits from clear rules of the road, this bill provides transparency and a durable framework for future of EWA products. So let me thank the gentleman from Wisconsin for his hard work on the legislation. I urge my colleagues to support it.
And I yield back and ask if anyone seeks recognition on the ANS. And hearing none, we'd move to amendments. And does anyone wish to make an amendment to the amendment in the nature of a substitute? Ranking member, you're recognized.
I have an amendment at the desk.
Mr. Chair, I reserve a point of order.
Speaker 27
Gentleman from Wisconsin reserves a point of order on the Waters amendment.
Let me ask the clerk to report the amendment, please.
Speaker 11
An amendment to the amendment in the nature of a substitute to HR 9330 offered by Ms. Waters of California, designated as 9330 amend 1.
J. Hill
Without objection, the amendment's considered read and the gentlewoman from California, Mrs. Waters, you're now recognized for five minutes to explain your amendment.
Maxine Waters
Thank you, Mr. Chairman. My amendment would ensure that EWA products are truly affordable so that Americans can keep as much of their paycheck as possible. It does this by establishing a monthly $10 limit on fees and tips that a consumer can pay in connection with earned wage access services. This is a common sense standard that ensures fees do not run rampant as workers try to simply access their own wages. Including a fee cap is critical because as written, this legislation does not establish any limits associated with earned wage advances.
Instead, any limits on the access to earned wages requested by customers, including the amount of earned wages a consumer can access, how many times a consumer can access their earned wages, and associated fees and tips for accessing earned wages would conveniently be determined by the EWA companies and would become predatory once workers become dependent on them. While we cannot ignore the financial hardships facing Americans today that make users take out an earned wage advance, we also cannot create an environment that leaves workers worse off than when they started. The universe of fees is also massive. There are some examples of fees that can be charged to workers: a monthly membership fee, expedited access fees for instant access or same-day deposits, a withdrawal fee, fee per bank transfer, and tips. Who knows what other creative fees will be added in the future.
Consumer advocates have pointed to the troubling outcome of these fees. In one EWA app, 80% of the EWA company's revenue came from workers who took out over 100 loans a year. In another app, one in five EWA users regularly incur fees and tips totaling $57 a month. And in another app, a worker paid almost $1,400 on 450 loans over two years. Under this bill, not only would consumers miss out on the rights afforded under traditional credit products, EWA users would have to navigate a marketplace without fee limits.
So I urge members to support this amendment and I yield back. Excuse me, I take back my yield back because I want to make sure that I understand that the opposite side of the aisle is supporting these companies that would lend, I suppose that's what you call it, part of their paycheck before payday, but could charge fees for doing it. And there's no limit on the fees they could charge.
I'm looking at the information that I have, $57 in one month for fees and different kinds of fees, several kinds of fees, fees for opening up the loan, fees for closing the loan, fees, fees, fees, fees. I know my friends on the opposite side of the aisle don't support this kind of stuff. I mean, I understand that you understand that there are people who may be desperate and they can't buy anything or they can't buy food before the paycheck day. But in understanding that, we shouldn't add to their problems by charging these fees. That's just a substitute for interest rates.
What are we doing here? I just think this is something that we can avoid. We could do better than that. And I understand also, and you straighten me out on this one, whether or not you take action on interest rates in states to say that states can or cannot do what. I don't mind a colloquy with Mr. Steil, perhaps he can answer this.
J. Hill
Would you like to use the seconds, we'll get you some more time too, do you want to respond in full?
Speaker 88
Happy to respond in full. There is a free option, free, no cost, no charge.
J. Hill
Why don't we reserve, we'll get time to him to do that with you, Ranking Member. The gentlewoman yields back. Who seeks time in on the amendment? Mr. Steil.
Bryan Steil
Thank you very much, Mr. Chairman, and appreciate the comments. But I think it's really important to make sure we're understanding the bill as introduced. There's a free option available to use the products. There's a, if a tip is considered, the default is set to zero. So the product is available to consumers at no cost.
It's a non-recourse product, which differentiates from other products that are available. So I think it's important to know that the free option is there, is provided within one day, and the default tip is set to zero. But maybe we can go back and just stage set here a little bit, why are we in this situation in the first place? It was considered assumed and standard, if you went and worked, you pitched in at a farm, you carried sacks of potatoes, you worked hard, at the end of the day, you got paid. Not that long ago, 100 years ago or more, individuals who would work over the course of a day were paid at the end of the day.
It was only in the modern era as large ERP systems came in, pay began to get delayed, it was paid once a month, twice a month, weekly, bi-weekly. And what we've had is a system that does not give access to individuals to the wages that they've earned. That's a challenge that exists in the marketplace. It actually exists to young men and women who work here in the United States House of Representatives. They're paid monthly.
Go home to my home state of Wisconsin, lots of businesses pay every two weeks. People who want to work an overtime shift, maybe they do have an expense, they want to work an overtime shift, earn a little bit of extra money. If you work as a bartender or a waiter or a waitress, I used to work at Applebee's, you work the Friday night shift, you actually get to go home with money in your pocket that day. Other jobs, that's not available. You can think about working at maybe a big box store, a Target or a Walmart, something like that.
You want to pick up the same Friday night shift as I would have done at Applebee's, you can't walk out of there with access to that money, and you might have a need for it.
