To amend the S.A.F.E. Mortgage Licensing Act of 2008 to provide a temporary license for loan originators transitioning between employers, and for other purposes.

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

Madam Speaker, I rise in strong opposition to H.R. 3978, the TRID Improvement Act of 2017.

H.R. 3978 has been dramatically expanded without input from Democrats to include several highly problematic and damaging bills. If enacted, this amended package of bills would ease the ability of high frequency traders to manipulate the stock markets undetected, encourage a regulatory race to the bottom in our Nation's stock exchanges, and harm investors and small businesses by weakening efforts to prevent accounting fraud at smaller public companies.

Taken together, this deregulatory package could significantly undermine market stability and gut investor and consumer protections at a time when our financial markets are already rattled.

Madam Speaker, from January 26 until last Thursday, the stock markets plunged just over 10 percent, becoming what the financial services industry calls ``stock market correction,'' and for the past two trading days, markets have rebounded the most since 2016.

Although market corrections are not new, what distinguishes today's volatility is that it is driven by complex computer strategies designed to buy and sell stocks and options millions of times a day. As many of us have witnessed, the Dow Jones Industrial Average may be up 500 points and then down 600 in less than a few minutes. For the average American who was hoping to one day retire with dignity by investing her hard-earned savings in the stock market, it can be distressing to see such wild swings always wondering whether the markets are truly fair or whether she is going to be fleeced. Unfortunately, the passage of H.R. 3978 would likely make those swings more extreme and increase the likelihood of problems going forward.

I am going to walk through each of the problematic provisions in this bill. Beginning with title IV, this provision is identical to H.R. 4546, the National Securities Exchange Regulatory Parity Act, which would weaken the standards for listing public companies for trading at U.S. stock exchanges. Today, exchanges listing standards set minimum requirements for a company's shares to be sold to the public without having to comply with State law. Exchanges can only revise these standards if the Securities and Exchange Commission first finds that new standards are substantially similar to the listing standards of the New York Stock Exchange.

This bill would remove any separate analysis for changing the standards and, thus, automatically preempt State oversight. As a result, the bill would encourage a race to the bottom of listing standards as exchanges compete with each other to attract companies with less restrictions, even if the standards are beneficial to the investors.

I believe that we should be strengthening the current analysis to promote fair and rigorous listing standards and only preempt State law when companies meet high standards. This is why I worked with the cosponsors last Congress to strike a bipartisan compromise which passed the House unanimously to require the SEC to develop a core qualitative listing standard. Unfortunately, my Republican colleagues have reversed their position in favor of empowering the industry over the investing public.

Turning to title III which is identical to H.R. 1645, the so-called Fostering Innovation Act, this provision would eliminate the independent audit of a company's financial reporting controls for up to 10 years for newly public companies provided that they have $50 million or less in gross revenues and less than $700 million in outstanding shares. Passed in the wake of the Enron and WorldCom accounting scandals, the requirement that public companies conduct an independent audit of financial controls is one of the many accounting provisions required by the bipartisan Sarbanes-Oxley Act that directly benefits investors and public companies by improving the accuracy of their financial reporting.

In fact, companies that are not subject to such review by an independent auditor are more likely to issue corrections to their financial reports leading to investor losses and higher losses for the company.

Investors like these audits because they improve the veracity of the reports they rely on to make investment decisions. Today, truly small public companies--those with less than $75 million worth of shares--are already exempt from the audit requirement. But this bill would extend the exemption to large companies that are nearly ten times that size. The law already provides newly public companies with an exemption for 5 years. Extending it to a decade would harm investor confidence and all such companies, hurting the very companies the bill's supporters purport to help.

Title II of this bill is the same language as H.R. 3948, the Protection of Source Code Act. This bill bans the SEC from inspecting source code used by regulated entities to engage in algorithmic or computer-driven trading and other activities that impact the securities markets and investors without first obtaining a subpoena. This provision would severely hamper the ability of the SEC to effectively examine persons like high-frequency traders and to investigate market disruptions.

The recent stock market volatility, which has seen all of the major stock indices decline by more than 10 percent in less than 2 weeks, has been exacerbated by high-frequency traders using complex computer algorithms to determine when to buy and sell millions of trades per second by making it harder for the capital markets COP to detect and stop bad actors and rein in fraudulent trading schemes. This provision will inevitably harm everyday Americans and retirees who rely on fair capital markets to invest their hard-earned savings.

To make matters worse, Republicans added a provision to pay for the cost of the bill by taking $2 million from the Securities and Exchange Commission's reserve fund. As a result, our financial watchdog will have less resources to support its capacity to oversee the markets through investments in IT and to respond to unforeseen market events like the flash crash.

In short, this bill asks taxpayers to pay for the costs of diminished capital market oversight by taking away SEC's funding to respond to emergency market situations that threaten market stability. This provision doubles down on the irresponsible policymaking we often see by the opposite side of the aisle.

The bill before us today would also make two less significant changes which I believe the Republicans included to garner additional support for the legislation. Nevertheless, even with these provisions, the package should be soundly rejected.

Title I, which includes the version of H.R. 3978, TRID Improvement Act of 2017, that the committee previously considered, would amend a mortgage disclosure known as TRID or the know-before-you-owe disclosure that informs home buyers of the terms and conditions of their mortgage. Responding to the concerns of some in the real estate industry, this provision would amend the disclosure to account for the discounts paid to borrowers in States where simultaneous lender and buyer title insurance is issued. However, the revised form does nothing for bars in States that do not provide such special rates to home buyers, and the provision eliminates the Consumer Bureau's ability to fix this aspect of the form even if a problem arises in the future.

