Kennedy urges FDIC to stop companies from taking advantage of legal loophole during pandemic
Aug 12 2020
“I have concerns that we are approaching an inflection point that compromises this nation's longstanding policy of not mixing commerce and banking. In particular, I am deeply concerned about companies the size of Rakuten, Google, or Facebook offering banking services without proper supervision. The ILC loophole was never meant to address these types of firms.”
MADISONVILLE, La. – Sen. John Kennedy (R-La.) today wrote to the Chairman of the Federal Deposit Insurance Corporation (FDIC), Jelena McWilliams, urging her not to allow industrial loan companies (ILCs) to take advantage of a loophole in the Bank Holding Company Act during the coronavirus pandemic. The loophole allows ILCs to circumvent supervision by the Federal Reserve and to pursue commercial activities that bank holding companies are not allowed to pursue.
“I have concerns that we are approaching an inflection point that compromises this nation's longstanding policy of not mixing commerce and banking. In particular, I am deeply concerned about companies the size of Rakuten, Google, or Facebook offering banking services without proper supervision. The ILC loophole was never meant to address these types of firms,” said Kennedy.
Specifically, Kennedy asked the FDIC not to approve any ILC-related applications, including applications from Square and Nelnet, until Congress and the FDIC can find a solution to the loophole.
“We need to tread lightly and ensure that complicated policy trade-offs are considered, while still encouraging innovation that reduces barriers to banking for customers and challenges market participants to improve their business models. Although Congress may be in the best position to address these complicated policy trade-offs, we would like to do so alongside the FDIC,” Kennedy added.
Kennedy’s letter is available here.
Kennedy opposes nomination of SocGen lawyer to investor protection board, cites Stanford Ponzi scheme
Aug 11 2020
“The SIPC Board of Directors should not include a current employee of an entity that is fighting tooth and nail against returning assets to victims of investment fraud. On behalf of the many Louisianians that SocGen is choosing not to help, I oppose Mr. Finkel’s nomination and respectfully urge the President to consider a new nominee.”
MADISONVILLE, La. – Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, wrote today to White House Chief of Staff Mark Meadows urging the administration to withdraw its nomination of Michael Finkel to be a Director of the Securities Investor Protection Corporation (SIPC).
Finkel currently works at Société Générale (SocGen) as Director and Senior Counsel. SocGen controls $210 million that belongs to victims of Robert Allen Stanford’s $7 billion Ponzi scheme.
“Nominating a SIPC Director from SocGen sends the wrong signal to investors across America. The SIPC Board of Directors should not include a current employee of an entity that is fighting tooth and nail against returning assets to victims of investment fraud. On behalf of the many Louisianians that SocGen is choosing not to help, I oppose Mr. Finkel’s nomination and respectfully urge the President to consider a new nominee,” wrote Kennedy.
More than 1,000 Louisianians from Baton Rouge, Covington and Lafayette lost significant amounts of their life savings from Stanford’s fraud, but SocGen refuses to return these funds to victims of the second largest securities fraud in U.S. history.
Kennedy’s letter is available here.
“The trend of desecrating Catholic spaces and property must stop. I trust you are actively working to identify and prosecute those who have committed these destructive acts.”
MADISONVILLE, La. – Sen. John Kennedy (R-La.) today wrote to Attorney General Bill Barr, asking that he act to end a series of assaults on Catholic churches and icons. Since May, America has seen at least 19 attacks on Catholic churches, statues, businesses, cemeteries, parishioners and personnel.
“The trend of desecrating Catholic spaces and property must stop. I trust you are actively working to identify and prosecute those who have committed these destructive acts. I ask that you also focus your efforts on preventing such violence to both Catholic people and property,” wrote Kennedy to Barr.
The spate of anti-Catholic crimes spans from coast to coast. On July 11, a man set fire to a church in Florida with parishioners inside. On the same day outside a Catholic church in Boston, fire destroyed a statue of the Virgin Mary displayed in memory of World War II veterans. St. Mary’s Basilica in Minneapolis, the first basilica in the U.S., was also damaged by fire.