And so we worked, and the companies have come to the table in the financial services space and said, actually, we can provide a solution here. Wages that have been earned will be available next day by this bill at no cost to the worker. Zero, no cost, no recourse, no cost. And if you want to provide a tip, you're allowed to. It's fully disclosed as to where the tip goes to.
And if you don't want to provide a tip, this legislation conveniently says the tip default amount is set at zero. So if an individual goes in and does the easiest click-throughs that they possibly could, they choose the free option, choose the default zero tip, no cost, no recourse. And so the concerns raised by the ranking member are a broader conversation we often have here about what is and is not the best role of governance in the space. But I think it's really important to recognize the free option. I'd be happy to yield to Chairman Hill if he'd like, otherwise I'll yield back to the chair in full.
I yield back.
Speaker 96
Gentleman yields back. Who seeks recognition? Gentlewoman from Massachusetts.
Thank you, Mr. Chair. I seek recognition.
To strike the last word, you're recognized for five minutes.
Ayanna Pressley
All right, thank you. I wish to express my vigorous support for the just and thoughtful amendment offered by Ranking Member Waters, and I also want to express my opposition to H.R. 9330, the Earned Wage Access Consumer Protection Act, which should be more accurately named the Ending Consumer Protections for Payday Loans Act. The American public should not be surprised that the same people who are gutting the Consumer Financial Protection Bureau are now taking it a step further with this legislation. This bill prevents state regulators from calling earned wage access products what they actually are: payday loans. While marketed as allowing users to access their paycheck early for free, a survey found that nearly 80% of people reported paying the extra fee to receive their money faster.
On top of that, a majority of people reported feeling compelled to leave tips. These costs add up. Across the largest earned wage access lenders, or EWA lenders, there is a 367% APR compared to 24% for credit cards. Research also found that the average person using EWA products took out advances anywhere between 10 to 36 times a year, and some did so more frequently. That averages out to about every paycheck, especially concerning given most of these people make less than $25,000 a year.
And since the EWA company gets repaid directly through the user's bank accounts, users get stuck in a debt loop using EWA and see their overdraft fees rise. In order to protect consumers, EWA must be treated for what it is: a loan. A financial company provides terms and conditions for giving money, the company charges a fee, and the company has a way to get its money back. That sounds like a loan by most people's standards. If it walks like a loan and talks like a loan, it's a loan, and people should know that.
In the Commonwealth of Massachusetts, the Attorney General's office led a multi-state effort on this issue and secured much-needed debt relief for consumers harmed by these unlawful predatory EWA products. But this bill would stop those efforts. And that is why I strongly oppose this bill and urge my colleagues to do the same. I yield back.
J. Hill
The gentlewoman yields back. Who seeks recognition?
I recognize myself for five minutes on the Waters amendment. I want to yield some time to the author of the underlying bill, Mr. Steil, for further time if he'd like to address the issue of same day. I mean, the next day is a free option, which is what is in the base text, but can you shed some light on people are challenging that it's not free and explain that?
Bryan Steil
Thank you, Mr. Chairman. I'll take a minute here to dive maybe a little bit deeper to provide some additional clarity on the topic. So as noted, the bill provides a free option. The bill also requires providers to disperse earned wages within a business day under the free option. That's what we were talking about before.
The amendment as proposed proposes an arbitrary monthly cap on fees and tips. Because the bill already guarantees a free option and makes tips entirely voluntary, consumers, not providers, decide whether to pay for expedited access. If a provider charges a fee, it is for services that go beyond the one-day free transfer that we made a requirement of the bill. Just like transferring a balance, fees are based on the amount of the instant transfer. Fee caps conflate a premium delivery speed with a fundamental service that is still available for free.
Instant transfers, consumers, just like tips, are optional. The fee is only incurred if a consumer explicitly chooses, chooses real-time instant routing to their debit card or bank account. Capping a fee on a purely voluntary premium delivery speed mischaracterizes it as a cost of access. Instant clearing networks, of course, are not free. To move money to a consumer's account in seconds, EWA providers must use private instant payment rails.
These networks charge fixed routing and transaction settlement fees. Fee caps ignore the underlying cost structures. Fee caps also discourage the employer-sponsored model of EWA services. Employer-integrated EWA providers invest heavily in integration with corporate payroll systems to ensure safe, data-verified access. Fee caps ignore the operational costs of maintaining these structures, complex technical integrations.
If fee caps eliminate the availability of instant transfers, consumers facing immediate financial emergencies, you've got a car that breaks down, etc., they'll wait, they will not wait one business day for a free standard ACH transfer. They would seek the payment model. So federal regulators have consistently noted that optional expedited delivery fees are fundamentally distinct from mandatory finance charges. And so I think in summary, the free option provides a free option, no cost to the consumer. The expedited is a cost associated with expediting that is voluntarily chosen by an individual who accesses the product.
And so hopefully that provides additional clarity to the ranking member. I'm happy to yield back.
Speaker 18
Gentleman yields back. Now I yield back to myself. Who seeks recognition? The gentleman from California.
Speaker 90
Thank you, Mr. Chair. I believe you're recognized for the last word for five minutes on the Waters amendment. I have an amendment at the desk. Yes, thank you.
Oh, I'm sorry, please forgive me.
J. Hill
No, no worries. Is there any other discussion on the Waters amendment? There's no further debate. The question now occurs on the Waters amendment. All those in favor, please say aye.
