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Mr. DOLD. Mr. Speaker, I yield myself such time as I may consume.
I rise today in support of H.R. 2827, which would clarify the definition of a ``municipal adviser'' to reflect the intent of the United States Congress. This bill received unanimous support and passed out of the Financial Services Committee with a vote of 60-0. I would like to urge my colleagues to support this important bipartisan legislation.
Municipal advisers are consultants who advise local municipalities about bond issuances, bond-proceed investment, financial derivative uses, and other financial matters. Like traditional financial advisers, municipal advisers must comply with an existing legal and regulatory framework while owing their clients a fiduciary duty.
But before Dodd-Frank, certain municipal advisers were not subject to any regulations--State, Federal or otherwise. Obviously, this legal and unjustified discrepancy between regulated and unregulated municipal advisers created a significant and, I would argue, unfair competitive advantage in favor of the unregulated municipal advisers.
Even more importantly, the regulatory gap gave a few bad actors the opportunity to take advantage of the State and local government officials who, like most people, aren't familiar with advanced and technical financial products. Dodd-Frank section 975 addressed this problem by requiring these unregulated advisers to register with the SEC and to follow rules written by the Municipal Securities Rulemaking Board.
The provisions generally have bipartisan political support as well as widespread industry support. However, most of us, both Republicans and Democrats, believe that the SEC's interpretation of the law has gone far beyond what Congress intended by, among other things, requiring volunteer members of local governing boards, engineers providing technical and comparative analysis, and bank tellers to register with the SEC as municipal advisers. In response to its proposal, the SEC received over 1,000 comment letters from across the industry that were overwhelmingly critical of the proposed rule.
This is why I introduced H.R. 2827. H.R. 2827 takes important steps to address these widely acknowledged concerns and specifies the scope and limits of Dodd-Frank's municipal adviser provisions.
After introducing our original version of H.R. 2827, we asked everyone on both sides of the aisle--and industry participants as well with a wide variety of perspectives--to give us their comments and suggestions for improving the legislation. My colleague and cosponsor from Wisconsin (Ms. Moore) and I have spent countless hours working and listening to all concerned parties to ensure that we have fully considered all the viewpoints in order to come up with the best possible legislation that could also pass with broad bipartisan support. At this time, I certainly want to thank her for all of her efforts.
Mr. Speaker, there were two concerns about the original version of H.R. 2827 that were the most significant. The first was that the original version of the bill would strike the Federal fiduciary duty for municipal advisers, leaving in place just the State-based fiduciary duty standards. Second, even when explicitly engaged to provide municipal adviser services, the original bill would have excluded certain parties from regulation as municipal advisers.
During the subcommittee markup, Ms. Moore and I articulated our plan for going forward with the legislation, and we invited more comments and suggestions from industry and all concerned parties. We were very pleased with the genuine engagement of the parties from across the industry and with their willingness to generously share their time, experience, effort, and knowledge with us. All of these contributions ultimately produced a better and stronger amended bill. We believe that this new version of the bill addresses the points raised since the subcommittee markup while still maintaining our broad coalition of bipartisan supporters.
This new bill preserves the Federal fiduciary standard and removes the blanket status exemptions while still maintaining a bright-line municipal adviser definition. It protects issuers by establishing clear lines and rules for municipal advisory activity and provides clarity in the marketplace.
In addition to the amendment's substance, I am very proud of the process that we've been able to undertake to get us to this point. I would like to thank my colleague again, Ms. Moore, and her staff for working with me and my staff, and I thank all of those who worked with us to get us to where we are in this process. They were so generous in sharing their time, and I am confident that what we have is a good bill with which we can move forward. Again, I urge my colleagues to support H.R. 2827.
With that, I reserve the balance of my time.
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Mr. DOLD. Mr. Speaker, I just want to again thank the gentlelady for her help and support with regard to this process which, as she aptly points out, was at times a little strenuous; but I believe in the end we were able to come together in a bipartisan fashion to produce what I hope is quality legislation that will be better for municipal advisers all across the country.
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Mr. DOLD. Mr. Speaker, I don't have any other speakers, but I do want to wrap up with a couple of thank-yous.
I certainly want to thank Chairman Bachus for allowing this markup to move forward, and I certainly appreciated his help and support. I want to again highlight how this was able to move forward in a bipartisan fashion, and I certainly want to thank my good friend, Ms. Moore from Wisconsin, for all of her work and efforts to work with me on what I hope is going to be a bill that everyone here in this Chamber will support.
With that, Mr. Speaker, I ask every one of my colleagues on both sides of the aisle to support H.R. 2827, and I yield back the balance of my time.
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