U. S. Debt limit, tax reform, and liquidity requirements for Community Banks. He also discusses possible provisions to deter currency manipulation and future u. S. Trade deals. Held by the House Financial Services committee, this is three hours. The committee will come to the committee will come to order. The chairs authorized to declare recess of the committee at any time. Members will have five legislative days in which to submit extraneous materials to the chair for inclusion the record. The hearings for the purpose of receiving the secretary of treasurys annual report on the state of the International Finance system. But before proceeding to that report, i will give you a report on the hollingsworth family of indiana. Would like to share with you some bury good news. Hollingsworthbert the fourth arrived this morning at 1 38 a. M. , weighing in at seven pounds, 15 ounces, mother and baby are doing well. Husband and father is a total wreck, but congratulations to our colleague, ray collings but congratulations to our college, ray hollingsworth. [applause] an excusede him absence from this mornings hearing. I now recognizes recognize myself for the three minutes to give an Opening Statement. Secretary Steven Mnuchin the system clearly needs improvement. President trump as outlined a bold forwardlooking plan to tackle the Serious Problems facing hard working American Families who have seen their paychecks that mate, their savings shrink, and their dreams diminished over the last decade. The fact is this economy is not close to reaching its potential. After theht years last recession ended, americans remained stuck in a flawless recovery in generations. Economy grew at a measly 1. 6 last year when our historic norm is twice that. Over 300,000 manufacturing jobs have disappeared over the last eight years. Obamanomeight years of ics has taken a toll. It has taken a toll on our Capital Markets. We simply cannot afford to lose our status as the Global Leader for Capital Markets. Yet, the United States has dropped to 17 in a recent world ranking of Economic Freedom. The stork will for our nation. Based upon levels of business freedom, investment freedom, and financial freedom. From u. S. Economic freedom has declined, Economic Freedom for a number of International Competitors has actually grown. I have faith in the u. S. Capital markets and in the spirit of to take entrepreneurs necessary risk in growth, but to do so, the unaccountable washington bureaucracy must finally be held accountable. We must address the regulatory costs of doing business in the u. S. Under. Frank. A little work plaintiff for American Companies to prosper, and as a result, our economy will grow healthier for all. For these reasons, the president s executive order establishing the Core Principles of regulating u. S. Financial systems is important to us all. Long, we have not empowered americans to make independent, Financial Decisions and informed choices in the marketplace. Save for retirement, or bill individual wealth or build individual wealth. We have not enabled American Companies to become and domestic and foreign markets. The secretary, your first report issued last month closely mirrors the key foundational principles and policies that are contained within the house. From helping bank allowed to detailing credit banks and unions, you will help craft a less burdensome, healthy repertory system. The actions that you and the demonstration are taking to ensure the competitiveness of the u. S. Financial system are a welcome change, and one that i fully support. Thank you for being here, and the committee looks for to working with you. I now yield four minutes to the Ranking Member for an Opening Statement. Welcome, secretary mnuchin. Secretary of the treasury, you have a wide range of responsibilities that are of great horns to our economy that are of great importance to our economy and American People. These range from secret our Financial System to advancing u. S. Values internationally. One bureau within the treasury responsible for safeguarding our Financial System is the Financial Crimes Enforcement Network. Andh as you know, collects analyzes and disseminates Financial Intelligence, in addition to suspicious activity reports, foreign bank reports and other reports. They have numerous information sharing arrangements with foreign Financial Intelligence units, making the bureau will curbioned to identify and illicit activity. It is critical to the American Public to know the extent to which the president , his family, and is associates colluded with russia for the 2016 election. Questions have been raised about the involvement with russia. As a committee of jurisdiction over treasury, we too have our own share of questions. Importantly, u. S. Secretary of the treasury are wellpositioned to assist this committee in fulfilling its oversight responsibilities and assessing President Trumps financial entanglements with russia. However, even though you have indicated i think im more indicated on more than one occasion, you do take requests from members of congress seriously. You do not respond to a letter from me or my colleagues requesting copies of all pertinent and financial records related to President Trumps financial transactions, business ties to russia. Your staff did call yesterday afternoon while you are