All those opposed, say no. In the opinion of the chair, the noes have it. The noes have it. The amendment is not adopted. The gentlewoman has requested a recorded vote on her amendment.
Those in favor of a recorded vote, raise your hands. A sufficient number having raised their hands, a recorded vote is so ordered. Pursuant to subsection C5 of Rule 3 of the committee rules, further proceedings on the amendment are postponed. Are there any other amendments on Mr. Steil's amendment in the nature of a substitute? Ms. Pressley, yes, she's... do you have an amendment at the desk?
We'll pause while it's distributed. The gentleman from Wisconsin reserves a point of order.
Thank you.
Speaker 11
An amendment to the amendment in the nature of a substitute to H.R. 9330 offered by Ms. Pressley of Massachusetts, designated as Pressley 087.
Speaker 93
Without objection, the amendment's considered read. The gentlewoman from Massachusetts is now recognized for five minutes to describe her amendment.
Speaker 94
Thank you, Mr. Chair. My amendment would strike the clause that preempts state action. It would ensure consumers are able to be protected by state laws and greater protections for earned wage access products. My amendment clarifies that states have the authority to take action to improve consumers' protections. H.R. 9330 currently prevents states from calling earned wage access products what they actually are: payday loans.
While these products are marketed as free to consumers, in reality, these products function as loans and should follow the same rules. Many states are taking action. This work has been important in districts like my own, where the Attorney General's office was able to secure more than $600,000 in restitution and debt relief for consumers who were victims of predatory earned wage products. States have been leaders in protecting consumers using these products, and we should not stop them from doing this important work, especially when the proposed federal framework provides less protection than many states are offering. Our constituents deserve more protection from predatory EWA, not less.
This is a common sense amendment that the federal framework can be a floor, but it should not be a ceiling that hinders states from acting in the best interest of its residents. I urge all members to vote yes on my amendment. I yield back.
Speaker 92
Gentlewoman yields back. Who seeks recognition on the Pressley amendment? Mr. Steil.
Bryan Steil
Thank you very much, Mr. Chairman. As I mentioned in my opening statement, the bill adopts a really carefully tailored approach to federal preemption. The bill only preempts state laws that treat EWA services as credit loans, debt, or other products of that nature, treat EWA services as creditors or lenders, or are so onerous as to prevent or interfere with EWA from existing within the state. This is a narrow preemption that only ensures EWA is treated consistently across the country and ensures that state law reflects the reality that EWA is not credit. I'll come back to that in a minute.
The preemption currently in the bill does operate as a floor, not as a ceiling, as the gentlewoman requests. States would retain all authority to enforce laws of general applicability, such as fraud, unfair deceptive business practices, and related consumer protection requirements. For these reasons, I can't support the bill. But now let me take a minute, if I can, to address the gentlewoman's claim regarding EWA and payday lending. Payday loans charge interest, create debt, and can be sent to collections.
EWA under this bill provides access to wages already earned by the consumer, carries no interest, no late fees, no credit impact, and no recourse. The provider bears all the risk, not the consumer. Simply put, EWA gives access to the money you are owed for the work you already completed. For these reasons, I can't support the amendment, and I yield back.
J. Hill
Gentleman yields back. Who seeks recognition on the amendment? Ms. Waters to strike the last word on the Pressley amendment.
Move to strike the last word.
Maxine Waters
Thank you. I want to thank Ms. Pressley for offering this important amendment to strike preemption of state law in the bill. Her amendment gives authority back to the states, allows them to conduct meaningful oversight over the EWA marketplace. Through these authorities, states would be able to ensure consumers are engaging with EWA services in a safe manner. As currently written, H.R. 9330 prohibits states from regulating and setting standards around EWA products similar to credit products.
In this sweeping preemption provision, the bill specifies that states cannot interfere with the provision of EWA services. We already know that this language will be used to litigate all state laws regarding EWA. To make matters worse, this bill directly undermines interest rate caps set by states, making EWA products riskier for everyone. Fortunately, Ms. Pressley's amendment would address these challenges and ultimately preserve state laws and protections. Ladies and gentlemen, let me just say this.
It is absolutely disturbing that when the poor finds themselves at a disadvantage and someone is making money off of their poverty, it is absolutely absurd that the members of Congress would be on the side of these exploiters. We've been fighting payday loans for years and other kinds of activity, and now we've got a preemption of states on these kinds of loans, people's money. As a matter of fact, as I see it, you're working for one of these corporations and you need early money, you ought to be able to request it and get it. They may have some rules about how many you can do, but what is it to stop these well-paid CEOs making all of this money, many times more percentage-wise than the workers are making, and they can't allow you to take part of your earned money a little bit earlier?
This is another exploitation. And let me say I never thought that I would be defending states' rights, but that's what I'm doing now. I'm defending the rights for states to be able to control this kind of activity. Again, this is simply exploitation. And I want to tell you, instead of interest rates, it's fees.
But you just heard the multiple kinds of fees that can be charged. And they can keep creating them. A fee if you take it out. A fee if you ask for it. A fee if you don't, uh, you know, if you ask for more than one or two or three or four.
Fees, fees, fees. But if in fact we preempt the states, um, they wouldn't be able, they're able to have these fees as many as they want and in any way that they describe them because we're preempting the states from having any authority over this EWA marketplace. This is outrageous. It's embarrassing. It's ridiculous, uh, to be in the Congress of the United States at a time when affordability is a huge crisis.