The violence has at times singled out minority groups. A Catholic church founded in 1923 by Middle Eastern immigrants to America was recently spray-painted with anti-police messages.
“The Founding Fathers considered freedom of religion so integral to the fabric of the nation that they codified it in the First Amendment to the Constitution. We cannot let a handful of people destroy this fundamental right,” said Kennedy.
Kennedy’s letter is available here.
“Louisiana’s colleges and universities produce our state’s next generation of leaders. This funding will help schools provide quality post-secondary education so our students can reach their full potential.”
WASHINGTON – Sen. John Kennedy (R-La.), a member of the Senate Appropriations Committee, today announced $5,926,454 in funding from the Department of Education to support education projects around Louisiana.
“Louisiana’s colleges and universities produce our state’s next generation of leaders. This funding will help schools provide quality post-secondary education so our students can reach their full potential,” said Kennedy.
The Student Support Services (SSS) program works to increase the number of low-income college students, first-generation college students and college students with disabilities who complete a post-secondary study program.
Projects supported by this funding include:
- $1,782,577 to support the SSS program through University of Louisiana at Lafayette.
- $564,585 to support the SSS program through Southern University at New Orleans.
- $481,134 to support the SSS program through Northwester State University.
- $435,675 to support the SSS program through Southern University at Shreveport.
- $401,131 to support the SSS program through Louisiana State University.
- $400,987 to support the SSS program through Southeastern Louisiana University.
- $323,716 to support the SSS program through the University of New Orleans.
- $261,888 to support the SSS program through Delgado Community College.
- $261,888 to support the SSS program through Loyola University.
- $261,888 to support the SSS program through River Parishes Community College.
- $261,888 to support the SSS program through Louisiana University Monroe.
- $249,999 to support the Minority Science and Engineering Improvement Program through Dillard University.
- $170,930 to support the SSS program through Dillard University.
- $68,168 to support doctoral dissertation research abroad through Tulane University’s Fulbright-Hays Program.
“The SEC, CFTC, Treasury, Federal Reserve and entire Senate are on the same page. Now, it’s time for the House to enshrine this policy in law. Short of that, we cannot ensure that firms beholden to Communist China will let U.S. regulators examine their books, which means we can’t protect American retirement and college savings from being exploited.”
WASHINGTON – President Trump’s Working Group on Financial Markets, tasked with examining risks to investors posed by the Chinese companies listed on U.S. exchanges, today issued recommendations inspired by the Holding Foreign Companies Accountable Act. Sen. John Kennedy (R-La.) issued the following statement in response to the working group’s decision:
“We’re thankful the president’s working group is committed to holding fraudulent Chinese companies accountable. The SEC, CFTC, Treasury, Federal Reserve and entire Senate are on the same page. Now, it’s time for the House to enshrine this policy in law. Short of that, we cannot ensure that firms beholden to Communist China will let U.S. regulators examine their books, which means we can’t protect American retirement and college savings from being exploited,” said Kennedy.
Background:
The Holding Foreign Companies Accountable Act passed the Senate unanimously this May.
Kennedy introduced the legislation to protect American investors and their retirement savings from foreign companies that have been operating on U.S. stock exchanges while flouting SEC oversight.
On June 4, the Trump Administration issued a presidential memorandum on protecting American investors from the risks posed by Chinese companies that list on U.S. exchanges.
“We must take firm, orderly action to end the Chinese practice of flouting American transparency requirements without negatively affecting American investors and financial markets. We must ensure that laws providing protections for investors in American financial markets are fully enforced for companies listed on United States stock exchanges,” said the memorandum.
The Holding Foreign Companies Accountable Act prohibits securities of a company from being listed on any of the U.S. securities exchanges if the company has failed to comply with the Public Company Accounting Oversight Board’s (PCAOB) audits for three years in a row.
The bill would also require public companies to disclose whether they are owned or controlled by a foreign government, including China’s communist government.
