Speaker 1: It's going to be a busy week here in Washington
Speaker 1: as the one hundred and eighteenth Congress tries to wrap
Speaker 1: up its work for the year. That of course, will
Speaker 1: include finding a way to keep the government open past
Speaker 1: midnight on Friday, where the deadline is, and we have
Speaker 1: no deal yet as to how exactly that happens. We
Speaker 1: know it will be a stopgap measure of some time,
Speaker 1: likely going into March. We just don't know how exactly
Speaker 1: the sausage is going to be made and what compromise
Speaker 1: the Democrat and Republican leaders in both chambers will reach,
Speaker 1: But we do know what does need to get done
Speaker 1: and get a signature from President Biden by that deadline
Speaker 1: on Friday, so that when we come back in January
Speaker 1: and the one hundred and nineteenth Congress takes its seats,
Speaker 1: they can get started on their to do list, and
Speaker 1: certainly the incoming chairs of the various committees in the
Speaker 1: House have to do lists of their own, and one
Speaker 1: of them is joining us now here on Bloomberg TV
Speaker 1: and Radio. He was just named the incoming chair of
Speaker 1: the House Financial Services Committee, and his Live with Me
Speaker 1: from Capitol Hill. Congressman French Hill of Arkansas. Congratulations sir,
Speaker 1: first and foremost for getting the gabble here, and I
Speaker 1: do want to get into everything you want to accomplish
Speaker 1: in financial services in the two years ahead. Could we
Speaker 1: just begin, though, with what exactly is going to happen
Speaker 1: this week? Is there's not a lot of time to
Speaker 1: work with here, and I wonder if the seventy two
Speaker 1: hour rule to read this stopgap legislation after its released
Speaker 1: is going to have to be waived.
Speaker 2: Well, Kayley, it's always good to be with you. Thanks
Speaker 2: for having me. Usually we hope to have that bill
Speaker 2: posted over the weekend, and we didn't see it, so
Speaker 2: you're right, we may be confronted with a tight time
Speaker 2: frame in order to review it before we have to
Speaker 2: vote on it and get the Senate to approve it
Speaker 2: before Friday.
Speaker 1: Well, that certainly is true. And when we talk about
Speaker 1: it being a deal making here, we understand that the
Speaker 1: Speaker is looking for economic aid to farmers and might
Speaker 1: need to offer out something else to Democrats in exchange
Speaker 1: for that. Are you concerned at all about what additional
Speaker 1: provisions do Democrats want could work its way into this
Speaker 1: continuing resolution?
Speaker 2: Well? Sure, because the real issue is that the continuing
Speaker 2: resolution be done at the Fiscal Responsibility Act levels. This
Speaker 2: is the agreement. I think the Speaker's done an outstanding
Speaker 2: job negotiating that. But our farm counties in this country
Speaker 2: are facing a crisis. The last three years have been
Speaker 2: bad on pricing. There were high supplies and number of
Speaker 2: commodities this year which depressed price furthers. So they've had
Speaker 2: high costs from the Ukraine invasion plus now low prices
Speaker 2: this year. So it's tough to be refinanced if you've
Speaker 2: had three bad years of a row. I was an
Speaker 2: ag lender many many years ago in banking, so I
Speaker 2: know how tough that is. The Speakers trying to get
Speaker 2: a deal where we just simply help the farm economy.
Speaker 2: I don't know why the Democrats are trying to take
Speaker 2: advantage of farmers who are hurting. This is not like
Speaker 2: it's a Republican policy, It's an American policy and try
Speaker 2: to help these farmers get through a tough period.
Speaker 1: Well, I'm glad you raised your background is once being
Speaker 1: a lender and community banker, sir, as we understand that
Speaker 1: is one of the reasons why you were able to
Speaker 1: win the gavel in what was a competitive race for
Speaker 1: the Chairmanship of Financial Services. So let's get into what
Speaker 1: you want to accomplish. I'd like to begin with crypto
Speaker 1: as this is Bloomberg TV and Radio. We obviously saw,
Speaker 1: as you shared the Digital Asset Subcommittee, through your committee
Speaker 1: and the House, the passage of the FIT twenty one
Speaker 1: Act Crypto Market Structure legislation that divvied up responsibilities between
Speaker 1: the CFTC and SEC. Are you going to start there
Speaker 1: and make changes or would you rather start from scratch
Speaker 1: when it comes to crypto market structure?