We can't afford gasoline. President promised he was going to reduce groceries, but he'll promise anything. He never, you know, does the right thing. However, we have the opportunity in this House not to go along with these kind of rip-offs and this kind of exploitation. People need money.
They should be able to get their own money that they have earned without all of this fees and other things and the states being preempted saying that you cannot, you cannot do anything to protect them. It's something that I'll never understand. And so here we are one more time, unashamedly exploiting the poor and those in desperate need. I yield back the balance of my time.
J. Hill
Gentlewoman yields back. Seeks recognition on the Pressley amendment. Mr. Barr of Kentucky.
Move to strike the last word.
You're recognized for five minutes.
Bryan Steil
I thank the gentleman from Kentucky. In, in this dialogue, I think it's worth, um, introducing two letters to the record. I'll ask unanimous consent in just a moment, Mr. Chairman. Let me, let me read relevant comments from each. First, a, a letter from the Black Chamber of Commerce from January 13th from their hearing.
The Black Chamber of Commerce says as follows: "Earned wage access represents a meaningful step forward in building a more inclusive and equitable financial system, one that empowers individuals to take control of their finances while reducing dependence on exploitative services," end quote. We'll also introduce for the record a letter from the National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship. They say as follows: quote, "EWA is not dependent on an individual's credit history, making it particularly valuable for immigrant entrepreneurs, first-time business owners, and new entrepreneurs who may not yet have established credit profiles despite being financially responsible and economically productive." So Mr., Mr. Chairman, I ask unanimous consent to insert both the letter from the Black Chamber of Commerce as well as from the National Asian Pacific Islander American Chamber of Commerce.
Bryan Steil
I, I mean, I offer both of those comments because I think they're actually pretty striking from the testimony we heard from witnesses here that earned wage access is a really important program.
The bill provides the free access that I think is actually pretty unique, but also important. But there are a lot, the ranking member is correct, there are a lot of people in the country that face real and substantive challenges. And earned wage access is actually a great avenue to truly help many of those people who may not have easy access to credit, which is why this not being a payday loan, being access to your actual wages earned with the ability to obtain that for free is such a unique technological product, financial technology that we can provide to people to truly help some of the people that the ranking member discussed in her comments. And so, appreciate the gentleman from Kentucky giving me time. I yield back to the gentleman.
Yield back. Gentleman from Kentucky yields back. Who seeks recognition? Gentlewoman from Michigan, Ms. Tlaib is recognized.
You're recognized for five minutes.
Ayanna Pressley
Thank you. I'd like to yield my time to Congresswoman Pressley.
Well, thank you, Representative Tlaib. This bill leaves out critical protections that states have enacted to reduce the amount of tips that can be charged to low-income borrowers, cap the APR percent that can be charged, and more. In fact, this bill even changes critical laws like the Equal Credit Opportunity Act from applying to earned wage payday loans to prevent discrimination. The new language in this bill is not clarifying, it's not streamlining legal compliance, and it definitely does not sound like it protects consumers any better than they are now. I support a strong federal framework, but the framework being offered today is not good for consumers.
As I raised earlier, given the success of our Attorney General's office in providing restitution to so many people who have been victimized, that what's being proposed here is weaker than what states like mine are already doing. Furthermore, when it comes to endorsement, I can't enumerate every organization that is opposed to this bill, but I will tell you there are 225 of them. And they represent labor and civil rights organizations and community groups ranging from the NAACP to the NAACP Legal Defense and Educational Fund, to the National Association of Consumer Advocates, to the National Consumer Law Center. You know, and I could go on. Again, there are 225 organizations, reputable, credible organizations that advocate for the most vulnerable and marginalized who are preyed upon by these payday loans and predatory products.
I yield back.
J. Hill
Gentlewoman yields back. Who seeks recognition? There's no further debate. The question now occurs on the Pressley amendment. All those in favor of the amendment shall signify by saying aye.
All those opposed signify by saying no. No, in the opinion of the chair the nos have it, the nos have it and the amendment is not adopted. The gentlewoman from California requests a recorded vote. All those in favor of a recorded vote raise your hands. Sufficient number having raised their hands, a recorded vote is ordered.
Pursuant to subsection C5 of rule 3 of the committee rules, further proceeding on the amendment are postponed. Are there further amendments to the amendment in the nature of a substitute? Gentleman from California.
Speaker 27
We'll pause and have it distributed. The gentleman from Wisconsin reserves a point of order. Thank you very much. Mr. Clerk, if you'd report the amendment.
Speaker 11
An amendment to the amendment in the nature of a substitute to H.R. 9330 offered by Mr. Licardo of California, designated as Licardo 116.
J. Hill
Without objection, the amendment is considered read, and the gentleman from California is now recognized for five minutes to describe his amendment.
Sam Liccardo
Thank you, Mr. Chair. I think there's been important progress in this draft since it was introduced in a prior Congress. Certainly with the requirement that every provider of earned wage access have a no-cost option, that's important. I think more recently we've seen changes that require the tipping default be set to zero. That the tip description the recipients cannot be misleading in any way, so it must be very clear that the tip goes to the company.
