The House Financial Services Committee, chaired by Congressman Jeb Hensarling, has booked a busy schedule next week. Included on the list of hearings is a visit from Secretary of the Treasury Jack Lew. Testifying on Thursday, September 22nd at 10AM, Lew will be addressing the Annual Report of the Financial Stability Oversight Council (FSOC) – a governmental entity created by Dodd-Frank. FSOC includes the participation of all the financial regulators and then some. The additional layer of governmental oversight has come under criticism in recent years as not being very effective in “identifying risks to the financial stability of the United States.” In fact, Hensarling himself previously labeled FSOC “the nation’s least transparent federal entity.” FSOC has also addressed the rise of Marketplace Lending in its most recent Annual Report. At that time, FSOC stated;
“As marketplace lending continues to grow, financial regulators will need to be attentive to signs of erosion in lending standards. In other markets, business models in which intermediaries receive fees for arranging new loans but do not retain an interest in the loans they originate have, at times, led to incentives for intermediaries to evaluate and monitor loans less rigorously. Furthermore, given the rapid rise in the number of marketplace lenders who often compete with traditional lenders for the same borrowers, there is a risk that underwriting standards and loan administration standards of these lenders could deteriorate to spur volumes, which could spill over into other market segments.”
Also on the schedule for HFSC is:
September 21 @ 10AM
The Subcommittee on Capital Markets and Government Sponsored Enterprises will hold a hearing entitled “Corporation Governance: Fostering a System that Promotes Capital Formation and Maximizes Shareholder Value.”
The hearing will examine the ability of the U.S. capital markets to permit public companies to raise capital efficiently as well as the Federal and state securities regulatory and legal regime with which public companies must comply.
The full schedule is available here.