The final provision, title V, is identical to H.R. 2948, the SAFE Mortgage Licensing Act. This title would ease the ability of individuals employed as mortgage originators to change employers by creating a temporary 120-day licensing regime so that they can continue to work at their new employer.

This bill would effectively treat mortgage originators who work for State registered firms the same as federally registered firms and was unanimously supported by committee Democrats. Unfortunately, because this legislation has been packaged with other deeply problematic and destructive bills, sensible relief to these individuals that has broad bipartisan support is being held hostage by Republicans' efforts to roll back as many safeguards as they can this year.

Madam Speaker, H.R. 3978, as amended, threatens many of the important reforms Democrats made to restore investor confidence to our capital markets after the worst financial crisis in generations. As the stock markets continue to wobble ominously in ways that threaten the savings of hardworking Americans, Congress should be strengthening oversight of the financial system, not weakening it.

Not surprisingly, H.R. 3978 is strongly opposed by the North American Association of Securities Administrators who serve on the frontline combating securities fraud on the State level and by nonpartisan organization who speak on behalf of our Nation's consumers, investors, and unions, including Consumer Federation of America, Center for American Progress, Americans for Financial Reform, AFL-CIO, and Public Citizen, and so do I.

Madam Speaker, I urge everyone to reject this harmful package of bills and to vote ``no'' on H.R. 3978.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I reserve the balance of my time.

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

Madam Speaker, given the extreme volatility in the stock markets over the past few weeks, I am particularly troubled by title II of this bill, which would make it easier for high-frequency traders to evade regulatory oversight of their potentially disruptive automated trading algorithms.

This provision is widely opposed by nonpartisan consumer and investor advocacy groups who recognize the impact automated trading has on our markets.

Let me read for you excerpts from a few letters from these groups that highlight the dangers of title 2.

Americans for Financial Reform--a coalition of more than 200 consumer, civil rights, investor, retiree community, labor, faith- based, and business groups--wrote: ``Title II would prevent regulators from inspecting not only their raw source code used in automated trading, but also any related intellectual property that `forms the basis for the design of' source code. Examination of such intellectual property would only be possible in an enforcement context pursuant to a subpoena. This implies that the SEC would have to wait until the damage was done through a `flash crash' or similar market disruption before taking any action, which would have to be retrospective.

``In light of the significance of automated trading to modern markets, and the potential risk of high-frequency trading, it makes no sense to tie the hands of regulators in examining detailed trading strategies and methods of high frequency traders.''

The Center for American Progress cautioned that: ``But in an era of fast-moving, `flash-crash'-prone markets, the SEC may have a wide range of regulatory reasons for why it may need to examine source codes, including approvals of new trading products or the supervision of trading venues. The SEC should only exercise that authority carefully and under the strictest protections for confidential information, but blocking it by law dangerously limits the SEC's ability to address the significant technology-based challenges to financial markets.''

The Consumer Federation of America, an association of nearly 300 consumer advocacy groups, similarly opposed title 2 because it ``would weaken SEC oversight of algorithmic trading and hamstring the agency from responding quickly to flash crashes or other market breakdowns.''

Further, the CFA wrote that: ``At a time when algorithmic trading is taking on increased importance in our capital markets, this bill would make it more difficult for the SEC to properly oversee such trading.

``The bill would require the SEC to first issue a subpoena before it could compel a person to produce or furnish to the SEC algorithmic trading source code or `similar intellectual property.' This would undermine the SEC's examination authority by creating a gaping hole in its ability to gain access to firm records relevant to the examination. It would also have a devastating effect on the agency's ability to respond quickly in the event of another `flash crash' or such events in the future. In order to oversee the markets effectively, the SEC needs to be able to accurately and efficiently reconstruct order entry and trading activity, including for algorithmic traders.''

Public Citizen, a consumer rights advocacy group with over 400,000 members and supporters, wrote: ``Market volatility caused not by real events such as outbreak of a war, but by computers, including computer glitches, threatens to erase savings to some innocent investors and erodes general investor confidence. The recent swings in the markets attest to the need for robust and urgent supervisory inspection. The May 6, 2010 `Flash Crash,' where markets collapsed by more than $1 trillion in less than an hour, revealed that such a robust and urgent supervision has been lacking. The SEC required nearly a half year to investigate this incident before identifying a flawed algorithmic at one major trader. SEC oversight should be streamlined, not hampered. Trading instructions and records of human traders are already subject to inspection, so it should be no different for those instructions and records generated by a machine. Hiding source code from regulatory scrutiny will leave those responsible for mistakes as well as those attempting to manipulate markets unaccountable.''

These letters demonstrate the wide opposition to title II by groups that truly understand that robust oversight of algorithmic trading is necessary for the help of our makers.

Madam Speaker, I include in the Record letters from these groups.

February 13, 2018.

Please vote NO on H.R. 3299 and H.R. 3978.

Hon. Member,

House of Representatives,

Washington, DC.

Dear Hon. Member: On behalf of more than 400,000 members

and supporters of Public Citizen, we ask you to vote NO on

H.R. 3299 and H.R. 3978, which are expected to be considered

by the full House on Wednesday, February 14, 2018. Provisions

in these bills would expose borrowers to abusive loans,

investors to dubious securities, and Americans generally to a

riskier financial system.

H.R. 3299, the Protecting Consumers' Access to Credit Act

of 2017, would allow predatory lenders to escape state limits

on high interest rates. The bill would nullify the Second

Circuit Court ruling in Madden v. Midland Funding. That

decision provided that a financial institution that buys

loans originated by a national bank could not benefit from

the National Bank Act's preemption of state interest rate

caps. While the Madden decision did not limit interest rates

that banks charge on credit, it does limit nonbanks from

evading state interest rate caps. This bill would pave the

way for payday lenders, financial technology (fintech)

companies and others to exploit that loophole and use a

``rent-a-bank'' arrangement in order to charge high interest

rates. Twenty state Attorneys General have written to oppose

this measure, noting that it undermines their efforts to

protect borrowers from abusive loan rates. We urge you to

oppose this bill.

