Floor Statements

Mr. Speaker, I just heard a Member from the opposite side of the aisle come to the floor to talk about what we are talking about. I am only talking about tax-and-spend Republicans.

Can you believe the Republicans who have been singing the song of conservatism for years? They called us ``tax-and-spend liberals.'' And they talk about the deficit. They even run signs talking about how much it is costing the American public every minute. But guess what. They are creating a deficit of $1.5 trillion in this tax scam that they are passing.

Mr. Speaker, I rise to express my outrage over this harmful tax scam legislation passed by tax-and-spend Republicans. That is what I am saying: tax-and-spend Republicans.

Both the House and Senate bills explode the deficit by over $1 trillion and raise taxes on the middle class in order to spend on tax cuts for the wealthy. After 10 years, those making $75,000 or less would see a tax increase, while those making $1 million or more would see their taxes decrease.

Under the House bill, tens of millions of working families nationwide would experience a tax increase by 2027.

I hope that the tax-and-spend Republicans on the other side of the aisle will come to their senses before sending a final bill to the President's desk.

Tax-and-spend Republicans: over a $1 trillion deficit. Can you believe it?

Mr. Speaker, I yield myself 5 minutes.

H.R. 477 seeks to provide a statutory exemption from registration with the Securities and Exchange Commission, or SEC, for certain brokers who facilitate the merger or acquisition of small businesses, known as M&A brokers.

When Congress first considered this exemption in a similar bill during the 113th Congress, our goal was to prompt the SEC to provide regulatory relief for these brokers from ill-fitting restrictions designed for persons helping companies raise capital rather than facilitating their transfer of ownership.

We succeeded. Two weeks after the House passed that bill, the SEC issued a no-action letter, which contained staff's view that, if an M&A broker complied with the terms and conditions of the letter, it would recommend that the SEC not take enforcement action against that broker for failing to register with the Commission.

Specifically, the no-action letter required the M&A broker to abide by certain commonsense restrictions to prevent such an exemption from being misused to raise capital or abused by bad actors.

According to the bill's proponents, H.R. 477 is still necessary to provide legal certainty since the no-action letter is merely the nonbinding opinion of SEC staff. I understand that concern; however, the bill inexplicably omits several of the conditions contained in the no-action letter that protect small businesses and their investors.

I am pleased that this Congress, Representative Sherman and Representative Huizenga have worked on a bipartisan basis to add these protections back in through an amendment. If so amended, I will support H.R. 477, which would strike the right balance between regulatory relief and the protection of small companies and their investors.

In particular, the amended bill would require an M&A broker that represents both the seller and the buyer to provide them with clear, written disclosures and obtain their consent to that conflict of interest; prohibit M&A brokers from misusing the exemption to raise capital rather than transfer ownership of small businesses; prohibit shell companies from using the exemption as a backdoor way to take a small business public; and prohibit fraudsters and other bad actors from using the exemption.

In addition, the bill would not change the statutory definition of broker, thereby preserving the SEC's ability to investigate and bring enforcement actions for violations of the antifraud provisions in the securities laws.

The bill also would limit the relief to mergers and acquisitions involving companies with less than $250 million in annual gross revenues, which is the total income of the company, or $25 million in annual earnings, which is the amount of income minus expenses. The amendment would then provide the SEC with the authority to modify these thresholds as necessary or appropriate in the public interest or for the protection of investors.

As our Nation's baby boomers head into retirement and look to sell their privately owned businesses to a new generation of entrepreneurs, it is important that they are able to do so in an efficient and cost- effective manner. If amended, H.R. 477 would allow them to do just that, and so I would support the bill.

I would like to thank my colleagues. I would like to thank Mr. Hensarling. I would like to thank Mr. Sherman.

This is an important bill for all of us. We are all so supportive of our small businesses. We want them to do well, and we do not want them to be hindered by unnecessary regulations.

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

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

Mr. Speaker, I rise in opposition to H.R. 1699 which would undermine the Dodd-Frank Wall Street Reform and Consumer Protection Act and eliminate consumer protections for some of the country's most vulnerable borrowers.

Mr. Speaker, the title of this bill paints it as a measure that purports to preserve access to manufactured housing. So I want to be very clear about what this bill is and what it is not about, and who will win and who will be harmed if this bill is signed into law.

This isn't about regulatory burdens, reducing access to credit. The lending volume in the manufactured housing industry has gotten back to where it was before the Consumer Financial Protection Bureau put new regulations in place.

This isn't about credit unions and community banks not being able to enter the manufactured housing market. Many credit unions already underwrite mortgage loans and chattel loans for manufactured housing. But what H.R. 1699 is about is one-stop-shop megainstitutions like Clayton Homes, owned by billionaire Warren Buffett, which has almost half of the market share for manufactured housing lending.

His manufactured housing empire profits in every imaginable way in this sector from producing housing, to selling housing, to originating the loans that take advantage of vulnerable customers and leave them with virtually no way to refinance.

This bill makes it easier for financial titans like billionaire Warren Buffett to earn even more profits at the expense of some of the most vulnerable consumers in this country.

I show this ad because they would have you believe that Clayton Homes is separate from all of the other entities that they have under Clayton Homes. One would think that, simply, Clayton Homes is the seller of these mortgages. But they are under different names. They are under Vanderbilt. They are under HomeFirst. They are under Benjamin Moore, and they are under Oakwood Homes.

So sometimes people think perhaps, if they are not getting the kind of service that they want when they are looking for a mortgage, that they will go to some other place other than Clayton. But they end up literally going to other entities owned by Clayton Homes.

This is a Warren Buffett bill. This is a Clayton bill. And to tell you the truth, this institution is not in the business of originating legislation for one particular business. This is what this is all about. And I will show you how they do it.

They have different names on their operations, but the ads all look the same. ``We will beat the match. We will beat the match.'' Same ads for Tru Value and the other entities owned by them, but they all belong to Warren Buffett and Clayton.

This bill, again, would harm manufactured housing consumers who are typically more vulnerable than the average homeowner. They are low- income buyers, rural buyers, minority buyers. And reports from the Consumer Financial Protection Bureau, the Manufactured Housing Institute, and the Center for Public Integrity have all shown us that this measure would not create access to affordable housing; but it would, instead, allow an incredibly profitable industry to make even more money at the expense of low-income and rural homeowners, even if the industry itself asserts that it has been growing and highly profitable, even in the years after Dodd-Frank, and the Consumer Bureau's mortgage protections have been in place.

So just take a look at this. If you take a look back what was happening in 2003, where they had 18 percent share in the market, now they have 39 percent. This is all Clayton, 39 percent. And their portfolio includes about $12.5 billion in customers.

So I would like to just reiterate again that this is about Warren Buffett and this is about Clayton. Let me just share with you that Berkshire Hathaway chairman Warren Buffett has also been touting its post-Dodd-Frank Act profitability of manufactured housing.

Clayton Homes is Berkshire's highly profitable manufactured housing subsidy, and it earned a total of $744 million in 2016, a 33 percent increase over 2014. Yes, that is a 33 percent increase after the Dodd- Frank Act rules were in place. Unfortunately, this is the same Clayton Homes that was the subject of a multipart Seattle Times and Center for Public Integrity joint investigation.

Mr. Speaker, The Seattle Times did a scathing series on Clayton. I include in the Record these articles that were done by The Seattle Times. Everyone should avail themselves of this damaging information.

[From the Seattle Times]

The Mobile-Home Trap: How a Warren Buffett Empire Preys on the Poor

(By Mike Baker and Daniel Wagner)

First of a series

Ephrata, Grant County.--After years of living in a 1963

travel trailer, Kirk and Patricia Ackley found a permanent

house with enough space to host grandkids and care for her

aging father suffering from dementia.

So, as the pilot cars prepared to guide the factory-built

home up from Oregon in May 2006, the Ackleys were elated to

finalize paperwork waiting for them at their loan broker's

kitchen table.

But the closing documents he set before them held a

surprise: The promised 7 percent interest rate was now 12.5

percent, with monthly payments of $1,100, up from $700.

The terms were too extreme for the Ackleys. But they'd

already spent $11,000, at the dealer's urging, for a concrete

foundation to accommodate this specific home. They could look

for other financing but desperately needed a space to care

for her father.

Kirk's construction job and Patricia's Wal-Mart job

together weren't enough to afford the new monthly payment.

But, they said, the broker was willing to inflate their

income in order to qualify them for the loan.

``You just need to remember,'' they recalled him saying,

``you can refinance as soon as you can.''

To their regret, the Ackleys signed.

The disastrous deal ruined their finances and nearly their

marriage. But until informed recently by a reporter, they

didn't realize that the homebuilder (Golden West), the dealer

(Oakwood Homes) and the lender (21st Mortgage) were all part

of a single company: Clayton Homes, the nation's biggest

homebuilder, which is controlled by its second-richest man--

Warren Buffett.

Buffett's mobile-home empire promises low-income Americans

the dream of homeownership. But Clayton relies on predatory

sales practices, exorbitant fees, and interest rates that can

exceed 15 percent, trapping many buyers in loans they can't

afford and in homes that are almost impossible to sell or

refinance, an investigation by The Seattle Times and Center

for Public Integrity has found.

Berkshire Hathaway, the investment conglomerate Buffett

leads, bought Clayton in 2003 and spent billions building it

into the mobile-home industry's biggest manufacturer and

lender. Today, Clayton is a many-headed hydra with companies

operating under at least 18 names, constructing nearly half

of the industry's new homes and selling them through its own

retailers. It finances more mobile-home purchases than any

other lender by a factor of six. It also sells property

insurance on them and repossesses them when borrowers fail to

pay.

Berkshire extracts value at every stage of the process.

Clayton even builds the homes with materials--such as paint

and carpeting--supplied by other Berkshire subsidiaries.

Clayton always profits

More than a dozen Clayton customers described a consistent

array of deceptive practices that locked them into ruinous

deals: loan terms that changed abruptly after they paid

deposits or prepared land for their new homes; surprise fees

tacked on to loans; and pressure to take on excessive

payments based on false promises that they could later

refinance.

Former dealers said the company encouraged them to steer

buyers to finance with Clayton's own high-interest lenders.

