Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, spoke on the House floor opposing H.R. 5143 as the next bill in the Trump agenda that would benefit Wall Street at the expense of financial stability.

“This week’s gift is less oversight of the largest insurers in the U.S., which will put us at risk for another AIG,” Waters said, noting the global insurer was a poster child of the financial crisis and was bailed out to the tune of $182 billion.

Waters explained that Dodd-Frank gave federal regulators oversight of the largest global insurers in the country because our state-based system of insurance regulation proved to be insufficient for these firms, which engaged in complex activities and posed significant risks to the economy. This includes negotiating international capital standards for companies like AIG, MetLife, and Prudential to prevent another economic collapse.

“Today's bill is designed to undermine the progress we’ve made on this front, and to ultimately prevent the adoption of these capital standards in the U.S.,” Waters said. “In fact, H.R. 5143 would add layers of burdensome red tape and unworkable requirements on our federal negotiators, making it virtually impossible for them to advocate effectively for U.S. interests on these issues or agree to any kind of standard.”

The full text of Waters’ statement, as prepared for delivery, is below:

Mr. Speaker, here we go again. Last week, the Majority made it clear that it was just getting started with its special-interest giveaways at the expense of financial stability and consumer protection. Now, before we adjourn, we are here to debate one last holiday gift to Wall Street. This week's gift is less oversight of the largest insurers in the U.S., which will put us at risk for another AIG. Don't forget: AIG was bailed out to the tune of $182 billion. And while Democrats passed Wall Street Reform to prevent another crisis and future bailouts, Chairman Hensarling and Donald Trump have made it clear that Dodd-Frank is on the chopping block. And without the safeguards in Dodd-Frank, a lack of capital standards for large insurance companies will put our economy at risk.

But no one should be surprised at what's taking place here. This is Donald Trump’s agenda. Despite promises to hold Wall Street accountable, the President-elect is proposing an administration that is heavy on Wall Street insiders. And their plans will do little to help the millions of Americans struggling to get ahead. But that's by design. Because Trumpism isn't really about helping the middle class. It is about lining the pockets of some of our biggest banks and insurance companies.

AIG, as I mentioned, is a poster child of the financial crisis. It engaged in financial activities that more closely resemble investment banking than traditional insurance. Prior to the crisis, state regulators – which have primary jurisdiction over insurance companies – did not effectively account for AIG’s activities related to credit derivatives or securities lending, for example, which allowed it to skate by with minimum capital. When AIG’s bets on subprime mortgage-backed securities failed, it collapsed and required a taxpayer bailout. Recall that we bailed out AIG because it was a counterparty to nearly all of the largest global banks – meaning that if AIG failed, it would bring down a series of global megabanks with it.

So under Dodd-Frank, we improved the oversight of insurance companies by giving federal regulators the necessary tools to prevent another collapse of large, globally active insurance companies. We're talking about the big boys here: AIG, MetLife, and Prudential. And for the past several years, federal regulators have been overseeing systemically important financial institutions, which are identified as such because they are expected to pose a substantial risk to our financial stability if they fail. Our federal regulators have also been negotiating with 140 other countries on international standards for large, globally connected insurers.

However, today's bill is designed to undermine the progress we’ve made on this front, and to ultimately prevent the adoption of these capital standards in the U.S.

In fact, H.R. 5143 would add layers of burdensome red tape and unworkable requirements on our federal negotiators, making it virtually impossible for them to advocate effectively for U.S. interests on these issues or agree to any kind of standard. For example, this bill would prevent negotiators from agreeing to any standard unless it focuses exclusively on a company’s ability to pay claims. However, focusing exclusively on a company’s ability to pay claims can leave those same policyholders vulnerable to systemic failure. Moreover, by crippling our ability to engage effectively on international insurance issues, this bill will ensure that the rest of the world will move on to adopt standards that are not in our best interest.

At worst, this bill is unconstitutional – something that the Administration detailed in its statement of policy – raising multiple conflicts between the President’s exclusive authority on international agreements and the bill’s requirements to directly include state insurance commissioners in international negotiations.

At best, this bill is a solution in search of a problem. It caters to an unfounded fear that internationally agreed upon policies would be forced upon small, domestic insurance companies and unwilling states.

Let me again reiterate that the standards being negotiated internationally are for the largest insurers that operate all over the world -- companies like AIG, MetLife and Prudential. It is a scare tactic to claim that these standards would be applied to anyone but the largest and most interconnected global insurers.

Second, states can never be compelled to adopt international standards such as these. These standards are nonbinding and each individual state has the discretion to adopt them, modify them, or reject them entirely after going through their full regulatory process.

Third, stakeholders have ample opportunity to weigh in on these discussions. For example, federal negotiators have held multiple sessions for stakeholders to provide input, and the International Association of Insurance Supervisors has greatly improved public access and consultation. Yet H.R. 5143 would require several additional notice and comment periods and several other layers of unnecessary red tape.

To make matters worse, the sponsor proposes to pay for the bill’s costs by taking $7 million from the Securities and Exchange Commission’s reserve fund, which means that our financial watchdog will be unable to respond to unforeseen events, like the flash crash. In short, this bill would ask taxpayers to pay for the costs of rejecting capital standards by taking away the funding the SEC needs to respond to emergency situations that threaten financial stability. That just doubles down on the irresponsible policymaking we’ve seen by the opposite side of the aisle.

As the veto threat issued by the White House on this bill states “the Nation has made great progress as a result of the Dodd-Frank Act, and we cannot allow this bill to hamper the United States’ ability to implement the best standards for our unique regulatory regime.”

Mr. Speaker, it’s clear that the Republicans will go to any lengths necessary to give industry what it wants – less oversight, less supervision, and less regulation. Republicans have repeatedly tried to hamstring our efforts to more effectively monitor and respond to systemic risk by working to dismantle the FSOC and its designation authority for SIFIs. They have called the FSOC unconstitutional and helped companies like MetLife challenge its designation in Court. So, I am not really surprised that Republicans would close out 2016 by bringing this bill to the floor but I am disappointed because the American people deserve better.

For these reasons, I would urge my colleagues to vote no on this bill.

Thank you, and I reserve the balance of my time.

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