We now have clarity through a recent colloquy on the record, and we will have report language indicating that fees can be regulated by state law, that is, there can be a fee cap installed by state law, not preempted where it's reasonable. And it's clear as well that we have other limitations that will hopefully provide significant protection. But there is still an ongoing concern, I think, of many that there could be overuse by consumers, by workers, of earned wage access and lead to a cycle of dependency, particularly where that use exceeds the very value of their paycheck. And so this is a straightforward amendment that would essentially assure that access be limited to the amount of the worker's paycheck. I understand and appreciate there's no recourse with regard to this access, no collections, no legal liability, but I am concerned about the cycle of obligation that is incurred, and so I would submit this amendment.
I yield.
Bryan Steil
The gentleman yields back. Gentleman from Wisconsin.
Thank you very much. I move to strike the last word.
You're recognized for five minutes.
Bryan Steil
I thank the chairman. I want to thank my colleague from California for his work on this. It reaffirms the reality reflected by this bill. I rise in support of the amendment offered by Mr. Licardo. I think it's really, I think it's actually a good amendment.
EWA is not credit. By requiring EWA service providers to confirm that consumers can only access the wages they've earned, consumers are more informed about the nature of the product they're accessing. EWA services give users access to the money they've already earned. That's why it's not credit. Our bill requires several clear, conspicuous disclosures to consumers in the base text, but adding on this attestation ensures consumers get a full picture of what they can access, how much they can access, and how much they have paid to access instant services if they choose to do so and not utilize the free product.
This product empowers consumers to choose when they're paid, and the disclosure we are including in the bill empower them to get a full picture of their EWA use. In a broader sense, I just want to thank my colleague Mr. Licardo from California for working with us to improve this bill. It's been a true bipartisan exercise in protecting and empowering consumers by delivering a federal framework for this innovative service. And so I encourage my colleagues to support this amendment. Mr. Chairman, I yield back.
J. Hill
Gentleman yields back. Who seeks further comment on Mr. Licardo's amendment? Hearing none, does the gentleman insist on his point of order? I would think so. There being no further debate on the amendment, the question now occurs on Mr. Licardo's amendment.
All those in favor of the amendment 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 is adopted.
J. Hill
And Mr. Locardo has requested a recorded vote. Those in favor raise your hands. Sufficient number having raised their hands, a recorded vote is ordered. Pursuant to subsection C5 of rule 3 of the committee rules, further proceedings on the amendment are postponed. Are there further amendments to the Locardo, I mean, amendment?
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 adoption of the amendment in the nature of a substitute and then will consider the question to report the measure. We'll now move to the next bill, which I believe is the last bill today, ladies and gentlemen. But this is not an indication of the quality of the bill. Pursuant to notice, I call HR 1640, the Heirs Estate Inheritance Resolution and Succession Act, the Heirs Act, which was introduced by the gentlewoman from Georgia, Ms. Williams.
The clerk will report the bill, which was distributed in advance.
Speaker 11
HR 1640 to establish a grant program for states that adopt the Uniform Partition of Heirs Property Act and for other purposes.
J. Hill
Without objection, the reading is dispensed with. Without objection, the bill is considered read and open to amendment at any point. Representative Williams has an amendment in the nature of a substitute, copies of which have been distributed in advance. Clerk will report that amendment.
Speaker 11
An amendment in the nature of a substitute to HR 1640 offered by Ms. Williams of Georgia, designated as ANS 1640.
Speaker 105
Without objection, the amendment is considered read and will serve as base text for purposes of amendment. The gentlewoman from Georgia, Ms. Williams, is recognized for five minutes to describe her amendment.
Nikema Williams
Thank you, Chairman Hill, and thank you, Ranking Member Waters, for your support of the Heirs Act, which might be the last bill on our agenda today, but with both of y'all's support, I know that we will get unanimous consent to get this across the finish line. Y'all, across the country, millions of families, Black families, Indigenous families, rural Appalachia, and farming communities are sitting on land that they can't sell, they can't borrow against, and they can't fully call their own. I know this issue all too well because my own family in rural Alabama is impacted. Not because of anything they did wrong, but because of a legal complexity called a tangled title or heirs property. When a loved one passes without a will, their land can pass informally to multiple heirs from generation to generation.
And without a clear title, these families are locked out of wealth that their land represents. We're talking about $32 billion in assessed land value across 44 states. Generational wealth that is trapped and at risk. That's why I'm proud to introduce the Heirs Act, co-led by my friends, Housing and Insurance Committee Ranking Member Emanuel Cleaver and Congressman Byron Donalds. The Heirs Act addresses this directly by helping states adopt the Uniform Partition of Heirs Property Act, a model law that protects families from predatory partition actions that have been used for decades to strip communities of color of their land.
Speaker 106
Critically, it expands access to grant-funded counseling and legal services so families can finally navigate these complex processes and secure what is rightfully theirs. This is not just a legal issue, it's an equity issue, it's an economic issue, it's a rural issue. It is why it is incredibly important that we pass this legislation out of committee. I am proud to report that this legislation has earned the support of the National Association of Real Estate Brokers, the National Community Development Association, the National Community Stabilization Trust, the National Consumer Law Center on behalf of its low-income clients, and the National Fair Housing Alliance. And I would like to enter letters of support into the record from the National Association of Realtors and the American Land Title Association.