Speaker 2: Well, first, Dusty Johnson from South Dakota and Gt. Thompson
Speaker 2: of Pennsylvania, both on the AD Committee, were my partners.
Speaker 2: They'll be my partners again in this Congress. We don't
Speaker 2: have a learning curve here. We can take the lessons
Speaker 2: that we learned in one hundred and eighteenth Congress by
Speaker 2: producing FIT, which was a bill that got seventy one
Speaker 2: Democratic votes here in the House, and the work that
Speaker 2: Jerman McKenny did with the ranking Member Maxine Waters on
Speaker 2: a stable coin bill. Both those will be priorities coming
Speaker 2: into the new Congress. We want to work with the
Speaker 2: Trump administration and Senate Banking Committee Chairman Tim Scott and
Speaker 2: try to get all of us on the same page
Speaker 2: as to how do we proceed in the one hundred and nineteenth.
Speaker 2: We've got new interest in the Senate. Bill Haggerty of
Speaker 2: Tennessee introduced his own bill in and around digital assets
Speaker 2: just before the election.
Speaker 1: Well, so what we consider though the actual market structure
Speaker 1: questions here? Obviously when FIT twenty one was passed, Gary
Speaker 1: Gensler was the chair of the secs he is now
Speaker 1: that will be changing in the new administration. Presumably it
Speaker 1: will be Paul Atkins, and I wonder if you're more
Speaker 1: comfortable with the SEC having greater authority over crypto compared
Speaker 1: to the CFTC under that kind of regime, if it's
Speaker 1: no longer going to be Gary Gensler at the HELM.
Speaker 2: Well, we didn't draft the FIT twenty one legislation because
Speaker 2: Gary Gensler was the chairman of the SEC. We drafted
Speaker 2: it because we thought there needed to be clear, transparent,
Speaker 2: transparent fit for purpose rules of the road for digital
Speaker 2: asset companies so that tokens that are on a decentralized
Speaker 2: functioning blockchain are treated differently. They're not treated as securities.
Speaker 2: And we put that in law and to find exactly
Speaker 2: how to do it. And I think that's still important
Speaker 2: for the SEC under President Trump and Paul Adkins as
Speaker 2: the chairman elect, because there's some things you can do
Speaker 2: by exemptive relief at the SEC, but there are other
Speaker 2: things that you actually need statutory work for. We're prepared
Speaker 2: to work with the new chairman the new Commission, but
Speaker 2: permanent changes come from making legal changes, not just doing
Speaker 2: exemptive relief at the Commission. So I prefer a legislative solution,
Speaker 2: but I want to work with the chairman and see
Speaker 2: how we can work together well.
Speaker 1: And I do wonder about the working It's not just
Speaker 1: other chairmen in the House and in the Senate, but
Speaker 1: others in this administration, like say David Sachs, Congressman, what
Speaker 1: is your relationship like with him or with other agencies
Speaker 1: that we understand? The White House we'll be giving a
Speaker 1: voice here in the shaping of crypto policy.
Speaker 2: We had a great relationship with the banking regulators, the Treasury,
Speaker 2: and the White House and the Biden administration on this topic,
Speaker 2: and I expect this will be even better in the
Speaker 2: Trump administration. The National Economic Council with Kevin Hastrett and
Speaker 2: Treasury Secretary Designate miscent the banking supervisors that President Trump
Speaker 2: will appoint, all of us will work together along with
Speaker 2: the SEC Chairman on crafting the best policy for digital assets.
Speaker 2: We want America to have a growth policy and a
Speaker 2: fairness and a transparent policy on how to have a
Speaker 2: digital asset economy here in America that produces growth. We
Speaker 2: want to add employees here. We don't want this business
Speaker 2: driven offshore as we witness during the Gensler and Biden
Speaker 2: Harris regime.
Speaker 1: Well, we know the President elect has talked about making
Speaker 1: the US the bitcoin capital of the world. He's also
Speaker 1: floated this notion, Sir, of a bitcoin reserve. Do you
Speaker 1: have any concerns with an establishment of that?