H.R. 3978, the TRID Improvement Act of 2017, is actually a

package of bills that were considered separately in the House

Financial Services Committee. One of these is the Financial

Stability Oversight Council Improvement Act (formerly H.R.

4061). This measure would add numerous procedural

requirements for the Financial Stability Oversight Council

(FSOC) when it considers the designation or continued

designation of a nonbank firm as a systemically important

financial institution (SIFI). Current rules already make SIFI

designation a high hurdle. The case of MetLife, for example,

shows that firms enjoy more than ample methods to contest

designation. After FSOC designated MetLife as systemically

important, it contested it in court and the case is pending.

Increasing the government's burden for designation would

restrict its ability to apply enhanced supervision to major

institutions. However, the largest bailout of the 2008

financial crash went to AIG, a nonbank engaged in reckless

derivatives activity beyond the purview of banking

supervisors. We oppose this measure.

Another bill contained in H.R. 3978 is the Fostering

Innovation Act (previously H.R. 1645). This bill amends

Section 404(b) of the Sarbanes-Oxley (SOX) law by increasing

from five to 10 years the time that CEOs of firms with less

than $50 million in revenue must attest to the accuracy of

their financial reporting. Congress approved SOX in response

to the accounting scandals at the turn of the millennium. The

rules are designed to promote accounting accuracy to the

shareholders who have entrusted their savings to these firms.

A Government Accountability Office (GAO) report found that

companies with inferior financial reporting controls have a

significantly higher likelihood of issuing a restatement of

their financial accounts. Firms that are unwilling to oblige

SOX should not be trusted with the capital of savers.

Extending the CEO attestation requirement from five to 10

years exacerbates the problem. From an investor perspective,

accounting safeguards are more important for smaller

companies, since larger companies generally attract a larger

and more sophisticated base of stock and bond holders who can

perform effective oversight. We oppose this measure.

A third bill that is part of the H.R. 3978 package is the

National Securities Exchange Regulatory Parity Act (formerly

H.R. 4546). This bill would eliminate state supervision of

securities if they are listed on an exchange, even if the

exchange has reduced standards compared with those of major

exchanges such as the New York Stock Exchange. Under current

law, state supervision is pre-empted only if the security is

listed on exchanges with rules overseen by the Securities and

Exchange Commission (SEC). Rules may differ between

exchanges, but they must be approved by the SEC to ensure

that they prevent fraud, serve the public interest and

protect investors. Moreover, exchanges must adopt and enforce

rules that are ``substantially similar'' to the major

exchanges, known formally as ``Named Markets,'' under current

law. The existing system deters a race to the bottom, where

an exchange may attempt to attract companies with weaker

rules. Conversely, this bill would actually promote that race

to the bottom by removing the requirement that the exchange

adopt rules that are substantially similar to those of the

Named Markets. We oppose this measure.

A fourth measure in H.R. 3978 is the Protection of Source

Code Act, (formerly H.R. 3948). This measure would impede the

ability of the SEC to conduct effective compliance

examinations of market volatility involving computer-driven

algorithms. The bill imposes a strict subpoena requirement

before staff could inspect otherwise routine business records

that involve source code. Market volatility caused not by

real events such as the outbreak of a war, but by computers,

including computer glitches, threatens to erase savings to

some innocent investors and erodes general investor

confidence. The recent swings in the markets attest to the

need for robust and urgent supervisory inspection. The May 6,

2010 ``Flash Crash,'' where markets collapsed by more than $1

trillion in less than an hour, revealed that such robust and

urgent supervision has been lacking. The SEC required nearly

a half year to investigate this incident before identifying a

flawed algorithm at one major trader. SEC oversight should be

streamlined, not hampered. Trading instructions and records

of human traders are already subject to inspection, so it

should be no different for those instructions and records

generated by a machine. Hiding source code from regulatory

scrutiny will leave those responsible for mistakes as well as

those attempting to manipulate markets unaccountable. We

oppose this measure.

Because of our opposition to these elements in H.R. 3978

and to H.R. 3299 we urge you to vote NO on these bills. As we

are marking the 10th anniversary of the Wall Street Crash,

it's clear that American consumers and investors deserve

stronger financial reforms, not weakened protections that

will make our economy more susceptible to another collapse.

Thank you for your consideration. For questions, please

contact Bartlett Naylor.

Sincerely,

Public Citizen.

Madam Speaker, I continue to reserve the balance of my time.

Madam Speaker, may I inquire as to whether or not the chairman has more speakers?

Madam Speaker, I yield myself the balance of my time.

Madam Speaker, it has become par for the course for the majority to recklessly advance harmful deregulatory packages like H.R. 3978. My friends on the other side of the aisle are moving forward with regulatory roadblocks at a furious pace, pushing dangerous bills through the House nearly every week.

It appears that they may have already completely forgotten a way that lacks financial regulation and allowed the crisis in 2008 to occur. That crisis badly damaged the whole economy and harmed all of our constituents. The impact was enormous: $13 trillion in household wealth was lost; 11 million people lost their homes to foreclosure; and the unemployment rate reached 10 percent.

Democrats responded by enacting Wall Street reform to ensure that consumers, investors, and our economy are protected from reckless actors and bad practices, but now Republicans cannot wait to take us back to the bad old days. It makes no sense.

As we have discussed, the package of bills now before us guts important financial protections at a time when markets are already experiencing turmoil. It would allow high-frequency traders to manipulate the stock markets undetected, encourage a regulatory race to the bottom at our Nation's stock exchanges, and harm investors by weakening efforts to detect accounting fraud at smaller public companies. This package of bills threatens important progress we have made to reduce risk in the financial system and return investor confidence.

