Capital Markets and Emergency Lending in the Covid-19 Era
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CAPITAL MARKETS AND EMERGENCY LENDING IN THE COVID-19 ERA VIRTUAL HEARING BEFORE THE SUBCOMMITTEE ON INVESTOR PROTECTION, ENTREPRENEURSHIP, AND CAPITAL MARKETS OF THE COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS SECOND SESSION JUNE 25, 2020 Printed for the use of the Committee on Financial Services Serial No. 116–98 ( U.S. GOVERNMENT PUBLISHING OFFICE 42–942 PDF WASHINGTON : 2021 VerDate Nov 24 2008 15:21 Feb 22, 2021 Jkt 095071 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 K:\DOCS\HBA177.160 TERRI HOUSE COMMITTEE ON FINANCIAL SERVICES MAXINE WATERS, California, Chairwoman CAROLYN B. MALONEY, New York PATRICK MCHENRY, North Carolina, NYDIA M. VELA´ ZQUEZ, New York Ranking Member BRAD SHERMAN, California ANN WAGNER, Missouri GREGORY W. MEEKS, New York FRANK D. LUCAS, Oklahoma WM. LACY CLAY, Missouri BILL POSEY, Florida DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri AL GREEN, Texas BILL HUIZENGA, Michigan EMANUEL CLEAVER, Missouri STEVE STIVERS, Ohio ED PERLMUTTER, Colorado ANDY BARR, Kentucky JIM A. HIMES, Connecticut SCOTT TIPTON, Colorado BILL FOSTER, Illinois ROGER WILLIAMS, Texas JOYCE BEATTY, Ohio FRENCH HILL, Arkansas DENNY HECK, Washington TOM EMMER, Minnesota JUAN VARGAS, California LEE M. ZELDIN, New York JOSH GOTTHEIMER, New Jersey BARRY LOUDERMILK, Georgia VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia AL LAWSON, Florida WARREN DAVIDSON, Ohio MICHAEL SAN NICOLAS, Guam TED BUDD, North Carolina RASHIDA TLAIB, Michigan DAVID KUSTOFF, Tennessee KATIE PORTER, California TREY HOLLINGSWORTH, Indiana CINDY AXNE, Iowa ANTHONY GONZALEZ, Ohio SEAN CASTEN, Illinois JOHN ROSE, Tennessee AYANNA PRESSLEY, Massachusetts BRYAN STEIL, Wisconsin BEN MCADAMS, Utah LANCE GOODEN, Texas ALEXANDRIA OCASIO-CORTEZ, New York DENVER RIGGLEMAN, Virginia JENNIFER WEXTON, Virginia WILLIAM TIMMONS, South Carolina STEPHEN F. LYNCH, Massachusetts VAN TAYLOR, Texas TULSI GABBARD, Hawaii ALMA ADAMS, North Carolina MADELEINE DEAN, Pennsylvania JESU´ S ‘‘CHUY’’ GARCIA, Illinois SYLVIA GARCIA, Texas DEAN PHILLIPS, Minnesota CHARLA OUERTATANI, Staff Director (II) VerDate Nov 24 2008 15:21 Feb 22, 2021 Jkt 095071 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 K:\DOCS\HBA177.160 TERRI SUBCOMMITTEE ON INVESTOR PROTECTION, ENTREPRENEURSHIP, AND CAPITAL MARKETS BRAD SHERMAN, California, Chairman CAROLYN B. MALONEY, New York BILL HUIZENGA, Michigan, Ranking DAVID SCOTT, Georgia Member JIM A. HIMES, Connecticut STEVE STIVERS, Ohio BILL FOSTER, Illinois ANN WAGNER, Missouri GREGORY W. MEEKS, New York FRENCH HILL, Arkansas JUAN VARGAS, California TOM EMMER, Minnesota JOSH GOTTHEIMER. New Jersey ALEXANDER X. MOONEY, West Virginia VICENTE GONZALEZ, Texas WARREN DAVIDSON, Ohio MICHAEL SAN NICOLAS, Guam TREY HOLLINGSWORTH, Indiana, Vice KATIE PORTER, California Ranking Member CINDY AXNE, Iowa ANTHONY GONZALEZ, Ohio SEAN CASTEN, Illinois BRYAN STEIL, Wisconsin ALEXANDRIA OCASIO-CORTEZ, New York (III) VerDate Nov 24 2008 15:21 Feb 22, 2021 Jkt 095071 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 K:\DOCS\HBA177.160 TERRI VerDate Nov 24 2008 15:21 Feb 22, 2021 Jkt 095071 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 K:\DOCS\HBA177.160 TERRI C O N T E N T S Page Hearing held on: June 25, 2020 .................................................................................................... 1 Appendix: June 25, 2020 .................................................................................................... 51 WITNESSES THURSDAY, JUNE 25, 2020 Clayton, Hon. Jay, Chairman, U.S. Securities and Exchange Commission (SEC) ..................................................................................................................... 5 APPENDIX Prepared statements: Clayton, Hon. Jay ............................................................................................. 52 ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD Sherman, Hon. Brad: Written statement of the Council of Institutional Investors ........................ 63 Written statement of the Credit Union National Association ...................... 88 Letter to Chairman Clayton from various undersigned organizations ........ 90 Written statement of the National Association of Securities Professionals 111 Written statement of the North American Securities Administrators Asso- ciation, Inc. .................................................................................................... 116 Written statement of Principles for Responsible Investment ....................... 129 Huizenga, Hon. Bill: Written statement of the U.S. Chamber of Commerce .................................. 145 Clayton, Hon. Jay: Written responses to questions for the record submitted by Chairman Sherman ........................................................................................................ 