Because clear titles, Mr. Chairman, are good for families, good for communities, and good for the broader housing market. With that, Mr. Chairman, I urge my colleagues to support this common-sense, bipartisan legislation, and I yield back.
J. Hill
Thanks the gentlewoman for, and thank you, she yields back. Who seeks recognition? The ranking member of the committee, Ms. Waters.
I move to strike the last word.
Maxine Waters
I want to thank Representative Williams for introducing this important and much-needed bill. Homeownership remains one of the most powerful tools for building generational wealth and creating economic security for families. But when a homeowner passes away without a will or clear title to their property, a lifetime of hard work and sacrifice can be placed at risk for their descendants. Across the country, 4% of homes worth a combined value of more than $240 billion are positioned to become heirs' properties, which is then finally owned land is inherited but without a clear and legal succession plan. Heirs' property has deep roots in the Southern Black Belt where it's caused irreparable harm, stripping wealth in those communities.
But this challenge also extends far beyond one region. It affects Americans all across the country, especially in rural and poor communities, including throughout the Appalachia region, where many families have lost land that have remained in their history for generations. Without a clear title, families often face obstacles accessing property tax relief, home repair loans, affordable financing, and even disaster recovery assistance after floods and fire strike. Homes that should be passed down to children and grandchildren instead become vulnerable to exploitation by predatory investors. Because these properties may be shared by multiple family members, outside investors can gain a partial ownership share and force the sale and loss of the entire property.
Often the home is sold at a price point far lower than market value, further stripping equity and wealth from that family as well as from generations to come. The Heirs Act provides a path forward with a common-sense solution. It incentivizes states to provide protections for the heirs of these properties, ensuring they have the chance to buy out an investor's share of the family property and get a fair value for the home when it is sold. The bill will also expand access to housing counseling and legal services to help families ensure they leave a clear title to their children. Congress just passed a critical housing bill last week to increase the supply of affordable homes and lower costs.
Now we must support goals of that bill by passing HR 1640 to help preserve families' ownership of those very homes and the equity they build up over time. And so I'm hopeful that the President of the United States will understand all of the work that went into organizing that bill, understand that on the House side we worked well together, on the Senate side we learned to compromise a bit, but not too much, because we were all focused on one thing, and that is to provide housing for the desperately needed in this country. Now that was not all in my statement, but I added it because we need to know it, we need to hear it. I yield back.
J. Hill
Gentlewoman yields back. Who seeks recognition? Gentleman from Missouri, the ranking member of the Housing Subcommittee, looking very handsome today.
Thank you, Mr. Chairman. Move to strike the last word.
You're recognized for five minutes.
Speaker 110
Thank you, Mr. Chairman. I support HR 1640, the Heirs Act of 2025, introduced by Congresswoman from Georgia, Ms. Williams. Having worked with Ms. Williams to introduce the legislation in Congress during the last session, I commend her persistence in refining this bill and moving this important issue forward. Heirs' property refers to land that has been passed down informally from generation to generation. In most cases, it involves landowners who died without a will.
According to Fannie Mae, there are over 500,000 potential heirs' properties, representing about $32.3 billion in at-risk housing wealth, concentrated in the Deep South, Appalachia, Puerto Rico, and other rural regions of the Midwest and Great Plains. When families cannot establish clear ownership, they cannot fully use their homes as financial assets, blocking access to mainstream mortgage and home repair products, disaster assistance, and property tax relief programs. Heirs' property is especially common among family farms, where unclear title can make it difficult to obtain operating loans, access federal conservation and agricultural programs, or make the long-term investments needed to keep farms productive and financially sustainable. This frozen wealth suppresses local investment and can depress property value and tax revenues in affected communities. I strongly support Ms. Williams's legislation, which would allow HUD to incentivize states to adopt model legislation to protect family land inherited without a will or legal documentation from forced sales and to assist heirs' property owners in clearing the title.
Groups including the Mortgage Bankers Association have made clear that the bill reduces barriers for lenders, supports responsible credit expansion, and helps to unlock the billions in equity locked up in affected communities. Thank you, Mr. Chairman, for allowing this legislation to come up for a vote. I yield back.
J. Hill
Gentleman yields back. Gentleman from Nebraska, the chair of the Housing Subcommittee.
Mr. Chairman, I move to strike the last word.
You're recognized for five minutes.
Mike Flood
Thank you, Mr. Chairman. I support the Heirs Act sponsored by Representatives Williams and Donalds. This bill would establish a grant program for states and localities that assist their residents with expenses relating to establishing and documenting property ownership rights or settling the estate of a decedent. Heirs' property is property that is passed down without a will or clear title and held by multiple descendants of the owner. In some cases, when multiple heirs have a claim to property, only one owner needs to agree to sell in order to force a sale of the entire property.
That can create unfortunate situations where families that have owned land for generations see it taken away due to a lack of proper documentation. This bill would permit HUD to assist states and localities that have existing programs that help heirs obtain the legal assistance they need to establish clear title. Similarly, the bipartisan and bicameral 21st Century Road to Housing Act includes language directing the GAO to study the issue of heirs' property reforms at both the state and the local level. I will support the bill today and urge my colleagues to vote yes. With that, I yield back.
J. Hill
Gentleman yields back. Who seeks recognition on the Williams bill? Seeing no other speakers, I'll recognize myself to strike the last word. I'm pleased that we're debating Ms. Williams' Heirs Act of 2025 today. This is a challenge that I've seen certainly recognized in my own city of Little Rock, Arkansas over the years.