In recent weeks, we have seen volatile markets that threaten the savings of hardworking American families. These circumstances should serve as a clear reminder that Congress should be strengthening oversight of the financial system, not weakening it by undermining or removing important protections.

H.R. 3978 is strongly opposed by our State's security cops, who are at the front line of combating fraud, and it is opposed by groups representing consumers, investors, and unions.

Madam Speaker, for all of these reasons, I urge Members to oppose H.R. 3978, and I yield back the balance of my time.

Mr. Speaker, I include in the Record the following letters of opposition.

Center for American Progress,

Washington, DC, February 13, 2018.

Hon. Paul Ryan,

Speaker, House of Representatives,

Washington, DC.

Hon. Nancy Pelosi,

Democratic Leader, House of Representatives,

Washington, DC.

Dear Speaker Ryan and Leader Pelosi: The Center for

American Progress (``CAP'') is writing today to express

opposition to H.R. 4061, the Financial Stability Oversight

Council Improvement Act of 2017, which is included as Title

VI of the revised H.R. 3978 package. It is our understanding

that the revised H.R. 3978 package will be considered on the

floor of the House of Representatives this week, so we

welcome the chance to share our concerns regarding this

legislation with you and your Members.

In short, this bill erodes a vital new financial regulatory

tool implemented following the devastating 2007-2008

financial crisis. If enacted, the U.S. financial regulatory

structure will be less equipped to handle risks that build up

outside of the traditional banking sector--making the

financial sector as a whole more vulnerable to another shock

and economic downturn. Americans paid for the last crisis

with their jobs, homes, and savings, while banks and other

financial institutions were bailed out. This bill

inexplicably makes a repeat of that economic calamity more

likely.

The 2007-2008 financial crisis demonstrated that excessive

risk could build up outside of the traditional banking

sector. Nonbank financial institutions like Lehman Brothers,

Bear Stearns, and AIG did not face the type of oversight and

regulatory standards warranted by their systemic importance.

The failure or near-failure of these institutions threatened

the stability of the U.S. financial sector. AIG and Bear

Stearns were bailed out accordingly, while the failure of

Lehman Brothers brought the global financial system to the

brink of collapse. The crisis also revealed that no one

financial regulator had a system-wide mandate, meaning

individual regulators were only focused on their respective

segments of the financial sector. This left financial

regulators in the dark regarding risks that built up across

different parts of the sector or that emerged in

underregulated parts of the sector.

In the wake of the financial crisis, President Obama worked

with Congress to pass the Dodd-Frank Wall Street Reform and

Consumer Protection Act--the most significant financial

regulatory reforms enacted since the Great Depression. One

important pillar of Dodd-Frank was the creation of the

Financial Stability Oversight Council (``FSOC''), a new

systemic risk regulatory body. The FSOC was created to bring

the disparate financial regulators together to identify and

mitigate threats to financial stability. The most important

tool given to the FSOC to fulfill this mission is the

authority to subject a nonbank financial company to enhanced

oversight and regulation by the Federal Reserve Board if

material distress at the company, or the company's

activities, could threaten financial stability. The FSOC has

used this designation authority sparingly and only after a

thorough, multi-stage review process in which the FSOC

communicates extensively with the company and the company's

primary regulators.

H.R. 4061 would add multiple additional hurdles to the

FSOC's already-rigorous designation process. The proposed

changes would add an estimated two years to the designation

process, meaning it would take roughly four years for the

FSOC to designate a nonbank financial company that could

threaten U.S. financial stability. The four-year estimate

does not even factor in the time it will take for the legal

proceedings to play out when a company challenges the

designation in court. The legal challenge by MetLife took

years, and likely would have taken longer if the Trump

administration didn't agree to stop pursuing the case. If

anything, this bill increases the procedural issues a

designated company could raise in court. H.R. 4061

practically invites a legal filibuster of the designation. It

renders the designation authority nearly useless. Hollowing

out this crucial post-crisis authority makes it far more

likely that an underregulated systemically important nonbank

will cause or aggravate the next financial crisis.

Contrary to critics of the FSOC, it is not a rigid body and

has in the past responded to legitimate process and

transparency suggestions. In 2015, after soliciting public

comment, the FSOC adopted 17 changes to its designation

process and transparency policies The current designation

process in place is rigorous and appropriately thorough. H.R.

4061 would add no less than nine new bureaucratic steps.

These proposed changes are excessive, and the intent is

clear: To prevent the FSOC from using this vital tool.

This legislation is even more concerning given the actions

Treasury Secretary Steven Mnuchin, Chairman of the FSOC, has

taken since the start of the Trump administration. The FSOC,

under Mnuchin's leadership, has: (i) rescinded the

designation of AIG, the company that received a $182 billion

bailout during the crisis; (ii) slashed the FSOC's budget and

staff; (iii) dropped the legal proceedings regarding

MetLife's designation; (iv) signaled that Prudential's

designation may be rescinded this year; and (v) recommended

some deeply concerning additional changes to the FSOC's

designation process in a report published in late 2017.

Further restricting the FSOC's authority at a time when it is

being dismantled from within would be a grave mistake.

For these reasons, CAP recommends that Members vote ``NO''

when the revised H.R. 3978 package of bills, which includes

H.R. 4061, is considered on the floor.

If you have any questions about this letter or would like

to discuss these issues further, please contact Gregg

Gelzinis.

Sincerely,

Gregg Gelzinis,

Research Assistant, Economic

Policy, Center for American Progress.

Mr. Speaker, I rise in opposition to the amendment.