Under federal guidelines, most Clayton mobile-home loans

are considered ``higher-priced.'' Those loans averaged 7

percentage points higher than the typical home loan in 2013,

according to a Times/CPI analysis of federal data, compared

to just 3.8 percentage points for other lenders.

Buyers told of Clayton collection agents urging them to cut

back on food and medical care or seek handouts in order to

make house payments. And when homes got hauled off to be

resold, some consumers already had paid so much in fees and

interest that the company still came out ahead. Even through

the Great Recession and housing crisis, Clayton was

profitable every year, generating $558 million in pre-tax

earnings in 2014.

The company's tactics contrast with Buffett's public

profile as a financial sage who values responsible lending

and helping poor Americans keep their homes.

Berkshire Hathaway spokeswoman Carrie Sova and Clayton

spokeswoman Audrey Saunders ignored more than a dozen

requests by phone, email and in person to discuss Clayton's

policies and treatment of consumers. In an emailed statement,

Saunders said Clayton helps customers find homes within their

budgets and has a ``purpose of opening doors to a better

life, one home at a time.''

(Update: After publication, Berkshire Hathaway's Omaha

headquarters sent a statement on behalf of Clayton Homes to

the Omaha World-Herald, which is also owned by Berkshire.)

First, a dream

As Buffett tells it, his purchase of Clayton Homes came

from an ``unlikely source'': Visiting students from the

University of Tennessee gave him a copy of founder Jim

Clayton's self-published memoir, ``First a Dream,'' in early

2003. Buffett enjoyed reading the book and admired Jim

Clayton's record, he has said, and soon called CEO Kevin

Clayton, offering to buy the company.

``A few phone calls later, we had a deal,'' Buffett said at

his 2003 shareholders meeting, according to notes taken at

the meeting by hedge-fund manager Whitney Tilson.

The tale of serendipitous dealmaking paints Buffett and the

Claytons as sharing down-to-earth values, antipathy for Wall

Street and an old-fashioned belief in treating people fairly.

But, in fact, the man who brought the students to Omaha said

Clayton's book wasn't the genesis of the deal.

``The Claytons really initiated this contact,'' said Al

Auxier, the Tennessee professor, since retired, who

chaperoned the student trip after fostering a relationship

with the billionaire.

CEO Kevin Clayton, the founder's son, reached out to

Buffett through Auxier, the professor said in a recent

interview, and asked whether Buffett might explore ``a

business relationship'' with Clayton Homes.

At the time, mobile-home loans had been defaulting at

alarming rates, and investors had grown wary of them. Kevin

Clayton was seeking a new source of cash to relend to

homebuyers. He knew that Berkshire Hathaway, with its perfect

bond rating, could provide it as cheaply as anyone. Later

that year, Berkshire Hathaway paid $1.7 billion in cash to

buy Clayton Homes.

Berkshire Hathaway quickly bought up failed competitors'

stores, factories and billions in troubled loans, building

Clayton Homes into the industry's dominant force. In 2013,

Clayton provided 39 percent of new mobile-home loans,

according to a Times/CPI analysis of federal data that 7,000

home lenders are required to submit. The next biggest lender

was Wells Fargo, with just 6 percent of the loans.

Clayton provided more than half of new mobile-home loans in

eight states. In Texas, the number exceeds 70 percent.

Clayton has more than 90 percent of the market in Odessa, one

of the most expensive places in the country to finance a

mobile home.

To maintain its down-to-earth image, Clayton has hired the

stars of the reality-TV show ``Duck Dynasty'' to appear in

ads.

The company's headquarters is a hulking structure of metal

sheeting surrounded by acres of parking lots and a beach

volleyball court for employees, located a few miles south of

Knoxville, Tenn. Next to the front door, there is a slot for

borrowers to deposit payments.

Near the headquarters, two Clayton sales lots sit three

miles from each other. Clayton Homes' banners promise ``$0

CASH DOWN.'' TruValue Homes, also owned by Clayton,

advertises ``REPOS FOR SALE.'' Other nearby Clayton lots

operate as Luv Homes and Oakwood Homes. With all the

different names, many customers believe that they're shopping

around.

House-sized banners at dealerships reinforce that

impression, proclaiming they will ``BEAT ANY DEAL.'' In some

parts of the country, buyers would have to drive many miles

past several Clayton-owned lots, to reach a true competitor.

Guided into costly loans

Soon after Buffett bought Clayton Homes, he declared a new

dawn for the moribund mobile-home industry, which provides

housing for some 20 million Americans. Lenders should require

``significant down payments and shorter-term loans,'' Buffett

wrote.

He called 30-year loans on mobile homes ``a mistake,''

according to notes Tilson took during Berkshire Hathaway's

2003 shareholders meeting.

``Home purchases should involve an honest-to-God down

payment of at least 10% and monthly payments that can be

comfortably handled by the borrower's income,'' Buffett later

wrote. ``That income should be carefully verified.''

But in examining more than 100 Clayton home sales through

interviews and reviews of loan documents from 41 states,

reporters found that the company's loans routinely violated

the lending standards laid out by Buffett.

Clayton dealers often sold homes with no cash down payment.

Numerous borrowers said they were persuaded to take on

outsized payments by dealers promising that they could later

refinance. And the average loan term actually increased from

21 years in 2007 to more than 23 years in 2009, the last time

Berkshire disclosed that detail.

Clayton's loan to Dorothy Mansfield, a disabled Army

veteran who lost her previous North Carolina home to a

tornado in 2011, includes key features that Buffett

condemned.

Mansfield had a lousy credit score of 474, court records

show. Although she had seasonal and part-time jobs, her

monthly income often consisted of less than $700 in

disability benefits. She had no money for a down payment when

she visited Clayton Homes in Fayetteville, N.C.

Vanderbilt, one of Clayton's lenders, approved her for a

$60,000, 20-year loan to buy a Clayton home at 10.13 percent

annual interest. She secured the loan with two parcels of

land that her family already owned free and clear.

The dealer didn't request any documents to verify

Mansfield's income or employment, records show.

Mansfield's monthly payment of $673 consumed almost all of

her guaranteed income. Within 18 months, she was behind on

payments and Clayton was trying to foreclose on the home and

land.

Many borrowers interviewed for this investigation described

being steered by Clayton dealers into Clayton financing

without realizing the companies were one and the same.

Sometimes, buyers said, the dealer described the financing as

the best deal available. Other times, the Clayton dealer said

it was the only financing option.

Kevin Carroll, former owner of a Clayton-affiliated

dealership in Indiana, said in an interview that he used

business loans from a Clayton lender to finance inventory for

his lot. If he also guided homebuyers to work

with the same lender, 21st Mortgage, the company would give

him a discount on his business loans--a ``kickback,'' in his

words.

Doug Farley, who was a general manager at several Clayton-

owned dealerships, also used the term ``kickback'' to

describe the profit-share he received on Clayton loans until

around 2008. After that, the company changed its incentives

to instead provide ``kickbacks'' on sales of Clayton's

insurance to borrowers, he said.

Ed Atherton, a former lot manager in Arkansas, said his

regional supervisor was pressuring lot managers to put at

least 80 percent of buyers into Clayton financing. Atherton

left the company in 2013.

During the most recent four-year period, 93 percent of

Clayton's mobile-home loans had such costly terms that they

required extra disclosure under federal rules. Among all

other mobile-home lenders, fewer than half of their loans met

that threshold.

Customers said in interviews that dealers misled them to

take on unaffordable loans, with tactics including last-

minute changes to loan terms and unexplained fees that

inflate loan balances. Such loans are, by definition,

predatory.

``They're going to assume the client is unsophisticated,

and they're right,'' said Felix Harris, a housing counselor

with the nonprofit Knoxville Area Urban League.

Some borrowers felt trapped because they put up a deposit

before the dealer explained the loan terms or, like the

Ackleys, felt compelled to swallow bait-and-switch deals

because they had spent thousands to prepare their land.

Promise denied

A couple of years after moving into their new mobile home,

Kirk Ackley was injured in a backhoe rollover. Unable to

work, he and his wife urgently needed to refinance the costly

21st Mortgage loan they regretted signing.

They pleaded with the lender several times for the better

terms that they originally were promised, but were denied,

they said. The Ackleys tried to explain the options to a 21st

supervisor: If they refinanced to lower payments, they could

stay in the home and 21st would get years of steady returns.

Otherwise, the company would have to come out to their rural

property, pull the house from its foundation and haul it

away, possibly damaging it during the repossession.

They both recall being baffled by his reply: ``We don't

care. We'll come take a chainsaw to it--cut it up and haul it

out in boxes.''

Nine Clayton consumers interviewed for this story said they

were promised a chance to refinance. In reality, Clayton

almost never refinances loans and accounts for well under 1

percent of mobile-home refinancings reported in government

data from 2010 to 2013. It made more than one-third of the

purchase loans during that period.

Of Washington's 25 largest mobile-home lenders, Clayton's

subsidiaries ranked No. 1 and No. 2 for the highest interest

rates in 2013. Together, they ranked eighth in loans

originated.

``If you have a decrease in income and can't afford the

mortgage, at least a lot of the big companies will do

modifications,'' said Harris, the Knoxville housing

counselor. ``Vanderbilt won't even entertain that.''

In general, owners have difficulty refinancing or selling

their mobile homes because few lenders offer such loans. One

big reason: Homes are overpriced or depreciate so quickly

that they generally are worth less than what the borrower

owes, even after years of monthly payments.

Ellie Carosa, of Napavine, Lewis County, found this out the

hard way in 2010 after she put down some $40,000 from an

inheritance to buy a used home from Clayton priced at about

$65,000.

Clayton sales reps steered Carosa, who is 67 years old and

disabled, to finance the unpaid amount through Vanderbilt at

9 percent interest over 20 years.

One year later, Carosa was already having problems--peeling

paint and failing carpets--so she decided to have a market

expert assess the value of her home. She hoped to eventually

sell the house so the money could help her granddaughter,

whom she adopted as her daughter at age 8, attend a local

college to study music.

Carosa was stunned to learn that the home was worth only

$35,000, far less than her original down payment.

"I've lost everything," Carosa said.

`Rudest, most condescending' agents

Berkshire's borrowers who fall behind on their payments

face harassing, potentially illegal phone calls from a

company rarely willing to offer relief.