Disputed title leaving vacant lots in an urban core or, as noted by several speakers, confusion over title in a rural farm situation. You have multiple heirs over multiple generations and it can create confusion. And I appreciate Ms. Williams tackling this technical but very important issue that she's outlined in her bill. And I'm also pleased to see that states around the country are tackling it because this is obviously a property law issue best handled in the states. And we now have more than almost half the states, including Arkansas, that have adopted the UCC amendments in order to help solidify this item of having an unclear title.
And while there's been also been action at the federal level, Chairman Flood mentioned specifically our 21st Century Road to Housing Act, which included a provision directing the GAO to study this issue and determine what additional ways we can reduce barriers. But also in the 2018 Farm Bill, the Heirs' Property Relending Program, which allowed the USDA to make loans to intermediary lenders who relend funds to heirs' property owners who can use the funds to clear the title to consolidate property interests. So that's a good start. State law changes, the work we did in 21st Century Housing, the long-standing program in the 2018 Farm Bill. Today's bill, 1640, is another step in the right direction that would provide HUD the authority to determine to make additional resources available to heirs' property owners going forward.
There are two issues, though, I'd like to see us continue to work on and I'd like to commit to Ms. Williams to work with her on this before this bill moves forward to the floor. Just two comments I have from reviewing the text. First, the bill allows for grants to be made for states and localities to assist heirs' property owners in formalizing title to their properties, but it doesn't make a distinction between owners unassisted by other federal programs versus those who have previously received some form of federal assistance. I think we ought to work on that, see if we can remedy that distinction. And then secondly, Ms. Williams' bill contains a provision allowing for individuals making up to 140% of the area median income to qualify for these grants, expanding the definition of low-moderate income persons.
And that is above the level that we just approved in our bipartisan housing package that we were all pleased to vote for and support and we hope becomes law very soon, where we intentionally limited the area median income to no more than 120% boundary that I think we should maintain. So I'd like her consideration on that as we work together moving this bill forward. I commend the gentlewoman for important work on the issue and urge members to support the bill as drafted and I look forward to continuing our efforts to help achieve better outcomes for heirs' property owners.
And with that, I yield back the balance of my time.
Anybody else seek recognition? Hearing none, we'll move to amendments. Is there anyone seeking to amend the gentlewoman's bill? There being no further discussion or amendments to the bill, the question now occurs on the adoption of the amendment in the nature of a substitute. All those in favor, signify by saying aye.
Aye. All those opposed, signify by saying nay. In the opinion of the chair, the ayes have it, and the amendment is adopted. Question now occurs on ordering the bill as amended to be reported to the House with a favorable recommendation. Those in favor, signify by saying aye.
Aye. All those opposed, signify by saying nay. In the opinion of the chair, the ayes have it. For what purpose does the gentlewoman from Georgia seek recognition?
J. Hill
Recorded vote is requested. All those in favor of recorded vote, raise your hands. A sufficient number having raised their hand, a recorded vote is ordered. Pursuant to subsection C5 of rule 3 of the committee rules, vote on this matter is postponed. Pursuant to the previous order, the chair declares the committee in recess subject to the call of the chair.
We will reconvene at 4:30 to vote on the postponed measures. The committee stands in recess.
Committee will come to order. Committee will reconvene. Pursuant to the chair's previous order we'll now take the vote pending on ordering HR 1483 as amended favorably reported. Members will vote electronically, the clerk will open the vote.
Speaker 114
Is there any member who has not voted or would like to change their vote? Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report.
J. Hill
Majority having voted in favor of HR 1483 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 pending amendments to HR 9329, the SEC Reform and Restructuring Act. The question is on the amendment offered by Ranking Member Waters, this is Waters 176. Clerk will open the vote. Is there any member who has not voted or would like to change their vote?
Clerk will close the vote and report.
J. Hill
Majority having voted against the amendment, the amendment is not agreed to. Question is now on the amendment offered by Representative Lynch, this is Lynch 069. Clerk will open the vote. Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report.
J. Hill
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 the opinion of the 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 signify by saying aye. All those opposed signify by saying no. In the opinion of the ayes have it, for what purpose does Representative Wagner seek recognition?
J. Hill
A recorded vote is requested. All those in favor of a recorded vote, raise your hand. 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. Clerk will open the vote.
Is there any member who has not voted or would like to change their vote? Here comes Mr. Vargas. Vargas!
Speaker 119
Well get your ass in your chair and do it. The clerk will close the vote and report. Hope, hope, standby. Hold that quirk. I feel like Ed is selling something over there.
Speaker 120
Oh yeah, take your time. No one is staring at you Byron, seriously. Whoa. Clerk will close the vote and now report.
J. Hill
A majority having voted in favor of HR 9329 as amended the bill is ordered favorably reported to the House, without objection a motion to reconsider is laid on the table. We'll now take the vote pending on ordering HR 7187 the Clarity for Compensation Act as amended favorably reported, members will vote electronically, the clerk will open the vote. Is there any member who has not voted or would like to change their vote. The clerk will close the vote and report.
J. Hill
A majority having voted in favor of HR 7187 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 HR 5775 this is the FCRA Liability Harmonization Act. Question is on the second amendment offered by ranking member Waters, this is HR 5775 B Bureau. Clerk will open the vote. The clerk, let's see Mr. Tlaib.