Mr. Speaker, the current language of title II of H.R. 3978 would require SEC examination staff to obtain a subpoena before it could inspect any source code whatsoever, including, for example, computer code reflecting a firm's adherence to the SEC's cybersecurity regulations.

The amendment offered by Mr. Foster would narrow the requirement in title II to only apply to proprietary source code related to algorithmic trading. While I applaud Mr. Foster and the amendment's cosponsor, Mr. Scott, for narrowing the overbroad language of title II, the amendment cannot fix this untimely and ill-advised legislation. Even as amended, title II would undermine effective oversight of the high-frequency traders that simultaneously create and stand to benefit from the kind of extreme market volatility that we have seen in the past few weeks.

Let's not forget that, on May 6, 2010, in an event referred to as the ``flash crash,'' major U.S. stock indices inexplicably plummeted nearly $1 trillion in less than an hour before mostly rebounding. Alarmingly, market regulators took nearly 5 months to determine that the flash crash was caused by a combination of a flawed execution algorithm of one institutional investor and aggressive algorithmic trading by HFTs.

While it is too early to tell exactly what created the recent volatility in the U.S. stock market, market analysts have suggested that algorithmic trading has played a central role. In fact, just last Tuesday, the day after the Dow Jones Industrial Average saw its biggest one-day point drop in history, Treasury Secretary Steve Mnuchin testified before the House Financial Services Committee that algorithmic trading ``definitely had an impact on market moves.''

Given the importance of algorithmic trading in our stock market, it makes no sense to obstruct the SEC's access to the information that enables such activity merely because it exists in an electronic format. Americans who have trillions of their dollars in 401(k) and other retirement and savings plans deserve the SEC's best efforts in investigating and mitigating computer-driven market disruptions. For this reason and for all of these reasons, and given my broader concerns that the bill would significantly harm investor confidence in our markets even if the amendment is adopted, I am urging a ``no'' vote on

Mr. Speaker, on that I demand the yeas and nays.

Madam Speaker, pursuant to House Resolution 736, I call up the bill (H.R. 3978) to amend the Real Estate Settlement Procedures Act of 1974 to modify requirements related to mortgage disclosures, and for other purposes, and ask for its immediate consideration in the House.

Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and submit extraneous material on the bill under consideration.

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

Madam Speaker, I rise today in strong support of H.R. 3978, which is a package of five strongly bipartisan bills, yet again, from the Financial Services Committee of the House. As standalone bills, all were favorably reported, again, with strong bipartisan support of at least three-quarters of the committee.

The title provision of this package is the TRID Improvement Act by Congressman French Hill. This bill amends CFPB's complex TILA/RESPA integrated disclosure, known as the TRID rule, in order to simplify the closing documents consumers get when they close a mortgage.

It does this by allowing for the calculation of the discounted rate that title insurance companies provide to consumers when they purchase a lender's and owner's title insurance policy simultaneously. This makes it more accurate, Madam Speaker.

Title II is the Protection of Source Code Act introduced by Representatives Sean Duffy and David Scott, a Republican and a Democrat. This provision ensures that the Securities and Exchange Commission cannot require financial services firms to disclose algorithmic trading source code without first obtaining a subpoena. Source code is among a firm's most sensitive information, and this bipartisan provision balances privacy and due process concerns while preserving the SEC's ability to obtain such information when necessary.

The third title is the Fostering Innovation Act which was introduced by Representatives Sinema and Hollingsworth to provide relief to small and emerging businesses by extending the popular onramp exemption of the JOBS Act for emerging growth companies in a more tailored manner. In short, it provides emerging growth companies more time to reach a size when they reasonably can be expected to financially sustain the legal, accounting, and compliance costs associated with the full Sarbanes-Oxley section 404(b) compliance.

Fourth, Madam Speaker, is the National Securities Exchange Regulatory Parity Act which was introduced by Mr. Royce and which will ensure further clarity and competition among national security exchanges by modernizing the blue sky exemption in the Securities Act. Modernizing this provision will ensure all national security exchanges operate on a level regulatory playing field and help protect retail investors from arbitrary acts by State regulators that may bar investors in one State from buying stock freely available to investors in every other State.

The final title of this bill is a provision introduced by Congressman Stivers to allow mortgage loan originators who work as loan officers in banks and credit unions to transition to a new job at a nonmortgage company without losing the ability to originate loans. Without this bill, the transition process can take weeks or months depending on the State.

Each of these measures, Madam Speaker, will cut through layers of red tape and help level the playing field making regulations smarter, fairer, clearer, and more efficient, thus ensuring that there are more competitively priced credit opportunities, more credit opportunities for consumers, and that investors have greater investment opportunities in competitive markets. They will provide commonsense regulatory relief. They are practical, they are bipartisan, and they are needed.

Madam Speaker, I encourage all of my colleagues to support the measure, and I reserve the balance of my time.

Madam Speaker, I yield 5 minutes to the gentleman from Arkansas (Mr. Hill), the majority whip of the committee and the sponsor of the legislation.

Madam Speaker, I yield 4 minutes to the gentleman from Wisconsin (Mr. Duffy), the chairman of the Subcommittee on Housing and Insurance and the sponsor of title 2 of the Protection of Source Code in this bill.

Madam Speaker, I yield an additional 30 seconds to the gentleman from Wisconsin.

Madam Speaker, I yield myself 30 seconds to say the widespread opposition to the bill alluded to by the ranking member doesn't include roughly half the Democrats on the committee, including the gentleman from Illinois (Mr. Foster), who was quoted in our markup as saying: ``As someone who can code in at least seven languages, I understand that source code is qualitatively different from other documents that a firm might have and that our regulators should have legitimate access to. They are truly the crown jewels of an electronic trading firm, and there are obvious dangers that have been exposed in transferring things really not just to the government, to any entity. The first line of defense in cybersecurity is to keep the data as closely held as reasonable and still be able to do your job.''