Speaker 2: Well, actually, I think Senator Loomis floated the idea of
Speaker 2: the reserve, and President Trump heard about it when he
Speaker 2: was at the Bitcoin conference in Nashville during July. This
Speaker 2: is something that has to be looked at carefully if
Speaker 2: that has benefits to the US Treasury and to the
Speaker 2: US balance sheet, and I'm sure Congress and members on
Speaker 2: both sides of the capital will do that.
Speaker 1: As we get into other banking matters as well, would
Speaker 1: you support a move to abolish the FDIC and to
Speaker 1: fold its duties into the Treasury Department.
Speaker 2: I think you've got to look at whatever proposals that
Speaker 2: the incoming administration has as part of a matrix, like
Speaker 2: what is the big picture objective here? Most people in
Speaker 2: Congress want outstanding, coordinated, harmonized supervision of our financial institutions
Speaker 2: that encourage new banks, encourage growth, encourage of fair minded
Speaker 2: rules and capital standards. And they don't want to create
Speaker 2: a situation where our community banks are going out of
Speaker 2: business because they can't comply with all the rules. And
Speaker 2: we want tailoring, that is, we want smaller banks with
Speaker 2: simpler balance sheets and simpler strategies to be treated differently
Speaker 2: than a big, large, complex company like City Bank or
Speaker 2: JP Morgan Chase. But we're willing to listen to what
Speaker 2: proposals that the administration has on supervisory changes.
Speaker 1: So that's not a no that you wouldn't necessarily be
Speaker 1: opposed from the start on abolishing the FDIC or shifting
Speaker 1: the way in which that insurance mechanism actually happens in
Speaker 1: the US.
Speaker 2: Well, I don't personally, I've never seen anybody submit an
Speaker 2: idea like that. I've read about it in the news,
Speaker 2: but I think deposit insurance is an important feature. We
Speaker 2: want to make sure it's run right. The FDIC has
Speaker 2: a poor leadership right now, but it's been an institution
Speaker 2: that's carried out its mission in a very tailored way.
Speaker 2: And I would just argue that we have, mostly in
Speaker 2: the Biden Harris regime, a personnel problem, not a structural problem.
Speaker 2: But the supervisory process in our country between state and
Speaker 2: federal supervisors has gotten convoluted. It's gotten in conflict with
Speaker 2: each other, it's not harmonized, it's not coordinated, and so
Speaker 2: there are a lot of improvements that need to be
Speaker 2: made in my view and bank supervision. So again I'm
Speaker 2: open minded about how those could be made. But just
Speaker 2: taking one out of context and saying that you should
Speaker 2: do away with the FDIC, I don't think so particularly
Speaker 2: the right way to go about it.
Speaker 1: Well, if it is to stick around, what do you
Speaker 1: see whoever Trump taps to lead the FDIC and the
Speaker 1: OCC for that matter, as their chief priority, what would
Speaker 1: you hoe hope that they deal with first?
Speaker 2: Well, first tailoring, following the law, making sure that their
Speaker 2: light touch regulation where it's deserved, and heavy complex tux
Speaker 2: regulation where it's merited because of the nature of the business. Further,
Speaker 2: I think they have to understand that fintech is here,
Speaker 2: and AI is here, and they need to deal with
Speaker 2: that reality and make sure that all banks of all
Speaker 2: sizes and broker dealers of all sizes are treated in
Speaker 2: the right way according with their business plan. But de
Speaker 2: banking businesses because they're involved in the fintech or the
Speaker 2: crypto business is not a good approach, and that's what
Speaker 2: we've seen in the Biden Harris administration, and in my
Speaker 2: view that's a key point to get changed as we
Speaker 2: change administrations. We do not want customers debanked because they're
Speaker 2: in a legal business, and we don't want to see
Speaker 2: banks and thrifts or credit unions or broker dealers treated
Speaker 2: inappropriately by the supervisors.
Speaker 1: Well, certainly we've seen a number of pursuits during this
Speaker 1: administration in regard to banking, including of course the initial
Speaker 1: proposal of the BOSL three un gained by the FEDS
Speaker 1: Vice Chair of Supervision Michael Barr, that obviously is now
Speaker 1: being changed. It's unclear what form it's ultimately going to take, sir,
Speaker 1: and I do wonder how you at the Financial Services
Speaker 1: Committee are hoping to shape ultimately that endgame and what's
Speaker 1: going to happen to capital requirements, assuming Michael Barr is
Speaker 1: still going to be the guy in this role.
