Financial Services issues affect us all and how they are dealt with is important to my work in Congress
For more than twenty years, Congressman Garrett has been at the forefront of public policy deliberations dealing with issues related to the financial services industry, developing considerable expertise in areas ranging from securities and finance to insurance and regulatory oversight.
At the start of the 112th Congress, Congressman Garrett was selected to serve as Chairman of the Subcommittee on Capital Markets and Government-Sponsored Enterprises for the House Financial Services Committee. In this role, Congressman Garrett oversees the subcommittee with jurisdiction over the Securities and Exchange Commission (SEC) and government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. In addition, the subcommittee handles all matters related to capital markets activities such as business capital formation and venture capital, as well as derivative instruments.
Housing Finance Reform
One of the major legislative initiatives the subcommittee will tackle in the 112th Congress is reform of the housing finance system in the U.S. In particular, the subcommittee will be examining ways to reform Fannie Mae and Freddie Mac, which are currently in government conservatorship and were the recipients of the largest bailout in the recent financial market crisis. The taxpayer funded bailouts that went to mortgage giants Fannie Mae and Freddie Mac have already been the largest of all the bailouts – weighing in at a $150 billion and counting. As Chairman of the subcommittee with jurisdiction over the GSEs, Congressman Garrett believes four objectives should be the driving force behind immediate reform efforts:
- Protect taxpayers;
- End all bailouts;
- Get private capital off the sidelines;
- Reduce the government’s exposure to the housing market.
To achieve those goals, Congressman Garrett has long been a proponent of getting the government out of the housing finance industry. Some of the basic tenants of Congressman Garrett’s legislative agenda to move toward a private housing marketplace include:
- Addressing the $1.5 trillion combined retained portfolios of Fannie and Freddie;
- Putting both entities on the federal government’s budget;
- Modifying the conforming loan limits;
- Abolishing the affordable housing goals, which numerous studies point to as one of the main causes of the GSE’s collapse.
Congressman Garrett was a primary architect of the comprehensive House Republican financial regulatory reform proposal during the 111th Congress. He authored substantive Republican alternatives in a number of key areas, including, but not limited to, derivatives and GSE reform. Despite his opposition to the overall package, he worked in a constructive fashion to pass several bipartisan provisions that strengthened the final House product. As a culmination of his intense work on regulatory reform in the House, Garrett was selected to serve as a conferee on the House-Senate Conference Committee responsible for reconciling the two chambers’ versions of the financial services regulatory reform bill.
During the debate of Dodd-Frank, Congressman Garrett was adamant in his view that the creation of more regulators would not solve the fundamental problem of our broken regulatory system. He felt the final product failed to address the root cause of the financial collapse – banks were permitted to take on too much risk because of the widespread belief that the U.S. government would bail them out if they failed. Congressman Garrett also felt the legislation was sending the wrong message to the markets by failing to abolish the “too big to fail” mentality.
Congressman Garrett believes that enshrining “too big to fail” into our lexicon was the exact opposite approach that should have been taken. Instead, Congressman Garrett believes we should have made it clear that no business – no matter how big or interconnected – is implicitly backed by American taxpayers. It’s not only unfair to American taxpayers, but it’s unfair to every other U.S. business that is deemed unworthy.
As Chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, Congressman Garrett will spearhead efforts to correct the most misguided provisions of Dodd-Frank, as well as closely monitor and provide rigorous oversight of the regulators tasked with implementing the law.
Financial Services Dictionary