Carol Carroll, a nurse living near Bug Tussle, Ala., began

looking for a new home in 2003 after her husband had died,

leaving her with a 6-year-old daughter. Instead of a down

payment, she said, the salesman assured her she could simply

put up two acres of her family land as collateral.

In December 2005, Carroll was permanently disabled in a

catastrophic car accident in which two people were killed.

Knowing it would take a few months for her disability

benefits to be approved, Carroll said, she called Vanderbilt

and asked for a temporary reprieve. The company's answer: "We

don't do that."

However, Clayton ratcheted up her property-insurance

premiums, eventually costing her $803 more per year than when

she started, she said. Carroll was one of several Clayton

borrowers who felt trapped in the company's insurance, often

because they were told they had no other options. Some had as

many as five years' worth of expensive premiums included

in their loans, inflating the total balance to be repaid

with interest. Others said they were misled into signing

up even though they already had other insurance.

Carroll has since sold belongings, borrowed money from

relatives and cut back on groceries to make payments. When

she was late, she spoke frequently to Clayton's phone agents,

whom she described as ``the rudest, most condescending people

I have ever dealt with.'' It's a characterization echoed by

almost every borrower interviewed for this story.

Consumers say the company's response to pleas for help is

an invasive interrogation about their family budgets,

including how much they spend on food, toiletries and

utilities.

Denise Pitts, of Knoxville, Tenn., said Vanderbilt

collectors have called her multiple times a day, with one

suggesting that she cancel her Internet service, even though

she home-schools her son. They have called her relatives and

neighbors, a tactic other borrowers reported.

After Pitts' husband, Kirk, was diagnosed with aggressive

cancer, she said, a Vanderbilt agent told her she should make

the house payment her ``first priority'' and let medical

bills go unpaid. She said the company has threatened to seize

her property immediately, even though the legal process to do

so would take at least several months.

Practices like contacting neighbors, calling repeatedly and

making false threats can violate consumer-protection laws in

Washington, Tennessee and other states.

Last year, frequent complaints about Clayton's aggressive

collection practices led Tennessee state officials to contact

local housing counselors seeking information about their

experiences with the company, according to two people with

knowledge of the conversations.

treated like car owners

Mobile-home buyers who own their land sites may be able to

finance their home purchases with real-estate mortgages,

which give them more federal and state consumer protections

than the other major financing option, a personal-property

loan. With conventional home mortgages, companies must wait

120 days before starting foreclosure. In some states, the

foreclosure process can take more than a year, giving

consumers a chance to save their homes.

Despite these protections, two-thirds of mobile-home buyers

who own their land end up in personal-property loans,

according to a federal study. These loans may close more

quickly and have fewer upfront costs, but their rates are

generally much higher. And if borrowers fall behind on

payments, their homes can be seized with little or no

warning.

Those buyers are more vulnerable because they end up being

treated like car owners instead of homeowners, said Bruce

Neas, an attorney who has worked for years on foreclosure and

manufactured-housing issues in Washington state.

Tiffany Galler was a single mother living in Crestview,

Fla., in 2005 when she bought a mobile home for $37,195 with

a loan from 21st Mortgage. She later rented out the home.

After making payments over eight years totaling more than

the sticker price of the home, Galler lost her tenant in

November 2013 and fell behind on her payments. She arranged

to show the home to a prospective renter two months later.

But when she arrived at her homesite, Galler found barren

dirt with PVC pipe sticking up from the ground.

She called 911, thinking someone had stolen her home.

Hours later, Galler tracked her repossessed house to a

sales lot 30 miles away that was affiliated with 21st. It was

listed for $25,900.

Clayton wins concessions

The government has known for years about concerns that

mobile-home buyers are treated unfairly. Little has been

done.

Fifteen years ago, Congress directed the Department of

Housing and Urban Development to examine issues such as loan

terms and regulations in order to find ways to make mobile

homes affordable. That's still on HUD's to-do list.

The industry, however, has protected its interests

vigorously. Clayton Homes is represented in Washington, D.C.,

by the Manufactured Housing Institute (MHI), a trade group

that has a Clayton executive as its vice chairman and another

as its secretary. CEO Kevin Clayton has represented MHI

before Congress.

MHI spent $4.5 million since 2003 lobbying the federal

government. Those efforts have helped the company escape much

scrutiny, as has Buffett's persona as a man of the people,

analysts say.

``There is a Teflon aspect to Warren Buffett,'' said James

McRitchie, who runs a widely read blog, Corporate Governance.

Still, after the housing crisis, lawmakers tightened

protections for mortgage borrowers with a sweeping overhaul

known as the Dodd-Frank Act, creating regulatory headaches

for the mobile-home industry. Kevin Clayton complained to

lawmakers in 2011 that the new rules would lump in some of

his company's loans with ``subprime, predatory'' mortgages,

making it harder for mobile-home buyers ``to obtain

affordable financing.''

Although the rules had yet to take effect that year, 99

percent of Clayton's mobile-

home loans were so expensive that they met the federal

government's ``higher-priced'' threshold.

Dodd-Frank also tasked federal financial regulators with

creating appraisal requirements for risky loans. Appraisals

are common for conventional home sales, protecting both the

lender and the consumer from a bad deal.

Clayton's own data suggest that its mobile homes may be

overpriced from the start, according to comments it filed

with federal regulators. When Vanderbilt was required to

obtain appraisals before finalizing a loan, company officials

wrote, the home was determined to be worth less than the

sales price about 3o percent of the time.

But when federal agencies jointly proposed appraisal rules

in September 2012, industry objections led them to exempt

loans secured solely by a manufactured home.

Then Clayton pushed for more concessions, arguing that

manufactured-home loans tied to land should also be exempt.

Paul Nichols, then-president of Clayton's Vanderbilt

Mortgage, told regulators that the appraisal requirement

would be costly and onerous, significantly reducing ``the

availability of affordable housing in the United States.''

In 2013, regulators conceded. They will not require a

complete appraisal for new manufactured homes.

Mr. Speaker, the investigation found that Clayton locked one disabled veteran in Tennessee, Ms. Dorothy Mansfield, into an expensive loan even though the required monthly payment would leave her with only $27 a month to cover the rest of her living costs.

Worst, it was a no-documentation loan, meaning that no one even bothered to verify Dorothy's income. The investigation also found that Clayton Homes' in-house lender, Vanderbilt Mortgage, charged minority borrowers substantially higher rates, on average, than their White counterparts.

Unfortunately, this appears not to have been an isolated incident as Federal data reveals that Vanderbilt Mortgage typically has charged African-American borrowers who make more than $75,000 a year more than White people who make only $35,000 a year.

Other Clayton Homes borrowers were quoted inexpensive loan terms only to see interest and fees rocket once they had put down a nonrefundable deposit or paid out large amounts of money to prepare their land for installation of the manufactured home.

Just like subprime mortgage loan borrowers who were preyed on before the financial crisis, many consumers who purchased manufactured housing were convinced to take out high-cost loans based on false promises that they would be able to refinance to lower rates in the future.

Former Clayton Homes salespeople have confirmed that they have pressured customers to use Clayton-affiliated financing even if it wasn't the best deal, and some even received kickbacks for putting customers into more expensive loans.

Under this bill, some of our most important consumer protection laws that prevent this kind of steering, like the Truth in Lending Act, the Secure and Fair Enforcement for Mortgage Licensing Act, and the Home Ownership and Equity Protection Act, would no longer apply to manufactured housing retailers and salespeople that offer credit to borrowers, even if those salespeople do the same things traditional loan originators do, like referring customers to a creditor or assisting them in applying for credit.

So, if enacted, H.R. 1699 would allow abusive lenders to charge over 14 percent interest before consumer protections are triggered--more than four times what the average borrower is paying on a home loan.

In the coming years, this number could very well grow to 16, 17, and likely 18 percent as interest rates rise back to normal. Even worse, the bill also makes it legal for Clayton Homes sales personnel to steer borrowers toward high-cost loans, loans from other parts of the Clayton conglomerate that are not in their best interests, a practice that Congress banned for all loan originators after the financial crisis.

Mr. Speaker, when it comes to manufactured housing, consumers are already exposed to significant risks, high interest rates, the inability to refinance and, in many cases, depreciation that starts as soon as the manufactured home is sold. Nevertheless, the House is considering a bill that rolls back key protections for these already financially vulnerable consumers.

It would do away with a number of protections current law attaches to many high-cost loans, such as stiffer penalties for bad-acting lenders, additional disclosures for investors and consumers who purchase high- cost mortgages, mandatory counseling so that borrowers know what they are getting into, and even the ability for borrowers to have their loan rescinded if lenders don't follow the law. It would do away with all of this.

As the Consumer Bureau noted in its study of the manufactured housing industry, individuals who apply for manufactured housing loans ``include customers that may be considered more financially vulnerable and thus may particularly stand to benefit from strong consumer protections.''

Now, in addition to the Consumer Bureau's report, investigative reporting has provided names and stories of individuals who have fallen victim to the market practices and policies described by the Consumer Bureau.

Finally, when a nearly identical measure was considered by the House last term as H.R. 650, the Obama administration issued a veto threat and said they ``strongly oppose'' the bill because it would ``put low- income and economically vulnerable consumers at significant risk of being subjected to predatory lending and being steered into more expensive loans even when they qualify for lower cost alternatives.''

This bill rolls back consumer protections amidst evidence that the manufactured housing industry needs more oversight and is, at its heart, a dangerous giveaway to a sector that already profits handsomely at the expense of vulnerable borrowers.

Mr. Speaker, I urge my colleagues to oppose this rip-off bill, and I reserve the balance of my time.

Mr. Speaker, what you just heard was a description of what some who represent some of these rural communities are doing for them or not doing for them. They say: Vulnerable consumer, you can have a loan at 18 percent. We know you can't afford it, and we will just come and repossess your manufactured housing when you can't pay.

For the chairman, I will take all the time that he would yield to me to continue this discussion and let people know exactly what is going on.

Mr. Speaker, I yield 5 minutes to the gentleman from Minnesota (Mr. Ellison), who is a true Congressional Progressive Caucus champion and a senior member of the Financial Services Committee.

Mr. Speaker, I yield the gentleman from Minnesota an additional 30 seconds.

