CHAMBER OF COMMERCE
OF THE
UNITED STATES OF AMERICA
R . BR U C E J O S T E N
1615 H STREET, N.W.
WASHINGTON, D.C. 20062-2000
202/463-5310
EXECUTIVE VICE PRESIDENT
GOVERNMENT AFFAIRS
November 2, 2015
The Honorable Jeb Hensarling
Chairman
Committee on Financial Services
U.S. House of Representatives
Washington, DC 20515
The Honorable Maxine Waters
Ranking Member
Committee on Financial Services
U.S. House of Representatives
Washington, DC 20515
Dear Chairman Hensarling and Ranking Member Waters:
The U.S. Chamber of Commerce, the worlds largest business federation representing the
interests of more than three million businesses of all sizes, sectors, and regions, as well as state
and local chambers and industry associations, and dedicated to promoting, protecting, and
defending Americas free enterprise system, supports several bills that the committee is expected
to mark up on November 3, 2015.
Congress, through the Pryor-Vitter amendment to Dodd-Frank, clearly determined that
the systemically important financial institutions (SIFIs) designation process should be used
rarelyto date, four nonbank financial companies have been designated as SIFIs. While the
Financial Stability Oversight Council (FSOC) has made some process reforms, companies do not
have clear rules to understand how they can mitigate risk-taking to avoid SIFI designation.
Moreover, the enhanced prudential standards by which nonbank SIFIs must comply remains
incomplete. This is why the Chamber released the report Financial Stability Oversight Council
Reform Agenda, which proposed a number of reforms to both FSOC and the Office of Financial
Research (OFR). A number of the bills under consideration would implement some of the
reforms suggested in this study.
H.R. 1309, the Systemic Risk Designation Improvement Act of 2015, H.R. 1550, the
Financial Stability Oversight Council Improvement Act of 2015, H.R. 3340, the Financial
Stability Oversight Council Reform Act, and H.R. 3557, the FSOC Transparency and
Accountability Act, would provide important process improvements to the operation of FSOC
and the designation system itself. In addition to the process improvements, these bills would
provide transparency and accountability, while allowing businesses to better understand risk
concerns to take corrective action before being designated.
H.R. 3857, to require the Board of Governors of the Federal Reserve System and the
Financial Stability Oversight Council to carry out certain requirements under the Financial
Stability Act of 2010 before making any new determination under section 113 of such Act, and
for other purposes, would require that prudential regulations be drafted and completed before
further designations of non-bank financial companies are made.
H.R. 3738, the Office of Financial Research Accountability Act of 2015, would correct
due process and accountability flaws at OFR. This bill would require that OFR provide an
annual work plan that provides transparency into any projects OFR is engaged in during the year.
Further, for any public reports issued regarding any financial entity, product, or activity, OFR
must consult with the regulatory agency with the relevant expertise, and allow for public notice
and comment on the report. Such common-sense processes would allow for a more robust
analysis that incorporates the views from diverse perspectives. This bill would also implement
much needed cyber security safeguards to protect the integrity and confidentiality of the data in
OFRs possession.
The Chamber also strongly supports the Small Business Credit Availability Act. Over
the past several years, mid-size and small businesses have had a harder time accessing capital
and the liquidity needed to grow and operate. While larger businesses can afford a higher cost of
capital, others have been forced to find alternative means of financing. Since 2010, we have
seen a large increase in financing to businesses, primarily mid-size firms, by Business
Development Corporations (BDCs). The Chamber supports the Small Business Credit
Availability Act as it would allow BDCs to meet the growing capital needs of businesses and
addresses some of the concerns raised during the 2013 hearing and by the Securities and
Exchange Commission. This bill would allow BDCs to increase their activities while
maintaining the historic levels of regulatory oversight and investor protection.
Collectively, these bills would give American businesses greater opportunity to grow and
create jobs. These bills would allow the federal government to appropriately identify and
address systemic risk in a more efficient way while providing businesses with clear rules of the
road. Additionally, capital formation would increase by allowing better use of business
development corporations with appropriate oversight. The Chamber urges the committee to
report these bills to the full House of Representatives as expeditiously as possible.
Sincerely,
R. Bruce Josten
cc: Members of the Committee on Financial Services