preparing for this hearing. I am looking forward to hearing directly from you about this matter today. There are also other areas where i have serious concerns. In june, the treasury released a report with recommendations that largely mirror you recommended cutting the Consumer FinancialProtection Bureau and rolling back important. Frank reform, including rules in place to ensure the stability of our Financial System with stress test and living wills. These recommendations are deeply harmful and shortsighted, given the progress we have made since the financial crisis. I also i remain concerned about the practices that took place at one west under your leadership, even though one west foreclosed over 36,000 families in california. And that has been the subject of numerous investigations. This president has selected numerous one west officials, including you, to fill government posts. For example, joseph, a former one west executive, has been nominated by trump to leave the office of the comptroller of the currency, which regulates the largest banks. Many democrats are concerned about the potential in a complex and interest with regard to a recent department of justice settlement with one west and any pending investigation into one west for wrongdoing that occurred during your tenure. So, i look for to hearing from you, and what you have to share with us today, and i yield back the balance of my time. The chair now recognizes the gentleman from kentucky, mr. Borage, chairman of our subcommittee for two minutes. Newton, thank you for your service and welcome to your first hearing on the state of the international Financial System. , which has jurisdiction over International Financial institutions, sanctions and Monetary Policy, you are off to a great start. Two days ago, this many passed a bill that would empower treasury to encourage muchneeded reforms to the world Banks International association, and reduce a level by 580 million. I think your staff are working so effectively on this legislation. We also looking for to the positive impact that you can have at the Financial StabilityOversight Council. I would urge you and your capacity as lead member, to assess the extent to which unconventional Monetary Policy and the feds 4. 5 billion Balance Sheet distorts economic decisions, and constrain american households and businesses from enjoying a faster and more complete recovery. As dallas fed president kaplan recently wrote, there is a cost to excessive accommodation in terms of limiting returns, as well as print distortions and imbalances in investing, hiring, and other business decisions. Monetary policy accommodation is not costless. Perhaps, the greatest threat that we face of the threats from terrorism around the world, and i hope to continue to work with you on key proposals that would help thwart terrorism. I want to applaud to work in the june treasury report and his call for muchneeded migratory relief for Community Financial institutions. According to a recent estimate, these reforms you proposed to allow firms to lend up to 2 trillion in the real economy, which would create opportunities for americans in all walks of life. Again, thank you, and i look for to your testimony. I yield back. Recognizes thew woman from wisconsin. Thank you very much. I know i would feel a lot better, mr. Secretary, if you support a strong, independent Protection Bureau, especially given your reputation as a foreclosure king. Im disappointed that you and the Trump Administration supported repeal of the extracted industry disclosures of the doddfrank 1504, and treasury is just behind the crooked deal with russia, while now secretary tillerson was the ceo. Officials thatom section 1502, conflict mineral provisions are working fine. I am hoping that you will support 1502. I am in their nice, sweet person and i hope to get today, but trust me, im going to fight you to the end. To keep that in place. [laughter] i look for to your testimony. The lady yields back. Today, we will welcome the testimony of the honorable Steven Mnuchin. Since this is a new administration, and the first time we have had a cabinetlevel official testify before our committee, i thought it would be prudent to review the committee and house rules on the quorum. Members are required under the rules of the house to observe the principles and courtesies and debates set forth. Divisions,t related by speaking and acting respectfully and by refraining from the use of disorderly words for on Parliament Tree language, which includes intruding motives, charging falsehoods, or implying a lack of intelligence. I would also at that over the last two years, my colleagues on the other side of the aisle have expanded upon these principles on the record, to say that no administration could be quoteunquote badgered, or ubject to i got you politics. And no administration witness should be talk to badly. No one should be interrupted. Every witness should be treated fairly. Every administration witness has the right to be able to respond. My democratic colleagues have opined that every administration witness should be treated with dignity, propriety, courtesy, and decorum. Inquiryntary Parliament Tree inquiry. Will this witness be sworn in . Custom to swear in administration witnesses. It is not our intent. Mr. Chairman, since you took time to talk