151 Written responses to questions for the record submitted by Representa- tive Himes ..................................................................................................... 158 Written responses to questions for the record submitted by Representa- tive Cleaver ................................................................................................... 161 (V) VerDate Nov 24 2008 15:21 Feb 22, 2021 Jkt 095071 PO 00000 Frm 00005 Fmt 5904 Sfmt 5904 K:\DOCS\HBA177.160 TERRI VerDate Nov 24 2008 15:21 Feb 22, 2021 Jkt 095071 PO 00000 Frm 00006 Fmt 5904 Sfmt 5904 K:\DOCS\HBA177.160 TERRI CAPITAL MARKETS AND EMERGENCY LENDING IN THE COVID-19 ERA Thursday, June 25, 2020 U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INVESTOR PROTECTION, ENTREPRENEURSHIP, AND CAPITAL MARKETS, COMMITTEE ON FINANCIAL SERVICES, Washington, D.C. The subcommittee met, pursuant to notice, at 12:06 p.m., in room 2128, Rayburn House Office Building, Hon. Brad Sherman [chair- man of the subcommittee] presiding. Members present: Representatives Sherman, Maloney, Himes, Foster, Meeks, Vargas, Gottheimer, San Nicolas, Porter, Axne, Casten; Huizenga, Stivers, Wagner, Hill, Mooney, Davidson, Hol- lingsworth, Gonzalez of Ohio, and Steil. Ex officio present: Representatives Waters and McHenry. Also present: Representatives Dean, Garcia of Texas; and Budd. Chairman SHERMAN. The Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets will come to order. Without objection, the Chair is authorized to declare a recess of the subcommittee at any time. Also, without objection, members of the full Financial Services Committee who are not members of the subcommittee are authorized to participate in today’s hearing, as long as they participate virtually. And they will be recognized after members of the subcommittee have been recognized. Members who are participating via the Webex platform are re- minded to keep their video function on at all times, even if they are not being recognized by the Chair. Members who are participating via the Webex platform are also reminded that they are responsible for muting and unmuting them- selves, and that they should mute themselves both before and after the time that they are allotted. But in addition to that, consistent with regulations accompanying H. Res. 965, staff will also be muting Members when they are not being recognized. Members are reminded that all House rules relating to order and decorum apply to this hybrid hearing. In addition, the Chair informs members participating in person that, in enforcing the order and decorum in this hearing room, the Chair has the duty to protect the safety of the Members. Last week, the Attending Physician provided the following guidance: ‘‘For U.S. House of Representatives’ meetings in limited enclosed spaceS—and this is one—such as a committee hearing room, for greater than 15 minutes, face coverings are required.’’ Accordingly, the Chair will treat wearing masks as a matter of order and deco- (1) VerDate Nov 24 2008 15:21 Feb 22, 2021 Jkt 095071 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 K:\DOCS\HBA177.160 TERRI 2 rum, and all Members should wear masks at all times in this room. Members who do not wish to wear masks may participate virtually through the Webex platform. Today’s hearing is entitled, ‘‘Capital Markets and Emergency Lending in the COVID-19 Era.’’ Mr. HUIZENGA. Mr. Chairman? I have a point of inquiry on that. Chairman SHERMAN. Yes? Mr. HUIZENGA. It was my understanding, based on the rules, that masks were required unless you were speaking, and during your question period. That was my understanding, so I just want to make sure it is clear for our— Chairman SHERMAN. It is the strong preference of the Chair that we wear the masks even while speaking, but that rule will be less enforced than at other times. The reason for that is, if you are not wearing a mask before you speak, you may not be called on in order. But, once I call on some- one, we will rely upon your dedication to the health of yourself but, more importantly, everyone else in the room, and urge you to con- tinue wearing your mask. You are, as we have seen from a number of instances, more like- ly to spread the disease when speaking than when not speaking. So I would urge you to do so, but my tools for enforcing that are more limited. Mr. HUIZENGA. Thank you, Mr. Chairman. I appreciate that. And to my Members, I advise your comfort level, and then, as we are dealing with this, much like the rules on the House Floor, if you are speaking, I think we are free to add to the comfort level, being able to deal with that. So, thank you. I yield back. Chairman SHERMAN. Okay. Accordingly, the Chair will treat wearing masks as a matter of order and decorum, and all