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. Hultgren), the vice chairman on the Subcommittee on Capital Markets, Securities, and Investment.

Madam Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Williams), the vice chairman of our Subcommittee on Monetary Policy and Trade.

Madam Speaker, I yield 2 minutes to the gentleman from Maine (Mr. Poliquin), a hardworking member of the Financial Services Committee.

Madam Speaker, I yield 2 minutes to the gentleman from New York (Mr. Zeldin), another member of the Financial Services Committee.

Madam Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. Loudermilk), another proud member of the Financial Services Committee.

Madam Speaker, I would tell the ranking member that I have potentially two speakers, if they make it. They are on their way from a hearing, but they are not here now.

Madam Speaker, may I inquire how much time I have remaining.

Madam Speaker, there may be other Members coming, so, at the moment, I yield myself 4 minutes.

Madam Speaker, again, all over America today, fortunately, because of the Tax Cuts and Jobs Act, people are waking up to new opportunities. They are finally seeing their wages begin to grow. We have seen the greatest wage growth in almost a decade, Madam Speaker, again, thanks to President Trump and thanks to a Republican Congress, a bill that was opposed by every single Democrat.

But as they wake up to these new opportunities, Madam Speaker, they also need new credit. As their incomes rise--this is good--they still need credit in order to buy a home, in order to purchase that car, and sometimes just to put groceries on the table. Unfortunately, over the last 8 years of the Obama administration where we saw probably one of the greatest increases in the cost, expense, and burden of costly Washington red tape, we have seen fewer credit opportunities.

So now, fortunately, today there are good men and women on both sides of the aisle who are trying to work together to bring some rationale and reason to the regulatory burden. Many Members on the other side of the aisle do realize that Dodd-Frank did not come down as tablets from Mt. Sinai, that it isn't chiseled into stone, and that maybe there are some improvements that could be made.

So today, we are taking a number of very bipartisan bills to the House floor. The Protecting Consumers' Access to Credit Act, which we debated earlier, Madam Speaker, passed by 42-17.

The TRID Improvement Act by Mr. Hill from Arkansas passed through our committee 53-5--90 percent. Almost all of the Democrats but the ranking member supported the bill. The Protection of Source Code Act, 46-14; the Fostering Innovation Act passed by a vote of 48-12, a Democratic bill; the National Securities Exchange Regulatory Parity Act, 46-14.

We have a lot of bipartisan bills, but with one exception, title V of the TRID Improvement Act, none of them were supported, unfortunately, by the ranking member.

So there is, again, a lot of bipartisan work we are trying to get done here. Unfortunately, very little of it is supported by the ranking member.

And why is this important? It is important, Madam Speaker, because every day we are still hearing from our constituents who need access to competitive affordable credit. And because of this Washington red tape and regulatory burden, they are not getting it.

It wasn't that long ago we heard from Ann of Wisconsin, who said:

My husband and I had very high credit scores. We have

plenty of equity in our home. But because my husband has a

seasonal job and finds other employment in the winter, many

banks we contacted rejected our loan request. They based our

annual income only on the job he has currently and said that

was part of the new regulations.

Part of the new regulations--there is somebody who won't buy a home; they can't get a home.

I heard from a mortgage banker in North Carolina who said:

Last year, we declined a young man and his family fixed

rate financing to purchase a primary home. The applicant

recently relocated to work for a family business. Prior to

Dodd-Frank, it would have been easy to qualify, but no more.

Another potential American home buyer denied credit because of this regulatory burden. Madam Speaker, that is what many of us, on both sides of the aisle, are trying to remedy today.

Madam Speaker, I am pleased to yield 2 minutes to the gentlewoman from Arizona (Ms. Sinema), a sponsor of title III of the Fostering Innovation Act.

Mr. Speaker, may I inquire how much time I have remaining.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, once again, I want to hear the voices of hardworking Americans, not just Washington, D.C., letterhead groups.

We heard from a community banker, who said:

A local union member wanted to refinance his primary

residence. He was currently laid off due to the winter

season. His tax return showed he was generally laid off for

about 6 weeks each year during the extreme cold but was

always called back when weather improved. Since he was laid

off, we could not meet the requirement to validate his

current income that would continue for 3 years. We had to

deny the loan.

Yet again, Mr. Speaker, more Washington red tape taking away home opportunities from hardworking Americans. It is wrong. We must do something about it. It is why, on a bipartisan basis, so many of us have gotten together to pass H.R. 3978.

Yes, we want to make sure that people can buy homes, they can buy cars, they can put groceries on the table, and right now, when the economy is finally starting to improve, thanks to President Trump and the Tax Cuts and Jobs Act, we want them to have opportunities.

Mr. Speaker, I encourage all Members to support H.R. 3978, and I yield back the balance of my time.

Mr. Speaker, I reserve a point of order on the gentleman's motion.

I object.

Mr. Speaker, I withdraw my reservation of a point of order.

Mr. Speaker, I claim time in opposition.

Mr. Speaker, I listened very carefully to my colleague on the Financial Services Committee. I lost track of how many times he mentioned Wells Fargo. That has nothing to do with an early growth company. That has nothing to do with this title of the bill.

So the Fostering Innovation Act by the gentlewoman from Arizona is all about allowing emerging-growth companies the opportunity to actually grow. What a novel concept.

What we know is, Mr. Speaker, in 8 years of Obamanomics, they were only able to produce about 1.8 percent economic growth, for all intents and purposes. Nobody's savings account came back. Wages were stagnant. And now that we have sensible regulation, now that we have passed the Tax Cuts and Jobs Act, now we have 3 percent economic growth, which is economic growth for America's working families. Unemployment is at a 17-year low. It remains at a 17-year low.