Many Americans invest in U.S. stock exchanges as part of their retirement savings, and dishonest companies operating on the exchanges put Americans at risk. This legislation protects the interest of American investors by ensuring that foreign companies traded in America are subject to the same independent audit requirements that apply to American companies.
Congress established the PCAOB to inspect audits of public companies, ensuring the information companies provide to the public is accurate, independent and trustworthy.
Currently, China’s communist government refuses to allow the PCAOB to inspect audits of companies registered in China and Hong Kong. Such companies represent a keen risk to American investors as nearly 11 percent of all securities class action lawsuits in 2011 were brought against Chinese-owned companies accused of misrepresenting themselves in financial documents.
According to the SEC, 224 U.S.-listed companies are located in countries where there are obstacles to PCAOB inspections. These companies have a combined market capitalization of more than $1.8 trillion.
In the last 10 years, the number of Chinese companies listed on U.S. stock exchanges has increased significantly, as those firms take advantage of the capital available in America.
“China’s government pressures U.S. businesses to read from its communist song sheet while planting its state-owned factories on American soil. Meanwhile, the CCP spies on our citizens and steals our innovation. It’s time to take specific, decisive steps to protect Americans and their businesses from the CCP’s attacks.”
WASHINGTON – Sen. John Kennedy (R-La.) today introduced three bills aimed at protecting Americans from the schemes of the Chinese Communist Party (CCP), which routinely spies on American citizens and bullies American businesses.
“Communist China’s ambition is to eclipse America’s economy and erase our freedoms, and it plays the long game. China’s government pressures U.S. businesses to read from its communist song sheet while planting its state-owned factories on American soil. Meanwhile, the CCP spies on our citizens and steals our innovation. It’s time to take specific, decisive steps to protect Americans and their businesses from the CCP’s attacks, and that’s what these bills do,” said Kennedy.
Kennedy’s package includes the Combatting Chinese Propaganda Act, WeChat No More Act and Exposing China’s Belt and Road Investment in America Act.
Combatting Chinese Propaganda Act
The Chinese Communist Party often pressures U.S. companies to speak and act against their own interests and against American liberties. The Combatting Chinese Propaganda Act prohibits companies that do business in the U.S. from making public statements that reflect the propaganda of the Chinese Communist Party.
Whether a company is U.S.- or foreign-owned, the Combatting Chinese Propaganda Act would prohibit companies operating in America from taking actions that are either against their fiduciary interests or at the bidding of China’s government.
The legislation would also make it illegal for companies to provide China’s government with the personal information of Chinese dissidents.
WeChat No More Act
WeChat has direct connections to the CCP, and the company spread pro-China misinformation with the goal of influencing the American public during the 2016 election. The platform censors topics like the #MeToo movement and Chinese public health scandals.
The WeChat No More Act would prohibit federal officials, federal employees and Members of Congress from downloading WeChat on government devices, with limited exceptions, including intelligence or cybersecurity activities.
This legislation is critical to America’s national security as WeChat is the most popular messaging application in China, with more than one billion users. As a result, people outside of China often depend on WeChat to communicate with those inside China’s borders.
Exposing China’s Belt and Road Investment in America Act
While the Chinese government keeps its domestic markets largely insulated from foreign influence, it regularly invests in the U.S. and other countries under the “greenfield” model. Firms fully owned by China’s communist regime are increasingly buying land, building factories and taking advantage of state and local tax breaks on American soil.
The goal of such state-operated enterprises is to siphon assets, technological innovation and influence away from U.S. businesses in order to expand the global presence of the Chinese Communist Party.
The Exposing China’s Belt and Road Investment in America Act would put Chinese greenfield initiatives under the review of the Committee on Foreign Investment in the United States (CFIUS). CFIUS would review these investments for national security purposes. The bill would extend CFIUS jurisdiction to cover greenfield investments made by entities under the control of the Chinese government. The legislation would also make it mandatory for greenfield investments to file a declaration with CFIUS if China’s government has a substantial interest in the investment.