The clerk will, let's see, is there any member who'd like, who's not voted would like to change their vote. Clerk will close the vote and report.
J. Hill
A majority having voted against the amendment the amendment is not agreed to, the question now occurs on the adoption of the amendment in a nature of a substitute all those in favor shall signify by saying aye, aye. All those opposed signify by saying no. In the opinion of the chair the ayes have it, the ayes have it 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.
In the opinion of the chair the ayes have it, for what purpose does representative Loudermilk seek recognition.
Request a recorded vote.
J. Hill
A recorded vote is requested all those in favor recorded vote raise your hands, a sufficient number having raised their hand a recorded vote is ordered. We'll now take that recorded vote on ordering the bill as amended favorably reported, the clerk will open the vote. Is there any member who has not voted or would like to change their vote. Clerk will close the vote and report.
Mr. Chairman on this vote the ayes are 27 and the nays are 23.
J. Hill
A majority having voted in favor of HR 5775 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 HR 5402, the Credit Access and Inclusion Act. The question is on the fourth amendment offered by Ranking Member Waters. This is HR 5402 B. Clerk will open the vote.
J. Hill
A majority having voted against the amendment, the amendment is not agreed to. The question is now on the amendment offered by Representative Bynum. This is Bynum 091. Clerk will open the vote. Is there any member who has not voted or would like to change their vote?
Clerk will close the vote and report.
J. Hill
In the opinion of the chair, the ayes have it, the ayes have it, and the amendment in the nature of a substitute is adopted. Question now occurs on ordering the bill, as amended, reported to the House with a favorable recommendation. Those in favor shall signify by saying aye. Aye. All those opposed signify by saying no.
In the opinion of the chair, the ayes have it. For what purpose does Representative Kim seek recognition? The representative has requested a recorded vote. All those in favor of a recorded vote, raise your hands. A sufficient number having 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. Is there any member who has not voted or would like to change their vote? Clerk will close the vote and report.
J. Hill
A majority having voted in favor of HR 5402 as amended, the bill is ordered favorably reported to the House. Without objection, a motion to reconsider is laid on the table. We'll now take the vote pending on ordering HR 9331 as amended, favorably reported. Members will vote electronically. The clerk will open the vote.
J. Hill
A majority having voted in favor of HR 9331, Stop Payments Fraud Act of 2026 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 HR 9330, the Earned Wage Access Consumer Protection Act. The question is on the fifth amendment offered by Ranking Member Waters. This is 9330 amendment one.
J. Hill
A majority having voted against the amendment, the amendment is not agreed to. Question now is on the amendment offered by representative Pressley. This is PRESSMA087. Clerk will open the vote. Is there any member who hasn't voted or would like to change their vote?
Clerk will close the vote and report. A majority having voted against the amendment, the amendment is not agreed to. Question now occurs on the amendment offered by representative Liccardo. This is LICAR116. Clerk will open the vote.
Is there any member who hasn't voted or would like to change their vote? Clerk will close the vote and report.
J. Hill
No. In the opinion of the chair the ayes have it, the ayes have it and the amendment in the nature of a substitute is adopted. Question now occurs on ordering the bill as amended favorably reported to the house with a favorable recommendation. Those in favor shall signify by saying aye. Aye.
All those opposed signify by saying nay. Nay. In the opinion of the chair the ayes have it. For what purpose does the gentleman from Wisconsin seek recognition? Mr. Steil 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. We will now take the vote on ordering the bill as amended favorably reported. The clerk will open the vote. Is there any member who has not voted or would like to change their vote?
Clerk will close the vote and report.
J. Hill
A majority having voted in favor of HR 9330 as amended the bill is ordered favorably reported to the house. Without objection a motion to reconsider is laid on the table. I now like to recognize the distinguished gentleman from Texas, Mr. Pete Sessions for a moment of personal privilege.
Pete Sessions
Mr. Chairman, thank you very much, point of personal privilege. Mr. Chairman, I'm honored to have today a bunch of interns who are from my office. We've got 31 interns this summer. They're also joined by a gentleman, the senior pastor of the Highland Park United Methodist Church in Dallas, Matt Tuggle and his son Boyd, who have taken time for Matt to be able to bring his son and show him the pride of our nation and our 250th birthday Washington DC.
Thank you very much, Mr. Chairman.
J. Hill
We appreciate our visitors. We're grateful you're here and we wish you a very happy 4th of July. Members will now take the vote pending on our last bill. This is H.R. 1640, the AIRS Act. We will vote on ordering it 1640 as amended, favorably reported to...
I know it's so exciting. Members will vote electronically. The clerk will open the vote. Gonzalez. Is there any member who has not voted or would like to change their vote?
As you exit, please be quiet so the clerks can hear. Is there any member who has not voted or would like to change their vote? Clerk will close and report. A majority having voted in favor of H.R. 1640 as amended, the bill's ordered favorably reported to the House. Without objection, the motion to reconsider is laid on the table.
Without objection, the staff are ordered to authorize to make necessary and conforming changes to the bills considered today. And pursuant to House Rule 11, Clause 2L, I give notice that all members will have the requisite number of days to file supplemental, minority, additional, and dissenting views. There being no further business pending, committee stands adjourned.