Mr. Speaker, I yield 2 minutes to the gentlewoman from Ohio (Mrs. Beatty), a member of the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. David Scott), a senior member of the Financial Services Committee.

Mr. Speaker, I yield the gentleman an additional 30 seconds.

Mr. Speaker, I yield 2 minutes to the gentlewoman from Illinois (Ms. Schakowsky), a member of the Progressive Caucus who is always on the side of consumers.

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

First, let me just say that I recognize some of the issues in the way that have been described by the gentleman from New Mexico (Mr. Pearce), and I think that he is on the right track in how we can deal with giving assistance to those who want to own manufactured housing and assistance to those who want to own more than one manufactured house and are looking toward their retirement, and I support that. He has given a new definition to me for balloon payments and how it works in this industry, and I want to work with him to get something done.

What I want to do is separate out the fact that these owners of manufactured housing need some protections in law. We don't want to strip out all these protections for them. They deserve to be treated fairly. If they are going to be charged high interest rates, they deserve to have the protections that everybody else has. I mean, it is not fair that some of us can buy homes at market rate, at 4.25 percent or whatever, and they have to pay 18 percent because they are considered a high risk, and they can't even refinance these homes.

I want to show you some of the advertising from Clayton where they talk about ``Repos Available.'' They have got plenty of them because they repossess these homes. And I just want to say that, in addition to this monopoly of Clayton's, the way that they treat people when they fall behind in their payments, they don't want to do loan modifications--they don't do them, really.

As a matter of fact, they hire these people off the street, basically, who come and harass these homeowners and treat them extremely bad, and they talk to them about the fact that they want this mortgage, they want this money paid, and they will tell them--we have got documentation where they tell them: Don't pay your medical bills. You pay, or we are going to come and repossess this.

I want to tell you, I have the greatest respect for the least of these. Whether you are in the urban area, whether you are in the rural area, you deserve the respect and support from your government. And I want you to know, for those who represent these areas, let's stop being on the side of the people who exploit them, and let's get on the side of the consumers.

In this last election, we heard a lot about the fact that people in small towns and rural areas were upset with their government and felt nobody cared about them. I want them to ask the people who represent them: Whose side are they on?

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

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

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

Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr. Crowley), the chair of the Democratic Caucus.

Mr. Speaker, will Mr. Hensarling yield that time he promised to yield me so I may yield it to Mr. Crowley?

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

Mr. Speaker, you have heard the debate on this bill, and I think everyone can easily recognize that we, on this side of the aisle, are trying to protect our most vulnerable consumers. People who live in manufactured housing and mobile homes in trailer parks need to be respected and given the same protections as anybody else with a mortgage.

I would say to those who are here supporting a bill that would allow interest rates on these mobile homes and on this manufactured housing to increase with no protections are putting their constituents at risk.

Mr. Speaker, I ask for a big ``no'' vote on this bill, and I yield back the balance of my time.

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

In its current form, I am.

Mr. Speaker, my amendment is simple. It would prevent bad actors from being able to use the exemptions in the underlying bill and evade the consumer protections in the Truth in Lending Act.

If a lender has committed or engaged in an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a

consumer for a consumer financial product or service; or if they have been convicted of fraud under Federal or State law in connection with a residential mortgage loan or the extension of any loan in connection with a manufactured or modular home, they cannot avail themselves of the bill's decreased scrutiny.

As I have already mentioned, Clayton Homes has nearly a monopolistic grip on manufactured housing lending. In 2010, Vanderbilt Mortgage-- Clayton's lending arm--paid a $2.8 million settlement to home buyers in North Carolina, after the State attorney general and commissioner of banks accused them of fraud for utilizing inaccurate information to obtain loans for consumers and for inflating the prices of manufactured homes.

This is the type of abuse that my amendment seeks to address. Making sure that lenders who have engaged in abusive practices abide by the rules set forth in Dodd-Frank and carried out by the Consumer Bureau is especially important now that the Trump administration is attempting to undermine the independence of the agency.

After the illegal move to install Mick Mulvaney as acting Director and then his quick move to freeze all the hiring, the supervision, and new regulations at the Consumer Bureau, it is clear that abusive financial institutions that simply rip off consumers will have free rein to continue harming them. That includes not only conglomerates like Clayton Homes, but repeat offenders, such as Wells Fargo, an institution that has illegally modified mortgages, charged fraudulent mortgage rates, and steered borrowers into predatory mortgage loans.

American families deserve better.

At an absolute minimum, a lender who has already proven that they cannot be trusted to originate responsible loans should not be awarded with diminished standards, particularly in an industry like manufactured housing, which is typically the only affordable option for many financially vulnerable consumers.

Mr. Speaker, time and time again, my colleagues on the opposite side of the aisle talk about how they are for Main Street America and for the rural communities that Democrats have forgotten. So why is it that they want to allow bad actors to prey upon rural families?

According to the Housing Assistance Council, while manufactured housing only makes up 6 percent of all housing nationally, it makes up 14 to 15 percent in rural and small town communities. We need to be doing more to help rural families, not making it easier for bad actors to just rip them off.

Mr. Speaker, I urge adoption of my amendment, and I yield back the balance of my time.

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

Mr. Speaker, I demand a recorded vote.

Mr. Speaker, I rise in opposition to the tax bill being debated in the Senate.

Under this bill, by 2027, those making $1 million and over will see the biggest tax cuts. All the while, by 2021, families earning just $10,000 to $30,000 would start seeing their taxes increase. By 2027, taxes would increase for all Americans earning $75,000 a year or less. The Senate bill repeals a vital part of ObamaCare and would lead to increased premiums and 13 million people becoming uninsured.

This bill is disastrous for America, California, and my district. In 2027, California residents will suffer from an over-$12 billion tax increase.

Mr. Speaker, I urge my Senate colleagues to oppose the GOP tax bill.

Madam Speaker, I rise today in opposition to H.R. 1, which is just a continuation of Republicans' relentless attack on working families. This is not a tax plan; it is a tax scam.

This President won't disclose how he is going to benefit from this tax scam. He has disrespected us all. This tax scam will eliminate the student loan interest deduction. It will eliminate State and local tax deductions on income. It will restrict the mortgage interest deduction.

It is estimated that 47 million taxpayers face a tax hike. Almost half of any tax cuts will go to the richest 1 percent. Residents of my State of California will face the largest net tax increase totaling $12.1 billion in 2027 alone.

Madam Speaker, I call on the President of the United States of America to show his tax income and to show his tax plan. He needs to let us know what he is all about and what his taxes are. From the very beginning, he said he couldn't show them at the time that he was asked when he was first inaugurated into this Presidency, but time has passed. It is time for the President to show us his tax returns, rather than coming up with a tax scam asking everybody else to pay up, to pay more, and saying that this is a middle class tax cut when it is not.

We want to know more about him and his plan. So with my 1 minute, my 2 minutes, whatever it is, this evening is all about saying a message to the President.

Even though I will be cautioned that I am not to talk to the President, I am calling on the President: Show your tax returns.

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

Mr. Speaker, I rise today in opposition to H.R. 2874, legislation that will make flood insurance more expensive, less available, and less fair for consumers.

At the outset, let me just say that I appreciate the time and effort that Chairman Hensarling and Mr. Duffy spent in responding to my calls for bipartisanship. We sat down multiple times to discuss areas where we could find compromise and a path forward.

Although our discussions were ultimately not successful and I strongly oppose this bill, I continue to believe that flood insurance really can be a bipartisan issue. In fact, I have a long history of working across the aisle on the National Flood Insurance Program.

In 2012, I coauthored the Biggert-Waters Act with former Representative Judy Biggert, and in 2014, when FEMA's botched implementation of the premium increases called for in that law led to unintended consequences, lawmakers from across the aisle joined me once again to pass the Homeowner Flood Insurance Affordability Act.

Unfortunately, despite the best efforts of Members from both sides of the aisle, I cannot support H.R. 2874 because it contains many provisions that will harm American families and businesses.

First and most importantly, the bill makes flood insurance more expensive. This bill will punish low and middle class Americans with increased premiums, surcharges, and reserve fund assessments. In the wake of a historic hurricane season that devastated so many communities, it is unconscionable that we are considering a bill that would make flood insurance less affordable. We should be focussing on providing additional disaster relief and recovery after these devastating storms, not punishing these communities with higher premiums and surcharges.

It is clear that there are those who choose to live near the coast as a luxury, but there are also those who live in floodplains who are low- and middle-income families with modest homes, including some neighborhoods that are predominantly minority. This is because of the sad history of government-endorsed racism in access to credit and in neighborhood planning that pushed minorities into the bad parts of town, which, in some cases, were bad because they were prone to flooding.

These communities also often lack the resources to make upgrades to their homes and infrastructure to guard against future flood risk and are the least able to recover after a flood. The Lower Ninth Ward in New Orleans is a prime example.

Another example is Greenspoint, a business district in Houston that was one of the hardest hit by Harvey. One in three residents in Greenspoint lives below the poverty line. Families in Greenspoint were still living in water-damaged and moldy units from flooding last year when they were hit again by Harvey.

There is no simple answer to our Nation's flooding problems, but I do know that raising the premiums and racking these up on policyholders will only hurt families as well as our economy.

Second, the bill makes flood insurance less available by allowing businesses to opt out of the requirement to purchase flood insurance, even if they are a high-risk property in a flood zone.

What is more, the bill kicks out certain low-value homes from the NFIP by prohibiting coverage for any home with claims that, over the entire history of the property, following enactment, even if it changes hands, exceed three times the replacement value of the structure.

This provision is so ill-conceived that the American Bankers Association wrote: ``Cutting off such properties from NFIP coverage will likely lead to significant hardship for homeowners, lenders, and communities. As borrowers lose NFIP coverage, and especially if alternative private coverage is not available or affordable, these properties will lose value, and the risk of abandonment and/or foreclosure increases dramatically. In some flood-prone communities, this could lead to a local or regional foreclosure crisis.''

Third, the bill makes flood insurance less fair for policyholders. In the wake of this historic hurricane season, it is astounding to me that the bill does nothing to fund flood maps so that we can better protect families. Oftentimes, communities are unaware of their true flood risk; and by not providing any funding for flood maps, building in areas with no information about flood risk will only continue.