Again, wages grew at 2.9 percent last year, the fastest in almost a decade. Two million Americans have gone back to work, Mr. Speaker, and this is not by accident.

So what the gentleman is doing with his motion to recommit is sending us back. He is rolling the clock back to an era where working Americans didn't get ahead, where entrepreneurship was at a generational low, where small businesses were finding it hard to access lines of credit. So the bill that he so much maligns from the gentlewoman from Arizona, who happens to reside on his side of the aisle--at markup, the ranking member of the relevant subcommittee, the gentlewoman from New York (Mrs. Maloney), supported the provision and said: This is a sensible compromise that provides a narrowly targeted relief to only the companies that truly need it.

Researching a new drug and getting FDA approval is a very, very long process, which is exactly what we heard in our committee. For example, we have heard from John Blake, senior vice president of finance at Atyr Pharma, who testified before the Subcommittee on Capital Markets, Securities, and Investments. He said: It remains the case that the biotech development time line is a decades-long affair. It is extremely likely that Atyr will still be in the lab, in the clinic, when our EGC clock expires, our early growth company.

In other words, they may have revenues, but they don't have profits. They don't have profits. This is something that is especially common in the biotech area. They need this capital for innovation.

So once again, we have heard this rhetoric on the other side of the aisle before. This is all about Dodd-Frank revisited. They aim at Wall Street, but they are hitting Main Street, Mr. Speaker. The MTR, the motion to recommit, hits Main Street in the gut. It will mean fewer early growth companies. It will mean fewer jobs. It will mean lower wage growth. And it will mean, again, a decimated and declining American Dream.

Mr. Speaker, we should reject the motion to recommit, and we should support the underlying bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I have a motion to recommit at the desk.

I am, in its current form.

Mr. Speaker, my amendment simply requires a company to have a policy in place to claw back executives' incentive-based pay if it is materially noncompliant with financial reporting requirements. Now, those words matter because the words ``materially noncompliant'' mean something in the accounting world. It has to be a big change, not just some minor, little accounting error.

This amendment really should be noncontroversial. It is outrageous, not to mention shortsighted, that almost a decade after the crisis that wrecked the economy we still don't have commonsense safeguards in place to ensure that CEOs do not turn a blind eye to problems that lead to a public restatement of their company's financials.

This is not something hypothetical. It happens on a pretty regular basis. It is not relegated to just the past. Everybody here is pretty familiar with Wells Fargo Bank. It has generated scandal after scandal by ripping off its own

consumers. Last year, the bank settled an 11-year lawsuit with the Department of Justice because it overcharged veterans who applied for home loan refinancing. At the same time, we learned of hundreds of thousands of car loan customers charged for car insurance that they never agreed to purchase.

In 2016, we learned of millions of fake deposits and credit card statements opened up by Wells Fargo and then charging their customers. Last September, the bank failed to refund insurance payments made by customers who paid off their car loans early. And most recently, we found out that they delayed mortgage closing dates in order to jack up their own fees.

These abuses come on top of $10 billion in fines by that bank that has been paid in recent years for everything from mortgage fraud, illegal marketing, kickback schemes, insider trading, racial discrimination, and student loan scams. Yet the bank believes that this kind of consistent misconduct is not materially financially important enough to require a restatement.

Wells Fargo has only ever clawed back a few tiny dollars from its executives. All this recommit does is simply says that if you commit an act that requires a material change in your public statements, you shouldn't profit by it. That is all. Not basic pay; just the incentive pay tied to those actions.

The underlying bill goes in the opposite direction. It makes it more likely that there will be material inaccuracies in certain public companies' financial statements. If this is what Congress is going to do, we should, at the very least, not incentivize that bad behavior. Title III of this bill allows new public companies to get out of independent audit requirements for 10 years--ten years.

Now, we all think, well, that is fine for a small company. Small company? Up to $700 million of company shares? That is a small company? Those are significant companies that put lots of people at risk, shareholders and investors.

In 2002, the Sarbanes-Oxley Act--I want to repeat, the Sarbanes-Oxley Act because Mike Oxley was the Republican chair of the Financial Services Committee at the time--requires companies to issue stock to publicly report their internal control structures and procedures for financial reporting. Those reports have to be attested to and covered in an audit report.

There is a reason why an independent audit of large corporations is a good thing: it makes it harder for them to hide bad actions. This recommit, again, it is simple. It doesn't change the underlying bill. It simply says: If a corporation makes a material change to its publicly stated financial records and an executive's incentive pay has been tied to the profits made off of that now-changed policy, the company has to have a policy in place whereby to claw back those ill- gotten profits. I don't think that is controversial. I don't think that is partisan. I don't think that is antibusiness. I don't think that is overregulation. It is simply fair.

We don't let bank robbers keep their money. We don't let other people who commit wrongdoings keep the profits that they have. Why should we let corporations who go out of their way--some, not all, only a handful go out of their way--to make sure that they hide their bad actions, report them badly? And when they get caught and have to report them appropriately, they still get to keep the ill-gotten gains.

That is all this recommit does. It is simple. It is straightforward. And I would hope that my friends on not just the other side but on both sides of this aisle see this as a thoughtful, insightful, and commonsense approach to amend this bill.

Mr. Speaker, with that, I yield back the remainder of my time.

Mr. Speaker, on that I demand the yeas and nays.

Madam Speaker, I thank the chairman for all of his work and support on this legislation, as well as the gentleman from Arkansas (Mr. Hill), for which my provision is made part of a larger package.

