U.S. Rep. Robert Pittenger of Charlotte says examining Dodd-Frank regulations that he argues are hurting the banking industry and U.S. economy will be on the to-do list this year for the House Financial Services Committee.
In a recent interview, the Republican shared with me other top issues he said the committee, on which he sits, will focus on in 2015. The committee oversees various financial industry regulators, including the Federal Reserve, the Federal Deposit Insurance Corp. and the Securities and Exchange Commission. It is chaired by Jeb Hensarling, a Texas Republican who is an outspoken advocate for limited government and who has criticized rules created under the 2010 Dodd-Frank Act, which was designed to prevent another financial crisis.
Pittenger, who is serving his second term in Congress, was reappointed to the committee last month by House Speaker John Boehner.
1. LOOK TO EASE REGS ON COMMUNITY BANKS
Pittenger said Dodd-Frank regulations are hurting banks of all sizes but community banks are feeling it the worst. He said the committee will seek to find ways to ease the regulatory burden on community banks.
“There is consensus in our committee that we need to give relief to community banks," said Pittenger, who served as board director for Charlotte-based Park Meridian Bank, which was acquired by Regions Financial Corp. in 2001.
Today's "hyper-regulatory environment" is affecting banks large and small, he said, and putting "enormous brakes on our economy" by making it tough for some businesses to get loans. "It’s very hard for a start-up company to find capital."
2. TAKE ANOTHER STAB AT THE PATH ACT
In 2013, the committee approved the Path Act, legislation that would wind down mortgage giants Fannie Mae and Freddie Mac, which the U.S. government seized during the mortgage crisis in 2008. But the act, whose acronym stands for Protecting American Taxpayers and Homeowners, never made it out of Congress.
Pittenger said the committee will review the act. A supporter of the act, Pittenger said he is concerned about the large footprint that Fannie and Freddie now have in the mortgage market, a footprint that he said is restricting private mortgage lending.
"Ninety-eight percent of all the (mortgage) loans today are government," he said. "That means the American taxpayer is behind them all. That’s $6 trillion. There’s another ($1) trillion in (Federal Housing Administration) guarantees. What we’ve done is squeezed the private market out. ... We have ... gotten duped into thinking the government's role is the best way. ...
"The solution is for the government to step back. Make room for the private equity to come in, for private capital. There is no room for the private capital now.”
Pittenger said that he wants the federal government to play a smaller role in the housing market, not withdraw completely. And he said he supports government-backed loans to help first-time homebuyers and low-income families.
3. DETERMINE WHAT TO DO ABOUT THE EXPORT-IMPORT BANK
Pittenger said the committee will take a look at what to do about the Export-Import Bank of the United States, a federal agency that lately has become a hotly debated topic in business and political circles.
The bank's charter is set to expire in June. It is unclear whether Congress will re-authorize it as it has in the past.
Some conservatives have pushed for an end to the bank, which, among other things, provides U.S. companies with loans to fulfill export orders. Pittenger is among conservatives who refer to the bank as a form of "corporate welfare."
Through the bank, the government is “picking and choosing winners and losers," he said.
“You help one company, but then you hurt another one. Boeing gets helped, but it hurts Delta. You’re playing favorites."
Pittenger points out that the bank's services are a taxpayer-funded perk that affects only a small amount of U.S. exports. He said the bank's services aid only 1 percent of U.S. exports but puts taxpayers at risk of a bailout if the loans default.
Just as scrutiny is sometimes placed on the high costs of welfare programs for Americans, scrutiny also should be placed on the "corporate welfare" provided by the Export-Import Bank, he said.
Advocates say the bank is particularly an important resource for small companies and that it is an important tool for expanding sales of U.S. goods and services abroad. In North Carolina, the bank has supported about 190 companies over the past seven years, more than half of them smaller businesses, including textiles and other manufacturers.
Pittenger is not the only member of the committee from the Charlotte area. The others are Rep. Patrick McHenry, of Lincoln County, and Mick Mulvaney, a Republican from Indian Land.
McHenry is the committee's vice chairman.