Climate change will only make these storms more frequent, stronger, and more devastating than ever before, and we must make sure that the NFIP remains available and affordable to all Americans, not make it worse.

For all of these reasons, I urge my colleagues to oppose H.R. 2874, and I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. Cleaver), the ranking member of the Housing and Insurance Subcommittee on the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentlewoman from New York (Mrs. Carolyn B. Maloney), the ranking member of the Subcommittee on Capital Markets of the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentlewoman from New York (Ms. Velazquez), the ranking member of the Small Business Committee and a senior member of the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. David Scott), a senior member of the Financial Services Committee.

Mr. Speaker, I yield an additional 30 seconds to the gentleman.

Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Al Green), the ranking member of the Oversight and Investigations Subcommittee on the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Crist), a leading voice on flood insurance and climate issues and a member of the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentleman from Louisiana (Mr. Richmond), the chair of the Congressional Black Caucus and a long time leader on flood insurance issues.

Mr. Speaker, I yield 3 minutes to the gentleman from New Jersey (Mr. LoBiondo), a senior member of the Transportation and Infrastructure Committee, and someone who has been working hard to try and have a bipartisan effort on this bill.

Mr. Speaker, I yield 1 minute to the

gentleman from New York (Mr. King), a senior member of the Financial Services Committee who has worked a long time for bipartisanship on reauthorization of the National Flood Insurance Program.

Mr. Speaker, I yield 2 minutes to the gentleman from Massachusetts (Mr. Capuano), a senior member of the Committee on Financial Services and a strong progressive leader.

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

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

Mr. Speaker, let me say to my colleagues on the opposite side of the aisle, my chairmen, Mr. Hensarling and Mr. Duffy, we did work very hard to try and get a bipartisan bill.

As I negotiated with them, every time I reached an impasse, I thought about Sandy and how hard Democrats had to work to provide support for an area that should have gotten the support of everyone in the Congress of the United States. However, there was a demand from the opposite side of the aisle that it had to be paid for. We worked very hard to give them assistance, and they still have not been made whole.

Every time I reached an impasse, I thought about Louisiana and the work that I had done after Katrina and the visits that I have made there, the people that I got to know, and what I really have learned to understand about affordability.

Every time I reached an impasse, I thought about Florida, I thought about Texas and what has happened recently with these storms.

Having worked in this way and having been a coauthor of Biggert- Waters and having been the author of the Homeowner Flood Insurance Affordability Act, I think I know something about storms, something about the devastation that has been caused to families and communities, and I insist on affordability.

Mr. Speaker, as Democrats and some Republicans have made clear, this is a comprehensively bad bill that is harmful for families and businesses. In the wake of one of the most disastrous hurricane seasons in history, this bill would make flood insurance more expensive, less available, and less fair for millions of Americans.

I have repeatedly stated that affordability is my top priority, which is made worse by this bill. Even with the slight revisions that the chairman has made, coverage would still be less available, and cherry- picking by the private sector would be encouraged, putting the government on the hook for the riskiest of policies.

It is important to note that the biggest challenge to the National Flood Insurance Program is its massive debt, which the bill only addresses by charging hardworking Americans more for their flood insurance. That is just not fair.

We have comprehensive support for this bill from both the private sector and from our nonprofits. I don't know about any consumer organizations that support this bill, but I do know this. I know that I worked very hard to talk about mitigation and how I thought it could be a program that the locals could be involved in with the Federal Government. I know I worked very hard talking about the repetitive occurrences that the chairman was concerned about, but I also offered alternatives to what he is advocating.

I talked about outreach and education to them, about a buyout program that they may join with and accept voluntarily. I know that I tried everything that I could. I listened to Members from both sides of the aisle, and I know that we both wanted to have a comprehensive bill that was bipartisan.

Mr. Speaker, it is unfortunate that we end up with this bad bill. I ask for a ``no'' vote on this bill, and I yield back the balance of my time.

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

Mr. Speaker, H.R. 2201 would create an unnecessary and potentially dangerous loophole in Federal and State securities laws by allowing companies to sell unregistered securities without important safeguards that normally apply to such transactions. Specifically, the bill would allow a company to raise up to $500,000 from 35 or fewer investors, subject only to the requirement that each of these investors has a substantive preexisting relationship with the company.

Currently, before a company can offer or sell its securities, it must either register the offering with the Securities and Exchange Commission--that is the SEC--or qualify for at least one of several existing exemptions from registration. These exemptions provide reduced regulatory requirements for businesses conducting the offerings, but are limited to investors who have the financial sophistication to understand the risks, or enough assets to bear losses without the full protections of the securities laws.

Additionally, unlike H.R. 2201, these existing exemptions include several critical investor protections, such as notice to regulators, limitations on advertising, and restrictions on resale. For example, securities offered pursuant to rule 506 of regulation D are restricted, meaning they cannot be resold for at least a year without registering them; that is, re-registering them.

Additionally, the re-registration exemptions available under the crowdfunding rules and regulation A impose limitations on the amounts an individual can invest in a year, thereby placing a cap on potential losses.

H.R. 2201's lack of basic safeguards would leave investors vulnerable to an array of investment scams. For example, a purchaser of securities offered pursuant to H.R. 2201 would be able to immediately resell the securities in secondary transactions. In the past, the failure to restrict the resale of unregistered securities has exposed secondary investors to ``pump and dump'' schemes, a form of fraud that involves hyping up cheap junk stock in order to resell it at a higher price to unwitting investors.

Additionally, investor and consumer advocates, like Americans for Financial Reform, Center for American Progress, and Public Citizen, oppose H.R. 2201 because it would enable a particularly deceptive scam known as ``affinity fraud.'' Bad actors perpetrating affinity fraud could use H.R. 2201 to prey upon religious communities, ethnic groups, and the elderly.

Just a few years ago, the SEC shut down a scheme targeting the Hispanic community in southern California. The perpetrators raised more than $800,000 by representing to close friends and family members that their investment would be used to develop a financial services firm serving the Hispanic community.

The SEC found that, instead of developing the purported business, the scammers ``used a large part of the investors' money to engage unsuccessfully in high risk `day-trading' of stocks; pay personal living, travel, and entertainment expenses; or make other unexplained expenditures with no connection to the purported startup business activities.''

H.R. 2201 would provide a roadmap for bad actors to similarly rip off investors. The bill's $500,000 cap on offerings does not eliminate the need for robust safeguards against fraud and abuse. In fact, these protections are even more important for offerings of this size, given the proliferation of investment schemes in the smaller offering space.

The SEC has found that ``fraud in the micro cap stock markets is of increasing concern to regulators, as such markets have proven to be fertile grounds for fraud and abuse.''

While $500,000 may not seem like a lot on Wall Street, for Main Street Americans, losing even a fraction of that amount would destroy the hope of one day retiring with dignity. Existing exemptions such as those available under the SEC's regulation D, regulation A, and crowdfunding rules provide ample opportunities for companies to raise capital while also protecting investors.

H.R. 2201 would only expose hardworking Americans to a new and wholly unnecessary risk. For these reasons, I urge my colleagues to vote ``no'' on H.R. 2201, and I reserve the balance of my time.

General Leave

Mr. Speaker, I yield such time as he may consume to the gentleman from Rhode Island (Mr. Cicilline).

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

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

Mr. Speaker, we have laid out this morning exactly how vulnerable groups and individuals can be taken advantage of with legislation like this. I don't know exactly where this legislation originated, but I can almost guarantee you that we are creating opportunities for individuals who don't have the best interest of our constituents at heart to literally get small groups together, 35, I guess, or less, and sell them on ideas where they are raising funds that probably will not result in profits as expected by those who are investing in these schemes.

No, there are no protections. There is no notice. The SEC will not know when and where these schemes are arising. So I would say to my colleagues on the opposite side of the aisle: When are we going to act as if we have the best interests of our constituents at heart? When are we going to be about protecting consumers rather than opening up opportunities for them to be the victims of fraud?

We have fraudulent schemes that are directed at the most vulnerable people. I know where those people who are organizing these schemes will go. They will go to our churches where well-meaning ministers and parishioners will be taken advantage of.

In these vulnerable communities that are always taken advantage of, we have people who are the victims of payday loans where they are paying 400 percent for moneys that they are borrowing when they are desperate in between paychecks. We have rent-to-own schemes. We have all kinds of schemes where these convenience stores, in places where we have food deserts, are charging extremely high prices for food that is basically being sold for regular, ordinary, good prices in other communities.

In some communities, even in California, the gas taxes are rising. We have the rental market that is going off the scale all over this country with people not being able to afford a decent lease or a decent rental space, and so here we are just opening up another opportunity for folks to be ripped off.

It is going to happen; I can guarantee you that. When you have something like this that is passed by the Congress of the United States, it is going to be taken advantage of, and the way that this is constructed, it almost begs to be taken advantage of.

So do you know what happens when this kind of thing takes place and Members of Congress put their reputations on passing this kind of legislation? When the rip-offs start and people are harmed a few years later, then they are going to come back with legislation talking about how they are correcting the fraud and the rip-offs that we caused in the first place.

When is this going to stop? We have a Consumer Financial Protection Bureau that is struggling every day to protect our consumers. Prior to Dodd-Frank, we had our oversight agencies with the responsibility of protecting consumers, but they didn't have any real protection. So Dodd-Frank reforms helped to create opportunities for Members of Congress to be able to protect their consumers and not to be involved in these kinds of schemes.

But the opposite side of the aisle has spent an inordinate amount of time trying to kill off the Consumer Financial Protection Bureau, and they have done it in so many ways. Not only do they come up with amendments time and time again to try and shut down the Consumer Financial Protection Bureau, they treat the Director of the Consumer Financial Protection Bureau so badly that they almost deny him the opportunity to come before our committee and to be heard.

So I don't know whose side legislators are on who create this kind of crap. I don't understand why it is deemed to be important to open up the opportunity for schemes and to not give the SEC the ability to know when they are getting started, to have the

kind of disclosures, and to have the kind of oversight that would protect the most vulnerable people in our society.

Mr. Speaker, yes, this legislation will probably pass today. The Republicans have the majority votes in this Congress, and I suppose they are going to get all of their people to vote for this bill that is going to rip off some of their constituents, and, again, we won't be able to stop it because, again, they have the majority votes.

