Dennis Moore

Madam Speaker, as a House conferee for H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act''), and the chief sponsor of the Nonadmitted and Reinsurance Reform Act (NRRA) that was included as Title V, Subtitle B of the Dodd-Frank Act, I rise to reaffirm these important provisions. The President signed the Dodd-Frank Act into law earlier this year (P.L. 111-203).

The NRRA seeks to address an issue that most people have never heard of. But it is an issue that we in this House have successfully addressed a number of times in the past few years, and one that affects the lives of millions of Americans, individuals and businesses large and small.

Non-admitted insurance, or surplus lines, is specialty insurance you cannot purchase in the traditional, admitted market. Often called the ``safety net'' of the insurance market, surplus lines provides for coverage when the traditional market is not available. This is insurance for satellites, toxic chemicals, new inventions, or insurance on homes and businesses in a scarce market.

With my distinguished colleague from New Jersey, Mr. Garrett, I sponsored the Nonadmitted and Reinsurance Reform Act to fix the fragmented, cumbersome regulation of this important marketplace. The goal of the NRRA was not to eliminate regulatory protections, but to streamline the regulatory regime to enable insurers and brokers to more easily and efficiently comply with state rules and provide much-needed insurance protections to consumers. The law accomplishes this by giving sole regulatory authority over a surplus lines transaction--including the authority to collect premium taxes--to the home state of the insured.

The NRRA passed the House four times--three times as a stand-alone measure and, finally, as part of the Dodd-Frank Act. With the law's enactment, the responsibility for implementation moves to the states. I'm told that the National Association of Insurance Commissioners (NAIC) is moving swiftly to draft a model agreement and statutory language to enable the states to collect and share surplus lines premium taxes. This sounds like a promising start, but only if the agreement and authorizing legislation are in keeping with the letter and spirit of the NRRA: to provide a simpler, uniform tax reporting and payment process with a single payment, to the insured's home state, for each transaction.

Premium tax simplification, while important, is but one part of the NRRA's goals. The broader intent of the law is to provide a comprehensive, uniform solution to the current regulatory mess by addressing the full spectrum of surplus lines regulation: declination and reporting requirements, broker licensing requirements and electronic processing, insurer eligibility standards, and treatment of sophisticated commercial purchasers. Most of

the provisions of the law will become effective next July without state action--as I mentioned, the rules of the insured's home state govern multi-state transactions and the insurer eligibility requirements and sophisticated commercial purchaser standards are set forth in the federal law.

Having said that, however, in order to truly realize the promise of the new law, the states need to take this opportunity to adopt a single set of uniform surplus lines regulatory requirements--requirements that are not just similar but the same in every state. I have no stake in how this is accomplished--by individual state laws based on NAIC or NCOIL models, through a standard-setting compact (which is authorized under the NRRA), or in some other manner. But it can and should be done--and the states should realize that now is the time to do it.

I urge the Congress to continue closely monitoring the full implementation of these important provisions.

Madam Speaker, as a House conferee for H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act''), I rise to reaffirm the intent of section 625 of the Dodd-Frank Act, which the President signed into law earlier this year (P.L. 111-203).

For years, many federal mutual holding companies have waived receipt of dividends in reliance on current Office of Thrift Supervision (``OTS'') regulations which permit waivers of such dividends. These regulations also provide that such dividend waivers would not affect the exchange ratio in the event of a full conversion to stock form.

Section 625 of the Dodd-Frank Act seeks to maintain the current OTS regulation regarding dividend waivers for federal mutual holding companies which, prior to December 1, 2009, had waived the receipt of dividends pursuant to current OTS regulations permitting such dividend waivers. Section 625 authorizes that these mutual holding companies may continue to do so as long as they provide proper notice beforehand and no finding is made that such dividend waivers constitute a safety and soundness violation. Section 625 also provides that such dividend waivers shall not affect the exchange ratio in the event of a later full conversion by the mutual holding company to stock form. The OTS's regulations (which

remain unaltered from when the Dodd-Frank Act was being debated and became law) define a mutual holding company as the top-tier company and includes any mid-tier stock holding company. Therefore, regardless of what level of the federal mutual holding company had or continues to waive the receipt of dividends, the clear intent behind Section 625 is to preserve the current OTS regulations with respect to these institutions.

I commend Chairman Frank for his leadership in drafting the Dodd- Frank Act, as well as his assistance in working with me to fully preserve and protect the thrift charter, including the dividend treatment of federal mutual holding companies. I also urge the Congress to carefully oversee the implementation of the Dodd-Frank Act, including provisions like Section 625, to ensure the regulators implement them in such a way as Congress intended.

Madam Speaker, I rise today to recognize the 20th anniversary of a program that has truly served this Nation well: the Federal Home Loan Banks' Affordable Housing Program, AHP. The AHP is funded by contributions of 10 percent of the Federal Home Loan Banks' net income. The AHP represents the largest, single source of private sector grants for housing and community development in the country targeted at underserved segments of the market. The Federal Home Loan Banks have distributed nearly $4 billion in AHP funds since the program's initiation in 1990.

The AHP is a flexible source of grants and loans designed to help community-based lending institutions and their community partners develop affordable owner-occupied and rental housing for very low- to moderate-income families and individuals. Applicants are encouraged to leverage their awards with other funding sources, including conventional loans, government-supported financing, tax-credit equity, foundation grants, and bond financing.

The Federal Home Loan Banks' affordable housing funds are a significant driver of job growth, housing production, and expanded tax bases, according to a research study recently completed by The Hendrickson Company and The Shimberg Center for Housing Studies at the University of Florida. The study sought to quantify the ``ripple effect'' of AHP dollars in employment, broader development spending, and growth of municipal tax bases. By creating more jobs and building tax bases, as well as developing affordable housing, AHP funds are having a unique and very positive economic impact that goes far beyond the units AHP helps fund or the dollars AHP awards, researchers found.

Created by Congress in 1932, the Federal Home Loan Banks are 12 regional banks, cooperatively owned and used by financial institutions serving America's communities to finance housing and economic development. More than 8,000 lenders are members of the Federal Home Loan Bank System, representing approximately 80 percent of America's insured lending institutions. The Federal Home Loan Banks and their members have been the largest and most reliable source of funding for community lending for nearly eight decades.

As Congress turns to housing finance reform next year, I strongly encourage returning and new Members of Congress to consider the successes of the Federal Home Loan Bank System and seek to only build upon them in crafting a stronger, more stable housing finance system in the United States for generations to come.