I also thank the gentlemen from Georgia and Illinois, my good friends across the aisle, David Scott and Bill Foster, both of whom are cosponsors of the Protection of Source Code Act. It is a bipartisan bill.

The recent cyber incidents at Equifax, SEC, and even at the NSA, has shown that all organizations are vulnerable to security risks. These incidents are a timely reminder of the risks that we face in this digital age.

Given this reality, it is important for government agencies such as the SEC to rethink what they collect, how they collect it, how it is stored, and what they do with this information in the long run.

The Protection of Source Code Act is a bipartisan bill intended to reduce some of the cybersecurity risks to our financial markets posed by the SEC when it gathers highly sensitive trading or source code information as part of their oversight duties.

The Protection of Source Code Act establishes a process for the SEC with respect to requesting source code and other intellectual property that forms the basis of source code.

It does not preclude the SEC from requesting data that it determines it needs for market oversight. It merely puts a process in place for how the SEC seeks access to certain intellectual property.

Having a process in place for how the SEC requests source code and similar intellectual property will better protect registrants and their clients and investors from inadvertent disclosure or cyber theft of their most valuable and important intellectual property.

Such disclosure or theft could destroy the American businesses that own the intellectual property. Worse, it could undermine investor confidence and create significant volatility in our financial markets.

In general, the SEC should not be requesting source code or intellectual property that forms the basis of source code. They shouldn't be collecting that on a regular basis. Such information is generally unnecessary for the SEC to perform its market oversight function and, as we have learned from recent cyber hacks, could create a very inviting treasure trove of sensitive data for computer hackers.

This bill ensures that the SEC will gather source code when it is truly needed, under a subpoena process that provides appropriate due process for the information.

Under this bill, the SEC, in conducting an exam, may continue to ask a registrant for general information about a registrant's trading system or trading strategies.

So let's break this down a little bit. We have source code that is highly sensitive. It is intellectual property. If you are the SEC, you can actually go onsite and look at the source code. I am fine with that.

But if you are going to collect the source code and take it back to the SEC and store it and you have a whole bunch of intellectual property from American businesses stored at the SEC, this is one-stop shopping for hackers. You have just got to do it once. Get in the SEC and you get it all.

My friend across the aisle, the ranking member, wants to talk about volatility. Wait and see if there is an SEC hack where they get all this information, all this source code. That is a risk we don't want to have.

We want due process. If you want to come in and take the source code, get a subpoena.

Do we believe in due process in America?

For the most sensitive data, the most sensitive information, get a subpoena and you can take it. But those are basic measurers, basic protections that we offer in America that we should employ at the SEC when they want this intellectual property that is of great value to these firms.

My bill, contrary to the ranking member's point, Madam Speaker, doesn't offer exemptions to exams. Exams will still happen. Also, it is still illegal to manipulate markets. Those things haven't changed.

This is just about due process.

It is important that we have truthful and honest information on the floor. This does not prohibit exams. This doesn't make legal manipulation of the markets. It is still illegal. All we are saying is we have sensitive source code, and if you want to take it to the SEC, you get a subpoena.

Frankly, we think there are problems with that. The SEC has been hacked. The NSA has been hacked. Everybody has been hacked. If you compile all this information, the risk that poses to our markets and volatility to our markets, I think, is unacceptable. That is why it is bipartisan.

I would encourage all Members of this House to take a step forward for due process.

Mr. Speaker, I have an amendment at the desk.

Mr. Speaker, my amendment clarifies that this bill is only intended to apply to the source code underpinning algorithmic trading rather than any computer code that exists anywhere in the enterprise.

The algorithmic source code at a trading firm are its crown jewels. It is basically the core of its existence in its intellectual property.

It is not merely historical or descriptive like books or records that regulators routinely have access to. Likewise, it is not a broad expression of strategies that a firm might use some time in the future. Rather, it is a specific and prescriptive algorithm that generates a specific outcome based on a specific set of inputs.

The firms that rely on algorithmic trading have Ph.D. scientists, mathematicians, and economists researching correlations that lead to these relationships between the inputs and outputs. These may be simple but may also be incredibly complex, involving multiple inputs that do not appear related at first glance.

This complexity, coupled with the fact that they are written largely in computer code, limits the usefulness of

inspecting source code as an examination tool. It is, rather, the behavior of the firm in the market that represents potential violations of security laws. Manipulative behavior, like frequently displaying or canceling orders, should get the regulators' attention and prompt them to ask the firm to explain it.

Source code would be and will be a valuable part of any investigation or enforcement action into observed manipulation of the market, but this is not the basis and should not be the basis for casual inspection. It would probably be central to proving the element of intent in an enforcement action because it demonstrates that the algorithm was designed to engage in, for example, manipulative or abusive behavior.

To this end, it is imperative that the firms achieve archived versions in effect at any given time and log modifications to those algorithms, including who made them, at any time that the code is altered. These should always be available by subpoena.

Additionally, I believe that most firms would allow the regulator on site to examine the source code on an air gap computer. To treat the source code as ordinary books and records would not limit the regulator to onsite examination, but would allow for staff to request it and that it be made available offsite, which has real dangers.

Because of the value the firm carries with its proprietary algorithms, it makes sense that the firm would be reluctant to allow any undue access to its crown jewels. It is really, I believe and I think the majority of my colleagues believe, something that should be accessible only by a subpoena.

My amendment simply clarifies that it is only the algorithmic trading code and related information that should be covered. I urge my colleagues to support my amendment and, upon its adoption, to support the bill on final passage.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I would just like to simply reiterate that it should be the actions in the market that are the first indications that the regulators should have a look at, and when they see suspicious activity in the market, that is the time to get the subpoena and go after the source code.

With that, I just urge the adoption of the amendment and the passage of the underlying bill.

Mr. Speaker, I yield back the balance of my time.