Speaker 2: Well, look, the Board of Governors is responsible for obviously
Speaker 2: that decision, and I don't believe that the Board of
Speaker 2: Governors is supportive of Basil three end game as proposed.
Speaker 2: I think President Trump should withdraw that rule and repropose
Speaker 2: whatever the right more balanced approach is. It'd got thousands
Speaker 2: of comments, they were all negative, and I don't believe
Speaker 2: that the Biden Harris' effort to just simply tweak the
Speaker 2: proposal and re release it is the way to go.
Speaker 2: I think it should be withdrawn and then be reconsidered
Speaker 2: by the Trump administration.
Speaker 1: As we consider other Biden era banking policies. Would you
Speaker 1: support a congressional review through the Congressional Review Act of
Speaker 1: any of them?
Speaker 2: Well, we have. We've done that for the Small Business
Speaker 2: Data Reporting, which is Section ten seventy one, that was
Speaker 2: a CFPB proposal. We've done that for the current the
Speaker 2: Corporate Transparency Act, which I still hope gets put in
Speaker 2: the cr this week to delay that. This is this
Speaker 2: beneficial ownership reporting for thirty two million American small businesses
Speaker 2: that I believe is the wrong approach and handled in
Speaker 2: an incorrect way. So I hope that we can use
Speaker 2: We've used the CRA for that, and we want to
Speaker 2: try to delay the implementation of that for a year
Speaker 2: since to give us an opportunity to reconsider. We'll use
Speaker 2: the Congressional Review Act. We'll use our Article one power
Speaker 2: on funding through looking at activities in the Financial Services
Speaker 2: Committee that are not currently authorized, and so we're going
Speaker 2: to use all the oversight authorities that we have at
Speaker 2: house financial Services to roll back what we believe to
Speaker 2: be an inappropriate level of regulation proposed by Biden. Harris.
Speaker 1: I'd like to ask you, as well a Congressman, about
Speaker 1: something we're hearing a lot about in Washington these days
Speaker 1: as we get ready for the second administration and for
Speaker 1: the doge to make their recommendations. It's this idea of
Speaker 1: remote work, or perhaps a return to working in the
Speaker 1: office instead of working remotely for those who work in
Speaker 1: Washington through federal agencies. Is there anything Congress can do
Speaker 1: to help the administration this incoming administration see through that
Speaker 1: goal of having people return to the office, even if
Speaker 1: there's existing union contracts that allow them to work from home.
Speaker 2: And this is the advantage of the DOGE process with
Speaker 2: Vivek and Elon. I think it's good to have for
Speaker 2: profit business executives look at the sedimentary regulatory burden that's
Speaker 2: been built up over years, and also the HR and
Speaker 2: work practices in the bureaucracy and try to find ways
Speaker 2: to do things in a more effective way efficient way,
Speaker 2: and we're possible to get out of certain businesses that
Speaker 2: are not necessary. We have a real issue here in Washington,
Speaker 2: d C. I think the last number I saw Kayley
Speaker 2: was only about forty percent of the federal workforce, and
Speaker 2: the District Columbia is in the office, and so the
Speaker 2: question is is that appropriate or inappropriate based on the
Speaker 2: kind of work that they're doing. We've seen since the
Speaker 2: pandemic the whole economy shift workflows, and so from a
Speaker 2: federal government point of view, maybe they don't need to
Speaker 2: do that in some areas, like if you're working in
Speaker 2: an auditing capacity, you're on the road a lot or
Speaker 2: working from a computer, and you want to do that
Speaker 2: from home. But that's the kind of good, straightforward look
Speaker 2: I think we'll get from DOJE in Vavek and Elon
Speaker 2: as they work with these Cabinet secretaries to assess workloads,
Speaker 2: management techniques, the use of technology, and the use of
Speaker 2: where people should be during the workday.
Speaker 1: All right, Congressman, thank you so much for being generous
Speaker 1: with your time on Bloomberg TV and radio today. That's
Speaker 1: Republican Congressman French Hill of Arkansas, the incoming chairman of
Speaker 1: the House Financial Services Committee. Happy holidays to you, sir,
Speaker 1: and will see you in one hundred and nineteenth when he,
Speaker 1: of course, will be taking that gavel