about how we should conduct ourselves today, i would like to remind you and your colleagues how you treated mr. Ray, and i never heard you take time out to say a member should conduct themselves. So, while we have not done some things in the past, and you are doing it now, i would like to make sure that i understand that you do not wish to swear in this witness . I believe in my tenure that we have sworn in one witness, and we have never required the obama demonstration officials to be sworn in. It is not my intention to swear in this witness. Profitimply by intent to from the minoritys advice on decorum. Thank you vary much, mr. Chairman. The book on the testimony of the honorable Steven Mnuchin. This is the first time he has appeared before our immediate ridiculous one is before our committee. Secretary mnuchin was born and raised in new york city and holds a bachelors degree from young university. Ofretary has several decades retail and Investment Banking in paris, which he brings to the office in which he now holds. Without objection, the witness. Written statement will be made part of the record. Welcome for your first appearance before our committee and you are not recognized for five and is to give an oral presentation of your testimony. Sec. Mnuchin thank you very. Uch members of the committee, i am pleased to be her today and a look for to discussing the important issues to the American People. I would like to begin by addressing treasurys report. Uses its leadership rolling in International Financial institutions to help ensure that they are carrying out there do core mandates effectively carrying out their core mandates effectively. As a federal government in streamlining, treasury is focused on keeping the International Financial institutions as costeffective as possible. We have pressed the imf to increase its focus on the need to address global, economic imbalances. This will help to improve prospects the u. S. Jobs and exports, while holding the imfs administrative budget largely flat in real terms. In addition, u. S. Support of multilateral a development banks, employ their Balance Sheets, have made it possible for us to substantially increase the assistance that they can provide to the worlds poorest countries, while reducing u. S. Budgetary contributions. Where it makes sense, we will preserve these investments and remain a top donor and shareholder, while also balancing priorities across other parts of the government. In doing so, we will continue to promote access to Economic Opportunities to eliminate poverty, and to build shared prosperity. When the world is prosperous and stable, america weeps the benefits. I would like to now highlight the domestic reform agenda. Let me begin by congratulating the committee on its passage of the choice act. Supportedstrations this legislation, and we will work with congress to reform the financial military system. Financial, regulatory system. This has given us time to see what has worked and what has not. Is committedation to robust, Financial System with a free flow of credit that fuels the engine of american growth. This means allowing Community Financial institutions to land, and Small Businesses access to borrowing. Theeans giving americans opportunity to make independent, Financial Decisions, such as buying a home, and saving for retirement. This also means preventing taxpayer bailouts. In theory, the president issued an executive order that directed the department of the treasury to report on whether financial regulations were in line with in june treasury released the first in a series of reports and response to this executive order. Our first report dealt with banks and Credit Unions. This provides a roadmap to better align the financial andem to serve consumers businesses and drive Economic Growth and while the report focused heavily on regulatory actions that can be taken by the executive branch, it also included a number of legislative recommendations to more appropriately align the laws governing depository institutions with the president s Core Financial principles. One of these is properly tailoring Capital Requirements for small, midsize, and regional banks that pose little or no risk to the Financial System. It included, the endorsement of a regulatory off around of a highly capitalized institution. Another recommendation is structural reform to provide a mechanism to identify a single regulator to ensure that there is not unneeded overlap or duplicated efforts. A third is a legislative remedy to the overly complex oper rule. Statutory changes to make the bureau more accountable. Working together we can implement both regulatory reforms and legislative remedies , particularly for the benefit of Community Banks and midsized institutions. Housing finance reform is also a priority of the treasury and the administration. The Current System in which gse agency in perpetual conservatorship is not sustainable and leaves taxpayers at risk. Our Housing Finance policy should be clear and should be designed to provide financing for homeowners and owners of multifamily units. Additionally policy should increase private sector participation and protect taxpayers. Component istical comprehensive tax reform. We are gone too long without addressing our tax system. Our business rate is one of the highest and complicated in the