“Louisiana shrimpers and their families produce the best seafood in the world. . . . The USDA’s decision is a win-win for Louisiana shrimpers and Americans who need a little help to persevere through hard times.”
WASHINGTON – Sen. John Kennedy (R-La.) today welcomed the U.S. Department of Agriculture’s (USDA) decision to purchase $30 million of shrimp to help alleviate food insecurity in the midst of the coronavirus pandemic. The USDA made the purchase under the Agriculture Act of 1935, which provides for national food assistance during emergencies.
“Louisiana shrimpers and their families produce the best seafood in the world. Season after season, Louisiana shrimpers have faithfully put food on the table for millions of Americans, and I admire their hard work and dedication during this crisis. The USDA’s decision is a win-win for Louisiana shrimpers and Americans who need a little help to persevere through hard times,” said Kennedy.
“Louisiana’s marshes help protect residents from storms and remain home to some of America’s most awesome wildlife. This NOAA funding will help support vital coastal restoration projects to guard beautiful marshlands.”
WASHINGTON – Sen. John Kennedy (R-La.), a member of the Senate Appropriations Committee, today announced $25,116,998 in funding from the National Ocean and Atmospheric Administration (NOAA) to support coastal protection and restoration projects around Louisiana.
“Louisiana’s marshes help protect residents from storms and remain home to some of America’s most awesome wildlife. This NOAA funding will help support vital coastal restoration projects to guard our beautiful marshlands,” said Kennedy.
Projects supported by this funding include:
- $22,245,176 to support the West Fourchon Marsh Creation and Nourishment Project, which will create and restore approximately 537 acres of marsh and mangrove habitat in Terrebonne Parish.
- $2,871,822 to support the North Delacroix Marsh Creation and Terracing Project, which will restore approximately 389 acres of marsh in St. Bernard Parish near Delacroix.
“Now is the time we should be doing more to ensure the survival of rural hospitals, not expediting their demise. We ask you to please reconsider this action and work with Congress to ensure the long-term vitality of our rural hospitals.”
WASHINGTON – Sen. John Kennedy (R-La.) today asked Centers for Medicare and Medicaid Services Administrator Seema Verma to reconsider a regulatory action that will force rural providers to repay up to 80 percent of their forgiven Paycheck Protection Program (PPP) loans through reductions in future Medicare and Medicaid reimbursements.
“This action is unacceptable. Not only will this exacerbate financial burdens for rural hospitals already operating on razor thin margins, but it will likely prove to be a catalyst in expediting the rural hospital closure crisis at a moment when many of these rural areas are current COVID-19 hotspots in need of the most assistance,” wrote Kennedy.
“The PPP was designed to help struggling businesses survive the economic impact brought on by COVID-19 and served as a lifeline for the rural hospitals,” continued Kennedy. “Louisiana, for example, is home to 57 rural hospitals—nine of which are deemed vulnerable—and 44 percent are currently operating at a loss.”
The letter also notes that President Trump yesterday issued an executive order to provide assistance to rural health providers.
“Now is the time we should be doing more to ensure the survival of rural hospitals, not expediting their demise. We ask you to please reconsider this action and work with Congress to ensure the long-term vitality of our rural hospitals,” Kennedy concluded.
Kennedy’s letter is available here.
“Opioid addiction has impacted thousands around Louisiana, and this funding will support critical services to help our communities battle substance abuse.”
MADISONVILLE, La. – Sen. John Kennedy (R-La.), a member of the Senate Appropriations Committee, today announced $5,984,910 in funding from the Department of Health and Human Services to support drug treatment projects around Louisiana.
“Opioid addiction has impacted thousands around Louisiana, and this funding will support critical services to help our communities battle substance abuse,” said Kennedy.
Projects supported by this funding include:
- $4,984,910 to support the Overdose Date to Action program through the Louisiana Department of Health.
- $1,000,000 to support the Rural Communities Opioid Response Program through Louisiana Primary Care Association, Inc.
