To amend the Securities Exchange Act of 1934 to clarify provisions relating to the regulation of municipal advisors, and for other purposes.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2827) to amend the Securities Exchange Act of 1934 to clarify provisions relating to the regulation of municipal advisors, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and to add extraneous material on this bill.

Mr. Speaker, I yield myself such time as I may consume.

I rise today in support of H.R. 2827, which would clarify the definition of a ``municipal adviser'' to reflect the intent of the United States Congress. This bill received unanimous support and passed out of the Financial Services Committee with a vote of 60-0. I would like to urge my colleagues to support this important bipartisan legislation.

Municipal advisers are consultants who advise local municipalities about bond issuances, bond-proceed investment, financial derivative uses, and other financial matters. Like traditional financial advisers, municipal advisers must comply with an existing legal and regulatory framework while owing their clients a fiduciary duty.

But before Dodd-Frank, certain municipal advisers were not subject to any regulations--State, Federal or otherwise. Obviously, this legal and unjustified discrepancy between regulated and unregulated municipal advisers created a significant and, I would

argue, unfair competitive advantage in favor of the unregulated municipal advisers.

Even more importantly, the regulatory gap gave a few bad actors the opportunity to take advantage of the State and local government officials who, like most people, aren't familiar with advanced and technical financial products. Dodd-Frank section 975 addressed this problem by requiring these unregulated advisers to register with the SEC and to follow rules written by the Municipal Securities Rulemaking Board.

The provisions generally have bipartisan political support as well as widespread industry support. However, most of us, both Republicans and Democrats, believe that the SEC's interpretation of the law has gone far beyond what Congress intended by, among other things, requiring volunteer members of local governing boards, engineers providing technical and comparative analysis, and bank tellers to register with the SEC as municipal advisers. In response to its proposal, the SEC received over 1,000 comment letters from across the industry that were overwhelmingly critical of the proposed rule.

This is why I introduced H.R. 2827. H.R. 2827 takes important steps to address these widely acknowledged concerns and specifies the scope and limits of Dodd-Frank's municipal adviser provisions.

After introducing our original version of H.R. 2827, we asked everyone on both sides of the aisle--and industry participants as well with a wide variety of perspectives--to give us their comments and suggestions for improving the legislation. My colleague and cosponsor from Wisconsin (Ms. Moore) and I have spent countless hours working and listening to all concerned parties to ensure that we have fully considered all the viewpoints in order to come up with the best possible legislation that could also pass with broad bipartisan support. At this time, I certainly want to thank her for all of her efforts.

Mr. Speaker, there were two concerns about the original version of H.R. 2827 that were the most significant. The first was that the original version of the bill would strike the Federal fiduciary duty for municipal advisers, leaving in place just the State-based fiduciary duty standards. Second, even when explicitly engaged to provide municipal adviser services, the original bill would have excluded certain parties from regulation as municipal advisers.

During the subcommittee markup, Ms. Moore and I articulated our plan for going forward with the legislation, and we invited more comments and suggestions from industry and all concerned parties. We were very pleased with the genuine engagement of the parties from across the industry and with their willingness to generously share their time, experience, effort, and knowledge with us. All of these contributions ultimately produced a better and stronger amended bill. We believe that this new version of the bill addresses the points raised since the subcommittee markup while still maintaining our broad coalition of bipartisan supporters.

This new bill preserves the Federal fiduciary standard and removes the blanket status exemptions while still maintaining a bright-line municipal adviser definition. It protects issuers by establishing clear lines and rules for municipal advisory activity and provides clarity in the marketplace.

In addition to the amendment's substance, I am very proud of the process that we've been able to undertake to get us to this point. I would like to thank my colleague again, Ms. Moore, and her staff for working with me and my staff, and I thank all of those who worked with us to get us to where we are in this process. They were so generous in sharing their time, and I am confident that what we have is a good bill with which we can move forward. Again, I urge my colleagues to support

Mr. Speaker, I just want to again thank the gentlelady for her help and support with regard to this process which, as she aptly points out, was at times a little strenuous; but I believe in the end we were able to come together in a bipartisan fashion to produce what I hope is quality legislation that will be better for municipal advisers all across the country.

I reserve the balance of my time.

Mr. Speaker, I don't have any other speakers, but I do want to wrap up with a couple of thank-yous.

I certainly want to thank Chairman Bachus for allowing this markup to move forward, and I certainly appreciated his help and support. I want to again highlight how this was able to move forward in a bipartisan fashion, and I certainly want to thank my good friend, Ms. Moore from Wisconsin, for all of her work and efforts to work with me on what I hope is going to be a bill that everyone here in this Chamber will support.

With that, Mr. Speaker, I ask every one of my colleagues on both sides of the aisle to support H.R. 2827, and I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I think Mr. Dold has dealt very well with very many of the specifics of H.R. 2827 relating to the regulations of municipal advisers. So, before I lose people, I want to briefly talk about the process that brought the bill to this point, and I want to thank a lot of people for their contributions to the final legislation.

As you've heard, the bill that passed the Financial Services Committee by 60-0 reflects the legislative process at its absolute best. It was a collaborative effort between Republicans and Democrats, issuers and market participants, and very, very diligent staffers on both sides of the aisle. If there is a single element that is most responsible for the bill's getting to this point, it is the integrity of the people involved. It speaks to their professionalism in that they stayed at the table and negotiated with the singular purpose of getting to the best result for the municipal market. There were times when the issues were tough and the disagreements real. There were times when it would have been very easy for people to just give up and walk away.