But I want the people of this country to know and understand what is happening, who is doing it to them, and why they are having a difficult time. At a time when the rental market is going off the scale and they can't afford to pay the first and the last month's rent to get into a place, I want them to know who is creating the difficulties in their lives when their jobs have not increased their pay, they are still trying to have a decent quality of life for their families, despite the fact that the pay does not match the job that they are doing, and they haven't had the pay increases.

When are we going to show that we stand up for the least of these? When your churches get ripped off--and we are working on some of those schemes now where, even with the responsibilities that the SEC has, we have people who are getting ripped off, and here we come with another piece of legislation. Then what we do is we shade it in terms of this is for small business development. Then we hear from the opposite side about all the other companies who started as little-bitty companies in their garage. Well, they all started without this bill. They didn't need this bill to start.

So why are you doing this? Yeah, you are right; there are a lot of companies, and you have named them, particularly in the high tech industries that started, and they had some of their own money to get started with, and maybe the family helped them, I don't know, but they didn't have this legislation. They didn't need this legislation. Nobody needs this legislation.

This legislation is harmful, and I would ask my colleagues to vote against the bill. If there are any Members on the opposite side of the aisle who really are concerned about their constituents, I would ask them to defy their leadership and vote against this bill.

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

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

Mr. Speaker, by allowing entities to sell unregistered securities based solely on a preexisting relationship with the investor, H.R. 2201 would create a road map for affinity fraud.

Affinity fraud is a type of investment scam where swindlers prey upon members of identifiable groups such as ethnic or religious communities or the elderly. Often, affinity fraudsters take advantage of preexisting relationships to engender trust and convince victims that a dubious investment is legitimate.

The Securities and Exchange Commission has found that such frauds pose heightened risks to investors because they can be difficult for regulators or law enforcement officials to detect, particularly where the fraudsters have used respected community or religious leaders to convince others to join the investment.

The following cases represent a sampling of recent affinity fraud actions from around the United States.

In August, 2013, the SEC halted an offering fraud scheme where Steven Bruce Heinz, a Utah resident purporting to be an investment adviser, sold phony investment contracts to more than 15 of his former clients, family members, and friends. According to the SEC's complaint, Heinz raised $4 million in investor funds he used to engage in high-risk trading of future contracts and to pay his own personal expenses such as family vacations to Mexico and a $600,000 loan.

Among the investors taken in by Heinz scam was ``the recent widow of a church associate of Heinz who invested with Heinz after he volunteered to assist her with her finances and investments after her spouse died.''

In 2012, the SEC stopped a $7.5 million fraud operation targeting the Persian-Jewish community in Los Angeles. The SEC's assistant regional director stated that Shervin Neman ``deceived members of his own community to raise money in this fraudulent Ponzi scheme. By exploiting investors' trust in him, Neman was continually able to raise more money to pay back existing investors and finance an extravagant lifestyle.''

According to the SEC's complaint, among other things, Neman spent investor funds to pay for his wedding and honeymoon, his wife's engagement ring, luxury cars, and VIP tickets to entertainment venues.

In 2015, the SEC permanently barred John Allan Russell from the securities industry after Russell pled guilty to securities fraud in Colorado State court. The SEC's administrative law judge found that Russell obtained almost $300,000 by selling debt securities to an elderly victim who suffered from dementia and Alzheimer's disease. The ALJ also determined that ``Russell's scheme may have involved affinity fraud because the misconduct began a few years after the victim acted as Russell's godfather at his baptism.''

These cases demonstrate that H.R. 2201's preexisting relationship requirement would not provide any meaningful deterrent against abuse. On the contrary, it would encourage opportunistic conduct targeting communities.

Mr. Speaker, I urge my colleagues to join me in voting ``no'' for this bill.

Given all that the SEC is able to do, they can't keep up with these schemes, and now you are going to open up the door for them to have to wrestle with trying to help people who are victims of these kinds of schemes.

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

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

Mr. Speaker, the North American Securities Administrators Association sent this letter of concern. They said that H.R. 2201 would result in an overly broad Federal exemption that would allow public solicitation and sales to any investor, regardless of sophistication or financial wherewithal, subject only to the requirement that there be a previously existing relationship, a standard that is not difficult to establish.

In practical terms, this means that Main Street investors could be solicited and sold up to $500,000 in private security by bad actors, including persons having been convicted of crimes or subject to one or more previous State enforcement actions, without any disclosure to the investor and without any notice to State or Federal regulators.

There is no valid basis for Congress to prevent State officials charged with protecting their constituents from making decisions about purely local or regional issues that would rely on the exemption established by H.R. 2201.

Further, preemption of State review or even notification for the type of small, localized offerings contemplated by H.R. 2201 would effectively handcuff the regulators best positioned to oversee such offerings.

Public Citizen said this bill ``would permit small offerings with no investor protections, such as notice of the offerings. It will enable a type of affinity fraud, where the seller can unload dubious securities, provided there is some relationship between seller and purchaser. This bill assumes that a preexisting relationship will deter abuse, which is a tenuous foundation, at best. Further, the relationship can begin with the offer.''

They don't have to have a previous relationship. It would start when the offer takes place.

Public Citizen further stated that ``the bill says the relationship must only exist before the purchase.''

Mr. Speaker, I include in the Record letters from these groups, as well as a letter from Americans for Financial Reform.

North American Securities

Administrators Association, Inc.,

Washington, DC, November 7, 2017.

Re H.R. 2201--The Micro-Offering Safe Harbor Act.

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: On behalf of the North

American Securities Administrators Association (``NASAA''), I

write to express concern and raise specific objections to

certain provisions of H.R. 2201, The Micro-Offering Safe

Harbor Act, which is scheduled to be considered by the House

of Representatives this week. The legislation would amend

securities laws in ways that could be profoundly detrimental

to investors, and detract from the viability of the

marketplace for offerings from new or smaller issuers that

are compliant with securities law.

The Micro-Offering Safe Harbor Act amends Section 4 of the

Securities Act of 1933 to create a new exemption from

registration. To qualify for the exemption, an offering would

have to meet certain criteria regarding the number of

purchasers, their relationship to the issuer, and the amount

of capital raised. However, as more fully discussed below,

the legislation fails to include critical investor protection

measures and would preempt state regulatory authority.

State securities regulators understand the need of small

businesses to efficiently raise capital and the role strong

investor protection plays in facilitating this goal.

Unfortunately, the changes embodied in H.R. 2201, while well

intended, are ill-advised and potentially quite dangerous.

For example, unregistered securities purchased under the

exemption established by H.R. 2201 would not be

``restricted,'' and could thus be sold immediately, exposing

investors to classic ``pump and dump'' schemes. Furthermore,

NASAA is aware of no evidence to support the proposition that

Congress should create a ``safe harbor'' to permit

unregistered securities offerings to be offered and sold,

including through general solicitation, regardless of

investor sophistication or financial wherewithal. Even as the

bill stands to introduce new and totally unnecessary risk

into securities markets--failing to even disqualify ``bad

actors'' from these markets--the goal of the legislation

remains unclear and its necessity is, at best, not well-

established. It is clear, however, from the terms of the

exemption, and its failure to impose even the modicum of

regulatory oversight that exists for similar ``private''

offerings under SEC Regulation D Rule 506, that offerings

made under the new exemption are likely to be

disproportionately risky and illiquid. This fact alone should

be cause for concern by Congress.

Beyond stark new risks to investors, this legislation

threatens to jeopardize the continued viability of

established markets geared to smaller issuers, many of which

operate lawfully within existing federal and state securities

laws. Such markets include securities sold pursuant to SEC

Rule 506, new federal exemptions established by the JOBS Act,

and exemptions adopted in many states to permit intrastate

crowdfunding. Without effective investor protection measures

a potential effect of H.R. 2201 could be to cause investors

to abandon the markets for smaller issues.

In closing, NASAA reiterates strong opposition to the

preemption of state registration and notice filing authority

in H.R. 2201. There is no valid basis for Congress to prevent

states from making decisions about the local or regional

issues that H.R. 2201 seeks to encourage. Failure to register

or at the very least, to notice file with state regulators

results in unknown sales, by unknown actors of unknown

enterprises and result in no gatekeeper function to protect

retail investors whose only source of recourse for fraudulent

sales are the state securities regulators. At a minimum H.R.

2201 should:

1) Include bad actor disqualifications;

2) Establish a holding period to reduce the likelihood of

``pump and dump'' schemes;

3) Provide at least a notice filing with state regulators

so that in the event of a fraudulent offering, state

regulators can begin an investigation to try and protect

retail investors;

4) Limit the sale amount to retail investors so that

investors are not ``encouraged'' to place all their eggs in

one basket; and

5) Prohibit or restrict general solicitation of what are

clearly high risk securities.

Thank you for your consideration of NASAA's views.

Sincerely,

Joseph P. Borg,

NASAA President and Alabama

Securities Director.

Mr. Speaker, I don't understand why Members of Congress would disregard what the State regulators are saying. State regulators are saying: Don't do this. Don't preempt us. Don't pass legislation that would undermine our ability to protect your constituents.

Yet they are ignoring this altogether. I know that they received this information. I know that they know that the association had cautioned against this legislation. Let me just make sure that everybody knows. It is the North American Securities Administrators Association. They represent all of the States in cautioning against this legislation.

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

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

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

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

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

For my colleagues on the opposite side of the aisle who are bemoaning the fact that small businesses don't have access to capital, they have these relationships with all of these big banks.

Why don't they get to the big banks and tell them they ought to be making loans to small businesses?

I don't hear them, as a part of, you know, their rhetoric, talking about how many of the big banks are not being responsible. And so my colleague on the opposite side of the aisle and my friend talk about what is common sense. I tell you what is common sense. Common sense is not to place vulnerable people in a position where they are going to get ripped off.

Mr. Speaker, H.R. 2201 is a harmful bill that would simply serve as an invitation for investment scams. The bill fails to take into account the numerous other exemptions we have for small-dollar offerings, including under regulation D, regulation A, and crowdfunding rules. These exemptions already permit small businesses to raise capital while also protecting against fraud.

