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Clarifying Provisions Relating to Regulation of Municipal Advisors

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

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

I think Mr. Dold has dealt very well with very many of the specifics of H.R. 2827 relating to the regulations of municipal advisers. So, before I lose people, I want to briefly talk about the process that brought the bill to this point, and I want to thank a lot of people for their contributions to the final legislation.

As you've heard, the bill that passed the Financial Services Committee by 60-0 reflects the legislative process at its absolute best. It was a collaborative effort between Republicans and Democrats, issuers and market participants, and very, very diligent staffers on both sides of the aisle. If there is a single element that is most responsible for the bill's getting to this point, it is the integrity of the people involved. It speaks to their professionalism in that they stayed at the table and negotiated with the singular purpose of getting to the best result for the municipal market. There were times when the issues were tough and the disagreements real. There were times when it would have been very easy for people to just give up and walk away.

But to the credit of all involved, everyone kept talking and kept searching for solutions.

Mr. Dold deserves a tremendous amount of credit for his leadership of this bill. He was consistently willing to engage tough issues in an open and thoughtful manner. I would also like to thank all of my colleagues on the committee, Republican and Democrat alike, for their invaluable input as we negotiated the bill. Finally, I think it is important that I mention the important contributions of Mr. Frank and Ms. Waters. At many critical points, both were instrumental in providing guidance.

H.R. 2827, which passed the House Financial Services Committee 60-0, almost didn't pass at all as there was so much confusion generated from the SEC promulgating a rule that initially was very confusing. It's only the second legislative effort related to Dodd-Frank to pass the committee unanimously.

Prior to the passage of Dodd-Frank, non-dealer advisers to municipal governments were unregulated. These unregulated parties were involved in a number of municipal market scandals that ultimately defrauded taxpayers. Section 975 brings municipal financial advisers, swap advisers, placement agents, and GIC brokers under Federal securities law. It is a goal that is not partisan.

Unfortunately, in 2010, the SEC released a proposed rulemaking related to section 975 that created massive confusion in the municipal market regarding how section 975 would be applied in the real world. H.R. 2827 seeks to clarify section 975 to provide certainty to the market so that the rules can be implemented and taxpayers can benefit from the protection it brings. This bill takes a fundamentally different approach from the SEC and the definition of municipal advisers. It makes ``municipal adviser'' an exclusionary definition, rather than trying to outline and define certain transactions which end up being very vague and overly broad.

Mr. Speaker, how much time is remaining?

The SPEAKER pro tempore. The gentlewoman from Wisconsin has 16 minutes remaining.

Ms. MOORE. It doesn't unnecessarily sweep in the universe of other professionals or impinge on the relationships of issuers and other market participants engaged in legitimate and necessary market activities like underwriting, providing accounting services, engineering advice, or offering traditional deposits and cash-management services to municipalities. It is a straightforward approach that effectuates the goals of 975 while meeting the real world needs of market participants.

I want to urge all my colleagues to support this important regulatory legislation. Again, I cannot thank the participants enough who participated in this bill.

With that, I reserve the balance of my time.

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