But to the credit of all involved, everyone kept talking and kept searching for solutions.

Mr. Dold deserves a tremendous amount of credit for his leadership of this bill. He was consistently willing to engage tough issues in an open and thoughtful manner. I would also like to thank all of my colleagues on the committee, Republican and Democrat alike, for their invaluable input as we negotiated the bill. Finally, I think it is important that I mention the important contributions of Mr. Frank and Ms. Waters. At many critical points, both were instrumental in providing guidance.

H.R. 2827, which passed the House Financial Services Committee 60-0, almost didn't pass at all as there was so much confusion generated from the SEC promulgating a rule that initially was very confusing. It's only the second legislative effort related to Dodd-Frank to pass the committee unanimously.

Prior to the passage of Dodd-Frank, non-dealer advisers to municipal governments were unregulated. These unregulated parties were involved in a number of municipal market scandals that ultimately defrauded taxpayers. Section 975 brings municipal financial advisers, swap advisers, placement agents, and GIC brokers under Federal securities law. It is a goal that is not partisan.

Unfortunately, in 2010, the SEC released a proposed rulemaking related to section 975 that created massive confusion in the municipal market regarding how section 975 would be applied in the real world. H.R. 2827 seeks to clarify section 975 to provide certainty to the market so that the rules can be implemented and taxpayers can benefit from the protection it brings. This bill takes a fundamentally different approach from the SEC and the definition of municipal advisers. It makes ``municipal adviser'' an exclusionary definition, rather than trying to outline and define certain transactions which end up being very vague and overly broad.

Mr. Speaker, how much time is remaining?

It doesn't unnecessarily sweep in the universe of other professionals or impinge on the relationships of issuers and other market participants engaged in legitimate and necessary market activities like underwriting, providing accounting services, engineering advice, or offering traditional deposits and cash- management services to municipalities. It is a straightforward approach that effectuates the goals of 975 while meeting the real world needs of market participants.

I want to urge all my colleagues to support this important regulatory legislation. Again, I cannot thank the participants enough who participated in this bill.

With that, I reserve the balance of my time.

Mr. Speaker, I yield such time as she may consume to the gentlewoman from New York (Mrs. Maloney).

I thank the gentlewoman from New York.

I just want to say again that I think we need to credit Mr. Dold, who is a fairly new Member. We actually listened to Members who were senior Members and didn't base it on our partisan differences as so often occurs. We really respected people's experience, and listened to their advice very earnestly.

Again, I would urge my colleagues to support this legislation, and I yield back the balance of my time.

Mr. Speaker, I rise in support of H.R. 2827 and commend my good friends and colleagues, Ms. Moore and Mr. Dold and Ranking Member Frank, and everyone else who worked very hard on this bill and for their willingness to work in a bipartisan way.

It is helpful to recall that the original Dodd-Frank regulations relating to municipal bond advisers only came about because of a number of manmade financial disasters involving municipalities and their advisers who were unregulated. It was just about a year ago that Jefferson County, Alabama, filed the biggest municipal bankruptcy in U.S. history. They joined the ranks of 11 other entities to file a chapter 9 bankruptcy that year, including Boise County, Idaho; Central Falls, Rhode Island; and Harrisonburg, Pennsylvania. They all had unique problems, but one of the things that they had in common was that they got some pretty costly advice, and it will haunt taxpayers for years.

This was an area that was completely unregulated before the financial crisis; and the Dodd-Frank reforms, including the municipal adviser registration requirement, were enacted to respond to those crises. The Dodd-Frank reforms require individuals who advise municipalities to register with the SEC and be subject to regulation by the Municipal Securities Rulemaking Board. This is a very good thing, but most of us agree that the SEC's proposed original rule went just a little bit too far and made the definition of a municipal adviser a little bit too broad. It was defined in a way that could have potentially captured those who were not actually providing investment advice.

For example, I know many institutions were concerned that under the SEC's proposed rule merely providing a bank account to a municipality could mean that an institution would have to register as an adviser and be subject to MSRB regulation all because they just provided basic banking services. As someone who was there during the consideration of Dodd-Frank, I can tell you that that was not what Congress intended; however, I was concerned that the original version of this bill went too far in the other direction, and that could have opened up such a gaping hole you could have driven a truck full of other people's money through it. I was concerned that the draft bill eliminated the critical fiduciary duty standard that we included in Dodd-Frank. The fiduciary duty is a vital element that ensures that the advisers provide advise that is in the best interest of the municipality.

I think that with this revised bill we have struck a good balance. Fiduciary duty is back in, and unintended capture is out. The revised language clearly and reasonably defines the activities that municipal advisers engage in and describes the kinds of advice that they provide. This bill now gives clear legislative guidance to ensure that the goal of heightened supervision of municipal advisers is realized. It keeps taxpayers a little bit safer, credit markets more stable, and regulations a bit fair.

All in all, I would say that it is a job well done, done in a bipartisan spirit with a great deal of time and commitment. I commend the two major sponsors who are speaking with us today; and I thank my good friend, Gwen Moore, for her work on this bill.