In light of these exemptions, there seems to be no reasonable explanation for the amount of legislative effort that has been wasted on this bill. Instead of H.R. 2201, which is unwarranted and may actually harm investors and the integrity of our markets, the House should be focused on passing legislation that can actually improve the lives of the Americans whom we serve.

Mr. Speaker, I urge my colleagues to vote ``no'' on H.R. 2201. Don't be a part of enacting one more scheme that is going to rip off our constituents, and then, you know, a few years later, come back here and talk about what a terrible thing it is that people are being ripped off by these investors, some of them who are criminals, but nobody knows it. The disclosure does not have to take place. They don't know that they have people who have already been involved in crimes who are coming to them talking about: let me help you earn some profits on this investment.

We know better. Common sense tells us better. If, in fact, we are committed to the proposition that we have a responsibility to protect our constituents from rip-offs, from fraud, from being taken advantage of, we will not support this bill. And I would hope that my friends on the opposite side of the aisle, despite how far they have gone in trying to represent that this bill is something that it is not, would at least change their minds today and support their constituents and vote ``no'' on this bill.

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

Mr. Speaker, I claim the time in opposition to the amendment, even though I am not opposed.

Mr. Speaker, under the current language of H.R. 2201, investors could be sold private securities by persons who have committed fraud or have violated security laws. Representative Emmer's amendment purports to add a layer of investor protections by adding a provision to so-called disqualify certain bad actors from utilizing the exemption.

While I applaud Mr. Emmer's attempt to add this most basic guardrail to a bill that otherwise creates an unmitigated safe harbor for fraudsters, I wonder why this provision was dropped from a similar bill that Mr. Emmer introduced last Congress.

Unfortunately, this amendment is woefully inadequate to address the otherwise dangerous new exemption created by H.R. 2201. Because the underlying bill requires no disclosure to investors and imposes no obligation to notify regulators of the offering, even if amended, H.R. 2201 would lead convicted fraudsters and lawbreakers to police themselves.

Moreover, the bill ties the hands of State securities regulators, who are the primary watchdogs over small, local securities offerings. If enacted, H.R. 2201 would leave a gaping hole in oversight of the very offerings it permits.

H.R. 2201 is a misguided attempt to support small businesses that is not meaningfully improved by the meager protections of this amendment. For these reasons, I continue to oppose this bill, and I urge all of my colleagues to vote ``no'' on H.R. 2201.

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

Mr. Speaker, I would like to warn the Members of this House not to take the compliments seriously that are being given by the gentleman who would have you believe that somehow I have totally embraced this amendment because I think it is going to change the fact that there is no disclosure to those who would be investing and no notice to the SEC.

So don't take him seriously when he talks about thanking me for encouraging and embracing. I have not done that. I am going to tolerate this amendment. It is late. It doesn't do what he says it is going to do. The bill is still a bad bill. It is a bill that is going to harm people. It is a bill that targets the most vulnerable people in our society. It is a bill where fraudsters are going to go into churches and convince ministers and parishioners that they are out to help them.

Members of Congress, do the right thing. Today, stand up against another attempt by misguided folks who would have you believe that they are helping people when, in fact, they are opening up opportunities for them to be ripped off one more time, ripped off in ways that could have been avoided.

Mr. Speaker, I oppose this bill. I ask everybody to vote against this bill.

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

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

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

Mr. Speaker, H.R. 3972 would expand the definition of ``accredited investor'' to organizations known as family offices and their family clients.

Family offices manage the financial interests of wealthy families. Deeming family offices and family clients to be accredited investors would allow them to more easily invest in private, unregistered security offerings.

Today, each family client, family member, and associated employees and entities must independently meet the accredited investor definition. This would require, for example, that each individual in a family independently meet certain income or net worth thresholds.

As I understand it, this process can be cumbersome for private funds that may lose their private, unregistered status if they fail to appropriately verify their investors as accredited or otherwise qualified to invest in private offerings. If there is any doubt, a private fund could deny a family office or family client the opportunity to invest.

This bill seeks to remedy that problem by recognizing that family offices and family clients are financially sophisticated in their own right. Thanks to an amendment by Representative Maloney that was unanimously accepted during the committee markup, the bill ensures that these family offices and family clients have the financial wherewithal and knowledge to invest as accredited investors in typically risky, illiquid private security offerings.

Specifically, the bill would apply the same standards currently in place for trusts so that, number one, the family office must have more than $5 million in assets; two, the family office and family clients must not be formed for the specific purpose of acquiring the securities offered; and, three, the family office and family client must be dedicated--or directed, rather, by a sophisticated person.

These restrictions limit the potential unintended consequences of the bill so that, for example, someone who could not otherwise meet the accredited investor test alone could not circumvent the rules by investing with another family member as a ``family office.''

They would also prevent estranged family members, who could be up to 10 generations removed, from investing as an accredited investor without receiving any services of or otherwise being affiliated with the family office.

I support the bill, and I reserve the balance of my time.

Mr. Speaker, I yield as much time as she may consume to the gentlewoman from New York (Mrs. Carolyn B. Maloney), the author of the bill and the sponsor of the bill.

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

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

First, allow me to say that I am very pleased that, by naming this legislation after Otto Warmbier, we are able to honor him and let his family know that we will not forget him. Nor will we forget the brutal, lethal treatment of this young, decent American student by the Government of North Korea.

There is simply no justification for the fury with which the Kim regime turned the massive power of the state on this young American man, who is alleged to have done nothing more than take a poster from a hotel. It is this kind of brutality--and the ongoing fundamental depravity of the North Korean regime--that will keep it from being a member of the global community of nations.

This is also why the rapid acceleration in the scale and range of North Korea's nuclear and missile programs is so alarming, including the launch of two intercontinental ballistic missiles in July, one of which experts believe could have had the capacity to reach the continental United States. Then, in September, the regime tested its sixth nuclear explosive device, and, according to U.S. and international estimates, this thermonuclear test was significantly higher in magnitude and yield than any previous test.

This has led to a bipartisan consensus in the Financial Services Committee that a new policy towards North Korea involving a maximum pressure campaign of financial isolation is the best chance we have to resolve this situation peacefully.

Such a strategy must entail a dramatically greater level of pressure than North Korea has faced to date, one strong enough to change Kim Jong-un's calculus about whether he is safer with or without his nuclear program.

The legislation before us today, H.R. 3898, calls for just such a U.S. strategy towards North Korea--and it is one that has the advantage of presenting an option other than a military-first response. As many experts have called for, this legislation takes a page from the Iran sanctions playbook by mandating the use of secondary sanctions, which were widely credited with forcing Iran to the negotiating table.

In the context of North Korea, an American program of secondary sanctions wouldn't just ban U.S. companies from doing business with North Korea, it would also force companies, individuals, banks, and governments to make a choice: stop doing business with North Korea and its enablers or be cut off from the global financial system.

Although we saw in the Iran context just how powerful this approach can be when carefully fashioned as part of a broad coalition, we must remember that sanctions alone are not a strategy. Sanctions are a tool, and in order for them to work, they must be linked to a broader strategic effort, with the high level of skill in their design and implementation, and with a clear understanding of the policy goals we are trying to achieve.

According to Adam Szubin, who formerly served as the Under Secretary of the Treasury for Terrorism and Financial Crimes, when Congress adopted a series of secondary sanction measures in 2010, aimed at containing Iran's nuclear program, the administration was already staffed, well-resourced, and ready to immediately deploy senior officials around the world.

Specifically, senior Treasury, White House, and State Department officials traveled around the world to explain the new U.S. sanctions regime and pressure governments, bankers, traders, and companies to enforce these sanctions in a tough and meaningful way.

Today, there is widespread recognition that a successful strategy to isolate and pressure North Korea must not only entail the effective implementation of sanctions, but also arguably an even more complex and sophisticated degree of statecraft in order to coordinate with our allies, and, in particular, to convince China that we have shared objectives when it comes to addressing the increasing destabilizing North Korean threat.

It is extremely concerning, therefore, that President Trump has shown virtually no capacity or willingness for the hard work necessary to secure concessions from North Korea, or enlist China and other key players to do their part to isolate the Kim regime. In fact, President Trump's reckless threats, his vow to destroy the Kim regime, his

name-calling, warmongering, and rejection of diplomacy contradict key administration officials, and leading experts, who continue to stress the importance of imposing pressure on the Kim regime. It also demonstrates a Commander in Chief who lacks the discipline and quality of leadership it takes to convince our allies to join us in dealing with the North Korean threat.

Given the high-stakes objectives; the lack of a unified, coherent policy from the executive branch; and concern about U.S. credibility on the global stage, I am pleased that, on this critical issue, Members from both sides of the aisle were able to come together behind a concrete strategic objective to force Pyongyang into nuclear diplomacy with the goal of permanently and verifiably limiting North Korea's WMD and ballistic missile programs.

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

Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. Carolyn B. Maloney).

Mr. Speaker, I yield an additional 1 minute to the gentlewoman from New York.

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

To my colleague on the opposite side of the aisle who was responding to part of my statement, of course there are many in this country who worry about President Trump's reckless threats, his promise of fire and fury, his vow to destroy the Kim regime, his name-calling, warmongering, and rejection of diplomacy.

It directly contradicts his leading Cabinet officials who continue to stress the importance of imposing pressure on the Kim regime. It also demonstrates a Commander in Chief who lacks the discipline and the capacity to convince our allies to join us in dealing with the North Korean threat.

The gentlewoman will happily not engage in personalities except to say that the rhetoric to call Kim Jong-un the little rocket man is not productive and it does not do us well.

We have a situation in which nearly every high-level official in the U.S. Government believes the threats posed by the North Korean nuclear and missile programs must be front and center in U.S. national security decisionmaking.

This is a time for U.S. diplomatic and foreign policy efforts to be aggressively focused on intensifying economic and diplomatic coordination with our allies and China in a strategy that would entail sophisticated policymaking capacity and coordination across the U.S. Government. Instead, a week ago, in a move that I believe history will strongly condemn, President Trump refused to recertify the Iran nuclear deal, throwing into question continued U.S. support for the landmark nuclear accord.

Whether you support or hate the Iran nuclear deal, it is widely viewed, at least so far, as successfully containing Iran's nuclear ambitions, and will for many years.

There can be no question that President Trump's threat to walk away from the international nuclear accord will have a direct and profoundly negative effect on our ability to convince Kim Jong-un or our allies that America will honor any commitment to integrate North Korea into the global community if it gives up its nuclear and missile programs.

In short, the President's threat to withdraw from the Iran nuclear deal undermines our credibility as a negotiating partner and throws into question the prospect of any effective nuclear diplomacy with North Korea. At a time when we are facing a nuclear crisis with North Korea, raising questions about our commitment to the Iran nuclear deal not only defies strategic logic, but it also undermines our national security.

On that issue, I would welcome, as I do with the legislation before us today, a stronger, more unified, bipartisan front.

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

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

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

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

Mr. Speaker, I rise to recognize and congratulate the Harriet Tubman Press on the occasion of its first publication.

The Harriet Tubman Press, an imprint of Tsehai Publishers, is an important new publishing platform based in Los Angeles, California. It is named after one of the great icons of American history, and it is one of the only imprints in the country dedicated to providing a platform for the voices of today's African-American scholars and writers.

The Harriet Tubman Press is housed in the Marymount Institute for Faith, Culture, and the Arts at Loyola Marymount University, which is one of the centers of higher learning in my congressional district--the 43rd District in California.

The first publication of the Harriet Tubman Press will be Voices from Leimert Park Redux, a diverse collection of poetry that beautifully captures the heartbeat of the Leimert Park community. For decades, this Los Angeles neighborhood has been a thriving beacon of African-American activism, culture, and the arts. At a time when gentrification and displacement threaten neighborhoods across Southern California, the preservation of African-American cultural heritage in Leimert Park could not be more important.

I congratulate Loyola Marymount University, Tsehai Publishing, the Harriet Tubman Press, and all the members of the South Central Los Angeles community that worked so hard to make this first publication possible. Your dedication and fortitude is necessary to the preservation of the African-American voice. I'd like to further thank the artists, authors, and poets who stand up and propel that voice into our country's consciousness. Your voices are the only currency that can never be taken from you.

May the first publication of the Harriet Tubman Press signal the birth of a new force devoted to propelling, celebrating, and highlighting African-American culture through literature.

Mr. Speaker, in the wake of the destruction that this historic hurricane season has wrought on Texas, Florida, the Virgin Islands, Puerto Rico, and the Gulf Coast, I am very pleased that, in addition to the emergency relief funds for wildfires that are burning on both ends of California, the bill also includes liquidity and emergency nutritional assistance for Puerto Rico, where they are facing particularly difficult challenges in their recovery efforts. This bill also provides for partial debt forgiveness of $16 billion for the National Flood Insurance Program.

I am encouraged to see that the administration finally understands what we have been saying for a long time: we need to forgive the debt of the NFIP, which FEMA has repeatedly stated it will never be able to repay.

Following the losses that will be incurred as a result of the recent hurricanes, the NFIP needs debt forgiveness more than ever. But let's be clear. The partial debt forgiveness will leave the NFIP with a crushing level of debt. Although this is a step in the right direction, we should forgive all of the debt that the NFIP has accrued from catastrophic storms like Katrina and Sandy instead of burdening the NFIP policyholders with hundreds of millions of dollars in interest payments every year.

Before this hurricane season, NFIP policyholders were already paying more in interest than the entire NFIP spends on salaries and expenses or funding mitigation or paying for flood maps.

Mr. Chairman, I rise in strong opposition to the Republican's 2018 budget, which would dramatically increase our deficit and debt by trillions of dollars to give millionaires and billionaires a massive tax cut.

Don't be fooled. This plan directly benefits President Trump, his family, and his administration, including Treasury Secretary Mnuchin, Education Secretary DeVos, and Commerce Secretary Ross, but offers breadcrumbs for the middle class and nothing for low-income Americans.

The craziest thing about all of this is that Republicans have been crowing for 7 years that the deficit is too large and that it is hurting our job growth, yet here they go abandoning their principles to cash out their rich benefactors.

I also want to talk about some of the ways Republicans partially pay for this tax cut for the rich. During the same week that Equifax and Wells Fargo executives are testifying about the harm they have caused to millions of Americans, Republicans propose gutting the Consumer Bureau, which has successfully helped millions of our constituents receive compensation by effectively eliminating its funding and independence.

What is more, Republicans would eliminate the backup authority to safely unwind failing megabanks without harm to our economy. Rather than eliminate this tool, we should instead be talking about how to break up bad megabanks like Wells Fargo, who repeatedly break the law and harm millions of consumers. Yet, both the Consumer Bureau and the megabank wind-down authority are sacrificed to pay for the richest 1 percent tax cut.

So I would urge all of my colleagues to reject this measure.

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

Mr. Speaker, H.R. 1624, offered by Mr. Messer and Mrs. Maloney, represents a bipartisan effort to ensure that certain financial institutions will continue to hold municipal securities, while also supporting the spirit of an important bank guardrail in the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Bank regulators promulgated the liquidity coverage rule to ensure that megabanks have a minimum number of assets that they could sell, even in the worst markets. The rule permits banks to count assets like Treasury securities, GSE debt, and investment-grade corporate securities towards the pool. Regulators found that these securities could be sold even in stressed environments, thereby allowing a megabank to weather the storm of an economic crisis. This rule, known as the liquidity coverage rule, is an important tool for banking regulators to guard against the type of contagion we saw during the financial crisis.

However, the bank regulators excluded all municipal securities because they concluded that municipal securities, as a class, are difficult to sell in stressed markets. This may be generally true, but the investment-grade debt of my State of California has lots of buyers and sellers and has a liquidity profile similar to many corporate securities. So it makes sense that, if there are municipal securities like California's debt that meet the same eligibility standards as other corporate securities, they should also be counted toward a bank's liquid assets under the rule.

The Federal Reserve quickly recognized this problem and has since adopted a correction to permit bank holding companies under its jurisdiction to treat municipal securities that are liquid, market ready, and investment grade the same as similar corporate securities.

This bill, as amended, takes the relief adopted by the Federal Reserve and extends it to banks regulated by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. It isn't clear to me just how many municipalities will benefit from this legislation, and I imagine most would not, but even if only a handful of our States and cities qualify, the bill is worth passing because it could help to reduce financing costs for those governments.

Mr. Speaker, I appreciate Mrs. Maloney's hard work and bipartisan efforts on this bill, and I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume, and I thank Mr. Messer for his leadership on this legislation.

He is absolutely correct. He worked very closely with Mrs. Maloney. This is a bipartisan bill. He correctly stated that we do sometimes get together and work on issues in ways that we can be helpful, not only to our constituents in general but to cities and towns. We have talked an awful lot about wanting to improve our infrastructures, and this is one way that it certainly can be done.

I would like to point out again the Federal Reserve's role in this because of the way that they recognized the problem and what they did to adopt a correction to the problem. So this bill again, as amended, takes the relief adopted by the Federal Reserve.

Again, this is a case where we had Members who understood this problem, moved forward on it, and recognized that the Federal Reserve also recognized the problem. When you have several entities who have recognized a problem, it certainly makes good sense and good public policy for everybody to come together to correct it. So with the Federal Reserve having come forward and adopting this relief, it means that it is extended to banks regulated by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.

Again, I wish I could say that every city in the United States would benefit from it, but not all will. Not all need it. But for those who do, I think it is important for us to recognize that when we have the opportunity to come together and to help any part of our country, and when it is very easy to do so, I think we should do it. So I am very pleased that we have been able to do that.

Mr. Speaker, I yield such time as she may consume to the gentlewoman from New York (Mrs. Carolyn B. Maloney), who is the lead Democratic cosponsor of this bill.

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

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

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

Mr. Speaker, I rise today in opposition to this bill, which began as a must-pass reauthorization of the Federal Aviation Administration but has

now become a Christmas tree for unrelated Republican priorities.

Puerto Rico is on the brink of a humanitarian crisis following Hurricane Maria that is being exacerbated by Trump's and Congress' failure to adequately respond. Tens of thousands in Texas and Florida are just beginning to pick up the pieces following Hurricanes Harvey and Irma. Yet, other than the small initial down payment of disaster aid we passed--which I might add Chairman Hensarling voted against-- Congress has yet to pass a single policy reform that will actually improve the lives of any of those who found themselves in harm's way.

This is the first time in this Congress that we are debating a flood insurance policy change on the House floor. However, this is not a policy change that would address the resilience of the Flood Insurance Program, help families to recover, or improve our country's response to natural disasters. No. The Republican response to the catastrophic storms of these last 2 months is to muscle through the expansion of private flood insurance, which has long been sought by the insurance industry.

Now, let me be clear. I don't oppose this policy. I voted for it last Congress and I voted for it when we marked it up in committee this year. But moving this bill at this time, while ignoring all the other policy responses needed but the Flood Insurance Program and the ongoing natural disasters in our country, is simply irresponsible.

The NFIP will expire on December 8 of this year, and we still lack a credible plan to ensure that it is reauthorized for the long term. Therefore, I will oppose any and all efforts to break apart the debate on substantive reforms to the NFIP from the reauthorization debate we should so desperately be having.

The bill before us today does absolutely nothing to address the stability of the NFIP, which is in jeopardy following a devastating series of catastrophic hurricanes across several States and U.S. territories. We know that we will need to increase the NFIP's borrowing authority so that policyholders from Harvey, Irma, and Maria can be made whole, but the chairman has no plan to deal with the debt, frequently telling those of us who have urged him to consider debt forgiveness to just forget about that idea.

I have long called for Congress to forgive NFIP's debt, particularly because of the unsustainable burden placed on policyholders paying hundreds of millions of dollars a year just on the interest for the government to pay itself back. Flood insurance is already unaffordable.

So why are we continuing to make it worse by saddling policyholders with interest on a debt that will never be repaid?

We need thoughtful, comprehensive solutions to a long-term reauthorization that addresses the debt, affordability, mapping, and mitigation. That is not what we have before us today.

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

Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. David Scott), a senior member of the Financial Services Committee.

Mr. Speaker, I yield the gentleman an additional 30 seconds.

Mr. Speaker, I yield 2 minutes to the gentleman from New Jersey (Mr. Pallone), the ranking member of the Energy and Commerce Committee.

Mr. Speaker, I yield the balance of my time to the gentleman from Louisiana (Mr. Graves), a true expert on flood insurance issues.

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